Monday, December 17, 2012

General Economics

Bloomberg | Euro-Area Exports Decline for Second Month Amid Recession
Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.
Washington Post | ECB’s Draghi urges leaders to create authority to clean up banks, on top of new watchdog
The head of the European Central Bank says EU leaders must move forward and set up an authority to clean up failed banks in a way that doesn’t leave taxpayers stuck with the bill.
Bloomberg | Manufacturing in New York Area Shrinks More Than Forecast
Manufacturing in the New York region shrank for a fifth straight month in December, while an increase in optimism about the next six months signals factories are poised to rebound should the federal government resolve its impasse over fiscal policy.
WSJ | Economy Poised for 2013 Gain
As 2012 comes to a close, the U.S. economy is also turning a page: The recovery is over. It looks like 2013 will be the start of a more normal, though hardly robust, period of growth.
Bloomberg | Treasury Plan Would Cut Rates on Some Mortgages in Bonds
Some struggling homeowners left out of current U.S. government mortgage-aid programs because their home loans have been packaged into private securities could see their interest rates cut through a subsidy being considered by the Treasury Department.
Washington Times | Senate fails to extend account insurance
A federal program giving unlimited insurance guarantees to some no-interest bank accounts, enacted at the height of the financial meltdown, will die out at the end of the year after the defeat of a Senate plan to extend it.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Bondage Of Redistribution Ideology
The idea that we should take from those who have and give to those who don't is viewed as proper and just among liberals. In fact, if you do not subscribe to redistribution ideology, you are attacked as being greedy at best and racist at worst. The problem is that income redistribution in practice promotes one of the same moral injustices found under slavery.

Economist | The safe asset shortage
Everyone needs to save. People need to be able to cover unexpected expenses and income reductions, to say nothing of retirement. To accomplish this, we buy equities and bonds, hoard gold coins and physical currency, open bank accounts, accumulate real estate, purchase insurance coverage, and even stock up on canned food.

Health Care

National Journal | 3 Reasons It's Not Yet Safe to Get Stoned
The big question since two states passed laws legalizing marijuana for non-medical use on November 6 has been how the federal government would respond. And thus far it's been silent -- until Friday.
Politico | GOP govs could gum up Obamacare
Can the governors do what Congress, the Supreme Court and the election couldn’t do — drive out Obamacare?

The Volokh Conspiracy | Most States Won’t Create Exchanges
Yesterday was the deadline for states to tell the Department of Health and Human Services whether they wanted create their own health insurance exchanges. As the NYT reports, only 17 states have said they intend to create an exchange.
Heritage Foundation | 12 Days of Obamacare Surprises: Taxes
When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 10 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.


Market Watch | Fed testing very limits of credibility: Lacker
The Federal Reserve is testing the limits of its credibility, said Jeffrey Lacker, the president of the Richmond Federal Reserve Bank, on Monday.
Real Clear Markets | At This Point There's No Way Out For the Fed
By upping the ante once again in its gamble to revive the lethargic economy through monetary action, the Federal Reserve's Open Market Committee is now compelling the rest of us to buy into a game that we may not be able to afford.

Econ Comments & Analysis                                                                                            
WSJ | Bernanke's Fiscal Cliff
The term "fiscal cliff" is an awfully hyperbolic way to describe the combination of tax increases and spending cuts currently scheduled to go into effect in the new year. But to the extent that the United States finds itself in a precarious fiscal situation, Federal Reserve Chairman Ben Bernanke shares much of the blame.
Washington Post | The Fed rolls the dice
It was big news last week when the Federal Reserve announced that it wants to maintain its current low-interest rate policy until unemployment, now 7.7 percent, drops to at least 6.5 percent.

WSJ | Fed’s Stein Defends Proposed Rules for Foreign Banks
Federal Reserve governor Jeremy Stein Monday defended the central bank’s latest proposal to change how it regulates foreign banks, saying the rules would help reduce risks to U.S. financial stability.


WSJ | Of Liberals and Loopholes
One post-election budget surprise has been President Obama's resistance to John Boehner's proposal to get $800 billion in new revenue by closing tax loopholes. Here's one likely reason: the high tax rates of his blue-state Democratic brethren.
CNBC | How Much Money Would Taxing the Rich Raise?
House Speaker John Boehner's latest tax proposal may mark a big step for Republicans. But it's a very small step in terms of actual tax revenues.

Econ Comments & Analysis                                                                                            
Financial Times | How to fix costly and unjust US tax system
Sooner or later the American tax code will be reformed. Probably sooner. Raising revenue will be the main motivation, but at a time of sharply increasing economic polarisation issues of fairness will be prominent too. There are also legitimate concerns about the complexity of current tax rules and their adverse effects on the economy.


Washington Times | Study: ‘Fiscal cliff’ could hit jobs hard
Failure by Congress to avoid the “fiscal cliff” could put hundreds of thousands of people across the nation out of work, most of whom don’t work for the government and don’t live in federal government strongholds.

Library of Economics | The Economics of "Right to Work"
The closed shop, where a worker must belong to the union before being hired, is dead. The union shop, where an individual must join the union once hired, is dead. The agency shop, where a worker cannot be made to join a union but can be required to pay dues if the union is the agent negotiating the contract for all workers, is dead.


Washington Times | Push Obama over the fiscal cliff
Unless the fiscal cliff dilemma is resolved within the next two weeks, everyone’s taxes go skyward. Rich and poor alike will hand over $500 billion more to the Internal Revenue Service. The across-the-board spending reductions will amount to about $110 billion, with more than half of the amount coming from defense. It’s enough to plunge an already sputtering economy into a deep recession.
National Journal | The Fiscal Cliff Plan B for Republicans
Week five of the fiscal-cliff negotiations came and went without any resolution, as Republicans increasingly looked for a backup plan to help them avert the fiscal cliff, save face on taxes, and give as little ground as possible politically.
Politico | Fiscal cliff: 2014 budget already delayed
The White House confirmed to POLITICO Sunday that it has deliberately slowed preparations for President Barack Obama’s fiscal 2014 budget until it has a better fix on the current talks with Republicans in Congress.

Econ Comments & Analysis                                                                                            
NY Times | That Terrible Trillion
As you might imagine, I find myself in a lot of discussions about U.S. fiscal policy, and the budget deficit in particular. And there’s one thing I can count on in these discussions: At some point someone will announce, in dire tones, that we have a ONE TRILLION DOLLAR deficit.
Heritage Foundation | The Economic and Fiscal Effects of the Obama Tax Plan
Nearly historic increases in federal personal income and payroll taxes combined with modest reductions in federal spending are set to begin on January 1, 2013. This is the “fiscal cliff”: a combination of fiscal policy changes that many analysts believe will send the U.S. economy into a recession.

WSJ | Avoiding Fiscal Cliff Won’t Spur Growth
A majority of economists surveyed said lawmakers will avoid across-the-board tax hikes and steep government spending cuts but say averting the fiscal cliff will do little to propel stronger economic growth immediately.
Heritage Foundation | Deficit Spending and Debt: Lessons from Japan
Deficit spending does not foster economic recovery. The U.S. and the world need to recognize the stagnation and inter-generational inequality caused by such spending, and for reference, they need not look further than Japan’s recent history of deficits.
Market Watch | Hopes rise for pre-Christmas fiscal cliff deal
Will this be the week that Washington cuts a deal to avert the fiscal cliff? While nobody knows for sure, House Speaker John Boehner and President Barack Obama reportedly have “never been closer to a deal” after Boehner said he’d accept higher taxes on incomes of $1 million and above and offered a one-year debt ceiling increase.