1. For the month of April, existing-home sales (at 4.97 million on a seasonally adjusted annual rate) were at the highest level for any month since November 2009, three and-a-half years ago, and were the highest for the month of April in six years – since 2007.

2. Compared to a year ago, home sales increased in April by 9.7%, which was the 22nd consecutive month of a year-over-year increase in home sales.

3. The median sales price for homes sold in April was $192,800, which was 11% above a year ago, and the highest median price since August 2008, nearly five years ago.  It was also the 14th consecutive month of a year-over-year increase in the median home price, which hasn’t happened since the period from April 2005 to May 2006.

4. Distressed sales accounted for 18% of April sales, down from 21% in March and 28% in April 2012.

5. Close to half (44%) of homes sold in April were on the market fewer than 30 days, while only 8% were on the market for a year or longer.

Lawrence Yun, NAR’s chief economist, said the housing market is recovery and summed it up this way:  “The robust housing market recovery is occurring in spite of tight access to credit and limited inventory.  Without these frictions, existing-home sales easily would be well above the 5-million unit pace. Buyer traffic is 31% stronger than a year ago, but sales are running only about 10% higher.  It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction.”

MP: Overall, a pretty positive report today on existing-home sales, and more evidence that “more homes are selling faster at higher prices” – which are the characteristics of a housing market recovery.

At any rate, with the Guardian Council’s elimination of Rafsanjani, who himself had been falsely anointed as a moderate, the press (here, here, here, and here) now calls former nuclear negotiator Hassan Rowhani and Tehran Mayor Mohammad Baqer Qalibaf the moderates, pragmatists, or reformists within the larger field. Let’s cast Qalibaf aside: He might have wanted the reformist label, but the former Islamic Revolutionary Guard Corps air force commander spoiled that image last week when he openly bragged of beating student protestors, albeit in his mind, for their own good.

What about Rowhani? He was a confidant of former president Mohammad Khatami, whom the West also deemed a reformer because as culture minister, he had only banned 600 books, not more. Rowhani is accustomed to dealing with Westerners because, after all, he was the Iranian face of negotiations in Geneva, Vienna, and elsewhere.

In October 2011, against the backdrop of criticism that he was too compliant to Western demands, Rowhani bragged to Etemaad, a reformist daily, about how he tricked the West to further Iran’s nuclear program. While the West celebrated Iran’s temporary suspension of enrichment, Rowhani explained that his goal was merely to have a pause anyway to install centrifuges:

When I was entrusted with this portfolio, we had no production in Isfahan. We couldn’t produce uranium tetrafluoride or uranium hexafluoride. Even if Natanz had been filled with centrifuges, we didn’t have the material to inject into them. There was a small amount of uranium hexafluoride which we had previously procured from certain countries and this was what we had at our disposal. But the Isfahan facilities had to be completed before [they] could transform yellow cake to low enriched uranium. We used the opportunity to do so and completed the Isfahan facilities.

This was not all. “We had no heavy water either,” he explained, “but [we] managed to achieve it during this period.” Here, he is referring to the heavy-water plant in Arak, which can produce plutonium and, in recent months, has become of increasing concern to diplomats and intelligence officials.

But hadn’t he shown flexibility by opening up to negotiations with Europe? Here, Rowhani explains:

The reason for inviting the three European foreign ministers to Tehran and for the Saadabad negotiations was to make Europe oppose the United States so that the [nuclear] issue was not submitted to the Security Council.”

By the time the Security Council took up even the watered-down sanctions that Moscow and Beijing approved, Tehran had already achieved what it wanted. “The Islamic Republic acted very wisely in my view and did not allow the United States to succeed,” Rowhani said. “It managed to oppose the United States and did not allow the nuclear case to be submitted to the Security Council… This was my objective.”

The Iranians often quip that they play chess while the Americans play checkers. If that’s the case, then it seems those willing to call Rowhani a reformist aren’t even ready for “Go Fish.”

Between 2001 and 2010, each influx of 100 high-skilled H-1B workers was associated with 183 more jobs for US natives.

Some advocates and interest groups have contended that expanding visa programs will hurt US workers — and that with the national unemployment rate hovering at 7.5%, expanding work visas just doesn’t make sense.

With respect to H-1B visas in particular, this notion is misguided and counterproductive to the goal of creating jobs for Americans.

What are H-1B visas?

H-1B visas allow US employers to sponsor and temporarily employ (for an initial period of three years) highly skilled foreign workers in “specialty occupations.” Since these jobs generally require a bachelor’s degree at the minimum, H-1B workers are highly-educated—better than half have either master’s or doctoral degrees.

These workers help alleviate a good problem that the US economy faces: the demand for highly-specialized and educated workers—especially within STEM fields —far outstrips domestic supply. US companies in these industries are growing so rapidly that the US education system can’t keep up.

