Monday, March 31, 2014

General Economics

CNN Money | Russia fallout pushes Europe to develop shale gas
Europe, seeking to reduce its dependence on Russian natural gas, is encouraging political leaders to step up efforts to tap the region's shale gas deposits.
Bloomberg | Millennials Mired in Wealth Gap as Older Americans Gain
The damage inflicted on U.S. households by the collapse of the housing market and recession wasn’t evenly distributed. Just ask Jason and Jessica Alinen.
Market Watch | Chicago business gauge falls to 55.9 in March
A gauge of Chicago-area businesses tumbled in March, hitting the lowest level since August, led by drops for new orders and employment, according to data released Monday.
WSJ | Consumer Sluggishness Seems to Be Growth Drag, for Now
A deceleration in consumer spending in recent months helped knock down estimates for U.S. growth in the first quarter, deferring hopes for a sustained pickup in the economy.
CNBC | Relax—gas prices aren’t likely to stay high long
Gasoline prices have clocked a 7 percent jump over the past six weeks but chin up drivers: The national average is expected to start hitting the brakes in the next few weeks and stay low even during summer driving season.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Days of Dynamic Growth May Be Over
You might compare the U.S. economy to someone who's recovering from a serious illness. At first, everyone hopes the patient will return to normal. Then it's gradually realized that the patient suffered permanent damage and will never be the same.
WSJ | Raiding Fannie and Freddie
Memories of a painful experience can be short, especially in Washington where most of the pain is inflicted on taxpayers. So perhaps it's no surprise that the same "affordable housing" crowd that misallocated hundreds of billions of dollars into real estate is once again urging more taxpayer subsidies for housing.
Washington Times | Fuzzy numbers obscure a stagnant Obama economy
The news media were ecstatic when the government said in January that the economy grew by 3.2 percent in the final three months of 2013. It was convincing proof, they said on the nightly news, that the economy had finally recovered from its chronic lethargy.
CRS | Social Security Disability Insurance (DI) Trust Fund: Background and Solvency Issues
The Social Security Disability Insurance (SSDI) program provides benefits to insured workers with disabilities under Social Security's full retirement age and their dependents based on an individual worker's earnings and work history in covered employment.
NBER | Commodity-Price Comovement and Global Economic Activity
Guided by the predictions of a general-equilibrium macroeconomic model with commodity prices, we apply a new factor-based identification strategy to decompose the historical sources of changes in commodity prices and global economic activity.

Heritage Foundation | It's Time To End Welfare for Big Business
Representative Paul Ryan of Wisconsin will release his House Republican budget next week, and one of its themes will be the fight against corporate welfare. Mr. Ryan says, “We can’t make the case to the American people that we are the reform party if we won’t reform the giant corporate-welfare state in Washington.” Bravo. Too bad so few of his colleagues agree with him.

Health Care

National Journal | Obamacare Survives, Now Can It Be Fixed?
President Obama and his team deserve credit for pulling Obamacare from the brink of disaster. Whether it lives to die another day depends on the answer to these and other questions.

Econ Comments & Analysis                                                                                            
CATO | Obamacare Isn’t about Health, It’s about Wealth Redistribution
The Hobby Lobby case now before the Supreme Court will test whether private, for-profit corporations, acting through their owners, can claim a religious exemption from ObamaCare’s mandate to cover contraception as part of employee health insurance.


FOX Business | Fed's George Wants End to Zero Rates, Doesn't Give Date
A top Federal Reserve official who has often warned of the risks of keeping U.S. interest rates too low for too long said on Friday she wants to see how winding down the Fed's massive bond-buying stimulus goes before setting out any path for rate hikes.
CNN Money | Deflation risk raises head again in Europe
Price pressures in the eurozone continued their four-month slide in March, sparking renewed talk about the risk of deflation and central bank action to spur the economy.

Econ Comments & Analysis                                                                                            
Market Watch | U.S. too-big-to-fail subsidy as high as $70 billion, IMF says
The too-big-to-fail subsidy that banks implicitly enjoy was worth up to $70 billion in the U.S. and $300 billion in the euro area in 2012, the International Monetary Fund said Monday.
WSJ | What Europe Can Learn From the U.S. Bank Crisis
Against a backdrop of stagnant euro-zone economic output and declining inflation, expected to fall below 0.6% for this month, European Central Bank officials signaled on March 25 that they were willing to take far more aggressive action to drive down borrowing rates for private business.


