Finance Geek

The media are consumed with multiple Washington scandals: the IRS, Benghazi, the Justice Department wiretapping. But what about the tragedy of the dim prospects for this month’s college graduates?
In a commencement address at Morehouse College on Sunday, President Obama told graduates, “Your generation is uniquely poised for success.”
But young Americans who campaigned for Obama, voted for Obama, and turned out their friends for Obama are graduating from college with substantial debt, few job prospects, and the requirement to buy expensive health insurance. They might be poised…

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Senate Finance Committee Chairman Max Baucus, an architect and supporter of the Affordable Care Act (ACA), recently caught the Administration’s attention when he voiced his concerns about the implementation of the health exchanges — the centerpiece of Obamacare now scheduled to go live on October 1 — saying that he sees “a huge train wreck coming.”
President Obama responded to concerns about implementation, emphasizing that he is 110 percent committed to getting implementation done right, but he also cautioned that there will be mistakes and hiccups.
While the Administration…

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Many commentators have wondered why the stock market has done so well during a period when the economy has been relatively weak. A common explanation has been that the Federal Reserve has pushed interest rates so low that investors have little choice but to buy stocks in hopes of returns that exceed inflation. There is some truth to that, but another reason is the gridlock on Capitol Hill.
A poorly kept secret is that almost all laws are bad for business. Some regulation is necessary. Clear rules are beneficial to business. But changing regulations frequently is bad for business and reduces…

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When you get right down to it, the political targeting and stalling of tax-exempt applications by the IRS was an effort to defund the Tea Party.
Rick Santelli, a Tea Party founder and my colleague, made this point first. I’ve taken it a step further: The IRS took the Tea Party out of play for the 2012 election to avoid a repeat of 2010 and another Tea Party landslide.
There are a lot of numbers out there.
Some say Tea Party applications for tax-exempt status averaged 27 months for approval, while those from liberal groups averaged nine. In one extreme case, according to the Washington…

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There had been two speculative attacks only a few years previous against the Thai baht, successfully defended by monetary officials in Bangkok. Related to the Mexican peso crisis, in January 1995 the baht started to drop against the floor set by the peg to the US dollar. It followed up again in March 1995, this time as the yen began an astonishing turn upward in the face of a stalled economy in Japan. In both cases the speculators were unsuccessful in forcing a devaluation.
The Bank of Thailand approached both episodes exactly the same. Encased in an economy dubbed one of the “Asian…

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Recent headlines proclaim “deep trouble” in the European cap-and-trade system for greenhouse gases, evidenced by the decline in allowance spot prices from over $25 per metric ton of carbon dioxide in June 2008 to about $3 this month. Although many press articles have referred to an “oversupply” of emissions permits, suggesting some kind of intrinsic imbalance, the markets are clearing just fine. It’s just that the price is lower than forecast. Whether this represents trouble or not depends on what you think the goal of the program should be. If the goal is to ensure…

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As seemingly every sentient being now knows, the Internal Revenue Service (IRS) has apparently been selective when it comes to the entities its agents scrutinize for tax-payment irregularities. Tea Party groups in particular (organizations known to be less sympathetic toward the IRS) seem to have generated abnormal amounts of attention from it.
Let it be said up front that the IRS’s presumed misdeeds are indeed offensive, but let’s not be so facile as to call what happened a scandal. If so, then it’s certainly the case that human nature is scandalous.
That is so because bias is…

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Recently in this space, I criticized an op-ed that claimed to resolve a paradox related to inequality and public policy. Ilyana Kuziemko and Stefanie Stantcheva argued that while Americans are “deeply troubled about the current level of income inequality,” support for government policy to reduce it is low. Based on a series of randomized experiments they conducted with Emmanuel Saez and Michael Norton, Kuziemko and Stantcheva speculated that rising inequality has eroded trust in government, resolving the paradox.
In my previous essay, I argued that there is little evidence to…

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The latest Social Security Administration data document that Social Security Disability Insurance (SSDI) rolls reached a record high of 8.85 million in March 2013, an increase of 1.6 million or 21 percent since the start of the Great Recession in 2007.
This recession-induced growth exacerbates the long time trend in SSDI program growth that has resulted in its real expenditures increasing sevenfold, from $18 billion (2010 dollars) in 1970 to $128 billion in 2010, a trend the CBO reports will result in program insolvency as early as 2016.
This long running disability epidemic, which hit its…

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Last month Texas Governor Rick Perry showed up at a business conference in Chicago making a pitch to the attendees to consider his state for their jobs. Illinois’ newspapers didn’t like Perry’s chutzpah in openly touting the Lone Star State in their backyard, but Perry wasn’t alone. Wisconsin’s Scott Walker showed up, too. And while Florida’s Rick Scott didn’t make it to the Prairie State, he sent a love letter to executives there which began with the salutation, “Dear Illinois Business Owner.” You can guess what came next.
There’s little…

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Securing America’s borders is no easy matter. Undocumented workers do not just walk across the borders but come in legally, by car, air, and ship, and then overstay their visas. Some estimate that 40 percent of undocumented workers came to the country legally and did not leave after their visas expired.
Coping with visa overstays, as they are known, has different challenges than stopping people from crossing the border. To keep people from crossing without permission, governments can build fences, and patrol with security forces, video cameras, and drones. Countries as different as…

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It’s been five years since the onset of the financial crisis - the rescue of Bear Stearns in March 2008 - and we still don’t know whether the financial system is safe. In a recent speech, Daniel Tarullo, the Federal Reserve’s point man on regulation, contended that substantial, though incomplete, progress has been made. As an example, he cited the doubling of equity capital for the 18 largest bank holding companies from $393 billion in late 2008 to $792 billion at the end of 2012. Equity capital is shareholders’ money; it acts as a buffer against losses. Interestingly,…

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Who would willingly choose to add a government to their lives? It certainly sounds like something unexpected, but could it actually make sense? Amazingly enough it can if adding a government allows you to stop another government from picking your pocket.
Here in Georgia where I live, new cities have been popping up around the metro Atlanta region. In regions that were unincorporated parts of Fulton County (the county containing Atlanta), four new cities now exist, meaning their residents have added a city government to their lives. The new cities (John’s Creek, Milton, Sandy Springs, and…

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NEW YORK (TheStreet) — This century has been tough on my generation.
Economic uncertainty has caused suicide rates to spike among those aged 39 to 64, says the Centers for Disease Control and Prevention. By 2010, someone my age was more likely to die by their own hand than in a car.
The highest risk, the report said, was for people like me, in their 50s. These are the middle-management professionals made redundant by the explosion of the dot-com bubble early in the decade and by the housing bubble and Great Recession later in the decade.
I came close to being among those statistics.
After…

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Corruption: We’re supposed to believe “low-level workers” are behind IRS abuse of conservatives. But this White House has used the IRS against political enemies before.
‘I’m not good at math,” said an apologetic director of the Internal Revenue Service’s tax-exempt entities division on Friday, after the agency’s targeting of conservative political groups for additional reviews during the 2012 election became known.
Groups with “tea party” or “patriot” in their names were harassed. But we’re assured political bias wasn’t the…

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