Monday, June 30, 2014

General Economics

FOX News | Dem lawmakers worry California’s cap-and-trade expansion will drive up gas prices
A group of California Democrats is having second thoughts about the state's expanding cap-and-trade program, urging Gov. Jerry Brown's administration to rethink the plan out of concern that it will drive up gas prices and hurt low-income residents. 
Market Watch | Chicago PMI retreats in June
Chicago PMI retreated in June after hitting a seven-month high in May, according to the Chicago business barometer released Monday .
Bloomberg | Slowing China Economy Dims Profit Outlook to 2012 Low
The most-actively traded Chinese companies in the U.S. are on pace to report the smallest profits in two years as growth in the world’s second-largest economy decelerates to the slowest since 1990.
Market Watch | Pending home sales highest in eight months
A gauge of pending home sales jumped 6.1% in May to reach the highest level in eight months, signaling that upcoming closings of existing homes are likely to speed up, the National Association of Realtors reported Monday.

Econ Comments & Analysis                                                                                            
Washington Times | Shrinking economy, fading hope
Stagnation is not an appealing campaign promise. The Democrats dare not ask, “Are you better off now than you were four years ago?” They dare not even ask whether Americans are better off than even four months ago. New statistics reveal that the economy just shrank another 3 percent.
WSJ | A Recovery Stymied by Redistribution
Why has the labor market contracted so much and why does it remain depressed? Major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways—and although these policies were advertised as employment-expanding, the fact is that they reduced incentives for people to work and for businesses to hire.
Real Clear Markets | The Sharing Economy Has 'Mad Men' Scared to Death
The Internet turned 25 this year. It came of age along with the Millennials, the first generation to live and breath in social media. The impacts from both are still rolling through and roiling the culture and the economy.
Forbes | "Room To Grow" Blind To The Most Important Issue For The Middle Class -- Economic Growth
In 1900, we had no airplanes, no computers, no cellphones, no internet. We had only rudimentary versions of cars, trucks, telephones, even cameras. As Stephen Moore and Julian L. Simon report in their underappreciated work, It’s Getting Better All the Time: 100 Greatest Trends of the Last 100 Years,
CNN Money | Should happiness, more than GDP, define a nation's success?
The tiny nation of Bhutan started measuring "gross national happiness" in the 1970s. More recently, public experts have started to tout the importance of measuring citizens' well-being in addition to GDP.
AEI | Conservatives against corporate welfare: It's time to put this agency out of its misery
After eight decades, the future of the Export-Import Bank is today uncertain. Its charter expires in late September and needs to be renewed by Congress if it is to live on. It shouldn't. It's time to pull the plug on the bank.

WSJ | Fed’s Bullard: Markets Right to Play Down Gloomy GDP Report
Federal Reserve Bank of St. Louis President James Bullard said markets are correct in looking past the “shockingly negative” estimate of first-quarter economic growth reported this past week amid other signs that the economy is improving.
CATO | The Coming School Choice Tidal Wave
Last week I reviewed the latest survey on education policy from the Friedman Foundation but I missed something that should warm the cockles of the hearts of everyone who supports greater choice in education: each generation is progressively more favorable and less opposed to educational choice. 
Library of Economics | When is nominal GDP targeting optimal?
There are good reasons to think that NGDP targeting is better suited to emerging and developing economies than to industrialized countries. These economies are more frequently subject to adverse terms-of-trade shocks, such as increases in world oil prices or declines in prices for their commodity exports. Their economies also tend to suffer larger supply shocks from natural disasters, other weather events, social unrest, and unexpected productivity changes.

Health Care

Econ Comments & Analysis                                                                                            
Daily Signal | What Does New Auto-Enrollment Rule Mean for Obamacare Customers?
Insurance customers on will be automatically enrolled in their current plans for 2015 unless they buy new coverage through federal and state-run online exchanges, the Obama administration announced.


Bloomberg | Euro-Area Inflation Steady at 0.5% Shows Draghi Challenge
The euro-area inflation rate held steady in June at less than half the European Central Bank’s target, underscoring the challenge faced by Mario Draghi as he tries to stoke prices and ignite growth.

Econ Comments & Analysis                                                                                            
NBER | Monetary Policy Surprises, Credit Costs and Economic Activity
We provide evidence on the nature of the monetary transmission mechanism. To identify policy shocks in a setting with both economic and financial variables, we combine traditional monetary vector autoregression (VAR) analysis with high frequency identification (HFI) of monetary policy shocks.
CATO | The Fed’s Stimulus Is a Chimera
The U.S. Federal Reserve Bank’s three rounds of quantitative easing and near-zero target for the federal funds rate have not provided the promised stimulus. The idea that dramatically expanding the Fed’s balance sheet and rapidly increasing the monetary base would revitalize the real economy is a fantasy. Printing fiat money does not lead to economic growth.


