Sunday, January 14, 2018

An Immigrant Nation Goes Off the Rails

The current discussion about immigration seems to miss the point that historically immigrants came to the United States to be free, to buy into American ideals of free speech, religious tolerance and free markets.  The flood of immigrants in the late nineteenth century and early twentieth century wanted to be part of this new experiment in freedom, across the Atlantic.  They were fleeing oppression and poverty and wanted a better life.

The modern form of immigration is very, very different.  Illegal immigration is mainly about people that do not respect the laws of the US.  Otherwise they would, as generations before, apply to become legal immigrants and enter the US in the time-tested method of legal immigration.  Instead, illegal immigrants broke our laws and came to the US illegally.  America was built by legal immigrants, not illegal immigrants.

Today, numerous groups of immigrants coming to the US despise the US, despise its citizens and despise its values.  Often, such folks plan to inflict outright mayhem on American citizens and some have succeeded in doing just that.  These aren't folks looking to build a new life in a culture they would like to be part of.  These are folks that mostly disrespect women, disrespect the rule of law, consider those with different religious views to be infidels.  What they are hoping to do is build an anti-democratic, male-dominated, religious theocracy in the United States.  It is unlikely that folks like this will build the future America.  But, they may well destroy it.

A policy such as the "visa lottery" system speaks volumes about how the US has lost control of who comes into the country.

None of this has anything to do with racism or islamaphobia or any such thing.   Europe is learning to its horror what happens when you have an immigration policy that makes no sense.  The US may soon be in a similarly perilous situation, as hundreds, soon to be thousands, of Americans lose their lives in senseless terrorist acts that common sense would have prevented.

Thursday, January 11, 2018

Bank Lending Regulations are Ridiculous

As Jamie Dimon noted earlier this week in an interview, there are literally thousands of regulatory items to be dealt with in servicing a simple mortgage loan  Supply and demand take a back seat to regulatory overkill.

If folks borrow money and can't pay the money back, then some type of default occurs.  There is nothing wrong with that.  That is how the system is supposed to work.  Only in Cuba, Venezuela and the old Soviet Union does no one ever go bankrupt.  Any economy worth its salt has bankrupties.  We should have bankruptcies.  If not, there is not enough risk taking.

Such risk taking should apply in the housing market, as well as anywhere else.  There is nothing wrong with it.  Current policy criminalizes risk taking that has a bad outcome.  That is ridiculous policy.

No one ever made any progress without taking risks.  That applies in every walk of life and should apply to bank lending market is well.  The regulators should back off.

If banks lose money, then equity and bond holders of the bank should suffer -- not American taxpayers.  Quit bailing out the banks and they will make rational decisions.  But, not all of these decisions will work out and that is as it should be.  Those who should shoulder the losses are the folks that own the banks and those who lend money to the banks -- not American taxpayers.

Leaving lending to the free market would make the right folks pay for mistakes -- not innocent taxpayers.  There is zero evidence that regulatory overkill ever prevented a financial collapse.  Indeed, quite the opposite.  Regulatory overkill means banks try to game the system of regulation as opposed to making sound, intelligent loans.  That is the China system; that is the Russian system; but that is not free enterprise.  America should return to free enterprise banking and abandon the Chinese system, imposed by Dodd-Frank legislation, of state-run banking.


Wednesday, January 10, 2018

The Ongoing War on Poor People

Numerous states passed laws that just became effective in the New Year that outlaw jobs for our citizens who have limited job skills.  These laws make it against the law for these folks to work and against the law for employers to hire them.

These laws do not affect wealthy folks or even middle class folks.  They are aimed at the lowest skilled and lowest income Americans.  It effectively guarantees that they will never join their brethren in the middle class.

This is another example of the war being waged against poor people in America.

What are these laws?  Minimum wage laws that forbid folks with skills that don't reach a certain level from having legal employment.  Thus, such folks naturally seek illegal employment and swell the criminal class in our society.

Why not let employee and employer decide who gets to work and at what wage level?  Why outlaw someone's ability to obtain job skills by taking a lower wage or no wage at all in order to learn the skills necessary to become a productive member of society?  In whose interest is it to forbid the poorest among us from gaining job skills?

Tuesday, January 9, 2018

Fed Maneuvering To Elminate Policy Goals

In articles in both the NY Times and the Wall Street Journal this morning, Federal Reserve Board members are described as urging the abandonment of the 2 % inflation goal that has been a cornerstone of recent Fed policy.  Why?  Because they can't achieve the goal.  So why not simply get rid of the goal, say these self-important Federal Reserve Board bigwigs?

The argument is that as long as inflation is below the targetted goal, the Fed can't engage in expansionary monetary policies.  So?

The purpose of the Fed is not to provide expansionary monetary policies.  The main purpose of the Fed is to stabilize the currency, i.e. control inflation.  There is no inflation to control these days, so the Fed has nothing to do.  Tsk, tsk.

The absurd Quantitative Easing program was the most recent fiasco in expansionary Fed monetary policies.  That program was a handmaiden in producing the lowest rate of economic growth for an economic recovery in American history (bad Obama policies also contributed -- the Fed wasn't the only bad actor).

There is no longer any rhyme or reason for contemporary Federal Reserve monetary policy.  But, don't expect Fed board members to own up to that.  They need some reason to make themselves seem relevant.  So look for the Fed members to argue that they should just do whatever the heck they want to do.  That's pretty much what they have been doing since Bernanke freaked out in the Fall of 2009.

