Tuesday, October 16, 2012

General Economics

Market Watch | U.S. industrial output rebounds 0.4% in September
Industrial output rebounded a bit in September after a steep drop in the prior month, partly related to Hurricane Isaac, the Federal Reserve reported Tuesday.
Washington Post | JPMorgan and Wells said that housing had turned a corner, but Citi says not so fast
On Friday, executives at Wells Fargo and JPMorgan Chase declared that the long-struggling market had turned a corner. On Monday, Citigroup’s top number-cruncher said he wasn’t so sure.
WSJ | In Reversal, Cash Leaks Out of China
Wealthy Chinese citizens are buying beachfront condos in Cyprus, paying big U.S. tuition bills for their children and stocking up on luxury goods in Singapore, frequently moving cash secretly through a flourishing network of money-transfer agents. Chinese companies, for their part, are making big-ticket foreign acquisitions, buying up natural resources and letting foreign profits accumulate overseas.
CNN Money | Banks accused of defrauding homeowners by rigging Libor
Add one more to the list of alleged victims of Libor manipulation: homeowners.
Market Watch | Oct. builder sentiment edges up to six-year high
Builder confidence in October edged higher to mark the sixth gain in a row and the top reading in more than six years, a trade group said Tuesday in the latest indicator of a revival in the housing market.

Econ Comments & Analysis                                                                                            
WSJ | Infostructure Is the New Infrastructure
Among advocates of big government and Keynesian countercyclical stimulus, one subject keeps coming up: infrastructure. They're always arguing the short- and long-term benefits of building new highways, bridges, tunnels, urban light-rail systems, or, the Holy Grail itself, a national high-speed rail network.
Washington Times | Global gloom & doom
Human-rights activists risking their lives to bring democracy to authoritarian countries found themselves snubbed Friday. The Nobel Committee somehow decided the European Union was more deserving of the Peace Prize.

Café Hayek | John Taylor on the Recovery, Part 2
Here is the second episode of the Numbers Game, my new project using charts and data. It’s John Taylor discussing some of the common arguments for why this is a mediocre recovery.
Library of Economics | True by Definition: Redistribution and Economic Freedom
The truth is that size of government and economic freedom are inextricably connected.  Any definition of "economic freedom" that doesn't directly incorporate the size of government is a crummy definition.
John Taylor | More on the Unusually Weak Recovery
The weak recovery continues to be a major topic. Over the weekend, Russ Roberts issued the second episode of his three part “chartcast” series on the topic, which is based on interviews with me and builds on his highly-regarded podcast series, but with helpful charts and illustrations.
Library of Economics | "Some Men Just Want to Watch the World Burn"
How much of politics is caused by the "visceral pleasure of being nasty?"  Since voters might not be too honest about the topic if you asked them outright, this topic seems ripe for a neuroscience experiment.  And note that this would be something a bit different from simply a "politics of envy." 

Health Care

CNN Money | Seniors on Social Security squeezed by rising prices
Janis Mason is 94 and has been receiving Social Security benefits for nearly 30 years. Because she has outlived her savings, the monthly checks are her only source of income.
Bloomberg | UnitedHealth Raises Forecast on Contained Medical Costs
UnitedHealth Group Inc. (UNH), the biggest U.S. health insurer, raised its 2012 profit forecast as enrollment in its Medicare and Medicaid plans surged in the third quarter and medical costs stayed stable.

Econ Comments & Analysis                                                                                            
NBER | Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City
Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts.

Economist | You didn't pay for it
I recently came across a political ad which featured an elderly man telling politicians to stay away from his Medicare. After all, he paid for it, the ad suggested. That struck me as interesting.
Café Hayek | Krugman’s body count
Noting that correlation is not causation is a hallmark of the economic way of thinking. Krugman prefers not to notice.


Market Watch | Consumer inflation rises 0.6% in September
Americans paid sharply higher prices for goods and services in September, the government said Tuesday, mainly because of the elevated cost of gas.
National Journal | Is CPI a 'One-Size Fits Nobody' Inflation Gauge?
How much do you spend a week on alcohol? Whatever it is, you're probably underestimating. By a lot. And that’s a problem for the statisticians who compile the nation's main inflation gauge.


Econ Comments & Analysis                                                                                            
WSJ | The Solyndra Memorial Tax Break
Perhaps you thought the Solyndra scandal amounted to a $535 million government loan that will never be repaid. No such luck. In the latest twist, Solyndra's investors could be rewarded for their failure, thanks to a tax benefit the Administration handed out in a bid to evade political accountability.
AEI | 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.

Greg Mankiw | Optimal Tax Policy
"Taxing capital income at a permanently lower rate than labor income would result in higher average long-term prosperity, relative to an alternative that generated the same amount of tax revenue by permanently taxing capital and labor income at equal rates instead."
Tax Foundation | Chart of the Day
Millionaire Tax Returns Fluctuate Considerably Each Year


CNN Money | Amazon to hire 50,000 seasonal workers
It's only October, but companies like Amazon are already thinking about the holidays. The online retailer is the latest to announce its seasonal hiring plan, and it's significant: 50,000 jobs in the United States

Calculated Risk | The Housing Bottom and the Unemployment Rate
Early this year when I wrote The Housing Bottom is Here and Housing: The Two Bottoms, I pointed out there are usually two bottoms for housing: the first for new home sales, housing starts and residential investment, and the second bottom is for house prices.


Econ Comments & Analysis                                                                                            
Institutional Investor | How Long Can U.S. Treasuries Remain a Safe Haven?
Investors in the U.S. Treasury market are behaving as if the term “sovereign debt crisis” had never entered the financial lexicon.
Washington Times | Falling off the fiscal cliff
Pundits and politicians are warning that the U.S. economy could go over a “fiscal cliff” on Jan. 1, when, under current law, we will face a double whammy of large spending cuts and significant tax increases. This, they warn, could trigger another recession.
Heritage Foundation | Federal Spending by the Numbers - 2012
The federal government has closed out its fourth straight year of trillion-dollar-plus deficits, and the imperative to rein in spending has never been greater. Because all government spending gets paid for through either taxes or borrowing—both of which burden the economy—spending reduction is an essential condition for promoting economic growth.

Economist | Is the slow recovery unusual?
In 2009, Carmen Reinhart and Kenneth Rogoff published This Time is Different, an empirical study of financial crises going back to the Middle Ages. Widely lauded by economists of all stripes, the book shows that recoveries following financial crises take a long time. Barack Obama, the U.S. president, has taken this message on the road to explain why he ought to be reelected despite a lacklustre economic record.
Neighborhood Effects | GASB’s new guidance and the well-funded plan
As of June 2012, GASB has put forth two new accounting guidelines to help value public sector pension plans. These are GASB 67 and GASB 68. These rules help government actuaries to calculate the value of plan assets and plan liabilities.
National Review | Obama Budget Deficits: A Story of Failed Promises
Back in 2009, the president projected that he would cut the deficit to $912 billion by 2011 and $581 billion by 2012. The reality is quite different. Fiscal year 2012, which ended a few weeks ago, was the fourth year in a row to close with a deficit that surpassed a trillion dollars.