Tuesday, April 1, 2014

General Economics

Market Watch | February construction spending rises 0.1%
Outlays for U.S. construction projects rose 0.1% in February to a seasonally adjusted annual rate of $945.7 billion, led by nonresidential projects, the U.S. Commerce Department reported Tuesday.
Bloomberg | Markit Final March Index of U.S. Manufacturing Fell to 55.5
The Markit Economics final index of U.S. manufacturing fell in March to 55.5 from 57.1 a month earlier, the London-based group said today.
FOX Business | Five States, Gulf of Mexico Carry U.S. Oil Production
Five states and the Gulf of Mexico accounted for more than 80% of all U.S. oil production in 2013, according to data from the Energy Information Administration.
Market Watch | ISM manufacturing index rises slightly in March
U.S. manufacturing companies expanded in March at a slightly faster pace compared to the prior month, a survey of executives found. The Institute for Supply Management said its manufacturing index rose to 53.7% from 53.2% in February.
Bloomberg | China Milk Thirst Hands U.S. Dairies Record 2014 Profits
In a year when most American farmers can expect lower earnings than in 2013, U.S. milk producers are having a windfall.
WSJ | Growth in U.S. Office Market is Picking Up
The U.S. office market is showing signs of picking up steam, with businesses adding space in the first quarter at the fastest pace since 2007, according to a report from real-estate data firm Reis Inc.
CNBC | The Western capitalist system is in danger of becoming not fit for purpose
How many times have we heard that the bank bonus system is needed in order for banks to attract "the best", that pay levels are where they are because of the need to retain the best people? If the best could manage the debacle of 2008, I'd hate to see what a team of mediocre executives could do.

Econ Comments & Analysis                                                                                            
Fortune | After 8 years, the real estate market is finally looking normal again
Since 2006, the real estate market has either been severely depressed or white hot. In 2014, it looks to settle down.
Barrons | Here Comes $75 Oil
The long-term outlook for global oil prices is lower, perhaps much lower, giving a strong boost to the U.S. economy while potentially crippling the economy of Vladimir Putin's Russia. Vast new discoveries of oil and natural gas in the U.S. and around the globe could drive the oil price to as low as $75 a barrel over the next five years from a current $100.
Real Clear Markets | The Growing Regulatory Burden, and the Challenge of Reform
According to the Office of Management and Budget, Americans currently spend 10 billion hours wading through federal paperwork requirements.
Forbes | Whither The New Deal? America's Enigmatic Economic Revolution
Economic crises tend to bring out the worst in people. Panic, demagoguery, and despair were all visible as the markets crashed in September 2008. Aside from prophecies about the collapse of the global economy absent government intervention, several financial executives committed suicide that autumn and winter. In one grisly case, the acting CFO of Freddie Mac, David Kellermann, hung himself in his basement.

WSJ | U.S. Oil Production Concentrated in Few States
Rising domestic oil production has enabled the U.S. to become more energy independent and has been a key reason why the trade deficit hasn’t skyrocketed in recent years. The smaller trade gap helps growth in the entire economy, but those oil rigs are located in a narrow section of the nation.
Calculated Risk | Fannie Mae: Mortgage Serious Delinquency rate declined in February, Lowest since November 2008
Fannie Mae reported today that the Single-Family Serious Delinquency rate declined in February to 2.27% from 2.33% in January. The serious delinquency rate is down from 3.13% in February 2013, and this is the lowest level since November 2008.

Health Care

Politico | Obamacare in Oregon: Failed exchange
Oregon had all the right ingredients for a sparkling Obamacare success story: a Democratic doctor as governor, an eager Legislature and a history of health care innovation. It ended up with Obamacare’s biggest technological disaster.
CNN Money | What we know - and don't know - about Obamacare
Obamacare open enrollment is drawing to close, though that doesn't mean the fervor over health care reform will subside anytime soon.
Politico | The Obamacare enthusiasm gap
Obamacare will be a huge voting issue for Republicans — that’s already clear. They’ll turn out in droves because they hate the law. What’s less clear is how Democrats will get their supporters to the polls to say, “hey, thanks for health reform.”

Econ Comments & Analysis                                                                                            
Washington Times | The Obamacare exchange problem
Even after President Obama and the Democrats enacted Obamacare, they didn’t know what was in it, despite Nancy Pelosi’s assurance that Congress would find out what it had done once it was the law.

Heritage Foundation | Md. Looks to Scrap $125.5 Million Obamacare Website, Start Over
As states and the federal government push for enrollment in Obamacare ahead of today’s midnight deadline, Maryland is poised for a do-over of its health insurance website, which has performed poorly at a cost of $125.5 million to date.


Bloomberg | World Bank Changing Rules, Fees to Commit 50% More Money
The World Bank, the international organization that’s trying to end extreme poverty by 2030, is changing lending rules and increasing some fees under a plan to boost the money it commits annually by about 50 percent.