Econ Comments & Analysis                                                                                            
CNN Money | Rand Paul's hopes for a flat tax
The blunt-spoken, Libertarian-leaning senator from Kentucky, who won the 2016 presidential straw poll among leading conservatives, favors a flat tax: a one-rate income tax system with a minimum of tax breaks for individuals and businesses.
WSJ | Japan's Sales-Tax Boost Will Test Abenomics
The tax increase is designed to pay for Japan's ballooning social-welfare costs and to pare its huge public debt, which, at more than twice the size of the economy, is the largest among rich nations. But it comes at an inopportune moment for Tokyo, which hopes Japan's cautious consumers continue to spend after more than 15 years of debilitating deflation.
CRS | Expired and Expiring Temporary Tax Provisions ("Tax Extenders")
Dozens of temporary tax provisions expired at the end of 2013. Most of the provisions that expired at the end of 2013 have been part of past temporary tax extension legislation. Most recently, many temporary tax provisions were extended as part of the American Taxpayer Relief Act


FOX News | Unemployment rates fell in 29 US states in February as hiring picks up
Unemployment rates fell in most states in February and two-thirds of the states reported job gains, evidence that most of the country is benefiting from slow but steady improvement in the job market.
CNN Money | Janet Yellen wants you to get a raise
Those are the words of Federal Reserve Chair Janet Yellen, who said Monday that the central bank's goal "is to help Main Street, not Wall Street." And she hopes to do that primarily by boosting the job market.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Obama's Minimum Wage Beliefs Are As False As Can Be
President Obama would like everyone to believe that raising the minimum wage will help those in poverty, will cause no drop in employment, and will probably even boost the economy. Unfortunately, these beliefs are as false as can be and come from a fundamental misunderstanding of the very Keynesian economics he professes to follow.
FOX Business | States that Raise the Wage See Decreased Jobs, High Teen Unemployment
As a part of his promised year of action, President Obama has continued to push for a hike in the federal minimum wage nationwide. But a new report shows raising the wage could have a negative impact on the still-recovering labor market.


Econ Comments & Analysis                                                                                            
Bloomberg | Biggest ETF Flow From U.S. Debt Since ’10 on Growth Optimism
Investors of exchange-traded funds that buy U.S. government debt are signaling confidence that economic growth is taking root.

Heritage Foundation | Printing Money: Adopt a New Typeface and Save $136 Million in the Federal Budget
The federal government can make a decision that would save taxpayers millions of dollars, and it wouldn’t have to cut programs, furlough workers, or even reduce duplicative spending: All it has to do is adopt a new uniform typeface to be used in all government documents.

Friday, March 28, 2014

General Economics

Bloomberg | Consumer Spending in U.S. Increases by Most in Three Months
Consumer spending in the U.S. rose in February by the most in three months as incomes increased, a sign that economic momentum was returning as Americans recovered from an unusually harsh winter.
FOX Business | Consumer Sentiment Ticks Higher in Late March
U.S. consumer sentiment fell in March as consumers were less hopeful about the prospects for the overall economy, a survey released on Friday showed.
CNN Money | Russia looks to Asia for trade cushion
As the United States and Europe threaten Russia with trade sanctions, Moscow is looking east to Asian countries that might act as an economic bulwark.
Bloomberg | Euro-Area Economic Confidence Increases More Than Expected
Euro-area economic confidence increased more than analysts forecast in March, easing pressure on the European Central Bank to take action next week to counter low inflation and spur growth.
WSJ | Firms' Profits Rise to Record High, Outpacing GDP Growth
U.S. corporate profits hit new highs last year, driven by the tight lid firms have kept on hiring and spending almost five years into the economic recovery.
Washington Times | More red tape: Obama imposes new greenhouse gas regulations
The White House announced plans Friday to impose more regulations to curb greenhouse gas emissions, including tighter rules on the coal and natural gas industries.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Income-Inequality Whiners Are Today's Neo-Marxists
In testimony to Congress, Dr. Jared Bernstein was asked by Rep. Mick Mulvaney (R-SC) whether he was generally disposed to favor the statement, "from each according to his abilities, to each according to his needs." Dr. Bernstein answered, apparently in earnest, that he viewed the statement "generally favorably."
WSJ | The Wrong Remedy for Fannie and Freddie
More than five years after a mortgage mania led to a global financial crisis rivaling the Great Depression, Washington is finally turning to home-loan finance reform.
Heritage Foundation | Red Tape Rising: Five Years of Regulatory Expansion
The Obama Administration is aggressively exploiting regulation to achieve its policy agenda, issuing 157 new major rules at a cost to Americans approaching $73 billion annually.

