Friday, February 28, 2014

General Economics

CNN Money | Now on your restaurant bill: Obamacare fee
Diners at eight Gator's Dockside casual eateries are finding a 1% Affordable Care Act surcharge on their tabs, which comes to 15 cents on a typical $15 lunch tab. Signs on the door and at tables alert diners to the fee, which is also listed separately on the bill.
FOX Business | Freddie Mac Rakes in $8.6B in 4Q Profits, Repays $71.3 Billion Bailout
Freddie Mac revealed on Thursday it hauled in $8.6 billion of profits during the fourth quarter, paving the way for the government-controlled mortgage giant to return another $10.4 billion to taxpayers.
CNN Money | Housing inequality: The tale of two communities
Home values in the top 10% wealthiest communities are worth more than six times that in the bottom 40%, a new survey has found.
Bloomberg | Economy in U.S. Expanded at Slower Pace Than First Estimated
The economy in the U.S. grew at a slower pace in the fourth quarter than previously estimated, giving the expansion less momentum heading into 2014.
CNN Money | Identity theft tops consumer complaints...again
Identity thieves were once again consumers' greatest gripe last year, followed by pesky debt collectors and frustrating banks and lenders.

Econ Comments & Analysis                                                                                            
WSJ | Higher Ed's Illusions
For years, polling data has shown that Americans hold the U.S. Congress in low esteem, with the Members' approval often sinking into the teens. So guess which American institution is on course to join them? It's our colleges and universities. Congress at least admits it's doing a poor job. The colleges don't.
Washington Times | How Obama drowns Main Street in regulations
A prescription for a more robust American economic recovery is not a mystery — the catalyst of job growth is small business. At a time when small businesses should be at the heart of our nation’s comeback, America’s best job creators deserve leaders who create an environment where businesses can thrive.
NY Times | A Dire Economic Forecast Based on New Assumptions
The part of the past that you deem most relevant can be critical in determining your outlook for the future. And nowhere is that clearer than in the changing economic forecasts that come out of the Congressional Budget Office.
CATO | Minimum Wages: A Poor Way to Reduce Poverty
While alleviating poverty is a widely shared goal, raising the minimum wage is a very inefficient means of achieving this objective and is likely to hurt many low-skilled workers.

WSJ | Vital Signs: Demand for Capital Goods Flattens Out
Thursday’s durable goods report was a mixed bag, but of particular interest to the economic outlook is the trend in orders for capital goods that contribute to the business-investment sector of gross domestic product.

Health Care

National Journal | Obama's Cut to Medicare Program Gets an Estimate: 5.9 percent
The insurance industry Thursday protested the Obama administration's planned cut to a Medicare program, saying it would cost seniors when it came time to pay their insurance premiums.
WSJ | Health Plans Rush to Size Up New Clients
Insurers are rushing to gather health information from the new customers they won on public marketplaces in a high-stakes outreach effort crucial to their hopes of profiting from the health-care law.

Econ Comments & Analysis                                                                                            
Forbes | Behind the '4 Million Obamacare Enrollees' Facade Is An Uncomfortable Truth
The White House has proudly announced that 4 million Americans are now enrolled in Obamacare.  More astute analysts rightly point out that being “enrolled” doesn’t mean enrollees have made their first premium payment, which could be a big hurdle.  But the even bigger question is: In the volatile individual health insurance market, how many will continue to pay their premiums?
CATO | What Governors Can Do to Lower Health Care Costs
Senate Minority Leader Mitch McConnell recently wrote to GOP governors asking them for ideas to reform the Affordable Care Act. Clearly governors are seen as key to Republican efforts to identify reforms Americans support. However, the governors are in a position to make an even bigger impact at the state level. Much of what could be done to increase access to care and reduce costs is illegal in many states.


WSJ | Fed's Fisher Could Support Faster Bond Tapering
Dallas Federal Reserve President Richard Fisher said Thursday that if the pace of economic growth were to pick up in the U.S., he would be open to accelerating the Federal Reserve's reduction of bond purchases.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Fed Has Become a Frankenstein of Epic Proportions
In what increasingly seems like both a recurring nightmare and an unfortunate case of deliberate short-term memory, the Chinese banking system is exhibiting dysfunction that is far too reminiscent of global dollar markets in late 2007.
CNN Money | Ben Bernanke grilled on AIG bailout
Former Fed chairman Ben Bernanke was grilled on Thursday about some of his toughest days in the job.
Mercatus | How Are Small Banks Faring Under Dodd-Frank?
This paper presents the results of the Mercatus Center’s Small Bank Survey, which include responses from approximately 200 banks across 41 states with less than $10 billion in assets each, serving mostly rural and small metropolitan markets. The initial analysis suggests that Dodd-Frank significantly affects small banks and their customers.

