Friday, May 30, 2014

General Economics

Bloomberg | Consumer Spending in U.S. Unexpectedly Declines
Consumer spending unexpectedly fell in April after the biggest surge in almost five years as incomes slowed, a sign the largest part of the U.S. economy will take time to accelerate.
Bloomberg | Consumer Sentiment in U.S. Fell More Than Forecast in May
Consumer confidence fell more than forecast in May, a sign consumer spending may be slow to pick up in the second quarter.
CNBC | A bright spot for economy: Fewer people rely on food stamps
After a surge in 2008, government spending on the Supplemental Nutrition Assistance Program, or SNAP, has peaked and begun falling, according to an analysis of the latest data by the research institute Center on Budget Policy and Priorities. So have the number of participants collecting SNAP benefits.

Econ Comments & Analysis                                                                                            
Forbes | Income Redistribution Is About Votes, Not About Helping The Poor
Everyone knows the famous Chinese proverb: Give a man a fish and you have fed him for a day; teach a man to fish and you have fed him for a lifetime. So why does the federal government spend so much money on giving away fish and so little on teaching people how to fish? Because Democrats want people to depend on government so that they will vote to re-elect them.
FOX Business | Flawed Policies Leading to Setback in Growth?
The U.S. economy contracted at an annual rate of 1% during the first quarter, according to revised data released Thursday by the Commerce Department. It marked the first time in three years that productivity and growth have shrunk.
Mercatus | The Economic Situation, June 2014
Have you ever had a car break down just as you felt you were beginning to get somewhere? And had to get out and hitchhike, hoofing it while hoping for a ride? If so, you know what it’s like to have your speed reduced to a crawl and to be hoping for a better ride.
NBER | Very Long-Run Discount Rates
We provide direct estimates of how agents trade off immediate costs and uncertain future benefits that occur in the very long run, 100 or more years away.

Fortune | More Americans borrowing against their homes
History repeats itself. Past is prologue. Everything is a cycle. Pick any cliché you want, but the fact is lending vehicles that practically disappeared following the 2008 credit crisis are back.
WSJ | Fed’s Lacker: Economy’s Contraction ‘Not Unexpected’ but Sees Possible Rebound Soon
That was “not unexpected, given the data flow we’ve seen,” Mr. Lacker said in an interview on CNBC, pointing to a drop in inventories, a rise in imports and a fall-off in defense spending. “There are a lot of transitory factors that will reverse and unwind in the second quarter.”
Heritage Foundation | GDP Report Confirms We Now Have a $2 Trillion Obama Growth Deficit
This morning’s depressing revised calculation of the growth of the economy in the first quarter of 2014 (-1.0 percent) makes it official: The Obama expansion is now $2 trillion short of where we would be if growth in this recovery had matched the Reagan recovery that started in 1982.

Health Care

National Journal | Obamacare’s Partisan Divide Is Bending Our Brains
"How has Obamacare affected you?" is a question whose answer depends on your income, how you get health insurance, and a couple of other demographics. But how people think Obamacare has affected them depends instead on their politics, according to the latest tracking poll from the Kaiser Family Foundation.

Econ Comments & Analysis                                                                                            
Fiscal Times | VA Scandal Exposes Single-Payer Health Care Flaws
A new scandal at the Veterans Administration has brought to the forefront all of the issues of accountability and performance of government bureaucracies in health care. The Inspector General’s report following up on the allegations of wait-list fraud and preventable deaths of dozens of American veterans provides a confirmation of the worst possibilities of federal monopolies on health care, and an indictment of the Obama administration’s executive competence. - See more at:
Reason | The VA Health System Is a Tragic Warning Against Government-Run Health Care
A damning report released by the Department of Veterans Affairs (VA) Inspector General will likely leave Democrats and their liberal allies clamoring for reforms to the government run health system for those who have served in the military.

Heritage Foundation | Report: Veterans Waited An Average of 115 Days for Doctor Appointments in Phoenix
In April, Rep. Jeff Miller (R-Fla.), Chairman of the House Committee on Veterans’ Affairs , requested that the VA to look into allegations of delays in VA medical care and preventable veterans’ deaths.  Yesterday, the VA office of Inspector General issued an interim report on the subject, and it is damning.


Market Watch | U.S. inflationary pressure continues to build, index shows
In yet another sign U.S. inflation is rising, the government's PCE index rose in April to its highest annualized rate since late 2012, the government reported Friday.

