Wednesday, March 6, 2013

General Economics

News                                                                                                                             
Bloomberg | Service Industries in U.S. Grow at Fastest Pace in a Year
Service industries in the U.S. expanded in February at the fastest pace in a year as a recovery in housing rippled through the economy.
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.
Bloomberg | Euro Exports Fell in Fourth Quarter as Slump Deepened: Economy
Euro-area exports fell in the fourth quarter for the first time in more than three years and investment declined as the sovereign debt crisis pushed the region deeper into a recession.
Bloomberg | Dow Climbs to Highest Level on Central Bank Optimism
The Dow Jones Industrial Average (INDU) climbed to a record, erasing losses from the financial crisis, as China vowed to maintain its growth target and investors bet central banks will continue stimulus measures.

Econ Comments & Analysis                                                                                            
Washington Times | Who regulates the regulators?
In Beltway terms, the Federal Communications Commission’s $350 million budget request for 2013 is practically a rounding error. Yet it costs the American people a lot more than that. In fact, it is the third-most-expensive federal agency, but thanks to a lack of transparency, very few people are aware of that fact.
Washington Post | The expensive Amtrak fantasy
There is something about Amtrak — perhaps the romance of railroads or the promise of relieving traffic congestion and economizing on oil and greenhouse-gas emissions — that causes otherwise sensible people to lose contact with reality. The reality is that Amtrak has been a waste of taxpayer money since its creation in 1970. It doesn’t significantly reduce congestion, fuel use or greenhouse gases.
WSJ | A Record Dow
One thing for sure, the stock market doesn't mind the federal budget sequester. The Dow Jones Industrial Average climbed to a new nominal record on Tuesday, rising by nearly 1% to hit 14253.77 and finishing for the day above its previous closing high in the faraway land of October 2007.
Politico | Financing for small businesses is fuel for economy
It’s a tried and true stump speech staple: “Small business is the engine of our economy.” Politicians on both sides of the aisle laud the virtues of entrepreneurial risk takers and hail their resilience as being what embodies the best of the American dream. Yet for all the complimentary rhetoric, there is still a woeful lack of action to protect and empower small-business initiatives for the real job creators in America.
WSJ | Help for Underwater Homes
The number of American homes that end up in foreclosure has started to decline, a welcome development that partly reflects an improving housing market.

Blogs                                                                                                                             
FOX Business | Even With The Sequester in Place, Feds Continue to Hire & Spend
"Deep concern." That's what President Obama said on Monday about his feelings towards the automatic federal spending cuts, which began to take place yesterday.

Health Care

News                                                                                                                             
Politico | Smokers can skirt higher premiums
Under the health law, insurers next year will be able to charge smokers up to 50 percent more than nonsmokers.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Healthcare For the Poor, Or Poor Healthcare?
Republicans are often vilified as wanting to "end Medicare as we know it." The Obama administration has taken the first action to do just that for millions of low-income seniors.

Monetary

News                                                                                                                             
Bloomberg | Surging Foreign Bank Reserves at New York Fed Won’t Alarm
A thawing in dollar markets for European banks may be making it easier for the Federal Reserve to fund its balance sheet, which has ballooned to a record of more than $3 trillion.

Econ Comments & Analysis                                                                                            
Market Watch | Fed's Plosser calls for tapering, then ending QE3
The Federal Reserve should begin scaling back its quantitative easing program with an eye toward stopping it before the end of the year, said Charles Plosser, president of the Philadelphia Federal Reserve Bank, on Wednesday.
Market Watch | Fed's Lacker says exit strategy a major concern
The Federal Reserve's planned exit strategy to hike rates and sell assets on its balance sheet will be tricky to execute, said Jeffrey Lacker, the president of the Richmond Federal Reserve on Tuesday.

Taxes

Econ Comments & Analysis                                                                                            
Washington Post | It’s time to tax financial transactions
On Friday at midnight, the sequester kicked in, triggering $85 billion in deep, dumb budget cuts that sent “nonessential personnel”— such as air traffic controllers — packing.

Employment

News                                                                                                                             
CNN Money | ADP: Private sector job growth remains 'sturdy'
Private sector job growth continued at a "sturdy" pace in February, despite government spending cuts and tax increases, according to a report from payroll processing firm ADP Wednesday.

Blogs                                                                                                                             
Heritage Foundation | SKILLS Act Would Cut Duplication and Waste in Job Training Programs
The federal government spends billions each year on job training programs. However, these programs are ineffective and waste billions on duplicative administrative expenses.

Budget

News                                                                                                                             
Politico | Odd allies fight against taxing municipal bonds
The push for reliable roads and bridges is bringing together a strange-bedfellows coalition: not only cities and counties whose economies rely on such projects but also soybean farmers, truckers and state transit advocates.
Bloomberg | Fiat Chief Urges End to Until-We-Die European Austerity
Fiat SpA (F) Chief Executive Officer Sergio Marchionne spoke out against deeper budget cuts in Europe as Renault SA (RNO) CEO Carlos Ghosn urged government spending to revive the region’s anemic sales, which he forecast won’t recover for another three years.
CNN Money | Why spending cuts may be here to stay
The threat of automatic budget cuts was supposed to light a fire under lawmakers and force them to do their jobs.

Econ Comments & Analysis                                                                                            
WSJ | #SequesterThis
In its bid to make the sequester as painful as possible, the White House announced Tuesday that it is canceling all visitor tours of the White House "during the popular Spring touring season." This fits President Obama's political strategy to punish the eighth graders visiting from Illinois instead of, say, the employees of the Agriculture Department who will attend a California conference sipping "exceptional local wines" and sampling "tasty dishes" prepared by "special guest chefs."
Barrons | Thinking About the Unthinkable
As Washington partisans fight with smoke and mirrors over automatic federal budget cuts for the current fiscal year, it's hard to see them in proper perspective. It may help to remember that Washington is the place where the word decimation lost its original meaning of a 10% reduction and became a synonym for total destruction.
CATO | Fewer Taxpayers, More Spending
Under economic pressure, the Obama administration has pursued an increasingly vigorous class war strategy. At the same time people continue to be dropped from the income tax rolls. This likely expands government and increases what the rest of us will have to pay.
AEI | Spending cuts may be answer to slow economic growth
The Dow set a new high on Tuesday, but the larger economy is a different story. What if today's sluggish economic growth turns out to be the new normal? That's the unsettling question asked by some of our most creative economic thinkers.
Heritage Foundation | Research Review: Spending Cuts Are Better Than Tax Increases
Governments regularly run fiscal deficits and periodically awake to the need to restore balance to their finances. These episodes of “fiscal correction” or “austerity” may emphasize either tax increases or spending cuts. As the United States faces an out-of-control budget deficit and trillions in unfunded promises to future retirees, the question looms large: Tax more, spend less, or do some of both?

Blogs                                                                                                                             
WSJ | White House Economist: Sequestration Poses New Risk to Economy
The across the board government spending cuts now in place pose a new threat to the U.S. economy, White House economist Alan Krueger said Tuesday.