WSJ | 5 Things Janet Yellen Said That Distance Her From Others’ Views
The main takeaway from Federal Reserve Chairwoman Janet Yellen’s testimony before the Senate Banking Committee was that central bank policy is on cruise control until officials get a better read on the economy’s performance. The Fed will continue to gradually reduce its monthly bond  purchases unless officials decide the economy has slowed substantially. A recent spate of bad weather in parts of the country make it hard to form a judgment now, Ms. Yellen said.


Politico | Wall Street threatens GOP on bank tax
Rep. Dave Camp’s tax proposal — which jacked up taxes on banks and threatens the bottom line of some major private equity players in New York — has infuriated donors in high finance.
Bloomberg | California Carbon Tax Would Be First at the Gas Pump
California would be the first U.S. state to impose a “carbon tax” directly on motorists at the fuel pump under a plan by a leading Democratic lawmaker to ease greenhouse-gas pollution.
AEI | One step closer to tax reform
Yesterday, House Ways and Means Committee Chairman Dave Camp (R-Michigan) unveiled the most sweeping, elaborate, and aggressive income tax reform proposal in a generation.

Econ Comments & Analysis                                                                                            
Market Watch | Dave Camp’s tax plan doesn’t go far enough
I had high hopes for House Ways and Means Chairman Dave Camp’s tax reform plan. Those hopes were dashed.
The Fiscal Times | Camp’s Courageous Tax Plan Is Bashed by All Sides
In putting out a comprehensive rewrite of the nation’s sclerotic and inefficient tax code, House Ways and Means Committee Chairman Rep. Dave Camp (R-MI) displayed a degree of political courage virtually unheard of in recent years, if measured only by the number of constituencies he pissed off.  - See more at:
Fortune | Dave Camp's pitch to overhaul U.S. taxes: An impossible dream?
Unlike many previous Republican proposals to cut taxes, the Michigan congressman specifies how government would pay for them. This is critical, but it's not pretty.


WSJ | Jobless Claims Rise More Than Expected
The number of Americans filing new claims for unemployment benefits jumped last week, the latest indication of volatility in the nation's job market.


Econ Comments & Analysis                                                                                            
CRS | Federal Trust Funds and the Budget
The federal budget consists of four basic fund groups—the general fund, special funds, revolving funds, and trust funds. The first three are often referred to as the federal funds group. Trust funds are an accounting mechanism that records revenues, offsetting receipts, or collections earmarked for the purpose of the specific fund.

Wednesday, February 26, 2014

General Economics

Bloomberg | New Home Sales in U.S. Unexpectedly Rise to Five-Year High
Purchases of new U.S. homes unexpectedly climbed in January to the highest level in more than five years, showing underlying strength in the industry even in the midst of unusually harsh weather.
CNBC | Mortgage applications at lowest level in two decades
Mortgage applications to buy a home fell last week to the lowest level in nearly two decades, according to a weekly survey from the Mortgage Bankers Association.
Bloomberg | First Solar Profit Slumps as Power-Plant Revenue Declines
First Solar Inc. (FSLR), the largest U.S. solar-panel manufacturer, posted a 58 percent decline in profit as revenue slumped from the utility-scale power plants it’s building in the U.S. Southwest. Its shares fell the most in more than six months.
Washington Times | Obama eases penalties for businesses hiring illegal immigrants
The Obama administration regularly cuts a break for businesses that hire illegal immigrants, reducing their fines by an average of 40 percent from what they should be, according to an audit released Tuesday that suggests the government could be doing more to go after unscrupulous employers.

