Monday, January 28, 2013

General Economics

Bloomberg | Pending Sales of Existing Homes in U.S. Decreased 4.3%
Pending U.S. home sales declined in December for the first time since August, showing uneven progress in the housing market.
FOX Business | Uncertainty to Slow Growth of Retail Sales in 2013
Retail sales this year are expected to grow at a slower pace than in 2012 as continued political wrangling in Washington and the sluggish global economy will likely inject further uncertainty into the market and force shoppers to play defense.
CNN Money | Housing to drive economic growth (finally!)
The bursting of the housing bubble plunged the economy into a recession from which it has yet to fully recover. But economists say this could finally be the year that housing lifts us out of the doldrums.
Bloomberg | Durable-Goods Demand Jump Points to U.S. Factory Pickup: Economy
Orders for durable goods in the U.S. rose in December for an unprecedented fourth consecutive month, indicating manufacturing will keep improving in 2013.

Econ Comments & Analysis                                                                                            
Washington Times | D.C.’s minimum wage folly
The nation’s post-election leftward lurch is gaining momentum. Six states, including New York and California, are agitating for a boost in the minimum wage. Sen. Tom Harkin, Iowa Democrat, wants the federal government to set a nationwide wage floor that will automatically rise each year.
Fortune | Another brick in the recovery road: Revenue rebounds
Analysts and investors are normally focused on corporate profits. But the most interesting sign of where the market and the economy are headed this earnings season could be coming from the top of corporate ledgers, rather than the bottom.
Washington Post | Is America in decline?
The subtext of political debate these days is that the United States is in decline — a proposition often portrayed as self-evident. The economy lacks dynamism; unemployment near 8 percent remains at recession levels. The president and his Republican critics barely talk to each other; stalemate seems unending. But what if America isn’t in decline?

Library of Economics | Government Hiring: Raising GDP by Definition
GDP, Gross Domestic Product. The number gets a lot of attention, deservedly.  You'd be foolish to use it as your sole economic statistic but you'd be just as foolish to ignore it and go with your gut.  
Economist | The return of the bubble?
American housing markets are at long last recovering from the epic bust that began in 2006. Sales, prices, and construction all seem to have reached a cyclical bottom.
WSJ | Corporate Economists Have Rosier View of 2013
Corporate economists are becoming more optimistic about 2013, in a new survey predicting the U.S. economy will expand at a fairly robust pace this year despite continued uncertainty in Washington.
Library of Economics | Learning About the Economy: Statistics or Uncle-Asking?
You can get your information about the economy from admittedly fallible statistical relationships, or you can ask your uncle. I, for one, have never hesitated over this choice. But I fear there may be altogether too much uncle-asking in government circles in general, and in central banking circles in particular. 
Calculated Risk | Dallas Fed: Regional Manufacturing Activity "Strengthens" in January
Texas factory activity rose sharply in January, according to business executives responding to the Texas Manufacturing Outlook Survey.

Health Care

Washington Times | Catholic University vows to pursue challenge to Obama health care law
Catholic University officials said Monday they have no plans to drop a legal challenge to a mandate requiring them to provide insurance coverage for contraception, after a federal judge dismissed their lawsuit against the Obama administration as not ready for consideration.

CATO | Will ObamaCare’s Exchanges Be Ready in October? Will Anyone Show Up?
Ahead of 2014 and to get ready for open enrollment this fall, insurers are gauging their interest in participating in certain markets based partly on how [the U.S. Department of Health and Human Services] writes regulations governing the exchanges set to open on Jan. 1, 2014.
Café Hayek | Is the Quality-Adjusted Cost of Health-Care Higher Today than in 1980?
 A statistician finds that people in 2013 spend much more on health-care than they did in 1980.  Is it proper to conclude from this correct statistical finding that the rise in health-care expenditures – this rise in health-care costs – is a problem, a curse, something that we should lament?  


Bloomberg | Default Swaps Lift Sovereign Ratings From Brink of Junk
The risk of owning sovereign bonds has fallen to a two-year low, setting the stage for more gains by the riskiest government securities as the investors look to a healing world economy.
Market Watch | Bernanke still chasing the elusive recovery
As Fed Chief Ben Bernanke faces what may be his last year in office, his goal of a self-sustaining economic recovery may yet exceed his grasp.
WSJ | Fed Seems Set to Keep The Money Spigot Open
Federal Reserve officials are likely to continue their easy-money policies when they gather this week to weigh a mixed economic outlook and a recent run of low inflation.
CNBC | Interest Rates Are Climbing, but May Not Last Long
The sudden rise in interest rates to nine-month highs doesn't yet signal a turn, but that could change if Congress resolves the fiscal crisis hanging over the markets.

