Thursday, December 13, 2012

General Economics

Bloomberg | Consumer Comfort Stagnates as U.S. Lawmakers Debate Budget
Consumer confidence in the U.S. stagnated last week, showing a lack of improvement since October as lawmakers continue to search for common ground on taxes and government spending in 2013.
Market Watch | U.S. retail sales rebound in November
American consumers didn’t go shopping much in October, but they made up for it in November.
Bloomberg | Mortgage Rates in the U.S. Drop to Near-Record Lows
The average rate for a 30-year fixed mortgage was 3.32 percent in the week ended today, down from 3.34 percent, McLean, Virginia-based Freddie Mac (FMCC) said in a statement. The average 15- year rate slipped to 2.66 percent from 2.67 percent.
CNN Money | Greece aid clears final hurdle
Eurozone finance ministers formally agreed Thursday to release more aid to Greece, with the first installment of funds due in the coming days.
National Journal | Fed Gloomier on Economic Forecast
The Federal Reserve on Wednesday issued a slightly more pessimistic forecast for economic growth and a slightly less pessimistic one for unemployment in 2013.

Econ Comments & Analysis                                                                                            
Investors | The Government, Not The Market, Created Our Financial Crisis
Suppose you saw a building on fire. Would you seek counsel from the arsonist who set it ablaze for advice on how to put it out?
AEI | For a human scale system productivity
The recent agreement reached on productivity between the Italian government and the labour and entrepreneurial trade unions is a good starting point, but certainly not the solution to the problem of competitiveness and productivity.

AEI | US net worth has recovered $13.5 trillion, but still below 2007 peak
By the way, the Fed’s latest Flow of Funds data show that the net worth of US households recovered by $1.7 trillion to $65 trillion during Q3.
Keith Hennessey | What kind of negotiator is President Obama?
President Obama’s behavior over the past month is consistent with three different models, and I cannot figure out which one applies.
AEI | SSI exemplifies America’s flawed approach to social welfare policy
As Nick Kristof wrote in his Sunday New York Times column and as Arthur Brooks noted in his blog post yesterday, some social welfare programs exhibit serious flaws. While budget concerns drive program criticism—particularly in the context of the looming fiscal cliff—the most effective calls for reform grow out of these programs’ ultimate failure to assist their targeted populations in achieving economic independence.

Health Care

USA Today | Surprise: New insurance fee in health overhaul law
Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Obama's health care overhaul.


Market Watch | U.S. producer prices fall 0.8% in November
U.S. producer prices fell a seasonally adjusted 0.8% in November, mostly because of lower energy costs, the Labor Department said Thursday.
Washington Times | In shift, Fed sets 6.5 percent unemployment goal for easing
The Federal Reserve on Wednesday announced a new easing program to boost the U.S. economy and said for the first time that it will keep interest rates near zero until unemployment falls below a newly established threshold of 6.5 percent.
Market Watch | Fed, central banks extend dollar swap lines
The U.S. Federal Reserve and other major central banks moved Thursday to keep pressures out of financial markets by keeping in place measures designed to make it easy for foreign banks to obtain dollar funding.

Econ Comments & Analysis                                                                                            
WSJ | The Fed's Contradiction
Four years ago this month the Federal Reserve began its epic program of monetary easing to rescue an economy in recession. On Wednesday, Chairman Ben Bernanke declared that this has worked so well that the Fed must keep easing money for as long as anyone can predict in order to save a still-sputtering recovery.
Fortune | How risky is the Fed's major move?
A bold and necessary move? Yes, but the Fed's growing activism has limits and is ultimately inconsistent with the proper efficient functioning of a market economy.

WSJ | Most on Fed See Rates Low Into 2015
Most Federal Reserve officials continue to expect the central bank to first raise interest rates in 2015, in a projection consistent with new monetary policy thresholds announced by the central bank Wednesday.
Heritage Foundation | QE4: Another Big Step Down a Dangerous Road
The Federal Reserve Board today announced the introduction of yet another hyper-aggressive monetary policy, dubbed “QE4” by some for the fourth round of quantitative easing. Three times a dud, fourth time a charm? Not likely.
WSJ | Parsing the Fed: How the Statement Changed
The Federal Reserve releases a statement at the conclusion of each of its policy-setting meetings, outlining the central bank’s economic outlook and the actions it plans to take.


Politico | Why tax hikes fall short for cliff talks
To accelerate private-sector growth, Republicans will need all their negotiating leverage to minimize taxes on investors by maximizing spending cuts. In a world where the majority of voters garner benefits from spending and see little cost to taxing investors, that’s never been easy. But the current circumstances make it much more precarious.
Politico | Tax relief could come in form of credit
Over the past few weeks, reports have surfaced that President Barack Obama is interested in providing middle-class families with additional tax cuts beyond just the preservation of the Bush-era tax rates. While that is welcome news, not all methods of delivering middle-class tax relief are created equal.

FOX Business | How to Be Tax Smart When Donating This Season
It’s the holiday season and the time to share our bounty with those less fortunate. An added bonus to the joy of giving is the ability to deduct the contributions on our tax returns.


USA Today | Unemployment claims drop in latest week
The number of Americans seeking unemployment benefits fell sharply for a fourth straight week, a sign the job market may be improving.
Market Watch | Jobless claims drop below pre-Sandy levels
The number of people who applied for new U.S. unemployment benefits last week fell below pre-Sandy levels and hovered near a four-year low.

Econ Comments & Analysis                                                                                            
USA Today | Editorial: Unions' woes are largely of their own making
Just 11.8% of workers now belong to a union. That's barely half what it was three decades ago, and the total would be even lower if not for an increase in unionized public-sector workers.
Washington Times | Right-to-work victory in Michigan
American families and taxpayers may be just three weeks from going over the “fiscal cliff,” a move economists predict will shrink the nation’s economy and dramatically increase unemployment, but you wouldn’t know it by the way President Obama has been approaching negotiations with Congress.

Political Calculations | U.S. Jobs Five Years After Their Peak
We're going to look at the change in the U.S. employment situation since the total level of employment in the U.S. peaked five years ago in November 2007, but first, let's look at the change since October 2012.


Politico | Getting past grudges to fiscal cliff deal
Between the hit movie and President Barack Obama’s second Inauguration, Lincoln is in the air in Washington. But maybe it’s time to also remember Grant, who knew war firsthand and had the good sense in victory to let the defeated take home their horses and mules for spring plowing.
CNN Money | Greece aid clears final hurdle
Eurozone finance ministers formally agreed Thursday to release more aid to Greece, with the first installment of funds due in the coming days.
Politico | A real debt goal: 60 percent by 2030
The fiscal cliff obsession in Washington is missing the whole point of fiscal reform: actually solving our national debt problem. Instead of focusing on an arbitrary target in one area of the budget, fiscal reform should build from a comprehensive goal that stabilizes the debt and provides the certainty and confidence needed to restart the U.S. economy.

CATO | Promises to Restrict Future Spending Are Worthless
The next year, when the formula called for another reimbursement cut, Congress passed an override. And each year since, Congress has followed the same pattern.