Tuesday, March 27, 2012

General Economics

Market Watch | Case-Shiller: Home prices fall in January
U.S. home prices fell for the fifth month in a row in January to the lowest level since early 2003, according to a closely followed index.
CNN Money | Congress ready to tackle postal reform
The Senate could start debating a bipartisan bill that offers buyouts to senior employees, cuts worker compensation benefits and makes it possible to end Saturday service in two years.
Bloomberg | China’s Industrial Company Profits Fall 5.2% on Exports
Net income dropped 5.2 percent from a year earlier to 606 billion yuan ($96 billion), the National Bureau of Statistics said on its website today. That compared with a 34.3 percent gain in the first two months of 2011.
Market Watch | Euro-zone needs 1 trilllion euro firewall: OECD
Euro-zone finance ministers meeting at the end of this week need to boost the firepower of the region's rescue funds to at least 1 trillion euros ($1.34 trillion) in order to restore market confidence, Angel Gurria, secretary-general of the Paris-based Organization for Economic Cooperation and Development, said Tuesday.
Politico | Highway bill: House GOP delays vote
House Republican plans to pass a three-month extension of the surface transportation law fell apart Monday as it became clear that the leadership didn't have the votes to move the bill.

Econ Comments & Analysis                                                                                            
FOX Business | OECD: Eurozone Not Out of the Woods Yet
The euro zone's public debt crisis is not over despite calmer financial markets this year, the OECD said on Tuesday, with a warning that the bloc's banks remain weak, debt levels are still rising and fiscal targets are far from assured.
WSJ | Monti Pulls a Thatcher
Italian Prime Minister Mario Monti has walked away from negotiations with Italy's labor unions and announced that he is going to move ahead with reforming the country's notorious employment laws—with or without union consent. If Rome is spared the fate that recently befell Athens, mark this as the week the turnaround began.
Washington Times | No more GOP whining about overregulation
The Supreme Court last week ruled against the Environmental Protection Agency (EPA) in a unanimous decision. The EPA had charged a couple with violating the Clean Water Act. It claimed their property was a “wetland” and said it would fine them up to $75,000 per day - but there was no water on the property and there had been no judicial review of the charge.
NBER | Why are Some Regions More Innovative than Others? The Role of Firm Size Diversity
Large labs may spawn spin-outs caused by innovations deemed unrelated to the firm's overall business. Small labs generate demand for specialized services that lower entry costs for others. We develop a theoretical framework to study the interplay of these two localized externalities and their impact on regional innovation.

Health Care

Econ Comments & Analysis                                                                                            
WSJ | ObamaCare Opening Day
The Supreme Court's epic oral arguments on the constitutionality of the Affordable Care Act began Monday with a kind of tease.
Politico | Medicare’s billion-dollar headache
It’s not easy to get lawmakers interested in an obscure and complex part of the Medicare law, especially when their minds are clearly on other topics, like the upcoming election.
CATO | Obamacare Both Unnecessary And Improper
Congress exercised unprecedented and unbounded power in passing Obamacare. Although Congress has the power to regulate commerce between states, it does not have the power to order commerce into existence so it can regulate it. By compelling Americans to purchase health insurance, this is precisely what the individual mandate does.

CATO | ObamaCare Oral Arguments Day 1 – Giving the People What They Want: An Actual Decision
Like nearly everyone who is commenting on the first round of oral arguments in the ObamaCare case, it seems highly likely that the Supreme Court will decide the case on the merits—that is, they will decide if the individual mandate is constitutional rather than pushing the issue back for another day.
The American | Do we really need healthcare reform at all?
 The Obama White House considered healthcare reform such a priority that it turned its attention to Obamacare about thirty seconds after getting the stimulus passed in 2009. Yet the pace of healthcare spending increases actually has been cooling since 2002.


WSJ | Fed Signals Resolve on Rates
Federal Reserve Chairman Ben Bernanke said the central bank's easy-money policies are still needed to confront deep problems in the labor market, moving to reinforce his plan to keep interest rates low for years.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Ben Bernanke's Shocking Gold Standard Ignorance
America's monetary problems could be solved by implementing the right kind of gold standard. However, doing this would render the Fed Chairman no more important than the head of The National Institute of Standards and Technology.