Econ Comments & Analysis                                                                                            
Real Clear Markets | A Rate Hike Has Been the Worst Market Call of 2014
The worst market call of 2014 has, so far at least, been the virtual assumption that interest rates will rise. Indeed it was just over a year ago that rates rose sharply due to Chairman Bernanke's hint that the Fed would begin "tapering" - reducing stimulus - in view of a strengthening U.S. recovery.
Real Clear Markets | The Fed Has Robbed Us Of a Vibrant Private Banking System
The evolution of currency and banking out of the nineteenth century provides more than a limited glimpse into the concepts and philosophies that we struggle with still. At the outset of the 1800's, the economic foundation in monetary terms was built upon specie, true hard money.
WSJ | A Better Solution for Too-Big-to-Fail Banks
Critics of Dodd-Frank have long argued that the law has not ended the danger posed to taxpayers and the financial system by "too-big-to-fail" banks. Instead, the law's "orderly liquidation authority" has institutionalized the problem by creating a formal bailout procedure and earmarking a new source of tax revenue to fund bailouts.
Washington Times | Dodd-Frank and regulation gone rogue
A bit of wisdom was actually uttered on Capitol Hill last week. The nation’s chief securities regulator told the House Committee on Financial Services that it was “extraordinarily important” for policymakers to “listen to the expertise” of professionals before running regulatory roughshod over industry.

Market Watch | A new hawk at the Fed? We may find out Friday
Investors will be listening closely for clues when Loretta Mester, the incoming president of the Cleveland Fed, gives her maiden speech on Friday. She will speak at 12:30 p.m. at the Cleveland Fed’s inaugural inflation conference.


Econ Comments & Analysis                                                                                            
FOX Business | Small Business Guide to Internet Sales Tax
Comprehending sales tax law is a lot like trying to understand the dinner table conversation at the mad hatter’s tea party. Sales tax law varies from state to state, and each industry has a special set of tax rules it needs to follow.
Heritage Foundation | Thomas Piketty’s wealth tax would be an administrative nightmare
Thomas Piketty’s best-selling treatise “Capital in the 21st Century” elates liberals because it argues on behalf of soaking the rich with excessive taxation. Mr. Piketty’s preferred mechanism for equalizing incomes is to institute a global tax on wealth.


Bloomberg | Minimum Wage Increases Advance From California to Seattle
Unions and other advocates of higher minimum wages saw advances in California and Seattle as President Barack Obama’s call to raise the federal minimum languishes in Congress.
WSJ | Factory-Job Rebound Produces Winners, Losers
The U.S. has added about 650,000 factory jobs since their numbers rebounded after the recession, putting manufacturing workers at 12.1 million and reversing a long decline in such jobs. But uneven growth has created regional disparities in the nation's overall economic recovery.

Econ Comments & Analysis                                                                                            
Fortune | Congress fails the long-term unemployed, once again
May 31 will mark the expiration of the measure to renew emergency unemployment compensation from January through June that the Senate passed with bipartisan support early last month. The House has left the legislation for dead ever since.


Econ Comments & Analysis                                                                                            
CRS | State, Foreign Operations, and Related Programs: FY2015 Budget and Appropriations
The annual State, Foreign Operations and Related Programs appropriations bill (also referred to here as "foreign affairs appropriations" or "foreign affairs funding") is the primary legislative vehicle through which Congress reviews the U.S. international affairs budget and influences executive branch foreign policy making.

Thursday, May 29, 2014

General Economics

CNN Money | GM made $22.6 billion. We lost $10.6 billion
GM has earned a stunning $22.6 billion since the dark days of the financial crisis, when the automaker was bailed out by the U.S. government. Taxpayers didn't fare nearly as well. They'd lost $10.6 billion by the time the U.S. Treasury department closed the books on the $49.5 billion bailout in December.
Bloomberg | Consumer Comfort in U.S. Falls to Lowest Level Since November
Consumer confidence declined last week to the lowest level since November as Americans’ views of their finances and the buying climate weakened.
CNN Money | U.S. economy shrinks, but it's not a big deal
Revised numbers released Thursday show the economy shrank in the first quarter, marking the first downturn since early 2011. Gross domestic product, the broadest measure of economic growth, fell at a 1% annual pace, according to the Bureau of Economic Analysis.
Bloomberg | Pending Sales of U.S. Existing Homes Increased 0.4% in April
Contracts to purchase previously owned homes rose for a second month in April, a sign the residential real estate market is stabilizing after a weak start to the year.
CNN Money | America's growing housing affordability gap
For the typical American household earning the median income, 65.5% of homes were affordable during the first quarter, according to a survey by the National Association of Home Builders (NAHB) and Wells Fargo Bank's Housing Affordability Index.

