Wednesday, November 30, 2016

A Trump "Inspired" Cabinet Pick

Conrad Black writes in National Review that the "inspired" pick is Mitch McConnell's wife becasue apparently some kind of crazed Great Depression era style make work project is going to be launched:
Nominating Elaine Chao, Senate majority leader Mitch McConnell’s wife, as secretary of transportation seems somewhat inspired, as she will be largely responsible for implementation of Trump’s New Deal–like program for putting the unemployed to work repairing scandalously decayed American infrastructure. 
The real scandal is that Black is promoting the filling of the swamp, FDR-style, in a magazine that once carried the words of Murray Rothbard and Henry Hazlitt who actually knew the difference between filling a swamp and draining it.

As David Stockman wrote about the American infrastructure that Black believes is "scandalously decayed infrastructure":
[T]he bridges of America are not falling down and the nation’s infrastructure—-to the extent that it is any business of Imperial Washington at all—-is not “crumbling”. Actually, Washington’s primary job is maintenance of the Interstate Highway System, and that’s in pretty good shape, including its heavily trafficked bridges...

But that’s not the half of Trump’s wild pitch on this one. Having swallowed the infrastructure myth hook, line and sinker, the GOP candidate went a horrid step further and talked up an “infrastructure bank”—–the Democrats’ favorite backdoor route to further ballooning the nation’s already crushing public debt....

Here’s the thing. Upwards of 95% of what passes for infrastructure investment—-highways, roads, streets, bridges, airports, seaports, mass transit, water and sewer, the power grid, parks and recreation etc—–are the responsibility of the private sector and should be paid for by users or, arguably, constitute local public goods and amenities. The latter should be managed by state and local governments and funded by local users and taxpayers.

But give the beltway lobbies and racketeers an inch and they will take a mile. After decades of Federal mission creep, there is virtually no aspect of “infrastructure” spending that has not wormed its way into the federal budget...

At the end of the day, the ballyhooed national infrastructure crisis is a beltway racket of the first order. It has been for decades.

And now even The Donald has taken the bait.
And he was "inspired" to pick, to run the racket, the wife of the lead Senate crony.

Or as Black sees it:
The emerging story is that Trump is packing his government with people admirably equipped to work closely with the Republican leadership in the Congress. 
Yup, Chao no doubt will work closely with Republican leadership, her husband.

And Black is correct about this very scary observation:
 Donald Trump is preparing to come out of the gate like a fire engine and join Franklin Roosevelt, Lyndon Johnson, and Ronald Reagan as a transformative president.
Oh and don't forget Trump foreign policy which no doubt will include efforts to overthrow the current regime in Iran.

As Black cheerfully explains the expected madness:
Although we are awaiting the nomination of a secretary of state, it is clear that, as promised, the mad Obama love-in with Iran is almost over...
 -RW

A Bunch of News Anchors Who Don't Know How to Pronounce Steven Mnuchin's Name


Learn the correct pronunciation, here.

OMG When Mnuchin is Not Enough

Not only is Donald Trump going with a former  Goldman Sachs banker  Steven Mnuchin as Treasury Secretary but Politico is reporting that Trump is considering Goldman Sachs President Gary Cohn for a senior administration job, possibly as director of the Office of Management and Budget,

Notes Politico:
People familiar with the matter say Cohn's meeting with Trump on Tuesday included talks about a potential job in the new administration, possibly to run OMB...
Cohn would add yet another Goldman name to a roster already filled with former executives from the influential bank, including Treasury pick Steven Mnuchin and incoming top White House adviser Steve Bannon.
  -RW

Visiting a Chinese Ghost City

This crazed apartment construction building is because of Chinese government planning.



-RW

(ht Dexter Morgan)

BOOM Oil Up 7% This Morning




Crude futures are up 7% this morning on growing expectations that OPEC will be able to reach a production-cut deal later in the day.

-RW

The Carrier "Deal" and Trump Apologists

I am afarid we are going to see a lot of this during the Trump Administration, Trump apologists everywhere. Trump can do no wrong.

A case in point, the comments at my post labeling Trump a bully for the Carrier deal.

One commenter writes:
Why are you against tax breaks, Wenzel? Isn't taxation theft?
But a tax credit can simply be further manipulation of the economy. It is not necessarily a "tax break" where a corproation is free to do as it pleases with money that otherwise would have been taxed.

Consider an economy where everyone is taxed at a rate of 30% but a "deal" is cut where everyone that devotes a certain amount of its resources to creating busts of Donald Trump gets a tax credit of 5%. I would suggest that this may not be an overall improvemnet for the economy.

A tax cut is different: Your taxes were 30%, now they are 25%, go and do whatever the hell you want with that 5%.

The free market supporter should always be advancing less intrusion of government in the economy, not twisted manipulations that cheer on the manipulator.

A second commneter writes:
I really want to know how Carrier or any other manufacturer moving can accurately be described as "free market forces" when the whole economic structure cannot be described as free market? Or are we merely free market because we have a stock market and a choice between 4 brands at the store? I'd say we have maybe a 50 to 60% free market structure.
There is some truth to this in that we don't know what an economy would look like under free market conditions, though it is likely that even more low paying jobs would leave the country.

