News
Bloomberg | Business Activity in U.S. Expands for First Time in Three Months
Business activity in the U.S. expanded in November for the first time in three months, showing superstorm Sandy is less damaging to the economy nationally.
USA Today | AAA warns E15 gasoline could cause car damage
E15, a higher blend of ethanol and gasoline, has rolled out in a handful of states. But its use in older vehicles is generating warnings from AAA, which says E15 could be harmful to pre-2012 vehicles.
Bloomberg | Germany Seen Recession-Bound in Poll Showing Euro Crisis
Germany, Europe’s largest economy, will be tipped into recession as the sovereign debt crisis roiling its neighbors extends into the new year, according to the Bloomberg Global Poll.
Market Watch | Why mortgage deduction may sail by fiscal cliff
As Washington battles over fiscal-cliff compromises, it’s likely that lawmakers will kick the can or at most make only small adjustments to one tax break that analysts say is ripe for reform: the mortgage-interest deduction.
Bloomberg | Corporate Bond Sales in U.S. Climb to Cap Busiest November Ever
Corporate bond sales in the U.S. capped the busiest November on record as issuance climbed to $45 billion this week, while relative yields narrowed as companies sought to lock in borrowing costs at almost unprecedented lows.
Market Watch | U.S. personal spending declines in October
Consumer spending in the U.S. fell 0.2% in October, the first decline in five months, while incomes were essentially flat, the Commerce Department said Friday.
Bloomberg | ECB Withholding Secret Greek Swaps File Keeps Taxpayers in Dark
The European Central Bank’s court victory allowing it to withhold files showing how Greece used derivatives to hide its debt leaves one of the region’s most powerful institutions free from public scrutiny as it assumes even more regulatory power.
National Journal | Fundamentals of Recent Economic Growth Are Not Fine
The economy is growing faster than initially thought, according to a Thursday report, but it may be taking on more fat than muscle, which could slow down growth in the final few months of the year, economists say.
Blogs
Calculated Risk | Kansas City Fed: Regional Manufacturing Activity "Eased Further" in November
According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity eased further in November, while producers’ expectations were unchanged from last month at modestly positive levels.
Daily Capitalist | BEA Raises 3rd Quarter 2012 GDP Growth Estimate To 2.67%
In their second estimate of the US GDP for the third quarter of 2012 the Bureau of Economic Analysis (BEA) found that the economy was growing at a 2.67% annualized rate, an upward revision of +0.65% from the previously published first estimate for the quarter.
Calculated Risk | A few comments on GDP Revision and Unemployment Claims
GDP Revision: Although Q3 real GDP growth was revised up from 2.0% annualized to 2.7%, the underlying details were disappointing.
AEI | A rather weak attack on NGDP targeting
I find much value in the idea of the Federal Reserve adopting a nominal GDP target. It provides a rule-based system to guide monetary policy and an anchor to economic expectations.
Friday, November 30, 2012
Health Care
News
CNN Money | Medicare patients at risk without doctors' fiscal cliff fix
As lawmakers head into talks to avoid the fiscal cliff, doctors are watching closely.
Econ Comments & Analysis
WSJ | The Death of 'Mediscare'
Since Nov. 6, Republicans have, for perfectly understandable reasons, expressed their deep disappointment with the election results. But even in defeat something significant and positive occurred: Republicans fought Democrats to a draw on the issue of Medicare.
CBO | Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services
Previously, when estimating the budgetary effects of legislation regarding prescription drugs, CBO found insufficient evidence of an “offsetting” effect of prescription drug use on spending for medical services.
Blogs
CATO | ‘By Far the Broadest and Potentially Most Damaging of the Legal Challenges’ to ObamaCare
As even some health law supporters concede, the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions.
AEI | How to turn Obamacare into FreeMarketcare in 4 (sort of) easy steps
If you posit that the Patient Protection and Affordable Care Act is here to stay, then what? One possibility for advocates of consumer-driven health reform is to embrace the health care reform law. Like, really embrace it. To the max.
CNN Money | Medicare patients at risk without doctors' fiscal cliff fix
As lawmakers head into talks to avoid the fiscal cliff, doctors are watching closely.
Econ Comments & Analysis
WSJ | The Death of 'Mediscare'
Since Nov. 6, Republicans have, for perfectly understandable reasons, expressed their deep disappointment with the election results. But even in defeat something significant and positive occurred: Republicans fought Democrats to a draw on the issue of Medicare.
CBO | Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services
Previously, when estimating the budgetary effects of legislation regarding prescription drugs, CBO found insufficient evidence of an “offsetting” effect of prescription drug use on spending for medical services.
Blogs
CATO | ‘By Far the Broadest and Potentially Most Damaging of the Legal Challenges’ to ObamaCare
As even some health law supporters concede, the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions.
AEI | How to turn Obamacare into FreeMarketcare in 4 (sort of) easy steps
If you posit that the Patient Protection and Affordable Care Act is here to stay, then what? One possibility for advocates of consumer-driven health reform is to embrace the health care reform law. Like, really embrace it. To the max.
Monetary
News
Market Watch | FDIC's Hoenig: Big banks should hold more capital
Regulators should replace "complex" global bank capital rules with a more simple system that requires large institutions hold more capital, Federal Deposit Insurance Corp. director Thomas Hoenig said Friday.
Econ Comments & Analysis
Real Clear Markets | Absent a Monetary Rule, Fiscal Cliffs Will Be the Norm
In the February 29, 1908, edition of New York Outlook magazine, Andrew Carnegie penned an article in which he lamented that the, "Americans have many advantages upon which we may plume ourselves as being in advance of other nations, but we have at least one humiliation to lessen self-glorification.
Blogs
Economist | Beware dangerous cliff
America's economy seems to have slowed sharply in the current quarter as businesses postpone investment while waiting to see if politicians can avoid sending the country over the "fiscal cliff".
Market Watch | FDIC's Hoenig: Big banks should hold more capital
Regulators should replace "complex" global bank capital rules with a more simple system that requires large institutions hold more capital, Federal Deposit Insurance Corp. director Thomas Hoenig said Friday.
Econ Comments & Analysis
Real Clear Markets | Absent a Monetary Rule, Fiscal Cliffs Will Be the Norm
In the February 29, 1908, edition of New York Outlook magazine, Andrew Carnegie penned an article in which he lamented that the, "Americans have many advantages upon which we may plume ourselves as being in advance of other nations, but we have at least one humiliation to lessen self-glorification.
Blogs
Economist | Beware dangerous cliff
America's economy seems to have slowed sharply in the current quarter as businesses postpone investment while waiting to see if politicians can avoid sending the country over the "fiscal cliff".
Taxes
News
WSJ | Tax Hit Looms on Mortgage Relief
Troubled homeowners who get a break from their mortgage lenders might not be so lucky with Uncle Sam, and could face hefty tax bills unless Congress acts to extend a key provision.
Fiscal Times | Treasury Needs a Tax Expert, Not a Wall St. Banker
With the virtual certainty that Treasury Secretary Timothy Geithner will be leaving his post shortly after the new year, there is much speculation about who might replace him.
Market Watch | Harkin: Tax high-speed traders to fill budget hole
Sen. Tom Harkin wants lawmakers to consider his financial transaction tax bill as they work on ways to resolve their differences on spending and taxes and the impending “fiscal cliff.”
CNN Money | How to raise taxes on the rich
The line in the sand in the fiscal cliff talks is clear: Democrats will only agree to a deal that raises the tax burden on high-income households.
CNBC | Complaints Aside, Most Face Lower Tax Burden Than in 1980
Alan Hicks divides long days between the insurance business he started in the late 1970s and the barbecue restaurant he opened with his sons three years ago.
Econ Comments & Analysis
WSJ | Costco's Dividend Tax Epiphany
When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco COST +1.04% co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte.
Blogs
Neighborhood Effects | What Was Wrong with the Bush Tax Cuts?
The fact is that the Bush tax cuts were deeply flawed, even from a free-market perspective. In a new paper with Mercatus program associate, Andrea Castillo, we contend
AEI | How much did we tax the rich during the greatest period of growth in American history?
People say, why worry so much about raising the marginal tax rate by a few percentage points? Do 4.6 points really matter, people like my colleague Michael “Tax and Spend” Strain and Louisiana Governor Bobby Jindal ask. Rates are “low” as they are, and it’s not like we’re talking about raising them to 75% here, they claim.
