Tuesday, March 1, 2011

General Economics

News                                                                                                                             
WSJ | Sweden's GDP Surges
Sweden's gross domestic product surged in the fourth quarter of 2010, rising the most since records began, easily beating forecasts and offering further support to the Riksbank's plans to raise interest rates during 2011.
NYT | Oil Drilling to Resume in the Gulf’s Deep Waters
The Interior Department said Monday that it had approved the first new deepwater drilling permit in the Gulf of Mexico since the BP explosion and spill last spring, a milestone after a period of intense uncertainty for industry and a wholesale remaking of the nation’s system of offshore oil and gas regulation.
WSJ | Italian GDP Grew 1.3% in 2010
Italy's economy grew 1.3% last year as it recovered from the recession in 2009 and its budget deficit shrank to 4.6% of gross domestic product, national statistics agency Istat said Tuesday.
CNN Money | Gas prices up for 7 days in a row
Fresh off a 27-cent jump last month, gas prices were up slightly in a daily survey by motorist group AAA, as the price of crude oil backed off recent highs.
WSJ | Canadian Growth Gives Lift to Leader
Canada's economy grew significantly faster than expected in the final three months of 2010, giving Prime Minister Stephen Harper's minority government a boost ahead of a possible election this year.
CNN Money | Manufacturing at nearly 7-year peak
Manufacturing activity in the United States climbed in February to the highest level in nearly seven years, a purchasing managers' group said Tuesday.
NYT | U.S. Plans for Trade Are Stalled
President Obama has made expanding exports a centerpiece of his plan for accelerating the economic recovery, but in recent weeks, his trade agenda has nearly ground to a halt amid partisan feuding.
WSJ | Fannie, Freddie Stuck In a Dividends Circle
For the first time since the financial crisis, Fannie Mae and Freddie Mac are showing glimmers of profitability. But the two mortgage behemoths still ask the Treasury Department every quarter for billions of dollars in cash, most of it going right back out the door to pay dividends to the same U.S. agency.

Econ Comments                                                                                                             
Washington Times | RAHN: Deliberately making Americans poorer
Obama’s energy policies hit hardest below the poverty belt
WSJ | A Union Education
What Wisconsin reveals about public workers and political power.
Washington Times | FEULNER: Ruled by regulation
Consumers’ choices range from expensive to more expensive
WSJ | Why Koch Industries Is Speaking Out
Crony capitalism and bloated government prevent entrepreneurs from producing the products and services that make people's lives better.
Washington Times | BACON: Money doesn’t matter in Wisconsin union battle
Collective-bargaining struggle determines teacher effectiveness
WSJ | The Political Math: Washington - Dollars = Plus for States
The federal government isn't simply bleeding money. Because of its addiction to red ink, it's bleeding power, which is starting to flow away from the nation's capital and out to the states. This is the little-recognized reality behind the remarkable political upheaval being seen in state capitals.
Independent Institute | Why Boom Is a No-Show: A Lack of Net Investment
Although the economy is showing some signs of revival, many people wonder why it hasn’t roared back, as it did after most previous contractions.

Blogs                                                                                                                             
AEI: The American | Flushing Money Down the Toilet
One of the most ridiculous regulatory actions of the past few years (and that is a stiff competition) has been the move to require low-flow toilets in the interests of water conservation, even for those areas in which water is not in short supply.
Forbes: Community of Liberty | Enterprise, Not Greed, Creates A Better World
Greed: The word itself has become central to the political debate over the budget, taxes, union benefits, what constitutes ethical behavior, and the shape of our society.
Independent Institute: The Beacon | Politics and Government “Investment”
Just as the words “government” and “efficiency” should never appear in the same sentence, so is true of “government” and “investment”.

