Tuesday, May 8, 2012

General Economics

CNN Money | Empire State Building cuts energy use 20%
The Empire State Building is on an energy diet. The hulking building, a symbol of American power and, to some, excess, has cut its energy use by 20%.
WSJ | As Gas Prices Fall, a Sigh of Relief
Gasoline prices fell for the fifth consecutive week, extending a sharp decline that has eased fears that prices would soon top $4 a gallon at the pump.
Bloomberg | German Industrial Output Rises More Than Forecast
German industrial output rose more than three times as much as economists forecast in March, adding to signs Europe’s largest economy may have avoided recession.
Market Watch | Sunnier outlook for U.S. trade sector
After sharply narrowing in the prior month, economists polled by MarketWatch expect the trade gap to widen in March to $49.5 billion, near the high end of its range over the past year, due to higher oil prices.
WSJ | Consumer Borrowing Rose 10.2% in March
Consumer borrowing on credit cards, car loans, student loans and other types of installment debt grew at a seasonally adjusted 10.2% annual rate to $2.54 trillion in March from February, the Federal Reserve said Monday. Mortgages aren't included in the tally.
Market Watch | NFIB small-business index at post-recession high
A measure of small-business optimism in April matched the best post-recession reading, a trade group said Tuesday. The National Federation of Independent Business said its small-business optimism index rose 2 points to 94.5, led by an 11-point jump in earnings trends.

Econ Comments & Analysis                                                                                            
Businessweek | Consumers Cutting Back? Are You Kidding?
Conventional wisdom says the economy is weak because consumers, constrained by excessive debt, are cutting back. That is wrong on two counts. I have a chart for each.
Politico | Congress must back Export-Import Bank
It is not often that the U.S. Chamber of Commerce, the National Association of Manufacturers, organized labor and small-business executives can agree. However, all these groups in March joined in urging the Senate to reauthorize the Export-Import Bank. Unfortunately, that effort was unsuccessful — though the bank helps support nearly 300,000 U.S. jobs.
NBER | How Firms Use Domestic and International Corporate Bond Markets
This paper provides the first comprehensive documentation of the main features of corporate bond issues in domestic and international markets and analyzes how firms use these markets after they internationalize. We find that debt issues in domestic and international bond markets have different characteristics, not explained by differences across firms or their country of origin.

Heritage Foundation | Reforming the Fastest Growing Government Welfare Program
The House of Representatives is poised to pass a budget reconciliation measure that would tackle increased spending in the food stamps program (or, as it’s currently known, the Supplemental Nutritional Assistance Program).
Library of Economics | Are Resources Exhaustible?
If resources are not fixed but created, then the nature of the scarcity problem changes dramatically.
Calculated Risk | Housing: Inventory declines 21% year-over-year in early May
According to the for (54 metro areas), inventory is off 20.7% compared to the same week last year. Unfortunately the deptofnumbers only started tracking inventory in April 2006.

Health Care

National Journal | Consumer-Directed Plans Save Money, but at What Cost?
So-called consumer-directed health plans, which aim to cut costs by imposing high deductibles and encouraging patients to look at their medical expenses, can definitely cut costs--but perhaps at the expense of important health screening, researchers reported on Monday.
National Journal | Could America's Fat Curve Be Flattening Out?
If policymakers, doctors, and Americans themselves could just figure out how to hold the population steady at the current 34 percent rate of obesity, the country could save $550 billion over 20 years, they said.

Econ Comments & Analysis                                                                                            
Market Watch | Higher health deductibles may save billions
Health-insurance plans with higher deductibles, increasingly popular among consumers, could save the medical system billions in costs if they were widely enacted, a study released Monday shows.

Tax Foundation | Estimating the Tax Costs of 'Obamacare'
Over at The Foundry, Kathryn Nix and Alyene Senger consider the tax impact of the Patient Protection and Affordable Care Act – known as “Obamacare” to its critics and supporters alike.


Econ Comments & Analysis                                                                                            
American Interest | The Once and Future Dollar
The dollar is involved in 85 percent of global foreign exchange trades. Fully 80 percent of all over-the-counter foreign exchange transactions involving the yuan and the yen are trades of those currencies for dollars.
Market Watch | Fed's Dudley: QE will stop if it causes inflation
A top Federal Reserve official on Tuesday assured foreign economic policymakers that the Fed's policy to purchases assets "will not continue the moment" it looks like it may be generating inflation.

John Taylor | A Diverse and Wide Open Hearing on Fed Reforms
The House Domestic Monetary Policy subcommittee, with Ron Paul in the chair, is holding hearings tomorrow (May 8) on six proposed bills to reform the Fed.