WSJ | Tax Hit Looms on Mortgage Relief
Troubled homeowners who get a break from their mortgage lenders might not be so lucky with Uncle Sam, and could face hefty tax bills unless Congress acts to extend a key provision.
Fiscal Times | Treasury Needs a Tax Expert, Not a Wall St. Banker
With the virtual certainty that Treasury Secretary Timothy Geithner will be leaving his post shortly after the new year, there is much speculation about who might replace him.
Market Watch | Harkin: Tax high-speed traders to fill budget hole
Sen. Tom Harkin wants lawmakers to consider his financial transaction tax bill as they work on ways to resolve their differences on spending and taxes and the impending “fiscal cliff.”
CNN Money | How to raise taxes on the rich
The line in the sand in the fiscal cliff talks is clear: Democrats will only agree to a deal that raises the tax burden on high-income households.
CNBC | Complaints Aside, Most Face Lower Tax Burden Than in 1980
Alan Hicks divides long days between the insurance business he started in the late 1970s and the barbecue restaurant he opened with his sons three years ago.
Econ Comments & Analysis
WSJ | Costco's Dividend Tax Epiphany
When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco COST +1.04% co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte.
Blogs
Neighborhood Effects | What Was Wrong with the Bush Tax Cuts?
The fact is that the Bush tax cuts were deeply flawed, even from a free-market perspective. In a new paper with Mercatus program associate, Andrea Castillo, we contend
AEI | How much did we tax the rich during the greatest period of growth in American history?
People say, why worry so much about raising the marginal tax rate by a few percentage points? Do 4.6 points really matter, people like my colleague Michael “Tax and Spend” Strain and Louisiana Governor Bobby Jindal ask. Rates are “low” as they are, and it’s not like we’re talking about raising them to 75% here, they claim.
Employment
News
Washington Times | Michigan eyes right-to-work measure
Having just helped torpedo a labor-backed move that would have enshrined collective-bargaining rights in the state’s constitution, emboldened Republican lawmakers are considering a move to make this historic bastion of union power into the nation’s 24th right-to-work state.
Washington Times | Michigan eyes right-to-work measure
Having just helped torpedo a labor-backed move that would have enshrined collective-bargaining rights in the state’s constitution, emboldened Republican lawmakers are considering a move to make this historic bastion of union power into the nation’s 24th right-to-work state.
Budget
News
Washington Times | Lot of movement, no progress on ‘fiscal cliff’: Tax increases vs. spending cuts
President Obama’s top aides floated a budget framework to Republicans on Thursday that would call for $1.6 trillion in tax increases coupled with a promise for future spending trims in order to head off the “fiscal cliff,” an offer GOP leaders immediately rejected, saying the White House needs to “get serious” about spending cuts.
Econ Comments & Analysis
Heritage Foundation | Six Bipartisan Entitlement Reforms to Solve the Real Fiscal Crisis: Only Presidential Leadership Is Needed
A high-stakes fiscal policy debate of unique size and import has just begun. Absent congressional action to the contrary, a massive slate of tax hikes and spending cuts will take effect on January 1, and that is only the first act.
Washington Times | Real solutions for the ‘fiscal cliff’
As we approach the “fiscal cliff” and Washington’s finest scramble to avert economic disaster, many ideas and proposals are being considered: Let the George W. Bush tax cuts expire, close loopholes or increase revenue. The jargon is familiar if not numbing.
AEI | Sovereign debt is not a risk-free asset
Sir, Mario Blejer says: “In most cases, sovereign debt is not a risk-free asset.” This is an understatement. The correct statement is: “In all cases, sovereign debt is not a risk-free asset.” As Anatole Kaletsky wrote a generation ago: “For at least 500 years, governments and nations have regularly defaulted.”
WSJ | This Unserious White House
The White House this week finally explained just how serious it is about averting a fiscal cliff that could throw the country back into a recession. The answer: not serious at all.
Market Watch | The hard facts about spending cuts
As lawmakers negotiate to avoid the so-called fiscal cliff, the combination of tax increases and spending cuts that are due to take place on Jan.1, 2013, the silence on spending cuts is deafening.
Washington TImes | Standoff at the ‘fiscal cliff’
Democrats have painted themselves into a box with their Mediscare tactics. Because they spent the last two years frightening seniors with tales of Republicans taking away their benefits and “ending Medicare as we know it,” the left-hand side of the aisle has effectively eliminated the possibility of negotiating changes to this broken program essential to any true resolution of the looming budgetary and tax disaster.
WSJ | The Real Danger From the Fiscal Cliff
Americans are told that they face a "fiscal cliff" if automatic federal spending cuts and tax increases occur at the end of the year. I'm not in favor of jumping off a cliff, but the logic of the supposed threat needs to be questioned.
City Journal | Can California Handle a Recovery?
The New York Times has made it official: California is not Greece. The state is showing “the first signs of a rebound,” reported the Times’s Adam Nagourney this week.
Forbes | The Fiscal Cliff: How To Call The Big Spenders' Bluff
The fiscal cliff – and the hullabaloo surrounding it — is a curious phenomenon. It has been over 3 years since Harry Reid’s Senate passed a budget. The U.S. federal government is over $16 trillion in debt. And Uncle Sam is borrowing 1 out of every 3 dollars he spends.
Blogs
Political Calculations | Transforming Student Loans from Taxes Back into Debt
Taxpayers already (or will) indirectly subsidize both the housing and healthcare sectors by covering GSE losses and paying for a healthcare system that pays out more than it receives in revenues. If the continued misalignment of educational resources ultimately leads to government “forgiveness” of student loan debt, it will simply be one more example of fiscal subsidies for a narrow demographic.
Washington Times | Lot of movement, no progress on ‘fiscal cliff’: Tax increases vs. spending cuts
President Obama’s top aides floated a budget framework to Republicans on Thursday that would call for $1.6 trillion in tax increases coupled with a promise for future spending trims in order to head off the “fiscal cliff,” an offer GOP leaders immediately rejected, saying the White House needs to “get serious” about spending cuts.
Econ Comments & Analysis
Heritage Foundation | Six Bipartisan Entitlement Reforms to Solve the Real Fiscal Crisis: Only Presidential Leadership Is Needed
A high-stakes fiscal policy debate of unique size and import has just begun. Absent congressional action to the contrary, a massive slate of tax hikes and spending cuts will take effect on January 1, and that is only the first act.
Washington Times | Real solutions for the ‘fiscal cliff’
As we approach the “fiscal cliff” and Washington’s finest scramble to avert economic disaster, many ideas and proposals are being considered: Let the George W. Bush tax cuts expire, close loopholes or increase revenue. The jargon is familiar if not numbing.
AEI | Sovereign debt is not a risk-free asset
Sir, Mario Blejer says: “In most cases, sovereign debt is not a risk-free asset.” This is an understatement. The correct statement is: “In all cases, sovereign debt is not a risk-free asset.” As Anatole Kaletsky wrote a generation ago: “For at least 500 years, governments and nations have regularly defaulted.”
WSJ | This Unserious White House
The White House this week finally explained just how serious it is about averting a fiscal cliff that could throw the country back into a recession. The answer: not serious at all.
Market Watch | The hard facts about spending cuts
As lawmakers negotiate to avoid the so-called fiscal cliff, the combination of tax increases and spending cuts that are due to take place on Jan.1, 2013, the silence on spending cuts is deafening.
Washington TImes | Standoff at the ‘fiscal cliff’
Democrats have painted themselves into a box with their Mediscare tactics. Because they spent the last two years frightening seniors with tales of Republicans taking away their benefits and “ending Medicare as we know it,” the left-hand side of the aisle has effectively eliminated the possibility of negotiating changes to this broken program essential to any true resolution of the looming budgetary and tax disaster.
WSJ | The Real Danger From the Fiscal Cliff
Americans are told that they face a "fiscal cliff" if automatic federal spending cuts and tax increases occur at the end of the year. I'm not in favor of jumping off a cliff, but the logic of the supposed threat needs to be questioned.
City Journal | Can California Handle a Recovery?
The New York Times has made it official: California is not Greece. The state is showing “the first signs of a rebound,” reported the Times’s Adam Nagourney this week.
