News
WSJ | Companies Shun Investment, Hoard Cash
Corporations have a higher share of cash on their balance sheets than at any time in nearly half a century, as businesses build up buffers rather than invest in new plants or hiring.
Market Watch | Household debt declines for 12th straight quarter
Household debt dropped for the 12th consecutive quarter, according to second-quarter data released by the Federal Reserve on Friday that shows the continued drag from the bursting of the housing bubble.
CNN: Money | The newest threat to home prices
Barring last-minute action by Congress, upscale housing is about to take another punch to the solar plexus -- just as it's struggling to stabilize.
Politico | Government handcuffs innovation
Yet while America’s high-tech businesses like IBM, Google, eBay and Amazon have led the world in innovation, the federal government has lagged far behind and shackled the industry with an outdated tax system and policies on trade, patents and Internet regulation that do not suit a fast-changing business environment. Increasingly, it’s become clear that Washington continues to pursue VHS policies in a Blu-ray world.
Econ Comments
AEI | Pipeline a Boon for US Jobs, Security
If America is to have a reliable and affordable supply of oil in the future, we will need Canada's oil sands.
Washington Times | GHEI: Greece’s inevitable fall
Out-of-control spending likely to spark financial chaos in eurozone.
Washington Times | DRIESSEN: Welcome victory in long regulatory war
EPA withdrew its job-killing ozone standards but prepares for the next assault.
Washington Post | Stuck in the Great Recession’s pessimism trap
Even for millions of Americans with jobs, there’s a palpable sense of loss and anxiety. One reason is the devastating housing slump, subtracting huge amounts from people’s wealth.
Washington Times | JAFFE: Counterproductive craziness at federal agency
$3 billion a year is spent making it harder to treat serious mental illness.
Blogs
Calculated Risk | Unofficial Problem Bank list declines to 984 Institutions
re is the unofficial problem bank list for Sept 16, 2011.
WSJ: Real Time Economics | Number of the Week: Big Cuts in Manufacturing Capacity
Manufacturing capacity — how much the nation’s factories can put out at full tilt — is way down since the recession began.
Calculated Risk | Schedule for Week of Sept 18th
Three key housing reports will be released this week: September homebuilder confidence on Monday, August housing starts on Tuesday, and August existing home sales on Wednesday.
Reports
NBER | Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions
This paper presents new empirical evidence on the effects of retirement benefits on labor force participation decisions. We use administrative data on the census of private sector employees in Austria and variation from mandated discontinuous changes in retirement benefits from the Austrian pension system. We present graphical evidence documenting labor supply responses to the policy discontinuities.
Weekly Economic & Financial Commentary | Retail Sales Flat, Manufacturing Back?
Retail sales posted a disappointing flat reading for the month of August, with weaker-than-expected sales figures for several categories, including clothing and autos.
Monday, September 19, 2011
Health Care
News
National Journal | Blue Cross Pushes HHS to Release All Regulations By Early 2012
Health plans don’t have the information they need to carry out some important health-reform changes – and they don’t have enough time to get the work done either, the Blue Cross and Blue Shield Association says.
Econ Comments
Cato Institute | Should Missouri Create a Health Insurance Exchange?
The most important health policy issue facing Missouri is the fate of the health care law that President Barack Obama signed last year, whose official title is the "Patient Protection and Affordable Care Act." That law is already increasing the cost of health insurance by as much as 30 percent in some cases, and will cause even greater premium increases in the years to come.
Blogs
Cato @ Liberty | Let the Market Cut Medicare?
The center-right consensus is that in order to balance the budget and improve health care, Congress needs to overhaul Medicare using some form of voucher or premium support.
AEI: American | How Private Health Insurance Slashed the Uninsured Rate for Americans: Health Fact of the Week
Over 70 years, the uninsured rate has declined by more than 80 percent (figure 6.6). It is noteworthy to see just how much of this decline occurred before the government got heavily involved in providing coverage during the 1960s.
Atlantic: Megan McArdle | Administration Ignored Warnings on Long-Term Care Plan
Speaking of ill-considered financial decisions made by politicians intent on their policy priorities, new emails revealed by the AP show that the administration was warned that parts of ObamaCare were a financial disaster--but plowed ahead anyway.
National Journal | Blue Cross Pushes HHS to Release All Regulations By Early 2012
Health plans don’t have the information they need to carry out some important health-reform changes – and they don’t have enough time to get the work done either, the Blue Cross and Blue Shield Association says.
