Thursday, September 20, 2012

General Economics

WSJ | Euro-Zone Business Sees Steepening Decline
Business activity in the euro zone declined at a faster pace in September, according to a survey of purchasing managers, increasing the likelihood that the currency area entered recession in the third quarter.
Bloomberg | Euro-Area Services, Manufacturing Slump to 39-Month Low: Economy
Euro-area services and manufacturing output fell to a 39-month low in September as European leaders struggled to reverse the single-currency bloc’s slide into recession.
Market Watch | September U.S. flash manufacturing stays at 51.5
Markit said its U.S. flash manufacturing purchasing managers index remained at 51.5 in September, as a slight acceleration in new orders and employment were balanced by a reduction in output.
Washington Times | U.S. home sales jump to highest since May 2010
U.S. sales of previously occupied homes jumped in August to the highest level in more than two years, adding momentum to the housing recovery.
National Journal | Smaller COLA on the Horizon for Federal Retirees
Federal retirees again are on track to receive a small annual cost-of-living adjustment boost in 2013, but it will probably be a lot smaller than this year’s increase.

Econ Comments & Analysis                                                                                            
Heritage Foundation | Obama’s End Run on Welfare Reform, Part One: Understanding Workfare
Congress enacted welfare reform legislation in 1996. This reform replaced the Aid to Families with Dependent Children (AFDC) program with a new program entitled Temporary Assistance for Needy Families (TANF). The immediate effects of welfare reform were striking.
AEI | Trade between the US and China
Trade between the US and China (graphic)
Politico | Still time to save small businesses
Our nation has a defining choice to make, and time is short. The Pentagon is bracing for devastating cuts through sequestration. For the sake of national security, jobs and the next generation, we must stop this in its tracks. There is still time to fix it — if we show leadership and make tough choices.
WSJ | Welfare Reform as We Knew It
It's hard to remember now, but this summer Mitt Romney opened a useful debate about "dependency"—concerning President Obama's regulation to rewrite the 1996 welfare reform. Democrats deny any such intent, but as early as this week the House plans to hold a vote to override the new rule.
Washington Times | Obama’s illegal scheme to end welfare work requirements
The Obama administration refuses to give up its backdoor and illegal pursuit to undermine the welfare work requirements. Not only is it claiming authority it doesn’t have and that prior administrations have explicitly stated does not exist, but the nonpartisan Government Accountability Office (GAO) has confirmed that the process by which the administration tried to claim this authority is illegal as well.
Forbes | Moody's May Rate Treasuries Aaa, But Central Planning Scores An F
Federal indebtedness recently surpassed $16 trillion. Moody’s quickly reiterated that America’s debt rating could be cut if Washington fails to navigate the approaching fiscal rapids.

Heritage Foundation | Food Stamp Participation Doubled Among Able-Bodied Adults After Obama Suspended Work Requirement
A new report from the Congressional Research Service (CRS) confirms that food stamp participation doubled among able-bodied adults after the Obama Administration suspended the program’s work requirements.
Economist | The opportunity to take responsibility
The citation of "the 47%" isn't that odd for a Republican; it became something of a standard GOP response to Occupy Wall Street's "we are the 99%" slogan. It is startling to hear the figure placed in this context, however, particularly by a major party candidate for president just weeks before an election.
Heritage Foundation | “Atlas Shrugged: Part II” Celebrates Free Market, Smaller Government
With mounting concern over America’s welfare state and growing dependence on government, the producers of “Atlas Shrugged: Part II” hope the timing of their movie brings clarity to the debate. It makes its big-screen debut on Oct. 12, less than a month before Election Day.
Political Calculations | Visualizing Income Inequality Since 1994
How is income inequality changing over time?
Heritage Foundation | The Right Rhetoric: Free Trade Leads to Jobs and Growth
A new article published yesterday in The Wall Street Journal, featuring new research by The Heritage Foundation, tries to slice through the rhetoric on trade policy during a week when the Obama Administration announced a new trade suit against China.
WSJ | Global Trade Slowdown
Data gathered by the CPB Netherlands Bureau for Economic Policy Analysis show that global trade volumes grew an unusually low 2.6% in the second quarter compared with a year earlier; the average pace over the past 20 years has been 6.1%.

Health Care

CNN Money | Two million more expected to pay penalty under Obamacare
Congress' official scorekeeper said Wednesday that roughly two million more Americans will pay penalties under President Obama's health care law for lacking insurance than had previously been estimated.

Econ Comments & Analysis                                                                                            
CBO | Payments of Penalties for Being Uninsured Under the Affordable Care Act
Beginning in 2014, the Affordable Care Act (comprising Public Law 111-148 and the health care provisions of P.L. 111-152) requires most legal residents of the United States to either obtain health insurance or pay a penalty tax.
Real Clear Markets | The Emerging Obamacare Truth Is Disarray
A remarkable truth about Obamacare is how many aspects of its initial programs and initiatives are already in disarray.
Politico | Medicare Advantage shrugs off cuts
The Obama administration is declaring a small victory on Medicare: The private Medicare Advantage plans haven’t been hurt by “Obamacare” after all.
CRS | Medical Loss Ratio Requirements Under the Patient Protection and Affordable Care Act (ACA): Issues for Congress
The 2010 Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) requires certain health insurers to provide rebates to their customers for each year that the insurers do not meet a set financial target called a medical loss ratio (MLR).

