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The announcement by the House Republican leadership that the Innovation Committee by a bipartisan vote of 24-8, but this vote was less convincing than the previous vote (33-5) on a nearly identical bill advanced in the House Judiciary Act (H.R. 9) will not be scheduled for a vote this summer has the bill’s supporters concerned but not yet alarmed. In June, H.R. 9 (”The Innovation Act”) was advanced in the House Judiciary Committee in the 113th Congress.The Senate Judiciary Committee advanced its own patent reform bill, S.1137 (”The Protecting American Talent and Entrepreneurship Act” or…

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Health Care: When insurers requested huge rate hikes for their 2016 ObamaCare plans, we were told not to worry because state regulators would force them down. But that’s not happening. Death spiral, anyone?
In Alaska, the state regulator approved a 39.6% rate increase for Moda Health, and Premera Blue Cross Blue Shield of Alaska got a 38.7% hike.
BlueCross BlueShield of Tennessee asked for and got a 36.3% boost in premiums. Oregon’s insurance commissioner approved a 25.6% increase for Moda, the biggest insurer on its ObamaCare exchange. In Kansas, ObamaCare enrollees will face increases of up…

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Stocks have always had a complicated relationship with the economy, which is why bubbles are the way they are. That paradigm has perhaps been stretched now more than at any point since even the FOMC, masters of four QE’s, aren’t much enthralled with their own handiwork. After proclaiming for years that stocks were a full part of the monetary channel, the “wealth effect” and all that, we are left to wonder just who has benefited from all this as the real economy cannot take much more. Thus the asset inflation is transformed in part from an active channel to instead a singular signal of what…

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Back in grad school (not all that long ago), we pondered whether a central bank should target equity (or other asset) prices to conduct monetary policy.
In theory, as the value of consumers’ stock portfolios rise, they will spend more because they are wealthier. It turned out, though, that the empirical link between monetary policy, equity prices, and consumption has always been rather weak.
Nonetheless, Fed Chairs tend to at least mention that they are paying attention to the stock market, even if they’re not willing to go as far as Alan Greenspan did with his infamous “irrational…

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Governor Jerry Brown celebrated last week when a recently published study - from researchers affiliated with Columbia University, the University of Idaho, and NASA’s Goddard Institute for Space Studies - determined climate change is, in fact, a contributor to the state’s drought. However, Brown’s celebrations may be premature. The study determined that just 8% to 27% of the precipitation irregularity between 2012 and 2014 can be attributed to climate change and only 5% to 18% of the anomaly for 2014 - the only year, thus far, that researchers determined reached record-breaking conditions. …

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The Council of Economic Advisors (CEA) recently released an important and timely report on occupational licensing. The recommendations of “Occupational Licensing: A Framework for Policymakers,” fit nicely with two growing realizations about jobs in the middle of the skill and wage distribution. The first is that they usually require education beyond a high school degree, but less than a four-year degree. The second is that they now play an important role in promoting economic mobility among young adults from poor families and could play an even more important role in the future. These…

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Tantalus was eternally doomed to stand in a pool of cool water beneath a fruit tree. Whenever he reached for the fruit, the wind would blow the branches out of his reach; if he kneeled to drink, the water would drain away.After years of extreme policy, the Fed’s twin goals of faster growth and 2% inflation remain tantalizingly out of reach. But are the Governors ready to look past the commodity bust, a strengthening dollar, and a near meltdown in Chinese stocks, and “tighten” policy for the first time in nine years?The Fed has talked the talk of “exit strategies” for years. The bank once upon…

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Fasten your seat belts, this ride is getting interesting. Last week the Dow Jones Industrial Average was down more than 1,000 points, notching its worst weekly performance in four years. The sell-off took the Dow Jones down more than 10% from its peak valuations, thereby constituting the first official correction in four years. One third of all S&P 500 companies are already in bear market territory, having declined more than 20% from their peaks. Scarier still, the selling intensified as the week drew to a close, with the Dow losing 530 points on Friday, after falling 350 points on Thursday….

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Will they or won’t they? That has been the central question for at least outsiders going back to May 2013. Despite continued surety about the economic direction, the Federal Reserve always seems to find “somehow” to be short. The recitation of this lingering inaction borders on Einstein’s version of insanity; each FOMC meeting is supposed to be the “liftoff” yet also at each is accompanied with how the economy just isn’t quite there. The singular persistence of “close” is illuminating.
It has to be that, for forward guidance even in the Yellen version is an unrelenting invitation to…

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A considerable legal battle is underway that could determine the fate of The Consumer Finance Protection Bureau (CFPB). The CFPB was created four years ago as part of the Dodd-Frank banking reform act. To its proponents, it is a government agency with the mandate to protect consumers with unprecedented authority. Its detractors have criticized it for its inefficiency, mismanagement, and unchecked authority. As the agency celebrates its fourth anniversary, a unanimous three-judge panel of the U.S. Court of Appeals ruled that the Texas bank bringing suit against the bureau has legal standing…

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Just-published minutes from the Fed’s July 28-29 meeting indicate that most officials saw conditions for a rate liftoff as “not yet” achieved. They may be approaching a rate-hike moment, but they’re not there yet. Good call. That’s right: Good call.
As I noted in my most-recent column, important forward-looking, inflation-sensitive market indicators are actually heading down, not up. These include soft commodities, sinking oil, weak gold, a strong dollar, declining Treasury break-even inflation spreads, and a flattening yield curve. Add to that slow nominal GDP, a sluggish money supply, and…

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By the end of 2013 there were approximately 1.5 million people in state or federal prisons, and the U.S. incarceration rate is the highest in the world. And while there is debate about the relationship between this level of imprisonment and crime rates, there is considerable research to show that a spell of incarceration exacerbates economic and social conditions for families as well as former inmates, especially in low-income neighborhoods. That has led the Obama Administration and some interesting strange-bedfellow groups to call for alternatives to prison for some infractions.The other…

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“Thank goodness for Steve Forbes” is a frequent refrain among the small number of economics writers who support the dollar’s revival as a stable measure of value. Respected by serious people on the left and right, and among the various “Schools” of economic thought, Forbes’s strong support for gold-defined money lends the movement an air of credibility that otherwise wouldn’t exist.
Add George Gilder to what is a short list of grand names lending support to good money. Readers interested in what drives Gilder’s thinking on the matter can access his new book The 21st Century Case for Gold: A…

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On Tuesday, August 11, China began devaluing its currency unit, the yuan against the U.S. dollar. Later that day, Republican presidential candidate Donald Trump denounced China, saying:
“I think you have to do something to rein in China. They devalued their currency today. They’re making it absolutely impossible for the United States to compete, and nobody does anything.”
For a candidate whose pitch is based upon being smarter than everyone else, Trump has taken a spectacularly stupid position with respect to China-not just economically, but politically. After all, it was less than three…

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Pretty much everyone in the world wants the Federal Reserve to begin its “rate liftoff.” September is the latest target date for this market consensus. But permit me one dissenting question: Are you sure?
Or as the saying goes, be careful what you wish for.Take a look at a bunch of forward-looking, inflation-sensitive market indicators. They’re flashing deflation, not inflation. In the past year or so, gold has dropped from $1,300 to $1,100, spot commodities have fallen 16 percent on the CRB index, and commodity futures are off 22 percent. Of course, oil has plunged to $42 a barrel, which…

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