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The New York Times, which last year editorialized against voting for Donald Trump for president because he has so coarsened our politics that he would fail as an example for our children, now offers in a single day one op-ed describing the presidents new communications director as a Wall Street snake, and another, from the Democratic Partys leader in the U.S. Senate, denouncing vulture capitalistsegregiously raising the price of lifesaving drugs without justification.
Between the snakes and the vultures, its almost enough to make a…

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If we learned anything from the bitter debate over the Affordable Care Act (ObamaCare) which seems doubtful it is that we cannot discuss health care in a way that is at once compassionate and rational. This is a significant failure because providing and financing health care has become, over the past half-century, the principal activity of the federal government.
If you go back to 1962, the earliest year with the data, federal health spending totaled $2.3 billion, which was 2.1% of the $107 billion budget. In 2016, the comparable figures were $1.2 trillion in health spending, which…

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The US dollar lost ground against all the major currencies, save sterling, over the past week, and also fell against most emerging market currencies.  There is little from a technical or fundamental perspective, including next week’s FOMC meeting, that suggests a reversal is at hand.Investors accept that the US economy rebounded in Q2 from another below average Q1 performance. They accept that the jobs market is still healthy.  What they doubt is that the Federal Reserve will raise interest rates in the face of price pressures that have moderated.  The fiscal course of the Trump…

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I participated in perhaps a bit of radio history last week when Steve Forbes and Art Laffer joined me on my syndicated radio show. It may have been the first time these supply-side-economics giants were ever together over the airwaves.
Forbes, of course, is chairman of Forbes Media and twice ran brilliant issue-campaigns for president. And Laffer, once a key advisor to President Reagan, is father to the ground-breaking Laffer curve, for which he should have won a Nobel prize. In our discussion together, they didnt disappoint. (For a full transcript, click here.)
We started with one…

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What’s the most useless economic measure that gains the widest attention among economists, the media, investors, money managers and policymakers? Among a disturbing number of indicators, a strong case can be made that it’s the unemployment rate.The latest stab at the unemployment rate by the U.S. Bureau of Labor Statistics was 4.4 percent in June. Particularly since the unemployment rate dipped to the 4.3 percent to 4.5 percent range over the last few months, there’s been a great deal of prattling on among assorted “experts” about the U.S. economy being at full employment. Of…

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Typically, U.S. Presidents are wary of claiming stock market performance as a referendum on their success. Most have seemed to understand that taking credit also means accepting blame, and no one would want to make the tortured argument that the positive moves reflect well on their presidency but that the negative moves do not. But Donald Trump has shown no reluctance to make any argument that suits his political purpose of the day, no matter its absurdity, and no matter if he has to contradict the arguments he made last year, or last week. Perhaps he assumes, as most investors seem to, that…

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A little over four years ago, the Bank of Japan started off the first arrow of Abenomics with a bang. The Japanese had, of course, experimented with QE in all but a few years of the 21st century, so to fulfill what Paul Krugman had long ago urged, the central bank would have to come up with something almost unbelievable. To many, it may have seemed they had done just that.
Japanese authorites gave the world QQE, the extra Q standing for qualitative as well as quantitative easing. It would have been better to have believed they doubled the number of Qs more so for…

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Those who rail against free trade as a job killer are beginning to grasp that they are boxing a shadow. The realization that jobs arent going to Mexico or China so much as to robots, digitization, and other technologies has spawned the emergence of a new Ludditism, aimed at saving jobs by stopping or slowing technological advancement. But all it could save us from is greater prosperity.
The recognition that Americans (and those in other developed countries) are not being replaced by foreigners so much as by robots has seeped through, spawning a new target. The same job-protection…

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The alleged failure of Republicans to repeal the mis-named Affordable Care Act (ACA) predictably has the conservative punditry up in arms. Why Cant Republicans Get Anything Done? was one of many frustrated headlines lamenting the GOPs lack of legislative success. One editorial asserted that Republican failure to do something about the ACA is one of the great political failures in recent U.S. history, and the damage will echo for years. Really?
Implicit in all the conservative ranting about the need to repeal, or worse, fix the ACA, is that healthcare was a…

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Many investors fear that stock prices will plunge when the Fed raises interest rates to normal levels. Others say, not to worry, the Fed only controls short-term interest rates, and stock prices depend on long-term rates. Yet others argue that, even if long-term rates do rise, the historical correlation between stocks and bonds is very loose.
Who is right? These arguments are all reasonable, but divert attention from what should matter to value investors.
It is certainly true, other things being equal, that higher interest rates make stocks (and bonds) less valuable.
It is certainly…

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Once-in-a-generation moment.
We have to get this done in 2017.
In a major speech last month, House Speaker Paul Ryan didnt mince words when it came to the urgent need to revamp our federal tax code, outlining what he deemed transformational tax reform. Congress and the White House should heed this call to action, as not doing so would be a major blow to families, businesses of all sizes, and our economy.
Over the last thirty-plus years, the tax code has become mired in complexity, loopholes, and inefficiency. Washington has stood idly by while the rest of the world…

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To hear Richard Reeves tell it, the upper middle class is fast becoming the bane of American society. Its members have entrenched themselves just below the top 1 percent and protect their privileged position through public policy and private behavior. Americans cherish the belief that they live in a mobile society, where hard work and imagination are rewarded. The upper middle class is destroying this faith, because its impeding poorer Americans from getting ahead.
That conclusion is dead wrong, but it contains just enough truth to seem plausible. We need to separate fact from…

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When last we left Citibank, it was in the middle of 2014 very briefly overtaking JP Morgan for the top spot in derivatives dealing. For the longest time, ages even, JPM ruled that space due to the nature of its business. As the primary triparty custodian in repo as well as the many other money dealing activities the bank sat on top of, to find them so far out in advance of all the others simply made sense.
According to bank call reports aggregated and published by the Office of the Comptroller of the Currency (OCC), at the apex of this eurodollar world in Q3 2007, JP Morgan showed $91.7…

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A central aspect of the U.S. Senate’s “Byrd Rule” is biased against tax relief, and it needs to be tossed out.With the battle over repealing ObamaCare, we’ve heard a good deal this year about “budget reconciliation.” What is this arcane federal budget term? Quite simply, budget reconciliation means that the U.S. House of Representatives and the Senate hammer out, in effect, a budget outline that provides marching orders for various House committees dealing with the budget. Eventually, an omnibus budget bill is voted on. Budget reconciliation operates under expedited procedures,…

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Those who complain about jobs lost to offshoring generally dont consider that the purpose of working is to consume. Offshoring production to other jurisdictions helps us to make the goods and services we use as efficiently as possible, by casting the widest possible net for the most economic way to fulfill each stage of production. The alternative to offshoring is to pursue autarky and build a closed economy. How well has that worked out?
Not very well, as the experience of the old German Democratic Republic demonstrates. The division of Germany after World War II offered a virtual…

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