Tuesday, January 22, 2013

General Economics

Market Watch | Housing rebound gives economy more pop
Consumers are feeling pinched by higher taxes and business investment has been choppy, so it’s a good thing the housing sector continues to build up speed.
Bloomberg | German Investor Confidence Increases to 2 1/2-Year High
German investor confidence increased to the highest in 2 1/2 years in January, adding to signs that Europe’s largest economy may gather momentum.
Market Watch | Sales of existing homes tick down in December
Sales of existing homes ticked down in December, while the total for 2012 hit the highest level in five years, according to data released Tuesday by the National Association of Realtors.
Politico | President Obama dodges 'hard choices' on entitlements
President Barack Obama insisted four years ago that the nation must make “hard decisions” to preserve entitlement programs.
Market Watch | Richmond Fed business index falls in January
The Richmond Fed's index of manufacturing activity fell in January to negative 12 from 5 in December, the bank said Tuesday.

Econ Comments & Analysis                                                                                            
Washington Times | Economic judgment day
The current debate about the debt vote is minor league compared to what will happen when the government literally cannot spend more than it is taking in. That time may be nearer than you think. It is true that the U.S. government can always “print” money to pay its bills, but at some point, printing more money becomes self-defeating because the resulting increase in the government bond interest rate and required interest payment will spiral out of control.
CRS | An Analysis of Where American Companies Report Profits: Indications of Profit Shifting
This report uses data on the operations of U.S. multinational companies (MNCs) to examine the extent to which, if any, MNCs are moving profits out of high-tax countries (or out of the U.S.) and into low-tax countries with little corresponding change in business operations, a practice known as "profit shifting."
CATO | Energy Future of Abundance
With an Arab Fall if not Winter dominating the Middle East, the U.S. is under pressure to intervene even more. Unfortunately, reliance on imported oil continues to entangle America and other countries in the Middle East’s volatile politics. Washington should free North America’s abundant natural resources instead.
Forbes | Academics Have Spoken, And Obamanomics Is The Path To Slow Growth
The fiscal policy debate over how to stimulate the economy and reduce the budget deficits has been resolved – at least among academic economists.  The way forward lies in reducing tax rates – especially on corporations and high-income individuals – and reducing spending.  The way backward lies in pursuing President Barack Obama’s call for more taxes and increased government spending.
Mercatus | Leadership on Social Security Desperately Needed
When President Obama was first inaugurated four years ago, the budget-related meme of the moment was that virtually all of our projected fiscal problems were due to health care, and Social Security represented a relatively small problem. After all, the previous year’s trustees’ report had shown twice as large a deficit in Medicare’s HI fund than was projected for all of Social Security.
AEI | Absent fiscal restraint, history will be unkind to Obama
President Obama took office four years ago talking not just about short-term stimulus, but also about the need to face up to the challenge of the long-term U.S. fiscal deficit.
CATO | Infrastructure Investment: A State, Local, and Private Responsibility
The current spending and debt crisis eventually will force debate on the role of the federal government — which programs necessitate taxpayer funding and which can be eliminated.

The Volokh Conspiracy | Privatization and Competition Policy
This is the first in a series of posts serial-blogging a draft chapter I’ve written on privatization and competition policy for a forthcoming Stanford University Press book on Competition and the Role of the State. What follows represents the current draft, though sans footnotes for the blog format.
Economist | How we got here
Mainstream macroeconomics has a pretty poor reputation these days, both among the public at large and among economists in other fields. This is hardly surprising. There is little consensus on even the most basic questions in macro.
WSJ | Richmond Fed Notes Weakness in Central Atlantic Manufacturing
Manufacturers in the central Atlantic region report that activity turned decidedly worse this month as nearly all categories turned negative, the Federal Reserve Bank of Richmond said Monday. Service-sector revenue in the area rebounded this month.
Economist | The boom this time
It is a holiday in America and inauguration day (ceremonial, anyway) and as good a time as any for reflection on what might be ahead for the American economy. Bill McBride has two good posts laying out a case for optimism and spotting possible sources of recession. I suppose I'll add my two cents.

