Wednesday, December 5, 2012

General Economics

Market Watch | Home values are up, but should you sell?
Many residential real estate markets finally seem to be getting better. In fact, some are getting a lot better. That means there are more people with hugely appreciated homes. If you fit into this category, please don’t sell without considering the heavy tax hit that would result.
Bloomberg | Best-Performing Fund Manager Sees U.S. Pipeline Growth
Kevin McCarthy, the world’s best- performing energy fund manager in the past year, stared at the tangle of tax-exempt partnerships and corporate parents that drive the U.S. oil and gas pipeline business and kept his cool.
CNN Money | There's a home price recovery... but it's really, really slow
Just about everybody agrees that the housing market is finally recovering -- but don't expect big price gains.
Market Watch | U.S. third-quarter productivity revised up to 2.9%
The increase in U.S. productivity in the third quarter was revised up to 2.9% from an initial reading of 1.9%, as companies generated more goods and services than originally estimated.
USA Today | Mortgage deduction is popular, but few claim it
Designed to boost homeownership, the mortgage interest deduction is one of the most popular provisions of the tax code. But Internal Revenue Service data show that only a quarter of tax filers claim it.
Bloomberg | Euro-Area Manufacturing, Services Contract for 10th Month
Euro-area services and manufacturing output shrank for a 10th month in November, suggesting the economy may struggle to pull out of a recession as governments toughen spending cuts to fight the sovereign-debt crisis.

Econ Comments & Analysis                                                                                            
CNN Money | The economy: What to expect in 2013
When you find yourself on a precipice, the standard advice for keeping calm is to not look down. Next year, don't look up.
Real Clear Markets | Now They Tell Us The Economy Is Weak?
Little noticed in President Obama's "fiscal cliff" plan is a demand for a huge new stimulus package. Wait! Wasn't he and everyone in the press telling us just before the election how the economy was gathering steam?
Forbes | Come On, President Obama, Your Economic Policies Aren't Even Keynesian
This election was brought to you by the letter “O” and the number 16 trillion, as Mitt Romney put it back in October, mocking Sesame Street.
Fortune | Municipal bonds: A train wreck waiting to happen
Investment-grade municipal bonds used to be Snooze City. You know, the kind of thing that we retail investors buy, stick into our portfolios, and then forget about. But these days, thanks to the Federal Reserve's holding down interest rates and the prospect of steeper income taxes facing top-bracket types, high-grade munis, which pay tax-free interest, have become insanely popular. And are a train wreck waiting to happen.
Real Clear Markets | It's Time For the FDIC To Stop Playing "TAG"
At the end of this month, a federal deposit insurance program created during the crisis and extended by Dodd-Frank is scheduled to come to an end. Under the so-called TAG (transaction account guarantee) program, the Federal Deposit Insurance Corporation provides unlimited insurance for noninterest-bearing transaction accounts, such as business checking accounts.
Market Watch | On the road to zero growth by 2050
Near zero economic growth by 2050? Yes, America’s economy is collapsing. Fast. Yes, the “most depressing forecast ever,” says InvestmentNews, trusted source for 90,000 professional financial advisers across America.
WSJ | The Underworked Public Employee
With state and local governments struggling to balance budgets in a still sluggish economy, government employment has fallen by 562,000 jobs since September 2008, a decline of 2.6%. In response, the Obama administration has called for more federal aid—on top of the $250 billion doled out in the 2009 Recovery Act—to help keep state and local government payrolls near prerecession levels.

WSJ | Fourth Quarter Likely to Deliver Economic Lump of Coal
In a best-case scenario, the economy would be heading out of 2012 with enough momentum to offset the fiscal drag coming in 2013. But this is not a best-case scenario.
The Hill | Gohmert calls for replacing CBO with competitive scoring system
Rep. Louie Gohmert (R-Texas) on Tuesday called for the elimination of the Congressional Budget Office (CBO) as the sole scorer of congressional legislation and the creation of a new, competitive system that would open the job of scoring to several entities at once.

Health Care

Econ Comments & Analysis                                                                                            
Politico | Health care savings without Medicare cuts
As President Barack Obama and congressional leaders continue discussions to avert the so-called fiscal cliff — the mix of tax increases and spending cuts set to take effect automatically in January — we hear a troubling but familiar refrain in Washington: To fix our deficit, we must cut Medicare benefits. That is flat-out wrong.

FOX Business | New Health-Reform Tax Scares Away Venture Capitalists
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 | Europe stumbles over banking union
Europe stumbles over banking union

Economist | Sometimes smaller is not better
Large banks are generally accepted to be more “systemically” dangerous than small ones, and governments are quicker to save big institutions when they run into trouble. But small institutions can still cause a lot of havoc, especially if they are all doing the same thing.


