Monday, November 30, 2015

Soaring Road Travel

The huge supply of gasoline in the market, and the resulting decline in gasoiline prices, has casued a boom in car travel.

 Based on the most recent “Traffic Volume Trends” report from the Federal Highway Administration, Americans drove more in September of this year (about 264 billion miles) than in any previous September in US history. The number of total vehicle miles driven over the most recent 12-month period from September 2014 to September 2015 of about 3.12 trillion miles set a new record for that measure of US traffic volume. And the 3.4% increase in September’s 12-month total traffic volume over last year was the largest annual increase in that measure since 1997.

(via Mark Perry)

Super Cyber Mnoday Deals at Amazon Have Been Launched

Go ahead dig in, there are many super deals on all kinds of products from jewelry, to clothing to toys and everything else you can think of. CLICK BELOW

BREAKING IMF Agrees to Include China's RMB in Benchmark SDR Currency Basket

The International Monetary Fund has agreed to add the Chinese yuan to its currency reserves basket.

The decision — which marks another step in China's global emergence — came after the IMF evaluated China's role as an exporter and the yuan's role as a "freely usable" currency. IMF Managing Director Christine Lagarde noted the currency's inclusion is a "clear representation of the reforms" taking place in China.

The addition of the yuan, or renminbi, will take effect next October.

This move in and of itself is not of major importance for the Chinese currency from a technical perspective though it will add some support to the currency when the IMF begins to accumulate it for its SDR basket. More significant is that it is another signal that the Chinese currency is a major currency---and another currency that traders will consider as an alternative currency when the inevitable collapse of the US dollar begins.

The SDR basket currently includes the U.S. dollar, Euro, Japanese yen, and pound sterling.


Democratic Socialism' Means the Loss of Liberty

Richard Ebeling emails:

Dear Bob,

I have a new article on the “EpicTimes” news and commentary website on “‘Democratic Socialism’ Means the Loss of Liberty.”

Democratic Party hopeful Bernie Sanders has recently delivered a speech explaining what he means by “democratic socialism.” It turns out that that what he means is Franklin Roosevelt’s 1944 “economic Bill of Rights,” in which FDR called for everyone to have a government-given entitlement to a job, a “living” wage, “adequate” food, clothing and “free time,” as well as a “decent” home and health care.

These are labeled “rights” because people are not truly “free” when the needs and necessities of life are not “freely” available to all. In this FDR and Sanders have merely picked up on a theme in Karl Marx that the only person who is really free is the individual who does not have to do anything that he does not want to do to get things he wants.

But since little of value is “free” in life because of scarcity – the limitedness of means to use to achieve our desired ends – if we don’t work ourselves to get what we want, then someone else must do the work and be compelled to part with the fruits of his own labor through government taxation and redistribution.

At the end of the day, the “freedom” dreamed of by Bernie Sanders and other “democratic socialists” (or American “progressives”) imposes government command over all, some of whom must be coerced to give up what they have produced, and others who become political dependents, getting from government to “set them free” from material wants, by being confined to the standards and requirements of what eligibility for these “entitlements” imposes.

Moving further down this road will only reduce the liberty of the citizenry even more than is already the case.


Krugman Admits There Has Been No Deflation

Paul Krugman, who has been screaming about the deflation threat in his NYT columns, blog posts and during television interviews, in a meandering comment on Sunday, centered around Hicks and Keynes, admitted that there has been no deflation (and that the Krugman-favored (p.484Phillips Curve model isn't forecasting correctly either). He seems to have given up on deflation as a threat in this business cycle, after warning about the threat for years.
One big problem has been the absence of deflation. The “accelerationist” Phillips curve that used to be standard — inflation depends on unemployment and lagged inflation — seemed consistent with the experience from previous big slumps, which were associated with large declines in the rate of inflation. Specifically, we used to cite the “clockwise spirals” one saw in unemployment-inflation space as evidence for something like the Friedman-Phelps theory of the natural rate.

But what worked in the 70s and 80s doesn’t look so good for recent experience...

