Thursday, January 26, 2012

General Economics

News                                                                                                                             
FOX News | Foreclosures made up 20 pct. of home sales in 3Q
Despite the decline, foreclosures still represented 20 percent of all homes sold in the July-September period — about four times more than at the height of the housing boom, foreclosure listing firm RealtyTrac Inc. said Thursday.
CNN Money | Federal student loan rate set to double
Loans taken out for the current school year carried an interest rate of 3.4%, thanks to a 2007 law that phased in rate reductions for subsidized Stafford loans to undergraduate students. But the law did not specify the rate after this year. So unless something is done, rates on new loans will revert back to 6.8% -- where they were in 2007.
Politico | More Americans optimistic about economy, new poll finds
37 percent of Americans think the economy will improve in 2012, the highest level in more than a year, according to a new NBC-Wall Street Journal poll. Only 17 percent think that the economy will get worse.
FOX News | Taxpayers still owed $132.9B from bailout
Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last as late as 2017, costing the government an additional $51 billion or so.
National Journal | Obama Proposes Legislation to Boost U.S. Manufacturing
Making good on his promise to announce new legislation targeting outsourced manufacturing jobs, President Obama announced six pieces of “insourcing” legislation on Wednesday.
Bloomberg | U.S. Durable Goods Orders Beat Forecasts
Bookings (DGNOCHNG) for goods meant to last at least three years climbed 3 percent after a revised 4.3 percent gain the prior month that was more than previously estimated, data from the Commerce Department showed today.

Econ Comments & Analysis                                                                                            
AEI | Common shock is the real cause of the financial crisis
It is certainly possible to find prime borrowers among people whose incomes are below the area median. But when more than half the mortgages Fannie and Freddie bought had to have that characteristic, the government-sponsored enterprises had to substantially reduce their underwriting standards in order to meet the affordable housing quotas.
Washington Times | Keystone Kops energy policy
Mr. Obama’s decision to kill the Keystone XL pipeline, which would carry oil from Alberta, Canada, to refineries on the U.S. Gulf Coast, is one more example of his administration’s ongoing war on fossil fuels - and the most recent example of how the president promises the exact opposite of what he is delivering.
Daily Finance | Is American Manufacturing on Track for a Comeback?
In December, Detroit's big-three automakers -- Ford (F), General Motors (GM), and Chrysler -- announced that they were going to hire 33,000 new workers.
NBER | Incentives and Adaptation: Evidence from Highway Procurement in Minnesota
We develop a theory of highway procurement in which contractors must modify their construction rate following a productivity shock. We model how time incentives affect the work rate and time taken, characterizing the efficient contract design.
Market Watch | Obama refi plan has bumpy road ahead
President Barack Obama’s State of the Union proposal to have Congress approve a sweeping mortgage-refinancing program funded by a bank tax has little or no chance of passage, analysts said.

Blogs                                                                                                                             
Heritage Foundation | State of the Housing Market: New Refinancing Promises?
So far, government interventions and the bailout of Fannie Mae and Freddie Mac have cost taxpayers $300 billion. The new plan may cost taxpayers hundreds of millions, perhaps billions, depending on how many families will be covered and what mortgage interest rate will be used for refinancing.
Marginal Revolution | What does the inequality-immobility link mean?
I see two big and very real problems: slow income growth for many income classes and a problem with excessively high returns to finance at the very top.
National Review | Claims and Contradictions in SOTU
Obviously, the whole speech last night was confused and self-contradicting. Here is some evidence of that, in the president’s own words
The American | Five energy errors from the State of the Union address
The Institute for Energy Research (IER) has a great post up today detailing the … let’s call them errors … regarding energy in President Obama’s State of the Union address last night.

Health Care

News                                                                                                                             
National Journal | Massachusetts Health Experience: What the Nation Can Expect?
Mitt Romney may not like to hear it, but if you want to know what health reform will look like for the United States, look to what’s happening in Massachusetts
National Journal | Republicans Getting Ready to Replace Health Reform Law
House Republicans plan to introduce a bill to replace Democrats’ landmark health reform law if the Supreme Court rules it unconstitutional.

Econ Comments & Analysis                                                                                            
Washington Times | Uncle Sam exacts penalty for quitting Medicare
Should people be allowed to leave Medicare? Even though Medicare is said to be highly popular, indispensable and a great boon to American seniors, some people really want out.

Blogs                                                                                                                             
The American | America’s humongous healthcare problem: Healthcare fact of the week
The president’s State of the Union address made no mention of what is purportedly his signature domestic policy achievement: the Affordable Care Act.

Monetary

News                                                                                                                             
Bloomberg | Bernanke Makes Case for More Bond Buying
The Federal Open Market Committee “recognizes the hardships imposed by high and persistent unemployment in an underperforming economy, and it is prepared to provide further monetary accommodation,” Bernanke said yesterday at a press conference in Washington.

Econ Comments & Analysis                                                                                            
WSJ | Ron Paul, the Fed and the Need for a Stable Dollar
On Wednesday the Federal Reserve shared its thoughts on the course of interest rates—but not on the implications for the value of the dollar. The two can't be disconnected.