That said, there may be an implication by the commenter that because we are not in a free market economy, we can not advocate for free markets. But justifying manipulations will never get  us to free markets. Free market policy should be advanced at all times and manipulations should be objected to. Failure to understand this is a failure to appreciate that sound free market advocacy is based on the principle that only free exchange can result in the certainty that all parties involved benefit. Manipulations always distort away from free exchange and thus it can never be said that such manipulations do not hurt some individuals in a very direct sense. Building busts of Donald Trump and cutting government "deals" to keep Carrier employees in the U.S. are distorting resources from what would otherwise emerge and thus be at the expense of those who will experience less resources available to them.

 -RW



What's the Difference Between a Trump Populist and a Socialist?

Not much.

Ed Yardeni writes:


The February 6, 2009 cover story of Newsweek was titled “We Are All Socialists Now.” I reread it over the weekend, and was floored by the first paragraph:
On the Fox News Channel last Wednesday evening, Sean Hannity was coming to the end of a segment with Indiana Congressman Mike Pence, the chair of the House Republican Conference and a vociferous foe of President Obama’s nearly $1 trillion stimulus bill. How, Pence had asked rhetorically, was $50 million for the National Endowment for the Arts going to put people back to work in Indiana? How would $20 million for "fish passage barriers" (a provision to pay for the removal of barriers in rivers and streams so that fish could migrate freely) help create jobs? Hannity could not have agreed more. "It is … the European Socialist Act of 2009," the host said, signing off. "We’re counting on you to stop it. Thank you, congressman.”
Jon Meacham, the author of the piece, concluded, “Whether we want to admit it or not--and many, especially Congressman Pence and Hannity, do not--the America of 2009 is moving toward a modern European state.”

Now Pence is the VEEP-elect and Hannity is one of the favorite journalists of POTUS-elect Donald Trump. None of them are socialists. However, they are all now self-proclaimed populists. I’m not sure what the difference is, since both socialists and populists tend to advocate strong government intervention to help the common man, the little guy, and the forgotten man.
 -RW

Trump as Bully

Trumpkins are hailing Donald Trump's "deal" that will result in Carrier keeping 1,000 jobs in Indiana that the company previously announced it would move to Mexico as part of a 2,000 jobs move.

But to reverse free market forces does nothing but lower the standard of living for both countries. It displays a complete lack of fundamental economic undersatanding, specifically the Law of Comparative Advantage.

Yet. the boorish act is being viewed in Trumpland as something heroic.

This is the Drudge headline:

Whatsmore, the deal was done on the backs of Indiana taxpayers.

 Sean Colarossi makes clear what really went down:
The president-elect is likely to claim that his great dealmaking skills are responsible for making the agreement happen, but what he won’t say is that United Technologies – Carrier’s parent company – was basically bribed with taxpayer dollars to keep a few hundred jobs in Indiana – and it had nothing to do with Trump himself...
According to CNBC, “There were new incentives on offer from the state of Indiana, where Pence is governor, that helped clear a path for the agreement.”
In other words, Pence served up a massive, taxpayer-funded handout to the company in order to score a short-term PR win. Trump will claim victory on Thursday when, really, it was a state-funded handout that convinced Carrier to keep some of its employees in the state.
A bully is about to enter the White House, who appears willing to go to great degrees and trample over free markets for a photo op.

 -RW

Tuesday, November 29, 2016

BREAKING Trump Picks Former Goldman Sachs Banker as Treasury Secretary

Politico is reporting that Donald Trump has chosen former Goldman Sachs banker  Steven Mnuchin  to serve as Treasury Secretary in the Trump Administration.

 -RW

Also see: Correct Pronunciation of Steven Mnuchin's Last Name

Goldman Sachs President Meets with Donald Trump

Gary Cohn, Goldman’s president and chief operating officer, was among those set to meet with the president-elect today, the Trump campaign said.

The purpose of the meeting is unclear.

Trump’s closest advisors, Stephen Bannon is a former Goldman banker. and according to The Wall Street Journal Trump is considering Goldman alum Steven Mnuchin for Treasury secretary

Koch Brothers' Operative Says It Is No Longer Practical to Have a Gold Standard

Former Cato Institute president and Ex-BB&T chief John Allison just told CNBC that it's no longer practical to have a gold standard, though, he is in favor of it on a "theoretical" level. a position he once held.

"There are a lot of gold bugs out there some are not very sophisticated," he said.

Imagine my surprise.

Allison met yesterday with Donald Trump and is under consideration for the Treasury Secretary position in the Trump administration.

The Koch brothers are co-founders of the Cato Institute. Allison remains on the Board of Directors.

It doesn't sound like Allison is in favor of ending the Fed either.

 -RW

Note: This is a corrected version. Early reports said that Allison said it was no longer practical to end the Fed and he did seem to imply that. He, in fact, said that a gold standard was no longer practical.





Trump Picks His HHR Secretary, But It Does Not Mean the End of Government-Managed Medicine

Richard Ebeling emails:

Dear Bob,

President-elect Donald Trump has settled on a new Secretary of Health and Human Resources for his soon to be incoming administration, Congressman Tom Price of Georgia, the media has reported.

“The Wall Street Journal” explained that Congressman Price has been a strong opponent of Obamacare, and presumably will oversee the legislative attempt to repeal Obama’s “signature legislation.” But what then?

The fact is neither Trump nor Price are for a real private competitive medical care and health insurance system. Trump has called for retaining the imposed rule of children under the age of 26 being eligible for their parents’ medical insurance policies, and retaining the regulation on health insurance companies preventing them from denying or discriminating against those with medical “pre-conditions.”

According to the WSJ, Congressman Price said last summer, “We think it is important that Washington not be in charge of health care. The problem that I have with Obamacare is that its premise is that Washington knows best.”

