Thursday, July 12, 2012

General Economics

WSJ | Deeper Slowdown Suspected in China
Official data due this week are expected to show growth in China slowing to its lowest rate since the global financial crisis. But some economists say they are turning up evidence that the true picture could be even worse.
USA Today | Fed officials warn of looming problems for economy
The Federal Reserve is open to taking further action to support the struggling U.S. economy. But minutes of the Fed's June meeting show policymakers at odds over whether the economy needs more help now.
Market Watch | Fewer underwater homeowners in 2012: CoreLogic
About 11.4 million U.S. residential properties were in negative equity at the end of the first quarter of 2012, down from about 12.1 million properties in the same position at the end of 2011, according to CoreLogic Thursday.
WSJ | Congress Nears Showdown Over Food-Stamp Funding
House and Senate lawmakers are headed for a collision over funding for food stamps, the big nutrition-assistance program for low-income Americans, in the latest skirmish in the larger battle over the size and scope of federal entitlement programs.
CNN Money | Wall Street: More volatility on the way. Thanks, Congress!
Following the stock market's rough run in the aftermath of the debt ceiling drama last summer, Wall Street experts are warning investors to buckle up for another a roller coaster ride.
WSJ | Housing Passes a Milestone
The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing.
WSJ | U.S. Trade Gap Narrows
The U.S. trade deficit narrowed for the second straight month in May, as exports picked up and falling oil prices helped drive down imports.
Bloomberg | Housing Rebound Signaled as Banks Resume Foreclosures: Mortgages
U.S. lenders are notifying more delinquent homeowners they face foreclosure, a step toward clearing a backlog of properties and helping to accelerate a housing recovery.
USA Today | 3-D printing could remake U.S. manufacturing
About 20 miles east of Pittsburgh, the former heart of the nation's steel industry, a small company called ExOne is churning out a new generation of stainless steel boat propellers, oil pump parts and door knobs.

Econ Comments & Analysis                                                                                            
Real Clear Markets | ObamaTax Will Make Insured Sicker, More Costly
Taxes are constitutional, according to the Supremes, but the tax provisions of the Patient Protection and Affordable Care Act won't make people sign up for health insurance.
Atlantic | Only Government Intervention Can Stop Corrupt Capitalism
At the core of capitalism are powerful forces that, if unconstrained, cause corporate corruption, as reflected in two recent corporate scandals, one involving Barclays and a second involving GlaxoSmithKline.
Politico | Start-ups key to economic revival
The most revered profession in the halls of Congress is the entrepreneur. We spend much of our time encouraging their success; supporting the small businesses they create, and debating how to replicate more of them.
WSJ | An Eminently Bad Idea
The housing bust has produced some terrible ideas, but now comes what may be the worst: A California county and two cities hit hard by foreclosures are thinking of using eminent domain to seize mortgages from private investors.
Washington Times | Don’t hate on oil companies
Between now and Election Day, you will be hearing a lot from Washington interest groups, Capitol Hill politicians and President Obama, demanding that Congress “repeal tax breaks for Big Oil” or “make the oil companies pay their fair share.”

Reuters | How economists get tripped up by statistics
Look at this scatter chart. There will be a quiz. Another dot is going to be added to this chart, in line with the distribution you see here. You get to choose what the X value of the dot is — and your aim is to get a Y value of greater than zero. So here’s the question: at what value of X are you going to have a 95% chance of getting a dot above the axis, in positive territory on the Y axis?
AEI | Economic mobility is alive and well in America
Video above is from, which accompanies this article “84 Percent of Americans Are Richer than Their Parents Were at the Same Age.”

Health Care

CNN Money | 6 reasons health care costs keep going up
Insurance premiums -- the monthly fees consumers pay to get coverage -- continue to rise much faster than the 2% rate of overall inflation. In 2011, average premiums rose 8% for individual coverage and 9% for family coverage, according to the Kaiser Family Foundation.
CNN Money | Demise of the solo doctor
Squeezed by high costs and shrinking insurance reimbursements, independent doctors are closing up shop or going to work at hospitals or bigger group practices where they aren't directly responsible for overhead costs.

Econ Comments & Analysis                                                                                            
Real Clear Markets | ObamaTax Will Make Insured Sicker, More Costly
Taxes are constitutional, according to the Supremes, but the tax provisions of the Patient Protection and Affordable Care Act won't make people sign up for health insurance.
Washington Times | Obama’s tax hypocrisy
President Obama promised never to raise taxes on the middle class, but he already has. The Supreme Court called the money Americans will owe the Internal Revenue Service if they fail to buy government-mandated health insurance in Obamacare a “tax.” Democrats think they can scam the American people by calling it a “penalty.” Republicans are making sure nobody falls for it.
WSJ | No One Would Miss ObamaCare, but the Window for Repeal Is Two Years
The minute the Supreme Court upheld most of the Patient Protection and Affordable Care Act, or ObamaCare, Republicans cranked up the "repeal and replace" volume. The House voted again Wednesday to repeal the entire law.


