Monday, June 18, 2012

General Economics

News                                                                                                                             
WSJ | Homeowner Aid Boosts Big Banks
A government program that helps struggling homeowners take advantage of low interest rates to cut monthly mortgage payments is providing an unexpected revenue boost to large banks such as Wells Fargo & Co. and J.P. Morgan Chase & Co.
NY Times | So You Think You Can Be a Hair Braider?
Jestina Clayton braids the hair of her daughter, Esther Clayton, 5, at her home in Centerville, Utah. Clayton and the Institute for Justice have filed a federal lawsuit seeking changes to Utah's hair-braiding regulations.
WSJ | Greeks Back European Bailout
Greek voters broke months of political stalemate by narrowly endorsing pro-bailout forces in a momentous election, easing fears of an imminent rupture with the euro zone—for the moment.
WSJ | Regulators Shut Banks in Three States
Regulators closed three banks, in Florida, Georgia and Tennessee, bringing the nationwide tally of bank failures to 31 for the year.

Econ Comments & Analysis                                                                                            
WSJ | Pell Grants Flunk Out
On campus, they'd call this frosh econ, but Washington is having a bit more trouble getting its mind around the expanding debacle of helping college students pay for their education.
Washington Times | Obama’s mythical 99%
A brand new Cadillac Escalade hybrid rolled down the posh streets of Old Town Alexandria, Va., on Friday morning. On the tailgate of this $78,000 luxury SUV was an Obama campaign bumper sticker carrying a simple message: “99%.” These limousine liberals just don’t get it.
USA Today | Worst-case scenario is ugly if Greece leaves the euro
Bankers, governments and investors are starting to prepare for Greece to stop using the euro as its currency, a move that could spread turmoil throughout the global financial system.
Washington Times | Dollars for smiles
The Obama administration is financing research to devise a new gauge for measuring Americans’ happiness. A National Academy of Sciences panel is analyzing proposals for surveying Americans’ “subjective well-being.” But there are grave perils in any “national happiness index” Uncle Sam might concoct.
WSJ | A Tale of Two Conservatives
One test for economic conservatives is whether they are willing to oppose constituent business interests looking for government favoritism. On that score, two recent contrasting votes by Jim DeMint of South Carolina and Marco Rubio of Florida are instructive.
Real Clear Markets | Obamanomics in One Lesson
President Obama's statement that "the private sector is doing fine" is not just gaffe. It is a lesson in bad economics and an explanation of the failure of Obamanomics.
WSJ | Protectionism Is Back
Despite the stunning power of innovation, there are forces trying to stifle it and replace it with economic schemes that threaten global trade and recovery. A new kind of protectionism is turning innovation policy on its head, unfairly benefiting domestic firms at the expense of foreign players.
Forbes | You Worry. You Shouldn't. Part 1: Overpopulation and Resource Exhaustion
Often, the risk as reported in the media is grossly out of proportion with the actual risk you face. Given that we have limited time and energy, there are some things people worry about that get far too much attention relative to the risks they pose.
Project Syndicate | A Global Perfect Storm
Dark, lowering financial and economic clouds are, it seems, rolling in from every direction: the eurozone, the United States, China, and elsewhere. Indeed, the global economy in 2013 could be a very difficult environment in which to find shelter.