Econ Comments & Analysis                                                                                            
Politico | President Obama to urge $302 billion transportation bill
President Barack Obama on Wednesday will call for a four-year, $302 billion transportation bill to replace the law that expires at the end of September, while repeating his pitch for tax reform to fill some of that gap.
The American | GDP and Measuring the Intangible
GDP statistics lead us to take an overly pessimistic view of the economy. There is no Great Stagnation. There is only a widening gap between the rate of economic improvement and our ability to measure that improvement.
Washington Times | Obama kickstarts the ‘minimum wage economy’
Louisiana Gov. Bobby Jindal came up with the perfect name for the Obama economy that you’ll be hearing a lot during this year’s midterm election campaigns.
AEI | Housing Risk Watch, February 2014
The January National Mortgage Risk Index (NMRI) for home purchase loans shows that low-risk loans accounted for only 42.2 percent of home mortgages extended in January 2014, down from 45.4 percent in December 2013 and 46.4 percent in August 2013 (the starting date for this series).

WSJ | Don’t Get Excited by Jump in New Home Sales
New home sales jumped to the highest level since July 2008 in January, which is really good news if it holds. But the Census new-home sales data is a choppy indicator with a small sample size, and when you take a longer look at the series it’s pretty clear that the nation’s two-year-old real estate turnaround is still largely a recovery in prices.
WSJ | Are Trade Talks Going Anywhere?
Well, at least not anywhere fast. U.S. Trade Representative Michael Froman said officials arrived with a “problem-solving mindset,” advanced the talks in several areas and now have some sort of understanding on rules for state-owned enterprises, investment in services industries, the telecommunications sector and food safety.

Health Care

Politico | Obamacare enrollment hits 4 million
About 4 million people have signed up for health coverage in the new Obamacare exchanges since Oct. 1 with just over a month left for people to enroll, federal officials said late Tuesday. That total is up from 3.3 million enrolled at the end of January.
National Journal | Can Obamacare Avoid a Consumer Rebellion?
When Obamacare handed insurance companies millions of compulsory customers, it also handed them a reminder of one of their industry's toughest realities: Consumers want low premiums, and they want to see any doctor they want. And it's impossible to give them both.

Heritage Foundation | Majority of Small Businesses Will See Health Premium Rate Hike Because of Obamacare
The Centers for Medicare and Medicaid Services Office of the Actuary last week released with little fanfare a report that is shaking up the debate over Obamacare’s impact on the economy, according to The Wall Street Journal. The federal actuarial report predicted that 65 percent of small businesses will see their health insurance premiums increase because of President Obama’s signature health law.


WSJ | Why Higher Interest Rates Could Depress Housing Turnover
Record declines in home prices are a big reason housing turnover has been so muted in recent years, but low interest rates could serve as an additional — and underappreciated — contributor to the depressed level of homes being offered for sale, according to a forthcoming paper from researchers at DePaul University.
WSJ | Geithner Among Fed Losers in 2008, Dudley Among Winners
The Federal Reserve’s release of transcripts from its 2008 policy meetings provides a chance to size up who among central bank officials did well, and who didn’t, in the heat of the crisis.


National Journal | Why the Republican Tax-Reform Proposal Is Likely Going Nowhere
After months of work, Republican Rep. Dave Camp, the House majority's lead tax-writer, is set to release an outline of his tax-reform overhaul plan Wednesday. But Republicans are already saying it's unlikely to go much further.
Bloomberg | Camp to Cap Mortgage Benefit While Ending State Tax Break
A tax plan from House Ways and Means Committee Chairman Dave Camp would further limit the mortgage-interest break and end the deduction for state and local taxes, according to a nonpartisan congressional summary.
WSJ | 'No Hope' for Tax Reform
Senate Minority Leader Mitch McConnell (R., Ky.) on Tuesday threw cold water on hopes for a tax-code overhaul this year, saying he didn't see how it would be possible.

Econ Comments & Analysis                                                                                            
WSJ | How to Fix Our Appalling Tax Code
There have been so many changes to the tax code over the past decade that it is now 10 times the size of the Bible, but with none of the Good News. That factual statement usually gets a good laugh back home in Michigan. What isn't funny is the effect that constant tinkering with taxes has had on the people who pay them, and on the economy.
ATR | IRS Warns: Obamacare Tax Must Be Paid with Tax Return
President Obama’s Internal Revenue Service today quietly released a series of Obamacare “Health Care Tax Tips” warning Americans that they must obtain “qualifying” health insurance – as defined by the federal government – or face a “shared responsibility payment” when filing their tax returns in 2015.

