Wednesday, January 4, 2012

General Economics

CNN: Money | Manufacturing activity, employment on the rise
The Institute of Supply Management's survey of manufacturing purchasing managers rose to 53.9 from 52.7. That's a bit better than the 53.4 forecast of economists surveyed by
Bloomberg | Raw Materials Seen Rebounding as Global Economy Skirts Slump: Commodities
Commodities may rebound from their first retreat in three years as developing economies shore up global growth, driving demand higher at a time when raw-material producers are already struggling to keep up.
Bloomberg | Retail Estimate for December Raised, Discounts Heavy
Retail sales at stores open more than a year may have gained as much as 4.5 percent in December, more than previously estimated, as U.S. shoppers pursued holiday discounts, a trade group said.
Daily Finance | Holidays' Retail Binge Will Lead to a Spending Diet in Early 2012
The holiday season was a heck of a party for retailers, but consumers are now nursing a shopping hangover that will keep them out of the nation's stores in January and February.
CNN: Money | Bankruptcies 2012: Doubling down
Expect the number and size of corporate bankruptcies to double in 2012.
WSJ | Weak Data Set Stage for ECB Rate Cut
Weak data on business activity and inflation Wednesday strengthened the likelihood of more interest-rate cuts by the European Central Bank in coming months.

Econ Comments                                                                                                             
WSJ | Why Public Pensions Are So Rich
Shifting government workers to 401(k)-style plans would offer greater transparency and keep benefits in line with the private economy.
RCM | The Housing Market Rebuilds Brick by Brick
There are certainly enough conventional reasons, from unemployment to the number of homes whose mortgages are underwater, to explain why the housing market hasn't begun a significant rebound four years after the slide began.
WSJ | Rent Control Hits the Supreme Court
Private apartment owners should not have to fund a public welfare program.

Cato @ Libety | Is Income Inequality Increasing? Only If You Don’t Count Health Benefits
Income inequality is not so much a problem as income opacity.
Reason Foundation | China's Emerging Housing Dilemma
China's housing market appears to be nearing a precipice, and it's far from clear Chinese policymakers will be able to stop in time before the economy goes over the edge.
AEI: The American | Obama’s worst-case economic scenario is now Wall Street’s baseline scenario
This 2012 forecast is from economic consultancy IHS Global. I think it fairly represents the Wall Street consensus:
Cato @ Liberty | Do Free Markets Tend Toward Concentration? The Case of Banking
Perhaps the most significant difference between my own views and those of my progressive friends is on the relationship between business and government, especially “big business”.
AEI: The American | Debunking Elizabeth Warren, (D-Occupy)
And the story of the past decade is one of a) slow economic growth and b) devastating crony capitalism in the housing and financial sectors. Too much government, too little entrepreneurial capitalism.
WSJ | World-Wide Factory Activity, by Country
Global manufacturing was expanding in much of the world last month, as growth in North America and Asia offset contraction in Europe, according to an index published by J.P. Morgan.

Health Care

National Journal | Congress Returns to Same Old Health Fights, Plus More Work
The House and Senate start off the new year in the same place where they ended it: squabbling over how to put off a 27 percent cut to Medicare doctors’ reimbursement.
National Journal | Work Insurance Often Offers Coverage for Programs to Stop Smoking
Smoking is such a familiar health hazard that some experts say it doesn't get the attention it deserves; the focus is often on other lifestyle-related conditions, especially obesity. But smoking is still the No. 1 cause of preventable death in this country.

Econ Comments                                                                                                             
Washington Times | WOLF: Cronyism doesn’t sell in corn country
Midwest resistance to Obamacare, ethanol subsidies is reason for hope.

Cato @ Liberty | As Predicted, Obama Administration Backs Off Medicare Anti-Fraud Efforts
Medicare and Medicaid are rife with fraud. We’re talking 10 percent or more of total spending, which is two orders of magnitude more than what credit card companies tolerate.
Econlog | Sins of Omission: What's Wrong With Gruber's Health Care Reform
In reality, cost control is simple. Everyone knows how to do it: Austerity and incentives. Government needs to spend less, and stop using regulation to discourage frugality.


