Wednesday, November 16, 2011

General Economics

Market Watch | U.S. economy to muddle along, top forecaster says
The euro crisis is exerting a powerful drag on the U.S. economy, sowing fear and uncertainty in an environment that already has plenty of both. Nonetheless, one top forecaster expects the American economy to continue to muddle along.
USA Today | Out-of-state retirement slows down
Aging Baby Boomers who dreamed of retiring in the sun near Florida beaches or Arizona deserts have hit a speed bump: the bad economy.
Politico | Eurozone’s economic woes could topple U.S. recovery
One false move could cause the building blocks of the global economy to tumble down, perhaps knocking out the shaky American recovery in the middle of the 2012 presidential campaign. U.S. officials have few options beyond carefully monitoring bank holdings and applying diplomatic pressure to their European counterparts.
Washington Times | Canadian urges quick decision on new pipeline route
Alberta’s premier said the Obama administration should speed up a decision after the Canadian pipeline developer agreed to shift the route of the massive $7 billion Canada-to-Texas Keystone oil pipeline out of an environmentally sensitive area of Nebraska.
National Journal | Energy Insiders: Keystone XL Pipeline Will Be Built
After the Obama administration pushed back approval of the project last Thursday pending a reroute in Nebraska, it was declared all but dead both by opponents celebrating victory and by many pipeline proponents mourning its purported demise. But when the dust settles, 64 percent of Insiders say, the $7 billion pipeline project will move forward.
CNN Money | Will FHA be the next big government bailout?
Continued trouble in the housing market has further eroded the Federal Housing Administration's reserves, leaving it with a very thin cushion to protect it against future financial losses.
WSJ | Turmoil Spreads in Europe
Bond Market Selloff Hits Nations Seen as Healthy, Raising Specter of Contagion.
Washington Times | Trade pact with U.S. stalls in Seoul
A major free-trade pact with the United States that was supposed to be a slam dunk has run into unexpected trouble here.

Econ Comments                                                                                                             
WSJ | The President's Venture Capitalist
Steven Chu, Solyndra and the political allocation of capital.
Forbes | What's Behind The Obama Administration's Assault On Private Investment?
That blunt question comes to mind after the Obama administration’s decision to block the $13 billion expansion of the Keystone XL oil pipeline. If it were an isolated incident, perhaps it wouldn’t matter all that much. But consider it in the context of the Administration’s recent pattern of hostility to private sector investments.
Washington Post | Will anyone rescue Europe from its economic crisis?
Amid Europe’s economic turmoil, a question nags: Where is the IMF? Created in 1945 — and reflecting the breakdown of global cooperation in the Great Depression — the International Monetary Fund was intended to prevent a few countries’ problems from dragging down the world economy.
Politico | Expressway to economic growth
For decades, all levels of government have neglected our infrastructure. For two years, Congress has failed in one of our fundamental responsibilities — long-term reauthorization of our nation’s highway and transit programs.
Washington Times | BECKNER: Big labor is real enemy of the 99 percent
Since the class-warfare message of the Occupy Wall Street protests started nearly two months ago, the two largest teachers unions, the National Education Association (NEA) and the American Federation of Teachers (AFT), have taken every chance possible to stand in solidarity with the group of mostly underemployed college students and left-leaning activists. | Is U.S. 'Lazy' On Investment?
The Obama administration has a record of making life miserable for foreign investors that put their capital on the line to create jobs in the U.S.
Forbes | Crony Capitalism: The Inevitable Outcome Of Overreaching Government
What leads anyone to believe that unconstrained power can be channeled in ways that don’t favor the politically connected? And why are the politicians who repeatedly put out the slop troughs, then theatrically rail against the pigs, rarely penalized at the polls?
RCM | Transformation Through Trade Agreements
Last week Tokyo was all abuzz about trade. Protesters were demonstrating in front of the Diet, talk show debates raged about the perils and prospects of joining the Trans-Pacific Partnership (TPP), and everyone waited to see what the relatively new Prime Minister, Yoshihiko Noda, would decide to do.