Reports                                                                                                                         
AEI | World Population Prospects and the Global Economic Outlook: The Shape of Things to Come
This paper examines global demographic prospects to the year 2030 and assesses the influence that impending population trends may have upon economic performance in coming years for the world as a whole and the major regional economies. A reasonably reliable assessment of prospective global trends to 2030 is feasible today because the overwhelming majority of people who will be living in that future world are already here, alive today.
Heritage Foundation | Housing Finance Reform: No Need for a New Fannie Mae and Freddie Mac
Given the task of producing a plan to develop a new housing finance system in light of the 2008 crisis and the failure of both Fannie Mae and Freddie Mac—a task that everyone agrees will be extremely complex—the Obama Administration decided to punt. Rather than one detailed plan, it produced brief summaries of three very different ones, leaving the nation to wonder what the Administration really wants.

Health Care

News                                                                                                                             
Daily Caller | Obama praises Romney for Mass. Health care overhaul
"I agree with Mitt Romney, who recently said he's proud of what he accomplished on health care in Massachusetts and said he supports giving states the power to determine their own health care."
Daily Caller | Obama Administration announces support for acceleration of health care waivers for states
In other words, states will have the leeway to pursue health care policies, irrespective of the new Affordable Care Act.
Baltimore Sun | Medical device approval plagued by unhealthy delays
Europe does better job than United States at bringing needed medical devices to market.
CSM | Health care reform: How big is Obama's concession?
On Monday, President Obama offered to let states design their own health systems, as long as they meet the overall goals of the national health care reform plan.
CNN Money | Medicaid funding busts state budgets
Several dozen governors are pleading with the president to let them drop enrollees in their costly Medicaid programs. They say this flexibility is critical in closing an estimated $125 billion budget gap for fiscal 2012, which starts July 1 in most states.
NationalJournal | Health Care Law to cost states $118 Billion, Republican Report Says
According to the report, adding new Medicaid enrollees under the law will cost California $19.4 billion from 2018 to 2023 and will cost Florida $12.94 billion from 2013 to 2023. It uses a variety of sources including state estimates.

Econ Comments                                                                                                             
USA Today | Pa.'s Corbett: Let states guide Medicaid reform
Governors from around the country will detail their experiences and challenges in trying to operate efficient, fiscally viable Medicaid programs under the burden of federal requirements that often hinder state objectives.
Washington Times | EDITORIAL: Medicare case could nix Obamacare
Federal compulsion is un-American.
CNN | Obama embraces earlier state flexibility on health care reform
The senior administration officials, speaking on background, explained that for any state alternatives to be eligible for a waiver, they must meet four criteria:
WSJ | The Massachusetts Health-Reform Mess
The Bay State has shown the risks of ObamaCare.
POLITICO | Experts: Individual mandate might fail
Forget all the shouting you’ve heard about the new mandate to buy health coverage. Forget the lawsuits, the cries of “Big Government” from Republicans and the Democrats’ claims that the new health care law would fall apart without it.

Blogs                                                                                                                             
Heritage Foundation | White House Still Failing to Fix Medicaid Crisis
Members on both sides of the aisle admit that states’ health care reform needs are vastly different and cannot be addressed by a one-size-fits-all approach like Obamacare, which imposes a pre-ordained federal version of reform on the states.
Cato Institute | Obama Offers States ‘Flexibility’ to Adopt Single-Payer instead of ObamaCare
A closer look shows that the president is not lifting the burdensome requirements ObamaCare imposes on states.  All he's doing is proposing to move up, from 2017 to 2014, the date on which states can apply for federal permission to impose a different but equivalently or more coercive plan to expand health insurance coverage.
Heritage Foundation | The Case for Entitlement Reform: Taxpayer Contributions Fall Dangerously Short of Received Benefits
Medicare and Social Security are important retirement security programs for millions of Americans. But they are ticking time bombs with trillions in future unfunded obligations that will bankrupt America if they are not changed.
Washington Post | Health care doesn't keep people healthy -- even in Canada
File this one under "health care doesn't work nearly as well as we'd like to believe." A group of researchers followed almost 15,000 initially healthy Canadians for more than 10 years to see whether universal access to health care meant that the rich and the poor were equally likely to stay healthy. The answer? Not even close.

Reports                                                                                                                         
Heritage Foundation | How States Can Survive the Medicaid Crisis
Along with the exploding costs of public-sector benefit packages, managing Medicaid is the greatest challenge confronting the nation’s governors and state legislative bodies. About 16 percent of the nation’s population is currently enrolled in Medicaid, the joint federal–state program for certain categories of mostly poor individuals.

