Wednesday, November 30, 2016

The Paris Accord? Who's Kidding Who?

China is dramatically expanding it's production of coal.  In just the past five years, China has opened and reopened more than 50 coal plants.  All of this dramatically expands China's carbon footprint.  Along with Al Gore, Barrack Obama and Hillary Clinton, China is putting more carbon into the atmosphere with each passing day.  Meanwhile, all of these folks are asking American companies to sacrifice profits and asking the American economy to slash economic growth in a "go it alone" climate change agenda.

If only America reduces its carbon footprint, which might require some sacrifice by Gore, Obama, Clinton, etal, it won't matter.  That is the opinion of the advocates and supporters of the Paris Accord.  So, tell us again, what is the point of the Paris Accord?  Simply a lone sacrifice by Americans while Europe and China expand carbon production without limit?

The Paris Accords are a one-sided agreement that Obama would force only Americans to abide by.  The net effect would be to reduce America to a third world country while China moves forward as the dominant economic power in the world.  That must be what Obama and his crowd really wanted in the first place.

Read today's NYTimes today on the expansion of the coal industry in China, remembering that the Obama crowd has destroyed the American coal industry in its drive to please environmental extremists.

Monday, November 28, 2016

Castro Dies: Who To Interview?

Given the outburst of strong emotions over the death of Cuban dictator and modern communist mogul, who do you think the NY Times would interview to get a balanced perspective?

How about Castro's sister?  Surprise, surprise, Castro's sister did not think folks should celebrate the death of her brother.  Another shocking piece of news from what is an increasingly absurd newspaper.

Sunday, November 27, 2016

Castro: Icon of the Progressives

The death of Fidel Castro allows Castro's name to be added alongside Hitler, Stalin, Mao, Mussolini and other brutal dictators in the long pantheon of tyrants who used firing squads and prisons to enforce their "goals for the people."  When you know all the answers, then you can use any method available to silence dissent and control the population.  Castro knew no limits to terror, violence and murder.  The result: a shriveled society with an average monthly income of $ 20.  Meanwhile Castro's personal wealth was estimated to be over $ 900 million in 2006.  This is the progressive end game.

As expected, Obama and the his political 'comrades' (including Vladimir Putin, Jimmy Carter, Canadian Prime Minister Trudeau, UN Secretary General) lauded the brutal Castro and his regime.  Trump, to his credit, did not laud Castro. Trump condemned him.  Trump had the right response; Obama is on the wrong side of history (and morality).

It's time the White House took down the pictures of their heroes -- Fidel Castro, Hugo Chavez, the Reverend Wright, and put Winston Churchill's bust back where it belongs.   We should stop celebrating would-be and actual murderers.

Thursday, November 24, 2016

Through the Diversity Lens

As President-elect Trump adds three more members to his cabinet, what is the response from the news media?  'Trump adds diversity" to his cabinet.  What an absurd way to describe potential cabinet members. Why single out the race and gender of the cabinet members?  Is this the only way to think about people?

What about a simple description of these people without identity politics intruding?  Why play the race and gender card?  Is America just a collection of separate races and separate genders and other arbitrary separate identities?  What happened to the "melting pot" notion?  The media is a national embarrassment and helps to divide one group of Americans from another by the manner in which they report the news.

The press should stop playing the race and gender (and other) cards and report the news without their usual prejudices, racial animosity, gender animosity, so prevalent in today's journalism.

Wednesday, November 23, 2016

Economists Abandon Their Posts

The Texas district court that struck down Obama's illegal extension of overtime pay to a new class of workers reminds us that economists have said nothing about this job killing Obama edict. Anytime you arbitrarily make it illegal for workers and businesses to freely contract, you lower worker income and lower worker employment.  There is no economic analysis that says otherwise.  Microeconomics is completely clear on this point.  So, why don't economists have something to say.

The answer: economists have become political hacks. They are slaves to their left-wing political ideology.  Part of this slavishness is 'of necessity.' After all, right wingers do not fare well in the modern academic echo chamber and the world of academic research grants.   To get grant money, you have to subscribe to the Elizabeth Warren view of the world.  Not much economics in that view.

Look at all the studies that economists have produced that say that increasing a price by government fiat leads to increasing demand.  You ask:  what studies?  Much of the research on the effect of the minimum wage suggests that if we could just raise the federal minimum wage to $ 100/hr, our problems would be over.  We would have licked inequality and poverty -- in a sense.  Most every job would be gone, so all would be equally poor.  So much for inequality.  Everyone would now be at starvation levels (think of today's Venezeula) and since poverty is always defined on a relative income/wealth basis, the absence of inequality in world of a starving populus impolies the elimination of poverty.

Pretty stupid isn't it.  But, that is exactly the way most of today's academic economists see the world.

Tuesday, November 22, 2016

Post Election Rally

What happened?  Where is the expected collapse of financial markets that were routinely predicted by the NYTimes, Washington Post, CNN, and MSNBC?  The pundits forecast a market disaster if Trump was elected?