Market Watch | No endorsement of Camp tax plan from Boehner
House Speaker John Boehner on Wednesday declined to endorse a sweeping tax-reform plan being offered by fellow Republican Dave Camp, saying only “there’s a conversation that needs to begin” about revamping the tax code.
Heritage Foundation | Tax Reform at Last?
Today, House Ways and Means Committee Chairman Dave Camp (R) of Michigan jumpstarts the tax reform debate. It’s about time. The tax code stables in Washington haven’t been cleaned out since 1986—more than a quarter century ago, when Ronald Reagan was President.


CNN Money | JPMorgan cutting jobs, slimming branches
In an effort to cut costs, the country's largest bank by assets said Tuesday that it plans to slash 8,000 jobs in its consumer and community banking division this year.

Econ Comments & Analysis                                                                                            
Barrons | The Minimum Wage Is No Friend of the Poor
The debate over raising the federal minimum wage to $10.10 an hour from the current $7.25 heated up last week with the publication of a Congressional Budget Office study, which estimated that total employment would likely be reduced by "500,000 workers" if the hike were implemented.
Fortune | Americans need more than a minimum wage hike
Paying workers more could lift nearly 1 million out of poverty, but low-skilled workers need more than that to thrive in today's job market.
AEI | The unemployment trap
Extended unemployment benefits lower workers’ incentives to search for jobs and to take jobs that may not be a perfect fit, and they may also lower firms’ incentives to hire new workers. It might seem intuitive that these incentives sometimes lead workers to delay their return to work, but many on the left dispute this.


Econ Comments & Analysis                                                                                            
Fortune | How to read President Obama's new budget
Next week President Obama is expected to send Congress his new budget. It's a huge, sprawling document; last year's was 2,476 pages in four volumes. Because no one can absorb all that instantly, here's an insider's guide to the budget for fiscal year 2015, which begins Oct. 1, 2014.
CATO | Obama’s ‘Age of Austerity’ Lie
During his first five years in office, the president has run up more than $5.7 trillion in debt. Of course, some might point out that at least some of the spending during the president’s first year in office can be attributed to President Bush.

CBO | Federal Revenues Are Projected to Increase Significantly Over the Next Two Years and Remain Steady as a Share of GDP Thereafter
The federal government’s revenues will increase by 9 percent in 2014 and by another 9 percent in 2015, CBO projects in The Budget and Economic Outlook: 2014 to 2024, reaching $3.3 trillion in 2015—about $530 billion more than receipts in 2013.

Monday, February 24, 2014

General Economics

CNN Money | Detroit bankruptcy plan proposes slashing pension benefits up to 34%
The plan proposes deep cuts in the health care coverage for retirees. And there could be even deeper cuts in what the city is offering to pay banks and other investors holding the city's debt. A summary of the plan on the city's Web site said bondholders would get new securities worth 20% of amount they are still owed.

Econ Comments & Analysis                                                                                            
CNN Money | G20 pledges to add $2 trillion to global economy
The largest global economies have pledged to install policies that will add $2 trillion to the world economy over the next five years.
Real Clear Markets | This Is the Age of Fairy-Tale Economics
The great virtue of the Congressional Budget Office's recent report on the minimum wage is that it injects a much-needed dose of reality into the debate over job creation.
Real Clear Markets | The Minimum Wage Is An Expensive Way To Help the Poor
President Obama wants Congress to raise the minimum wage from its current $7.25 per hour to $10.10 per hour. He says this is needed to be fair to workers and to help lift poor, working families out of poverty. The first part is probably not true and the minimum wage is a very inefficient way to accomplish the second goal.
Fortune | Why coal and many oil investments are losing luster
Climate change has long been an issue, but companies are also starting to pull back because it's wasteful spending.
CBO | Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output in 2013
When ARRA was being considered, CBO and the staff of the Joint Committee on Taxation estimated that it would increase budget deficits by $787 billion between fiscal years 2009 and 2019. CBO now estimates that the total impact over the 2009–2019 period will amount to about $830 billion. By CBO’s estimate, close to half of that impact occurred in fiscal year 2010, and more than 95 percent of ARRA’s budgetary impact was realized by the end of December 2013.
AEI | More equality, less work: Obama's America, according to the CBO
The Obama administration has benefited quite a bit from its analysis of a number of policy issues, including the fiscal stimulus and immigration reform. But there is currently a chill in the relationship between the White House and the Congressional Budget Office that has spilled into the media over the agency’s estimates of the labor market effects of two of President Obama’s most important policy efforts.

