Monday, November 10, 2014

General Economics

Wall Street Journal | A Sure-Fire Way to Harm The Economy
Just as it seems the U.S. economy might be turning a corner, a little-known and seemingly benign change in accounting rules could cost millions of jobs and billions in lost economic growth. Most business owners and their employees have no idea what may be coming.
Real Clear Markets | The Hidden Facts Behind Inequality Statistics
Americans underestimate the actual levels of income and wealth inequality and believe the ideal income and wealth distributions are even more equal than what they imagine reality to be, according to research by Harvard's Michael Norton (read Jordan Weissmann's write-up of the research here). This, not particularly surprising result tells us very little as I suspect that most Americans would also underestimate the value of benefits provided to the poor in this country, the number of polar bears living in the Arctic, and many other facts that may or may not be of importance. The more interesting point is that anyone thinks this matters.
Forbes | U.S. Takes On China At APEC
“Obama is weakened at home, so he won’t be in a position to challenge China,” Shi Yinhong of Renmin University told Bloomberg, referring to the two-day Asia-Pacific Economic Cooperation summit. On Monday and Tuesday, the leaders of the 21-nation organization, celebrating its 25th anniversary this year, will meet in a sprawling purpose-built resort on the outskirts of Beijing, near the Great Wall.

Econ Comments & Analysis                                                                                            
Forbes | Repeal Dodd-Frank and End Too Big To Fail
The Republicans will hold a comfortable majority in the U.S. House and, at most, a 55 seat majority in the Senate for the 114th Congress. That’s not a wide enough margin to override a Presidential veto. Still, the Republicans owe it to their constituents to exercise governance.


Market Watch | With nine-month head start, Fed still may get jobless forecast wrong
Federal Reserve officials have acknowledged they have been caught by surprise by the downward trajectory of the unemployment rate.
Real Clear Markets | Did the Fed's QE Actually Help?
The Federal Reserve has ended its roughly $3.7 trillion program of bond buying, leaving in its wake a host of hard questions. Did it strengthen the economic recovery? If so, by how much? What are the long-run effects? Should it be used again? We don't have good answers.

Econ Comments & Analysis                                                                                            
Market Watch | The Fed and other central banks have to handle money better
Global economic policies aren’t effective enough, either to restore growth or bring inflation to a level needed to address the world’s debt problems.


Econ Comments & Analysis                                                                                            
Forbes | The Overwhelming Case Against Capital Gains Taxation
According to the bean counters at Ernst and Young, the United States has one of the highest capital gains tax rates in the world.


Market Watch | Everything but higher wages
The employment situation report, released Friday by the Bureau of Labor Statistics,tells the same story we have seen for much of 2014; the recovery has gathered steam, and job growth has accelerated, but not nearly fast enough to produce wage growth for most Americans.

Econ Comments & Analysis                                                                                            
Wall Street Journal | Clear Evidence on Disincentives to Work
People in government like to take credit for the drop in the unemployment rate this year. But one reason the rate dropped is because the government didn’t extend unemployment benefits.


Wall Street Journal | Younger Generation Faces a Savings Deficit
Adults under age 35—the so-called millennial generation—currently have a savings rate of negative 2%, meaning they are burning through their assets or going into debt, according to Moody’s Analytics. That compares with a positive savings rate of about 3% for those age 35 to 44, 6% for those 45 to 54, and 13% for those 55 and older.