News
CNN Money | BofA hit with $1.3 billion mortgage penalty
BofA hit with $1.3 billion mortgage penalty
Politico | Iowa Senate: Ethanol fuels a clash in corn country
The Iowan is touting federal support for ethanol while competing in one of 2014’s most critical Senate contests — and he’s banking on his ability to champion his state’s cause in D.C., where the corn industry’s political power has waned. While critics ranging from environmentalists to anti-subsidy fiscal conservatives have turned against ethanol, Braley is busy posing at gas stations that sell the corn-based biofuel, campaigning with farmers and pressuring EPA to protect the federal mandate that guarantees corn’s role in the U.S. fuel supply.
Bloomberg | Consumer Confidence Declines in U.S. to Lowest Since June
Confidence among U.S. consumers retreated last week to an almost two-month low as limited wage growth chipped away at perceptions about personal finances.
CNBC | US Midwest business index drops to 13-month low in July
The pace of business activity in the U.S. Midwest in July sank to its slowest level since June 2013, signaling a sharp deceleration in that region's economy, a report showed on Thursday.
Econ Comments & Analysis
Market Watch | 2 new reverse mortgage rules for couples
Reverse mortgages (home loans for people 62 and older that let them convert home equity into cash) can be a useful way for homeowners to receive extra income in retirement; the loan must be repaid when the borrower dies, moves or sells the home.
Forbes | Just Your Run-Of-The-Mill Blockbuster Returns
Let’s play a word-association game. Stocks are up? Good! Stocks are down? Volatile! What’s missing is that a market that’s up a lot comes with volatility–the happy kind.
WSJ | The 2.1% Expansion
Growth for the second quarter surprised on the upside at 4%, rebounding from the minus-2.1% plunge in the first quarter. The widespread hope is that this will finally mark the long-promised leap to a faster growth plateau five years after the recession ended in June 2009. We share that hope even if we've learned to be skeptical about the expectation.
Real Clear Markets | The Hidden Gloom Underlying California's 'Boom'
Good news, in 2013, California's economy grew faster than the nation's - 2 percent vs. 1.8 percent. Many have used this as vindication that California's progressive policies, ranging from the 2012 Proposition 30 tax increases to implementation of AB 32's cap-and-trade scheme, are not hindering growth (some even suggest such policies are aiding the growth).
Mercatus | Social Security is in Crisis
The 2014 Social Security Trustees report showed a continuation of the current trend toward insolvency of both of its trust funds. As in the previous two years, the Trustees estimate that Social Security's combined retirement and disability trust funds will become exhausted in 2033, less than 20 years from now.
CATO | The Conservative Case for Immigration Reform
The debate over immigration reform, intensified by the surge of unaccompanied child migrants at the U.S.–Mexico border, has many conservatives worried. Republican strategist Lanhee Chen explained that conservative opposition to immigration reform in the United States “is a very visceral reaction to what America should be about.” According to conservative opponents of immigration reform, immigrants will change America.
Thursday, July 31, 2014
Health Care
News
National Journal | Obamacare Website Has Cost $840 Million
The Obama administration has spent roughly $840 million on HealthCare.gov, including more than $150 million just in cost overruns for the version that failed so badly when it launched last year.
National Journal | Obamacare Website Has Cost $840 Million
The Obama administration has spent roughly $840 million on HealthCare.gov, including more than $150 million just in cost overruns for the version that failed so badly when it launched last year.
Monetary
News
Bloomberg | Dollar Posting Best Month in More Than a Year
The dollar posted its biggest monthly gain in more than a year as unemployment claims fell to the lowest since 2006 before a jobs report forecast to show a sixth month of 200,000-plus gains.
Econ Comments & Analysis
AEI | Dodd-Frank doesn't end 'too big to fail'
The Dodd-Frank Act was supposed to end investors’ perception that the largest financial firms are “too big to fail” (TBTF) and remove the risk that a large institutional failure could create financial instability unless the government protected investors from loss. Four years on, Dodd-Frank has imposed huge regulatory burdens that are sapping economic growth, but it has not ended TBTF or the possibility of taxpayer bailouts.
Blogs
Market Watch | Fed statement provides fodder for hawks and doves
Federal Reserve Chairwoman Janet Yellen is an equal opportunity central banker. The statement she crafted containing gifts for both hawks and doves.
WSJ | Economists React to the FOMC Statement: ‘Mixed Messages’
The Federal Reserve said Wednesday it would scale back its monthly bond purchases to $25 billion and offered a modestly more upbeat assessment of the inflation, jobs and the economy. Economists largely said the announcement came in as expected, but that subtle changes indicate Fed officials see general improvement in the U.S. economy.
Bloomberg | Dollar Posting Best Month in More Than a Year
The dollar posted its biggest monthly gain in more than a year as unemployment claims fell to the lowest since 2006 before a jobs report forecast to show a sixth month of 200,000-plus gains.
Econ Comments & Analysis
AEI | Dodd-Frank doesn't end 'too big to fail'
The Dodd-Frank Act was supposed to end investors’ perception that the largest financial firms are “too big to fail” (TBTF) and remove the risk that a large institutional failure could create financial instability unless the government protected investors from loss. Four years on, Dodd-Frank has imposed huge regulatory burdens that are sapping economic growth, but it has not ended TBTF or the possibility of taxpayer bailouts.
Blogs
Market Watch | Fed statement provides fodder for hawks and doves
Federal Reserve Chairwoman Janet Yellen is an equal opportunity central banker. The statement she crafted containing gifts for both hawks and doves.
WSJ | Economists React to the FOMC Statement: ‘Mixed Messages’
The Federal Reserve said Wednesday it would scale back its monthly bond purchases to $25 billion and offered a modestly more upbeat assessment of the inflation, jobs and the economy. Economists largely said the announcement came in as expected, but that subtle changes indicate Fed officials see general improvement in the U.S. economy.
Taxes
Econ Comments & Analysis
Investors | Cut World's Highest Tax Rate To Curb Tax Inversions
The last several months have seen a wave of American companies merging with foreign companies, a process known as "inverting." In effect, inversion is the corporate equivalent of a renunciation of American citizenship. By some estimates, about $250 billion of these deals have been consummated since the start of the year, and another $100 billion could be finalized soon.
Investors | Cut World's Highest Tax Rate To Curb Tax Inversions
The last several months have seen a wave of American companies merging with foreign companies, a process known as "inverting." In effect, inversion is the corporate equivalent of a renunciation of American citizenship. By some estimates, about $250 billion of these deals have been consummated since the start of the year, and another $100 billion could be finalized soon.
Employment
News
Bloomberg | Middle-Wage Employment Moves U.S. Past Fast-Food Jobs
Ryan Kenny has been testing chainsaws for the last seven months and getting paid for it. He’s also among a growing cadre of U.S. middle-income earners.
CNN Money | There are a lot more 50-somethings working 3 jobs
Today, 115,000 people over the age of 55 are working three jobs, according to the Department of Labor. That's a 170% increase from 43,000 in 1994, when the government began keeping these records, and a 60% increase from before the Great Recession in 2006, when there were 73,000 older workers with three jobs.
Market Watch | U.S. employment cost index posts fastest rise since 2008
An index that measures the price of U.S. labor rose in the second quarter at the fastest pace since the fall of 2008, largely because of higher retirement and health-care benefits.
Bloomberg | Jobless Claims in U.S. in Past Month Drop to Eight-Year Low
Fewer Americans filed applications for unemployment insurance benefits over the past month than at any time in more than eight years, signaling employers are hanging on to workers as demand improves.
Blogs
WSJ | Long-Term Unemployed Likely to Return to Job Market, Study Finds
The long-running debate about the causes of America’s high rate of long-term unemployment is far from settled. A new working paper from the National Bureau of Economic Research wades into the discussion and its findings fall squarely on the side of those who see the labor market’s woes as a product of a weak business cycle.
Bloomberg | Middle-Wage Employment Moves U.S. Past Fast-Food Jobs
Ryan Kenny has been testing chainsaws for the last seven months and getting paid for it. He’s also among a growing cadre of U.S. middle-income earners.
CNN Money | There are a lot more 50-somethings working 3 jobs
Today, 115,000 people over the age of 55 are working three jobs, according to the Department of Labor. That's a 170% increase from 43,000 in 1994, when the government began keeping these records, and a 60% increase from before the Great Recession in 2006, when there were 73,000 older workers with three jobs.