Econ Comments
Cato Institute | Should Missouri Create a Health Insurance Exchange?
The most important health policy issue facing Missouri is the fate of the health care law that President Barack Obama signed last year, whose official title is the "Patient Protection and Affordable Care Act." That law is already increasing the cost of health insurance by as much as 30 percent in some cases, and will cause even greater premium increases in the years to come.
Blogs
Cato @ Liberty | Let the Market Cut Medicare?
The center-right consensus is that in order to balance the budget and improve health care, Congress needs to overhaul Medicare using some form of voucher or premium support.
AEI: American | How Private Health Insurance Slashed the Uninsured Rate for Americans: Health Fact of the Week
Over 70 years, the uninsured rate has declined by more than 80 percent (figure 6.6). It is noteworthy to see just how much of this decline occurred before the government got heavily involved in providing coverage during the 1960s.
Atlantic: Megan McArdle | Administration Ignored Warnings on Long-Term Care Plan
Speaking of ill-considered financial decisions made by politicians intent on their policy priorities, new emails revealed by the AP show that the administration was warned that parts of ObamaCare were a financial disaster--but plowed ahead anyway.
Monetary
News
WSJ | Fed Ponders Jobs, Inflation Targets
Federal Reserve officials, worried that a wobbly economy and their fractious debates are confusing the public, are examining whether to adopt more explicit economic targets to clarify their strategy for lowering unemployment without fueling inflation.
Bloomberg | Bernanke Tolerating Inflation to Revive Economy
Inflation flashing red may be less of a green light for higher interest rates as global growth falters.
Market Watch | Dollar extends gains to 1% on Greek default fears
The U.S. dollar rose versus most major rivals Monday, with the euro under renewed pressure as fears of a Greek debt default mounted.
CNN: Money | The Fed's unemployment hawks
The Fed's dual mandate to promote both maximum employment and price stability creates a natural conflict as policymakers debate the best action to stabilize the economy. But rarely in the central bank's history has that debate been so pronounced.
Econ Comments
NY Times | A Little Inflation Can Be a Dangerous Thing
My point is not that we are on the edge today of serious inflation, which is unlikely if the Fed remains vigilant.
Bloomberg | End the Fed's Dual Mandate And Focus on Prices: John B. Taylor
The dual mandate language is based on an outmoded concept of a tradeoff between inflation and unemployment. Moreover, too many goals blur responsibility and accountability. The dual goal enables politicians to lean on the Fed, and people often cite it as an excuse for unconventional policies.
WSJ | Fed Ponders Jobs, Inflation Targets
Federal Reserve officials, worried that a wobbly economy and their fractious debates are confusing the public, are examining whether to adopt more explicit economic targets to clarify their strategy for lowering unemployment without fueling inflation.
Bloomberg | Bernanke Tolerating Inflation to Revive Economy
Inflation flashing red may be less of a green light for higher interest rates as global growth falters.
Market Watch | Dollar extends gains to 1% on Greek default fears
The U.S. dollar rose versus most major rivals Monday, with the euro under renewed pressure as fears of a Greek debt default mounted.
CNN: Money | The Fed's unemployment hawks
The Fed's dual mandate to promote both maximum employment and price stability creates a natural conflict as policymakers debate the best action to stabilize the economy. But rarely in the central bank's history has that debate been so pronounced.
Econ Comments
NY Times | A Little Inflation Can Be a Dangerous Thing
My point is not that we are on the edge today of serious inflation, which is unlikely if the Fed remains vigilant.
Bloomberg | End the Fed's Dual Mandate And Focus on Prices: John B. Taylor
The dual mandate language is based on an outmoded concept of a tradeoff between inflation and unemployment. Moreover, too many goals blur responsibility and accountability. The dual goal enables politicians to lean on the Fed, and people often cite it as an excuse for unconventional policies.
Taxes
News
WSJ | Millionaire's Tax To Be Tough Sell
President Barack Obama's proposal to raise taxes on some millionaires will likely please members of his party, but it is unlikely to have much practical impact on federal deficits anytime soon.
Bloomberg | Obama Deficit Plan to Call for $1.5 Trillion in Taxes
In combination with cuts in spending, Obama said, his plan would reduce the long-term deficit by $3 trillion beyond the $1 trillion that was agreed to as part of a deal to raise the U.S. debt ceiling.
