News
Market Watch | Fed testing very limits of credibility: Lacker
The Federal Reserve is testing the limits of its credibility, said Jeffrey Lacker, the president of the Richmond Federal Reserve Bank, on Monday.
Real Clear Markets | At This Point There's No Way Out For the Fed
By upping the ante once again in its gamble to revive the lethargic economy through monetary action, the Federal Reserve's Open Market Committee is now compelling the rest of us to buy into a game that we may not be able to afford.
Econ Comments & Analysis
WSJ | Bernanke's Fiscal Cliff
The term "fiscal cliff" is an awfully hyperbolic way to describe the combination of tax increases and spending cuts currently scheduled to go into effect in the new year. But to the extent that the United States finds itself in a precarious fiscal situation, Federal Reserve Chairman Ben Bernanke shares much of the blame.
Washington Post | The Fed rolls the dice
It was big news last week when the Federal Reserve announced that it wants to maintain its current low-interest rate policy until unemployment, now 7.7 percent, drops to at least 6.5 percent.
Blogs
WSJ | Fed’s Stein Defends Proposed Rules for Foreign Banks
Federal Reserve governor Jeremy Stein Monday defended the central bank’s latest proposal to change how it regulates foreign banks, saying the rules would help reduce risks to U.S. financial stability.
Monday, December 17, 2012
Taxes
News
WSJ | Of Liberals and Loopholes
One post-election budget surprise has been President Obama's resistance to John Boehner's proposal to get $800 billion in new revenue by closing tax loopholes. Here's one likely reason: the high tax rates of his blue-state Democratic brethren.
CNBC | How Much Money Would Taxing the Rich Raise?
House Speaker John Boehner's latest tax proposal may mark a big step for Republicans. But it's a very small step in terms of actual tax revenues.
Econ Comments & Analysis
Financial Times | How to fix costly and unjust US tax system
Sooner or later the American tax code will be reformed. Probably sooner. Raising revenue will be the main motivation, but at a time of sharply increasing economic polarisation issues of fairness will be prominent too. There are also legitimate concerns about the complexity of current tax rules and their adverse effects on the economy.
WSJ | Of Liberals and Loopholes
One post-election budget surprise has been President Obama's resistance to John Boehner's proposal to get $800 billion in new revenue by closing tax loopholes. Here's one likely reason: the high tax rates of his blue-state Democratic brethren.
CNBC | How Much Money Would Taxing the Rich Raise?
House Speaker John Boehner's latest tax proposal may mark a big step for Republicans. But it's a very small step in terms of actual tax revenues.
Econ Comments & Analysis
Financial Times | How to fix costly and unjust US tax system
Sooner or later the American tax code will be reformed. Probably sooner. Raising revenue will be the main motivation, but at a time of sharply increasing economic polarisation issues of fairness will be prominent too. There are also legitimate concerns about the complexity of current tax rules and their adverse effects on the economy.
Employment
News
Washington Times | Study: ‘Fiscal cliff’ could hit jobs hard
Failure by Congress to avoid the “fiscal cliff” could put hundreds of thousands of people across the nation out of work, most of whom don’t work for the government and don’t live in federal government strongholds.
Blogs
Library of Economics | The Economics of "Right to Work"
The closed shop, where a worker must belong to the union before being hired, is dead. The union shop, where an individual must join the union once hired, is dead. The agency shop, where a worker cannot be made to join a union but can be required to pay dues if the union is the agent negotiating the contract for all workers, is dead.
Washington Times | Study: ‘Fiscal cliff’ could hit jobs hard
Failure by Congress to avoid the “fiscal cliff” could put hundreds of thousands of people across the nation out of work, most of whom don’t work for the government and don’t live in federal government strongholds.
Blogs
Library of Economics | The Economics of "Right to Work"
The closed shop, where a worker must belong to the union before being hired, is dead. The union shop, where an individual must join the union once hired, is dead. The agency shop, where a worker cannot be made to join a union but can be required to pay dues if the union is the agent negotiating the contract for all workers, is dead.
Budget
News
Washington Times | Push Obama over the fiscal cliff
Unless the fiscal cliff dilemma is resolved within the next two weeks, everyone’s taxes go skyward. Rich and poor alike will hand over $500 billion more to the Internal Revenue Service. The across-the-board spending reductions will amount to about $110 billion, with more than half of the amount coming from defense. It’s enough to plunge an already sputtering economy into a deep recession.
