Tuesday, June 12, 2012

General Economics

News                                                                                                                             
CNN Money | 10 most entrepreneurial states
Opening up a small business in a tough economy is a risky gamble. But these 10 states saw more startup activity than anywhere else nationwide, according to the Kauffman Index of Entrepreneurial Activity. Here's why.
WSJ | Foreigners Snap Up Properties in the U.S.
The six-year slide in U.S. home prices and the dollar's weakness against some currencies are driving a property-buying binge by Asians, Canadians, Europeans and Latin Americans eager to own a piece of America.
CNN Money | Living on food stamps in middle-class suburbia
Since the recession, persistent unemployment has left middle-class life out of reach for millions of Americans.
Market Watch | U.S. import prices tumble 1% in May
U.S. import prices dropped 1% in May, the biggest one-month drop since June 2010, the Labor Department said Tuesday. Prices for U.S. imports also decreased over the past 12 months, falling 0.3%, the first year-over-year decline since October 2009. Fuel prices tumbled 4.2%, while nonfuel imports edged down 0.1%.
WSJ | Counting on an Inheritance? Count Again.
For years now, there's been a lot of talk about boomers getting tremendous windfalls as their parents pass on. Many boomers, in fact, have been lagging behind in their savings, betting on—hoping for—big bequests, especially since many of them suffered big losses in 2008.
National Journal | Three Iron Truths of the (Not-Fine) Recovery
The U.S. economy is not doing fine. Not in the private sector, and especially not in the public sector. President Obama was wrong to say otherwise – that the private sector is fine – last week. Mitt Romney was wrong to suggest laying off teachers and firefighters hasn’t hurt.
CNN Money | Retirement age must rise - OECD
As life expectancy continues to rise, a new report suggests that governments need to raise the age of retirement in order to keep up.
Market Watch | Recession crushed middle-class wealth: Fed survey
The recession crushed the net worth of middle-class families as real estate values tumbled, according to a survey released by the Federal Reserve on Monday.
CNN Money | Euro crisis: It's still not over
Spain officially requested a bailout for the nation's banks Saturday but euphoria about the weekend's announcement was short-lived.

Econ Comments & Analysis                                                                                            
Investors | Obama's Politics Are More Insidious Than Socialism
What President Obama has been pushing for, and moving toward, is more insidious: government control of the economy, while leaving ownership in private hands. That way, politicians get to call the shots but, when their bright ideas lead to disaster, they can always blame those who own businesses in the private sector.
Politico | Study: Lobbying bad for business?
In a surprising finding, a new study shows that massive lobbying in D.C. and campaign donations by corporations are linked with worse market performance.
Washington Times | Obama’s ‘fine’ economy
President Obama told the American people Friday that he believes “the private sector is doing fine.” The astounding statement reverberated from the White House Briefing Room, and the negative reaction was intense.
WSJ | The Next Step for Europe Is Financial Union
The crisis has shown that Europe's economic and monetary union is incomplete: The single currency needs to be supported by a financial union. Our banks today are euro-zone banks—not German, Spanish or French banks. They can borrow from the European Central Bank anywhere; they can lend to any euro-area citizen or firm. Depositors can easily shift money from one country to another.
Heritage Foundation | A Housing Market Without Fannie Mae and Freddie Mac: Effect on the Homeownership Rate
This study analyzes the impact of affordable lending efforts by government-sponsored entities (GSEs) on national homeownership rate, by race, ethnic group, and census region.

Blogs                                                                                                                             
Café Hayek | In a complex system, bias reigns
Step back for a minute and consider the challenge of measuring the impact of the stimulus. It is one of many things that happened between February 2009 and the end of 2010.
National Review | Did the Stimulus Work?
“Yes it has, and yes, it does!” says E. J. Dionne Jr. in the Washington Post. The evidence: Almost all economists agree that it did. That’s him
Calculated Risk | NFIB: Small Business Optimism Index "Stagnates" in May
Dropping just a tenth-of-a-point in the month of May, the Nation Federation of Independent Business (NFIB) Index of Small Business Optimism came in at 94.4.
National Review | Cronyism, American Style
This is a good piece by economist Luigi Zingales about cronyism– the practice of using government to deliver favors to your friends in the business world — in Italy and what Americans can learn from it. From his account it sounds like cronyism is the driving force behind the Italian job market
The American | Doing fine: Sales growth at U.S. companies falls to lowest point since financial crisis
The U.S. economy may not be in a recession. And the private sector may be doing better than the public sector. But economic growth is nowhere near what it should be.

Health Care

News                                                                                                                             
National Journal | Report: To Cut Health Care Costs, Start With Paperwork
If you want to save money on health care, look at the paperwork. A study published on Monday by the left-leaning Center for American Progress estimates that the U.S. health care system could save some $40 billion a year by simply streamlining administrative processes.