Bloomberg | Slowing Inflation May Give ECB Room to Maneuver on Interest Rates: Economy
Euro-region inflation (ECCPEMUY) slowed for the first time in five months in December, giving the European Central Bank room to lower borrowing costs further as the economy edges toward a recession.
Market Watch | U.S. dollar falls as economic data improves
The dollar extended its decline Tuesday after stronger-than-expected economic data in the U.S. added to better statistics from Asia and Europe, lifting equity markets as investors felt more comfortable wading into riskier assets at the beginning of a new year.
USA Today | Fed to pull back curtain on members' interest-rate forecasts
The Federal Reserve will begin disclosing the interest-rate forecasts of its policymaking committee members after this month's meeting, a move economists say will let everyone from consumers to corporate treasurers make financial plans with a clearer view of the future.

WSJ: Real Time Economics | Economists React: Fed Moves to ‘Alleviate Uncertainty’
Economists and others weigh in on the Fed’s announcement that it will start publishing forecasts for interest rates.
Minyanville | Why China-Japan Currency Deal Could Hurt US Treasuries
Both countries will lose the urge to devalue competitively.
WSJ: Real Time Economics | Latest Fed Transparency Move Draws Mixed Response
The Federal Reserve‘s latest move to open up the policy-making process is getting mixed reviews from economists, who are struggling to make sense of what the central bank is in fact planning to do, as well as what it can accomplish.


CNN Money | Swiss bankers charged in $1.2 billion tax fraud
Three Swiss bankers have been charged with helping American taxpayers hide more than $1.2 billion from the Internal Revenue Service, the U.S. Attorney's Office in Manhattan announced Tuesday.
WSJ | U.S. Tax Haul Trails Profit Surge
Here is one thing for deficit hawks to watch in 2012: corporate tax receipts. Although U.S. corporate profits have rebounded smartly since the financial crisis, the same can't be said for the tax take.

Econ Comments                                                                                                             
WSJ | Will Republicans Hand the Left a VAT Victory?
Mitt Romney won't rule out the possibility of imposing a tax that's the fast track to a European welfare state.

EconLog | The Interesting Political Economy of the Social Security Tax Cut
My Hoover colleague Paul Gregory has an interesting op/ed on how things would look if the media treated Republican congressmen the way they treat Democrats. He takes a New York Times story and rewrites it the way people who oppose the extension of unemployment benefits and of the payroll tax cut would like it to be reported. His piece is worth reading.
Daily Capitalist | A Politically Incorrect Look At Marginal Tax Rates
In my last piece, The Laffer Curve and Austrian Economics, I argued that the “Laffer Maxima” moves depending on where the economy is in the boom-bust credit cycle. I used an example of a marginal restaurant business in the bust phase, which fails when the income tax rate on the people who live nearby rises by 100 basis points.


WSJ | Jobless Data Highlight Euro Challenges
Germany's seasonally adjusted jobless total dropped by 22,000 in December for a 6.8% unemployment rate, the data showed, following a downwardly revised drop of 23,000 in November.

Econ Comments                                                                                                             
WSJ | More Brown Jobs
Now foreign investors are betting on America's shale boom.
NY Post | Jobless black hole
This coming Friday could be a very tricky day for America’s psyche.
RCM | Tracking the Unreported (15.6%) Unemployed
Unfortunately, the reality is even worse than these numbers suggest.

American: Enterprise Blog | The economic free lunch of high-skill immigration
Having lots of smart, entrepreneurial people in your country is a pretty good way to promote an innovative, growing economy.
NRO: The Corner | Good News on Income Mobility
What better way to start the new year than by learning that the American dream still lives on?


Econ Comments                                                                                                             
Washington Times | GHEI: What happened to spending cuts?
Debt ceiling to surge to $16.4 trillion.
Washington Times | KENDALL: 1.2 trillion here, $1.2 trillion there …
Obama shows no inclination toward relinquishing his overspending ways.