Tuesday, April 22, 2014

General Economics

Politico | Obama trip stirs emotions over Asia trade pact
President Barack Obama’s abilities as negotiator-in-chief for the United States will be put to the test this week on a trip to Asia that could set the stage for the conclusion of a huge new free-trade agreement. But the deal faces even more hurdles at home because of opposition from fellow Democrats.
CNN Money | Rebirth of America's dead factories
The past two decades have been brutal for American manufacturing as companies shifted production overseas and introduced high-tech systems that eliminated jobs.
Bloomberg | U.S. Home Prices Rose 6.9% in February as Recovery Cools
U.S. house prices rose 6.9 percent in the 12 months through February, the smallest gain in a year, in a sign that the housing market’s recovery is cooling.
WSJ | Price of Gas in U.S. Rises as Refiners Export More to Other Countries
Drivers in the U.S. are facing rising gasoline prices ahead of summer-vacation season, just as refiners here are shipping more gas to other countries.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Deficits Bother You? The Real Problem Is Inept Governance
For about a decade now, budget hawks have been warning that the federal budget is fundamentally out of balance. Spending on entitlements and interest payments on the federal debt will grow more rapidly than revenues, eventually producing a debt spiral that will precipitate another financial crisis.
CNN Money | 5 ways to stay ahead of rising costs
Imposing accountability and awareness can go a long way to taming the bane of many businesses.
Washington Times | Resisting the rising tide of regulations
If you’re like most Americans, the phrase “the cost of government” brings to mind thoughts of spending programs and tax increases. There’s another way that government costs us money, though. It’s something that often flies under the radar; namely, regulations.
Fortune | How to shrink America's income gap
The key is to find the sweet spot where everyone has a fair chance of sharing the gains in profits and productivity.
CNBC | How income inequality can hurt the economy
Given that the adjectives most used in describing the economy's recovery from the great recession include "sluggish" and "disappointing" it may come as a surprise to some that average household income in the U.S. is higher, in nominal terms, than it was in 2008.
NBER | Understanding the Great Recession
We argue that the vast bulk of movements in aggregate real economic activity during the Great Recession were due to financial frictions interacting with the zero lower bound.
AEI | Fannie and Freddie are obviously SIFIs
We have a new post-crisis financial category: systemically important financial institutions, meaning anybody big enough and leveraged enough to possibly create "systemic risk" for everybody else. If you are a super-big and super-leveraged financial firm, the Financial Stability Oversight Council can designate you as a SIFI. But it has not so designated Fannie Mae and Freddie Mac.

WSJ | The Leading Index Shows Economy Will Warm Up after Winter’s Chill
The Conference Board’s leading index is designed to forecast economic activity, not the weather. So, the split between the leading and coincident indexes so far this year offers further evidence of how the weather slowed growth in the first quarter. It also supports expectations that economic activity is picking up this quarter.
Heritage Foundation | What’s Another Few Months for a Keystone XL Decision?
Despite the promise of construction jobs and a dependable source of Canadian oil for American refineries, last week the State Department announced an extension of the inter-agency comment period, likely pushing back the final decision until after the November mid-term elections. The project, which has bipartisan support, the backing of several unions, and approval from former energy and interior secretaries, would bring up to 830,000 barrels of oil per day from Alberta, Canada down to Gulf Coast refineries.
WSJ | The Hows and Why of Economic Optimism
The recovery from the financial crisis is now one of the longest in U.S. history, and economists don’t see it running out of steam anytime soon. But why are they so confident?

Health Care

Politico | Beyond 8 million: Obamacare math
It’s not that 8 million isn’t a significant number. It is. The surge of people who signed up in the new health insurance exchanges surpassed both White House targets and expectations. It seemed unimaginable six months ago.
CNN Money | Medicare vs. private insurance: Which costs less
Wonder why some doctors grumble when a Medicare patient walks in the door? It's likely because the government program typically pays only 80% of what private insurers do.