Reuters | Despite stimulus, middle class still struggles
Five years ago Monday, President Barack Obama signed the signature economic proposal of his presidency, saying that the passage of the $787 billion economic stimulus package heralded the “the beginning of the end” of the Great Recession.
CATO | Fannie and Freddie Offset Reported Government Spending
The federal government took control of mortgage giants Fannie Mae and Freddie Mac (F&F) in 2008 and have bailed them out with $189 billion of taxpayer money.
Library of Economics | The Minimum Wage vs. Welfare: Band-Aid or Salt?
Peter Thiel entertains what economists would call a "second-best" argument in favor of raising the minimum wage

Health Care

Politico | Major spending cut proposed for Medicare Advantage
The Obama administration is proposing a major cut in 2015 payments to Medicare Advantage, in a move that is sure to set off a ferocious campaign by the insurance industry to reverse the decision and likely will further complicate the health care politics of the midterm elections.

Econ Comments & Analysis                                                                                            
Market Watch | Economists as divided on Obamacare as everyone else
Ask economists about monetary policy, and you’re not going to hear much division. Ask them about Obamacare and they’re as divided as everyone else.
Real Clear Markets | In the Healthcare Debate, Every Day Is Groundhog Day
In America's health care debate, every day starts like every other day.

Heritage Foundation | 3 Things You Don’t Know About Obamacare That Could Hurt You
Nearly one in three Americans have little familiarity with Obamacare, and the ramifications are playing out in the media. Since each day brings headlines highlighting Americans who are surprised by changes in their health care situation because of President Obama’s signature achievement, The Heritage Foundation compiled three Obamacare items that might surprise you


Bloomberg | Draghi: ECB Prepared to Add Stimulus on Deflation Risks
European Central Bank President Mario Draghi said policy makers are ready to add to stimulus if the outlook for prices deteriorates, though there are currently no signs of deflation in the euro area.
Market Watch | Euro-zone inflation falls at record speed
The prices of consumer goods in the euro zone fell in January from December at the steepest rate since records began in 2001, a new sign that domestic demand is ailing and will continue to hinder an economic recovery.
CNN Money | Federal Reserve underestimated the crisis
If it wasn't already obvious, it certainly is now: The Federal Reserve didn't see the Great Recession coming until it was in the thick of the crisis.
Bloomberg | Yellen Seeking New Low-Rate Guidance Can Use Forecasts: Economy
As Janet Yellen seeks to forge a consensus on a new strategy for communicating the Federal Reserve’s intention to keep rates low, she can reach for a six-year-old tool: the Fed’s quarterly forecasts.

Econ Comments & Analysis                                                                                            
Bloomberg | Make Banks Safer: Tax Them
Nearly six years after the financial crisis, regulators have adopted a slew of new rules that might make individual banks a little safer. None of the measures, though, adequately addresses a more troubling and hard-to-recognize problem: the risk lurking in the linkages between financial institutions.
Fortune | Fed transcripts: Bernanke chose to let Lehman fail
Newly released transcripts cast doubt on the claim that the Fed didn't have the power to save the investment bank.


Econ Comments & Analysis                                                                                            
Washington Times | Remembering the tax-reform lessons that Reagan taught
These days we hear gloomy statements that no significant reforms can be accomplished by a lame-duck president in his sixth year in office with a partisan, divided House and Senate, in an election year.


FOX Business | United Technologies' Sikorsky Unit to Cut 600 Jobs
Sikorsky Aircraft, the helicopter unit of United Technologies Corp (UTX), on Friday said it would lay off 600 workers beginning in the next few weeks, citing continued "challenging and unstable economic conditions."
CNN Money | Big business hits back on minimum wage
Big business is striking back hard against President Obama's efforts to raise the minimum wage, using a government report released just Tuesday that said the effort would both lift people out of poverty and spur job losses.

Heritage Foundation | Few People Actually Raise Families on Minimum Wage
Bias often appears in facts someone omits, not in actual inaccuracies. Take the New York Times’ new minimum wage calculator, which shows how difficult it can be to support oneself on just a minimum-wage income. Left unsaid: Few minimum-wage workers do so.


