News
Bloomberg |
Michigan Consumer Sentiment Fell to Five-Month Low in December
The Thomson Reuters/University of Michigan consumer sentiment index decreased to 72.9, the weakest since July, from 82.7 in November. Economists projected a final reading of 75 for December.
CNN: Money | Greece may remain in euro after all
Greece has come a long way. And while the nation's economy remains deeply depressed, the risk it will exit the euro zone has been greatly reduced.
Bloomberg | States Gaining in Economic Health as Manufacturing Grows
The economic health of 27 U.S. states showed signs of improvement as a four-year high in industrial production spurred gains in the so-called Rust Belt region, where manufacturing accounts for a larger share of jobs.
Market Watch | Freddie Mac chief economist on threats to housing
While the housing market is showing signs of life, the looming fiscal cliff remains a threat, as does global instability, the chief economist at mortgage-buying giant Freddie Mac told MarketWatch.
CNN: Money | Americans earned more, spent more, saved more
Personal income rose 0.6% during the month, and spending rose 0.4%. Meanwhile, people also stashed away a larger portion of their earnings. The savings rate rose to 3.6% in November, up from 3.4% in October.
Bloomberg | Spain 2012 Deficit Slippage Looms as Recession Deepens
Spain will struggle to meet its 2012 deficit target as a contracting economy hinders the impact of the deepest budget cuts in the nation’s democratic history, Deputy Budget Minister Marta Fernandez Curras said.
Econ Comments & Analysis
WSJ | ICE Buys NYSE
A merger that reflects the decline of U.S. equity markets.
Washington Times | Mortgage industry insider warns about a stifling regulatory cliff
Five years of criticism of banks by politicians, the public, the media and regulators have left the industry averse to taking risks.
WSJ | Strassel: Big Business Sells Out Small Business
CEOs say yes to higher individual taxes in return for Obama's promise of corporate tax reform.
NBER | Long Run Impacts of Childhood Access to the Safety Net
In particular, we focus on the introduction of a key element of the U.S. safety net, the Food Stamp Program, which was rolled out across counties in the U.S. between 1961 and 1975. We use the Panel Study of Income Dynamics to assemble unique data linking family background and county of residence in early childhood to adult health and economic outcomes.
Friday, December 21, 2012
Health Care
News
Fiscal Times | Medicare May Be Silent Killer in Budget Battles
Taxes may be taking the lion’s share of the spotlight right now in the fervor to negotiate a fiscal cliff deal, but Medicare looks more and more like the major obstacle to putting the federal budget on a stable course.
Blogs
Heritage Foundation | 12 Days of Obamacare Surprises: Loss of Employer-Sponsored Insurance
Under Obamacare, most employers will either provide government-approved health coverage or drop coverage, pay a penalty, and send their employees to the new government-subsidized exchanges.
Fiscal Times | Medicare May Be Silent Killer in Budget Battles
Taxes may be taking the lion’s share of the spotlight right now in the fervor to negotiate a fiscal cliff deal, but Medicare looks more and more like the major obstacle to putting the federal budget on a stable course.
Blogs
Heritage Foundation | 12 Days of Obamacare Surprises: Loss of Employer-Sponsored Insurance
Under Obamacare, most employers will either provide government-approved health coverage or drop coverage, pay a penalty, and send their employees to the new government-subsidized exchanges.
Monetary
News
Washington Post | U.S. banks loosening standards for risky corporate loans, OCC says
Regulators are concerned that banks are loosening their standards for one of the riskiest forms of corporate lending, a trend that harkens back to perilous practices common in the run-up to the financial crisis.
Time | LIBOR Scandal: Yep, It’s as Bad as We Thought
Given how widely used LIBOR is to price financial instruments, homeowners are just one group that could have potentially lost money due to rate manipulation.
Bloomberg | Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt
Chairman Ben S. Bernanke’s efforts to energize the U.S. economy since 2008 have been credited with rousing the housing market from a six-year funk, lowering the jobless rate and putting more money in the pockets of both mortgage lenders and borrowers.
Blogs
WSJ: Real Time Economics | Fed May Get Its Hope for More Inflation in 2013
According to the latest projections by Fed board members and regional presidents, core consumer inflation–as defined by yearly increase in the personal consumption expenditure price index excluding food and energy–is projected to run between 1.6% and 1.9% next year.
The Economist | Shrink this e-dollar
One of the fun things about the blogosphere is that occasionally a tiny debate that occured months ago will be reanimated and advanced.
Washington Post | U.S. banks loosening standards for risky corporate loans, OCC says
Regulators are concerned that banks are loosening their standards for one of the riskiest forms of corporate lending, a trend that harkens back to perilous practices common in the run-up to the financial crisis.
Time | LIBOR Scandal: Yep, It’s as Bad as We Thought
Given how widely used LIBOR is to price financial instruments, homeowners are just one group that could have potentially lost money due to rate manipulation.
Bloomberg | Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt
Chairman Ben S. Bernanke’s efforts to energize the U.S. economy since 2008 have been credited with rousing the housing market from a six-year funk, lowering the jobless rate and putting more money in the pockets of both mortgage lenders and borrowers.
Blogs
WSJ: Real Time Economics | Fed May Get Its Hope for More Inflation in 2013
According to the latest projections by Fed board members and regional presidents, core consumer inflation–as defined by yearly increase in the personal consumption expenditure price index excluding food and energy–is projected to run between 1.6% and 1.9% next year.
The Economist | Shrink this e-dollar
One of the fun things about the blogosphere is that occasionally a tiny debate that occured months ago will be reanimated and advanced.
Taxes
News
Washington Post | Struggling homeowners may lose critical tax break in fiscal cliff talks
Among the tax breaks at risk in the negotiations between the White House and Congress to avert the “fiscal cliff” is a measure aimed at helping struggling homeowners.
Econ Comments & Analysis
Washington Times | SCHATZ AND LAZOF: Raising taxes won’t fix bloated government
Federal agency overlap costs $400 billion a year.
WSJ | Will the Carbon Tax Make a Comeback?
A proposed levy on energy use sparked outrage and was abandoned. The president, it was said, had been 'BTU-ed.'
NY Times | A Tax Credit Worth Preserving
Lawmakers interested in simplifying the corporate tax code must take care to protect the low-income housing tax credit, which allows corporations to reduce their tax liabilities by investing in affordable housing.
Washington Post | Struggling homeowners may lose critical tax break in fiscal cliff talks
Among the tax breaks at risk in the negotiations between the White House and Congress to avert the “fiscal cliff” is a measure aimed at helping struggling homeowners.
Econ Comments & Analysis
Washington Times | SCHATZ AND LAZOF: Raising taxes won’t fix bloated government
Federal agency overlap costs $400 billion a year.
WSJ | Will the Carbon Tax Make a Comeback?
A proposed levy on energy use sparked outrage and was abandoned. The president, it was said, had been 'BTU-ed.'
NY Times | A Tax Credit Worth Preserving
Lawmakers interested in simplifying the corporate tax code must take care to protect the low-income housing tax credit, which allows corporations to reduce their tax liabilities by investing in affordable housing.
Employment
Econ Comments & Analysis
Forbes | Michigan's Right-To-Work and The Hostess Bankruptcy
Of course union bashers will trot out statistics showing that job creation is greater in right-to-work states, but it seems here the economists who divine these statistics are mistaking cause and effect.
Forbes | Michigan's Right-To-Work and The Hostess Bankruptcy
Of course union bashers will trot out statistics showing that job creation is greater in right-to-work states, but it seems here the economists who divine these statistics are mistaking cause and effect.
Budget
News
Politico | Sequestration: Where will the cuts hit?
When it comes to sequestration, President Barack Obama and most lawmakers would prefer to just not go there.
CNN: Money | Fallout from fiscal cliff inaction
Congress and the White House created the fiscal cliff. And now they've waited too long to avert it, even if they do somehow eke out a deal by Dec. 31.
