Monday, October 31, 2011

General Economics

WSJ | Companies in Europe Are Pulling Back
The financial turmoil rattling governments and banks in Europe is further weighing on the already-sluggish outlook for business in the region.
Washington Times | Obama: U.S. growth key to global recovery
Setting the tone for his trip to the G-20 summit in France next week, President Obama said Friday the most important thing world leaders can do to boost the global economy is “to get the U.S. economy growing faster.”
CNN: Money | Bank of America may soften $5 debit card fee
Bank of America is considering softening its controversial policy of charging some customers for making purchases with their debit cards, according to a person familiar with the bank's plans.
WSJ | OECD Forecasts Weak Growth Until 2013
Advanced economies are looking at two years of weak growth and high unemployment and the outlook is likely to worsen unless Europe fails to rein in its sovereign-debt crisis, the Organization for Economic Development and Cooperation said Monday, as it slashed next year's growth prediction for the U.S. and the euro zone.
CNN: Money | Home prices heading for triple-dip
The besieged housing market has even further to fall before home prices really hit rock bottom.
WSJ | Slow Recovery Feels Like Recession
Americans are two years into a recovery that doesn't feel much different to many of them from life during the most bruising recession in seven decades.

Econ Comments                                                                                                             
Politico | Wall Street reform law bogged down
President Barack Obama signed the Dodd-Frank financial reform bill into law 15 months ago, saying he was anxious to put new rules of the road in place for Wall Street.
Washington Times | GHEI: Europe accepts the inevitable
Bailout of big spenders in Greece ignores deeper continental crisis.
WSJ | What Business Wants From Washington
America works best when government creates a stable environment for competition.
Washington Times | EDITORIAL: Obama’s spooky economy
Consumer uncertainty casts a shadow over news of temporary growth.

Daily Capitalist | Q3 GDP Is A Head Fake
There are several things to understand about gross domestic product before analyzing the numbers:
Calculated Risk | Unofficial Problem Bank list increases to 985 Institutions
The OCC finally released some information on its actions since September 23rd. This week, also, the FDIC released its actions through September. These releases contributed to many changes to the Unofficial Problem Bank List.
Cato@Institute | Congress Just Can’t Stop Trying to Micromanage the Housing Market, Part 5,672
It seems like death and taxes are not the only constants in life, you can add the seemingly endless attempts of Congress to micromanage the housing market.
Independent Institution | The Inversion of America’s Dominant Ideology
Obama is not the brightest light, yet he understands how to get elected, and in that quest he is pandering to the same personal irresponsibility and desire to prey on one’s fellows that have been the hallmarks American politics from the Progressive Era to the present.
Café Hayek | Drunk With Keynesian Prejudices
The central irony of financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending it is only resolved by increases in confidence, borrowing and lending, and spending.
Econlog | Russ Roberts on Aggregate Demand
When an economy is not healthy, there is less exchange. There is less buying and selling of goods and services and labor. To describe that unhealthiness as less aggregate demand is just to put the problem into different words.
Café Hayek | Aggregate Demand–II
First, like ordinary demand, Aggregate Demand is not a quantity but a relation.
Calculated Risk | Recovery Measures
By request, here is an update to four key indicators used by the NBER for business cycle dating: GDP, Employment, Industrial production and real personal income less transfer payments.

CRS | Economic Growth and the Unemployment Rate
A persistently high unemployment rate is of concern to Congress for a variety of reasons, including its negative consequences for the economic well-being of individuals and its impact on the federal budget.

Health Care

National Journal | Obama Orders FDA to Address Drug Shortages
The order will be Obama's latest move to bypass Congress. Proposals like those included in Monday's executive order have been pending in Congress for over eight months.
Politico | Time to end Obama's CLASS struggle
U.S. taxpayers received some good news recently. Secretary of Health and Human Services Kathleen Sebelius announced that she was dumping Obamacare’s Community Living Assistance Services and Supports program, which was intended to provide government-run, long-term care insurance.


WSJ | Japan Intervenes on Yen to Cap Sharp Rise
Currency Strength Seen to Be Dragging Down Economy; Move Designed to Help Export Sector.
Market Watch | Meet China’s new financial regulators
A major phase of China’s long-anticipated leadership turnover kicked off Saturday, with the appointment of three new chairmen at China’s financial regulatory agencies.
Market Watch | Dollar jumps after Japan intervenes to sell yen
U.S. rises across the board in wake of intervention; euro up on yen.
Fox Business | MF Global Suspended From Doing Business With NY Fed
The New York Fed suspended MF Global from conducting new business with the central bank on Monday and its shares were suspended, as the troubled brokerage nears a deal on its future.