Econ Comments & Analysis                                                                                            
NY Sun | Rescuing the Stimulus
Paul Krugman has a column out about how President Obama’s economic program was a political disaster because of the “perception that stimulus failed.” It reminds us of Mark Twain’s jibe about Wagner’s music being “better than it sounds.” At least Twain was aware of the circularity of his famous wise crack.* Professor Krugman seems oblivious to the fact that, in the stimulus racket, success is nothing if it’s not perceived.
Mercatus | Record-High Deficits Are Not "Austerity"
Rather than engage in a semantic discussion about what constitutes an “era of austerity,” I will simply present some salient facts of the US budget for readers who may be unfamiliar with them.

Library of Economics | The Keynesian information bubble
Paul Krugman likes to brag that he doesn't read conservative bloggers, as they have nothing useful to say. And certainly the world is full of conservatives making sloppy arguments. But the downside of that strategy is that when he makes silly mistakes, he never finds out about them.
Heritage Foundation | Obama's Austerity Myth
The Obama administration put out the word this weekend that the president’s new budget will end several years of “austerity” in Washington. Come again? Austerity? Since 2009, federal borrowing has skyrocketed by $6 trillion. This year’s budget deficit is expected to fall to somewhere near $500 billion, which sadly is progress, because the first-term Obama deficits all exceeded $1 trillion.

Friday, February 21, 2014

General Economics

Bloomberg | Sales of U.S. Existing Homes Slump to Lowest Since July 2012
Sales of previously owned U.S. homes dropped in January to the lowest level in more than a year as harsh winter weather combined with a lack of supply, tight credit and declining affordability slowed demand.
Fox News | Fewer US homes repossessed by lenders in January, but some states could see foreclosure surge
Lenders repossessed fewer U.S. homes in January, bringing the number of completed foreclosures down to the lowest level in more than six years
Bloomberg | G-20 Pushes Growth as Stimulus Withdrawal Backed, Draft Says
The Group of 20 will take “concrete actions” to bolster growth while backing the normalization of monetary policy in advanced economies, according to a draft communique seen by Bloomberg News.
WSJ | College Uses Test Data to Show Value
Cash-Conscious Families Clamor for Numbers on How Much Students Learn.

Econ Comments & Analysis                                                                                            
WSJ | Mortgage Troubles Near Prerecession Levels
Five years after the end of the U.S. recession, the number of Americans who are behind on their mortgages and the backlog of homes in the foreclosure process are finally narrowing to prerecession levels.
CNN Money | Mortgage bailout now profitable for taxpayers
Fannie Mae's latest quarterly profit means taxpayers have now turned a profit on the $187 billion bailout of Fannie Mae and Freddie Mac.
CNBC | Cost of owning a home is spiking in 2014
The sharp rise in home prices in 2013 caused two conflicting results: The return of positive home equity for hundreds of thousands of borrowers and considerably weaker affordability for an equally large pool of potential homebuyers.
Fiscal Times | Is Poor Forecasting the Achilles Heel of Economics?
Unfortunately, much economic forecasting is quite cosmetic. Forecasters are often trying to predict estimates rather than reality. This is an occupational hazard resulting from the common practice of continually revising economic data, sometimes long after the fact.
Cato Institute | GOP Should Support Free Trade
Free trade means removing harmful policies. Trade agreements are an effective way to make that happen, and trade promotion authority is meant to facilitate those agreements.

WSJ: Real Time Economics | As G-20 Starts, World Bank Highlights Global Risks
The World Bank gave G20 emerging market officials fresh ammunition in their efforts to urge greater caution by the U.S. Federal Reserve as the central bank considers its easy money exit strategy.

Health Care

Heritage Foundation | Biden Lowers Obamacare Enrollment Expectations
Speaking to patrons of a Minneapolis coffee shop on Wednesday, Vice President Joe Biden moved the goal post further back on how many Americans would enroll in the Obamacare health insurance exchanges before the March 31 deadline.


WSJ | Fed Releases Transcripts of 2008 Crisis-Era Meetings
"The Federal Reserve on Friday released transcripts of 14 scheduled and emergency policy meetings it held in 2008, providing the most complete view yet into developments inside the nation's central bank as the financial crisis worsened and threatened to plunge the U.S. into another Great Depression."

WSJ: Real Time Economics | Federal Reserve 2008: A Timeline of Fed Actions and Financial Crisis Events
The year 2008 marked the worst of the financial crisis, a time when the Federal Reserve struggled to prevent the financial system from collapsing and triggering another depression.
WSJ: Real Time Economics | U.S. Inflation Is a Window into a Global Growth Risk
The U.S. seems to be in a new part of the inflation cycle. U.S. services inflation is stabilizing at a lower level than it was in the 1990s and 2000s. It is long past falling. Goods inflation, on the other hand, is in a new down cycle.