Bloomberg | Japan Output Rebounds in Sign Companies Enduring Tax Rise
Japan’s production rebounded in May, indicating that manufacturers are riding out a sales-tax increase as Prime Minister Shinzo Abe seeks to steer the economy through its aftermath.

FOX Business | Tax Reform and Your Small Business
Every couple of years utterances of the implementation of a flat tax emerge. In fact, in a tax seminar during the early 1990s, a well-revered speaker made one of those mark-my-words predictions that the flat tax would be operational within the next few years.


Econ Comments & Analysis                                                                                            
Daily Signal | Where Have All the Jobs Gone?
The commerce department reported Wednesday that the economy contracted by nearly 3 percent from January through March. This dismal shrinkage in output has many Americans worrying about a dreaded double dip recession.

WSJ | Economists Haven’t Been This Upbeat About Jobs Since 2010
Economists polled by The Wall Street Journal predict the economy added 218,000 jobs in June. During the five-year economic recovery, the only time that the consensus estimate was higher was in May 2010, a month in which figures were sharply inflated by the temporary hiring of census workers.


Econ Comments & Analysis                                                                                            
Real Clear Markets | Government Fixes Have Created Long-Term Instability
As a tool for analyzing and influencing the economy, is the business cycle outdated? Yes, says the Bank for International Settlements (BIS) in Basel, Switzerland. Unless you're deep into today's economic debates, you've probably never heard of the BIS. But its annual reports - the latest is just out - are eagerly awaited because the BIS plays an informal role as loyal opposition to mainstream economics. This year is no different.
Mercatus | There is a Way Out for States Trapped in the Pension Sinkhole
Detroit--desperately trying to reduce its obligations in federal bankruptcy court--is the classic example. But the financial sinkhole swallowing Detroit is spreading throughout the country at an alarming rate.

Friday, June 27, 2014

General Economics

Politico | How immigration reform died
Janet Murguia, president of the National Council of La Raza, had just explained why she declared him the “deporter in chief” in a speech in early March. Obama, who was infuriated when he first heard Murguia’s remarks weeks earlier, sat in silence, trying to keep his anger in check, according to advocates in attendance.
CNN Money | Millennial-driven housing boom coming
Some 11 million recent grads were living with a parent in 2012, according to Pew. The homeownership rate for those under age 35 was 36% in the first three months of 2014, down from a high of 43% in 2005, according to the Census.
National Journal | Where Homeowners Are Still Underwater
There's been a lot of encouraging news about the housing market recently. New home sales are up, foreclosures are down, and a decreasing number of people owe more on their mortgages than their homes are currently worth, according to the Department of Housing and Urban Development. Last month, homeowners' equity reached the highest level since the recession began. 
FOX News | Texas-Oklahoma segment of Keystone spouts big dividends, says study
A new study claims that a just-built 485-mile stretch of the Keystone XL pipeline has been a huge economic boon for two dozen rural and poor Oklahoma and Texas counties—and will create the same significant impact in five other states if the project’s long stalled northern segment ever wins White House approval.
CNN Money | Americans still hesitant to spend more
Personal income rose 0.4% in May, according to the Bureau of Economic Analysis. It may not sound like much, but it marked the fifth straight month in a row that incomes rose. Not only that, but incomes are rising faster than inflation -- an encouraging sign that people are gaining more buying power.
Bloomberg | Consumer Sentiment in U.S. Rose in June From Month Earlier
Consumer sentiment improved in June as higher stock prices and an improving labor market helped bolster Americans views of the economy.

Econ Comments & Analysis                                                                                            
Washington Times | The end of American democracy?
There are so many scandals plaguing the administration of Barack Obama that any sentient historian would have to contemplate whether this nation’s status as the world’s model democratic nation has finally come to an end.
Forbes | Conservatives Should Oppose Social Engineering Even By Conservatives
Recently a group of conservative intellectuals banded together to create a conservative policy reform agenda. Using the title “Room to Grow,” these self-styled reform conservatives are pushing conservatives to have a positive agenda, to be for something rather than simply blocking the liberal agenda. That is a good idea, on its face. The problem is that conservative social engineering has the same drawback as liberal social engineering: government is still distorting markets and picking winners and losers.
Bloomberg | Who Wins and Who Loses as Oil Spike Challenges Global Economy
No matter how hard residents of Hungary, the Czech Republic and Turkey work, they won’t strike oil. Nor will those in the Philippines, India and Thailand. They’ll be the biggest losers if this month’s spike in crude prices is extended, say UBS AG economists Larry Hatheway and Andrew Cates.
Market Watch | Summers: Economic pickup could come on unstable ground
The former Treasury secretary for President Bill Clinton and the head of the National Economic Council under President Barack Obama says it’s not out of the realm of possibility that the economy could accelerate — but the acceleration could come on unstable footing.

