Monday, June 2, 2014

General Economics

CNBC | US economy: Where is the money?
Are you trying to decide whether the U.S. economy's relatively weak performance in the first quarter of this year is just a proverbial "pause that refreshes," or whether it's a continuation of a trend of lackluster growth for the foreseeable future?
National Journal | Can Connecticut Solve the U.S. Retirement Crisis?
Connecticut may be best known for its colleges, seaside communities, aging industrial cities, and easy access to New York City. Now, the state also wants to be known as the place trying to solve the country's impending retirement crisis, sparked by millions of Americans who have not saved enough cash to sustain them in their old age.
FOX Business | Investing for the Long-Term? Look for Stability
Instead of focusing on the short term, a request from my two daughters to invest their money, prompted me to take a longer-term view of the market.
CNN Money | US recovery hits 5-year mark, but long way to go
It's June 2014, and that means it's been five years since the Great Recession officially ended. If you're not ready to celebrate this milestone, you're certainly not alone.
Market Watch | Final Markit manufacturing PMI totals 56.4 in May
The final Markit reading of U.S. manufacturing conditions in May totaled 56.4, compared to a preliminary reading of 56.2, the privately run firm said Monday. In April the index registered 55.4.
CNN Money | Millennials squeezed out of buying a home
Just 36% of Americans under the age of 35 own a home, according to the Census Bureau. That's down from 42% in 2007 and the lowest level since 1982, when the agency began tracking homeownership by age.
CNBC | US manufacturing sector grows, speed slows: ISM
The Institute for Supply Management (ISM) said its index of national factory activity fell to 53.2 last month from 54.9 in April, coming in shy of the 55.5 expected according to a Reuters poll of economists.

Econ Comments & Analysis                                                                                            
WSJ | With Stocks at Record Highs, What Could Go Wrong?
The S&P 500 is up nearly 10% since its 2014 low in the first week of February. The index, which tracks the largest stocks, is now at a record high, up 4.1% for the year.
Mercatus | Piketty: A Wealth of Misconceptions
Thomas Piketty's Capital in the Twenty-First Century might soon stand with Karl Marx'sCapital, which inspired its title, as one of the most influential economic masterworks of the past 150 years. But sad to say, this 696-page tome, ably translated by Arthur Goldhammer, is no more enlightening about capitalism in the 21st century than Marx'sCapital was about capitalism in the 19th century.
AEI | A capital agenda we can all agree on
The activities of the federal government anno 2014 fall into two categories, roughly speaking. It maintains a military to defend the nation from threats from overseas (foreign policy) and it maintains a plethora of programs designed to crowd out savings (domestic policy).
CATO | How Regulations Harm U.S. Manufacturing
“Revival” is probably not the right word for a sector that has been trending upward with respect to every relevant performance metric since the nadir of the recession. The most recently published U.S. government data reveal all-time highs for manufacturing sector output, value-added, revenues, exports, profits, and foreign direct investment. Business is good for manufacturers in the U.S., but it could be better still.

WSJ | Fed’s Williams: U.S. Economy Should Snap Back in Second Quarter
The U.S. economy should rebound this spring following its winter downturn, but growth won’t be exceptionally robust going forward, Federal Reserve Bank of San Francisco President John Williams said Friday.
WSJ | Investors Rewarded for Trek Into Little Known Markets
Investors who ventured into frontier markets—the smaller, lesser-known cousins of emerging markets—have been rewarded with impressive equity returns over the past 18 months.
CATO | Globalization Eradicates Poverty
Interconnected, free markets generate wealth and pull people out of poverty. This occurs as the connective technologies of globalization (like the Internet) increase competition. That benefits consumers who can buy more, increasingly inexpensive products to better their quality of life. That also creates innovation and employment, as is the case for Chinese villagers.

Health Care

National Journal | Doctor Shortages Aren't Just a Veterans Affairs Problem. They're a Nationwide Problem.
Last week, an investigative report revealed that 1,700 veterans who wanted to see a doctor at a Phoenix Veterans Affairs hospital were missing from an official waiting list, mirroring a tactic used at two dozen other facilities across the country to mask long waits for medical care.

Econ Comments & Analysis                                                                                            
Mercatus | Hipster Health Insurance 101: Advice for When You're Getting the Short End of the Stick
Twenty-six-year-olds who own 1,000-square-foot fixer-uppers don't pay the same homeowners insurance premiums as 60-year-olds with 10,000-square-foot McMansions. "One day, you'll be 60 years old with a big house" doesn't imply, "so pay big bucks now to subsidize unlucky me and my grand digs." But that's Dad's argument about health insurance.

