Friday, October 28, 2011

General Economics

Bloomberg | Economy in U.S. Surpasses Pre-Recession Level
The value of goods and services produced in the U.S. surpassed its pre-recession level after 15 quarters, taking three times longer than the average for 10 previous recoveries since World War II.
Source | Consumers spend more, save less in September
Consumers increased their spending in September much faster than their wages rose, dipping into their savings to pay for their purchases.
CNN: Money | Washington spars over government regulations
If new regulations were a significant drag, the consequences would show up in data that measure business profits, workforce trends and investment levels, the government contends.
WSJ | Consumer Spending Gains Outpace Income
Americans dug deeper into their savings last month to propel consumer spending amid weak wage gains.
Washington Times | Obama seeks authority to make Pacific trading pacts
Buoyed by success of recent free-trade deals.
WSJ | Recession Fears Recede as Economy Grows 2.5%
The economy grew 2.5% in the third quarter, a quick-enough pace to blunt fears that the U.S. is about to plunge into recession again but not fast enough to signal that the halting recovery is about to get on a roll.

Econ Comments                                                                                                             
AEI | The Four Players Driving Innovation
Policymakers at both ends of Pennsylvania Avenue want to get the American economy growing again. Growth can lower unemployment, and it can yield the revenues needed to fill federal coffers. The key to robust economic growth is innovation. So how do we get it?
Washington Post | MILLER: Unraveling red tape
Regulatory reform is key to unleashing economic growth.
Market Watch | TARP housing programs still need fix: watchdog
The housing support programs funded by the Troubled Asset Relief Program still are in need of improvements with just a year left for new mortgage modifications.
WSJ | The Resilient Economy
Left on its own to grow and innovate, the U.S. private economy is a remarkable engine of prosperity.
National Journal | Obama Calls for Global Cooperation to Fix Economy in Op-Ed
Obama touted the G20’s efforts two years ago to rescue the world economy but said progress hadn’t come fast enough. He called for action in three areas to spur economic growth: accelerating the U.S. economy's growth to lead the global recovery, resolving the crisis in Europe, and encouraging individual countries to confront their fiscal challenges to help keep global growth balanced.
AEI | Three Narratives About the Financial Crisis
The most important lesson we can learn from the financial crisis is what caused it.
WSJ | Everyone Bails Out Everyone
European deal has something for everyone, except the real problem.
RCM | Marx, Keynes and the Last Economic Mile
There is a mathematical problem running through the mainstream of economic thought, one that has been expressed in various forms since the time of Adam Smith. There is apparently a shortcoming to capitalism that springs forth from the very basic, elemental idea of profits.

Café Hayek | My challenge to Paul Krugman
The evidence for the Keynesian worldview is very mixed. Most economists come down in favor or against it because of their prior ideological beliefs. Krugman is a Keynesian because he wants bigger government.
WSJ: Real Time Economcis | The Red Flag in Today’s GDP Report
Economists are already wondering whether a plunge in consumer confidence will eventually translate into lower consumer spending.
Mercatus Center: Neighborhood Effects | Trapped by Government Privilege
The right to operate two New York City taxi cabs has just been sold for $1 million apiece.
WSJ: Real Time Economcis | Vital Signs: Capital Spending Hits Record
Companies’ capital-spending orders hit a record last month. Nondefense capital-goods orders excluding aircraft, which is a proxy for business spending on equipment and software, rose to $68.9 billion from $67.2 billion in August.
AEI: American | Tracking the same households over time shows significant income mobility
In the discussions on income inequality and wage stagnation, we frequently hear about the “top 1%” or the “top 10%” or the “bottom 99%” and the public has started to believe that those groups operate like closed private clubs that contain the exact same people or households every year.

Heritage Foundation | Heritage Foundation How Should Americans Think About International Organizations?
The Founders believed that nations should seek to work amicably toward common goals and in defense of mutual interests.

Health Care

National Journal | With Stimulus Funds Gone, States Brace for Increased Medicaid Spending
Stimulus spending cushioned states from Medicaid expenditures in 2009 and 2010 -- making those two years the only period in the program’s history when state Medicaid spending did not rise. With stimulus funds gone, state spending on Medicaid is expected to increase by an average of 28.7 percent in the next fiscal year.
CNN: Money | For most seniors, a small Medicare rate hike
Premiums for office visits and outpatient hospital services will go up by $3.50 a month, the Obama administration announced Thursday.
National Journal | Seniors Get a Break On Medicare Part B Premiums
For most beneficiaries, premiums will be $99.90 a month in 2012, a $3.50 increase over the $96.40 paid this year by a majority of elderly and disabled beneficiaries.
Politico | Kaiser poll finds drop in support for health care reform law
Just 34 percent of those surveyed said they have a favorable view of the Affordable Care Act, the lowest ranking in Kaiser Family Foundation’s monthly Health Tracking Poll since the law passed in March 2010. By contrast, 51 percent said they have an unfavorable view.

