Monday, September 24, 2012

General Economics

News                                                                                                                             
Market Watch | Wait to hit stimulus brakes: business economists
Economists who work for businesses and banks believe taxes should be raised and spending should be cut to reduce the government’s budget deficit — just not next year.
Market Watch | Big bank derivatives trading drops: report
The amount of derivatives held by insured U.S. banks and savings institutions fell for the fourth consecutive quarter, according to the Office of the Comptroller of the Currency in its second quarter report Friday.
CNN Money | German businesses remain gloomy
Faced with a persistent debt crisis in Europe, German businesses see few reasons for optimism.

Econ Comments & Analysis                                                                                            
NBER | Policy Intervention in Debt Renegotiation: Evidence from the Home Affordable Modification Program
The main rationale for policy intervention in debt renegotiation is to enhance such activity when foreclosures are perceived to be inefficiently high.
Real Clear Markets | It's Time to Regulate the Regulators
For the past 30 years, first under President Reagan's Executive Order 12291, and then succeeded by President Clinton's Executive Order 12866, U.S. government executive branch agencies have been required to prepare a regulatory impact analysis, including a cost-benefit analysis, for all major federal administrative rules ("regulations") having an annual effect on the economy of $100 million or more, or those having an adverse effect on the economy or a federal agency action.
Minyanville | The Recession That Won't End
Greece is near the end of its tenure in the European Monetary Union (EMU).  Deposits continue to flee the country.  Worse, 20% of Greek bank loans are now non-performing (that number is only 9.5% in Spain, a record high there and causing increased concern).
WSJ | The Mess He Inherited
A full four years after the collapse of Lehman Brothers, the 2008 financial crisis continues to shape American politics. How else to explain polls showing President Obama with an edge over Mitt Romney on economic issues, despite high unemployment and stagnant incomes?
Washington Post | The American Dream’s empty promise
It’s time to retire the American Dream — or at least give it a long vacation. We ought to drop it from our national conversation.

Blogs                                                                                                                             
Calculated Risk | Unofficial Problem Bank list declines to 878 Institutions
As anticipated, the OCC released its actions through mid-August 2012 that led to many changes in the Unofficial Problem Bank List.
Greg Mankiw | Mankiw vs. DeLong and Krugman on the CEA’s Real GDP Forecasts in Early 2009: What Might a Time Series Econometrician Have Said?
In early 2009, the incoming Obama administration’s Council of Economic Advisers predicted real GDP would rebound strongly from recession levels.
Calculated Risk | Schedule for Week of Sept 23rd
Other key reports include the third estimate of Q2 GDP on Thursday, and August Personal Income and Spending on Friday.
National Review | 55 Percent of americans Say Government Has Too Much Influence Over Our Lives
A new Reason Foundation poll finds that a majority of people believe that the government has too much influence on their lives (so do I).
John Taylor | Regulatory Expansion Versus Economic Expansion in Two Recoveries
Much can be learned by comparing the very weak recovery from the 2007-2009 recession with the very strong recovery from the 1981-82 recession.

Health Care

News                                                                                                                             
NY Times | Liking It or Not, States Prepare for Health Law
Like many Republican governors, Jan Brewer of Arizona is a stinging critic of President Obama’s health care law. When the Supreme Court upheld it in June, she called the ruling “an overreaching and unaffordable assault on states’ rights and individual liberty.”
USA Today | Health care law's impact on businesses varies
Companies specializing in driving down spending on health care, whether through electronic records, preventive care or consolidating services, are turning out to be the biggest winners from the 2010 health care law.
NY Times | Medicare Bills Rise as Records Turn Electronic
When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.

Blogs                                                                                                                             
Heritage Foundation | The Medicare Roundup: Setting the Record Straight
In recent weeks, liberal politicians, editorialists, and policy analysts have vigorously attacked reform of Medicare based on a defined contribution financing. In fact, this approach to reforming Medicare has a long bipartisan tradition, going back to the 1980s and Representatives Richard Gephardt (D–MO) and David Stockman (R–MI). In fact, much of this criticism is distorted, misleading, or just plain wrong.