Health Care

CNBC | An Obamacare bailout? Insurers already got one!
For ordinary consumers, the answer varies. A lot of Americans who never had insurance before have indeed been able to find health coverage AND health care, (they're two different things, after all).
CNN Money | Obamacare = opportunity for insurers
For insurers, Obamacare spells opportunity: They are flocking to sell more policies on more state exchanges for 2015.
WSJ | Federal Health-Exchange Plans to Automatically Renew
The Obama administration plans to automatically renew for next year the health plans and premium subsidies that consumers obtained through the Affordable Care Act's federal insurance exchange.

Econ Comments & Analysis                                                                                            
Mercatus | The ACA is the Problem, Not CBO
Lately there has been a flurry of articles and columns about how the Congressional Budget Office is no longer able to tell us whether the Affordable Care Act will reduce or worsen the federal budget deficit. Those interested in federal budget policy should understand an important truth underlying this coverage: the problem here lies not with CBO, it is with the ACA. While the ACA’s costs are proving real, several of its provisions designed to produce budget savings are not yet doing so.
CNBC | Obamacare Will Suck the Life Out of the Economy
The word "unexpectedly" for negative economic reports has become a much-mocked clich̩ in the media over the past five-plus years of recovery, but this week's final look at first-quarter economic growth deserves an exception. First estimated at a meager 0.1 percent annualized rate, and then downwardly revised to -1.0 percent in May, most economists expected a smaller revision to the downside Рin the -1.5 percent-1.8 percent range.

CATO | ObamaCare’s Exchanges Perform More than a Dozen Functions Besides Issuing Subsidies
One of the issues underlying Halbig v. Sebelius and three similar lawsuits making their way through federal courts is whether Congress intentionally restricted the Patient Protection and Affordable Care Act’s (PPACA) private health-insurance subsidies to individuals who buy coverage through state-established exchanges. If so, that would mean the Internal Revenue Service’s decision to issue subsidies in the 34 states that did not establish exchanges (i.e., that have federally established exchanges) is illegal. For more on the IRS’s attempt to rewrite the PPACA in this fashion, click here.


Bloomberg | Yellen Spending Mix Lacks Ingredient of Higher Pay
Janet Yellen and her Federal Reserve colleagues are finally succeeding in their efforts to generate higher inflation. Now they must do the same for wages to prevent U.S. households from getting squeezed.
FOX Business | Walking a Tightrope: How Deutsche Thinks the Fed Will Exit Ultra-Loose Policies
Torsten Slok, chief international economist at Deutsche Bank Securities, crafted a chart that examines how the Federal Reserve could exit its ultra-accommodative monetary policy.  

Econ Comments & Analysis                                                                                            
WSJ | The Fed Needs to Return to Monetary Rules
As the Federal Reserve's large-scale bond purchases wind down, financial markets and policy makers now are focused on when the Fed will move to increase interest rates. There is a more fundamental question that needs to be answered: Will the central bank continue its highly interventionist and discretionary monetary policies, or will it move to a more rules-based approach?
Market Watch | Bullard: Markets think Fed is more dovish than it is
Financial markets think the Federal Reserve is more dovish than it actually is, said St. Louis Federal Reserve president James Bullard on Thursday.

Market Watch | ‘Dreaded conflict’ for the Fed: slower growth and faster inflation
The numbers coming out of the Commerce Department on Thursday morning weren’t on their face alarming for the Federal Reserve, but they certainly didn’t make lives any easier — inflation is heating up while consumer spending seems lackluster. The PCE measure of inflation rose to 1.8% year-on-year — getting closer to the central bank’s 2% target — while consumer spending rose just 0.2% on the month to take the year-on-year move to 3.7%.
WSJ | Fed’s Lacker: Rates Could Rise Even If Economic Growth Remains Subdued
The Federal Reserve is likely to begin raising interest rates next year even if the U.S. economy doesn’t experience a substantial acceleration in growth, Federal Reserve Bank of Richmond President Jeffrey Lacker said Thursday.