CATO | Could Vice President Biden Help Save the Administration’s Trade Agenda?
Francisco Sanchez, former undersecretary of Commerce for international trade in President Obama’s first term, commented on the administration’s trade efforts in a March 21 article in Politico.  His view is that the president will need to get directly involved in making the case for liberalization if he wants his trade agenda to succeed. 
Heritage Foundation | Cruz’s Energy Bill a Win for Economy, Taxpayers, and Free Markets
Over the past few years, energy production has been one of the bright spots in the American economy. The U. S. is now the world’s largest natural gas producer and will soon be the world’s largest oil producer. Senator Ted Cruz’s (R–Texas) American Energy Renaissance Act, along with its companion bill introduced in the House by Representative Jim Bridenstine (R–Okla.), will help this sector shine even brighter.

Health Care

Politico | The Obamacare report card
After six months, the first enrollment season is coming to an end. So it’s time to take stock, with POLITICO’s report card that covers the highs and lows of the rollout.
National Journal | Obamacare Premiums a Guessing Game—Again
Whether Obamacare premiums will increase next year—and by how much—will once again come down to good-old guesswork on the part of insurance companies.
CNN Money | Obamacare tops 6 million signups
More than 6 million people have signed up for Obamacare, as a crush of people raced to get health insurance before the March 31 deadline.

Econ Comments & Analysis                                                                                            
Fiscal Times | Hospitals Plot the End of Insurance Companies
The problems with the implementation of the Affordable Care Act may be masking another major change in the way health care is delivered to U.S. consumers, experts believe. - See more at:


Bloomberg | Fed’s Evans Sees Rate Increase in Second Half of 2015
Federal Reserve Bank of Chicago President Charles Evans said the central bank will probably raise interest rates in the second half of next year and the timing will depend on the pace of inflation.

Econ Comments & Analysis                                                                                            
Bloomberg | Fed of 1970s Shows Capacity May Mislead: Cutting Research
The decision of central banks to focus more on economic slack as a barometer of when inflation will become a problem could backfire, if history is any guide.
Real Clear Markets | The Fed, Not the Reserve Primary Fund, 'Broke the Buck'
Since their inception in the 1970s, money market funds (MMFs) have been a highly successful financial innovation. Before the financial crisis, MMFs held approximately $3.6 trillion in assets; today, they are somewhat smaller, with about $2.9 trillion under management.
Fortune | The absurd way the U.S. measures inflation: Your rent
One-third of the U.S. consumer price index is based on a highly subjective question: How much can you rent your home for?

WSJ | Inflation Slows Again, Bouncing Around Four-Year Low
The Commerce Department’s latest read of consumer prices on Friday showed price pressures moving in a direction many Federal Reserve officials find uncomfortable. The personal consumption expenditures price index — the central bank’s preferred inflation gauge — slowed to an annual gain of less than 1%.


Econ Comments & Analysis                                                                                            
Market Watch | Japan steps off the tax cliff Tuesday — Can it survive?
It was the mid-1990s. Japan had gone from a rising economic superpower to a nation in decline, mired in what would be known as “The Lost Decade.”
CRS | The Earned Income Tax Credit (EITC): An Overview
The Earned Income Tax Credit (EITC or EIC) began in 1975 as a temporary program to return a portion of the Social Security tax paid by lower-income taxpayers (the credit was, and remains, calculated as a percentage of earned income, with no direct link to Social Security taxes paid by the tax filer), and was made permanent in 1978.


Market Watch | Obamacare a bigger issue than minimum wage?
On Jan. 31, a fry cook asked President Obama why his hours were being cut to part time because of Obamacare, and the President responded by saying he was pushing to raise the minimum wage.

WSJ | Expect Surge in Temp Jobs to Continue
The surge in contract and “temp” jobs since the recession ended is likely to continue, a range of experts have said, in part because of slack in the labor market and decisions by many corporations to maximize flexibility in their work force.


National Journal | Why It Sucks to Be CBO
In 2002, Republican Rep. Jim Nussle, head of the House Budget Committee, was upset about the way the Congressional Budget Office had changed its score of a farm bill. At a closed-door meeting of the GOP leadership, he left no doubt about how he felt. "The CBO sucks, and you can quote me on that," he told the group, according to Fox News.
CNBC | $1 trillion student loan debt widens US wealth gap
Every month that Gregory Zbylut pays $1,300 toward his law school loans is another month of not qualifying for a decent mortgage.

