Monday, May 21, 2012

General Economics

News                                                                                                                             
USA Today | Rural economies in West, Midwest remain strong
The economy remains strong in rural areas of 10 Midwest and Western states because of the health of agricultural businesses there, according to a new survey of banks serving rural areas.
WSJ | At Summit, a Struggle for Consensus on Economic Woes
Leaders of the Group of Eight major economies ended a weekend summit in which they struggled with little success to find agreement on next steps to calm the euro zone debt crisis, which poses a threat to the fragile U.S. recovery.
USA Today | Smallest of businesses can have a huge impact
In honor of National Small Business Week from May 20 to 26, I want to salute the smallest of small businesses.
WSJ | Europe Weighs Exit Scenario
Europe has begun to prepare for Greece's possible exit from the euro zone ahead of a crucial round of elections in the country next month, which are fast becoming a referendum on its membership in the common currency.

Econ Comments & Analysis                                                                                            
Washington Times | EU train wreck, meet U.S. stuck truck
Resembling a huge 74-wheeler packed with unassembled goodies, the U.S. economy is stranded on the grade crossing with the Euro Express gathering speed as it tears down the tracks for a seemingly inevitable collision.
Washington Post | Role of American capitalism on trial
This election is being fought along the traditional skirmish line of capital versus labor. President Obama projects himself as the protector of workers and families who are preyed upon by greedy and wealthy capitalists.
Washington Times | Springtime blues for consumers
Americans are still asking themselves, “where’s the recovery?” The latest re- ports suggest the answer is nowhere in sight, as the present “recovery” is looking an awful lot like a recession.
AEI | J.P. Morgan and the conceptual confusion of the Volcker rule
We have certainly heard a lot about the $2 billion "trading loss" at J.P. Morgan, which is of course not at all the same as the bank experiencing a loss on its bottom line. From the perspective of the corporate profit and loss statement, a trading loss is one expense item in the context of all revenues and expenses.

Blogs                                                                                                                             
CATO | Why Top Incomes Rose: Elasticity Not Corporate Executive Pay
The politically convenient media fascination with incomes of the top 1 percent has degenerated into a new obsession with the top one-tenth of one percent – the top 0.1 percent.  As before, the blame game points to greedy corporate executives.
Calculated Risk | Unofficial Problem Bank list increases to 928 Institutions
Here is the unofficial problem bank list for May 18, 2012.
Atlantic | Hayek Was Right: Why Cloud Computing Proves the Power of Markets
This sets up something I explore at length in the book: the fundamental tension between innovation and cohesion, which I see as the key trade-off that has undergirded most of key political economy debates of at least the last 30 years. I make some limited suggestions that I believe could slightly alleviate it.
WSJ | Economists React: What if Greece Exits the Euro Zone?
As the prospect of Greece leaving the euro becomes more real by the day, economists are trying to figure out what would happen next, to the economy and to the markets.

Health Care

Econ Comments & Analysis                                                                                            
National Journal | Treasury Releases Rules for Health Exchange Credits
The Treasury Department released final regulations late on Friday detailing the tax credits meant to help people buy health insurance on the exchanges being established under the 2010 health reform law.
Politico | Study: Health care costs on rise
A new study could pose a challenge to the basic premise of President Barack Obama’s approach to controlling health costs — that spending will come down if doctors don’t give patients as much unnecessary medical care.

Blogs                                                                                                                             
Heritage Foundation | HSAs Could Bring Health Costs Down; Too Bad Obamacare Destroys Them
Breaking research published by Health Affairs shows that if consumer-directed health plans increased as a share of employer-sponsored plans from 12.4 percent to 50 percent, it could save $57.1 billion annually in national health expenditures.

Monetary

Econ Comments & Analysis                                                                                            
Bloomberg | Fed Proves More Bullish Than Wall Street Forecasting U.S. Growth
Stephen Stanley, chief economist at Pierpont Securities LLC, has derided the Federal Reserve for downplaying improvement in the U.S. economy. Yet his 2.6 percent forecast for growth this year is below the midpoint in the central bank’s projection of 2.4 percent to 2.9 percent.
Market Watch | Fed's Lockhart: No need for more QE at present
Atlanta Federal Reserve Bank President Dennis Lockhart on Monday said "sustained monetary accommodation" is appropriate in order to keep the U.S. economic recovery on track but that he doesn't see a need at present for another round of quantitative easing.

