Tuesday, January 3, 2012

General Economics

CNN: Money | Iowa's economy: Not issue No. 1?
Today, unemployment is relatively low. Farmland -- and its edible bounty -- are in high demand. Home prices are stable. That's not to say things are great. But they could be a lot worse.
Bloomberg | U.S. Auto Dealers Have Best December in 5 Years
U.S. consumers, who are more confident than they have been in eight months, were lured to auto showrooms by holiday discounts and may have pushed car sales to the second fastest pace in more than two years.
USA Today | S&P 500 perfectly flat for 2011, Dow up 5.5% for year
The Standard & Poor's 500 index closed 2011 a tiny fraction of a point below where it started the year, ending up with a 0.00% change. For the last day of trading before the new year, the S&P closed at 1,257.60, up 5.4 points or 0.4%.
WSJ | Welfare Lines Overflow
Crowded Public-Assistance Centers Interrupt Services as Demand for Aid Grows.
Market Watch | PMI data underline euro-zone recession fears
Dec. manufacturing gauge shows fifth month of contraction.
CNN: Money | European recovery? Wait till 2013
Don't expect the economic problems dogging Europe to be solved any time soon. Economists sure don't.
USA Today | U.S. Treasuries end 2011 as one of year's best investments
Investors clamored for Treasuries in 2011, giving the market its best return since 2008, even after the U.S. government lost its sterling AAA credit rating. The turmoil in global markets only seemed to increase demand for Treasuries, which are still seen as the lowest-risk investments anywhere.
WSJ | New Hurdles Loom in Euro Crisis
Italy Bond Sales, France Vote Are Among Signal Events for Europe's Economy—and the World's.
Bloomberg | Global Manufacturing Displays Resilience to Europe’s Debt Crisis: Economy
Manufacturing from the U.K. to India showed improvement in December, suggesting production is weathering strains from Europe’s sovereign debt crisis.
WSJ | America as Number Two
Hong Kong again beat the NYSE in new stock offerings in 2011.
NY Times | For 2012, Signs Point to Tepid Consumer Spending
Macroeconomic Advisers, a forecasting company, projects growth of around 2 percent for the first half of this year, down from an estimate of 3.6 percent in the fourth quarter of 2011 and just 1.8 percent in the third quarter.
USA Today | In a first, gas and other fuels are top U.S. export
Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990.

Econ Comments                                                                                                             
Washington Times | RAHN: Purveyors of financial destruction
Blame for national decline belongs with Democratic incompetents.
WSJ | The Rise of Consumption Equality
Getting rich requires serving a mass market, which means the rest of us can buy what the rich buy.
Washington Times | FEULNER: Congress’ performance in 2011
Mixed results leave lawmakers unpopular with voters.
AEI | Why European loans could hurt US taxpayers
"In assessing how serious the risk of IMF lending is to U.S. taxpayers, it is of note that the IMF's loan commitments to Greece, Ireland and Portugal amount to as much as 10% of those countries' gross domestic products."
NY Times | I Just Got Here, but I Know Trouble When I See It
Believe it or not, times are getting better.
Project Syndicate | Rethinking the Growth Imperative
Modern macroeconomics often seems to treat rapid and stable economic growth as the be-all and end-all of policy. But does it really make sense to take growth as the main social objective in perpetuity, as economics textbooks implicitly assume?
WSJ | 2012: A U.S. Referendum on Europe
The EU's crisis is not just fiscal and monetary. It's also a crisis of vision and character.

Cato @ Liberty | Cato @ Liberty The Opportunity Costs of Bailing Out Fannie and Freddie
We’ve sunk $169 billion, and counting, into bailing out Fannie Mae and Freddie Mac.
WSJ: Real Time Economics | Five Economic Trends to Watch in 2012
The Council on Foreign Relations polled economists to identify five trends to watch in the coming year. They all fall under the increasingly common theme of “uncertainty,” and most of them touch on U.S. or euro-zone policies.
Cato @ Liberty | Our Freedom to Trade Expanded in 2011
The news right now is full of retrospective stories about 2011. Not to be left out, here are a few observations on the real if modest progress made in 2011 to expand the freedom of Americans to trade in the global economy.
Café Hayek | Café Hayek Fannie and Freddie and the crisis
The SEC suit against former execs of Fannie and Freddie appears to vindicate the Pinto/Wallison view that government housing policy pushed Fannie and Freddie into unsafe loans and caused the financial crisis.
Minyanville | Suppression of Financial Information Likely to Continue in 2012
The fixing of prices and rates by officials threatens the role of markets.
WSJ: Real Time Economics | Top 5 Economic Charts of 2011
As the year draws to a close, Real Time Economics takes a look back at five of our favorite charts from the Journal in 2011. These graphics look at the most recent year as well as the past to give us some insight into the future.
Daily Capitalist | Daily Capitalist Making Sense Of 2011
This is the time of year when you are supposed to look back and make sense of what happened during the year and make predictions about the new year. A futile task if there ever was one.
Café Hayek | Keynes was right?
It’s hard to ignore deficits when the interest rate you can borrow at is rising steadily and investors become nervous that they’re not going to get their money back.

CRS | CRS Changes in the Distribution of Income Among Tax Filers Between 1996 and 2006: The Role of Labor Income, Capital Income, and Tax Policy
Taxes were less progressive in 2006 than in 1996, and consequently, tax policy also contributed to the increase in income inequality between 1996 and 2006. But overall income inequality would likely have increased even in the absence of tax policy changes.

