Friday, November 30, 2012

General Economics

Bloomberg | Business Activity in U.S. Expands for First Time in Three Months
Business activity in the U.S. expanded in November for the first time in three months, showing superstorm Sandy is less damaging to the economy nationally.
USA Today | AAA warns E15 gasoline could cause car damage
E15, a higher blend of ethanol and gasoline, has rolled out in a handful of states. But its use in older vehicles is generating warnings from AAA, which says E15 could be harmful to pre-2012 vehicles.
Bloomberg | Germany Seen Recession-Bound in Poll Showing Euro Crisis
Germany, Europe’s largest economy, will be tipped into recession as the sovereign debt crisis roiling its neighbors extends into the new year, according to the Bloomberg Global Poll.
Market Watch | Why mortgage deduction may sail by fiscal cliff
As Washington battles over fiscal-cliff compromises, it’s likely that lawmakers will kick the can or at most make only small adjustments to one tax break that analysts say is ripe for reform: the mortgage-interest deduction.
Bloomberg | Corporate Bond Sales in U.S. Climb to Cap Busiest November Ever
Corporate bond sales in the U.S. capped the busiest November on record as issuance climbed to $45 billion this week, while relative yields narrowed as companies sought to lock in borrowing costs at almost unprecedented lows.
Market Watch | U.S. personal spending declines in October
Consumer spending in the U.S. fell 0.2% in October, the first decline in five months, while incomes were essentially flat, the Commerce Department said Friday.
Bloomberg | ECB Withholding Secret Greek Swaps File Keeps Taxpayers in Dark
The European Central Bank’s court victory allowing it to withhold files showing how Greece used derivatives to hide its debt leaves one of the region’s most powerful institutions free from public scrutiny as it assumes even more regulatory power.
National Journal | Fundamentals of Recent Economic Growth Are Not Fine
The economy is growing faster than initially thought, according to a Thursday report, but it may be taking on more fat than muscle, which could slow down growth in the final few months of the year, economists say.

Calculated Risk | Kansas City Fed: Regional Manufacturing Activity "Eased Further" in November
According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity eased further in November, while producers’ expectations were unchanged from last month at modestly positive levels.
Daily Capitalist | BEA Raises 3rd Quarter 2012 GDP Growth Estimate To 2.67%
In their second estimate of the US GDP for the third quarter of 2012 the Bureau of Economic Analysis (BEA) found that the economy was growing at a 2.67% annualized rate, an upward revision of +0.65% from the previously published first estimate for the quarter.
Calculated Risk | A few comments on GDP Revision and Unemployment Claims
GDP Revision: Although Q3 real GDP growth was revised up from 2.0% annualized to 2.7%, the underlying details were disappointing.
AEI | A rather weak attack on NGDP targeting
I find much value in the idea of the Federal Reserve adopting a nominal GDP target. It provides a rule-based system to guide monetary policy and an anchor to economic expectations.

Health Care

CNN Money | Medicare patients at risk without doctors' fiscal cliff fix
As lawmakers head into talks to avoid the fiscal cliff, doctors are watching closely.

Econ Comments & Analysis                                                                                            
WSJ | The Death of 'Mediscare'
Since Nov. 6, Republicans have, for perfectly understandable reasons, expressed their deep disappointment with the election results. But even in defeat something significant and positive occurred: Republicans fought Democrats to a draw on the issue of Medicare.
CBO | Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services
Previously, when estimating the budgetary effects of legislation regarding prescription drugs, CBO found insufficient evidence of an “offsetting” effect of prescription drug use on spending for medical services.

CATO | ‘By Far the Broadest and Potentially Most Damaging of the Legal Challenges’ to ObamaCare
As even some health law supporters concede, the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions.
AEI | How to turn Obamacare into FreeMarketcare in 4 (sort of) easy steps
If you posit that the Patient Protection and Affordable Care Act is here to stay, then what? One possibility for advocates of consumer-driven health reform is to embrace the health care reform law. Like, really embrace it. To the max.


Market Watch | FDIC's Hoenig: Big banks should hold more capital
Regulators should replace "complex" global bank capital rules with a more simple system that requires large institutions hold more capital, Federal Deposit Insurance Corp. director Thomas Hoenig said Friday.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Absent a Monetary Rule, Fiscal Cliffs Will Be the Norm
In the February 29, 1908, edition of New York Outlook magazine, Andrew Carnegie penned an article in which he lamented that the, "Americans have many advantages upon which we may plume ourselves as being in advance of other nations, but we have at least one humiliation to lessen self-glorification.

Economist | Beware dangerous cliff
America's economy seems to have slowed sharply in the current quarter as businesses postpone investment while waiting to see if politicians can avoid sending the country over the "fiscal cliff".


