Friday, March 9, 2012

General Economics

News                                                                                                                             
Market Watch | U.S. trade gap widens sharply in January
The U.S. trade deficit widened sharply in January, driven higher by record imports of autos, capital goods and food, government data showed Friday.
CNBC | Wholesale Business Inventories Rose 0.4% in January
Inventories at the wholesale level increased 0.4 percent in January following an even larger 1.1 percent gain in December
CNN Money | House passes bipartisan bill aimed at start-ups
In a rare moment of bipartisanship, the House overwhelmingly passed a bill Thursday aimed at making it easier for small companies to grow and go public.
Bloomberg | Staffing Companies Outperform as European Outlook Stabilizes
Euro-area and U.K. staffing companies are outperforming the market, a signal that investors predict economic conditions in the region won’t be as bad as previously forecast.
WSJ | Consumers Shape Up Their Finances
Americans ramped up their borrowing late last year for the first time since the depths of the recession, as households took out loans for education, cars and holiday gifts.
CNN Money | ECB: Gloomy on economy, upbeat on euro
The European Central Bank offered a slightly more pessimistic outlook for the eurozone economy Thursday and said it expects inflation to rise this year on higher oil prices.

Econ Comments & Analysis                                                                                            
WSJ | A Look at the Global One Percent
While the Occupy Wall Street movement may be waning, the perception of growing income inequality in America is not. For those on the left, the widening gap between the top 1% of earners and the remaining 99% is proof that American capitalism is unjust and should be traded in for an economic model more closely resembling the social democracies of Europe.
Politico | Tapping the oil reserve is bad policy
Congress created the Strategic Petroleum Reserve in 1975 to respond to “severe energy supply interruptions.” The president is authorized to tap into it if an emergency of significant scope and duration threatens to cause a price increase that is likely to have a major adverse impact on the national economy.

Blogs                                                                                                                             
WSJ | Some Problem Banks May Never Exit Federal Bailout
More banks are missing dividend, interest and other repayments to the Treasury Department and some may never exit from a federal financial-system bailout program, a government watchdog said Thursday.
Heritage Foundation | Morning Bell: A Disappointing Recovery Leaves Americans Suffering
In the Super Tuesday primary, the economy was the number one issue on voters’ minds, be they in Massachusetts, Georgia, Ohio, or Virginia. And that wasn’t because they were happy about high unemployment and slow wage growth.

Health Care

News                                                                                                                             
Politico | Medicare cuts hurt smaller providers
For House-Senate negotiators, it was just the last piece in a political jigsaw puzzle. For Annette Iacono, vice president and general manager of a community lab in the Philadelphia suburbs, it “hit us in the solar plexus hard.”

Econ Comments & Analysis                                                                                            
NBER | Demand and Reimbursement Effects of Healthcare Reform: Health Care Utilization and Infant Mortality in Thailand
The Thai 30 Baht program was one of the largest health system reforms ever undertaken by a low-middle income country. In addition to lowering the cost of care for the previously uninsured in public facilities, it also entailed a fourfold increase in funding provided to hospitals to care for the poorest 30% of the population

Blogs                                                                                                                             
Atlantic | The Myth of the Free-Market American Health Care System
Yesterday, Pascal-Emmanuel Gobry posted a stimulating comparison between the American and French health-care systems. "From my outlook," he writes, "there's something that I haven't seen discussed and yet seems striking to me: how similar the French and U.S. healthcare systems are. On its face, this seems like a preposterous notion: whenever the two are mentioned together, it's to say that they're polar opposites."
Heritage Foundation | Obamacare Knows Best?
Under Obamacare, the recommendations made by USPSTF will automatically determine which preventive health services are included by health insurance plans. The health law thus distorts the original intention of these otherwise perfectly reasonable recommendations by turning them into unreasonable requirements.

Monetary

News                                                                                                                             
Bloomberg | China Inflation May Provide Room for Stimulus: Economy
China’s inflation eased to the slowest pace in 20 months while new loans, industrial output and retail sales were below analysts’ forecasts, boosting the case for easing monetary policy in the world’s second-biggest economy.
Bloomberg | India’s Central Bank Cuts Reserve Ratio as Cash Squeeze Threatens Economy
India’s central bank unexpectedly slashed the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system that threatens to deepen an economic slowdown.

