Wednesday, November 28, 2012

General Economics

CNN Money | Spanish bank bailout gets go-ahead
The European Commission has approved Spain's plans to restructure four of its weakest banks, clearing the way for them to receive nearly €37 billion in fresh capital from the eurozone's bailout fund.
Bloomberg | U.S. Said to Weigh Tightening Rules for Foreign Lenders
U.S. units of foreign lenders including Deutsche Bank AG (DBK) may be required by regulators to comply with tougher capital rules that some banks sought to skirt, three people with knowledge of the discussions said.
FOX Business | Obama to Meet With CEOs Over Fiscal Cliff
Chief executives from top U.S. corporations, including Goldman Sachs, Deloitte LLP, and Caterpillar Inc., will meet with President Barack Obama on Wednesday to discuss U.S. fiscal problems, the White House said.

Econ Comments & Analysis                                                                                            
WSJ | A Mandate to Raise Food Prices
Americans should understand that this year’s drought—the worst in 50 years—isn’t the primary reason for record-high food prices. The drought made things worse, but the leading driver of long-term increases in food costs is a deeply flawed federal mandate.
Real Clear Markets | Our Handling of Keystone Is a Smack In Canada's Face
The Keystone XL (KXL) pipeline, which would bring oil from Canada's oil-sands to refiners in the Gulf Coast is in the news again. An unlikely set of bedfellows have recently come out with strong statements of support for the pipeline.
Washington Times | Obama’s war on wealth
A big issue is missing in the debate over the “fiscal cliff”: how to get the Obama economy growing again, fueling capital investment, jobs and higher incomes.
Washington Times | Overturning Dodd-Frank
Ordinarily, political disputes ought to be settled by lawmakers accountable to the public, not unelected judges. It’s bad form for a political party to run to the judicial branch simply because it can’t win on an issue fair-and-square in the legislature. Sometimes, however, there’s no alternative but to turn to judicial referees when the other side is caught cheating.

Political Calculations | Factoring in the Falling Dollar for US-China Trade
Previously, using just the U.S. dollar-based growth rate of U.S. exports to China, we found that China's economy had entered into recession in December 2011.
Calculated Risk | Update: The Recession Probability Chart
Historically, three consecutive months of smoothed probabilities above 80% has been a reliable signal of the start of a new recession, while three consecutive months of smoothed probabilities below 20% has been a reliable signal of the start of a new expansion.
AEI | Can the US economy still grow like it used to?
The days of 3%-plus GDP growth — the U.S. has grown by 3.4% a year since WWII — are a thing of the past thanks to a) declining population growth, b) declining productivity in the service sector, c) rising commodity costs, and d) climate change.

Health Care

Politico | Poll: Health coverage not federal government's job
For the first time in 12 years, a majority say it is not the federal government’s responsibility to ensure that health care coverage is provided to all Americans, according to a poll on Wednesday.

Econ Comments & Analysis                                                                                            
WSJ | Hope and Exchange
ObamaCare is due to land in a mere 10 months—about 300 days—and the Administration is not even close to ready, so naturally the political and media classes are attacking the Governors and state legislators who decline to help out. Mostly Republicans, they’re facing a torrent of abuse in Washington and pressure from health lobbies at home.

FOX Business | 800 Companies, Groups Demand Repeal of Medical Device Tax
Starting January 1, medical-device makers must pay a new 2.3% excise tax on sales, regardless if they make a profit, to raise $30 billion over the next decade to pay for health reform.


CNN Money | Federal Reserve official aims for 6.5% unemployment
Just how far should the unemployment rate fall before the Federal Reserve raises interest rates? Charles Evans, president of the Chicago Fed, wants the central bank to keep the federal funds rate near zero until unemployment falls to 6.5% -- a jobless rate not seen since 2008.
National Journal | Treasury: China Not a Currency Manipulator
The U.S. Treasury Department declined to label China a currency manipulator in a Tuesday report. The agency said in its semiannual report to Congress on international economic and exchange-rate policies of the major U.S. trading partners that none met the criteria necessary to be designated a manipulator, including China.

Econ Comments & Analysis                                                                                            
WSJ | Bernanke's Seoul Brothers
Another monetary-policy domino fell Tuesday when Seoul introduced a new round of capital controls. South Korea's financial regulators will reduce the amount of foreign-exchange forwards that banks can carry on their balance sheets.

Economist | Central banking for fun and profit
Central banks earn hefty profits. They own assets with a positive nominal yield and fund themselves by creating either reserves or currency, which yield next to nothing. In most countries, these profits are remitted to the fiscal authority. After all, the central bank is a public institution, so the people should benefit whenever the monetary authority does well.


Politico | Some say add fee to energy production
With pencils being sharpened on a debt deal, all eyes are on the gas tax as a possible savior for transportation spending. But another option that may cause lawmakers less heartburn is being obscured by the gas tax dust: linking energy production with infrastructure spending.

Econ Comments & Analysis                                                                                            
WSJ | Obama Vetoes a Carbon Tax—in Europe
President Obama has said he’s going to continue his crusade against carbon energy in a second term, and we believe him. Yet there he was Tuesday signing a bipartisan bill shielding U.S. airlines from paying a carbon tax merely for flying to Europe.
CNBC | Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny
Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families - and the broader housing market.

National Review | The Buffett Tax Twists
Yesterday in the New York Times, Billionaire Warren Buffett renewed his call to increase taxes on the rich. While I wished he would spend half the time and energy he spends calling for tax increases on advocating spending cuts, the piece does have a few interesting features.
AEI | 3 charts that show just what’s happened to the tax code since 1979
From 1979 through 2000,  all of the changes in the tax code before the Bush tax cuts effectively reduced the average tax rate for the bottom 80 percent of earners and raised the average tax rate for the top 20 percent.


Heritage Foundation | Obama Tax Hike on Small Business Would Chill Hiring
“Would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?” When asked this question by Today’s Matt Lauer, Warren Buffett confidently answered, “No.” How could this be, when the tax hikes desired by President Obama would fall directly on some of America’s most successful job creators?


WSJ | Greek Debt Plan Relies on Rosy Outlook
A long-awaited deal cobbled together by euro-zone finance ministers early Tuesday gives Greece a rough outline for cutting its mountain of debt, but the plan threatens to be derailed if the country's economy doesn't emerge from recession in two years.
NY Times | Now Touring, the Debt Duo, Simpson-Bowles
Theirs is an improbable buddy act that is making for unlikely entertainment from campuses to corporations on a most serious subject: the federal debt. The proof of their appeal: some business groups pay them $40,000 each per appearance. Really. To discuss budgets and baselines.
WSJ | Democrats Harden Budget Positions
The White House and congressional Democrats hardened their budget positions on Tuesday and signaled they are prepared for partisan jockeying before any agreement to block impending spending cuts and tax increases can be reached with Republicans.
CNN Money | What is 'Fix the Debt?'
The election may be over. But there's a "Campaign to Fix the Debt" backed by millions of dollars that's well under way and gaining a voice in Washington.
Bloomberg | China’s U.S. Debt Buying Seen Limited, Former Adviser Says
China may limit its purchases of U.S. Treasuries because the central bank has reduced its buying of dollars at home, according to a Chinese academic who has served as a government adviser.

Calculated Risk | Fed: Consumer Deleveraging Continued in Q3, Student Debt increases
In its latest Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York announced that in the third quarter, non-real estate household debt jumped 2.3% to $2.7 trillion. The increase was due to a boost in student loans ($42 billion), auto loans ($18 billion) and credit card balances ($2 billion).