Econ Comments & Analysis                                                                                            
Barrons | Is the Stock Market Behaving Like It's 2007?
It's May 2014. And according to some interesting analysis by Pension Partners, a New York-based investment advisor, the market conditions are eerily similar to May 2007, five months before the end of the last long-running bull market.
WSJ | Book Review: 'House of Debt' by Atif Mian and Amir Sufi
Success has many parents, it is said, but failure is an orphan. Not so the crash of 2008. Trade imbalances, low interest rates, reckless banks, lax regulation, pliable bond-rating agencies, the government's encouragement of borrowing and home buying—all played a role in the financial crisis and the recession that followed.
Politico | On Energy, ‘All of the Above’ Is Working
It may come as a surprise, but the world leader in combined oil and natural gas production last year was not Saudi Arabia, despite its vast reserves. Nor was it Russia with its natural gas giant Gazprom. Rather, for the third year in a row, these countries were surpassed by the United States.
WSJ | European Markets at Risk from 'Fickle' Capital Inflows, ECB Says
The European Central Bank warned that the main risk for European financial markets is a reversal of potentially "fickle" capital inflows into the euro zone, a factor that has benefited banks and governments in recent months by lowering borrowing costs.
Mercatus | Evaluating Regulatory Reforms: Lessons for Future Reforms
Whether they think that agencies regulate too much or not enough, critics from widely differing perspectives agree that rulemaking is all too often hijacked by special interests. Some critics claim that federal agencies are influenced too much by calls for new regulation from various activist groups. Others argue that powerful industry lobbies often derail necessary regulation and leave people exposed to environmental harms and unsafe products.

WSJ | Contracting GDP Is Rare Outside of Recessions
The U.S. economy contracted at a 1% seasonally adjusted annual pace in the first three months of the year, the Commerce Department said Thursday, marking only the second time since the recession that output declined during a quarter.
WSJ | Gas Prices and Global Consumption
Cheap gas makes people use too much of it — that’s the takeaway from a study in this month’s American Economic Review. In “The Economic Cost of Global Fuel Subsidies,” Lucas Davis, a associate professor at Berkeley’s Haas Business School, uses World Bank data to show that countries with consumer fuel subsides have higher fuel consumption.

Health Care

National Journal | Is an $84,000 Hepatitis Drug Too Expensive?
An $84,000 hepatitis drug called Sovaldi is at the center of a new battle between pharmaceutical companies and insurers—but the fight is about much more than one drug.
WSJ | Study Finds Nearly 30% of World Population Is Overweight or Obese
The obesity epidemic is global: 2.1 billion people, or about 29% of the world's population, were either overweight or obese in 2013, and nearly two out of three of the obese live in developing countries, according to a study released Thursday.

Econ Comments & Analysis                                                                                            
Politico | Steve Scalise to push GOP leaders on Obamacare alternative
Rep. Steve Scalise is gearing up to put new pressure on Speaker John Boehner and other top Republican leaders to repeal Obamacare in favor of a conservative-backed health care package.

Heritage Foundation | Nevada Gives Up on $91 Million Obamacare Exchange
Nevada became the third state-based exchange to make such a decision, joining Massachusetts, which is joining the federal exchange temporarily while it works to fix its state-based exchange, and Oregon, which has ditched its exchange entirely—making a total of 39 states dependent on the federal exchange for, at a minimum, enrollment in 2015.


FOX Business | Fischer Sworn in to Fed Policy Board
Former Bank of Israel Governor Stanley Fischer was sworn in as a member of the Federal Reserve's board on Wednesday, buttressing the U.S. central bank's depleted policymaking ranks as officials map out plans to exit from their extraordinary stimulus.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Janet Yellen's 'Labor Market Slack' Fixation Has Nothing To Do With Inflation
When manufacture of Boeing's 787 Dreamliner began in 2007, one not-so-notable aspect of the efficient plane's creation was that it was taking place around the world, in seven different countries. Even something as prosaic as the pencil is the result of cooperation globally, so it's no surprise that a cutting-edge airplane would require specialized ‘hands' from around the world.

Library of Economics | Inflation targeting: It's even worse than you thought
Back in the 1990s inflation targeting was all the rage. I was a sceptic. I recall asking a senior central banker at the time what he would do if faced with stagflation - high inflation, low growth. Would he raise interest rates and force the economy into recession just to meet the target? He said the situation would never arise.