Why didn’t the sustained high unemployment after 2008 push us into deflation?
Here's Krugman in 2011 on CNN warning about the deflation threat (starts at 4:35),


Ten Reasons That Market-Determined Wages Are Better Than Government-Mandated Minimum Wages

By Mark J. Perry

Based on a minimum wage debate I participated in recently at Northwood University, here are ten reasons that I support market-determined wages over government-mandated minimum wages.

1. Government-mandated minimum wages are always arbitrary and almost never based on any sound economic/cost-benefit analysis. Why $10.10 an hour (Obama said “ten-ten is easy to remember”) and not $9.10 or $11.10 an hour? Why $15 an hour and not $14 or $16 an hour or $25 an hour? In contrast, market-determined wages reflect supply and demand conditions that are specific to local market conditions and vary widely by geographic region and by industry.

2. A uniform federal minimum wage may be sub-optimal for many states, and uniform state minimum wages may be sub-optimal for many cities. A one-size-fits-all approach to a single, uniform federal minimum wage is really a “one-size-fits-none approach.

3. Minimum wage laws require costly taxpayer-funded monitoring and enforcement mechanisms, whereas market wages don’t require enforcement.

4. Minimum wage laws discriminate against unskilled workers in favor of skilled workers, and the greatest amount of discrimination takes place against minority groups, like blacks. Milton Friedman called the minimum wage the most anti-black law in America.

5. Adjustments to total compensation following minimum wage hikes will disadvantage workers in the form of reduced hours, reduced fringe benefits, and reduced on-the-job training, and a lower quality work environment.

6. Many unskilled workers will face reduced employment opportunities because of minimum wage laws and will be denied valuable on-the-job training, and the opportunity of acquire experience and skills.

Hillary Clinton Announces $275 Billion Infrastructure Plan

On Sunday in Boston, Hillary Clinton rolled out a $275 billion infrastructure plan.

A campaign aide added that the bulk of that -- $250 billion - would go to direct investment by the federal government, while the remaining $25 billion would support a national Strategic Infrastructure Bank, which would fund future projects through a combination of financing mechanisms, reports NBC.

According to NBC, the aide said the plan would be paid for by business tax reform. He did not offer more details.

The proposal is really about buying crony construction support and union support.

Orange-t-shirt clad LIUNA members turned out in force and dotted the audience in hardhat, reported NBC.s. The Carpenters union made special shirts for the occasion, showing both their and Clinton's campaign logo.

Terry O'Sullivan, the president of the Laborers International Union (LiUNA), which recently endorsed Clinton, said the former secretary of state "understands unions," adding that organized labor will make this election.

The only good thing about this crony over-the-top spending is that if Hillary is elected, she will never be able to get this passed with a Republican Congress,

NBC notes:
Infrastructure spending has been a top priority of President Obama's as well, but his plans have so far failed to go anywhere in the Republican-controlled Congress. Clinton's proposal would face the same opposition in Congress, which is likely to have at least one chamber under GOP control if she wins the presidency.
Congressional logjam is our friend here.


Sunday, November 29, 2015

Best Look Yet at Amazon's Flying Drone Delivery Program

The eventual goal is to deliver packages weighing five pounds or less within half an hour.

"One day, seeing Prime Air vehicles will be as normal as seeing mail trucks on the road," Amazon writes.

It's still in testing, but this is what it is going to look like.

(via Business Insider)

Paging Walter Block: It is Now Legal to Own an Asteroid in the U.S.

Professor Walter Block, who has recently completed (with Peter L. Nelson) a book on  private property ownership of water, Water Capitalism: The Case for Privatizing Oceans, Rivers, Lakes, and Aquifers and who is working on a book on capitalism and private property in space, may have something to say about the U.S. Commercial Space Launch Competitiveness Act (H.R. 2262).