Econlog | How Sticky Are Nominal Wages?
Since the financial crisis, productivity growth has been pretty good, and it has exceeded real wage growth, which has been zero. Of course, you can always rescue the AD story by saying that, well, wage growth should have been even less, because of weak AD.
WSJ: Real Time Economics | Vital Signs: Japan Bounces Back
Japan’s economy has bounced back. The nation’s gross domestic product grew 6% in the third quarter, at an annual rate, from the second; in the three previous quarters it contracted.
The Telegraph | Paul Krugman is rewriting history now that the eurozone, beloved by US liberals, is going down in flames
New York Times columnist Paul Krugman is right about one thing, when he says: “now, with Italy falling off a cliff, it’s hard to see how the euro can survive at all”.
WSJ: Real Time Economics | WSJ: Real Time Economics Keynes vs. Hayek? Bullard Knows Which One Floats His Boat
The economic and financial tumult of recent years, and governments’ reaction to it, have left the economics community to deal with a fundamental question.
NY Times | The Sharp Increase in the Food Stamps Program
The poor economy is not the only reason that safety-net programs are spending more. The food stamp program is another example of a safety-net program that is significantly more costly than it was before the recession began.
WSJ: Real Time Economics | WSJ: Real Time Economics Shoppers May Surprise Cautious Retailers
The shopping-bag brigade was on the march last month. Retail sales increased a better-than-expected 0.5% in October. Early November retail reports are also positive.

CBO | Policies for Increasing Economic Growth and Employment in 2012 and 2013
Reductions in taxes and increases in government spending would produce short-term economic benefits—but without offsetting actions to reverse the accumulation of government debt, future output and future incomes would tend to be lower than they otherwise would have been.

Health Care

National Journal | CLASS Act Repeal Clears Subcommittee
The CLASS Act was meant to provide long-term care insurance as part of last year’s health care law. The Congressional Budget Office said it would save $84 billion over 10 years, to 2020, because it was expected to bring in premiums for many years before beneficiaries could collect payouts.
NY Times | Insurance Mandate May Be Health Bill’s Undoing
The theory behind the mandate, according to its proponents, is this: Requiring coverage brings both sick and healthy people into the pool of those insured, which is essential because premiums paid by the healthy offset the cost of covering the sick.

Econ Comments                                                                                                             
WSJ | Another ObamaCare Glitch
Congress made a legal mistake while rushing through the health law. Now it's come back to haunt the administration.

Heritage Foundation | The Individual Mandate: A Step Closer, but the Fight Against Obamacare Must Continue
The individual mandate is the poster child of this Administration and the liberals in Congress overstepping their authority to inject the government into the lives of its citizens.
AEI: American | Game theory, the Supreme Court, and ObamaCare
In the ObamaCare case, the Court’s four liberal justices enjoy a far more straightforward calculus than the conservatives.
Cato @ Liberty | A Potentially Fatal ObamaCare Glitch
ObamaCare authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321). In other words, states that refuse to create an exchange can block much of ObamaCare’s spending and practically force Congress to reopen the law for revisions.


WSJ | IMF Calls for China Banking Revamp
China needs to revamp its banking system so that it relies more on market mechanisms, such as interest rates, to head off a "steady build-up of financial sector vulnerabilities," the International Monetary Fund said, in its first broad review of China's financial system.
WSJ | Data Bolster China's Currency Case
Drop in Current-Account Surplus Further Evidence Beijing Is Shifting Economy Away From Export Dependence.
Market Watch | Prices for U.S. consumers drop in October
Americans got some relief in October as the cost of living fell, mainly because of lower prices for gasoline, fruits and vegetables, the government reported.

Econ Comments                                                                                                             
Bloomberg | Fed Presidents Differ on More Monetary Easing in Quest to Boost Employment
Federal Reserve officials aired divisions over whether the central bank should wait to see if the economy deteriorates before taking further steps to reduce borrowing costs and lower unemployment.