Instead a historic, post-election rally greeted the Trump victory.  Big surprise, of course, to the media who seem to think markets and the economy fare better when politicians demonize businesses and rich people and constantly impose more regulations and higher taxes.  It must be a shock to the pundits that markets actually prefer the exact opposite.

A breath of fresh air is blowing through the land. Markets are rallying, spirits are up, and the financial markets are surging -- not only in the US, but globally.  Maybe the markets know something that the haters of capitalism don't know.

Free markets may be on the way back.  We shall see.  But, the markets are clearly happy about the election results even if the media and the pundits are not.

Monday, November 21, 2016

Name Calling in Lieu of Policy Positions

It is no longer possible to have a rational debate about political issues.  Read the NY Times and the Washington Post.  The position of the Democratic Party, as presented faithfully by the Times and WAPO, is that Republicans are racists and bigots.  End of subject.

If you look for a rational defense of ObamaCare, Climate Change, Democratic Party Immigration Policy, Democratic Party Economic Policy, you won't find it.  But, what you will find is consistent character assassination, following carefully the Obama-Clinton script in the recent election.. Anyone who doesn't agree with the Democratic Party agenda is a racist and a bigot.  That's it.

Meanwhile the NYTimes and WAPO faithfully defended Obama bureaucrats who pleaded the 5th, who accepted immunity deals with the Justice Department in exchange for nothing at all, the Solyndra deal and on and on.

This has now become a one-sided policy debate since nothing of substance is ever offered by the anti-Trump press.  Okay, suppose everyone but you is a racist and a bigot.  Is that the end of it?  If the majority of Americans are racists and bigots, as the Democratic Party, NYTimes and WAPO seem to believe, does that mean that rational discourse of political issues is no longer possible.

It must be great to occupy such a high moral ground that you no longer have to defend your policy positions.

Next Up....Dallas

The rolling bankruptcies in public pension land continue unabated.  Next up is the city of Dallas in the thriving state of Texas.  You don't have to have a sick economy to create a bankrupt pension fund.  Dallas is not Detroit, but the endgame will be the same as regards the cities' pension funds.

The story is laid out in some detail in today's NYTimes (buried amongst a phalanx of front page articles labeling anyone who disagrees with NY Times editorial policy as a racist, a bigot, a nazi or a white supremacist).

Notice that there were no prior signals indicating serious trouble.  There never is. The trustees and administrators of these funds paper over problems and hide the truth from the public.  Dallas is no different than almost every other public pension fund in America.  It is difficult to think of a single exception.

So who loses.  Essentially everyone.  Those expecting a pension will have a rude awakening.  Taxpayers will receive the bitter pill of increasing taxes.  The only winners are the trustees, administrators and all the folks who have milked these systems and continue to milk these systems.  Wall Street wins.  The bureaucrats win.  The public and the employees lose.

Sunday, November 20, 2016

The Impossibility of a Debate over Economics

It would be instructive to the body politic to hear a real discussion between Democrats and Republicans over the economic issues of our times.   The overriding issue is economic growth.  What policies are good for economic growth; what policies are bad for economic growth.  This type of discussion could be useful and interesting.

Banks have held back from promoting economic growth both in the US and Europe. Banks are still operating under the cloud of the financial collapse of 2008.  Regulation in both areas are driven more by revenge and economic envy than by sound economic policy.  The result:  Europe hasn't had any growth in a decade and the US has had minimal growth.  So, why not a discussion?

Instead Democrats spend most of their time indulging in character assassination.    This was the Hillary Clinton playbook.  Describe those who disagree with you as racists and homophobes and then you can avoid discussions about real issues.  This continues.  As Trump announces his cabinet picks, the Democrats only response is that all the picks are racists, homophobes, etc. 

The Democratic Party doesn't seem capable of a rational discussion of today's economic issues.They didn't seem to learn much from the recent elections that have reduced the Democratic Party to the status of irrelevance.  One suspects that they will become even more irrelevant, as they continue to avoid discussions of real economic and political issues in favor of demagoguery and character assassination.

Watch the hysterical outbursts that dominate CNN and MSNBC coverage of today's news.  There is never any real news on these Democratic Party fronts.  Instead, there is round-the-clock vitriol, character assassination and extremist talk.  If you want any real news, you have to go elsewhere.  These folks spend almost all of their time crying over the recent election and trying to pretend that it never happened.

Too bad.  A real discussion about economic and political issues would be useful. So would an honest source of information about the news events of the day.  It is a sad state of affairs, when conservative-biased Fox News is the most balanced news network available in the modern day.

Saturday, November 19, 2016

Time For A New Dictionary

Many words that have been used over the years seem to have changed their meaning in recent years.  Take the words:  "racist," "bigot," or "sexist."  The meaning of these words in the dictionary would leave moderns confused. These words, today, all mean the same thing. They mean anyone who does not agree with far-left Democratic Party orthodoxy.  If you think Obamacare should be repealed, you are racist.  If you think Dodd-Frank should be repealed, you are a racist and/or sexist.  An on and on.

