Wednesday, February 13, 2013

General Economics

CNN Money | Retail sales up despite payroll tax hike
Higher payroll taxes didn't stop U.S. consumers from hitting the malls in January.
Politico | Is exporting natural gas a problem?
Heavy hitters on both sides of the natural gas debate warned senators Tuesday that the natural gas boom could fizzle if the U.S. takes the wrong tack.
Bloomberg | Obama Says U.S. Will Begin Trade Talks With 27 EU Nations
President Barack Obama pledged to pursue a trade agreement with the European Union that would expand the world’s largest economic relationship, while at the same time completing discussions for a Pacific-region accord.
National Journal | The Most Important Policies In President Obama's 2013 State of the Union Address
President Obama on Tuesday challenged Congress to find a way to dodge the sequester and seize the opportunity for more-enduring deficit reduction, using his fourth State of the Union address to paint lawmakers as the obstacle to a more prosperous and inclusive country.
Market Watch | Business inventories up 0.1% in December
Business inventories edged up 0.1% in December to a seasonally adjusted $1.62 trillion, the Commerce Department said Wednesday. That's a 5.1% gain compared to Dec. 2011, and the ratio of inventories to sales was 1.27, down from 1.28 in November. November's inventories growth was lowered to 0.2% growth from a 0.3% gain.

Econ Comments & Analysis                                                                                            
WSJ | The Economic Windfall of Immigration Reform
After months of acrimony, it now appears that immigration reform, and a comprehensive one at that, is within reach. While most of the debates have been about the immediate consequences of any change in policy, the goal should be to promote economic growth over the next 40 years.
Washington Times | Attack on the free
For at least the last 2,500 years, from the time of the Athenian republic, fragile islands of freedom have been under attack. Unfortunately, nothing has changed, except now some of the aggressor states cloak themselves in the mantle of compassionate democratic countries.
Forbes | Obama's State Of the Union: A Blast To a Slow-Growth Past
In his State of the Union preview, Gerald Seib of the Wall Street Journal observed that “Four times, President Barack Obama has stood in the well of the House of Representatives and delivered a State of the Union address—and four times, economic anxieties have largely overshadowed his efforts to push a broad agenda.”
AEI | Get ready, Japan's economy is set to boom
On February 5, BOJ Governor Masaaki Shirakawa announced that he will step down on March 19, three weeks early. Shirakawa's departure accelerates a BOJ (Bank of Japan) leadership transition that will support the push for more aggressive monetary easing by Japan's new Prime Minister, Shinzo Abe. Shirakawa's early exit coincides with the scheduled departures of the BOJ's two Deputy Governors.

Neighborhood Effects | Translating the President and the Republican Response
Economic jargon can be difficult to parse. Political speech—often by design—can be just as impenetrable. So, it stands to reason that when politicians are talking economics, it’s easy to get lost. As a guide to this year’s State of the Union and the Republican response, below are some translations of statements each might make.
Calculated Risk | MBA: Mortgage Applications Decrease in Latest Weekly Survey
The Refinance Index decreased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 10 percent from one week earlier.

Health Care

CNBC | Drop Coverage or Cut Hours? Big Companies Grapple With Obamacare
For large retail and restaurant chains the big unknown in the year ahead is how much more they'll pay for health coverage. Employers with 50 or more workers who put in 30 hours a week will be required to provide health care coverage or pay a fine, under the Affordable Care Act, also called the ACA or Obamacare. But the details haven't been settled.

Heritage Foundation | No, Obamacare Does Not Lower Health Care Spending
Obamacare supporters tend to give credit to the law where credit is not due. In the latest attempt, Senate Budget Committee Chairman Patty Murray (D–WA) tried to link lower projections for Medicare and Medicaid spending to the Affordable Care Act.
Heritage Foundation | Hospices Reveal Obamacare’s Impact
Hospices—health care facilities for the terminally ill—along with other Medicare providers are facing Medicare pay cuts. Of the $716 billion in payment reductions, hospice care was hit by a $17 billion payment cut from 2013 to 2022.