Market Watch | U.S. employment cost index posts fastest rise since 2008
An index that measures the price of U.S. labor rose in the second quarter at the fastest pace since the fall of 2008, largely because of higher retirement and health-care benefits.
Bloomberg | Jobless Claims in U.S. in Past Month Drop to Eight-Year Low
Fewer Americans filed applications for unemployment insurance benefits over the past month than at any time in more than eight years, signaling employers are hanging on to workers as demand improves.
Blogs
WSJ | Long-Term Unemployed Likely to Return to Job Market, Study Finds
The long-running debate about the causes of America’s high rate of long-term unemployment is far from settled. A new working paper from the National Bureau of Economic Research wades into the discussion and its findings fall squarely on the side of those who see the labor market’s woes as a product of a weak business cycle.
Budget
News
CNN Money | No deal: Argentina in default as talks fail
After frantic last minute talks failed to produce a deal late Wednesday, Standard & Poor's deemed the country to be in default on some of its obligations. The change in credit rating could hike Argentina's borrowing costs, and put even more pressure on the country's already-struggling economy.
WSJ | Families Borrow Less for College
In the 2013-14 academic year just ended, the typical family paid 22% of total college costs by borrowing, down from 27% in each of the preceding two school years. These families paid 42% of college costs by using income or savings from the parents and/or student, vs. 38% the year before and 40% in 2011-12, according to the Sallie Mae study, conducted by market-research company Ipsos Public Affairs.
CNN Money | No deal: Argentina in default as talks fail
After frantic last minute talks failed to produce a deal late Wednesday, Standard & Poor's deemed the country to be in default on some of its obligations. The change in credit rating could hike Argentina's borrowing costs, and put even more pressure on the country's already-struggling economy.
WSJ | Families Borrow Less for College
In the 2013-14 academic year just ended, the typical family paid 22% of total college costs by borrowing, down from 27% in each of the preceding two school years. These families paid 42% of college costs by using income or savings from the parents and/or student, vs. 38% the year before and 40% in 2011-12, according to the Sallie Mae study, conducted by market-research company Ipsos Public Affairs.
Wednesday, July 30, 2014
General Economics
News
FOX Business | If the Bulls Stick Around, Stocks Could Rise Another 25%
Stocks may be near record levels but the bull market is not done. Digital technologies permit businesses to use investors’ cash far more efficiently these days, and could easily push up stock prices another 25%.
Bloomberg | Greenspan Says Stocks to See ‘Significant Correction’
Former Federal Reserve Chairman Alan Greenspan said equity markets will see a decline at some point after surging for the past several years.
WSJ | Energy Regulators Say EPA's Climate Rule Poses Grid Challenges
President Barack Obama's proposed rule to curb carbon emissions from the nation's power plants could raise costs and affect reliability in the U.S. electricity system, federal regulators told Congress.
Econ Comments & Analysis
Real Clear Markets | Dodd-Frank's Birthday Marred By Its Many Inadequacies
Financial reform debates rarely dwell long on the purposes financial markets serve. Instead policy debaters move quickly from cursory diagnoses to regulatory remedies. As a consequence, the reforms that these discussions produce often inadvertently impede the proper functioning of the markets. An impaired financial industry can have deep and devastating effects on people far away from Wall Street and Washington.
WSJ | Liberals Love the 'One Percent'
Federal Reserve Chair Janet Yellen has said the central bank's goal is "to help Main Street not Wall Street," and many liberal commentators seem convinced that she is advancing that goal. But talk to anyone on Wall Street. If they are being frank, they'll admit that the Fed's loose monetary policy has been one of the biggest contributors to their returns over the past five years. Unwittingly, it seems, liberals who support the Fed are defending policies that boost the wealth of the wealthy but do nothing to reduce inequality.
Washington Times | An economic era defined by slowdown
President Obama’s job-approval polls slipped precariously closer toward the 30 percent range this week as many more Americans expressed deep dissatisfaction with his failed presidency.
Fortune | Explaining the mystery of fast economic growth under Democratic presidents
If you hang around enough enthusiastic Democrats during election season, you will surely hear these folks trumpet the fact that the economy performs much better during Democratic presidential administrations than Republican ones.
Market Watch | Breadth divergence is a troubling sign for the stock market
The general state of the stock market seems quite healthy, with the Standard & Poor’s 500 Index making new all-time intraday and closing highs on several recent days.
CATO | Dangerously Demagoguing Entitlements
The Democratic Senatorial Campaign Committee is financing an Iowa ad saying that GOP nominee Joni Ernst has “proposed privatizing Social Security [and] gambling our savings in the stock market.”
Blogs
WSJ | 5 Takeaways from Wednesday’s GDP Report
Economic output rebounded during the second quarter, advancing at a 4% rate, and the large decline during the first quarter was revised down slightly, to a 2.1% decline from a 2.9% drop, according to estimates published by the Commerce Department on Wednesday.
WSJ | Revisions Boost Growth in 2013, But Show Weaker Overall Recovery
The U.S. economy expanded at a stronger pace in the second half of 2013 than previously measured, growing at the fastest rate since 2003, according to revised data released by the Commerce Department on Wednesday.
FOX Business | If the Bulls Stick Around, Stocks Could Rise Another 25%
Stocks may be near record levels but the bull market is not done. Digital technologies permit businesses to use investors’ cash far more efficiently these days, and could easily push up stock prices another 25%.
Bloomberg | Greenspan Says Stocks to See ‘Significant Correction’
Former Federal Reserve Chairman Alan Greenspan said equity markets will see a decline at some point after surging for the past several years.
WSJ | Energy Regulators Say EPA's Climate Rule Poses Grid Challenges
President Barack Obama's proposed rule to curb carbon emissions from the nation's power plants could raise costs and affect reliability in the U.S. electricity system, federal regulators told Congress.
Econ Comments & Analysis
Real Clear Markets | Dodd-Frank's Birthday Marred By Its Many Inadequacies
Financial reform debates rarely dwell long on the purposes financial markets serve. Instead policy debaters move quickly from cursory diagnoses to regulatory remedies. As a consequence, the reforms that these discussions produce often inadvertently impede the proper functioning of the markets. An impaired financial industry can have deep and devastating effects on people far away from Wall Street and Washington.
WSJ | Liberals Love the 'One Percent'
Federal Reserve Chair Janet Yellen has said the central bank's goal is "to help Main Street not Wall Street," and many liberal commentators seem convinced that she is advancing that goal. But talk to anyone on Wall Street. If they are being frank, they'll admit that the Fed's loose monetary policy has been one of the biggest contributors to their returns over the past five years. Unwittingly, it seems, liberals who support the Fed are defending policies that boost the wealth of the wealthy but do nothing to reduce inequality.
Washington Times | An economic era defined by slowdown
President Obama’s job-approval polls slipped precariously closer toward the 30 percent range this week as many more Americans expressed deep dissatisfaction with his failed presidency.
Fortune | Explaining the mystery of fast economic growth under Democratic presidents
If you hang around enough enthusiastic Democrats during election season, you will surely hear these folks trumpet the fact that the economy performs much better during Democratic presidential administrations than Republican ones.
Market Watch | Breadth divergence is a troubling sign for the stock market
The general state of the stock market seems quite healthy, with the Standard & Poor’s 500 Index making new all-time intraday and closing highs on several recent days.
CATO | Dangerously Demagoguing Entitlements
The Democratic Senatorial Campaign Committee is financing an Iowa ad saying that GOP nominee Joni Ernst has “proposed privatizing Social Security [and] gambling our savings in the stock market.”
Blogs
WSJ | 5 Takeaways from Wednesday’s GDP Report
Economic output rebounded during the second quarter, advancing at a 4% rate, and the large decline during the first quarter was revised down slightly, to a 2.1% decline from a 2.9% drop, according to estimates published by the Commerce Department on Wednesday.
WSJ | Revisions Boost Growth in 2013, But Show Weaker Overall Recovery
The U.S. economy expanded at a stronger pace in the second half of 2013 than previously measured, growing at the fastest rate since 2003, according to revised data released by the Commerce Department on Wednesday.
Health Care
News
Politico | Court throws out an Obamacare tax law challenge
A federal appeals court Tuesday rejected yet another legal challenge to Obamacare, ruling that it did not violate a constitutional provision that requires tax laws to be written in the House. Most of what became the Affordable Care Act was written in the Senate.
