Tuesday, February 18, 2014

General Economics

Politico | Obama to order tougher fuel standards for heavy trucks
President Barack Obama on Tuesday will order his agencies to tighten the fuel-efficiency standards for medium- and heavy-duty vehicles, the latest stage in his effort to tackle climate change without waiting for Congress to act.
Politico | 5 years in, Obama salutes stimulus
The costly $787 billion spending bill that President Barack Obama signed into law soon after taking office boosted the economy and helped avoid another Great Depression, the White House said in a status report on Monday’s fifth anniversary of the law’s enactment.
CNN Money | Food stamp use among military rises again
More military families used food stamps to buy milk, cheese, meat and bread at military grocers last year.
Market Watch | Empire State index slips to 4.5 in February
Manufacturing activity in the New York region slipped in February after hitting its highest reading since May 2012 in January, the Federal Reserve Bank of New York said Tuesday.
WSJ | Remedial College Courses Face a New Test
A new state law here is trying a novel approach to determine whether incoming students are prepared to move on to college-level coursework: let them decide for themselves.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Oil Is Where the Growth Is, So Let's Drill
The economy is stumbling along at 2 percent annual GDP growth and employment growth continues to disappoint. One bright spot is energy, which is booming despite government obstacles. With more efficient regulation America could increase energy production, and next week Senator Ted Cruz (R-TX) will release a bill to do just that.
WSJ | The Truth About the 'One Percent'
'Income inequality" has emerged as the issue du jour in national politics, threatening to displace the unpopular health-care law and the slow-growing economy this election year. Speeches and columns now routinely attack the banks or "the undeserving rich" and call on Washington to do something to redistribute income from the "super rich" to the poor and middle class.
Washington Times | Being taxed for bad advice by international organizations
If you became aware that the advice you were receiving from your economic advisers was causing you to get poorer rather than richer, how long would you keep them?
WSJ | Obama's Shale Gas Trojan Horse
On Jan. 28, the White House website posted a fact sheet accompanying the State of the Union address, "Opportunity for All: Key Executive Actions the President Will Take in 2014." Mr. Obama called for Congress to join with him and with state and local governments to create "Sustainable Shale Gas Growth Zones." The goal is to "make sure shale gas is developed in a safe, responsible way that helps build diverse and resilient regional economies that can withstand boom-and-bust cycles and can be leaders in building and deploying clean energy technologies."
Washington Times | The unhappy anniversary of stimulus boondoggle
Five years ago this week, President Obama jump-started the economy, leading to the greatest period of sustained growth in history. No, we haven’t seen it, either, but that was what he said would happen when he signed into law the American Recovery and Reinvestment Act. A trillion dollars later, we’re no better off.
Mercatus | Companies Subsidizing Consumption Is Good for the Market, Innovation, and Users
The practice of one party subsidizing a customer’s consumption is common in many industries. Particularly for media, information, and publishing, companies — a business model that represents or touches every major tech company these days.

Heritage Foundation | How to Free the Housing Market from Government—and Lower Your Mortgage Payments
That sounds magnificent, and we couldn’t agree more. No one wants another housing crisis, and taxpayers certainly shouldn’t be on the hook for it.
Library of Economics | In the 1930s it seemed "obvious" that financial turmoil had caused the Great Depression
Perhaps some day economists will realize that the models they were teaching their students in 2007 imply that the world's central banks caused the Great Recession.

Health Care

Politico | Kathleen Sebelius: No job loss under Obamacare
Health and Human Services Secretary Kathleen Sebelius says there is “absolutely no evidence” that the Affordable Care Act will drive down employment, despite a report from the Congressional Budget Office released Feb. 4 predicting fewer people would be working.
National Journal | It’s the Moment of Truth for One State’s Grand Obamacare Bargain
Arkansas's grand health care experiment is on the rocks. It was less than a year ago that a Democratic governor and a Republican Legislature passed a compromise to expand their state's Medicaid program

Econ Comments & Analysis                                                                                            
CNN Money | Want to see a doctor? Be prepared to wait!
Need to see a doctor, but it's not an emergency? You might have to wait a few weeks, though it depends on where you live.

