Saturday, June 24, 2017

Larry Kudlow Supports Taxing Your Taxes

I don't think Crazy Eddie (Antar) with the help of his accounting mastermind cousin, Sam Antar, would ever think of trying to pull this off.

 RW

Home Prices Spiking in Gay Communities



As the housing market continues to recover from the Great Recession, gay neighborhoods are leading the charge, reports CBS News.

In 2012, it would have cost homebuyers nearly 30 percent more to live in neighborhoods with a large number of gay, lesbian and bisexual residents. Now, it will run almost 37 percent more to live in those same areas.

In honor of Pride Month, Trulia partnered with OKCupid to track the rising -- and falling -- demand for gay communities across the country since 2012. They did this by calculating a "Pride Score." That's the percentage of OKCupid users searching for same-sex partners plus the percentage of same-sex households, according to Census data, for ZIP codes in each U.S. metro area. Trulia then calculated the median values per square foot of homes for sale in those neighborhoods in both 2012 and 2017 to see how they changed over time and relative to their metro areas.

According to the study, many predominantly gay neighborhoods have recovered more quickly than other neighborhoods.

"This is the big puzzle of the whole story," said Ralph McLaughlin, Trulia's chief economist.

"The leading hypothesis is that since 'Pride' individuals and couples tend to have fewer children and higher disposable incomes, they might seek out neighborhoods that are on the upswing."

 RW

Hayek on Keynes's Ignorance of Economics

 RW

Friday, June 23, 2017

Charlie Munger Says Al Gore is ‘Not Very Smart,’ But Became Filthy Rich Anyway

CNBC reports:
Warren Buffett's top lieutenant, Charlie Munger, told a small group of investors that the simple strategy of buying only service company stocks made former Vice President Al Gore very wealthy.

"Al Gore has come into you fellas business. ... He has made 3 or 4 hundred million dollars in your business. And he's not very smart," Munger said at the Daily Journal annual meeting on Feb. 15. "He had one obsessive idea that global warming was a terrible thing. … So his idea when he went into investment counseling is he was not going to put any CO2 in the air."
Though the comments were made more than four months ago, they went largely unnoticed and have not been widely reported on elsewhere.
He also shared more details on how Gore became successful in the money management business:
"So he found some partner to go into investment counseling with and says we're not going to have any (carbon dioxide). But this partner is a value investor and a good one. So what they did is, is Gore hired staff to find people who didn't put CO2 in the air. Of course that put him into services. Microsoft and all these service companies were just ideally located. And this value investor picked the best service companies. So all of a sudden the clients are making hundreds of millions of dollars and they are paying part of it to Al Gore. Al Gore has hundreds of millions dollars in your profession. And he's an idiot. It's an interesting story. And a true one."
Here is the video of Munger's comments:



 RW

(ht Murray Sabrin)

Why the First 118 Miles for the Los Angeles to SF Bullet Train Started in Fresno(?) and Could Cost $3.6 Billion More Than Expected



By K. Lloyd Billingsley

California’s vaunted bullet train has yet to carry a single passenger but it has managed to make the news. As it turns out, the state’s High-Speed Rail Authority offered a contract extension of $3 million on a noncompetitive basis. In other words, it was a no-bid sweetheart deal. That emerged in a new report from California’s state auditor Elaine Howle, who finds that the state’s General Services and Technology departments “did not provide adequate oversight of the billions of dollars state agencies awarded through noncompetitive contracts from fiscal years 2011–12 through 2015–16.” The 27 noncompetitive deals the auditor reviewed “could have been avoided if the agencies had engaged in sufficient planning.” Likewise, “both General Services and Technology have enforcement mechanisms, they rarely employed them, allowing agencies to continue inappropriately using noncompetitive requests.” Taxpayers should not be surprised that the vaunted “bullet-train” is on this track.

As we noted, it was pitched as a swift route from Los Angeles to the Bay Area, but construction began way out by Fresno, not exactly on the route. The land the rail project needs remains in the hands of the rightful owners, and the first 118 miles could cost $3.6 billion more than expected. The Federal Railroad Administration has already forked over grants of $3.5 billion for that very segment, supposedly the easiest. Other parts would require the most elaborate tunneling project in U.S. history, certain to incur massive cost overruns.

Few Californians are panting for an essentially 19th century form of transportation that was slower and more expensive than air travel. California’s high-speed rail project is best viewed as a bait-and-switch ploy to get state voters to finance local transit projects they otherwise would not support. The state’s High Speed Rail Authority has no experience building anything, but has managed to establish, count ‘em, four offices, a Sacramento headquarters and three regional offices. Commuters can’t ride those, but the Authority works well as a comfy sinecure for ruling-class retreads like board member Lynn Schenk, a former congresswoman and chief of staff for governor Gray Davis. As we noted, a convicted embezzler also found work with the rail authority, so criminals are also all aboard.

Taxpayers should not be surprised that this bloated, useless outfit should hand out $3 million in a no-bid deal to favored insiders. And according to High-Speed Rail’s new business plan, the total cost for the project will now be $98 billion.

The above originally appeared at the Independent Institute.