Econ Comments & Analysis                                                                                            
WSJ | The Fed's Missing Guidance
Janet Yellen, like Ben Bernanke before her, believes that the Federal Reserve should communicate the reasons for its current policies and the strategy of its future policy actions. And so we have been told the basic plans are for gradually reducing the volume of large-scale asset purchases, and for keeping short-term interest rates low—"for some time," as she said in her speech on Monday—in order to stimulate employment and raise the inflation rate toward 2%.
Fortune | Why America's fear of 'too big to fail' is irrational
The U.S. Federal Reserve recently concluded that six of America's biggest banks enjoy about $8.5 billion a year in savings, mostly in the form of paying lower borrowing costs than smaller institutions. That might sound unfair, but that's a pretty small price U.S. taxpayers effectively pay to avoid another financial crisis. In addition, the Troubled Asset Relief Program, though unpopular, actually netted a profit for taxpayers as the government's investments have been gradually wound down; and then there is the case of Ally, the former General Motors (GM) finance subsidiary, whose planned IPO will result in a gain for the public.


WSJ | The $2.4 Billion Tax Question for Caterpillar
Caterpillar Inc. has deferred or avoided paying $2.4 billion of U.S. taxes under a corporate restructuring 15 years ago that shifted most of the profits from overseas replacement-part sales to a Swiss subsidiary, according to a Senate subcommittee report.

Econ Comments & Analysis                                                                                            
Heritage Foundation | Tax Extenders an Opportunity to Improve the Tax Code
The tax extenders are a group of approximately 50 tax-reducing policies that expire regularly. Congress has traditionally extended them just as regularly as they expire.

WSJ | Japan’s Firms Fret Over Tax Increase
As Japan raises its sales tax today to 8% from 5%, the big question is whether the economy is on  a sufficiently upward trajectory to withstand a pullback in consumption.


CNBC | Why Democrats really need a stellar jobs report Friday
Every jobs report has political significance given the extent to which Republicans and Democrats attempt to spin the numbers to their best advantage. But this Friday's March employment report is especially critical following the weak winter numbers and the impending midterm election season.

Econ Comments & Analysis                                                                                            
Real Clear Markets | 'Paycheck Fairness' Will Lead to Fewer Paychecks, Less Fairness
On April Fools' Day the Senate Committee on Health, Education, Labor and Pensions is holding a hearing on the Paycheck Fairness Act, sponsored by Senator Barbara Mikulski, who will reportedly chair the hearing.

Heritage Foundation | Who Creates Jobs—and Why?
If you want to protect spending in Washington, call it “job creation.” That’s the flip side of yesterday’s quip by Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, skewering the tendency of politicians to dress their favorite lobbies or spending policies as job generators.


WSJ | Paul Ryan Unveils GOP Plan to Balance Budget in 10 Years
House Budget Committee Chairman Paul Ryan (R., Wis.) Tuesday proposed eliminating the government's budget deficit in 10 years through major changes to Medicare, Medicaid, food stamps and other programs—and took the controversial step of counting in assumptions on how the plan would spur economic growth.
Washington Times | Constitutional conundrum: Michigan demand for a balanced budget could trigger amendment convention
Michigan lawmakers last week voted to demand a balanced budget amendment to the U.S. Constitution, a move that could set into motion a never-tested, widely feared convention with the power to rewrite part of the founding document.

Econ Comments & Analysis                                                                                            
Mercatus | The True Weight of the Fiscal Gap
Conventional fiscal accounting points to debt held by the public—currently at about $12 trillion—as the measure of a country’s fiscal sustainability.
CBO | Budgetary and Economic Outcomes Under Paths for Federal Revenues and Noninterest Spending Specified by Chairman Ryan, April 2014
At the request of the Chairman of the House Budget Committee, Congressman Paul Ryan, CBO has projected budgetary and economic outcomes under paths for federal revenues and spending (excluding interest payments) specified by the Chairman.

CBO | CBO's Role in Budget Resolutions
The Chairman of the House Budget Committee has announced that the committee will be developing and voting on a proposed budget resolution this week. Past experience indicates that CBO will receive lots of questions about that budget resolution and about our “estimates” of its impact. So, let me explain a bit about such resolutions.
CATO | Is Government Debt a Problem?
Based on what’s happened in Greece and other European nations, we know from real-world evidence that even nations from the developed world can spend themselves into debt trouble.
Heritage Foundation | The Pros and Cons of Ryan’s 2015 Path to Prosperity Budget
Today, House Budget Committee Chairman Paul Ryan released the Fiscal Year 2015 Path to Prosperity Budget. Building on foundations established in 2011, this plan seeks to balance the budget within 10 years by cutting spending, reforming poverty programs, and importantly, reforming the health care entitlements—the largest drivers of deficit spending and debt.