Bloomberg | Boehner Drops ‘Plan B’ as Budget Effort Turns to Disarray
House Speaker John Boehner scrapped a plan to allow higher tax rates on annual income above $1 million, yielding to anti-tax resistance within his own party and throwing already-stalled budget talks deeper into turmoil.
Econ Comments & Analysis
WSJ | Teetering on the Cliff
Boehner's tax bill failure reflects Obama's failure to negotiate seriously.
CBO | H.R. 6684, the Spending Reduction Act of 2012
Assuming enactment around January 1, 2013, CBO and the staff of the Joint Committee on Taxation estimate that enacting H.R. 6684 would yield net deficit reduction of $217.7 billion over the 2013-2022 period.
Blogs
Café Hayek | What Everyone Knows About Austerity
How does it come to pass that everyone comes to know something that isn’t true? A simple answer is that if enough people treat it as true and those people have some credibility, then most people will assume it is true.
Politico | Sequestration: Where will the cuts hit?
When it comes to sequestration, President Barack Obama and most lawmakers would prefer to just not go there.
CNN: Money | Fallout from fiscal cliff inaction
Congress and the White House created the fiscal cliff. And now they've waited too long to avert it, even if they do somehow eke out a deal by Dec. 31.
Bloomberg | Boehner Drops ‘Plan B’ as Budget Effort Turns to Disarray
House Speaker John Boehner scrapped a plan to allow higher tax rates on annual income above $1 million, yielding to anti-tax resistance within his own party and throwing already-stalled budget talks deeper into turmoil.
Econ Comments & Analysis
WSJ | Teetering on the Cliff
Boehner's tax bill failure reflects Obama's failure to negotiate seriously.
CBO | H.R. 6684, the Spending Reduction Act of 2012
Assuming enactment around January 1, 2013, CBO and the staff of the Joint Committee on Taxation estimate that enacting H.R. 6684 would yield net deficit reduction of $217.7 billion over the 2013-2022 period.
Blogs
Café Hayek | What Everyone Knows About Austerity
How does it come to pass that everyone comes to know something that isn’t true? A simple answer is that if enough people treat it as true and those people have some credibility, then most people will assume it is true.
Thursday, December 20, 2012
General Economics
News
Market Watch | Leading economic index drops 0.2% in November
The U.S. economy looks to be slowing, the Conference Board said Thursday as it reported its leading economic index dropped in November. The leading economic index dropped 0.2% in November, in line with the MarketWatch-compiled economist consensus and the fourth fall of the year.
Market Watch | Sales of existing homes rise 5.9% in November
Sales of existing homes rose 5.9% in November to a seasonally adjusted annual rate of 5.04 million, reaching the highest rate since November 2009, when a tax credit was expected to expire.
WSJ | Senate GOP to Propose $24 Billion Sandy Package
Senate Republicans will soon propose a $24 billion aid package for superstorm Sandy rebuilding efforts as an alternative to the $60 billion plan being pressed by Senate Democrats.
Bloomberg | Obama Proving $418 Billion Bailout No Failure as GM Buys
The U.S. Treasury’s plan to sell its remaining 32 percent stake in General Motors Co. (GM) is a leap forward for the Obama administration’s effort to end a $418 billion bailout program that in four years was transformed from a political albatross to a winning campaign issue.
Washington Times | U.S. economy grew by 3.1 percent in summer
The U.S. economy grew at an annual rate of 3.1 percent over the summer as consumers spent more and state and local governments added to growth for the first time in three years — but the economy is likely slowing in the current quarter.
WSJ | Report Says Libor-Tied Losses at Fannie, Freddie May Top $3 Billion
That figure is among the largest potential losses reported amid the unfolding Libor scandal and comes as federal officials remain mum on how the alleged manipulation cost the government.
Econ Comments & Analysis
AEI | How to restructure Social Security
To see how we might reform the structure of Social Security, we need to get into the nitty-gritty details of how the program works. Social Security benefits are financed by a payroll tax on earnings. While the payroll tax discourages work, it doesn't always do so to the same extent as the income tax.
WSJ | Arthur Brooks: America's Dangerous Powerball Economy
Unearned income—as from the lottery or entitlements—doesn't buy happiness.
Source | A Process for Cleaning Up Federal Regulations
This paper suggests a process to identify, evaluate, and eliminate inefficient regulations.
WSJ | How Washington Crowds Out Private Lending
Government loans to students and banks should help markets, not supplant them.
Market Watch | The real meaning of rising home prices
As home prices continue to climb, some analysts are questioning whether that alone indicates the housing market is truly in recovery mode.
Heritage Foundation | Three Social Security Fixes to Solve the Real Fiscal Crisis
As a solution is found to the fiscal cliff, policymakers should include the first steps toward fixing Social Security.
Blogs
Econ Lib | Does An Increase in Supply Lead to Higher Prices
Why is it profitable for Saudi Arabia that Canada extracts oil from its tar sands?
WSJ: Real Time Economics | Philly Fed Manufacturing Bounces Back
Business conditions for mid-Atlantic manufacturers this month improved dramatically, according to a report released Thursday by the Federal Reserve Bank of Philadelphia.
Market Watch | Leading economic index drops 0.2% in November
The U.S. economy looks to be slowing, the Conference Board said Thursday as it reported its leading economic index dropped in November. The leading economic index dropped 0.2% in November, in line with the MarketWatch-compiled economist consensus and the fourth fall of the year.
Market Watch | Sales of existing homes rise 5.9% in November
Sales of existing homes rose 5.9% in November to a seasonally adjusted annual rate of 5.04 million, reaching the highest rate since November 2009, when a tax credit was expected to expire.
WSJ | Senate GOP to Propose $24 Billion Sandy Package
Senate Republicans will soon propose a $24 billion aid package for superstorm Sandy rebuilding efforts as an alternative to the $60 billion plan being pressed by Senate Democrats.
Bloomberg | Obama Proving $418 Billion Bailout No Failure as GM Buys
The U.S. Treasury’s plan to sell its remaining 32 percent stake in General Motors Co. (GM) is a leap forward for the Obama administration’s effort to end a $418 billion bailout program that in four years was transformed from a political albatross to a winning campaign issue.
Washington Times | U.S. economy grew by 3.1 percent in summer
The U.S. economy grew at an annual rate of 3.1 percent over the summer as consumers spent more and state and local governments added to growth for the first time in three years — but the economy is likely slowing in the current quarter.
WSJ | Report Says Libor-Tied Losses at Fannie, Freddie May Top $3 Billion
That figure is among the largest potential losses reported amid the unfolding Libor scandal and comes as federal officials remain mum on how the alleged manipulation cost the government.
Econ Comments & Analysis
AEI | How to restructure Social Security
To see how we might reform the structure of Social Security, we need to get into the nitty-gritty details of how the program works. Social Security benefits are financed by a payroll tax on earnings. While the payroll tax discourages work, it doesn't always do so to the same extent as the income tax.
WSJ | Arthur Brooks: America's Dangerous Powerball Economy
Unearned income—as from the lottery or entitlements—doesn't buy happiness.
Source | A Process for Cleaning Up Federal Regulations
This paper suggests a process to identify, evaluate, and eliminate inefficient regulations.
WSJ | How Washington Crowds Out Private Lending
Government loans to students and banks should help markets, not supplant them.
Market Watch | The real meaning of rising home prices
As home prices continue to climb, some analysts are questioning whether that alone indicates the housing market is truly in recovery mode.
Heritage Foundation | Three Social Security Fixes to Solve the Real Fiscal Crisis
As a solution is found to the fiscal cliff, policymakers should include the first steps toward fixing Social Security.
Blogs
Econ Lib | Does An Increase in Supply Lead to Higher Prices
Why is it profitable for Saudi Arabia that Canada extracts oil from its tar sands?
WSJ: Real Time Economics | Philly Fed Manufacturing Bounces Back
Business conditions for mid-Atlantic manufacturers this month improved dramatically, according to a report released Thursday by the Federal Reserve Bank of Philadelphia.