National Journal | The Fiscal Cliff Plan B for Republicans
Week five of the fiscal-cliff negotiations came and went without any resolution, as Republicans increasingly looked for a backup plan to help them avert the fiscal cliff, save face on taxes, and give as little ground as possible politically.
Politico | Fiscal cliff: 2014 budget already delayed
The White House confirmed to POLITICO Sunday that it has deliberately slowed preparations for President Barack Obama’s fiscal 2014 budget until it has a better fix on the current talks with Republicans in Congress.
Econ Comments & Analysis
NY Times | That Terrible Trillion
As you might imagine, I find myself in a lot of discussions about U.S. fiscal policy, and the budget deficit in particular. And there’s one thing I can count on in these discussions: At some point someone will announce, in dire tones, that we have a ONE TRILLION DOLLAR deficit.
Heritage Foundation | The Economic and Fiscal Effects of the Obama Tax Plan
Nearly historic increases in federal personal income and payroll taxes combined with modest reductions in federal spending are set to begin on January 1, 2013. This is the “fiscal cliff”: a combination of fiscal policy changes that many analysts believe will send the U.S. economy into a recession.
Blogs
WSJ | Avoiding Fiscal Cliff Won’t Spur Growth
A majority of economists surveyed said lawmakers will avoid across-the-board tax hikes and steep government spending cuts but say averting the fiscal cliff will do little to propel stronger economic growth immediately.
Heritage Foundation | Deficit Spending and Debt: Lessons from Japan
Deficit spending does not foster economic recovery. The U.S. and the world need to recognize the stagnation and inter-generational inequality caused by such spending, and for reference, they need not look further than Japan’s recent history of deficits.
Market Watch | Hopes rise for pre-Christmas fiscal cliff deal
Will this be the week that Washington cuts a deal to avert the fiscal cliff? While nobody knows for sure, House Speaker John Boehner and President Barack Obama reportedly have “never been closer to a deal” after Boehner said he’d accept higher taxes on incomes of $1 million and above and offered a one-year debt ceiling increase.
Washington Times | Push Obama over the fiscal cliff
Unless the fiscal cliff dilemma is resolved within the next two weeks, everyone’s taxes go skyward. Rich and poor alike will hand over $500 billion more to the Internal Revenue Service. The across-the-board spending reductions will amount to about $110 billion, with more than half of the amount coming from defense. It’s enough to plunge an already sputtering economy into a deep recession.
National Journal | The Fiscal Cliff Plan B for Republicans
Week five of the fiscal-cliff negotiations came and went without any resolution, as Republicans increasingly looked for a backup plan to help them avert the fiscal cliff, save face on taxes, and give as little ground as possible politically.
Politico | Fiscal cliff: 2014 budget already delayed
The White House confirmed to POLITICO Sunday that it has deliberately slowed preparations for President Barack Obama’s fiscal 2014 budget until it has a better fix on the current talks with Republicans in Congress.
Econ Comments & Analysis
NY Times | That Terrible Trillion
As you might imagine, I find myself in a lot of discussions about U.S. fiscal policy, and the budget deficit in particular. And there’s one thing I can count on in these discussions: At some point someone will announce, in dire tones, that we have a ONE TRILLION DOLLAR deficit.
Heritage Foundation | The Economic and Fiscal Effects of the Obama Tax Plan
Nearly historic increases in federal personal income and payroll taxes combined with modest reductions in federal spending are set to begin on January 1, 2013. This is the “fiscal cliff”: a combination of fiscal policy changes that many analysts believe will send the U.S. economy into a recession.
Blogs
WSJ | Avoiding Fiscal Cliff Won’t Spur Growth
A majority of economists surveyed said lawmakers will avoid across-the-board tax hikes and steep government spending cuts but say averting the fiscal cliff will do little to propel stronger economic growth immediately.
Heritage Foundation | Deficit Spending and Debt: Lessons from Japan
Deficit spending does not foster economic recovery. The U.S. and the world need to recognize the stagnation and inter-generational inequality caused by such spending, and for reference, they need not look further than Japan’s recent history of deficits.
