Friday, March 1, 2013

General Economics

News                                                                                                                             
Bloomberg | U.S. Michigan Consumer Sentiment Index Rose to 77.6 in February
The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment for February rose to 77.6 from 73.8 at the end of the previous month.
CNN Money | Expect relief from record February gas prices
Gas prices rose 10% this month, making it the worst February on record, but drivers can expect relief up ahead. - See more at: http://money.cnn.com/2013/02/28/news/economy/gas-prices-february/index.html?iid=SF_E_LN#sthash.z1DgCqLb.dpuf
Bloomberg | Factory Expansion Spurs Growth as Budget Cuts Loom: Economy
American factories expanded in February at the fastest pace in almost two years, spurred by a jump in orders that is helping propel an economy about to be tested by federal government cutbacks.
Politico | Big business on sequester: Zzzz
The financial markets and some of the nation’s biggest business groups have a collective response to the looming sequester: yawn.
Market Watch | January construction spending drops unexpectedly
Outlays for U.S. construction projects unexpectedly declined in January, the Commerce Department reported Friday. Construction spending fell 2.1% in January to an annualized rate of $883.3 billion, the first drop since last March.
Bloomberg | Consumer Spending in U.S. Climbs Even as Taxes Hurt Incomes
Consumer spending in the U.S. rose in January even as incomes dropped by the most in 20 years, showing households were weathering the payroll-tax increase by socking away less money in the bank.

Econ Comments & Analysis                                                                                            
Daily Caller | The sequester will be good for the economy
Politicians, pundits and economists are all forecasting horrific impacts on the U.S. economy as sequestration hits Friday. The basis for this view is the standard — Keynesian — claim that spending cuts slow economic growth, perhaps even causing a recession. This claim is false.
Mercatus | Volcker Rule Continues to Trouble Regulators and Industry
Federal regulators are still struggling to finalize the long-awaited Volcker rule—a component of the Dodd-Frank Act of 2010 that prohibits banks from engaging in proprietary trading and limits their investment in hedge funds. Now it’s being reported that the final rule won’t be ready until the second half of this year, creating more uncertainty for the private sector.
WSJ | Obamageddon
If you're reading this after midnight on Friday, March 1, the dreaded Beltway hour of doom known as the "sequester" has arrived and the news is that the world has not ended. You can pinch yourself to make sure. This does not mean there won't be more political histrionics, but the beginning of applying reason to Washington is understanding that it is possible to cut at least some federal spending.
Real Clear Markets | Free Lunch For the Middle Class Now Causing Pain
President Obama and his cabinet are busy scaring the American public about all the pain that the tiny budget cuts called for in the sequester are going to cause.
Mercatus | GDP: Slow Growth Ahead
There was only one lane open as I made my trip to Atlanta; the other three were blocked with those unhappy yellow and black make-believe barrels used by the highway folks. Traffic flow was constrained by efforts to repair potholes and broken pavement.
AEI | The Housing Bubble and the Limits of Human Knowledge
Fannie Mae and Freddie Mac lost an aggregate $246 billion during the shriveling of the great American housing bubble. They lost all the profits they had made since 1971 plus another $140 billion — quite a performance.

Health Care

Econ Comments & Analysis                                                                                            
CRS | Comparing Medicaid and Exchanges: Benefits and Costs for Individuals and Families
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) expands health insurance coverage primarily through two mechanisms: by expanding the existing Medicaid program and by establishing new health insurance exchanges where certain individuals and businesses can purchase private health insurance.
NBER | Health Information Technology and Patient Outcomes: The Role of Organizational and Informational Complementarities
Health information technology (IT) adoption, it is argued, will dramatically improve patient care. We study the impact of hospital IT adoption on patient outcomes focusing on the roles of technological and organizational complements in affecting IT's value and explore underlying mechanisms through which IT facilitates the coordination of labor inputs.

Monetary

Econ Comments & Analysis                                                                                            
Market Watch | Fed should not scale back QE plan: Evans
The Federal Reserve should not scale back its bond-buying program, said Charles Evans, president of the Chicago Fed Bank, on Thursday. In a speech to the CFA Society of Iowa in Des Moines, Evans said that the U.S. should not replicate the mistake made by the Japanese government of trying to end its easy monetary policy too soon. - See more at: http://articles.marketwatch.com/2013-02-28/economy/37352137_1_qe-plan-asset-bubbles-easy-monetary-policy#sthash.k0lr3y0F.dpuf

Blogs                                                                                                                             
Economist | The Eager for Catastrophe Bank
It is safe to say that we have passed the point at which criticisms of the European Central Bank must be prefaced with the caveat that, yes, the ECB did prevent a nasty break-up of the single currency when its head, Mario Draghi, promised to do "whatever it takes" to keep the euro zone together.

Taxes

Econ Comments & Analysis                                                                                            
Forbes | For Entrepreneurs, California's Tax Code Becomes The Roach Motel
Entrepreneurs succeed by seizing growth opportunities and avoiding fiscal threats. They develop a keen sensitivity to marketplace changes, either imposed on them by competition or via government action (or inaction, as is often the case), and they respond with moves that will better position their company.

Employment

News                                                                                                                             
CNN Money | IRS holds off furloughs to spare tax season
The Internal Revenue Service will wait until the end of tax season to furlough its employees. - See more at: http://money.cnn.com/2013/02/28/news/economy/irs-tax-furloughs/index.html#sthash.G1PAX3tH.dpuf
Washington Times | Eurozone unemployment rate hits record high of 11.9 percent but inflation drops below target
Italy’s voters gave their verdict on the austerity medicine they’ve been forced to take when they went to the polls earlier this week. By Friday, one of the reasons behind the protest was highlighted when the country’s unemployment hit its highest level in at least two decades.

Econ Comments & Analysis                                                                                            
Heritage Foundation | Who Earns the Minimum Wage? Suburban Teenagers, Not Single Parents
Most minimum-wage workers, however, are not poor. Congress should examine which workers—that would not lose their jobs—would benefit from a higher minimum wage.

Budget

News                                                                                                                             
CNN Money | Spending cuts: When they'll really bite
Friday's the day. The arbitrary, across-the-board spending cuts lawmakers approved but swore would never happen are set to begin. - See more at: http://money.cnn.com/2013/02/28/news/economy/spending-cuts/index.html#sthash.KChDvMwM.dpuf

Econ Comments & Analysis                                                                                            
Washington Times | Sequestration doesn’t cut nearly enough
A study to learn whether or not a fish called the golden shiner can teach us about “collective action”: $5 million.
WSJ | Bursting Debt Bubble
'We are not a deadbeat nation," President Obama famously said during the debt-ceiling fight. We'll see how long the Treasury can sustain gargantuan deficits. But at the level of individual borrowers, and specifically young people with student loans, defaults are spiking to historic levels.
Washington Times | Sequestration ignores the real spending problem
To listen to the parade of Obama administration officials warning of civilization-ending consequences from the measly $85 billion in spending “cuts” sequestration will bring, one can only reach one of two conclusions: Either they are just making stuff up to make the cuts as painful as possible, or the federal budget is so out of control that a mere 2.4 percent reduction in projected spending is more than the system can handle.
Washington Times | Debt is a real drag in any season
Like snow during a long stretch of miserable winter weather, the U.S. has been piling up debt year after year. Being “snowed under” in this way is profoundly depressing, fiscally as well as mentally.