Health Care
News
CNBC | Medicare Premium Increase Plan Redefines 'Well-Off'
Failure by panel would trigger cuts in spending.
CNBC | Medicare Premium Increase Plan Redefines 'Well-Off'
Failure by panel would trigger cuts in spending.
Monetary
News
Fox Business | Bank of Japan Boosts Stimulus Again
The Bank of Japan delivered its third shot of monetary stimulus in four months on Thursday, in a prelude to more aggressive action next year as it faces intensifying pressure from the country's next leader for bolder action to beat deflation.
Econ Comments & Analysis
New York Post | Fed chief has gone totally round the Ben(d)
Fed Chairman Ben Bernanke, who has already done more than enough to destroy this country's currency, must need a change of prescription.
Blogs
The Economist | How durable is the emerging NGDP consensus?
Those who want central bankers to focus to changes in nominal incomes rather than the pace of consumer price increases have made tremendous progress over the past few years, at least when it comes to persuading economists and pundits.
Fox Business | Bank of Japan Boosts Stimulus Again
The Bank of Japan delivered its third shot of monetary stimulus in four months on Thursday, in a prelude to more aggressive action next year as it faces intensifying pressure from the country's next leader for bolder action to beat deflation.
Econ Comments & Analysis
New York Post | Fed chief has gone totally round the Ben(d)
Fed Chairman Ben Bernanke, who has already done more than enough to destroy this country's currency, must need a change of prescription.
Blogs
The Economist | How durable is the emerging NGDP consensus?
Those who want central bankers to focus to changes in nominal incomes rather than the pace of consumer price increases have made tremendous progress over the past few years, at least when it comes to persuading economists and pundits.
Taxes
News
CNN: Money | Lack of AMT fix could delay 100 million tax returns
As many as 100 million taxpayers may be unable to file their returns until late March and would face refund delays if Congress fails to reach a fiscal cliff deal by Dec. 31 that includes an Alternative Minimum Tax fix.
Econ Comments & Analysis
Washington Times | TAYLOR AND TANTON: Blow off wind-production tax credit
Wind-energy advocates claim that with just one more extension of the 20-year-old “temporary” wind-production tax credit, wind generation finally could become competitive with conventional sources of electricity. The truth is, it’s never been competitive — and has only appeared to be close because some of its costs have been subsidized and others have been ignored.
RCM | To Reduce Tax Avoidance, Eliminate Deductions and Cut Taxes
Tax avoidance is legal. Most tax avoidance entails the use of deductions expressly created by governments, and it includes everything from the homeowner's mortgage-interest deduction to corporate deductions for research and development.
LA Times | Kinsley: Tuning the tax code
Given that all taxes are disincentives, what kinds of taxes do we want?
Blogs
WSJ: Real Time Economics | Tax Increases Coming Whether Fiscal Cliff Is Averted or Not
Neither the Obama administration nor congressional Republicans want to increase taxes on everyone, but most workers are likely to see lower take-home pay in 2013, eating away at economic growth.
CNN: Money | Lack of AMT fix could delay 100 million tax returns
As many as 100 million taxpayers may be unable to file their returns until late March and would face refund delays if Congress fails to reach a fiscal cliff deal by Dec. 31 that includes an Alternative Minimum Tax fix.
Econ Comments & Analysis
Washington Times | TAYLOR AND TANTON: Blow off wind-production tax credit
Wind-energy advocates claim that with just one more extension of the 20-year-old “temporary” wind-production tax credit, wind generation finally could become competitive with conventional sources of electricity. The truth is, it’s never been competitive — and has only appeared to be close because some of its costs have been subsidized and others have been ignored.
RCM | To Reduce Tax Avoidance, Eliminate Deductions and Cut Taxes
Tax avoidance is legal. Most tax avoidance entails the use of deductions expressly created by governments, and it includes everything from the homeowner's mortgage-interest deduction to corporate deductions for research and development.
LA Times | Kinsley: Tuning the tax code
Given that all taxes are disincentives, what kinds of taxes do we want?
Blogs
WSJ: Real Time Economics | Tax Increases Coming Whether Fiscal Cliff Is Averted or Not
Neither the Obama administration nor congressional Republicans want to increase taxes on everyone, but most workers are likely to see lower take-home pay in 2013, eating away at economic growth.
Employment
News
Washington Times | Americans seeking unemployment aid rises by 17,000
The number of Americans applying for unemployment benefits rose last week by 17,000, reversing four weeks of declines. But the number of people seeking aid is consistent with a job market that continues to grow modestly.
Washington Times | Americans seeking unemployment aid rises by 17,000
The number of Americans applying for unemployment benefits rose last week by 17,000, reversing four weeks of declines. But the number of people seeking aid is consistent with a job market that continues to grow modestly.
Budget
News
National Journal | Obama Urges GOP to Take the Fiscal-Cliff Deal
“There’s got to be, I think, a recognition on the part of my Republican friends that, you know—take the deal,” Obama said. “They will be able to claim that they have worked with me over the last two years to reduce the deficit, more than any other deficit-reduction package.”
Roll Call | Boehner Faces GOP Caucus Backlash On 'Plan B' for Taxes and Fiscal Cliff
With both Democrats and hard-line conservative Republicans vowing to tank his “plan B” bill that would allow tax increases on millionaires, Boehner’s test Thursday will be to show the White House and Democrats that he has some control over his unruly conference as time to produce a deal averting tax hikes and automatic spending cuts runs out.
National Journal | Experts: GOP Plan B Would Lighten Tax Burden for Some Wealthy Households
Only those who earn between $200,000 and $1 million would see their federal tax burden shrink under the GOP's 'Plan B' proposal, according to analysis from the nonpartisan Tax Policy Center.
CNBC | Goodbye, Government, Under Either Fiscal Plan
The frenzied partisan horse-trading has glossed over what is arguably the central issue of any debate over long-term fiscal policy: the kind of role we expect the government to play in the nation's future.
Econ Comments & Analysis
Washington Times | MILLER: Obama’s ‘fiscal cliff’ win
House Speaker John A. Boehner is trying to salvage what he can in the showdown with President Obama over the “fiscal cliff.” To do so, he gave in to Mr. Obama’s demand to raise income tax rates.
Mercatus Center | Impartiality, Political Participation, and Federal Budget Process Reform
The Founders insisted that trust in government is essential to the stability of government and the security of rights, and that public participation in, and the transparency of, political processes are essential to the cultivation of trust in government.
Blogs
Heritage Foundation | Obama Fiscal Cliff Plan Silent on Payroll Tax Cut
This time last year President Obama said of the pending expiration of the payroll tax cut, “It may be that there’s [sic] some folks in the House who refuse to vote for this compromise because they don’t think that 40 bucks is a lot of money. But anyone who knows what it’s like to stretch a budget knows that…$40 can make all the difference in the world.”
Cato Institute | Portugal May Become the First of Europe’s Bankrupt Welfare States to Stumble upon a Genuine Recovery Formula: Less Spending AND Lower Tax Rates
Before getting too excited, it’s important to note that the Portuguese proposal is a bit gimmicky. It’s not a corporate tax rate of 10 percent, it’s a special rate of 10 percent for new investment, however that’s defined.
Reason.com | It's the Spending, Stupid!
The media obsess about tax rates, but spending is more important. As Milton Friedman taught us, spending is a far more accurate gauge of the government burden.
National Journal | Obama Urges GOP to Take the Fiscal-Cliff Deal
“There’s got to be, I think, a recognition on the part of my Republican friends that, you know—take the deal,” Obama said. “They will be able to claim that they have worked with me over the last two years to reduce the deficit, more than any other deficit-reduction package.”
Roll Call | Boehner Faces GOP Caucus Backlash On 'Plan B' for Taxes and Fiscal Cliff
With both Democrats and hard-line conservative Republicans vowing to tank his “plan B” bill that would allow tax increases on millionaires, Boehner’s test Thursday will be to show the White House and Democrats that he has some control over his unruly conference as time to produce a deal averting tax hikes and automatic spending cuts runs out.
National Journal | Experts: GOP Plan B Would Lighten Tax Burden for Some Wealthy Households
Only those who earn between $200,000 and $1 million would see their federal tax burden shrink under the GOP's 'Plan B' proposal, according to analysis from the nonpartisan Tax Policy Center.
CNBC | Goodbye, Government, Under Either Fiscal Plan
The frenzied partisan horse-trading has glossed over what is arguably the central issue of any debate over long-term fiscal policy: the kind of role we expect the government to play in the nation's future.
Econ Comments & Analysis
Washington Times | MILLER: Obama’s ‘fiscal cliff’ win
House Speaker John A. Boehner is trying to salvage what he can in the showdown with President Obama over the “fiscal cliff.” To do so, he gave in to Mr. Obama’s demand to raise income tax rates.
Mercatus Center | Impartiality, Political Participation, and Federal Budget Process Reform
The Founders insisted that trust in government is essential to the stability of government and the security of rights, and that public participation in, and the transparency of, political processes are essential to the cultivation of trust in government.
Blogs
Heritage Foundation | Obama Fiscal Cliff Plan Silent on Payroll Tax Cut
This time last year President Obama said of the pending expiration of the payroll tax cut, “It may be that there’s [sic] some folks in the House who refuse to vote for this compromise because they don’t think that 40 bucks is a lot of money. But anyone who knows what it’s like to stretch a budget knows that…$40 can make all the difference in the world.”
Cato Institute | Portugal May Become the First of Europe’s Bankrupt Welfare States to Stumble upon a Genuine Recovery Formula: Less Spending AND Lower Tax Rates
Before getting too excited, it’s important to note that the Portuguese proposal is a bit gimmicky. It’s not a corporate tax rate of 10 percent, it’s a special rate of 10 percent for new investment, however that’s defined.
Reason.com | It's the Spending, Stupid!
The media obsess about tax rates, but spending is more important. As Milton Friedman taught us, spending is a far more accurate gauge of the government burden.
Wednesday, December 19, 2012
General Economics
News
CNN Money | Home building slows, but still going strong
The pace of home building slowed slightly in November but remained near the four-year high reached the previous month, according to a government report released Tuesday.
Bloomberg | German Business Confidence Rises for a Second Month
German business confidence increased for a second month in December, signaling Europe’s largest economy may support a euro-area recovery next year.
CNN Money | Port strike looms as talks break down
A strike at container ports from Boston to Houston appears more likely after talks broke down Tuesday, leaving businesses worried about a crippling shutdown set to start in less than two weeks.
WSJ | U.S. Economy Will Face Drag Next Year
Deal or no deal, the U.S. economy will face a drag of some kind from Washington budget policy next year. The White House and GOP are just negotiating how much.
Bloomberg | An Economics Masterpiece You Should Be Reading Now
The most valuable new book I’ve read this year is Justin Yifu Lin’s “The Quest for Prosperity.” George Akerlof, a Nobel laureate in economics and a man not given to reckless overstatement, calls it “a masterpiece.” I’d say that’s right.
CNN Money | S&P boosts Greece's credit rating
Standard and Poor's boosted Greece's credit rating by several notches Tuesday, citing the broad commitment to keep Greece in the eurozone.
Econ Comments & Analysis
Washington Times | The choices: raise taxes, go over the cliff or kick the can
Kicking the can may be the least-repugnant remaining resolution to the “fiscal cliff.” The only alternatives appear to be simply going over the cliff, or a Republican cave-in on income tax rates in exchange for mostly cosmetic spending reductions.
Market Watch | Fitch: Fiscal cliff is top threat to world economy
The U.S. fiscal cliff -- the combination of massive spending cuts and tax hikes set to begin taking effect Jan. 1 unless politicians reach a budget deal -- is the "single biggest near-term threat to the world economy, given its potential to tip the U.S. into an unnecessary and avoidable recession," Fitch Ratings said Wednesday in its biannual sovereign review and outlook report.
Washington Times | Staying prosperous
The world’s becoming a more prosperous place. That’s good news for many countries — just not the United States.
Mercatus | The American Recovery and Reinvestment Act of 2009 Didn't Work
In early 2009, President Obama predicted that his American Recovery and Reinvestment Act would "jump-start our economy," "create new jobs," and provide "many years of economic growth."
AEI | How to restructure Social Security
Washington is abuzz with talk of entitlement reform. In his latest offer on the fiscal cliff negotiations, President Obama has proposed slowing the growth of entitlement spending. More generally, both parties recognize that returning these entitlement programs to solvency will entail politically painful cuts to promised benefits, increases in tax revenues, or both.
Washington Times | Federal rules cost $10,000 per employee
What do the Progressive Policy Institute, former Sen. Phil Gramm of Texas, former presidential candidate Herman Cain and the Competitive Enterprise Institute have in common? An idea for rolling back overregulation.
Blogs
WSJ | Secondary Sources: U.S. vs. World, Mortgages, Keynesianism
A roundup of economic news from around the Web.
Café Hayek | Cataloging Our Progress: Basic Lawn Care
Using my Sears Fall/Winter 1956 catalog, I searched for the lowest-priced basic lawn-care items available at Sears in 1956, constrained only by the requirement that the ‘big’ items – lawn mower and lawn edger – be gasoline- or electric-powered rather than fully manual.
Market Watch | Why a recession may be coming no matter what fiscal-cliff deal is reached
Spoiler alert: We could already be in a recession. This is not the conventional wisdom. The common narrative goes some like talks look ugly, but in the end things will get resolved either before Jan. 1 or later in the month and the economy gets a new lease on life
WSJ | Fed’s Fisher: U.S. Companies Not Able to Perform
U.S. companies “have the resources they need to do what we want them to do–in this case, invest in job creation,” Federal Reserve Bank of Dallas President Richard Fisher said. “But as long as that fence of uncertainty is in place, they will not be able to perform,” the policy maker said.
Heritage Foundation | Beware! Regulations Incoming!
The problem, of course, is not simply the number and cost of new regulations. The larger concern is about the way these regulations are actually being made and enforced. The process is often unconstitutional and empowers bureaucrats instead of American citizens.
CNN Money | Home building slows, but still going strong
The pace of home building slowed slightly in November but remained near the four-year high reached the previous month, according to a government report released Tuesday.
Bloomberg | German Business Confidence Rises for a Second Month
German business confidence increased for a second month in December, signaling Europe’s largest economy may support a euro-area recovery next year.
CNN Money | Port strike looms as talks break down
A strike at container ports from Boston to Houston appears more likely after talks broke down Tuesday, leaving businesses worried about a crippling shutdown set to start in less than two weeks.
WSJ | U.S. Economy Will Face Drag Next Year
Deal or no deal, the U.S. economy will face a drag of some kind from Washington budget policy next year. The White House and GOP are just negotiating how much.
Bloomberg | An Economics Masterpiece You Should Be Reading Now
The most valuable new book I’ve read this year is Justin Yifu Lin’s “The Quest for Prosperity.” George Akerlof, a Nobel laureate in economics and a man not given to reckless overstatement, calls it “a masterpiece.” I’d say that’s right.
CNN Money | S&P boosts Greece's credit rating
Standard and Poor's boosted Greece's credit rating by several notches Tuesday, citing the broad commitment to keep Greece in the eurozone.
Econ Comments & Analysis
Washington Times | The choices: raise taxes, go over the cliff or kick the can
Kicking the can may be the least-repugnant remaining resolution to the “fiscal cliff.” The only alternatives appear to be simply going over the cliff, or a Republican cave-in on income tax rates in exchange for mostly cosmetic spending reductions.