Econ Comments & Analysis
Daily Signal | It Wasn’t a Tax Before It Was a Tax: Court Upholds Obamacare Individual Mandate
A three-judge panel of the D.C. Circuit Court of Appeals on Tuesday ruled against a challenge to Obamacare’s individual mandate based on the origination clause of the Constitution.
Politico | Court throws out an Obamacare tax law challenge
A federal appeals court Tuesday rejected yet another legal challenge to Obamacare, ruling that it did not violate a constitutional provision that requires tax laws to be written in the House. Most of what became the Affordable Care Act was written in the Senate.
Econ Comments & Analysis
Daily Signal | It Wasn’t a Tax Before It Was a Tax: Court Upholds Obamacare Individual Mandate
A three-judge panel of the D.C. Circuit Court of Appeals on Tuesday ruled against a challenge to Obamacare’s individual mandate based on the origination clause of the Constitution.
Monetary
News
Market Watch | U.S. inflation accelerates sharply in second quarter
Inflation as measured by the Federal Reserve's preferred price index surged in the second quarter to the highest annual rate in three years, potentially making the central's bank effort at managing the U.S. recovery more difficult.
WSJ | Regulator Wants Monitors in Deutsche Bank, Barclays U.S. Offices as Part of FX Probe
New York's banking regulator is pushing to install government monitors inside the U.S. offices of Deutsche Bank AG and Barclays PLC as part of an intensifying investigation into possible manipulation in the foreign-exchange market, according to people familiar with the probe.
Econ Comments & Analysis
Bloomberg | Fed Decision-Day Guide: QE Tapering to Inflation Debate
Here’s what to look for when the Federal Open Market Committee releases its policy statement at 2 p.m. today in Washington. Federal Reserve officials won’t provide new economic projections, and Chair Janet Yellen isn’t scheduled to give a post-meeting press conference.
Market Watch | U.S. inflation accelerates sharply in second quarter
Inflation as measured by the Federal Reserve's preferred price index surged in the second quarter to the highest annual rate in three years, potentially making the central's bank effort at managing the U.S. recovery more difficult.
WSJ | Regulator Wants Monitors in Deutsche Bank, Barclays U.S. Offices as Part of FX Probe
New York's banking regulator is pushing to install government monitors inside the U.S. offices of Deutsche Bank AG and Barclays PLC as part of an intensifying investigation into possible manipulation in the foreign-exchange market, according to people familiar with the probe.
Econ Comments & Analysis
Bloomberg | Fed Decision-Day Guide: QE Tapering to Inflation Debate
Here’s what to look for when the Federal Open Market Committee releases its policy statement at 2 p.m. today in Washington. Federal Reserve officials won’t provide new economic projections, and Chair Janet Yellen isn’t scheduled to give a post-meeting press conference.
Taxes
Econ Comments & Analysis
WSJ | Why Liberals Hate Kansas
Liberals accuse Republicans of exaggerating the damage of raising taxes. So it's amusing to hear the apocalyptic claims about Kansas Governor Sam Brownback's income-tax cuts. Their goal is to defeat Mr. Brownback for re-election but in particular discredit tax reform in the states.
WSJ | Why Liberals Hate Kansas
Liberals accuse Republicans of exaggerating the damage of raising taxes. So it's amusing to hear the apocalyptic claims about Kansas Governor Sam Brownback's income-tax cuts. Their goal is to defeat Mr. Brownback for re-election but in particular discredit tax reform in the states.
Employment
News
National Journal | Women in Low-Wage Jobs Are Underpaid and Overloaded
Despite holding better educational credentials than ever before, women continue to make up two-thirds of the workers earning $10.10 per hour or less.
CNN Money | Amgen joins job-cut parade
Amgen became the latest company to announce major layoffs, despite signs that the U.S. jobs picture is improving. In its earnings presentation Tuesday, the biotechnology firm revealed it plans to eliminate 2,400 to 2,900 jobs, or about 12-15% of its workforce.
Bloomberg | ADP Says Companies in U.S. Boosted Payrolls by 218,000
Companies added 218,000 workers in July, exceeding the average for the year and showing improving demand is bolstering the U.S. job market, a private payrolls report showed today.
Market Watch | 40 years of presidents: Who fought unemployment and won?
If a president’s performance were based solely on the unemployment rate while he was in office, who should have left the White House with his head held high? A new state-by-state analysis of unemployment over the last 40 years aims to find out.
Econ Comments & Analysis
CATO | A Case against Child Labor Prohibitions
Halima is an 11-year-old girl who clips loose threads off of Hanes underwear in a Bangladeshi factory.1 She works about eight hours a day, six days per week. She has to process 150 pairs of underwear an hour. At work she feels “very tired and exhausted,” and sometimes falls asleep standing up. She makes 53 cents a day for her efforts. Make no mistake, it is a rough life.
National Journal | Women in Low-Wage Jobs Are Underpaid and Overloaded
Despite holding better educational credentials than ever before, women continue to make up two-thirds of the workers earning $10.10 per hour or less.
CNN Money | Amgen joins job-cut parade
Amgen became the latest company to announce major layoffs, despite signs that the U.S. jobs picture is improving. In its earnings presentation Tuesday, the biotechnology firm revealed it plans to eliminate 2,400 to 2,900 jobs, or about 12-15% of its workforce.
Bloomberg | ADP Says Companies in U.S. Boosted Payrolls by 218,000
Companies added 218,000 workers in July, exceeding the average for the year and showing improving demand is bolstering the U.S. job market, a private payrolls report showed today.
Market Watch | 40 years of presidents: Who fought unemployment and won?
If a president’s performance were based solely on the unemployment rate while he was in office, who should have left the White House with his head held high? A new state-by-state analysis of unemployment over the last 40 years aims to find out.
Econ Comments & Analysis
CATO | A Case against Child Labor Prohibitions
Halima is an 11-year-old girl who clips loose threads off of Hanes underwear in a Bangladeshi factory.1 She works about eight hours a day, six days per week. She has to process 150 pairs of underwear an hour. At work she feels “very tired and exhausted,” and sometimes falls asleep standing up. She makes 53 cents a day for her efforts. Make no mistake, it is a rough life.
Budget
Econ Comments & Analysis
USA Today | Keep chopping federal spending: Another view
President Obama is not doing enough to rein in spending and deficits. He says the deficit has been cut in half since he came to office. But that is a cut from the giant 2009 figure of $1.4 trillion, which was so high partly because of his costly stimulus bill.
Washington Times | In Congress, big spenders all
Politicians just can’t give up their free-spending ways, and it’s not difficult to find a Republican who wants to expand the government just like a Democrat. An accurate indicator of whether a congressman is a cheapskate or a spendthrift is which congressional organization he joins.
Blogs
WSJ | One Big Factor in the Economic Uptick: Government Spending
The U.S. economy rebounded strongly in the second quarter and a big contribution to that growth was renewed strength from the government, especially at the state and local level. Government spending climbed by 1.6% at an annual rate, its strongest three months since the third quarter of 2012.
USA Today | Keep chopping federal spending: Another view
President Obama is not doing enough to rein in spending and deficits. He says the deficit has been cut in half since he came to office. But that is a cut from the giant 2009 figure of $1.4 trillion, which was so high partly because of his costly stimulus bill.
Washington Times | In Congress, big spenders all
Politicians just can’t give up their free-spending ways, and it’s not difficult to find a Republican who wants to expand the government just like a Democrat. An accurate indicator of whether a congressman is a cheapskate or a spendthrift is which congressional organization he joins.
Blogs
WSJ | One Big Factor in the Economic Uptick: Government Spending
The U.S. economy rebounded strongly in the second quarter and a big contribution to that growth was renewed strength from the government, especially at the state and local level. Government spending climbed by 1.6% at an annual rate, its strongest three months since the third quarter of 2012.
Tuesday, July 29, 2014
General Economics
News
Bloomberg | Million-Dollar U.S. Housing Loans Surge to Record Level
Banks are handing out mortgages of as much as $10 million to the wealthy in record numbers while first-time homebuyers struggle to get loans.
CNN Money | Home price increases continue at slower pace
The S&P/Case-Shiller home price index, a closely watched measure of home values. posted a 9.3% annual increase in its May reading, down from the 10.8% rate in April. The rate of increase was as high as 13.7% in November before slowing every month since.
