Friday, September 14, 2012

General Economics

Bloomberg | U.S. Industrial Production Fell in August
Industrial production in the U.S. shrank in August by the most since March 2009, reinforcing concern that a pillar of the expansion is faltering.
WSJ | Japan Cuts Economic Assessment
The Japanese government cut its assessment of the economy for the second straight month in September, as a slowdown in key export markets weighed on domestic demand and production.
Bloomberg | Retail Sales in U.S. Rose 0.9% in August on Auto Demand
Retail sales in the U.S. increased in August by the most in six months, easing concern about a larger pullback in the biggest part of the economy.
CNN Money | Who are the unbanked?
Nearly 10 million households across the country are living without a bank account. And in some states, these residents make up a big slice of the population.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Consumer Protection Financial Bureau's Overinflated Self-Image
Richard Cordray, Director of the Consumer Financial Protection Bureau, will testify today in front of the Senate Banking Committee about the CFPB's most recent semi-annual report.
Investors | Obamanomics: The Results Are In
If President Obama had run in 2008 promising to cut family incomes, shove more people into poverty, create greater inequality and make people more dependent on the federal government — and that black Americans would fare worse than everyone else — would he have won that election?
NBER | Did Capital Requirements and Fair Value Accounting Spark Fire Sales in Distressed Mortgage-Backed Securities?
Much attention has been paid to the large decreases in value of non-agency residential mortgage-backed securities (RMBS) during the financial crisis. Many observers have argued that the fall in prices was partly driven by decreased liquidity and fire sales.
CATO | Book Review: What Money Can't Buy: The Moral Limits of Markets
Michael Sandel knows something about money. After all, the Harvard political philosopher exchanges his ideas for money—a lot of money, in fact. Now Sandel has written a book (available for $27) about what things should not be for sale.

WSJ | World Bank Report: Less Complex Regulation Is Best for Developing Nations
Less may be more when it comes to financial regulation, especially in developing countries, according to a new report on from the World Bank, released to coincide with the anniversary of the September 2008 collapse of Lehman Brothers.
AEI | Blessed are the poor in…
It seems downright peculiar to have an official income-based measure of poverty that isn’t affected at all by several of the largest anti-poverty programs. And it seems peculiar to base our official measure of poverty on income, when the fundamental concept of poverty is really about having a shortfall of consumption.

Health Care

National Journal | What's Behind the Slowdown in Health Care Costs?
Former President Clinton delved into the subject at his convention speech in Charlotte, N.C., suggesting that President Obama's health care law produced the slower-than-average growth in health care spending in 2010 and 2011.

Heritage Foundation | Medicare Reform Debate: What Really Works in Health Care Competition
Of course, Medicare has been shown to be “efficient” enough to lose more money to fraud than private insurance. Peter Suderman of Reason magazine recently pointed out a number of studies suggesting that the private sector can effectively control costs in health care.


Washington Times | Fed to spend $40 billion a month on bond purchases
The Federal Reserve unleashed a series of aggressive actions Thursday intended to stimulate the still-weak economy by making it cheaper for consumers and businesses to borrow and spend.
Market Watch | Fed to launch QE3 by buying mortgage securities
The Federal Reserve, worried that improvement in the unemployment rate has stalled, announced a third round of bond purchases on Thursday in an effort to bring down long-term interest rates and spur economic growth.

Econ Comments & Analysis                                                                                            
National Journal | Fed to Politicians: We’re Not Swayed
Federal Reserve Chairman Ben Bernanke doesn’t care about Capitol Hill or campaign-trail bullies. He has said repeatedly as the central bank has come under a political magnifying glass this year: The Fed bases its decisions on economics, not politics.
Washington Post | A different kind of inflation problem
Fortunately, not everything is up to date in Kansas City. Esther George, president of the regional Federal Reserve Bank here, is refreshingly retrograde regarding what less circumspect people welcome as the modernizing of the nation’s central bank into a central economic planner.
Market Watch | FDIC chief: more lending key to economy
The chief of a key bank regulator on Friday argued that hikes in lending by financial institutions - not reducing loan-loss reserves -- is a necessary condition for growing the economy.
WSJ | Bernanke Unbounded
So much for fears that the Federal Reserve might disappoint Wall Street. Chairman Ben Bernanke and his music men at the Fed's Open Market Committee put on their party hats Thursday and unleashed an unlimited program of monetary easing. The move exceeded even Wall Street's expectations, but whether it will help the real economy in the long term is doubtful.
Heritage Foundation | Bernanke’s Quantitative Easing: Wrong Medicine for an Ailing Economy
The Federal Reserve’s Open Market Committee announced today that it would pursue $40 billion in additional monthly stimulus in the form of quantitative easing.