Econlog | Measurement Problems: House Price Inflation
If you are a consumer, you can say that the housing component of your cost of living went up. If you are a renter, rents have gone up. If you are an owner, the decline in the value of your home can be imputed as a "rent" that you paid to live in your house.
Atlantic: Megan McArdle | Save the Euro! (If You Can)
We got a little breathing room after the Greek and Italian prime ministers resigned, and now once again, Italy is flirting with disastrous rates on its bonds, the kind that trigger full-on credit crisis. And now French and Belgian bonds--and even those of the Netherlands--are under pressure.
WSJ: Real Time Economics | Fed’s Evans Seeks To ‘Take New Chances’ on Monetary Policy
The slow-to-recover U.S. economy requires the Federal Reserve to “stretch the boundaries and take new chances” on monetary policy, a key Fed official said Tuesday.


Mercatus Center | When are Tax Expenditures Really Spending
However, TRA86 eliminated only the most politically vulnerable tax expenditures while retaining the tax expenditures with the most vehement political support and greatest economic cost: exclusion of employer-provided health insurance and pension benefits and the home mortgage-interest deduction.


WSJ | Citi Poised to Slash More Jobs
Citigroup Inc. is preparing to eliminate 900 jobs in its securities and banking division, or about 5% of the unit's world-wide staff, as turmoil in the equity and debt markets erodes revenue, people familiar with the situation said.
Politico | Startups creating fewer jobs
The trend predates the 2008 financial meltdown, suggesting the economy might not be able to rely on new firms to churn out jobs as they have in the past.

Econ Comments                                                                                                             
WSJ | To Increase Jobs, Increase Economic Freedom
Business is not a zero-sum game struggling over a fixed pie. Instead it grows and makes the total pie larger, creating value for all of its major stakeholders, including employees and communities.
WSJ | The Keystone Debacle
The pipeline would mean at least 20,000 new construction jobs. It would provide lower cost and reliable shipping opportunities for surging North Dakota oil production.

EconLog | Youth Unemployment: A Puzzle for Any Story
By the same token, it is hard to tell a story in which these young people started out in one industry and then lost their jobs to a shift in demand or technology.
Daily Capitalist | OECD Unemployment Rate Stays High
"The OECD area unemployment rate, at 8.2% in September 2011, was unchanged from August. The rate has remained at around 8.2% since January 2011."


WSJ | Gimmicks Could Help Rescue Deficit Talks
Experts Say Accounting Tricks Are Being Used Instead of Fundamental Policy Changes Needed for Long-Term Budget Fix.
CNN Money | Americans doubt super committee will succeed
Seventy-eight percent of people questioned in the survey say they think it is somewhat or very unlikely the committee will develop a plan to significantly reduce the federal budget deficit by Nov. 23, with just over one in five saying it is likely a majority of the panel's six Democrats and six Republicans will reach an agreement.
WSJ | Postal Service Logs Loss in Billions
The Postal Service said it lost $5.1 billion through Sept. 30 and that the loss would have hit $10.6 billion without recent legislation allowing it to delay a required annual $5.5 billion payment into a fund for future retiree health benefits.

Econ Comments                                                                                                             
National Journal | QUICK TAKE: White House Announces $18 Billion Savings From Improper Payments
Executive efforts have saved $18 billion this year in wasteful spending by social programs. Federal agencies tracked down and brought back payments to wrongful beneficiaries of Medicaid, Medicare, Pell Grant and SNAP (formerly food stamps) programs—prying them, at times, from their cold dead fingers.
Washington Times | MILLER: Democrats split over balanced budget
Fiscal restraint amendment is a wedge issue in the House.

NRO: The Corner | Final Thoughts on the Supercommittee
According to these stories, lawmakers have concerns about what the supercommittee will come up with if an agreement is reached, and fears about the spending cuts that may take place if the supercommittee fails. But these fears are misplaced.