Tuesday, October 2, 2012

General Economics

News                                                                                                                             
Bloomberg | AIG Says Oversight Panel Weighing Systemic Risk Label
American International Group Inc. (AIG), the insurer that counts the U.S. as its top shareholder, said a government panel has told the company it is under consideration to be labeled a potential risk to the financial system, a designation that would bring increased federal oversight.
WSJ | Europe's Economic Outlook Worsens
Euro-zone manufacturing activity shrank for the 14th straight month in September and unemployment hit a fresh record in August, suggesting prospects are worsening for a quick return to growth in the currency bloc.
Washington Times | Economy Briefs: U.S. manufacturing up for 1st time in 4 months
U.S. manufacturing grew for the first time in four months, buoyed by a jump in new orders and more jobs. The increase is a hopeful sign that the economy may be improving after a weak stretch.
WSJ | World Bank Sees Long Crisis Effect
The European debt crisis could weigh on the world economy for years, forcing policy makers to rethink their approaches to restoring growth and boosting job creation, the World Bank's new chief economist said in an interview Monday.
Bloomberg | Wall Street Equities Traders Face Worst Year Since 2006
Wall Street banks’ equities-trading units aren’t getting much relief from the strongest stock rally since 2009, as sinking volume and already thin margins threaten to make their annual performance the worst in six years.
AOL Energy | Energy Policy Debate: Fossil Fuels vs. Renewables
Energy tax policy and regulation – what they are and what they should be – are the critical issues for the Presidential candidates, diverse energy experts agreed.

Econ Comments & Analysis                                                                                            
Daily Caller | America’s future: California or Texas?
It is oft said that if you want a glimpse of America’s future, look to California. The home to Hollywood has led the way in national trends from the first no-fault divorce law and the permissive Therapeutic Abortion Act of 1967 (both were signed into law by Ronald Reagan) to the great Proposition 13 property tax cut of 1978.
FOX Business | U.S. Says AIG Still Too Big Too Fail, May Get Heightened Oversight
Insurance giant AIG is one of the major nonbank financial companies being considered for greater regulation and oversight under the Dodd-Frank act.

Blogs                                                                                                                             
Heritage Foundation | 10 Ways the Obama Administration Is Hurting America’s Energy Economy
One of the few bright spots over the past few years in America’s economy has been energy production, but this has occurred largely in spite of this Administration’s energy policies, not because of them.
Economist | Growth without rebalancing is not enough
My colleague writes that the turmoil in the euro zone will persist until growth resumes. In particular, he sensibly notes that beleaguered treasuries will not be able to prevent sovereign debt burdens from spiraling out of control unless tax revenues rise.
Political Calculations | The Microrecession of 2012-Q2
As we've long forecast, the BEA's third estimate of GDP for the second quarter of 2012 has confirmed that the U.S. economy is at least experiencing a microrecession.
National Review | More Americans Dependent on Disability, Longer
While looking into the reasons for the drop in labor-force participation, I stumbled upon this report by Senator Coburn called “Social Security Disability Programs: Improving the Quality of Benefit Award Decisions.” There he notes that “economists estimate that Americans added to disability rolls could account for as much as a quarter of the two percent drop in the labor force participation rate since 2007.”

Health Care

News                                                                                                                             
NY Times | Doctor Visits Dropping, New Census Figures Show
Americans of working age are going to the doctor less frequently than they were 10 years ago, according to a new report by the Census Bureau.

Econ Comments & Analysis                                                                                            
Washington Times | The truth about Obamacare in Mississippi
When the Supreme Court ruled on the Obama administration’s health care reform law a few months ago, the court upheld the right of the states to decline Medicaid expansion.
Heritage Foundation | Why Medicare Premium Support Would Not Cost Future Beneficiaries $6,400 More
Opponents of Medicare premium support routinely charge that it would cost future retirees $6,400 more annually. In fact, this dollar amount is incorrect, and the charge is erroneous.

Blogs                                                                                                                             
National Review | Re: A Fantasy-Based Case for Obamacare
If you haven’t already done it, I recommend that you read the piece by AEI’s Jim Capretta in response to the NYT op-ed piece by his colleague J.  D. Kleinke, “The Conservative Case for Obamacare.”