Christian Nordqvist reports:
Owning an asteroid is now legal in the Unites States, after President Barack Obama signed the U.S. Commercial Space Launch Competitiveness Act (H.R. 2262) into law, effectively reversing decades of space law. Before the new law was signed, space had been largely treated as publicly owned, i.e. nobody could claim commercial ownership of anything in outer space.
Now, US citizens have the right to own the asteroid resources they obtain, which several companies, including Planetary Resources Inc., say will encourage the commercial exploration and utilization of resources from asteroids.
Eric Anderson, Co-Founder and Co-Chairman of Planetary Resources, Inc., said:
“This is the single greatest recognition of property rights in history. This legislation establishes the same supportive framework that created the great economies of history, and will encourage the sustained development of space.”
Market Business News comments:
Asteroids are rich in precious metals and minerals. Mining them could become a giant business. But companies need to know that what they harvest is theirs. 

 The new US law states:
A United States citizen engaged in commercial recovery of an asteroid resource or a space resource under this chapter shall be entitled to any asteroid resource or space resource obtained, including to possess, own, transport, use, and sell the asteroid resource or space resource obtained in accordance with applicable law, including the international obligations of the United States.

The full text of  H.R. 2262, the “U.S. Commercial Space Launch Competitiveness Act,” is here.


Clinton to Unveil Large Economic Spending Proposal in Boston

Welcome to the world of the crony Clintons and how the associated scams are promoted to rhe masses.

At a Sunday event at Faneuil Hall in Boston, Hillary Clinton will be joined by Boston Mayor Martin J. Walsh, a Democrat, to launch a ‘‘Hard Hats for Hillary’’ coalition group consisting of unionized supporters in construction, building, and transportation industries, campaign aides said.

At the event Hillary will unveil the largest plank of her economic agenda, proposing hundreds of billions of dollars in spending, primarily on infrastructure projects, according to a campaign aide, reports The Boston Globe.

Over the course of several weeks, she plans to outline the remainder of her crony payoff "jobs" plan, which calls for spending in manufacturing, clean energy, and research funding.

The proposals constitute the largest amount of spending that the campaign has outlined thus far, exceeding the $350 billion that Clinton has proposed for a college affordability plan.

And note this gift to the crony part of Wall Street;

Clinton’s plan proposes the creation of an infrastructure bank to leverage hundreds of billions of dollars in foreign and domestic private investment for infrastructure projects.

No doubt to fund "private investment" by banksters and to be managed for stiff fees by banksters.


Why US Mainland Citizens Will End Up Paying for the Financial Crisis in Puerto Rico (And a Warning for Those Holding Illinois Debt)

The Economist, correctly, reports (my emphasis)
[T]he economic outlook for America’s Caribbean dependency is anything but sunny. Its government owes $72 billion in debt, which it says it cannot repay. On December 1st the territory is supposed to make—and is almost certain to miss—a $354m debt payment. And that is just the first of a series of repayments that add up to $1.4 billion (or nearly 1.5% of GDP) due in December and January.

Politicians in Washington are scrambling for a solution. The island’s fiscal woes are in part the result of chronically bad budgeting. But they also stem from structural economic weakness. Bailing out Puerto Rico, which is self-governing but not a state, is not a popular option. Yet when any corner of America faces a deterioration in its long-run economic fortunes, the costs will end up being shared, one way or another...

As the economy has withered, obligations to creditors have loomed larger.

Many Puerto Ricans have not waited for a recovery. More than 200 move to the mainland every day. Roughly 5m Americans of Puerto Rican descent live in the continental United States; 3.5m remain on the island. Its labour force has shrunk 11% since 2009...

Migration reduces unemployment, but it cannot liberate struggling spots from accrued obligations—most notably pensions. Puerto Rico’s biggest government-pension programme has sufficient funds to cover just 0.7% of future obligations. State pension pots are not in quite such bad shape, but massive liabilities still loom. In Illinois, where the labour force has shrunk by about 3% since 2007, pensions are just 39% funded. Puerto Rico will not be the last local government to run out of money...

The administration of Barack Obama has released a...plan to repair Puerto Rico’s finances. It would allow indebted government agencies, such as the island’s power company, to declare bankruptcy, and would provide for a restructuring of other debts and pension obligations. The federal government would also oversee the territory’s future public spending; as a sweetener, residents of the territory would gain full access to various anti-poverty schemes that are less generous there than on the mainland.