Bloomberg | Consumer Confidence in U.S. Jumps to Highest Since 2007
Confidence among U.S. consumers soared in July to the highest level in almost seven years as Americans grew more upbeat about the labor market and the outlook for the economy.
Econ Comments & Analysis
Investors | Mortgage Rule Shows Lenders Not Joking About 'Witch Hunt'
In a proposed new mortgage rule, the Obama administration in effect confesses it never had enough credit data to charge dozens of mortgage lenders with racial bias. It's a 573-page admission of guilt.
Washington Times | Thinking outside nanny-state box with Paul Ryan
Rep. Paul Ryan of Wisconsin is perhaps the smartest conservative in Congress. Unusual for a politician, the former vice presidential nominee actually spends time thinking about problems and coming up with solutions. He is one conservative who believes Republicans will never prosper simply by denouncing liberal solutions to societal problems, unworkable as they may be, but must in addition come up with their own.
Market Watch | U.S. productivity ... and how to improve it
The surprising drop in first-quarter productivity has set economists scrambling to figure out ways to boost it.
Blogs
WSJ | Is the Private Mortgage-Bond Market Dead or Dormant?
It’s been nearly seven years since the market for so-called private-label mortgage bonds, or those that aren’t backed by government-related entities, dried up. For years, government policy makers and financiers have speculated over when those markets might meaningfully revive.
Bloomberg | Million-Dollar U.S. Housing Loans Surge to Record Level
Banks are handing out mortgages of as much as $10 million to the wealthy in record numbers while first-time homebuyers struggle to get loans.
CNN Money | Home price increases continue at slower pace
The S&P/Case-Shiller home price index, a closely watched measure of home values. posted a 9.3% annual increase in its May reading, down from the 10.8% rate in April. The rate of increase was as high as 13.7% in November before slowing every month since.
Bloomberg | Consumer Confidence in U.S. Jumps to Highest Since 2007
Confidence among U.S. consumers soared in July to the highest level in almost seven years as Americans grew more upbeat about the labor market and the outlook for the economy.
Econ Comments & Analysis
Investors | Mortgage Rule Shows Lenders Not Joking About 'Witch Hunt'
In a proposed new mortgage rule, the Obama administration in effect confesses it never had enough credit data to charge dozens of mortgage lenders with racial bias. It's a 573-page admission of guilt.
Washington Times | Thinking outside nanny-state box with Paul Ryan
Rep. Paul Ryan of Wisconsin is perhaps the smartest conservative in Congress. Unusual for a politician, the former vice presidential nominee actually spends time thinking about problems and coming up with solutions. He is one conservative who believes Republicans will never prosper simply by denouncing liberal solutions to societal problems, unworkable as they may be, but must in addition come up with their own.
Market Watch | U.S. productivity ... and how to improve it
The surprising drop in first-quarter productivity has set economists scrambling to figure out ways to boost it.
Blogs
WSJ | Is the Private Mortgage-Bond Market Dead or Dormant?
It’s been nearly seven years since the market for so-called private-label mortgage bonds, or those that aren’t backed by government-related entities, dried up. For years, government policy makers and financiers have speculated over when those markets might meaningfully revive.
Health Care
News
Politico | Medicare financial outlook brightens
Medicare’s financial outlook has improved somewhat, the government said on Monday, though there was no agreement on the reasons behind the brighter forecast.
Politico | Medicare financial outlook brightens
Medicare’s financial outlook has improved somewhat, the government said on Monday, though there was no agreement on the reasons behind the brighter forecast.
Monetary
News
CNBC | Wall Street worries Fed's easing will 'end badly'
Wall Street isn't all that confident the Federal Reserve can end its easy money policies without a market crash, a recession or high inflation. In its July Fed Survey, CNBC asked Wall Street pros how the Fed's current policies will end and found market participants surprisingly divided.
Econ Comments & Analysis
CNBC | The Fed in denial
The United States Federal Reserve System is one of the most powerful governmental organizations in the history of the world. America's central bank has control over the supply of dollars, and currently exerts great influence over interest rates, both for short-term and long-term borrowing.
Blogs
WSJ | Grand Central: Tame Inflation Expectations a Trump Card for Fed’s Doves
Hawks on the policy committee will point to a declining jobless rate as reason to consider raising short-term interest rates in the months ahead to prevent the economy from overheating. They’ll also note that inflation has moved off its low levels near 1% from earlier this year, toward the Fed’s 2% target.
CNBC | Wall Street worries Fed's easing will 'end badly'
Wall Street isn't all that confident the Federal Reserve can end its easy money policies without a market crash, a recession or high inflation. In its July Fed Survey, CNBC asked Wall Street pros how the Fed's current policies will end and found market participants surprisingly divided.
Econ Comments & Analysis
CNBC | The Fed in denial
The United States Federal Reserve System is one of the most powerful governmental organizations in the history of the world. America's central bank has control over the supply of dollars, and currently exerts great influence over interest rates, both for short-term and long-term borrowing.
Blogs
WSJ | Grand Central: Tame Inflation Expectations a Trump Card for Fed’s Doves
Hawks on the policy committee will point to a declining jobless rate as reason to consider raising short-term interest rates in the months ahead to prevent the economy from overheating. They’ll also note that inflation has moved off its low levels near 1% from earlier this year, toward the Fed’s 2% target.
Taxes
News
WSJ | Windstream Seeks to Cut Taxes by Forming a REIT
Windstream Corp. said it intends to spin off some of its telecommunications network assets into an independent, publicly traded real estate investment trust, a move that comes as a wave of U.S. companies look for ways to lower their tax burdens.
WSJ | Report Finds More Than 80,000 Pentagon Employees Owed Back Taxes
More than 80,000 Defense Department workers working in sensitive settings owed more than $730 million in taxes to the federal government, according to a new investigation, debts that raise new concerns about safeguards for protecting America's secrets.
WSJ | Windstream Seeks to Cut Taxes by Forming a REIT
Windstream Corp. said it intends to spin off some of its telecommunications network assets into an independent, publicly traded real estate investment trust, a move that comes as a wave of U.S. companies look for ways to lower their tax burdens.
WSJ | Report Finds More Than 80,000 Pentagon Employees Owed Back Taxes
More than 80,000 Defense Department workers working in sensitive settings owed more than $730 million in taxes to the federal government, according to a new investigation, debts that raise new concerns about safeguards for protecting America's secrets.
Employment
Econ Comments & Analysis
Mercatus | Establishing a Minimum Wage for Contractors
The Department of Labor’s (DOL) proposed rule, “Establishing a Minimum Wage for Contractors,”1 is intended to implement Executive Order 13658. The stated purpose of the Executive Order is to increase efficiency and cost savings in work performed by federal contractors by raising the hourly minimum wage that contractors pay their workers.2 The proposed rule establishes standards and procedures for implementing and enforcing the minimum wage protections for federal contractors required by Executive Order 13658.
Real Clear Markets | Unemployment, and the 'Skills Shortage' Myth
The jobless rate has dipped to 6.1 percent, and businesses are already complaining about a skills shortage. Earlier this month the Wall Street Journal reported rising complaints by small business owners about their inability to fill critical job openings.
Mercatus | Does the Minimum Wage Increase Worker Productivity?
The Department of Labor (DOL) recently proposed a regulation establishing a higher minimum wage for federal contractors. The stated goal of the proposed rule is to increase efficiency and lower costs in work performed by federal contractors. In its justification for the rule, the DOL cites numerous studies to support its claim that higher wages are associated with higher levels of worker productivity, but the agency gets the causality reversed, among other errors of interpretation.
Mercatus | Establishing a Minimum Wage for Contractors
The Department of Labor’s (DOL) proposed rule, “Establishing a Minimum Wage for Contractors,”1 is intended to implement Executive Order 13658. The stated purpose of the Executive Order is to increase efficiency and cost savings in work performed by federal contractors by raising the hourly minimum wage that contractors pay their workers.2 The proposed rule establishes standards and procedures for implementing and enforcing the minimum wage protections for federal contractors required by Executive Order 13658.
Real Clear Markets | Unemployment, and the 'Skills Shortage' Myth
The jobless rate has dipped to 6.1 percent, and businesses are already complaining about a skills shortage. Earlier this month the Wall Street Journal reported rising complaints by small business owners about their inability to fill critical job openings.
Mercatus | Does the Minimum Wage Increase Worker Productivity?
