Friday, November 18, 2011

General Economics

USA Today | Rate on 30-year mortgages hits 4%, just over record low
The average rate on the 30-year mortgage stayed near 4% for the third straight week, just above the record low. But cheap mortgage rates are doing little to boost home sales or refinancing.
Market Watch | Congress eyes help for big first-time homeowners
Provision in must-pass spending bill could hike taxpayer costs.
MSN: Money | Will DC wreck the economy again?
We've seen politicians in Europe roil the market, and now the congressional supercommittee is running out of time. Will members make the hard decisions we need?

Econ Comments                                                                                                             
Forbes | There Are No Longer Any Excuses For Obamanomics
Before this last recession, since the Great Depression recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months. Yet here we are 47 months after the last recession started, and we still have no real recovery.
Bloomberg | Economy Growing at Fastest Pace
The U.S. economy may end 2011 growing at its fastest clip in 18 months as analysts increase their forecasts for the fourth quarter just a few months after a slowdown raised concern among investors.
Washington Times | MILLER: Trimming the welfare state
Proposals would streamline wasteful, duplicative bureaucracy.
AEI: American | It’s Europe’s Economic Growth, Stupid
European policymakers are clinging to the forlorn hope that the eurozone crisis can readily be defused by putting in place national unity governments in Greece and Italy.

Café Hayek | Sniffing Out Rent-Seekers
This young man apparently believes that government refusing to prevent businesses from competing for consumer dollars is the same as government forcibly transferring money from consumers to businesses. But he’s mistaken.
WSJ: Real Time Economics | Fed’s Pianalto: European Slowdown Could Trim 0.5% From U.S. Growth
A U.S. Federal Reserve official said Thursday that she sees signs of inflationary pressure moderating, and upgraded her growth forecasts for the next two years.
Econlog | Do AS and AD Intersect in a Recession?
There, the only problem in the economy is that the wage rate is too high. Thus, you get an excess supply of labor. Given the too-high wage, there is no excess supply in the goods market (firms are producing where marginal revenue equals marginal cost). But I have two issues with the textbook model.
WSJ: Real Time Economics | Food Stamp Use Rose in 2010
Food stamp use continued to rise in the U.S last year, with almost 12% of all households receiving some form of the assistance, the Census Bureau said Thursday. More recent data show that 15% of the population gets food-stamp assistance.
Reason Foundation | Nominal GDP Targeting: Inflation and Misdirection
In the interview, Romer states that the Fed should encourage inflation and commit to whatever is necessary to achieve rapid growth in the short-term, and then once the economy gets back on trend, “return to normal inflation and get back to the very steady, responsible policy as before.”
WSJ: Real Time Economics | European Children More Likely to Outperform Parents Than Americans
Despite the widespread belief among Americans that they’re destined to do better than their parents, Americans are more likely to live as well as or worse than their parents than their counterparts in many European countries.

NBER | General Education, Vocational Education, and Labor-Market Outcomes over the Life-Cycle
Policy debates about the balance of vocational and general education programs focus on the school-to-work transition. But with rapid technological change, gains in youth employment from vocational education may be offset by less adaptability and thus diminished employment later in life.
Mercatus Center | Regulatory Analysis and Regulatory Reform
Congress and the executive branch have attempted to improve the quality of regulatory decisions by adopting several laws and executive orders.

Health Care

CNN: Money | National electronic health records network gets closer
The ambitious goal of setting up a nationwide, interconnected, private and secure electronic health records system isn't yet a reality -- but we're getting closer.
National Journal | Census Report: '90 Is the New 85'
By 2050, the United States is likely to have 9 million people 90 and older, the report projected. In 1980, only 720,000 Americans were around who had lived past their 90th birthdays. That number grew to 1.9 million last year.
Politico | Romney's real health reform goals differed
Mitt Romney has spent a lot of time defending himself over the Massachusetts health care law. But there's another way to judge his health care record: Look at what he wanted to do.

Volokh Conspiracy | Will the Necessary & Proper clause save Obamacare? Not if the Court follows McCulloch v. Maryland
In short, the Necessary and Proper Clause expressed the well-known agency law doctrine of principals and incidents. That is, the grant of power to an agent (and the federal government was an agent of the people, to exercise certain delegated powers) was considered to include incidental powers.
Heritage Foundation | Obamacare Threatens Life and Liberty
The Supreme Court’s announcement on Monday that it will consider the constitutionality of some of Obamacare’s provisions, including the individual mandate, has reignited discussion of the health care law’s many problematic provisions.
ThinkMarkets | Sliding Toward the Individual Health Insurance Mandate: An Absurdist Analysis
So building upon a very bad decision Wickard v. Filburn, the logic of this constitutional reasoning leads to the Bedlam that it all just a matter of how a law requiring the purchase of health insurance is phrased, and whether you have EVER OR AT ANY TIME engaged in ANY COMMERCE (since everything is interstate!).


