Friday, December 21, 2012

General Economics

Bloomberg | Michigan Consumer Sentiment Fell to Five-Month Low in December
The Thomson Reuters/University of Michigan consumer sentiment index decreased to 72.9, the weakest since July, from 82.7 in November. Economists projected a final reading of 75 for December.
CNN: Money | Greece may remain in euro after all
Greece has come a long way. And while the nation's economy remains deeply depressed, the risk it will exit the euro zone has been greatly reduced.
Bloomberg | States Gaining in Economic Health as Manufacturing Grows
The economic health of 27 U.S. states showed signs of improvement as a four-year high in industrial production spurred gains in the so-called Rust Belt region, where manufacturing accounts for a larger share of jobs.
Market Watch | Freddie Mac chief economist on threats to housing
While the housing market is showing signs of life, the looming fiscal cliff remains a threat, as does global instability, the chief economist at mortgage-buying giant Freddie Mac told MarketWatch.
CNN: Money | Americans earned more, spent more, saved more
Personal income rose 0.6% during the month, and spending rose 0.4%. Meanwhile, people also stashed away a larger portion of their earnings. The savings rate rose to 3.6% in November, up from 3.4% in October.
Bloomberg | Spain 2012 Deficit Slippage Looms as Recession Deepens
Spain will struggle to meet its 2012 deficit target as a contracting economy hinders the impact of the deepest budget cuts in the nation’s democratic history, Deputy Budget Minister Marta Fernandez Curras said.

Econ Comments & Analysis                                                                                            
A merger that reflects the decline of U.S. equity markets.
Washington Times | Mortgage industry insider warns about a stifling regulatory cliff
Five years of criticism of banks by politicians, the public, the media and regulators have left the industry averse to taking risks.
WSJ | Strassel: Big Business Sells Out Small Business
CEOs say yes to higher individual taxes in return for Obama's promise of corporate tax reform.
NBER | Long Run Impacts of Childhood Access to the Safety Net
In particular, we focus on the introduction of a key element of the U.S. safety net, the Food Stamp Program, which was rolled out across counties in the U.S. between 1961 and 1975. We use the Panel Study of Income Dynamics to assemble unique data linking family background and county of residence in early childhood to adult health and economic outcomes.

Health Care

Fiscal Times | Medicare May Be Silent Killer in Budget Battles
Taxes may be taking the lion’s share of the spotlight right now in the fervor to negotiate a fiscal cliff deal, but Medicare looks more and more like the major obstacle to putting the federal budget on a stable course.

Heritage Foundation | 12 Days of Obamacare Surprises: Loss of Employer-Sponsored Insurance
Under Obamacare, most employers will either provide government-approved health coverage or drop coverage, pay a penalty, and send their employees to the new government-subsidized exchanges.


Washington Post | U.S. banks loosening standards for risky corporate loans, OCC says
Regulators are concerned that banks are loosening their standards for one of the riskiest forms of corporate lending, a trend that harkens back to perilous practices common in the run-up to the financial crisis.
Time | LIBOR Scandal: Yep, It’s as Bad as We Thought
Given how widely used LIBOR is to price financial instruments, homeowners are just one group that could have potentially lost money due to rate manipulation.
Bloomberg | Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt
Chairman Ben S. Bernanke’s efforts to energize the U.S. economy since 2008 have been credited with rousing the housing market from a six-year funk, lowering the jobless rate and putting more money in the pockets of both mortgage lenders and borrowers.

WSJ: Real Time Economics | Fed May Get Its Hope for More Inflation in 2013
According to the latest projections by Fed board members and regional presidents, core consumer inflation–as defined by yearly increase in the personal consumption expenditure price index excluding food and energy–is projected to run between 1.6% and 1.9% next year.
The Economist | Shrink this e-dollar
One of the fun things about the blogosphere is that occasionally a tiny debate that occured months ago will be reanimated and advanced.


Washington Post | Struggling homeowners may lose critical tax break in fiscal cliff talks
Among the tax breaks at risk in the negotiations between the White House and Congress to avert the “fiscal cliff” is a measure aimed at helping struggling homeowners.

Econ Comments & Analysis                                                                                            
Washington Times | SCHATZ AND LAZOF: Raising taxes won’t fix bloated government
Federal agency overlap costs $400 billion a year.
WSJ | Will the Carbon Tax Make a Comeback?
A proposed levy on energy use sparked outrage and was abandoned. The president, it was said, had been 'BTU-ed.'
NY Times | A Tax Credit Worth Preserving
Lawmakers interested in simplifying the corporate tax code must take care to protect the low-income housing tax credit, which allows corporations to reduce their tax liabilities by investing in affordable housing.


Econ Comments & Analysis                                                                                            
Forbes | Michigan's Right-To-Work and The Hostess Bankruptcy
Of course union bashers will trot out statistics showing that job creation is greater in right-to-work states, but it seems here the economists who divine these statistics are mistaking cause and effect.


Politico | Sequestration: Where will the cuts hit?
When it comes to sequestration, President Barack Obama and most lawmakers would prefer to just not go there.
CNN: Money | Fallout from fiscal cliff inaction
Congress and the White House created the fiscal cliff. And now they've waited too long to avert it, even if they do somehow eke out a deal by Dec. 31.
Bloomberg | Boehner Drops ‘Plan B’ as Budget Effort Turns to Disarray
House Speaker John Boehner scrapped a plan to allow higher tax rates on annual income above $1 million, yielding to anti-tax resistance within his own party and throwing already-stalled budget talks deeper into turmoil.

Econ Comments & Analysis                                                                                            
WSJ | Teetering on the Cliff
Boehner's tax bill failure reflects Obama's failure to negotiate seriously.
CBO | H.R. 6684, the Spending Reduction Act of 2012
Assuming enactment around January 1, 2013, CBO and the staff of the Joint Committee on Taxation estimate that enacting H.R. 6684 would yield net deficit reduction of $217.7 billion over the 2013-2022 period.

Café Hayek | What Everyone Knows About Austerity
How does it come to pass that everyone comes to know something that isn’t true? A simple answer is that if enough people treat it as true and those people have some credibility, then most people will assume it is true.