Monday, October 15, 2012

General Economics

News                                                                                                                             
WSJ | Euro-Zone Factory Output Rises Again
Industrial production in the 17 countries that share the euro rose for the second straight month in August, driven by a surge in output of durable consumer goods that suggests southern European economies may be on the mend.
Market Watch | Retail sales jump 1.1% in September
U.S. retail sales rose a seasonally adjusted 1.1% in September, as spending rose for every segment except department stores, the Commerce Department said Monday.
Bloomberg | Global Economy Distress 3.0 Looms as Emerging Markets Fal
The global economy is facing its third major brake on expansion in five years as emerging markets slow from China to Brazil, provoking debate about how much policy makers should respond.
WSJ | OECD Chief: ECB Credibility at Risk
The delay in actually deploying the European Central Bank's new backstop offer for troubled euro-zone nations is eroding confidence that the so-called "bazooka" will work, the head of the Organization for Economic Cooperation and Development warned Friday.
Market Watch | Oct. Empire State index contracts for third month
The Empire State manufacturing index increased slightly but remained in negative territory for the third straight month, the New York Federal Reserve Bank said Monday.
Bloomberg | Business Economists Reduce U.S. GDP Growth Forecasts
Business economists cut their U.S. growth outlook for next year to 2.4 percent as companies and consumers restrain spending, a survey released today showed.
CNN Money | A new housing boom
The long-battered housing market is finally starting to get back on its feet. But some experts believe it could soon become another housing boom.

Econ Comments & Analysis                                                                                            
Washington Times | Obamanomics hasn’t worked
Sen. Claire McCaskill, Missouri Democrat, once told Fox News that President Obama’s $833 billion stimulus was “wildly successful.” As the Election Day draws near, it’s important to have a clear view of the impact of the president’s major legislative achievement second only to Obamacare.
WSJ | The Retreat of Globalization
The popular wisdom has it that trade and investment continue apace across national borders. After all, globalization—connecting capital and labor, producers and consumers, emerging economies and their more mature counterparts—has led the world-wide surge in economic activity for the last three decades.
Washington Post | The BRIC rescue that wasn’t
The acronym stands for Brazil-Russia-India-China. Coined by economist Jim O’Neill of Goldman Sachs, it symbolizes the rise of once-poor countries (“emerging markets”) into economic powerhouses.
NY Times | That Blurry Line Between Makers and Takers
Mitt Romney has apologized for his depiction of 47 percent of America as wealth takers rather than wealth makers. But his blunder touched inadvertently on some discomforting truths about the importance of politics in income distribution in the United States.
Minyanville | Just How Much Should We Trust the Congressional Budget Office?
In a hyper-polarized political world, the Congressional Budget Office, or CBO, has become the go-to source for politicians whenever they want to argue their cases, because of its reputation of non-partisanship, which instantly confers credibility.
FOX Business | Study: Public Pensions Underfunded by $1.2B
The largest 100 public pension funds have around $1.2 trillion of unfunded liabilities, about $300 billion above the nearly $900 billion they reported themselves, according to a new actuarial study to be released on Monday.
NBER | The Distributional Effects of the Social Security Windfall Elimination Provision
Millions of federal, state and local government employees have lifetime earnings that are divided between employment that is covered by the Social Security system and employment that is not covered.
CATO | The Keynesian Path to Fiscal Irresponsibility
The basic idea behind Keynesian policy for achieving stable economic growth is straightforward, and superficially plausible. When the economy is in a downturn with underutilized resources, Keynesians believe the federal government should increase aggregate demand by increasing deficit spending through some combination of more spending and lower taxes.

Blogs                                                                                                                             
Calculated Risk | Schedule for Week of Oct 14th
This will be a very busy week for economic data. There are three key housing reports to be released this week: October homebuilder confidence on Tuesday, September housing starts on Wednesday, and September existing home sales on Friday.
Political Calculations | U.S. and China Trade Growth Hits Zero
Looking at the just published trade data between the U.S. and China, it would appear that both the U.S. and China have fallen into recession. Both nations are now showing near-zero annualized growth rates for the value of goods and services traded between them in August 2012
Calculated Risk | Unofficial Problem Bank list declines to 872 Institutions
As anticipated, minor changes were made to the Unofficial Problem Bank List this week.
WSJ | Debate Rages Over Recoveries From Financial Crises
While the presidential candidates battle over the Obama administration’s handling of the U.S. economy, some prominent economists are going to war over a related subject.
Daily Capitalist | An “Austrian” In China
It’s a rare afternoon in the Chinese capital when smog hasn’t blocked the skies, and one of China’s most famous economists is in a sanguine mood. The economy is in trouble as the Communist Party heads for a once-in-a-decade transfer of power while prosecuting its former golden boy, Bo Xilai, on criminal charges.
AEI | Economist: This is the weakest post-financial crisis recovery since the 1880s
People are looking for answers to why the economy is growing so slowly. Is the answer that economic growth is normally weak following deep recessions and financial crises?