The Fed should be abolished and monetary policy should be completely rule based.  Too much ink is wasted on this absurd institution.

Monday, January 8, 2018

"Economists" Expect Slow Economic Growth?

The news this morning is chock full of stories about how slow economic growth will be in the next year or so.  These so-called "economists" typically use the "straight-edge" method of forecasting the economy -- whatever has been happening will continue to happen.

Because the Obama years had such pitiful economic growth, economists expect the economy to continue to have a weak pulse.  Good luck with that.

The ongoing deregulation and major tax reform is already having a very significant impact upon businesses in the US. 

The reality is that there is no limit to economic growth, especially in the midst of historic technological shifts in the way we do things.  Only the heavy hand of government limits our future and that hand is slowly but surely being restrained.

It is possible, may even be likely to see 4 to 5 percent real economic growth in the years ahead, if capitalism is permitted to get its head.  A simple slowdown in the brutal attacks on capitalism by the Obama forces in recent years is enough.

Capitalism is a very powerful force.  Merely slowing the efforts of its opponents is enough to get things going again and going stronger than expected.

The consensus of the "economists" is wrong.  This economy is about to break out of its ten year slumber.

Monday, January 1, 2018

The Information Paradox

How do you find out the everyday facts of our nation's political life?  In simpler days, we might watch the evening news or peruse our local newspaper.  Sometimes the facts reported in these media outlets were limited, sometimes incorrect, occasionally totally false.  But rarely was there a feeling that the media itself had its own political agenda and that this agenda was more important to the media than truthful reporting.  Today, things are very, very different.

We learned decades ago that Pravda, the main news organ of the communist party in the long-gone Soviet Union, was a pure propaganda machine.  Truth was routinely subordinated to whatever the current party line happened to be -- and that party line changed often enough to make it clear that truth and consistency were largely irrelevant considerations to those publishing Pravda.  That was then, this is now.

Who believes or accepts what is presented today on CNN, CBS, ABC, NBC or what one reads in the New York Times or Washington Post?  Is there even a minimal effort by these organizations to present facts or is everything published and aired simply invented to convince the listener or reader to adopt a particular political stance?  Even Fox News is not as "fair and balanced" as it purports, but without Fox News, most of the truly significant events of our modern day would go unreported, because many of the these events don't fit the narrative that the 'mainstream media' seems to be promoting daily.

Admittedly, many of President Trump's tweets are difficult to defend and much of the cosmetics that surround this administration are troublesome, but what has that got to do with truthfully reporting the contents of the recently enacted tax reform package or honestly reporting the facts surrounding the various ongoing FBI and Congressional investigations.  Facts are facts -- or they should be.  But, increasingly, the mainstream media doesn't see it that way -- nor do significant numbers of senior personnel at the FBI, apparently.

The paradox of all of this is that the existence of the internet makes it possible to find the truth, but you have to work at it.  It is no longer simply a matter of tuning in to the evening news or reading a major US daily newspaper.  The evening news and the major daily newspapers are essentially organs of an anti-capitalist, anti-democratic, plutocracy that thinks Americans are too ignorant to think for themselves.  So, such outlets tell us what they think we should hear, so that we will believe what they think we should believe.

Thank goodness for Donald Trump.  For all of his flaws, and there are many, Trump represents a breath of fresh air in a media world that is increasingly aimed at destroying the American dream.  That dream doesn't fit their narrative.

Saturday, December 30, 2017

The High Price of Misleading the Public -- the Coming SALT Fiasco

The main stream media has consistently presented false information about the recently enacted tax reform law.  Most of this misinformation is deliberate, partisan and thoughtless.  The best example is the treatment of the new limitations on state and local tax deductions (SALT).

The media claims that middle income taxpayers in high tax states face significant tax increases.  That claim is an utter falsehood.  Middle income in NYC is $ 67,000 per year, according to the most recent data available.   Practically no one anywhere near that level of income itemizes deductions.  Such middle income taxpayers utilize the standard deduction in NYC and everywhere else.  Even in NYC barely half of all taxpayers use itemized deductions.  No surprise here, except for those who listen and believe the main stream media.

The way the media phrases this is the following:  the average amount of state and local taxes deducted is such and such.  But that average applies only to those who itemize their deductions, which, for the country as a whole is less than one-third of all taxpayers.

Those who do use the state and local income tax deduction currently are high income taxpayers, many of whom get no benefit at all from such deductions.  But, they don't know that.  Why, no benefit?  The AMT (Alternative Minimum Tax) has, for many years reduced and eliminated the actual benefit of deducting state and local taxes.  The problem is that taxpayers don't know that.

Why don't taxpayers know that, even though they are taking the SALT deduction, they actually get little or no benefit from the deduction?  Because the law is so complicated that even tax experts don't understand its impact.

What this means is that those folks rushing to prepay their local taxes are wasting their time?  Very, very few will get any benefit at all from such deductions in 2017 because of the AMT.

Why doesn't the media tell these folks the truth?  Why is Governor Cuomo telling people to rush to do something that can only hurt them and not help them?  Good questions.

Increasingly the truth and the facts are of no interest to liberal politicians and their handmaidens -- the mainstream media.  Unfortunately, in the case of the SALT deductions, people are being misled and many will be hurt by their lies.