Market Watch | Fitch: Fiscal cliff is top threat to world economy
The U.S. fiscal cliff -- the combination of massive spending cuts and tax hikes set to begin taking effect Jan. 1 unless politicians reach a budget deal -- is the "single biggest near-term threat to the world economy, given its potential to tip the U.S. into an unnecessary and avoidable recession," Fitch Ratings said Wednesday in its biannual sovereign review and outlook report.
Washington Times | Staying prosperous
The world’s becoming a more prosperous place. That’s good news for many countries — just not the United States.
Mercatus | The American Recovery and Reinvestment Act of 2009 Didn't Work
In early 2009, President Obama predicted that his American Recovery and Reinvestment Act would "jump-start our economy," "create new jobs," and provide "many years of economic growth."
AEI | How to restructure Social Security
Washington is abuzz with talk of entitlement reform. In his latest offer on the fiscal cliff negotiations, President Obama has proposed slowing the growth of entitlement spending. More generally, both parties recognize that returning these entitlement programs to solvency will entail politically painful cuts to promised benefits, increases in tax revenues, or both.
Washington Times | Federal rules cost $10,000 per employee
What do the Progressive Policy Institute, former Sen. Phil Gramm of Texas, former presidential candidate Herman Cain and the Competitive Enterprise Institute have in common? An idea for rolling back overregulation.
Blogs
WSJ | Secondary Sources: U.S. vs. World, Mortgages, Keynesianism
A roundup of economic news from around the Web.
Café Hayek | Cataloging Our Progress: Basic Lawn Care
Using my Sears Fall/Winter 1956 catalog, I searched for the lowest-priced basic lawn-care items available at Sears in 1956, constrained only by the requirement that the ‘big’ items – lawn mower and lawn edger – be gasoline- or electric-powered rather than fully manual.
Market Watch | Why a recession may be coming no matter what fiscal-cliff deal is reached
Spoiler alert: We could already be in a recession. This is not the conventional wisdom. The common narrative goes some like talks look ugly, but in the end things will get resolved either before Jan. 1 or later in the month and the economy gets a new lease on life
WSJ | Fed’s Fisher: U.S. Companies Not Able to Perform
U.S. companies “have the resources they need to do what we want them to do–in this case, invest in job creation,” Federal Reserve Bank of Dallas President Richard Fisher said. “But as long as that fence of uncertainty is in place, they will not be able to perform,” the policy maker said.
Heritage Foundation | Beware! Regulations Incoming!
The problem, of course, is not simply the number and cost of new regulations. The larger concern is about the way these regulations are actually being made and enforced. The process is often unconstitutional and empowers bureaucrats instead of American citizens.
Health Care
News
Roll Call | Health Exchanges: Can They Be Ready by 2014?
The idea of a health insurance exchange as laid out in President Barack Obama’s signature law seems straightforward: an online marketplace where people will shop for private health insurance, like buying an airline ticket or a hotel room.
Econ Comments & Analysis
CRS | Medicaid Disproportionate Share Hospital Payments
The Medicaid statute requires states to make disproportionate share hospital (DSH) payments to hospitals treating large numbers of low-income patients. This provision is intended to recognize the disadvantaged financial situation of those hospitals because low-income patients are more likely to be uninsured or Medicaid enrollees.
Blogs
Heritage Foundation | Medical Device Tax Is Latest Proof That Taxes Matter
The more time passes, the more we get to see in real life the consequences of Obamacare. We warned back when it passed that the 18 tax increases it contained would do serious damage to the economy. Only now that the damage is about to take hold do some in Congress take note.
Neighborhood Effects | New Research on West Virginia’s Medicaid Reforms
In 2007 the state enacted a Medicaid redesign with one objective being to reduce the rate at which Medicaid patients visited emergency rooms for non-emergencies. Additionally, the plan, called Mountain Health Choices, was intended to incentivize healthy behaviors among Medicaid recipients.
Heritage Foundation | 12 Days of Obamacare Surprises: Uninsured Americans
Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 8 days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.
Roll Call | Health Exchanges: Can They Be Ready by 2014?
The idea of a health insurance exchange as laid out in President Barack Obama’s signature law seems straightforward: an online marketplace where people will shop for private health insurance, like buying an airline ticket or a hotel room.
Econ Comments & Analysis
CRS | Medicaid Disproportionate Share Hospital Payments
The Medicaid statute requires states to make disproportionate share hospital (DSH) payments to hospitals treating large numbers of low-income patients. This provision is intended to recognize the disadvantaged financial situation of those hospitals because low-income patients are more likely to be uninsured or Medicaid enrollees.
Blogs
Heritage Foundation | Medical Device Tax Is Latest Proof That Taxes Matter
The more time passes, the more we get to see in real life the consequences of Obamacare. We warned back when it passed that the 18 tax increases it contained would do serious damage to the economy. Only now that the damage is about to take hold do some in Congress take note.
Neighborhood Effects | New Research on West Virginia’s Medicaid Reforms
In 2007 the state enacted a Medicaid redesign with one objective being to reduce the rate at which Medicaid patients visited emergency rooms for non-emergencies. Additionally, the plan, called Mountain Health Choices, was intended to incentivize healthy behaviors among Medicaid recipients.
Heritage Foundation | 12 Days of Obamacare Surprises: Uninsured Americans
Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 8 days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.
Monetary
News
CNN Money | What a new inflation measure would mean for your wallet
President Obama put a new offer on the table in the fiscal cliff negotiations, and it includes a wonky change that may raise your taxes and reduce your Social Security benefits ... a little.
Market Watch | UBS settles interest-rate-rigging charges
UBS AG became the second bank to settle accusations that it tried to rig benchmark interest rates, agreeing to pay roughly $1.5 billion in a deal with authorities in multiple countries that points to a broader manipulation scandal than previously known.
Econ Comments & Analysis
Washington Times | Millennials should support return to the gold standard
My generation, the so-called “millennials” between the ages of 18 and 29, is looking toward the future, and we don’t like what we see. Washington is bursting with chatter about debt and deficit, and Capitol Hill is overrun by progressive politicians ready to pillage the wallets of young people to atone for government’s shortcomings in payments to our parents and grandparents.
CNN Money | What a new inflation measure would mean for your wallet
President Obama put a new offer on the table in the fiscal cliff negotiations, and it includes a wonky change that may raise your taxes and reduce your Social Security benefits ... a little.
Market Watch | UBS settles interest-rate-rigging charges
UBS AG became the second bank to settle accusations that it tried to rig benchmark interest rates, agreeing to pay roughly $1.5 billion in a deal with authorities in multiple countries that points to a broader manipulation scandal than previously known.
Econ Comments & Analysis
Washington Times | Millennials should support return to the gold standard
My generation, the so-called “millennials” between the ages of 18 and 29, is looking toward the future, and we don’t like what we see. Washington is bursting with chatter about debt and deficit, and Capitol Hill is overrun by progressive politicians ready to pillage the wallets of young people to atone for government’s shortcomings in payments to our parents and grandparents.
Taxes
Econ Comments & Analysis
Politico | History’s lesson on the stimulus and tax increase
The narrative seems familiar: a president coming off a significant election victory with improving poll numbers; his allies on the left demanding an ambitious Big Government agenda; political pundits opining about how Republicans must bow to reality by abandoning their core principles; some Republican elected officials hinting about a new “bipartisan” approach and shaken congressional Republicans standing as the last line of defense.
Politico | Don’t tie tax extenders bill to fiscal cliff
Lost among the fiscal cliff debates on marginal tax rates and the sequester is a bipartisan package of important tax cuts that the House and the Senate should take up and pass immediately, regardless of whether Democrats and Republicans can reach a larger compromise.
Real Clear Markets | The Muni Bond Tax Break Is a Tempting Reform Target
Prominent mayors and municipal officials called the President last week to urge him to preserve tax breaks which benefit cities amidst talk of federal tax increases. The President listened but apparently gave them no assurances about one of their greatest concerns, allowing holders of municipal bonds to continue to receive their interest tax-free.