Washington Times | D.C. Council approves biggest tax cut in 15 years
The D.C. Council on Wednesday gave its blessing to the first significant package of tax cuts in the District since 1999, providing relief to residents of a city whose coffers have swelled in recent years along with its cost of living.

Econ Comments & Analysis                                                                                            
Bloomberg View | Dave Camp's Good Tax Policy Is Good Politics, Too
In this election year, it’s no surprise that House Ways and Means Committee Chairman Dave Camp’s effort to reform the federal tax code has met significant resistance both on Wall Street and in Washington. Although the Michigan Republican remains committed to a fundamental revision of the system, he is now pursuing a different course: making permanent some of the temporary, but pro-growth, elements of the existing code.

WSJ | Japan Retail Sales Show Sales Tax Beginning to Bite
Japan’s higher sales tax began taking a bite out of consumption in April, as retail sales dived 13.7% on-month, the biggest fall under the current data series that began in 2002.
CATO | Corporate Taxes: Less Is More
Why does the Canadian federal government collect 1.9 percent of GDP in revenues with a 15 percent corporate tax rate, while the U.S. federal government only collects about the same (2.0 percent) with a 35 percent corporate tax rate?


Market Watch | Jobless claims near post-recession low
The number of people applying for U.S. unemployment benefits sank last week to the second-lowest level since the recession ended in mid-2009, suggesting continued improvement in a labor market that’s perked up in the early spring.

WSJ | Labor Market Improving Across U.S. Cities — Except in Alabama
The labor market improved over the last year in most of the nation’s largest cities, following the national trend. But 11 metropolitan areas experienced increases in their jobless rates — and almost all of them, it turns out, were in Alabama.
WSJ | For Job Security, Abstract and Manual Skills are Best
Building off of work done by other labor economists, two researchers at the Federal Reserve of Cleveland, Murat Tasci and Jessica Ice, looked at how jobs with different skill sets performed during the Great Recession and weak recovery. The bottom line: jobs with routinized skills were hit hardest during the downturn and have been the slowest to recover.
WSJ | 7 Million People Earn America’s Other Minimum Wage: $23,660
The U.S. has a minimum wage of $7.25 an hour for most types of work. Another, lesser known minimum-wage threshold is $23,660 a year. That’s the minimum an employer can pay workers and avoid requirements to pay them overtime.


Econ Comments & Analysis                                                                                            
USA Today | Bond yields plunge to 2014 lows
Pushed down by fears of a slowing economy, the yield on the bellwether 10-year Treasury note fell to 2.44% Wednesday, its lowest since June 2013.
NBER | Small Victories: Creating Intrinsic Motivation in Savings and Debt Reduction
Saving when faced with the immediate option to spend is an unpleasant but not conceptually difficult task. One popular approach contradicts traditional economic theory by suggesting that people in debt should pay off their debts from smallest size to largest regardless of interest rate, to realize quick motivational gains from eliminating debts.

Wednesday, May 28, 2014

General Economics

Politico | Cap and trade lives on through the states
Nine Northeastern states already take part in a regional trading network that puts an economic price on their power plants’ carbon output, while California has a carbon trading system that is linked with Quebec. The Northeastern states saw their power plants’ carbon emissions drop more than 40 percent from 2005 to 2012, the trading network told EPA in December — without any of cap-and-trade critics’ apocalyptic expectations for such a system.
Bloomberg | Euro-Area Economic Confidence Climbs More Than Expected in May
Economic confidence in the 18-nation euro area increased more than forecast in May, as the European Central Bank considers taking action next month to avert the risk of deflation and spur growth.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Get Ready For the Subprime Mortgage Crack-Up 2.0
In 1991 community advocate Gail Cincotta, in testimony before the Senate Banking committee stated: "Lenders will respond to the most conservative standards unless [the GSEs] are aggressive and convincing in their efforts to expand historically narrow underwriting." The next year Congress imposed affordable housing mandates on Fannie Mae and Freddie Mac.
Washington Times | ‘O’ is for Obama’s overregulation
It has always the intention of the Obama administration to remake the American economy, and, in doing so, remake American society at large. Nowhere has this been more evident than in its use of executive branch power — through regulations, executive orders and task force operations — to target industries (and the segments of society that they serve) and bring them to heel to do what the administration wants.
Market Watch | China acquiring recklessly, just as Japan did in 1980s
In a country where almost any pair of people disagree on something, Israel’s biggest food producer, Tnuva, has been a pillar of consensus.
WSJ | Are We Underestimating America's Fracking Boom?
Start with exotic Nazi technology, take a detour with South African apartheidists, and add a bit role for Iranian imams. What you have is—what else? —one of the most improbable and important American business stories of the past decade.
Investors | Why Does Washington Still Suffer From Fatal Conceit Of Central Planning?
F.A. Hayek won the Nobel prize in economics in part because of his prescient warning about what he called "the fatal conceit," of intellectuals, who tend to believe that they are capable of centrally planning life for everyone.
NBER | The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption
Using a survey of households in the Nielsen Consumer Panel and the randomized timing of disbursement of the 2008 Economic Stimulus Payments, we find that a household’s spending rose by ten percent the week it received a Payment and remained high cumulating to 1.5–3.8 percent of spending over three months.

