Tuesday, January 15, 2013

General Economics

Bloomberg | Manufacturing in New York Region Contracts for Sixth Month
Manufacturing in the New York region contracted in January for the sixth straight month as the industry continued to face the effects of fiscal uncertainty in the U.S. and lackluster demand overseas.
FOX News | New investigation of personal finance industry reveals leaders, gurus often serve themselves
After the financial crisis began in 2008, it suddenly became OK, even desirable, to talk about the illogic of ballooning borrowing and runaway stocks — and the inevitability that bubbles pop.
CNN Money | Entitlement America: Who benefits?
The middle class may have been spared the worst of the tax increases, but they may not be so lucky in the coming entitlement reform battle over deficit reduction.
Bloomberg | Retail Sales Rise in U.S. to Close 2012 on Upbeat Note: Economy
Retail sales rose more than forecast in December to end 2012 on a positive note, indicating Americans may be able to rise above Washington’s budget rancor to keep contributing to economic growth.
Washington Post | Ranks of working poor increasing
Nearly a third of the nation’s working families earn salaries so low that they struggle to pay for their necessities, according to a new report.

Econ Comments & Analysis                                                                                            
Washington Times | Tale of two economic styles
Will 2013 be a better year? A number of economic commentators have been saying the worst is behind us. I think they are wrong, and here is why. In most major countries, including the United States, government is growing faster than the private sector.
Mercatus | Rethinking the Volcker Rule
The Volcker Rule prohibits financial institutions reliant on deposit insurance from engaging in proprietary trading and limits their relationships with hedge funds and other private funds.
Washington Times | A lesson for Socialists
Forty-five years ago this month, history’s most notable attempt to resolve socialism’s inherent contradiction began. It failed, as all attempts had previously and all have since. It failed because socialism fundamentally means repressing capitalism and capitalism remains irrepressible. Still, the attempt and its outcome are valuable reminders of how far the world has come, and how quickly it could regress.

Library of Economics | Obama's Mistake on Social Security
If congressional Republicans refuse to pay America's bills on time, Social Security checks, and veterans benefits will be delayed.

Health Care

Politico | Focus on Obamacare delays mental health law
Mental health advocates say a landmark 2008 law meant to expand access to millions of Americans has gotten back-burner treatment by the Obama administration because of its relentless focus on the Affordable Care Act.
Washington Post | Shining a light on Medicare payments
Now costing more than $500 billion per year, Medicare is central to the United States’ fiscal predicament. For this complicated problem, there are many complicated proposed solutions.

Econ Comments & Analysis                                                                                            
Washington Times | Obamacare tax on medical devices hurts jobs and health
With the start of the new year, one of the little noticed but potentially harmful features of Obamacare has now gone into effect. It is the tax on medical device manufacturers.


Bloomberg | Bernanke to Weigh QE Costs as Fed Assets Approach Record
Federal Reserve Chairman Ben S. Bernanke indicated that the central bank is weighing the potential costs from its $85 billion in monthly purchases of bonds while saying the unorthodox easing bolsters the economy.
CNN Money | Federal Reserve official wants more stimulus
One member of the Federal Reserve wants the central bank to stimulate the economy even more.
Market Watch | U.S. producer prices decline 0.2% in December
U.S. producer prices fell a seasonally adjusted 0.2% in December, led by lower food prices, the U.S. Department of Labor reported Tuesday.
FOX Business | Bernanke: Raise the Debt Ceiling
Federal Reserve Chairman Ben Bernanke on Monday urged U.S. lawmakers to lift the country's borrowing limit to avoid a potentially disastrous debt default, warning that the economy was still at risk from political gridlock over the deficit.

Coordination Problem | Market Monetarism and the Monetary Constitution
An important post from Lars Christensen at The Market Monetarist this morning.  Lars argues that many folks have misunderstood the argument for monetary easing in order to target NGDP growth by framing it in terms of discretionary policy.


CNBC | Payroll Tax Hike Will Affect Your Paycheck and the Economy
The sting from higher taxes in your first 2013 paycheck is also going to sting the economy this year, particularly in the first quarter.