Taxes

News                                                                                                                             
Accounting Today | More than $1.1 Billion in Tax Refunds Still Unclaimed
Refunds totaling more than $1.1 billion may be waiting for nearly 1.1 million people who did not file a federal income tax return for 2007, according to the Internal Revenue Service.

Econ Comments                                                                                                             
Fortune | The payroll tax cut isn't working
When Congress approved sweeping tax cuts last year in hopes of giving the economy an extra boost, it might not have anticipated how much oil and food prices would weigh on consumers.
AEI | Responding to VAT: Concurrent Tax and Social Security Reforms
If a VAT is adopted, it should be used to eliminate the corporate income tax and its assortment of economic inefficiencies.

Blogs                                                                                                                             
Forbes: Janet Novack | Are Amazon.com’s Days Of Tax Free Selling Numbered?
Hasn’t Amazon successfully fended off pesky state tax collectors for 16 glorious years? Yes, but the battle has entered a new stage as Amazon builds warehouse/fulfillment centers in more locations, states grow hungrier for revenue, and a rising sales tax rate (it now averages 9.64% nationwide) puts retailers who do collect tax at an ever bigger disadvantage.
CSM: The Adam Smith Institute Blog | Three ill-advised British tax hikes
Changes to income tax, insurance rates, and fuel duty will take effect in April.

Monetary

News                                                                                                                             
MSN | Why stay-at-home moms are mad at the Fed
A central bank proposal would limit non-working spouses' credit access.
CNN Money | Bernanke: Inflation risk 'modest'
"My sense is that the increases we've seen so far -- while tough for many people -- do not yet pose a significant risk to the overall recovery," Bernanke said.
MSN | Bernanke warns recent oil price surge could impede U.S. growth
Likely outcome would be temporary and modest rise in inflation, Fed chief tells Congress.
Bloomberg | Bernanke's Call for Deficit Plan Tempers Republican Criticism of Stimulus
Federal Reserve Chairman Ben S. Bernanke’s calls for an immediate plan to control U.S. debt are winning praise from some of the same Republican lawmakers who rebuked him for the central bank’s record monetary stimulus.
Fiscal Times | Dollar Slides to 4-Month Low to Open Week
The dollar hit a four-month low Monday against a group of six major currencies on expectations that central banks overseas will raise interest rates before the Federal Reserve does.
Bloomberg | Bernanke Sees Temporary Inflation Gain From Commodities
Experience with such price gains in recent decades, along with currently stable labor costs, suggests a “temporary and relatively modest increase in U.S. consumer price inflation,” Bernanke said.
WSJ | Inflation Prompts a Flurry of Subsidies
Moves to Soften Blow Could Backfire On Asian Countries, Economists Argue.

Econ Comments                                                                                                             
Cato Institute | Money, Inflation, and Rising World Commodity Prices
Are America and the world at risk for another inflationary episode similar to the 1970s and early 1980s? Or do current low rates of inflation portend low inflation for the foreseeable future?
Bloomberg | Euro Saviors Balk at Spot in History's Dustbin: Matthew Lynn
The euro wasn’t just meant to provide economic harmony. It was supposed to ensure political stability as well. Neither has happened and a generation of politicians will pay for it.

