Friday, January 4, 2013

General Economics

National Journal | Why the Economy Won't Blast Off Anytime Soon
The good news is that the uncertainty leading up to the year-end fiscal cliff negotiations didn’t seem to hit the labor market hard, as some had feared. The bad news is an economic surge in 2013 appears out of reach, at least for now.
Bloomberg | Housing a Sweet Spot for U.S. Economy as Recovery Expands
At Lambert Ranch, an Irvine, California, housing development where prices start at $1 million, just two of 98 homes are unsold since the project opened in May.
CNN Money | Glimmer of hope for Europe's economy
Europe's economy showed signs of resilience in December as activity in Germany stabilized, suggesting a return to growth later this year might be in the cards.
FOX Business | Factory Orders Flat in November
New orders received by U.S. factories were flat in November, missing expectations as demand for aircraft sank sharply, although a gauge of business spending plans still gave a positive sign for the economy
Bloomberg | Services in U.S. Expand at the Fastest Pace in 10 Months
Service industries in the U.S. expanded in December at the fastest pace in 10 months, helping spur the world’s largest economy at the end of 2012.
WSJ | Google Dodges Antitrust Hit
The Federal Trade Commission said Thursday it wouldn't bring charges against Google after a 19-month investigation into whether the company favored its own products and services in its search results and unfairly harmed rivals.

Econ Comments & Analysis                                                                                            
Washington Times | Red tape on the rise
That dysfunctional arrangement ensures President Obama won’t be able to get away with passing all the bills he needs to fulfill his agenda. He showed in his first term a willingness to use regulatory agencies to enact by rule what he couldn’t by law. As a recent Competitive Enterprise Institute (CEI) report found, the renewed emphasis on red tape in the second term will cost Americans dearly.
WSJ | The Taxman's Uncharitable New Rule
The Occupy Wall Street, what's-yours-is-mine-sentiment is alive and well, at least judging by the furious reaction to a recent message I sent out on Twitter concerning the tax increase that President Barack Obama just signed into law.
Washington Times | ‘Fiscal cliff’ drama reveals flawed system
Gerrymandering is, by definition, a practice “that attempts to establish a political advantage for a particular party or group by manipulating geographic boundaries to create partisan or incumbent-protected districts.”
AEI | Fiscal cliff deal bad for future generations
The fiscal cliff has been averted, but no one should be patting themselves on the back. Congress managed at the last second to largely avoid tax hikes and to defer automatic across-the-board spending cuts of over $100 billion a year. But overall, the machinations before the legislation and the legislation itself are disastrous for five reasons.

Library of Economics | Finance Regulations to Watch in 2013: International Speed Bankruptcy & U.S. Crowdfunding
US and UK regulators will unveil the first cross-border plans to deal with failing global banks on Monday, outlining proposals to force shareholders and creditors on both sides of the Atlantic to take losses...
Market Watch | Prepare for zero real growth in the U.S. in 2013
The fiscal-cliff deal — the tax half of the deal anyway — is now past us, and the reflation trade continues along. However, what we now see, which the very scary Paul Farrell pointed out this week, is a number of very strong headwinds developing for 2013 and 2014. Farrell is primarily looking for the Black Swan, which is the in vogue thing to do since 2008, but there are much more evident storms coming to eventually find shelter from.
WSJ | Making It to the 1% and Staying There
Lurking not far beneath the surface in the uproar over the 1% versus the 99% is the notion that once an American makes it to the top he or she is very likely to stay there. But is that so?
CATO | How Trade Agreements Stray from Free Trade
U.S. labor unions are keeping an eye on the U.S.-European efforts to deepen economic ties, and believe a potential U.S.-EU trade agreement could provide an opportunity to raise some U.S. labor standards to the level prevailing in EU member states, according to labor sources.

Health Care

Politico | Health care guide to debt limit battle
Congress’s most recent spending battle left the health industry with some nicks and scratches, but it’s leery of having to hand over even bigger savings in the next battle looming two months from now.

Econ Comments & Analysis                                                                                            
Fortune | 2013: The year we become the health care nation
Forget 'fiscal cliff' and 'debt ceiling.' The words on everyone's lips this year will be 'health care' and just how we're going to pay for it.


Bloomberg | Euro-Area Consumer Prices Rise More Than Estimated on Food
Euro-area consumer prices increased more than economists estimated in December as higher prices for food and services offset slower growth in energy costs.
CNBC | End of Stimulus? Why It Isn't All Bad News
The Federal Reserve's minutes on Thursday hinted at an earlier-than-expected end to its unprecedented bond buying program, triggering a sell-off in equities as investors worried about an end to historically low interest rates. The upside? Analysts say this is the Fed's way of weaning markets off the drug of quantitative easing and reflects the central bank's confidence in the U.S. economy.
WSJ | Fed Divided Over Bond Buys
A new fault line has opened up at the Federal Reserve over how long to continue bond-buying programs aimed at spurring stronger economic growth.

