Thursday, December 1, 2011

General Economics

News                                                                                                                             
CNN: Money | A costly winter ahead for home heating oil users
The price of heating the average home with oil is expected to jump 10% this year to an average of $2,535 over the winter heating season (October 1 through March 31), according to the U.S. Energy Information Administration (EIA). That's 45% higher than just two years ago, when the average bill was just $1,752.
WSJ | Euro-Zone Manufacturing Downturn Deepens
The euro zone's manufacturing sector contracted at a faster rate in November, with production and new orders falling at the strongest rate since the height of the credit crunch in 2009, a monthly survey by Markit showed Thursday.
WSJ | Fed Names a New Chief Regulator
The Federal Reserve said Wednesday that Michael Gibson would take over as director of its regulatory division, a key role as the U.S. central bank implements the Dodd-Frank financial overhaul law.
CNN: Money | Oil's up, gas is down. Why?
Those anxiously watching the rally in U.S. oil prices over the past few weeks have received a pleasant surprise at the pump: while oil has shot upward, gasoline is moving in the opposite direction.

Econ Comments                                                                                                             
Daily Caller | Uncertainty: America’s competitive disadvantage
This may sound like a rallying cry from Cairo’s Tahrir Square, but today companies must consider these political risk factors when making investment decisions in the U.S.
Washington Times | GHEI: Eurozone free-fall
U.S. taxpayers may bankroll Old World’s big spenders.
National Journal | Fiscal union can’t save Europe
Advocates of the European Union often cite the United States as a model of successful continent-wide government. Some have even suggested that the problem with Europe is that it is not centralized enough. On this view, the modern E.U. resembles not so much the American constitutional system as it does its predecessor, the Articles of Confederation.

Blogs                                                                                                                             
WSJ | China's Superior Economic Model
The free-market fundamentalist economic model is being thrown onto the trash heap of history.
Calculated Risk | Fannie Mae and Freddie Mac Serious Delinquency Rates mostly unchanged in October
Fannie Mae reported that the Single-Family Serious Delinquency rate was unchanged at 4.00% in October. This is down from 4.52% in October of 2010. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.
AEI: American | Governments are not the same as countries
Most discussions of the European sovereign debt crisis make a common error. This is the failure to distinguish between the country and the present government of that country. For example, they may wonder “how to save Greece.” But the debt in question is the debt of the government of Greece, not of Greece, the country.
Volokh Conspiracy | When Laws Hurt the People They’re Supposed to Help
It just seems to me that the general question is difficult, and that our normal intuitions in favor of exceptionless equal treatment may not be sound in all such cases.
Café Hayek | Even less precise
CBO “estimates” of the effect of stimulus on employment in the the third quarter of 2011 are even less precise than earlier ones. Stimulus spending “increased the number of people employed by between 0.4 million and 2.4 million.

Reports                                                                                                                         
NBER | Financial Sector Ups and Downs and the Real Sector: Big Hindrance, Little Help
We examine how financial expansion and contraction cycles affect the broader economy through their impact on 8 real economic sectors in a panel of 28 countries over 1960-2005, paying particular attention to large, or sharp, contractions and magnifying and mitigating factors.

Health Care

News                                                                                                                             
USA Today | Health care jobs grow . . . in administration
After New Hampshire's legislature severely cut Medicaid funding last summer, hospitals throughout the state began shedding jobs. Exeter Health Resources, which runs a 100-bed hospital near the coast, lopped off 110, almost 5% of its workforce, many of them nurses and other caregivers.

Econ Comments                                                                                                             
Cato @ Liberty | One Executive Order That Could Stop ObamaCare
In other words, the worst elements of ObamaCare — the government price controls it imposes on health insurance, the individual mandate, and the new spending on health-insurance entitlements — are “statutorily required programs” that, say, President Romney cannot repeal or even halt by executive order.
Cato @ Liberty | You Can’t Make a Silk Purse out of ObamaCare’s Poll Numbers
After taking a negative turn in October, the public’s overall views on the ACA returned to a more mixed status this month. Still, Americans remain somewhat more likely to have an unfavorable view of the law (44%) than a favorable one (37%).

Blogs                                                                                                                             
Heritage Foundation | Government Price Controls for Health Care: A Deficit-Reduction Strategy to Avoid
The federal government sets prices for services paid for by Medicare, Medicaid, and the Veterans Administration (VA) employing a variety of mechanisms, with a variety of consequences. Medicare’s complex fee schedules overpay providers for some services, underpay them for others, and therefore do not reflect the value of medical goods and services accurately.

Monetary

News                                                                                                                             
WSJ | Betting on Central Banks
A short-term liquidity reprieve is not the end of Europe's mess.

Econ Comments                                                                                                             
Bloomberg | Majority of Economists Still See Deflation Gloom
After concern last summer of an imminent double-dip recession in the U.S., the data got a bit brighter in the fall. The economy grew faster than expected in the third quarter and has created almost 2.8 million private- sector jobs since the labor market bottomed in early 2010.

