Middle Class Dismissed

A Social Phenomenon: Protests Erupt in Brazil

"A girl organized a protest, expecting a few hundred people to attend. Instead, there were tens of thousands, and then a million. It was like throwing a seed crystal into a super-saturated solution and causing crystallization throughout the whole body of liquid. It was like a wildfire spreading. This is what we so far have NOT seen occur in America. This is, however, what the authorities are preparing for. They know that the array of grievances of Americans is growing by the day, week, month and year. They know that they have not addressed these grievances, and they know that when the promises of government cannot be kept, these grievances are going to spill into the streets." Continue reading →

Continue ReadingA Social Phenomenon: Protests Erupt in Brazil

The Bush-Obama Great Stagnation

"Robert Higgs has another must read in his 'Etceteras … Real Gross Domestic Private Product, 2000-2012' in the most recent Independent Review. He provides good arguments on why government product should be (and perhaps almost was) excluded from income and product accounts. He then builds a measure of Real Gross Domestic Private Product for the Bush-Obama years. Based on his calculations, he states, 'Perhaps the most positive statement we can make about the private economy’s performance during this thirteen-year period is that it has been somewhat better than complete stagnation.'" Continue reading →

Continue ReadingThe Bush-Obama Great Stagnation

Why the Status Quo Is Doomed

"Every one of these implicit assumptions has been turned on its head: growth is barely above the rate of inflation; by some measures, it has already fallen below the real rate of inflation. Debt is increasing much faster than income or wealth. Virtually all of the recent expansion of wealth/income is flowing to the top 10%. This is why the status quo is doomed: there is no Plan B or even conceptual alternative to the 'more growth forever' agenda. The oft-touted fantasy is that 'we're going to grow our way out of this,' but it is abundantly clear that debt is rising far faster than growth or incomes." Continue reading →

Continue ReadingWhy the Status Quo Is Doomed

British central bank softens rules for banks to give economy £70bn boost

"The UK’s big four lenders will be able to reduce their cash and cash-like assets by 20pc under the recommendation, made by the Bank’s Financial Policy Committee (FPC). The excess 'liquidity' could then be used 'to support lending to the real economy', it said. The FPC estimated the impact of the rule change on the big four to be 'around £70bn'. Interest rates have been at a record low of 0.5pc for more than four years and households have become increasingly reliant on such cheap credit. The proportion of borrowers on variable rate mortgages linked to the 0.5pc rate is close to a historical high, the Bank said." Continue reading →

Continue ReadingBritish central bank softens rules for banks to give economy £70bn boost

More than half of Americans disapprove of Obamacare

"A majority of Americans say Obamacare will make things worse for their families and the nation overall, a poll released on Thursday found, highlighting the challenges his administration still faces in winning over the public. Overall, the survey of nearly 2,050 adults showed 52 percent disapprove of the 2010 law aimed at expanding access to health insurance for millions of people, according to Gallup. Another 44 percent said they back the changes. Among those polled, 42 percent said it would make their family’s healthcare situation worse while 33 percent said it would have little impact. Just 22 percent said they thought it would help, the poll showed." Continue reading →

Continue ReadingMore than half of Americans disapprove of Obamacare

Young Americans may dodge health law

"Young Americans may have been among the biggest supporters of Obamacare, but they may also be the least likely to comply with the law. In 2014, benefits experts say, the cheapest option for 20-somethings will be to pay the penalty for not buying health insurance, rather than paying for any health insurance at all—that is, provided they don’t get sick. And as more young people do the math, more seem to be deciding the Affordable Care Act isn’t such a good deal for them: Support for a national health-care plan dropped nearly 11% among American college freshmen between 2008 to 2012." Continue reading →

Continue ReadingYoung Americans may dodge health law

Obamacare could eat up your raise

"Expecting to get a raise next year? It could be eaten up by your health care bill. In an effort to meet the affordability requirement of the Affordable Care Act, which kicks in next year and requires that workers spend no more than 9.5% of their income on premiums, more employers are turning to insurance plans in which premiums vary based on a person’s salary, rather than having all workers pay a flat rate. That way, employees who make more money pay bigger premiums. While the strategy, which some employers have been using for decades, is still not mainstream, more companies are adopting the system as a way to prepare for the health reform law." Continue reading →

Continue ReadingObamacare could eat up your raise

U.S. withdraws Bangladesh trade ‘privileges’ over worker safety

"The United States withdrew trade privileges from Bangladesh Thursday, citing dangerous conditions for workers in the wake of a factory building collapse that killed over 1,100 people. Multiple recent tragedies in the country’s huge garment sector 'have served to highlight some of the serious shortcomings in worker rights and workplace safety standards in Bangladesh,' said US Trade Representative Michael Froman." Continue reading →

Continue ReadingU.S. withdraws Bangladesh trade ‘privileges’ over worker safety

What Higher Mortgage Rates Mean in the Real World

"Rates on the roughly 48 million outstanding mortgages in the U.S. will rise. There are still millions of adjustable rate mortgages out there, often second mortgages or HELOCs. Those will start ticking higher in the months ahead. $240 a month ($2,880 a year) may not seem like much, but multiply that by a million, and then by many millions, and the number starts becoming consequential: that money is no longer available for consumption or investment. Rising mortgage rates reduce household purchasing power just like higher taxes and inflation. That means there is less household income to spend on other things, and that's not good for 'growth.'" Continue reading →

Continue ReadingWhat Higher Mortgage Rates Mean in the Real World