Monday, March 19, 2012

General Economics

WSJ | Biotech Funding Gets Harder to Find
These small, innovative drug companies were once an investment darling, able to secure millions of dollars from venture capitalists and even more later through public offerings. But in recent years, venture financing for biotech has been in decline, due to the tough economic environment and poor returns from stock offerings.
CNN Money | UPS expands its reach with $6.8 billion deal
United Parcel Service is expanding its global reach by agreeing to acquire rival delivery service company TNT Express in a $6.8 billion deal.
Bloomberg | Stevens Sees China Matching U.S. in Decade on 7.5% Growth
China’s lower growth target will still allow one measure of its gross domestic product to exceed the euro area in a few years and match the U.S. economy in a decade, Reserve Bank of Australia Governor Glenn Stevens said.

Econ Comments & Analysis                                                                                            
Market Watch | Fed's Dudley: Economy still faces headwinds
Despite incoming data that suggests the U.S. economy is on firmer footing, it is too soon to say that the U.S. is out of the woods, said William Dudley, the president of the New York Federal Reserve Bank, on Monday.
WSJ | The Corporate Disclosure Assault
Shareholder proxy season is coming up, and along with it a new batch of politicized shareholder resolutions. The underreported story this year is the flowering of a long-planned political campaign intended to stop companies from exercising their free-speech rights to influence government. Corporate directors need to know what they're up against.
Motley Fool | Education Isn't the Slam Dunk Investment It Used to Be
At a time when a college education couldn't be more important to U.S. workers, the return on investment for college is becoming frighteningly low. I'm reminded of this cost every month when I see nearly six figures of student loan debt staring me in the face, and for my younger family members, it looks like the numbers are only getting worse.
WSJ | No Relief in Sight at Pump
U.S. gasoline prices jumped 6% in February, and market experts predict they will climb higher because critical refining operations in the Northeast are shutting down.
Washington Post | Long-term understanding of the U.S. economic crisis
Four years after the onset of the financial crisis — in March 2008 Bear Stearns was rescued from failure — we still lack a clear understanding of the underlying causes.

CATO | DOT Moves to Support Even More Wasteful Transit Projects
The Department of Transportation (DOT) is proposing new rules that would allow it to fund exceedingly wasteful rail transit projects that do nothing to relieve congestion.
Calculated Risk | Schedule for Week of March 18th
The key reports this week are housing related. This includes the NAHB builder confidence survey on Monday, housing starts on Tuesday, existing home sales on Wednesday, and new home sales on Friday.
Greg Mankiw | How to Teach Aggregate Supply Shocks
Nick Rowe has a thoughtful post about his discomfort with teaching shocks to the short-run aggregate supply curve.  Larry Ball and I once pondered this topic, which eventually led to this paper. 
Heritage Foundation | How the Strategic Petroleum Reserve Affects Gas Prices
What happened to gasoline prices the last time Obama invoked a coordinated release of the Strategic Petroleum Reserve?
Calculated Risk | Unofficial Problem Bank list declines to 952 Institutions
This is an unofficial list of Problem Banks compiled only from public sources.
The American | Why Geithner is wrong to blame the weak recovery on the financial crisis
Don’t blame Obama for the weak economic recovery, blame the financial crisis. That was the message Thursday from U.S. Treasury Secretary Timothy Geithner

Health Care

NY Times | Gender Gap Persists in Cost of Health Insurance
Women still pay more than men for the same health insurance coverage, according to new research and data from online brokers.
Politico | Health-care reform still standing
Despite all the bombs thrown at the health reform law — and there have been bombs aplenty — two years after President Barack Obama signed his crowning domestic achievement, the core provisions remain essentially unscathed, and reform is kicking in haltingly around the country.
National Journal | Federal Government Won't Be Pushed Around on Medicaid
The Obama administration’s decision to end federal funding for a Texas family planning program draws a clear line: when it comes to Medicaid, don’t mess with the federal government.

Econ Comments & Analysis                                                                                            
Washington Times | End Obamacare, don’t mend it
Every election, voters are told that this election is the most important of our lifetimes. In most elections, it’s not really true. In 2012, though, it probably is true, for one reason: Obamacare.
Washington Times | Obamacare’s mounting costs
The countdown is on for the Supreme Court showdown on Obamacare. As lawyers on both sides prepare their oral arguments for later this month, the nonpartisan Congressional Budget Office has provided yet more evidence that the federal takeover of health care is a foolhardy endeavor whose price tag far exceeds any imagined benefits.