How do they benefit the economy?

H-1B workers generally fill jobs that complement native workers rather than compete against them. As a result, H-1B workers boost job growth for US native workers by enabling companies to grow more quickly. In her 2011 report, “Immigration and American Jobs,” AEI visiting scholar Madeline Zavodny shows that 100 additional H-1Bs are associated with 183 more jobs among US natives, and that a 10 percent increase in H-1B workers increased native employment by .11 percent.

These workers purchase cars. They eat at restaurants. They hire accountants to help them navigate a complex tax code. And they increase the earnings of the companies they work for. All of these activities all create jobs for US natives.

What’s the problem?

There aren’t enough H-1Bs to meet employer needs. The annual cap of 65,000 (85,000 if you count the 20,000 dedicated to foreign graduates of US universities) was hit in the first week of filing in FY 2014. The improving economy promises to further shrink that window.

What to do about it?

It is clear that the H-1B program must be expanded. Current policy hamstrings growing companies and denies US native workers the benefits of that growth.

The Gang of Eight proposal takes a substantial step in the right direction, raising the annual H-1B cap to 110,000 (plus 25,000 for graduates of US universities with advanced degrees in STEM fields). This would go a long way toward addressing the labor shortages of US companies, while also boosting employment for native workers. H-1B expansion would be a win—for US workers, for US companies, and for the best and brightest minds intent on honing their craft in America.

1. US auto factories are cutting back on summer downtime this year to meet growing buyer demand for new cars and trucks.

2. Home sales are booming in Houston (highest monthly sales in 6 years, prices are at a new record high) and Austin (highest April sales in 9 years).

3. GALLUP: Americans’ Economic Confidence Reaches a Five-Year Weekly High.

4. Americans are fed up with frugality: Restaurant sales reached an all-time high in April.

Taxes and Regulation

5. US corporations paid more than $100 billion – at an average effective rate of 25% – in foreign income taxes in 2009.

6. Q: Who will pay higher premiums under Obamacare? A: Men ages 21-29 could pay 56% more, and men ages 30-39 almost 50% more.

7. Taxpayers paid  more than $1.2 million in labor costs over the last 5 years for the Capitol’s fully automated Senators-only elevators.

8. License Creep: Since 2005, 25 states have ordered teeth-whitening businesses to close to protect the Dental Cartel.

Markets in Everything:

9. 78-square-foot Manhattan mini-apartments.

10. Washington state butcher spikes pig feed with weed – “Potbelly Pigs.”

Uplifting News: 

11. Oklahoma tornado survivor finds dog buried alive under rubble during live TV interview and

12. A stranger leaves a $1,000 tip to help a waitress take her dream trip to Italy.

Miscellaneous

13. Why are French kids so much better-behaved than American kids, and why do so few French kids (<5%) have ADHD v. US kids (9%)?

14. Jason Richwine: “There’s no racial or ethnic agenda in my dissertation. There’s nothing to suggest that any groups are “inferior” to others.”

6. Jay-Z – 99 Problems (2004)

Constitutional conservatism is on the rise, with Texas Senator Ted Cruz as its standard-bearer, and Mr. Carter must be pleased. This song is an outspoken defense of Fourth Amendment rights, and has been analyzed as such by law school professors. The second verse portrays a traffic stop: Mr. Carter has been caught speeding (“Well you was doing fifty-five in a fifty-four“), and he is worried that the illegal drugs in the trunk of his car (“In my trunk is raw“) will be found by the police officer who stopped him. Though the legal details are not entirely accurate, Mr. Carter’s forceful insistence on due process makes the arrival of a K9 unit and the detection of illicit drugs a requirement for a search of his trunk to be admissible. The K9 unit never arrives, hence the triumphant chorus (“I got 99 problems, but a bitch ain’t one“). A victory for the guilty, but a victory for individual rights in the face of discretionary law enforcement as well.

(On a sidenote, when Mr. Carter performed this song at the inaugural Staff Ball, celebrating president Obama’s victory, he and 4,000 Obama campaign operatives changed the word “bitch” in the chorus to “Bush,” as a part of their never-ending struggle for a new civility in the public arena.)

Read Part 15 here.

Climate change chatter ran rampant after an unusually violent string of twisters in 2011 (see chart above), including a Joplin, Mo., storm that killed 158 people. After tornadoes took at least 24 lives in Moore, Okla., on Monday, headlines are once again raising the question: Will a warming world fuel more tornado strikes?

Michael Mann, a climatologist who directs the Earth System Science Center at Pennsylvania State University said “If you’re a betting person — or the insurance or reinsurance industry, for that matter — you’d probably go with a prediction of greater frequency and intensity of tornadoes as a result of human-caused climate change.”