Thursday, March 27, 2014

General Economics

Bloomberg | Economy in U.S. Expands More Than Previously Estimated
The U.S. economy grew more rapidly in the fourth quarter than previously estimated as consumer spending climbed by the most in three years, showing the expansion had momentum heading into this year’s harsh winter.
Bloomberg | Consumer Sentiment in the U.S. Declines to a Seven-Week Low
Consumer confidence in the U.S. declined to the lowest level in seven weeks as Americans turned more pessimistic about the economy.
Market Watch | U.S. corporate profits slow in fourth quarter
The growth in aftertax U.S. corporate profits slowed to 2% in the fourth quarter from 2.4% in the third quarter and 3.5% in the second quarter, adjusted for inventories and other special accounting effects, the government reported Thursday.
WSJ | Lehman to Dole Out Additional $17.9 Billion to Creditors
The team winding down Lehman Brothers Holdings Inc. said it would be doling out $17.9 billion to creditors more than five years after the investment bank's collapse triggered the financial crisis.
CNBC | Being poor not a person's fault: CNBC survey
As the nation engages in a heated debate over inequalities' causes and cures, the latest CNBC All-America Economic Survey finds a majority of Americans believe people are poor because of circumstances outside their control but are split on whether the wealthy have earned their riches.

Econ Comments & Analysis                                                                                            
Forbes | New, Revolutionary Way To Measure The Economy Is Coming -- Believe Me, This Is A Big Deal
This month a new way to measure the economy will be released, which, as time passes, will have a profound and manifestly positive impact on economic policy and politics.
Fortune | Why a mean reversion would be mean to the stock market
If the benchmarks used to determine the value of securities were to suddenly reverse course, the "new normal" could soon be history.
WSJ | Why Can't the Left Govern?
Surveying the fall in support for the governments of Barack Obama, New York City's progressive Mayor Bill de Blasio and France's Socialist President François Hollande, a diagnosis of the current crisis begins to emerge: The political left can win elections but it's unable to govern.
AEI | Long-term home ownership trends: The US, England, and Canada
A century ago, in 1910, the U.S. homeownership rate was 46%. It rose to 48% in the great boom of the 1920s, then called “the Coolidge Prosperity,” after the U.S. President of the time. This was when the U.S. government had its first home ownership promotion: the “Own Your Own Home” campaign, begun in 1922 under then-Secretary of Commerce (later President) Herbert Hoover.
WSJ | The New Republican Reformers
Their target is the GOP, but they are not angry liberals bent on destroying it. They are reform-minded Republican leaders intent on strengthening it.

WSJ | 5 Things We Learned in the Economic Census of Businesses
The U.S. Census Bureau on Wednesday began releasing data from its 2012 Economic Census. The survey of American businesses, taken every five years, provides the broadest and most complete picture of the U.S. economy. It also reveals changes since the pre-recession 2007 census. Below are five highlights from the report.
Heritage Foundation | How to Avoid Another Housing Crisis, Explained in Under a Minute
Fannie Mae and Freddie Mac cost taxpayers billions of dollars, even in good economic times, write Heritage’s Norbert Michel and John Ligon. When the housing market collapsed in 2008, they note, the cost to taxpayers was even higher.
Calculated Risk | NAR: Pending Home Sales Index down 10.5% year-over-year in February
The Pending Home Sales Index, a forward-looking indicator based on contract signings, dipped 0.8 percent to 93.9 from a downwardly revised 94.7 in January, and is 10.5 percent below February 2013 when it was 104.9. The February reading was the lowest since October 2011, when it was 92.2.
WSJ | Vital Signs: Still No Momentum in Business Spending
The latest data on business spending remains sluggish. Shipments of nondefense capital goods excluding aircraft edged up 0.5% in February, but that followed a 1.4% drop in January. The numbers suggest the business equipment sector is contributing almost nothing to first-quarter gross domestic product growth.

Health Care

National Journal | Here's Who Gets An Obamacare Extension
Obamacare's enrollment deadline isn't dead, but the administration may have just added a new loophole. The window still technically ends on March 31. But people who couldn't finish the enrollment process will get extra time to sign up, as long as they say that they tried to meet the deadline, the Centers for Medicare and Medicaid Services said Wednesday.