Health Care

Econ Comments & Analysis                                                                                            
WSJ | Let Doctors Cure Health-Care Costs
For years the efforts to cure the health-care system's ailments—including runaway costs, less time physicians can spend with patients, and the rules and reports that consume more time of physicians and hospital staff—have failed. They've failed because they ignored a basic fact: The delivery of care is shaped largely by the way care is paid for.

Monetary

News                                                                                                                             
Bloomberg | Fischer Backs Fed QE3 as World ‘Awfully Close’ to Recession
Bank of Israel Governor Stanley Fischer said the world is “awfully close” to a recession, and backed the Federal Reserve’s increase in quantitative easing as strengthening its policy credibility.
CNN Money | Treasury delays report that could hit China on currency
The Treasury Department said Friday that it was delaying the release of a report on international exchange rates that often contains criticism of China's currency policies.
Bloomberg | Dudley Says Fed Won’t Make ‘Hasty’ Exit From Stimulus
Federal Reserve Bank of New York President William C. Dudley said the central bank won’t cut back record monetary stimulus too quickly when the economy begins to gain strength.

Econ Comments & Analysis                                                                                            
Project Syndicate | Hard to be Easing
The United States Federal Reserve’s decision to undertake a third round of quantitative easing, or QE3, has raised three important questions.
CNN Money | Fed's Dudley: Stimulus could have been 'more aggressive'
Falling mortgage rates fueled by the Fed are having only a limited impact on the economy, said Federal Reserve Bank of New York President William Dudley Monday.

Blogs                                                                                                                             
Calculated Risk | Bernanke: On the international impact of US accommodative Monetary Policy
Bernanke's conclusion is: [US monetary] "policy not only helps strengthen the U.S. economic recovery, but by boosting U.S. spending and growth, it has the effect of helping support the global economy as well."

Taxes

Econ Comments & Analysis                                                                                            
WSJ | Schumer to Tax Reform: Drop Dead
The polls say voters want more bipartisanship, and one possibility in 2013 is tax reform that trades lower rates for fewer loopholes. Well, so much for that. The man who wants to be the next leader of the Senate Democrats has declared that this "old-style of tax reform is obsolete."
The American | Obama’s Big Tax Increases on Small Business
It is quite a stretch for President Obama to argue that he wants to cut taxes for small businesses. In reality, he is proposing to increase taxes on small businesses by around $49 billion.
AEI | Statutory and effective tax rates: Part 2
In the first article of this two-part series, I considered the incentive effects of income and consumption taxes in a hypothetical economy with no passage of time and therefore no savings.1 In that hypothetical economy, individuals chose how much to work and consume and which goods to consume, but had no choice about when to work or consume. I now extend the analysis to consider an economy that features the passage of time.

Employment

News                                                                                                                             
USA Today | Study says shortage of skilled workers not that severe
A shortage of skilled manufacturing workers that's blamed for helping push up unemployment is far smaller than believed, according to a study out today.

Econ Comments & Analysis                                                                                            
Forbes | Obama's Real Unemployment Rate Is 14.7%, And A Recession's On The Way
The Bureau of Labor Statistics (BLS) reported last Friday that 114,000 new jobs were created last month, according to its Establishment Survey of business payrolls that has been emphasized by the Obama Administration.

Budget

News                                                                                                                             
Market Watch | U.S. deficit stays above $1 trillion in 2012
The U.S. government finished fiscal 2012 with a deficit of $1.089 trillion, the Treasury Department reported Friday, a smaller gap than in the prior year but still the fourth straight year with a $1 trillion-plus shortfall.
WSJ | Budget Deficit Again Tops $1 Trillion
The U.S. government ran a $1.089 trillion budget deficit in the fiscal year that ended Sept. 30, a smaller gap than the year before but still stubbornly high and likely to fuel further debate over tax and spending policies.

Econ Comments & Analysis                                                                                            
Fortune | Let's jump off the fiscal cliff
The shock of more than half a trillion dollars in tax increases and spending cuts could send us into another recession.  But with a little stimulus, it might be a blessing, not a curse.