CNN Money | Colorado stash: $184M in marijuana taxes
Colorado expects to take in about $184 million in tax revenue from marijuana in the first 18 months after legislation -- and much of that money will be funneled into teaching kids to stay away from pot.

Econ Comments & Analysis                                                                                            
Fox Business | The Tax Benefits of Health Insurance and Fringe Benefits
It’s no secret that providing health insurance is expensive, making , many small businesses choose not provide benefits, letting their employees deal with securing individual plans.
Market Watch | Obama plan: Cut tax breaks for richest retirement savers
President Barack Obama plans to ask Congress in early March, as part of his fiscal 2015 budget, to reduce some of the tax advantages for employer-sponsored retirement plans for higher-income earners, according to published reports.


Fox Business | RBS to Retrench in Investment Banking, Cut 30,000 Jobs: Report
People familiar with the plans told the financial daily that the bank is expected to refocus on three groups that include retail customers, small businesses and larger companies.

Econ Comments & Analysis                                                                                            
Market Watch | Can higher wages actually hurt the economy?
CBO measures the elasticity of demand for labor at a paltry -0.1. The net result is that for any wage increase, CBO would find workers making more money, and very few workers losing their jobs.
Washington Times | LAMBRO: Obama killing jobs to create prosperity?
President Obama was hit by two major reports this week that reinforced what many, if not most, of us knew about his economic policies: They are killing jobs.
Forbes | The Minimum Wage Is An Economic Black Hole
Is raising the minimum wage to $10.10/hour a good idea? It depends upon how you feel about throwing 500,000 more Americans into an economic black hole.

CNN Money | Is Wal-Mart serious about boosting the minimum wage? Don't bet on it.
The world's largest retailer is disavowing a report that it's "looking" at supporting a Democratic push. But the company has a history of playing word games on the wage issue anyway.


National Journal | Deficit Slips From Political Agenda, Taking Advocates Down, Too
With spending down and only the hardest choices left, deficit reduction has lost steam.
Fox Business | Obama to Propose Wholly Political Budget -- Progress Be Damned!
President Obama is putting the finishing touches on his budget message to Congress. According to press reports, it would be criminal if it wasn’t so comical!

Econ Comments & Analysis                                                                                            
Politico | Obama to drop entitlement cuts from 2015 budget
Gone, the White House said, is Obama’s proposal for chained CPI and is any sense of presidential urgency on long-term entitlement reform.
CRS | The Debt Limit Since 2011
Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years.

CBO | Federal Budget Deficits Are Projected to Decline Through 2015 but Rise Thereafter, Further Boosting Federal Debt
Today’s post summarizes CBO’s assessment of the budget outlook over the next decade. Three more posts—to appear over the next several days—will provide more detail about the outlook for spending, revenues, and the economy.

Thursday, February 20, 2014

General Economics

Market Watch | 30-year-mortgage rate rises to 4.33%
Rising for a second week, the average rate for a 30-year fixed-rate mortgage increased to 4.33% in the week that ended Feb. 20 from 4.28% in the prior week, according to a Thursday report from federally controlled mortgage buyer Freddie Mac
FOX Business | Mid-Atlantic Manufacturing Activity Plunges in February
The Philadelphia Fed reports manufacturing activity in the mid-Atlantic region contracted in February with its gauge coming in at -6.3, from 9.4 in January, far below Wall Street’s estimate of 8. Readings above 0 point to expansion while those below point to contraction.
Market Watch | Philly manufacturing index takes big dive in February
Philadelphia-area manufacturers reported worsening conditions in February, a reading that contradicted an upbeat national manufacturing purchasing managers index for the month released earlier in the morning.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Twenty Years After NAFTA, Obama Must Lead In the Toluca Two Step
Mexico's President Enrique Peña Nieto hosts his first North American Leaders Summit in Toluca this week. Twenty years after NAFTA took effect, the United States, Canada and Mexico share more than $1 trillion in trade along tightly integrated supply chains fueled by a dynamic sharing of ideas, research and innovation. Supporting the regional economy are more than 320 million legal border crossings each year.
WSJ | Private Capital for Public Works
The budget deal and $1.1 trillion spending bill agreed to by Congress and the White House should help our country climb out of recession. We also hope the compromise and common sense displayed by these agreements mean Washington can next tackle what's really needed to assure robust economic growth and full employment—the rebuilding of public infrastructure.
Fortune | Is the housing recovery losing steam?
The latest data suggest that the promised construction boom may not materialize.