Econ Comments & Analysis                                                                                            
Politico | A brief history of Obamacare delays
In reality, the administration is just continuing a long pattern of delays. They’re all designed to show flexibility and help the law work better, but they also fuel a public perception that Obamacare deadlines never really mean anything.
WSJ | The Individual Mandate Goes Poof
One by one, the myths of the Affordable Care Act have been revealed. When the curtain on open enrollment falls on March 31, the last remaining big myth of ObamaCare will be fully exposed: The individual mandate has failed.

FOX Business | What You Need To Know Before Signing Up For Health Insurance
The administration had said it wanted seven million people to sign up, but only five million have done so, according to.the most recent government report. So, you can bet the website will be pretty busy over the next several days. Here’s what you need to know if you plan to sign up:


Market Watch | Fed's Pianalto: Next move based on range of data
No single data point will determine how long the Federal Reserve can keep short-term interest rates low, said Sandra Pianalto, president of the Cleveland regional central bank branch, on Thursday.
WSJ | Fed Kills Citi Plan to Pay Investors
Citigroup Inc. failed to get Federal Reserve approval to reward investors with higher dividends and stock buybacks, a surprising blow to Chief Executive Michael Corbat's effort to bolster the bank's reputation following a 2008 government rescue.

Econ Comments & Analysis                                                                                            
Fortune | Citi and four other banks stumble in Fed stress tests
The Fed approves the capital plans of 25 others. Goldman and Bank of America were forced to resubmit.
Market Watch | Fed's Bullard: Financial stability concerns loom large
St. Louis Federal Reserve Bank President James Bullard said Thursday that the key risk for U.S. economy would be a bubble forming as the central bank removes monetary-policy accommodations, while he also raised concerns about financial stability in the U.S. economy.
Fortune | Redeeming Greenspan: Don't blame the Fed for bubbles
Critics love to call out monetary policy as one of the prime causes of the financial crisis. But the data just don't back that up.
CRS | Financial Condition of Depository Banks
A bank is an institution that obtains either a federal or state charter that allows it to accept federally insured deposits and pay interest to depositors. In addition, the charter allows banks to make residential and commercial mortgage loans; provide check cashing and clearing services; underwrite securities that include U.S. Treasuries, municipal bonds, commercial paper, and Fannie Mae and Freddie Mac issuances; and other activities as defined by statute.

WSJ | Fed’s Plosser Wants Inflation to Creep Higher
A top Federal Reserve official said Wednesday he wants to see U.S. inflation, which has been undershooting the central bank’s target for some time, to move higher.
Library of Economics | Central banks do not deserve our respect
Nor (in my view) do they deserve our contempt. They should be viewed skeptically. They are trying to do a good job, but often fall well short. One such occasion occurred in 2011 when the ECB tightened monetary policy.


WSJ | Illinois Governor Seeks to Keep Temporary Tax Rise
Illinois Gov. Pat Quinn proposed making permanent a temporary income-tax increase put in place in response to the recession, saying the money is needed to prevent deep cuts and continue stabilizing a state plagued by fiscal problems.


FOX Business | U.S. Jobs Market Dropouts Increasingly Likely To Stay Out
A growing number of Americans quitting the labor force are likely gone for good, offering a cautionary note to the Federal Reserve as it tries to gauge how tight the jobs market is and how quickly to raise interest rates.
CNN Money | Connecticut boosts minimum wage to $10.10 by 2017
The state legislature approved the bill Wednesday and Gov. Dannel Malloy, who proposed the increase, announced he would sign it on Thursday evening.
Bloomberg | Fewer Firings Signal U.S. Will Regain Growth Momentum: Economy
Fewer Americans than forecast applied for unemployment insurance payments last week, pointing to an improving labor market that will help the economy regain momentum following the harsh winter.

WSJ | Fewest Americans Earning Minimum Wage Since 2008
The number of Americans earning the federal minimum wage or less last year fell to the lowest level since 2008, reflecting both broader wage growth and an increasing number of states setting their higher levels.


Econ Comments & Analysis                                                                                            
Daily Caller | Obama’s new budget will hamper energy job creation
Earlier this month President Obama unveiled his FY2015 budget proposal. His plan includes hefty new taxes on job creators. Much of this burden will fall on the energy industry, which has proven to be a particularly powerful engine of new employment in recent years.
Market Watch | Treasury curve now flattest since 2009
Investors ditched the Treasurys most sensitive to rising interest rates while gobbling up longer-term securities on Monday, sending the differential between their yields to the narrowest since 2009.

Neighborhood Effects | Hercules, California’s Herculean debts
What lead the city of Hercules, California to default on its debts? Guest poster Marc Joffe, Principal Consultant at Public Sector Credit, finds a case of mission-creep in the “dynamic city on the Bay’s”  decision to issue debt to finance power plants and affordable housing.

