Tuesday, January 10, 2012

General Economics

News                                                                                                                             
CNN: Money | Turning foreclosures into rentals
Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.
Bloomberg | China Import Growth Misses Estimates as Export Gains Slow; Surplus Widens
China’s import growth fell to a two- year low in December, underscoring a slowdown in the fastest- growing major economy that deepens risks for the global outlook.
Bloomberg | U.S. Wholesale Inventories Rise Less-Than-Forecast 0.1% as Sales Gain 0.6%
Inventories at U.S. wholesalers rose less than forecast in November as distributors struggled to keep up with demand, a sign gains in manufacturing will keep the economy growing.
Market Watch | Nov. consumer credit jump biggest in decade
U.S. consumers increased their debt in November by the most in a decade, with auto, student and credit-card borrowing all advancing.
Bloomberg | U.S. Economy’s Challenges Greater This Year Than Last, Gluskin Sheff Says
“Certainly, we’re not in a recession right now,” Rosenberg said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. Nonetheless, he said, “I still believe the economy is still fragile and this recovery is still quite spotty.”

Econ Comments                                                                                                             
WSJ | California's High-Speed Rail Fibs
Florida and Ohio have walked away from dubious train projects. Are Golden Staters more gullible?
AEI | 2012: a better year for the US economy
The pace of US economic growth in 2011, especially during the second half of the year, was disappointing, just as growth in Europe and China has been.
Cato Institute | The Income-Inequality Myth
The gap between rich and poor may not be nearly as large as thought, and that inequality may not be growing at all.

Blogs                                                                                                                             
Mercatus Center | Comparative study of state and local pension plans
The ratio of active employees to retired employees is falling. In 2010 the ratio is 1.87, down from a ratio of 2 in 2008. The number of retirees is growing at a faster rate than the number of active employees.
Independent Institute | Why Your Dog Doesn’t Own Your Entire House, and the Government Doesn’t, Either
The operative word is marginal. Here, as in so many other places where erroneous economic reasoning crops up, the mistake comes from all-or-nothing thinking. In our case, no dog, no house; no fire department, no earnings; no police force, no earnings; and so forth, including, please recall, no work, no earnings.
Calculated Risk | Question #3 for 2012: Will foreclosure activity increase in 2012?
Foreclosure activity is still very high, although activity slowed in 2011 because of "foreclosure gate" issues. The number of REOs also declined in 2011. Will foreclosure activity increase in 2012?
AEI: American | Yes, Obama really is considering a mass refi plan
There are significant obstacles to refinancing in current circumstances. Declines in home equity have been aggravated by tighter standards, high refinancing fees, burdensome administrative processes, and legal risks to the lenders refinancing the loan.
On The Economy | Some Deep Wonkery on Moving Seasonality
There was a 42,000 spike in the number of couriers/messengers last month, and the Bureau pointed out “that seasonal hiring was particularly strong in December. This may reflect increased online purchasing during the holiday season.”

Reports                                                                                                                         
NBER | When Credit Bites Back: Leverage, Business Cycles, and Crises
This paper studies the role of leverage in the business cycle. Based on a study of nearly 200 recession episodes in 14 advanced countries between 1870 and 2008, we document a new stylized fact of the modern business cycle: more credit-intensive booms tend to be followed by deeper recessions and slower recoveries.

Health Care

News                                                                                                                             
National Journal | Study: Special Home-Visit Program Could Promote Prevention
A special Medicare program that stresses home health visits for patients with chronic diseases helped keep diabetes patients out of the hospital and may have lowered costs using time-honored prevention methods, researchers reported on Monday.
NY Times | Recession Holds Down Health Spending
National health spending rose a slight 3.9 percent in 2010, as Americans delayed hospital care, doctor’s visits and prescription drug purchases for the second year in a row, the Obama administration reported Monday.
National Journal | Americans Spend Less on Health Care; Recession to Blame
Total health spending in the country, including federal programs like Medicare and Medicaid and private insurance, was $2.6 trillion in 2010, or $8,402 per person.

Econ Comments                                                                                                             
Washington Times | MILLER: Ryan’s reform 2.0
Obama faces down a bipartisan effort to get beyond Mediscare.
Washington Times | ZYCHER: Obamacare inhibits medical technology
Top-down health care rationing likely to cost hundreds of billions.