Market Watch | Fed's Plosser: Rate guidance can be improved
The Federal Reserve's current guidance to markets on how long it will keep rates near zero is a step in the right direction but needs to be improved, said Charles Plosser, the president of the Philadelphia Federal Reserve Bank, on Tuesday.
Bloomberg | Fed’s Lacker Says Crisis in 2007 Worsened by Rescue Policy
Federal Reserve Bank of Richmond President Jeffrey Lacker said the financial system was weakened further as it began to fall into crisis in 2007 and 2008 by an “ambiguous rescue policy.”
Market Watch | U.S. import price index rises 0.6% in January
Prices paid for goods imported into the U.S. increased 0.6% in January, led by fuel, close to analysts' expectations of a 0.7% gain, the U.S. Department of Labor reported Wednesday.
WSJ | Fed Bank Chiefs Back Money-Fund Overhaul
The leaders of all 12 regional Federal Reserve banks are throwing their weight behind a push to overhaul the $2.7 trillion money-market industry, an unusual joint action sure to fuel debate about a group of funds whose troubles threatened the stability of the financial system during the 2008 credit crisis.

Economist | The people versus the bankers
Most of what we call money is actually short-term debt created by banks when they make loans. This means that banks are the stewards of our savings and manage the payments system. As a result, they have a privileged place in our society: governments never deliberately choose to liquidate the banking system.


Econ Comments & Analysis                                                                                            
Washington Times | Treating terrible economy with higher taxes
The definition of a failed, spendthrift, debt-producing fiscal policy is making the same proposals over and over again and expecting a different result.


Econ Comments & Analysis                                                                                            
CNN Money | The impact of a $9 minimum wage
After promising five years ago to raise the federal minimum wage, President Obama finally unveiled a plan to do so on Tuesday.
FOX Business | Higher Minimum Wage, Higher Unemployment?
In his State of the Union address, President Barack Obama proposed hiking the minimum wage to $9 an hour by 2015, from $7.25, where it has been since 2009. The president also wants to index the minimum wage to inflation, so that it continues to rise in the future.


Bloomberg | No Agreement on $1.2 Trillion in Cuts as Deadline Nears
Democrats and Republicans in the U.S. Congress are nowhere near a plan to avert $1.2 trillion in spending cuts about two weeks before they are set to begin.
Politico | Republicans predict sequester will happen
Top congressional Republicans predicted Wednesday that the sequester will hit at the end of the month – the latest chapter in the series of budget battles that have stymied Washington in the last few years.
WSJ | Budget Surplus Posted for January
The U.S. budget posted a rare January surplus, largely reflecting a big boost in tax revenue, the Treasury Department said Tuesday.

Econ Comments & Analysis                                                                                            
WSJ | Don't Count on China to Bail Out the U.S.
With the U.S. likely to continue running substantial deficits, Americans wonder if China is going to continue buying up U.S. Treasurys.
CBO | Testimony on the Budget and Economic Outlook: Fiscal Years 2013 to 2023
Economic growth will remain slow this year, CBO anticipates, as gradual improvement in many of the forces that drive the economy is offset by the effects of budgetary changes that are scheduled to occur under current law. After this year, economic growth will speed up, CBO projects, causing the unemployment rate to decline and inflation and interest rates to eventually rise from their current low levels.
CATO | Spending Beyond Our Means: How We Are Bankrupting Future Generations
Current U.S. fiscal policy, including the recently concluded “fiscal cliff” debt deal, is placing an enormous financial burden on today’s children and on future generations in order to deliver government benefits to current middle-aged workers and their elders. Standard government accounting methods hide that intergenerational transfer from the public and make it difficult to calculate how large the transfer is.
Heritage Foundation | How the United States’ High Debt Will Weaken the Economy and Hurt Americans
U.S. federal spending in 2013, combined with depressed receipts from a weak economy, is on track to result in a deficit of $850 billion. Publicly held debt in the United States will exceed 76 percent of gross domestic product (GDP) in 2013, and chronic deficits are projected to push U.S. debt to 87 percent of the economy in 10 years.

Library of Economics | Must Default Be Avoided at All Costs?
Raising the debt ceiling without a commitment to improve our long-term debt problem has adverse consequences as well. Recently, the rating agency Fitch warned the US government that while it wants the debt ceiling to be raised, it also wants the government to come up with a credible medium-term deficit-reduction plan.