Archive for the “RealClearMarkets” Category

Articles from RealClearMarkets.

President Trumps new CEA chair, Kevin Hassett, walked into the lions den last week with his first official speech. He used the moment to pound the leftist Tax Policy Center (TPC). It was a wonderful sight.
When Hassett wasnt pounding the TPC, he was spanking them. He took them to the woodshed, and disciplined them in public view.
Hassett rightfully accused the TPC for ignoring widely accepted economic literature, for using false assumptions on tax details that have never been published, and for manufacturing income-redistribution (tax cuts for the rich) and deficit numbers that…

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From Friday, August 11, through Friday, September 1, this year, the equivalent yield on the 4-week US Treasury bill was calculated to be less than 1% in each trading day during that time. There is, of course, no single 4-week Treasury bill, and they dont pay any interest. You buy them at a discount and redeem them at par on maturity. The difference in the discounted price and par is the equivalent yield, blended among the several bill CUSIPs that make up the 4-week constant maturity proxy.
There really isnt any reason for bill yields to trade less than 1%, however. The Federal…

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Commerce Secretary Wilbur Ross claims that the amount of U.S content in goods from Mexico and Canada has declined since NAFTA went into effect. Time for a fact check: U.S content in goods from its two NAFTA partners has actually more than doubled, because overall trade in goods among the three countries has increased so dramatically. There are more manufacturing components going back and forth among the three countries and the actual volume produced in the United States is greater than ever.
Its true that the percentage of U.S. value-added in the goods the United States imports from…

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In the film The Sound of Music (1965), one of the characters, Max Detweiler, declares, I like rich people. I like the way they live. I like the way I live when Im with them.
I get it. Indeed, many people do. But theres a heck of a lot more to rich people than fast cars, big houses, nice food, and yachts. From an economists perspective, there are three key reasons why rich people rock.
First, in a free market system, theres really only one way to legitimately earn considerable wealth, and thats by supplying goods or services that other people want or need. In another…

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“At this time 85 years ago, Yale economist Irving Fisher was jubilant. “Stock prices have reached what looks like a permanently high plateau,” he rejoiced in the pages of The New York Times. That dry pronunciation would go on to be one of his most frequently quoted predictions — but only because history would record his declaration as one of the wrongest market readings of all time.”–Time Magazine, “The Worst Stock Tip In History”
In Jim “El Capitan” Cramer’s opening missive today he analytically addresses the active vs. passive conflict, which helps explain the market’s steady bullish…

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The current fight in the U.S solar industry over the International Trade Commission finding of injury to domestic panel producers from imports demonstrates that protectionism does not just hurt the ultimate consumers for whom a product is made. It hurts everyone who adds value along the chain, including domestic businesses and their employees.
Ignoring the arguments of the vast majority of players in the industry, including some manufacturers, the ITC last month ruled on behalf of two companies that brought action against China-based solar panel producers. The ruling set the stage for…

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The salaries commanded by professional athletes make an inviting target. But their compensation is based on the same criteria as everyone else the economic value they generate. The salary scale in professional sports actually demonstrates that the marketplace works: What players are paid reflects their comparative skill and market power.
Professional athletes command a lot of money because a lot of people want to see them perform their job. Unlike most of us, they do not just make a product. They are the product. Their skill and drawing power determines how many fans pay to see their…

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Amid the gridlock and uncertainty gripping Washington, one big item left over from the Obama era has been quietly resolving itself the role that mortgage companies Fannie Mae and Freddie Mac will play in our economy.
Among the decisive steps Congress and the Bush Administration took while the markets and economy convulsed in 2008 was passage of legislation — the Housing and Economic Recovery Act (HERA), which led to the government sponsored enterprises (GSEs) being placed in a conservatorship under the authority of the HERA-created Federal Housing Finance Agency (FHFA). An infusion of…

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The most illuminating recent article about the tax reform debate didnt appear on the front page of any newspaper. It wasnt in the business section, or on the editorial page.
It was an interview that appeared on an inside page of the New York Times arts section with Ellen Stern.
Stern isnt an academic economist or a politician or a tax policy expert at some Washington think tank. Shes a widow. Her husband, Jerome, died in March. Beginning on November 14 and continuing through March 2018 in nine separate events, Sothebys is scheduled to auction off the collection of art…

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It has been six years since Wisconsin Governor Scott Walker signed a law that severely restricted the power of public-employee unions to bargain collectively. Many found it easy to sympathize with the workers whose bargaining rights would be circumscribed, people doing valued work such as teachers, nurses, and prison guards. But public-sector workers have enormous clout at the bargaining table, compared to their private-sector employees. Is it justified?
Since the battle of Wisconsin, the issue has arisen on the other side of the Atlantic. The U.K parliament limited public sector…

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The food is just…When you taste it you feel good. Those are the words of Daniel Awaitey, a 27-year old Ghanaian. He was talking to New York Times reporters Dionne Searcey and Matt Richtel about his favorite restaurant in Accra, the capital city of Ghana. That restaurant is Kentucky Fried Chicken (KFC).
Awaitey is a young African with, according to Searcey and Richtel, a well-paying job in the booming oil sector. Whats extra interesting and uplifting about Awaitey is that eating at KFC is a major treat for him. He was celebrating his 27th birthday at this most American…

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Many complain that the shift from jobs that primarily require physical strength to those that require greater cognitive skills has left some at the wayside. They argue that declining labor force participation rates reflect discouraged workers, and necessitate the sheltering of semi-skilled jobs through protectionist trade policies and even taxes on new technologies. But declining labor force participation isnt an argument against leveraging technology and other efficiencies. It is an argument for it.
Decline in labor force participation mainly stems from the aging of the population….

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President Trump isnt draining the swamp. He unveiled his long-awaited tax reform package last week, and although many crucial details were missing (for example, the income brackets), he was full of accolades. This is a revolutionary change, he said.
Well, not yet.
The federal income-tax system almost everyone seems to agree is a mess. It features relatively high nominal rates (up to 39.6 percent on individual income and 35 percent on corporate income) whose impact is offset by a baffling array of tax breaks, loopholes, preferences or tax expenditures, depending…

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Much as he did in his command performance before the U.N. when he took back control of U.S. foreign policy, President Trump has seized and energized the tax-cut issue. Almost daily, he is pounding away on the themes of faster economic growth and more take-home pay, arguing that his plan will make Americas economy great again.
This is Trumpian leadership at its best.
Under my administration, Trump just told the National Association of Manufacturers, the era of economic surrender is over.
The Trump plan would slash large and small business tax rates, double the standard deduction…

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When Donald Trump was elected last November, the dollar rallied. Although the New Yorker had given mixed signals about currency policy throughout his presidential campaign, the price of an ounce of gold (historically the best proxy for the dollars value) closed the month down more than $100.
The greenback has since given back all its gains. Not only has it weakened against most foreign currencies, the price of gold has crawled back to where it was in the days before Mr. Trumps election. None of this should come as a surprise to those who have been paying attention.
Presidents generally…

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