Recently the White House Office of Management and Budget released its Midsession Review, an update and review of the budget that President Obama submitted to Congress. The document extols the virtues of the administration’s economic policies, noting that a combination of economic growth, discretionary budget cuts and the reversal of the Bush tax cuts has halved the federal deficit. Moving forward, the administration hopes to further the economic recovery through additional budgetary savings from health-care reforms, closing tax loopholes for the wealthy and sensible immigration reform. What…

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The jobless rate has dipped to 6.1 percent, and businesses are already complaining about a skills shortage. Earlier this month the Wall Street Journal reported rising complaints by small business owners about their inability to fill critical job openings. Their complaints are not new. Two years ago, when unemployment topped 8%, personnel managers in manufacturing companies grumbled that it was impossible to fill positions requiring specialized skills. The Manufacturing Institute claimed that 600,000 job openings were going unfilled.We shouldn’t be surprised when shrinking unemployment makes…

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The U.S. automotive industry has surged past the previous vehicle safety recall record of 33.01 million it established in 2004, reaching 39.85 million vehicles recalled through July, and with five months yet to go in this year, the final number is tragically still “blue sky” in nature. This past week, General Motors (GM) announced six additional recalls covering 717,950 vehicles in the U.S. - although none of these recalls were for faulty ignition switches. This latest recall brings to 60 for the automotive manufacturer in 2014, totaling a record-setting 26.41 million vehicles globally, and…

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It is a rare day when the federal government does something smart, especially in the world of targeted investments. Solyndra and the myriad of other targeted investments made and lost by the government in the area of alternative energy are pretty much what we expect when the government tries to pick winners or invest taxpayer money in places that the private sector has chosen not to go. Finally, the White House may have found its niche on Wall Street: matchmaker.The White House Rural Council is helping to create what they are calling the Rural Infrastructure Opportunity Fund. This will be a…

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Just for once, wouldn’t it be great if President Obama actually defended American business, instead of attacking it?
Just once?
Wouldn’t it be great if Obama acknowledged that U.S. firms are overburdened by the highest corporate tax rate among developed countries, and as a result are becoming less and less competitive?
Wouldn’t it be great if he said he wants to fix this tax imbalance in order to grow the economy faster and give U.S. businesses a leg up on the global scene?
Couldn’t he just say that?
He could say it like this: “Look, I don’t want to drive businesses away. I want to keep…

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Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank’s history. While her tenure thus far may feel like a seamless extension of the Greenspan/Bernanke era, investors should understand how much further Yellen is…

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Maybe there is some natural fidelity to history in John Locke’s return to England from exile in the company of the future Queen Mary. It certainly contrasts with his ignominious flight many years earlier from the Catholic James I, though history itself has been rewritten on the occasion of his strife with the ruling regime. While Locke has been synonymous with the founding of true liberalism, authoring the basis by which the principles have been largely set, he had years before written an absolutionist piece defending the monarchy.
To reconcile Locke’s intellectual journey from Hobbesian…

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Corporate America’s latest public-relations disaster comes under the banner “tax inversion,” where a U.S. company shifts its legal headquarters to a country with a lower tax rate.
Just last week, U.S. drugmaker AbbVie agreed to buy a foreign firm, Shire PLC, in part to reduce its corporate tax rate, which is expected to drop from 22% to 13%. In most inversions, companies keep their headquarters’ physical activities - the people, the buildings - in the U.S., as would AbbVie. Still, the practice has understandably provoked a furious backlash.
These companies “have deserted our country to avoid…

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Editor’s Note: This article was originally published at 5 p.m. EDT on Real Money on July 22. Sign up for a free trial of Real Money.
The Organisation for Economic Co-operation and Development (OECD) this month published a 60-page economic policy paper titled “Policy Challenges for the Next 50 Years.”
For traders, the subject matter is largely irrelevant and most probably confusing. For professional investors and advisers to them, along with accountants, attorneys and public officials, it is a must-read.
The paper’s principal point is that the nominal and real economic growth rates that were…

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If the amount of press ink used to report a study is any indicator of its contribution to public understanding, the National Institute on Retirement Security’s (NIRS) 2013 report, “The Retirement Savings Crisis: Is It Worse than We Think?” might be the gold standard on the subject of retirement security. The report concludes that 84% of Americans are falling short of reasonable retirement savings targets and, even when total net worth is considered, two-thirds are at risk of an inadequate retirement income. The total “retirement savings gap,” NIRS claims, may reach trillion. According to…

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Last night Fiona and I watched Her, a kind and sensitive film about love between a human and an artificial intelligence. I’ve embedded the trailer above in case you want to take a look.

It’s a great film on two levels. Firstly as a modern era human love story and secondly for the way it shows what artificial intelligence will bring to society. Her shows how powerful artificial intelligences will be, the range of emotions they will have and how they will evolve and explores issues of mutual dependency. All of this is played out without the usual ‘machines vs humans’ narrative which allows for a more nuanced investigation of the issues. It’s powerful stuff. I’d love to say more, but won’t for fear of ruining the film.

We will most likely have a $1,000 computer with the power of a human brain before the end of the next decade so the stuff of science fiction could be with us very soon. It’s impossible at this stage to say how it will play out, but I’m excited to see it. Will the machines have personalities? Will they have soul’s? Will they treat us well?

For better or worse we will have answers to all these questions inside the next twenty years or so.



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As Congress mulls over a temporary patch for the Highway Trust Fund, President Obama is addressing infrastructure construction with his Build America Investment Initiative. The initiative is not the ordinary big government program. Instead, the Build America Investment Initiative is intended to be a “public-private partnership” or “PPP” for the acronym-loving Washington crowd. A “public-private partnership” may sound like an oxymoron to individuals who work in the private sector. Partnership is an ancient and venerable institution. For millennia, individuals have formed partnerships to…

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In congressional testimony last week, newly minted Fed Chairman Janet Yellen ably revealed why the central bank she runs is often such an imposing barrier to economic progress. While it will be explained later in the piece why Yellen will ultimately have a successful Fed tenure in a debased, “soft bigotry of low expectations” sense, her testimony makes clear that she’ll succeed despite her impressive weakness as an economic thinker.
Responding to Sen. Tom Coburn’s skepticism about the Fed’s zero rate policies, Yellen said “The reason we have low interest rates is to deal with a very real…

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Paul Samuelson, in a long ago policy debate, noted that a cat that jumps on a hot stove once never jumps on a hot stove again; of course, it never jumps on a cold stove either. Today, Samuelson’s image applies to the long running complaint that expansionary policies are courting dangerous inflation.Apart from the years immediately following World War II, when wartime controls on wages, prices and production were lifted, the one notable period of inflation in the modern US economy came in the 1970s. CPI inflation reached double digit rates in the mid-70s and again in the late-70s and…

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In Congressional testimony this week, Federal Reserve Chair Janet Yellen pointed to several economic maladies warranting continued activism by the central bank. But what ails the U.S. economy cannot be fixed by monetary policy.
This has been an exceptionally weak recovery when gauged by the labor market. About half of the decline in the unemployment rate can be accounted for by “discouraged workers,” who have dropped out of the labor force and are no longer actively seeking jobs. For that reason, the unemployment rate is increasingly becoming a misleading gauge of the labor market.
In…

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