Monetary

Econ Comments & Analysis                                                                                            
Real Clear Markets | Monetary Policy Is Now An All-Too-Real Depressant
By June 2003, the average 30-year fixed mortgage rate had fallen to a new low of about 5.25%. The pace of housing construction had risen to a rate of about 1.6 million new units annually, leading to overall employment in the construction industry of about 6.7 million workers.
Forbes | Bernanke Administers Another Cruel Dose Of Financial Morphine With QE3
After nearly four years of ultra-low interest rates and a tripling of the Federal Reserve’s balance sheet—but with little progress on reducing the unemployment rate— the Bernanke Fed has once again come to the rescue with another dose of financial morphine.

Blogs                                                                                                                             
WSJ | Fed Action May Widen Wealth Gap
One unintended consequence of another round of quantitative easing by the Federal Reserve is that it will likely widen the gap in the consumer sector between the recovered-from-recession and the still-struggling.
CATO | ‘Has the Fed Been a Failure?’
That is the provocative title of the lead paper in the prestigious economics publication, the Journal of Macroeconomics. It is authored by George Selgin, William D. Lastrapes, and Lawrence H. White. (Selgin and White are professors, Cato scholars, and many-time participants in the annual Cato monetary conference).
Free Banking | The real problem today is not so much nominal
Scott Sumner told us in September 2009 that "the real problem was nominal," that is, the recession and its high unemployment were primarily due to an unsatisfied excess demand for money (combined with real effects on debt burdens of nominal income being below its previous path).

Taxes

News                                                                                                                             
Washington Times | Collecting taxes too costly, unfair, Web seller argues
In a battle over who should collect online sales tax, Overstock.com’s chief said Thursday that Internet stores have an inherent right to collect fewer taxes than traditional retailers because they take up less space and don’t use such city services as roads, schools, police and fire departments.
USA Today | Medical device makers fear tax
Even as the new health care law adds millions of insured customers to the paying pool, medical device manufacturers say a tax on their product could cost them billions.

Blogs                                                                                                                             
FOX Business | Taxing Millionaires at 100% Wouldn't Be Enough to Keep U.S. Running
According to calculations by FOX News analysts James Farrell and Mitch Kweit, taxing millionaires at 100% would now run the federal government for two and a half to three months.
Library of Economics | Can Progressive Taxation Survive Exit?
 If citizens and firms could relocate easily, governments that offered low value for the tax dollar would lose citizens, and those that offered good value would gain citizens.  
Neighborhood Effects | Do Taxes Affect Economic Growth?
The CRS has a new report by Thomas Hungerford that has attracted some attention. It seems to suggest that taxes do not affect economic growth. To be precise, it seems to suggest that the top marginal tax rates of two taxes in particular—the personal income tax rate and the capital gains tax rate—have little statistically significant effect on economic growth.
Tax Foundation | Sensible Sales Tax Treatment of "Deal of the Day" Vouchers Approved, Over Four States' Objections
While “deal of the day” vouchers from companies like Groupon can get you into a pricey art exhibit or let you eat at your favorite steak house for half the cost, they’ve caused some headaches in the tax world.

Employment

News                                                                                                                             
Daily Finance | Walmart to Hire More Than 50,000 for U.S. Holiday Rush
Wal-Mart Stores (WMT) plans to hire more than 50,000 seasonal employees to work at its Walmart stores in the United States, slightly more than it did last year, as it gets ready for the winter holiday season, its busiest time of year.
WSJ | Firms Miss Out on Jobs Push
A new federal program that lets states give companies financial incentives for hiring jobless people hasn't gained traction, illustrating the complications of government attempts to tackle unemployment.