In its place, Price has called for “refundable, age-adjusted tax credits for people to buy insurance if they don’t have access to coverage through an employer or government program” or if already enrolled in Medicare or Medicaid, an individual could opt out and get such a tax credit, instead, for their private, individual coverage. In other words, Congressman Price’s version of health care “choice.”

The WSJ also quoted Price as saying, “There’s a genuine desire to have us [the Republicans in Congress] coalesce around a single plan so that the American people can see who’s trying to solve these challenges. I wouldn’t draw any lines in the sand other than that the path that we’re on doesn’t work.”

What Trump and Price (and clearly most other Republicans) are calling for in place of Obamacare is, well . . . just another form of government-funded and regulation-influenced health insurance and medical care. In other words, a semi-socialized medicine with “choice.”

Not too long ago, I published a piece on why, “For Healthcare the Best Government Plan is No Plan.”

http://www.thedailybell.com/editorials/richard-ebeling-for-healthcare-the-best-government-plan-is-no-plan/

I argued there is no solution to competitively affordable and quality health insurance and medical care other than to fully and completely leave these matters to the private market with no government intervention, regulation or control.

Yet that is the real alternative that conservatives and Republicans are unwilling to make, including the Republican leadership in the Congress and in the incoming Trump Administration. Instead, they want a “middle way” that seems to allow “choice” and some competition while retaining the hand of government in a crucial area of human well-being that should not be left anywhere near the hands of those in political power.

Best,
Richard

BOOM Cyber Monday Sales Biggest Online Shopping Day in U.S. History

Shoppers spent $3.45 billion on Cyber Monday, according to data compiled by Adobe Digital Insights.

Cyber Monday sales jumped 12.1 percent year-over-year and surpassed initial expectations that called for total sales of $3.36 billion, according to the research firm.

Top-selling electronics by units on the day include Sony's PlayStation 4 and Microsoft's Xbox gaming consoles as well as Samsung 4K TVs, Apple iPhones and Amazon's Fire tablets.

Lego's building blocks, Hasbro's Nerf dart guns and Mattel's Barbie dolls were among top-selling toys, Adobe said.

This is not what a recession looks like.

 -RW

Caroline Baum on Tom Price's Healthcare Plan

I am very suspicious of the healthcare plan of the man that Donald Trump has chosen for Secretary of Health and Human Services, Tom Price.

There is just no reason for government to be centrally planning healthcare at all. And I consider it a major scam to promote the idea that government coercion is necessary to provide "charity" of any kind, including that for healthcare.

That said, Price's plan is better than Obamacare.

In 2103, Caroline Baum discussed the key features of the plan:
Republicans do have a plan, even though you may not have heard about it. Representative Tom Price, a Georgia Republican, has introduced H.R. 2300, the Empowering Patients First Act, just as he did in the 111th and 112th Congresses. Price, a physician, says the goal of his patient-centric proposal is to ensure access to health coverage for all Americans, control costs, solve the problems of portability and pre-existing conditions, and improve the health-care delivery structure. Under Price’s plan, Americans would own their coverage, taking it with them when they change jobs. It would level the playing field by offering individuals a tax deduction, in addition to a refundable tax credit, for purchasing insurance. It would save billions of dollars by addressing lawsuit abuse, freeing doctors from practicing defensive medicine. And yes, it would repeal Obamacare. 
I would take this plan over Obamacare any day, but it is far from a free market plan. There are numerous opportunities in this plan for crony deals--and the tax bill is going to be huge. In addition to the fact that central planning suffocates production, advancement and innovation.

 -RW

OMG China to Allocate Credit Based on Social Behavior

This is why government tracking of an individual's activities, including spending, is so dangerous.

The Wall Street Journal reports:
Swiping her son’s half-fare student card through the turnstile here one Monday afternoon, Chen Li earned herself a $6 fine and a reprimand from a subway-station inspector for not paying the adult fare.

A notice on a post nearby suggested more-dire consequences. It warned that infractors could be docked points in the city’s “personal credit information system.” A decline in Ms. Chen’s credit score, according to official pronouncements, could affect her daily life, including securing loans, jobs and her son’s school admission.

“I’m sure if it comes up, I can explain,“ Ms. Chen said, saying she picked up the card accidentally. “It was unintentional.”

Hangzhou’s local government is piloting a “social credit” system the Communist Party has said it wants to roll out nationwide by 2020, a digital reboot of the methods of social control the regime uses to avert threats to its legitimacy.

More than three dozen local governments across China are beginning to compile digital records of social and financial behavior to rate creditworthiness. A person can incur black marks for infractions such as fare cheating, jaywalking and violating family-planning rules. The effort echoes the dang’an, a system of dossiers the Communist party keeps on urban workers’ behavior.




(ht Ben Steil)

Iran Oil Minister Says "No Cut In Production"

This really shouldn't come as a surprise but oil is down on the news.

Iranian Oil Minister Bijan Namdar Zangeneh says that Iran will not cut its oil production as part of any deal reached by oil producers when they meet in Vienna tomorrow.

Iran is still in the process of ramping up production following sanctions which resulted in severe production declines. It is not a surprise that they would be unwilling to cut production.

Saudi Arabia and Russia are the key players that will determine if a cut or cap deal is reached tomorrow. As I have explained in the EPJ Daily Alert, they both have reasons to reach a cap or cut deal, if possible.

