Friday, April 8, 2011

General Economics

National Journal | Effects of a Shutdown on GDP Negligible, Analysts Say
As negotiations stall and the federal government veers toward a shutdown, both politicians and the public have begun to fret over the possible economic effects of a government suspension, with some even opining that it could derail the recovery.
Telegraph | We must call the bluff of the big, bad banks
It would be insane not to change the structure of banking, because it’s doomed to fail again, writes Jeff Randall.
RCM | The Trouble With Economic Statistics
Even in the absence of political meddling, economic statistics can be slippery things.

Econ Comments                                                                                                             
Fortune | IMF says high oil prices are here to stay
Don't hold your breath for a big drop in oil prices.
Market Watch | Is America the next Portugal?
It’s easy to watch this economic Duck Soup unfolding and think the debt crisis is entirely limited to penny-ante Freedonias in Europe.

Mercatus Center: Neighborhood Effects | Another Look at Income Mobility
As far as I am concerned, the important thing is to have a dynamic and growing economy with plenty of opportunities for those who are the least well-off among us. We can debate about whether or not ours is that sort of economy—especially given the current economic climate—but a simplistic analysis of income groups gives us very little information on this score.
Marginal Revolution | David Brooks nails it
People will look back and see the non-expiration of the Bush tax cuts as a turning point.
Café Hayek | Obama embraces regime uncertainty
Maybe massive unspecified changes in the regulation of the health and financial sectors wasn’t such a good idea in the middle of a recession.
EconLog | 40 Things I Learned in My First 40 Years
Today I turn 40.  To ease the pain, I've decided to write a list of important lessons I've learned during my first four decades.

Heritage Foundation | Why Does Economic Freedom Matter?
America’s founders knew that liberty is about more than just securing political freedoms. True liberty requires economic freedom—the ability to profit from our own ideas and labor, to work, produce, consume, own, trade, and invest according to our own choices.

Health Care

US News | 6 Pages of Obamacare Equals 429 Pages of Regulations
Giving proof to Main Street's worries that President Obama's healthcare reform will lead to thousands of new and costly regulations, the Department of Health and Human Services has taken on small section of the law and written enough new rules to every page of Obama's campaign book, plus another 45 pages.
WSJ | Senators Push to Open Database on Medicare
Two senators have introduced legislation to overturn a 1979 court injunction that bars the government from revealing what individual physicians earn from Medicare.
NationalJournal | Medical Errors Cost Health Care System Billions
As much as 45 cents out of every dollar spent on U.S. health care is related to a medical mistake, researchers reported on Thursday
NationalJournal | Feds, Insurers Both Reject Ryan Budget Plan for Medicare
Government health officials and industry executives on Thursday soundly rejected the plan in Rep. Paul Ryan's budget proposal to convert Medicare to a voucher program, saying it will take people out of an organized system that works and put them into a less coordinated framework.
Politico | Government shutdown won't stop health law implementation
Implementation of the health reform law will not stop if there is a government shutdown. If it's funded by mandatory spending in the Affordable Care Act, implementation can continue, however; regulation writing would likely be significantly hindered because those staff salaries are funded by discretionary dollars.

Econ Comments                                                                                                             
AEI | Complaints about Budget Plan Veer Off Path
Personally, if I were on a plane that had one engine out and was belching smoke, I would certainly hope somebody with some judgment and competence might calmly remove his oxygen mask long enough to suggest "ending this flight as we know it"

Heritage Foundation | House Moves Toward Draining Obamacare Slush Funds
Efforts to defund Obamacare one bite at a time are making progress in the House, although Senate prospects remain dim.  The House is addressing parts of Obamacare which are so loosely-drafted that House Speaker John Boehner and others label them multi-billion-dollar “slush funds.”


CNN Money | 12 most common tax scams
With less than two weeks to go before Tax Day, scammers are hard at work coming up with ways to score every last penny. That means stealing identities, filing fake tax forms, hiding income offshore and exaggerating charitable donations.


Bloomberg | Europe’s $2 Trillion of Distressed Debt Set to Outstrip U.S.
The distressed debt market in Europe is set to outstrip the U.S. for the first time as the region’s sovereign crisis forces banks to sell $2 trillion of under performing assets, Strategic Value Partners LLC said.
CNN: Money | Fed at a 'tipping point' on monetary policy
In the delicate balancing act between its two main responsibilities -- promoting job growth and staving off inflation -- the Fed has been squarely focused on stimulating employment. But Fisher thinks the time has come to wrap up those efforts and shift policy in the other direction.
WSJ | Europe's Rate Rise Signals End of Cheap-Money Era
In the U.S., where there is less inflation angst than in Europe, the Federal Reserve is unlikely to follow until very late this year or early next. Moving ahead of the Fed is unusual for Europe's central bank. The Fed moved first in the previous two global monetary-tightening cycles since the ECB was formed 12 years ago—in the late 1990s, and in the mid-2000s.
The Economist | And then there were three
The first of two articles on Europe’s debt crisis looks at Portugal’s decision to ask for help. The second examines the price Greece is paying for going down the same path
The Economist | The third bail-out
How to make sure the latest bail-out marks the beginning of the end of the euro zone’s debt crisis
Bloomberg | European Debt Crisis Morphs Into New Phase: Mohamed El-Erian
Portugal’s need for emergency assistance became inevitable last month once its parliament rejected the government’s plans for yet another round of austerity.