Forbes | The Fiscal Cliff: How To Call The Big Spenders' Bluff
The fiscal cliff – and the hullabaloo surrounding it — is a curious phenomenon. It has been over 3 years since Harry Reid’s Senate passed a budget. The U.S. federal government is over $16 trillion in debt. And Uncle Sam is borrowing 1 out of every 3 dollars he spends.
Blogs
Political Calculations | Transforming Student Loans from Taxes Back into Debt
Taxpayers already (or will) indirectly subsidize both the housing and healthcare sectors by covering GSE losses and paying for a healthcare system that pays out more than it receives in revenues. If the continued misalignment of educational resources ultimately leads to government “forgiveness” of student loan debt, it will simply be one more example of fiscal subsidies for a narrow demographic.
Thursday, November 29, 2012
General Economics
News
CNN Money | IMF paper: China investment excessive
China's policymakers are leaning too heavily on investment to boost economic growth, a strategy that could destabilize the world's second largest economy, according to a paper prepared by International Monetary Fund researchers.
Bloomberg | U.S. Economy Grew at 2.7% Rate, More Than First Estimated
The economy in the U.S. expanded more than previously estimated in the third quarter as a narrower trade deficit and gains in inventory overshadowed a smaller gain in consumer spending.
WSJ | Greater Euro-Zone Unification Proposed
European officials proposed an overhaul of euro-zone institutions that would create a common budget for the 17 nations using the common currency and, ultimately, grant powers to issue debt collectively backed by the currency bloc.
Bloomberg | Euro-Area Economic Sentiment Unexpectedly Up in November
Economic confidence in the euro area unexpectedly rose in November even as the single-currency bloc was mired in its second recession in four years and leaders worked to contain the debt crisis.
CNN Money | Nearly 15 million households on food stamps
The number of American households receiving food stamps jumped nearly 10% in 2011.
CNBC | Volcker Says Rule Is Already Changing Wall Street
In a rare interview, former Fed Chairman Paul Volcker told CNBC that his namesake rule has already changed the way Wall Street does business, despite the delays in crafting the final draft of the rule, which regulatory officials now say won’t happen until next year.
Econ Comments & Analysis
Washington Times | GOP must fight corporate welfare
No one accuses establishment Republicans of being terribly brave or bright, but this insanity has got to stop: Democrats repeatedly frighten Republicans into accepting their statist agenda and then blame them for behaving like, well, Democrats. Republicans just keep falling for it.
Washington Times | Obamanomics still isn’t working
President Obama promised he’d put America back to work again. Four years into his presidency, things aren’t looking much brighter. It is a sign of the times that a fractional boost in the mood of shoppers is hailed as joyful news. Consumer confidence ticked up from 73.1 to 73.7 in November, according to the Advisory Board’s index, which was released Tuesday.
CNN Money | IMF paper: China investment excessive
China's policymakers are leaning too heavily on investment to boost economic growth, a strategy that could destabilize the world's second largest economy, according to a paper prepared by International Monetary Fund researchers.
Bloomberg | U.S. Economy Grew at 2.7% Rate, More Than First Estimated
The economy in the U.S. expanded more than previously estimated in the third quarter as a narrower trade deficit and gains in inventory overshadowed a smaller gain in consumer spending.
WSJ | Greater Euro-Zone Unification Proposed
European officials proposed an overhaul of euro-zone institutions that would create a common budget for the 17 nations using the common currency and, ultimately, grant powers to issue debt collectively backed by the currency bloc.
Bloomberg | Euro-Area Economic Sentiment Unexpectedly Up in November
Economic confidence in the euro area unexpectedly rose in November even as the single-currency bloc was mired in its second recession in four years and leaders worked to contain the debt crisis.
CNN Money | Nearly 15 million households on food stamps
The number of American households receiving food stamps jumped nearly 10% in 2011.
CNBC | Volcker Says Rule Is Already Changing Wall Street
In a rare interview, former Fed Chairman Paul Volcker told CNBC that his namesake rule has already changed the way Wall Street does business, despite the delays in crafting the final draft of the rule, which regulatory officials now say won’t happen until next year.
Econ Comments & Analysis
Washington Times | GOP must fight corporate welfare
No one accuses establishment Republicans of being terribly brave or bright, but this insanity has got to stop: Democrats repeatedly frighten Republicans into accepting their statist agenda and then blame them for behaving like, well, Democrats. Republicans just keep falling for it.
Washington Times | Obamanomics still isn’t working
President Obama promised he’d put America back to work again. Four years into his presidency, things aren’t looking much brighter. It is a sign of the times that a fractional boost in the mood of shoppers is hailed as joyful news. Consumer confidence ticked up from 73.1 to 73.7 in November, according to the Advisory Board’s index, which was released Tuesday.
Health Care
News
Politico | Experts: Governors won’t resist Medicaid expansion for long
Governors will eventually succumb to pressure to expand their Medicaid programs, a pair of health care experts predicted Thursday, arguing that the prospect of medical practices going out of business will force their hands.
Politico | Experts: Governors won’t resist Medicaid expansion for long
Governors will eventually succumb to pressure to expand their Medicaid programs, a pair of health care experts predicted Thursday, arguing that the prospect of medical practices going out of business will force their hands.
Monetary
News
FOX Business | Fed's Fisher: Rates to Stay Low Through 2015
Dallas Fed President Richard Fisher, a top U.S. Federal Reserve official repeated on Thursday that the Federal Reserve's interest rates would remain at low levels until 2015.
FOX Business | Fed's Fisher: Rates to Stay Low Through 2015
Dallas Fed President Richard Fisher, a top U.S. Federal Reserve official repeated on Thursday that the Federal Reserve's interest rates would remain at low levels until 2015.
Taxes
News
WSJ | Obama Is Flexible on Highest Tax Rates
President Barack Obama signaled he wouldn't insist tax rates on upper-income Americans rise to Clinton-era peaks as part of a deficit-reduction deal, showing new flexibility as he tries to accelerate talks with congressional Republicans.
Econ Comments & Analysis
Politico | A quick primer on soaking the rich
The Oracle of Omaha came on the show yesterday and promoted his plan to impose a minimum 30 percent tax on millionaires and billionaires. Warren Buffett said such a tax was necessary because fully a quarter of the 400 richest Americans (who averaged $200 million in income) paid a tax rate of less than 15 percent - and six of those super-rich individuals paid nothing at all.
Washington Times | Feel-good tax hikes are bad economic policy
“What I’m not going to do is extend the Bush tax cuts for the wealthiest 2 percent that we cannot afford and according to economists will have the least positive impact on the economy.” So proclaimed President Obama in his first post-election news conference.
Investors | Fiscal Cliff Endgame Will Include Tax Hikes On The Rich
As a practical matter, the debate over higher taxes is finished. If there's an agreement to avoid the "fiscal cliff," it will almost certainly contain large tax increases mostly or entirely on the wealthy.
WSJ | The Great 2012 Cashout
Perhaps you've heard from various economic sages that tax rates don't matter either to economic growth or taxpayer behavior. Don't tell that to the companies and individuals who are busy cashing out their investments or paying dividends to get ahead of the Obama tax scythe in January.
CATO | All about Taxes
If Republicans would only agree to dump Grover Norquist, Democrats will agree to cut spending and reform entitlements. Then, we can all join hands and sing Kumbaya as we usher in a new era of compromise and fiscal responsibility. Except that now that Republicans have agreed to raise taxes, er, revenue, as part of an agreement to avoid the looming fiscal cliff, liberals appear to have decided that there really isn't a need to cut spending after all.
Blogs
Tax Foundation | Buffett's Case for Minimum Tax on the Rich Fails on All Accounts
In a recent op-ed in the New York Times [found here], Warren Buffett is once again insisting on a new super-minimum tax on the super-wealthy. He suggests that the rich pay an effective tax rate of 30 percent on incomes between $1 million and $10 million and a 35 percent effective tax rate on incomes above that.
Heritage Foundation | Bipartisan Tax Reform? It Happened in 1986
Whenever Washington leaders start talking about the economy, they like to refer to deals and legislation from years past. In the latest fiscal cliff talks, the Tax Reform Act of 1986 has come up. Why?
AEI | Top 10 things Obama’s $82 billion tax hike on the rich would buy
President Obama’s plan to raise taxes on the wealthy will bring in roughly $82 billion a year. Since the federal government is spending well over a trillion dollars more than it takes in each year, that won’t put much of a dent in our fiscal problems.
