Tuesday, January 8, 2013

General Economics

Bloomberg | Euro-Area Economic Confidence Rises More Than Estimated
Economic confidence in the euro area increased more than economists forecast in December even as the 17-nation currency bloc remained mired in its second recession in four years.
Politico | New tech and government regs: A glaring divide
What happens here at the annual Consumer Electronics Show certainly doesn’t stay here, at least not as far as Washington is concerned.
Market Watch | Small-business sentiment edges up from lows: NFIB
A measure of small-business sentiment in December edged up but still was the second-worst reading since March 2010, the National Federation of Independent Business said Tuesday.
FOX Business | AIG may join bailout suit against U.S. government
American International Group Inc, the insurer rescued by the U.S. government in 2008 with a bailout that ultimately totaled $182 billion, may join a lawsuit against the government alleging the terms of the deal were unfair.
Bloomberg | GM Seen Holding U.S. Share After Slipping to 88-Year Low
General Motors Co. (GM) likely will maintain its position in the U.S. after its market share plunged to the lowest since Alfred P. Sloan’s first full year running the company.
WSJ | Apartment Rents Continue to Rise As Vacancies Fall
Apartment landlords continued to impose hefty rent increases as 2012 drew to a close, although there are some early indications they could be losing their leverage with tenants.

Econ Comments & Analysis                                                                                            
Real Clear Markets | 3 Ways Congress Can Boost Growth
The new tax law passed on January 1, before the 112th Congress adjourned, will slow American economic growth because it raised income taxes on most taxpayers.
CNBC | Income Inequality: Is It Good for Everyone?
Income inequality has been on the rise for three decades in the United States, according to the Congressional Budget Office, with the gap between the "haves" and "have-nots" currently at its widest point since 1967.
WSJ | The Foreclosure Shakedowns
Another search party has returned from the foreclosure litigation swamp. And once again, our brave regulatory first responders found few actual victims. But there is a virtue in Monday's $8.5 billion settlement between federal regulators and 10 giant banks over foreclosure practices. At least the regulators admit that most of the people due to receive compensation were never victimized.
WSJ | Chinese 'Currency Manipulation' Is Not the Problem
When things are not going well, it is common to seek scapegoats. In this vein, populists of various stripes allege that China manipulates the value of its currency to favor its exports and undercut American workers, particularly in manufacturing.
AOL | Subsidies for Big Oil?
The US government needs to stop giving subsidies to Big Oil! This is such a common rallying cry that few stop to consider what it really means.
NBER | The Asset Price Meltdown and the Wealth of the Middle Class
I find that median wealth plummeted over the years 2007 to 2010, and by 2010 was at its lowest level since 1969. The inequality of net worth, after almost two decades of little movement, was up sharply from 2007 to 2010.

Library of Economics | Wage Rigidity in Of Human Bondage
When economists say "wage rigidity," they almost always mean downward wage rigidity.  Nominal wages almost never come down.  Yet in W. Somerset Maugham's Of Human Bondage, set in late 19th-century England, upward wage rigidity plays an interesting role in the plot.
Market Watch | Watch these six China investment themes for 2013: Deutsche Bank
Watch for a growth recovery in China this year, according to Deutsche Bank, which highlighted improvements for cement, construction and shipping companies.

Health Care

Politico | What's with slow rise in health spending?
Health care spending continued to grow at one of the slowest rates in history last year even as signs emerged that the downward pressures applied by the recession were beginning to lift, according to an annual government report published Monday.
WSJ | Health-Cost Pause Nears End
U.S. health-care spending grew at a record low pace for a third consecutive year in 2011, according to federal figures released Monday, but signs are emerging that the slow growth may not last.

CATO | The Obama Administration’s Illegal Health Care Taxes: an Update
There have been several developments with respect to the Obama administration’s attempt to impose the Patient Protection and Affordable Care Act’s employer-mandate penalties and individual-mandate penalties where it has no authority to do so.


