Thursday, February 2, 2012

General Economics

WSJ | Belgium Slides Into Recession
Belgium's economy fell back into recession at the end of 2011, reversing the strong growth it had seen in the first half of the year as the country became the latest to fall victim to the euro zone's twin fiscal and banking crises.
National Journal | White House Proposes Long-Shot Housing Initiative
The White House on Wednesday proposed initiatives to stabilize the struggling housing market, but the package faces long odds because it relies in part on a bank tax that is likely to go nowhere in Congress.
Bloomberg | China Economy Heading for ‘Hard Landing’ as Exports Falter, Shilling Says
China’s economy is headed for a “hard landing” this year as weaker demand overseas chokes off exports, said Gary Shilling, who correctly forecast the U.S. recession that began in December 2007.
Bloomberg | Manufacturing in U.S. Bolsters Global Expansion: Economy
Manufacturing in the U.S. grew in January at the fastest pace in seven months, adding to signs of a global pickup from Germany to China.
Market Watch | Fourth-quarter productivity growth slows
The productivity of U.S. businesses rose at a slower rate in the fourth quarter as labor costs rose, the government said Thursday.

Econ Comments & Analysis                                                                                            
WSJ | The 'Financial Recession' Excuse
Commerce Department data released last Friday show that four years after the recession began, real gross domestic product per person is down $1,112, while 5.8 million fewer Americans are working than when the recession started.
Washington Times | The economics of fear
The Congressional Budget Office (CBO) issued its outlook through 2022, with near-term figures looking increasingly negative. This shouldn’t surprise anyone.
Project Syndicate | Coronary Capitalism
A systematic and broad failure of regulation is the elephant in the room when it comes to reforming today’s Western capitalism.
Washington Times | Obama’s divided America
A new survey shows that Barack Obama is the most polarizing president in the last 60 years. As divisive as he is, the current occupant of the White House has simply exacerbated a trend towards disunity that has been developing for years.

Café Hayek | A Question for Protectionists
Congressional Quarterly reports (unfortunately gated) that several members of Congress – from both parties – seek to raise tariffs on Americans who buy foreign goods that (allegedly) are subsidized by foreign governments
Coordination Problem | Corporatism Is NOT Capitalism
Several leading classical liberal and libertarian thinkers have over the past few years suggested abandoning the name capitalism because of the connotation that it implies caputre by the corporate elite.
Marginal Revolution | Why is the quality of American governance so low?
Conversely, I would argue that the quality of governance in the US tends to be low precisely because of a continuing tradition of Jacksonian populism.
WSJ | World-Wide Factory Activity, by Country
The manufacturing sectors in most of the world improved last month, though many regions, especially in Europe, remained in contractionary territory.
Heritage Foundation | Clean Energy: Cap and Trade Lite
In his State of the Union address last month, President Obama requested that Congress pass legislation mandating a national clean energy standard (CES). A CES targets the CO2 emissions from the electric power industry by setting minimum percentages of total power (electricity) generation that must come from sources that emit no CO2.
CATO | One Year Later, Another Look at Obamanomics vs. Reaganomics
Under Reagan’s policies, the economy skyrocketed. Under Obama’s policies, by contrast, we’ve just barely gotten back to where we were when the recession began.

Health Care

National Journal | Attacks From All Sides on Essential Health Benefits
The Health and Human Services Department may have avoided a political backlash when it decided not to spell out a precise package of benefits that most insurance plans would need to contain in 2014. But the vague approach still upset a lot of players in the health care world.
National Journal | More Patients Sign Up for Medicare Advantage, HHS Says
Medicare Advantage enrollment rose by about 10 percent this year and premiums fell by 7 percent on average, Health and Human Services Secretary Kathleen Sebelius said on Wednesday.

Heritage Foundation | Obamacare Ends Medicare (As We Know It)
In a recent Politico article, House Minority Whip Steny Hoyer (D–MD) is quoted as saying liberals will use Obamacare’s new provisions to combat a conservative budget that reforms Medicare using premium support.
CATO | ‘The Problem with CLASS Is That It’s Voluntary.’
As I write, the House is debating a bill that would repeal the CLASS Act, one of two new entitlements created under ObamaCare. It’s hard express just how awful this program is.
Heritage Foundation | Federal Spending on Health Care Doubles in the Next Decade
As the government continues its fiscal irresponsibility, 2012 will be the fourth straight year of trillion-dollar deficits. This trend is on track to continue as a result of increasing federal spending on health care, which will more than double between 2012 and 2022.