Econ Comments & Analysis                                                                                            
NBER | The Federal Reserve, Emerging Markets, and Capital Controls: A High Frequency Empirical Investigation
In this paper I use weekly data from seven emerging nations – four in Latin America and three in Asia – to investigate the extent to which changes in Fed policy interest rates have been transmitted into domestic short term interest rates during the 2000s.
Market Watch | Fed sees bond buying ending this year
There was a general sense among Federal Reserve officials that their bond-buying program would last, at most, until the end of the year, according to the minutes from their meeting last month that were released on Thursday.
Forbes | The 1870-1914 Gold Standard: The Most Perfect One Ever Created
The most perfect monetary system humans have yet created was the world gold standard system of the late 19th century, roughly 1870-1914. We don’t have to hypothesize too much about what a new world gold standard system could look like. We can just look at what has already been done.


CNN Money | Fiscal cliff deal raises taxes on 77% of Americans
More than three in four Americans will pay higher taxes for 2013, thanks to the fiscal cliff deal passed in Congress on New Year's Day.

Econ Comments & Analysis                                                                                            
Washington Times | Surreal world of Obama tax hikes
On the contrary, the eleventh-hour compromise is marred by higher taxes that will hinder further growth, cost hundreds of thousands of jobs and make life even tougher for many Americans barely surviving paycheck to paycheck.
TIME | At Long Last, A Permanent Patch for A Dreaded Tax
A tax meant only for the wealthy but that paralyzed much of the middle class for decades has been permanently de-fanged. Score one, at least, for the eleventh-hour fiscal cliff deal.
Daily Beast | After the Fiscal Cliff: What do Democrats Want?
I wrote on Monday that it wasn't clear to me that Republicans actually wanted any of the stuff they said they wanted in exchange for tax hikes, like entitlement cuts. The Democrats at least had one thing that was politically popular: tax hikes on those who make more than $250,000 a year.

Atlantic | Sorry, Middle Class: In a Few Years, Your Taxes Will Have to Go Up, Too
Here are two facts about taxes under the fiscal cliff deal.


CNN Money | December jobs report: Hiring and unemployment steady
Hiring remained moderate at the end of the year as employers appeared undaunted by the fiscal cliff gridlock in December.
CNN Money | Forget discouraged, 3 million workers hopelessly unemployed
Employers may be hiring, but there's another big problem with the job market that isn't being tracked as closely: the hopelessly unemployed.

Econ Comments & Analysis                                                                                            
Bloomberg | Jobs Lost Hit 5 Million With Rigged Currencies: Cutting Research
Exchange-rate manipulation by countries from China to Denmark has cost the U.S. as many as five million jobs in recent years, according to the Peterson Institute for International Economics.
Politico | It pays for states to raise bar on minimum wage
On New Year’s Day, our states accomplished something that Congress has achieved only erratically over the past 40 years: raising the minimum wage.

WSJ | Economists React: Good-Not-Great Labor Market
Economists and others weigh in on the report showing a 155,000 gain in U.S. jobs and the unemployment rate unchanged at 7.8%.


National Journal | Don't Despair (Yet) Over Next Fiscal Cliff
The tenor of analysis in the wake of Fiscal Cliff Deal #1 could be summarized as "woe is us." But here’s a radical thought: Maybe the next round of Capital Hill strife won’t be as bad as what we’ve just endured at the precipice of the Dec. 31 cliff.
CNBC | End of Stimulus? Why It Isn't All Bad News
The Federal Reserve's minutes on Thursday hinted at an earlier-than-expected end to its unprecedented bond buying program, triggering a sell-off in equities as investors worried about an end to historically low interest rates. The upside? Analysts say this is the Fed's way of weaning markets off the drug of quantitative easing and reflects the central bank's confidence in the U.S. economy.
Bloomberg | Geithner Said to Plan Departure Before Debt Ceiling Deal
Treasury Secretary Timothy F. Geithner finds himself in a familiar position: eager to resume life outside government and facing contentious negotiations with Congress over raising the federal debt ceiling.
Washington Post | How the fiscal cliff deal will affect the economy and deficits, in six charts
While the legislation that President Obama signed into law on Tuesday night averts the worst effects of the fiscal cliff and is a step toward raising revenue needed to cut the deficit, most economists would say it is an incomplete solution at best. Here are three ways – and six charts – showing what the fiscal cliff deal does and doesn’t accomplish.

Econ Comments & Analysis                                                                                            
WSJ | The Debt-Ceiling Fight Will Be Dirty
In the classic movie "The Untouchables," the street-smart cop Jim Malone explains to his golden-boy partner Eliot Ness that things will have to get dirty if they intend to bring down Al Capone: "You see what I'm saying is, what are you prepared to do?" That's the question for the GOP as it sifts through the ashes of this week's cliff deal.
Heritage Foundation | A New, Extra-Extraordinary Debt-Ceiling Tool
The federal government has once again hit its statutory debt limit. For the next few weeks, Washington will be funding its budget shortfalls through the Treasury Department’s traditional “extraordinary” measures.