Blogs                                                                                                                             
Daily Capitalist | A Brief Market-Oriented Review of Prior Coordinated Central Bank Interventions
Today, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing measures designed to address elevated pressures in short-term funding markets.
Heritage Foundation | The Fed, Other Central Banks Prepare for the Firestorm
The Fed has shocked us once again, and it’s probably right. There’s a firestorm on the horizon. It starts in Europe, but it threatens the U.S. economy just as surely, and the Fed is getting ready.

Taxes

News                                                                                                                             
National Journal | GOP Still Wrestling With Payroll-Tax Cut
Republican leaders privately warned rank-and-file lawmakers on Wednesday to get behind President’s Obama’s requested payroll-tax cut extension or face election-year charges that the GOP raised taxes on Americans struggling in an uncertain economy.
CNN Money | Senate Republicans lay out payroll tax cut plan
Senate Republicans on Wednesday released the outlines of their proposal to extend the payroll tax cut -- and it differs significantly from one put out by Senate Democrats.
Politico | Fed salary freeze to cover payroll tax cut
President Barack Obama instituted a two-year federal pay freeze that began Jan. 1. Republicans would like to extend the freeze for three more years and cut the federal workforce by 10 percent, or 200,000 employees, by 2015.
CNN Money | Amazon and eBay brawl over Web sales tax
Amazon and eBay had it out in a public brawl in Washington on Wednesday during a congressional hearing about allowing states to collect sales tax on Internet purchases.

Econ Comments                                                                                                             
Forbes | The Sheer Tax Naivete Of Krugman, Shiller And Sachs
In the wake of the failure of Congress’ “Supercommittee” to agree upon a plan for reining in the U.S. budget deficit, Progressives have once again started beating the drums for higher taxes.

Reports                                                                                                                         
CRS | Tax Provisions Expiring in 2011 and "Tax Extenders"
A number of temporary tax provisions are scheduled to expire at the end of 2011. Notably, the temporary two-percentage-point reduction in the payroll tax rate for individuals was enacted, at the end of 2010, as a one-year temporary provision. Other provisions scheduled to expire at the end of 2011 include the Alternative Minimum Tax (AMT) "patch," as well as a number of previously extended temporary provisions known as "tax extenders."

Employment

News                                                                                                                             
CNN Money | Young workers getting hired again
Some 650,000 workers aged 16 to 24 found employment in the past three months, the biggest spike for that age group since the recession began, according to Labor Department statistics.
Merket Watch | Jobless claims back above 400,000 level again
The number of Americans who applied for jobless benefits last week rose above 400,000 again, an indication that the pace of hiring in the U.S. likely remains modest at best.

Blogs                                                                                                                             
WSJ: Real Time Economics | Congress Wrestles With 2012 Unemployment Benefits Extension
Nearly overshadowed by debates over more contentious issues, Congress is wrestling with how to extend federal unemployment benefits that are about to expire.
WSJ: Real Time Economics | Economists on ADP Report: Won’t Get Fooled Again
Wednesday’s closely watched ADP report stunned economy-watchers with its strong reading of 206,000 new jobs created in the U.S. private sector in November. But economists weren’t quick to change their forecasts for Friday’s nonfarm payroll number (which includes both private and government jobs).

Budget

News                                                                                                                             
Politico | Report: Fiscally, states shaping up
The budget picture in states across the country has begun to show signs of improvement, a new report Thursday shows.

Econ Comments                                                                                                             
Daily Finance | Abracadabra! Bankrupt Cities are Suddenly Un-Bankrupt! (Or Not)
Last month, the capital city of Pennsylvania filed for Chapter 9 bankruptcy protection. Harrisburg had taken out a $317 million loan to fund a municipal incinerator, but it didn't have the money to pay even interest on the loan, much less the principal.
Washington Times | MILLER: The waste eraser
Line-item veto would slow down Washington’s big spenders.

Blogs                                                                                                                             
Atlantic: McArdle | World's Central Bankers Hand Dying Europe a Band-Aid
While this is billed as a coordinated global action, this is really about dollars, and the Fed.  No other currency is seeing that much excess demand.
EconLog | Nick Rowe Asks About Debt Growth
My line is that the nonfinancial sector wants to issue long-term, risky liabilities and to hold short-term, riskless assets. The financial sector accomodates by doing the reverse.
Atlantic: McArdle | Reasons to Worry About the Prospects for a European Bailout
Then there are the reasons to worry that it won't happen at all, such as the German hyperobsession with their hyperinflation, and the genuine questions about whether it's even possible for Greece and Italy to execute (not just plan!) an austerity program under German aegis.  All of this conspires to make me very, very worried.
Mercatus Center: Neighborhood Effects | Why Do Some States Face Steep Borrowing Costs?
One of the interesting—and alarming—developments in state finance over the last few years is the spread between borrowing costs among the states.