Economics

Sticky Thoughts: The Market, Not The Government, Gave Us Super Glue

"It was the competitive market that finally gave the product life, but first it had to struggle through an incredible array of barriers, from disincentives to monopoly grants to regulatory restrictions. What might have helped people at daily life since the 1940s took a half a century. Part of that time passage is inherent in the market process, but much of the rest of it was due to intervention. It was not science as such that made the difference. It was science given flight by market forces. At each stage of its development, the market was there, encouraging, prodding, guiding, and leading to the light, despite all odds." Continue reading →

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Walmart may cancel three planned D.C. stores over ‘livable wage’ act

"The District will have three fewer Walmart stores if the city's liveable wage act passes on Wednesday. The number has been cut from six to three, due to the District’s own doing. Councilwoman Yvette Alexander oversees Ward 7, where two of the three proposed Walmarts may no longer be built. Legislation that is supposed to pass on Wednesday requires big box stores like Walmart to start employee salaries at $12.50 – well above the District’s $8.25 minimum wage. Unfortunately, pulling the plug on these locations allegedly means pulling the plug on approximately 900 jobs as well." Continue reading →

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Senators push bill to replace Fannie, Freddie with national mortgage insurance

"The two firms, which back nearly half of all new U.S. home loans, were chartered by Congress to expand mortgage finance but operated as private, profit-making companies. Given the central role they played in the financial system, the government felt compelled to bail them out when they ran into trouble. The bill would require private entities to buy mortgages from lenders and issue them to investors as securities. Private equity would be required to absorb a 10 percent loss of the principal underlying those new mortgage-backed securities if the loans went bad. A new guarantor, called the Federal Mortgage Insurance Corp., would replace Fannie Mae and Freddie Mac." Continue reading →

Continue ReadingSenators push bill to replace Fannie, Freddie with national mortgage insurance

1,700,000 Foreclosures Are in the Pipeline.

"A government report says that 1.7 million homeowners are 90 days or more late in their mortgage payments. Fannie Mae and HUD will wind up with these homes on their books, unless they decide to let the homeowners live rent-free. This is shadow inventory. It hangs like the sword of Damocles over the housing market. If the government does nothing, these homeowners will receive a huge subsidy: a tax-free grant equal to their mortgage payment, month after month, year after year. But if it forecloses, what will it do with these empty houses. Then the subsidy goes to operators of the squatters. Will the government kick the can? Probably." Continue reading →

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Why Sir John Templeton renounced US citizenship – AKA why the US shot itself in the foot

"The media is prone to depict Templeton as a tax cheat. The reason? Had he been a U.S. citizen when he died, the U.S. government would have received approximately 100 million in estate taxes. I am not aware of Templeton ever publicly stating his reasons for renouncing U.S. citizenship. Nobody knows for sure. But, I suspect that the correlation between his renouncing U.S. citizenship in 1964 and the enactment of the CFC (Controlled Foreign Corporation and SubPart F) rules in 1962 did play a role. The 1962 changes in the Internal Revenue Code meant that Templeton may have been forced to choose between U.S. citizenship and his mutual fund business." Continue reading →

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Is Obamacare About to Kill Hotel Room Service?

"In August, the New York Hilton Midtown, in the heart of Manhattan, will discontinue food and drink service to all 2,000 of its rooms. In its place will be a new self-service Herb n’ Kitchen stocked with grab-and-go items. A spokesman for the hotel, which is part of the chain that also operates the Waldorf, cited declining demand for room service as the reason; some hotel industry experts see the elimination of the labor-intensive amenity as a way for the chain to save money." Continue reading →

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Keynesians Use Thomas Edison’s Advice For Destruction

"Thomas Edison is known to have said the following: 'I have not failed. I've just found 10,000 ways that won't work.' Unfortunately, instead of Keynesians admitting defeat (like they should have at least 40 years ago) they're gonna go all Thomas Edison on us. This 'experiment' turns out to be nothing new at all, but the same old same old. So welcome Japanese citizens to the world of being a lab rat. We Americans have been poked and prodded ourselves for many years, and appreciate your company. Failed ideas die hard (e.g. Marx's ideas died hard). Unfortunately, the mad scientist Keynesians will refuse to give up until economic law forces them." Continue reading →

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$179,000 Each–In Debt

"Government and household debt has reached $179,000 per person in the U.S. For the past several years, we've heard pundits blathering on about the 'great deleveraging' that's reduced the household debt burden, freeing up American consumers to borrow more, more, more. The Great Deleveraging is shown here--yes, it's that thin slice of debt writeoffs. Debt has since resumed its inexorable rise. That which is unsustainable will go away. That includes debt, malinvestments, currencies, deficits and yes, entire empires." Continue reading →

Continue Reading$179,000 Each–In Debt

Is It Good News or Bad News that the White House Has Delayed the Obamacare Employer Mandate?

“So part of me is happy that the White House has bumped into reality and now admits that it hasn’t been able to come up with a workable plan for the employer mandate.  But another part of me is unhappy.  … Continue reading →

Continue ReadingIs It Good News or Bad News that the White House Has Delayed the Obamacare Employer Mandate?