Thursday, March 8, 2012

General Economics

WSJ | Consumers Ramped Up Borrowing in January
Household borrowing through car loans, student loans, credit cards and other debt, excluding mortgages, rose at a seasonally adjusted 8.6% annual rate in January, the fourth straight month of rapid growth, according to Federal Reserve data out Wednesday.
USA Today | Consumer borrowing nearly at pre-recession levels
Consumer borrowing rose by $17.8 billion in January, the Federal Reserve said Wednesday. That followed similar gains in December and November.
CNN Money | Energy subsidies total $24 billion, most to renewables
The federal government spent $24 billion on energy subsidies in 2011, with the vast majority going to renewable energy sources, according to a government report.
Real Clear Markets | The Misleading Tale of Income Inequality
Although cries for redistribution by government echo in the press and among some politicians, by some measures economic inequality is no greater now than it was in the 1980s.
Bloomberg | German Industrial Output Rises More Than Forecast on Construction: Economy
Production (GRIPIMOM) rose 1.6 percent from December, when it fell 2.6 percent, which was the steepest decline in almost three years, the Economy Ministry in Berlin said today. Economists forecast a January increase of 1.1 percent
Politico | Ensuring food stamp integrity
Despite a rash of recent stories about food stamp fraud, the facts are that the Agriculture Department has a zero tolerance policy on this. We aggressively pursue those trying to take advantage of America’s compassion for people in need.

Econ Comments & Analysis                                                                                            
Washington Post | Is China No. 1?
Does China already have the world’s largest economy? Most economists think not, and there’s a widespread guessing game as to when it will.
Washington Times | Cash for billionaires
Democrats are fond of playing the class-warfare card in calling for tax hikes on “millionaires and billionaires.” It’s their way of pretending to stand for the little guy.
MSN Money | Will home prices fall 20% more?
Ask the average guy on the street about things like European Central Bank support for Greece or the intricacies of the deficit debate in Washington, and watch his eyes glaze over.

Library of Economics | The Bailouts and the Economy
Because the U.S. Treasury bailed out and backstopped banks, the U.S. unemployment rate was lower at the end of 2010 than it would have been without these measures.
CATO | Obama Fixes the Housing Market Again (and Helps the Troops)
Yesterday President Obama announced yet another set of programs intended to help the housing market.  The majority of these are aimed at helping active service members of the military. 
WSJ | Exports Make Up 10% of Economic Activity in Largest Metro Areas
Exports, which have been a bright spot throughout the economic recovery, account for about 1/10th of economic activity from the top 100 U.S. metro areas on average, according to this study by the Brookings Institution.
The American | No surprise: TARP bailout encouraged banks to make riskier loans
Here’s a handy rule of thumb: Bailouts lead to more bailouts. They encourage risky behavior by limiting downside. If some person or institution acts recklessly, don’t worry; Uncle Sucker will catch them if they fall. A new Fed study shows the the moral hazard issue came into play with banks that took TARP funds
Marginal Revolution | Some Economics of Pay What You Want Pricing
Imagine that under the pay-what-you-want model consumers choose to split their consumer-surplus with the seller. Here is a neat little proof for the linear demand case that under this heuristic profits are as large as under monopoly pricing!
The American | Harvard, we have a problem: Too many liberal arts majors
Rather than pushing students to attend a four-year, brick-and-mortar college in pursuit of the BA, how about business-backed training and apprenticeship programs leading to a high-skill technical degree just like in Germany and some other northern European nations?

Health Care

National Journal | Dementia To Cost $200 Billion in 2012, Report Finds
The bill for taking care of people with Alzheimer's and other dementias will  reach $200 billion this year in the United States, including  $140 billion paid by Medicare and Medicaid, the Alzheimer’s  Association said on Thursday.

