Subject: Economics of media bias, too big to fail (AEI Economics Ledger) If you have trouble reading this

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Media bias
NEW RESEARCH Is newspaper coverage of economic events politically biased? Kevin Hassett and John Lott: Our results suggest that American newspapers tend to give more positive coverage to the same economic news when Democrats are in the White House than when Republicans are; a similar though smaller effect is found for Democratic control of Congress.

Joblessness and homelessness

NEW RESEARCH Work sharing and unemployment. Kevin Hassett and Michael Strain: In this paper we make three points: First, the impact of long-term unemployment on the lives of those affected is so significantly negative that addressing the issue should be a top priority for policymakers. Second, extended unemployment insurance benefits are an insufficient way to deal with unemployment, and additional policies are needed. Finally, an alternative reform of unemployment insurance could reduce the risk that the next recession might lead to another surge in long-term unemployment. Homelessness in NYC. Robert Doar: The recently-passed New York State budget offers the city a second opportunity to create a move out subsidy program which the city officials say they have designed. It is supposed to be for shelter residents who are working and is limited to a few thousand participants. But if jobs keep growing and the city remains as popular, I don't see how another try at subsidizing people's exits from shelters will lead, by itself, to a dramatic reduction in the homeless population. PODCAST The problem with a national minimum wage

Too big to fail

NEW RESEARCH What the Financial Stability Oversight Councils Prudential decision tells us about systemically important financial institution (SIFI) designation. Peter Wallison: If this pattern continues, large sectors of the financial system beyond banking particularly the securities and capital markets will be swept into bank-like regulation by the Fed, and firms considered too big to fail may come to dominate currently competitive financial industries. Congress must step in, and quickly. Designate Fannie Mae and Freddie Mac as SIFIs. Alex Pollock: Fannie Mae and Freddie Mac are two of the largest and most highly leveraged financial institutions in the world. Fannie Mae is larger than JPMorgan or Bank of America; Freddie Mac is larger than Citigroup or Wells Fargo. Each of them funds trillions of dollars of mortgages and sells trillions of dollars of debt obligations and mortgage-backed securities (MBSs) throughout the financial system and around the world. Unwarranted focus on money-market funds. Peter Wallison: The ensuing effort by the Fed to place the blame for the financial crisis on money market funds, and the corresponding efforts of the FSOC to pressure the SEC into changing the accounting rules for money market funds, are wholly misplaced and should be abandoned.

The marriage of governments and banks for better or for worse. Alex Pollock: Each nations banking system needs to be understood as a mutually profitable deal between the politicians who control the government and the bankers who get government charters for their banks. These deals vary among countries in historically contingent or path-dependent ways, resulting in quite different banking systemsin some countries, robust; in others, systems prone to collapse. The bailout of too-bit-to-fail General Motors. Jim Pethokoukis: There is not much a $50 billion government check can do about a dysfunctional corporate culture except temporarily paper over it. Look, a dynamic economy promotes free entry of new firms and easy exit of uncompetitive incumbents. Government is there to provide a safety net for workers, not for corporate entities.

The next phase of the ACA

Seven million enrollees does not fix the ACA. Jim Capretta: Who are these enrollees? Remember, Obamacare forced the cancellation of many millions of insurance plans sold in the individual insurance market. . . . Several surveys have unsurprisingly shown that a relatively small percentage perhaps onethird or lower of the enrollees in the exchanges were previously uninsured. That implies that, so far, enrollment in the exchanges has reduced the ranks of the uninsured by about 2 million people. VIDEO Challenges still ahead for Obamacare

Marxism on the rise?

The new Marxism. Jim Pethokoukis: Thanks to Piketty, the left is now having a Galaxy Quest moment. All that stuff their Marxist economics professors taught them about the inherent contradictions of capitalism and about historys being on the side of the planners all the theories that the apparent victory of market capitalism in the last decades of the 20th century seemed to invalidate well, its all true after all. . . . But the neo-Marxists might want to contain their enthusiasm. Competition is good. Derek Scissors: What free trade does more than anything else is increase competition. We know that competing against firms and workers from overseas is painful for some American firms and workers. We also know that being able to choose foreign goods and services is wonderful for American consumers.

Mark your calendar

TODAY AEI Event: Major surgery needed: A call for structural reform of the US corporate income tax 4.9 Federal Open Market Committee announcement 4.10 Jobless claims 4.11 AEI Event: The British recovery: Remarks by George Osborne, chancellor of the Exchequer 4.25 AEI Event: Obamacares rocky start and uncertain future

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