AEI | Review of 'The Benefit and the Burden: Tax Reform — Why We Need It and What It Will Take'
While experts will already be familiar with most of the material in the book, readers with less background will be able to obtain helpful guidance on many aspects of the current tax system and reform proposals. Unfortunately, those readers will need to proceed with caution,as the book contains a significant number of factual and economic errors.
Politico | History’s lesson on the stimulus and tax increase
The narrative seems familiar: a president coming off a significant election victory with improving poll numbers; his allies on the left demanding an ambitious Big Government agenda; political pundits opining about how Republicans must bow to reality by abandoning their core principles; some Republican elected officials hinting about a new “bipartisan” approach and shaken congressional Republicans standing as the last line of defense.
Politico | Don’t tie tax extenders bill to fiscal cliff
Lost among the fiscal cliff debates on marginal tax rates and the sequester is a bipartisan package of important tax cuts that the House and the Senate should take up and pass immediately, regardless of whether Democrats and Republicans can reach a larger compromise.
Real Clear Markets | The Muni Bond Tax Break Is a Tempting Reform Target
Prominent mayors and municipal officials called the President last week to urge him to preserve tax breaks which benefit cities amidst talk of federal tax increases. The President listened but apparently gave them no assurances about one of their greatest concerns, allowing holders of municipal bonds to continue to receive their interest tax-free.
AEI | Review of 'The Benefit and the Burden: Tax Reform — Why We Need It and What It Will Take'
While experts will already be familiar with most of the material in the book, readers with less background will be able to obtain helpful guidance on many aspects of the current tax system and reform proposals. Unfortunately, those readers will need to proceed with caution,as the book contains a significant number of factual and economic errors.
Employment
Blogs
Heritage Foundation | USDA’s Stimulus Jobs Data Plagued by Inaccuracies
Federal requirements for monitoring jobs data associated with President Obama’s stimulus package are insufficient to ensure that that the information is accurate, according to a review of that data compiled by the Inspector General of the U.S. Department of Agriculture.
Heritage Foundation | USDA’s Stimulus Jobs Data Plagued by Inaccuracies
Federal requirements for monitoring jobs data associated with President Obama’s stimulus package are insufficient to ensure that that the information is accurate, according to a review of that data compiled by the Inspector General of the U.S. Department of Agriculture.
Budget
News
CNN Money | Treasury to sell remaining GM shares
The Treasury Department announced plans on Wednesday to sell the 500 million shares of General Motors it still owns, closing the books on the $51 billion bailout that started four years ago.
National Journal | Obama, Boehner Not Far Apart on Fiscal-Cliff Numbers
If you stop listening to the political noise on Capitol Hill, you’ll realize the dirty secret about the current state of play of the fiscal-cliff negotiations: The Democrats and Republicans aren’t very far apart in their proposals to one another.
Econ Comments & Analysis
WSJ | A Bad Budget Deal
It's clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend.
Roll Call | A Budget Crystal Ball for 2013
For the third year in a row I am not writing a year-in-review column because, honestly, they’re boring and unnecessary. If you’ve been interested enough in the federal budget to read my column in 2012, you already know what happened and probably don’t want to be reminded. If you didn’t care during the year, you don’t need to know now.
CNN Money | Treasury to sell remaining GM shares
The Treasury Department announced plans on Wednesday to sell the 500 million shares of General Motors it still owns, closing the books on the $51 billion bailout that started four years ago.
National Journal | Obama, Boehner Not Far Apart on Fiscal-Cliff Numbers
If you stop listening to the political noise on Capitol Hill, you’ll realize the dirty secret about the current state of play of the fiscal-cliff negotiations: The Democrats and Republicans aren’t very far apart in their proposals to one another.
Econ Comments & Analysis
WSJ | A Bad Budget Deal
It's clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend.
Roll Call | A Budget Crystal Ball for 2013
For the third year in a row I am not writing a year-in-review column because, honestly, they’re boring and unnecessary. If you’ve been interested enough in the federal budget to read my column in 2012, you already know what happened and probably don’t want to be reminded. If you didn’t care during the year, you don’t need to know now.
Tuesday, December 18, 2012
General Economics
News
CNN Money | For sale: U.S. highways and bridges
State and local governments are in desperate need of cash for all manner of road, building and bridge repair, and are increasingly turning to private money for funding.
Washington Post | US current account trade deficit fell to $107.5 billion in third quarter, lowest since 2010
The U.S. current account trade deficit narrowed in the July-September quarter to the smallest level since late 2010, but the improvement may not last.
Market Watch | Dec. NAHB builder confidence highest since 2006
A gauge of confidence among home builders rose in December to the highest level since April 2006, with respondents encouraged by declining inventory and good sales conditions, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday.
Bloomberg | China Foreign-Investment Declines for 12th Time in 13 Months
Foreign direct investment in China fell for the 12th time in 13 months, suggesting the nation’s economic-growth rebound has yet to attract a fresh influx of capital spending from abroad.
WSJ | Struggling Greeks Face Harsh Winter
The spread of economic hardship is fraying Greece's social fabric and straining its political cohesion as the country enters the harshest winter of its three-year-old debt crisis. Even the tightknit Greek family—an institution that has helped the population to absorb a collapse in employment—is under pressure as household incomes dwindle.
WSJ | U.S. to Sell Bulk of TARP Banks
The Treasury in 2013 hopes to clear out its portfolio of banks that took bailout funds during the financial crisis, including scores of institutions that have missed dividend payments owed to the government.
Econ Comments & Analysis
Washington Times | EPA regulates water
The environmentalist movement has gone off the deep end. It’s bad enough that the courts have allowed the Environmental Protection Agency (EPA) to declare carbon dioxide, one of the essential components of life on this planet, to be a pollutant. Now the same bureaucratic zealots are going after water itself.
Mercatus | Regulatory Benefits: Examining Agency Justification For New Regulations
This study attempts to shed some light on whether the benefits claimed by the federal agencies are likely to be achieved. In contrast to other validation studies, the study focuses on the agencies’ benefit claims rather than the actually measured benefits.
Washington Times | Obama’s money misunderstanding
In times past, political leaders would lay out their domestic and foreign policies in clear, coherent terms. President Obama talks about getting our fiscal house in order but fails to propose any meaningful spending cuts.
Washington Times | Next generation won’t inherit the American dream
President George W. Bush was fond of saying that he would not be around when the real history of his administration was written. Whether that is true in the digital age is unclear.
Blogs
Economist | At the top of an underperforming class
For those who started out the year optimists on American growth (such as me), 2012 was sobering. It looks like America will end the year having grown about 2%, according to Deutsche Bank, marginally below the average pace since the recovery began in mid-2009.
CNN Money | For sale: U.S. highways and bridges
State and local governments are in desperate need of cash for all manner of road, building and bridge repair, and are increasingly turning to private money for funding.
Washington Post | US current account trade deficit fell to $107.5 billion in third quarter, lowest since 2010
The U.S. current account trade deficit narrowed in the July-September quarter to the smallest level since late 2010, but the improvement may not last.
Market Watch | Dec. NAHB builder confidence highest since 2006
A gauge of confidence among home builders rose in December to the highest level since April 2006, with respondents encouraged by declining inventory and good sales conditions, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday.
Bloomberg | China Foreign-Investment Declines for 12th Time in 13 Months
Foreign direct investment in China fell for the 12th time in 13 months, suggesting the nation’s economic-growth rebound has yet to attract a fresh influx of capital spending from abroad.
WSJ | Struggling Greeks Face Harsh Winter
The spread of economic hardship is fraying Greece's social fabric and straining its political cohesion as the country enters the harshest winter of its three-year-old debt crisis. Even the tightknit Greek family—an institution that has helped the population to absorb a collapse in employment—is under pressure as household incomes dwindle.
