Monday, April 16, 2012

General Economics

CNN Money | Obama forms group to streamline natural gas policies
President Obama issued an executive order Friday, establishing a meeting of the minds to work on natural gas policies for his administration.
Market Watch | Bernanke: Housing was trigger of crisis, not cause
Subprime mortgages and the housing bubble were the trigger while high leverage, unstable funding and deficient risk management and supervision were the vulnerabilities that led to the financial crisis, Federal Reserve Chairman Ben Bernanke said Friday.
Bloomberg | No Double-Dip Deja Vu Seen for U.S. Economy
The U.S. looks unlikely to suffer the same sort of swoon this year as the one in 2011: Household, bank and company balance sheets are stronger, and the shocks hitting the economy so far are weaker, with retail sales rising more than forecast as gasoline prices show signs of slipping from an early-year increase.
NY Times | Many U.S. Immigrants’ Children Seek American Dream Abroad
Samir N. Kapadia seemed to be on the rise in Washington, moving from an internship on Capitol Hill to jobs at a major foundation and a consulting firm. Yet his days, he felt, had become routine.
CNN Money | Small firms avoiding loans, citing slow recovery
Small firms are faring better, but they aren't seeing enough fortune ahead to justify taking on debt to grow.
Market Watch | U.S. retail sales rise sharply again in March
Americans splurged on a wide range of goods and services for the third straight month, suggesting the U.S. economy grew somewhat faster than expected in the first quarter.
Bloomberg | Banks Seen Dangerous Defying Obama’s Too-Big-to-Fail Move
Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the nation’s credit markets seized up and required unprecedented bailouts by the government.

Econ Comments & Analysis                                                                                            
Washington Times | On the tracks to bankruptcy
California’s fanciful bullet train project embodies everything that is wrong with government today. The state’s High-Speed Rail Authority on Tuesday released details of a revised business plan that claims laying down tracks from Los Angeles to San Francisco will now cost a mere $68 billion instead of $98 billion - as if that were a bargain.
NY Times | Competition Is Healthy for Governments, Too
Most everyone agrees that competition is vital to a well-functioning market economy. Since the days of Adam Smith, economists have understood that the invisible hand of the marketplace works only if producers of goods and services vie with one another.
Spectator | The Poverty of Equality
This vision of equality as a social goal, with equal incomes and wealth for all, is severely counterproductive economically, and so makes for a poor society as well.
CRS | Reduce, Refinance, and Rent? The Economic Incentives, Risks, and Ramifications of Housing Market Policy Options
The bursting of the housing bubble in 2006 precipitated the December 2007 - June 2009 recession and a financial panic in September 2008. With the housing market seen as a locus for many of the economic problems that emerged, some Members of Congress propose intervening in the housing market as a means of improving not only the housing market itself but also the financial sector and the broader economy. 
NBER | Macroeconomic Effects of Corporate Default Crises: A Long-Term Perspective
Using an extensive new data set on corporate bond defaults in the U.S. from 1866 to 2010, we study the macroeconomic effects of bond market crises and contrast them with those resulting from banking crises.

Heritage Foundation | DeMarco Warns of the Dangers of Large-Scale Forgiving of Mortgage Debt
To hear certain parts of the press tell it, the acting director of the Federal Housing Finance Agency (FHFA), Ed DeMarco, announced that the agency is willing to consider wholesale write-downs of underwater mortgages in a recent speech on the subject. However, a closer reading of DeMarco’s speech and the news stories shows that he actually understands the dangers of such a move.
CATO | Obamanomics on Display
Is the Buffett Rule a step toward tax fairness? Or, as Hill Republicans argue, is it a gimmick that would do nothing to boost job growth or make a real dent in paying down the nation’s ballooning debt? Which side of the argument will win politically in November?
Calculated Risk | Unofficial Problem Bank list declines to 944 Institutions
As a result, it was quiet week for the Unofficial Problem Bank List with no failures, three removals, and one addition.
The American | Responding to Derek Thompson on income inequality
Some smart cookies take issue with my recent blogging on the Burkhauser-Cornell University study on income inequality.
Calculated Risk | Schedule for Week of April 15th
There are three key housing reports that will be released this week: April homebuilder confidence on Monday, March housing starts on Tuesday, and March existing home sales on Thursday.
National Review | Congress’s Chance to Take on Corporate Welfare
In the last two days, the Washington Examiner’s brave Tim Carney has been reporting live from the Ex-Im Bank conference. It means that he had to sit through sessions where he  heard both former president Bill Clinton and Chicago Mayor Rahm Emmanuel rationalize how they could be simultaneously in favor of free trade and of export subsidies.