Market Watch | Robert Shiller: Falling mortgage rates may ‘stimulate’ home sales
Mortgage rates have dropped so much this year – falling about one-third of a percentage point — that the low levels could “stimulate” the housing market, Nobel Prize-winning economist and home-price expert Robert Shiller said Tuesday.
Fortune | A Kickstarter for real estate gets a big boost
Fundrise, a crowdfunding platform that gives neighborhood residents a stake in what gets built, secures a $31 million round from some tech and real estate heavy hitters.
Heritage Foundation | The Economic History Lessons We Never Learned
Are conservatives going to allow liberals to rewrite the history of the Great Recession, just as they so successfully did in writing the fictitious account of the Great Depression, which now appears in almost every American history text?

Health Care

National Journal | Politics of Immigration Leaving Millions With No Health Care
Lines have been drawn on the familiar issues in immigration reform: border security, an earned pathway to citizenship, and visa programs. Notably missing from the conversation on both sides of the aisle is how to provide health coverage to the millions of newly legalized immigrants.
WSJ | Insurers Push to Rein In Spending on Cancer Care
Insurers are changing how they pay for cancer care, aiming to blunt soaring costs and push oncologists to adhere to standardized treatment guidelines.

Econ Comments & Analysis                                                                                            
FOX Business | Medicaid Eating Up States’ Budgets: Will Taxpayers Pick Up the Tab?
It’s widely accepted that consumers will likely face higher health insurance premiums under the Affordable Care Act over the next few years due to inflation within the health-care industry and the wider availability of care nationwide. But another medical-related government program might also cause their taxes to rise: Medicaid.
Mercatus | The Political Roots of Health Insurance Benefit Mandates
Benefit mandates restrict the kinds of plans that private health insurance companies can offer by requiring them to cover certain conditions or procedures. Benefit mandates should not be confused with individual mandates (which require individuals to buy health insurance) or employer mandates (which require employers to buy health insurance for their workers).


Bloomberg | Yellen Has Scant Power to Relieve U.S. Housing Slowdown
The hesitant housing recovery has surprised and concerned Federal Reserve Chair Janet Yellen and her colleagues at the central bank. It’s not clear how much they can do about it.
WSJ | Federal Reserve Lacks Official to Oversee Regulatory Efforts
The Federal Reserve has aimed a seemingly nonstop spate of rules at the nation's biggest banks as it tries to wring risk out of the U.S. financial system in the wake of the financial crisis.

Econ Comments & Analysis                                                                                            
Forbes | We Need A Boring Monetary Policy
Yes, monetary policy is boring. However, market panics, financial crises, recessions, unemployment, and poverty can also get boring after a while. Unfortunately, it now seems clear that new Federal Reserve Chairman Janet Yellen is determined to continue Ben Bernanke’s rules-free, improvisational, monetary chaos.
AEI | Focus on currency manipulation
Martin Feldstein, the renowned Harvard University economist, is calling on the U.S. Treasury Department to end its 20-year practice of reporting to Congress on a semi-annual basis as to whether America's main trading partners have been manipulating their exchange rates.

WSJ | Fed Still Short of Employment, Inflation Goals, Lockhart Says
The Federal Reserve must be patient before it considers raising interest rates even after the central bank winds down its bond-buying program and as the recovery picks up steam, Atlanta Fed President Dennis Lockhart said Tuesday.


Econ Comments & Analysis                                                                                            
Slate | A Portrait of the Billionaire as a Young Tax Cheat
Creation myths about entrepreneurs inevitably include tales of triumph over adversity—a failed early company here, a break with a long-term partner there. Richard Branson, the goateed and grinning mascot of British capitalism, is no different. His Virgin empire grew from a record label that brought us both the Sex Pistols and Boy George to encompass airlines, rails, and mobile phone service.

