Monday, February 25, 2013

General Economics

News                                                                                                                             
Bloomberg | China’s Slower Manufacturing Casts Shadow Over Recovery: Economy
China’s manufacturing is expanding at the slowest pace in four months, a private survey showed, underscoring the headwinds faced by policy makers in the world’s second-biggest economy.
Market Watch | National activity below trend in January
The Chicago Fed's national activity index fell to -0.32 in January from +0.25 in December, a reading that indicates the U.S. economy is running below trend.
Bloomberg | Spending Cuts Threaten State Recoveries, Governors Say
Federal budget cuts will probably push the U.S. back into recession by damaging states’ economies recovering from the worst fiscal crisis since the Great Depression, governors said.
Washington Post | Business economists looking for moderate growth in 2013 with stronger growth in 2014
Business economists expect 2013 will be another year of sub-par growth for the U.S. economy, reflecting uncertainty stemming from the budget battles in Washington and Europe’s on-going debt problems. But they think the economy will improve as the year progresses and by 2014 will grow at the fastest pace in nine years.

Econ Comments & Analysis                                                                                            
Politico | A plan to fix housing
Six years after the collapse of the housing market, the problems in housing remain as severe as ever, and solutions continue to be elusive.
Businessweek | Don't Weep for Boomers Close to Retirement
Thanks to the brutal combination of the recent recession and boomer demographics, the words “retirement” and “penury” are practically synonymous.
Mercatus | The Regressive Effects of Regulation: Who Bears the Cost?
In a market economy, regulations are often thought of as a useful tool in correcting the imbalance of power between large, entrenched interests and consumers. Federal agencies are supposed to create universal rules of the road that protect the health, safety, and welfare of customers and employees, secondary considerations for companies focused on profits.
NBER | Growth Slowdowns Redux: New Evidence on the Middle-Income Trap
We analyze the incidence and correlates of growth slowdowns in fast-growing middle-income countries, extending the analysis of an earlier paper (Eichengreen, Park and Shin 2012).

Blogs                                                                                                                             
National Journal | What Does the Keystone XL Pipeline Represent?
What does the controversial Keystone XL pipeline stand for? And what is at stake when President Obama decides its fate? The 1,700-mile, tar-sands project has come to symbolize much more than a pipeline. Almost five years after the project's first step into the regulatory process, Washington is still fighting about its fate.
Library of Economics | Should Cost/Benefit Analysis Consider Only Benefits?
Don't worry. I'm not going to produce a new insight that cost/benefit analysis should consider only benefits. But the reason for the title of this post is that a logical conclusion to draw is that Josh Barro thinks so.
Café Hayek | Import-Led Growth
Many people – high-school teachers, celebrated historians, politicians, the list is long – are convinced that nations can grow wealthy through exports. This belief is nonsense.

Health Care

News                                                                                                                             
Bloomberg | Health Premium Increases Damped by Greater U.S. Scrutiny
The number of requests by health insurers for double-digit rate increases fell about 41 percentage points since the end of 2009, according to a U.S. report that cited the success of the health-care overhaul.

Monetary

News                                                                                                                             
CNBC | Bernanke's Challenge: Prime Markets for End of QE
Federal Reserve Chairman Ben Bernanke is preparing for a most sensitive task: telling jittery investors who have grown accustomed to the U.S. central bank's ultra-easy monetary policies that things will eventually have to change.
Bloomberg | Bernanke’s Stimulus Spurring U.S. Employment in Housing
Federal Reserve Chairman Ben S. Bernanke has something to tout before Congress in hearings this week: job growth in the auto and housing industries.

Econ Comments & Analysis                                                                                            
Washington Times | The Fed’s bubble fuel
The consequences of the Federal Reserve’s loose-money policy are starting to hit home. Even members of the Federal Open Market Committee are concerned, as revealed in the Wednesday release of the minutes of a meeting earlier this year.

Blogs                                                                                                                             
WSJ | Fed Exit Strategy a Work in Progress
Two developments are worth watching on the Federal Reserve front these days. Both relate to Fed planning for how it will withdraw one day from the aggressive bond buying it is now pursuing to bolster the markets and the economy.

Taxes

News                                                                                                                             
Politico | Sequestration: Expecting a tax refund? It may be delayed
Law-abiding taxpayers could shoulder the brunt of the blow when the sequester hits the Internal Revenue Service Friday — and tax cheats might find it easier to rig the system.
CNN Money | Marijuana dealers get slammed by taxes
Thanks to a decades-old law targeting drug runners, entrepreneurs in the nascent medical marijuana industry face a unique burden: an effective federal income tax rate that can soar as high as 75%.

Employment

Econ Comments & Analysis                                                                                            
Real Clear Markets | It's Time To End Our Minimum Wage Psychosis
The minimum wage is the perfect example of how Americans have lost contact with reality and exhibit delusional thinking. Simply because it sounds like it makes sense, Americans lap up the minimum wage elixir like dehydrated groupies of Jim Jones in the Peoples Temple.

Budget

News                                                                                                                             
Politico | Sequestration: Cuts before compromise?
Congress returns Monday with all eyes on a last Senate attempt to forestall across-the-board spending cuts March 1 that threaten to cripple government services this spring and roll back the clock to before Barack Obama’s presidency.
CNBC | One Quarter of US Has More Card Debt Than Savings
Rumors of the spendthrift American consumer may be slightly exaggerated. Bankrate's 2013 February Financial Security Index found that a majority of consumers — by a narrow margin — say they have more savings than credit card debt.

Econ Comments & Analysis                                                                                            
Washington Times | Sequestration follies
Here we go again. Lawmakers are once more warning that the nation hangs on the brink of unimaginable disaster. Another cliff, you might say. Five days from now automatic budget restraint is scheduled to take effect, and nothing frightens a politician more than restraint on spending.
WSJ | A Silver Linings Deficit Playbook
Cheer up, America. Yes, it's February. But spring training has begun, the days are growing longer, the weather is getting warmer, and—are you ready for this?—the federal budget picture is improving.
CATO | The Fairy Tale on Spending Cuts
“The sequester is coming, the sequester is coming,” cries Chicken Little, speaking of the across-the-board spending reductions set to kick in next Friday. As a result, much of the Washington establishment, politicians of both parties, and the media are bracing for the apocalypse.
Washington Post | The true national debt
You’d think this would be an easy question. Surely we know how much the government owes. Unfortunately, it’s not that simple. The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning.