Wednesday, July 16, 2014

General Economics

Bloomberg | China’s Economic Expansion Accelerates to 7.5%
China’s economic growth accelerated for the first time in three quarters after the government sped up spending and freed up more money for loans to counter a property slump.
Bloomberg | Gain in Factory Output Provides Boost to U.S. Growth
Industrial production climbed in June to cap the strongest quarter in almost four years as manufacturers provided a bigger spark for the U.S. economy.
Bloomberg | Homebuilder Confidence in U.S. Climbs to Six-Month High
Confidence among U.S. homebuilders rose more than forecast in July, reaching the highest level in six months, as growing payrolls brightened the outlook after a shaky first half.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Gaping Hole In the Middle of Dodd-Frank
When President Obama signed Dodd-Frank into law four years ago, there was a widely acknowledged hole in the legislation-housing finance reform was left for later.
National Journal | Conservative Groups Unite Against Export-Import Bank
A powerful coalition of conservative advocacy groups is taking a united stand against the Export-Import Bank, raising the stakes in the debate over whether to reauthorize the agency that provides foreign loan guarantees aimed at boosting U.S. exports.
Market Watch | Right and left finally agree: Obama has checked out
Mainstream media joins right-wing critics
Mercatus | The US Export-Import Bank: A Review of the Debate over Reauthorization
The Export-Import Bank of the United States (Ex-Im Bank)—the federal government’s export-credit agency—faces an uncertain future. With the bank’s charter soon to expire, Washington has become the scene of a fierce battle over whether to continue funding this obscure, Depression-era government bank. 
AEI | Stop worrying about the 1 percent. Their money can't help the middle class.
It would be an understatement to claim that income inequality is much discussed these days. And if you have read the Internet in the last few months, you surely witnessed the fawning, obnoxious adoration heaped upon Thomas Piketty’s “Capital in the Twenty-First Century.” Often bought, seldom read, Piketty’s 700 pages shine a big bright light on the fortunes of the top one percent, and have made him a hero in the eyes of the inequality left.

WSJ | The Homeownership Rate for Millennials Has Hit Bottom
More millennials became homeowners last year, a sign that the homeownership rate among America’s young adults may have hit bottom, according to a new analysis of Census data published Wednesday.
Yahoo Finance | Investors haven't been this optimistic since 1987. Here's why that's bad.
The most recent survey by Investors Intelligence reports a market bull/bear ratio of 4-to-1. That’s the highest it’s been all year, close to the peak of 2013 and approaching levels not seen since early 1987.
Library of Economics | Governments don't create problems, they solve problems
Yes, I'm being sarcastic. I associate this view with American liberals. It often seems that when there is a problem such as the 2008 financial crisis, they immediately assume "the market" is to blame, and "more regulation" is the answer. On closer inspection it's also a view of policymakers, whether liberal or conservative.

Health Care

CNN Money | Obamacare help was in high demand
People who signed up for the Affordable Care Act insurance found they had to answer questions about income, taxes, family size and immigration status. There were also multiple choices available for plans that were not very different from each other.

Econ Comments & Analysis                                                                                            
CATO | Is Obamacare Working?
Two recent surveys have shown a significant reduction in the number of Americans without health insurance since the start of Obamacare in October 2013. According to the Commonwealth Foundation, the uninsured rate fell from 20 to 15 percent, while Gallup found a decline from 18 to 13.4 percent. Both surveys indicate that roughly 8 million Americans have gained insurance over the past ten months.


Bloomberg | Zero-Rate Calm Belied by Demand for 15-Year Mortgage Debt
For evidence that U.S. bond investors aren’t being satisfied by Federal Reserve Chair Janet Yellen’s dovish words, take a look at government-backed mortgage securities.
Bloomberg | Wholesale Prices in U.S. Increase More Than Forecast on Fuel
The 0.4 percent increase in the producer price index followed a 0.2 percent drop in May, the Labor Department reported today. The median estimate in a Bloomberg survey of 69 economists called for an advance of 0.2 percent. Fuel costs climbed 2.1 percent, the biggest gain since February 2013.
Bloomberg | Yellen Expects Fed to Reiterate Plan to Reduce Balance Sheet
Federal Reserve Chair Janet Yellen reiterated the central bank plans to reduce the size of its $4.38 trillion balance sheet as it normalizes monetary policy.

