Thursday, January 22, 2015

General Economics

Market Watch | U.S. jobless claims fall 10,000 to 307,000
The number of people who applied for U.S. unemployment benefits in mid-January fell by 10,000 but remained above the key 300,000 mark for the third straight week, the first time that's happened since July. Initial jobless claims declined to 307,000 in the seven days ended Jan. 10 from a revised 317,000 in the prior week, the Labor Department said Thursday.
Market Watch | U.S. home prices grew 0.8% in November, FHFA says
U.S. house prices rose a seasonally adjusted 0.8% in November, according to the Federal Housing Finance Agency house price index released Thursday.
Wall Street Journal | ECB Announces Stimulus Plan
The European Central Bank said Thursday it will purchase eurozone countries’ government bonds, a landmark decision aimed at combating stagnation and ultralow inflation in a region that has emerged as a top risk to the global economic recovery.

Econ Comments & Analysis                                                                                            
New York Times | Day After President’s Speech, Some Doubts Linger Over Nation’s Recovery
As a web developer benefiting from an 8 percent pay raise, Brad McLaughlin is looking good economically. He and his girlfriend are spending more money on natural groceries, ski weekends in Colorado’s mountains and vacations to England and Austin, Tex. Not that he credits President Obama for any of it.
Market Watch | The winners from Draghi’s QE? America and Britain
Waiting for Godot seems like just a few minutes by comparison. The markets have been expecting the European Central Bank to launch its own version of quantitative easing since the dinosaurs roamed the earth — or at least since 2011, when it became clear the eurozone was going to need something to lift its struggling economies off the rocks.
Wall Street Journal | Now He’s After Middle-Class Savers
President Obama is pitching his new tax plan as a way to help the middle class at the expense of the rich. But middle-class savers are bound to notice if he achieves two of the White House’s stated goals—to “roll back” tax benefits of 529 college savings plans and “repeal tax incentives going forward” for Coverdell Education Savings Accounts.
Forbes | The President's Middle-Class Economics
In his 2015 State of the Union address, President Obama laid out his vision for how to help the middle-class, dubbing it middle-class economics. His plan includes tax increases of $320 billion to pay for around $200 billion in new or expanded tax credits. Unfortunately, his policy prescriptions would continue years of slow economic growth and flat incomes for the middle-class.

Wall Street Journal | Why Should Americans Care About European Central Bank Policy Moves?
What happens in Frankfurt stays in Frankfurt, nicht? Not exactly, when it comes to the U.S. economy.
Wall Street Journal | How China’s Slowdown Could Drag Down the Global Economy
China’s economic growth is slowing to its lowest pace in more than two decades as it reaches the limits of its credit-fueled, export-led expansion and tries to avoid a hard landing.

Health Care

Econ Comments & Analysis                                                                                            
Meratus Center | From Fortress to Frontier: How Innovation Can Save Health Care
Despite the fierce debate over health care policy, the political Left and Right are more alike than they realize. Both have spent decades pursuing policies that obstruct health care’s capacity to save lives, ease suffering, and cut costs.
Daily Signal | Medicare Reform Hearings: Making a Bipartisan Case for Common Sense
Medicare doctors face a 21 percent pay cut this year because a complex formula called the Sustainable Growth Rate (SGR), a feature of current law, requires the drastic cut. Repealing that formula to pay physicians would add hundreds of billions of dollars to the nation’s deficits, which is why the House Energy and Commerce Committee is holding two days of hearings on new ways to reform Medicare physician payment while improving Medicare and controlling its costs.


Econ Comments & Analysis                                                                                            
Market Watch | Why the ECB’s QE won’t delay Fed rate increases
Investors are beginning to bet that the Federal Reserve will lose its nerve and postpone the increase in interest rates that the central bank has hinted would come sometime this summer. They’re going to lose that bet because the strong dollar isn’t signaling weakness in the U.S. economy, but strength.
Market Watch | As central banks surprise, Fed may have to throw in the towel
The surprises coming out of the Swiss National Bank, the European Central Bank, the Bank of England and the Bank of Canada spell tectonic shifts occurring in the global economy that inevitably will hit these shores.
Forbes | Lower Inflation: Another Chance For Government Mistakes
World inflation is falling, along with oil prices. This shouldn’t have caught financial markets by surprise, since private-sector credit growth remains very slow.
Wall Street Journal | The World’s Monetary Dead End
Central banks in the U.S., Japan and Europe are trapped in a loop. They are fully invested in the theory that zero rates and bond buying are stimulative and add to inflation, yet growth, inflation and median incomes keep going down.


Econ Comments & Analysis                                                                                            
Forbes | Don't Tax The Rich To Benefit The Middle Class, Help The Poor Instead
In his State of the Union Speech, President Obama called for tax increases on the rich in order to pass out goodies to the middle class. In particular, he wants to raise capital gains taxes on the rich and use the money to provide tax breaks to middle class families with two working parents, for those with child care expenses, and for those paying for college. Not only are his proposed freebies all bad ideas, he is spending the money on the wrong group.
Forbes | Obama's 529 College Savings Plan Tax Hike Is An Assault On The American Dream
It’s pretty clear that the Obama White House and their allies on The Left just don’t get it when it comes to their proposed tax hike on 529 college savings plans.
Forbes | The IRS Has Too Many Responsibilities
Last week, IRS Commissioner John Koskinen said at a news conference that the IRS may need to use furloughs in order to handle its budget issues. A well-functioning revenue service is necessary for an effective government, so it is worthwhile to consider the facts of the situation, and what they mean.
Daily Signal | How Obama’s New Tax Plan Discriminates Against Stay-at-Home Parents
President Obama’s new tax plan, which he discussed in part in the State of the Union, lays out new proposals that he claims would help low- and middle-income families. These included a new tax credit program for dual-earner families and an expansion of the Earned Income Tax Credit (EITC) program for single, childless adults. He also proposed a substantial increase to the child care tax credit.


Bloomberg | More Americans Than Forecast Filed Jobless Claims Last Week
More Americans than forecast filed applications for unemployment benefitslast week, a sign of lingering holiday turnover.
Market Watch | Jobless claims above 300,000 for third straight week for first time since July
The number of people who sought new U.S. unemployment benefits in mid-January fell by 10,000, but the level of applicants remained above 300,000 for the third straight week for the first time since July in what’s likely a reflection of post-holiday layoffs.

Econ Comments & Analysis                                                                                            
Telegraph | Barack Obama is shattering the competiveness of the US economy
If it wasn’t for the fact the speaker was clean shaven, didn’t have long straggly hair, and didn’t tell any lewd jokes, it could have been Russell Brand delivering the State of the Union address to Congress this week.

Wall Street Journal | World Economy Needs 280 Million Jobs in Next Five Years, ILO Says
The world economy will need to generate nearly 280 million new jobs between now and the end of 2019 to make up ground lost during the last recession and ensure new labor market entrants can find work, the International Labor Organization said in a new report.