All you have to do to avoid being a racist is to subscribe completely to the political positions of the Democratic Party, especially the views of Elizabeth Warren. It really doesn't matter if you have the racial views of the KKK.  That's okay as long as you publicly support Elizabeth Warren and the Democratic Party. 

That certainly simplifies the new dictionary.

Friday, November 18, 2016

Climate Change and Home Prices

There is an interesting article about Southern Florida in today's NYTimes.  The main point is that "climate change" is causing flooding.  The article cites residents as saying that homes are expected to be under water within five decades.   The article notes that homes sell quickly and that home prices are rising.

So, if that's the case and that much of Florida will soon be under water and uninhabitable, why are home prices rising so fast?  Would you rush to buy a home that everyone thinks will be submerged in your lifetime?  Would you expect that purchase to be a winner.

Meanwhile, in areas that are expected to be beach fronts within a few years, land prices are stagnant.  If you knew that global warming was going to make certain properties, now inland, into valuable beach fronts, do you think prices would be stagnant?

Why are prices flying in coastal areas soon to be under water?  What does the market know that the "climate change" crowd doesn't know.  Why isn't Al Gore buying up properties inland?  At current prices, they are a bargain, if Gore is correct about climate change.

Maybe these "climate change" true believers want to pay up to buy homes in areas soon to be under water, so they can be victims.   It's the only thing that makes sense.

Thursday, November 17, 2016

Fed Will Act .... Yawn

Janet Yellen signaled unequivocally that the Federal Reserve Open Market Committee will raise the repo and funds rate in their December meeting.  It is hard to believe that this is a surprise to anyone.  Rates have been flying upward since July with only the rates the Fed controls remaining dormant.  So, the Fed is now facing reality and raising the two rates that they have any influence over.

Much ado about nothing.  The Fed is acting only to avoid the market proving, once again, the irrelevancy of the Federal Reserve.

Wednesday, November 16, 2016

Neel Kashkari's Absurdities

One of the Fed Governors, Minneapolis Governor Neel Kashkari has proposed the ultimate absurdity -- capital requirements on banks that are so high that their effect would slice out 40 percent of our GDP.  This is extreme nuttiness.

His entire point is designed to "end too big to fail."  Why does anyone care about "too big to fail?"   Nothing is too big to fail.  If banks had been permitted to fail in 2008, our GDP would probably be fifty percent larger today than it is.

Worrying about "too big to fail" is completely ridiculous.  Dodd-Frank should be repealed and the bailouts should end....permanently.  There is no reason for bailouts.

Banks need to take on more risk, not less.  In a healthy economy, banks as well as other companies will routinely fail now and then.  That's what capitalism is all about.

No one ever fails in fascism or socialism.  The economy doesn't grow in fascism or socialism and widespread poverty is the normal state of affairs.  Who needs that?

Let banks and other business fail. There is nothing wrong with that.  Get rid of the FDIC guarantees.  Investors can put their money in money market funds that consist mainly of US treasuries.  You can write checks on such money market funds and they are no less safe than the FDIC guarantees, since both are backed by the US treasuries.

Unleash the economy and return to real economic growth.  Kashkari's proposal is simply another way to further weaken the American economy.  We should go the other direction and strengthen the economy.

Tuesday, November 15, 2016

Higher (sic) Education

Many Americans are learning more about the state of higher education than they wanted to know.  Our nations colleges and universities have been taken over by folks who are essentially vanguard politicians.  Education has taken a back seat to the furtherance of a political agenda.

The answer is to eliminate federal and state funding to these institutions.  They are not providing a "public good."  One could argue that they are providing a "public bad."  The charitable contribution deduction that feeds this beast should be eliminated. 

Folks that want to use higher education as a political fulcrum should pay for that.  Innocent taxpayers are being forced to fund all of this silliness. The average taxpayer cannot afford to send his/her children to these institutions, but they are nevertheless asked to fund them. 

Starve the beast.  Stop all contributions to these places.  Eliminate taxpayer funding for what is increasingly little more than a political operation of the far left.

Monday, November 14, 2016

Eliminate the Charitable Deduction

The charitable deduction creates lots of mischief.  Imagine that someone gives $ 1 million to a "charity."  Generally, they will then receive a $ 400 thousand reduction in personal income taxes.  So, what is actually happening is that the donor is giving $ 600,000, but you the taxpayer are footing the other $ 400,000 without your knowledge or consent.

How much say does the taxpayer have in where this money is going?  That's right. None. 

Let people who wish to make charitable gifts make them without the taxpayer being on the hook.  If they are generous people, then they should be generous with their own money -- not with taxpayer money.

If the argument is that charitable contributions will decline without the financial incentive of a tax deduction, then that alone should tell you that the deduction should be eliminated.  Why provide financial incentives, if folks would not otherwise be generous.  Maybe these charities don't really merit the support that the charitable deduction provides.

Think of the Clinton Foundation as an example of the problem.

While we are at it, we may as well eliminate the mortgage interest deduction as well, since there is no reason to favor home ownership over renting in the tax code.