Market Watch | Hopes rise for pre-Christmas fiscal cliff deal
Will this be the week that Washington cuts a deal to avert the fiscal cliff? While nobody knows for sure, House Speaker John Boehner and President Barack Obama reportedly have “never been closer to a deal” after Boehner said he’d accept higher taxes on incomes of $1 million and above and offered a one-year debt ceiling increase.
Friday, December 14, 2012
General Economics
News
Washington Times | Rate on U.S. 30-year mortgage dips to 3.32 pct.
Average U.S. rates on fixed mortgages fell this week near record lows, providing more incentive for Americans to buy homes and refinance.
USA Today | Mortgage rates fall near record lows
Average rates on fixed mortgages fell this week near record lows.
Bloomberg | Industrial Production in U.S. Jumps on Rebound From Sandy
Industrial production in the U.S. rose in November by the most in two years as manufacturers recovered from superstorm Sandy.
Washington Times | Senate fails to extend account insurance
A federal program giving unlimited insurance guarantees to some no-interest bank accounts, enacted at the height of the financial meltdown, will die out at the end of the year after the defeat of a Senate plan to extend it.
Market Watch | Will deficit reduction crush stocks?
The stock market goes up whenever John Boehner or Barack Obama says something vaguely positive about fiscal cliff negotiations. It goes down when they say something negative.
Bloomberg | ECB Says Risks Remain as Financial Tensions Ease Tangibly
The European Central Bank said there are still risks to financial stability in the euro area, even after tensions abated “tangibly” in the last half year.
Econ Comments & Analysis
TIME | Why Your 401(k) Match Will Get Cut
Employee benefits are constantly evolving, and the trend line isn’t great for most workers. Last week, IBM—an often copied benefits leader—delivered another blow. The business services giant revamped its 401(k) plan in a way that will transfer millions of dollars to shareholders at the expense of employees.
Blogs
AEI | New study shows devastating foreclosures on the rise
My new groundbreaking study out this morning –noted by Gretchen Morgenson of the New York Times– reveals never-before-available data at the zip-code level on projected foreclosure rates for families getting FHA loans nationwide.
Daily Capitalist | Small Business Surveys Suggest New Downtrend Despite Incomplete Recovery From the Great Recession
The National Federation of Small Business and Gallup have recently published results of small business surveys, which are consistent with other data which are presented below.
AEI | Why the worst may be over for income inequality
When the extent of offshoring becomes sufficiently large, further increases in offshoring induce technical change now biased in favor of unskilled labor because offshoring closes the gap between unskilled wages in the West and the East, thus limiting the power of the price effect fueling skill-biased technical change. The unequalizing impact of offshoring is thus greatest at the beginning.
Neighborhood Effects | Government-Granted Privilege is not Capitalism
A quick lesson for Mr. Schmidt: genuine capitalism is about competing on a level playing field for customer dollars. If you offer a superior product or service, customers will reward you by voluntarily parting with their money in exchange for what you offer.
Washington Times | Rate on U.S. 30-year mortgage dips to 3.32 pct.
Average U.S. rates on fixed mortgages fell this week near record lows, providing more incentive for Americans to buy homes and refinance.
USA Today | Mortgage rates fall near record lows
Average rates on fixed mortgages fell this week near record lows.
Bloomberg | Industrial Production in U.S. Jumps on Rebound From Sandy
Industrial production in the U.S. rose in November by the most in two years as manufacturers recovered from superstorm Sandy.
Washington Times | Senate fails to extend account insurance
A federal program giving unlimited insurance guarantees to some no-interest bank accounts, enacted at the height of the financial meltdown, will die out at the end of the year after the defeat of a Senate plan to extend it.
Market Watch | Will deficit reduction crush stocks?
The stock market goes up whenever John Boehner or Barack Obama says something vaguely positive about fiscal cliff negotiations. It goes down when they say something negative.
Bloomberg | ECB Says Risks Remain as Financial Tensions Ease Tangibly
The European Central Bank said there are still risks to financial stability in the euro area, even after tensions abated “tangibly” in the last half year.
Econ Comments & Analysis
TIME | Why Your 401(k) Match Will Get Cut
Employee benefits are constantly evolving, and the trend line isn’t great for most workers. Last week, IBM—an often copied benefits leader—delivered another blow. The business services giant revamped its 401(k) plan in a way that will transfer millions of dollars to shareholders at the expense of employees.
