Tuesday, January 29, 2013

General Economics

News                                                                                                                             
AOL Energy | Everyone Knows Its Price, But How Much do You Really Know About Gasoline?
Your favorite Exxon station is very likely not owned or operated by Exxon and the same is true for the rest of the major oil companies.
Bloomberg | Consumer Confidence in U.S. Falls to Lowest Level Since 2011
Confidence among U.S. consumers declined more than forecast in January, reaching the lowest level in more than a year as higher payroll taxes took a bigger bite out of Americans’ paychecks.
Washington Times | Study: Incomes in open-shop states higher, after adjusting for living costs
Claims by union proponents that union-shop states beget higher incomes forget one little detail: the cost of living.
Washington Post | Housing emerges as economic bright spot after years in the dark
The nation’s housing market is surging again after years of historic declines, and the unique forces powering its return could last well into 2013.

Econ Comments & Analysis                                                                                            
Washington Times | Obama’s America looks a lot like the EU
Almost a decade ago, Europeans and many progressive Americans were lamenting how the United States was going to miss out on the 21st-century paradigm symbolized by the robust European Union. Neanderthal Americans were importing ever more oil while waging a costly “war on terror” and fighting conflicts in Iraq and Afghanistan. Our budget deficit in 2003 hit $374 billion.
Washington Times | The pipeline to change the direction of the economy
With the swift approval of one project that science has proved time and time again to be safe, our country has the opportunity to put more than 20,000 unemployed Americans back to work, pour hundreds of millions of dollars into our economy annually, and safely transport 830,000 barrels of North American oil daily from Alberta, Canada, through Montana, North Dakota, South Dakota and Nebraska to refineries located on the Gulf Coast.
Gallup | Healthcare Costs, Taxes Worry U.S. Small Businesses Most
More than half of U.S. small-business owners say healthcare costs (54%) and taxes on small businesses (53%) are hurting their operating environment "a lot," making these the top two concerns among eight issues tested in a January Wells Fargo/Gallup Small Business survey.
Mercatus | More Government Spending Won't Reduce Poverty
Despite unprecedented levels of government spending to help low-income Americans, a record 46 million people in the United States are living in poverty. In 2011, two thirds of the working-age poor were unemployed for the entire year.
NBER | When Is There a Strong Transfer Risk from the Sovereigns to the Corporates? Property Rights Gaps and CDS Spreads
When a sovereign faces the risk of debt default, it may be tempted to expropriate the private sector. This may be one reason for why international investment in private companies has to take into account the sovereign risk.

Blogs                                                                                                                             
Heritage Foundation | Income Inequality: Fretting over Success
World elites are worried about something that, in and of itself, is not a problem: income inequality.
WSJ | Companies Ignored Cliff Chatter, but Taxes, Spending Cuts Will Have Real Bite
Monday’s U.S. durable-goods report suggests that — despite all the chatter about uncertainty and the fiscal cliff — business executives ignored their misgivings about Washington and went ahead with capital-expenditure plans.
WSJ | U.S. Retail Sales Growth Expected to Pull Back in 2013
U.S. retail sales are expected to rise 3.4% this year, the slowest rate since 2010, as consumers lower spending because of a tax bite to their paychecks and bickering among policymakers over fiscal matters, according to the industry’s biggest trade group.
Heritage Foundation | It’s Time to Stop Picking Winners and Losers in the Energy Industry
Representative Mike Pompeo (R–KS) hopes his new bill calling for the repeal of all energy tax credits on both conventional and renewable energy sources will level the playing field for energy producers and consumers and prevent the government from picking “winners and losers.”
Library of Economics | Boettke on Living Economics
I enjoyed the latest Econtalk interview, the one with Peter Boettke. They're discussing Boettke's latest book, Living Economics.

Health Care

News                                                                                                                             
Politico | States rethink high-risk-pool plans
When the health exchanges open next year, they will cover some of the sickest and costliest patients, people who cannot easily get insurance precisely because they are so likely to run up bills that no insurer would want to be on the hook for.