Eliminating these deductions could dramatically lower tax rates and increase tax revenues at the same time.  A win-win.

Absence of Economic Growth is Killing the EU

Pundits come up with a multitude of reasons why the EU is falling apart.  There is really only one main reason.  Zero economic growth.

The absence of growth in Europe has the same roots as the virtual elimination of economic growth in the US -- too much government.  Taxes are too high and regulations are overwhelming.  Net business formation is zero and employment growth, to the extent there is any at all, cannot keep up with the small growth in the work force

This is the price of the welfare state and a meddling government bureaucracy.  In America, the tensions created by the absence of economic growth fuel the Sanders/Trump phenomena.  In the EU, the same tensions are fueling the rise of nationalistic, anti-immigration and extreme-leftist political parties that are on the rise.

Economic growth solves lots of problems.  Killing economic growth inevitably destroys the political concensus needed to govern from the middle.  Europe is learning that lesson the hard way as the EU slowly but surely disintegrates. 

Hopefully, the recent election in the US might bring enough of a return to free markets to get economic growth back into the picture.  If not, the centrist parties in the US will become increasingly irrelevant and the path to a European-like political disintegration is simply a matter of time.

Sunday, November 13, 2016

Time to Reconsider Higher Education Funding

Large numbers of students at elite colleges have shut down their role as students, taken up signs and devote more time to protesting and disruption and less to classwork and learning.  The demand for "safe spaces" and "snowflake" protections is mushrooming.

Who is funding all of this?  You are.  The American taxpayer, whose income, on average, is a fraction of those who are demonstrating.  So, you are paying for folks to insult you.  Why do it?

Federal and state funding for higher education should be reconsidered.  It is not clear that society as a whole benefits from much of what today passes as research in the modern university.  Funding is mainly available for projects that represent a single, usually extreme, point of view.  This is not open, unbiased research.  This is politically motivated research designed to further a pre-conceived agenda.  Why fund this stuff?

As part of tax reform, the charitable deduction should be reconsidered.  This deduction is the main source of funding for extremist politics.  Why do it.  Lets reform it.  If people want to give to charities, let them.  But, why should taxpayers subsidize such giving in the tax code.

It's time to put a stop to using taxpayer money for blatantly political activities.  Higher education mainly benefits those who attend our colleges and universities.  These places are increasingly oases of pleasure and comfort and look less and less like the schools of earlier generations.  They are hyper-political with declining academic standards and weakening academic rigour.  Why fund this stuff?

It's time that those who benefit from education, pay for it.  The taxpayers don't need to fund something that issues forth nothing but contempt for taxpayers on a daily basis.

Extremism at the Brookings Institution

Anyone who labors under the delusion that the Brookings Institution is a "think tank" should take a gander at today's WAPO article by Leon Wieseltier, who is described as a "senior fellow in culture and policy at the Brookings Institution."

Here is how this "think tank" representative described the recent election: "the nasty anti-modern furies that carried this repulsive demogogue to the White House."   It gets worse.  Here's how this thinker views European governments: "the vile illiberalism that currently disgraces other governments in the West..."  An on and on.

The Brookings Institution is not "left of center," as it is often described.  It is instead, a homebase for far left fanatics with an extreme hatred for anything American.  Leon Wieseltier is a poster child for this hatred.  Read the article.  It is eye popping.

Saturday, November 12, 2016

Stock Market Reaction to the Trump Win

US stocks were up 5 percent in concert with a huge global stock market rally for the week.  The pundits had, of course, predicted it would be otherwise.  The world was going to come to an end, according to the pundits, if Trump was elected.  What happened?

Maybe higher taxes, more regulation, more demonizing of business isn't all that good for common stocks.  That's one possibility that perhaps the pundits hadn't considered.

The pundits, who mostly approved of Obamacare, Dodd-Frank, and more regulation, think, somehow, the economy and the financial markets can withstand an all-out assault on business.  Guess what, stocks think otherwise.

What about the "never-Trumpers."  What does Dana Perino, George Will, John Kasich, the Bush family, the various Republicans who urged people not to vote for Trump?  They must be really unhappy, now.

If folks had followed the advice of George Will, Clinton would be busy assembling her cabinet and and making further plans to destroy American commerce.  Too bad.  Is that really what Perino, Will, Kasich, the Bushes wanted?  More regulation, higher taxes, a far-left Supreme Court, more executive orders bypassing Congress.  Was that the world that Dana, George, John and Jeb were hoping for?

Makes you wonder.

Revolt of the Wealthy Kids

Across America, wealthy young people have taken to the streets to protest that they did not get their way in last Tuesday's election.  The vast majority of these protestors didn't bother to vote and couldn't name their own Congressmen or Senators.  But, what the heck?  Protesting is fun and makes one feel moral and heroic.

The same nonsense is playing out on college campuses -- the ultimate playground of the wealthiest American youth.  Students, whose families are almost exclusively in the top five percent of the income and wealth strata of the country, are decrying their unhappiness at the results of the election.  They are also letting everyone know what they think of the average American, who they describe as racist, homophobe, stupid and on and on.