Health Care

Bloomberg | J&J’s Forecast Misses Analyst Estimates, May Sell Unit
Johnson & Johnson (JNJ), the world’s biggest maker of health-care products, provided a full-year earnings forecast that was less than analysts estimated and said it is exploring a possible sale of a diagnostics unit.
Politico | Obamacare a tempting target for cuts
Republicans never got their chance to chop down President Barack Obama’s health care law, but that doesn’t mean it’s safe from the clippers as Congress looks for solutions for tough fiscal times.

Econ Comments & Analysis                                                                                            
CNN Money | What your health care will really cost
Until recently you were more likely to solve a Rubik's Cube than figure out what you might pay for a health care service.


CNN Money | Bernanke won't be back in 2014, say economists
Economists believe we have only one more year of Ben Bernanke's tumultuous tenure as chairman of the Federal Reserve. And most think that's bad news for the economy.
Financial Post | Bank of Japan makes biggest push in decades to jump-start economy
The Bank of Japan made its strongest commitment yet to end two decades of stagnation, shifting to Federal Reserve-style open-ended asset purchases while disappointing investors by delaying the program until next year.

Econ Comments & Analysis                                                                                            
CNN Money | Interest rates: The big freeze
The low rates of the past few years -- which have warmed the hearts of mortgage applicants but been cold comfort to savers -- are unlikely to budge soon. For that, thank (or blame) the Federal Reserve.


CNN Money | Obama: Let's 'revamp' our taxes
Each president used an inaugural address to herald his intent to push tax changes during his term. Reagan and Bush were successful, but experts say Obama faces high hurdles to achieve the tax code revamp he has in mind.
CNN Money | 11 EU states to introduce tax on stock trades
European Union finance ministers have cleared the way for 11 members of the eurozone to introduce a tax on trading aimed at raising billions in euros from the financial services industry and deterring speculation.

Econ Comments & Analysis                                                                                            
Fortune | Estimating your new taxes: It's worse than you think
Well, it turns out that I knew even less about federal income taxes than I thought I did. In my recent column lamenting the extra complexity added to the tax code by the fiscal cliff avoidance legislation and the fact that even a numbers nut like me needs expert help to figure out his tax rate, I wrote that the legislation raised taxes on single people with at least $400,000 of adjusted gross income, and couples with at least $450,000. 


Washington Post | UN: Global unemployment set to swell by millions despite pick-up in economies
The U.N. labor agency warns that the lingering effects of the global economic crisis means unemployment will continue to rise — even though world economies are expected to pick up.


Roll Call | Debt Limit Move Provides Budget Deal Opportunity
The short-term debt limit suspension detailed Monday by House Republicans appears likely to delay one fiscal confrontation, but opinions are divided on whether it could lay the groundwork for something much bigger.
CNN Money | Wall Street's $11 billion windfall from fiscal cliff deal
Wall Street can thank Congress for a $11 billion tax windfall from the fiscal cliff deal that President Obama signed into law at the beginning of this month.

Econ Comments & Analysis                                                                                            
Washington Post | America’s deficits: The problem is more than fiscal
Since the November election the U.S. public policy debate has been focused on prospective budget deficits and what can be done to reduce them. The concerns are partly economic: There is a recognition that debts cannot indefinitely be allowed to grow faster than incomes and the capacity to repay them.
WSJ | Amid the Debt-Ceiling Debate, Overblown Fears of Default
House Republicans last week unveiled a plan to raise the debt ceiling for three months, giving them time to negotiate spending cuts and entitlement reform without a Sword of Damocles—the threat of hitting the federal government's statutory borrowing limit—hanging over the process.

Economist | Who runs first?
TheInternational Monetary Fund (IMF) often tells governments that they borrow too much. Now they warn that some governments are borrowing from the wrong people. As they put it, “our new research shows that advanced economies’ exposure to refinancing risk and changes in government borrowing costs depend mainly on who is holding the bonds.” Their findings are interesting but there may be less here than meets the eye.
Heritage Foundation | Debt Limit: Talk of Tax Increases Distracts from Spending Problem
In response to President Obama’s press conference last week, House Majority Whip Steny Hoyer (D–MD) claimed, “Clearly we need additional [spending] cuts. But…revenues have not been resolved.”
Heritage Foundation | Chart of the Week: Each American’s Share of Debt Is Skyrocketing
As the nation pushes into another debt ceiling debate, an AP-GfK poll released last week found that 39 percent of Americans think any debt ceiling increase should come with a serious plan to reduce spending. Another 21 percent believe that the ceiling should not be raised at all.