Monday, March 26, 2012

General Economics

WSJ | Firms' Cash Hoarding Stunts Europe
Banks are struggling to rebuild capital and repair the damage wrought by poor lending and investment decisions they made before the financial crisis, and are wary about new lending.
Bloomberg | German Ifo Business Confidence Unexpectedly Increases
German business confidence unexpectedly rose to an eight-month high in March, suggesting Europe’s largest economy will return to growth even as the sovereign debt crisis curbs euro-area demand for its exports.

Econ Comments & Analysis                                                                                            
AEI | Caricature of how Republicans see the financial crisis
Sir, Edward Luce's description of the competing views in the US about both the financial crisis and a supposed "crisis of capitalism" was a caricature, particularly his discussion of the view he ascribed to the Republicans
Investors | Obama Creates a Nation of Food Stamp Dependents
Dependency: When New Gingrich called President Obama "the best food stamp president in American history," the media pooh-poohed it. But, in fact, Obama has aggressively pushed dependence on government for food.
Forbes | How to Contain a Financial Crisis Without Bailouts
Four years after the fall of Bear Stearns our fallback policy in a crisis is just as it was in 2008: rely on emergency, ad hoc lending by the Fed. We should not settle for this approach.
Daily Finance | The Complete Overhaul Social Security Needs to Survive
In this DailyFinance exclusive, two retirement experts propose dramatically different solutions to the Social Security crisis. Below, Chuck Saletta weighs in.

Heritage Foundation | An Alternative Energy Efficiency Program
Adding to a long list of energy-efficiency legislation, two Members of Congress—David B. McKinley (R–WV) and Peter Welch (D–VT)—recently proposed a federal energy-efficiency bill that gives tax rebates to homeowners who make energy-saving improvements to their homes. This bill and its predecessors reward consumers for saving money.
CATO | Red Team, Blue Team, and Gas Prices
Pretty clear Red Team/Blue Team answers. Republicans in 2006 accepted that there wasn’t much the president could do to reduce gas prices, but most of them think Obama could.
Calculated Risk | Schedule for Week of March 25th
The key reports this week are the January Case-Shiller house price index, to be released on Tuesday, the February Durable Goods report on Wednesday, the February Personal Income and Outlays report on Friday, and the third estimate of Q4 GDP on Thursday.
Keith Hennessey | Subsidizing wind and solar because China and Germany are doing it
The President has picked three industries and is arguing for an industrial policy to subsidize them in part because other countries are subsidizing them.
CATO | Don’t Look to Government If You Want Equality
In a not so subtle brief for taxing the rich, Washington Post business and economics columnist Steven Pearlstein looks critically today at Rep. Paul Ryan’s latest House Republican budget proposal.
Calculated Risk | Unofficial Problem Bank list declines to 949 Institutions
Here is the unofficial problem bank list for March 23, 2012.
WSJ | What if Young Adults Don’t Want to Leave Home?
78%: Percent of 25-34 year olds who have lived with their parents and are satisfied with the arrangement.
CATO | Why Is the Recovery Slow?
Everyone wonders why the recovery is so slow and unemployment remains so high. Just read the papers — in detail.

Health Care

CNN Money | What if the health reform mandate dies?
Is the new requirement that people buy health insurance unconstitutional?
National Journal | Legal Insiders Expect Supreme Court to Uphold Health Care Law
As the Supreme Court prepares to hear historic oral arguments on President Obama’s health care reform law this week, a survey of legal insiders released Monday morning found a widespread expectation that the Court would uphold the central pillars of the law.

Econ Comments & Analysis                                                                                            
WSJ | Liberty and ObamaCare
Few legal cases in the modern era are as consequential, or as defining, as the challenges to the Patient Protection and Affordable Care Act that the Supreme Court hears beginning Monday.
Washington Times | Obamacare’s hefty tax bill
President Obama promised to make health care more affordable, but instead he’s done the opposite.
CRS | Affordable Care Act: Litigation Resources
In March 2010, Congress passed P.L. 111-148, the Patient Protection and Affordable Care Act of 2010 (PPACA), and amended it by passing P.L. 111-152, the Health Care and Education Reconciliation Act of 2010 (HCERA).


WSJ | Fresh Warnings on Money Policies
Three global central-bank leaders warned that decision makers needed to be on alert for an array of risks associated with their easy-money policies.