Minyanville | US Inflation: Further Significant Declines Expected
The FOMC will not likely be concerned about slowing inflation as real disposable income will benefit substantially.
WSJ: Real Time Economics | Fed Hawks, Doves Want Policy Restrictions
There has been an outpouring of commentary from regional Federal Reserve bank presidents that questions some of the fundamentals of U.S. central banking.
Minyanville | Banks Bracing for 2012 Euro Financial Apocalypse
As the European debt crisis threatens to spiral out of control, banks are scrambling behind the scenes to protect their balance sheets and hedge their exposure to ride-out an increasingly scary 2012.
WSJ: Real Time Economics | Fed’s Dudley: We Aren’t Out of Ammunition for Economy
The Federal Reserve still has the tools to spur better growth, and it may yet again buy bonds to boost its balance sheet in a bid to boost the economy, a top central-bank official said Thursday.

RCM: Wells Fargo | Has the Fed’s Unconventional Approach Been Successful?
With economic growth projected to remain below trend for at least the next two years and the Federal Funds Target Rate at its lower bound, unconventional monetary policy has become commonplace, but is it effective?


Econ Comments                                                                                                             
Politico | Extend biotech tax credit
American families and businesses want Washington to put aside partisanship and help foster an environment in which private-sector job growth can flourish.
National Journal | Tax-Reform Debate Advances With Bids From Camp, New Democrat Coalition
As the high-stakes fight over tax revenue raged behind the super committee’s closed doors, lawmakers outside the special panel began to lay the framework of a more complicated and potentially more significant debate just around the corner – comprehensive reform of the U.S. tax code.
CNN: Money | Tax millionaires like me more - Dow Chemical CEO
Dow Chemical Chief Executive Officer Andrew N. Liveris is calling on Congress to raise taxes on millionaires -- including himself. Liveris said that balancing revenue collection and distribution of wealth is "what made this country great."


CNN: Money | Unemployment claims fall to another 7-month low
Amid the Great Recession, weekly initial claims had risen as high as 659,000 in March 2009. As the job market started to improve, they eventually retreated to as low as 375,000 in February this year.

Econlog | Dan Hamermesh: Let's Regulate Labor Markets Even More
Daniel Hamermesh has presented data showing that, all else equal, ugly people do worse economically and are less happy than the non-ugly.


Washington Times | Supercommittee deadlocked with deadline approaching
Failure by panel would trigger cuts in spending.
National Journal | Congress Passes Appropriations, CR Bill
Covering science agencies and five cabinet departments, it's a step forward.
CNN: Money | Debt committee: 11th-hour cheat sheet
Democrats and Republicans still can't come to bipartisan agreement on two central issues: the best way to increase tax revenue and reduce social program spending; and by how much.

Econ Comments                                                                                                             
Washington Times | LAMBRO: Taking a stab at deficit reduction standoff
Toomey plan might be supercommittee’s last chance.
WSJ | The Sequester Option
The spending cuts in 2013 would hardly be onerous.
Washington Times | BOEHNER et al.: Balanced Budget Amendment now
Past failures and present debt danger leave us one responsible choice.

Mercatus Center: Neighborhood Effects | What Makes for a Good Balanced Budget Amendment?
There are many different varieties of balanced budget amendments and some of these have much stronger features than others. In my view, the most-effective amendments are those that:
Heritage Foundation | Supercommittee Dithers on Tax Hikes – But Where are the Spending Cuts?
What’s a supercommittee to do? Total national debt just hit a new record at $15 trillion, an increase of approximately $700 billion since the Supercommittee’s August inception.
AEI: American | Paul Ryan’s 17-page response to the CBO’s income inequality study
One underreported conclusion from the CBO study is that shifts in government transfers and federal taxes have contributed to increasing inequality over time. Both taxes and government transfers remain progressive, but the equalizing effect of transfers and taxes on household income was smaller in 2007 than it was in 1979.

Mercatus Center: Neighborhood Effects | Federal Infrastructure Spending: Neither a Good Stimulus Nor a Good Investment
According to economic research, fiscal stimulus can be counterproductive if it is not timely, targeted, and temporary. By nature, infrastructure spending is not timely and very hard to target. Even when money is available, it can be months or even years before it’s spent.