Wednesday, February 26, 2014

General Economics

Bloomberg | New Home Sales in U.S. Unexpectedly Rise to Five-Year High
Purchases of new U.S. homes unexpectedly climbed in January to the highest level in more than five years, showing underlying strength in the industry even in the midst of unusually harsh weather.
CNBC | Mortgage applications at lowest level in two decades
Mortgage applications to buy a home fell last week to the lowest level in nearly two decades, according to a weekly survey from the Mortgage Bankers Association.
Bloomberg | First Solar Profit Slumps as Power-Plant Revenue Declines
First Solar Inc. (FSLR), the largest U.S. solar-panel manufacturer, posted a 58 percent decline in profit as revenue slumped from the utility-scale power plants it’s building in the U.S. Southwest. Its shares fell the most in more than six months.
Washington Times | Obama eases penalties for businesses hiring illegal immigrants
The Obama administration regularly cuts a break for businesses that hire illegal immigrants, reducing their fines by an average of 40 percent from what they should be, according to an audit released Tuesday that suggests the government could be doing more to go after unscrupulous employers.

Econ Comments & Analysis                                                                                            
Politico | President Obama to urge $302 billion transportation bill
President Barack Obama on Wednesday will call for a four-year, $302 billion transportation bill to replace the law that expires at the end of September, while repeating his pitch for tax reform to fill some of that gap.
The American | GDP and Measuring the Intangible
GDP statistics lead us to take an overly pessimistic view of the economy. There is no Great Stagnation. There is only a widening gap between the rate of economic improvement and our ability to measure that improvement.
Washington Times | Obama kickstarts the ‘minimum wage economy’
Louisiana Gov. Bobby Jindal came up with the perfect name for the Obama economy that you’ll be hearing a lot during this year’s midterm election campaigns.
AEI | Housing Risk Watch, February 2014
The January National Mortgage Risk Index (NMRI) for home purchase loans shows that low-risk loans accounted for only 42.2 percent of home mortgages extended in January 2014, down from 45.4 percent in December 2013 and 46.4 percent in August 2013 (the starting date for this series).

WSJ | Don’t Get Excited by Jump in New Home Sales
New home sales jumped to the highest level since July 2008 in January, which is really good news if it holds. But the Census new-home sales data is a choppy indicator with a small sample size, and when you take a longer look at the series it’s pretty clear that the nation’s two-year-old real estate turnaround is still largely a recovery in prices.
WSJ | Are Trade Talks Going Anywhere?
Well, at least not anywhere fast. U.S. Trade Representative Michael Froman said officials arrived with a “problem-solving mindset,” advanced the talks in several areas and now have some sort of understanding on rules for state-owned enterprises, investment in services industries, the telecommunications sector and food safety.

Health Care

Politico | Obamacare enrollment hits 4 million
About 4 million people have signed up for health coverage in the new Obamacare exchanges since Oct. 1 with just over a month left for people to enroll, federal officials said late Tuesday. That total is up from 3.3 million enrolled at the end of January.
National Journal | Can Obamacare Avoid a Consumer Rebellion?
When Obamacare handed insurance companies millions of compulsory customers, it also handed them a reminder of one of their industry's toughest realities: Consumers want low premiums, and they want to see any doctor they want. And it's impossible to give them both.

Heritage Foundation | Majority of Small Businesses Will See Health Premium Rate Hike Because of Obamacare
The Centers for Medicare and Medicaid Services Office of the Actuary last week released with little fanfare a report that is shaking up the debate over Obamacare’s impact on the economy, according to The Wall Street Journal. The federal actuarial report predicted that 65 percent of small businesses will see their health insurance premiums increase because of President Obama’s signature health law.


WSJ | Why Higher Interest Rates Could Depress Housing Turnover
Record declines in home prices are a big reason housing turnover has been so muted in recent years, but low interest rates could serve as an additional — and underappreciated — contributor to the depressed level of homes being offered for sale, according to a forthcoming paper from researchers at DePaul University.
WSJ | Geithner Among Fed Losers in 2008, Dudley Among Winners
The Federal Reserve’s release of transcripts from its 2008 policy meetings provides a chance to size up who among central bank officials did well, and who didn’t, in the heat of the crisis.


