Friday, January 16, 2015

General Economics

CNN Money | Most Americans feel they are falling behind
Some 55% say they are falling behind, according to a new Pew Research Center study. That's the case even though most of those polled feel the economy is recovering.
Market Watch | Industrial production slips 0.1% in December as utilities output slides
Industrial production declined 0.1% in December, marking the first drop since August, after unusually warm weather quelled demand for heating, the Federal Reserve reported Friday.
Market Watch | Consumer prices see biggest monthly slide in six years on falling gas
Consumer inflation in December saw the biggest monthly drop in six years as gasoline prices tumbled, according to government data released Friday.
Market Watch | Here’s what saw the biggest deflation in 2014
Consumer prices saw the smallest annual gain since 2008 — just 0.8% — and some items got significantly cheaper.
Market Watch | Here’s what saw the most inflation in 2014
Consumer prices saw the smallest annual gain since 2008 — just 0.8% — but that doesn’t mean all items sank in price.

Econ Comments & Analysis                                                                                            
Wall Street Journal | WSJ Survey: Economists See 2015 GDP Growth at 3%
Falling oil prices will be a boon to the domestic economy at least through the first half of the year, but the price drop also means the U.S. will flirt briefly with deflation, according to The Wall Street Journal’s latest survey of economic forecasters.
Wall Street Journal | How Spending Sapped the Global Recovery
As the world’s elites gather in Davos next week, expect more big names to join the chorus calling for increased government spending to enliven the flailing global recovery. President Obama and Treasury Secretary Jack Lew are among the voices urging European leaders to spend more. The International Monetary Fund and former Treasury Secretary Larry Summers —who wrote in the Financial Times in October that “there is for once a free lunch”—have even been arguing that government borrowing to build roads or airports would more than pay for itself. If only governments in the developed world would start spending more, this refrain goes, the global economy’s future would be brighter.
Wall Street Journal | Biggest Banks Lag Behind as Economy Gains Steam
More than five years into the economic recovery, the nation’s biggest banks are still on the outside looking in, as their fortunes grow increasingly disconnected from the rest of the country’s.

AEI | Why the world economy may face a permanent slump
The math is the math. Global population growth is slowing and so is the working-age population. Employment will grow by just 0.3% annually during the next 50 years, forecasts a new report from the McKinsey Global Institute. And if even if productivity growth matches the rapid rate of the past half century, “the rate of increase in global GDP growth will therefore still fall by 40%, to about 2.1 percent a year.”
AEI | As oil and gas prices tumble, it’s a good time to reflect on the marvels of the market and Julian Simon
At today’s price of $2.09 per gallon, gasoline prices in the US are the lowest in history, adjusting for increased fuel economy and higher wages as the chart above illustrates. At today’s average fuel economy of 25.1 miles per gallon, a typical car would require just under four gallons of gas, which would cost $8.32 at today’s price of $2.09.  At the estimated average hourly wage today of $20.82, a typical worker would have to work for 24 minutes to earn enough pre-tax income to purchase the gas required to drive 100 miles, and that brings the “time cost of gas” priced in minutes of work to the lowest level in US history.

Health Care

Econ Comments & Analysis                                                                                            
Bloomberg | The Individual Mandate
It’s here at last. Since the individual mandate was proposed as a central feature of President Barack Obama’s health reform plans in 2009, it has been one of the country’s most bitterly divisive issues.
Daily Signal | How Obamacare Exchanges Have Decreased Competition Among Insurers
Unsurprisingly, Obamacare has made yet another problem worse—creating a government exchange that is less competitive than the prior individual market.


Econ Comments & Analysis                                                                                            
Wall Street Journal | Low Inflation Could Complicate Fed’s Decision
U.S. consumer prices rose at their slowest annual pace last month in more than five years largely due to a plunge in oil prices, a potential complication for the Federal Reserve as it looks to raise interest rates later this year.


Econ Comments & Analysis                                                                                            
Daily Signal | New GOP Plan Would Force Online Sales to Be Taxed at Rate of Seller’s State
House Judiciary Committee chairman Bob Goodlatte, R-Va., this week jumpstarted the sputtering effort to allow states to collect sales taxes on sales by out-of-state, mostly Internet-based, sellers. Known as “home rule and revenue return,” his plan would allow Internet purchases to be taxed – but at the rate established by the seller’s state, not the rate set by the buyer’s state.


CNN Money | Texas: America's boom-and-bust oil capital
Up until just a few months ago, things were going gangbusters in Texas. Now, with oil breaking below $45 a barrel, there's a legitimate fear the state will tumble into a recession.


Bloomberg | Obama Said to Seek 7% Budget Boost, Setting Up Fight With Congress
President Barack Obama will ask Congress for as much as $68 billion more than current budget limits in fiscal 2016, according to two people familiar with the administration’s proposal.

Econ Comments & Analysis                                                                                            
Wall Street Journal | The Other Debt Bomb in Public-Employee Benefits
Public-pension funds have garnered attention in recent years for being underfunded, but a more precarious situation has received much less notice: health-care obligations for public retirees.