Wednesday, January 2, 2013

General Economics

News                                                                                                                             
CNN Money | Fiscal cliff deal would hit the rich - but it could have been worse
The rich will see a much bigger tax bill under the fiscal cliff deal, but even they will get some nice breaks.
Bloomberg | Euro-Area December Manufacturing Shrinks More Than Estimated
Euro-area manufacturing output contracted more than initially estimated in December, adding to signs a recession in the currency bloc may extend into this year as leaders struggle to tackle the sovereign-debt crisis.
Bloomberg | Outlook for 2013 Improves as U.S. Manufacturing Climbs
Manufacturing picked up in December, reflecting growth in orders, employment and exports that indicate the U.S. expansion will be sustained in 2013 following the budget deal.
Politico | 112th Congress legacy: Unfinished business
For two years, President Barack Obama and Congress ignored virtually every other pressing matter to engage in an ideological war over the size of government and who should foot the bill for it.
CNN Money | Fiscal cliff deal boosts world markets
World markets advanced Wednesday as lawmakers in the United States completed legislation that will mute much but not all of the fiscal cliff.
CNBC | Tech Giants Brace for More Scrutiny From Regulators
Silicon Valley lobbied hard in Washington in 2012, and despite some friction with regulators, fared fairly well. In 2013, though, government scrutiny is likely to grow. And with this scrutiny will come even greater efforts by the tech industry to press its case in the nation's capital and overseas.

Econ Comments & Analysis                                                                                            
Washington Times | Obama needs to prove he’s serious about energy independence
Federal energy development is an important answer to the questions on jobs, national security, the environment and federal budget that plague our nation right now. A focus on energy production is crucial to reviving our economy. In particular, we must turn our attention to natural gas because America is awash in it.
WSJ | Lost Decade, Revisited
We said it four years ago: A lost decade was coming, though not as some mechanical inevitability of the housing bust. Rather, that financial crisis put politics in charge in a way that would burden the economy's growth for years to come.
Washingotn Post | Obama’s leadership failure
The “fiscal cliff” is a massive failure of presidential leadership. The tedious and technical negotiations are but a subplot in a larger drama.
WSJ | Nothing Is Certain Except More Debt and Taxes
Whatever ultimately emerges from the fiscal-cliff negotiations over the past 48 hours, the country will survive. But the damage can't be undone. Taxes are going up for all working Americans. And so is the size of government.
Forbes | Memo to Washington: Economic Growth Is Easy
With the U.S. economy continuing to limp along, the economics profession continues to cast about for answers to this seeming mystery. In truth, economic growth is easy, and the irony today is that economists themselves are arguably the greatest barrier to a rebound.
Heritage Foundation | The 10 Worst Regulations of 2012
During 2012, virtually every aspect of American life, from caloric intake to dishwasher efficiency, was subjected to government meddling.

Blogs                                                                                                                             
WSJ | Construction Spending Dropped in November
Spending on U.S. construction projects unexpectedly fell in November as home building slowed and federal government outlays plummeted.

Health Care

News                                                                                                                             
Roll Call | Cuts to Some Medicare Payments Provide Offsets for 'Doc Fix'
The Senate-passed fiscal cliff bill would block for one year a scheduled 27 percent cut in reimbursements for Medicare physicians, paid for by familiar cuts and adjustments to other provider payments.
National Journal | Will 'Obamacare' Fill the Gaps in Our Mental Health System?
Tragedies like the recent school shooting in Newtown, Conn., initiate conversations about access to mental health services nearly as consistently as they do discussions of gun control. And though it is not known whether the shooter, Adam Lanza, was mentally ill, public officials jumped on the opportunity to promote better and increased access to behavioral care as one effort to address the massacre.

Monetary

News                                                                                                                             
Washington Times | Fewer U.S. banks failing as industry regains its strength
U.S. banks ended 2012 with their best profits since 2006 and fewer failures than at any time since the financial crisis struck in 2008. They’re helping support an economy slowed by high unemployment, flat pay, sluggish manufacturing and anxious consumers.