Health Care

Fox News | State cuts to Medicaid affect patients, providers
Just as Medicaid prepares for a vast expansion under the federal health care overhaul, the 47-year-old entitlement program for the poor is under increasing pressure as deficit-burdened states chip away at benefits and cut payments to doctors.
National Journal | In-Hospital Mortality Rates Not an Accurate Measure of Care Quality
Tracking the number of patients who die in the hospital might not be the best way to gauge a hospital’s quality, researchers reported on Monday. Because different hospitals have different policies on when to send patients home, it makes more sense to look at mortality over a set window, such as whether a patient is still alive 30 days from admission.


Bloomberg | Wen Says China May Fine-Tune Monetary Policy Amid ‘Difficult’ Conditions
"We see downside pressure on our economy and elevated inflation at the same time,” Wen said during a two-day trip to Hunan province, according to a statement on the government’s website yesterday. “We also face problems of weakening external demand and rising costs for companies.”

Econ Comments                                                                                                             
Fox Business | U.N. Official: Food Prices May Ease in 2012
Global food prices measured by the FAO hit a peak in February but have been falling since June as crops have improved and concerns about global economic turmoil have reined in demand growth.
Cato Institute | The Fed's Mission Impossible
Will this new round of rules, and greater discretionary supervision, finally stop too big to fail?

Free Banking | Hyperinflation, alive and well
I have some very clear memories about inflation in the US from the late 1970s and early 1980s.
Free Banking | Good deflation and good inflation
A couple of weeks ago, Scott Sumner pointed out that many conservative-leaning economists think that certain types of deflation can be good. The same economists, though, are typically reluctant to acknowledge that by a similar argument, certain types of inflation can be good.


National Journal | McConnell Names Payroll Tax Conferees
Senate Minority Leader Mitch McConnell, R-Ky., named three Republican negotiators on Friday to the conference committee empowered to negotiate a full-year extension of a payroll-tax break for 160 million American workers.
USA Today: Travel | One break for travelers: Cities not looking to raise visitor taxes
For business travelers who'll be back on the road this new year, there's some good news: Cities don't appear eager to increase taxes for renting a room or eating a meal.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Europe’s airline tax bomb
EU schemers look for lucre in all the wrong places.
Reason Foundation | 77 Percent of Americans Oppose Raising the Gas Tax, Reason-Rupe Transportation Poll Finds
Poll finds a majority of voters support tolls over taxes to pay for roads and favor using public-private partnerships to build critical infrastructure.

Marginal Revolution | Sentences of note
But overall income inequality would likely have increased even in the absence of tax policy changes.
Daily Capitalist | The Laffer Curve And Austrian School Economics
 I submit for the consideration of the reader that in the bust phase, any change in the tax rate drives a big change at the margin of economic activity.
Marginal Revolution | How is the U.S. tax system different?
A new report by the Organization for Economic Cooperation and Development shows that in the middle of the last decade — i.e., after the Bush tax cuts were introduced — the U.S. income tax was about as strongly redistributive as income taxes in Canada, Denmark, Finland, the Netherlands and Sweden.


NY Times | Factory Jobs Gain, but Wages Retreat
Manufacturers are hiring again in America, softening a long slide in factory employment. But for a new generation of blue-collar workers, even those protected by unions, the price of employment is likely to be lower wages stretching to retirement.
Bloomberg | Goldman’s O’Neill Sees Aging Labor in BRICs
Aging and shrinking labor pools are also poised to curb expansion across the other so-called BRIC nations that contributed almost half of global growth in the past decade.
NY Times | A Gathering Storm Over ‘Right to Work’ in Indiana
Nearly a year after legislatures in Wisconsin and several other Republican-dominated states curbed the power of public sector unions, lawmakers are now turning their sights toward private sector unions, setting up what is sure to be another political storm.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: EEOC undermines job creation
Federal bureaucracy strangles businesses with new red tape.

WSJ: Real Time Economics | Economic Indicators: Jobs Will Be Job One
A hobbled housing market, debt-ridden consumers and European turmoil point to meager improvements in the U.S. job picture this year.
WSJ: Real Time Economics | Heading Into 2012, Hopes Rise For Job Markets
The U.S. economy’s New Year’s resolution: create jobs at a faster pace in 2012.
WSJ: Real Time Economics | Number of the Week: More Jobs in 2011, But Still Not Enough
131 million: The average number of people working in the United States in 2011, through November.


WSJ | President Delays Request to Raise the Debt Ceiling
President Barack Obama delayed submitting a request to Congress on Friday for a $1.2 trillion increase in the debt ceiling, setting up a renewed debate in January over the nation's spending and borrowing habits.

Econ Comments                                                                                                             
Library of Economics & Liberty | Reducing Real Output by Increasing Federal Spending
"Political authorities are highly unlikely to match the right jobs with the right workers."

EconLog | Christina Romer Breaks with President Obama
We already have a blueprint for a bipartisan solution. The Bowles-Simpson Commission hashed out a sensible plan of spending cuts, entitlement program reforms and revenue increases that would shave $4 trillion off the deficit over the next decade.
Mercatus Center: Neighborhood Effects | State finances going into 2012
In 2012, municipal bonds are unlikely to return at same levels as 2011…
Café Hayek | We Refuse to Lend to Us
Such a tax-induced reduction in productive output is a cost even of internally owed debt.
Calculated Risk | Merkel: 2012 "more difficult than 2011"
Not much of a "happy new year" in Europe ...