Econ Comments & Analysis                                                                                            
Fortune | Sorry, middle class. The VAT may be inevitable.
If the government fails to enact structural reforms in spending, an entirely new source of revenue will be needed. The most likely one is a value-added tax that would crush the middle class.
AEI | The progressive US tax code
For many years, left-wing intellectuals have exalted Western Europe as the paragon of redistributive equity, contrasting it with the trickle-down nightmare that is America. But on tax policy, at least, that characterization is flat-out wrong,  especially after the latest round of tax increases.
WSJ | The Next Tax Increase
In case you missed it, President Obama held a press conference Monday to make essentially two points: He won't negotiate with Republicans over raising the federal debt limit, and if Republicans want any spending cuts at any time in the next four years they'll have to raise taxes along with it. He won, so get used to it, chumps.


CNN Money | Wal-Mart to hire 100,000 veterans
Wal-Mart Stores said Tuesday that, over the next five years, it will hire every veteran who honorably left the military in the last year.

Heritage Foundation | Michigan Right-to-Work Law: How to Fight for the Freedom to Work
Last month, a special session of the Michigan legislature passed and Governor Rick Snyder (R–MI) signed right-to-work legislation, which outlaws compulsory union membership. “This simply means that workers will no longer be forced to join a union,” noted Ed Feulner, president of The Heritage Foundation, at the time. “They will still be free to do so, if they wish.”


Politico | Timothy Geithner: Default looms between mid-February and early March
The U.S. government will exhaust its borrowing authority between mid-February and early March if Congress doesn’t raise the debt ceiling, outgoing Treasury Secretary Timothy Geithner told Congress in a letter today.
Roll Call | House GOP Leaders Consider Four-Year Debt Limit Deal
With the administration’s debt ceiling deadline fast approaching, House Republican leaders are considering a four-year debt limit increase that would take the issue off the table for the rest of President Barack Obama’s presidency.
Bloomberg | Fitch Says Top AAA Sovereign Ratings Under Pressure in 2013
Fitch Ratings said its AAA credit rankings on France, the U.S. and the U.K. are likely to come under pressure this year due to slow economic growth and high debt levels.
CNBC | Younger Americans Have More Credit-Card Debt Problems: Study
American credit card holders in their late 20s and early 30s have more debt than older consumers, repay it more slowly and risk dying in debt if they don't curb their spending habits, a new study showed on Monday.

Econ Comments & Analysis                                                                                            
USA Today | Marco Rubio: Stop Washington's reckless spending
Just 17 months ago, Washington raised the nation's debt limit to $16.39 trillion, the largest debt ceiling level in our nation's history. But because this increase didn't include serious spending reductions, it didn't take long to reach this borrowing limit.
WSJ | The Debt Ceiling Is Scarier Than the Fiscal Cliff
Despite its dismal approval rating, Congress deserves thanks for at least not driving the economy over the fiscal cliff. Let me state unequivocally that the New Year's Day deal was a lot better than the alternative, no doubt.
Real Clear Markets | Going Big On Deficit Reduction Is Dead. Now What?
Nearly everyone understands that the nation's deficit will eventually bankrupt the federal government and have a catastrophic effect on the American economy. But, hey, interest rates are low and investors are still willing to purchase the federal debt despite receiving almost no return. There seems to be no immediate threat.
CATO | The Overrated Debt Ceiling
The debt is currently $16.4 trillion, technically in excess of the statutory limit, and the Treasury Department has been using “extraordinary measures,” such as delaying payments to federal retirement programs, in order to push back the final day of reckoning.

Heritage Foundation | Debt Ceiling: Default Not at Issue, Federal Spending Is
President Obama is expected to make his case for a debt ceiling increase at a press conference this morning. The development comes as House Republicans are reportedly weighing “default” and “government shutdown.” While it’s encouraging that conservatives are gearing up for a fight, it’s important that policymakers and the public keep those two terms straight.
Café Hayek | Cochrane on the Debt Ceiling
If a $100 bond comes due, the Treasury can sell a new $100 bond to pay off the principal without increasing the total amount of debt.  And there’s still $2.5 trillion of tax revenue coming in. That’s plenty to cover interest payments.