Tuesday, January 27, 2015

General Economics

Market Watch | Orders for durable goods sink in December
Orders for durable goods declined sharply in December, raising questions about whether businesses are really ready to ramp up investment in 2015.
Market Watch | U.S. home prices edge 0.2% lower in November: Case-Shiller
U.S. house prices edged back by 0.2% in November, to lower the year-on-year advance to 4.3%, according to the S&P/Case-Shiller 20-city composite released Tuesday.
Market Watch | Consumer confidence index jumps to seven-year high of 102.9
Consumer confidence jumped in January to the best reading since August 2007, according to the latest reading from the Conference Board. The consumer-confidence index rose to 102.9 from 93.1 in December, above the MarketWatch-compiled economist forecast of 96.9.
Market Watch | New-home sales jump 11.6% to 481,000 annual rate in December
Sales of new single-family homes rose sharply in December, helping sales for the year to show a modest increase from 2013, the Commerce Department reported Tuesday. Sales of new single-family homes jumped 11.6% in December to a seasonally adjusted annual rate of 481,000.

Econ Comments & Analysis                                                                                            
Real Clear Markets | If the president really wants to help the middle class, he will stop trying to mandate equal results and concentrate instead on legislating equal opportunity.
In his recent State of the Union speech, President Obama extolled the virtues of "middle class economics," as a means of spurring economic growth and creating a more inclusive economy. Just what this entails is unclear, but President Obama says this "means helping folks afford child care, college, health care, a home, retirement, and my budget will address each of these issues, lowering the taxes of working families and putting thousands of dollars back into their pockets each year." On closer examination, the policy agenda the president is laying out is a tired mix of class warfare, new taxes, and more government spending.
Market Watch | The right way to help the middle class
If the president really wants to help the middle class, he will stop trying to mandate equal results and concentrate instead on legislating equal opportunity.
The Daily Beast | Making Free Trade Sexy
A true free trade agenda should be the cornerstone of any “middle class economics” platform. Open international markets lower domestic prices for consumers, increase export opportunities for small and big business alike, and induce formerly-protected manufacturers to improve and compete on a global stage. But we shouldn’t expect Obama to embrace the benefits of free trade just yet.
Washington Times | Obama’s illusory economic recovery
The big news from this week's State of the Union address is that the economic "crisis is over." Apparently, we've been rescued from a second Great Depression and everything this president has done to fix the economy has worked.
Wall Street Journal | A Modest Uptick in American Economic Freedom
A steep, seven-year decline in U.S. economic freedom has come to an end, according to the 2015 Index of Economic Freedom, published Tuesday by the Heritage Foundation and The Wall Street Journal. The U.S. score in the index experienced a particularly large drop in 2009-10, pushing this country out of the “free” category and into the “mostly free” category. A slight 0.7-point uptick this year has allowed the U.S. to retain its 12th-place ranking.

Wall Street Journal | Behind the CBO’s Forecast: Visions of the 3rd Longest Expansion in U.S. History
The Congressional Budget Office predicts the government’s deficits will shrink in 2015 and again in 2016. As a share of the economy, it will fall to 2.5% and remain there through 2017 before beginning to rise again with the aging of the population.


Econ Comments & Analysis                                                                                            
Market Watch | The lemmings of QE
Predictably, the European Central Bank has joined the world’s other major monetary authorities in the greatest experiment in the history of central banking.


Econ Comments & Analysis                                                                                            
Wall Street Journal | When Workers Choose
No Administration in decades has favored organized labor like President Obama ’s, yet union membership keeps declining, as it did again last year according to Friday’s annual report from the U.S. Bureau of Labor Statistics. The story seems to be that when given a choice, many union members would rather not pay for the privilege.
Wall Street Journal | Solving the Puzzle of Stagnant Wages
The elation over wage increases in private business reported in last month’s job report has been replaced by disappointment. The Bureau of Labor Statistics reported on Jan. 16 that average hourly earnings fell five cents in December, eating up most of the six-cent increase in November. Between 2010 and 2014, the average real wage fell 1.1%, a poor showing after rising 3.4% between 2006 and 2010. What accounts for this performance?


Wall Street Journal | CBO: Deficit to Narrow, Then Widen in ’18
Existing budget restraints and stronger economic growth will chip away at the federal deficit into 2017 before the gap begins to widen again, the Congressional Budget Office said, providing ammunition for both parties ahead of the White House’s first budget proposal to the Republican-controlled Congress.

Econ Comments & Analysis                                                                                            
CBO | The Budget and Economic Outlook: 2015 to 2025
The federal budget deficit, which has fallen sharply during the past few years, is projected to hold steady relative to the size of the economy through 2018. Beyond that point, however, the gap between spending and revenues is projected to grow, further increasing federal debt relative to the size of the economy—which is already historically high.

Wall Street Journal | You Ask, We Answer: Why Is the Debt Rising Faster Than the Deficit?
Last year, the federal government’s deficit was the smallest since 2007. Doesn’t $3 trillion in revenue and $3.5 trillion in spending represent a government that’s out of control? Isn’t the deficit only okay because the Federal Reserve has pinned interest rates so low? What will happen when rates go back to normal? How can the total national debt rise faster than the deficit?