Econ Comments & Analysis                                                                                            
Heritage Foundation | Congress Should Be Cautious About Expanding the Child Tax Credit
Members of Congress have renewed the discussion of increasing the Child Tax Credit (CTC) to help the beleaguered middle class. Their desire to help the middle class is laudable. The slow recovery and President Barack Obama’s faulty economic policies have hit the middle class hard, but increasing the CTC is not the best way to deliver relief. The better approach would be tax reform that reduces disincentives to engage in economically productive activities.

FOX Business | S&P: Cut Corporate Taxes to Create 10M New Jobs
Lowering corporate tax rates and simplifying the maniacally-convoluted tax code is slowly catching fire. S&P Capital IQ has provided an estimate on just what would happen to the U.S. economy if the effective corporate tax rate paid by S&P 500 companies dropped to Switzerland’s average, effective rate of 22.4% from our current 32.3%.
WSJ | After Tax Increase, Signs of Recovery in Japan Consumption
Japanese private consumption showed signs of recovery in May after it plunged on April’s sales-tax rise, an encouraging sign for Prime Minister Shinzo Abe’s push to lift the economy out of its long funk.


Washington Times | ALL of the net jobs gains in the U.S. since 2000 have gone to immigrants
Since 2000, all of the net jobs added by the U.S. economy have gone to immigrants, both legal and illegal, according to a report being released Friday by the Center for Immigration Studies that challenges prevailing wisdom that the country needs an influx of workers.

WSJ | Massachusetts Sets Nation’s Highest Minimum Wage
Massachusetts will reach the level—50% higher than the federal rate–in three steps of $1 increases. The new law supplants Vermont as the state set to have the highest wage floor. Legislators there earlier this month approved raising the state’s minimum wage to $10.50 an hour by 2018.


Econ Comments & Analysis                                                                                            
The Fiscal Times | How to Stop the Epidemic of Student Debt Defaults
This week, while analysts debated the seriousness of the student debt crisis, one statistic went unchallenged: Student loan defaults are at their highest rate in 20 years, affecting over 7 million borrowers.  - See more at:

Thursday, June 26, 2014

General Economics

CNN Money | Is this government agency worth saving?
The Export-Import Bank has quickly become public enemy no. 1 among conservative Republicans in the House.
WSJ | Americans' Generational Race Gap Gets Wider
The demographic divide between older white Americans and younger minorities grew wider last year, according to Census Bureau data released Thursday, highlighting a long-term shift that might alter the interplay between generations.

Econ Comments & Analysis                                                                                            
CNN Money | U.S. refines its crude oil export ban
The decision green-lights Pioneer Natural Resources (PXD) to export condensate export condensate, an ultra-light oil. Condensate has been processed enough to make it less liable to explode, but requires further refining to be useable.
WSJ | GDP's ObamaCare Downgrade
Financial markets shrugged off Wednesday's punch-in-the-stomach report that first quarter GDP shrank by 2.9% on an annual basis, far more than earlier estimates and the worst quarterly decline in five years. Optimists blame the weather and point to faster growth in the current quarter, which is reasonable but still shouldn't overlook ObamaCare's role in nearly sending the economy back into recession.
Investors | GDP: Another 'No Biggie'?
Economists are writing off the sharp 2.9% drop in first-quarter GDP as a temporary contraction. Maybe. What isn't temporary is President Obama's massively subpar growth record over the past five years.
WSJ | Behind the Productivity Plunge: Fewer Startups
In the first quarter of 2014, GDP in the U.S. plunged at a 2.9% annual rate, and productivity—the inflation-adjusted business output per hour worked—declined at a 3.5% annual rate. This is the worst productivity statistic since 1990. And productivity since 2005 has declined by more than 8% relative to its long-run trend. This means that business output is nearly $1 trillion less today than what it would be had productivity continued to grow at its average rate of about 2.5% per year.
Washington Times | Reviving free-trade agreements would revive the economy
America’s economic engine needs a jump start. Everyone agrees on that much. The Commerce Department reported Wednesday that U.S. production shrank 2.9 percent in the first quarter of 2014, while corporate profits tumbled 9 percent from last year’s numbers. One way out of this would be to give President Obama more power.
AEI | Is there a retirement crisis?
If you have followed the headlines in recent years on the question of Americans' retirement savings, you could be forgiven a bit of panic. "Our next big crisis will be a retirement crisis," read one headline in MarketWatch earlier this year. "The Greatest Retirement Crisis in American History," read another in Forbes. A study by the National Institute on Retirement Security put its warning in the form of a question: "The Retirement Savings Crisis: Is It Worse Than We Think?"