Econ Comments & Analysis                                                                                            
Daily Caller | Yes, corporations are people
Corporations are composed of people. So are unions. So are universities. So are families. The belief that we can somehow “tax corporations” without “taxing people” is the fallacy at the heart of Romney’s exchange.
Washington Times | Ethanol’s hidden gasoline tax
With regular gasoline prices still averaging more than $3.50 a gallon nationwide, the last thing drivers need is car troubles. Yet a new scheme from Washington to boost the ethanol content of gasoline from 10 percent to 15 percent could gum up many motorists’ travel plans - literally as well as figuratively.
WSJ | Of Course 70% Tax Rates Are Counterproductive
President Obama and others are demanding that we raise taxes on the "rich," and two recent academic papers that have gotten a lot of attention claim to show that there will be no ill effects if we do.

Library of Economics | Regulation Matters More than Taxes, According to Study
Small businesses care almost twice as much about licensing regulations as they do about tax rates when rating the business-friendliness of their state or local government.
Tax Foundation | Monday Map: State Income and Sales Tax Deductions
Today's Monday Map shows which states benefit from the federal income tax deduction for state taxes. Taxpayers can elect to deduct either state income or sales taxes, but not both; in most states, the income tax deduction is worth more.


USA Today | Gen Y grads more likely to launch start-ups
Take an unpredictable job market, an overwhelming variety of possible careers, and a generation that thinks differently about the workplace, and you wind up with college graduates who are taking matters into their own hands.
USA Today | Boomer retirements drive down jobless rate
Last month's drop in unemployment to 8.1% from 8.2% resulted from a shrinking labor force, suggesting that many discouraged workers gave up job searches. But analyses by two economists show growing Baby Boomer retirements were behind most of the decline in the labor force — those employed and looking for work.

Heritage Foundation | Infographic: Americans Fleeing the Job Market
On Friday, Americans woke up to the news that the labor market in April 2012 continued its plodding path of mediocrity. A mere 115,000 jobs were added and the unemployment rate remained above 8 percent. But one of the most troubling indicators of the economy’s poor climate is the declining labor force participation rate — that is,  the number of people actively employed or seeking employment.
Political Calculations | Jobs Fade in April 2012
We see that for all the age groups we routinely cover. The number of teens (Age 16-19) recorded as having jobs fell by 14,000 from the level recorded in March 2012 to 4,321,000 in April 2012.
Calculated Risk | The Declining Participation Rate
There has been some discussion about the causes of the decline in the participation rate. Here is a post from Catherine Rampell today at the NY Times economix today: Baby Boomers and the Shrinking Work Force


CNN Money | U.S. to make $15 billion profit on AIG bailout
The U.S. government will make a $15.1 billion profit from the bailout of insurer AIG, according to a congressional watchdog panel's report.
National Journal | Sequester-Replacement Bill Clears House Budget Panel on Party-Line Vote
The House Budget Committee on Monday approved a bill that boosts defense spending by making additional cuts to domestic programs, further aggravating what has become a divisive election-year fight over spending priorities.
Market Watch | U.S. to run first surplus since 2008: CBO
The U.S. government recorded a budget surplus of $58 billion in April, the Congressional Budget Office estimated on Monday, breaking a streak of deficits that began in 2008.

Econ Comments & Analysis                                                                                            
Washington Times | Austerity is blamed
Denial is leading to collective economic suicide in Europe and the United States. The French on Sunday elected a socialist president who wants to raise taxes on those elusive rich and keep spending as if there is no tomorrow.
CBO | Federal Budget Deficit Totaled $721 Billion for the First Seven Months of 2012, CBO Estimates
The federal government incurred a budget deficit of $721 billion in the first seven months of fiscal year 2012, CBO estimates in its latest Monthly Budget Review—$149 billion less than the shortfall reported during the same period last year.
Heritage Foundation | Why Budget “Reconciliation” Matters
The spending reduction plan in the U.S. House of Representatives takes an important step toward fixing two huge budget and policy dilemmas facing Congress: the crude, across-the-board spending cuts mandated by last year’s debt ceiling agreement, and the unsustainable growth of entitlement spending, which threatens to overwhelm the budget and suffocate the economy.

National Review | Show Me the ‘Savage’ Spending Cuts in Europe, Please
Austerity is destroying Europe, we are told. In fact, this “anti-austerity” slogan was a big reason for the victory of newly elected socialist Fran├žois Hollande to the presidency of France.
The American | ‘Ruin, eldest daughter of Zeus, she blinds us all, that fatal madness’
Ruin, in Greek mythology, is the spirit of delusion, of rash impulse, of folly. As voters did in France, Greeks voted against the undeniable and unavoidable consequences of their own actions. Ruin brought them to crisis, and Ruin continues to pushes them during this crisis.