Tuesday Quick Hits

I'm still shaking off the Labor Day cobwebs (no, not from LaborFest), and my fantasy football draft's tonight, so only some headlines tonight:

• Here comes Boeing-Airbus, Round II.  With most folks expecting the WTO to issue a pretty solid rebuke of American subsidies to Boeing, I wonder just how many members of Congress next week will take back all those nasty things they said about Airbus when its adverse WTO ruling came down. (Hint: it's somewhere between zero and none.)

• Have we already become a nation of men, not laws?  Word out of Nevada sure makes it appear that way, with plenty of so-called "Republicans" backing Sen. Harry Reid because of all that juicy pork (and influence) he brings to the state as Senate Majority Leader.

• Maybe there's hope for free trade in America just yet...  WaPo progressive blogger Ezra Klein mails in a yaantastic, and still wrong, lament about the sad state of the American manufacturing sector.  Normally, I wouldn't even give such trite nonsense the dignity of a even blog mention, but the debate in the comments section makes it noteworthy.  (Talk about a backhanded endorsement of Klein's work!)  Therein, several commenters actually set Klein (and other ignorant folks) straight.  And - I checked - none of the educated commenters was Cato's Dan Ikenson!  Maybe some of this stuff is actually sinking in.

•  ...Then again, maybe not.  Nate Silver at the NYT has an interesting analysis of the campaign platforms of 33 "toss-up" congressional seats.  We know that the Dems are running on protectionism, so it's not surprising that Silver finds a few of them doing so here.  But guess how many Republicans are running on expanding free trade?  Yep, zero.  Sigh. 

• Never fear, folks, Larry Summers is on the RMB case!  Oh, wait....  So the White House has dispatched Summers to China to discuss China's currency and other bilateral economic issues.  Problem.  Solved.  (<--- sarcasm)  Fortunately, this WSJ Asia editorial hits on several things that Summers could discuss with the Chinese which might, you know, actually help matters.  Crazy thought, I know.

• Clunkers Revenge.  I must admit that I find it really difficult to pity the folks who jumped at the chance for some free gub'mint cash but are now having buyers remorse.  Nevertheless, this news isn't good for the economy, and it's further proof that top-down, Keynesian economic planning is just an awful idea.

• Chances for the KORUS FTA may have just gotten a little worse.  Most experts opined that the upcoming implementation of the EU-Korea FTA was going to light a fire under the administration's butt to finally move the US-Korea FTA in 2011.  The news that Italy is threatening to derail the EU agreement might just pour a whole lot of San Pelligrino on any near-term KORUS plans.

Clunkers Fail, Ctd.

I fear I'm sounding like a broken record, but this is one song that deserves to be played until your ears bleed.  Once again proving that Americans buy stuff with a finite supply of money (as opposed to an endless supply of magic beans and pixie dust), consumer spending dropped dramatically upon the conclusion of the "successful beyond anyone's wildest dreams" Cash for Clunkers program.  Here's MarketWatch on Friday with the disheartening-yet-totally-expected news:

U.S. consumer spending fell sharply in September after the government's cash-for-clunkers program expired, while after-tax incomes dropped for the fourth month in a row, the Commerce Department estimated Friday.

On a real (inflation-adjusted) basis, consumer spending sank a seasonally adjusted 0.6% in September, a reversal from the 1% gain seen during in August, the government's data showed. It was the largest decline in spending since December.

Real disposable incomes after taxes also fell, off a seasonally adjusted 0.1% to mark the fourth consecutive decline.

Despite overall growth in the economy in the third quarter, incomes aren't growing and jobs are still being lost at a rapid pace.

"The labor market remains challenging and until we see real improvement, sustained wage gains will be elusive," wrote Adam York, economist with Wells Fargo Securities....

Sluggish income growth is a major challenge for consumers in the fourth quarter, said Lori Helwing, economist for Bank of America's Merrill Lynch. She expects consumer spending to grow at an annualized pace of just 0.5% in the quarter, a big downshift after a 3.4% pop in the third quarter.

Meanwhile, the Commerce Department said current-dollar (not inflation-adjusted), spending dropped 0.5% in September after a 1.4% gain in August. Current-dollar incomes were flat, coming down from a 0.1% gain in August.

Economists surveyed by MarketWatch had been looking for nominal spending to fall 0.4% and for incomes to ease 0.1%....

The decline in September spending was largely due to the end of the government's subsidy program for autos.

Real spending on durable goods, including autos, fell 7.2% in September, pivoting off a 6.7% increase seen in August. Still, the level of spending on durable goods in September was higher than in July.

Real spending on nondurable goods rose 0.5%, on the heels of a 0.9% gain in August. Spending on goods excluding autos was "solid," according to Morgan Stanley economist David Greenlaw, who projects spending will rise about 2% on an annualized basis in the fourth quarter.

Totally and utterly unsurprising.  I just hope that the White House won't now attack the Commerce Department for this unapproved bad news.  (Edmunds fired back today at the White House, btw.)