Econ Comments                                                                                                             
WSJ | Repeal Health Law? It Won't Be Easy
Every Republican presidential candidate has promised to repeal the Obama administration's health-care overhaul. But despite full-throated criticism, it's going to be hard for any of them to fulfill that pledge if elected.


Minyanville | Inflation, Jobs, and the Artificial Flow of Monetary Policy
The Federal Reserve's policy to devalue the dollar in order to stimulate employment was backed by solid economic theory, and in theory it worked -- except for the part that didn't work.


WSJ | Taxes Remain Stumbling Block For Deficit Panel
The rejection by Democratic and Republican members of the deficit-reduction supercommittee of each others' opening offers may mark the beginning, not the end, of an intensifying effort to determine whether taxes will be raised as part of a compromise, officials following the work of the panel said Thursday.

Econ Comments                                                                                                             
Washington Times | LAMBRO: Republicans tout tax reform
Lower, simpler levies are only way out of Obama recession.
Bloomberg | Want to Create Jobs? First Cut Capital-Gains Taxes: Amity Shlaes
Along with jobs, raising taxes on the rich is one of things the Wall Street protesters feel strongly about, as Andrew Cuomo, the Democratic governor of New York, is learning all too well.

Heritage Foundation | Super Committee Proposal: Tax Hikes Should Be a Nonstarter
Few, if any, details had leaked—until today, when we learned that the Democrats are trying to break the logjam and “go large” by offering up a deficit reduction package approaching $3 trillion.
American: Enterprise Blog | The chained CPI is a stealth tax increase
Various news sources are reporting that Congressional Democrats on the deficit supercommittee have floated the idea of changing the measure of inflation used for most federal policies.


WSJ | Whirlpool Plans Job Cuts, Lowers Forecast
Whirlpool said it plans to eliminate more than 5,000 positions, primarily in North America and Europe, representing a 10% work-force reduction in those regions.

Econ Comments                                                                                                             
Politico | Repatriation boosts job creation
It’s no secret that the U.S. economy is short on cash and shorter on consumer confidence. Sadly, in Washington’s constant search for answers, it has become its own worst enemy.


WSJ | Fannie, Freddie Bailout Costs Revised Lower
A federal regulator on Thursday revised down the U.S. government's likely tab for bailing out Fannie Mae and Freddie Mac as the mortgage-finance giants begin to repay more money to taxpayers.
National Journal | Boehner Team Rips Senate Dems’ Deficit Plan
House Speaker John Boehner’s economic staff on Thursday branded the Senate Democratic bid to reduce the national deficit by $3 trillion over 10 years “not a serious proposal.” The Ohio Republican's staff also said the Democrats' plan is marred by unrealistic defense cuts and politically and economically toxic tax increases.
WSJ | Next Act—The Plan Is Put to Test
The deal euro-zone leaders hammered out in the early hours of Thursday sparked a world-wide stock rally. But the market moves belied widespread caution about the accord among economists and analysts—and even some of the decision-makers in the debt crisis.

Econ Comments                                                                                                             
Washington Post | A Greek default in all but name
There’s an Orwellian quality to Europe’s latest financial rescue. Words lose their ordinary meaning. Greece, for example, has clearly defaulted, but no one says so.
WSJ | Four Reasons Keynesians Keep Getting It Wrong
Except for a few diehards who want still more government spending, and those who make the unverifiable claim that the economy would have collapsed without it, most now recognize that more than a trillion dollars of spending by the Bush and Obama administrations has left the economy in a slump and unemployment hovering above 9%.

Heritage Foundation | Does ‘Austerity’ Work?
Remember the Great Depression of the 1920s? If not, that’s because it didn’t happen. The recession of the early ‘20s quickly ended after spending and taxes were cut dramatically. It provides a clear lesson in “austerity” that President Obama should heed.
Mercatus Center: Neighborhood Effects | House Promises not to Bailout State Pension Funds
Yesterday, the House took up a bill aimed at preventing union leaders from collecting pensions based on salaries that they earned working for a public sector union rather than the state. While the issue of pension fund abuse has provoked media outrage, this reform would do little to help the funds’ overall solvency.
American: Enterprise Blog | US-EU debt crises: The parallels are striking—and disheartening
The deal to save Greece from default, just brokered in Europe, requires investors (mostly banks) to write off about 50 percent of their loans to Greece.