WSJ | Obama Is Flexible on Highest Tax Rates
President Barack Obama signaled he wouldn't insist tax rates on upper-income Americans rise to Clinton-era peaks as part of a deficit-reduction deal, showing new flexibility as he tries to accelerate talks with congressional Republicans.
Econ Comments & Analysis
Politico | A quick primer on soaking the rich
The Oracle of Omaha came on the show yesterday and promoted his plan to impose a minimum 30 percent tax on millionaires and billionaires. Warren Buffett said such a tax was necessary because fully a quarter of the 400 richest Americans (who averaged $200 million in income) paid a tax rate of less than 15 percent - and six of those super-rich individuals paid nothing at all.
Washington Times | Feel-good tax hikes are bad economic policy
“What I’m not going to do is extend the Bush tax cuts for the wealthiest 2 percent that we cannot afford and according to economists will have the least positive impact on the economy.” So proclaimed President Obama in his first post-election news conference.
Investors | Fiscal Cliff Endgame Will Include Tax Hikes On The Rich
As a practical matter, the debate over higher taxes is finished. If there's an agreement to avoid the "fiscal cliff," it will almost certainly contain large tax increases mostly or entirely on the wealthy.
WSJ | The Great 2012 Cashout
Perhaps you've heard from various economic sages that tax rates don't matter either to economic growth or taxpayer behavior. Don't tell that to the companies and individuals who are busy cashing out their investments or paying dividends to get ahead of the Obama tax scythe in January.
CATO | All about Taxes
If Republicans would only agree to dump Grover Norquist, Democrats will agree to cut spending and reform entitlements. Then, we can all join hands and sing Kumbaya as we usher in a new era of compromise and fiscal responsibility. Except that now that Republicans have agreed to raise taxes, er, revenue, as part of an agreement to avoid the looming fiscal cliff, liberals appear to have decided that there really isn't a need to cut spending after all.
Blogs
Tax Foundation | Buffett's Case for Minimum Tax on the Rich Fails on All Accounts
In a recent op-ed in the New York Times [found here], Warren Buffett is once again insisting on a new super-minimum tax on the super-wealthy. He suggests that the rich pay an effective tax rate of 30 percent on incomes between $1 million and $10 million and a 35 percent effective tax rate on incomes above that.
Heritage Foundation | Bipartisan Tax Reform? It Happened in 1986
Whenever Washington leaders start talking about the economy, they like to refer to deals and legislation from years past. In the latest fiscal cliff talks, the Tax Reform Act of 1986 has come up. Why?
AEI | Top 10 things Obama’s $82 billion tax hike on the rich would buy
President Obama’s plan to raise taxes on the wealthy will bring in roughly $82 billion a year. Since the federal government is spending well over a trillion dollars more than it takes in each year, that won’t put much of a dent in our fiscal problems.
Employment
News
USA Today | Construction industry faces worker shortage
Contractors are struggling with shortages of workers as the home-building market comes to life and some commercial sectors strengthen. The crunch is affecting a handful of states, including Texas, Arizona, Iowa and Florida.
Bloomberg | Jobless Claims in U.S. Decrease as Sandy Effect Dissipates
Fewer Americans filed first-time claims for unemployment insurance payments last week as the labor market disruptions wrought by superstorm Sandy ebbed.
Econ Comments & Analysis
CBO | Unemployment Insurance in the Wake of the Recent Recession
Far more workers were laid off in 2008 and 2009 than in 2006 and 2007. The number of workers who lost their job and started receiving UI benefits peaked at 14.4 million in 2009, whereas an average of roughly 8 million laid-off workers started receiving benefits in each fiscal year from 2004 to 2007.
USA Today | Construction industry faces worker shortage
Contractors are struggling with shortages of workers as the home-building market comes to life and some commercial sectors strengthen. The crunch is affecting a handful of states, including Texas, Arizona, Iowa and Florida.
Bloomberg | Jobless Claims in U.S. Decrease as Sandy Effect Dissipates
Fewer Americans filed first-time claims for unemployment insurance payments last week as the labor market disruptions wrought by superstorm Sandy ebbed.
Econ Comments & Analysis
CBO | Unemployment Insurance in the Wake of the Recent Recession
Far more workers were laid off in 2008 and 2009 than in 2006 and 2007. The number of workers who lost their job and started receiving UI benefits peaked at 14.4 million in 2009, whereas an average of roughly 8 million laid-off workers started receiving benefits in each fiscal year from 2004 to 2007.
Budget
News
CNN Money | Fiscal cliff countdown: Automatic spending cuts
There's one part of the fiscal cliff that nearly everyone agrees on: avoiding the $1.2 trillion in automatic spending cuts scheduled to begin on Jan 2.
National Journal | Is Our Debt Burden Really $100 Trillion?
Wanna scare somebody about America's debt on the eve of the fiscal cliff? I mean, really scare somebody? Here's a trick. Don't talk about the debt. Talk about "unfunded liabilities."
Econ Comments & Analysis
WSJ | The Outlines of a Budget Deal Are Obvious
With a big assist from Ohio, the president clinched a second term after a tough fight. In his victory statement, he pledged to "continue our economic progress" and see "our servicemen and women . . . come home." There were high hopes and a belief he had a mandate.
AEI | A debt strategy for the next 30 years
The United States is on an unsustainable fiscal course. This year marks the fourth in a row that the U.S. federal deficit will exceed $1.1 trillion. Since the end of 2007, the federal debt, now $11 trillion, has doubled as a share of annual GDP-from 36% to 73%. The long-term outlook is even worse.
WSJ | Unbalanced
Republican fiscal cliff negotiators are infuriated because they can't get the White House to propose serious spending cuts. They complain that behind closed doors the White House team and congressional Democrats want only one thing: higher taxes.
Heritage Foundation | What’s in the Fiscal Cliff?
The nation is now firmly on track to go over the fiscal cliff in January 2013 unless Washington takes action. The uncertainty leading up to the fiscal cliff—especially Taxmageddon—is already hurting the economy today and, according to projections by the Congressional Budget Office, could send the country back into recession in 2013
Blogs
Keith Hennessey | More on the President’s veto bluff
Yesterday I argued that the President is bluffing on his veto threat. Today I want to respond to some great feedback from friends and readers. Warning: discussions of negotiating strategy and tactics can get a little dense.
National Review | Repeat after Me: Social Security Adds To the Deficit
In this morning’s USA Today, Senator Dick Durbin tries to make (again) the case that “Social Security is not in crisis.” His piece repeats the ideas that Social Security “continues to bring in new funds annually through payroll taxes,” “has a substantial trust fund” and “does not add a penny to the deficit.” However, both the existence of a positive balance in the trust fund and the payroll-tax collection don’t prove the senator’s point that Social Security is not in crisis.
CNN Money | Fiscal cliff countdown: Automatic spending cuts
There's one part of the fiscal cliff that nearly everyone agrees on: avoiding the $1.2 trillion in automatic spending cuts scheduled to begin on Jan 2.
National Journal | Is Our Debt Burden Really $100 Trillion?
Wanna scare somebody about America's debt on the eve of the fiscal cliff? I mean, really scare somebody? Here's a trick. Don't talk about the debt. Talk about "unfunded liabilities."
Econ Comments & Analysis
WSJ | The Outlines of a Budget Deal Are Obvious
With a big assist from Ohio, the president clinched a second term after a tough fight. In his victory statement, he pledged to "continue our economic progress" and see "our servicemen and women . . . come home." There were high hopes and a belief he had a mandate.
AEI | A debt strategy for the next 30 years
The United States is on an unsustainable fiscal course. This year marks the fourth in a row that the U.S. federal deficit will exceed $1.1 trillion. Since the end of 2007, the federal debt, now $11 trillion, has doubled as a share of annual GDP-from 36% to 73%. The long-term outlook is even worse.
WSJ | Unbalanced
Republican fiscal cliff negotiators are infuriated because they can't get the White House to propose serious spending cuts. They complain that behind closed doors the White House team and congressional Democrats want only one thing: higher taxes.
Heritage Foundation | What’s in the Fiscal Cliff?
The nation is now firmly on track to go over the fiscal cliff in January 2013 unless Washington takes action. The uncertainty leading up to the fiscal cliff—especially Taxmageddon—is already hurting the economy today and, according to projections by the Congressional Budget Office, could send the country back into recession in 2013
Blogs
Keith Hennessey | More on the President’s veto bluff
Yesterday I argued that the President is bluffing on his veto threat. Today I want to respond to some great feedback from friends and readers. Warning: discussions of negotiating strategy and tactics can get a little dense.