Econ Comments & Analysis                                                                                            
Forbes | How a Gold Standard Would Match Currency Supply With Demand
A “currency” is also a useful gadget like a blender. We don’t use it to make margaritas, but rather as a tool of commerce. It’s a useful tool, which is why we all have some. However, we don’t want to have too much – at some point, we would rather have some sort of good or service, or other asset, instead of a bigger pile of paper banknotes.
Reason Foundation | 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.

Blogs                                                                                                                             
WSJ | Draghi Defends ECB Balance Sheet Expansion
The European Central Bank president used his monthly press conference to take issue with a recent Wall Street Journal article on the ECB’s balance sheet now exceeding three trillion euros after it pumped a total of one trillion euros in three-year loans into European banks.

Taxes

Econ Comments & Analysis                                                                                            
Real Clear Markets | Unlocking Entrepreneurial Forces: States Can Spark Business Creation, Attract Venture Capital Investment, and Increase Job Growth by Eliminating Taxation of Capital Gains
Taxation of capital gains is, among other things, a tax on entrepreneurship. Businesses – new businesses especially – need investment to flourish. States that have lowered their taxes on capital gains have seen an increase in investment which precipitated an increase in entrepreneurial activity and the job creation that accompanies it.
CRS | The Impact of Budget Proposals on Tax-Exempt Bonds
Under current law, interest income from bonds issued by state and local governments is exempt from federal income taxes. In addition, interest on bonds issued by certain nonprofit entities and authorities is also exempt from federal income taxes. Together, these tax preferences are estimated to generate a federal revenue loss of $309.9 billion over the 2012 to 2016 budget window.
CATO | The Pleasures And Perils of Tax Loopholes
To some degree, a loophole is in the eye of the beholder. As U.S. Senator Russell Long explained, “A tax loophole is something that benefits the other guy. If it benefits you, it’s a reform.”

Employment

News                                                                                                                             
Market Watch | Job gains seen topping 200,000 in February
The U.S. labor market appears to be picking up speed, but the pace of job growth is neither turtle nor hare.

Econ Comments & Analysis                                                                                            
Daily Caller | How government is killing retailers and retail jobs
We see vacant stores throughout America. In the fourth quarter of 2011, our national retail vacancy rate was 11 percent, up from 7.7 percent in the first quarter of 2008, according to Reis Reports. It’s a retail vacancy rate we have not seen since 1991.

Blogs                                                                                                                             
Calculated Risk | Employment Summary and Discussion
This was a solid report, especially considering the upward revisions to payrolls for December and January. The better than normal weather helped, and there is still a long ways to go for a healthy labor market with solid wage gains.
The American | How Obama’s Energy Policy Will Kill Jobs
President Obama is once again proposing selectively punitive treatment of the oil and natural gas industry, one of the strongest job-creating sectors of the U.S. economy.
WSJ | Why Didn’t Unemployment Rate Drop?
The U.S. unemployment rate stayed at 8.3% in February, but a broader measure dropped to 14.9% from 15.1% the prior month, indicating that the labor market is strengthening.

Budget

News                                                                                                                             
National Journal | A Look at Possible FY 2013 Budget Elements
As Republicans struggle to come to agreement on the topline of the GOP’s upcoming fiscal 2013 budget – with conservatives pushing for House Budget Chairman Paul Ryan, R-Wis., to limit spending to under the $1.047 trillion cap set by the Budget Control Act and appropriators warning that doing so could cause more trouble than it’s worth – the calculations involved in producing the budget have been thrown into high relief.
Politico | Big fears over U.S. foreign debt
Nearly three-quarters of Americans are “very concerned” with the amount of U.S. debt held by other countries, according to a new survey Friday.
National Journal | House GOP Divided on Size of Spending Cut in 2013 Budget
Conservatives are pushing for House Budget Committee Chairman Paul Ryan, R-Wis., to produce a fiscal 2013 budget that would cap spending below the $1.047 trillion topline set by the Budget Control Act in August, even as moderate Republicans warn that breaking that debt deal could jeopardize passage of a host of spending measures down the line.
WSJ | Greece Passes Key Debt Test
Just over 80% of Greece's private-sector creditors had agreed by a Thursday evening deadline to turn in their bonds for new ones with less than half the face value, touching off a massive debt swap that marks a seminal moment in Europe's long-frustrated efforts to rescue its most financially vulnerable nation.

Econ Comments & Analysis                                                                                            
Washington Times | Backbone in the budget season
You can always count on politicians to max out their credit line. Plans for 2013 already have Washington nearing the spending limit set last summer in the Budget Control Act.