Wednesday, April 11, 2012

General Economics

CNN Money | Fannie, Freddie regulator still resists principal reduction
Allowing Fannie Mae and Freddie Mac to offer principal reductions may save money thanks to enhanced government incentives, a preliminary analysis released Tuesday shows.
Market Watch | Why gas is more expensive in China than in U.S.
Chen Weidong works at China National Offshore Oil Corporation. When he bought a compact car in 2004, it cost 180 yuan ($28.6) to fill up. Now he pays 400 yuan.
CNN Money | U.S., China, Japan lead world in economic growth
The U.S., Japanese and Chinese economies have regained their momentum and are leading the world in growth, according to the latest report Tuesday from a global monitoring group.
Market Watch | A slowly healing housing market
Encouraging reports on the housing market are stirring up optimism about this year’s home buying and selling season.
CNN Money | Iran-fueled oil price spike biggest threat to economy
An oil price spike caused by a confrontation with Iran is now seen as the biggest threat to the U.S. economy.
Market Watch | U.S. import prices jump 1.3% in March
The prices paid for goods imported into the U.S. jumpd 1.3% in March, mainly because of higher oil costs, the Labor Department said Wednesday.

Econ Comments & Analysis                                                                                            
NBER | Small Cues Change Savings Choices
In randomized field experiments, we embedded one- to two-sentence anchoring, goal-setting, or savings threshold cues in emails to employees about their 401(k) savings plan. We find that anchors increase or decrease 401(k) contribution rates by up to 1.4% of income.
National Journal | DeMarco’s Principal Reduction Does More for Politicians than Homeowners
If Edward DeMarco’s announcement on Tuesday that he is considering principal reductions for a limited class of homeowners whose mortgages are held by Fannie Mae and Freddie Mac comes to fruition, it is likely to have only a modest impact on the beleaguered housing sector and the plight of underwater borrowers.
CATO | The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty--And Fail
On January 8, 1964, President Lyndon B. Johnson delivered a State of the Union address to Congress in which he declared an "unconditional war on poverty in America." At the time, the poverty rate in America was around 19 percent and falling rapidly. This year, it is reported that the poverty rate is expected to be roughly 15.1 percent and climbing.
Washington Times | Obama invokes ‘Buffett rule’ just to change the subject
What do you do when you’re losing a debate? Change the subject. That’s really all you need to know to understand President Obama’s resuscitation of his infamous “Buffett rule” that would impose a minimum 30 percent effective tax rate on businesses and families earning $1 million.
WSJ | The Volcker Rule Is Fatally Flawed
The fundamental question is whether we want banks to act as market intermediaries or not. If a case can be made that this is somehow dangerous or will lead to another financial crisis, then let's have someone make it.
Washington Times | Let business mind its own business
In his Wisconsin victory speech April 3, Mitt Romney said, “Washington has to become an ally of business, not the opposition of business.”
CRS | The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA DR)
This permanent, comprehensive, and reciprocal trade agreement eliminates tariff and non-tariff barriers to two-way trade, building on unilateral trade preferences begun under the 1983 Caribbean Basin Initiative (CBI).

Daily Capitalist | The Obama Plan To Increase Poverty
President Obama has kicked off his re-election campaign by appealing to his base on what he sees as wealth inequality being a cause of our economic malaise.
Forex Live | New KC Fed president calls for end to “too-big-to-fail”
Esther George is the new head of the Kansas City Fed, replacing the uber-hawk, Tom Hoenig. She takes on systemic risk in her comments this morning, so far steering clear of monetary policy.

Health Care

National Journal | Enrollment Low in Medicare Bonus Program
The federal government has signed up 27 hospital and doctor groups to participate in one of the health reform law’s great cost-saving hopes, the Centers for Medicare and Medicaid Services announced on Tuesday.

Econ Comments & Analysis                                                                                            
Washington Times | Health care law cripples U.S. finances
One of the motivating principles underlying the passage of comprehensive health care reform was that it would substantially improve the federal fiscal outlook. But many are skeptical of claims that the law, known as the Affordable Care Act, or ACA, will simultaneously extend the solvency of Medicare, provide subsidized health coverage to more than 30 million new people and yet somehow reduce federal deficits.
Real Clear Markets | The Individual Mandate Won't Save Obamacare
For all the talk about the Affordable Care Act's mandate to purchase insurance, you might think that the mandate is the linchpin of the entire law.

The American | Turns out Obamacare really does the bend the curve — in the wrong direction
So it turns out Obamacare is both constitutionally and financial dubious at best. But really, Obamacare never would have passed Congress in 2010 without this fiscal sleight of hand.
Heritage Foundation | New Study Shows Obamacare’s Huge Additions to Federal Deficit
A study released today by Charles Blahous, one of two public trustees of Medicare and Social Security, once again shows that Obamacare increases federal deficits and significantly worsens the nation’s fiscal outlook.
National Review | Re: Obamacare and the Deficit
Yes, there is a new study by my Mercatus Center colleague Chuck Blahous showing that President Obama’s health-care law will add more than $340 billion to the nation’s already deep budget problems over the next decade.
NCPA | What Food Stamps Can Teach Us about Health Care
There are about 50 million people on Medicaid in the United States and the biggest problem they have, by far, is finding a doctor who will see them.