Monetary

News                                                                                                                             
Washington Times | Bernanke makes case for Fed rate policies
Chairman Ben S. Bernanke offered a wide-ranging defense Monday of the Federal Reserve’s bold policies to stimulate the still-weak economy, saying the Fed needs to drive down borrowing rates because the economy isn’t growing fast enough to reduce high unemployment.
Bloomberg | Investors Doubt QE3 Lift to U.S. Discretionary Spending
Investors are proving skeptical that the Federal Reserve’s announcement of additional quantitative easing will get Americans to spend more.
Market Watch | Fed’s Bernanke takes on critics of QE3
Federal Reserve Board Chairman Ben Bernanke attempted Monday to answer some of the fierce criticism and public unease facing the Fed’s third round of bond purchases, known as quantitative easing or QE3.
Bloomberg | Volcker Says Fed Bond-Buying Has No Effect on Inflation
Paul Volcker, former chairman of the Federal Reserve, said the U.S. central bank’s latest bond-buying program isn’t creating inflationary pressure.

Econ Comments & Analysis                                                                                            
NY Sun | Bernanke Warns His Creator
“Bernanke warns congress to butt out of interest-rate policy discussions . . .” is the headline up on the Drudge Report following the speech today by the Federal Reserve’s chairman at Indiana.

Blogs                                                                                                                             
AEI | How low interest rates are affecting Social Security
The Social Security trust fund is an accounting entity with little economic meaning. However, the trust fund does have an important legal meaning: Once the fund is depleted, by law Social Security must cut benefits across the board to the level payable through payroll tax revenues alone, implying cuts of around 25 percent for new and existing beneficiaries alike.

Taxes

News                                                                                                                             
Politico | Feds: Taxpayers could cover layoff costs under sequester
Taxpayers would be on the hook for the costs of laying off defense industry workers if automatic, across-the-board budget cuts were to take effect Jan. 2.

Econ Comments & Analysis                                                                                            
WSJ | Europe's Same Old Austerity
Remember all that euro-babble before the French election about fiscal "austerity" harming growth? Well, meet the new austerity, same as the old austerity, which means higher taxes on the private economy and token discipline for the state. Growth is an afterthought.

Blogs                                                                                                                             
Library of Economics | Robert Murphy: A New Result on Carbon Taxes
Just about every public discussion of carbon tax swaps implicitly assumes that the distortions emanating from the tax code must decrease if the government begins taxing a negative externality (carbon emissions) and uses the revenue to reduce tax rates on productive activity. However, the analysis of the tax interaction effect shows that this assumption may be wrong.

Employment

News                                                                                                                             
Washington Times | Eurozone unemployment stuck at record 11.4 percent
Unemployment across the 17 countries that use the euro remained at its record high rate of 11.4 percent in August, official data showed Monday, renewing concerns that efforts to slash debts have sacrificed jobs.
CNN Money | Macy's to hire 80,000 holiday workers
Macy's is ramping up its hiring for this year's holiday shopping season, with plans to bring on 80,000 seasonal workers.
WSJ | Office Markets Stagnate on Soft Hiring
Companies added office space at a slow pace in the third quarter, leaving vacancies in U.S. office markets at high levels amid sluggish growth in the labor force.
Market Watch | U.S. job growth, manufacturing grow soft
Another month of ho-hum job growth and further signs of a manufacturing malaise are in this week’s economic forecast.

Blogs                                                                                                                             
WSJ | Middle-Skill Jobs Are Lagging
Many economists and policymakers recognize computers and related technologies render redundant jobs that can be automated. Lower-skilled workers, while not well paid, are protected because their jobs often need some form of personal contact. Highly skilled workers perform tasks computers can’t and possess the education to take advantage of and exploit technological advances.

Budget

News                                                                                                                             
CNN Money | Economists: Fiscal cliff a serious threat, but unlikely
Getting economists to agree on almost anything is tough. But on the subject of the fiscal cliff, a survey by CNNMoney found an almost unanimous consensus.
Market Watch | Euro crisis could turn on these key October dates
If you thought September was eventful, October offers plenty more opportunities for European officials to either soothe or aggravate the euro zone’s long-running debt crisis.

Econ Comments & Analysis                                                                                            
WSJ | Europe's Same Old Austerity
Remember all that euro-babble before the French election about fiscal "austerity" harming growth? Well, meet the new austerity, same as the old austerity, which means higher taxes on the private economy and token discipline for the state. Growth is an afterthought.
Washington Times | Uncle Sam’s fiscal year disaster
The government’s new fiscal year starts on October 1. This year marks the fourth consecutive time the deficit has surpassed $1 trillion. A fiscal year is to accountants what the calendar year is to the rest of us: a time to take stock of what we need to do better. Where Washington is concerned, it’s time for some New Year’s resolutions.