WSJ | A Look Inside the Fed’s Balance Sheet
The Federal Reserve‘s declaration of a new bond-buying program will begin bulking back of a balance sheet that has been basically flat for more than a year.
Economist | The power of positive thinking
Earlier this year, the Federal Reserve reached a crossroads. It had lowered short-term interest rates to zero and promised to keep them there until 2013, and then 2014. It had undertaken multiple rounds of bond purchases to lower long-term interest rates. Yet the recovery was actually losing steam; unemployment had stopped falling.
Heritage Foundation | Energy Department Touts Solar Power That Generates 0.14% of Electricity
The U.S. Department of Energy this week touted the growth of solar power, complete with an impressive chart that boasts, “Solar Generation Has a Bright Future.” Yet a closer look at solar’s overall role reveals that it represented just 0.14 percent of the total electric power generated and consumed in June.
Daily Capitalist | The Fed Panicked
The bottom line is that the Fed panicked. It is extraordinary that the Fed would announce an open-ended “we’ll print as much as it takes, as long as it takes” policy. Chairman Bernanke is sending a signal to the markets and to government that the economy is bad and getting worse and that the Fed will do its part as everyone expects them to do.
WSJ | Fed Pushes Out Rate-Hike Expectations, Lowers 2012 Growth View
Federal Reserve policy makers pushed out expectations of the first hike in short-term rates, and lowered their expectations for growth this year in quarterly forecasts released Thursday.


CNBC | Tackling the Holy Grail of Tax Reform: Loopholes
The two political parties and their presidential standard bearers are moving inexorably toward an acrimonious public debate next month over how to pay for tax reform, which will be a major issue during the next session of Congress no matter who wins the White House or controls Congress after November.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Corporate Tax: Republicans Versus Democrats
The practice of U.S. corporations keeping hundreds of billions of dollars in profits overseas to escape onerous American taxes has become a political issue in this presidential election. Both candidates have expressed concern and proposed changes to the current tax system that include reducing corporate income tax and ending various deductions. There the similarities end, however.
CRS | The Corporate Income Tax System: Overview and Options for Reform
Many economists and policymakers believe that the U.S. corporate tax system is in need of reform. There is, however, disagreement over why the corporate tax system needs to be reformed, and what specific policy measures should be included in a reform.

Tax Foundation | Journalists Too Quick to Conclude There is No Tradeoff between Taxes and Growth
The OECD finds a hierarchy of taxes in terms of damage done to the economy: corporate income taxes are most harmful, followed by personal income taxes, then consumption, and property taxes.


WSJ | Fed Acts to Fix Jobs Market
The Federal Reserve, frustrated by persistently high U.S. unemployment and the torpid recovery, launched an aggressive program to spur the economy through open-ended commitments to buy mortgage-backed securities and a promise to keep interest rates low for years.
Market Watch | Fed: Unemployment won't reach 7% until 2014
The Federal Reserve's forecast for unemployment assumes new policy basically won't do much for two years.
CNN Money | The case for outsourcing jobs
Outsourcing has become a dirty word in this election cycle. But most economists say sending jobs overseas isn't necessarily a bad thing.


Washington Times | House passes stopgap bill at Democrats’ spending level
After fighting all year for a lower spending number, House Republicans reversed course Thursday and passed a bill funding the government at the level Democrats had pushed for all along. The vote that averts the kind of government-shutdown showdowns that have become increasingly frequent.
WSJ | IMF Official Sees Need for More Greek Aid
Greece will need additional funding from its creditors to overcome its budget gap, the country's representative on the International Monetary Fund's board said Thursday.
Market Watch | Budget deficit crosses $1 trillion mark
The U.S. government's budget deficit for fiscal 2012 crossed the $1 trillion mark in August, the Treasury Department said on Thursday, to stand at $1.16 trillion.
Washington Times | Hill panel gets earful from small business about ‘fiscal cliff’
With the so-called “fiscal cliff” quickly approaching at the end of the year, small-business owners on Thursday told a House subcommittee that the Obama administration’s tax proposal would hurt the nation’s leading job providers and prevent them from hiring or increasing wages and benefits.
Bloomberg | Spain’s Aid Dilemma in Focus at Euro Crisis Meeting
European finance ministers squared off over a possible aid program for Spain, with creditors unwilling to commit until the government takes additional steps to boost competitiveness and rid the economy of debt.

Econ Comments & Analysis                                                                                            
Washington Times | There are only two ways to cut budget deficits
The core of President Obama’s campaign is built upon the fallacious idea that Mitt Romney’s plan to get the economy growing again will take us back to the policies that caused the Great Recession.
Washington Times | Obama’s runaway red ink
The national debt vaulted past the $16 trillion mark two weeks ago, but there’s no sign of a slowdown. The federal government is entering the fourth straight year in which it has spent $1 trillion more than it collected in revenue. An imbalance so large can’t continue without threatening America’s future.

WSJ | Some Bright Spots, but U.S. Cities Still Face Fiscal Strain-Survey
America’s cities are projecting a sixth straight year of revenue declines in 2012, but more financial officers feel their municipalities are better able to meet their fiscal needs, according to a survey released Thursday by the National League of Cities.
Political Calculations | Summer 2012: To Whom Does the U.S. Government Owe Money?
Although the United States' total public debt outstanding has now exceeded 16 trillion dollars, at least as of 31 August 2012, the relative percentages for the major holders of all the debt issued by the U.S. government shown above are likely unchanged.