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Just as the steady torrent of awful economic data, which began in the First Quarter and continued well into April and May, had forced many market analysts to grudgingly concede that 2015 would not see the robust economic growth that most had expected, the statisticians arrived on the scene like a cavalry charge and routed the forces of pessimism with a wave of their spreadsheets.The campaign began in late April with some seemingly groundbreaking analysis by CNBC’s Steve Liesman showing that over a 30 year time frame GDP data had consistently measured first quarter growth at 1.87%, which was…

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Thomas Jefferson said “a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouths of labor the bread it has earned.” Against this backdrop the 100 year old federal income tax code contains 73,954 pages of special interest gobbledygook. This juxtaposition tells us something is seriously out of alignment in America. It’s time for honest discussion on reforming our income tax system with a Flat Tax.
Enter Reihan Salam of National Review. Writing:…

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In all this talk about whether the economy will be strong enough to support the first policy change of this cycle, and how utterly sad it is to even have to argue about it, the larger issues about the exact operational framework remain largely unexamined. The intent of the FOMC is to undergo an orderly transition from extraordinary policy positions toward a setting more like normal. To go from A to B is not as simple as plugging in a new number, a fact that Federal Reserve officials are very quietly dealing with. The Fed has a repo problem, one that has been around since August 2007, which…

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In a previous RealClearMarkets column, I explored the causes and consequences of California’s ongoing housing affordability crisis. In a state where the average house price and monthly rental price hovers almost 2 and 1 times, respectively, above the national averages, it is clear that for far too many, homeownership isn’t an option and renting is just as much of a strain on household budgets.
Earlier this week, the Hoover Institution released the May/June 2015 issue of Eureka, an every-other-month California-centric policy publication featuring commentary on a timely policy topic. This…

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While central planning has historically been associated with the American left, and with failed socialist experiments outside the U.S., it’s most recently revealed itself on the American right. The movement isn’t large or growing, but there’s a sliver of the right that’s fallen in love with its own version of central economic control. The members of this nascent group call themselves ‘market monetarists.’
‘Market monetarists’ believe that economic growth can be managed by the Federal Reserve. Convinced that the U.S. central bank can control the supply of dollars in the U.S.,…

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‘Concierge healthcare’ has been dubbed the Rolls Royce of healthcare, which is why wealthy senior citizens are opting out of the traditional patient-doctor model in favor of shorter wait times and more personalized care offered by these fancy healthcare plans. Of course, convenience comes at a price - many concierge plans charge $5,000 plus per year just to be a member. Nevertheless, those that can afford to avoid the congested system jump at the chance.
For the rest of us, though, industry consolidation and other fallout from Obamacare, mean we’re stuck on the trajectory of declining…

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There is universal recognition in Washington that the 35 percent federal corporate tax rate is out of step with our global competitors and should be lowered at least to 25 percent in order to improve U.S. competitiveness and economic growth. And while there clearly is a need for comprehensive tax reform, many have suggested that lawmakers move forward with corporate-only reform, provided that it be accomplished in a revenue-neutral manner by broadening the corporate tax base.While corporate-only tax reform may appear to be less complicated and more expeditious than comprehensive reform, there…

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Dodd-Frank is rounding the bend to its five-year mark. Its vocal cheering section does not seem to notice that it’s looking a bit haggard. One area in which its weakness is evident is over-the-counter derivatives reform, which accounts for approximately 20 percent of Dodd-Frank’s pages and much of its rhetoric. Dodd-Frank relies on central counterparty clearinghouses to bring order to over-the-counter derivatives-financial contracts that help companies manage their risks. Although Title VIII of the Act gives a nod to clearinghouses as a potential source of new risk, that concern gets lost in…

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Americans are standing on the cusp of a revolution in how we access and use money, a revolution that could make our economic lives more secure and our economy more robust. Just as e-commerce freed merchants and customers from geographic boundaries in the delivery of goods, advances in financial technology promise to make it easier for businesses, investors, and consumers to raise capital, make investments, and transfer money to anyone, anywhere. This technological revolution brings the promise of greater opportunity, particularly for those who live outside the wealthiest parts of the…

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“What is harmful or disastrous to an individual must be equally harmful or disastrous to the collection of individuals that make up a nation.” - Henry Hazlitt, Economics In One Lesson
At the recent SALT Conference in Las Vegas, Michael Novogratz, the president of Fortress Investment Group, opened up his wide-ranging presentation with mention of his 76-year old mother. Novogratz talked about how she has never in her life paid retail. Even the mothers of billionaires search for bargains.
This likely wasn’t Novogratz’s intent, but he provided conference attendees with one of the better (but…

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This is no time to get all worked up over China’s currency manipulation. To use it as an excuse to resist the Obama administration’s pro-trade posture is perverse. This opposition weakens the United States’ competitive position. All of Asia - the fastest-growing part of the world economy - is watching the debate over the Trans-Pacific Partnership. If Congress derails President Obama’s trade policies, these countries will rightly conclude that the United States is not a dependable partner. By default, they would be swept into a trading system dominated by China.
To be clear: China’s currency…

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Last week witnessed a tragic train derailment on the Amtrak line that connects major East Coast cities. While the exact cause of the accident is not known yet, within two days liberal politicians had seized on the occasion to demand larger subsidies for Amtrak. In fact, the events of last week show the precise opposite-Amtrak should not receive a larger subsidy, but rather should be sold off and privatized.
Currently, Amtrak receives more than $1 billion in funding from Congress although it still manages to lose money. Amtrak was in the process of completing the installation of a new safety…

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One of the interesting nuggets coming out of the conservative sweep in the British elections was the failure of bank-bashing by the Labour party. Labour leader Miliband, who has since resigned, was anti-bank, anti-rich, and anti-business. It failed. And while conservative leader David Cameron didn’t necessarily defend banks, he didn’t attack them either.
Now, the case for Tory economic management wasn’t bad. The London Stock Exchange has been hot as a pistol. And the British economy is growing about 2.5 to 3 percent. Not great, not awful. It was enough for a handsome Tory victory. And it may…

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In December 2009, the FDIC issued its first National Survey of Unbanked and Underbanked Households. As the FDIC mentions, it was under statutory obligation requiring it make an ongoing survey of the “problem” even though the problem is never clearly defined. It is simply assumed that households that make payment intermediation with other means than a traditional banking account is somehow a victim; that “access” to banking amounts in some way to a societal and systemic transgression.
The justification for this is, again, an assumption that, overall, using alternate means are more costly…

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Investors continue to be concerned about two key issues for the stock market: (i) how stocks will react as interest rates rise and (ii) the impact of U.S. dollar strength relative to other currencies and its potential effect on the earnings outlook for companies with currency exposure.
The lack of an alternative to equities or “TINA” (there is no alternative)is directly related to the historically low interest rate environment we are currently experiencing, and the fact that the broader fixed income asset class is unappealing to investors. Many stocks actually have higher dividend yields…

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