Monday, February 24, 2014

General Economics

CNN Money | Detroit bankruptcy plan proposes slashing pension benefits up to 34%
The plan proposes deep cuts in the health care coverage for retirees. And there could be even deeper cuts in what the city is offering to pay banks and other investors holding the city's debt. A summary of the plan on the city's Web site said bondholders would get new securities worth 20% of amount they are still owed.

Econ Comments & Analysis                                                                                            
CNN Money | G20 pledges to add $2 trillion to global economy
The largest global economies have pledged to install policies that will add $2 trillion to the world economy over the next five years.
Real Clear Markets | This Is the Age of Fairy-Tale Economics
The great virtue of the Congressional Budget Office's recent report on the minimum wage is that it injects a much-needed dose of reality into the debate over job creation.
Real Clear Markets | The Minimum Wage Is An Expensive Way To Help the Poor
President Obama wants Congress to raise the minimum wage from its current $7.25 per hour to $10.10 per hour. He says this is needed to be fair to workers and to help lift poor, working families out of poverty. The first part is probably not true and the minimum wage is a very inefficient way to accomplish the second goal.
Fortune | Why coal and many oil investments are losing luster
Climate change has long been an issue, but companies are also starting to pull back because it's wasteful spending.
CBO | Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output in 2013
When ARRA was being considered, CBO and the staff of the Joint Committee on Taxation estimated that it would increase budget deficits by $787 billion between fiscal years 2009 and 2019. CBO now estimates that the total impact over the 2009–2019 period will amount to about $830 billion. By CBO’s estimate, close to half of that impact occurred in fiscal year 2010, and more than 95 percent of ARRA’s budgetary impact was realized by the end of December 2013.
AEI | More equality, less work: Obama's America, according to the CBO
The Obama administration has benefited quite a bit from its analysis of a number of policy issues, including the fiscal stimulus and immigration reform. But there is currently a chill in the relationship between the White House and the Congressional Budget Office that has spilled into the media over the agency’s estimates of the labor market effects of two of President Obama’s most important policy efforts.

Reuters | Despite stimulus, middle class still struggles
Five years ago Monday, President Barack Obama signed the signature economic proposal of his presidency, saying that the passage of the $787 billion economic stimulus package heralded the “the beginning of the end” of the Great Recession.
CATO | Fannie and Freddie Offset Reported Government Spending
The federal government took control of mortgage giants Fannie Mae and Freddie Mac (F&F) in 2008 and have bailed them out with $189 billion of taxpayer money.
Library of Economics | The Minimum Wage vs. Welfare: Band-Aid or Salt?
Peter Thiel entertains what economists would call a "second-best" argument in favor of raising the minimum wage

Health Care

Politico | Major spending cut proposed for Medicare Advantage
The Obama administration is proposing a major cut in 2015 payments to Medicare Advantage, in a move that is sure to set off a ferocious campaign by the insurance industry to reverse the decision and likely will further complicate the health care politics of the midterm elections.

Econ Comments & Analysis                                                                                            
Market Watch | Economists as divided on Obamacare as everyone else
Ask economists about monetary policy, and you’re not going to hear much division. Ask them about Obamacare and they’re as divided as everyone else.
Real Clear Markets | In the Healthcare Debate, Every Day Is Groundhog Day
In America's health care debate, every day starts like every other day.

Heritage Foundation | 3 Things You Don’t Know About Obamacare That Could Hurt You
Nearly one in three Americans have little familiarity with Obamacare, and the ramifications are playing out in the media. Since each day brings headlines highlighting Americans who are surprised by changes in their health care situation because of President Obama’s signature achievement, The Heritage Foundation compiled three Obamacare items that might surprise you


Bloomberg | Draghi: ECB Prepared to Add Stimulus on Deflation Risks
European Central Bank President Mario Draghi said policy makers are ready to add to stimulus if the outlook for prices deteriorates, though there are currently no signs of deflation in the euro area.
Market Watch | Euro-zone inflation falls at record speed
The prices of consumer goods in the euro zone fell in January from December at the steepest rate since records began in 2001, a new sign that domestic demand is ailing and will continue to hinder an economic recovery.
CNN Money | Federal Reserve underestimated the crisis
If it wasn't already obvious, it certainly is now: The Federal Reserve didn't see the Great Recession coming until it was in the thick of the crisis.
Bloomberg | Yellen Seeking New Low-Rate Guidance Can Use Forecasts: Economy
As Janet Yellen seeks to forge a consensus on a new strategy for communicating the Federal Reserve’s intention to keep rates low, she can reach for a six-year-old tool: the Fed’s quarterly forecasts.

Econ Comments & Analysis                                                                                            
Bloomberg | Make Banks Safer: Tax Them
Nearly six years after the financial crisis, regulators have adopted a slew of new rules that might make individual banks a little safer. None of the measures, though, adequately addresses a more troubling and hard-to-recognize problem: the risk lurking in the linkages between financial institutions.
Fortune | Fed transcripts: Bernanke chose to let Lehman fail
Newly released transcripts cast doubt on the claim that the Fed didn't have the power to save the investment bank.


Econ Comments & Analysis                                                                                            
Washington Times | Remembering the tax-reform lessons that Reagan taught
These days we hear gloomy statements that no significant reforms can be accomplished by a lame-duck president in his sixth year in office with a partisan, divided House and Senate, in an election year.


FOX Business | United Technologies' Sikorsky Unit to Cut 600 Jobs
Sikorsky Aircraft, the helicopter unit of United Technologies Corp (UTX), on Friday said it would lay off 600 workers beginning in the next few weeks, citing continued "challenging and unstable economic conditions."
CNN Money | Big business hits back on minimum wage
Big business is striking back hard against President Obama's efforts to raise the minimum wage, using a government report released just Tuesday that said the effort would both lift people out of poverty and spur job losses.

Heritage Foundation | Few People Actually Raise Families on Minimum Wage
Bias often appears in facts someone omits, not in actual inaccuracies. Take the New York Times’ new minimum wage calculator, which shows how difficult it can be to support oneself on just a minimum-wage income. Left unsaid: Few minimum-wage workers do so.


Econ Comments & Analysis                                                                                            
NY Sun | Rescuing the Stimulus
Paul Krugman has a column out about how President Obama’s economic program was a political disaster because of the “perception that stimulus failed.” It reminds us of Mark Twain’s jibe about Wagner’s music being “better than it sounds.” At least Twain was aware of the circularity of his famous wise crack.* Professor Krugman seems oblivious to the fact that, in the stimulus racket, success is nothing if it’s not perceived.
Mercatus | Record-High Deficits Are Not "Austerity"
Rather than engage in a semantic discussion about what constitutes an “era of austerity,” I will simply present some salient facts of the US budget for readers who may be unfamiliar with them.

Library of Economics | The Keynesian information bubble
Paul Krugman likes to brag that he doesn't read conservative bloggers, as they have nothing useful to say. And certainly the world is full of conservatives making sloppy arguments. But the downside of that strategy is that when he makes silly mistakes, he never finds out about them.
Heritage Foundation | Obama's Austerity Myth
The Obama administration put out the word this weekend that the president’s new budget will end several years of “austerity” in Washington. Come again? Austerity? Since 2009, federal borrowing has skyrocketed by $6 trillion. This year’s budget deficit is expected to fall to somewhere near $500 billion, which sadly is progress, because the first-term Obama deficits all exceeded $1 trillion.