Tax Foundation | ObamaCare "Penalty Tax" Now Estimated to Hit 6 Million Mostly Low- and Middle-Income Americans
The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) have updated their estimates of how many people will have to pay the “penalty tax” for not complying with the ObamaCare individual mandate to buy health insurance


WSJ | Central Banks Flex Muscles
Massive injections of stimulus into financial markets by the world's largest central banks are creating a domino effect around the globe, prompting governments from Brazil to Turkey to take steps to keep easy money from flooding in and driving up their currencies.
CNN Money | Federal Reserve policies favor the rich
The Federal Reserve's most recent stimulus is expected to boost homes prices and the stock market, but what if you're too poor to invest in either?
Market Watch | Fed's QE3 plan built on Japan lessons: Rosengren
The aggressive nature of the Federal Reserve's third round of asset purchases, or QE3, was designed so that the U.S. does not suffer a prolonged economic stagnation like Japan, said Eric Rosengren, the president of the Boston Fed Bank on Thursday.
Bloomberg | Euro-Area Services, Manufacturing Slump to 39-Month Low: Economy
Euro-area services and manufacturing output fell to a 39-month low in September as European leaders struggled to reverse the single-currency bloc’s slide into recession.

Econ Comments & Analysis                                                                                            
Market Watch | Is inflation back from the dead?
One of the standout features of the financial crisis has been that inflation has collapsed. Over the past few years, even as the Federal Reserve has pumped hundreds of billions of dollars into the economy to get it moving, prices and wages have barely moved, and the bond market has boomed.
Market Watch | Bullard says Fed policy 'broadly appropriate': FT
Current U.S. monetary policy "remains broadly appropriate," wrote the president of the Federal Reserve Bank of St Louis, James Bullard, in the Financial Times on Thursday.
NBER | An Empirical Analysis of the Fed's Term Auction Facility
The U.S. Federal Reserve used the Term Auction Facility (TAF) to provide term funding to eligible depository institutions from December 2007 to March 2010.

Economist | The global output gap
The image at right is a graphic taken from Bloomberg's markets page, which shows four indexes of commodity prices. There are obviously a lot of things influencing commodity prices, from drought in America to China's growth prospects, but what pops out in this image is the overwhelming influence of perceptions of the euro-area crisis.
WSJ | Kansas City Fed’s George Opposes Bond Buying
Kansas City Federal Reserve Bank President Esther George Tuesday said she opposed the central bank’s latest bond-buying effort, saying it risks higher inflation and distortions in the market, the Daily Oklahoman reported Wednesday on its website.
John Taylor | The Eroding Effect of QE3 on Mortgage Spreads
It has been a week now since the Fed’s QE3 announcement that it would be again buying mortgage backed securities (MBS). There was an initial decline in the mortgage spread on the announcement but, as often happens, that initial impact seems to have been eroding away day by day.


Econ Comments & Analysis                                                                                            
Washington Times | Your looming tax hike
Every American’s paycheck will be smaller on Jan. 1 — the only question is by how much. The payroll-tax break put in place two years ago will expire Dec. 31, and no one in Washington wants to extend it again. On top of this, all income tax rates will rise unless Congress and President Obama act.
Forbes | The Bush Tax Rates Are Too High To Move This Boulder
Economies are like huge boulders. Once an economy is at a standstill, it is like a massive boulder at rest. To start that boulder rolling again, it takes an enormous amount of force.

FOX Business | Taxpayers Finally Picking Up Obama's 4-Year Tab
How many times have you heard somebody say Congress should do something about this or that problem? Maybe you've even said it yourself.
Tax Foundation | Some Nonpayers Do Pay Income Tax
I wanted to follow up on my previous post about different ways to define a "nonpayer" with some data from the IRS.


Market Watch | U.S. jobless claims show little improvement
Slighter fewer Americans applied for unemployment benefits last week, but there appeared to be no improvement in hiring trends across the nation.

Econ Comments & Analysis                                                                                            
WSJ | Hard Unemployment Truths About 'Soft' Skills
At a recent dinner in Washington, D.C., with representatives from major American manufacturing companies, I listened as the talk turned to how hard it is to find qualified applicants for jobs.

Library of Economics | Long-Run Unemployment at Low Inflation: Dourado vs. Akerlof-Dickens-Perry
Around 40 percent of the unemployed have been unemployed for six months or longer. And the mean duration of unemployment is even longer, around 40 weeks, which means that the distribution has a high-duration tail.


National Journal | Wanted: 'Adult' Leaders to Fend Off Sequestration
The inability of lawmakers to head off the looming threat of automatic budget cuts is a crisis that already is harming agencies and cries out for “adult” leaders to put patriotism over party, a prestigious panel of ex-government officials said on Monday.

Econ Comments & Analysis                                                                                            
Daily Caller | Putting the national debt in perspective
In January 1984, when the Grace Commission issued its report, its estimate that the national debt would exceed $13,000,000,000,000 in 2000 unless action was taken to reduce wasteful spending was loudly and roundly dismissed as being outrageously pessimistic and extremely unlikely. The projection was not inaccurate; it was just premature.

Heritage Foundation | Obama: Don’t Worry About $16 Trillion Debt
Excuse me? On September 4, the U.S. national debt hit the $16 trillion mark. We now owe more on the national debt than the entire U.S. economy produced in goods and services in all of 2012. Per U.S. taxpayer, that massive level of debt stands at over $111,000 and continues rising as you read this. The average American is earning about $51,000 in income in 2012.