Monday, February 6, 2012

General Economics

Bloomberg | Era of Falling Food Prices Seen at End on Growth in Population
The United Nations’ Food and Agriculture Organization has said global food output must rise 70 percent by 2050 to feed a world population expected to grow to 9 billion
Market Watch | Obama says he has stabilized economy
President Barack Obama said Monday that his administration has managed to stabilize the economy and the challenge now is to take it to the next level.
Bloomberg | Euro Markets Rebound on Draghi-Merkel Policies
Such signs of improvement reflect mounting bets that the euro will last and the two-year debt crisis won’t, as emergency loans from European Central Bank President Draghi take hold and leaders including German Chancellor Merkel pivot from crafting tougher fiscal rules to considering bigger bailout funds.

Econ Comments & Analysis                                                                                            
CATO | Fixing Mortgage Finance: What to Do with the Federal Housing Administration?
While Fannie Mae, Freddie Mac, and private subprime lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market and put taxpayers at risk of having to finance massive financial bailouts.
Bloomberg | The Hidden Burden of Ultra-Low Interest Rates
The hope is that by making mortgages and other loans cheaper, ultra-low rates eventually may revive economic growth.
Washington Post | World economy’s uncharted territory
We’ve entered a zone of ignorance where familiar experience and ideas count for less.
NY Times | Do Manufacturers Need Special Treatment?
A successful argument for a government manufacturing policy has to go beyond the feeling that it’s better to produce “real things” than services.
Forbes | President Obama's State Of The Union Confusion And Deception
President Barack Obama’s State of the Union (SOTU) last week was another exhibition of what I have called calculated deception. 
Washington Times | The Great Keystone XL Pipeline Massacre
What the Great Keystone XL Pipeline Presidential Massacre of 2012 affirms is the president’s out-of-touch energy policy: Oil is bad.
NBER | Immigrants, Welfare Reform, and the U.S. Safety Net
Beginning with the 1996 federal welfare reform law many of the central safety net programs in the U.S. eliminated eligibility for legal immigrants, who had been previously eligible on the same terms as citizens.

Calculated Risk | Recovery Measures
If the economy adds 243 thousand payroll jobs per month on average (the January report), it will take another 2 years to get back to the pre-recession employment peak.
Calculated Risk | Schedule for Week of February 5th
The key economic release is the December trade balance report to be released on Friday.
The American | Happy Reagan Day, 2012!
Ronald Wilson Reagan, America’s 40th president, was born on Feb. 6, 1911. His presidency left America prouder and stronger and better. And his economic policies ushered in a Long Boom as this chart from the Joint Economic Committee (via the Heritage Foundation) shows:
Calculated Risk | Unofficial Problem Bank list unchanged at 958 Institutions
This is an unofficial list of Problem Banks compiled only from public sources.

Health Care

Econ Comments & Analysis                                                                                            
WSJ | Health Reform Built to Fail
Americans may not be familiar with the medical innovation called negative pressure wound therapy, though it has helped hundreds of thousands of patients with complex or chronic injuries like burns or diabetic ulcer complications that could never heal on their own. Now President Obama's Medicare team is about to severely damage this field, and many others too—all in the name of reforming how the entitlement pays for care.
Politico | Constitutional fairy tales and the Affordable Care Act
Opponents of the Affordable Care Act routinely spin a tea-party-infused tale about how our nation’s founding was all about limiting government.

The American | When Medicare wipes out Social Security: Healthcare fact of the week
Attention, children and grandchildren of Baby Boomers: save early and save often. Within 75 years, the average monthly premiums required for Medicare and out-of-pocket spending for Medicare-covered services will equal the average monthly Social Security check


WSJ | Fed Likely to Retain Stance on Low Rates
A few more months of strong jobs reports like the one released Friday, and the Federal Reserve might need to draw up a new game plan. For now, though, Fed Chairman Ben Bernanke seems unlikely to rewrite his script for the central bank.
Bloomberg | EU May Relax Sovereign Debt Demands for Banks
European bank supervisors may discuss easing requirements for lenders to hold capital against sovereign debt this week as part of more than 30 meetings this month to track banks’ progress in complying with updated requirements, two people with knowledge of the discussions said.

Econ Comments & Analysis                                                                                            
WSJ | The Fed Votes No Confidence
We're now in the 37th month of central government manipulation of the free-market system through the Federal Reserve's near-zero interest rate policy. Is it working?
Bloomberg | Fed Inflation Goal Is More Politics Than Policy
The Federal Reserve’s decision last month to set a soft inflation target is the latest in a series of steps the central bank has taken in recent years to improve policy transparency. It’s also the most controversial among economists, and with good reason.