CATO | Veterans Need Choice in Choosing Health Care
Medical care for veterans has become Washington’s latest scandal du jour.  Those injured while serving their country deserve prompt, quality medical attention. 


FOX Business | Fed's Plosser Floats New Approach To Forward Guidance On Rates
The Federal Reserve should provide more information on the likely future path of interest rates and explain its policy decisions in the context of those forecasts, a top Fed official said on Friday.

Econ Comments & Analysis                                                                                            
Bloomberg | Lehman Lesson Lost as Bank Lobby Gains Clout, Reinfeldt Says
Sweden’s Prime Minister Fredrik Reinfeldt said the world risks forgetting the lessons of the financial crisis as the bank lobby gains dominance.
Bloomberg | Buy With Central Banks Is U.S.-Japan Lesson for ECB QE Scenario
If central banks are buying, it pays for investors to join in.
Forbes | Steve Forbes Aims To End Four Decades Of Slow-Motion Wealth Destruction
Their hearts are surely in the right place, but when money is discussed with devotees of the Austrian School, they frequently tout the concept of “competing currencies.” At first glance it’s hard to argue with them. Rather than leave money to government, why not let private actors compete to issue the best money?

WSJ | John Taylor: Interest Rates Should Already Be Higher
Our main topic of conversation, which is being hotly debated in markets and at the Fed, was where short-term interest rates should be in the years ahead, after the Fed lifts them from zero.
Calculated Risk | Unofficial Problem Bank list declines to 496 Institutions
Added this week were GSL Savings Bank, Guttenberg, NJ ($100 million); Grant County Deposit Bank, Williamstown, KY ($79 million); and Columbus Junction State Bank, Columbus Junction, IA ($56 million).


Econ Comments & Analysis                                                                                            
FOX Business | Small Business Guide to Internet Sales Tax
Comprehending sales tax law is a lot like trying to understand the dinner table conversation at the mad hatter’s tea party. Sales tax law varies from state to state, and each industry has a special set of tax rules it needs to follow.

Heritage Foundation | A Global Wealth Tax Is a Lousy Idea
Thomas Piketty’s best-selling treatise “Capital in the 21st Century” elates liberals because it argues on behalf of soaking the rich with excessive taxation. Mr. Piketty’s preferred mechanism for equalizing incomes is to institute a global tax on wealth.


Market Watch | May likely to bring shower of new U.S. jobs
The economy is widely expected to post another strong month of job creation in May, fueling hopes that the fastest U.S. growth since the end of the recession five years ago is just around the corner.

Econ Comments & Analysis                                                                                            
WSJ | Weak Wages Pose Threat to Liftoff for Economy
A long-awaited liftoff in the U.S. economy is facing pressure from stubbornly weak wage growth, muddying the outlook for consumers and challenging Federal Reserve policy makers who are counting on a pickup as they unwind the central bank's extraordinary support for the recovery.

Library of Economics | Raise Minimum Wage: Reduce Benefits
At the start of this year, the minimum wage in SeaTac, a city in Washington state, was raised by a whopping 63 percent--from $9.19 an hour to $15.00 an hour. If we critics of the minimum wage, including the late economists Paul Samuelson, James Tobin, Gunnar Myrdal, and Milton Friedman, and a large percent of the economics profession--are right about our economic analysis, then we should certainly expect some of the negative results to show up in SeaTac, a small city surrounding the Seattle/Tacoma International Airport.


Politico | OMB: Child migrants to cost U.S. $2.3 billion
New White House estimates show that the projected costs of caring for and resettling child migrants from Central America could reach $2.28 billion next year — well over double what the administration asked for in its 2015 budget just months ago.
Bloomberg | Unstoppable $100 Trillion Bond Market Renders Models Useless
Just last month, researchers at the Federal Reserve Bank of New York retooled a gauge of relative yields on Treasuries, casting aside three decades of data that incorporated estimates for market rates from professional forecasters. Priya Misra, the head of U.S. rates strategy at Bank of America Corp., says a risk metric she’s relied on hasn’t worked since March.

Econ Comments & Analysis                                                                                            
WSJ | Fraudulent Government Accounting
This headline will strike many readers as redundant. But we're hoping that through repetition Members of Congress may be motivated to stop misleading their constituents about the cost of federal credit programs.