WSJ | U.S. to Sell Bulk of TARP Banks
The Treasury in 2013 hopes to clear out its portfolio of banks that took bailout funds during the financial crisis, including scores of institutions that have missed dividend payments owed to the government.
Econ Comments & Analysis
Washington Times | EPA regulates water
The environmentalist movement has gone off the deep end. It’s bad enough that the courts have allowed the Environmental Protection Agency (EPA) to declare carbon dioxide, one of the essential components of life on this planet, to be a pollutant. Now the same bureaucratic zealots are going after water itself.
Mercatus | Regulatory Benefits: Examining Agency Justification For New Regulations
This study attempts to shed some light on whether the benefits claimed by the federal agencies are likely to be achieved. In contrast to other validation studies, the study focuses on the agencies’ benefit claims rather than the actually measured benefits.
Washington Times | Obama’s money misunderstanding
In times past, political leaders would lay out their domestic and foreign policies in clear, coherent terms. President Obama talks about getting our fiscal house in order but fails to propose any meaningful spending cuts.
Washington Times | Next generation won’t inherit the American dream
President George W. Bush was fond of saying that he would not be around when the real history of his administration was written. Whether that is true in the digital age is unclear.
Blogs
Economist | At the top of an underperforming class
For those who started out the year optimists on American growth (such as me), 2012 was sobering. It looks like America will end the year having grown about 2%, according to Deutsche Bank, marginally below the average pace since the recovery began in mid-2009.
Health Care
Econ Comments & Analysis
WSJ | ObamaCare's Faux Federalism
Having failed to persuade 26 states that participating in ObamaCare is a good deal, the liberals behind the law are denouncing these dissident Governors as federalist hypocrites. A few critics on the right are chiming in and arguing that the 26 are inviting worse results once the feds swoop in.
Mercatus | Medicaid Reforms and Emergency Room Visits: Evidence from West Virginia's Medicaid Redesign
Federal and state governments are under increasing pressure to limit Medicaid spending without negative health consequences. We examine a unique policy effort in West Virginia aimed at reducing spending and improving health through personal responsibility and preventive care.
Blogs
Heritage Foundation | 12 Days of Obamacare Surprises: Exchange Subsidies
Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 9 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.
WSJ | ObamaCare's Faux Federalism
Having failed to persuade 26 states that participating in ObamaCare is a good deal, the liberals behind the law are denouncing these dissident Governors as federalist hypocrites. A few critics on the right are chiming in and arguing that the 26 are inviting worse results once the feds swoop in.
Mercatus | Medicaid Reforms and Emergency Room Visits: Evidence from West Virginia's Medicaid Redesign
Federal and state governments are under increasing pressure to limit Medicaid spending without negative health consequences. We examine a unique policy effort in West Virginia aimed at reducing spending and improving health through personal responsibility and preventive care.
Blogs
Heritage Foundation | 12 Days of Obamacare Surprises: Exchange Subsidies
Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 9 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.
Monetary
News
MSN Money | Fed drops the pretense, buys bonds
Our redoubtable Federal Reserve was front and center last week as it continued its wildly aggressive monetary policy ways.
Econ Comments & Analysis
WSJ | ECB Chief Defends Austerity Measures
European Central Bank President Mario Draghi urged governments to build on "painful progress" they have made on narrowing budget deficits and overhauling their economies, despite the near-term damage these policies have inflicted on business activity and unemployment.
Hussman Funds | Roach Motel Monetary Policy
While we continue to observe some noise and dispersion in various month-to-month economic reports, the growth courses of production, consumption, sales, income and new order activity remain relatively indistinguishable from what we observed at the start of the past two recessions.
CATO | Basel’s Capital Curse
In the aftermath of the financial crisis, the oracles of money and banking have been beating the drums for “recapitalization” — telling us that, to avoid future crises, banks must be made stronger.
MSN Money | Fed drops the pretense, buys bonds
Our redoubtable Federal Reserve was front and center last week as it continued its wildly aggressive monetary policy ways.
Econ Comments & Analysis
WSJ | ECB Chief Defends Austerity Measures
European Central Bank President Mario Draghi urged governments to build on "painful progress" they have made on narrowing budget deficits and overhauling their economies, despite the near-term damage these policies have inflicted on business activity and unemployment.
Hussman Funds | Roach Motel Monetary Policy
While we continue to observe some noise and dispersion in various month-to-month economic reports, the growth courses of production, consumption, sales, income and new order activity remain relatively indistinguishable from what we observed at the start of the past two recessions.
CATO | Basel’s Capital Curse
In the aftermath of the financial crisis, the oracles of money and banking have been beating the drums for “recapitalization” — telling us that, to avoid future crises, banks must be made stronger.
Taxes
News
CNN Money | Tax bite on the rich if rates go up
The fiscal cliff may not be resolved yet. But after the latest round of offers and counteroffers, it's fair to assume that tax rates will be going up on the rich in some fashion.
CNN Money | Parents await fate of four key tax breaks
As the countdown to a fiscal cliff reaches its final days, four key tax breaks for parents are hanging in the balance.
Econ Comments & Analysis
Washington Times | ‘Cliff’ aside, expired breaks set to slam taxpayers
While much of Washington is consumed by the debate over tax increases scheduled to take effect next year, big tax hikes already have gone into effect for millions of families and businesses this year.
Real Clear Markets | The GOP Must Move The Tax Debate From Fairness to Facts
The current battle in Washington over how to avert the fiscal cliff (or even if we should) has the two sides talking past each other more than talking to each other.
Blogs
Heritage Foundation | The Obama Tax Plan: Undercutting Economic Growth
The President and his advocates in Congress argue that raising taxes on all taxpayers would damage the economy but that raising taxes on only “high-income” households is supposedly not economically destructive. This line of reasoning is simply mistaken.
CNN Money | Tax bite on the rich if rates go up
The fiscal cliff may not be resolved yet. But after the latest round of offers and counteroffers, it's fair to assume that tax rates will be going up on the rich in some fashion.
CNN Money | Parents await fate of four key tax breaks
As the countdown to a fiscal cliff reaches its final days, four key tax breaks for parents are hanging in the balance.
Econ Comments & Analysis
Washington Times | ‘Cliff’ aside, expired breaks set to slam taxpayers
While much of Washington is consumed by the debate over tax increases scheduled to take effect next year, big tax hikes already have gone into effect for millions of families and businesses this year.
Real Clear Markets | The GOP Must Move The Tax Debate From Fairness to Facts
The current battle in Washington over how to avert the fiscal cliff (or even if we should) has the two sides talking past each other more than talking to each other.
Blogs
Heritage Foundation | The Obama Tax Plan: Undercutting Economic Growth
The President and his advocates in Congress argue that raising taxes on all taxpayers would damage the economy but that raising taxes on only “high-income” households is supposedly not economically destructive. This line of reasoning is simply mistaken.
Employment
News
Washington Post | Why the unemployment rate might soon stop falling
Over the past year, the U.S. unemployment rate has fallen rapidly, from 8.7 percent last November to 7.7 percent today. But a new paper from the Federal Reserve Bank of San Francisco suggests that this decline could soon stall out.
Blogs
WSJ | Closer Look at Union vs. Nonunion Workers’ Wages
Over the weekend, the Journal reported on the economics of “right-to-work” rules. The conclusion: It’s complicated, especially when it comes to proving cause and effect. But at a very basic level, right-to-work states have lower unemployment rates and faster job growth, but also lower wages.
Washington Post | Why the unemployment rate might soon stop falling
Over the past year, the U.S. unemployment rate has fallen rapidly, from 8.7 percent last November to 7.7 percent today. But a new paper from the Federal Reserve Bank of San Francisco suggests that this decline could soon stall out.
Blogs
WSJ | Closer Look at Union vs. Nonunion Workers’ Wages
Over the weekend, the Journal reported on the economics of “right-to-work” rules. The conclusion: It’s complicated, especially when it comes to proving cause and effect. But at a very basic level, right-to-work states have lower unemployment rates and faster job growth, but also lower wages.
