Tuesday, March 5, 2013

General Economics

News                                                                                                                             
Fox Business | Proof the Fed is Juicing the Markets
Charles Brady, senior editor of the FOX Business Network, has put together a remarkable chart that clearly shows the Federal Reserve’s monetary easing policies are not going into the U.S. economy, but instead into the stock market.
CNN Money | Why America's middle class is losing ground
When Debbie Bruister buys a gallon of milk at her local Kroger supermarket, she pays $3.69, up 70 cents from what she paid last year.
Market Watch | ISM services-company index climbs in February
U.S. service-sector companies grew at a slightly faster pace in February and expanded for the 39th straight month, according to the Institute for Supply Management.
Bloomberg | Euro-Area Services Output Contracts Less Than Estimated
Euro-area services output shrank less than initially estimated in February, adding to signs the currency bloc’s economy may be beginning to emerge from a recession.
Market Watch | U.S. home prices extend gains in January
U.S. home prices advanced by 0.7% in January to stretch the year-on-year advance to 9.7% -- the largest year-on-year gain since April 2006, according to CoreLogic.

Econ Comments & Analysis                                                                                            
Market Watch | Fed's Powell: Ending too big to fail to take years
Efforts by federal regulators to find ways to manage financial institutions so they are not too big to fail will take years and success is not assured, said Federal Reserve Board Governor Jerome Powell on Monday.
Mercatus | Helping the Poor Without Hurting the Recovery
The president’s recent proposal to increase the minimum wage to $9.00 is not the way to help low-income households. Raising the minimum wage is more likely to increase unemployment for some of the least skilled American workers and further impede a historically slow recovery. Research from the Mercatus Center shows that regulatory reform would help low-income families without causing more unemployment or slowing the recovery.
Washington Times | Locking in the homeowner
It is estimated that up to a quarter of all American households still owe more on their mortgages than their homes are worth. Many of these people have been able to refinance their home loans with much lower interest rates, but that does not solve the problem because they have a balance sheet problem rather than a cash-flow problem.
Real Clear Markets | The Ongoing, Hideous Lie About 'Victimized' Mortgage Holders
On its most recent magazine cover with the "The Great American Housing Rebound" as the title, Bloomberg BusinessWeek featured characters that, as the New York Post put it, were "drawn to look like minorities." Perhaps eager to make a lot of noise, Ryan Chittum of the Columbia Journalism Review responded that "minority borrowers were disproportionately victimized in the bubble. But BusinessWeek here has them on the cover bathing in housing-ATM cash, implying that they're going to create another bubble. That's not okay."
Mercatus | Expanding Medicaid: The Conflicting Incentives Facing States
Recent decisions by individual states concerning the Affordable Care Act (ACA)’s now-optional Medicaid expansion have been much in the news of late. Today the Mercatus Center is publishing my comprehensive study of the conflicting incentives facing states as they make their choices about expansion.

Blogs                                                                                                                             
CATO | Keystone XL Passes Another Hurdle
On Friday, the State Department released its draft Environmental Impact Statement (EIS) on the Keystone XL pipeline. It could not have been much worse for pipeline opponents.
Heritage Foundation | Morning Bell: Busting 5 Myths About the Minimum Wage
While President Obama and other proponents of a higher minimum wage want you to visualize that single parent, the truth is that a burger-flipping teenager or college student with a part-time job paints a much more accurate picture of the minimum wage in America.
Calculated Risk | CoreLogic: House Prices up 9.7% Year-over-year in January
Home prices nationwide, including distressed sales, increased on a year-over-year basis by 9.7 percent in January 2013 compared to January 2012. This change represents the biggest increase since April 2006 and the 11th consecutive monthly increase in home prices nationally.

Health Care

Econ Comments & Analysis                                                                                            
Politico | Medicare cuts are a giant step backward
It is well-known that policymakers are facing tremendous political pressure to reduce spending and the deficit. It is also clear that our entitlement programs are the chief driver of federal spending both now and in the future. However, indiscriminate cost cutting like the sequester is not the best answer for the latter, and certainly not the recently announced cuts to the Medicare Advantage program for the former.
WSJ | The Real Promise of 'Accountable Care'
For decades, the inexorable rise in health-care costs has been accompanied by growing evidence of large variations in care and widespread gaps in quality and efficiency. Almost daily, new developments come along that in other industries would improve quality and access—such as Web- and phone-based services, electronic transactions and more-convenient facilities. In health care, however, innovative technologies and services seem to increase costs and complexity.
Real Clear Markets | Obamacare Insurance Plans Will Be Bare Bones -- And Expensive
There's mounting evidence that come fall, the health plans sold through the Obamacare exchanges will be bare bones affairs - with narrow networks of providers to select from, and heavy co-insurance once patients go "out of network."
Mercatus | The Affordable Care Act's Optional Medicaid Expansion
In a new study published by the Mercatus Center at George Mason University, senior research fellow Charles Blahous analyzes the myriad factors states must weigh in their decisions whether to expand Medicaid coverage.

