Tuesday, September 27, 2011

General Economics

WSJ | Freddie Faulted on Mortgage Reviews
A federal watchdog said Freddie Mac may have given up opportunities to recover billions of dollars in claims over defaulted mortgages and suggested that a January settlement with Bank of America Corp. to resolve $1.3 billion in bad-loan claims was inadequate.
Washington Times | Fewer banks offering free checking
Charges on accounts rise to recoup revenues lost to lower card-swipe fees.
Market Watch | Sales of new U.S. homes dip in August
The sale of new single-family homes fell in August for the fourth month in a row, indicating that the depressed U.S. housing market shows no signs of recovery.
National Journal | Dems, Too, Have Raided Clean-Energy Programs
In the summer of 2009, Senate Majority Leader Harry Reid, D.-Nev., pushed through the chamber a measure that dipped into the Energy Department program, taking $2 billion to pay for extending the administration’s successful “cash for clunkers” program.

Econ Comments                                                                                                             
WSJ | The Truth About Who Fights for Us
In 2007, only 11% of enlisted military recruits came from the poorest U.S. neighborhoods.
Market Watch | No quick fix seen for long-running debt crisis
Economists said deep divisions and fears of domestic political backlash will continue to complicate efforts to prevent a widely-expected Greek default from turning into a global financial catastrophe.

Heritage Foundation | Tales of the Red Tape #20: The Outer Limits of Regulation
The Obama Administration has issued a record number of costly rules and regulations compared to its predecessors. But one set of new guidelines, in particular, takes government authority to new heights.
Econlog | The Myth of the Macroeconomy
There are multiple escalators in the economy. At any one point in time, some people are on up escalators, and some people are on down escalators.
Daily Capitalist | Chicago and Dallas: More Negative Data
One by one, the Fed districts are reporting declining factory and industrial activity. Today the Chicago Fed reported a decline in activity, but last Friday, the ISM PMI (manufacturing) report came out negative, showing a 2.3 point decline to 56.5. It is still over the 50 level which means positive growth, but the trend looks negative:
ThinkMarkets | Another step down the road to serfdom
As the scope of federal regulation grows, Congress finds itself increasingly embroiled in problems of economic planning.
Heritage Foundation | Restoring Personal Responsibility in Welfare
Fifteen years ago, Congress voted to “end welfare as we know it.” As a result, the Temporary Assistance for Needy Families (TANF) program was created (in place of the old Aid to Families with Dependent Children), which, for the first time, inserted work requirements and a five-year time limit for those receiving federal cash assistance.

Mercatus Center | How Friendly to Entrepreneurs are "Business Friendly" Policies?
Entrepreneurial activity is a fundamental component of economic growth and development in the United States. States that experience increased entrepreneurial activity also see higher levels of overall economic growth.

Health Care

CNN: Money | 5 most expensive states for child care
The rising cost of child care has become a heavy burden for cash-strapped parents, particularly in these states, where it averages at least 15% of a family's annual income.
National Journal | Children's Hospitals a Growth Industry, Kaiser Reports
Children’s hospitals have become a big growth industry in health care, Kaiser Health News reported on Monday. Many of these facilities are not only getting larger and fancier, but they are effectively lobbying Congress for special treatment and negotiating with insurance companies for premium pay rates.

Heritage Foundation | New Study Shows Obamacare’s Impact on Ohio Coverage and Premiums
Americans knew the negative impact Obamacare would have on the nation before the law even passed. Millions of Americans will be added to Medicaid, which already provides low-quality coverage and patchy access to care.


Market Watch | Dollar wavers against the euro
The dollar gave up small gains against the euro Monday, following back-and-forth action in the U.S. stock market as traders worked through reports that European officials are weighing a broad plan to ensure a default by Greece wouldn’t spread contagion to the euro zone’s banking system or to other sovereigns.
CNN: Money | How transparent should the Federal Reserve be?
"Potent" and "appropriate" were the words two Federal Reserve officials separately but simultaneously used to describe the central bank's tools to boost the economy Monday. But they differed on which of those tools are effective and which could be detrimental.