Blogs                                                                                                                             
WSJ | The Lone Dissenter: Richmond Fed’s Lacker
Jeffrey Lacker came back with a bang. The president of the Federal Reserve Bank of Richmond today rejoined the Federal Open Market Committee‘s regular voting rotation for the first time since 2009. And he used the opportunity to dissent in the Fed’s 9-1 decision on interest-rate policy.
Calculated Risk | Bernanke paves the way for Q3
Although the FOMC might still wait until one of the two day meetings in April or June, the likelihood of QE3 being announced at the March 13th meeting has increased significantly.
WSJ | Fed Officials Detail Rate Projections
The Federal Reserve on Wednesday, in its first release of interest-rate projections by Fed officials, suggested interest rates could stay near zero for longer than previously indicated, a move that could aid the U.S. economy’s slow path to recovery.

Taxes

News                                                                                                                             
WSJ | Corporate-Tax Revamp Faces Hurdle
Despite broad agreement that the corporate tax code is a flawed mélange, election-year skepticism from Republicans and strained relations between the White House and the business community complicate the Obama administration's plans to overhaul it.
NY Times | Talk of Taxing the Rich More Faces Political Realities
President Obama’s call for “tax fairness” and Mitt Romney’s tax returns have catapulted the debate over tax increases on the rich to the top of the political agenda.
CNN Money | Obama's 30% millionaire tax
President Obama this week defined what he believes should be the minimum "fair share" for millionaires and billionaires to pay in taxes. His answer: At least 30% of their income.
WSJ | Payroll-Tax Break Still Divides Lawmakers
Democratic and Republican negotiators plunged back into the debate at their first public meeting Tuesday, offering diverging ideas over how to pay for the extensions—estimated to cost about $160 billion in total

Econ Comments & Analysis                                                                                            
Washington Times | Tax cheats on the federal rolls
Figures released this week show 98,291 current civilian employees have a severe tax lien against them. When retirees and military personnel are included, the debt figure goes up to an astounding $3.4 billion.
Market Watch | Tax deductions: Enjoy them while you can
Two-thirds of U.S. taxpayers claim the standard deduction, but if ever there was a time to make the most of valuable tax deductions and credits, it might be now, before it’s too late.
WSJ | The Buffett Ruse
The U.S. economy is still hobbling out of recession, real family incomes are falling and 14 million Americans are unemployed, but Mr. Obama declared that his top priority is not to reform the tax code to promote growth and job creation.
Washington Times | Reshaping Social Security and our society
Social Security has fundamentally changed. This is because the historical, almost sacrosanct, linkage between Social Security taxes and benefits has been severed.
FOX Business | The Truth About the Federal Tax Burden
You wouldn’t be at fault if you thought President Barack Obama could make a rainbow sound defeatist if you listened to his State of the Union address last night.
Real Clear Markets | President Obama's Capital Gains Tax Envy
In his State of the Union Address Tuesday evening, President Obama repeated his call for tax increases on high income earners-even though some of these same tax increases failed to get through Congress in 2010 when the Democrats controlled both Houses.

Blogs                                                                                                                             
Tax Foundation | 2012 State Business Tax Climate Index Released
The 10 best states in this year's 2012 Index are Wyoming, South Dakota, Nevada, Alaska, Florida, New Hampshire, Washington, Montana, Texas, and Utah.
National Review | Poor Warren Buffett's Secretary
Buffett does pay more in taxes than his secretary, both in dollar amount and as share of income, when one properly takes the double taxation of corporate profit into consideration.

Employment

News                                                                                                                             
Bloomberg | Factory Jobs Obama Wants for U.S. Probably Won’t Return in Large Numbers
Factory jobs, which have been shrinking as a share of total U.S. employment since the early 1950s, remain 2 million below their pre-recession level.
CNN Money | First-time unemployment claims climb
The Labor Department reported Thursday that 377,000 people filed for initial unemployment benefits in the week ended Jan. 21, up 21,000 from a revised reading of 356,000 claims the week before.

Econ Comments & Analysis                                                                                            
Real Clear Markets | How to Grow Jobs Without Growing the Deficit
Good news: economic activity is picking up. Not so good news: economic growth remains anemic and the pace of job creation too slow to make a meaningful dent in the unemployment rate.

Budget

News                                                                                                                             
Politico | TARP still owes $133B
Taxpayers are still owed $132.9 billion from the financial bailout initiated under President George W. Bush and continued by President Barack Obama, and some of those funds will never be repaid.

Econ Comments & Analysis                                                                                            
AEI | How and why a U.S. sovereign debt crisis could occur
A U.S. sovereign debt crisis is a remote possibility, but in our increasingly fragile system it could be triggered by a number of financial catastrophes

Blogs                                                                                                                             
Library of Economics | Gridlock vs. Compromise on the Deficit
Ordinarily, advocates of limited government say that gridlock is our friend. But four out of the five of us see it as our enemy right now.