 -RW

Hackers Breached San Francisco’s Transit System and Demanded a Ransom

By Henry Grabar

The computer system that serves San Francisco’s Muni was hacked late last week, giving locals tens of thousands of free rides on the nation’s seventh-largest transit system. The ransom, according to correspondence between the San Francisco Examiner and the email address displayed on Muni employees’ hacked computer screens, was 100 Bitcoin, or about $74,000.

By Sunday, station ticket machines were up and running again, but the hackers indicated to Hoodline, a local news site, that they had compromised more than 2,000 computers in the Muni network in addition to agencywide functions like payroll, email, and real-time bus locations. To cope, the transit agency was assigning routes to bus drivers via handwritten notes on bulletin boards, the Examiner reported. It doesn’t appear to have paid the ransom, though $73,000 is a pittance relative to the potential damage.

The ransomware at work appears to be HDD Cryptor, also known as Mamba, which blocks access to compromised computers entirely. Its rapid takeover of Muni demonstrates—again—the extensive vulnerabilities of networked devices and “smart” infrastructure.

Read the rest here.

BREAKING Anti-Obamacare Congressman Chosen By Trump For Secretary of Health and Human Services

Jennifer Jacobs at Bloomberg is reporting that Donald Trump has chosen Georgia U.S. Rep. Tom Price for Secretary of Health and Human Services.

Price is a major opponent of Obamacare. However, no one should take his opposition to Obamacare and then reach the conclusion that he wants free markets in healthcare.

He has introduced legislation in the House known as The Empowering Patients First Act.

It is a typical technocrat's attempt at tweaking around the edges of current law, rather than taking the wrecking ball to the entire central planning program. For the most part, his plan is just moving pieces around the legislative chess board that will change the entry points of coercion but that is about all.

The one positive in the bill is that it has no individual mandate. In other words, some healthcare freedom will return to individuals especially young workers, who really need only very limited catastrophic coverage. Thus, it will mean that the young won't be squeezed under his plan into high premiums to support elderly, as is the case with Obamacare.

It is downhill from there for the plan, though, with shady gimmicks to make up for the lost central planning revenue of the individual mandate . Ezra Klein noted when Price's plan first came out in 2009 that the plan:
...extend[s] the employer tax deduction to individuals while capping it at "the average value of the national health exclusion for Employer Sponsored Insurance (family/singles) grown at inflation." This amounts to a huge tax increase, incidentally, although Price won't call it that.
Higher taxes. Yeah, great idea.

Bottom line: Price is all about keeping the central planning role of government in healthcare going.

Also of note, Phillip Klein writes that "Price happens to also be close with [general all-around budget scammer]House Speaker Paul Ryan..."

 -RW

Monday, November 28, 2016

New York City Getting More Pod Hotels

Creative entrepreneurship is awesome.






Whoa! Rupert Murdoch and Family Got Taken for $200 Million in the Theranos Scam

The Wall Street Journal reports:
Theranos Inc. received much of its funding from high-profile private investors who weren’t part of the ecosystem that typically backs startups and could see their stakes wiped out by the blood-testing company’s regulatory and technological troubles, people familiar with the matter said.

Several large investments from families and individuals helped infuse Theranos with $632 million in its latest funding round, which stretched from 2014 to 2015, according to the people familiar with the matter and documents filed by Theranos in Arizona and Delaware.

Those investors include Rupert Murdoch and family-controlled Cox Enterprises Inc., which put about $100 million each into Theranos, people familiar with the matter said...
On Monday, Robertson Stephens & Co. co-founder Robert Colman accused Theranos in a lawsuit of making false and misleading claims about its operations and technology while soliciting money from investors.
According to the Journal, Murdoch  and family made their investments sometime between 2014 and 2015,

I was suspicious about the company from the first time I learned about it in 2014 and my suspicions just continued to grow.

 -RW

Also see:The Very Creepy, Kissinger Connected, Theranos

Henry Hazlitt and the Art of Economics

Journalist Henry Hazlitt popularized the ideas of Austrian economics and was a co-founder of the Foundation for Economic Education.

Henry Hazlitt (1894-1993) was a well-known journalist and economics writer for publications such as TheWall Street JournalThe Nation, and The New York Times. He popularized the ideas of Austrian economics and was a co-founder of the Foundation for Economic Education. He is still widely cited for his writings on free markets, especially his best-selling book Economics in One Lesson.

Growing up, Hazlitt endured a difficult family and financial situation. After his father passed away when he was a baby, Hazlitt grew up in poverty, and spent several years at Girard College, “a school in Philadelphia for poor, fatherless boys.” His family’s financial situation temporarily improved after his mother remarried, but his stepfather, who was an alcoholic, died when Hazlitt was 13.
Hazlitt’s economic perspective was impacted by an experience he had with his uncle during a summer vacation. Hazlitt’s uncle was an electrician who worked at an amusement park for a show called “The Galveston Flood”; he was in charge of the electrical effects that simulated the disaster. His uncle hoped that Fourth of July would bring in crowds to see the show, but it rained all day. According to Hazlitt in his essay My Life and Conclusions,
Read the rest here.