Econ Comments & Analysis                                                                                            
The American | The Left’s Flip-Flop on the Bush Tax Cuts
Opponents of the Bush tax cuts have done a silent flip-flop on whether those cuts helped the middle class.
Bloomberg | Obama’s Sanctimony Proves Who the Real Scrooge Is
As right as Dickens. That’s what U.S. President Barack Obama suggested about his tax plan when he recently used “A Christmas Carol” by Charles Dickens to frame his case for rate increases.
Politico | Gas tax: On the table, but not in the conversation
Washington is abuzz with talk about the income tax — but Americans may not be aware there is another rate on the table. Amid the fiscal cliff debate, there’s a revenue option that would re-examine the way roads and bridges have been funded over the past 50 years: the federal gas tax.

Economist | Revenue today or revenue tomorrow
Many developed countries are seeking new sources of tax revenue to balance their budgets today. They also face aging populations expecting long, comfortable retirements. A new paper from Harvard economists Raj Chetty and Steve Friedman, partnered with Danish researchers, may offer a solution.
Political Calculations | The Flat Tax the U.S. Effectively Already Has
Harvard economist Greg Mankiw offered a unique observation following the release of the findings of a CBO study on the effective marginal tax rates that many Americans really pay on their incomes, after taking into account any government assistance they might receive and the income levels at which their welfare benefits phase out


Washington Post | Citigroup to cut more than 11,000 jobs as it looks to lower expenses
Citigroup said Wednesday that it will cut 11,000 jobs, a bold early move by new CEO Michael Corbat. The cuts amount to about 4 percent of Citi’s workforce of 262,000.
Market Watch | U.S. jobs growth slows in November, ADP estimates
The U.S. saw slower jobs growth in November as Hurricane Sandy hurt employment, particularly in the manufacturing sector, a payrolls processing firm estimated Wednesday.

Econ Comments & Analysis                                                                                            
AEI | How hard is it to find a job?
A reporter asked me the other day about extending unemployment-insurance (UI) benefits, which have been part of budget talks to avert the "fiscal cliff."

Economix | Degree Inflation? Jobs That Newly Require B.A.’s
Despite the sob stories you hear about unemployed college graduates, bachelor’s degrees have actually gotten more valuable over time.


WSJ | GOP Deficit Plan Irks Conservatives
Conservatives on Tuesday took aim at House Speaker John Boehner's deficit-reduction proposal in the fiscal cliff talks, a dispute that was aggravated by Mr. Boehner's decision to remove some conservatives from prized committees.
Bloomberg | Obama Lesson on Debt Talks Is Standing Firm on Tax Rates
President Barack Obama is hardening his stance in his first post-election confrontation with Republicans, declaring he will make no deal on the country’s fiscal future unless congressional leaders first accept tax-rate increases on top earners.

Econ Comments & Analysis                                                                                            
WSJ | The Budget Baseline Con
If the fiscal cliff talks make Lindsay Lohan look like a productive member of society, perhaps it's because President Obama and John Boehner are playing by the dysfunctional Beltway rules. The rules work if you like bigger government, but Republicans need a new strategy, which starts by exposing the rigged game of "baseline budgeting."
Washington Times | Obama’s fiscal-cliff Christmas
Who is trying to push the United States off the “fiscal cliff”? Many left-wing commentators predictably have placed the blame squarely on the Republicans. Yet a much stronger case can be made that the fault lies with President Obama.
Real Clear Markets | Bad Boy Cities and States Test Fiscal Limits
Illinois' reputation as the incorrigible outlaw of state finance has continued to grow throughout the fall. In mid-October, a fiscal study group co-chaired by former Federal Reserve Chairman Paul Volcker issued a stinging assessment of the state's finances which argued that Illinois is effectively insolvent.
WSJ | How to Get a Budget Deal Instead of the Cliff
In case you're wondering, a typical U.S. recession pushes the unemployment rate up more than three percentage points. Even small recessions raise it more than two points. If we fall into another recession in early 2013, while we are still digging out from "the big one," the unemployment rate will begin its climb from a base near 8%.
Town Hall | Fiscal Cliff Notes
Amid all the political and media hoopla about the "fiscal cliff" crisis, there are a few facts that are worth noting.

CATO | Exposing Washington’s Dishonest Budget Math
In these John Stossel and Judge Napolitano interviews, for instance, I explain that the crooks in DC have created a system that allows them to claim they’re cutting the budget when the burden of government spending actually is rising.