Wednesday, March 26, 2014

General Economics

FOX Business | Durable Goods Orders Rise 2.2% in February
Orders for long-lasting U.S. manufactured goods rebounded more than expected in February and shipments snapped two straight months of declines, providing fresh signs the economy was shaking off some of its winter gloom.
CNN Money | Top incomes can be fleeting
There are few lifetime memberships in the exclusive club of high-income taxpayers. In fact, there's a lot of turnover in the top 1%, entry into which took at least $389,000 of adjusted gross income in 2011 -- a threshold met by nearly 1.37 million returns that year.
Bloomberg | Rising Utility Costs Lingering After Winter’s Chill Fades
U.S. consumers got a glimpse of rising future utility bills during the winter as coal- and nuclear-plant shutdowns boosted reliance on natural gas.
USA Today | Best retirement advice for many: Never retire
By now, we all know how difficult retirement is — especially the planning part. But there is a group of people who believe they have a solution: Never retire.
CNBC | Declining US profits signal inevitable recession: SocGen bear
Albert Edwards, Societe Generale's uber-bearish strategist, has once again taken aim at economists bullish on the U.S. economy, highlighting a contraction in corporate profits that could leave the country exposed to external shocks and an "inevitable" recession.

Econ Comments & Analysis                                                                                            
Forbes | The Rise Of The Nanny State Is Why America Needs A Regulatory Budget
Washington refuses to control spending, and it certainly doesn’t control the costs of federal regulations it imposes on citizens at the rate of over 3,500 annually.
Investors | Reaganomics Vs. Obamanomics: Two Wholly Different Outcomes
Despite adding almost a trillion dollars to our national debt and failing to keep the unemployment rate at or below 8% as advertised, liberals consider President Obama's signature stimulus package — the American Recovery and Reinvestment Act — a success, in part because of the number of jobs it "saved."
Fortune | America's thorny affordable housing crisis
A new report argues that there are just 31 affordable housing units for every 100 families who need them. Addressing this problem raises more questions than it answers.
National Review | Land of Inequality
From the end of World War II until the 1990s, California possessed a magnetism unique among the 50 states. It was — according to a mythology that was probably overwrought even in those halcyon days — an American Eden, a place where ambition and unfettered imagination combined to make even the most exotic dreams seem feasible.
NY Sun | Lagarde’s Waterloo
The failure today in the Senate the so-called “reform” of the International Monetary Fund is an encouraging moment. Senator Reid had tried to tie the scheme, a lunge for money, to the Ukraine rescue, but then retreated, saying the IMF part of it would not have been able to pass the House.

WSJ | Asia Misses Out on Capital Spending Bump
Capital investment in emerging markets, especially Asia, is lagging the developed world, a trend likely to damp growth prospects in many nations.

Health Care

Econ Comments & Analysis                                                                                            
FOX Business | Forget Enrollment, There’s Another Major Piece Missing from ObamaCare
Much emphasis has been placed on enrollment stats as the Affordable Care Act’s inaugural open enrollment period comes to an end. But there’s a key function on the federal exchange that remains inactive: the mechanism to reconcile payments between the government and insurance companies.
NBER | Who Benefits when the Government Pays More? Pass-Through in the Medicare Advantage Program
Governments contract with private firms to provide a wide range of services. While a large body of previous work has estimated the effects of that contracting, surprisingly little has investigated how those effects vary with the generosity of the contract.
CATO | The Medicaid Mess
Even as those parts of Obamacare that have not yet been postponed stagger toward the finish line on March 31, one part of the president’s health-care law continues to build momentum. As of this writing, 25 states and the District of Columbia have chosen to expand their Medicaid programs in accordance with Obamacare. This includes several states governed by Republicans, including Arizona, New Jersey, New Mexico, and Ohio (Governor John Kasich has described the expansion as part of his duty as a Christian).


CNBC | What the bond market might say about the Fed
After the Fed ruffled markets in the past week, the Treasury's 5-year note auction Wednesday should get more attention than usual as traders watch to see whether the prospect for higher rates has been fully priced in.
Bloomberg | Measuring the Handouts to Big Banks
The largest U.S. banks and their lobbyists have been trying hard to counteract the growing impression that they present an unacceptable threat to the economy. In a new series of papers, the Federal Reserve Bank of New York offers some evidence that they probably won’t like.

