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We Americans pride ourselves on not having a “welfare state.” We’re not like Europeans.
We’re more individualistic and self-reliant, and although we may have a “social safety net” to protect people against unpredictable personal and societal tragedies, we explicitly repudiate a comprehensive welfare state as inherently un-American.
Dream on.
Call it a massive case of national self-deception. Indeed, judged by how much countries devote of their national income to social spending, we have the world’s second-largest welfare state - just behind France.
This is not just conjecture. The…

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There is an important but unanswered question associated with President Obama’s executive order on immigration. Will the approximately five million undocumented immigrants covered by the President’s action be eligible to receive welfare benefits? And if so, how much will those benefits cost?In his speech announcing the new policy, the President said not to worry. While he was clear that undocumented immigrants would not be eligible for Affordable Care Act subsidies, the President appeared to deny the new group (mostly parents of children born in the United Sates) other kinds of federal…

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This Black Friday, the start of the Christmas holiday shopping season, the United Food and Commercial Workers will be leading demonstrations at 1,600 Walmarts all over the country, demanding that Walmart pay an hourly minimum wage of $15.
Organized under the banner of OUR Walmart, which stands for Organization United for Respect at Walmart, the union pretends to represent workers. In reality, Walmart’s 1.3 million employees have not elected the union or OUR Walmart to represent them, and in January, the National Labor Relations Board forbade the union from claiming to represent WalMart…

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Earlier this month the Congressional Budget Office published new estimates of income losses and gains in the Great Recession and in the recovery up through 2011. It is an update of earlier analyses, and it shows changes in pre-tax and post-tax incomes and in the distribution of federal tax burdens on low-, middle- and high-income families.The report offers insight into the role of government tax and benefit policy in protecting family incomes during the nation’s worst post-war recession. By almost any measure the policy was a resounding success. For middle-income families, tax cuts and higher…

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As Washington fights over immigration reform, much of the focus is on the wrong half of the problem. Immigration reform consists of two parts: illegal immigration (how to stop it and what to do with those already here) and legal immigration (how to select those granted permission to live and work in the United States). All the political battles are focused on the first part of the problem when the second may be more crucial to the long run economic growth, and thereby fiscal stability, of our country.
Stopping illegal immigration may help the economy and state, local, and federal government…

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This summer Blake Masters sent me a pre-publication copy of the book he had written with Peter Thiel, entitled Zero to One. Peter Thiel, as you probably know, is the founder of PayPal and Palantir and one of the earliest investors in Facebook. He is now one of Silicon Valley’s most influential venture capitalists. He taught a course on business start-ups at Stanford in 2012; Masters enrolled in the class, took highly detailed notes, and worked with Thiel to turn that into the book Zero to One. Having long been an admirer of Thiel, I read the book hungrily — underlining, marking, and…

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Is this immigration game really worth the candle? I think not. And I say this as someone who is an immigration reformer, not a restrictionist.
The free movement of trade, capital, and labor is strongly pro-growth. History shows that legal immigration is good for America, economic growth, entrepreneurship, job creation, and hard-working families. America must remain a city on a hill, attracting the best and brightest from around the world - a beacon of freedom.
The trouble is, Obama’s executive actions not only usurp powers that are not his, they don’t really solve key immigration…

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It was nice to see that the FOMC considered US treasury bond trading on October 15 at its October FOMC meeting. More than a month later, there still isn’t much by way of consensus on what caused the “crash” nor how to interpret the events of that day. Even the “crash” itself was odd in that what occurred was not a precipitous drop in price, but the exact opposite. In terms of yields on treasury bonds, it was there where the usual convention about such things related.
To say it was an extraordinary event is to be severely understated, though attention is limited outside the immediate rungs…

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While California’s official November 4th election results won’t be finalized until the end of the month, we can still gauge the success of certain economic competitiveness messages. With national Republicans failing to pick up any California Congressional seats, the national messaging largely proved ineffective, even with a seemingly Republican-friendly electorate. Instead, it would appear that despite the lackluster gubernatorial election, California issues reined. But that doesn’t mean all of them were successful.
The Messages That Succeeded
Pension Reform: San Jose and San Diego are…

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In the four years since the passage of Dodd-Frank, the financial regulators have written a lot of new rules. Throughout the implementation period, at least one of the chambers of Congress has been under the control of the party that passed Dodd-Frank. Agencies therefore have been spared some painful scrutiny of their Dodd-Frank implementation programs. This month’s election changed that, and agencies are likely to face a lot more uncomfortable oversight in the upcoming Congress. But the new Congress, not as wedded to Dodd-Frank as its predecessors, could also make life more bearable for…

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A new Congress is arriving, and it is time to reform FSOC, the “Financial Stability Oversight Council.” FSOC is part of the efflorescence of regulatory bureaucracy created by the notorious Dodd-Frank Act of 2010– a typical political over-reaction, as happens in every cycle.
FSOC is a committee of regulators assigned the high-sounding job of identifying and preventing the threat of “systemic risk.” This is probably not possible. The utter failure of central banks, notably including the Federal Reserve, regulators and economists in general to diagnose the great 21st century bubbles in the…

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Now that the midterm elections are over, the Department of Labor is getting ready to release new proposed rules on overtime pay. These rules will fulfill President Obama’s promise to raise the salary level at which employers are required to pay overtime. In March, at the White House, the President said, “Overtime is a pretty simple idea: If you have to work more, you should get paid more.”
But this promise contradicts other promises the president has made, most specifically towards working women. The president wants working women to have flexible hours and to be able to telecommute, job…

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President Obama has claimed that income inequality is the “defining issue of our time.”
There is no doubt that income inequality is growing. A recent CBO report that traced market income (before taxes or government transfer payments) shows that 80 percent of U.S. households had a smaller share of market income in 2007 (before the Great Recession) than in 1979. Even the top 20 percent, taken as a whole, increased its share of market income by less than half a percentage point. The winners were the top 1 percent of earners. Their share of market income leaped from 10.5 percent in 1979 to 21.3…

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It’s perhaps apocryphal, but in his classic 1982 book The Economy In Mind, the late Warren Brookes referenced the arrival of a famous Keynesian at New York’s JFK airport in 1979. Upon reaching customs, the customs’ official checking passports said to the economist “I don’t know whether I should let you back, Professor, considering what you economists have done to this country.”Brookes’ story bears relevance in light of the aggressive actions taken by economists at the Fed, and at central banks around the world. To witness their machinations is to marvel at the damage being done, and to…

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Trying to invest like Warren Buffett has such a long history that numerous columns have been written about how to construct portfolios of companies that the writer posits Warren Buffett would like. Other investors or money managers simply build portfolios of companies in which his Berkshire Hathaway has substantial holdings. Multiple books have been written on how to invest like Buffett. Still, it is always worth reminding, particularly as the subject of tax reform bubbles up in Washington, D.C. once again, that while imitating Warren Buffett can come with large rewards, listening to him is a…

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