Econ Comments & Analysis                                                                                            
Washington Times | Uncertainty and unemployment
Amalaise has fallen over the economy. At a time when we should have fully recovered from the Great Recession, we’re still 4 million jobs short of where we were just a few years ago. Doubts about economic policy, particularly forthcoming changes in taxes, has turned this “recovery” into a job loser.
WSJ | Middle-Class Job Killer
President Obama is campaigning for re-election as a better protector of middle-class jobs than Mitt Romney, and somehow he seems to be getting away with it. Tell that to the miners and others employed in the coal industry, a middle-class job if there ever was one, and the target of relentless regulatory assault over the last four years.
Forbes | The Economy Crushing Collapse Of Startup Jobs
Everyone in Washington loves entrepreneurs. Or so they say. Supporting entrepreneurs is about as controversial as fighting poverty and honoring the troops. But in this election, especially with jobs as the top concern, voters will be looking at results, not rhetoric.
Washington Times | Unions stack the deck against job creation
According to the U.S. Department of Labor’s Bureau of Labor Statistics, just 15 percent of construction workers are either union members or covered by union contract. PLAs effectively shut out 85 percent of the badly bleeding construction industry.

Blogs                                                                                                                             
WSJ | Number of the Week: Government Workers Stay Put Longer
7.8: Median number of years that public workers have been employed by the government as of January 2012.
WSJ | Fiscal Cliff Not Leading to Layoffs — Yet
The looming fiscal cliff could be a disaster for the U.S. economy, but it hasn’t been so far — at least not when it comes to jobs.
FOX Business | RBS Raises Job-Cut Target to 3,800
Government-owned banking giant Royal Bank of Scotland (RBS: 8.80, -0.12, -1.29%) hiked its job-cut target on Monday to 3,800 as the financial-services industry continues to slash costs amid difficult market conditions.

Budget

News                                                                                                                             
WSJ | Borrowing Weighs on U.K. Debt Goals
The British government, which looks increasingly likely to overshoot its borrowing target as it struggles with a slumping economy, is stepping up efforts to tout the U.K. as a good place to invest.
Bloomberg | Fed Recovery Doubts Spur Investor Bid for Treasuries
U.S. investors are buying Treasuries at a faster pace than foreigners for the first time since 2010, aiding the government in its efforts to borrow as total public debt outstanding rises above $16 trillion.
WSJ | Pension Crisis Looms Despite Cuts
Almost every state in the U.S. has made cuts to its public-employee pensions, seeking to dig out from the economic downturn, but so far the measures have fallen well short of bridging a nearly $1 trillion funding gap.
WSJ | Senate Passes $500 Billion Funding Bill
In their last act in Washington before the Nov. 6 elections, Senate lawmakers voted to approve a roughly $500 billion bill to fund the federal government for six months from Oct. 1.
CNN Money | Romney's balanced budget: Tall order
Mitt Romney says he would balance the federal budget by the end of his second term. So what would it take? In short, a lot.
National Journal | Senate Approves Continuing Resolution
Forced to vote in the middle of the night due to procedural hurdles, the Senate early on Saturday morning passed a continuing resolution, 62-30, to keep the government funded through late March at an annual rate of $1.047 trillion. President Obama is expected to sign the stopgap bill shortly.

Econ Comments & Analysis                                                                                            
WSJ | How Canada Saved Its Bacon
Former Canadian Prime Minister Paul Martin has a stern warning for the U.S. political class: Get real about the gap between federal revenues and spending, or get ready for disaster.
Forbes | Rick Ungar Is Wrong: Obama Is The Biggest Spender In World History
On May 24, 2012, Rick Ungar told the readers at Forbes.com that President Barack Obama “is the smallest government spender since Eisenhower.”  “[O]ur president has actually been tighter with a buck than any United States president since Dwight D. Eisenhower,” Ungar insisted.

Blogs                                                                                                                             
Market Watch | Fiscal cliff would hit poor, rich the most
According to analysis from Goldman Sachs, the average hit to disposable incomes would be 4% but the poor and the rich would see the biggest impact on income.