National Review | Repeat after Me: Social Security Adds To the Deficit
In this morning’s USA Today, Senator Dick Durbin tries to make (again) the case that “Social Security is not in crisis.” His piece repeats the ideas that Social Security “continues to bring in new funds annually through payroll taxes,” “has a substantial trust fund” and “does not add a penny to the deficit.” However, both the existence of a positive balance in the trust fund and the payroll-tax collection don’t prove the senator’s point that Social Security is not in crisis.
Wednesday, November 28, 2012
General Economics
News
CNN Money | Spanish bank bailout gets go-ahead
The European Commission has approved Spain's plans to restructure four of its weakest banks, clearing the way for them to receive nearly €37 billion in fresh capital from the eurozone's bailout fund.
Bloomberg | U.S. Said to Weigh Tightening Rules for Foreign Lenders
U.S. units of foreign lenders including Deutsche Bank AG (DBK) may be required by regulators to comply with tougher capital rules that some banks sought to skirt, three people with knowledge of the discussions said.
FOX Business | Obama to Meet With CEOs Over Fiscal Cliff
Chief executives from top U.S. corporations, including Goldman Sachs, Deloitte LLP, and Caterpillar Inc., will meet with President Barack Obama on Wednesday to discuss U.S. fiscal problems, the White House said.
Econ Comments & Analysis
WSJ | A Mandate to Raise Food Prices
Americans should understand that this year’s drought—the worst in 50 years—isn’t the primary reason for record-high food prices. The drought made things worse, but the leading driver of long-term increases in food costs is a deeply flawed federal mandate.
Real Clear Markets | Our Handling of Keystone Is a Smack In Canada's Face
The Keystone XL (KXL) pipeline, which would bring oil from Canada's oil-sands to refiners in the Gulf Coast is in the news again. An unlikely set of bedfellows have recently come out with strong statements of support for the pipeline.
Washington Times | Obama’s war on wealth
A big issue is missing in the debate over the “fiscal cliff”: how to get the Obama economy growing again, fueling capital investment, jobs and higher incomes.
Washington Times | Overturning Dodd-Frank
Ordinarily, political disputes ought to be settled by lawmakers accountable to the public, not unelected judges. It’s bad form for a political party to run to the judicial branch simply because it can’t win on an issue fair-and-square in the legislature. Sometimes, however, there’s no alternative but to turn to judicial referees when the other side is caught cheating.
Blogs
Political Calculations | Factoring in the Falling Dollar for US-China Trade
Previously, using just the U.S. dollar-based growth rate of U.S. exports to China, we found that China's economy had entered into recession in December 2011.
Calculated Risk | Update: The Recession Probability Chart
Historically, three consecutive months of smoothed probabilities above 80% has been a reliable signal of the start of a new recession, while three consecutive months of smoothed probabilities below 20% has been a reliable signal of the start of a new expansion.
AEI | Can the US economy still grow like it used to?
The days of 3%-plus GDP growth — the U.S. has grown by 3.4% a year since WWII — are a thing of the past thanks to a) declining population growth, b) declining productivity in the service sector, c) rising commodity costs, and d) climate change.
CNN Money | Spanish bank bailout gets go-ahead
The European Commission has approved Spain's plans to restructure four of its weakest banks, clearing the way for them to receive nearly €37 billion in fresh capital from the eurozone's bailout fund.
Bloomberg | U.S. Said to Weigh Tightening Rules for Foreign Lenders
U.S. units of foreign lenders including Deutsche Bank AG (DBK) may be required by regulators to comply with tougher capital rules that some banks sought to skirt, three people with knowledge of the discussions said.
FOX Business | Obama to Meet With CEOs Over Fiscal Cliff
Chief executives from top U.S. corporations, including Goldman Sachs, Deloitte LLP, and Caterpillar Inc., will meet with President Barack Obama on Wednesday to discuss U.S. fiscal problems, the White House said.
Econ Comments & Analysis
WSJ | A Mandate to Raise Food Prices
Americans should understand that this year’s drought—the worst in 50 years—isn’t the primary reason for record-high food prices. The drought made things worse, but the leading driver of long-term increases in food costs is a deeply flawed federal mandate.
Real Clear Markets | Our Handling of Keystone Is a Smack In Canada's Face
The Keystone XL (KXL) pipeline, which would bring oil from Canada's oil-sands to refiners in the Gulf Coast is in the news again. An unlikely set of bedfellows have recently come out with strong statements of support for the pipeline.
Washington Times | Obama’s war on wealth
A big issue is missing in the debate over the “fiscal cliff”: how to get the Obama economy growing again, fueling capital investment, jobs and higher incomes.
Washington Times | Overturning Dodd-Frank
Ordinarily, political disputes ought to be settled by lawmakers accountable to the public, not unelected judges. It’s bad form for a political party to run to the judicial branch simply because it can’t win on an issue fair-and-square in the legislature. Sometimes, however, there’s no alternative but to turn to judicial referees when the other side is caught cheating.
Blogs
Political Calculations | Factoring in the Falling Dollar for US-China Trade
Previously, using just the U.S. dollar-based growth rate of U.S. exports to China, we found that China's economy had entered into recession in December 2011.
Calculated Risk | Update: The Recession Probability Chart
Historically, three consecutive months of smoothed probabilities above 80% has been a reliable signal of the start of a new recession, while three consecutive months of smoothed probabilities below 20% has been a reliable signal of the start of a new expansion.
AEI | Can the US economy still grow like it used to?
The days of 3%-plus GDP growth — the U.S. has grown by 3.4% a year since WWII — are a thing of the past thanks to a) declining population growth, b) declining productivity in the service sector, c) rising commodity costs, and d) climate change.
Health Care
News
Politico | Poll: Health coverage not federal government's job
For the first time in 12 years, a majority say it is not the federal government’s responsibility to ensure that health care coverage is provided to all Americans, according to a poll on Wednesday.
Econ Comments & Analysis
WSJ | Hope and Exchange
ObamaCare is due to land in a mere 10 months—about 300 days—and the Administration is not even close to ready, so naturally the political and media classes are attacking the Governors and state legislators who decline to help out. Mostly Republicans, they’re facing a torrent of abuse in Washington and pressure from health lobbies at home.
Blogs
FOX Business | 800 Companies, Groups Demand Repeal of Medical Device Tax
Starting January 1, medical-device makers must pay a new 2.3% excise tax on sales, regardless if they make a profit, to raise $30 billion over the next decade to pay for health reform.
Politico | Poll: Health coverage not federal government's job
For the first time in 12 years, a majority say it is not the federal government’s responsibility to ensure that health care coverage is provided to all Americans, according to a poll on Wednesday.
Econ Comments & Analysis
WSJ | Hope and Exchange
ObamaCare is due to land in a mere 10 months—about 300 days—and the Administration is not even close to ready, so naturally the political and media classes are attacking the Governors and state legislators who decline to help out. Mostly Republicans, they’re facing a torrent of abuse in Washington and pressure from health lobbies at home.
Blogs
FOX Business | 800 Companies, Groups Demand Repeal of Medical Device Tax
Starting January 1, medical-device makers must pay a new 2.3% excise tax on sales, regardless if they make a profit, to raise $30 billion over the next decade to pay for health reform.
Monetary
News
CNN Money | Federal Reserve official aims for 6.5% unemployment
Just how far should the unemployment rate fall before the Federal Reserve raises interest rates? Charles Evans, president of the Chicago Fed, wants the central bank to keep the federal funds rate near zero until unemployment falls to 6.5% -- a jobless rate not seen since 2008.
National Journal | Treasury: China Not a Currency Manipulator
The U.S. Treasury Department declined to label China a currency manipulator in a Tuesday report. The agency said in its semiannual report to Congress on international economic and exchange-rate policies of the major U.S. trading partners that none met the criteria necessary to be designated a manipulator, including China.
Econ Comments & Analysis
WSJ | Bernanke's Seoul Brothers
Another monetary-policy domino fell Tuesday when Seoul introduced a new round of capital controls. South Korea's financial regulators will reduce the amount of foreign-exchange forwards that banks can carry on their balance sheets.