Blogs
AEI | New study shows devastating foreclosures on the rise
My new groundbreaking study out this morning –noted by Gretchen Morgenson of the New York Times– reveals never-before-available data at the zip-code level on projected foreclosure rates for families getting FHA loans nationwide.
Daily Capitalist | Small Business Surveys Suggest New Downtrend Despite Incomplete Recovery From the Great Recession
The National Federation of Small Business and Gallup have recently published results of small business surveys, which are consistent with other data which are presented below.
AEI | Why the worst may be over for income inequality
When the extent of offshoring becomes sufficiently large, further increases in offshoring induce technical change now biased in favor of unskilled labor because offshoring closes the gap between unskilled wages in the West and the East, thus limiting the power of the price effect fueling skill-biased technical change. The unequalizing impact of offshoring is thus greatest at the beginning.
Neighborhood Effects | Government-Granted Privilege is not Capitalism
A quick lesson for Mr. Schmidt: genuine capitalism is about competing on a level playing field for customer dollars. If you offer a superior product or service, customers will reward you by voluntarily parting with their money in exchange for what you offer.
Health Care
News
Politico | Democrats split on Medicare concessions in cliff talks
A growing number of Democrats in the Senate are ready to offer up a key concession on Medicare to try to reach a deal on the fiscal cliff: higher premium payments for wealthy seniors.
National Journal | 'Obamacare' Is the Law of the Land, but 3 Enormous Challenges Loom
How quickly the politics of health care has changed. Just over a month ago, the country was debating whether President Obama’s health reform law, aka “Obamacare,” should be saved or scrapped. Now, with the president’s reelection, that’s all settled, and regulators, states, employers, and health care providers are rushing to get ready for a transformed system that is coming in 2014.
Econ Comments & Analysis
WSJ | It's a Mad, Mad, Mad, Mad ObamaCare
For sheer political farce, not much can compete with ObamaCare's passage, which included slipping the bill through the Senate before dawn three Christmas eves ago. But the madcap dash to get ready for the entitlement's October 2013 start-up date is a pretty close second.
Blogs
Heritage Foundation | Medicare Cuts vs. Medicare Reform
As the discussions over the fiscal cliff continue, the debate over entitlement reform is getting confused. The issue is not only how much savings constitutes reform, but also the underlying policies that get you there. Thus far in the fiscal cliff negotiations, Republicans have pushed for greater spending cuts, namely in Medicare.
AEI | How to fix Medicare in 100 words
If we expect to bend the Medicare cost curve, we must change the financial incentives that promote the use of services. The federal subsidy cannot grow without limit, and Medicare’s payment arrangements must make that clear to both consumers and providers.
Politico | Democrats split on Medicare concessions in cliff talks
A growing number of Democrats in the Senate are ready to offer up a key concession on Medicare to try to reach a deal on the fiscal cliff: higher premium payments for wealthy seniors.
National Journal | 'Obamacare' Is the Law of the Land, but 3 Enormous Challenges Loom
How quickly the politics of health care has changed. Just over a month ago, the country was debating whether President Obama’s health reform law, aka “Obamacare,” should be saved or scrapped. Now, with the president’s reelection, that’s all settled, and regulators, states, employers, and health care providers are rushing to get ready for a transformed system that is coming in 2014.
Econ Comments & Analysis
WSJ | It's a Mad, Mad, Mad, Mad ObamaCare
For sheer political farce, not much can compete with ObamaCare's passage, which included slipping the bill through the Senate before dawn three Christmas eves ago. But the madcap dash to get ready for the entitlement's October 2013 start-up date is a pretty close second.
Blogs
Heritage Foundation | Medicare Cuts vs. Medicare Reform
As the discussions over the fiscal cliff continue, the debate over entitlement reform is getting confused. The issue is not only how much savings constitutes reform, but also the underlying policies that get you there. Thus far in the fiscal cliff negotiations, Republicans have pushed for greater spending cuts, namely in Medicare.
AEI | How to fix Medicare in 100 words
If we expect to bend the Medicare cost curve, we must change the financial incentives that promote the use of services. The federal subsidy cannot grow without limit, and Medicare’s payment arrangements must make that clear to both consumers and providers.
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