WSJ | Jeroen Dijsselbloem Urges Euro-Zone Countries to Cut Taxes
A top euro-zone official on Tuesday called on the bloc's governments to look for a concerted effort to lower taxes, a move he said could boost the region's sluggish economy and create jobs.
CATO | Talking Taxes with Rep. Ralph Hall
Rep. Ralph Hall is in the news for losing to a primary challenger in his Texas district. I first met 91-year-old Hall just last week as we were on a Capitol Hill panel together organized by the Texas Association of Business (TAB). In the photo, that’s Hall to my right and Rep. Kevin Brady and TAB head Bill Hammond on my left. (Photo credit: Office of Rep. Hall).


CNN Money | Michigan raises minimum wage to $9.25
The minimum wage has gotten a boost in Michigan, the latest in a growing number of states where lawmakers voted this year to raise the wage.

Econ Comments & Analysis                                                                                            
LA Times | A higher minimum wage -- at what cost?
Washington politicos want to know which way popular winds are blowing so they can set their sails accordingly. Rarely, though, are they as explicit as President Obama in citing public opinion as a justification for policy. When pressed to defend his call for a $10.10 minimum wage, Obama routinely points to the November 2013 Gallup poll wherein 76% of respondents said they favored a higher minimum wage. A higher minimum wage is "what America wants," asserts the president.


Econ Comments & Analysis                                                                                            
Washington Times | A presidential legacy of record overspending
Federal spending is exploding under President Obama, shattering every record for budget deficits, public debt and annual expenditures. So much so, that a term like “big government” fails to adequately define the fiscal wreckage that has occurred under his presidency.

Tuesday, May 27, 2014

General Economics

CNN Money | Cut your cooling costs by 30% or more
With electric rates predicted to climb 10% by summer, cranking up your air conditioner could cost you big this year. But that doesn't have to mean living in a sweat lodge.
FOX News | Taxpayers paid $5.7 million for global warming games
Taxpayers paid more than $5 million to create climate change games, including voicemails from the future warning that “neo-luddites” will kill global warming enthusiasts by 2035.
CNN Money | Mail delivery to your door at risk
Currently, 37 million American homes and businesses get mail delivered to their doors. Now, about 15 million of them are at risk of losing home delivery if House Republicans have their way.
Bloomberg | Durable Goods Orders in U.S. Unexpectedly Increase
Orders for durable goods unexpectedly climbed for a third month in April, a sign U.S. factories will help the world’s biggest economy strengthen.
WSJ | Signs of a Suburban Comeback
The long tug of war between big cities and suburbs is tilting ever so slightly back to the land of lawns and malls. After two years of solid urban growth, more Americans are moving again to suburbs and beyond.

Econ Comments & Analysis                                                                                            
Washington Times | Future for new college graduates looks bleak
It’s that time of year again — graduation season. While commencement ceremonies should be a time of celebration for college graduates, it has rather become a moment of panic.
Fortune | Home price growth slows down across 20 U.S. cities
Home values for single-family residences increased 12.4% from March 2013, according to the S&P/Case-Shiller index, which tracks property values across the top 10 and 20 biggest U.S. metropolitan areas. That's the slowest 12-month gain since July and down from the 12.9% annual increase reported in February.
Real Clear Markets | Obama's Plan To Make the Poor Even Poorer
President Obama has called inequality "the defining challenge of our time." But on June 2 he will announce new "cap-and-trade" environmental regulations that will make the poor a lot poorer and the rich a little less rich.
Fortune | The U.S. has the world's most competitive economy. So what?
The fact that the American economy is the world's most competitive comes as cold comfort to the nation's unemployed and to those who have not experienced real wage increases in a generation.
CNN Money | Did Piketty get it wrong? Analysis questions author's data
On one side is Thomas Piketty, author of the best-selling tome "Capital in the Twenty-First Century." He argues that wealth inequality is growing and "threatens to generate extreme inequalities that stir discontent and undermine democratic values," and published the data behind his conclusions online.
Mercatus | Why We Need Regulatory Reform in Two Charts
The Problem: The American regulatory system has no working, systematic process for reviewing regulations for obsolescence or poor performance, facilitating the accumulation of a vast stock of regulations.
AEI | What conservatives don't understand about the modern US economy
A new manifesto making the rounds in conservative circles is as much a time-travel tale as the new comic-book movie, X-Men: Days of Future Past. Activists hope that embracing supposedly timeless economic policies, such as tax cuts and balanced budgets, will unite and then ignite the Republican Party. Reagan-era nostalgia, unfortunately, is not much of a superpower. Without recognition that new economic challenges require new thinking and new solutions, this tired GOP sequel is unlikely to attract much of an audience.