These wealthy, elitist students think that only their views should matter.  They want to silence others who disagree with them.  They have virtually full support from the college administrators and faculty, who also seem to have a lot of time on their hands to engage in this activity.

Most people, who work for a living, don't have time to party in the streets day after day.  They have responsibilities, families, bills to pay.  It must be great not to face any of the day to day issues that normal Americans have to deal with.  That leaves time to grab up a banner, scrawl an obscenity on it and go block some traffic somewhere.  Great fun!

Friday, November 11, 2016

The Notion of a "Divided Country"

When was the country not divided?  When was that exactly?  The left is arguing that since Clinton outpolled Trump, Trump's election is illegitimate.  Really?  What about the House and Senate?  What about the majority of states that have Republican governors and legislatures?  Where have people elected folks with the views of the protestors?  Where are the Clintonistas in office?

The answer: the public has overwhelmingly tossed out the Clinton and left wing politicians at every level.  That's why Republicans control the White House, the Congress, the nation's Governors and the nation's legislators.  The people have spoken; accept it.

Most Americans would like to feel safe and secure.  They would like to return to economic prosperity.  They would like to return to rule by law, not rule by one person.  These folks have elected like-minded people at every level of government in the US.  If you believe in Democracy, you have to accept the results.

Watching left wing news (CNN, MSNBC), actions on college campuses and wealthy street demonstrators make it clear that these folks do not accept the results of our democracy.  When Obama won, there were zero demonstrations.  The "deplorables" did not riot, did not destroy property.  They organized themselves and won elections.  And now they are in the catbird seat.

This country has always been divided.  Nothing new here. That actually is what is great about this country -- toleration for opposing views.  The left, the media and the academia would like to shut down opposing views.  Hopefully, they will not succeed in their intolerance.

Free Markets -- On Their Way Back to America

Among top priorities of the newly elected Trump Administration are to repeal Obamacare and Dodd-Frank.  If nothing else, those two actions alone could spark an economic revival in America.  But beyond those two actions, the Trump forces have pledged themselves to a full-out assault on business regulation, simplified and lower taxes, and repatriation of two trillion dollars in US corporate funds held outside the US.

The prospects for the return of free markets have never been better.  The long dormant American economic engine may be revived.  Who would have expected this a week ago?

Who Promotes Division?

Notice that after the election is over, who is it that is not accepting the results? The losers -- the left.  Notice the violent demonstrations now going on across the country.  Violence is a key part of these demonstrations.  These folks think that they have the right to destroy property of others and they are doing it.

At colleges and universities across the country, the wealthiest young Americans are busy demanding special treatment in the classroom and creating 'safe spaces' so that they can lament the political victory of folks who could never afford to send their kids, much less themselves, to fancy schools.

This is the revolt of the rich.  If you look to see who voted for Donald Trump, it was, by and large, average Americans without college degrees.  These wealthy, elite demonstrators have nothing but contempt for the average American.  As Hillary Clinton, so aptly captured the moment, these people are "deplorables' and are "irredeemable."

The elite are striking back from their cushy spots in academia -- their target is the average American.

Thursday, November 10, 2016

The Humbling of the Elites

The average American is not sitting in a cushy job, protected by tenure or in some other way protected from competitive forces.  The average American is worried about their job, their family, their freedom.

The elite are not worried about any of the issues that face the average American.  They are worried mainly about providing government subsidies and protection to themselves and an elite few.  The average American, to the elite, is a racist, a homophone or much, much worse.

As the elite move from their limousines into their jets they never encounter the folks that led to the Trump victory.   They speak mostly to people who take orders from them or who are other elites.  The elite view the average American with contemptuous superiority.  The arrogance of the elites is breathtaking.

If you want to know what the elites are thinking and what they think of the average American, read the NYTimes and the Washington Post.  The elites are uncomfortable with "messy" democracy.  They prefer, like Elizabeth Warren, to make the rules and have the average American accept their hegemony.  Or, like George Will or Dana Perino on the right, they want the country to elect candidates that they approve of, who went to the right schools and have the appropriate table manners.  Issues are really not important to the elites, so long as they run the show.

It became clear in the recent election that wide swaths of the media are little more than direct arms of the Democratic Party.  The media shamelessly aided and abetted the Clinton candidacy in numerous ways that most of us never knew.  But, now we know.  We always suspected media bias.  This is far more than bias.  This is subservience to a political party.  That's not bias, but something very different.

Free expression and free markets have been under attack for several decades by the political establishment (of both major political parties).  Now, perhaps under Trump, this can be reversed and free markets and free speech can be returned as staples of American life.

This means big change.  The elites are threatened and they will fight back.  Look at the current demonstrations around the country by wealthy left-wing students, who see their privileged positions in society threatened.  These students like the cushy road into entitlement land, putting them into bureaucracies so they can cavalierly destroy industries, coal comes to mind, that they don't approve of.  Coal minors and their families be damned, say the elite, as they run rough shod over a community of average Americans plunged into economic despair and economic ruin.