The Tyrant "Castro Was a Full Man of the Enlightenment"

By Don Boudreaux

NYU history professor Greg Grandin, writing in The Nation, concludes: “In all his goodness and badness, Castro was a full man of the Enlightenment.”  (Earlier in the essay, Grandin suggests that Fidel Castro was a better man than Donald Trump.  Now as readers of this blog know, I’m emphatically no fan of Trump.  But to suggest that Trump is a worse human being, and will be a worse “leader,” than Castro is absurd.  What Pres. Trump might do remains to be seen; what El Presidente Castro did do is a matter of historical record.)
Admittedly, Grandin is extreme.  But even many pundits in the mainstream media treat Castro as if his trumpeted good intentions (that is, expressed intentions that warm the hearts of “Progressives”) and fake ‘achievements’ (such as the imaginary creation of a world-class health-care system for the Cuban people) render Castro something other than the murderous monster that he was.
For socialists and “Progressives,” a business person who lobbies against carbon taxes, or who employs workers at wages lower than the socialists and “Progressives” think “fair,” or who offers for sale fat-filled fast food, is an anti-social beast who deserves unmitigated derision.  Acting always peacefully, and without attempting to dupe the gullible with grandiose lies about ‘remaking society,’ such a business person gets no respect from what Deirdre McCloskey calls “the clerisy.”  Such a business person is believed by the clerisy to profit dishonestly, and often cruelly, at the expense of others.  Such a business person is held by the clerisy in contempt for his or her alleged small-mindedness, philistinism, and greed.
And yet these same clerisy who see nothing but venality and “social injustice” when they cast their eyes on peaceful market activities see in the violent regimes of fiends such as Castro allegedly good reasons, if not always to fully excuse these fiends of the blood, anguish, and destitution that they cause, at least to ‘weigh’ against these unfortunate realities the alleged “accomplishments” of these dictators.
It is a perverted code of ethics that causes those who fondly remember the “accomplishments” of blood-thirsty brutes such as Fidel Castro to burst into paroxysms of anger over the alleged evil of off-shoring the production of automobile tires or of accumulating unusually large sums of financial wealth by making entrepreneurial advances in retailing.
The above originally appeared at Cafe Hayek.

Italian Bank Shares Dive on Fears About Potential Referendum Defeat


The FTSE Italia All-Share Banks Sector Index IT8300 is down 4.16% today.

Italian voters next Sunday will be asked in a referendum to approve changes to the country’s constitution.

 The large scale proposed reforms would cut the Senate’s size by two-thirds and reduce powers held by the country’s 20 regional governments. Italian Prime Minister Matteo Renzi is promoting the referendum.

Critics of the proposals say they “put democracy at risk in Italy as so much power will be concentrated in the hands of few people—not necessarily representing the majority of the voters,” Citibank said in a note last week.

In other words, the referendum is an elitist proposal to maintain slipping control. If the referendum fails, it could mean the end for government support of Italian banks.

Recent polls show growing opposition to the proposed reforms.

 -RW

(via MarketWatch)

Cuba’s Glum Economic Forecast

Tyler Cowen writes:

One way to approach Cuba’s economic fate is to consider the Caribbean region as a whole. For the most part, it has seen mediocre results since the financial crisis of 2008. Economic problems have plagued Puerto Rico, Trinidad, Jamaica, Haiti and Barbados, with only Jamaica seeing a real turnaround.
The core problems of the region include high debt, weak commodity prices, lack of economies of scale and an inability to upgrade tourist facilities to compete with the U.S., Mexico and further-flung locales. Cuba cannot service its foreign debt, and losing most of its support from Venezuela has been a massive fiscal problem.
Perhaps the country most like Cuba in the Caribbean, in terms of history, heritage and ethnic composition, is the Dominican Republic. Currently, it has a nominal gross domestic product of somewhat over $6,000 per capita, depending which source you prefer. That’s far from the bottom tier of developing economies, but it’s hardly a shining star. And Cuba will take a long time to attract a comparable level of multinational investment, or to develop its tourist facilities to a comparable level of sophistication. Well-functioning electricity and air conditioning cannot be taken for granted in Cuba, especially after the major decline in energy supplies from Venezuela.
The most optimistic forecast for Cuba is that, after a few decades of struggle and reorientation, it will end up at the income level of the Dominican Republic.
If you are wondering, the World Bank measures Cuban GDP at over $6,000 per capita, but that is based on a planned economy and an unrealistic exchange rate. In reality, Cuba probably is richer than Nicaragua, where GDP per capital is approximately $2,000, but we don’t know by how much. Cuba does have relatively high levels of health care and education, but we’ve learned from post-Soviet reform experiences that it is easy for a nation to lose those advantages. There are already shortages of many basic health care items, includingmedical technology and antibiotics.
Read his full analysis here.

