Wednesday, May 16, 2012

General Economics

Washington Times | Obama will urge lawmakers to act on his economic to-do list
Wielding a lengthy “to-do list” of economic proposals, President Obama is bringing the bipartisan congressional leadership to the White House on Wednesday to urge them to act on his proposals or risk being portrayed as a do-nothing Congress heading into November.
CNN Money | Keystone isn't the only pipeline
At least a dozen new oil pipeline projects are slated to move forward in the United States over the next few years, bringing controversial sources of new crude to market despite the holdup of a portion of the Keystone pipeline expansion.
USA Today | Eurozone avoids recession in Q1, thanks to Germany
Europe dodged a bullet, as the combined economy of the 17 countries that use the euro narrowly avoided recession in the first quarter of the year.
WSJ | EU Reaches Deal on Basel Rules
European Union finance ministers agreed Tuesday on revised draft legislation on how to implement the Basel III accords on banking capital and liquidity, after last-minute changes granting more powers to member states.
Bloomberg | U.S. Senate Sends Export-Import Bank Measure to Obama (Update 2)
The U.S. Senate voted to reauthorize the Export-Import Bank for three years and increase its lending authority 40 percent by 2014, clearing the measure for President Barack Obama’s signature.

Econ Comments & Analysis                                                                                            
NBER | Who Suffers During Recessions?
In this paper we examine how business cycles affect labor market outcomes in the United States. We conduct a detailed analysis of how cycles affect outcomes differentially across persons of differing age, education, race, and gender, and we compare the cyclical sensitivity during the Great Recession to that in the early 1980s recession.
WSJ | In Greek Drama, 4 Potential Endings
As Greece careens toward another election, it's growing more likely that the country will crash out of the euro—but it is not yet inevitable.
National Review | Once Again, Break Up the Banks
Et tu, Jamie Dimon? The embarrassing announcement of a large trading loss at J. P. Morgan has brought the issue of bank regulation back to the fore.
Politico | Too big to fail bigger than ever
JPMorgan Chase’s $2 billion blunder is throwing the spotlight on an awkward truth for President Barack Obama’s promise to end the era of big bank bailouts: The same institutions that were deemed “too big to fail” before the financial collapse are even bigger now.
WSJ | The Big Danger With Big Banks
In the early 1950s, when I was a young college graduate and a new employee of the Frost Bank, my great-Uncle Joe Frost, then CEO, told me that the very first goal we had was to return the deposits we received from customers. Our obligation was to take care of the community's liquid assets and manage them safely so others could use them (via loans) to grow.
WSJ | Democracy and the Euro
One way to look at this week's events in Greece is as George Papandreou's revenge. As Prime Minister last November, he proposed that Greeks vote on whether they could live with the conditions the EU and IMF were imposing in return for a bailout. The idea sent markets into a tizzy, Mr. Papandreou lost his job, and the referendum never occurred.

Heritage Foundation | U.S. Free Trade Agreement with Colombia Enters into Force Today — Finally!
Following through on President Obama’s announcement last month in Cartagena that the U.S.–Colombia Trade Promotion Agreement will take effect on May 15, 2012
Economist | The no-growth zone
It is another grim day for European markets. Break-up worries continue to grow. You can read Charlemagne on yesterday's disappointing euro-group meeting. The news has gotten worse today, as Greece's political parties seem to have failed to form a government, meaning that new elections will be held in June.
Atlantic | What Is Causality?
What I find really interesting is there are some fairly basic principles for how analysis can get really screwy but which can't be fixed by adding more control variables, increasing your sample size, or fiddling with assumptions about the distribution of the dependent variable.
WSJ | Stagnant Wages Limit Consumer Spending
Consumers managed a soft 0.1% gain in April retail sales, which suggests consumer spending is contributing only modestly to second-quarter economic growth.
The American | New study: It was technology that smashed private-sector unions
When the productivity of unskilled labor is (relatively) high it pays for the union to organize a lot of firms and demand generous wages. The shift from an artisan economy to an assembly line economy during the beginning of the 20th century was associated with an increase in the (relative) productivity of unskilled labor that led to an increase in unionization and a decrease in income inequality.
Political Calculations | Enabling Disability Fraud
We were inspired by Climateer Investing's summary of the econoblogosphere's ongoing analysis of the increasing level of disability fraud in the U.S., where hundreds of thousands of people would appear to be ending up after their extended unemployment insurance benefits expire

Health Care

National Journal | Health Care Law Means $1 Trillion for Insurance Industry, Study Finds
Thanks to the 2010 health care reform law, health insurance companies will pocket an additional $1 trillion in new revenues by 2020, a new study from Bloomberg Government concludes.