Econ Comments                                                                                                             
WSJ | The Lisbon Irony
Europe's growth problems aren't the fault of central bankers.
WSJ | No Time for Euro Complacency
When Greece applied for a euro-zone bailout last May, the markets went into a tailspin for months, and when Ireland hit the buffers in December, the fallout lasted weeks. Yet Portugal's decision to throw in the towel Wednesday has barely troubled investors: the euro rose, Italian and Spanish bond yields remained close to 12-month lows and bank stocks rose.
AEI | Waving the Rules for Portugal
In the absence of an effective Portuguese government it is difficult to see how the EU can maintain the pretense that when bailing out the European periphery it does so only with the strictest of credible conditions attached.

RCM: Wells Fargo Securities | ECB Hikes Rates As Portugal Seeks Help
As widely expected, the ECB hiked its main policy rate by 25 bps. Although another rate hike does not appear imminent, we look for a modest pace of tightening in the quarters ahead.


CNN: Money | The price of a shutdown
So if the federal government shuts down, taxpayers would save a lot of money, right? Not quite. It would actually cost taxpayers money. And for every day the shutdown continues, the bill would go up.
Fox News | Gov't shutdown could hit federal workers in wallet
"Last time there was a government shutdown, furloughed federal workers were able to recover their lost pay. They may not be so lucky this time. Congress would have to decide whether an estimated 800,000 government employees could recoup back wages if they are forced to stay out of work. When workers were sidelined during the most recent partial shutdowns of 1995 and 1996, Congress quickly voted to make them whole.
CQ | Shutdowns of the Past
On 17 occasions since September 1976, Congress has allowed appropriations to lapse, requiring the govenrment to begin shutting down non-essential operations.
RollCall | Senate Democrats Likely to Offer Short-Term CR
Senate Democrats are likely to try to pass a short-term spending bill of their own if Majority Leader Harry Reid, Speaker John Boehner and President Barack Obama fail to reach a breakthrough at a White House meeting Thursday night.
Politico | White House hopes last minute heroics keep government running
Republicans have hit President Barack Obama for being out of touch, disengaged and unwilling to lead on the budget negotiations and Democrats aren't wild about his taste for last minute heroics either.

Econ Comments                                                                                                             
CNN: Money | The economic bullishness behind the Ryan budget
Paul Ryan's budget dramatically reduces the size of the federal government over the long run, which could be incredibly bullish for economic growth in the United States.
Fox Business | Three Cheers for Budget Cuts
I got excited this week when I hear about Congressman Ryan's "Roadmap to Prosperity." $6 Trillion in cuts! Finally, Congress might address entitlement spending, and eventually get the budget balanced. His plan even got the liberal journalists at the NY Times to acknowledge that the current system is unsustainable.
WSJ | The Republican Entitlement Gamble
Paul Ryan presented a plan for reform. The party's job now is to back him up.
Politico | Keep cutting, but fund defense now
Congress can either pass another short term funding measure sustaining government for a week at a cost savings of $12 billion, or shutdown the federal government in the hope that one side evenutally gives in. The choice could not be more distinct.
WSJ | Who Really Wants a Shutdown?
President Obama does, but the GOP's strategy is a lot less clear.
NRO | Ryan’s Leap
The budget chairman is right, bold, and vulnerable to demagoguery.
NRO | How to Avoid Blame for a Shutdown
A guide for Republicans.
NRO | Got a Better Plan?
If Democrats think the Ryan budget is too radical, let them offer a credible alternative.
NRO | A True Path to Prosperity
Rep. Paul Ryan's plan offers sobriety and hope.
RCM | Define Radical: Pros and Cons of Ryan Plan
You might call it a "put-up-or-shut-up" plan, forcing opponents to show how they would deal with the nation's fiscal problems. Opponents instead have called the plan "radical," "irresponsible," and "extreme." Is it, really?

Cato@Liberty | Negotiating a Budget Compromise
House Democratic Whip Steny Hoyer says “you can’t negotiate on the basis that one side gives 100 percent and the other side gives zero.” Good point. So let’s see: The budget is $836 billion higher than it was in President Bush’s last full fiscal year.
Heritage Foundation | RSC Budget Balances the Budget through Spending Restraint
The Republican Study Committee (RSC) has released a 10-year budget blueprint that reins in federal spending, balances the budget, and modernizes the federal budget process. While President Obama’s budget would bury the nation in $9.5 trillion of additional debt over the next decade, the RSC would accumulate just $1.8 trillion of debt over the next eight years before balancing the budget in 2020. And they accomplish this without raising taxes.
Cato@Liberty | The Budget Impasse: Who’s to Blame?
Will there be a budget agreement? Who knows. Has Obama shown himself to be a capable leader in this budget battle? Please. One thing is clear, though: It’s beyond rich for Democrats to blame Republicans for this budget impasse.


WSJ | Claims for Benefits Fall Amid Job Gains
The number of idled U.S. workers filing new claims for unemployment compensation fell last week more than expected, providing another sign of improvement in the jobs market.

Econ Comments                                                                                                             
WSJ | Jobs, Regulations and Broken Windows
The White House thinks that more regulations will create more jobs.
Minyanville | Why Jobless Claims "Improvement" Is Totally Irrelevant
For a self-sustaining recovery, the more important and mostly overlooked part of the weekly jobless claims data is the number of individuals continuing to receive unemployment benefits.