Wednesday, April 30, 2014

General Economics

Bloomberg | China Set to Overtake U.S. as Biggest Economy Using PPP Measure
China is poised to overtake the U.S. as the world’s biggest economy, while India has vaulted into third place, ahead of Japan, using calculations that take exchange rates into account.
Bloomberg | Growth Freezes Up as U.S. Business Investment Slumps
The harsh winter sent a chill through the U.S. economy in the first quarter as slumps in business investment and home construction stalled growth.
Bloomberg | Chicago-Area Manufacturing Grows at Fastest Pace Since October
Business activity in the Chicago area expanded in April at the fastest pace in six months, a sign manufacturing will keep supporting the world’s largest economy.
WSJ | Stress Tests Forecast $190 Billion in Losses at Fannie Mae, Freddie Mac in Severe Downturn
Fannie Mae and Freddie Mac could require another $190 billion in government support under a worst-case economic scenario, according to stress test results made public Wednesday by the firms' federal regulator.

Econ Comments & Analysis                                                                                            
WSJ | The Real Inequality Problem
Among the too numerous frustrations of the political process is that a lot of smart and talented people spend their time and energy fulminating about things that don't really matter. That diverts attention from our nation's real problems. There are few better examples than today's debate about economic inequality.
USA Today | As prices rise, housing recovery wobbles
A housing recovery that was expected to accelerate this year is instead sputtering. And no, you can't just blame the weather.
National Journal | America Needs Mortgage Finance Reform That Ends Decades of Discrimination
Mortgage finance is a $10 trillion market, and housing comprises one-fifth of the United States economy. Reforming the U.S. mortgage-finance system is the next—and perhaps final—step in an ongoing effort to create a safer, sustainable housing market. The Senate Banking Committee leadership has unveiled a reform plan and scheduled the measure for a committee vote as early as today.

WSJ | China’s Economy Surpassing U.S.? Well, Yes and No
There are a number of reports around Wednesday that China’s economy, by one measure at least, is likely to surpass the U.S. in size sometime this year.
Market Watch | Housing cuts quarterly economic growth again in first back-to-back drop since 2009
Housing cut economic growth in the first quarter, following a drop at the end of last year, for the sector’s first back-to-back subtraction since the first half of 2009, according to government data released Wednesday.
WSJ | Share of Global Economic Output by Developed Economies Falling
The share of world economic output produced by developed economies is falling, but the incomes of people living in them continue to be well above the levels enjoyed by their counterparts in more rapidly-growing large developing economies, according to new figures produced by a grouping of statistics agencies around the world.
CATO | New Frontiers in Regulatory Overreach
In most cases, excessive regulation doesn’t surprise me all that much.  It usually focuses on familiar industries, such as automobiles.  So, for example, when the National Highway Traffic Safety Administration came up with a rule mandating that all cars and light trucks sold in the United States have rearview cameras, it wasn’t a great shock.
Heritage Foundation | New GDP Report Means America Still Stuck in Slow Growth Rut
The Bureau of Economic Analysis released its first report for GDP growth in the first quarter of 2014 today. It showed the economy grew at an anemic 0.1 percent from January to March. The more meaningful measure of growth, private-sector GDP, rose by a still meager 0.2 percent.

Health Care

National Journal | Is Another Obamacare Exemption on the Horizon?
The Affordable Care Act doesn't always easily translate to foreign markets, so the House voted 268-150 Tuesday to exempt health plans provided to expatriates who live abroad for more than six months from key requirements of the law.

WSJ | Health Care, Heating Spending Save First-Quarter GDP From Contraction
“If health-care spending had been unchanged, the headline GDP growth number would have been -1.0%,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Heritage Foundation | Will Taxpayers Recoup the Estimated $305 Million Spent on Oregon’s Failed Obamacare Exchange?
Oregon’s exchange has experienced extreme technical difficulties, including never successfully enrolling one person from start to finish online during the 2014 enrollment period. The exchange board recommends switching to the federal exchange because the costs of fixing Cover Oregon would be too great.


WSJ | Fed Board Holds Closed Meeting on Monetary Policy
The meeting coincided with a regular gathering of the larger Federal Open Market Committee, which comprises the board members and five regional bank residents and which makes monthly decisions on interest rates. The committee is expected to vote to cut its monthly bond purchases by another $10 billion to $45 billion and hold short-term interest rates steady near zero.

Econ Comments & Analysis                                                                                            
Real Clear Market | It Would Be a Shock If the Fed Were To Change Its Policy
It would be shocking if the Fed were to change monetary policy in any notable way at the FOMC meeting that concludes today. One reason is that the recent data have been consistent with the Fed's outlook for moderate growth with low inflation, and thus won't prompt a shift in either the ongoing taper of the Fed's asset purchases or its forward guidance for the federal funds rate. Another reason, however, is simply that Fed Chair Yellen does not have a press conference after this meeting.


Econ Comments & Analysis                                                                                            
Fortune | Rep. Dave Camp's upstream battle for bipartisan tax reform
Everyone talks about wanting bipartisan reform of our hideous tax code. But look at the frustrations that have befallen Rep. Dave Camp (R-Mich.), who has thrown his heart and soul into trying to get it done. Camp, chairman of the House Ways and Means Committee, has spent four years pushing for tax reform in various forums.
CBO | Tax Technical Corrections Act of 2014
The Tax Technical Corrections Act of 2014 would make various clerical corrections, clarifications, and conforming and other technical changes to the Internal Revenue Code.


Bloomberg | ADP Says Companies in U.S. Add Most Workers in Five Months
Companies added more workers in April than at any time in the previous five months, signaling further progress in the labor market, a private payrolls report showed.
Politico | Senate GOP blocks wage hike
Senate Republicans rejected opening debate on a Democratic bill to gradually hike the minimum wage to $10.10 an hour on Wednesday, arguing the legislation would cost the nation jobs while it undergoes a tepid economic recovery.

Econ Comments & Analysis                                                                                            
Mercatus | The Best Way to Fight Poverty
Much of Washington’s ongoing economic policy debate focuses on reducing poverty, with many arguing to raise the minimum wage and expand government programs. But this focus ignores two simple truths.
AEI | Dangerous to ignore high unemployment rates
Sir, One has to be surprised at Niall Ferguson’s sanguine view of the tectonic changes taking place in European politics. Since, despite the recent dramatic change in the European political landscape, he only adds to the complacency in European policy circles by confidently asserting that despite the economic shocks it has experienced the European political centre will hold.


CNN Money | Five years later, TARP price tag hits $40 billion
Little more than five years later, the rescue of Wall Street and Main Street during the financial crisis has cost taxpayers about $40 billion, according to a watchdog agency report released Wednesday.
FOX Business | U.S. Government Says It Lost $11.2 Billion On GM Bailout
The U.S. government lost $11.2 billion on its bailout of General Motors Co, more than the $10.3 billion the Treasury Department estimated when it sold its remaining GM shares in December, according to a government report released on Wednesday.
CNN Money | This city's residents have the least debt
The average debt load for a person living in Detroit is $23,604. That's the lowest of any major city and is down 7.1% from four years ago, according to Experian, which looked at credit card, auto, personal and student loan debt in the 20 largest U.S. metropolitan areas.

Econ Comments & Analysis                                                                                            
Bloomberg | Treasury Trims Some Debt Auctions as U.S. Deficit Shrinks
The U.S. Treasury Department said it will trim the size of two- and three-year note auctions starting this quarter as a shrinking budget deficit gives the government scope to reduce borrowing.