Tuesday, January 22, 2019

Ocasio-Cortez: System That Allows Billionaires is ‘Immoral’

Alexandria Ocasio-Cortez 
This Marxist-Leninist never takes a day off.

Rep. Alexandria Ocasio-Cortez said in an interview on Monday that she believes a system that allows people to become billionaires is “immoral,” reports the New York Post.

Top Level Warning On Massive US Fiscal Deficit

Even Keynesian technocrats are getting concerned about the massive U.S. fiscal deficit.

In a wide-ranging interview (video below), Gian Maria Milesi-Ferretti, deputy director of research at the International Monetary Fund, warns that EU economies are slowing and that exploding U.S. fiscal deficit is becoming a concern.

The concern about the U.S. deficit is genuine.

Monday, January 21, 2019

New York City Restaurants Slashing Staff Over $15 Minimum Wage

This government interventionist move is working out really well.

New York City restaurants are slashing their staff after a state law that took effect at the end of 2018 mandating restaurants with 11 or more workers to pay a $15 an hour minimum wage, reports Breitbart.

Pawnshops and Payday Lenders Surge on US Government Shutdown

I am pretty good at event trading and have advised in the EPJ Daily Alert  regarding a potential trade when the shutdown ends but I missed the pawnshop and payday lender play.

Pawnshop chains and payday lenders, have experienced strong stock price spikes during the longest government shutdown in US history, reports the Financial Times.

WARNING: Chinese Corporate Bond Defaults Hit Record High

Defaults on Chinese corporate bonds rose to a record high last year, according to the credit rating firm Fitch.

Forty-five Chinese corporates defaulted on 117 bonds with a principal amount of Rmb110.5bn ($16.3bn).

Both the number of issuers and principal value were all-time peaks.

Sunday, January 20, 2019

The Week Ahead

The World Economic Forum begins in Davos, Switzerland on Tuesday. Scheduled to be in attendance are:

Jair Bolsonaro, the new right wing president of Brazil.
George Soros
Bill Gates

Sunday Data: Where the World’s Ultra Rich Population Lives

Where the World's Ultra Rich Population Lives


Hey, Alexandria Ocasio-Cortez, Even President Eisenhower Was a Tax Dodger and Didn't Have to Pay Taxes at the Then Top Rate of 91%

General Eisenhower
Laura Saunders at The Wall Street Journal explains:

From 1940 through 1980 the top rate for the highest earners never dipped below 70%. During most of the 1950s, when the U.S. economy dominated the world, the top rate was 91%. It kicked in at $400,000 of taxable income, or roughly $3.7 million in today’s dollars...

The Treasury Debt Doomsday Scenario

Here are some solid observations from Joe Rennison at the Financial Times on what could really crash the entire bond market:

China’s....holdings [of US Treasury securities] fell by $46bn to $1.14tn...Analysts say it is likely that China, at least to some extent, is choosing to sell dollars to prop up its currency, rather than buying US government bonds...

The Government Shutdown and The Fallacy of the "Public Sector"

Murray N. Rothbard
Below is a reprint of a Murray Rothbard essay particularly relevant at this time of the partial government shutdown. It was originally appeared in the New Individualist Review (Summer, 1961)

The Fallacy of the "Public Sector"
By Murray N. Rothbard

We have heard a great deal in recent years of the "public sector," and solemn discussions abound through the land on whether or not the public sector should be increased vis-à-vis the "private sector." The very terminology is redolent of pure science, and indeed it emerges from the supposedly scientific, if rather grubby, world of "national-income statistics." But the concept is hardly wertfrei; in fact, it is fraught with grave, and questionable, implications.

Saturday, January 19, 2019

Why Socialism Persists

In the video below Mises Institute president, Jeff Deist, makes some very sound points on the why it appears socialism is gaining greater support in the United States and what to do about the advance.

There is a lot to think about here.

Why socialism is advancing and a strategy on how to counter it are the most important political action level questions of our time.

Trump to Use Federal Funds to Prop Up US Bomb Makers

Welcome to US direct investment in the military-industrial complex.

President Donald Trump has approved direct federal investment in suppliers of American bomb parts and chemicals, part of as much as $250 million in direct investments by the Pentagon, reports The Military Times.

The Cheap-Shot Smearing of Free Market Economists

Quinn Slobodian
David E. Bernstein writes:

I've been involved off and on over the past year and a half in the ongoing debate over Nancy MacLean's book Democracy in Chains. My interest in the book was piqued when some of my Facebook friends were criticizing it for a variety of scholarly sins. I got hold of the book, and immediately turned to MacLean's brief discussion of my law school and its former dean, Henry Manne. I found that what MacLean wrote did not mesh with the facts. I thought perhaps that she was led astray by sources she thought to be reliable, so I checked her footnotes. Nope. She just made things up. For example, she asserted that Manne only hired white male faculty, which was not remotely true. Not only did the source she cited in the relevant footnote not assert this, it specifically mentioned my colleague Bruce Kobayashi, who has a very common Japanese surname and is in fact of Japanese descent.