The Department of Labor (DOL) recently proposed a regulation establishing a higher minimum wage for federal contractors. The stated goal of the proposed rule is to increase efficiency and lower costs in work performed by federal contractors. In its justification for the rule, the DOL cites numerous studies to support its claim that higher wages are associated with higher levels of worker productivity, but the agency gets the causality reversed, among other errors of interpretation.
Budget
News
National Journal | The Geography of Debt in the U.S.
Five years after the Great Recession officially ended, Americans across the country are still swimming in debt. The amount and nature of that indebtedness, however, differs from state to state and region to region.
FOX Business | Treasury: Social Security Broadly Funded Until 2033
Slower growth in healthcare spending is shoring up the funding outlook for the federal Medicare program that covers the hospital bills of the elderly, trustees of the program said on Monday.
Econ Comments & Analysis
Real Clear Markets | The Danger of Deficits To Our Economy
Recently the White House Office of Management and Budget released its Midsession Review, an update and review of the budget that President Obama submitted to Congress. The document extols the virtues of the administration's economic policies, noting that a combination of economic growth, discretionary budget cuts and the reversal of the Bush tax cuts has halved the federal deficit.
CATO | Keep Chopping Federal Spending
President Obama is not doing enough to rein in spending and deficits. He says the deficit has been cut in half since he came to office. But that is a cut from the giant 2009 figure of $1.4 trillion, which was so high partly because of his costly stimulus bill.
Blogs
CBO | The Uncertainty of Long-Term Budget Projections
Budget projections are inherently uncertain. CBO’s projections in The 2014 Long-Term Budget Outlook generally reflect current law and estimates of future economic conditions and demographic trends (those projections are called CBO’s “extended baseline”). If future spending and tax policies differ from what is prescribed in current law, budgetary outcomes will differ from CBO’s extended baseline, as discussed in a blog post last week.
National Journal | The Geography of Debt in the U.S.
Five years after the Great Recession officially ended, Americans across the country are still swimming in debt. The amount and nature of that indebtedness, however, differs from state to state and region to region.
FOX Business | Treasury: Social Security Broadly Funded Until 2033
Slower growth in healthcare spending is shoring up the funding outlook for the federal Medicare program that covers the hospital bills of the elderly, trustees of the program said on Monday.
Econ Comments & Analysis
Real Clear Markets | The Danger of Deficits To Our Economy
Recently the White House Office of Management and Budget released its Midsession Review, an update and review of the budget that President Obama submitted to Congress. The document extols the virtues of the administration's economic policies, noting that a combination of economic growth, discretionary budget cuts and the reversal of the Bush tax cuts has halved the federal deficit.
CATO | Keep Chopping Federal Spending
President Obama is not doing enough to rein in spending and deficits. He says the deficit has been cut in half since he came to office. But that is a cut from the giant 2009 figure of $1.4 trillion, which was so high partly because of his costly stimulus bill.
Blogs
CBO | The Uncertainty of Long-Term Budget Projections
Budget projections are inherently uncertain. CBO’s projections in The 2014 Long-Term Budget Outlook generally reflect current law and estimates of future economic conditions and demographic trends (those projections are called CBO’s “extended baseline”). If future spending and tax policies differ from what is prescribed in current law, budgetary outcomes will differ from CBO’s extended baseline, as discussed in a blog post last week.
Monday, July 28, 2014
General Economics
News
Politico | Export-Import Bank faces danger from all sides
Conservatives may be headlining the opposition to the Export-Import Bank, but the efforts of coal-friendly Democrats to change the little-known agency’s rules could further jeopardize its future.
FOX Business | Pending Home Sales Unexpectedly Sag in June
The National Association of Realtors (NAR) said on Monday its Pending Home Sales Index, based on contracts signed last month, fell 1.1 percent to 102.7.
CNN Money | Smart people buy generic brands
Nine times out of 10, pharmacists and doctors will buy the generic version of aspirin, rather than a brand-name like Bayer. Likewise, professional chefs prefer store-brand sugar, salt and baking powder instead of brand name ingredients.
Econ Comments & Analysis
Washington Times | To fix America, copy Texas
Imagine if Democrats could point to one state that survived the economic recession better than the rest because of liberal policies. Imagine if that state created more jobs, attracted more new businesses and cut the cost of living significantly. Democrats would sing the praises of that state to every voter in the 2014 and 2016 elections.
Daily Caller | What if Obama Defended American Business?
Wouldn’t it be great if Obama acknowledged that U.S. firms are overburdened by the highest corporate tax rate among developed countries, and as a result are becoming less and less competitive?
Washington Times | Ryan’s entitlement reforms would promote work
Poverty is as endemic today as it was when President Lyndon Johnson inaugurated the War on Poverty, and Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, is offering sensible proposals to change things for the better.
Daily Signal | This Chart Proves the War on Poverty Has Been a Catastrophic Failure
For the past 50 years, the government’s annual poverty rate has hardly changed at all. According to the U.S. Census Bureau, 15 percent of Americans still live in poverty, roughly the same rate as the mid-1960s when the War on Poverty was just starting. After adjusting for inflation, federal and state welfare spending today is 16 times greater than it was when President Johnson launched the War on Poverty. If converted into cash, current means-tested spending is five times the amount needed to eliminate all official poverty in the U.S. How can the government spend so much while poverty remains unchanged?
Blogs
WSJ | Some Home Builders Say First-Time Buyers Returning, Others Not Sure
The anticipated return of first-time buyers to the housing market remains, like many economic indicators, prone to fits and starts. This week, two more leading home builders differed on whether first-timers are on their way back.
Library of Economics | Intervention Leads to More Intervention
The late Ludwig von Mises famously argued that when governments intervene in the economy, they often create new problems. Then, to address these problems, they impose new regulations that themselves to new problems, etc.
Politico | Export-Import Bank faces danger from all sides
Conservatives may be headlining the opposition to the Export-Import Bank, but the efforts of coal-friendly Democrats to change the little-known agency’s rules could further jeopardize its future.
FOX Business | Pending Home Sales Unexpectedly Sag in June
The National Association of Realtors (NAR) said on Monday its Pending Home Sales Index, based on contracts signed last month, fell 1.1 percent to 102.7.
CNN Money | Smart people buy generic brands
Nine times out of 10, pharmacists and doctors will buy the generic version of aspirin, rather than a brand-name like Bayer. Likewise, professional chefs prefer store-brand sugar, salt and baking powder instead of brand name ingredients.
Econ Comments & Analysis
Washington Times | To fix America, copy Texas
Imagine if Democrats could point to one state that survived the economic recession better than the rest because of liberal policies. Imagine if that state created more jobs, attracted more new businesses and cut the cost of living significantly. Democrats would sing the praises of that state to every voter in the 2014 and 2016 elections.
Daily Caller | What if Obama Defended American Business?
Wouldn’t it be great if Obama acknowledged that U.S. firms are overburdened by the highest corporate tax rate among developed countries, and as a result are becoming less and less competitive?
Washington Times | Ryan’s entitlement reforms would promote work
Poverty is as endemic today as it was when President Lyndon Johnson inaugurated the War on Poverty, and Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, is offering sensible proposals to change things for the better.
Daily Signal | This Chart Proves the War on Poverty Has Been a Catastrophic Failure
For the past 50 years, the government’s annual poverty rate has hardly changed at all. According to the U.S. Census Bureau, 15 percent of Americans still live in poverty, roughly the same rate as the mid-1960s when the War on Poverty was just starting. After adjusting for inflation, federal and state welfare spending today is 16 times greater than it was when President Johnson launched the War on Poverty. If converted into cash, current means-tested spending is five times the amount needed to eliminate all official poverty in the U.S. How can the government spend so much while poverty remains unchanged?
Blogs
WSJ | Some Home Builders Say First-Time Buyers Returning, Others Not Sure
The anticipated return of first-time buyers to the housing market remains, like many economic indicators, prone to fits and starts. This week, two more leading home builders differed on whether first-timers are on their way back.
Library of Economics | Intervention Leads to More Intervention
The late Ludwig von Mises famously argued that when governments intervene in the economy, they often create new problems. Then, to address these problems, they impose new regulations that themselves to new problems, etc.
Health Care
News
Daily Signal | Doctors: Government-Run Health Care Driving Us Out of Business
Advocates of single-payer health care promise high-quality low-cost health care for all. But physicians in Vermont say the state’s move towards a single-payer health care system is driving independent doctors out of business and eliminating patient choice.