Econ Comments & Analysis                                                                                            
Daily Finance | Why Your 2012 Tax Bill May Jump By $8,000
Thanks to yet another lapse by our lawmakers in Washington, more than 20 million taxpayers may pay a tax that was originally designed to hit only the ultra-rich -- and the increase could cost you as much as $8,000.
AEI | The misdirected tax debate and the small business stock exclusion
Intense debate continues over the appropriate level of marginal income tax rates, particularly as policymakers consider whether to extend part or all of the 2001 and 2003 tax cuts, which are currently scheduled to expire at the end of 2012.

Neighborhood Effects | Governor O’Malley Ties Taxes to Educational Achievement
Maryland Governor Martin O’Malley has proposed several new taxes that he says are necessary to close the state’s $1.1 billion budget gap.
Heritage Foundation | Government Unions Support California Tax Hike
Two well-connected government unions in California are teaming with Gov. Jerry Brown to support a multibillion-dollar tax increase.


WSJ | Canada Jobless Rate Rises Unexpectedly
The economy added just 2,300 net new jobs and the unemployment rate rose to 7.6% from 7.5%, Statistics Canada said Friday.
CNN Money | Big drop in unemployment rate for blacks
The unemployment rate for blacks fell more than 2 percentage points last month to its lowest level since March 2009.
WSJ | Jobs Power Market Rebound
The U.S. economy added more jobs in January than in any month since early last year, pushing down the unemployment rate to a level not seen since President Barack Obama's first full month in office.

Econ Comments & Analysis                                                                                            
FOX News | From relief to despair: Varying views of jobs data
The headline numbers mask vast disparities — from the New Yorker thrilled to have found a catering job to the Indianapolis truck driver forced to take a 40 percent pay cut to work again.
Investors | As Obama Crows, Real Story Is 10.5 Mil Jobs Deficit
Of course it's good news that 243,000 new jobs were created in January, shaving the unemployment rate to 8.3%. But thanks to massive policy errors by the White House, we're still way below where we should be.
Washington Times | Obama’s bogus jobs data
The White House hyped the news Friday that January payrolls had risen by 243,000. The hitch is the Bureau of Labor Statistics (BLS) also dropped 1.2 million from the calculated workforce.
Real Clear Markets | Another Unemployment Rate Fairy Tale
The BLS reported that the closely followed "headline" (U-3) unemployment rate fell to 8.3% in January. This represented a decline of 0.2 percentage points from the previous month's level and the lowest level since February 2009. So, why isn't this good news?

WSJ | Did Economy Really Create 500,000 Jobs?
According to one little-followed measure, the economy created nearly 500,000 jobs last month — about twice as many as the government’s official figure of 243,000.
Calculated Risk | Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
This was a solid report and well above expectations. However there is still a long ways to go for a healthy labor market with solid wage gains.
WSJ | The Hiring Hare Will Soon Morph Into a Tortoise
Can the labor markets maintain such hippity-hoppity vigor? It seems unlikely. The drags from the euro zone, housing and deleveraging are still weighing on growth prospects.
Calculated Risk | Unemployment Rate, Participation Rate, Jobs added
There were some revisions this morning to previous employment reports. This included the annual benchmark revision to state unemployment insurance (UI) records, and benchmarking the population controls to the 2010 Census data and an update to seasonal factors.
WSJ | What’s Behind the Unemployment Rate Drop?
Under the government’s definitions, people only count as unemployed when they’re actively looking for work. So when the unemployment rate drops, it could mean that unemployed people found jobs, or it could mean that they gave up looking for work.
Daily Capitalist | Unions Continue To Drive Themselves Out Of Business
It is good news for Americans that labor union membership fell to an historic low in 2011—11.8% of the wage and salary workforce. There are now only 14.8 million union members in the U.S.
Political Calculations | Teens Still "Most Screwed Over"
Teens between the ages of 16 and 19 only saw their numbers increase from December 2011 and January 2012 by just 2,000, even with the statistical adjustment!


WSJ | Greek Wrangling Bodes Ill for Lisbon
Portugal has long been perceived as the next-most-likely country to follow Greece's path and restructure its debt, and the tough terms being presented to Greece's creditors have led many in the market to fear the same could come for Portugal, analysts say.

Econ Comments & Analysis                                                                                            
WSJ | An American History Lesson for Europe
In 1789, the political price for our federal constitution included a bailout of the 13 indebted states. But it was by refusing to bail out the states a second time in the 1840s that the United States preserved its federal system, with substantial fiscal independence for state governments. Facing a similar moment, Europe might learn from our experience.

Atlantic | Greeks Inch Closer to Default
The negotiations over Greek debt are really pushing the limit.  It's been hard enough getting the private creditors--on whom the entire haircut looks set to fall--to accept losses which one person quoted by the FT puts at greater than 70%.  But the Greeks are also proving difficult.
CATO | Has Congress Cut Any Spending Yet?
It’s been a year since Republicans assumed control in the House in the wake of the 2010 elections, which were powered by Tea Party concerns about massive federal spending and deficits. With the more conservative House, has Congress made any progress on spending cuts yet?