Gwen Ingram, an artist and yoga instructor, is one of many Oklahomans who have protested Keystone XL in recent weeks. The proposed project has become a poster child in the climate change debate, and Ingram said she does see a potential connection between climate change and the latest string of tornadoes to rip through her state, which boasts a long history of fossil fuel production and transport.

“They seem to be bigger and more intense,” said Ingram of the local tornadoes.”

2. From a Fox News story yesterday:

California Democratic Sen. Barbara Boxer used part of her Monday floor speech to connect the Oklahoma tornadoes to climate change.

“This is climate change,” she said. “We were warned about extreme weather, not just hot weather but extreme weather. … When I had my hearings … scientists all agreed that what we’d start to see was extreme weather. … It’s going to get hot. But you’re also going to see snow in the summer in some places. You’re going have terrible storms. You’re going to have tornadoes.”

MP: There’s just one small, inconvenient problem with making a connection between climate change and an increasing frequency of violent tornadoes – the link doesn’t actually exist. The chart above displays the annual number of “strong to violent tornadoes” (F3 to F5 on the Fujita Scale) in the US from 1954 to 2012 based on data from the National Oceanic and Atmospheric Administration’s National Climatic Data Center. Here are some weather-related facts:

1. Between 1954 and 2012, there has been a downward trend in the frequency of strong to violent tornadoes in the US, and that decline is statistically significant at the 1% level (see red line in chart). On average, there has been a decline of almost 0.40 violent tornadoes every year since 1954, or a decline of almost 4 violent tornadoes very decade.

2. Although there was a significant number (84) of violent tornadoes in 2011 (which generated responses like this in the Washington Post that claimed a link to climate change), there were actually more violent tornadoes in both 1957 (99) and 1965 (98).

3. In the first half of the sample period from 1954 to 1983, there were nine years when there were more than 60 violent tornadoes, and the annual average was 52 during that period. In contrast, in the second half of the sample from 1984 to 2012 there were only two years when there were more than 60 violent tornadoes, and the annual average was only 37.6.

Bottom Line: The statistical evidence on violent tornadoes, although frequently ignored by the media, politicians, and others claiming a link between violent weather and climate change, suggests that the frequency of violent tornadoes like the recent one in Moore, Oklahoma, has been declining over time, not increasing.

But if you’re really worried that the Fed’s actions are creating an unequal benefit, Adair Turner, former head of the UK’s Financial Services Authority, and monetary economist Michael Woodford offer a twist: Fed-financed tax cuts. It’s an idea that Ben Bernanke actually spoke about in a 2003 speech in Tokyo:

My thesis here is that cooperation between the monetary and fiscal authorities in Japan could help solve the problems that each policymaker faces on its own. Consider for example a tax cut for households and businesses that is explicitly coupled with incremental BOJ purchases of government debt–so that the tax cut is in effect financed by money creation. Moreover, assume that the Bank of Japan has made a commitment, by announcing a price-level target, to reflate the economy, so that much or all of the increase in the money stock is viewed as permanent. …

Isn’t it irresponsible to recommend a tax cut, given the poor state of Japanese public finances? To the contrary, from a fiscal perspective, the policy would almost certainly be stabilizing, in the sense of reducing the debt-to-GDP ratio. The BOJ’s purchases would leave the nominal quantity of debt in the hands of the public unchanged, while nominal GDP would rise owing to increased nominal spending. Indeed, nothing would help reduce Japan’s fiscal woes more than healthy growth in nominal GDP and hence in tax revenues.

Turner and Woodford suggest coupling the idea with a nominal GDP target. In addition to the inequality argument I raise, Turner argues that having a central bank finance fiscal stimulus would pose less risk to financial stability than the Fed’s current program:

Cutting long-term interest rates by quantitative easing may be equally ineffective. And very low interest rates, sustained for many years, will encourage a search for yield, hence financial innovation and carry trades, which create risks to financial stability.

Fiscal stimulus, in its conventional funded form, financed by bond issues, may be more effective. Fiscal multipliers may be high when central banks are committed to keeping interest rates low for the foreseeable future. But with public debt levels already high and rising, concerns about future debt sustainability may create ‘Ricardian equivalence’ effects with households and companies aware that tax cuts today will have to be offset by tax rises later.

In this specific environment  – ‘helicopter money’ – should be regarded as an available option. Ben Bernanke proposed this for Japan in 2003. If Japan had used it then, it would now have some mix of a higher real GDP level, a higher price level, and lower public debt to GDP.

Another reminder that the Fed isn’t out of ammunition. But would this be a good idea? I ran it by economist and blogger Josh Hendrickson:

I think that they are generally correct that a tax rebate financed with money creation would be stimulative in the short run.  I do have some concerns about pursuing this sort of policy, at least in the present context.

A helicopter drop is essentially a once-and-for-all policy.  In other words, it is not something that the government can do multiple times. In principle, this isn’t a problem because typically one would only advocate this policy as a way to return to a particular level of NGDP (or the price level).