Econ Comments & Analysis                                                                                            
Bloomberg | Fed More Effective With Inflation, Funds Rate Goals
The Federal Reserve’s decision to spell out the optimal rate at which prices should increase in the U.S. and the possible trajectory of its benchmark interest rate will make policy more effective, a survey showed.
Forbes | Zero Interest Rate Policy Is Batting Zero
Popular economic theory says artificially low rates of interest stimulate the economy, but history says otherwise.

Economist | Those cautious central bankers
Central bankers seem to love thinking of themselves as sober, serious individuals, always alert to the potential risks of their actions. Some of them, anyway.
Daily Capitalist | Is Inflation, A Stagnant Economy, And Lower Standard Of Living In Our Future?
On August 15, 1971, President Richard Nixon unilaterally terminated U.S. obligations under the 27-year old Bretton Woods monetary framework, and with it the U.S. Dollar link to gold.  The world became at once a global economy based on government-run fiat currencies
Economist | What is the Fed telling markets?
Last year, the Fed began its most aggressive ever use of "forward guidance" as a monetary-policy tool, when it provided a calendar date—initially 2013, now late 2014—through which the Fed was likely to leave rates at exceptionally low levels.


Econ Comments & Analysis                                                                                            
WSJ | Governor 13.3%
It's hard to believe now, but Jerry Brown once ran for President as a reformer who favored a flat tax with a 13% top federal rate. That was 1992. Nowadays in his second stint as Governor, he's running to give California alone a higher top income-tax rate.
WSJ | Death Tax Defying
While Washington continues to debate what to do with the federal death tax—the top rate is now 35% and is scheduled to rise to 55% next year—states are starting to recognize that their high estate taxes are a good way to chase away wealth producers.

Library of Economics | The Problem with a Variable Tax on Gasoline
Other economists suggest a gasoline tax that would increase as gasoline prices fall toward a predetermined floor and decrease as pump prices rise above it.
Greg Mankiw | The Looming Recession Threat
The recent payroll gains and the declining unemployment rate in the United States have raised hopes that the economy will now start growing faster than the tepid 1.7 per cent rate of last year. Optimists are expecting growth rates as high as three per cent for this year and next.


Econ Comments & Analysis                                                                                            
Market Watch | Berrnanke: Not clear if good jobs trends will last
Federal Reserve Chairman Ben Bernanke on Monday said the improvement in the labor market might not be able to be sustained, in comments the market interpreted as an indication the central bank wasn’t willing to exit its ultra-easy monetary policy.
Politico | Congress, W.H. have lost respect for federal workers
Congress and President Barack Obama have been treating federal workers like the nation’s piggy bank. They have imposed a two-year pay freeze to reduce the budget deficit, raised pension contributions of future civil servants to fund extended unemployment benefits and talked about additional compensation cutbacks that further devalue public service.
Bloomberg | Bernanke Says Accommodative Policy Needed to Cut Joblessness
Federal Reserve Chairman Ben S. Bernanke said while he’s encouraged by the unemployment rate’s decline to 8.3 percent, continued accommodative monetary policy will be needed to make further progress.


National Journal | Republican Study Committee to Release Budget with Deeper Cuts than Ryan's
The conservative Republican Study Committee will unveil its own budget Tuesday, a week after House Budget Committee Chairman Paul Ryan, R-Wis., released a proposal that did not cut spending as much as the hard line group wanted.

Econ Comments & Analysis                                                                                            
Washington Times | Motown lowdown
The Motor City is skidding toward bankruptcy. Moody's Investors Services downgraded about $2.5 billion of Detroit’s debt on Tuesday, acknowledging the harsh reality that this once-great metropolis has failed.
Roll Call | Budget Reveals Conservatives’ Distrust of Leaders
House Budget Chairman Paul Ryan’s financial blueprint will likely pass the House this week, but resistance from conservatives reveals a growing distrust of GOP leaders when it comes to deficit reduction.
Heritage Foundation | Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus
Government spending has increased considerably over the past decade, and, unless a dramatic shift occurs, spending will continue to grow at unsustainable rates.

The American | Paul Ryan’s supply-side budget: Prosperity, not austerity
Real economic growth — driven by Schumpeterian innovation — can produce fiscal miracles. If nothing else, Rep. Paul Ryan’s Path to Prosperity demonstrates that reality. The budget Ryan put forward on Tuesday would balance in 2039. That’s a long time from now. The Chicago Cubs might even win a World Series by then.