CATO | What Is Causing Drug Shortages?
A number of people have asked me what is causing the current shortages in certain types of drugs. Here’s what I’ve been able to discern so far
Atlantic | Liberals Are Wrong: Free Market Health Care Is Possible
One of the big divides between liberals and conservatives, of course, is on the value and utility of the free market. Most Americans appreciate that market-based economies, broadly speaking, outperform state-based ones. But most, if not all, progressives make the argument that health care is different: that markets may work for computers and soda pop, but they don't work in health care.


USA Today | Inflation heated up a bit in February
Inflation rose 0.4% 0in February, however, the 18% boost is gasoline prices since December, is still not showing much impact on consumer prices.

Econ Comments & Analysis                                                                                            
Daily Capitalist | King Dollar will cut oil prices
No matter how much President Obama protests, the simple fact is that he continues to oppose and mock and disparage oil and gas drilling. He is a prisoner of the environmental left, and he remains on the wrong side of energy history.

Reason Foundation | Oil Prices and Monetary Policy
At the heart of [artificial asset price inflation] is the misconfiguration of risk within monetary policy. For central banks, especially the Federal Reserve, risk is risk, undifferentiated. In reality, there is a chasm between financial risk and real risk. Certainly there are positives to convincing businesses and individuals to take and accept financial risk, but if it is not matched and then surpassed by true economic risk it is a doomed effort.


Greg Mankiw | On the Taxation of Capital Gains
I kicked off a fun discussion
The American | Do tax rates matter? Absolutely!
But taxes are important. One of my favorite bloggers, Tino Sanandaji of the University of Chicago, constructed the above graph — the color of which I altered just a smidgen — which shows changes in the top marginal tax rates in advanced economies from 1975 through 2008, combined with growth in per capita income from the OECD. Guess what? Countries that cut taxes more had higher growth.


Econ Comments & Analysis                                                                                            
CNN Money | Jobless numbers defy economic theory
Economists are scratching their heads over the recent failure of a textbook economic law: In order for the unemployment rate to be where it is today, our economy should be growing faster than it is.

Calculated Risk | Year-over-year Change in Public and Private Payroll Employment
American bosses added 2.021 million jobs in the year ended in February. That's a 1.5 percent job growth pace. It's the fastest bout of hiring since January 2007.


CNN Money | Fights brewing over House Republicans' budget
Lawmakers won't be finalizing too many financial decisions before the November elections. But they're about to engage in yet another fight that could risk a government shutdown in the fall.
CNN Money | Obama's budget would add $6.4 trillion to debt - CBO
The Congressional Budget Office concluded that the president's budget would add less to the country's debt than if lawmakers simply extend a number of favored policies, such as the Bush-era tax cuts. It would also shrink annual deficits to the point where they no longer are growing faster than the economy.

Econ Comments & Analysis                                                                                            
Washington Times | A common-sense deficit in the face of global problems
Technology insures in the near term an increasing superiority of America’s weapons. But the U.S. Navy is heading toward a reduction in the number of ships not seen since before World War II. American strategy might well run into tactical difficulties maintaining freedom of the seas around the world, a primary U.S. concern since the founding of the republic, including waters off the East Asian mainland.
WSJ | The U.S. Cruises Toward a 2013 Fiscal Cliff
At some point, the spectacle America is now calling a presidential campaign will turn away from comedy and start focusing on things that really matter—such as the "fiscal cliff" our federal government is rapidly approaching.
Politico | GOP on budget: Bitten, but not shy
Despite getting hammered by Democrats last year, the GOP is gambling that going big and bold on their fiscal blueprint — think major changes to Medicare and Medicaid — will convince voters the GOP is the nation’s responsible party, comprised of lawmakers attuned to the nation’s fiscal woes.
CBO | An Analysis of the President's 2013 Budget
This report by the Congressional Budget Office (CBO) presents an analysis of the proposals contained in the President's budget request for fiscal year 2013.

Neighborhood Effects | Don’t Bailout the States
Last week the Illinois House adopted HR 0720 which was part of a growing effort to remove the possibility of a federal bailout for the states.
Marginal Revolution | Temporary vs. permanent increases in government spending
We make up for first-temporary-then-permanent spending boosts by a mix of growth and higher taxes.  Krugman might well be happy with that scenario, but the data do show intertemporal interdependence for budgetary decisions, with a mix of persistence on one variable (spending) and mean-reversion on another (debt-gdp ratio).