WSJ | Inflation Eases as Gasoline Prices Fall
The recent slide in gasoline prices in the U.S. has pushed the nation's annual rate of inflation to its lowest level in more than a year, easing some economic strains on consumers.
Bloomberg | Euro-Area Inflation Slowed in April, March Exports Declined
European inflation slowed last month and exports dropped in March as the euro region’s spreading fiscal crisis undermined the economy and consumer demand.
WSJ | Price Is Right for Stimulating Action by Fed
After Tuesday's inflation report, the price is suddenly right again for the Federal Reserve to start considering more stimulus.

Marginal Revolution | I know, I know, M2 isn’t exactly the right indicator
M2 money supply growth rates are plunging in Greece (down -16.8% y/y through February), Spain (down -4.7%), and Portugal (-3.8% through January). It is up only 1.3% through February in Italy.
Daily Capitalist | Bill Gross Finally Realizes Global Monetary System At A Breaking Point
I have never been able to figure out Bill Gross of PIMCO. He pleaded for government stimulus and quantitative easing when the economy was crashing and that earned him a place on our Crony Capitalist list. 


Econ Comments & Analysis                                                                                            
WSJ | Oklahoma Reform Showdown
Do Republicans stand for economic growth and tax reform, or not? That question is on the table in Oklahoma, where GOP Governor Mary Fallin has a plan to cut and eventually eliminate the income tax. Her main opposition: fellow Republicans in the state Senate.

Tax Foundation | Maryland Senate Approves Income Tax Hike; Sneaks in Tobacco Hike Too
Today, we've just received word from the Maryland statehouse that the Senate has passed the income tax increases, and also snuck in a tobacco excise tax increase. The income tax increase will mean that a family of four earning $250,000 in Montgomery county will pay almost $1,000 more in taxes each year.


Econ Comments & Analysis                                                                                            
Heritage Foundation | JOLT Act: Congress Moving in the Right Direction on Visa Reform
The latest version of the JOLT Act does much to improve upon its past iteration. It removes much of the misguided priority programs and specialized provisions for different kinds of travelers seeking to visit the U.S.—notably provisions for extended visas for Chinese nationals and lowered fees for off-peak visas.


CNN Money | Boehner: Spending cuts must top debt ceiling increase
House Speaker John Boehner warned Tuesday that he won't permit another increase in the debt ceiling without a larger amount of spending cuts and reforms approved in tandem.

Econ Comments & Analysis                                                                                            
Politico | John Boehner: Let's have debt fight right now
Forget the lame duck. Some top lawmakers want Congress to deal with the whole mess of expiring taxes and start up another debt-limit debate right away, in the heat of an election.
Washington Times | Shocker Senate budget
Sen. Harry Reid gave up his budgeting responsibilities once President Obama was elected. For the fourth straight year, the Senate majority leader hasn’t bothered with a spending plan, enabling a $5 trillion spree at 1600 Pennsylvania Ave.

CATO | The States Are Already Getting Bailed Out
So here’s another suggestion for state and local officials. If you want to spend more money than Washington will give you, go out and tell your taxpayers that you want to increase their taxes to pay for it.
National Review | Ireland and the Austerity Fairy
Ireland should pursue austerity in the form of spending cuts not only for the quick economic-growth payoff, but they are also desirable from a structural standpoint, since they would likely help avoid future fiscal crises.
The American | The fiscal cliff is like a nasty, double-diamond ski slope
Fiscal cliff = recession—or an even worse recession if the EU debt crisis already has the economy shrinking by then.