Econ Comments & Analysis                                                                                            
Bloomberg | Bullard Says Fed Hasn’t Discussed Date to End QE
Federal Reserve Bank of St. Louis President James Bullard said policy makers haven’t committed to a specific month to end bond purchases even as it would take a significant shift in the outlook to alter the path of tapering.
Real Clear Markets | The Volcker Rule Increases the Likelihood That Banks Will Default
Last Thursday, without any fanfare, the Office of the Comptroller of the Currency released the economic analysis for the Volcker Rule. The timing-approximately three months after the OCC and its fellow regulators released the final rule-and the substance of the analysis are troubling.

WSJ | Atlanta Fed’s Lockhart Says Second Half of 2015 Is Soonest Rates Could Rise
The Federal Reserve will likely begin to raise interest rates in the second half of 2015, but it could be much longer because the U.S. labor market needs time to fully recover from the recession, Federal Reserve Bank of Atlanta President Dennis Lockhart said Tuesday.
WSJ | Everything You Ever Wanted to Know About Washington’s Battle Over the IMF
Democrats are yielding on another fight with Republicans over major changes to the International Monetary Fund, this time to clear a U.S. bailout for Ukraine. Where does that leave the U.S., the IMF and the fund’s members? Here’s everything you could possibly want to know, and why it matters.


WSJ | IRS Says Bitcoin Is Property, Not Currency
The Internal Revenue Service made its first pronouncement on the issue Tuesday, saying it will treat bitcoin and other virtual currencies like property such as stocks, and not currency, giving a potential boost to investors but imposing extensive record-keeping rules. The rule generally would impose capital-gains taxes, rather than higher regular tax rates, on investors' profits.

Econ Comments & Analysis                                                                                            
CRS | The American Opportunity Tax Credit: Overview, Analysis, and Policy Options
The credit, worth up to $2,500 per student, can be claimed for a student's qualifying expenses incurred during the first four years of post-secondary education.


CNN Money | Pew: Online news organizations have created 5,000 jobs
How many reporting jobs have new online news organizations created? Pew Research Center has tried to put a number on it: 5,000.

Econ Comments & Analysis                                                                                            
WSJ | How America Loses a Job Every 43 Seconds
The first of next month is a big day for the U.S., and not because it's April Fools' Day. April 1 is when the U.S. Citizenship and Immigration Services begins accepting new H-1B visa petitions for 2015.
FOX Business | New Study Argues Long-Term Unemployed Don’t Put Much Pressure on Overall Jobs Market
The long-term unemployed, according to a new study, exert relatively little pressure on the overall economy and have a different effect on the macro economy than the short-term unemployed. This “unlucky subset of the unemployed”, it said, will more likely not find a job than find one.
The American | A National Minimum Wage Is a Bad Fit for Low-Cost Communities
A one-size-fits-all minimum wage, without any adjustments for the significant differences in the cost of living across the country, will disproportionately affect low-skilled workers in low-cost areas.

WSJ | Where Did They Get a Raise Last Year?
Nationwide, the average growth of personal income slowed to 2.6% in 2013 from 4.3% in 2012, the report found. Residents in every state saw weaker income growth from a year earlier, ranging from a 7.6% rise in North Dakota to the 1.5% gain in West Virginia.
Café Hayek | More on How Minimum Wage Legislation Harms Even Employed Workers
The positive net returns of improved worker morale would be captured chiefly by each firm that raised its workers’ wages, no ‘publicness’ aspect of the efficiency gains from higher wages would prevent any firm that can profit from raising its workers’ wages from raising those wages.


Econ Comments & Analysis                                                                                            
Politico | Student loan debt deal comes with tax catch
Millions of taxpayers struggling with student loan debt are being pitched what may seem like a dream come true this tax season: lower monthly payments and a chance to see a chunk of their debt disappear.

Friday, March 21, 2014

General Economics

National Journal | Both Parties In Denial Over Resolving Urban Poverty
In the 1990s, there was a bipartisan consensus on welfare reform. That's now ancient history.
WSJ | City vs. Country: How Where We Live Deepens the Nation's Political Divide
There have always been differences between rural and urban America, but they have grown vast and deep, and now are an underappreciated factor in dividing the U.S. political system, say politicians and academicians.
Real Clear Markets | California: CEOs Rate It Worst U.S. Business Climate For 8 Years Running
California's economy continues to experience a tepid recovery since the Great Recession. One reason why: according to CEO Magazine, California has had the worst business climate in the nation for the last eight years, due in no small part to policies out of Sacramento.