The Man Likely to Replace Raul Castro

Marcy Kreiter reports:
The one constant in Cuba in the last six decades has been a Castro holding the reins of power. But with Friday’s death of Fidel and the fact his younger brother Raul is 85, attention is turning to the next generation of Cuban leaders.
Miguel Diaz-Canel, 55, currently serves as Raul Castro’s vice president and is his apparent successor. He has been working his way up the hierarchy for 30 years, first in provincial positions and then as minister of higher education. When he was 43, he became a member of the Politburo, the youngest ever. Most of the other members fought in the 1959 revolution.
An electrical engineer by trade and a Beatles fan, Diaz-Canel is a social media devotee, often posting pictures of himself and the younger Castro brother.
America’s Quarterly said in a profile last year Diaz-Canel generally keeps a low profile. He was born after the revolution and is a member of the reform wing of the party, more an experienced manager than ideologue. Unlike the Castros, he dresses in jeans and sports jackets, eschewing military fatigues.
"He is well-liked, young, well-educated, and he's gone through all the different hoops. That he is admired in the often snippy world of university circles is very significant and shows he has the talent for handling people," Professor Rafael Betancourt of the University of Havana told the Latin Post.
He is described as witty and relaxed in private, but not a rousing speaker or charismatic leader in public....
The question is whether Diaz-Canel will be able to maintain the same kind of control as the Castro brothers, who forged strong relationships with the military, which controls nearly all of the island’s money and economy.
Cuban dissident and human rights activist Antonio Rodiles thinks not. He told the Latin Post Diaz-Canel will be little more than a figurehead for the military, a placeholder until younger members of the Castro family, like Raul Castro’s son Alejandro are ready to seize power.
"When Raul Castro is the president, then yes, the president runs Cuba," Jaime Suchliki, director of the University of Miami's Institute for Cuban and Cuban-American Studies, told the Miami Herald. "When Raul Castro is not president, that will be a very different matter. Díaz-Canel has no tanks and no troops."
Col. Alejandro Castro Espin, 51, is in Cuba’s Interior Ministry security forces and one of his father’s closest aides as a member of a commission on defense and national security. Also in the wings is Col. Alberto Rodriguez Lopez-Callejas, his son-in-law.
The Herald said signs of generational change are emerging all over the island.
"They are showing on the Mesa Redonda TV show documentaries glorifying the lives of old military generals, humanizing the lives of members of the elite,” Cuban dissident Ailer González told the Herald. It seems a sort of goodbye, in order to promote younger people willing to continue defending the regime."

Wealthy Designers Refuse Service to Melania Trump — But You Have to Serve Everybody

By Caleb Verbois


People magazine recently reported news that a number of prominent fashion designers have refused to work with Melania Trump because they do not approve of her, or more likely, her husband’s politics and language. Given Donald Trump’s often offensive way of speaking about, well, almost everything, that is understandable. Thus, they conclude, if you design and make clothes for Melania Trump, especially the outfit she will wear to the inauguration, you are, in some small way, endorsing Donald Trump and all he stands for. So designers like Sophie Theallet have decided that because they “stand against all discrimination and prejudice,” they cannot work for Melania.
This all seems rather ironic. How can progressive fashion designers like Sophie Theallet refuse to serve anyone? In recent years it’s become first unreasonable, then politically incorrect, and lately illegal for some people to refuse service. Not fashion designers of course. They are above that. No, I’m thinking about bakers and photographers, who, because of their religious beliefs, have politely but firmly declined to provide service for gay weddings. Note that they have not declined service to homosexuals. They have just made it clear that they cannot morally provide a wedding cake or floral 
And for that, they have been pilloried in the press, sued, and threatened with a loss of their businesses and personal savings. Consider Barronelle Stutzman, a florist in Washington who has served and employed people of all backgrounds, including homosexuals, for her entire career. However, after she declined to provide flowers for a homosexual wedding, in accordance with her faith, both the ACLU and Washington state attorney general have sued not just her business, but her personally. That mirrors the situation of Oregon bakers Aaron and Melissa Klein. They baked a cake for a woman who was so happy with their work that she and her partner asked Melissa to bake their wedding cake. The Kleins politely explained that due to their faith, they could not endorse a wedding that violated their beliefs. In response, the state sued them, put a legal order on them banning them from talking about their desire to work according to their faith, and said they “needed rehabilitation.” The fine the state assessed and the subsequent hate mail and threats forced the Klein’s to close their business and led Aaron Klein to go to work as a sanitation worker to pay their bills.
Does anyone think Sophie Theallet will be sued and driven out of business for refusing to endorse Trump’s inauguration? Maybe Trump should sue for discriminatory practices. After all, one could say that turnabout is fair play. The progressives have made life difficult for Christian and religious small businesses, so now it is time to make life difficult for fashion designers. That would certainly fit with Donald Trump’s tit-for-tat attitude towards almost everything in life, especially lawsuits.
But it is the wrong approach. The problem is not that some designers have refused to work with Melania. Let’s be honest, the world does not have a shortage of overpriced dress designers. Melania can find someone else. That is also true for homosexual couples that have sued and persecuted religious florists and bakers. The country does not have a shortage of either. Moreover, while Theallet is refusing to serve Trump at all, religious photographers and bakers are more than willing to serve homosexual customers — just not at their wedding.
No, the issue has never been a lack of service providers. It has been an unwillingness to accept that other people may not endorse your behavior. Prominent fashion designers are refusing to serve Melania Trump because they do not want to appear as though they endorse her husband’s behavior. They should have the right to make that decision free from threats of lawsuits and public harassment. In just the same way, religious photographers and bakers should have the right to politely refuse to endorse the practice of gay weddings.
America has always given a very high precedence to conscientious objections, but increasingly, rights of conscience are being marginalized. Religious liberty is much more than merely having the freedom to attend church, synagogue, or mosque. It is the freedom to actually live out your religious beliefs—even ones that may not be politically correct or agreeable to high fashion designers—every day of the week. 

The above originally appeared at Mises.org

Sunday, November 27, 2016

BREAKING 'French Thatcher' Fillon Wins France's Republican Primary

The free market-leaning François Fillon will lead France's Republican party after winning a runoff Sunday in the party's first-ever US-style primary election.

But definitely not a libertarian. According to CNN, Fillon is a social conservative who has talked of ending France's famed 35-hour work week and getting tough with the country's powerful trade unions. He has also spoken of cutting public spending, abolishing the wealth tax, reducing immigration and investing billions in security, defense and justice.

He will face Marine Le Pen of the far-right National Front Party in a presidential vote next spring.

