The fiscal cliff
As the cliff gets closer, the horizon gets shorter, and people are starting to notice. The Wall Street Journal (WSJ) has “Getting a Fix on the Fiscal Cliff” (p. A2) and the Financial Times (FT) has “Fiscal cliff dims business mood” (p. 2). The WSJ article offers a pretty good breakdown of the possible scenarios and is worth a look, while the FT article presents more evidence for the negative effects of uncertainty—which we already knew, and have discussed, but it is always nice to have more evidence.
“US Consumer Rebound Based on More-Solid Foundations” (WSJ, p. C12) discusses how the housing recovery is providing a foundation for a much wider nascent recovery. I mentioned a couple of days ago that I plan a more detailed analysis of this, but in the meantime, this article makes several excellent points. Worth reading.
Health insurance changes
Possibly the most cutting-edge article in today’s papers, with the largest implications for the future, is “Big Firms Overhaul Health Coverage” on the front page of the WSJ. It describes how Sears and Darden Restaurants (Red Lobster, among others) plan to provide employees with a fixed amount of money to buy health benefits, rather than arranging the benefits themselves. This transition, if it catches on, will be even bigger than the shift from pensions to 401(k)s and will be driven by the same factors. If this is the future, it will have even more of an effect on the health system than Obamacare.
Chinese economy still looking negative
The New York Times (NYT) leads on the front page with “China Politics Stall Overhaul for Economy,” which talks about how the Chinese economy is showing signs of serious weakness and how the pending government transition has frozen the typical response of stimulus. The WSJ’s “New Labor Attitudes Fed Into China Riot” (p. B1) expands on several of the points I made yesterday about the changing expectations of younger workers and how that must change the Chinese economy.