WSJ | Tax Hit Looms on Mortgage Relief
Troubled homeowners who get a break from their mortgage lenders might not be so lucky with Uncle Sam, and could face hefty tax bills unless Congress acts to extend a key provision.
Fiscal Times | Treasury Needs a Tax Expert, Not a Wall St. Banker
With the virtual certainty that Treasury Secretary Timothy Geithner will be leaving his post shortly after the new year, there is much speculation about who might replace him.
Market Watch | Harkin: Tax high-speed traders to fill budget hole
Sen. Tom Harkin wants lawmakers to consider his financial transaction tax bill as they work on ways to resolve their differences on spending and taxes and the impending “fiscal cliff.”
CNN Money | How to raise taxes on the rich
The line in the sand in the fiscal cliff talks is clear: Democrats will only agree to a deal that raises the tax burden on high-income households.
CNBC | Complaints Aside, Most Face Lower Tax Burden Than in 1980
Alan Hicks divides long days between the insurance business he started in the late 1970s and the barbecue restaurant he opened with his sons three years ago.

Econ Comments & Analysis                                                                                            
WSJ | Costco's Dividend Tax Epiphany
When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco COST +1.04% co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte.

Neighborhood Effects | What Was Wrong with the Bush Tax Cuts?
The fact is that the Bush tax cuts were deeply flawed, even from a free-market perspective. In a new paper with Mercatus program associate, Andrea Castillo, we contend
AEI | How much did we tax the rich during the greatest period of growth in American history?
People say, why worry so much about raising the marginal tax rate by a few percentage points? Do 4.6 points really matter, people like my colleague Michael “Tax and Spend” Strain and Louisiana Governor Bobby Jindal ask. Rates are “low” as they are, and it’s not like we’re talking about raising them to 75% here, they claim.


Washington Times | Michigan eyes right-to-work measure
Having just helped torpedo a labor-backed move that would have enshrined collective-bargaining rights in the state’s constitution, emboldened Republican lawmakers are considering a move to make this historic bastion of union power into the nation’s 24th right-to-work state.


Washington Times | Lot of movement, no progress on ‘fiscal cliff’: Tax increases vs. spending cuts
President Obama’s top aides floated a budget framework to Republicans on Thursday that would call for $1.6 trillion in tax increases coupled with a promise for future spending trims in order to head off the “fiscal cliff,” an offer GOP leaders immediately rejected, saying the White House needs to “get serious” about spending cuts.

Econ Comments & Analysis                                                                                            
Heritage Foundation | Six Bipartisan Entitlement Reforms to Solve the Real Fiscal Crisis: Only Presidential Leadership Is Needed
A high-stakes fiscal policy debate of unique size and import has just begun. Absent congressional action to the contrary, a massive slate of tax hikes and spending cuts will take effect on January 1, and that is only the first act.
Washington Times | Real solutions for the ‘fiscal cliff’
As we approach the “fiscal cliff” and Washington’s finest scramble to avert economic disaster, many ideas and proposals are being considered: Let the George W. Bush tax cuts expire, close loopholes or increase revenue. The jargon is familiar if not numbing.
AEI | Sovereign debt is not a risk-free asset
Sir, Mario Blejer says: “In most cases, sovereign debt is not a risk-free asset.” This is an understatement. The correct statement is: “In all cases, sovereign debt is not a risk-free asset.” As Anatole Kaletsky wrote a generation ago: “For at least 500 years, governments and nations have regularly defaulted.”
WSJ | This Unserious White House
The White House this week finally explained just how serious it is about averting a fiscal cliff that could throw the country back into a recession. The answer: not serious at all.
Market Watch | The hard facts about spending cuts
As lawmakers negotiate to avoid the so-called fiscal cliff, the combination of tax increases and spending cuts that are due to take place on Jan.1, 2013, the silence on spending cuts is deafening.
Washington TImes | Standoff at the ‘fiscal cliff’
Democrats have painted themselves into a box with their Mediscare tactics. Because they spent the last two years frightening seniors with tales of Republicans taking away their benefits and “ending Medicare as we know it,” the left-hand side of the aisle has effectively eliminated the possibility of negotiating changes to this broken program essential to any true resolution of the looming budgetary and tax disaster.
WSJ | The Real Danger From the Fiscal Cliff
Americans are told that they face a "fiscal cliff" if automatic federal spending cuts and tax increases occur at the end of the year. I'm not in favor of jumping off a cliff, but the logic of the supposed threat needs to be questioned.
City Journal | Can California Handle a Recovery?
The New York Times has made it official: California is not Greece. The state is showing “the first signs of a rebound,” reported the Times’s Adam Nagourney this week.
Forbes | The Fiscal Cliff: How To Call The Big Spenders' Bluff
The fiscal cliff – and the hullabaloo surrounding it — is a curious phenomenon. It has been over 3 years since Harry Reid’s Senate passed a budget. The U.S. federal government is over $16 trillion in debt. And Uncle Sam is borrowing 1 out of every 3 dollars he spends.

Political Calculations | Transforming Student Loans from Taxes Back into Debt
Taxpayers already (or will) indirectly subsidize both the housing and healthcare sectors by covering GSE losses and paying for a healthcare system that pays out more than it receives in revenues. If the continued misalignment of educational resources ultimately leads to government “forgiveness” of student loan debt, it will simply be one more example of fiscal subsidies for a narrow demographic.