Monday, March 10, 2014

General Economics

Bloomberg | BP Is Biggest Loser Among U.S. Government Contractors
BP Plc (BP), once the Pentagon’s top fuel supplier, is now the biggest loser among U.S. government vendors.
Market Watch | Global business optimism at 2-yr high: Markit
Global business optimism reached a two-year high in February, according to a survey conducted by Markit based on responses from 11,000 companies.
WSJ | New-Home Building Is Shifting to Apartments
The share of new homes being built as rental apartments is at the highest level in at least four decades, as an improving jobs picture spurs younger Americans to form their own households but tighter lending standards make it more difficult to buy.
WSJ | Japan GDP Growth Revised Down
Japan's economy grew even more slowly than initially calculated in the final three months of 2013 and posted another record current-account deficit in January, poor figures that suggest the economy could be in for a rocky period.

Econ Comments & Analysis                                                                                            
Investors | Economic Growth Is The Greatest Anti-Poverty Program
For the last 50 years real income per person in the United States has grown at a rate of about 2.3% per year. That may not sound like such a big deal, but it adds up year after year. So much so that real incomes will actually double every 31 years.
WSJ | Surging Home Prices Are a Double-Edged Sword
It is hard to overstate the benefits of rising prices to the economy broadly and to homeowners, banks and home builders specifically after years of declines. Price gains have pulled more Americans from the brink of foreclosure and given home buyers more confidence that they won't get stuck with an asset whose value will decline.
Politico | Don’t Send America’s Natural Gas to Ukraine
Russia’s invasion of Ukraine has given a boost to those calling for the United States to expedite natural gas exports to help allies overseas. In this thinking, American gas exports — in the form of liquefied natural gas, or LNG — are not only a boon to the domestic economy but also a potent geopolitical tool to be wielded against the Kremlin.
WSJ | American Gas for Europe
One silver lining—or sliver of a lining—from the Russian invasion of Crimea is that it may awaken Western Europe from its strategic slumbers. A sign of hope came Sunday when British Foreign Secretary William Hague said that European leaders may seek to buy more natural gas from the United States.

WSJ | Highlights of Marco Rubio’s Economic Plan
Florida Republican Sen. Marco Rubio had a rough time last year after he stirred a backlash among conservative Republicans with his quest to revamp the country’s immigration laws. As if to make up for lost time, the freshman senator is now speaking out on foreign policy, education and the consolidation of poverty funding , among a range of other policy proposals he has floated in recent months.
Library of Economics | Is Outrage at the Top 1% Distracting Us?
I worry about growing income inequality. But I worry even more that the discussion is too narrowly focused. I worry that our outrage at the top 1 percent is distracting us from the problem that we should really care about: how to create opportunities and ensure a reasonable standard of living for the bottom 20 percent.

Health Care

CNN Money | No health insurance? Prepare to pay the penalty
Time is running out to sign up for individual health insurance. And if you don't have some type of coverage this year, be prepared to pay a penalty.

Econ Comments & Analysis                                                                                            
Washington Times | Obamacare’s income-inequality factor
An employment decline is the much-publicized verdict of the Congressional Budget Office’s recent analysis of Obamacare, but increased income inequality is the overlooked threat arising from it.
National Journal | The Fine Line the Obama Administration Is Walking With Doctors and Hospitals
The success of Obamacare--and the White House's efforts to drive down health care spending--depend on the cooperation of the doctors and hospitals charged with carrying out reforms.


Market Watch | Fed’s Plosser: Taper pace may be too slow
The Federal Reserve may have to accelerate the pace of tapering to take into account the economic pickup currently ongoing in the U.S. and the improving forecast for the near future, Federal Reserve Bank of Philadelphia President Charles Plosser said Monday.