From the perch of wealthy entitlement, the left subscribes to half-baked slogans, such as Climate Change, as they go about destroying the hopes and dreams of average Americans.  Climate Change is based upon little more than a scientifically unsupported act of faith.  Research funds are not available to those who don't buy into Climate Change.  If you want research funds, you have to drink the koolade.  So, they buy in and support these things so that grant money will continue to flow in.  Is this corruption?  Yes, it is.  But the elite don't care because they are beneficiaries of this corruption.  Meanwhile the economy is bludgeoned mostly by bureaucrats who never saw a free market that they approved of.

Sooner or later, the empire strikes back and now they have struck back.  The elites and their religious ideologies and their contempt for average Americans are now threatened.  The Trump revolution looks to displace comfortable perches of all of these elites.  That's why you see the polemics in the NY Times and the Washington Post.  That's why you see demonstrations by wealthy leftist students.

The elites want to maintain their control and their economic advantages over the average American.  They will stop at nothing to destroy free markets.  Their insulting attitude toward the political views of average Americans -- see today's Washington Post article about how Trump's victory is a victory for the Ku Klux Klan -- will not stop.  That's what being an elitist is all about.  They don't care one whit for the average American -- white or black, Muslim or non-Muslim.  All the elites care about is maintaining control and keeping the average American in their place.

Trump Agenda is Mostly a Free Market Agenda

Evidently repealing Obamacare and repealing Dodd-Frank are among the top priorities of the Trump Administration that will begin on January 20th.  Eliminating the arbitrary, mostly illegal, executive actions related to climate change is next.  (Whatever you think of climate change, the executive under the US Consitution never had the authority to impose these regulations, without Congressional authority, in the first place).

This could have a dramatic effect on the US Economy and it would be extremely positive.

Some say: how can you repeal ObamaCare.  Then what?  The answer is obvious.  How about a free market in health care?  Let consumers buy whatever insurance policies they want to buy in the free market and let insurance companies sell whatever insurance policies they want.  That simple principle would enable the US to have the best health care provision in the world and "bend back the cost curve."

Fixing the problems related to pre-existing conditions, insurance companies dropping unhealthy consumers and arranging vouchers for the poorest among us is easy.  There is no need to destroy the American health care system in order to fix these relatively simple problems (perhaps the current auto insurance system in US might provide a few clues about how to fix this).  In any event, replacing Obamacare with a free market health system is almost trivial in concept and can be done.

Placing a cap on medical lawsuits and permitting interstate insurance activities solves most of the other problems related to health care.  These are easy things to do and should be done.

What role is there for the government?  None.  Vouchers will solve the problem of the poor. Nothing else would be required.

Repealing Dodd-Frank is easy.  Repeal it.  Done.  Make all regulations related to Dodd-Frank immediately invalid.  Done.  Eliminate the Consumer Protection Agency.  Done.  And on and on.  It is time for the American economic engine to wake up and breathe fresh air once more.  It looks increasingly likely that Trump and Congressional Republicans just might make that happen.

It is time to bring the broom to the Obama nightmare.  Drain the swamp and drain it thoroughly.

Wednesday, November 9, 2016

The Bonfire of the Vanities

Incredible?  The little guy has spoken and the elites have taken it on the chin.  The elites have never understood why excessive taxation, excessive regulation, endless litigation and divisiveness are not popular with most Americans.  People want jobs; they want rising income and they could care less about the nonsense talked about by the Clinton team.

Nov 8, 2016 was a great victory for the little guy.  Admittedly, a flawed messenger produced that victory.  But, was there anyone involved in this thing who wasn't flawed?

Free markets may now have a window of opportunity.  Other than possible protectionist tendencies, the rest of the Trump economic package will be a healthy respite from the Obama-Clinton strangulation of the US economy.  Good things may lie ahead.

Tuesday, November 8, 2016

Election Malaise - Economic Madness

This has to be the worst election in US history.  Virtually no real issues about policy surfaced in this nightmare of personal attacks and flawed candidates.

So, what are the economic issues?

There is one central, overriding issue, that didn't really get discussed in the campaign -- the economy.  The absence of economic growth in the US and in the western countries generally is the biggest and most important issue in the modern world.

Since the 1850s, economic growth has transformed the world and created a gigantic middle class in every developed country in the world.  Since the 1990s, this growth has stumbled and finally halted.  Absence of economic growth is the source of most of the incredible discontent that is reflected in the campaigns of Bernie Sanders and Donald Trump.

Economic growth and free markets are the essential ingredients of a society that wants even the poorest and most dispossesed citizens to have a chance.  Take away growth and free markets and only political influence will reign.  If you know the right people, then you have a chance.  Otherwise you are condemned to declining opportunities and living standards and progressively poorer government institutions, such as schools, hospitals, and legal structures.  That's where we are.

Americans have no faith in the future.  It shows up in every poll.  Debates about inequalities and injustices dominate the conversation.  Why?  Because the economic pie doesn't grow any longer and it is increasingly clear that the pie will not grow in the future.  So, let's fight over it now.