CATO | Making Sense of Federal Housing Law, Once More With Feeling!
The Fair Housing Act was enacted to prevent discrimination in the buying, selling, and renting of homes on the basis of certain protected categories, including race. While it’s clear that the Act bars discriminatory intent, such as refusing to deal with members of a certain racial group, it remains an open question whether it covers claims of “disparate impact,” where the effects of a neutral policy—say, requiring a credit check—disproportionately harms members of the protected class.
CATO | Small Is Beautiful
The sticker is appropriate for bumpers, hoods, fenders, and windshields, or even around your home on garage doors and mailboxes.

Health Care

Daily Signal | Pictures of Faith at Work: This Family Waits, Prays for Obamacare Ruling
The Supreme Court is expected to decide as early as today whether the government can force two family businesses, Hobby Lobby and Conestoga Wood Specialties, to provide employee health plans that cover abortion-inducing drugs and devices. Countless other faith-based family businesses face devastating fines under Obamacare if they don’t break their moral and religious convictions and comply with the same mandate issued by the Department of Health and Human Services.

Econ Comments & Analysis                                                                                            
Daily Signal | Insurers on Obamacare Exchanges in 2015: What to Watch For
There have been a number of recent news reports about additional insurers applying to offer coverage in Obamacare exchanges in 2015. Although it is too early to draw any conclusions—since this is just the beginning of a three-month process—it is still likely that at least a few more insurers will participate in the exchanges next year.


Bloomberg | Fed Neutralized in Mortgage Bonds on Supply Slump
The $5.4 trillion market for U.S. government-backed mortgage bonds is poised for its biggest first-half rally since 2010 as a surprising drop in supply outweighs a pullback in Federal Reserve purchases.

Econ Comments & Analysis                                                                                            
Market Watch | Time for Yellen to target inflation, worry less about jobs
Now Federal Reserve Chairwoman Janet Yellen is herself approaching a crossroads. And the stakes are also very high: the health of the markets and the U.S. economy over the next few years.
Bloomberg View | Banks Can Still Have Fun Prop Trading in Rates
Lawmakers sought the flexibility to finance government spending and didn’t see the trading as particularly risky, said Barney Frank, who as a Massachusetts congressman helped draft the 2010 Dodd-Frank Act that mandated the Volcker Rule.
Market Watch | Kevin Warsh: Fed policy is 'reverse Robin Hood'
The Federal Reserve's easy-money policies are benefiting the rich at the expense of the poor in a "reverse Robin Hood" scenario, said Kevin Warsh, a former member of the Federal Reserve System Board of Governors.

WSJ | Consumer Inflation Hits Highest Level Since 2012, Near Fed’s 2% Target
The price index for personal consumption expenditures — the Federal Reserve’s preferred gauge — advanced 1.8% in May from a year earlier, the Commerce Department said Thursday. That was the highest since October 2012.


FOX Business | The Tax Story Behind 770 Accounts
My nephew recently sent me a link to a website advertising what he excitedly called an “incredible investment.”  It was for a 770 account, and he was ready to jump on the bandwagon.


National Journal | Employers’ Role in State Job-Training Programs Will Grow
It's a small change, but one that could greatly increase the influence of businesses with their local governments when it comes to job creation. A job-training bill that passed the Senate on Wednesday, 95-3, significantly bolsters employers' voices on local committees that determine what types of job-training programs receive federal dollars. It does that primarily by shrinking these committees to less than half their current size.
Fox News | Mr. Obama, where are our 5 million missing jobs?
The commerce department reported Wednesday that the economy contracted by nearly 3 percent from January through March. This dismal shrinkage in output has many Americans worrying about a dreaded double dip recession.
CNN Money | Ikea lifting minimum wage to nearly $11 an hour
Ikea is acting on its own to lift the minimum wage, and it's doing it in a unique way: The U.S. average will be $10.76 and hour, but will be adjusted in different areas for cost of living.
Bloomberg | Jobless Claims in U.S. Decreased 2,000 Last Week to 312,000
Fewer Americans filed applications for unemployment benefits last week, a sign of steady progress in the labor market.

Econ Comments & Analysis                                                                                            
Mercatus | Dreams Deferred: Young Workers and Recent Graduates in the US Economy
The young are always far more affected by an employment crisis than older workers. Today, however, they face one of the worst labor markets of any generation. Not only have they experienced the Great Recession, but six years later they still face a poorly performing labor market. Their employment level is down, earnings and earnings growth are lower, wealth is lower, and millions of the young have yet to even enter the labor force. In fact, they are a large part of the biggest ongoing economic challenge we face today—the shrinking labor force. 