National Journal | Why the Republican Tax-Reform Proposal Is Likely Going Nowhere
After months of work, Republican Rep. Dave Camp, the House majority's lead tax-writer, is set to release an outline of his tax-reform overhaul plan Wednesday. But Republicans are already saying it's unlikely to go much further.
Bloomberg | Camp to Cap Mortgage Benefit While Ending State Tax Break
A tax plan from House Ways and Means Committee Chairman Dave Camp would further limit the mortgage-interest break and end the deduction for state and local taxes, according to a nonpartisan congressional summary.
WSJ | 'No Hope' for Tax Reform
Senate Minority Leader Mitch McConnell (R., Ky.) on Tuesday threw cold water on hopes for a tax-code overhaul this year, saying he didn't see how it would be possible.

Econ Comments & Analysis                                                                                            
WSJ | How to Fix Our Appalling Tax Code
There have been so many changes to the tax code over the past decade that it is now 10 times the size of the Bible, but with none of the Good News. That factual statement usually gets a good laugh back home in Michigan. What isn't funny is the effect that constant tinkering with taxes has had on the people who pay them, and on the economy.
ATR | IRS Warns: Obamacare Tax Must Be Paid with Tax Return
President Obama’s Internal Revenue Service today quietly released a series of Obamacare “Health Care Tax Tips” warning Americans that they must obtain “qualifying” health insurance – as defined by the federal government – or face a “shared responsibility payment” when filing their tax returns in 2015.

Market Watch | No endorsement of Camp tax plan from Boehner
House Speaker John Boehner on Wednesday declined to endorse a sweeping tax-reform plan being offered by fellow Republican Dave Camp, saying only “there’s a conversation that needs to begin” about revamping the tax code.
Heritage Foundation | Tax Reform at Last?
Today, House Ways and Means Committee Chairman Dave Camp (R) of Michigan jumpstarts the tax reform debate. It’s about time. The tax code stables in Washington haven’t been cleaned out since 1986—more than a quarter century ago, when Ronald Reagan was President.


CNN Money | JPMorgan cutting jobs, slimming branches
In an effort to cut costs, the country's largest bank by assets said Tuesday that it plans to slash 8,000 jobs in its consumer and community banking division this year.

Econ Comments & Analysis                                                                                            
Barrons | The Minimum Wage Is No Friend of the Poor
The debate over raising the federal minimum wage to $10.10 an hour from the current $7.25 heated up last week with the publication of a Congressional Budget Office study, which estimated that total employment would likely be reduced by "500,000 workers" if the hike were implemented.
Fortune | Americans need more than a minimum wage hike
Paying workers more could lift nearly 1 million out of poverty, but low-skilled workers need more than that to thrive in today's job market.
AEI | The unemployment trap
Extended unemployment benefits lower workers’ incentives to search for jobs and to take jobs that may not be a perfect fit, and they may also lower firms’ incentives to hire new workers. It might seem intuitive that these incentives sometimes lead workers to delay their return to work, but many on the left dispute this.


Econ Comments & Analysis                                                                                            
Fortune | How to read President Obama's new budget
Next week President Obama is expected to send Congress his new budget. It's a huge, sprawling document; last year's was 2,476 pages in four volumes. Because no one can absorb all that instantly, here's an insider's guide to the budget for fiscal year 2015, which begins Oct. 1, 2014.
CATO | Obama’s ‘Age of Austerity’ Lie
During his first five years in office, the president has run up more than $5.7 trillion in debt. Of course, some might point out that at least some of the spending during the president’s first year in office can be attributed to President Bush.

CBO | Federal Revenues Are Projected to Increase Significantly Over the Next Two Years and Remain Steady as a Share of GDP Thereafter
The federal government’s revenues will increase by 9 percent in 2014 and by another 9 percent in 2015, CBO projects in The Budget and Economic Outlook: 2014 to 2024, reaching $3.3 trillion in 2015—about $530 billion more than receipts in 2013.