Budget
News
Bloomberg | Boehner to Push Budget Bill While Continuing Talks
House Speaker John Boehner said he will push a budget “plan B” measure that will include tax increases on income of more than $1 million a year, while he continues to negotiate with President Barack Obama.
CNN Money | Debt ceiling a big question in fiscal cliff deal
With just two weeks to go before the end of the year, the fiscal cliff remains unresolved and the country's debt is just $63 billion shy of the $16.394 trillion legal borrowing limit.
Econ Comments & Analysis
Politico | Deficit solution must preserve the American dream
For families still struggling to get by, the holiday season is a time for hope that the coming year will bring new opportunities. While our economic recovery has seen significant progress, there is still much more to be done to get Americans back to work and expand our middle class.
WSJ | Face-Off: Two Views on the Deficit Debate
Two economists from opposite ends of the political spectrum offer their takes on how Congress should tackle the federal deficit.
Blogs
Neighborhood Effects | Maryland’s budget troubles continue into the New Year
Each year a committee made up of Maryland state legislators gets together to set a spending growth limit for Maryland’s general fund budget.
Washington Post | Making progress on a ‘fiscal cliff’ deal?
Maybe the White House and House Speaker John Boehner (R-Ohio) really are getting somewhere on the “fiscal cliff” deal.
Bloomberg | Boehner to Push Budget Bill While Continuing Talks
House Speaker John Boehner said he will push a budget “plan B” measure that will include tax increases on income of more than $1 million a year, while he continues to negotiate with President Barack Obama.
CNN Money | Debt ceiling a big question in fiscal cliff deal
With just two weeks to go before the end of the year, the fiscal cliff remains unresolved and the country's debt is just $63 billion shy of the $16.394 trillion legal borrowing limit.
Econ Comments & Analysis
Politico | Deficit solution must preserve the American dream
For families still struggling to get by, the holiday season is a time for hope that the coming year will bring new opportunities. While our economic recovery has seen significant progress, there is still much more to be done to get Americans back to work and expand our middle class.
WSJ | Face-Off: Two Views on the Deficit Debate
Two economists from opposite ends of the political spectrum offer their takes on how Congress should tackle the federal deficit.
Blogs
Neighborhood Effects | Maryland’s budget troubles continue into the New Year
Each year a committee made up of Maryland state legislators gets together to set a spending growth limit for Maryland’s general fund budget.
Washington Post | Making progress on a ‘fiscal cliff’ deal?
Maybe the White House and House Speaker John Boehner (R-Ohio) really are getting somewhere on the “fiscal cliff” deal.
Monday, December 17, 2012
General Economics
News
Bloomberg | Euro-Area Exports Decline for Second Month Amid Recession
Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.
Washington Post | ECB’s Draghi urges leaders to create authority to clean up banks, on top of new watchdog
The head of the European Central Bank says EU leaders must move forward and set up an authority to clean up failed banks in a way that doesn’t leave taxpayers stuck with the bill.
Bloomberg | Manufacturing in New York Area Shrinks More Than Forecast
Manufacturing in the New York region shrank for a fifth straight month in December, while an increase in optimism about the next six months signals factories are poised to rebound should the federal government resolve its impasse over fiscal policy.
WSJ | Economy Poised for 2013 Gain
As 2012 comes to a close, the U.S. economy is also turning a page: The recovery is over. It looks like 2013 will be the start of a more normal, though hardly robust, period of growth.
Bloomberg | Treasury Plan Would Cut Rates on Some Mortgages in Bonds
Some struggling homeowners left out of current U.S. government mortgage-aid programs because their home loans have been packaged into private securities could see their interest rates cut through a subsidy being considered by the Treasury Department.
Washington Times | Senate fails to extend account insurance
A federal program giving unlimited insurance guarantees to some no-interest bank accounts, enacted at the height of the financial meltdown, will die out at the end of the year after the defeat of a Senate plan to extend it.
Econ Comments & Analysis
Real Clear Markets | The Bondage Of Redistribution Ideology
The idea that we should take from those who have and give to those who don't is viewed as proper and just among liberals. In fact, if you do not subscribe to redistribution ideology, you are attacked as being greedy at best and racist at worst. The problem is that income redistribution in practice promotes one of the same moral injustices found under slavery.
Blogs
Economist | The safe asset shortage
Everyone needs to save. People need to be able to cover unexpected expenses and income reductions, to say nothing of retirement. To accomplish this, we buy equities and bonds, hoard gold coins and physical currency, open bank accounts, accumulate real estate, purchase insurance coverage, and even stock up on canned food.
Bloomberg | Euro-Area Exports Decline for Second Month Amid Recession
Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.
Washington Post | ECB’s Draghi urges leaders to create authority to clean up banks, on top of new watchdog
The head of the European Central Bank says EU leaders must move forward and set up an authority to clean up failed banks in a way that doesn’t leave taxpayers stuck with the bill.
Bloomberg | Manufacturing in New York Area Shrinks More Than Forecast
Manufacturing in the New York region shrank for a fifth straight month in December, while an increase in optimism about the next six months signals factories are poised to rebound should the federal government resolve its impasse over fiscal policy.
WSJ | Economy Poised for 2013 Gain
As 2012 comes to a close, the U.S. economy is also turning a page: The recovery is over. It looks like 2013 will be the start of a more normal, though hardly robust, period of growth.
Bloomberg | Treasury Plan Would Cut Rates on Some Mortgages in Bonds
Some struggling homeowners left out of current U.S. government mortgage-aid programs because their home loans have been packaged into private securities could see their interest rates cut through a subsidy being considered by the Treasury Department.
Washington Times | Senate fails to extend account insurance
A federal program giving unlimited insurance guarantees to some no-interest bank accounts, enacted at the height of the financial meltdown, will die out at the end of the year after the defeat of a Senate plan to extend it.
Econ Comments & Analysis
Real Clear Markets | The Bondage Of Redistribution Ideology
The idea that we should take from those who have and give to those who don't is viewed as proper and just among liberals. In fact, if you do not subscribe to redistribution ideology, you are attacked as being greedy at best and racist at worst. The problem is that income redistribution in practice promotes one of the same moral injustices found under slavery.
Blogs
Economist | The safe asset shortage
Everyone needs to save. People need to be able to cover unexpected expenses and income reductions, to say nothing of retirement. To accomplish this, we buy equities and bonds, hoard gold coins and physical currency, open bank accounts, accumulate real estate, purchase insurance coverage, and even stock up on canned food.
Health Care
News
National Journal | 3 Reasons It's Not Yet Safe to Get Stoned
The big question since two states passed laws legalizing marijuana for non-medical use on November 6 has been how the federal government would respond. And thus far it's been silent -- until Friday.
Politico | GOP govs could gum up Obamacare
Can the governors do what Congress, the Supreme Court and the election couldn’t do — drive out Obamacare?
Blogs
The Volokh Conspiracy | Most States Won’t Create Exchanges
Yesterday was the deadline for states to tell the Department of Health and Human Services whether they wanted create their own health insurance exchanges. As the NYT reports, only 17 states have said they intend to create an exchange.
Heritage Foundation | 12 Days of Obamacare Surprises: Taxes
When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 10 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.
National Journal | 3 Reasons It's Not Yet Safe to Get Stoned
The big question since two states passed laws legalizing marijuana for non-medical use on November 6 has been how the federal government would respond. And thus far it's been silent -- until Friday.
Politico | GOP govs could gum up Obamacare
Can the governors do what Congress, the Supreme Court and the election couldn’t do — drive out Obamacare?
Blogs
The Volokh Conspiracy | Most States Won’t Create Exchanges
Yesterday was the deadline for states to tell the Department of Health and Human Services whether they wanted create their own health insurance exchanges. As the NYT reports, only 17 states have said they intend to create an exchange.
Heritage Foundation | 12 Days of Obamacare Surprises: Taxes
When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 10 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.
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