Blogs                                                                                                                             
Economist | The central banker's bogeyman
I enjoy reading the Atlanta Fed's macroblog. Lately, however, it has become useful as a source of insight into the mindset of the inflation-averse central banker, thanks to a some recent writing by the Atlanta Fed's executive vice president and research director, David Altig.

Taxes

News                                                                                                                             
Market Watch | Tax man makes it hard to be an American
Peter Dunn renounced his U.S. citizenship last year so he no longer would have to deal with the Internal Revenue Service.

Econ Comments & Analysis                                                                                            
Washington Times | Small businesses sweat it out
The arrival of summer in the nation’s capital is always heralded by humidity and resulting citywide lethargy. Unfortunately for small-business owners perspiring over what taxes they’ll owe Uncle Sam for the year, this season is no different.
Forbes | Kidney Stone Horrors Explain Why The Estate Tax Should Be Abolished
All of which brings up the estate tax.  Many in our midst believe it’s essential.  Some say we need it to reduce the budget deficit despite unrelentingly observable evidence that a dollar handed over to a profligate Congress leads to government spending exponentially greater than the initial dollar. 
Real Clear Markets | 10 Ways the Greek People Can Save Themselves
The tragedy that is Greek democracy has entered its final act. Nothing can save the Greek government. Nothing can save the Greek banks. Nothing can keep Greece on the euro. But the Greek people still have the power to save themselves.
LA Times | In Europe, time for true austerity
Talks to form a coalition government in Greece collapsed again this week as a result of the country's belt-tightening backlash.
WSJ | There Goes the Sun
Washington has long ensured that American taxpayers subsidize solar power as much or more than any energy source. Now the political class wants consumers to pay even more in the form of tariffs on imports of Chinese solar cells. And we thought the Obama Administration liked green energy.

Employment

News                                                                                                                             
Market Watch | Business economists see somewhat faster hiring
Business economists predict the U.S. will grow at a moderate 2.4% rate in 2012 and companies will hire workers at a somewhat faster pace than previously forecast.

Blogs                                                                                                                             
Calculated Risk | State Unemployment Rates decline in 37 states in April
Thirty-seven states and the District of Columbia recorded unemployment rate decreases, five states posted rate increases, and eight states had no change, the U.S. Bureau of Labor Statistics reported today.

Budget

News                                                                                                                             
CNN Money | Fiscal cliff: Market sting may come sooner
The going assumption is that lawmakers will wait until after Election Day to deal with the $7 trillion worth of tax hikes and spending cuts set to take effect in January. Most observers believe Congress at the last minute will postpone them and punt real policy decisions to 2013.
WSJ | Fresh Worries Over Spain
Jittery U.K. customers of one of Spain's biggest lenders pulled out funds on Friday, and bad debts held by Spanish banks rose to a 17-year high, underscoring the continuing challenges facing the country's financial sector.
National Journal | House Appropriations Releases 2013 Draft Spending for Capitol
The House Appropriations Legislative Branch subcommittee on Thursday released its draft of fiscal 2013 spending allocations for agencies and programs under its purview; the $3.3 billion bill will be marked up in subcommittee on Friday.

Econ Comments & Analysis                                                                                            
WSJ | Three Views of the 'Fiscal Cliff'
Discussion of the so-called fiscal cliff—the combination of tax increases and spending cuts that will come in 2013 if Congress and the president don't act—confuses a number of different issues. The evidence suggests that we should fear the tax hikes, but not necessarily the spending cuts.

Blogs                                                                                                                             
The American | Just how bad for the economy would falling off the 2013 fiscal cliff be? Bad
Just how big and scary is the fiscal cliff American faces in 2013? Well, there are various estimates, and the folks at the Committee for a Responsible Federal Budget have compiled a bunch of them.