Thursday, January 24, 2013

General Economics

News                                                                                                                             
Bloomberg | Global Growth Glimmers as Manufacturing Picks Up Speed: Economy
China’s manufacturing grew at the fastest pace in two years and euro-area services and factory output shrank less than economists forecast in surveys for January, adding to signs of resilience in the global economy.
National Journal | Recession Pushes States to Make Deep Cuts to Higher-Ed Budgets
Since the recession, 38 states have made steep cuts to funding for higher education. How will graduating high school students make do?
Bloomberg | Consumer Comfort Falls Amid Mounting Concern Over U.S. Economy
Consumer confidence fell last week to its lowest level in more than three months as concern about the U.S. economy mounted.
Market Watch | 30-year mortgage rate rises to 3.42%
The average rate on the 30-year fixed-rate mortgage rose to 3.42% in the week ending Jan. 24 - the highest rate since late September -- up from 3.38% in the prior week, Freddie Mac said Thursday in its weekly report. Despite the gain, rates remain near record lows.
Bloomberg | Index of Leading Economic Indicators in U.S. Increases 0.5%
The index of U.S. leading indicators rose in December by the most in three months, showing the world’s largest economy is poised to keep growing through the first half of this year.

Econ Comments & Analysis                                                                                            
Atlantic | What Obama Forgot: Economic Growth Is the Only Way to Social Progress
The commentariat has already reached a consensus: In his second inaugural, President Obama gave a stirring, modern statement of equality as a core national value and progressive government as a core instrument to that end.
WSJ | The Myth of a Stagnant Middle Class
A favorite "progressive" trope is that America's middle class has stagnated economically since the 1970s. One version of this claim, made by Robert Reich, President Clinton's labor secretary, is typical: "After three decades of flat wages during which almost all the gains of growth have gone to the very top," he wrote in 2010, "the middle class no longer has the buying power to keep the economy going."
Politico | Championing the freedom to export
A noisy argument has broken out in Washington over whether to permit the export of liquefied natural gas beyond today’s modest levels. New production methods have greatly increased North American natural gas production, and this boom is projected to continue for several decades. Surging supplies have depressed domestic prices, and much higher prices abroad have made the notion of exporting LNG attractive.
Washington Post | Keystone XL is coming back
President Obama ejected the Keystone XL oil pipeline this time last year, a result that Canada had every reason to be dismayed by, as did Americans whom the project would have employed. The issue is coming back, and the president has even less reason to nix the project than he did last time.

Blogs                                                                                                                             
WSJ | Kansas City Fed Reports Contracting Manufacturing
Factory activity in the Plains states is still contracting this month, according to a regional Federal Reserve bank report released Thursday.
Economist | Looking better
When Barack Obama was sworn in four years ago, the economic figures were terrifying. A financial crisis and a savage recession were in full swing, and house foreclosures were soaring.
WSJ | Slow Economic Growth Is the ‘New Normal’ – Fannie Mae
The gradual but below-potential economic growth seen in 2012 is likely to continue in 2013 and into 2014, according to a new report from Fannie Mae
CafĂ© Hayek | America’s Middle-Class: Doing Better than Ever
In today’s Wall Street Journal, Carpe Diem’s Mark Perry and I offer evidence against the frequently heard trope that America’s middle-class has stagnated economically since the 1970s.

Health Care

News                                                                                                                             
Politico | States hustle to modernize Medicaid
Whether states accept or reject the Medicaid expansion under the health law, they’ve got plenty of work to do to get ready for big changes in coverage next year.

Monetary

News                                                                                                                             
CNN Money | Inside the Fed's fight
The public face of American monetary policy is a bearded, soft-spoken, baseball-loving academic who was given his job by a Republican president and reappointed by a Democrat.

Econ Comments & Analysis                                                                                            
Bloomberg | How Fed Learned to Stop Worrying and Love Zero
For anyone whose financial memory dates back to a time when the overnight interbank rate was in double digits, the Federal Reserve’s announcement last month that zero was here to stay was nothing short of stunning.

Taxes

Econ Comments & Analysis                                                                                            
Washington Times | State income taxes in peril
Governors Bobby Jindal of Louisiana, Dave Heineman of Nebraska and Sam Brownback of Kansas have all recently publicly stated their desire to eliminate their states’ income taxes. Now joining this movement is North Carolina, where last week Senate President Pro Tempore Phil Berger called for his state to pursue serious tax reform this session, possibly including a repeal of North Carolina’s income tax.
AEI | We need a progressive consumption tax
In the short run, reform efforts are likely to focus on improving the income tax. We should curb ill-designed tax breaks, like those for expensive homes and Cadillac health insurance plans, and reform business taxes.

Employment

News                                                                                                                             
Politico | Union ranks fall in labor fight states
Union membership fell to its lowest levels since the Great Depression in 2012, with pronounced drops in two Midwestern states where unions lost major political battles in recent years.
FOX News | Manufacturing companies using technology since recession to replace white-collar workers, too
Manufacturers have been using technology to cut blue-collar jobs for years. Now, they're targeting their white-collar workers, too.
CNN Money | Jobless claims fall to another 5-year low
The number of Americans filing initial claims for unemployment benefits is hovering at its lowest level in five years, after falling for a second week in a row.

Blogs                                                                                                                             
WSJ | California May Hold Key to Big Drop in Jobless Claims
Wondering how we’ve had two big blowout drops in weekly jobless claims? Why do economists keep highballing their estimates? Perhaps California holds the answers.

Budget

News                                                                                                                             
Politico | Next up: Sequester, budget resolution
Now that the debt ceiling fight has been delayed until May, the next big fiscal drama deadline is March 1, when the spending cuts of the sequester take effect.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Unavoidable Federal Debt Debate Impasse
Congressional Republicans are seen as the primary obstacles to addressing the nation's burgeoning public debt-now over $16 trillion-but this says more about the deftness of Democratic Party political spin than a real resolution of America's fiscal problems.
Washington Times | Knocking fiscal sense back into government
How can senators and congressmen in Washington go home and tell their kids and grandkids they have a bright future ahead of them? This is a serious, bipartisan question. Washington politicians have consistently failed to tackle the spending problem in this country, and these supposed leaders have proved they are willing to steal nearly half of every dollar spent in this country from the future income of their children and grandchildren.
CBO | H.R. 325, a bill to ensure the complete and timely payment of the obligations of the United States Government until May 19, 2013, and for other purposes
H.R. 325 would temporarily suspend the limitation on borrowing by the Treasury through May 18, 2013. On the following day, the current debt limit of $16.394 trillion would be raised by the amount of borrowing above that level during the period in which the limitation was suspended.

Blogs                                                                                                                             
CATO | Is Anybody Surprised that Krugman Was Wrong about U.K. Fiscal Policy?
Just like in the United States, politicians in the United Kingdom use the deceptive practice of “baseline budgeting” as part of fiscal policy.
Library of Economics | When is a Spending Multiplier "Big"?
Two papers I saw presented this morning took very different approaches to reach a similar conclusion--inside a currency union there can be big fiscal policy multipliers.