Econ Comments                                                                                                             
Forbes | The Federal Reserve Produces A Black Swan
The Fed has made a horrible mistake. Its new policy has hit the economy with a deflationary shock that puts the U.S. recovery at risk and undermines Europe’s efforts to stem its own debt crisis.
Bloomberg | Fed Officials Express Doubt About Faster Inflation as Tool to Boost Growth
Fed Governor Sarah Bloom Raskin said the central bank’s use of tools has been “completely appropriate” and that she would be “quite leery” of allowing higher inflation or price expectations in an attempt to lower real interest rates. St. Louis Fed President James Bullard said faster inflation won’t reduce the housing glut. He also said “monetary policy is ultra-loose right now, and appropriately so.”


Econ Comments                                                                                                             
Washington Times | CAIN: Economic crisis requires real tax reform
Half-measures and far-off fixes won’t mend our broken jobs engine.
WSJ | A Short History of the Income Tax
One original sin was the separation of the corporate and personal tax, giving lawyers, accountants and the wealthy a chance to game the system.
Washington Times | RAHN: Obama’s tax falsehoods
President must know his quest to raise taxes will kill jobs.
WSJ | Mr. Buffett's Tax Secrets
The least he can do is show Americans why he pays so little.
Bloomberg | Is Warren Buffett the New Andrew Mellon? Not Quite: Amity Shlaes
Mellon ran the Treasury like a railroad: Taxes were tolls, and the government should set tax rates according to "what the traffic will bear."
Politico | A bipartisan step toward tax reform
Right now, there is over $1 trillion in American businesses’ global earnings trapped overseas by punitive tax rates governing the repatriation of those funds.

AEI | The Benefits and Limitations of Income Tax Reform
A number of recent proposals have called for broadening the individual income tax base while lowering statutory income tax rates. Such proposals would eliminate or curtail various preferential income tax provisions and use some or all of the resulting revenue to lower statutory tax rates. In this Outlook, we analyze the economic effects of this approach to tax reform.


NY Times | Deep Recession Sharply Altered U.S. Jobless Map
When the unemployment rate rose in most states last month, it underscored the extent to which the deep recession, the anemic recovery and the lingering crisis of joblessness are beginning to reshape the nation’s economic map.

Econ Comments                                                                                                             
NY Post | ‘Labor’-ing to separate jobs facts, fiction
When the Labor Department checked its employment figures in 2010, it realized that The Truth was that 378,000 jobs it believed existed really didn’t.
Politico | 'Shovel-ready' jobs could take time
President Barack Obama hasn’t yet used the term “shovel ready” in his latest jobs pitch, but he faces a familiar problem: Infrastructure experts doubt that billions in emergency spending will be the quick jobs fix the president is promising.
Fox Business | Long-Term Unemployed Workers Face Even Tougher Battle
...according to The American 99ers Union, the growing number of those who have been out of work for longer than 99 weeks are the ones at most risk. Regardless of how you count them, the problem is very real and growing.

Political Calculations | Dear White House Staffer...
Because that outlook has gotten much worse, and also because of what that means for jobs, the really bad news we have for you is that basically, you're hosed.

RCM: Wells Fargo Economics Group | Employment: Beyond the Sound Bites—Reading the Signals IV
Sex, race and ethnicity are always touchy subjects. However, good policy making demands we look at the reality of the differences in the employment experience if we wish to make progress on jobs.


WSJ | Stopgap Fix Ends Budget Impasse
Senate Approves Short-Term Funding Measure After Sticking Point Is Resolved.
NY Times | More Gloom Lies Ahead for Cities, Report Says
Nearly a third of the nation’s cities are laying off workers this year. More than half have canceled or delayed infrastructure projects. And two out of five have raised their fees.

Econ Comments                                                                                                             
AEI | The Chained CPI: A Path to Bipartisan Deficit Reduction
Because the chained CPI is expected to rise about 0.25 percent per year more slowly than the price indexes that are currently used, that switch would increase revenue and lower government benefit payments, thereby reducing the deficit and alleviating the long-term fiscal imbalance.

Mercatus Center | From Defined Benefit to Defined Contribution
The common rationale for reform is that defined benefit plans are proving costly to taxpayers, and the costs cannot be carried forward during stagnant economic times. In addition to their high total costs—as evidenced by total contribution rates that exceed 20 percent per dollar in most public programs—defined benefit programs are less predictable when it comes to future funding costs and outlays.