Monetary

Econ Comments                                                                                                             
WSJ | Italy Is Biggest Risk to Euro, Says Fitch
Fitch Ratings Tuesday said Italy is the euro-zone member that poses the greatest threat to the future of the currency bloc, as the lack of a region-wide plan to prevent the sovereign-debt crisis from spreading has been coupled with the country's large debt burden and high borrowing costs.
WSJ | The Fed's Housing Politics
The central bank compromises its independence with rank electioneering.

Blogs                                                                                                                             
WSJ: Real Time Economics | U.S. Factories Could Suffer From Dollar’s Appeal
A strong dollar may enhance the U.S.’s sense of pride. But it will be a headwind for U.S. manufacturing.
Minyanville | The Big Mistake India Made in Trying to Fight Inflation
Higher short-term interest rates did not solve one problem, but rather created another.

Taxes

News                                                                                                                             
USA Today | IRS revives program seeking back taxes from offshore schemes
The Internal Revenue Service is reviving a program that lets Americans hiding their money abroad pay back taxes and penalties while avoiding criminal prosecution, an effort that in recent years has netted the government billions of dollars.
WSJ | More Firms Enjoy Tax-Free Status
...such firms don't employ an army of accountants to shield profits in complex tax shelters. Their enviable tax position is perfectly legal and has been encouraged by Congress and state governments.

Econ Comments                                                                                                             
AEI | Railroad taxes, discrimination, and the 4-R Act: A misstep by the Eighth Circuit
The court held that the sales tax could not discriminate against railroads because it was legally imposed on the company providing repair services to railroads rather than on the railroad receiving the services.

Employment

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Obama cooks the unemployment books
Don’t believe bureaucrats, unemployment is really 11.4 percent.
WSJ | Indiana's Right to Work
Hoosiers debate voluntary union membership.
Forbes | Less Stimulus, More Jobs
In the present crisis, government is not the solution to our problem, government is the problem.

Blogs                                                                                                                             
Political Calculations | Only Adults Need Apply....
The big news on the jobs front is that the unemployment rate for December 2012 fell to its lowest rate since early 2009, reaching 8.5% following a massive revision in U.S. employment data covering the period from January 2007 through December 2011.
NRO: The Corner | Labor Supply and Taxes
I just got back from a four-day trip to France. During that time I got to hear an interview of the head of la CGT, one of the big labor unions there, about the alleged austerity plan that the government would like to put in place. He was not happy.
WSJ: Real Time Economics | Vital Signs: Slowing Cuts in State, Local Government Jobs
State and local governments — from big cities to rural school districts — cut 14,000 workers in December 2011, compared with 24,000 that were cut in the month of December 2010.

Budget

News                                                                                                                             
USA Today | USDA says it will close 259 offices to save $150M million
The U.S. Department of Agriculture will close 259 domestic offices, labs and other facilities as part of an effort to save $150 million per year, U.S. Agriculture Secretary Tom Vilsack announced Monday.
Washington Times | U.S. runs in the red for 39th straight month
The federal government ran a deficit in December, marking the 39th straight month in the red, according to preliminary estimates Monday by the Congressional Budget Office, continuing a streak that dates back to the last days of President George W. Bush and encompasses President Obama’s entire term.
WSJ | Greek Bailout in Peril
France, Germany Press Athens, Bondholders to Reduce Debt.
USA Today | Consumer borrowing surges in November
Americans are feeling confident enough in the economy to go back to a time-honored tradition — taking on a little extra debt.

Econ Comments                                                                                                             
WSJ | Obama 'Retrenches'—America Retreats
Spending less on defense means squandering the money elsewhere.

Blogs                                                                                                                             
Heritage Foundation | VIDEO: The Reality of America’s National Debt
America’s total debt now tops $15.2 trillion—the size of the entire economy. While this is a real concern, the greater problem is the growth of spending and debt in the future. Spending on entitlements is the real driver of future debt.

Reports                                                                                                                         
CBO | Monthly Budget Review
Based on the Monthly Treasury Statement for November and the Daily Treasury Statements for December.