New York City mayor Michael Bloomberg argues that immigration reform can foster growth (Bloomberg). Cities with larger foreign born populations enjoy stronger credit ratings, revitalized neighborhoods, and higher per-capita incomes. High skilled immigrants are more likely to start a business and can increase productivity and job growth; STEM professionals create an average of 2.62 U.S. jobs each. While reform remained stalled in the United States, nations such as Germany and South Korea are easing restrictions to attract global talent. One particular area of concern for U.S. competitiveness is the relative low level of employment visas; only 7 percent of U.S. green cards have an economic rationale. Read more »

Despite the looming fiscal cliff, and mounting debt, the United States continues to enjoy low borrowing costs, perhaps because the rest of the world has great troubles (WSJ). Economist Kenneth Rogoff sees low global interest rates as a short term equilibrium resulting from the global savings glut, central bank intervention, and growing economic concerns driving investors into bonds that are seen as stable. While he says the current low rates could persist for some time, he says they could also unwind “remarkably quickly.” Read more »

One of China’s largest auto-parts makers, Wanxiang Group (WSJ), announced plans to acquire 80 percent of ailing battery maker A123 Systems for $450 million. The Massachusetts-based firm grew out of materials technology developed at MIT and creates advanced battery technology for transportation, commercial, and electrical grid applications. Read more »

President Obama signed a new law requiring his budget office to provide details on how it will implement $109 billion in automatic budget cuts for January 2013 (TheHill). The law was passed unanimously by the Senate, and by a 414-2 vote in the House, giving the Obama administration thirty days to issue its report to Congress. The budget sequestration will require $1 trillion in cuts over 10 years, and is one element of the “fiscal cliff.” Read more »

The Wall Street Journal’s David Wessel provides some facts for the debate over what tax rate higher-income Americans should pay. Since the 1980s, top earners have garnered a larger share of income, but are paying an even bigger slice of federal taxes. Average tax rates have declined for almost everyone, and the bottom 40 percent have seen declines in both income share and tax share. Overall, the country’s progressive tax system has lessened the trend of greater income inequality, yet inequality continues to rise. Read more »

Early this morning, the Curiosity rover successfully touched down on the Martian surface (LATimes). The $2.5 billion mission was launched on November 26, and its primary task will last almost two years. Curiosity will search for signs of past life and delve into Mars’ geologic history. Its primary destination is Mount Sharp, a three-mile high mountain inside Gale Crater that may once have been submerged in a lake. The successful landing in a relatively small window was considered a major technical accomplishment. NASA’s chief scientist commented: “Curiosity will set us up for the day when men and women will land on the surface of Mars, and it might not be that far away.” Read more »

H1-B visas allow firms to sponsor qualified professionals to work in the United States on a temporary basis, but there is contentious debate over raising the cap on visas (WashPost). Detractors point to the high national unemployment rate, but a recent report by the Brookings Institution argues that the local unemployment rate for skilled professions is far lower in localities where H1-B visas are in greatest demand, the nation’s leading centers of innovation. The report concludes that restricting the supply of innovative workers and charging visa fees makes it difficult and more expensive for firms to invest in new ideas. Read more »

House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) agreed to pass a continuing resolution extending government funding for six months once current authorizations end October 1 (TheHill). Total government spending will be set at the expected 2012 level, despite the large deficit. The agreement–if passed in September after Congress returns from its August recess–will prevent another fiscal showdown the month before the national election. Read more »

The New Teacher Project (TNTP) released a report indicating that many public school leaders are failing to find and support good teachers (Education Week). The study found that both the most and least successful teachers leave at the same rate. In one school district, only one fifth of the lowest performing teachers were encouraged to leave, while over one third were encouraged to stay. The report recommends making retention of “irreplaceable” teachers a priority, and reinforcing the teaching profession through higher expectations. TNTP was founded in 1997 by Michelle Rhee, who went on to become chancellor of public schools in Washington, DC. Read more »

As policymakers debate the “fiscal cliff” of spending cuts and tax increases scheduled to take effect at the end of the year, slowing federal spending is already hampering economic growth (WSJ). Reduced federal spending and tax increases can be beneficial in the long run by closing the yawning federal deficit, but the 3.3 percent decrease in spending and elimination of over 52,000 federal government jobs in the past year may imperil growth in the short run. “It’s unbelievable how much the economy is getting hurt already by the sharp drop in federal spending,” said the chief U.S. economist for Deutsche Bank. Read more »