Wednesday, January 15, 2014

General Economics

Market Watch | Empire State index jumps to 12.5 in January
Manufacturing activity in the New York region surged in January after three months of weak readings, the Federal Reserve Bank of New York said Wednesday.
WSJ | Bank of America Profit Climbs, Helped by Cost-Cutting Progress
Bank of America Corp. saw its fourth-quarter profit surge from a year-earlier period that was marred by charges as the bank made progress cutting costs and benefited from lower provisions for soured loans.
CNN Money | State with highest minimum wage may hike it again
The governor of Washington is calling for an increase in the state's minimum wage, which is already the highest in the nation.
Washington Times | America in crisis: Government cited as No. 1 problem in the country
Gallup says 21 percent of people put their dissatisfaction with Congress and politicians in general just above the economy, at 18 percent. Unemployment and health care issues come in third, at 16 percent.

Econ Comments & Analysis                                                                                            
Forbes | Why Economic Growth Is Exponentially More Important Than Income Inequality
In 1900, we had no airplanes, no computers, no cellphones, no internet. We had only rudimentary versions of cars, trucks, telephones, even cameras.
Investors | Demagoguing Income Inequality Leads To Less For All
Democrats plan to demagogue income inequality and the wealth gap for political gain in this year's elections. Most of what's said about income inequality is stupid or, at best, ill-informed. Much to their disgrace, economists focusing on measures of income inequality bring little light to the issue.
WSJ | Where Right and Left Agree on Inequality
Mitt Romney's contemptuous dismissal of the "47%" has turned out to be the most consequential utterance of the 2012 presidential campaign. The line about those who are dependent on government and unlikely to vote for him was recognized by thoughtful conservatives for what it was: an economic and moral mistake as well as a political blunder.
Washington Times | Obama’s ‘income inequality’ deeper from bailing out his rich Wall Street donors
Snarky attacks on Wall Street, wealthy investors, bankers and other favorite liberal targets have become the soup of the day. President Obama’s “income inequality” has replaced the “war on women” as his second-term mantra, but the inequality is from Mr. Obama’s own kitchen.
Politico | We Need to Solve the Poverty Crisis. Just Not Obama’s Way.
Economic inequality has become the left’s great hope for recovering its political integrity after the Obamacare disaster. President Obama, trying to change the subject, has latched onto the issue and is sure to make many more speeches about it in the New Year. New York’s new mayor, Bill de Blasio, promises to make that great city an experimental lab for progressive ideas aimed at curing inequality.
Washington Times | America is dragged down by Obama regulations
Although there has been constant tension between those desiring a strong central government that maintains control and order, and those desiring maximum personal freedom as long as the rights of others are preserved, our country managed to thrive for many decades with an unprecedented level of autonomy for its citizens.

CATO | The Minimum Wage: Immoral and Inefficient
Democratic politicians are desperate to make up for ObamaCare’s disastrous roll-out.  Thirteen states are increasing their minimums this year, and some Democrats believe raising the national minimum wage is a winning campaign issue for November.
NCPA | Myths about Inequality
“Inequality is the defining challenge of our time,” according to President Obama. It’s certainly the topic of the day for Paul Krugman, Joe Stiglitz and a whole raft of liberal pundits. But have you noticed that hardly anyone else is talking about it?

Health Care

National Journal | White House Moves Obamacare Goalposts Again
The White House is scaling back another self-imposed standard for Obamacare's success—and it's one the administration has spent months promoting.

Econ Comments & Analysis                                                                                            
FOX Business | Lack of Young Enrollees Means Higher Costs, Will it Happen?
The highly- anticipated demographics of enrollees over the first half of open enrollment revealed that 24% of the 2.2 million people enrolled in (but haven’t necessarily paid for) coverage on a state or the federal exchange were between the much-needed ages of 18 to 34. On the flip side, nearly one-third of enrollees are ages 45 and up.
NBER | Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap
Most health insurance policies use cost-sharing to reduce excess utilization. The purchase of supplemental insurance can blunt the impact of this cost-sharing, potentially increasing utilization and exerting a negative externality on the primary insurance provider.


Bloomberg | U.S. Producer Prices Rose in 2013 by Least in Five Years
Wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years, showing companies face little pressure to charge more.

Econ Comments & Analysis                                                                                            
Daily Beast | The Insanely Profitable Federal Reserve
The Fed, like Newt Gingrich, was hatched in secret one hundred years ago, on a small island off the coast of Georgia.  It was created to bring order to a chaotic banking system in the wake of a string of financial crises around the turn of the century. What's gotten the mainstream media buzzing about the bank of late is the fact that, for the first time in it's century-long history, a woman will be running the show. As many have pointed out, incoming chairperson Janet Yellen may in fact become the most powerful woman in the world upon her ascension on February 1st.

WSJ | Fed’s Fisher: Glad Fed Tapered, but First Cut Should Have Been Bigger
Federal Reserve Bank of Dallas President Richard Fisher said Tuesday that while he’s glad the central bank has begun to wind down its bond-buying stimulus program, he would have preferred a more aggressive start to the effort, in remarks that also suggested unease with current levels in the stock market.


FOX Business | Survey: 9 in 10 Franchisees Want Tax Reform
While franchise expansion is predicted to continue to outpace the overall economy in 2014, new research from the International Franchise Association suggests that comprehensive tax reform would spur even greater growth.


Politico | Senate blocks jobless aid
The Senate blocked two separate proposals to revive emergency unemployment benefits that expired in December, all but killing the prospects of reviving jobless aid for now.

WSJ | For Recent Grads, Good Jobs Really Are Hard to Find
Anecdotal accounts of young college grads working as baristas, bartenders or retail clerks are widespread, provoking questions about the economic logic of going to college, particularly if doing so means taking on a lot of debt.


Politico | House to vote on bipartisan budget
Call it the Return of the Jedi or the prodigal son. But the giant omnibus spending bill moving through Congress this week looms largest for the Appropriations Committees after years of being kicked to the curb by party leaders and ignored by a feckless White House.

Econ Comments & Analysis                                                                                            
Bloomberg | Fed Student-Loan Focus Shows Recognition of Growth Risk
Tiffany Roberson works for the state of Texas as a parole officer, teaches part time and is living with her parents after finishing a master’s degree. She’s held off marrying her boyfriend of four years and starting a family because she owes more than $170,000 in federal and private student loans.
CNN Money | Time to get on a spending diet
Now that the season of gluttony has passed, you may be looking back on your bank and credit card statements with a twinge of regret.

CATO | Wasteful Federal Aid to the States
In my testimony last week to the House Oversight Committee, I focused on aid-to-state programs as a major source of waste in the federal budget.
Library of Economics | Why are Keynesians so far-sighted?
I recently did a post pointing out that higher interest rates don't reduce AD.  Indeed even higher interest rates caused by a decrease in the money supply don't reduce AD. Rather the higher rates raise velocity, but that effect is more than offset by the decrease in the money supply.