Wednesday, June 13, 2012

General Economics

News                                                                                                                             
Market Watch | May retail sales fall as gas purchases tumble
U.S. retail sales fell in May for the second month in a row — the first time that’s happened in two years — as consumers spent less to fill up their gas tanks, government data showed Wednesday.
Bloomberg | Euro-Area Industrial Output Falls Second Month on Germany
Euro-area industrial production declined for a second month in April, led by a drop in Germany, adding to signs of a deepening economic slump.
WSJ | Euro Zone Industrial Output Falls
Factory output in the euro zone fell sharply in April, an early indication the 17-nation economy may shrink again later this year after it narrowly escaped recession in the first quarter.
Washington Times | Economy on a steady course despite job scare
While Wall Street and Washington were obsessing over recent signs of softening in the job market and a flare-up of the European debt crisis, much of the rest of the economy has been chugging along showing improvement.
WSJ | France to Revise Economic Forecast
The French government is in the process of revising its growth forecasts for next year after a weak start to 2012, underscoring the challenges for President François Hollande as he seeks to control debt and deficit levels while delivering on a promise to foster growth domestically and in Europe.
Market Watch | Why mortgage rates should be lower
More than $10 billion a year in U.S. taxpayer subsidies meant to assist house buyers may instead be adding to the profits of lenders, a new study finds.
WSJ | Threat Spreads Across Europe
Borrowing costs for Italy and Spain continued to surge on Tuesday, escalating calls for bigger steps from euro-zone leaders amid a new warning that the crisis is dragging down even the world's resilient emerging economies.

Econ Comments & Analysis                                                                                            
Spiegel | This Time, Europe Really Is on the Brink
The European Union was created to avoid repeating the disasters of the 1930s, but Germany, of all countries, has failed to learn from history. As the euro crisis escalates, Berlin should remember how the banking crisis of 1931 contributed to the breakdown of democracy across Europe. Action is urgently needed to stop history from repeating itself.
WSJ | A Sugar Showdown
One reason industry handouts flourish in Washington is that they provide concentrated benefits to a few producers, while the cost is spread widely to all Americans. A case study is the sugar program, which the Senate will vote on as early as today.
AEI | Let's bring Canada and Mexico into the Pacific Trade Pact
It is time for the United States to stop dragging its heels and allow Canada and Mexico to enter the negotiations for a Trans-Pacific Partnership Trade Agreement (TPP).
Washington Times | ‘Doing fine’ in Obama’s economy
President Obama’s belief that “the private sector is doing fine” ranks as the most uninformed statement on the struggling American economy to date.
WSJ | Large Banks Need 'Living Wills'
J.P. Morgan Chase's $2 billion in hedging-related losses has been in the news of late. Overlooked in much of the commentary, however, is that a sizeable loss at a large bank holding company would not be a public-policy concern were it not for the belief that the creditors of such firms will benefit from taxpayer support in the event of failure.
Daily Finance | 80 Is the New 65: How High Should We Boost Retirement Age?
Life expectancies soared over the past century, thanks to advances in medical technology. Today the average 55-year-old will live to 82. In the 1930s, most were lucky to make it to 60.
CRS | Alternative Fuel and Advanced Vehicle Technology Incentives: A Summary of Federal Programs
A wide array of federal incentives support the development and deployment of alternatives to conventional fuels and engines in transportation. These incentives include tax deductions and credits for vehicle purchases and the installation of refueling systems, federal grants for conversion of older vehicles to newer technologies, mandates for the use of biofuels, and incentives for manufacturers to produce alternative fuel vehicles.
NBER | Fuel Economy and Safety: The Influences of Vehicle Class and Driver Behavior
Fuel economy standards change the composition of the vehicle fleet, potentially influencing accident safety. I introduce a model of the fleet that captures risks across interactions between vehicle types while simultaneously recovering estimates of unobserved driving safety behavior.

Blogs                                                                                                                             
National Review | What Generational Warfare Looks Like and What We Can Do About It
The share of people in the 65–74 age group will grow from 19.3 percent of the U.S. in 2007 to 32.3 percent in 2020, and 38.8 percent in 2030. For the 75+ age group, the share will go from 18.6 percent in 2007 to 22.5 percent in 2020, then 33.3 in 2030. 
Keith Hennessey | President Obama made two strategic mistakes last Friday
President Obama made not one but two strategic mistakes last Friday. Everyone paying attention picked up on his first mistake. The President said “The private sector is doing fine,” a quote that Republicans will use to great effect during the remainder of this election cycle.
Café Hayek | Compared to what
By the way, the overall drop in real per capita GDP between the peak in 2007 through 2009 was about 5%. The growth between 2009 and 2011 for all of the EU is about 3%. So without austerity, Europe hasn’t recovered completely either.