Nothing changes this, but economic growth.  That won't happen regardless of who wins the election without a sea-change in the attitude of our citizens toward free markets.  Support for the minimum wage is a clear indicator of the current cultural antagonism against free markets.  Free markets are the only hope for people at the bottom of the economic pile.  The elite will never, willingly, surrender their hegemony, no matter how many promises they make.

Monday, November 7, 2016

John Harwood Fesses Up

Wikileaks exposed an email from John Harwood, a so-called "journalist," who appears regularly on CNBC.  The email from Harwood to Hillary Clinton's campaign manager asked Podesta what questions Podesta thought Harwood should ask Jeb Bush!  Presumably, Podesta provided him some good gotcha-moment questions. That seemed to be Harwood's specialty as a presidential debate "moderator."

Harwood, when asked, said that it was perfectly normal for him to solicit the campaign manager of Hillary Clinton to provide questions to ask Jeb Bush.  Well, for him, it is perfectly normal.  That's whats happened to standards of journalism in the modern political age.  As for the term "moderator," perhaps that should be redefined to mean "partisan political combatant."  That definition better fits John Harwood. 

Harwood is completely useless if one is looking for objective and independent analysis.  If what you want is the party line from the Obama-Clinton axis, then Harwood is your man.  But, why watch him?  Better to watch the "horse's mouth," so to speak.  Obama and Clinton can speak for themselves.  They don't need Harwood as their parrot.

Sunday, November 6, 2016

Idle Time on Their Hands

Affluent liberal economists are constantly looking for things to do.   Proposing higher taxes and more ways to waste taxpayers' money can't quite fill up all the idle time that economists seems to have available.  Now, the next new idea is "pre-distribution" economics.  The NY Times has tossed up a trial balloon for 'pre-distribution' economics in this morning's edition.

Here's the way this works.  Instead of letting business owners earn the profits of their investments, the 'pre-distribution' gang proposes that workers share in the profits.  This, of course, is not a volunteer program.  This is to be mandated by the full force of law.  If you wish to invest your money in a business, you no longer will be entitled to the proceeds of that investment.  That's over in the brave new world of 'pre-distribution' economics.

In this brave new world, who will invest in American companies?  The answer: no one.  Why not just invest your money in other companies in other countries where investors get the fruits of their investments?

Once these geniuses make it illegal to invest your own money in a business without sharing your profits with some third party, investments in American companies will disappear.  Then, I suppose, the plan will be to have 'government' take up the slack.  The government will invest directly in businesses.

This is a pretty direct road to fascism.  No doubt you will need a lot of extreme-left economists to supervise this entire exercise.  Presumably modern day Venezuela will be the political and economic model.

If you think this idea is a joke, check it out.  The article is by Neil Irwin and is billed as the chief policy idea to be promoted in the soon-to-be Clinton Administration.

Maybe negative growth is their goal after all.

Saturday, November 5, 2016

Public Policy Ignores Basic Economics

It is routinely assumed in public policy debates that incentives do not matter.  Policy wonks increasing talk as if increasing a price has no effect on demand and as if providing a subsidy has no impact on behavior.  The fact that 94 million working age Americans are no longer part of the work force is attributed to what?  Why has the American savings rate collapsed?

Economists increasingly look for non-economic arguments to explain obvious economic facts.  Why?  Because the economic arguments would undermine the support for the policies that economists wish to support.

Here's an example.  In China, pensions are provided by the provinces, not by Beijing.  A recent WSJ article interviewed Chinese citizens regarding their faith in whether or not they will eventually receive their pensions.  What they found is that the average Chinese do not have any faith that their pensions will be paid.

What about America?  Whenever anyone criticizes the absence of sound funding for social security or for state and local public pension funds, the left tries to silence such critics by arguing that criticizing the funding scares people and creates public anxiety.  So, instead, the left argues that everyone should pretend that social security is actually properly funded and nothing needs to be done to repair state and local public pension funds.  All is well, they say.

Leftist economists argue that there is no difference between the situation in China and the situation in the US regarding pension funds -- both are woefully underfunded and it is likely that pensioners will not receive what is promised.  Are these two situations the same?

No, they aren't.  Because the Chinese citizens know that they are not going to get the full value of the pension promises, they have taken action on their own -- they have raised their savings rate.  Chinese private savings rates are at the 30 percent level.  Even if the pension funds don't materialize, the average Chinese are taking steps to avoid disaster because they are well aware that disaster is what lies ahead.

What about the average American?  The average American's saving rate is zero.  The average American believes the lies told to them by the left and public policy wonks.  They believe that social security and medicare will solve their problems in old age.  So, they take no action to ward off disaster.

The difference is in the information they have.  If you know that no one will provide you with a pension, you save.  If you are fed lies about how well funded your pensions and health care systems are, then you don't save.  Then incentives take hold.  You take action to protect yourself if you are properly informed.  The facts show that incentives matter.