Top Ten Ways Senate Obamacare Bill Is Fake Repeal

 RW

(ht Felix Bronstein)

The Strange Book Collection on Paul Krugman's Book Shelf

MuckRock informs that in 2014, journalist J.K. Trotter received in response to a FOIL request for correspondence between City University of New York and economist/New York Times columnist Paul Krugman, regarding an upcoming gig at their Income Inequality Institute.

It is the request that broke the story that Krugman was to be paid a $225,000 salary at CUNY as a professor there.

The collection included emails released under the request, including an email with attached selfies of Krugman that reveal an odd collection of books on shelves behind him. What a mess/

The books might be in alphabetical order.

On the left on one shelf (circled) it appears that there is a copy of the 1964 book, The Economics of Soviet Planning by Abram Bergson.

On the right there appears to be a copy of the Sidney Blumenthal book, The Clinton Wars.

But the collection strikes me as a particularly unimpressive collection, placed in a very sloppy manner. Could this really have been taken inside Krugman's old Princeton office?

If you can identify any other books in the mix, please let me know. There are more pics here.

 RW

Murray Rothbard on The Libertarian Solution to Welfare

Something for Trump to think about.



 -RW

Thursday, June 22, 2017

E-Currency Crashes From $319 to 10 Cents, Then Rebounds


Welcome to the modern day version of the Tulip bubble.

The price of ethereum crashed as low as 10 cents from around $319 in about a second on the GDAX cryptocurrency exchange on Wednesday, a move that is being blamed on a "multimillion dollar market sell" order, reports CNBC.

Ethereum is an alternative digital currency to bitcoin and had been trading as high as $352 on Wednesday. It has since rebounded from its flash-crash lows to trade to about $325 on the GDAX exchange.

Adam White, the vice president of GDAX which is run by U.S. firm Coinbase, posted on the exchange's blog, outlining what took place at around 12:30 p.m. PT on Wednesday. According to White, the multimillion dollar market sell order resulted in a number of orders being filled from $317.81 to $224.48.

As the price continued to fall, another 800 stop loss orders and margin funding liquidations caused ethereum to trade as low as 10 cents.

 -RW

An Open Letter Requesting Answers From Robert Lighthizer

Mr. Robert Lighthizer
United States Trade Representative
Washington, DC
Mr. Lighthizer:
Yesterday you informed the Senate Finance Committee that the Trump administration plans to punitively tax more Americans who buy imports.  In that testimony you declared that “the president’s view, and mine, is that when you see a trade deficit in the hundreds of billions of dollars – and that deficit goes on for years and years regardless of changes in the broader economy – one must then be concerned that the deficit represents structural problems in global trade.”
The flipside of the U.S. trade deficit is the U.S. capital-account surplus.  Indeed, “capital-account surplus” is simply another way of saying “trade deficit” (or, more precisely, “current-account deficit”).  And a U.S. capital-account surplus means both that (1) foreigners find America to be an especially attractive place to invest, and (2) capital – that is, resources necessary to expand the productive capacity and productivity of the economy – flows from around the world into America.
So let’s reword your statement without changing its economic content: “[T]he president’s view, and mine, is that when you see global investors consistently willing to increase their stakes in the American economy to the tune of the hundreds of billions of dollars – and that economy-expanding fondness for investing in America goes on for years and years regardless of changes in the broader economy – one must then be concerned that the investments represents structural problems in global trade.”
In light of the reality that America remains an especially attractive destination for investment,* can you explain to us Americans just why the continued willingness of foreigners to invest in the U.S. economy is a danger to us – one that justifies your further obstructing our freedom to choose how to spend our own money?  And can you elaborate on why you believe that something is amiss with U.S. government policies that fail to more vigorously block capital from abroad flowing into our economy?
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030
* Although the administration’s trade policies do seem to be designed to greatly reduce the attractiveness of America to investors.

The above originally appeared at Cafe Hayek.

Rand Paul Blasts Republican Healthcare Bill

Here's a first take on the just-released draft of the bill. (Note: The current draft could still change significantly before the final version hits the floor.)

This is far from a free market healthcare plan. It continues to keep government heavily involved in healthcare. Remarkably, it even keeps Obamacare's subsidies.

On the plus side, it eliminates the individual mandate.

Return to this post for updates,

 RW

UPDATE 1

The full text of the bill is here.

UPDATE 2

More details (via CNBC)

The bill would repeal, retroactive to the beginning of 2016, the Obamacare rule requiring most Americans to have some form of health-coverage or pay a tax penalty fine.
---

The bill also would continue for at least two years to offer reimbursements to health insurance companies for subsidies that reduce out-of-pocket costs for low income customers of Obamacare plans.

---

UPDATE 3

Via CNBC:

On Thursday, about an hour after the bill was posted online, NBC's Chuck Todd tweeted that a group of a conservative Republican senators were meeting, and that there are at least three GOP senators, and possibly more, who plan to announce later today that they will oppose the bill.

If that number proves to be accurate, it could be a death blow to the bill.\

Sen. Rand Paul, R-Tenn., told NBC that he and several other members of the GOP caucus would be making a statement on the bill later Thursday.

"It looks like we're keeping Obamacare, not repealing," said Paul, who declined to say whether that meant he would vote against the bill.