Econ Comments & Analysis                                                                                            
Forbes | The Fed Is Not Printing Money, It's Doing Something Much Worse
The Federal Reserve’s seemingly endless program of quantitative easing (QE) begun under Ben Bernanke, and continuing at a slightly slower pace under Janet Yellen, has some of the punditry and much of the electorate up in arms. With good reason.
CNBC | Perfect storm for inflation could rock the market
As investors cheer the good news for job growth that came with the February employment report, they may be overlooking a troublesome dynamic: A tightening jobs market, in combination with rising commodity costs, could stir inflation, cutting into corporate profits and forcing the Federal Reserve to become more hawkish.
CRS | Budgetary and Distributional Effects of Adopting the Chained CPI
This report examines the budgetary and distributional effects of using what is referred to as the Chained Consumer Price Index (C-CPI-U or chained CPI) as the official measure of inflation for adjusting federal revenue and spending programs for inflation.

WSJ | Grand Central: The Fed’s Slow, Tortuous Path Toward the Exit
At a policy meeting in June 2011, Federal Reserve officials agreed on a long-term plan to eventually exit sometime in the future from their unconventional monetary policies and return to its interest-rate-setting ways of the past. That plan is looking increasingly obsolete. The contours of a new plan are being debated within the Fed and slowly coming into shape.
Library of Economics | The old rules still apply (What the rest of the profession could learn from Ben Bernanke)
During the days of William Jennings Bryan it was pretty well understood that deflationary monetary policies helped bondholders and inflationary monetary policies helped debtors. That's why the rich favored the gold standard and lots of indebted farmers and small merchants favored a bimetallic system (which would have been slightly more inflationary.)


Econ Comments & Analysis                                                                                            
Forbes | The Tax Code: Make It Flat
If Republicans and pro-growth Democrats had their wits about them, they would push the flat tax.
Washington Times | Taxing Marylanders until they flee
Maryland, one of the bluest of blue states, is the poster child demonstrating that taxing the rich fails to balance the state budget. Yet Democrats, who have complete monopoly control on all branches of state government, continue to think that doing the same thing over and over will lead to a different result.

WSJ | Manufacturers Blame Expiring Tax Breaks For Restrained Investment
More than a third of U.S. manufacturers say they’ll scale back investment plans this year because a pair of federal tax breaks expired at the end of 2013, according to a survey by the National Association of Manufacturers to be released Monday.
CATO | Tax Reform Error #1: Confusing Tax Expenditures with Revenues
House Ways and Means Chairman Dave Camp has released a complex 182-page “discussion draft” called The Tax Reform Act of 2014. Rather get bogged down in details, I will take this opportunity to review several fundamental errors that repeatedly plagued most past and present efforts to reform the federal income tax, including the Camp proposal.
CATO | Tax Reform Error #2: Phasing-in Lower Tax Rates
Since 1981, Republican legislators have shown a strong penchant for phasing-in tax rate reductions over several years.  That tradition is maintained in Ways and Means Committee Chair Dave Camp’s proposed 979-page “simplification” of the U.S. tax system.


Econ Comments & Analysis                                                                                            
Real Clear Markets | At This Rate, It Will Take 28 Years To Get Everyone Back To Work
From a jobs perspective, the economy treaded water in February. We didn't drown in unemployment, but nor did we manage to swim closer to the prosperity shore. It was a "blah" month, in the midst of the worst economic recovery in American history.
Mercatus | Modest Job Gains, But Labor Force and Overall Momentum Dragging
Mercatus Center senior research fellow Keith Hall—former commissioner of the Bureau of Labor Statistics—reacts to today’s unemployment report from the BLS:


Bloomberg | Debt Exceeds $100 Trillion as Governments Binge
The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates.

WSJ | Pace of Student Lending Shows Signs of Easing
The pace of student borrowing from the federal government slowed for the third straight year in January, an indication that a major driver of overall consumer debt may be decelerating.
CATO | A Fiscal Lesson from Germany
Tax rates are too onerous and government spending consumes about 44 percent of economic output. That’s even higher than it is in the United States, where politicians at the federal, state, and local levels divert about 39 percent of GDP into the public sector.