Author Archive

Who says politicians arent an innovative bunch? Just take a look at the federal budget, and one discovers considerable innovation in dreaming up ways to take and spend other peoples money.
Among the many destructive tax measures imagined and imposed by government officials over the decades well, actually, over the centuries the death tax (or estate tax) stands out as a particularly egregious levy.
After paying assorted and substantial taxes and fees to various levels of government over a lifetime, the tax man shows up at death to claim a percentage of the deceaseds assets….

More…

Comments No Comments »

In the last month, California Governor Jerry Brown declared the 5-plus year California drought officially over and Sacramento Democrats, with the help of one rogue Republican State Senator, passed a billion gas and vehicle tax increase. Both actions were applauded by Sacramento leaders as fixing serious challenges facing the state, but in reality, California’s one-party rule squandered two excellent opportunities to ensure two serious problems plaguing the Golden State were sustainably resolved. At the end of the day, California will not be ready to weather the next drought and despite…

More…

Comments No Comments »

Because of the way things have turned out, events that occurred ten years ago remain freshly relevant today in a way that couldnt be said of past periods. The Crash of 1987, for example, was but a footnote in trivia by 1997. The oil embargo and nasty global recession of 1974-75 had by 1984 and 1985 become just a memory, though painful completely unrelated to the world of the mid-1980s. In early 2007, by contrast, Ben Bernanke said subprime was contained and his fellow policymakers made other such statements that still haunt us today.
Before getting to those, we have to more…

More…

Comments No Comments »

Memory need not deceive, but it is mercifully selective C.J. Maloney, Back to the Land
In 1983 All the Right Moves, a film about a high school football team within a dying steel town (the fictional Ampipe, PA) was released. The movie didn’t receive great reviews, but its cast (including Tom Cruise and Craig T. Nelson) succeeded in portraying the desperate struggle of the towns athletes to escape the drudgery of mill work through success on the football field; success that would hopefully lead to football scholarships at colleges and universities far away from Ampipe.
All the…

More…

Comments No Comments »

“Welcome to the party, pal.”
–John McLane, “Die Hard”
For the first time in a long while, I am not short any indices and I own no leveraged inverse market ETFs.
It is not because I am bullish. I am not, as I continue to believe, looking over the balance of 2017, that the downside risk is roughly 2.5x to 3.0x the upside reward.
Indeed, the market recently has displayed obvious technical and fundamental flaws that have led to some serious markdowns of certain sectors (e.g., financials) and individual equities (e.g., IBM (IBM) overnight); we have taken advantage of some of these. Moreover,…

More…

Comments No Comments »

By now everyone has seen the video of law enforcement officers throwing Dr. David Dao around and dragging him off a United Airlines flightdazed and bloodied.
But when viral videos and memes fade out, lawsuits ramp up. Dr. Dao has secured not one but two attorneys: one an expert in corporate law, the other a personal injury specialist.
The most obvious cause of action available relates to unnecessary use of force. But Daos attorneys might also strategically emphasize their clients race and ethnicity (despite their current suggestions to the contrary). Dao is Asian actually…

More…

Comments No Comments »

Bonds may represent one of the most expensive asset classes extant
Barring a recession, bond holders are almost guaranteed losses over the next decade
On both stocks and bonds, I am at the polar opposite of Mae West who once said,”Personally, I like two types of men, domestic and foreign.”
As overvalued as I believe the the U.S. stock market may be, fixed-income instruments may be even more overvalued.
After being stuck in a range of between 2.30% to 2.65%, the yield on the 10-year U.S. note breached the lower end and ended last week at 2.23%.
Yesterday the 10-year note…

More…

Comments No Comments »

Tax Day is upon us, and once again it is a reminder of how intricate and complicated the tax code really is. At nearly 75,000 pages, the code is easily the most onerous thing government ever spawned by government.
As Millennials eager for economic opportunity in the short-term and sustainable growth in the long-run, we are hopeful that the President Trump and congressional leaders will pursue a new course on taxes. Our generations views on work and the economy are already driving growth in the sharing economy and redefining what jobs look like for the 21st century.
Its no secret that…

More…

Comments No Comments »

Today is Tax Day in America. When April 15th happens to fall on a weekend, the IRS “generously” permits us to extend the filing ritual until the following Monday. But since Monday was a holiday in the District of Columbia known as (without irony) Emancipation Day, we all enjoyed an extra bonus day to comply. And for the most part, comply we do: the voluntary compliance rate, defined by the IRS as taxes timely paid as a percentage of taxes owed in aggregate, is nearly 82%. Compare this with Italy, for example, where tax evasion is a national pastime. For a nation born out of tax resistance, we…

More…

Comments No Comments »

That the forceful ejection of a United Airlines passenger the Sunday before last proved so newsworthy indicated something thats largely been ignored by the airlines myriad critics and advisers. What happened was news precisely because its so rare.
But for a commentariat prone to turning anecdote into statistic, Uniteds resort to force when it came to properly removing David Dao (more on this in a bit) from one of its airplanes was naturally (to the chattering class, at least) a sign of a tone-deaf airline; one clueless about customer service thanks to a culture within…

More…

Comments No Comments »

There are lots of public policy problems that, even with the best of political goodwill, cannot be easily solved. They’re just inherently tough. Fixing airline overbooking is not one of them.
As proposed by Harvard economist Greg Mankiw on his blog, the solution is straightforward: Make the airlines pay when they overbook. When they do, “they should fully bear the consequences. They should be required (by government regulation) to keep raising the offered compensation until they get volunteers to give up their seats,” writes Mankiw. “If $800 does not work, then try $1,600 or $8,000.”
Mankiw…

More…

Comments No Comments »

Its springtime in Washington. The cherry blossoms have lost their premature bloom, but talk of financial regulatory reform is in full flower. Lets hope that these reform discussions are longer-lived than the cherry blossoms. There is reason to worry, however, that we will not succeed in more than superficially disentangling ourselves from Dodd-Franks seductive embrace.
On the promising side, we are hearing some calls for reform from people who were central in shaping Dodd-Frank implementation. For example, as Federal Reserve Governor Daniel Tarullo packed his bags, he made an…

More…

Comments No Comments »

Populism is a mushy political term, and populists tend to be a scattered bunch. But as much as the populist label has been applied to varying interests over the decades, three factors seem to provide a common thread for populism, i.e., fear of something, opposition to elites (which also has had a very flexible meaning over time), and resulting bad economic policies.
Populism first gained traction in U.S. political circles in the late nineteenth century, whereby rural, agricultural interests lined up against urban areas. Looking back on that era, the populists ironically were…

More…

Comments No Comments »

US interest rates and the yen seemed to stabilize before US President Trump’s Wall Street Journal interview was released. For the first time in months, Trump used the bully pulpit to push the dollar down.
The real broad trade-weighted dollar rose in seven of the last eight months in 2016, including the last four months of the year. It has fallen in the first three months of 2017. US exports are up 6.7% year-over-year in February. Exports trended lower in 2015 but recovered steadily last year and were at two-year highs in February.
Trump said the dollar was getting so strong that hit…

More…

Comments No Comments »

It may turn out that the widespread belief that most Americans’ incomes have stagnated for years is, well, false or at least overstated.
Say what?
No doubt, many Americans feel that, except for the rich and segments of the upper middle class, they’ve been treading water economically for years. To take a prominent piece of evidence: In 2015, the average “real” (inflation-adjusted) wage of workers was about $21 an hour, almost exactly what it was in 1975.
That’s nearly half a century without a wage increase!
Or is it?
In a provocative new study, economist Bruce Sacerdote of Dartmouth College…

More…

Comments No Comments »