Heritage Foundation | The 10 Terrible Provisions of Obamacare You May Not Have Heard Of
Obamacare includes such a variety and volume of negative policies that it’s hard to keep track of them all. Here is a list of 10 terrible provisions that every American should be aware of


WSJ | 'Sterilized' Bond Buying an Option in Fed Arsenal
Federal Reserve officials are considering a new type of bond-buying program designed to subdue worries about future inflation if they decide to take new steps to boost the economy in the months ahead.
FOX Business | ECB Keeps Key Interest Rate at 1%
The European Central Bank (ECB) held its key lending rate at a record low one percent Thursday, in line with forecasts. Attention now turns to ECB president Mario Draghi's news conference in Frankfurt at 1:30pm GMT.
Market Watch | Fed weighing new form of bond buying: report
Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Americans Don't Benefit From Fed Inflated Asset Prices
The Dow Jones Industrial Average and the S&P 500 have had a rocky couple of weeks, including the largest drop of the year on Tuesday. Their rollercoaster highs and lows haven't really meant much when it comes to economic growth in America though.
Morgan Stanley | Fed Thoughts: QE or Not QE?
For some time, our call has been that the Federal Reserve will undertake additional balance-sheet action in 1H12.  This view has been in and out of consensus thus far this year, even though the Fed appears to have been adhering to a consistent storyline throughout.
Forbes | Monetary Policy FAQ: Explaining the Basics of the Dollar
Today, the dollar takes its value on a moment-by-moment basis from the value that the markets place upon the dollars of the U.S. monetary base.

WSJ | House Democrats Request Hearing on Altering Fed Mandate
Democratic lawmakers on the U.S. House Financial Services Committee asked Wednesday to hold a hearing focused on a proposed change to the Federal Reserve‘s mandate that would strip the central bank of its focus on employment.
WSJ | CEOs Say Change Volcker Rule, Other Pending Fed Regulations
A group of chief executives on Wednesday called for major changes in Washington, including modifying parts of the Dodd-Frank financial overhaul bill and balancing the federal budget.


Heritage Foundation | Clean Energy Standard: Another Energy Tax in Disguise
These policies are not things we do for our grandchildren; they are things we would do to them. The costs are hugely back loaded onto future generations, while the front-end costs are often fictionalized with unrealistic assumptions about carbon-reduction strategies.


CNN Money | Jobless claims bounce off lows
First-time claims for unemployment benefits ticked higher last week, slightly dimming prospects for Friday's employment report.
FOX News | In quest to create jobs, some states get creative
In the quest to create jobs, some states are getting creative: Nevada may hold contests to encourage entrepreneurs. Ohio is giving control of its liquor profits to a group of business leaders. And Washington and Alabama are "selling" income they don't even have yet.
FOX News | How states fared on unemployment aid applications
Slightly more people applied for U.S. unemployment benefits last week. But the overall level stayed low enough to suggest the job market is strengthening.

Econ Comments & Analysis                                                                                            
WSJ | Small Is Beautiful
We keep hearing that the partisan gulf in modern Washington is too wide to "get things done," but Republicans and Democrats agree on a lot. For example, both parties claim to revere the Constitution.

Calculated Risk | CFO Survey: U.S. Employment Growth to Accelerate
In March 2011, CFOs in this survey only expected to increase full time employees by 1.2% over the next 12 months, so 2.1% is a solid increase.


WSJ | Moody's: Local Governments Are Likeliest Muni Defaulters
Municipal-bond defaults should remain rare, Moody's Investors Service said in a report, with the biggest risk a shift from defaults by health-care and housing issuers to those by local governments.
CNN Money | Energy subsidies total $24 billion, most to renewables
The federal government spent $24 billion on energy subsidies in 2011, with the vast majority going to renewable energy sources, according to a government report.
Bloomberg | Greece Closes In on Swap as Investors Agree
Greece moved closer to sealing the biggest sovereign restructuring in history as investors indicated they’ll participate in the nation’s debt swap.
WSJ | Greek Debt Swap Gets More Support
Holders of more than half of Greek bonds have so far pledged to participate in the government's debt-exchange offer as part of a restructuring that will see the value of their holdings more than halved.

Econ Comments & Analysis                                                                                            
Politico | GOP budget target could provoke fight
Anxious to change the subject, House Republicans moved toward picking a new fight with the White House over spending Wednesday even as the leadership confirmed it will go slower on legislation challenging President Barack Obama’s policy of requiring contraception coverage by health insurance companies.
CBO | Monthly Budget Review
The federal government incurred a budget deficit of $578 billion in the first five months of fiscal year 2012, CBO estimates—$63 billion less than the shortfall recorded for the same period last year.