 -RW

Castro's "Monetary Policy"

From George Borjas:
In the days before credit cards and electronic transfers, all transactions were made in cash. Castro quickly found a simple way of confiscating "excess" cash. The currency was changed overnight. And everyone had to turn in their old paper currency for the new paper currency, with some limits being imposed on the amount of the transactions. There was a miles-long line on what I think was a Saturday morning, as the entire Cuban population was turned into beggars for the new currency.
(via David Henderson)

Where the National Debt Will Be When Obama Leaves Office and What Will Happen to It Under Trump

Since the U.S. federal government’s fiscal year cycled over to FY2017 on October 1, 2016, the U.S. government’s total public debt outstanding has been growing at a faster rate. If that faster growth rate holds at the average pace it has had through November 23, 2016, just before Thanksgiving, the total public debt outstanding will grow to exceed $20 trillion sometime around December 15, 2016.


Extending that projection out further, by the time that President Obama reaches the end of his tenure in office on January 20, 2017, the U.S. total public debt outstanding would be slightly under $20.16 trillion, which would mean that President Obama’s fiscal policies would be responsible for having increased the size of the national debt by $9.5 trillion, nearly doubling its size since he was first sworn into office on January 20, 2009. Over the 8 years of his presidency, that represents the national debt of the U.S. growing by an average rate of nearly $1.2 trillion per year.
According to the Committee for a Responsible Federal Budget analysis, the various fiscal policy proposals that President-elect Donald Trump advanced during the 2016 election campaign would result in the U.S. national debt increasing by another $5.3 billion over the next 10 years, which would represent an average growth rate of $0.53 trillion per year.
The above originally appeared at mygovcost.org
RW note: Under Trump, I expect the debt to climb higher than the Committee for a Responsible Federal Budget projections.

Black Friday Online Sales Surge To Record $3.34 Billion

E-commerce sales continue to rocket higher as the Black Friday total reached $3.34 billion   The move to mobile was even more rapid as sales reached $1.2 billion, up 33% from last year.

According to Adobe shopping data for:
…..Black Friday and Thanksgiving Day. More than $5 billion ($5.27 billion) was spent online by the end of Black Friday, a 17.7 percent increase year-over-year (YoY). Black Friday set a new record by surpassing the three-billion-dollar mark for the first time at $3.34 billion (21.6 percent growth YoY) while Thanksgiving accounted for the remaining $1.93 billion. Black Friday became the first day in retail history to drive over one billion dollars in mobile revenue at $1.2 billion, a 33 percent growth YoY
This is not what a recession looks like.

(via  24-7 Wall St)

What Economists Think About Donald Trump’s 100-Day Plan

On his way to becoming the president-elect of the United States, Donald Trump resolved to fix issues ranging from national security to economic growth. As part of his campaign, Trump proposed a 100-Day Plan that included “seven actions to protect American workers” from, among other things, the Trans-Pacific Partnership, currency manipulation, and energy drilling restrictions.

 Leading economists, polled by Chicago Booth’s Initiative on Global Markets as part of its Economic Experts Panel, overwhelmingly disagree with his seven-point plan.

Here are comments, from polled economists, that I agree with:

Christopher Udry, Yale“These seven actions are symbolism (5, 6), actions with trivial immediate but disastrous long-run consequences (7), or threats of trade war (1-4).”Response: Strongly Disagree 

José Scheinkman, Princeton“Most low-skilled workers would be hurt by higher cost of imports, disruption of global supply chains caused by tariffs and retaliations.”Response: Strongly Disagree
These are Keynesian responses that I disagree with partially, for their view that government stimulus will be somewhat beneficial when it is nothing but shifting resources into inefficient government directed make work programs:

Barry Eichengreen, UC Berkeley
“Short-term fiscal stimulus will be a plus for the middle class, but then the negatives (investor uncertainty, inequality, geopolitical risk) will dominate.”
Response: Disagree


Daron Acemoglu, MIT
“Increased infrastructure spending could help construction, but the overall plan won’t help workers and will likely reduce medium term growth.”
Response: Disagree


David AutorMIT
“Policies that raise import prices, deregulate dirty industries, and launch big infrastructure projects will boost non-college wages and jobs.”
Response: Agree

 -RW

OH YEAH: “François Fillon’s Position, It’s Free-Market With an Axe.”

The Financial Times reports on François Fillon, the surprise frontrunner in the race for France’s centre-right presidential nomination:
“Fillon is at the centre of gravity of the traditional right,” Pascal Perrineau, a professor at Sciences Po, says. “They are normally a quiet bunch, but they have woken up with the gay marriage law.”

If these voters confirm their support in a second round of voting on Sunday, France will come closer to having its own “Margaret Thatcher moment”. Like the former British premier, Mr Fillon is far from being an EU enthusiast and favours economic “shock” therapy, vowing to cut 500,000 civil service jobs and reduce the welfare state to fund €50bn in tax breaks for companies.

A free-market revolution would be a novelty in France, a nation built on the idea of a strong state and which is prone to periodic labour unrest. But a significant portion of the rightwing electorate now believes that previous attempts to save the eurozone’s second-largest economy from decline have failed.

“I thought for a long time that the country was difficult to reform,” Mr Fillon told the Financial Times in Paris earlier this month. “But if you show strong determination to the unions, if you use the presidential election to debate those measures and if you implement them quickly after being elected, it’s feasible.”