Friday, January 18, 2019

Trump’s Tariffs Are Killing American Steel

By Benn Steil and Benjamin Della Rocca

“Our Steel Industry is the talk of the World,” President Trump tweeted in September. “It has been given new life, and is thriving.”

Yet nearly a year after Trump slapped tariffs on imported steel, the U.S. steel industry is not thriving. It is reeling. Steel prices have fallen back to pre-tariff levels. Employment is stagnant. The clearest sign that tariffs are not working, however, is the stock market.

Statist Economists, Including All LIving Former Fed Chairs, Call for Carbon Tax

Fed chairs turned climate experts
A group of statist economists, including Fed chairs from Alan Greenspan to Janet Yellen, is endorsing a plan to "combat" climate change by slapping a tax on greenhouse gas emissions and then distributing the revenue to American households.

All living former Federal Reserve Board chairs and previous leaders of the president’s Council of Economic Advisers have signed on to a statement asserting that a gradually rising carbon tax is “the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary.”

Establishment Economists Are Completely Baffled By the Support for Mercantilism By President Trump and His Followers

Alan Blinde
You don't get much more establishment than Alan Blinder.

He is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs in the Economics Department at Princeton University. He served on President Bill Clinton's Council of Economic Advisers (1993-1994). He was also the Vice Chairman of the Board of Governors of the Federal Reserve System (1994-1996).

Thursday, January 17, 2019

Trump Cancels US Delegation to Davos World Economic Forum

Update below.

Facing questions about plans to send a delegation of top officials to next week to the World Economic Forum, President Trump late today announced he would cancel the trip “[o]ut of consideration for the 800,000 great American workers not receiving pay.”

Problems With Bryan Caplan's "Why I'm Not an Austrian Economist": Part 2

By Robert Wenzel

This is Part 2 of my comments on Bryan Caplan's essay, "Why I'm not an Austrian Economist."

From the point I left off in Part1, Caplan continues on with his attack on Rothbard.

Welfare Cowboys Should Be Ashamed of Themselves

Chris Edwards writes:

A reporter called the other day to ask what I thought about the National Endowment for the Arts (NEA) giving subsidies to the National Cowboy Poetry Gathering in Elko, Nevada. The government appears to have given the cowboy poets hundreds of thousands of taxpayer dollars over the years.

The Serious Confusion About Corporate Buybacks and Other Corporate Share Transactions

Fritz Machlup
At the post, Socialist Alexandria Ocasio-Cortez Recommended for House Finance Committee, commenter Unknown Saver writes:
It is not enough that we have had 10 years of 0% interest rates, but now president Donald Dow Jones gave every corporation a tariff/deficit funded tax windfall to create jobs. What did most CEO's do? They enriched themselves with stock buy backs.

There is a lot to untangle here in this short comment.

Wednesday, January 16, 2019

Democrats Introduce Bill to Hike Federal Minimum Wage to $15 Per Hour

Democrats have introduced a bill this morning to raise the federal minimum wage to $15 per hour.

There were 181 Democratic co-sponsors.

The Raise the Wage Act, backed by House Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer and several declared or prospective 2020 Democratic presidential candidates, would hike the minimum wage to $15 per hour by 2024 through annual increases. It would also end provisions that in some cases allow employers to pay workers under age 20 and employees with disabilities less than the wage floor.

Socialist Alexandria Ocasio-Cortez Recommended for House Finance Committee

Alexandria Ocasio-Cortez 
Just days after House speaker Nancy Pelosi prevented Alexandria Ocasio-Cortez from gaining a seat on the House Ways and Means Committee, the Democratic Party's steering committee voted to recommend her for the House Financial Services Committee.

According to Bloomberg, she will now almost certainly join the powerful committee that oversees Wall Street.

Problems With Bryan Caplan's "Why I'm Not an Austrian Economist": Part 1

By Robert Wenzel

Bryan Caplan's essay, "Why I'm not an Austrian Economist," is apparently getting a second wind on the internet.  A version of the paper was first published in 1997 in the Southern Economic Journal and Caplan published a more expanded version at a later date on his website.

I have received a slew of emails linking to the website version, with correspondents asking me to comment on the paper, so I am guessing the paper has received prominent mention at some Austrian school site.