WSJ | U.S. Manufacturing Importing As Many Jobs As It Exports, Says Group
America is now luring as many factory jobs back from overseas—a process known as reshoring—as it’s losing to continued offshoring.
WSJ | Fed’s Lacker: Much Labor Market Slack Remains Due to Structural Issues
Much of the weakness remaining in the U.S. labor market is due to structural issues, such as a skills mismatch between available workers and available jobs, that cannot be easily addressed by monetary policymakers at the Federal Reserve, Federal Reserve Bank of Richmond President Jeffrey Lacker said Thursday.


Politico | Should President Obama veto spending bills?
There’s life after a veto, and as a former governor, Clinton seemed to relish it. He faced down a Republican-controlled Congress for six years, during which he successfully vetoed a broad array of appropriations bills over not just money but also policy riders.

Wednesday, June 25, 2014

General Economics

Politico | U.S. economy shrank at steep 2.9 percent rate in Q1
The U.S. economy shrank at a steep annual rate of 2.9 percent in the January-March quarter as a harsh winter contributed to the biggest contraction since the depths of the recession five years ago. But the setback is expected to be temporary, with growth rebounding solidly since spring.
Bloomberg | Orders for U.S. Capital Goods Rise as Investment Picks Up
Orders for U.S. business equipment climbed in May, showing corporate investment is helping revive the economy after a slump at the start of the year.
WSJ | U.S. Ruling Loosens Four-Decade Ban On Oil Exports
The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad.

Econ Comments & Analysis                                                                                            
Bloomberg View | Millennials Skip the Ring and Mortgage  
They’re living at home in growing numbers. They're not buying homes, which creates ripple effects throughout the housing market. They’re having more babies out of wedlock than in it.
FOX News | Great Recession and slow recovery have widened US wealth gap as home prices trail stock gains
The Great Recession and the slow recovery have sharply widened the gap between the wealthiest Americans and everyone else, according to a study that underscores the unevenness of wealth gains since the recession ended.

WSJ | Economists React to -2.9% Q1 GDP Revision: ‘Different Shades of Nasty’
The U.S. economy contracted at a 2.9% annual pace in the first quarter this year, the Commerce Department said Wednesday. That is a sharply lower reading than earlier estimates and marked its sharpest pullback since the recession ended five years ago.  Economists weighed in on the third read, what it might mean for the economic recovery, and where activity stands in the second quarter.

Health Care

National Journal | Here Comes the Hardest Part About Obamacare
For people like me who want the Affordable Care Act to work but who worry about the Obama administration's management record, this story in The Washington Post is foreboding: "Businesses Gear Up for Employer Mandate."
WSJ | Sick Drawn to New Coverage in Health-Law Plans
People enrolled in new plans under the health law are showing higher rates of serious health conditions than other insurance customers, according to an early analysis of medical claims, putting pressure on insurers around the country as they prepare to propose rates for next year.

Econ Comments & Analysis                                                                                            
Washington Times | The president’s Cronycare
Promises, promises. Once upon a time, Barack Obama said he would put an end to monkey business as usual in Washington. “First,” he said, “we will close the revolving door that has allowed people to use their administration job as a steppingstone to further their lobbying.” Like so many of the president’s campaign pledges, this one has proved to be a fairy tale.
WSJ | After A Lull, Health-Care Spending is Poised to Pick Up, Study Says
Health-care spending will accelerate next year for the first time since the recession ended, a reversal of a trend that could have broad implications for employers and the economy, a new study says.
NBER | Pharmaceutical Profits and the Social Value of Innovation
Prior research has shown that exogenous shocks to the demand for medical products spur additional product development. These studies do not distinguish between breakthrough products and those that largely duplicate the performance of existing products. In this paper, we use a novel data set to explore the impact of the introduction of Medicare Part D on the development of new biotechnology products.


Econ Comments & Analysis                                                                                            
Market Watch | Draghi’s monetary blitz has failed to lift euro zone
The build-up was intense. The hype was overwhelming. The anticipation was growing. But the actual performance? So far, very disappointing.
Mercatus | Testimony Before the House Committee on Financial Services
In gathering to discuss the past and uncertain future of the US Export-Import Bank, we have a rare opportunity to reconsider the assumptions, mission, and activities of the federal government’s official export credit corporation ahead of the reauthorization vote. In order to make the best decision, however, policymakers must know all the facts.

WSJ | Dudley: Fed Rate Outlook Depends on Economy
Federal Reserve Bank of New York President William Dudley said Tuesday the market’s view that the U.S. central bank will first raise rates in the middle of next year is reasonable.


