Tuesday, December 20, 2011

General Economics

News                                                                                                                             
CNN: Money | Ohio set to see oil boom thanks to fracking
Thanks to controversial new drilling technology, the state that once produced a third of the nation's crude and was the birthplace of John D. Rockefeller's mighty Standard Oil could once again be a significant source of domestic supply.
Bloomberg | U.S. Housing Starts Jump 9.3%, to Highest in Year
Builders broke ground in November on more houses than at any time in the past 19 months, led by a surge in multifamily units, signaling the market is stabilizing heading into 2012.
Bloomberg | German Business Confidence Unexpectedly Rises
German business confidence unexpectedly rose for a second month in December as two economic institutes predicted Europe’s biggest economy will stave off the debt crisis and avoid a recession in 2012.
Market Watch | Home-builder confidence hits 19-mo. High
The National Association of Home Builders/Wells Fargo housing market index rose to 21 in December from 19 in November, marking the third monthly rise in a row.

Econ Comments                                                                                                             
Washington Times | MURRAY AND BIER: Create wealth, not jobs
Keystone XL pipeline would boost prosperity, not government.
WSJ | Beware the Global 'Equity Gap'
McKinsey projects a growing imbalance between the amount of stocks that investors will want to hold and what companies will need to fund growth.
AEI | AEI 2011: Dissecting the financial crisis
In the last two weeks of this year, the AEI 2011 series will highlight the institute's work that has made an impact, made a difference and made headlines over the past year.
Bloomberg | Invention Is the Mother of Economic Growth: Nathan Myhrvold
One reason “dismal science” aptly describes economics is that it so often winds up in a zero-sum trade-off of diminishing returns. That gets depressing when the global economy is in a sorry state, as it is now.
Barron's | Buckle Up!
Wall Street strategists see U.S. stocks rising 12% next year, but most of the gains will come in the second half. Europe's response to its problems will call the tune. The case for big dividend payers.

Blogs                                                                                                                             
Cato @ Liberty | House Transparency Slated to Improve
Last Friday, the House Administration Committee adopted standards that “require all House legislative documents be published electronically in an open, searchable format on one centralized website.”
Heritage Foundation | Mr. President, There’s Bipartisan Support for Keystone XL
The Keystone XL pipeline, which would bring 700,000 barrels of oil per day from Canada to refineries in Texas and give a major boost to the U.S. economy, is the hot-button issue when it comes to the payroll tax cut package.
Café Hayek | A Huge Negative Externality
Robert Samuelson highlights a significant danger of Keynesian economics – namely, it lends a patina of scientific legitimacy to the “political bias … to favor short-term stimulus (by lowering taxes and raising spending), which is popular, and to ignore long-term deficits.

Reports                                                                                                                         
Mercatus Center | Spending Surge for Seniors: Medicare and Social Security Total 50 Percent of Budget by 2030
The growing number of beneficiaries due to the aging of the baby-boom generation will cause scheduled spending to surge. If current Social Security and Medicare policies continue without change, large deficits will undoubtedly emerge in the next decade and will grow even larger in subsequent decades.

Health Care

News                                                                                                                             
NY Times | Supreme Court to Hear Health Care Case in Late March
The Supreme Court announced on Monday that it would devote three days in late March to hearing arguments in challenges to the 2010 health care overhaul law. A decision in the case is expected by the end of June.
National Journal | Feds Face Challenges in Launching Health Exchange
With many states unwilling or unable to get insurance exchanges operational by the health law deadline of Jan. 1, 2014, pressure is growing on the federal government to do the job for them.

Blogs                                                                                                                             
Heritage Foundation | Obamacare Set for Oral Argument
Today, the Supreme Court released the oral argument schedule for the consolidated Obamacare challenges. The Court will hear oral argument on March 26, 27 and 28, 2012, with a nearly unprecedented amount of time allotted for argument.

Monetary

News                                                                                                                             
CNN: Money | Eurozone pledges €150 billion to IMF
European finance ministers announced plans for euro area governments to funnel €150 billion into the International Monetary Fund, according to statement issued Monday following a lengthy conference call.
Bloomberg | Republican Lawmaker Wants More Fed Disclosure, Inflation Focus
Representative Kevin Brady, the top Republican on the Joint Economic Committee, is drafting legislation that would focus the Federal Reserve on a single mandate for price stability, require more transparency and shift control over interest rates away from Washington.

Econ Comments                                                                                                             
CNBC | Euro Break-Up 'Unthinkable': ECB Vice-President
It’s still absurd and unthinkable in many senses of the word,” Constâncio said. "For people who really understand what it means to have a monetary union, it’s really unmanageable and unthinkable.”

Blogs                                                                                                                             
Calculated Risk | ECB Warns on Risks
The European Central Bank warned Monday of a perilous year ahead as the sovereign debt crisis collides with slower economic growth and a dearth of market financing for banks.

Reports                                                                                                                         
NBER | Sovereign CDS and Bond Pricing Dynamics in the Euro-area
This analysis tests the price discovery relationship between sovereign CDS premia and bond yield spreads on the same reference entity. The theoretical no-arbitrage relationship between the two credit spreads is confronted with daily data from six Euro-area countries over the period 2004-2011.

Taxes

News                                                                                                                             
CNN: Money | Payroll tax: Congress on vexing path
Once again, Congress is going down to the wire on a "must-pass" bill that lawmakers have been debating for months. The centerpiece of this one -- the soon-to-expire payroll tax cut -- affects more than 160 million people.
National Journal | QUICK TAKE: Senate Payroll Tax Provision Tough to Implement: Think Tank
The Senate bill orders that wages above $18,350 in the first two months of the year be subject to the standard 6.2 percent payroll tax. The $18,350 figure is the two-month pro-rated amount of the $110,100 limit on exposure to payroll taxes in 2012. The Senate made this move to prevent the wealthiest income earners from also receiving the payroll tax cut.

Econ Comments                                                                                                             
WSJ | Liberals Love the 1%
A lesson in big business tax favoritism in Illinois.

Blogs                                                                                                                             
Minyanville | Decoding the Payroll Tax Cut: How Well Does It Work?
Economists say allowing the cut to expire could have serious consequences for the still fragile economy.

Employment

News                                                                                                                             
Fox News | Report: States Have Cut Thousands of Government Jobs Since Recession
State governments across the country have cut more than 80,000 jobs since the beginning of the recession, reflecting steep drops in tax revenue and providing a drag on the economies in many parts of the country.

Econ Comments                                                                                                             
Washington Times | RAHN: Government spending jobs myth
Facts show Keynesian model is wrong.

Budget

Econ Comments                                                                                                             
Politico | Easy deficit trim: Ax the dollar bill
The government’s own watchdog, the nonpartisan Government Accountability Office, has long advocated the elimination of the dollar bill. Its most recent report in March estimated that switching from a $1 bill to a $1 coin would save at least $5.5 billion over 30 years.

Blogs                                                                                                                             
Econlog | Fiscal Policy: A Counterexample for Krugman
The result of years of cuts in government spending was that, as a percent of GDP, federal spending on programs fell from a high of 17.5 percent in 1992-93 to 11.3 percent in 2000-01.
Coordination Problem | e Said It Before, and I Will Say It Again -- Everyone Please Read Buchanan and Wagner To Clarify What Is Going On
I would interpret this argument slightly different than the conventional wisdom --- Keynesianism is not a panacea because Keynesianism has dominated public policy making for half a century and has left us in such a state of public debt.