Blogs
Economist | Central banking for fun and profit
Central banks earn hefty profits. They own assets with a positive nominal yield and fund themselves by creating either reserves or currency, which yield next to nothing. In most countries, these profits are remitted to the fiscal authority. After all, the central bank is a public institution, so the people should benefit whenever the monetary authority does well.
CNN Money | Federal Reserve official aims for 6.5% unemployment
Just how far should the unemployment rate fall before the Federal Reserve raises interest rates? Charles Evans, president of the Chicago Fed, wants the central bank to keep the federal funds rate near zero until unemployment falls to 6.5% -- a jobless rate not seen since 2008.
National Journal | Treasury: China Not a Currency Manipulator
The U.S. Treasury Department declined to label China a currency manipulator in a Tuesday report. The agency said in its semiannual report to Congress on international economic and exchange-rate policies of the major U.S. trading partners that none met the criteria necessary to be designated a manipulator, including China.
Econ Comments & Analysis
WSJ | Bernanke's Seoul Brothers
Another monetary-policy domino fell Tuesday when Seoul introduced a new round of capital controls. South Korea's financial regulators will reduce the amount of foreign-exchange forwards that banks can carry on their balance sheets.
Blogs
Economist | Central banking for fun and profit
Central banks earn hefty profits. They own assets with a positive nominal yield and fund themselves by creating either reserves or currency, which yield next to nothing. In most countries, these profits are remitted to the fiscal authority. After all, the central bank is a public institution, so the people should benefit whenever the monetary authority does well.
Taxes
News
Politico | Some say add fee to energy production
With pencils being sharpened on a debt deal, all eyes are on the gas tax as a possible savior for transportation spending. But another option that may cause lawmakers less heartburn is being obscured by the gas tax dust: linking energy production with infrastructure spending.
Econ Comments & Analysis
WSJ | Obama Vetoes a Carbon Tax—in Europe
President Obama has said he’s going to continue his crusade against carbon energy in a second term, and we believe him. Yet there he was Tuesday signing a bipartisan bill shielding U.S. airlines from paying a carbon tax merely for flying to Europe.
CNBC | Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny
Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families - and the broader housing market.
Blogs
National Review | The Buffett Tax Twists
Yesterday in the New York Times, Billionaire Warren Buffett renewed his call to increase taxes on the rich. While I wished he would spend half the time and energy he spends calling for tax increases on advocating spending cuts, the piece does have a few interesting features.
AEI | 3 charts that show just what’s happened to the tax code since 1979
From 1979 through 2000, all of the changes in the tax code before the Bush tax cuts effectively reduced the average tax rate for the bottom 80 percent of earners and raised the average tax rate for the top 20 percent.
Politico | Some say add fee to energy production
With pencils being sharpened on a debt deal, all eyes are on the gas tax as a possible savior for transportation spending. But another option that may cause lawmakers less heartburn is being obscured by the gas tax dust: linking energy production with infrastructure spending.
Econ Comments & Analysis
WSJ | Obama Vetoes a Carbon Tax—in Europe
President Obama has said he’s going to continue his crusade against carbon energy in a second term, and we believe him. Yet there he was Tuesday signing a bipartisan bill shielding U.S. airlines from paying a carbon tax merely for flying to Europe.
CNBC | Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny
Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families - and the broader housing market.
Blogs
National Review | The Buffett Tax Twists
Yesterday in the New York Times, Billionaire Warren Buffett renewed his call to increase taxes on the rich. While I wished he would spend half the time and energy he spends calling for tax increases on advocating spending cuts, the piece does have a few interesting features.
AEI | 3 charts that show just what’s happened to the tax code since 1979
From 1979 through 2000, all of the changes in the tax code before the Bush tax cuts effectively reduced the average tax rate for the bottom 80 percent of earners and raised the average tax rate for the top 20 percent.
Employment
Blogs
Heritage Foundation | Obama Tax Hike on Small Business Would Chill Hiring
“Would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?” When asked this question by Today’s Matt Lauer, Warren Buffett confidently answered, “No.” How could this be, when the tax hikes desired by President Obama would fall directly on some of America’s most successful job creators?
Heritage Foundation | Obama Tax Hike on Small Business Would Chill Hiring
“Would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?” When asked this question by Today’s Matt Lauer, Warren Buffett confidently answered, “No.” How could this be, when the tax hikes desired by President Obama would fall directly on some of America’s most successful job creators?
Budget
News
WSJ | Greek Debt Plan Relies on Rosy Outlook
A long-awaited deal cobbled together by euro-zone finance ministers early Tuesday gives Greece a rough outline for cutting its mountain of debt, but the plan threatens to be derailed if the country's economy doesn't emerge from recession in two years.
NY Times | Now Touring, the Debt Duo, Simpson-Bowles
Theirs is an improbable buddy act that is making for unlikely entertainment from campuses to corporations on a most serious subject: the federal debt. The proof of their appeal: some business groups pay them $40,000 each per appearance. Really. To discuss budgets and baselines.
WSJ | Democrats Harden Budget Positions
The White House and congressional Democrats hardened their budget positions on Tuesday and signaled they are prepared for partisan jockeying before any agreement to block impending spending cuts and tax increases can be reached with Republicans.
CNN Money | What is 'Fix the Debt?'
The election may be over. But there's a "Campaign to Fix the Debt" backed by millions of dollars that's well under way and gaining a voice in Washington.
Bloomberg | China’s U.S. Debt Buying Seen Limited, Former Adviser Says
China may limit its purchases of U.S. Treasuries because the central bank has reduced its buying of dollars at home, according to a Chinese academic who has served as a government adviser.
Blogs
Calculated Risk | Fed: Consumer Deleveraging Continued in Q3, Student Debt increases
In its latest Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York announced that in the third quarter, non-real estate household debt jumped 2.3% to $2.7 trillion. The increase was due to a boost in student loans ($42 billion), auto loans ($18 billion) and credit card balances ($2 billion).
WSJ | Greek Debt Plan Relies on Rosy Outlook
A long-awaited deal cobbled together by euro-zone finance ministers early Tuesday gives Greece a rough outline for cutting its mountain of debt, but the plan threatens to be derailed if the country's economy doesn't emerge from recession in two years.
NY Times | Now Touring, the Debt Duo, Simpson-Bowles
Theirs is an improbable buddy act that is making for unlikely entertainment from campuses to corporations on a most serious subject: the federal debt. The proof of their appeal: some business groups pay them $40,000 each per appearance. Really. To discuss budgets and baselines.
WSJ | Democrats Harden Budget Positions
The White House and congressional Democrats hardened their budget positions on Tuesday and signaled they are prepared for partisan jockeying before any agreement to block impending spending cuts and tax increases can be reached with Republicans.
CNN Money | What is 'Fix the Debt?'
The election may be over. But there's a "Campaign to Fix the Debt" backed by millions of dollars that's well under way and gaining a voice in Washington.
Bloomberg | China’s U.S. Debt Buying Seen Limited, Former Adviser Says
China may limit its purchases of U.S. Treasuries because the central bank has reduced its buying of dollars at home, according to a Chinese academic who has served as a government adviser.
Blogs
Calculated Risk | Fed: Consumer Deleveraging Continued in Q3, Student Debt increases
In its latest Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York announced that in the third quarter, non-real estate household debt jumped 2.3% to $2.7 trillion. The increase was due to a boost in student loans ($42 billion), auto loans ($18 billion) and credit card balances ($2 billion).
Tuesday, November 27, 2012
General Economics
News
Market Watch | Fed's Lockhart warns on cyber-threat facing banks
The U.S. financial system and its regulators need to "update our thinking" about the threat of cyber-attacks given the spike and magnitude of recent events, said Dennis Lockhart, president of the Atlanta Federal Reserve Bank, on Tuesday.
Bloomberg | Demand for U.S. Capital Goods Climbs in Spending Rebound
Demand for goods such as machinery and electronics climbed in October by the most in five months, signaling companies are starting to overcome concern the looming fiscal cliff will derail the U.S. economy.
Market Watch | Case-Shiller shows home prices rise again
U.S. home prices rose in September for the sixth month, signaling that the housing market is "in the midst of a recovery," according to the S&P/Case-Shiller home-price index released Tuesday.
Econ Comments & Analysis
WSJ | Tagging the Taxpayer
Just in time for Christmas, banks and their lobbyists are asking Uncle Santa for the greatest regulatory gift: the extension of a taxpayer subsidy. The lobbying plan is to attach this banker benefit to legislation addressing the fiscal cliff, or any other legislative vehicle that moves in late December.