National Journal | Should the Government Use Tax Credits to Encourage Apprenticeship Programs?
Republican Sen. Tim Scott of South Carolina described a "devastating" economic outlook for the country if Washington can't find a way to connect poor Americans to more than 4 million open jobs.
Daily Signal | IRS Admits Wrongdoing, to Pay $50,000 in Leaking of Marriage Group’s Tax Return
Two years after activists for same-sex marriage obtained the confidential tax return and donor list of a national group opposed to redefining marriage, the Internal Revenue Service has admitted wrongdoing and agreed to settle the resulting lawsuit.

Econ Comments & Analysis                                                                                            
Politico | Tax cuts are coming to D.C. — no thanks to Congress
While Congress talks endlessly about a rewrite of the Tax Code that would lower individual and corporate income tax rates — without actually doing it — the D.C. City Council has quietly adopted a plan that looks a lot like the one lawmakers in the Capitol say they want.
WSJ | With Businesses Fleeing America, Congress Must Act
American businesses are heading for the exits to escape the U.S. tax code. Medical device company Medtronic announced recently that it planned to acquire the Ireland-based firm Covidien and relocate headquarters in Dublin, making it the biggest company yet to leave our shores for a more favorable tax climate. It's just the latest example, and the flight will continue until the U.S. reforms its outdated, uncompetitive tax code.

Washington Post | Your taxes are going up. You just don’t know it yet.
Looking at our politics today, it’s hard to imagine taxes rising anytime soon—certainly for the middle class, and probably even for the wealthy. President Obama has forsworn hiking taxes on anyone earning under $250,000. Republicans might take control of the Senate in 2014 and the White House in 2016, presumably dashing the hopes of anyone looking to raise more tax revenue.


WSJ | Surprising Findings on Two-Year vs. Four-Year Degrees
As states for the first time mine graduates' salary data from public colleges, they are finding that paychecks for holders of associate degrees in a technical field are outstripping many grads with four-year degrees, at least early in a career.

Econ Comments & Analysis                                                                                            
Forbes | Job Creation Is The Real Key To Helping Working Families
President Obama dreams of an American economy in which all workers have ample paid leave benefits, maximum flexibility, and, of course, receive more than a living wage.  Yet in making his case for this vision, in this oped that appeared in the Huffington Post in conjunction with the White House “Summit on Working Families,” the President—perhaps unsurprisingly, given his Administration’s economic record—seems unfamiliar with the costs associated with greater benefits, the tradeoffs that workers and employers must consider when creating compensation packages, and the sad reality that the biggest problem facing many Americans today isn’t that their jobs pay too little or offer too few benefits, but that they cannot find enough work at all.


CNN Money | Your dead ex-spouse's debt can become your problem
If you're divorced and your ex-spouse dies, you might find yourself dealing with a range of emotions. You might be surprised to learn you may have to deal with creditors too.
Bloomberg | China Local Debt Growth Slows as Economic Expansion Cools
China’s chief auditor said growth in local government debt slowed, a sign that tighter scrutiny on borrowing and an economic slowdown have curbed credit.

Econ Comments & Analysis                                                                                            
Weekly Standard | ‘Student Loan Relief Now’
My father is one of the reasons that student loans cannot normally be discharged via bankruptcy. Such an outcome was never his goal: quite the opposite, in fact, because exempting student debt from bankruptcy relief makes little economic sense and is patently unfair to the students saddled with such debt. A sensible reform of this law could slow tuition growth and put a lid on exploding student debt while sparing young adults the debilitating stress of a debt they can never hope to repay.

WSJ | Harkin Opens Door To Bankruptcy Option for Student Loans
A top Senate Democrat is set to unveil legislation Wednesday that would allow a small portion of Americans’ student debt to be discharged through bankruptcy proceedings, a measure that would likely hit the profits of private lenders.

Monday, June 23, 2014

General Economics

WSJ | Drop in Short Sales Trims House Inventory
Short sales of underwater homes have fallen sharply amid the expiration of a key tax break, a situation that could slow the housing recovery and further limits an already thin supply of houses for sale.
CNN Money | Oil prices spark economic growth concerns
Islamist militant gains in Iraq sent world oil prices higher Monday, sparking concerns that this could hurt global economic growth, especially in Europe where the recovery seems to be faltering.
Market Watch | Consumers, businesses still penny pinching
Hiring is up. Car sales are strong. U.S. manufacturers are growing faster. The economy seems to have emerged from a winter slumber on an upbeat path.
WSJ | Cities in South, West to Grow Faster
The U.S. economy seems headed to a long-run growth rate well below 3%, but some metropolitan areas will see their economies surge above 4% annually for the rest of this decade, according to a study released by the U.S. Conference of Mayors.
Washington Times | U.S. oil flow helps keep prices in check as threats rise overseas
America’s growing energy independence is paying major dividends this spring, helping to keep a lid on fuel prices despite sudden threats to major global oil supplies in Iraq and Russia that in the past would have sent prices soaring.