Health Care

News                                                                                                                             
Bloomberg | Medicare Advantage Enrollment Rises 10% on Lower Premiums
Enrollment in U.S. government-backed Medicare plans run by insurers led by UnitedHealth Group Inc. (UNH) rose 10 percent to a record this year as lower premiums enticed people to sign up, a study shows.
National Journal | Report: Medicaid a Drag on State Budgets
For governors and state legislators looking to balance their budgets, the growth of Medicaid is a worsening headache, according to a new report on state budgets.

Monetary

News                                                                                                                             
Market Watch | U.S. producer prices plummet 1% in May
Lower costs energy and food pulled the U.S. producer price index down 1.0% in May, the Labor Department reported Wednesday, in the biggest one-month drop in close to three years.
Bloomberg | World Bank Says It’s ‘Very Open’ to Selling More Dim Sum Bonds
The World Bank may issue yuan- denominated bonds in Hong Kong again when borrowing costs become more favorable, according to Michael Bennett, its head of derivatives and structured finance.

Econ Comments & Analysis                                                                                            
WSJ | How the Euro Will End
The euro is the world's first currency invented out of whole cloth. It is a currency without a country. The European Union is not a federal state, like the United States, but an agglomeration of sovereign states.
Investors | The Economy Doesn't Need Any More Action From The Fed
Some Federal Reserve Bank presidents and governors are talking about the possibility of further action to encourage growth in the economy. What planet are they on?

Blogs                                                                                                                             
WSJ | Economists Say Inflation Won’t Stand in Way of Fed Aid
The looming Federal Reserve meeting has economists locked in a full scale debate over whether weak economic data will force officials to provide more stimulus to the economy.

Taxes

News                                                                                                                             
WSJ | Federal Deficit Narrows as Tax Receipts Rise
Higher tax receipts and slightly lower government spending have narrowed the federal deficit for the first eight months of the fiscal year compared with a year earlier, Treasury Department figures showed Tuesday.
CNN Money | North Dakota votes 'no' on ending property tax
Voters in North Dakota, where the economy is swelling with money from the oil boom, have voted against abolishing property taxes in the state.

Econ Comments & Analysis                                                                                            
Real Clear Markets | A Sensible Plan to Bring U.S. Corporate Profits Home
The current system for taxing the international profits of U.S. corporations is highly flawed. It raises very little revenue and encourages companies not to invest in the United States. But Democrats and Republicans disagree about how to fix the broken system.

Employment

News                                                                                                                             
USA Today | More than seven in 10 U.S. teens jobless in summer
Fewer than three in 10 American teenagers now hold jobs such as running cash registers, mowing lawns or busing restaurant tables from June to August.
CNN Money | Health spending growth to stay low, then jump
Total health spending in the United States will grow at near-historic low rates until 2014 and then increase as provisions of the health reform law take effect, according to a government report Tuesday.

Econ Comments & Analysis                                                                                            
WSJ | Student Loans and Double Standards
President Obama likes to say that everyone in America should "play by the same rules." Okay, so then why does the Administration's new student-loan rule apply to for-profit colleges, but not nonprofits?
Project Syndicate | Share the Work
The United States today is facing a crisis of long-term unemployment unlike anything it has seen since the 1930’s. Some 40% of the unemployed have been out of work for six months or more, which, as US Federal Reserve Board Chairman Ben Bernanke noted in a recent speech, is far higher than in any other post-World War II recession.

Budget

News                                                                                                                             
CNN Money | Student loan payback gets White House attention
The deadline for Congress to extend the low 3.2% interest rate on student loans is fast approaching. But the Obama administration, eager to make college debt a re-election issue, is looking for a way to lessen the burden on graduates.
WSJ | Spanish Yields Hit Euro-Era High
Spanish bond yields hit a euro-era high, fanning speculation that the country might need a bailout of its own, and Italian yields climbed amid fears that its highly indebted government, too, could run into trouble.

Econ Comments & Analysis                                                                                            
Investors | Huge U.S. Debt Mountain Threatens Future Prosperity
Ask anyone who owns a business what happens if you borrow and spend more than you take in as revenue.
CBO | Status of Discretionary Appropriations: FY 2013 Senate
Estimates of discretionary budget authority and outlays for fiscal year 2013.
Bloomberg | How Germans Botched the Spanish Bank Bailout
The instant response to the plan for supporting Spanish banks had been euphoric. Even as bond markets pushed the cost of Spanish public borrowing even higher, in effect declaring the country insolvent, politicians were still applauding themselves.

Blogs                                                                                                                             
The American | Unintended Spanish consequences
Europe’s desperate attempt this weekend to shore up the Spanish banking system with a €100 billion loan ahead of the all-important Greek parliamentary elections on Sunday, June 17 appears to have backfired. For rather than restoring investor confidence in Spain, it appears to have done the exact opposite.