Econ Comments & Analysis
Heritage Foundation | New Obamacare Enrollment Data: Employer-Based Coverage Declines
New data show that the number of people who have private health insurance increased by just over 520,000 in the six months between October 1, 2013, and March 31, 2014. That was because almost all the gains in individual coverage through the Obamacare exchanges were offset by reduced enrollment in employer-sponsored group coverage.
Daily Signal | Doctors: Government-Run Health Care Driving Us Out of Business
Advocates of single-payer health care promise high-quality low-cost health care for all. But physicians in Vermont say the state’s move towards a single-payer health care system is driving independent doctors out of business and eliminating patient choice.
Econ Comments & Analysis
Heritage Foundation | New Obamacare Enrollment Data: Employer-Based Coverage Declines
New data show that the number of people who have private health insurance increased by just over 520,000 in the six months between October 1, 2013, and March 31, 2014. That was because almost all the gains in individual coverage through the Obamacare exchanges were offset by reduced enrollment in employer-sponsored group coverage.
Monetary
News
Bloomberg | Yellen Watching What She Eats Would Help Track Prices
The next time Federal Reserve Chair Janet Yellen grabs dinner at her favorite eatery, she might want to take a longer look at the cost of her entrée.
WSJ | Fed's Rate Debate Looks Set to Heat Up
Federal Reserve officials will likely move closer to ending their purchases of mortgage and Treasury bonds at a policy meeting this coming week and discuss when and how to raise interest rates.
Econ Comments & Analysis
WSJ | The Danger of Too Loose, Too Long
First, we are experiencing financial excess that is of our own making. There is a lot of talk about "macroprudential supervision" as a way to prevent financial excess from creating financial instability. But macroprudential supervision is something of a Maginot Line: It can be circumvented. Relying upon it to prevent financial instability provides an artificial sense of confidence.
CRS | Federal Reserve: Oversight and Disclosure Issues
Critics of the Federal Reserve (Fed) have long argued for more oversight, transparency, and disclosure. Criticism intensified following the extensive assistance to financial firms provided by the Fed during the financial crisis. In 2010, the identities of borrowers were publicly disclosed for the first time. Recently, critics have sought a Government Accountability Office (GAO) audit of the Fed.
Blogs
WSJ | Fed Forward Guidance Works, Sometimes Better Than Others: IMF
The Federal Reserve’s various efforts at honing its low-rates message have been successful at keeping borrowing costs down by giving investors greater clarity about the likely path of policy, according to the International Monetary Fund.
WSJ | IMF Lays Out Own Fed Exit Strategy
Fed officials are expected to continue discussions about what combination of interest-rate tools to use when they decide it’s time to raise borrowing costs across the economy, and the IMF this week offered a few suggestions.
Bloomberg | Yellen Watching What She Eats Would Help Track Prices
The next time Federal Reserve Chair Janet Yellen grabs dinner at her favorite eatery, she might want to take a longer look at the cost of her entrée.
WSJ | Fed's Rate Debate Looks Set to Heat Up
Federal Reserve officials will likely move closer to ending their purchases of mortgage and Treasury bonds at a policy meeting this coming week and discuss when and how to raise interest rates.
Econ Comments & Analysis
WSJ | The Danger of Too Loose, Too Long
First, we are experiencing financial excess that is of our own making. There is a lot of talk about "macroprudential supervision" as a way to prevent financial excess from creating financial instability. But macroprudential supervision is something of a Maginot Line: It can be circumvented. Relying upon it to prevent financial instability provides an artificial sense of confidence.
CRS | Federal Reserve: Oversight and Disclosure Issues
Critics of the Federal Reserve (Fed) have long argued for more oversight, transparency, and disclosure. Criticism intensified following the extensive assistance to financial firms provided by the Fed during the financial crisis. In 2010, the identities of borrowers were publicly disclosed for the first time. Recently, critics have sought a Government Accountability Office (GAO) audit of the Fed.
Blogs
WSJ | Fed Forward Guidance Works, Sometimes Better Than Others: IMF
The Federal Reserve’s various efforts at honing its low-rates message have been successful at keeping borrowing costs down by giving investors greater clarity about the likely path of policy, according to the International Monetary Fund.
WSJ | IMF Lays Out Own Fed Exit Strategy
Fed officials are expected to continue discussions about what combination of interest-rate tools to use when they decide it’s time to raise borrowing costs across the economy, and the IMF this week offered a few suggestions.
Taxes
Econ Comments & Analysis
WSJ | Why Corporate Inversions Are All the Rage
Senate Finance Committee Chairman Ron Wyden (D., Ore.) recently called the American tax code a "rotting mess of a carcass." The phrase captures how repugnant the current tax system has become—and perhaps most repugnant is the U.S. tax treatment of corporate income, especially from foreign sources.
Blogs
CATO | ALEC Report on State Tax Expenditures
State policymakers often look for ways to attract investment, companies, talent, and residents to their states. Sometimes they do it with sensible and broad-based reforms, such as reducing business regulations, increasing school quality, or lowering and simplifying making taxes. Unfortunately, another way they try to do it is to provide narrow tax benefits and subsidies to particular businesses and industries.
WSJ | Why Corporate Inversions Are All the Rage
Senate Finance Committee Chairman Ron Wyden (D., Ore.) recently called the American tax code a "rotting mess of a carcass." The phrase captures how repugnant the current tax system has become—and perhaps most repugnant is the U.S. tax treatment of corporate income, especially from foreign sources.
Blogs
CATO | ALEC Report on State Tax Expenditures
State policymakers often look for ways to attract investment, companies, talent, and residents to their states. Sometimes they do it with sensible and broad-based reforms, such as reducing business regulations, increasing school quality, or lowering and simplifying making taxes. Unfortunately, another way they try to do it is to provide narrow tax benefits and subsidies to particular businesses and industries.
Employment
News
CNN Money | There's no place like the economy
The key thing to watch is whether robust jobs growth is continuing into the second half of the year. In June, the government said 288,000 jobs were added, bringing the total number of jobs added in the first six months of 2014 to 1.4 million. That was the strongest six months for job growth since 2006.
CNBC | Across US job market, layoffs are becoming rare
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006—nearly two years before the Great Recession began—the government said Thursday.
Econ Comments & Analysis
Mercatus | Misleading Minimum Wage Statistics
Earlier this month, President Obama seized upon fresh data from the Labor Department to argue for a higher minimum wage. According to the president and a subsequent Associated Press report, the 13 states that raised their minimum wages in January of this year are now enjoying, on average, faster job growth than the other 37 states.
Blogs
FOX Business | Mid-Market Report: More Jobs on the Way?
According to a new survey by American Express (AXP), more than 80% of firms say they plan to hire staff over the next six months. About 52% plan to hire only full-time employees, while 55% of the companies surveyed say they currently have more employees than they did a year ago.
CNN Money | There's no place like the economy
The key thing to watch is whether robust jobs growth is continuing into the second half of the year. In June, the government said 288,000 jobs were added, bringing the total number of jobs added in the first six months of 2014 to 1.4 million. That was the strongest six months for job growth since 2006.
CNBC | Across US job market, layoffs are becoming rare
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006—nearly two years before the Great Recession began—the government said Thursday.
Econ Comments & Analysis
Mercatus | Misleading Minimum Wage Statistics
Earlier this month, President Obama seized upon fresh data from the Labor Department to argue for a higher minimum wage. According to the president and a subsequent Associated Press report, the 13 states that raised their minimum wages in January of this year are now enjoying, on average, faster job growth than the other 37 states.
Blogs
FOX Business | Mid-Market Report: More Jobs on the Way?
According to a new survey by American Express (AXP), more than 80% of firms say they plan to hire staff over the next six months. About 52% plan to hire only full-time employees, while 55% of the companies surveyed say they currently have more employees than they did a year ago.
Budget
News
CNN Money | Investors help the rich pay off student loans
It's an increasingly popular form of lending called peer-to-peer, or P2P. Firms like Social Finance (SoFi) and contemporaries Lending Club and Prosper pair people who want income with people looking for credit. It's an end run around traditional bank lending.
Econ Comments & Analysis
CATO | Reversing the Decline in Small Business Lending
Of course small business lending is risky. The annual failure rate for firms with fewer than five employees averages around 20 percent — 1 in 5. That’s true even during a boom.
