Friday, October 26, 2012

General Economics

Market Watch | U.S. economy speeds up in third quarter
The U.S. economy sped up in the third quarter as consumers and the federal government boosted spending and home construction accelerated.
WSJ | South Korea GDP Growth Slows
The South Korean economy grew at the slowest pace in nearly three years in the third quarter from the prior three months as the persistent euro-zone debt crisis hurt corporate investment, the Bank of Korea said Friday, adding to pressure on the central bank to keep its policy rate low to promote growth.
FOX News | Average US rate on 30-year fixed mortgage edges up to 3.41 pct.; 15-year loan at 2.72 pct.
Average U.S. mortgage rates rose only slightly this week and continued to hover near record lows, a trend that has helped boost home sales and refinancing.
Market Watch | Business investment has ground to a halt
Despite an incredible 9.9% gain in orders for durable goods in September, business investment — one of the major engines of economic and profit growth over the past three years — has stalled out, at least temporarily.
Bloomberg | Michigan Consumer Sentiment Index Rose to 82.6 in October
Confidence among U.S. consumers rose in October from the prior month to the highest level since before the last recession began five years ago.

Econ Comments & Analysis                                                                                            
WSJ | The Anatomy of Government Failure
More than any presidential election since 1980, the current campaign is about the proper size and scope of government. With so fundamental an issue at stake, the chronic claims on behalf of government "solutions" for perceived problems need to be subjected to a reality check.
Washington Times | U.S. economy on schedule to crash March 2014
Those wild and crazy Mayans put down their marker that the end of the world would occur on Dec. 21, 2012 — about two months from now. There is, of course, some small chance that they might be right. On the other hand, there is a very large probability that the real end of the world will occur around March 4, 2014.
AEI | Returning to an economic growth agenda
The engine of growth that has fueled the U.S. economy for over 225 years appears idle. In the five-year period from the second half of 2007 through the first half of 2012, the U.S. GDP growth rate has averaged just 0.6 percent annually. In fact, as the accompanying chart indicates, the average annual growth rate of the U.S. economy has been below 1 percent during the last five years, far slower than its recent historical average.
Real Clear Markets | Got a Problem? Easy, Blame Free Trade
It is not an understatement to say that Europe is an economic mess. It might be surprising, however, to mention that one of the most dysfunctional national pieces inside the patchwork currency noose of the euro is France.
Heritage Foundation | 2013 Index of Economic Freedom: No Boost in Trade Freedom
The latest rankings of trade freedom around the world, developed by The Heritage Foundation and The Wall Street Journal in the forthcoming 2013 Index of Economic Freedom, once again demonstrate how citizens of countries that embrace free trade are better off than citizens of countries that do not.

Economist | Better faster than slower
It isn't difficult to be the least dirty shirt in the hamper these days. America's economy seems to relish the role, continuing to post growth performances that would be utterly disappointing were they not so much better than those managed by other rich countries. Real output rose at a 2% annual pace in the third quarter, reported the Bureau of Economic Analysis this morning. That's miles better than Europe, which remains stuck in recession.
John Taylor | An Unusually Weak Recovery as Usually Defined
The view that the current U.S. recovery is unusually weak compared to past U.S. recoveries from recessions with financial crises is gaining more and more support.

Health Care

NY Times | Spending on Medicaid Has Slowed, Survey Finds
The annual growth in spending on Medicaid slowed sharply last year as the economy began to improve, a survey by the Kaiser Family Foundation found. Enrollment in the program grew only modestly as well, but that may change as millions of people are due to become eligible in 2014 under the new national health care law.

Econ Comments & Analysis                                                                                            
Washington Times | Obama’s Medicaid expansion will bankrupt states
As a practicing doctor serving in Congress, I am glad Mitt Romney and President Obama are debating Medicaid. For 20 years, I have taught and treated patients in a safety-net hospital. For 20 years, I have seen well-meaning politicians harm patient care. I see this now with Mr. Obama’s expansion of Medicaid.

Heritage Foundation | The Contraception Misconception
The contraception debate in a nutshell: There is no contraception debate. No one—neither Republicans nor the more than 100 individuals and organizations suing over the HHS mandate—is calling for a ban on contraception.


CNBC | Fed's Lacker: Latest Stimulus Will Boost Inflation
The Federal Reserve's latest stimulus will not boost economic growth without creating unwanted inflation, said Jeffrey Lacker, president of the Richmond Fed and lone dissenter on the central bank's policy committee.

Econ Comments & Analysis                                                                                            
Forbes | Inequality Is The Child Of Fiat Money
For a while there, it looked like the 2012 election was going to be a referendum on economic inequality. This would have been weird, in that economic growth and its twin, employment, are the clear issues of choice in these years of torpid economic recovery.


CNN Money | CEOs: Taxes have to be part of debt plan
As Congress dithers on resolving the fiscal cliff and long-term debt, 87 CEOs of major companies publicly urged lawmakers to compromise -- and fast.

Econ Comments & Analysis                                                                                            
CRS | Constitutionality of Retroactive Tax Legislation
It is clear there is no absolute constitutional bar to retroactive tax legislation. Nonetheless, it is possible, albeit rare, for retroactive tax legislation that increases a taxpayer's tax liability to violate the Constitution.

Tax Foundation | Chart of the Day
The Aging of America's Taxpayers


CNN Money | Spanish unemployment hits new peak
Spain's unemployment rate hit a record high of 25% in the third quarter, as the jobless total grew to nearly 5.8 million people.
CNN Money | American Airlines to hire 2,500 pilots
The iconic, but troubled, American Airlines says it intends to hire 2,500 pilots over the next five years.

Econ Comments & Analysis                                                                                            
NBER | The United States Labor Market: Status Quo or A New Normal?
The recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of unemployment that prevailed in the recent past. Is this true?

Economist | Labour lost
I've been mulling over an interesting new (or newly updated) paper by Guillermo Calvo, Fabrizio Coricelli, and Pablo Ottonello on the labour-market consequences of differing inflation rates in the wake of financial crises.


WSJ | Illinois Growth Threatened by Finances, Report Says
A culture of short-sightedness among the leaders of Illinois threatens the state's economic growth and its ability to provide the basic services its residents need, according to a new report on state fiscal problems by a high-profile task force.

Econ Comments & Analysis                                                                                            
WSJ | State of Dysfunction
The precarious financial situation in liberal states is the big story no one wants to talk about, but maybe Illinois voters will start to pay attention with the new report from former New York Lieutenant Governor Richard Ravitch and former Federal Reserve Chairman Paul Volcker. "Illinois has been doing backflips on a high wire, without a net," they write as part of their State Budget Crisis Task Force.
Politico | Progressives should support a ‘grand bargain’
This week, some of the most vocal progressive organizations planted a flag in the ground in opposition to a grand bargain budget agreement in the lame duck Congress. Led by AFL-CIO President Richard Trumka, who Tuesday wrote an op-ed in POLITICO, “Americans don’t want ‘grand bargain,’” these groups made a particular point in opposing any fixes to Social Security and Medicare.