Budget

News                                                                                                                             
WSJ | Billions in Bloat Uncovered in Beltway
Sen. Tom Coburn (R., Okla.), who pushed for the report, estimated it identifies between $100 billion and $200 billion in duplicative spending. The GAO didn't put a specific figure on the spending overlap.
Washington Times | Spending measure likely to be OK’d
The House is slated to vote Tuesday on a bill to push until March 18 the shutdown deadline while cutting $4 billion from 2010 spending levels.
WSJ | Hungary to Lower Public Debt to 65%-75% of GDP
The Hungarian government said Tuesday it plans to lower its public debt, the highest in central and eastern Europe, to between 65%-70% of gross domestic product by the end of 2014 through fiscal restructuring and the transfer of private pension-fund assets to the state.
NY Times | Pension Funds Strained, States Look at 401(k) Plans
Utah decided to adopt a 401(k)-type plan after the stock market plunge in 2008 caused the shortfall in the state’s pension plan to balloon to $6.5 billion.
WSJ | Spain Meets Deficit Target
Spain's 2010 budget deficit was equal to 9.24% of gross domestic product, ahead of its 9.3%-of-GDP target, and down from 11.1% of GDP in 2009.
USA Today | Earmarks' targeted in House's interim $4B trim
The stopgap spending plan the House of Representatives plans to vote on today cuts $4 billion from this year's budget, including $2.7 billion in special projects known as "earmarks" that almost nobody planned on spending anyway.
WSJ | Indian Budget Reins in Spending Increases
Mr. Mukherjee is betting on substantially higher tax revenues to shrink this year's fiscal deficit to 5.1% of gross domestic product, down from an earlier target of 5.5%.

Econ Comments                                                                                                             
Bloomberg | Constitution Is Only Way to Cut U.S. Deficit: David M. Primo
All of these proposals lack a crucial element: spending limits enforced through the U.S. Constitution. Without a constitutional amendment, meaningful budget restraint will be put off, and Congress will revert back to the legislative state of nature, where survival means spending, not cutting.
Cato Institute | Adult Conversation on the Budget Means No More Fibbing
...if being an adult requires acknowledging reality, taking responsibility, and living within your means, we've got a very long way to go on Capitol Hill, in the White House, and among the public at large.
Fiscal Times | 10 Voices Weigh In on Handling Long-Term Debt
...here is advice from ten politicians and economic experts – relative newcomers as well as veterans of budget warfare – on what do about the long-term debt…

Blogs                                                                                                                             
Bankrupting America | Have you gotten your money’s worth from Congress this year?
Taxpayers spend about $107.8 million per week on Congress.
NRO: The Corner | More on Spending Cuts and Economic Growth
There is also the fact that the report confuses budget authority with budget outlays, which is what’s actually spent. Basically, it plugs wrong numbers into an already problematic model.
Macroadvisers | The GDP Effects of a (Brief) Government Shutdown (-0.2 in Q1)
Non-essential functions of the federal government might be shut down temporarily when the current stop-gap funding measure expires on March 4. This would reduce GDP during the first quarter, although by less than has been reported elsewhere.

Reports                                                                                                                         
GAO | Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue
GAO Identified Areas of Potential Duplication, Overlap, and Fragmentation, Which, if Effectively Addressed, Could Provide Financial and Other Benefits

Employment

News                                                                                                                             
CSM | How earnings for unionized public employees compare with private sector
In the fight for balanced budgets vs. benefits for public employees, what's fair and what's politics?
Time | Your Incredible Shrinking Paycheck
The drop in wages occurs in part because unemployment rose so sharply and widely after the crisis and has remained higher for longer than in past recessions. Both factors have led to a disconnect between labor supply and demand that makes it tough for workers to negotiate better deals.
WSJ | Strides by Women, Still a Wage Gap
Women are gaining ground educationally and economically, but men still make more money on average and women are more likely to live in poverty, according to a White House report expected to be released Tuesday.
Time | Paper Trail
With physical newspapers making their way to an ever shrinking number of customers, paperboys (and girls) have become an endangered species.
WSJ | German Job Market Improves Further
Germany's labor market improved sharply in February and unemployment declined by much more than expected, owing to the country's solid economic upswing.
National Journal | Union Protests Spread Across the U.S.
Amendments to block labor unions from engaging in collective bargaining with the government over salaries and benefits for public workers are sparking protests.
Politico | Report: House budget plan could kill 700K jobs
Republicans’ efforts to cut billions of dollars from the federal budget between now and October could cost the country as many as 700,000 jobs by the end of next year, a nonpartisan economic analysis released Monday found.

Blogs                                                                                                                             
CSM: The New Economy | Election no quick cure for Ireland's ills: more debt, fewer jobs
Ireland's new leaders have few options in reversing the downward spiral of debt and joblessness.