Health Care

National Journal | Proposed Rule Could Hit Health Subsidies, Critics Say
Consumer advocates, physician groups, and several Democratic lawmakers are fighting a quiet battle over a key benefit in the health care law: tax credits to help millions of people buy insurance. 
National Journal | Arizona Bans Abortions After 20 Weeks
Arizona's Republican Governor Jan Brewer officially banned abortions after 20 weeks of pregnancy on Thursday, when she signed into law the latest in controversial state statutes aiming to restrict abortion access.


WSJ | China Loosens Grip on Yuan
China made one of its strongest moves yet to show that it believes the yuan is ready to become a global currency by loosening daily trading limits.
CNBC | Bernanke Defends Fed Response to Financial Crisis
Chairman Ben Bernanke said Friday that the Federal Reserve was left with few good options when it stepped in to shore up the largest U.S. financial institutions during the 2008 crisis.
WSJ | Consumer Price Rise Puts Fed in Quandary
Consumer prices rose 2.7% in March from a year ago, presenting a quandary for Federal Reserve officials who say their mission is to keep the inflation rate lower.

AEI | Yes, exiting euro can be smooth
Sir, Wolfgang M√ľnchau berates European policy makers for their macroeconomic illiteracy (“The Wolfson prize for European political illiteracy, April 9). Yet by asserting that macroeconomists do not have a model for monetary unions he reveals his own macroeconomic illiteracy.


NY Times | For Americans Abroad, Taxes Just Got More Complicated
As income tax filing deadline rolls around, spare a thought for the millions of Americans overseas who have been singled out by Congress for special treatment, with a new form that will add to the hassle of tax time for many and, critics say, set up the unwary for penalties.
Market Watch | Taxes: Are you paying your fair share?
Even as President Barack Obama pitches the “Buffett rule” to ensure that millionaires pay at least a 30% tax rate, some commentators are decrying the fact that about half of U.S. taxpayers don’t pay any federal income tax.
Politico | Hill girds for tax-bill battle
With the glare of the public spotlight trained on Tax Day, Congress is readying for a political fight with dueling tax votes this week that will define each party’s priorities in this election year.

Econ Comments & Analysis                                                                                            
Politico | Skip Buffett tax, try for real reform
In the middle of the weakest recovery since the Great Depression, with more than 20 million Americans still out of work or underemployed, it is reasonable to expect that President Barack Obama and Congress would focus on real solutions to create jobs — including reforming our inefficient, complex and outdated tax code.
WSJ | The TurboTax Crime Wave
Taxpayers who employ an accountant or other preparer have some protection from daunting penalties if the IRS finds mistakes. Software users who prepare their returns without help have little or no protection.
Forbes | Why Voters Should Abolish the Mega Millions Lottery
Lots of fun was had, even for the losers, though not discussed enough are the major negatives that come with lottery programs run by the State. If tax rate cuts are the gift that keeps on giving, then lotteries are the hidden theft that keeps on taking.
Washington Times | Washington’s tax revolt
The other Washington - the state on the left coast - is fed up with taxes. That’s a bit surprising considering the liberal outpost happily cast its 11 electoral votes for Barack Obama and hasn’t sided with a Republican in nearly three decades.
WSJ | Winning the War Against Women
The Democrats have found their kind of war. It's the "war against women" they have conjured for the Obama Presidential campaign run. Should be fun, but don't look for any of the combatants to speak for the realities of today's women. Still, there's an opportunity here for Mitt Romney, if he'll seize it.
Forbes | Obama's Missing Principle on the Buffett Rule
Pity the poor aide operating the White House Twitter account yesterday who wrote “principal” instead of “principle” in a sentence describing the Buffett Rule named for billionaire investor Warren Buffett. As the aide unwittingly suggested, a tax plan built around the circumstances of one CEO is less about principle than, well, a principal.