CNN Money | Investors help the rich pay off student loans
It's an increasingly popular form of lending called peer-to-peer, or P2P. Firms like Social Finance (SoFi) and contemporaries Lending Club and Prosper pair people who want income with people looking for credit. It's an end run around traditional bank lending.
Econ Comments & Analysis
CATO | Reversing the Decline in Small Business Lending
Of course small business lending is risky. The annual failure rate for firms with fewer than five employees averages around 20 percent — 1 in 5. That’s true even during a boom.
Friday, July 25, 2014
General Economics
News
National Journal | How Car Ownership Helps the Working Poor Get Ahead
Buses stop right outside LaToyia Newman-Gross's apartment in suburban Columbia, Md. That doesn't mean it's easy to get around by public transit. "They run every hour," says Newman-Gross, 32. If you miss a bus, you're stuck. Waiting out in the sun or snow with her four children beside her usually isn't a great option.
FOX Business | How to Tap Your IRA Early Without a Penalty
Retirement account withdrawals before age 59 1/2 typically incur penalties, but there are a few exceptions. One of those exceptions, outlined in Section 72(t) of the IRS code, allows penalty-free withdrawals for a "series of substantially equal periodic payments." These payments are based on your account balance and your age. You won't be able to take big lump-sum withdrawals, since the amounts are based on life expectancy -- in other words, they're designed to stretch out the payments over your remaining lifetime. The payments must continue for at least five years or until you turn 59 1/2, whichever takes longer.
Bloomberg | Orders for U.S. Capital Goods Rose After Revised May Drop
Orders for U.S. business equipment rose in June after falling the prior month, forming an inconsistent pattern that indicates corporate investment lacks the momentum needed to propel economic growth to a higher level.
WSJ | Ryan Proposes Consolidated Antipoverty Effort
Bringing detail to Republican promises to address poverty, House Budget Committee Chairman Paul Ryan laid out a plan Thursday for using a conservative approach to reshape food stamps, housing assistance and other federal social programs,
Econ Comments & Analysis
Fortune | Why the era of global free-trade is dwindling
For roughly 30 years, there had been growing momentum for nations to tear down trade barriers through free-trade agreements. The creation of free-trade blocs snowballed as countries signed on to these pacts to promote export-led economic growth.
Forbes | Economic Growth Is Slow Because Politicians Keep Trying To Help
While economic growth in the second quarter of the year is likely to rebound significantly from the sharp contraction of the first quarter, politicians are continually expounding on their ideas to bring more economic growth. They also spend a good bit of time attacking political opponents over how their policies are responsible for the slow economic growth of the past five years. In this case, the politicians are half right (which is probably above their career average).
Blogs
WSJ | Something New for U.S. Manufacturing: Stability
One economist thinks so. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, a research group in Arlington, Va., regularly does his own calculation of the number of plants based on data from the Bureau of Labor Statistics that tracks factory openings and closings. Even in the darkest days of manufacturing’s long slide, there were factories being built—but their number was far outweighed by the rush to shutter operations. Millions of jobs were lost in the process.
National Journal | How Car Ownership Helps the Working Poor Get Ahead
Buses stop right outside LaToyia Newman-Gross's apartment in suburban Columbia, Md. That doesn't mean it's easy to get around by public transit. "They run every hour," says Newman-Gross, 32. If you miss a bus, you're stuck. Waiting out in the sun or snow with her four children beside her usually isn't a great option.
FOX Business | How to Tap Your IRA Early Without a Penalty
Retirement account withdrawals before age 59 1/2 typically incur penalties, but there are a few exceptions. One of those exceptions, outlined in Section 72(t) of the IRS code, allows penalty-free withdrawals for a "series of substantially equal periodic payments." These payments are based on your account balance and your age. You won't be able to take big lump-sum withdrawals, since the amounts are based on life expectancy -- in other words, they're designed to stretch out the payments over your remaining lifetime. The payments must continue for at least five years or until you turn 59 1/2, whichever takes longer.
Bloomberg | Orders for U.S. Capital Goods Rose After Revised May Drop
Orders for U.S. business equipment rose in June after falling the prior month, forming an inconsistent pattern that indicates corporate investment lacks the momentum needed to propel economic growth to a higher level.
WSJ | Ryan Proposes Consolidated Antipoverty Effort
Bringing detail to Republican promises to address poverty, House Budget Committee Chairman Paul Ryan laid out a plan Thursday for using a conservative approach to reshape food stamps, housing assistance and other federal social programs,
Econ Comments & Analysis
Fortune | Why the era of global free-trade is dwindling
For roughly 30 years, there had been growing momentum for nations to tear down trade barriers through free-trade agreements. The creation of free-trade blocs snowballed as countries signed on to these pacts to promote export-led economic growth.
Forbes | Economic Growth Is Slow Because Politicians Keep Trying To Help
While economic growth in the second quarter of the year is likely to rebound significantly from the sharp contraction of the first quarter, politicians are continually expounding on their ideas to bring more economic growth. They also spend a good bit of time attacking political opponents over how their policies are responsible for the slow economic growth of the past five years. In this case, the politicians are half right (which is probably above their career average).
Blogs
WSJ | Something New for U.S. Manufacturing: Stability
One economist thinks so. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, a research group in Arlington, Va., regularly does his own calculation of the number of plants based on data from the Bureau of Labor Statistics that tracks factory openings and closings. Even in the darkest days of manufacturing’s long slide, there were factories being built—but their number was far outweighed by the rush to shutter operations. Millions of jobs were lost in the process.
Health Care
News
Politico | IRS prepping for Obamacare employer mandate in 2015
The Obama administration signaled Thursday it’s not backing down from the controversial health law employer mandate that has been delayed twice and is the centerpiece of the House’s lawsuit against the president.
CNN Money | Thanks Obamacare! Check is in the mail for 6.8 million people
More than 6.8 million Americans will get a refund from their health insurer this summer. Total value of the rebates will be $332 million, with an average of $80 going to each family. They'll be issued by August 1.
Econ Comments & Analysis
WSJ | A 2014 Health-Care Strategy: Freedom
Contradictory rulings this week by the D.C. and Fourth Circuit Courts of Appeals mean that ObamaCare will probably return to the Supreme Court. The crucial issue is whether the government can subsidize premiums for health insurance bought on federal exchanges, though the Affordable Care Act's plain language authorizes subsidies only for policies purchased on "an Exchange established by the State."
CRS | Private Health Insurance Market Reforms in the Affordable Care Act (ACA)
The Affordable Care Act (ACA, P.L. 111-148, as amended) establishes federal requirements that apply to private health insurance. The market reforms affect insurance offered to groups and individuals and impose requirements on sponsors of coverage (e.g., employers). In general, all of ACA's market reforms are currently effective; some became effective shortly after ACA was passed in 2010, while others are effective for plan years that begin on or after January 1, 2014.
Politico | IRS prepping for Obamacare employer mandate in 2015
The Obama administration signaled Thursday it’s not backing down from the controversial health law employer mandate that has been delayed twice and is the centerpiece of the House’s lawsuit against the president.
CNN Money | Thanks Obamacare! Check is in the mail for 6.8 million people
More than 6.8 million Americans will get a refund from their health insurer this summer. Total value of the rebates will be $332 million, with an average of $80 going to each family. They'll be issued by August 1.
Econ Comments & Analysis
WSJ | A 2014 Health-Care Strategy: Freedom
Contradictory rulings this week by the D.C. and Fourth Circuit Courts of Appeals mean that ObamaCare will probably return to the Supreme Court. The crucial issue is whether the government can subsidize premiums for health insurance bought on federal exchanges, though the Affordable Care Act's plain language authorizes subsidies only for policies purchased on "an Exchange established by the State."
CRS | Private Health Insurance Market Reforms in the Affordable Care Act (ACA)
The Affordable Care Act (ACA, P.L. 111-148, as amended) establishes federal requirements that apply to private health insurance. The market reforms affect insurance offered to groups and individuals and impose requirements on sponsors of coverage (e.g., employers). In general, all of ACA's market reforms are currently effective; some became effective shortly after ACA was passed in 2010, while others are effective for plan years that begin on or after January 1, 2014.
Monetary
News
Bloomberg | Dollar Rises to Highest in Month as U.S. Outperforms
A gauge of the dollar rose to the highest level in a more than month amid signs the U.S. economy, beset by years of sluggish growth, is outperforming its major peers.