Blogs                                                                                                                             
Calculated Risk | Schedule for Week of June 17th
The focus will be on Greece on Sunday. For the US, this week is about the Fed and housing. The key reports are housing starts on Tuesday, and Existing Home Sales on Thursday.
Neighborhood Effects | Net Worth is Down and that May Explain Why Stimulus Wasn’t Particularly Effective
This week saw the release of the Federal Reserve’s Survey of Consumer Finances. The news isn’t good. Median net worth fell 38.8 percent from 2007 to 2010.
Calculated Risk | Unofficial Problem Bank list declines to 919 Institutions
In all, there were six removals and two additions. The changes leave the list with 919 institutions with assets of $354.0 billion. A year ago, 996 institutions with assets of $416.7 billion.
National Review | Farmers Will Harvest Big Bailout in Next Farm Bill
Last week, I looked at one aspect of the cronyism going on in this year’s farm bill: farm subsidies. Today, I look at another aspect of the question: the potentially massive farmers’ bailout called the shallow-loss program.
Marginal Revolution | Is a high home ownership rate a sign of a successful country?
I saw an El Pais spread on this, which I cannot find on-line.  Here are the European countries with the highest owner occupancy rates
Keith Hennessey | President Obama’s Cleveland economy speech – detailed outline
This is my attempt to build a detailed outline of the economic speech President Obama gave in Cleveland yesterday
Café Hayek | Do we need more education?
I didn’t follow the Romney narrative. But he was on to something even if he indeed did backtrack–Obama wants to grow the public sector and so does Krugman. They both want more teachers (and police and firefighters, presumably.) The current level is never optimal.

Health Care

News                                                                                                                             
NY Times | In Health Care Ruling, Vast Implications for Medicaid
As a construction worker and logger, Bryan L. Mashburn does what he describes as “backbreaking, muscle-pulling work,” laying concrete foundations for water towers and felling 3,000-pound trees. He has no health insurance, and he tried to avoid going to doctors when he crushed a finger on one occasion and metal shavings flew deep into his eye another time.
FOX News | A welcome let-up in health costs that may not last
Health care spending has eased up recently, bringing a welcome respite for government and corporate budgets. But experts who track health care's economic indicators like the vital signs of a patient disagree on the diagnosis and what the future holds.
National Journal | Dems Fend Off Attempts to Defund Health Care Reform
The Senate Appropriations Committee on Thursday approved a $158.8 billion fiscal year 2013 spending bill funding Labor, Health and Human Services, Education and related agencies on a party-line vote, 16-14, paving the way for the measure – which should differ significantly from the corresponding House bill – to head to the floor this summer.

Econ Comments & Analysis                                                                                            
WSJ | GOPCare
No one knows how the Supreme Court will come down in its decision on ObamaCare, expected in a little over a week. No one knows how President Obama will respond if the court overturns some or all of the law, though we have a pretty good idea. And no one knows how the Republicans will respond either, including the Republicans.
Washington Post | The folly of Obamacare
We pay our presidents for judgment, and President Obama committed a colossal error of judgment in making health-care “reform” a centerpiece of his first term. Ahead of the Supreme Court’s decision on the Affordable Care Act (ACA) — and regardless of how the court decides — it’s clear that Obama overreached.
WSJ | Why I No Longer Support the Health Insurance Mandate
Soon the U.S. Supreme Court will rule on the constitutionality of the Affordable Care Act. I am not a lawyer, or an expert on the Constitution. But as the chairman and CEO of a major health plan, I had a ringside seat to the entire health-care reform process. After much reflection, I have concluded that the federal individual mandate, which requires all Americans to purchase health insurance starting in 2014, will not be upheld.

Blogs                                                                                                                             
Heritage Foundation | Five Devastating Effects Obamacare Will Have on Young Adults
In anticipation of the Supreme Court’s Obamacare decision, it is important to remember that the constitutionality of the law’s individual mandate isn’t the only concern. For example, Obamacare will negatively impact many younger Americans. Here’s a list of five ways young adults will be hurt by the law

Monetary

News                                                                                                                             
CNN Money | What else can the Fed do?
Hiring has slowed, economic growth has eased, inflation is tame and millions of Americans remain unemployed. In short, the recovery is stalling.
Bloomberg | Fed Seen Twisting to Risk Management to Spur U.S. Growth
Federal Reserve officials must choose this week between their best estimates and their worst fears of what will happen to the U.S. economy.
Market Watch | Fed expected to twist again
The Federal Reserve is likely to extend its Operation Twist program at the end of its two-day meeting on Wednesday, a growing number of Fed watchers said over the weekend.

