Friday, May 13, 2011

General Economics

News                                                                                                                             
Bloomberg | Portugal Re-Enters Recession After Government Cuts Spending, Raises Taxes
Portugal’s economy shrank for a second quarter in the three months through March, putting the country back into recession as the government tries to cut spending and raises taxes to narrow its budget deficit.
Market Watch | U.S. consumer sentiment improves in May
A gauge of U.S. consumer confidence rose in May to a three-month high, according to a survey released Friday, as confidence about the future improved.
CNN Money | Congress' gas price impotence
Despite all the noise coming from Congress over high gas prices, oil company profits or more drilling, in reality there's very little lawmakers can do to bring down the price of fuel.

Econ Comments                                                                                                             
Source | The True Story of the Financial Crisis
As many readers of The American Spectator will know, I was a member of the Financial Crisis Inquiry Commission, a 10-member body appointed by Congress to investigate the causes of the financial crisis of 2008. The Commission issued its report in late January 2011, with a majority concluding that the crisis could have been avoided if the private sector had not taken so many risks and government regulators had not been asleep at the switch.
National Journal | Hatch: Dems Need to Lay Off Big Oil
'Selective' attack for political reasons is 'wrong,' Utah senator says.
MSN | What if you had to buy American?
It might be supremely patriotic to stop purchasing imports, but the consequences for US consumers and the economy would be devastating.
Fiscal Times | Overseas Bank Law Could Drive Away Investment in U.S.
It's hard to argue with a law intended to eliminate rampant offshore tax cheating, especially in light of estimates that the U.S. loses as much as $100 billion in tax revenue a year because of offshore schemes.
RCM | Stalling the Engine of Economic Recovery
As America struggles to get people back to work after the deep recession, the best strategy is to focus on unleashing those industries most primed to create high-quality jobs, to innovate, and to strengthen our manufacturing sector so we can boost exports.
Bloomberg | Wall Street: Not Guilty
Why have no executives gone to jail for their roles in the financial crisis? Perhaps because risk-taking and stupidity aren't criminal.
New York Post | 'Fair trade' is a crock
You're likeliest to see the "fair trade" label at high end coffee shops and grocery stores especially ones with a progressive clientele. The certification in supposed to let you enjoy your latte without feeling guilty for exploiting the Ethiopian or Ecuadoran who harvested he beans.
Minyanville | Five Things You Need to Know: This Is What the Economy Really Looks Like
A look at Google Finance Indexes paints a grim picture of the economy.

Blogs                                                                                                                             
NRO: The Corner | Redistribution of Income: Not From the Rich to the Poor But From the Young to the Old
There isn't a bank account with people's names written on it, nor is there a lock box that contains extra payroll taxes collected since the 1980's. The money is gone and has beens pent over the years on things like roads, student loans, wars and farms subsidies.
The Economist: Free exchange | Falling slowly
What we see here are successive Bank of England forecasts for British output. From 2005 to 2007, the lines are tightly bunched and follow the longer trend. Beginning in late 2007, this pattern changes and output forecasts fall. And what's interesting is that after the big decline that occurs between August of 2008 and May of 2009, expectations continue to deteriorate.
Heritage Foundation | Obama Oil Policy Threatens Alaska Pipeline’s Existence
The invaluable Alaskan oil pipeline isn’t doing well these days. A remedy to help fix this precious resource is available but overzealous environmentalists and over-regulatory politicians are standing in the way.  The ever-decreasing amount of oil flowing through the pipeline is disrupting its effective operation — and threatening its very existence.