WSJ | Poor Americans Direct 40% of Their Spending to Housing Expenses
Housing and food expenses absorb more than half of low-income Americans’ annual spending. Even the wealthiest Americans devote a sizable share of their spending to keeping a roof over their heads and food in their refrigerators.
Heritage Foundation | 6 Small Towns With Big Government Problems
Out-of-control government, most common to Washington, D.C., can trickle down to small towns, too.

Health Care

WSJ | New Costs From Health Law Snarl Union Contract Talks
Unions and employers are tussling over who will pick up the tab for new mandates, such as coverage for dependent children to age 26, as well as future costs, such as a tax on premium health plans starting in 2018. The question is poised to become a significant point of tension as tens of thousands of labor contracts covering millions of workers expire in the next several years, with ACA-related cost increases ranging from 5% to 12.5% in current talks.

Econ Comments & Analysis                                                                                            
Mercatus | Where is the Innovation in Health Care?
Health care in the United States is stuck in a rut. Americans are spending more on the same old care. The disastrous Obamacare rollout creates more problems than the administration can spin that it “solves.” We have simply grown to accept rising prices and stagnating service as a fact of life.


Econ Comments & Analysis                                                                                            
Bloomberg | Bond Market to Fed: Your 4% Rate Forecast Is Way Too High
The bond market, unparalleled in predicting shifts in the U.S. economy over the decades, has a message: interest rates aren’t going to rise as high as even the Federal Reserve’s own forecast.
WSJ | Lagarde Says Central Banks May Have to Consider Financial Stability
Central bankers around the world may have to take financial stability into greater account, in addition to their usual duties of keeping inflation low while maintaining close cooperation with each other, International Monetary Fund managing director Christine Lagarde said Sunday.

Market Watch | Fed should make exit decisions while things are quiet, former top staffer says
The Fed is not expected to make any move toward the exit until it is finished tapering its bond-buying program in the fourth quarter. This gives the Fed a few meetings of relative calm to explain its exit to the market, said Brian Sack, a former senior Fed officials, in an interview  with the Wall Street Journal.
Library of Economics | The goal of monetary stimulus is to boost saving
Negative deposit rates" means that the banks will charge the customer for saving money and placing it in the bank. According to Keynesian theory (if there really is such a thing) government needs to spur "aggregate demand" in order to stimulate the economy to increased production. Keynes had no respect for savings...only spending.


Econ Comments & Analysis                                                                                            
Washington Times | Saving the Internet from killer taxes
The time to protect Internet freedom is now. That means telling the government to butt out and stay out. Period. That’s why Congress must make permanent the ban on Internet-access taxes that expires in the fall.
Real Clear Markets | How Tax Havens Complicate the U.S. Corporate Tax
The House of Representatives will soon vote on making permanent six temporary tax breaks for business, including the look-thru rule for CFCs (controlled foreign corporations). Although this rule seems like a technical exemption, it allows U.S. multinationals to move a lot of their foreign profits to tax havens and thereby serves as a major deterrent to sensible tax reform.
WSJ | U.S. Supreme Court Agrees to Hear Maryland Double-Taxation Case
The U.S. Supreme Court on Tuesday agreed to decide the scope of a state's power to tax residents' income when those earnings have already been taxed by another state.

WSJ | IMF Lagarde Urges Tax Overhaul to Tackle Inequality
Inequality casts “a dark shadow” across the global economy and countries should consider overhauling their tax systems to tackle gulfs in incomes and wealth, according to Christine Lagarde, managing director of the International Monetary Fund.


Econ Comments & Analysis                                                                                            
FOX Business | 5 Steps to Help Turn an Internship Into a Job
“Students that make a good impression during the course of their internship are much more likely to get hired by an organization, or at least be able to make valuable networking connections that they will be able to use as a future reference,” says Penny Loretto, a career expert and blogger for

WSJ | In Grist for Fed’s Debate, Researchers Say Unemployment Rate isn’t Undercounting Slack
If policymakers think the job market has considerable slack, with many more available workers than available jobs, they might hold down short-term interest rates for longer to bolster the economic recovery. If they think the labor market is getting tight, they might raise rates sooner to head off inflation as wages rise.