Blogs                                                                                                                             
Economist | My money is bigger than yours
I grew up thinking in British pounds. So when I travel abroad I'm used to dividing foreign prices not multiplying them. This has a calming effect, I find. Prices are smaller than they look.
WSJ | Economists: Fed Most Likely to Extend Twist
The Federal Reserve is most likely to decide to extend Operation Twist at next week’s policy meeting, according to a Wall Street Journal survey of economists.

Taxes

News                                                                                                                             
WSJ | Italy Unveils Measures to Boost Growth
Prime Minister Mario Monti unveiled an array of measures aimed at getting companies and households to invest, as Italy tries to put to rest talk that it could be the next domino to fall in the European bailout line.

Econ Comments & Analysis                                                                                            
Forbes | Governor Brownback's Reformed Kansas Could Have Missouri Singing The Blues
A recent article covering Red Kansas and the leadership of Governor Sam Brownback, lays out a new trajectory for a Midwestern state that has decided to take Texas’ lead on tax policy, rather than that of California. Last month, Kansas Governor Sam Brownback turned the tide on Kansas tax policy, delivering on his legislative promise to ignite what the Wall Street Journal referred to as “the Heartland Tax Rebellion.”
AEI | Here's how to replace the income tax
How would an “X” tax—a progressive consumption tax—work?

Blogs                                                                                                                             
Heritage Foundation | Taxmageddon to Hit These States and Congressional Districts Especially Hard
Taxmageddon is getting ready to suffocate the U.S. economy under crushing tax increases on January 1, 2013. These tax hikes include the expiration of the 2001 and 2003 tax reductions and the tax increases from the 2010 health care law.
Marginal Revolution | Taxes and the Onset of Economic Growth
In a recent book Besley and Persson 2011 argue that fiscal capacity is strongly correlated with economic performance across countries

Employment

Blogs                                                                                                                             
Calculated Risk | State Unemployment Rates little changed in May
Regional and state unemployment rates were little changed in May. Eighteen states recorded unemployment rate increases, 14 states and the District of Columbia posted rate decreases, and 18 states had no change, the U.S. Bureau of Labor Statistics reported today.
WSJ | Hiring Slows in Key States
Employers cut jobs in May in four battleground states expected to play a key role in the presidential election, and added them at a feeble pace in five others.

Budget

News                                                                                                                             
WSJ | Next, Athens Seeks Coalition, Cuts
Greece's conservatives eked out a slim victory in Sunday's elections, a result opening the door to a coalition government that will try to keep the country in the euro zone by sticking to an international bailout program.
USA Today | Foreign holdings of U.S. debt hit record high
Foreign demand for U.S. Treasury securities rose to a record high in April. China, the largest buyer of Treasury debt, increased its holdings slightly after trimming them for two straight months.
WSJ | Funds for Region Called Insufficient
The euro-zone's bailout funds are now insufficient to aid a large member of the currency area, the world's biggest private financial institutions said Sunday.
Bloomberg | Fiscal Cliff Road Paved by Those Who Took U.S. to Brink
The people responsible for averting the end-of-year fiscal cliff are the same ones who almost caused a U.S. debt default, let airline ticket taxes lapse for two weeks and came within two hours of shutting down the government.
WSJ | IMF Warns of Irish Borrowing Woes, Puts Onus on Euro Zone
The Irish government will find it difficult to return to international bond markets next year unless the euro zone comes up with a plan that promises to end its long-running fiscal drama, the International Monetary Fund said Friday.
National Journal | House Republican Proposes One-Year Solution to Fiscal Cliff
Amid concerns that lawmakers will be unable to unite to prevent the U.S. economy from dropping off a looming fiscal cliff this fall, the chairman of the House's Republican Policy Committee suggested a solution: Punt the problem for a year.

Econ Comments & Analysis                                                                                            
WSJ | A Greek Reprieve
Europeans—at least the non-Germans—breathed a sigh of relief Sunday as a plurality of Greek voters took a step back from jumping out of the euro zone. Now we'll see what Europe's leaders can do with their latest reprieve.
CNN Money | Euro bailout firewall not big enough
The recent €100 billion bailout of Spain's banks will leave Europe's financial rescue fund without enough money to bail out another big economy, an international banking group warned on Sunday.