Wednesday, June 25, 2014

General Economics

Politico | U.S. economy shrank at steep 2.9 percent rate in Q1
The U.S. economy shrank at a steep annual rate of 2.9 percent in the January-March quarter as a harsh winter contributed to the biggest contraction since the depths of the recession five years ago. But the setback is expected to be temporary, with growth rebounding solidly since spring.
Bloomberg | Orders for U.S. Capital Goods Rise as Investment Picks Up
Orders for U.S. business equipment climbed in May, showing corporate investment is helping revive the economy after a slump at the start of the year.
WSJ | U.S. Ruling Loosens Four-Decade Ban On Oil Exports
The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad.

Econ Comments & Analysis                                                                                            
Bloomberg View | Millennials Skip the Ring and Mortgage  
They’re living at home in growing numbers. They're not buying homes, which creates ripple effects throughout the housing market. They’re having more babies out of wedlock than in it.
FOX News | Great Recession and slow recovery have widened US wealth gap as home prices trail stock gains
The Great Recession and the slow recovery have sharply widened the gap between the wealthiest Americans and everyone else, according to a study that underscores the unevenness of wealth gains since the recession ended.

WSJ | Economists React to -2.9% Q1 GDP Revision: ‘Different Shades of Nasty’
The U.S. economy contracted at a 2.9% annual pace in the first quarter this year, the Commerce Department said Wednesday. That is a sharply lower reading than earlier estimates and marked its sharpest pullback since the recession ended five years ago.  Economists weighed in on the third read, what it might mean for the economic recovery, and where activity stands in the second quarter.

Health Care

National Journal | Here Comes the Hardest Part About Obamacare
For people like me who want the Affordable Care Act to work but who worry about the Obama administration's management record, this story in The Washington Post is foreboding: "Businesses Gear Up for Employer Mandate."
WSJ | Sick Drawn to New Coverage in Health-Law Plans
People enrolled in new plans under the health law are showing higher rates of serious health conditions than other insurance customers, according to an early analysis of medical claims, putting pressure on insurers around the country as they prepare to propose rates for next year.

Econ Comments & Analysis                                                                                            
Washington Times | The president’s Cronycare
Promises, promises. Once upon a time, Barack Obama said he would put an end to monkey business as usual in Washington. “First,” he said, “we will close the revolving door that has allowed people to use their administration job as a steppingstone to further their lobbying.” Like so many of the president’s campaign pledges, this one has proved to be a fairy tale.
WSJ | After A Lull, Health-Care Spending is Poised to Pick Up, Study Says
Health-care spending will accelerate next year for the first time since the recession ended, a reversal of a trend that could have broad implications for employers and the economy, a new study says.
NBER | Pharmaceutical Profits and the Social Value of Innovation
Prior research has shown that exogenous shocks to the demand for medical products spur additional product development. These studies do not distinguish between breakthrough products and those that largely duplicate the performance of existing products. In this paper, we use a novel data set to explore the impact of the introduction of Medicare Part D on the development of new biotechnology products.


Econ Comments & Analysis                                                                                            
Market Watch | Draghi’s monetary blitz has failed to lift euro zone
The build-up was intense. The hype was overwhelming. The anticipation was growing. But the actual performance? So far, very disappointing.
Mercatus | Testimony Before the House Committee on Financial Services
In gathering to discuss the past and uncertain future of the US Export-Import Bank, we have a rare opportunity to reconsider the assumptions, mission, and activities of the federal government’s official export credit corporation ahead of the reauthorization vote. In order to make the best decision, however, policymakers must know all the facts.

WSJ | Dudley: Fed Rate Outlook Depends on Economy
Federal Reserve Bank of New York President William Dudley said Tuesday the market’s view that the U.S. central bank will first raise rates in the middle of next year is reasonable.


National Journal | Should the Government Use Tax Credits to Encourage Apprenticeship Programs?
Republican Sen. Tim Scott of South Carolina described a "devastating" economic outlook for the country if Washington can't find a way to connect poor Americans to more than 4 million open jobs.
Daily Signal | IRS Admits Wrongdoing, to Pay $50,000 in Leaking of Marriage Group’s Tax Return
Two years after activists for same-sex marriage obtained the confidential tax return and donor list of a national group opposed to redefining marriage, the Internal Revenue Service has admitted wrongdoing and agreed to settle the resulting lawsuit.

Econ Comments & Analysis                                                                                            
Politico | Tax cuts are coming to D.C. — no thanks to Congress
While Congress talks endlessly about a rewrite of the Tax Code that would lower individual and corporate income tax rates — without actually doing it — the D.C. City Council has quietly adopted a plan that looks a lot like the one lawmakers in the Capitol say they want.
WSJ | With Businesses Fleeing America, Congress Must Act
American businesses are heading for the exits to escape the U.S. tax code. Medical device company Medtronic announced recently that it planned to acquire the Ireland-based firm Covidien and relocate headquarters in Dublin, making it the biggest company yet to leave our shores for a more favorable tax climate. It's just the latest example, and the flight will continue until the U.S. reforms its outdated, uncompetitive tax code.

Washington Post | Your taxes are going up. You just don’t know it yet.
Looking at our politics today, it’s hard to imagine taxes rising anytime soon—certainly for the middle class, and probably even for the wealthy. President Obama has forsworn hiking taxes on anyone earning under $250,000. Republicans might take control of the Senate in 2014 and the White House in 2016, presumably dashing the hopes of anyone looking to raise more tax revenue.


WSJ | Surprising Findings on Two-Year vs. Four-Year Degrees
As states for the first time mine graduates' salary data from public colleges, they are finding that paychecks for holders of associate degrees in a technical field are outstripping many grads with four-year degrees, at least early in a career.

Econ Comments & Analysis                                                                                            
Forbes | Job Creation Is The Real Key To Helping Working Families
President Obama dreams of an American economy in which all workers have ample paid leave benefits, maximum flexibility, and, of course, receive more than a living wage.  Yet in making his case for this vision, in this oped that appeared in the Huffington Post in conjunction with the White House “Summit on Working Families,” the President—perhaps unsurprisingly, given his Administration’s economic record—seems unfamiliar with the costs associated with greater benefits, the tradeoffs that workers and employers must consider when creating compensation packages, and the sad reality that the biggest problem facing many Americans today isn’t that their jobs pay too little or offer too few benefits, but that they cannot find enough work at all.


CNN Money | Your dead ex-spouse's debt can become your problem
If you're divorced and your ex-spouse dies, you might find yourself dealing with a range of emotions. You might be surprised to learn you may have to deal with creditors too.
Bloomberg | China Local Debt Growth Slows as Economic Expansion Cools
China’s chief auditor said growth in local government debt slowed, a sign that tighter scrutiny on borrowing and an economic slowdown have curbed credit.

Econ Comments & Analysis                                                                                            
Weekly Standard | ‘Student Loan Relief Now’
My father is one of the reasons that student loans cannot normally be discharged via bankruptcy. Such an outcome was never his goal: quite the opposite, in fact, because exempting student debt from bankruptcy relief makes little economic sense and is patently unfair to the students saddled with such debt. A sensible reform of this law could slow tuition growth and put a lid on exploding student debt while sparing young adults the debilitating stress of a debt they can never hope to repay.

WSJ | Harkin Opens Door To Bankruptcy Option for Student Loans
A top Senate Democrat is set to unveil legislation Wednesday that would allow a small portion of Americans’ student debt to be discharged through bankruptcy proceedings, a measure that would likely hit the profits of private lenders.