Blogs                                                                                                                             
CATO | How Firms Will Adapt to Avoid ObamaCare’s Mandates (and Drive up Its Cost)
Thousands of small businesses across the U.S. are desperately looking for a way to escape their own fiscal cliff. That’s because ObamaCare is forcing them to cover their employees’ health care or pay a fine—either of which will cut into profits and stymie future investment and growth…

Monetary

News                                                                                                                             
Bloomberg | Bernanke Seen Buying $1.14 Trillion in Assets in 2014
Federal Reserve Chairman Ben S. Bernanke’s latest round of bond buying will reach $1.14 trillion before he ends the program in the first quarter of 2014, according to median estimates in a Bloomberg survey of economists.
CNN Money | Meet the Fed's newest voters
The Federal Reserve will shake up its roster at its meeting this week, just as it does at the beginning of every year.
CNBC | No Wall Street Consensus on When & How QE Ends
Wall Street expects the Federal Reserve to remain highly aggressive throughout 2013 but is divided over when quantitative easing will end and how it will be stopped, according to the January CNBC Fed Survey.

Econ Comments & Analysis                                                                                            
WSJ | Fed Policy Is a Drag on the Economy
As they meet this week, Federal Reserve Chairman Ben Bernanke and his colleagues will be looking at an economic recovery that has been far weaker than expected. Early in 2010 they predicted that growth in 2012 would be a robust 4%. It turned out to be a disappointing 2%. And as the recovery fell short of their expectations, they continued and then doubled down on the emergency interventions used in the panic in 2008.
Mercatus | Evaluating Risk-Based Capital Regulation
The standard capital ratio of equity over assets has long been used as an important indicator of bank risk. Banks with more equity are less affected by asset depreciation than are other banks because a drop in the value of their assets affects only their equity and not their liabilities.

Taxes

Econ Comments & Analysis                                                                                            
Real Clear Markets | 35% Is Way Too High For Corporate Taxes
If there's one policy agreement between Republicans and Democrats, it's that the 35% corporate tax rate in the United States should be reduced to 28% or 25%. The current rate, highest in the advanced industrial world, disincentivizes investment and encourages corporations to relocate overseas.

Employment

News                                                                                                                             
CNN Money | Unions in trouble
The slow, steady decline of unions continued in 2012, when membership shrank by nearly 400,000.

Budget

News                                                                                                                             
CNN Money | Automatic spending cuts more likely now
Chances are growing that the automatic, across-the-board spending cuts that no one thought would ever happen may soon take effect.
Politico | Debt ceiling fix could last until August
The next deadline for raising the nation’s borrowing limit may not come until August if the Senate passes the House-approved debt ceiling bill this week as scheduled, according to Capitol Hill sources.

Econ Comments & Analysis                                                                                            
Forbes | How President Obama Lost His Shirt to John Boehner
In retrospect, at the Battle at Fiscal Cliff, Boehner took President Obama to the cleaners. He did it suavely, without histrionics. While Obama churlishly, and in a politically amateurish manner, publicly strutted about having forced the Republicans to raise tax rates on “the wealthiest Americans” Boehner, quietly, was pocketing his winnings.
AEI | Trillion dollar deficits are sustainable for now, unfortunately
An abrupt spending sequester at a rate of about $110bn per year ($1.1tn over 10 years) scheduled to begin March 1 could cause a US recession, coming as it does on top of tax increases worth about 1.5 per cent of GDP enacted in January.

Blogs                                                                                                                             
CBO | CBO Now Plans To Release Budget and Economic Outlook on February 5
That report will include updated economic and budget projections that incorporate the effects of the legislation enacted at the beginning of the year, a revised economic forecast consistent with the budget projections, and other changes to CBO’s estimates.
CATO | Federal Withholding: One Budget or Two?
Along with increasing the debt ceiling to whatever level it reaches by May 18th, the bill would withhold the pay of members of Congress and senators if their respective bodies don’t pass a budget by the April 15th deadline found in the Congressional Budget Act of 1974.