Minyanville | Has the Market Become Addicted to Quantitative Easing?
Minyanville's own Todd Harrison just sat on a panel for the Maxim Group Growth Conference in New York. Todd debated with Paul LaRosa, Maxim Group's chief market technician, and Ed Yardeni, president and chief investment strategist of Yardeni Research in a session titled "Perspectives on the Global Economic and Political Landscape."
Library of Economics | George Selgin on "The Bernank"
George Selgin has an excellent commentary on Ben Bernanke's maiden lecture on monetary policy at George Washington University. Not only does George dispel myths that most people believe, but also he dispels myths that I believed.
Daily Capitalist | Fed Policy: Bernanke Is Warming Up His Helicopter
Economists cling to statistical data like barnacles in order to have some kind of anchor to explain what is going on in the world. They will try to cram the square data peg into the round holes of economic ”laws” rather than abandon them when they are obviously wrong. Which is not a very satisfactory way to explain things.
WSJ | Economics Survey: Fed Should Hold Back From QE3 This Year
The Federal Reserve shouldn’t undertake a new round of bond buying this year, an overwhelming majority of a group polled by the National Association for Business Economics said in a survey released Monday.


CNBC | Not-So-‘Mad’ Ideas About Taxes
This month, the Roosevelt Hotel, on East 45th Street, initiated a special offer in commemoration of “Mad Men,” whose return to television on Sunday night for a fifth season is something surely known now even to preschoolers of merely middling sophistication.
Politico | Senate votes to debate bill that would kill oil tax breaks
As promised, Senate Republicans gave the green light Monday to debating a Democratic bill that would repeal billions in oil industry tax incentives — the latest twist in the parties’ struggle to seize the high ground on gasoline prices.
CNBC | Economists See Higher Taxes as Way to Cut Deficit
Economists say a combination of higher taxes and lower spending is the best way to reduce the federal budget deficit.

Econ Comments & Analysis                                                                                            
CNN Money | Tax reform: Why it's so hard
Tax reform. Politicians tout it as fiscal nirvana. It will spur economic growth, curb deficits, reduce income inequality, you name it. But all the happy talk belies the truth about tax reform, which Bruce Bartlett knows a thing or two about, having worked as a senior policy analyst for President Reagan in 1986. That was the last time Washington embarked on a major overhaul of the tax code.

The American | White House considered a $170 billion soda tax to pay for Obamacare
Back in April 2009, Nancy-Ann DeParle, the Obama White House healthcare czar, wrote a memo that suggested President Obama would have to reverse his campaign stance against an individual mandate to purchase health insurance. Blame the Congressional Budget Office, she said


CNN Money | White House: Jobs recovery isn't 'statistical fluke'
President Obama's chief economic adviser continued to defend the strength of the latest jobs data on Tuesday, even though other economists have suggested that the economy is still in a slow recovery despite job gains.
NY Times | Bernanke Says Faster Growth Is Needed to Bolster Job Market
In a speech that sought by turns to deflate optimism and pessimism about the labor market, the Federal Reserve chairman, Ben S. Bernanke, said Monday that the Fed’s efforts to stimulate growth were gradually reducing unemployment, but that the scale and duration of the problem could leave lasting scars on the economy.

Econ Comments & Analysis                                                                                            
Bloomberg | Fire Up America’s Jobs Factory With Aid for Startups
Last week, with broad support, the Senate passed an amended version of the Jumpstart Our Business Startups Act (or the JOBS Act). Because the bill had already been passed by the House on March 8, and is supported by the White House, it seems bound to become law.
National Journal | Fed Economists Pour Water on Positive Unemployment News
February may have capped the biggest six-month drop in unemployment in nearly 30 years, but there may be more to the sunny news than meets the eye, two Federal Reserve Bank of New York economists wrote in a Monday blog post that echoes Fed president Ben Bernanke's morning comments.

Marginal Revolution | The hysteresis effect on unemployed labor, and unemployment scarring
Here is a good WSJ piece on labor market hysteresis, a topic also of recent interest to Bernanke, Summers, DeLong, and others.  I’ve been trying to learn more about that literature, and here is what I came up with.


Econ Comments & Analysis                                                                                            
Washington Times | Restoring budgetary sanity
“I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared,” Thomas Jefferson once wrote. “To preserve our independence, we must not let our rulers load us with perpetual debt.”
WSJ | Ryan and the Right
It's no surprise that the White House has denounced Paul Ryan's new House budget as the end of welfare-state civilization. The puzzle is why some conservatives are taking shots at the best chance in decades for serious government reform.

National Review | The Ryan Plan vs. the President’s Budget
This week, I would like looks at the 10-year spending projections from the House Republican Budget and the White House budget for 2013.
WSJ | Should Central Banks Help Governments Run Bigger Deficits?
Paul McCulley, who drew attention for his provocative commentary when he was a senior partner at U.S. bond giant Pimco, is challenging one of the most deeply held principles of modern central banking: That central banks should always strive to be independent of fiscal authorities.