Econ Comments & Analysis                                                                                            
WSJ | ObamaCare's Secret History
On Friday House Republicans released more documents that expose the collusion between the health-care industry and the White House that produced ObamaCare, and what a story of crony capitalism it is. If the trove of emails proves anything, it's that the Tea Party isn't angry enough.

Monetary

News                                                                                                                             
Bloomberg | Fed’s Evans Says He Would Support Various Stimulus Plans
Federal Reserve Bank of Chicago President Charles Evans said he would support a variety of measures to generate faster job growth, underscoring his preference for more stimulus.

Econ Comments & Analysis                                                                                            
Washington Times | Wrong tools for the job
Assume you are a skilled heart surgeon and your patient needs a new heart valve, but you were given a spoon rather than a scalpel to cut open a chest. Relying on the Federal Reserve and the European Central Bank (ECB) to cure the lack of job growth is going to be no more effective than giving a heart surgeon a spoon.

Taxes

News                                                                                                                             
CNN Money | Key senator promises tax reform plan
Calling the U.S. tax code the "worst of all worlds," Sen. Max Baucus said Monday he is working on a detailed tax reform proposal that he promised would draw bipartisan support.
FOX News | US states forecast highest tax revenue in 5 years
U.S. states expect to collect higher tax revenues in the coming budget year that combined would top pre-recession levels, according to a survey. The increase could reduce pressure on states to cut budgets and lay off workers.
National Journal | Baucus Offers No Specifics on Tax Reform
The chairman of the Senate Finance Committee urged Congress on Monday to avoid "divisive" votes on tax issues before the November elections in order to preserve room for compromise on a batch of tax-related measures before the end of the year. But he offered no specifics on his ideas for overhauling the tax code.

Econ Comments & Analysis                                                                                            
AEI | The capital gains preference: Imperfect, but useful
As prescribed by section 1(h), the maximum rate on long-term capital gains is 15 percent. Since 2003, qualified dividends have enjoyed the same preferential rate. Starting in 2013, the maximum tax rate on long-term capital gains is slated to rise to 20 percent and qualified dividends are to become subject to ordinary income tax rates.

Blogs                                                                                                                             
Heritage Foundation | Even Wind Executive Doesn’t Want Wind Tax Credit
The expiration of the production tax credit (PTC) for wind and other renewable energy sources is the subject of intense debate. Some see the credit as a tool for creating jobs and battling global warming. Others see it as an expensive, market-distorting device that rewards inefficiency and punishes competitiveness.

Employment

News                                                                                                                             
CNN Money | 8 job killing companies
Why is the jobs recovery still so sluggish? These 8 companies recently announced layoffs in the thousands.

Blogs                                                                                                                             
Keith Hennessey | Is private sector employment fine in absolute or relative terms?
Let’s take the President’s claim seriously. What would lead him to claim that (1) the private sector is doing fine, and (2) the problem is in government employment rather than private employment, thus necessitating his policies of increased federal spending to create more government jobs?

Budget

News                                                                                                                             
Market Watch | Cyprus could be fifth EU nation to get bailout
The island-nation of Cyprus could be the fifth euro-zone economy to seek a bailout, according to a report published in The Wall Street Journal on Tuesday.
Fortune | The fiscal cliff may look more like a fiscal slope
Economists and investors have warned of an impending U.S. financial crisis at the end of this year, but others think the fears are dangerously misguided.

Econ Comments & Analysis                                                                                            
WSJ | Obama's Real Spending Record
President Obama shocked us the other day when he said, "Since I've been president, federal spending has risen at the lowest pace in nearly 60 years." Having heard him champion the "multiplier effects" of deficit-financed stimulus spending, we saw him as an enthusiastic supporter of throwing other people's money at just about any problem.

Blogs                                                                                                                             
Economist | Plugging leaks
As reported last Friday, euro-area finance ministers negotiated a Spanish bank bail-out over the weekend, in the form of up to €100 billion in lending from emergency funds to the Spanish government.
Political Calculations | Austerity, Done Right, Part 2
How has the small nation of Estonia been able to turn its fiscal and economic situation around so effectively?
Neighborhood Effects | Is Government the Solution?
The degree of disagreement over stimulus is evident when you look at the literature on the “government purchases multiplier.” The multiplier measures the amount by which an economy expands when the government increases its purchases of goods and services by $1.00.
WSJ | States Trim Rate of Spending Growth
State general-fund spending is projected to grow 2.2% in nominal terms in the next fiscal year, much slower than in the past two years and less than half of its long-run average, according to a report released Tuesday by the National Governors Association and the National Association of State Budget Officers.