Washington Times | Battling a bailout culture
Some Americans believe in the founding principle that individuals are responsible for their own well-being and will voluntarily aid those in need. Others believe that people should be required to take care of their fellow citizens.
Barrons | A Cause for Thanksgiving, Part I
M. King Hubbert should be spinning in his grave. In defiance of Hubbert's theory of "peak oil," the International Energy Agency recently predicted that the U.S. will have energy independence by 2020 and return to its former place as the world's biggest producer of oil. By 2030 or sooner, according to the IEA, North America will be a significant energy exporter.
Blogs
WSJ | Secondary Sources: No Fiscal Cliff Progress, Buffett Tax Avoidance, Services Spending
In spite of what you may be reading elsewhere, we are no closer today to avoiding the fiscal cliff than we were the day after Election Day. All of the so-called progress to date has been one of three things: the media looking for a story, a misunderstanding of what it’s going to take to get a deal or hype.
AEI | When fighting inequality produces more inequality
I like Jonathan Haidt a lot, and there’s much good sense in this recent NYTimes op/ed about common threats to the nation’s future and the possibility of liberals and conservatives agreeing on the need to face these threats.
Market Watch | Fed's Lockhart warns on cyber-threat facing banks
The U.S. financial system and its regulators need to "update our thinking" about the threat of cyber-attacks given the spike and magnitude of recent events, said Dennis Lockhart, president of the Atlanta Federal Reserve Bank, on Tuesday.
Bloomberg | Demand for U.S. Capital Goods Climbs in Spending Rebound
Demand for goods such as machinery and electronics climbed in October by the most in five months, signaling companies are starting to overcome concern the looming fiscal cliff will derail the U.S. economy.
Market Watch | Case-Shiller shows home prices rise again
U.S. home prices rose in September for the sixth month, signaling that the housing market is "in the midst of a recovery," according to the S&P/Case-Shiller home-price index released Tuesday.
Econ Comments & Analysis
WSJ | Tagging the Taxpayer
Just in time for Christmas, banks and their lobbyists are asking Uncle Santa for the greatest regulatory gift: the extension of a taxpayer subsidy. The lobbying plan is to attach this banker benefit to legislation addressing the fiscal cliff, or any other legislative vehicle that moves in late December.
Washington Times | Battling a bailout culture
Some Americans believe in the founding principle that individuals are responsible for their own well-being and will voluntarily aid those in need. Others believe that people should be required to take care of their fellow citizens.
Barrons | A Cause for Thanksgiving, Part I
M. King Hubbert should be spinning in his grave. In defiance of Hubbert's theory of "peak oil," the International Energy Agency recently predicted that the U.S. will have energy independence by 2020 and return to its former place as the world's biggest producer of oil. By 2030 or sooner, according to the IEA, North America will be a significant energy exporter.
Blogs
WSJ | Secondary Sources: No Fiscal Cliff Progress, Buffett Tax Avoidance, Services Spending
In spite of what you may be reading elsewhere, we are no closer today to avoiding the fiscal cliff than we were the day after Election Day. All of the so-called progress to date has been one of three things: the media looking for a story, a misunderstanding of what it’s going to take to get a deal or hype.
AEI | When fighting inequality produces more inequality
I like Jonathan Haidt a lot, and there’s much good sense in this recent NYTimes op/ed about common threats to the nation’s future and the possibility of liberals and conservatives agreeing on the need to face these threats.
Health Care
Blogs
Heritage Foundation | Some Obamacare Legal Challenges Are Alive and Well
On Monday, the U.S. Supreme Court, in granting a petition for rehearing in Liberty University v. Geitner, vacated the U.S. Fourth Circuit’s prior dismissal of Liberty’s challenge to Obamacare and directed the Fourth Circuit to reconsider its decision in light of the Supreme Court’s recent decision in NFIB v. Sebelius (2012).
Heritage Foundation | Some Obamacare Legal Challenges Are Alive and Well
On Monday, the U.S. Supreme Court, in granting a petition for rehearing in Liberty University v. Geitner, vacated the U.S. Fourth Circuit’s prior dismissal of Liberty’s challenge to Obamacare and directed the Fourth Circuit to reconsider its decision in light of the Supreme Court’s recent decision in NFIB v. Sebelius (2012).
Monetary
News
National Journal | SEC Chairman Schapiro to Step Down Next Month
Securities and Exchange Commission Chairman Mary Schapiro will step down on Dec. 14, the agency announced on Monday. President Obama will designate SEC Commissioner Elisse Walter as chairman when Schapiro leaves next month, the White House said in a separate statement.
National Journal | SEC Chairman Schapiro to Step Down Next Month
Securities and Exchange Commission Chairman Mary Schapiro will step down on Dec. 14, the agency announced on Monday. President Obama will designate SEC Commissioner Elisse Walter as chairman when Schapiro leaves next month, the White House said in a separate statement.
Taxes
Econ Comments & Analysis
WSJ | Tagging the Taxpayer
Just in time for Christmas, banks and their lobbyists are asking Uncle Santa for the greatest regulatory gift: the extension of a taxpayer subsidy. The lobbying plan is to attach this banker benefit to legislation addressing the fiscal cliff, or any other legislative vehicle that moves in late December.
AEI | Use tax collection on interstate sales: The need for federal legislation
In this article, I argue that the time has come for Congress to authorize states to require use tax collection by out-of-state sellers.
Heritage Foundation | Tax Policy: Obama Is Still Wrong on Tax Rates
In his first press conference after the election, President Barack Obama said, “What I’m not going to do is extend the Bush tax cuts for the wealthiest 2 percent that we cannot afford and according to economists will have the least positive impact on the economy.”
Blogs
Greg Mankiw | A Master of Tax Avoidance
Warren Buffett has an op-ed in today's NY Times on one of his most popular themes: The rich should pay more in taxes. At first blush, his position seems noble: A rich guy says that people like him should pay more to support the commonweal. But on closer examination, one realizes that Mr Buffett never mentions doing anything to eliminate the tax-avoidance strategies that he uses most aggressively.
WSJ | Tagging the Taxpayer
Just in time for Christmas, banks and their lobbyists are asking Uncle Santa for the greatest regulatory gift: the extension of a taxpayer subsidy. The lobbying plan is to attach this banker benefit to legislation addressing the fiscal cliff, or any other legislative vehicle that moves in late December.
AEI | Use tax collection on interstate sales: The need for federal legislation
In this article, I argue that the time has come for Congress to authorize states to require use tax collection by out-of-state sellers.
Heritage Foundation | Tax Policy: Obama Is Still Wrong on Tax Rates
In his first press conference after the election, President Barack Obama said, “What I’m not going to do is extend the Bush tax cuts for the wealthiest 2 percent that we cannot afford and according to economists will have the least positive impact on the economy.”
Blogs
Greg Mankiw | A Master of Tax Avoidance
Warren Buffett has an op-ed in today's NY Times on one of his most popular themes: The rich should pay more in taxes. At first blush, his position seems noble: A rich guy says that people like him should pay more to support the commonweal. But on closer examination, one realizes that Mr Buffett never mentions doing anything to eliminate the tax-avoidance strategies that he uses most aggressively.
Employment
Econ Comments & Analysis
Washington Times | On Dec. 3, the Supreme Court will hear a case determining the future of more than 2 million jobs and tens of thousands of landowners.
On Dec. 3, the Supreme Court will hear a case determining the future of more than 2 million jobs and tens of thousands of landowners.
Washington Times | On Dec. 3, the Supreme Court will hear a case determining the future of more than 2 million jobs and tens of thousands of landowners.
On Dec. 3, the Supreme Court will hear a case determining the future of more than 2 million jobs and tens of thousands of landowners.
Budget
News
Market Watch | OECD: Fiscal-cliff failure could trigger recession
The Organization for Economic Cooperation and Development on Tuesday warned of a "hesitant and uneven recovery over the coming two years," saying it expects global growth of 1.4% this year and next.
WSJ | Talks Over Fiscal Cliff Stay Stuck in Low Gear
Congressional leaders return to Washington this week facing the prospect that talks with the White House over the country's budget impasse have barely progressed, a reminder of the philosophical divisions that remain despite both sides' early professions of optimism.
Bloomberg | Fiscal Cliff Compromise Elusive as Congress Returns
Republicans’ post-election rhetorical openness to higher taxes comes with a price that neither side of the fiscal debate in Washington may be willing to pay.