Health Care

National Journal | The Obamacare Enrollment Crash Is Coming
After a disastrous launch, the law's backers are breathing a sigh of relief as enrollees flock to its insurance exchanges. But the totals are built on a shaky foundation, and at some point soon, the exchange enrollment figures are going to fall, perhaps by more than 1 million people.

Heritage Foundation | Obamacare Costs Money, and Some People Don't Like It
Obamacare is going to cost just about everyone—and some people don’t want to hear that. One restaurant owner in Los Angeles is making it clear that providing health benefits for his employees is something his customers help pay for.


National Journal | 6.5 Percent Unemployment No Longer a Good Target for Rate Rise, Says Fed
For over a year, the Federal Reserve has said it planned to raise its benchmark interest rate—the one that's currently near zero, and whose level ripples through interest rates across the economy—around the time that the nation's unemployment rate hit 6.5 percent, so long as inflation wasn't getting out of hand.
Bloomberg | Consumer Prices in U.S. Increased at Slower Pace in January
The cost of living in the U.S. rose at a slower pace in January, a sign inflation was restrained in early 2014.

WSJ | Fed’s Williams: High Bar for Fed to Change Tapering Trajectory
The bar is high for the Federal Reserve to change course on winding down its signature bond-buying program, Federal Reserve Bank of San Francisco President John Williams said Wednesday.


CNN Money | 4 ways the rich will pay more this tax season
Thanks to the fiscal cliff deal and the Affordable Care Act, the top 1% of taxpayers - and many in the top 3% as well - will have to pay a bigger tax bill come April 15.

Econ Comments & Analysis                                                                                            
Politico | Dave Camp defies skeptics, plans tax bill next week
Defying skepticism from Republican leaders, Camp plans to release a major plan to rewrite the tax code next week, according to an email obtained by POLITICO.
Mercatus | And the Winner of the 'Worst Tax Policy' Oscar Is ...
The Academy Awards are nearly upon us, and that means long-winded acceptance speeches from actors and directors, filled with thanks for all the people who have helped them along the way. Listen closely to those speeches. Because they should really be thanking you.
Heritage Foundation | The Proper Tax Treatment of Interest
Treating interest properly in the tax code is essential to maintaining neutrality. Neutrality should be the guiding principle of tax reform. It holds that taxes should not influence—positively or negatively—the economic decisions of families, investors, entrepreneurs, or businesses. A neutral tax code is the most conducive to economic growth.


National Journal | CBO Defends Its Minimum-Wage Estimate as Democrats Fume
White House pique notwithstanding, the Congressional Budget Office is standing by its estimate of the job impact that a minimum-wage hike would create.
CNN Money | Gap raising its minimum pay to $10/hour
Gap Inc. is raising the minimum pay for 65,000 U.S. employees, winning praise from President Obama who is pushing to raise the nation's minimum wage by a similar amount.
Bloomberg | Jobless Claims in U.S. Fell Last Week as Firings Abated
Fewer Americans filed applications for unemployment benefits last week, a sign employers are holding the line on firings even as cold weather slowed industries from manufacturing to housing.
CNBC | Real solutions to America's jobs problem
Despite the claims of significant job creation over the past five years, the reality is that far too many Americans are unemployed and underemployed. However, in typical government fashion, proposed solutions come in the form of entitlements and taxes rather than fixes for the fundamental underlying problems.

Econ Comments & Analysis                                                                                            
Investors | America's Shale Boom Is A Major Job Creator
Silicon Valley may get better press, but in this period of dismal employment growth it's the oft-maligned hydrocarbon sector that's creating more jobs faster.
Washington Times | Minimum wage, maximum damage
Hold on to your wallet. President Obama is calling on Congress to “give America a raise.” Mr. Obama is never so generous as when he’s spending someone else’s money, so this raise is going to cost us a bundle.
AEI | Spread the good news!
Somewhat to my surprise, Furman and Stevenson appear to have overlooked the most important, headline-grabbing news in the report. The CBO estimates that probably about 500,000, but with a reasonable likelihood even a million workers will lose their jobs in what is still a weak labor market.