Bloomberg | ECB May Wait for Investor Deal on Greek Swap
The European Central Bank is likely to refuse to show its hand on how it will help cut Greece’s debt burden until investors and the government have agreed to a deal, said economists from ING Group to Deutsche Bank.


WSJ | Payroll-Tax-Cut Extension Gets Bipartisan Backing
Lawmakers came to quick agreement Wednesday that Congress should extend a payroll-tax break for the remainder of the year, but Democrats cautioned that disagreements over how to offset the cost could still derail the consensus.
CNN Money | Payroll tax holiday running down
Despite bipartisan support on Capitol Hill for extending a temporary payroll tax cut for the rest of 2012, lawmakers have yet to close the deal.

Econ Comments & Analysis                                                                                            
Bloomberg | Lowering Taxes on the Rich Can Raise Revenue: Amity Shlaes
Tax the rich. Forever. And not just in election years. The general assumption is that rate increases will be the new norm. The main reason for this is said to be democracy itself.
AEI | Britain's high green taxes
In 1994, the Major government implemented the first ‘environmental tax’ on airline travel.Tariffs are likely to increase in the near future, to increase government revenue and deter increases in greenhouse gas emissions.

Tax Foundation | Rhode Island Governor Proposes Tax Hikes on Sales, Tobacco, Lodging, Vehicle License Fees, Kitchen Sink
Gov. Chafee (I) of Rhode Island proposed a budget yesterday that would cobble together $92 million from arbitrary places, with an effort to increase spending on education.


WSJ | Spanish Unemployment Soars
Spain's jobless claims shot up 4% in January from December to 4.59 million, a sign that the euro zone's fourth-largest economy is still shedding jobs at a record rate.
NY Times | American Airlines Seeks 13,000 Job Cuts
It plans to terminate its pension plans. It wants to cut back health benefits for current employees and retirees. Over all, it said, it seeks to cut employee costs by 20 percent.
CNN Money | Challenger: Job cuts increased in January
Planned job cuts for the month of January totaled 53,486, according to a report from outplacement consulting firm Challenger, Gray & Christmas. That's a 28% increase from December and the highest total since the 116,000 cuts announced in September.
Politico | House backs federal pay freeze
The House voted 309-117 to extend the salary freeze for federal workers - as well as for members of Congress - for one more year. The standard salary for a member of Congress has stayed at $174,000 since 2009.
Market Watch | January private-sector jobs rise 170,000: ADP
Employment in the nation’s private sector is improving at a moderate pace, with two years of job gains now on the books, according to a monthly labor-market report released Wednesday by payrolls-processor Automatic Data Processing Inc.

Neighborhood Effects | Twenty states face bill for Unemployment Benefits
The Center on Budget and Policy Priorities has a new analysis highlighting the $35 billion bill that 20 states owe to the federal government for covering benefit extensions. The report points to one of the design problems with the current program.
WSJ | Broader Unemployment Rates, by State
Unemployment nationwide averaged 8.9% in 2011, but the rate still hovered in the double-digits in states such as Nevada and California.
Zero Hedge | This Is Europe's Scariest Chart
Surging Greek and Portuguese bond yields? Plunging Italian bank stocks? The projected GDP of the Eurozone? In the grand scheme of things, while certainly disturbing, none of these data points actually tell us much about the secular shift within European society
WSJ | Chicago Fed Blames Baby Boomers for Big Part of Labor Force Drop
The long-running decline in the proportion of Americans still tied to the labor force relative to the nation’s total population has been vexing economists and government officials for some time.


Econ Comments & Analysis                                                                                            
Real Clear Markets | A Good, But Not Great, Highway Bill
On Thursday the House Transportation and Infrastructure Committee marks up its new transportation bill, the American Energy and Infrastructure Jobs Act.
Motley Fool | America: The World's Debt Destroyer
If you think America is ravaged by debt, stop and take a look around. The United States is one of the only developed nations on Earth shedding debt in a meaningful way.
CBO | Testimony on the Budget and Economic Outlook: Fiscal Years 2012 to 2022
CBO projects a $1.1 trillion federal budget deficit for fiscal year 2012 if current laws remain unchanged. Measured as a share of the nation’s output (gross domestic product, or GDP), that shortfall of 7.0 percent is nearly 2 percentage points below the deficit recorded in 2011

Daily Capitalist | Euroland’s Hidden Balance-of-Payments Crisis
Below the surface of the euro area‘s public debt and banking crisis lies a balance-of-payments crisis caused by a misalignment of internal real exchange rates.
Atlantic | CBO: How Hosed Are We?
 The projections continue to deteriorate, largely because the recession has been longer and deeper than the CBO projected.  We can now expect $1 trillion deficits even past Obama's first term.