WSJ | Obama Seeks New Tax Rate for Wealthy
Mr. McConnell said raising taxes on individuals making $1 million or more would end up hurting small-business owners because more than 700,000 of them file their taxes as individuals, not businesses.
Econ Comments
National Journal | The Small-Bore Solution
Extending the payroll-tax cut beyond 2012 is an anchor of Obama’s jobs plan. Good luck with that.
NY Times | Fair Taxes? Depends What You Mean by ‘Fair’
These claims are enough to get populist juices flowing. The problem with them is that they don’t hold up under close examination.
Blogs
Cato@Liberty | CPAs Celebrate as Obama Proposes to Create a Turbo-Charged Alternative Minimum Tax
The alternative minimum tax (AMT) is one of the most-hated features of the tax code. It is such a nightmare of complexity that even Democrats routinely have supported “patches” and “band-aids” to protect millions of additional households from getting trapped in this surreal parallel tax universe – one that requires taxpayers to calculate their taxes two different ways, with the IRS getting the maximum amount of money from the two returns.
Heritage Foundation | Heritage Responds to Obama’s Debt Reduction and Tax Proposal
Want to Tackle Spending? Obamacare Has Got to Go.
Daily Capitalist | The Warren Buffet Tax
Mr. Buffet favors taking away assets of rich people because they have them. That is, because he feels rich people should pay more, he wishes to force rich people to pay more.
WSJ | Millionaire's Tax To Be Tough Sell
President Barack Obama's proposal to raise taxes on some millionaires will likely please members of his party, but it is unlikely to have much practical impact on federal deficits anytime soon.
Bloomberg | Obama Deficit Plan to Call for $1.5 Trillion in Taxes
In combination with cuts in spending, Obama said, his plan would reduce the long-term deficit by $3 trillion beyond the $1 trillion that was agreed to as part of a deal to raise the U.S. debt ceiling.
WSJ | Obama Seeks New Tax Rate for Wealthy
Mr. McConnell said raising taxes on individuals making $1 million or more would end up hurting small-business owners because more than 700,000 of them file their taxes as individuals, not businesses.
Econ Comments
National Journal | The Small-Bore Solution
Extending the payroll-tax cut beyond 2012 is an anchor of Obama’s jobs plan. Good luck with that.
NY Times | Fair Taxes? Depends What You Mean by ‘Fair’
These claims are enough to get populist juices flowing. The problem with them is that they don’t hold up under close examination.
Blogs
Cato@Liberty | CPAs Celebrate as Obama Proposes to Create a Turbo-Charged Alternative Minimum Tax
The alternative minimum tax (AMT) is one of the most-hated features of the tax code. It is such a nightmare of complexity that even Democrats routinely have supported “patches” and “band-aids” to protect millions of additional households from getting trapped in this surreal parallel tax universe – one that requires taxpayers to calculate their taxes two different ways, with the IRS getting the maximum amount of money from the two returns.
Heritage Foundation | Heritage Responds to Obama’s Debt Reduction and Tax Proposal
Want to Tackle Spending? Obamacare Has Got to Go.
Daily Capitalist | The Warren Buffet Tax
Mr. Buffet favors taking away assets of rich people because they have them. That is, because he feels rich people should pay more, he wishes to force rich people to pay more.
Employment
Econ Comments
Forbes | Immigration: It's Time To Get Serious About Legalizing All Work
Rather than put up roadblocks to human migration as it applies to the United States, it’s time to legalize all work within the U.S.
WSJ | Why the Jobs Plan Falls Short
Instead of temporary tax breaks and more spending, we need permanent tax incentives, development of our energy resources, and entitlement reform.
Daily Caller | The American Jobs Act won’t create jobs, it will destroy them
Those who do not learn from history are doomed to repeat it. President Obama’s American Jobs Act must be considered in that context.
Blogs
NRO: The Corner | You Snooze, You Lose
Basically, the American Jobs Act of 2011 (still the only one so far) proposes to abolish the corporate income tax. I am all in favor of that jobs bill. And it certainly beats stimulus by way of more infrastructure spending.
Calculated Risk | State Unemployment Rates "little changed" in August
The fact that 45 states and the District of Columbia have seen little or no improvement over the last year is a reminder that the unemployment crisis is ongoing.
Daily Capitalist | The Hoax That Is The Infrastructure Bank
Jobs aren’t created by government. That is not to say that government employees or contractors do not work; they do. What it means is that government does not create wealth-creating jobs that are self-sustaining as would a private business.