Washington Times | Government predicts even higher gas prices
U.S. drivers will pay an average of 24 cents more per gallon for gasoline during this summer’s travel season, the government said Tuesday.
Bloomberg | IMF Said Ready to Cut China Current-Account Surplus Forecast
The International Monetary Fund is set to lower its forecasts for China’s medium-term current- account surplus, according to two officials who have seen the draft report.
Market Watch | KC Fed's George attacks too-big-to-fail policies
Kansas City Fed President Esther George on Wednesday said the most important step in restoring market discipline to the financial system would be to eliminate too-big-to-fail policies, including taking advantage of a provision in the Gramm-Leach-Bliley Act that would force divestitures or termination of new activities within 180 days if a financial holding company isn't well managed or capitalized.

WSJ | Fed ‘Hawk’ Wants Rate Hike This Year or Next
The U.S. unemployment rate will continue to improve over the next two years, opening the door for policy makers to begin raising interest rates by as early as late 2012, the head of the Minneapolis Federal Reserve Bank said Tuesday.


National Journal | Obama Ignores Critics of 'Buffett Rule,' Presses Case on Fairness
President Obama, undeterred by growing skepticism of the political and economic merits of the so-called "Buffett Rule," is pressing forward on his demand that Congress adopt a minimum tax rate on millionaires, arguing on Tuesday that “it’s time for us to choose which direction we want to go in as a country” and ridiculing the idea that benefits can “trickle down” to the middle class.
CNN Money | Ryan: Let's do tax reform this year
Paul Ryan, the Republican chairman of the House Budget Committee, says that since the Bush tax cuts are set to expire at the end of this year anyway, now would be a good time for Congress to pass comprehensive tax reform.
Politico | Art Laffer: Don't die in Tennessee
Former Reagan economic adviser Art Laffer thinks his home state of Tennessee is a great place to live. And to friendly business crowds in the state, he’s been singing its praises of late — praise for everything from Tennessee’s lack of an income tax to its low union activity to its low property tax burden.

Econ Comments & Analysis                                                                                            
WSJ | What's a 'Fair' Tax for the Mega Millionaires?
According to the headlines, three winning ticket holders in the March 30 Mega Millions lottery will split $656 million. Actually, the lucky winners will get quite a bit less—the payout will be reduced by about 35% to cover what they owe in federal income taxes, not to mention what they will owe in state and local taxes.
WSJ | The Obama Rule
This week the Administration officially endorsed what in essence is the Obama Rule: Taxes must be high simply to spread the wealth, never mind the impact on the economy or government revenue. It's all about "fairness," baby.

Tax Foundation | Buffett Rule is really an Anti-Corporate Rule
Today the President once again pushed the Buffet Rule millionaire surtax as the solution to our tax problems.


Econ Comments & Analysis                                                                                            
AEI | Raising minimum wage is maximum stupidity
And if there were no unintended consequences from government-mandated minimum wages, perhaps it would be a fine idea. But there are harmful knock-on effects that hurt some of the economy’s most vulnerable participants: young workers and those with few skills.

Calculated Risk | BLS: Job Openings increased slightly in February
The number of job openings in February was 3.5 million, little changed from January. Although the number of job openings remained below the 4.3 million openings when the recession began in December 2007, the number of job openings has increased 46 percent since the end of the recession in June 2009.
National Review | Are Obama’s Policies Hurting Women?
In other words, men did lose more jobs in the recession. Now that the economy is growing again, men are recovering jobs at a faster pace than women.  In fact, the latest employment report shows that male participation in the work force was up 14,000 while female participation fell 177,000, in part because women tend to work in retail or government jobs, which have been cut in recent months.
AEI | Overpaid public workers: The evidence mounts
One year ago, Wisconsin Gov. Scott Walker signed legislation increasing the pension and health contributions of public-sector employees and restricting their collective-bargaining power. The governor set off a firestorm that continues today, with a recall effort being waged against him and his allies.


Politico | Paul Ryan: Faith in the budget plan
House Budget Chairman Rep. Paul Ryan (R-Wis.) says his Catholic faith helped shape the Republican budget plan by stressing local control and concern for the poor, according to an interview with the Christian Broadcasting Network released Tuesday.

Econ Comments & Analysis                                                                                            
VOX | The austerity question: ‘How’ is as important as ‘how much’
Until the critical principle – ‘how’ is as important as ‘how much’ – is embraced, the austerity debate in Europe will continue to be completely out of line with the real economic trade-offs.

Economist | Dealing with debt
The IMF is now releasing chapters from the April edition of its World Economic Outlook and one of them—chapter 3—is quite a nice discussion of the impact of household debt on economic recovery.