Econ Comments & Analysis                                                                                            
Bloomberg | ECB Says Impact of Proposed Banking Rules May Vary Across EU
The European Central Bank said it’s vital to evaluate the impact of planned new banking rules across the European Union as it may vary from one country to another.


Washington Times | Sandy relief bill eats up taxes on the rich
Congress is poised to clear the final $50 billion chunk of emergency aid for Superstorm Sandy relief Monday — and in one vote, it will have used up all the new tax money President Obama won by raising rates on the wealthy in the “fiscal cliff” deal.

Econ Comments & Analysis                                                                                            
AEI | Total tax-code termination?
It would be the ultimate fiscal cliff. A group of House Republicans wants to put an expiration date on the 75,000-page U.S. tax code. The Tax Code Termination Act would require the repeal of the entire code in 2017 — except for the bits dealing with Social Security and Medicare — with a new system ready to go for the following year.


CNN Money | Overeducated and underemployed
Getting a college degree still helps your chances of getting a job, but not necessarily a good one.
Washington Post | Job market probably kept making progress
The job market in the U.S. probably kept making headway in January even in the face of Washington’s budget battles, economists said before reports this week.
Washington Times | EPA rules kill Texas power plant, 3,900 jobs
Environmental Protection Agency regulations are snuffing out another power plant, Chase Power announced Wednesday, killing its $3 billion Corpus Christi, Texas, coal project and 3,900 prospective jobs.

Econ Comments & Analysis                                                                                            
CRS | Unemployment Insurance: Legislative Issues in the 113th Congress
The 113th Congress may face a number of issues related to currently available unemployment insurance programs: Unemployment Compensation (UC), temporary Emergency Unemployment Compensation (EUC08), and Extended Benefits (EB).
NBER | Do Labor Market Policies Have Displacement Effects? Evidence from a Clustered Randomized Experiment
This paper reports the results from a randomized experiment designed to evaluate the direct and indirect (displacement) impacts of job placement assistance on the labor market outcomes of young, educated job seekers in France. We use a two-step design.
AEI | A contracting workforce means tepid economic growth for advanced economies
The financial crisis hit at a very inopportune moment for western economies. Of course, there’s never a good time for a 5.1 percent of GDP contraction, which is what occurred in the U.S. over an eighteen-month period starting in late 2007 and continuing into mid-2009. But this was particularly bad timing because the U.S. and other advanced economies were already in for a rough ride over the coming two decades due to the unprecedented demographic transformation that is now well underway globally.


CNN Money | Europe: No retreat from austerity
The message was unmistakable: The austerity push that has dominated Europe in the past year will continue even as the economy struggles.
CNN Money | How realistic is a balanced budget in 10 years?
House Republicans have put aside the debt ceiling as leverage in their fight for spending cuts. Now their goal is to balance the federal budget in 10 years.

Econ Comments & Analysis                                                                                            
Market Watch | Near-term debt-limit risks to U.S. AAA fade: Fitch
The temporary suspension of the U.S. federal government's debt limit removes the near-term risk to the country's AAA rating, Fitch Ratings said Monday.
WSJ | The Case for Across-the-Board Spending Cuts
You know the cliché: America's fiscal condition might be grim, but lawmakers should avoid the "meat ax" of across-the-board spending cuts and instead use the "scalpel" of targeted reductions. The problem with this argument is that, given today's politics, it is nonsensical.
Politico | Budget's not high on Dems' to-do list
‘Show me your budget, and I will tell you what you value.” That’s what Joe Biden said last summer, and he meant it as a criticism of Republicans. The vice president’s comment raises a question: Where are the Democrats’ values? They’re in hiding, judging from their unwillingness to present any budget plans for almost four years.
Mercatus | The Debt Ceiling: Assets Available to Prevent Default
The debt ceiling, or the legal limit the federal government may borrow, is set currently at $16.4 trillion.[1] In his latest report, Secretary of the Treasury Timothy Geithner predicts that the United States will need to increase the debt ceiling sometime between February 15, 2013, and early March 2013.

CATO | The Sequester May Not Be ‘Fair,’ but It’s Real and It Would Slow the Growth of Government
Much to the horror of various interest groups, it appears that there will be a “sequester” on March 1. This means an automatic reduction in spending authority for selected programs (interest payments are exempt, as are most entitlement outlays).