Forbes | Immigration: It's Time To Get Serious About Legalizing All Work
Rather than put up roadblocks to human migration as it applies to the United States, it’s time to legalize all work within the U.S.
WSJ | Why the Jobs Plan Falls Short
Instead of temporary tax breaks and more spending, we need permanent tax incentives, development of our energy resources, and entitlement reform.
Daily Caller | The American Jobs Act won’t create jobs, it will destroy them
Those who do not learn from history are doomed to repeat it. President Obama’s American Jobs Act must be considered in that context.
Blogs
NRO: The Corner | You Snooze, You Lose
Basically, the American Jobs Act of 2011 (still the only one so far) proposes to abolish the corporate income tax. I am all in favor of that jobs bill. And it certainly beats stimulus by way of more infrastructure spending.
Calculated Risk | State Unemployment Rates "little changed" in August
The fact that 45 states and the District of Columbia have seen little or no improvement over the last year is a reminder that the unemployment crisis is ongoing.
Daily Capitalist | The Hoax That Is The Infrastructure Bank
Jobs aren’t created by government. That is not to say that government employees or contractors do not work; they do. What it means is that government does not create wealth-creating jobs that are self-sustaining as would a private business.
Budget
Econ Comments
CNN Money | Why debt ceiling spending caps won't stick
In other words, lawmakers can just change the law. Or pass a new one. And they probably will.
WSJ | Sovereign Debt Risk Seen More Volatile
The risk premiums attached to the sovereign debt of developed economies will be "persistently higher and more volatile" in the future, the Bank for International Settlements warned in its quarterly report, released Sunday.
CNN Money | Greece: Is this the end game?
The fraught negotiations have revived fears that Greece could default on its debts in a disorganized way, something that investors and economists fear could ripple throughout the global financial system.
Barron's | History Lessons
Europe is testing the thesis of Carmen Reinhart and Kenneth Rogoff's This Time Is Different: Eight Centuries of Financial Folly, in real time.
AEI | Taxes and Debt: Left and Right Dare to Agree
The Congressional Budget Office's most recent long-term projection shows that the primary deficit (excluding interest payments) will shrink until 2018 but then begin to rise. By 2035, it will go to 6.6% of GDP--and then just keep on rising.
Blogs
NRO: The Corner | Abusing Emergency Spending
Supplemental spending, and “emergency” spending in particular, has become Washington’s tool of choice for evading annual budget limits and increasing spending across the board.
Mercatus Center: Neighberhood Effects | When Does Each State’s Debt Reach 90 Percent of GDP?
Absent policy change, debt in every state of the union will be greater than 90 percent by 2070.
Political Calculations | Obama vs America: 2012 Spending Edition
How much can typical Americans actually afford for the U.S. federal government to spend? And how does that compare with the amount of money that President Obama would really like to spend?
CNN Money | Why debt ceiling spending caps won't stick
In other words, lawmakers can just change the law. Or pass a new one. And they probably will.
WSJ | Sovereign Debt Risk Seen More Volatile
The risk premiums attached to the sovereign debt of developed economies will be "persistently higher and more volatile" in the future, the Bank for International Settlements warned in its quarterly report, released Sunday.
CNN Money | Greece: Is this the end game?
The fraught negotiations have revived fears that Greece could default on its debts in a disorganized way, something that investors and economists fear could ripple throughout the global financial system.
Barron's | History Lessons
Europe is testing the thesis of Carmen Reinhart and Kenneth Rogoff's This Time Is Different: Eight Centuries of Financial Folly, in real time.
AEI | Taxes and Debt: Left and Right Dare to Agree
The Congressional Budget Office's most recent long-term projection shows that the primary deficit (excluding interest payments) will shrink until 2018 but then begin to rise. By 2035, it will go to 6.6% of GDP--and then just keep on rising.
Blogs
NRO: The Corner | Abusing Emergency Spending
Supplemental spending, and “emergency” spending in particular, has become Washington’s tool of choice for evading annual budget limits and increasing spending across the board.
Mercatus Center: Neighberhood Effects | When Does Each State’s Debt Reach 90 Percent of GDP?
Absent policy change, debt in every state of the union will be greater than 90 percent by 2070.
Political Calculations | Obama vs America: 2012 Spending Edition
How much can typical Americans actually afford for the U.S. federal government to spend? And how does that compare with the amount of money that President Obama would really like to spend?
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