Tuesday, February 21, 2012

General Economics

News                                                                                                                             
WSJ | S&P Affirms Japan Rating
Standard & Poor's Corp. on Monday reaffirmed Japan's sovereign-debt rating at double-A-minus and maintained its negative outlook, a move that leaves Prime Minister Yoshihiko Noda under pressure to deliver on tax increases to improve the country's dire fiscal position.
Washington Times | Gas prices are highest ever for this time of year
At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.
WSJ | Japan Posts Largest Trade Deficit on Record
Japan posted a record merchandise trade deficit in January, as a global economic slowdown and the strong yen hurt exports, while fuel imports continued to increase.
CNN Money | Manufacturing: Not a magic pill for the economy
Today, in the midst of an even deeper and more prolonged recession, the 1980s debate about whether manufacturing matters is front and center.

Econ Comments & Analysis                                                                                            
Economist | Too big not to fail
Flaws in the confused, bloated law passed in the aftermath of America’s financial crisis become ever more apparent
WSJ | Mortgage Settlement Or Mortgage Shakedown?
The $25 billion mortgage settlement negotiated on Feb. 9 by the administration and 49 state attorneys general with five big banks has been greeted with considerable political suspicion.
Washington Times | Onerous effects of overregulation
High taxes draw a lot of attention, and rightly so. They depress investment and discourage innovation. But escalating regulatory costs also undermine our economy.
Daily Caller | Home Heating Oil Delivery
Just when the good economic news of the last few months was beginning to sink in, the nation’s newspapers are full of headlines about rising gas prices.
Washington Times | Obama’s gas-price spike
Here we go again. Gasoline prices are rising rapidly and already have shattered the $4-a-gallon mark in California. Industry analysts say the all-time national average record of $4.11 could be shattered this summer.
Investor | Obama Stimulus Turns Three: What Has It Achieved?
Without any fanfare whatsoever from the White House, February 17 marks the three-year anniversary of the day President Obama signed the much ballyhooed stimulus into law.
Financial Post | Irrational behaviourists
With governments from Athens to Queen’s Park struggling under unsustainable debt and productivity-killing taxes, regulations and social policies, this hardly seems to be the time to suggest new policy initiatives based on the “irrationality” of the man in the street.
Forbes | Toward a True Free Market in Television Programming
There’s a common myth heard frequently in communications policy circles that America’s video marketplace was largely deregulated in the 1980’s and ‘90s, and that we now have a free market nirvana.
CATO | State and Local Pension Plans: Funding Status, Asset Management, and a Look Ahead
State and local employee pension plans, which are primarily defined benefit plans, have come under increased scrutiny of late.

Blogs                                                                                                                             
Calculated Risk | Schedule for Week of February 19th
The key reports this week are the January existing home sales report on Wednesday and the new home sales report on Friday. The AIA's Architecture Billings Index for January will also be released on Wednesday.
CATO | The USA And Europe: A Graphical Status Report
The ability to interpret and understand economic data in terms of patterns, relationships, connections and structures that are likely to prevail in the future is critical if we are to make sound economic decisions today.
Calculated Risk | Unofficial Problem Bank list declines to 956 Institutions
This is an unofficial list of Problem Banks compiled only from public sources.
CATO | Local Governments Also To Blame For Housing Crisis
Whether it is federal mortgage subsidies, like Fannie Mae, or reduced interest rates via loose monetary policy, these policies increase the demand for housing by allowing, and encouraging, more buyers to enter the market.  As I’ve written in more detail elsewhere, this narrative ignores the supply side of the market.

Health Care

News                                                                                                                             
National Journal | Democrats Sacrifice Health Reform Law For Doc Fix
As Congress inches towards a final payroll tax deal that puts off a steep cut to Medicare physicians, Democrats have once again given up a big chunk of spending in their landmark health reform law.