Econ Comments & Analysis                                                                                            
CNN Money | Subprime mortgages making a comeback
Borrowers with bad credit were shut out of the mortgage market after the housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again.
CNN Money | Why the bull market could end tomorrow
Timing the market, to many investors, is a science akin to fortune telling or tarot cards. Financial experts warn retail shareholders constantly: Don't try this at home. Yet with the market going on a sixth year of gains and hovering near record-high levels, the bull seems more vulnerable every day.
AEI | Domestic shipping industry needs load of competition
It's time — indeed way past time — for Congress to repeal a century-old shipping law known as the Jones Act, a protectionist policy adopted during Woodrow Wilson's administration that has no place in today's modern global economy.

Health Care

National Journal | States Holding Out on Medicaid Expansion Are Beginning to Crack
With 25 states and the District of Columbia opting in to Medicaid under the Affordable Care Act and another six in limbo, the tumult in a handful of holdout states is increasing. The White House hopes unrest in states like Florida, New Hampshire, Nebraska, and Maine will help turn the fight decidedly in their favor.

Econ Comments & Analysis                                                                                            
Fox Business | Millennials Share Why They Aren’t Signing Up for ObamaCare
The Obama Administration has been making its pitch to get millennials to sign up for health insurance under the Affordable Care Ac since Oct. 1 employing a host of marketing tactics including the ad featuring a young man in a onesie sipping on hot chocolate in his pajamas encouraging his peers to get covered.

Heritage Foundation | Have You Saved $2,500 Lately?
President Obama recently admitted that Obamacare will cause some Americans to lose their doctors. Some have suggested that his promise “If you like your doctor, you can keep your doctor” should be 2014’s “Lie of the Year.” But what about his promise that Obamacare would lower premiums by $2,500 per family?
Heritage Foundation | Guess How Many States Are Trying to Extend Their Obamacare Enrollment Deadlines
With only 11 days left in Obamacare’s open enrollment period, several states running the health law’s insurance exchanges are looking at ways to extend their enrollment deadlines for consumers who run into technical glitches.

Monetary News

Market Watch | Banks would see losses of $501 billion under tough Fed test
Thirty of the largest banks that operate in the U.S. would see losses of $501 billion under a severe recession, the Federal Reserve said Thursday in announcing stress-test results that it says show a banking system in better shape than five years ago. A less severe downturn would result in bank losses of $355 billion, the Fed said.
Bloomberg | Kocherlakota Says New Fed Guidance Fosters Policy Uncertainty
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota, who dissented from this week’s decision on monetary policy, said the central bank’s new guidance about its policy intentions risks holding back economic growth by fostering uncertainty.

Econ Comments & Analysis                                                                                            
Market Watch | How the Fed is hurting seniors
The low-interest-rate policy does more harm than good.
Washington Times | Yellen’s message about Federal Reserve’s plans unsettle market
“Monetary policy will be geared to evolving conditions in the economy,” she said. “And the public does need to understand that as those views evolve, the committee’s views on policy will likely evolve with them.”
CNN Money | Yellen's big mistake
Yellen made just one mistake as far as I'm concerned. It was a big one though. You know how they say you're not supposed to discuss religion, politics and sex in polite company? Central bankers need to add the calendar to that list.
Bloomberg | It's OK If the Economy Overheats a Bit
The Federal Reserve’s decision yesterday to drop its commitment to keep interest rates near zero until the unemployment rate is below 6.5 percent shows that monetary policy has arrived at a new challenge: how to change tack as the U.S. economy reaches full employment.
Mercatus Center | Small Banks in the Eye of Dodd-Frank
Small banks didn't cause the financial crisis that led to the Dodd-Frank Wall Street Reform and Consumer Protection Act - and the act's framers said they didn't intend for the law's burdensome requirements to hit smaller institutions. But the results of our recent small-bank survey published through the Mercatus Center demonstrate the futility of these good intentions.
NBER | The Transmission of Federal Reserve Tapering News to Emerging Financial Markets
This paper evaluates the impact of tapering “news” announcements by Fed senior policy makers on financial markets in emerging economies. We apply a panel framework using daily data, and find that emerging market asset prices respond most to statements by Fed Chairman Bernanke, and much less to other Fed officials.

WSJ: Real Time Economics | The Case for Not Worrying So Much About Fed-Generated Financial Instability
There is a steady drumbeat from some corners of Wall Street and some academic economists that the Federal Reserve’s very low interest rates and unconventional monetary policy, inevitably, will create bubbles and financial instability somewhere.