Econ Comments                                                                                                             
Market Watch | Fed may hibernate until spring
Despite recent talk about another round of quantitative easing, the Federal Reserve is expected this week to remain on the sidelines, a stance that may last into next spring, economists said.
Washington Times | SANDERS: The euro is dead! Long live the euro!
As “Europe” falls apart, it’s natural that each of its 27 members would be doing their own thing. For the moment - while a search goes on for a missing $1.4 trillion in euros - the euro has been rescued as a common currency for 17 European Union members and, hopefully, the whole Europe Project to unite a continent for peace and progress survives.

Greg Mankiw's Blog | More on a Nominal GDP Target
Christy Romer makes the case for a new framework for monetary policy. She is kind enough to remind us of this old paper that Bob Hall and I wrote on the topic.
Reason Foundation | Banks Win, You Lose on Federal Reserve Policy
Operation Twist will officially be one-month-old next week and the results could not be further from Fed projections.


Econ Comments                                                                                                             
WSJ | California's New Green Tax
As the world retreats from cap and trade, Sacramento signs on.
Bloomberg | How Higher Taxes for a Few Lightens Load for All: Phil Keisling
On Jan. 1, 2012, almost every working American will be hit with the biggest tax increase of his or her lifetime. That’s when the Social Security payroll tax will revert to its pre-2009 rate of 6.2 percent, from 4.2 percent now.
Forbes | A Flat Tax Would Be Fine, A Consumption Tax True Perfection
For one, much as a flat tax would inspire lobbyists looking for deductions on what would be a simplified tax, so would the same occur with a consumption levy.

Heritage Foundation | Chart of the Week: Taxing the Wealthy to Cover Future Deficits Won’t Work
Democrats on the Joint Select Committee on Deficit Reduction last week floated a proposal that includes massive tax increases on wealthy Americans. While their plan would also include some cuts to entitlement programs, the tax-code changes make up a significant portion, according to press reports.
EconLog | The Missed Opportunity of the Payroll Tax Cut
I admit that I may be unusually clueless about my income.  I further admit that workers don't have to notice a tax cut to respond to the higher income it generates.  But I still have to insist that tax cuts are more likely to change behavior if they're widely noticed - and Obama's payroll tax cut doesn't qualify.


WSJ | Benefits Run Out for Spain's Jobless
As Unemployment Hits 15-Year High, More Spaniards Struggle to Make Ends Meet, Adding to Pressure on Social Services

Econ Comments                                                                                                             
RCM | Yes, Regulation Does Keep Unemployment High
When regulations make hiring employees more expensive, companies won't hire as many of them. It's a simple truth. But it is an inconvenient one for many who work in politics.


WSJ | Census Confronts Budget Ax
Washington politicians often battle over what economic statistics mean and what to do about them. Now, they are fighting about the statistics themselves.
Daily Finance | Banks Back Away from New Fees, Focus on Cost Cutting Instead
Still, the banks are looking for ways to make up for the revenue lost under new federal regulations enacted earlier this month, and to compensate for low interest rates.
WSJ | For Europe Bailout Fund, Next Stop Is Japan
The head of Europe's bailout fund, Klaus Regling, takes his tour of potential Asian investors to Japan next, after Beijing proved unwilling to open its checkbook until European leaders could offer more details about their plan to save the euro zone.

Econ Comments                                                                                                             
RCM | The Supercommittee Isn't Making Super Cuts
Budget: Given all the hoopla, you'd think the deficit Supercommittee was hacking away at the size of government without mercy. In fact, even the $1.2 trillion in hoped-for cuts will do nothing to attack our long-term deficits.
National Journal | Gang of Six Members: Super Committee Can Still ‘Go Big’
Sens. Mark Warner, D-Va.  and Saxby Chambliss, R-Ga., leaders of the bipartisan “Gang of Six,” on Monday continued to push a "go big" $4 trillion deficit reduction plan, instead of the $1.2 trillion the super committee has been tasked with cutting.
Telegraph | Why the latest eurozone bail-out is destined to fail within weeks
My sincere hope is that collective and decisive action by the eurozone's large member states will stabilize global markets, at least for a while, so allowing the global economy to catch its breath.

Atlantic: McArdle | The Incredible Shrinking Supercommittee
A couple of weeks ago, I had a conversation with a prominent--and not normally excessively optimistic--budget expert.  This person offered me two reasons to hope that the Supercommittee in charge of finding budget cuts would choose to go big rather than go home.
Heritage Foundation | Myths of Austerity Failures
Small wonder, then, why the economy didn’t quickly recover like it did after the downturn of 1920. Hoover followed the opposite path. Rather than cutting government to let the free market grow, he grew government, which shrank the free market and staved off recovery.

NBER | Fiscal Multipliers in Recession and Expansion
We also consider the responses of other key macroeconomic variables and find that these responses generally vary over the cycle as well, in a pattern consistent with the varying impact on GDP.