Wednesday, May 23, 2012

General Economics

USA Today | Eurozone warned 'severe recession' looming
The 17-country eurozone risks falling into a "severe recession," the Organization for Economic Cooperation and Development warned on Tuesday, as it called on governments and Europe's central bank to act quickly to keep the slowdown from dragging down the global economy.
WSJ | OECD Slashes Euro-Zone Growth Forecast
The Organization for Economic Cooperation and Development Tuesday slashed its forecasts for growth across the euro zone for this year and next, and warned that the area's debt crisis could pull it into a vicious downward spiral without the right policy action.
Washington Times | Argentina’s long economic boom coming to an end
Argentina’s nine-year economic expansion is slowing sharply, according to analysts, who predict growth of 2.5 percent to 3 percent this year, half the 5.1 percent projected by the government’s 2012 budget and far below last year’s 8.9 percent rise.
Market Watch | Feds looking at J.P. Morgan disclosures
Federal regulators said Tuesday they are examining whether J.P. Morgan Chase & Co. violated rules requiring the bank to publicly disclose material changes in a timely manner, after it reported recently that the firm’s chief investment office had losses of at least $2 billion in credit derivatives.
WSJ | Japan Is Jolted By Cut in Rating
Fitch Ratings on Tuesday delivered a surprise jolt to Japan's political leadership, downgrading the sovereign rating and blasting the government for taking a "leisurely" approach to solving the country's spiraling debt problems.
National Journal | Oil boom strikes Kansas
Oil rigs are springing up in farmers' fields. "No vacancy" signs hang in the windows of local motels, and a steady stream of trucks barrel through Main Streets. Along the state's southern border, the once-quiet farm towns are quickly transforming into boomtowns.
WSJ | China Is Stimulused Out
Chinese stocks jumped 1.1% Tuesday on hopes that the government will ramp up spending again to ward off an economic slump. Premier Wen Jiabao stoked expectations on Sunday with a statement that "more priority should be given to maintaining stable economic growth."
National Journal | CBO Warns of Recession Due to Sequester, Tax Increases
In an extraordinary move, the nonpartisan Congressional Budget Office warned Tuesday that the United States could be plunged back into recession next year due to a brutal combination of automatic spending cuts and tax increases set to take effect in January that would eat up $607 billion.  
Market Watch | World Bank sees China as drag on emerging Asia
The World Bank on Wednesday forecast slower economic expansion for developing nations in East Asia this year due to weakness in China, and urged governments in the region to look domestically for growth rather than relying on exports.
Daily Finance | America's Uneven Economic Recovery: The 10 Best and 10 Worst Cities
For the past few months, reports have repeatedly affirmed that the economy is slowly improving. However, as one recent study highlights, some areas are recovering much faster than others. In fact, depending on where you live, the future may be bright ... or bleak.

Econ Comments & Analysis                                                                                            
WSJ | How the Recovery Went Wrong
President Obama, in speech after speech, proudly makes the following point: Although we inherited the worst recession since the Great Depression, we have generated net new jobs every month, and while we need to do more, we are going in the right direction.
Real Clear Markets | True Entitlement Reform Will Hit Upper and Middle Classes
Entitlements - programs that automatically pay benefits to all eligible recipients - come in different forms. Some programs, such as food stamps, Supplemental Security Income, and Medicaid, are available only to low-income households. Others, such as Medicare and Social Security, provide benefits across the income spectrum, with the bulk of the payments going to the middle class.
Washington Times | Obama’s economic fantasy land
President Obama’s anti-capitalism attacks on Mitt Romney’s long career as an investor who bankrolled businesses and created jobs isn’t playing well in some Democratic circles.
Forbes | A College Bubble So Big Even The New York Times And 60 Minutes Can See It...Sort Of
In 2009 I was invited to speak to the annual meeting of a mid-sized accounting firm in Florida. Of course, the big topic of conversation was the housing bubble and the financial crisis which resulted.
AEI | Regulators and Too-Big-To-Fail Banks Are Partners
The fact that all the regulated entities so well understand this motto and the vindictiveness of the regulatory bureaucrats in carrying it out make the unelected regulatory state so hard to subject to checks and balances.
Washington Times | Rethinking global economic stimulus
I recently gave a presentation to more than 700 World Bank employees from more than 100 countries. In preparing for my speech, I was struck by the fact that several of the bank’s largest donors - for example, the United States and Japan - have much greater fiscal challenges than some of its largest borrowers. Even more striking, most of the World Bank employees did not realize this fact.
WSJ | China Is Stimulused Out
Chinese stocks jumped 1.1% Tuesday on hopes that the government will ramp up spending again to ward off an economic slump. Premier Wen Jiabao stoked expectations on Sunday with a statement that "more priority should be given to maintaining stable economic growth."

