(Corrects spelling of Mark Thoma in final item)
Good morning. Here’s a selection of stories I’m reading today on subjects ranging from the Federal Reserve’s thinking to the government shutdown. And yes, the two are related.
Talking their way to the status-quo ante
The only surprise from the minutes of the Fed’s no-taper meeting in September was that there were no real surprises. Policy makers took the U.S. economy’s temperature, found that it was still below normal, and decided to delay the onset of tapering until later this year. Policy makers were concerned the decision would be viewed as a sign they were pessimistic on the economic outlook. Well, duh. Both the rise in long-term interest rates and fiscal “uncertainty” -- the potential for a government shutdown and debt-ceiling impasse -- figured prominently in the decision to stand pat last month. Most members of the policy committee said the time would be right for tapering later this year, but with fiscal policy in limbo and no economic data, that plan has been put on hold.
The adults are in the room, maybe
Congressman Paul Ryan, Republican of Wisconsin, has been pretty much MIA while some of his colleagues were digging themselves into a hole. Now Ryan, chairman of the House Budget Committee, has a plan to pair a short-term debt-limit increase with a “framework for broader budget reduction talks,” according to the Wall Street Journal. (Ryan’s op-ed in Wednesday’s Journal laid out sound ideas, many with bipartisan support, for structural budget reform.) House Republicans are meeting with President Obama today. Let’s hope the president, not to mention Ryan’s House colleagues, are listening.
Yellen understands the downside of rules, regulations
Much of the debate over the choice of the next Fed chairman centered on the attitudes of the candidates to bank regulation, rather than monetary policy. Janet Yellen, now nominated to succeed Ben Bernanke, was part of the biggest regulatory overhaul since the 1930s. “As chairman, she will lead the drive for those policies, while monitoring their costs for borrowers and banks,” write Bloomberg News’ Craig Torres and Josh Zumbrum. Yellen is expected to be tough in areas such as systemic risk and capital adequacy, but she’s well aware of the adverse effect rules can have on economic development.
Go West, young man
If you are looking for a state conducive to business, the Tax Foundation’s 2014 State Business Tax Climate Index finds Wyoming to be No. 1, followed by South Dakota, Nevada, Alaska and Florida. And what makes these the best states for business? The absence of one or more of the major taxes: corporate, individual income and sales tax. Two states -- Indiana and Utah -- make the Top-10 list even though they impose the three major taxes, because they “levy them with low rates on broad bases,” according to the study. Tied for last place are…you’ll have to read the study to find out. (Hint: both states begin with the word “New.”)
Marc Thoma shares something on the shutdown from economist Stephen Ziliak, the founder of “Haiku Economics.” News to me. I’ll have to read up on this art form and report back.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)