Friday, April 27, 2012

General Economics

Bloomebrg | Stocks Advance as Earnings Overshadow GDP; Euro Climbs
U.S. stocks rose for a fourth straight day as improving consumer confidence and earnings overshadowed lower-than-forecast economic growth and a downgrade of Spain’s credit rating. The dollar weakened versus most major peers while Treasuries were little changed.
USA Today | AAA study finds driving costs get small increase
There's bad news and good news for economically battered drivers in auto club AAA's annual report on the cost of owning and operating a vehicle.
Politico | Poll: Feds' favorability at 15-year low
Today, just one in three has a favorable view of the federal government — the lowest level in 15 years, according to a Pew survey. The majority of Americans remain satisfied with their local and state governments — 61 percent and 52 percent, respectively — but only 33 percent feel likewise about the federal government.
National Journal | First-Quarter GDP Underwhelms, Fueling Concern Over a Possible Slowing Recovery
Real gross domestic product grew by 2.2 percent from the fourth quarter of 2011 to the first of 2012, less than the 2.6 percent expected by economists polled by Dow Jones Newswires. That number is roughly in line with consensus estimates conducted by other organizations.
Market Watch | Student loan fees may be capped as House vote set
A step was taken Wednesday by the House Republican leadership to cap federal student loan fees, in a development that could take away an issue President Barack Obama has been campaigning on this week.

Econ Comments & Analysis                                                                                            
Forbes | The 99% Need Growth, Not Economic Fairness
President Obama and his merry band of Progressives are beating the drums for big tax increases on “The 1%” for the sake of “fairness”.  This is about the only campaign strategy left to him, because he has proved over the past three years that he doesn’t have a clue as to how to produce jobs and economic growth.  However, if you look at the numbers, “The 99%” needs faster economic growth a lot more than it needs Obama’s version of “tax fairness”.
Real Clear Markets | Europe Is In Recession, the U.S. Isn't Far Behind
The global banking system in 2012 has seen a marked transition from the monetary concept that gained universal traction nearly 100 years ago. The United States in 1912 was the only economic power without a central bank, but by 1913 one had been created, though its creators, both bankers and government officials, were very cautious about having the words "central bank" in the title of the agency. Instead the Federal Reserve System was born as a private corporation capitalized by individual regional banking interests, by far the largest being the banks in New York City.
Politico | Keystone XL feeds dangerous addiction
With all the talk on Capitol Hill and Main Street about gas prices, it is critical to start discussing ways of decreasing the demand for gasoline by weaning ourselves off oil—for our energy security and our national security. This ought to be top priority for all politicians, regardless of party.
Forbes | Yo-Yo Economics?
President Obama recently disparaged free-market economics as “you’re-on-your-own economics.” It’s a catchy phrase—rhythmic, alliterative, clever. I like the sound of it. Too bad it’s bunk.
Economist | New rivers of gold
Last year Mexicans received an estimated $24 billion from friends and family working abroad, mainly in the United States, with which Mexico forms the world’s busiest remittance corridor. But a closer look at the Tapachulan queue shows how the remittance business is changing. Many are not Mexicans receiving cash from America, but migrant workers sending it back home to Guatemala or Honduras.
Politico | Big Labor’s big moment
For years Big Labor has been looking small, but it doesn’t feel that way now. Unions won an Ohio referendum overturning Gov. John Kasich’s effort to restrict collective bargaining for government employees.
AEI | Would you settle your claims on Social Security for 80 cents on the dollar? (I would)
The problem is pretty basic: According to the new calculations of the Social Security Trustees’ 2012 Report, Social Security’s future costs are a lot bigger than its future income.

Economist | The black hole
For much of the past few years, China has been at the centre of heated rhetoric over its contribution to global imbalances and a corresponding shortfall in global aggregate demand.
WSJ | New Grads’ Pay Gap Is Lasting Legacy of Recession
A new study by the Conference Board measures how median wages within different labor groups fared during and after the Great Recession that ran from December 2007 until June 2009.
National Review | The Crucial Distinction Between Being Pro-Business and Pro-Market
There is nothing wrong about lowering tax rates to promote economic growth or attract investments. However, it is wrong to dole out lower rates to specific and well-connected businesses or to target these lower rates based on size.
WSJ | What’s Wrong With Education in the U.S.?
Like home ownership, Americans are obsessed with the importance of obtaining a college degree, and so it gets over-emphasized and over-subsidized through student loans that lead in many cases to too many people paying ever-higher tuition rates at mediocre colleges and obtaining a worthless degree.