Atlantic | Property Rights and the Tragedy of the Commons
The importance of property rights for environmental conservation is not a new idea. It lay at the core of the early American conservation movement. After all, it was the institution of property rights that enabled the first Audubon Societies to post private reserves to protect birds from hunters who sought to collect their feathers for women's hats.
Library of Economics | Principles-Based Regulation
The bankers are always able to outmaneuver the regulators, staying within the letter of the rules while mocking their spirit.
John Taylor | Big Mac and Big Macro
One of the most important things for students to learn in introductory economics is that differences in productivity are the main reason for differences in real wages over time and across countries.

Health Care

National Journal | Fewer Diabetics Dying in U.S., Study Finds
Fewer patients with diabetes are dying prematurely from heart disease and stroke, mostly due to better medical care but also because people are taking better care of themselves, federal health experts said on Tuesday.
CNN Money | Small business shuns health care tax credit
A tax credit meant to help millions of small businesses afford health coverage for their employees was claimed by only 170,300 last year, a government watchdog has found.
National Journal | No Defense-VA Integrated Electronic Health Record Until 2017
The Defense and Veterans Affairs departments will not deploy an integrated electronic health record until 2017, eight years after President Obama kick-started the project, according to Defense Secretary Leon Panetta and VA Secretary Eric Shinseki.

Heritage Foundation | HHS Inks $20 Million Contract to Sell Obamacare to Skeptical Public
The Department of Health and Human Services has inked a $20 million contract with a top public-relations firm to sell aspects of the Obamacare law to the American public.


Barrons | Markets Rebound on Notion of More Monetary Easing
Global risk markets rallied Monday, with the exception of a certain newly issued social-networking stock, on thoughts new policies may be coming if needed to stave off a worsening of global stresses. Not needed measures either to get at the root cause of the crisis in Europe or to prevent a massive fiscal contraction next year in the U.S., but from more monetary expansion ease symptoms of distress.
Bloomberg | European Banks Unprepared for Greek Exit From Euro
Europe’s banks, sitting on $1.19 trillion of debt to Spain, Portugal, Italy and Ireland, are facing a wave of losses if Greece abandons the euro.

Econ Comments & Analysis                                                                                            
CATO | Competition in Currency: The Potential for Private Money
Privately issued money can benefit consumers in many ways, particularly in the areas of value stability and product variety. Decentralized currency production can benefit consumers by reducing inflation and increasing economic stability.


WSJ | Kansas Governor Signs Tax-Cut Bill
Kansas Gov. Sam Brownback signed into law Tuesday a tax-cut measure that had divided GOP lawmakers in one of the country's most fiscally conservative states, pitting tea-party advocates who argued it would spur economic growth against some fellow Republicans who worried the cuts go too far.


CNN Money | HP prepares to announce mass layoffs
Hewlett-Packard will announce another round of substantial job cuts Wednesday afternoon in an effort to streamline its teetering PC and services businesses, a source familiar with the plans told Fortune.

The American | U.S. manufacturing output may boom, but not jobs
The new export-based prosperity may not translate into higher wages for everyone, or even most people, in the United States. Skilled laborers who work with smart machines or even hold advanced managerial jobs will continue to make big gains, as the numbers have been showing for some time.


CNN Money | CBO: Fiscal cliff likely to cause recession
Trillions of dollars in looming tax hikes and spending cuts set to take effect next year would likely cause a recession, the Congressional Budget Office said Tuesday.
WSJ | Ex-Premier Says Greece Must Stick With Cuts
Greece's former Prime Minister Lucas Papademos on Tuesday warned that Greeks have no choice but to stick with a painful austerity program dictated by its lenders or face an exit from the euro zone that would devastate the economy, boost inflation and generate new social strains.

Econ Comments & Analysis                                                                                            
CATO | Baby Budget Hawks of the GOP
The conventional wisdom, pushed for very different reasons by both Republicans and Democrats, is that Republicans in Congress, controlled by radical tea-partiers, have been slashing government spending. Thus it becomes a little hard to understand how, in the few short months since last year’s debt-ceiling deal, the federal debt has increased by more than $1.5 trillion, roughly $13,000 per household.

Coordination Problems | Is This How the Myth of the Laissez Faire Herbert Hoover Was Invented?
Following the debate over "austerity" in Europe these past few weeks has led me to wonder if we are witnessing once again how historical mythology gets created.  By stating it this way I realize that I am siding with those who positioned themselves squarely opposed to Krugman's 'accounting' of contemporary policy history and the so-called 'savage cuts' that have been experienced in Europe.
Political Calculations | Spain: A Very Different Fiscal Crisis
Having looked at how Greece arrived at its current crisis, we thought we'd turn to the next country that is coming to dominate the bad economic news in Europe: Spain.