Reports                                                                                                                         
Mercatus Center | The Need for National Mortgage Servicing Standards
The recent crash of the housing market and the rise of unemployment led to a historic surge in serious delinquencies and requests for loan modifications, short sales, and related transactions. As a result, the residential mortgage servicing industry was overwhelmed. Going forward, it is helpful to recommend changes to both servicing and securitization industries so that they can avoid problems going forward as we attempt to revive the securitization market.
Heritage Foundation | What’s an Oil Subsidy?
In his fiscal year (FY) 2012 budget request, President Obama proposed to end subsidies for oil companies by eliminating tax breaks, including accelerated depreciation options. A growing number of policymakers have echoed that call

Health Care

News                                                                                                                             
National Journal | House Panel Targets Medicaid
The House Energy and Commerce Health Subcommittee on Thursday approved legislation loosening federal rules for Medicaid, setting up a bill that could force hundreds of thousands of people out of the federal health program.
Politico | Mitt Romney defends Mass. health law
Mitt Romney used slide after slide in a power point presentation Thursday to make the case that the health care reform law he signed in 2006 isn't much like the one President Barack Obama signed last year.

Econ Comments                                                                                                             
WSJ | Romney's Daredevil Act
On health care, Mitt tries to bridge the unbridgeable.
AEI | Taking the Individual Mandate Off Life Support
The real evidence of the connection between the mandate and the problems it purportedly could solve is shaky at best. Nevertheless, the Obama administration and its congressional allies hoped that an individual mandate could accomplish two political goals: First, it might obscure the full cost of expanded coverage by conscripting private resources to pay for most of it without explicit tax increases; second, it would ensure enough new captive customers for private insurers to provide them with sustainable revenue and keep their risk pools from falling apart, despite expanded regulatory requirements and benefits mandates.  

Reports                                                                                                                         
NBER | Selection on Moral Hazard in Health Insurance
In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on moral hazard" can have important implications for attempts to combat either selection or moral hazard.
CBO | Additional Information About CBO's Baseline Projections of Federal Subsidies for Health Insurance Provided Through Exchanges
This discussion addresses subsidies for insurance premiums only and does not cover subsidies for cost sharing. Under current law, certain individuals with lower income will also be entitled to subsidies to reduce the amount they will be required to pay for cost sharing for medical services. Those subsidies for cost sharing will increase over time roughly in line with the growth of costs for medical care and the growth in the number of people receiving those subsidies. This document does not address that provision because it is not directly related to how federal subsidies for premiums will grow over time.

Taxes

News                                                                                                                             
National Journal | Boehner: Tie Eliminating Tax Breaks to Lower Corporate Rates
House Speaker John Boehner, R-Ohio, said on Thursday that he could support eliminating tax breaks, including those given to oil companies, if the revenue gained was coupled with a lower corporate tax rate.
Fiscal Times | Longtime Tax Breaks May Get Booted by the Budget
It has been 25 years since major tax breaks were seriously scrutinized as part of budget negotiations.
National Journal | Business Chiefs Want Tax Reform, Not Holiday
They urge Ways and Means for a permanent exemption on overseas profits.

Econ Comments                                                                                                             
FT | Big oil protests too much on tax
On both sides of the Atlantic, oil and gas executives are fighting politicians who have targeted them for tax increases.

Blogs                                                                                                                             
Atlantic: McArdle | Roth IRAs: Safety in Numbers?
Getting a tax break now in your 401(k) or traditional IRA is guaranteed; getting a tax break in the future is not.
Forbes: On the Cutting Edge | Reaganomics Vs. Obamanomics: Fallacies Offered By The Left
The tax rate, particularly the marginal tax rate, which is the tax rate that applies to the last dollar earned, determines how much the producer is allowed to keep out of what he or she produces.

Monetary

News                                                                                                                             
Fiscal Times | Rising Food and Gas Costs Push Up Consumer Prices
The Consumer Price Index increased 0.4 percent in April, the Labor Department said. In the past 12 months, prices have risen 3.2 percent. That's the biggest 12-month gain since October 2008.
Market Watch | Treasurys gain after U.S. inflation report
Treasury prices rose on Friday, pushing yields lower, after a U.S. report showed consumer prices rose last month as expected, relieving some worries about the impact of rising energy prices on the broader market.

