Economics

Krugman thinks low interest rates are behind the boom in paper currency. Not so fast!

"Yes, as Krugman says, interest rates are probably an important factor. But I’m not so sure they’re the most important factor — for a few reasons. For starters, a lot of the demand for U.S. currency is coming from abroad. If you’re in another country with high inflation or severe instability, one of your main concerns is going to be preserving your purchasing power. About 70 percent of U.S. currency today – in the form of $100 bills – is abroad, compared to about 50 percent two decades ago. And while the total level of $100 bills outstanding in the United States has a little more than doubled over 20 years, the growth in $100 bills abroad has increased by far more." Continue reading →

Continue ReadingKrugman thinks low interest rates are behind the boom in paper currency. Not so fast!

Ron Paul: Let Market Forces Solve Organ Transplant Crisis

"Ten-year old cystic fibrosis patient Sarah Murnaghan captured the nation's attention when federal bureaucrats imposed a de facto death sentence on her by refusing to modify the rules governing organ transplants. Even though Sarah's own physician said she was an excellent candidate to receive an adult organ transplant, government officials refused to even consider modifying their rules. Fortunately, a federal judge intervened so Sarah received the lung transplant. But the welcome decision in this case does not change the need to end government control of organ donations and repeal the federal ban on compensating organ donors." Continue reading →

Continue ReadingRon Paul: Let Market Forces Solve Organ Transplant Crisis

The Truth About SwedenCare

"As a Swede currently living in the United States, with actual experience of Swedencare, I must reply to the delusions propagated by professor Robert H. Frank in his June 15 article titled 'What Sweden Can Teach Us About Obamacare.' It is surprising to read something so out of line with basic economic theory from an economics professor. But theory aside, it would have sufficed for professor Frank to have taken a field trip down to the nearest public emergency room to have his illusions irreparably shattered. The reality is that Swedish healthcare is the perfect illustration of the tragedy of central planning. It is expensive and — even worse — it kills innocent people." Continue reading →

Continue ReadingThe Truth About SwedenCare

Restaurant Shift: Sorry, Just Part-Time

"Rod Carstensen, owner of 11 Del Taco restaurants around Denver, began in April converting his mostly full-time workforce into one comprising mostly part-time help to minimize his health-care costs. He estimates the costs could have climbed by as much as $400,000 a year without the change. Mr. Carstensen had 180 full-time and 40 part-time workers and is in the process of switching to 80 full-time and 320 part-time workers who clock no more than 28 hours per week. He is plowing ahead despite the Obama administration's reprieve, he said, because 'we need to get there anyway, and it will take until January 1, 2015, to make this transition.'" Continue reading →

Continue ReadingRestaurant Shift: Sorry, Just Part-Time

DOE Green Energy Loans: $11.45 million per job and a rounding error’s worth of averted carbon emissions.

"Green energy jobs and DOE loans are tallied under programs 1703 and 1705 on this list. Permanent jobs created: 2,298; Taxpayer financed loan guarantees: $26.33 billion. 19 of the projects cost more than $10 million per permanent job. Even if you use the Obama maldaministration’s accounting methods and include temporary employment, the totally idiotic 'jobs created/saved' category and include the 33,000 Ford Motor Company jobs 'saved', you get ~60,000 jobs at a cost of $34.5 billion –> $580,000 per job." Continue reading →

Continue ReadingDOE Green Energy Loans: $11.45 million per job and a rounding error’s worth of averted carbon emissions.

Illinois’ failing economic model: more food stamps, fewer jobs

"Between February 2012 and February 2013, Illinois added nearly 200,000 new enrollees to the Supplemental Nutrition Assistance Program, or SNAP. In contrast, Illinois added only 68,400 non-farm payroll jobs during that same time period. This disappointing news comes on top of the most recent Bureau of Labor Statistics labor release that reported Illinois has the second-highest unemployment rate in the nation. Over the past decade, the numbers look even worse. The state added nearly 1 million residents to food stamp programs, while suffering a net loss of more than 200,000 payroll jobs." Continue reading →

Continue ReadingIllinois’ failing economic model: more food stamps, fewer jobs

Renewed fear of global recession as companies rein in spending plans

"Growth in spending on machinery and investment by the world’s 2,000 biggest companies has begun to contract for the first time since the Lehman crisis, led by sharp falls in China and a near collapse in Latin America. Company spending plans are watched as an early warning gauge for the economy. The drastic falls in large parts of the world doom hopes for strong recovery later this year, and even point to a recession risk.The International Monetary Fund has cut its global forecast for this year to 3.1pc, sharply downgrading Russia, Brazil, South Africa, India and Mexico, as well as Italy and Germany." Continue reading →

Continue ReadingRenewed fear of global recession as companies rein in spending plans

Oregon ‘Pay It Forward’ Tuition Plan Punishes Graduates’ Success

"If Oregon makes the program mandatory, its colleges will in effect become the only ones in the U.S. that charge students with higher earnings potential more for their education, because they will contribute more over 25 years than everyone else. Motivated students wishing to major in engineering or finance will, quite rationally, opt for private colleges or out-of-state public colleges where they won’t have to subsidize liberal arts majors. A college financing program that requires students to sign away a chunk of their future income would also be unappealing to wealthy families that have the ability to pay cash. They would probably opt for private colleges, too." Continue reading →

Continue ReadingOregon ‘Pay It Forward’ Tuition Plan Punishes Graduates’ Success

Fed Puzzle: The Massive Collapse in Money Velocity

"With the velocity of money plummeting, it's clear that something in the fractional reserve banking system is broken -- the money remains trapped in the financial system. Yet another indicator of this is the Fed's Money Multiplier, or an indicator of how the money injected in the banking system is multiplied by lending and economic activity. That's reached new lows recently too, indicating that the fractional reserve system is not living up to expectations. This means that traders with access to large amounts of cheap trading capital can continue to make big bets as the Fed supports their access to capital -- but small businesses can't get the same access to capital." Continue reading →

Continue ReadingFed Puzzle: The Massive Collapse in Money Velocity

Ben Bernanke as Easter Bunny: Why the Fed Can’t Prevent the Coming Crash

"If you use a zero percent return, it's easy to figure out how much you need to save. If you want to work for 30 years, and live in retirement for 30 years, then you should save 50 percent. If you want to work for 40 years, and live in retirement for 10 years, you should save 25 percent. And so on. Over the last two decades or so, savings rates have ranged from single digits to slightly negative. In rough terms, zero percent. So as a nation, we have essentially no savings and face very low future returns. The inference is simple: We will need to increase savings drastically." Continue reading →

Continue ReadingBen Bernanke as Easter Bunny: Why the Fed Can’t Prevent the Coming Crash