If Congress spurns this plan, Puerto Rico’s government will be forced to raise taxes to crippling levels and slash spending to pay its bills. That would hit the island’s residents, 40% of whom live below the poverty line, hard. It is difficult to imagine the federal government ignoring the humanitarian crisis that would probably follow. In addition, emigration to the mainland would presumably jump, initiating a vicious cycle whereby a shrinking tax base leads to rising taxes and curtailed services, prompting further emigration. As American citizens, the migrants will be eligible for public support of various kinds on the mainland. There is no question, in other words, that America will end up bearing much of the cost of Puerto Rico’s past profligacy. The only question is how considered and efficient its assistance will be.

The World's Fastest Growing Cities (Urban Growth per Hour)

Goodbye, Chairman Mao.

By 2025, the Chinese city of Shenzhen will be home to more than 12 million people. In 1950, it was a fishing village with only 3,148 citizens.

In India, Delhi is growing at 79 people per hour, Mumbai at 51. In China, Shanghai expands by 51 new citizens an hour.

London and New York are growing at a rate of 9 and 10 people per hour.

(via The Guardian)

Trump on Billionaires Getting Good Restaurant Tables and on Dumb NYT Financial Moves

Note: There is a commercial break in the middle of this clip. The clip doesn't end until Trump says he would like an apology from NYT before they go out of business.


Saturday, November 28, 2015

Bernie on Taxes (And a response)

Though I doubt as president he would cut anyone's taxes.

My response:

Gordon T. Long Interviews Robert Wenzel

An Interview with Friedrich A. Hayek (Part 2 of 2)

BREAKING Putin Approves Economic Sanctions Against Turkey

Russian President Vladimir Putin has signed a decree imposing a package of economic sanctions against Turkey following its downing of a Russian Su-24 bomber in Syria. The measures include banning several Turkish organizations and the import of certain goods.

A decree on "measures providing the national security of the Russian Federation and the protection of its citizens against criminal and other unlawful acts, and on imposing special economic measures in relation to Turkish Republic" was signed on Saturday, the Kremlin press service said.

Employers in Russia will be prohibited from hiring Turkish nationals for work starting January 1, 2016.

The ban will touch upon only new workers, the decree said, adding that employees who already officially hired as of December 31, 2015 will not fall subject to the sanctions.

The government has been tasked by the president with introducing a ban on charter flights between Russia and Turkey. Russian travel agencies have been advised to stop selling tours to Turkey, the Kremlin announced.

The visa-free regime for Turkish nationals traveling to Russia will be suspended starting from 2016, the decree signed by the Russian leader says.

It will not affect those who have residence permits, as well as Turkish diplomats working in Turkish embassies and consulates on the territory of Russia, and their families.

The government has also been tasked with enhancing security control at its ports in the Sea of Azov and Black Sea. The illegal presence and movement of Turkish vessels offshore nearby Russian sea ports must be prevented, the decree said.

(via Reuters)

An Interview with Friedrich A. Hayek (Part 1 of 2)

REPORT Greek Women Selling Sex for the Price of a Sandwich

This is what happens in a bankster squeezed economy mixed with a socialist government.

Daniela Deane at WaPo writes:
Young Greek women are selling sex for the price of a sandwich as six years of painful austerity have pushed the European country to the financial brink, a new study showed Friday.

The study, which compiled data on more than 17,000 sex workers operating in Greece, found that Greek women now dominate the country’s prostitution industry, replacing Eastern European women, and that the sex on sale in Greece is some of the cheapest on offer in Europe.

“Some women just do it for a cheese pie, or a sandwich they need to eat because they are hungry,” Gregory Laxos, a sociology professor at the Panteion University in Athens, told the London Times newspaper. “Others [do it] to pay taxes, bills, for urgent expenses or a quick [drug] fix,” said Laxos, who conducted the three-year study.

The Rent Near a Federal Reserve Money Spigot

Spotted in the lower Nob Hill district of San Francisco outside a B/C building, (Which means rents are now probably higher further up Nob Hill.). Thank you, Janet Yellen.


The History of Capitalism by Ludwig von Mises

Mises on Economic History

Economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics
-Ludwig von Mises