Econ Comments & Analysis                                                                                            
Reason | Nothing Left to Cut?
Modern Democrats do not have the will to shrink the federal waistline. Sadly, modern Republicans are little better: Despite paying lip service to balanced budgets, the elephants of the Grand Old Party are too often just as gluttonous as their opponents, and averse to naming specific programs that deserve the ax.

Friday, May 23, 2014

General Economics

Fox Business | Oil Futures Dip, Gasoline Climbs Ahead of Holiday Weekend
Oil futures slipped Thursday as traders who had bet on higher prices locked in profits after Wednesday's rally, while gasoline futures hit a three-week high on expectations of rising demand.
Bloomberg | Americans’ Outlook for U.S. Economy Falls to Seven-Month Low
Americans’ expectations for the economy deteriorated to a seven-month low in May, a sign that the rebound from weakness earlier this year may be limited by still-cautious consumers.
Fox Business | New Home Sales Rebound in April
Sales of new U.S. single-family homes rose more than expected in April and the stock of houses on the market hit a 3-1/2 year-high, a sign the sputtering housing recovery may be poised to regain steam.

Econ Comments & Analysis                                                                                            
Washington Times | ALLEN: Reagan’s Ex-Im Bank reforms still paying dividends
The lender that reaped $1 billion in 2013 deserves reauthorization.
WSJ | Without Keystone XL
Some energy analysts figure the White House's continuing refusal to approve the Keystone XL oil pipeline may become less relevant as oil companies develop other ways to ship their product. But the surge in oil shipments by rail is creating new public health risks while raising the cost of food production.
CNN Money | Bank of America is making money on its financial crisis settlement
The deal that BofA struck two months ago with Fannie and Freddie's regulator, restitution for financial crisis misdeeds, could end up boosting the bank's bottom line by $1.4 billion.
Mercatus Center | Is Now the Time for Housing Finance Reform? Maybe Not
If the United States is ever to enjoy sensible policy in housing, the choices will have to be made at a time when officials are focused on the public interest and firmly reject the suggestions coming from the social engineers and the special-interest lobbyists. Unfortunately, that does not seem to be the case today.

Health Care

Econ Comments & Analysis                                                                                            
WSJ | The Government Health-Care Model
The Veterans scandal shows where ObamaCare ends up.

Heritage | Family Health Costs Rise to $23,215
Health care costs have risen to $23,215 a year for the typical family of four that gets insurance through work, according to a new report from Milliman Inc., Seattle-based consultants and actuaries.


Econ Comments & Analysis                                                                                            
Real Clear Markets | Interest Rate Manipulation Comes Back to Haunt Its Most Ardent Supporters
To bring this back toward the generalities, it appears to me, and many others, that the credit markets are much less stable now than if QE had never been proposed.
NBER | Monetary Policy and Real Borrowing Costs at the Zero Lower Bound
The efficacy of unconventional policy in lowering real borrowing costs is comparable to that of conventional policy, in that it implies a complete pass-through of policy-induced movements in Treasury yields to comparable-maturity private yields.

WSJ: Real Time Economics | Grand Central: How High Will Fed Push Rates?
The April survey, released earlier this week, shows bond dealers expected the fed funds rate to average just 2.75% for the coming decade.
WSJ: Real Time Economics | In Face-off, Fed’s Keeping the IMF Out of Its Currency Swap Domain
Several advanced-economy central banks, including the Fed, have successfully stymied efforts by some emerging markets to create a short-term cash line at the fund to help shore up economies against market shocks.


Politico | Lawmakers have bigger tax woes than IRS workers
It turns out that IRS employees have a much better record paying their taxes than lawmakers and their staff in both the House and Senate — almost five and three times better, to be exact, according to data released by the IRS on Thursday.
WSJ | Proposed Rules on Tax-Exempt Groups Face Revision
Administration Likely to Revise Proposal to Tighten Rules on Political Activity by Tax-Exempt Groups


CNN Money | HP to cut up to 16,000 more jobs
The ax is falling once again at Hewlett-Packard. HP announced Thursday that it will cut an additional 11,000 to 16,000 jobs, after previously revealing plans for 34,000 layoffs.

Econ Comments & Analysis                                                                                            
Forbes | People Support Raising The Minimum Wage Until Told The Costs
Once people make the link between the benefit (higher pay for some) and the cost (fewer jobs, higher prices) the level of support shrinks to a clear minority.
WSJ | Skilled Foreign Workers a Boon to Pay, Study Finds
The findings suggest an influx of foreign workers wouldn't hurt wages for the existing workforce, and would raise pay in many cases. The study follows a long line of research supporting the argument that skilled immigrants would boost the U.S. economy.