NY Times | Easing of Rules for Banks Acknowledges Reality
Over the last weekend, Mr. Dimon finally got what he had wanted: a form of deregulation of sorts. The new international capital requirements for banks, known as Basel III — apologies if your eyes are glazing over — were significantly relaxed by regulators.

WSJ | What’s So Great About Independent Central Banks?
The monetary prong of its legislative program calls for a higher inflation target and also an open-ended commitment on the part of the BOJ to expand its balance sheet.


CNN Money | How we used our payroll tax cut
Americans spent more of the extra income they received from the payroll tax cut in 2011 than they intended to.

Econ Comments & Analysis                                                                                            
Washington Times | Consumption-based tax reform boosts economy
The debate about the “fiscal cliff” may be over for now, but the questions about taxes are as pressing as ever: Should we raise them, by how much, and on whom?
Mercatus | The Home Mortgage Interest Deduction
The home mortgage interest deduction is the largest explicit tax deduction for households in the federal income tax code. Politicians have been reluctant to even consider removing this deduction, believing it to be one that provides significant benefits to middle-class taxpayers and encourages homeownership.

Heritage Foundation | Morning Bell: 13 Tax Increases in 2013
New Year’s Day was tough for taxpayers. Thirteen tax increases kicked in. The deal that Congress and President Obama struck that finally—but only partially—avoided the fiscal cliff resulted in seven tax increases. Those hikes combined with six tax increases from Obamacare that also began on New Year’s Day.


Bloomberg | U.S. Set for Biggest State-Local Jobs Boost Since 2007
State and local governments are in their best financial shape since the recession, giving them leeway to cushion the U.S. economy from federal budget cuts with spending and hiring of their own.
NY Post | Job stats: Don’t let arithmetic get in the way
If you aren’t confused yet about what the economy is doing, you haven’t been paying close enough attention to recent news reports.


Roll Call | Battle Lines Harden in the Game of Debt Limit Chicken
In the coming debt-ceiling debate, President Barack Obama and Speaker John A. Boehner will face another test of wills over fiscal policy — and the “Boehner rule” could be a linchpin that will either set the tone for the remainder of Obama’s term, if Boehner has his way, or be a thing of the past, as the president hopes.
National Journal | The Emergency Debt Plan That Would Put U.S. Citizens Second
In just a few weeks, the federal government won’t be able to pay all its bills on time. If that happens, the nation could start paying its lenders, many of them foreign, before its citizens.
Washington Times | With U.S. fiscal problems unresolved, treasured AAA rating may fall off cliff
The United States looks increasingly likely to lose its gold-plated AAA credit rating in the next few months amid warnings by Wall Street rating agencies that last week’s $650 billion “fiscal cliff” deal did not go far enough to reduce $1 trillion deficits and stabilize the debt.

Econ Comments & Analysis                                                                                            
Forbes | The GOP Opportunity To Turn Fiscal Cliff "Defeat" Into Victory
Can the Washington Republicans turn their “defeat” on taxes in the “fiscal cliff deal” into a strategic victory?  That is the biggest question now facing the GOP and financial markets.
Bloomberg | Why Austerity Works and Stimulus Doesn’t
After five years of financial crisis, the European record is in: Northern Europe is sound, thanks to austerity, while southern Europe is hurting because of half- hearted austerity or, worse, fiscal stimulus. The predominant Keynesian thinking has been tested, and it has failed spectacularly.
Washington Times | Uncle Sam won’t stop overspending
Tax revenue in 2013 will be lower (despite the just passed tax increase), and government spending will be higher than forecast. It’s an easy prediction — and this is why.

WSJ | Think Tank: Debt Ceiling Deadline Likely in February
The U.S. government is likely to exhaust all its emergency measures to avoid a debt crisis sometime in late February, based on a detailed analysis of the government’s daily cash flows, a prominent Washington think tank said on Monday.