Blogs                                                                                                                             
Neighborhood Effects | New Medicaid Case Study Highlights the Role of Politics in Policy
Last week, Scott Beaulier and Brandon Pizzola released new research on Medicaid, conducting case studies of five states that have implemented reform measures designed to control program costs. They find that the political climate is essential to the success of reforms.

Taxes

News                                                                                                                             
NY Times | Obama’s Tax Policy Targets Rising Sector of His Base: The Affluent
Partisan clashes over President Obama’s proposed tax increases have obscured something remarkable: that the affluent Americans targeted by his policy represent a growing share of his own party’s base.
National Journal | Obama: Payroll-Tax Extension 'Just a Start'
President Obama thanked Congress for voting to extend the payroll-tax cut on Friday but emphasized it was just “an important short-term step to strengthen our economy."

Monetary

News                                                                                                                             
MSN Money | Higher prices to pinch economy
For months, I've been warning that the Federal Reserve's hardheaded determination to pump trillions and trillions in ultra-cheap cash into the economy was passing the point of no return.

Blogs                                                                                                                             
Calculated Risk | Key Measures of Inflation in January
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in January on a seasonally adjusted basis

Employment

News                                                                                                                             
CNN Money | White House predicts 2 million more jobs in 2012
"While actions taken to prevent a deeper recession and to strengthen the recovery have made a difference, the nation is still recovering from that profound crisis and the problems that led to it," the Economic Report of the President said.
Washington Times | Millennials forced to put lives on hold
Nicholas Rastenis has been through the wringer. After getting a master’s degree in fine arts from Yale University in 2008, he expected to land a job at a top design firm. But nearly four years later, after many months of joblessness, austerity and anxiety, his ambitions in life have come down quite a bit.
Washington Post | U.S. manufacturing sees shortage of skilled factory workers
This stretch of the Rust Belt might seem like an easy place to find factory workers. Unemployment hovers above 9 percent. Foreign competition has thrown many out of work. It is a platitude that this industrial hub, like the country itself, needs more manufacturing work.

Econ Comments & Analysis                                                                                            
Washington Times | No Master Lock on job creation
President Obama traveled to Milwaukee Wednesday to praise security company Master Lock for setting an example of “insourcing” and promising business leaders who re-create jobs in America that “your country will do everything we can to help you succeed.”
WSJ | As Job Market Mends, Dropouts Fall Behind
While the U.S. job market is showing signs of improvement, one sizable group of workers has been falling further behind: high-school dropouts.

Blogs                                                                                                                             
Calculated Risk | Percent Job Losses: Great Recession and Great Depression
The causes of the Great Recession were similar to the Great Depression - as opposed to most post war recessions that were caused by Fed tightening to slow inflation - and I'm frequently asked if we could compare the percent job losses during the two periods.
Calculated Risk | Housing Starts and the Unemployment Rate
An update by request: The following graph shows single family housing starts (through January) and the unemployment rate (inverted) also through January.

Budget

News                                                                                                                             
NY Times | Budget Woes Prompt Erosion of Public Jobs, With a Heavy Toll in Silicon Valley
The nation has lost 668,000 state and local government jobs since the recession hit — more than in any modern downturn, according to a new analysis of labor statistics by the Nelson A. Rockefeller Institute of Government.
Market Watch | Europe agrees to second Greek bailout
After a long wait for a final agreement, European finance ministers approved the terms of a fresh aid package for Greece on Tuesday and the country agreed the terms of a deal with its private debt holders.

Econ Comments & Analysis                                                                                            
Motley Fool | What Happens When China Stops Buying Our Debt?
Once China refuses to finance our massive deficits, the thought goes, interest rates will surge, and the Treasury might have a hard time selling bonds (ask Greece what it's like).

Blogs                                                                                                                             
Calculated Risk | Greek Debt Deal Reached
Euro zone finance ministers struck a deal ... that includes new financing of 130 billion euros and aims to cut Greece's debt to 121 percent of GDP by 2020, two EU officials said.