Polls suggest that, as the centre-right’s candidate, he would be well placed to qualify for the presidential runoff next year given the unpopularity of President François Hollande. He would in all likelihood face Marine Le Pen, leader of the far-right National Front, and would probably beat her.

The Telegraph
  reports:
France is expected to elect its first truly Thatcherite leader of the Right on Sunday, with François Fillon in pole position to take on an ebullient far-Right Front National

Seen as a no-hoper even a month ago, one last-minute poll sees Mr Fillon, a former prime minister, winning the presidential primary nomination for his Republicans party with 61 per cent of the vote against 39 per cent for his older, more moderate rival, Alain Juppé.

The race has attracted huge interest in France, drawing four million voters to the polls in the first round, because the winner stands a high chance as things stand of becoming French president next year in a run-off against FN leader Marine Le Pen.

Fillon first showed up on my radar in 2009:  France Rejects Obama Style Stimulus.

 -RW

Rothbard on the European Union

An excerpt from a speech called "The Current State of World Affairs" by Murray Rothbard - Q & A. Recorded at the 1989 Texas State Libertarian Conference.



   -RW


Saturday, November 26, 2016

The Definitive Analysis of the Bernie Sanders Phenomenon

David Gordon reviews the new Hunter Lewis bookWhere Bernie Went Wrong: And Why His Remedies Will Just Make Crony Capitalism Worse and concludes:
Hunter Lewis  deserves great praise for his trenchant dissection of Sanders and for pointing the way to the truth.
The full review is here.

Rubio Blasts Obama's 'Pathetic' Castro Statement

“President Obama issued a pathetic statement on death of dictator #FidelCastro with no mention of thousands he killed & imprisoned,” Rubio said in a tweet.


The full statement of the central planning loving Obama on the death of Castro is here.

Rubio also blasted mainstream media coverage of the Castro death:

Newsbusters reports:

 On MSNBC, Andrea Mitchell insisted in a stock bio that Castro “gave his people better health care and education.” Appearing live by phone, she soon trumpted how Castro “will be revered” for “education and social services and medical care to all of his people.”

Along a similar theme, in an ABC Special Report during Nightline, Jim Avila maintained that “even Castro’s critics praised his advances in health care and in education.”

In a relatively tough report on Castro’s abuses, CNN’s Martin Savidge, in a pre-recorded bio piece, highlighted how “many saw positives, education and health care for all, racial integration.”

A meandering Brian Williams popped up by phone on MSNBC to ruminate and recalled how in his last visit to Cuba, in 2015: “You see the medicine system they are very proud of.”

ABC’s Avila went so far as to tout how Castro “was considered, even to this day, the George Washington of his country among those who remain in Cuba.”

Reminiscing about his high school years, via phone on MSNBC, Chris Matthews asserted that Castro was “a romantic figure when he came into power” and, Matthews wasn’t embarrassed to relay, “we rooted like mad for the guy” who “was almost like a folk hero to most of us.”
Via Hot Air:
Save the mythology surrounding the idea that Scandinavia is a veritable socialist paradise, the left covets no other fable more dearly than they do the notion that communist Cuba serves as a model for what centralized health care can and should be.

Neither is true, and countless reports and studies have debunked both myths. But still they refuse to die. Among the few benefits associated with President Barack Obama’s decision to unilaterally relax trade and travel restriction with Cuba will be the disillusionment of the American leftists who travel to Cuba expecting to encounter a medical wonderland. They will be underwhelmed by what they find.


 According to a study conducted by the group International SOS ranking every nation on Earth for the risks associated with seeking health care inside their borders, Cuba was among the many “high risk” (colored orange) nations for visitors who happen to fall ill while traveling abroad.

In fact, travelers are more likely to receive proper medical care in nations like the Dominican Republic, Mexico, Panama and Colombia than they are to get sound care in Cuba...

“Many Cubans complain that top-level government and Communist Party officials have access to VIP health treatment, while ordinary people must queue from dawn for a routine test, with no guarantee that the allotted numbers will not run out before it is their turn,” Lucia Newman, a former Cuban resident, wrote for Al Jazeera in 2012. “The system is free, but it is neither fast nor efficient for two important reasons. One is obviously the lack of financial resources, and the other – which is related to the first – is the “export” of doctors, nurses and dentists in exchange for hard currency.”

“Over the years, I have heard many complain about the deteriorating quality of the services offered. One of the problems is that no small number of Cuban doctors have left the country looking for better opportunities abroad,” she added. “They are considered deserters.”

But who could blame them, considering that Cuban doctors are paid by the state an average of between $30 and $50 per month for their services.

Marco Rubio Issues Statement on the Death of the 'Murderous Dictator' Castro

 U.S. Senator Marco Rubio (R-FL) issued the following statement regarding the death of Cuban dictator Fidel Castro:

“Fidel Castro seized power promising to bring freedom and prosperity to Cuba, but his communist regime turned it into an impoverished island prison. Over six decades, millions of Cubans were forced to flee their own country, and those accused of opposing the regime were routinely jailed and even killed.

“Sadly, Fidel Castro's death does not mean freedom for the Cuban people or justice for the democratic activists, religious leaders, and political opponents he and his brother have jailed and persecuted. The dictator has died, but the dictatorship has not. And one thing is clear, history will not absolve Fidel Castro; it will remember him as an evil, murderous dictator who inflicted misery and suffering on his own people.

“The future of Cuba ultimately remains in the hands of the Cuban people, and now more than ever Congress and the new administration must stand with them against their brutal rulers and support their struggle for freedom and basic human rights.”