This raises questions about whether it would be politically feasible to have a tax rebate that is large enough to have the needed effect on the level of NGDP — especially considering it would be financed through money creation.  In addition, it is possible that even if the policy was adopted there would be destabilizing effects given the public’s concern about the size of the Fed’s balance sheet and the corresponding enlargement that would necessarily result.

Update: And David Beckworth:

The economy’s inability to reach “escape velocity” is because of the shortage of safe, money-like assets. A Fed-financed tax cut (or “helicopter drop”) that directly delivered money to households and continued to do so until nominal GDP hit its pre-crisis trend growth path would be a very effective way to solve this shortage.

1. Carbon taxes.

2. Nuclear power.

3. Tough emission standards: “Innovation will flower in response to the mixture of price and regulatory standards, as has so frequently happened before. We will not know what businesses can do if we do not dare to ask.

4. Create a secure global trade regime in the lower-carbon fuels. This is one way to persuade China to shift away from coal.

5. Develop ways of financing the transfer of the best available technologies for creating and, still more important, saving energy across the entire planet.

6. Let governments invest in research and early-stage innovation, through a mixture of funding university research and supporting public-private partnerships.

7. Invest in adaptation to the effects of climate change. This will surely also have to be a focus of development assistance in the future.

8. Think through geo-engineering, large-scale manipulation of the planet to reverse climate change, dire though that idea is.

2. The audacious plan to end hunger with 3-D printed food. “Anjun Contractor, a mechanical engineer with a background in 3D printing, envisions a day when every kitchen has a 3D printer, and the earth’s 12 billion people feed themselves customized, nutritionally-appropriate meals synthesized one layer at a time, from cartridges of powder and oils they buy at the corner grocery store.”

HT: Bill Greenway

By late this summer, the State Department plans to send dozens of additional diplomatic security agents to high-threat embassies, install millions of dollars of advanced fire-survival gear and surveillance cameras in those diplomatic posts, and improve training for employees headed to the riskiest missions.

One of the things I admired most about murdered US Ambassador Chris Stevens — a man whom I never met — was that he understood the importance of getting out and about. It is a characteristic that — despite the howls of protest that sometimes emerge from the Foreign Service whenever its officers feel besmirched — is sorely lacking in the State Department today. One of the reasons why the State Department is woefully bad at gauging the mood on the street or predicting events is that its diplomats remained trapped in the elite bubble, if not within the walls of embassies itself.

While ambassadors technically run the show at embassies, Regional Security Officers (RSOs) run lives. Their goal is not diplomacy, but keeping diplomats safe. The best way to keep diplomats safe is to keep them locked up behind high walls. In Iraq — America’s most expensive embassy — diplomats engage Iraqis — but only those who can get past multiple checkpoints and into the sprawling compound. Outside the high walls, life goes on as normal — and Iranian, Turkish, and various Arab countries’ diplomats meet Iraqis on the streets, in shops, and at restaurants. Diplomats — frustrated at the restrictions — have privately claimed that the Embassy in Baghdad is only able to support 12 trips outside the embassy walls each day. In a compound of hundreds, that means that most will never experience the country to which they represent the United States.

The Lebanese civil war devastated that country but, despite continued political tension, normalcy now reigns. Teens and young couples stroll the cornice, stopping at the occasional shwarma stand as they pass old men fishing or smoking hookahs. It’s a scene American diplomats won’t experience because, once RSOs impose security restrictions, no one wants to be the employee who loosens them, lest he get blamed if something happens.

Security can be taken to extremes. The best way not to be secure is simply not to station diplomats in hardship posts. Thankfully, no one serious makes that case, but too much security effectively achieves the same thing. Benghazi was a tragedy, but blanket security restrictions are not the answer. That Secretary of State Clinton or her immediate underlings rejected calls for plugging security holes demonstrates incompetence in addressing a fluid situation with nuance and precision, but the real danger lies in faulty intelligence.

That Obama administration and senior State Department officials sought to apologize for if not deny the growth of radical Islamism in Libya (and Syria, Egypt, Afghanistan, Turkey, Tunisia, Yemen, and elsewhere) suggests politicization of intelligence at the most senior of levels. That the reaction to an Islamist terror attack is to insulate diplomats from the reality of the societies they are supposed to observe will only compound the failure. Now more than ever, it’s important to hire diplomats who achieve fluency in strategically important languages and have the street smarts and wherewithal to put their training to use. Rather than holding countless meetings and drafting a cable after each one, they should be out and about holistically assessing the situation and reporting back on the feel of the street. Apt policymakers might then calibrate American policy to the reality on the ground rather than the illusions of the bubble. That might be uncomfortable for some and seem risky for RSOs, but preserving American national security will never be a risk-free endeavor.