Econ Comments                                                                                                             
Barron's | Anticipating the Removal of the Punch Bowl
Commodities, stocks slide again ahead of the impending end of QE2.
Bloomberg | Japan’s Most Important Banker Shirakawa Sees Only Bubbles in Extra Easing
With his nation’s economy contracting under disaster damage of as much as 25 trillion yen ($310 billion), Bank of Japan Governor Masaaki Shirakawa is signaling that his biggest worry is inflation.
Minyanville | Large Bank Rules Coming: Bernanke
According to Bernanke's prepared remarks, the Fed will propose a new package of rules addressing liquidity requirements, single-counterparty credit limits, stress test processes, how to formally handle future failures of too-big-too fail institutions, and the adoption of bank "living wills".
Minyanville | The Failure of Fed Policy: Why Growth Is Dead
A rising stock market, low inflation expectations, and lots and lots of cheap credit for even the riskiest companies. Too bad it's all an illusion.

Blogs                                                                                                                             
The Economist: Free exchange | Conservatives chasing bad ideas
Views on the efficacy of countercyclical fiscal policy obviously differ, though prior to the election of Barack Obama Republican legislators had no compunction about voting for stimulus packages (though tax cuts were obviously favoured). The turn against monetary policy is a disturbing and potentially quite dangerous development. Once upon a time, Milton Friedman—a man who basically blamed the Depression on tight money—was the leading economic intellectual of the conservative movement. Now top GOP members can't stop talking about the importance of "hard money" for recovery. Everyone from Rand Paul to Tim Pawlenty to Paul Ryan is on the bandwagon.

Budget

News                                                                                                                             
Bloomberg | Debt May Exceed Size of Economies This Year for Greece, Portugal, Ireland
Greece, Ireland and Portugal, the euro region countries that needed 256 billion euros ($366 billion) in emergency aid to avoid default, may all see their debt loads exceed the size of their economies this year.
Fiscal Times | EU Warns Debt in Bailout Countries above Forecasts
The European Union warned Friday that the debt loads of Greece, Ireland and Portugal will be much bigger than previously forecast, adding to fears that international bailouts are failing to solve the region's crisis.
CNN Money | $6.2 trillion: A decade of deficits
In 2001, the nonpartisan Congressional Budget Office projected that the federal government would run a surplus of $5.6 trillion over the ensuing decade.
WSJ | Stakes Rise on Debt Vote
House Republicans Increasingly Question Urgency of August Deadline.
CNN Money | Bernanke: Debt ceiling fight poses Lehman-like risk
During a Senate Banking Committeee hearing, Bernanke reiterated catastrophic consequences should Congress either fail to raise the limit on borrowing or edge too close to that limit.

Econ Comments                                                                                                             
Washington Post | The deficit spending storm we cannot avoid
...America cannot continue on its debt and deficit track (currently more than $14 trillion of debt, $62 trillion-plus in unfunded liabilities and over $1 trillion in annual deficits projected for years to come).

Blogs                                                                                                                             
NRO: The Corner | Some Thoughts on Threats Of Imminent Default Coming from Treasury
...the date of our “imminent default if the debt ceiling wasn’t raised” has been moved back over time from March 31 to August 2. Does it mean that when Secretary Geithner says he can’t, he really means that he won’t, or that he would rather not?
Heritage Foundation | USPS Loses Another $2.2 Billion: What Congress Can Do
That follows a loss in fiscal year 2010 of some $8.5 billion.

Reports                                                                                                                         
Mercatus Center | Should the Constitution be Amended to Address the Federal Deficit?
Testimony before the House Committee on the Judiciary, Subcommittee on the Constitution.

Employment

News                                                                                                                             
Fox News | How states fared on unemployment applications
The number of people seeking unemployment benefits plummeted 44,000 to 434,000, the Labor Department said Thursday. That was the biggest weekly drop since February 2010.

Econ Comments                                                                                                             
WSJ | Boeing and the Union Berlin Wall
Between 2000 and 2008, 4.8 million Americans moved from forced union states to right-to-work states—that's one person every minute of every day.

Blogs                                                                                                                             
EconLog | Specialized Labor
For over two centuries, economists have spoken of "labor" as if it were homogeneous. Back in the real world, people were learning trades, becoming trained as professionals, starting businesses, and otherwise undertaking to differentiate themselves.