Monetary

News                                                                                                                             
Bloomberg | U.S. Credit Swaps Fall to Lowest Level in More Than Five Months
A gauge of U.S. corporate credit risk fell to the lowest level in more than five months before the release of a non-manufacturing services report.

Econ Comments & Analysis                                                                                            
Fortune | Why the Fed is failing to boost lending
Ben Bernanke's policy of low interest rates is meant to boost lending. But a new study shows that as banks have gotten bigger, the Fed has become less powerful.

Blogs                                                                                                                             
Market Watch | Volcker on why banker worries are ‘baloney’
Bank lobbyists beware: Former Federal Reserve Chairman Paul Volcker thinks your worries about regulations he helped craft are “baloney.”
Macroeconomic Resilience | The Greenspan Fed’s Biggest Mistake: The LTCM Rate Cuts
The debate as to whether the Greenspan Fed’s easy money policies are to blame for the 2008 financial crisis tends to focus on the Fed’s actions after the bursting of the dot-com bubble in 2001.

Taxes

Econ Comments & Analysis                                                                                            
CNN Money | 3 ways to lower your tax bill
Before you start planning for 2013, you still have 2012 taxes to worry about.
NY Times | Why Carried Interest Is a Capital Gain
The current debates on tax reform and government spending levels have often focused on raising taxes on carried interest. While many, including a recent opinion piece in The New York Times by Lynn Forester de Rothschild, have homed in on carried interest to raise revenue, little discussion has focused on how carried interest actually functions and why it was treated as a long-term capital gain in the first place.

Employment

News                                                                                                                             
CNN Money | First furlough notices go out
The Army sent letters on Feb. 28 and March 1 to unions warning that employees at the Aberdeen Proving Ground in Gunpowder, Md., as well as the Corps of Engineers in Walla Walla, Wash., will be forced to stay at home without pay one day each week from April 22 through Sept. 21.

Econ Comments & Analysis                                                                                            
Real Clear Markets | To Navigate $12M Sequester, BLS Cuts Green Jobs
In a triumph of common sense, the Bureau of Labor Statistics is responding to the sequester by eliminating its count of green jobs, an $8 million annual waste of taxpayer funds.

Budget

News                                                                                                                             
Politico | House GOP rolls out stopgap spending plan
House Republicans moved ahead Monday behind a six-month stopgap spending bill that would keep the government funded through September but also lock in appropriations at a far lower level than even Rep. Paul Ryan’s budget envisioned last spring.
Bloomberg | EU Opens Way for Easier Budgets After Austerity Backlash
European finance ministers opened the way for looser budget policies after a backlash against austerity thrust Italy into political limbo and shattered months of relative stability in European markets.

Econ Comments & Analysis                                                                                            
WSJ | Larger Spending Cuts Would Help the Economy
President Obama's most recent prescription for economic growth—more government stimulus spending, new social programs, higher taxes on upper-income earners, subsidies for some industries and increased regulation for all of them—is likely to have the same anemic results as in his first administration.
Washington Times | The sequestration farce
Politicians know the game is up once “Saturday Night Live” mocks them and their policies. President Obama found himself in that unenviable position this weekend. He had mustered all his effort to dispatch Cabinet secretaries to stand before every available camera in sight to recite tales of the mayhem and horror that would follow in the wake of a minuscule across-the-board reduction in federal spending.
Washington Post | With the sequester, Obama gets his ‘balanced’ approach
Congressional Republicans have had quite a comeback. In January, the GOP was forced to vote for a major tax hike with zero spending cuts. Now it is President Obama who has been forced to accept spending cuts with no tax hike. Who says divided government doesn’t work?

Blogs                                                                                                                             
FOX Business | The Next Housing Bubble: Student Loan
Uh-oh. It’s beginning to feel just a little bit like the 2006 housing bubble that burst. This time it's not housing that is growing uncontrollably, it’s student loan debt.
WSJ | No More Easy Ways to Cut U.S. Debt
U.S. policymakers already took the relatively easy steps to reduce the massive federal government debt burden, meaning more difficult choices lay ahead, Douglas Elmendorf, director of the Congressional Budget Office, said Monday.