WSJ | Fed Weighs More Stimulus
Federal Reserve officials sent new signals they are seriously considering more actions to bolster the economic recovery but disappointed many investors by not indicating they are committed to taking action.
Market Watch | Few Fed officials backed more easing: minutes
Only a few officials thought that more asset purchases would be necessary at the Federal Reserve’s policy meeting in June, according to the minutes released on Wednesday that drove U.S. stocks lower.
WSJ | Forecasters Predict Fed Will Do More to Spur Recovery
Amid mounting evidence that the U.S. recovery has slowed, more economists in The Wall Street Journal's monthly forecasting survey expect the Federal Reserve to take further action, even though most don't think such a move is warranted.
Bloomberg | Import Prices in U.S. Fell in June by Most Since 2008
Prices of goods imported into the U.S. decreased more than forecast in June as declining energy costs curbed inflation.

Daily Capitalist | Operation Twist Will Fail — Again
A fall in interest rates cannot grow the economy. All that it can produce is a misallocation of real savings. As a rule, an artificial lowering of interest rates (which is accompanied by the central bank’s monetary pumping — increasing commercial banks’ reserves) boosts the demand for lending; and this, as a rule, causes banks to expand credit “out of thin air.”


National Journal | Congressional Dems Get on Board With Obama's Tax Message
Congressional Democrats this week have quickly rallied behind President Obama’s call for extending reduced tax rates for people who earn less than $250,000 a year, as members, at least for the moment, shake off internal disagreements for the sake of unified messaging.

CATO | CBO on Income and Tax Distribution
The Washington establishment loves talking about the “distribution” of income and taxes. The CBO has issued a new report on the topic that will no doubt keep the discussion rolling on.
Minyanville | The Amazon Tax Is Coming! Will Tax-Free Online Shopping Be History?
In most states, you can cruise Amazon (AMZN) or any other e-commerce site and buy all that you want tax-free. This is thanks to a Supreme Court decision in 1992 called Quill vs. North Dakota, in which it was ruled that states can't collect taxes from vendors that don't have a physical presence in the state. 


USA Today | Greek unemployment rises again
Unemployment in Greece has risen yet again, reaching 22.5% in April this year, a massive jump from the 16.2% in the same month last year, and up from the 22% in March.
Market Watch | U.S. jobless claims drop 26,000 to 350,000
First-time filings for unemployment benefits fell last week to the lowest level in more than four years, but the decline likely stemmed from fewer auto-sector layoffs than normal and other onetime factors that could soon be reversed.
CNBC | Austerity Stifling Job Creation: Labor Organization
The International Labour Organization (ILO) called on European leaders to invest in their economies and make job creation their priority on Wednesday, as it released a new report which showed 3.5 million jobs had been lost since the 2008 financial crisis and a further 4.5 million were at risk.

Econ Comments & Analysis                                                                                            
WSJ | What I Learned Fighting the NLRB
In June 2011, the National Labor Relations Board began a case against Boeing for opening a nonunion plant in South Carolina. Six months later, the International Association of Machinists withdrew its charge that the company was engaging in unfair labor practices, and the NLRB dismissed its complaint.


WSJ | Portugal's Leader Won't Soften Austerity
Portuguese Prime Minister Pedro Passos Coelho vowed to push ahead with the government's plan to revamp the small country's economy despite calls from opposition lawmakers to renegotiate terms of its €78 billion ($97 billion) bailout.
Bloomberg | Samaras Pledges Greek Budget Reforms as Doubts Rise on Goals
Greece’s government will implement reforms to convince the European Union and the International Monetary Fund of the need for more time to reduce the budget deficit as officials confirmed the country will fall short of promised funds from the sale of state assets this year.
WSJ | Madrid Austerity Plan Boosted to $80 Billion
Spanish Prime Minister Mariano Rajoy announced new austerity measures Wednesday that should help Madrid cut its budget deficit by €65 billion ($80 billion) through to 2015, and warned the euro-zone's fourth-largest economy may not grow at all next year.
CNN Money | California bankruptcies are only the beginning
San Bernardino became the third California city to file for bankruptcy in the past few weeks ... but it won't be the last.

Econ Comments & Analysis                                                                                            
WSJ | As San Bernardino Goes . . .
After the California city of Stockton declared bankruptcy last month, politicians and credit raters assured investors that municipal bonds were still safe and that the city's insolvency presented no systemic risk. Does that script sound familiar? In reality, expensive labor agreements are threatening municipalities across the U.S., though the people who should be most concerned are taxpayers.
CBO | Status of Discretionary Appropriations: FY 2013 House
Estimates of discretionary budget authority and outlays for fiscal year 2013.

Think Markets | Hundred Years of Bailouts
After all that’s been said and written about financial crises, it is rare to come across useful insights.  Financing Failure. A Century of Bailouts by Vern McKinley documents a major continuity with past policy making. He shows that policies intended to prop up failing companies are nothing new—the same basic pattern has recurred time and again.