CATO | The Laffer Curve Shows that Tax Increases Are a Very Bad Idea – even if They Generate More Tax Revenue
The Laffer Curve is a graphical representation of the relationship between tax rates, tax revenue, and taxable income. It is frequently cited by people who want to explain the common-sense notion that punitive tax rates may not generate much additional revenue if people respond in ways that result in less taxable income.
Reason Foundation | State Tax Collections Rise $62 Billion in 2011
State tax collections increased $62.1 billion—or 8.9 percent—up to $763.7 billion in 2011, according to the U.S. Census Bureau’s recently released 2011 Annual Survey of State Government Tax Collections.
The American | Here’s what Ron Paul’s tax plan would do to the federal budget
Well, I’d like to have everybody taxed at the same rate, and of course, my goal is to get as close to zero as possible, because there was a time in our history when we didn’t have income taxes. But when government takes it upon themselves to do so much, you have to have a tax code.
Tax Foundation | New “Rich States, Poor States” Report Looks at Tax and Spending Policy
This week, the American Legislative Exchange Council released their 5th edition of the annual Rich States, Poor States report, which ranks states according to a variety of tax, spending, and regulatory policies.
Daily Capitalist | Obama, The Buffett Tax, And Economics
The controversy over the “Buffett tax” on “millionaires” and “billionaires” continues since my post, “The Obama Plan To Increase Poverty”. The media have been full of interviews and commentary about this. The President continues to hammer away at his claim that the lack of wealth redistribution is a “drag on the economy.”
Tax Foundation | White House Overstates Middle Class Tax Rate, Fails to Mention Payroll Tax Holiday
Scott Hodge recently commented on how the White House has used the chart below to bolster their claims that high-income earners pay too little tax, when in fact it indicates the top 1 percent pay about twice what middle-income households pay.


USA Today | 'Shove It' indicator: More people now quit than get fired
The number of people quitting their jobs in February outnumbered the amount of workers who were laid off by companies for the first time since this economic recovery began, a sign that consumer confidence may be higher than investors currently believe.

FOX Business | Report: Credit Suisse May Cut 5,000 Jobs
Swiss banking giant Credit Suisse reportedly plans to slash up to another 5,000 investment-banking jobs amid shareholder pressure to rein in expenses.
Political Calculations | Updated: Jobs Above and Below the Minimum Wage Line
With the release of the BLS' report for 2011 on the Characteristic of Minimum Wage Earners, we can now update our pioneering chart illustrating how the federal minimum wage-earning composition of the U.S. workforce has changed in each year since 2006.
Calculated Risk | Percent Job Losses: Great Recession and Great Depression
The causes of the Great Recession were similar to the Great Depression - as opposed to most post war recessions that were caused by Fed tightening to slow inflation - and I'm frequently asked if we could compare the percent job losses during the two periods. Unfortunately there is very little data for the Great Depression.
The American | Makers vs. Takers: Stunning chart show how U.S. labor market becoming like Europe’s
Out of the many signs that the US economic recovery is not as strong as previous ones, the variable that possibly best demonstrates the weakness of the recovery is the stagnant employment to population ratio. This ratio summarizes two labor market variables: the unemployment rate and the participation rate.


NY Times | House Republicans to Tackle Ambitious Budget
House Republicans return from spring recess next week to face the difficult — some say impossible — task of filling the gaping holes in the House-passed budget, including figuring out how to slash income tax rates without costing the government any money and finding nearly $3 trillion in savings from entitlement programs over the next decade.
Roll Call | Conrad Budget Plan Puzzling
A decision by retiring Senate Budget Chairman Kent Conrad to move a budget blueprint this week has sparked questions over whether he is looking to bolster his legacy at the expense of his Democratic colleagues who are running for re-election.