Heritage Foundation | Obama Has Unilaterally Changed or Delayed Obamacare 24 Times
President Obama has unilaterally changed or delayed Obamacare 24 times without going back to Congress, according to Fox News’ Chris Wallace. Members of Congress sparred Sunday over Obama’s decision last week to delay Obamacare’s employer mandate.


Market Watch | The Fed can’t do everything
When it comes to boosting economic activity, monetary policy has its limits.

Econ Comments & Analysis                                                                                            
AEI | Yellen's wishful thinking
Last week, in her congressional debut as head of the Federal Reserve, Janet Yellen paid short shrift to the notion that recent international economic developments should be a major concern to the Fed as it continues tapering its bond-buying program.

WSJ | Labor Department Produces New Approach To PPI
The Labor Department this week will change the way it calculates the Producer Price Index, a gauge of U.S. inflation, to measure a much wider swath of the U.S. economy.


Econ Comments & Analysis                                                                                            
Real Clear Markets | Don't Believe the Economists About 'Low' U.S. Corporate Taxes
Have you ever been caught in the rain on a day the forecast said was supposed to be sunny and wondered, did the weatherman even look outside before issuing his forecast? Is his weather model really that bad?
Fortune | How a national sales tax could solve America's inequality problem
If the U.S. uses a national sales tax to bolster the social safety net -- programs like Medicare, Social Security, food stamps, and Medicaid -- it could reduce income inequality, argues a new study.
CRS | The Corporate Income Tax System: Overview and Options for Reform
Many economists and policymakers believe that the U.S. corporate tax system is in need of reform. There is, however, disagreement over why the corporate tax system needs to be reformed, and what specific policy measures should be included in a reform.


CNBC | Unemployed and hoping for help from Congress
The House of Representatives is out of session until February 26. The Senate leaves tomorrow, not to return until February 25. Between now and then, more than 100,000 Americans will join the more than 1.7 million long-term jobless who have exhausted unemployment benefits that, only two months ago, would have continued for as much as a year.

Econ Comments & Analysis                                                                                            
NBER | A Contribution to the Empirics of Reservation Wages
This paper provides evidence on the behavior of reservation wages over the spell of unemployment using high‐frequency longitudinal data. Using data from our survey of unemployed workers in New Jersey, where workers were interviewed each week for up to 24 weeks, we find that self‐reported reservation wages decline at a modest rate over the spell of unemployment, with point estimates ranging from 0.05 to 0.14 percent per week of unemployment.
CATO | Minimum Wage Hike Means More Sub-Minimum Workers
In the State of the Union address, President Obama endorsed a bill to raise the $7.25 federal minimum wage by nearly 40% over three years to $10.10 an hour in 2016. That would be an exact copy of what President Bush did on May 25, 2007, by signing into law a 40% minimum wage hike in three stages — from $5.15 to $5.85 on July 24, 2007, then $6.55 a year later and $7.25 on July 24, 2009. Have we not learned anything from what happened last time?


Bloomberg | U.S. Cross-Border Outflow of Capital Hits Highest Since 2009
A measure of capital flowing in and out of the U.S. in December showed the biggest net selling since February 2009, according to Treasury Department data released today.

Econ Comments & Analysis                                                                                            
CATO | Cutting the $4 Trillion Budget
Media attention on the federal budget usually focuses on contentious issues, such as the debt limit, food stamp cuts, and Republican cave-ins. But let’s look at the big picture: What does the government spend almost $4 trillion of our money on each year?
Heritage Foundation | Blank Check: What It Means to Suspend the Debt Limit
Some commentators have criticized use of the phrase “blank check” to describe the recent vote to suspend the debt limit for more than a year. They argue that the debt limit suspension merely means that the Treasury is allowed to borrow for the purpose of covering spending Congress already approved.