Bloomberg | Greece Wins Easier Debt Terms as EU Hails Rescue Formula
European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health.
Econ Comments & Analysis
WSJ | Why $16 Trillion Only Hints at the True U.S. Debt
A decade and a half ago, both of us served on President Clinton's Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama's recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts.
Real Clear Markets | Kick the Cliff Down the Road, Then Start Negotiating
With the election and Thanksgiving out of the way, the rest of the year is shaping up to be an epic showdown between Democrats and Republicans over tax policy and how to avoid going over the fiscal cliff. At this point there appears to be little room for optimism that either side will give enough ground to avert the spending cuts and tax hikes that will otherwise go into effect within weeks.
Blogs
Calculated Risk | Greek Debt Deal Reached
Euro zone finance ministers and the International Monetary Fund clinched agreement on a new debt target for Greece on Monday in a breakthrough towards releasing an urgently needed tranche of loans to the near-bankrupt economy, officials said.
John Taylor | A Way to Avoid the Fiscal Cliff without Creating Another One
So far the fiscal cliff debate has mainly been about whether tax revenues should be on or off the table with little mention of spending. But the economics of the debate—as distinct from the raw politics—make no sense without considering spending.
Market Watch | OECD: Fiscal-cliff failure could trigger recession
The Organization for Economic Cooperation and Development on Tuesday warned of a "hesitant and uneven recovery over the coming two years," saying it expects global growth of 1.4% this year and next.
WSJ | Talks Over Fiscal Cliff Stay Stuck in Low Gear
Congressional leaders return to Washington this week facing the prospect that talks with the White House over the country's budget impasse have barely progressed, a reminder of the philosophical divisions that remain despite both sides' early professions of optimism.
Bloomberg | Fiscal Cliff Compromise Elusive as Congress Returns
Republicans’ post-election rhetorical openness to higher taxes comes with a price that neither side of the fiscal debate in Washington may be willing to pay.
Bloomberg | Greece Wins Easier Debt Terms as EU Hails Rescue Formula
European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health.
Econ Comments & Analysis
WSJ | Why $16 Trillion Only Hints at the True U.S. Debt
A decade and a half ago, both of us served on President Clinton's Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama's recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts.
Real Clear Markets | Kick the Cliff Down the Road, Then Start Negotiating
With the election and Thanksgiving out of the way, the rest of the year is shaping up to be an epic showdown between Democrats and Republicans over tax policy and how to avoid going over the fiscal cliff. At this point there appears to be little room for optimism that either side will give enough ground to avert the spending cuts and tax hikes that will otherwise go into effect within weeks.
Blogs
Calculated Risk | Greek Debt Deal Reached
Euro zone finance ministers and the International Monetary Fund clinched agreement on a new debt target for Greece on Monday in a breakthrough towards releasing an urgently needed tranche of loans to the near-bankrupt economy, officials said.
John Taylor | A Way to Avoid the Fiscal Cliff without Creating Another One
So far the fiscal cliff debate has mainly been about whether tax revenues should be on or off the table with little mention of spending. But the economics of the debate—as distinct from the raw politics—make no sense without considering spending.
Monday, November 26, 2012
General Economics
News
Bloomberg | Home Equity Loans Make Comeback Fueling U.S. Spending
After six years of declines, lending for so-called Helocs will rise 30 percent to $79.6 billion in 2012, the highest level since the start of the financial crisis in 2008, according to the economics research unit of Moody’s Corp. Originations next year will jump another 31 percent to $104 billion, it projected.
Market Watch | Understanding the GDP paradox
Like a stuffed turkey, the week after the Thanksgiving break is loaded with economic indicators, including an updated estimate of third-quarter gross domestic product that may be fattened up.
Econ Comments & Analysis
Washington Post | Why the recovery is feeble
Federal Reserve Chairman Ben Bernanke last week became the latest economist to ask why the current economic recovery has been so weak. The question has inspired a cottage industry of studies, papers and speeches with often-esoteric and murky theories.
Fortune | Wells Fargo CEO: Why Americans are saving so much
CEO John Stumpf discusses how his bank has seen record savings deposit growth, as more Americans look for safe places to put their cash.
Blogs
Economist | Mexico rising
Last week I wrote a short post on Mexico's improving economic fortunes and its bright outlook. Conveniently, the most recent issue of The Economist features a special report on Mexico, which includes a long look at the country's promising economy.
Calculated Risk | Unofficial Problem Bank list unchanged at 857 Institutions
The first unofficial problem bank list was published in August 2009 with 389 institutions. The number of unofficial problem banks grew steadily and peaked at 1,002 institutions on June 10, 2011. The list has been declining recently.
Calculated Risk | Schedule for Week of Nov 25th
Negotiations concerning the "fiscal slope" in the US will be back in the headlines this week. And, in Europe, the discussion on funding for Greece will resume on Monday.
Bloomberg | Home Equity Loans Make Comeback Fueling U.S. Spending
After six years of declines, lending for so-called Helocs will rise 30 percent to $79.6 billion in 2012, the highest level since the start of the financial crisis in 2008, according to the economics research unit of Moody’s Corp. Originations next year will jump another 31 percent to $104 billion, it projected.
Market Watch | Understanding the GDP paradox
Like a stuffed turkey, the week after the Thanksgiving break is loaded with economic indicators, including an updated estimate of third-quarter gross domestic product that may be fattened up.
Econ Comments & Analysis
Washington Post | Why the recovery is feeble
Federal Reserve Chairman Ben Bernanke last week became the latest economist to ask why the current economic recovery has been so weak. The question has inspired a cottage industry of studies, papers and speeches with often-esoteric and murky theories.
Fortune | Wells Fargo CEO: Why Americans are saving so much
CEO John Stumpf discusses how his bank has seen record savings deposit growth, as more Americans look for safe places to put their cash.
Blogs
Economist | Mexico rising
Last week I wrote a short post on Mexico's improving economic fortunes and its bright outlook. Conveniently, the most recent issue of The Economist features a special report on Mexico, which includes a long look at the country's promising economy.
Calculated Risk | Unofficial Problem Bank list unchanged at 857 Institutions
The first unofficial problem bank list was published in August 2009 with 389 institutions. The number of unofficial problem banks grew steadily and peaked at 1,002 institutions on June 10, 2011. The list has been declining recently.
Calculated Risk | Schedule for Week of Nov 25th
Negotiations concerning the "fiscal slope" in the US will be back in the headlines this week. And, in Europe, the discussion on funding for Greece will resume on Monday.
Health Care
News
National Journal | Medicare Competition Makes Bipartisan Comeback
After President Obama’s reelection win, you might think that talk of competition in Medicare—a cornerstone of Mitt Romney’s campaign—would fall by the wayside. But introducing greater competition into the health program for older Americans is an idea that could prove ripe for a bipartisan compromise in any "Grand Bargain" on the budget.
National Journal | Medicare Competition Makes Bipartisan Comeback
After President Obama’s reelection win, you might think that talk of competition in Medicare—a cornerstone of Mitt Romney’s campaign—would fall by the wayside. But introducing greater competition into the health program for older Americans is an idea that could prove ripe for a bipartisan compromise in any "Grand Bargain" on the budget.
Monetary
News
Bloomberg | Overnight Rates Surge in Fed’s Operation Twist
You wouldn’t know the Federal Reserve has done nothing but add to its record monetary stimulus from looking at short-term funding markets.
Blogs
AEI | 2 charts that show the Fed is not monetizing the debt
While there’s much in Fed policy to criticize over the past decade, there’s no need to overstate things. Right now, for instance, we see lots of talk that the Fed is monetizing the debt, which would be indistinguishable from money printing. In fact, it is money printing and risks a dangerous bout of inflation. But is that really what the Fed is doing?
Bloomberg | Overnight Rates Surge in Fed’s Operation Twist
You wouldn’t know the Federal Reserve has done nothing but add to its record monetary stimulus from looking at short-term funding markets.
Blogs
AEI | 2 charts that show the Fed is not monetizing the debt
While there’s much in Fed policy to criticize over the past decade, there’s no need to overstate things. Right now, for instance, we see lots of talk that the Fed is monetizing the debt, which would be indistinguishable from money printing. In fact, it is money printing and risks a dangerous bout of inflation. But is that really what the Fed is doing?
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