Market Watch | Fed clears Zions' resubmitted stress test
The Federal Reserve said Friday that it won't object to a resubmitted capital plan by Zions Bancorp. The Fed had previously rejected a plan because the bank did not meet the minimum, post-stress tier 1 common ratio of 5%, but under the new submission, the firm's minimum, post-stress tier 1 common ratio was 5.1%.
Market Watch | Japan prices inflate further, thanks to sales tax
Japan's consumer prices chalked up steady increases in June, at least on an annual basis, according to data out Friday from the Statistics Bureau, though the results again reflected the April 1 sales-tax hike.
Econ Comments & Analysis
Market Watch | Obama: Fed focused on right thing
President Barack Obama on Thursday said Fed Chairwoman Janet Yellen and her colleagues at the U.S. central bank have been right to focus on restoring the health of the U.S. labor market. In an interview on CNBC, Obama said the cost of high unemployment of young people and workers who can't get back into the labor market "has devastating effects on the economy for generations."
Telegraph | IMF fears ultra-low rates are fuelling asset bubbles
Ultra-low interest rates around the world are fuelling financial bubbles and pushing investors into overvalued assets, the International Monetary Fund has warned in a marked shift of policy.
WSJ | The Federal Reserve's Risky Reverse Repurchase Scheme
Four years after the passage of Dodd-Frank, we are still discussing whether the law has made the financial system more stable. These discussions are important, yet too little attention is being paid to a Federal Reserve program called the Overnight Reverse Repurchase Facility, also referred to as ON RRP. This program, while well-intentioned, could be a new source of financial instability. It needs a closer look.
CATO | Fed Proposal to End Bailouts Falls Short
At the heart of public anger with Wall Street is the sense that accountability is lacking. The largest banks seem to live in a ‘heads I win, tails you lose’ world in which they keep their gains but receive a bailout to prevent their failure.
Blogs
WSJ | Which Wage Measure Best Captures Inflation Pressures?
Federal Reserve Chairwoman Janet Yellen has made clear that her perceptions of a healthy labor market hinge on more than just the unemployment rate or the strength of recent job gains. Also high up on her labor-market dashboard is wage growth. As labor markets tighten, workers should be able to bargain for bigger raises.
Bloomberg | Dollar Rises to Highest in Month as U.S. Outperforms
A gauge of the dollar rose to the highest level in a more than month amid signs the U.S. economy, beset by years of sluggish growth, is outperforming its major peers.
Market Watch | Fed clears Zions' resubmitted stress test
The Federal Reserve said Friday that it won't object to a resubmitted capital plan by Zions Bancorp. The Fed had previously rejected a plan because the bank did not meet the minimum, post-stress tier 1 common ratio of 5%, but under the new submission, the firm's minimum, post-stress tier 1 common ratio was 5.1%.
Market Watch | Japan prices inflate further, thanks to sales tax
Japan's consumer prices chalked up steady increases in June, at least on an annual basis, according to data out Friday from the Statistics Bureau, though the results again reflected the April 1 sales-tax hike.
Econ Comments & Analysis
Market Watch | Obama: Fed focused on right thing
President Barack Obama on Thursday said Fed Chairwoman Janet Yellen and her colleagues at the U.S. central bank have been right to focus on restoring the health of the U.S. labor market. In an interview on CNBC, Obama said the cost of high unemployment of young people and workers who can't get back into the labor market "has devastating effects on the economy for generations."
Telegraph | IMF fears ultra-low rates are fuelling asset bubbles
Ultra-low interest rates around the world are fuelling financial bubbles and pushing investors into overvalued assets, the International Monetary Fund has warned in a marked shift of policy.
WSJ | The Federal Reserve's Risky Reverse Repurchase Scheme
Four years after the passage of Dodd-Frank, we are still discussing whether the law has made the financial system more stable. These discussions are important, yet too little attention is being paid to a Federal Reserve program called the Overnight Reverse Repurchase Facility, also referred to as ON RRP. This program, while well-intentioned, could be a new source of financial instability. It needs a closer look.
CATO | Fed Proposal to End Bailouts Falls Short
At the heart of public anger with Wall Street is the sense that accountability is lacking. The largest banks seem to live in a ‘heads I win, tails you lose’ world in which they keep their gains but receive a bailout to prevent their failure.
Blogs
WSJ | Which Wage Measure Best Captures Inflation Pressures?
Federal Reserve Chairwoman Janet Yellen has made clear that her perceptions of a healthy labor market hinge on more than just the unemployment rate or the strength of recent job gains. Also high up on her labor-market dashboard is wage growth. As labor markets tighten, workers should be able to bargain for bigger raises.
Taxes
News
Bloomberg | Rich French Fleeing Hollande Taxes Find Portugal Haven
Lisbon real estate agent Paulo Silva says Portugal’s property market has a Frenchman to thank. Francois Hollande, that is.
Econ Comments & Analysis
FOX Business | The Tax Differences Between a C Corporation and an S Corporation
Deciding the difference between a C Corp and an S Corp should include a tax professional and an attorney. The attorney can address the liability and legal issues of incorporating and the tax professional can explain the tax consequences and even worksheet anticipated liabilities based on the actual situation.
Heritage Foundation | IMF Wants U.S. Taxpayers to Shoulder More Risk
The International Monetary Fund’s (IMF) report on its 2014 Article IV consultation with the United States highlights the importance of securing a safer financial system. The IMF’s policy recommendations would, however, achieve the opposite while putting U.S. taxpayers at risk.
Blogs
FOX Business | Mortgage Interest Rate Deduction: Do We Really Need It?
I argued that childless renters making a good income tend to be on the losing end when it comes to the tax breaks. Most readers pointed out that renters do not have the overhead that comes with owning a house, which means the write-off of mortgage interest and property taxes levels the playing field.
Bloomberg | Rich French Fleeing Hollande Taxes Find Portugal Haven
Lisbon real estate agent Paulo Silva says Portugal’s property market has a Frenchman to thank. Francois Hollande, that is.
Econ Comments & Analysis
FOX Business | The Tax Differences Between a C Corporation and an S Corporation
Deciding the difference between a C Corp and an S Corp should include a tax professional and an attorney. The attorney can address the liability and legal issues of incorporating and the tax professional can explain the tax consequences and even worksheet anticipated liabilities based on the actual situation.
Heritage Foundation | IMF Wants U.S. Taxpayers to Shoulder More Risk
The International Monetary Fund’s (IMF) report on its 2014 Article IV consultation with the United States highlights the importance of securing a safer financial system. The IMF’s policy recommendations would, however, achieve the opposite while putting U.S. taxpayers at risk.
Blogs
FOX Business | Mortgage Interest Rate Deduction: Do We Really Need It?
I argued that childless renters making a good income tend to be on the losing end when it comes to the tax breaks. Most readers pointed out that renters do not have the overhead that comes with owning a house, which means the write-off of mortgage interest and property taxes levels the playing field.
Employment
News
FOX News | Fewer and fewer US layoffs mean job security is as strong as it's been in more than 8 years
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006 — nearly two years before the Great Recession began — the government said Thursday.
Econ Comments & Analysis
Mercatus | Social Security Disability Insurance's Effect on Labor Force Participation
The labor force participation rate for the prime working-age population — those between 25 and 54 years old — has been declining in the U.S. since 1997. One of the big reasons is a rise in the disability rate, which hit a record 5.2 percent in 2013. Since the start of the Great Recession, the withdrawal rate due to disability has accelerated. In fact, 90 percent of the labor force decline for those who were in their prime working ages for the entire six-year span was from disability. Most of this — three quarters — was from those receiving Social Security Disability Insurance (SSDI) benefits.
FOX News | Fewer and fewer US layoffs mean job security is as strong as it's been in more than 8 years
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006 — nearly two years before the Great Recession began — the government said Thursday.
Econ Comments & Analysis
Mercatus | Social Security Disability Insurance's Effect on Labor Force Participation
The labor force participation rate for the prime working-age population — those between 25 and 54 years old — has been declining in the U.S. since 1997. One of the big reasons is a rise in the disability rate, which hit a record 5.2 percent in 2013. Since the start of the Great Recession, the withdrawal rate due to disability has accelerated. In fact, 90 percent of the labor force decline for those who were in their prime working ages for the entire six-year span was from disability. Most of this — three quarters — was from those receiving Social Security Disability Insurance (SSDI) benefits.
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