Econ Comments & Analysis                                                                                            
NY Post | The greatest wealth transfer in human history is coming
It’s the greatest migration of wealth ever to hit humanity: The unprecedented flood of money, four times the size of the US gross domestic product, that will be passed along to a younger generation over the next half-century.
WSJ | 'Pikettymania' and Inequality in the U.S.
The attention that's been showered on Thomas Piketty's best-selling tome, "Capital in the 21st Century," has been something to behold. Pikettymania has raised public awareness of inequality in the U.S. as no one has managed to do since the 1960s. Predictably, Mr. Piketty, a professor at the Paris School of Economics, is being lionized by the left and vilified by the right.
Real Clear Markets | 'Doing Something' To Help the Poor Is Often Impoverishing
The desire to help the poor is an understandable one. Almost all of us want to do so, and even those with the most negative views about the welfare state probably agree that there is a strong moral duty to help the poor.
Washington Times | New EPA rule will burden the economy
Earlier this month, the Obama administration offered its latest and best thoughts on how to rearrange the American economy — and bring yet another part of it firmly under the control of the federal government.
Forbes | Rob Lowe Explains Economics Through Stories Once Only Told To His Friends
It was during high school in the Los Angeles area in the late 1980s that my political views began to take shape. Though I’d self-identified from early childhood as a Republican (kids usually adapt their parents’ Party affiliation), it was then that I started to read National Review, books by Thomas Sowell, and most prominently of all, I began reading the Wall Street Journal’s editorial page (overseen by the legendary editor Robert Bartley) on a daily basis.
Heritage Foundation | Reducing the Burden on Small Public Companies Would Promote Innovation, Job Creation, and Economic Growth
Securities and Exchange Commission (SEC) regulations impose high costs on companies seeking to access the public securities markets. These costs are prohibitively high for small and medium-sized companies and impede their ability to access the capital needed to grow, innovate, and create jobs.

Health Care

National Journal | What a GOP Senate Would Mean for Obamacare
For now, the GOP isn't talking much about what would come after Election Day. Its candidates are falling over themselves to pledge their support for full repeal—which may well be a winning message in a campaign but will be politically impossible even with the Senate majority. After all, President Obama will still be in the White House.
National Journal | Obamacare Is Getting a Management Overhaul
Just two weeks into the job, Health and Human Services Secretary Sylvia Mathews Burwell is overhauling the fractured management structure that led to the disastrous rollout.

Econ Comments & Analysis                                                                                            
NBER | Impact of Premium Subsidies on the Take-up of Health Insurance: Evidence from the 2009 American Recovery and Reinvestment Act (ARRA)
We study the impact of the 65-percent federal health insurance premium subsidy, which aimed to help unemployed workers retain coverage and was in effect from February 2009 to May 2010 through the American Recovery and Reinvestment Act (ARRA).


Econ Comments & Analysis                                                                                            
Bloomberg View | Type the Title You Want People to See
Type the sentence(s) summarizing the link here.
AEI | Type the Title You Want People to See
Type the sentence(s) summarizing the link here.

WSJ | Fitch Report: Fed’s Reverse Repos Are Reshaping the Securities-Borrowing Market
Although it’s only in a testing phase, a Federal Reserve program aimed at improving central bank control over short-term interest rates is already reshaping the markets where dealers go to finance their bond-trading positions.
WSJ | What the Gap Between CPI and PCE Means for Fed Overshooting
One of the biggest debates right now over the outlook for inflation is whether the Federal Reserve would allow inflation to overshoot its target – that is, allow inflation to rise above 2% for some period of time. Chicago Fed President Charles Evans and San Francisco Fed President John Williams have argued perhaps it should.
Library of Economics | The Fed at 100: A century of procyclical policy
Up until 2008 I had a sort of "Whig view" of Fed history. They made many mistakes, but learned enough from those mistakes to gradually improve. Now I'm not so sure.


WSJ | Spain Unveils Sweeping Cuts on Income, Corporate Taxes
Spanish leaders who broke their no-new-taxes pledge after taking office 2½ years ago announced sweeping tax cuts on Friday, saying it was time to compensate a recession-battered populace for its sacrifices and boost a nascent recovery.

Econ Comments & Analysis                                                                                            
Daily Signal | Hiking the Federal Gas Tax Is a Mistake. Here’s Why.
Much clamoring for more federal transportation spending, and fuel tax hikes to pay for it, has come out of Washington recently. The Highway Trust Fund faces a $15 billion gap in 2015 between projected spending and the money it will collect in fuel taxes and fees.