Econ Comments & Analysis                                                                                            
CNN Money | Millions slip into Obamacare 'coverage gap'
The human toll of the coverage gap can be found all too easily in Hidalgo County, Texas, where less than half of non-senior adults had health insurance in 2012.
NY Times | Health Care Spending’s Recent Surge Stirs Unease
For years, because of structural changes in the health care delivery system and the deep economic downturn, the health care “cost curve” — as economists and policy makers call it — had bent. Health spending was growing no faster than spending on other goods or services, an anomaly in 50 years of government accounts.


Market Watch | Citi: ECB likely to launch QE in euro zone
Quantitative easing is probably coming to the euro zone in the foreseeable future as the European Central Bank scrambles to deal with low inflation, economists at Citigroup said in a note on Tuesday.
CNBC | Monetary policy can't save long-term unemployed
Jobless claims may have dropped to pre-recession lows, but that doesn't mean the job market is healthy, the chief economist for Sterne Agee told CNBC on Thursday.
Market Watch | Fed must choose: More jobs or less inflation
The Federal Reserve certainly thinks so — indeed, it is basing its monetary policy on this very premise, according to Fed Chair Janet Yellen. This may prove to be the case but if it does, it will only be for a moment in time. For you see, there normally is a trade-off between employment and inflation. If you want high employment, you have to be prepared for more inflation. On the other hand, if low inflation is your objective, it comes at the expense of less employment.

Econ Comments & Analysis                                                                                            
WSJ | Guess Who Makes More Than Bankers: Their Regulators
It is true that the very top bank executives make more in a year than most of us make in a lifetime, but compensation of this magnitude is rare. Most banks in this country are small businesses and pay employees modest salaries. The Bureau of Labor Statistics reports that the average annual salary of a bank employee was $49,540 in 2012, not much higher than the average annual across all occupations, $45,790.


CNN Money | $100,000 income: Three very different tax bills
There are a lot of differences between Queens, Topeka and Seattle. One that stands out: People making the same money in each of those places can face very different tax bills.
WSJ | Towns Taxed by Shift to More Homes, Fewer Stores
For years, this growing suburb of Phoenix had been anticipating the development of an open-air mall on 500 acres, a project that promised to be the main commercial center—and tax generator—on the town's southern end.


Econ Comments & Analysis                                                                                            
Bloomberg | Improving Job Market Driving Rebound in U.S. Growth
An improving job market and increasing factory production in March contributed to a jump in the U.S. index of leading indicators that signals the pace of economic growth is poised to snap back.
WSJ | Welders Make $150,000? Bring Back Shop Class
In American high schools, it is becoming increasingly hard to defend the vanishing of shop class from the curriculum. The trend began in the 1970s, when it became conventional wisdom that a four-year college degree was essential. As Forbes magazine reported in 2012, 90% of shop classes have been eliminated for the Los Angeles unified school district's 660,000 students. Yet a 2012 Bureau of Labor Statistics study shows that 48% of all college graduates are working in jobs that don't require a four-year degree.

WSJ | Two In Five Americans Now Earn Degrees After High School
The steady increase in the proportion of Americans earning degrees after high school graduation continued in 2012 for the fifth straight year, according to a new report.
WSJ | Labor Shortages Pop Up, but Wage Growth Still Lags
One interesting item in the Federal Reserve‘s beige book, released last week, was a report from the Minneapolis Fed that “in the energy-producing areas of North Dakota, the U.S. Postal Service and its union recently agreed to pay increases of up to 20% for rural carriers.” According to the Associated Press, the postal service is having a hard time, competing even with fast-food restaurants to find workers in western North Dakota, the site of the Bakken oil fields and a state with a 2.6% jobless rate.
WSJ | Long- and Short-Term Unemployment Have Similar Inflation Impact: Fed Paper
Long-term unemployment creates a drag on inflation similar to that created by short-term joblessness, according to a new paper by a Federal Reserve economist paper that casts doubt on the notion that researchers should study the two categories separately.


WSJ | Federal Plans That Forgive Student Debt Skyrocket
Government officials are trying to rein in increasingly popular federal programs that forgive some student debt, amid rising concerns over the plans' costs and the possibility they could encourage colleges to push tuition even higher.