The Chinese are in a better situation because they don't believe the lies their government puts out.  Woe be it to the average American who believes the patently false lies about the funding of social security and medicare.

Thursday, November 3, 2016

Federal Reserve Irrelevance

As expected, the Federal Reserve took no action yesterday at their Open Market Committee two-day meeting.  But, the Fed did signal a rate hike for December....whoop-tee-doo!

Rates have already climbed more than 50 basis points on longer dated treasuries.  It is becoming all too obvious that the Fed is irrelevant in the rate setting market.  They don't matter.  The infamous December 2015 "Liftoff," which "raised" rates did nothing of the kind.  Across the board, interest rates fell after the Fed "Liftoff."

Now rates have been moving steadily higher since July ...... without the Fed.  So, at the end of the day, what difference does the Fed make?  You would think that their actions have at least a 50/50 chance of moving rates in the direction they desire.  So far, they are batting zero.

It is 100 percent certain that the Fed will raise repo and funds rates in December, so that they can continue to pretend that the Fed matters.  The Fed only matters because of their absurd policy of buying several trillion dollars worth of debt securities that now hamper their ability to conduct monetary policy.  Otherwise, the Fed is irrelevant.

But, they still get a lot of press.

Wednesday, November 2, 2016

Why Alienate Your Audience?

This past month Fox Business News overtook and surpassed CNBC.  That's pretty shocking.  CNBC has been the go-to cable station for financial news almost from its infancy.  But, no longer.


Maybe Andrew Ross Sorkin is the reason.  He certainly is for me.  His constant advocacy of a political view interferes with what would otherwise be interesting and entertaining financial eommentary.

Add in CNBC's John Harwood, who is completely in the tank for Obama and Clinton.  Harwood even checked with Podesta to be certain that Hillary's campaign manager didn't have any trouble with Harwood's reporting.  It is hard to see Sorkin and Harwood as commentators.  Instead, they both seem to be active partisans in a political campaign with little or no objectivity for financial and/or political news.  Who needs this?

After a while, folks get tired of being insulted and Sorkin goes out of his way to insult anyone who disagrees with him.  So, why watch him?  It's not like you're hearing a reasoned presentation of an opposing view.  What you hear from Sorkin as well as Harwood are mainly insults and innuendo.  So, the migration to Fox.

Fox is blatantly political as well and that's not good.  But, most people who are seeking financial news are politically more in sync with Fox than with CNBC.  CNBC, if they would stick to financial commentary, would have never lost their perch.  But, by unleashing Sorkin and Harwood on a daily basis to promote Hillary Clinton, Elizabeth Warren and others, CNBC has lost viewers who get sick of the daily diet of Sorkin and Harwood and move to Fox.  I have.

You see a similar pattern in professional sports and college athletics.  Deliberately insulting veterans, the police and the country, many athletes have chosen to go public with their lack of respect for the American flag.  Fine.  But, why watch these folks anymore.  Not me.  I am tired of these folks insulting half (or more) of the population with their arrogance.

They want a smaller audience.  Every indication is that they are getting that smaller audience. That's what they wanted and what they deserve.

I respect the American flag.  I have no interest in cheering for, watching, or in any way supporting folks who disrespect the American flag.  And, I have a lot of company.

The Consequences of Slow or No Economic Growth

Normally in economic recoveries, the United States has been blessed with almost double digit economic growth in the early stages (25 percent in 1933, for example) and then things taper off to four percent for the balance of the next five to six years.  There have been differences here and there, but US recoveries have been powerful in all cases, except for the period after 2000.


The growing tenacles of big government have made it increasingly hard for the American economy to grow. This same pattern has been evident in Europe for decades.  High taxes, massive regulation, burgeoning entitlements reinforce one another to curb any real chance for economic growth.  It is what it is and we are where we are.

But, who suffers?

Those who lose jobs to international trade cannot find new ones in a sluggish economy.  We lost jobs to trade in every decade since World War II, but we more than made these jobs up by the vigor of the American economy.  Now we don't make those jobs up because our economy has lost its zip.

People at the bottom of the economy had real opportunity before 2000, but now they don't.  Why?  Regulatory barriers, high taxes, minimum wage regulations, Obamacare, and on and on.  Thus, concerns mount about inequality.  These concerns were largely absent when the US economy had high levels of economic growth.  Now with no growth, inequality concerns are front and center.

The elites don't get this.  They don't see economic growth as a problem.  They don't see economic stagnation as a problem.  The elite have jobs, they have tenure, they have union protections and they plan to hold on to them.  They don't really care what happens to those at the bottom, as long as those at the bottom vote to keep the elites in power.  Beyond that concern, the elites could care less.

As the US economy deteriorates, social and economic problems will multiply.  There will be calls for even more government control and spending (note the current calls for increased infrastructure spending).  All of this pushes those at the bottom of the economic pile further down and enhances the wealth and status of the elites.

The idea of America as a land of opportunity becomes more and more a memory of the days when the American economy grew and American politicians were committed to that economic growth.  We are now in a very different environment.