Health Care

National Journal | Health Groups Rally for Public Health Fund
Public health groups are rallying the troops to try to help preserve the public health fund created under the 2010 health reform law, which Republicans now say they’ll raid to help pay for a student loan program.


Bloomberg | Bank of Japan Expands Stimulus as Economy Set to Slow
The Bank of Japan (8301) expanded its plan for government-bond purchases by 10 trillion yen ($124 billion) after the world’s third-largest economy showed signs of slowing and lawmakers pressed for more aggressive steps.

Econ Comments & Analysis                                                                                            
WSJ | Money-Market Funds Still Need Reform
In the fall of 2008, the world learned what financial stability is, through its absence. Over a few short weeks, Fannie Mae and Freddie Mac entered federal conservatorship, Lehman Brothers filed for bankruptcy, Merrill Lynch was purchased by Bank of America, and AIG received an $85 billion loan from the Federal Reserve to continue operating.
Heritage Foundation | Volcker Rule May Make the Financial and Banking System Riskier
By now, it should be clear even to casual observers that the Volcker Rule, which was intended to limit the “risky” activities of banks by banning them from certain types of transactions, will be nearly impossible to implement without severe unintended damage to the U.S. financial system and many other types of businesses both here in the U.S. and overseas.


Politico | Buffett rule serious or gimmick?
Although voters differ on whether raising taxes on wealthy Americans would help or hurt the economy, a slight majority believe the “Buffett rule” is “an election-year gimmick,” according to a Fox News poll.

Econ Comments & Analysis                                                                                            
NBER | Gasoline Taxes and Consumer Behavior
Gasoline taxes can be employed to correct externalities associated with automobile use, to reduce dependency on foreign oil, and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes.

Tax Foundation | States Without Income Taxes Rely on Varying Forms of Revenue
According to the latest U.S. Census Bureau data, state-level individual income taxes make up the largest share of total state government tax collections. In 2011, state governments brought in $259 billion through these taxes, approximately 34 percent of total collections. However, there are currently 9 states that do not tax wage income
Keith Hennessey | Government doesn’t give tax cuts, it takes more or less taxes
Wednesday the President spoke to a college crowd in favor of raising taxes on the rich to subsidize low interest rates on student loans. His comments provide an opportunity to explain the signficance of how one talks about taxes.


WSJ | U.S. Firms Add Jobs, but Mostly Overseas
Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.
CNN Money | White House: Middle class jobs are trickling back
The middle class may be starting to heal from a decades-long decline, President Obama's chief economic adviser said Thursday.

Econ Comments & Analysis                                                                                            
Motley Fool | More Jobs, Less Work, Low Wages, Dark Future: Part 2
We looked at a paradox yesterday: While unemployment rose, average working hours fell, incomes stagnated, savings increased, and debt was repaid, Americans kept their wallets open and spent a decent amount of money. Those don't add up. What gives?

WSJ | Are Jobless Claims Tracking Gas Prices?
Jonathan Basile of Credit Suisse observes an interesting pattern in gasoline prices and jobless claims: Since the start of the year, prices and claims have risen in almost the same percentage terms.


USA Today | Heavy debt loads may be holding down consumer spending
Households have whittled down the massive debt they racked up in the mid-2000s credit bubble, but apparently not enough to nudge them into a spending binge that could jump-start the recovery, some economists say.

Econ Comments & Analysis                                                                                            
Bloomberg | Spain Rules Out Bailout as De Guindos Says Banks Funded
Spanish Economy Minister Luis de Guindos ruled out seeking a bailout hours before Standard & Poor’s cut the country’s credit rating to three levels above junk and a report showed unemployment jumped close to a record.

Tax Foundation | CBO: President’s Budget Worse than Taxmageddon
The Congressional Budget Office (CBO) has released their estimate of the economic impact of the President's 2013 budget.  It's not good.  It's not even good relative to Taxmageddon, which is the roughly $500 billion tax increase scheduled to happen at the end of this year due to expiring provisions such as the Bush tax cuts, the payroll tax holiday, and the Alternative Minimum Tax (AMT) patch. 
The American | Why Hubbard is right, and Geithner and Goolsbee are wrong
President Obama’s budget proposes to continue elevated levels of federal spending relative to GDP. So how does the president propose to pay for this?
Think Markets | European Austerity in Perspective
Attempts to rein in government spending necessarily have unpleasant side effects.  Thus the Dutch government collapsed amid budget talks to control the deficit.   And British national output appears to be shrinking.