Economy

Economic Daily Outlook

WEDNESDAY, FEBRUARY 23, 2012

 

ECONOMICS:

Winners and Losers From a Tax Proposal

http://www.nytimes.com/2012/02/23/business/tax-break-for-manufacturers-offset-elsewhere.html

The Obama administration, seeking to promote domestic manufacturing without increasing the federal deficit, proposed Wednesday to offset new tax breaks for manufacturers by raising taxes on a wide range of other companies.

Some of the prospective losers are familiar targets, including oil and gas companies, private equity firms and companies that move jobs overseas.

OPINION: Opening Up the Fed (Simon Johnson)

http://economix.blogs.nytimes.com/2012/02/23/opening-up-the-fed/

The Federal Reserve has great power in modern American society, including the ability to move the economy and, at least indirectly, to create or destroy fortunes. Its powers operate in two ways: through control over monetary policy, meaning interest rates and credit conditions more broadly, and through its influence over how the financial system is regulated generally and how specific large banks are treated.

The secrecy of our central bank has long been a source of controversy. In line with changes at central banks in other countries over recent decades, the Fed’s chairman, Ben Bernanke, has pushed for more transparency regarding how individual members of the Federal Open Market Committee view the economy — and thus how they are thinking about the future course of interest rates (and the Fed keeps us posted). This is a commendable change, helping people throughout the economy understand what the Fed is trying to do and why.

Florida Weights a Measure to Ease Way to Foreclosure

http://www.nytimes.com/2012/02/23/us/florida-bill-would-ease-way-to-foreclosure.html

Hoping to speed up and streamline Florida’s lumbering foreclosure process, state lawmakers are considering legislation to make it easier to foreclose on abandoned properties and force lenders to move more quickly to complete foreclosures.

With one-fourth of the nation’s foreclosures, Florida is still struggling to pull out of a housing crash that plunged it into recession. It continues to have one of the country’s largest backlogs of foreclosure cases: 360,000. This is in large part because the process, which in Florida requires a judge’s approval, is so slow-moving. RealtyTrac estimates that it takes nearly two years for lenders to repossess a foreclosed house in Florida, which is one of the longest time frames in the country.

 

REGULATION:

SEC May Ticket Speeding Traders

http://online.wsj.com/article/SB10001424052970203918304577239440668644280.html?mod=djemMarketBeat_h

The Securities and Exchange Commission is looking to curb high-frequency traders’ huge influence on stock trading and is considering charging fees for the myriad buy and sell orders that are later canceled, among other options.

SEC Chairman Mary Schapiro said a large portion of equities trading has little to do with “the fundamentals of the company that’s being traded.” She said it had more to do with “the minuscule aberrational price move” that computer-assisted traders with direct connections to the exchange can “jump on” in fractions of a second.

CFTC Poised to Re-Propose Dodd-Frank Block Trade Regulation

http://www.bloomberg.com/news/2012-02-23/cftc-poised-to-re-propose-dodd-frank-block-trade-regulation.html

The U.S. Commodity Futures Trading Commission is poised to re-propose Dodd-Frank Act regulations that would determine when swaps are big enough that their price and size don’t need to be reported immediately to the public.

CFTC commissioners may vote at a meeting in Washington today to seek comment on a revised measure after JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. and financial-industry trade associations said the original proposal could hamper liquidity and didn’t account for different types of swaps. Banks told the CFTC they need time to hedge or lay off risk related to so- called block trades before they are reported.

PRESS RELEASE: Plan to Protect Privacy in the Internet Age by Adopting Consumer Privacy Bill of Rights (White House)

http://www.whitehouse.gov/the-press-office/2012/02/23/fact-sheet-plan-protect-privacy-internet-age-adopting-consumer-privacy-b

 

HEALTHCARE:

Analysis: Is A New Federal Patient Safety Effort Doing Enough to Curb Medical Errors?

http://www.kaiserhealthnews.org/Stories/2012/February/23/millenson-HENs.aspx

The Medicare program is betting on a new course of action to curb what one medical journal has dubbed an “epidemic” of uncontrolled patient harm.

The effort is pegged to the success of a little-known entity called a “hospital engagement network” (HEN). In December, the government charged 26 HENs with preventing more than 60,000 deaths and 1.8 million injuries from so-called “hospital-acquired conditions” over the next three years. That’s the equivalent of eliminating all deaths from HIV/AIDS or homicide over the same period.

OPINION: Health Care’s Coming Price Revolution (Joseph Rago)      

http://online.wsj.com/article/SB10001424052970203513604577140601338643544.html

The old-line Marxists used to talk about “heightening the contradictions” of capitalism to make things worse and hasten the revolution. One of the great ironies of the Affordable Care Act is that it may be doing just that.

Two years on, the major achievement of President Obama’s new entitlement and its regulatory apparatus has been to heighten the contradictions and dysfunctions of the health-care status quo even as it creates multiple new problems. The good—and less noticed—news is that the growing disruption is driving the industry toward the solution that prevails in the rest of the economy: the price mechanism. In the context of American health care, this might be a watershed.

 

ENERGY:

Analysis: Obama goes on offense over high gasoline prices

http://www.reuters.com/article/2012/02/23/us-campaign-obama-gasoline-idUSTRE81M0B920120223

As Republican presidential candidates toss barbs at Barack Obama over expensive gasoline, the U.S. president and his team are going on the offensive with a strategy to divert blame and prepare voters for higher costs.

In subtle and not so subtle ways, Obama, a Democrat, is raising the issue of high prices to promote his own policy priorities and blunt criticism from the men vying to unseat him in the November 6 election.

 

EDUCATION:

Chicago Shake-Up Targets 17 Schools

http://online.wsj.com/article/SB10001424052970204778604577239643010165010.html

This city’s school board voted Wednesday to shake up the teaching staffs at 17 low-performing public schools, handing Mayor Rahm Emanuel a victory in his battle with the teachers union and highlighting an increasingly aggressive stance on education overhauls by a number of Democratic mayors nationwide.

The Chicago Board of Education voted to close five elementary schools, phase out one high school and “turn around” 10 schools by firing all the teachers and making them reapply for jobs. One other high school will convert to a new school with a health-science focus.

 

FOREIGN POLICY:

EU Expects 2012 Recession

http://online.wsj.com/article/SB10001424052970203960804577240691793472720.html

The euro-zone economy will fall back into recession at the start of this year and is now seen contracting in 2012 as a whole, the European Commission said Thursday.

The new forecasts will add to concerns about the impact of broad-based regional austerity plans. The 2012 forecasts for Italy, Spain and Greece were all slashed—each of them countries that are applying significant fiscal consolidation.

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