Monday, January 14, 2013

General Economics

Bloomberg | Euro Leaders Declaring Worst Is Over Turn to Economy Woes
European leaders declaring they’ve gained the upper hand in the three-year-old debt crisis are sharpening efforts to channel a rebound in financial markets to an economic recovery to chip away at soaring unemployment.
Market Watch | The worrisome struggle to grow and add jobs
The world’s largest economy had added an average of just 153,000 jobs a month in each of the past two years. And U.S. growth has jogged along at a lackluster 2% pace since the end of the Great Recession.
Bloomberg | Crop Prices Advance After U.S. Supply Shrinks More Than Expected
Crop prices rose in Chicago, driving corn toward the longest rally since February, as U.S. government estimates showed shrinking stockpiles after the worst drought since the 1930s seared fields across the Midwest.
Market Watch | U.S. retail spending might suffer a blow
Retailers likely racked up decent sales in December, but the bigger question is whether they’ll repeat that performance in January after Americans see how much their paychecks have shrunk.
Bloomberg | Mortgage Bonds Slump as Fed’s Buying Boost Fades: Credit Markets
After posting their worst returns since 1999, government-backed mortgage bonds are starting 2013 with losses on speculation the end of Federal Reserve purchases is in sight and as homeowner refinancing roils the market.

Econ Comments & Analysis                                                                                            
Fortune | The ticking time bomb in bond funds
Wall Street is in the process of turning one of its most plain vanilla investments - and one that average investors have flocked to in recent years because of its perceived safety - into ticking time bombs. Unfortunately, no one should be all that surprised. Wall Street does this all the time.
The American | Skin in the Housing Game
Recourse mortgages with significant down payments will stabilize the housing market, prevent speculative bubbles from forming, and limit taxpayer risk.
Heritage Foundation | The Role of GSEs in the Housing Market
The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), the major housing government-sponsored enterprises (GSEs), hold dominant positions in the U.S. mortgage market.

National Journal | Should America Exploit Energy Exports?
How--if at all--should the United States take advantage of fossil-fuel exports?
Economist | Trust us
Economists occasionally worry that they're developing a bit of a bad reputation among the general public, and that this may impair their ability to influence discussions on public policy. This has become an acute concern since the onset of the crisis.
Library of Economics | How to Trust Government Data (or not)
I recommend Russ's recent EconTalk with Morten Jerven.  Jerven's forthcoming book, Poor Numbers, shows that GDP estimates in sub-Saharan Africa are fraught with error. Jerven, who visited many statistics offices in the region firsthand, concludes that poorly staffed offices and ever-shifting measurement standards give us reason to doubt the quality of these data.

Health Care

Politico | Obamacare mandate may be ‘mandate plus’
The Obama administration always said there was a practical reason it needed the mandate, which starts next year. It wasn’t to be mean to people — it was supposed to pull in enough healthy customers to help pay for all the sick people who will get coverage. That’s why the White House stuck with it all the way to the Supreme Court — however unpopular politically, it was the best tool to make the new health system work.

Econ Comments & Analysis                                                                                            
WSJ | Obama's Health Spending 'Problem'
President Obama said a fair bit during the fiscal-cliff negotiations—speaking for 45 minutes in one 50-minute meeting, for example—but today let's zero in on the claim he kept repeating: "We don't have a spending problem. We have a health-care problem." For our money—and yours—those are two of the most remarkable sentences our Orator in Chief has ever strung together.


Market Watch | Monetary policy needs to boost growth: Fed's Evans
Monetary policy needs to help produce the most "robust demand growth" the U.S. can reasonably achieve with appropriate measures for price stability, because of the consolidation of public sector finances that is needed, Chicago Fed President Charles Evans told an audience Monday morning local time in Hong Kong, according to prepared comments.
Bloomberg | Fed’s Little-Noticed Escape Clause Allows for U.S. Growth
Federal Reserve Chairman Ben S. Bernanke is giving himself an escape clause from his latest stimulus steps in case the economy finally gains momentum.


WSJ | Retailers Fear Payroll Tax Will Cut Consumer Spending
American workers are opening their first paychecks of the year and finding an unpleasant surprise: The government's take has gone up.

Econ Comments & Analysis                                                                                            
WSJ | E-Filing and the Explosion in Tax-Return Fraud
Now that Americans finally know the tax rate they'll be paying, it's time to start thinking about the annual drudgery of filing their returns. It's also the season when identity thieves begin ripping off those returns and stealing billions in false or misdirected refunds. Tax fraud, amazingly, is now the third-largest theft of federal funds after Medicare/Medicaid and unemployment-insurance fraud.
Washington Times | Carbon tax mischief
Good news: American oil production has reached its highest point in two decades. The bad news, though, is when liberals see all that fossil fuel flowing, their first instinct is to tax it.
WSJ | Greek Tax Insanity
Can a country tax itself into economic oblivion? An outside observer might well conclude that Greece is running an experiment to find out. The Greek government imposed another big tax increase Saturday to appease the European Union and the International Monetary Fund.

CATO | Do Higher Tax Rates Hurt Growth?
Because of Obama’s class-warfare tax hike and additional tax increases by kleptocrats at the state level, many successful taxpayers will now lose more than 50 percent of any additional income they generate for the American economy.


WSJ | Vital Signs Chart: Less Competition for Job Openings
The competition to find a job continues to ease up slightly. The number of job seekers for each opening was 3.28 in November, the lowest level in more than four years. That reflects slow but steady hiring by employers.


Politico | Double trouble: House GOP eyes default, shutdown
House Republicans are seriously entertaining dramatic steps, including default or shutting down the government, to force President Barack Obama to finally cut spending by the end of March.

Econ Comments & Analysis                                                                                            
Forbes | Everything the Hysterics Tell You About Budget Deficits Is Wrong
Other than monetary policy, no area of economic discussion is more confused than the one about government spending and budget deficits. Without defending heavy government spending for even a second, most everything readers are presented with about spending and deficits is embarrassingly wrong.
AEI | Six ways to fix the US economy
As President Obama approaches this legislative season, he has a chance to learn from his successes and failures, and position himself to maximize the chance that sound policies are enacted.  To do that, he needs to take 6 steps.

Economist | Deminted
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit," said Anthony Coley, a Treasury spokesman.
The Volokh Conspiracy | What Can Be Done about the Debt Ceiling?
A second approach calls for the Treasury to “prioritize” the payment of bondholders when allocating incoming tax revenues. But prioritization comes at a cost: the very reason we need to borrow is that incoming revenues don’t cover all our spending.