Econ Comments & Analysis                                                                                            
Investors | Fed's Failed Monetary Experiment About To End
The Fed: The recovery is not yet "complete," Federal Reserve Chairwoman Janet Yellen suggested Tuesday, but the central bank plans to let interest rates rise anyway. We'll soon learn just how solid this so-called recovery is.
WSJ | How to Spark Another 'Great Moderation'
Sound money and free markets go hand in hand. In 1776, Adam Smith wrote of the importance of rules for "a well-regulated paper-money" in "The Wealth of Nations." In 1962, Milton Friedman made the chapter "Control of Money," with its rationale for monetary rules, a centerpiece of "Capitalism and Freedom." In the 1980s, British Prime Minister Margaret Thatcher and President Ronald Reagan made sound money principles a key part of their market-based reform platforms.

WSJ | Fed’s George: Economy ‘Best Served’ By Fed Raising Rates
Federal Reserve Bank of Kansas City leader Esther George said Tuesday the economy would be “best served” by a steady and gradual campaign of short-term interest rate increases by the U.S. central bank.
WSJ | Yellen Uncomfortable With Proposed GOP Legislation for Fed
Ms. Yellen said she would welcome having a community banker on the central bank’s board, but added she does not believe new legislation is needed to ensure one is included.


Econ Comments & Analysis                                                                                            
CNN Money | Lew: Stop firms moving abroad to dodge tax
U.S. Treasury Secretary Jack Lew is urging Congress to act to prevent U.S. companies shifting their headquarters abroad to benefit from a lower tax rate.
WSJ | The Senate That Taxed the Internet
On Tuesday the House passed a permanent extension of the Internet Tax Freedom Act, which prevents new taxes on email and Internet access services. A rare Washington example of bipartisan cooperation to encourage economic growth, the measure is so popular that it did not even require a roll call vote. It passed by acclamation.

Market Watch | Slim chances seen for tax ‘inversion’ clampdown, analysts say
Treasury Secretary Jacob Lew wants to shut the door on so-called tax “inversions,” but a pair of analysts say it’s going to stay open – at least for the time being.


Fortune | Business majors' job prospects are looking bright
At a recent open house for parents of incoming freshmen business students at Bentley University, Career Services Director Len Morrison had an encouraging message to share. Recent graduates have been landing jobs with ease, and companies have been flocking to campus, many making multiple hires, Morrison said.

WSJ | Is the U.S. Labor Market Getting Less Dynamic?
Declining churn in the labor market may be holding back people’s careers and the entire economy. One of the key questions about this phenomenon is whether it’s the temporary result of an especially severe recession, or if some sort of structural changes in the U.S. economy are making the labor market permanently less dynamic.


WSJ | California Drought Will Cost $2.2 Billion in Agriculture Losses This Year
California's drought will cost the state $2.2 billion this year in losses and added expenses for its giant agriculture industry, while cutting 17,100, or 3.8%, of the state's farm jobs, according to a report released Tuesday.

Econ Comments & Analysis                                                                                            
CBO | Testimony on The 2014 Long-Term Budget Outlook
In brief, between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing its debt to soar. The total amount of federal debt held by the public is now equivalent to about 74 percent of the economy’s annual output, or gross domestic product (GDP)—a higher percentage than at any point in U.S. history except a brief period around World War II and almost twice the percentage at the end of 2008.

Reason Foundation | America's Unsustainable Long-Term Debt Trajectory
In the past year or so, the White House has become increasingly aggressive in touting President Obama’s achievements in reducing the deficit. The deficit has been “cut by more than half since 2009,” a 2013 blog post by the White House Office of Management and Budget declared, pointing to the shrinking of the deficit as a percentage of the economy.
WSJ | Few States Prepared for Economic Slumps
That’s the finding of a new report out Tuesday from Pew Charitable Trusts. Researchers there argue states don’t fill their “rainy day” funds enough to prepare for economic slumps, missing out on a key buffer during recessions.