Econ Comments & Analysis                                                                                            
AEI | As his Fed tenure comes to a close, what should Bernanke's legacy be?
The final lap of the Bernanke era at the Fed has begun. His current term as Chairman ends next January, and the odds that he would stay on for four more years are close to zero. The job has been absolutely exhausting since the onset of the financial crisis in 2007, and Bernanke has a very able successor waiting in the wings - the current Vice Chair, Janet Yellen.

Blogs                                                                                                                             
Econbrowser | QE3 and beyond
Now that we've closed the books on 2012, I thought it might be useful to take a look at where monetary policy has led us over the last four years.
Economist | What's moving Japanese markets?
Political change in Japan is spurring hope among many economic writers that a dramatic change in Japanese monetary policy might put many old theories to the test, and bring the Japanese economy out of stagnation at last.

Taxes

News                                                                                                                             
Politico | Democrats win key tax fights in emerging fiscal cliff deal
The emerging fiscal cliff deal is enough to leave Republicans with a major New Year’s hangover. The package being negotiated by Senate Republican Leader Mitch McConnell and Vice President Joe Biden amounts to a defeat for the GOP on multiple fronts.

Econ Comments & Analysis                                                                                            
WSJ | Nothing Is Certain Except More Debt and Taxes
Whatever ultimately emerges from the fiscal-cliff negotiations over the past 48 hours, the country will survive. But the damage can't be undone. Taxes are going up for all working Americans. And so is the size of government.

Blogs                                                                                                                             
Reason | A Tax Cuts Mystery
The chief of detectives shoved his hands into the pockets of his trenchcoat and tugged at the brim of his fedora. “We’ve got a murder on our hands, gentlemen.”

Employment

Econ Comments & Analysis                                                                                            
CNBC | Budget Deal Will Push Up Unemployment
Friday, forecasters expect the Labor Department to report the economy added 155,000 jobs in December—substantially less than is needed to pull unemployment down to acceptable levels.

Budget

News                                                                                                                             
CNN Money | CBO: Fiscal cliff deal adds $4 trillion to deficits
The fiscal cliff deal approved by Congress will increase deficits over the next decade by close to $4 trillion, according to the Congressional Budget Office.
Politico | Will tax deal grow or shrink deficit?
Like everything else in Washington these days, measuring the cost of the New Year’s tax compromise approved by Congress depends on where you stand.
CNN Money | Fiscal cliff deal stops many tax hikes, but leaves big issues pending
The fiscal cliff compromise approved by the House late Tuesday will mute much but not all of the negative economic impact of going over the cliff.
Washington Post | ‘Fiscal cliff’ deal falls short under three economic theories
Economists generally offer three theories for what’s hampering the still-sluggish U.S. economy: the Keynesian theory, which would like to see lower taxes or more government spending; the spending/debt theory, which would like to see both of those reined in; and the uncertainty theory. Under none of them can the deal to avert the “fiscal cliff” be considered an economic success.

Blogs                                                                                                                             
CATO | Grading the Fiscal Cliff Deal: Terrible, but Could Be Worse
The faux drama in Washington is finally over. The misfits in Washington reached a deal on the fiscal cliff.
CATO | Congress Ducks the Debt Problem Again
That’s why fiscal conservatives should look very skeptically at the “fiscal cliff” and “grand bargain” proposals, most of which promise to cut spending some day—not this year, not next year, but swear to God some time in the next 10 years.
Economist | How much is too much?
The popularity of austerity policies has waned over the past several years thanks to evidence that it may have been counterproductive. But many are still worried by the fact that, relative to national income, government debt is now larger in many countries than at any point since WWII. Moreover, for most nations, government debt is projected to grow relative to income for years to come.
WSJ | Academic Economists React: Shortfalls of Fiscal Cliff Deal
The deal appears to offer no entitlement reforms, no tax reform, and higher marginal tax rates. After all the public discussion over the past couple years of what a good fiscal reform would like, it is hard to imagine a deal that would be less responsive to the ideas of bipartisan policy wonks. –Greg Mankiw