Archive for the “RealClearMarkets” Category

Articles from RealClearMarkets.

Early in my teaching career, a student named Jon told me about an exciting investment. All through high school, he had been collecting plate blocks of postage stamps. At the time, postage stamps were printed fifty stamps to a sheet and the four stamps in a two-by-two block next to the sheet’s serial number were called a plate block.
Plate blocks were rare because no one had ever thought to save them. Why would anyone want the two-by-two square of stamps next to the serial number? How often does anyone use four stamps to mail a letter?
Then, unexpectedly, plate blocks became a collectible….

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Some supporters of the immigration bill endorsed by President Trump claim the legislation would move the United States toward an immigration system more like Canadas. As a Canadian, let me offer two pieces of advice: 1. It would do no such thing. 2. In Canada, there is growing support for allowing more immigrants, not fewer. In fact, economic growth demands it.
The immigration bill introduced by Senators Tom Cotton and David Perdue would slash legal immigration to the United States by 50 percent from a million to 500,000 in 10 years. Conversely, Canada already allows 300,000…

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Real export growth was basically nonexistent in 2015 and 2016. In fact, exports actually declined by 0.3 percent last year – the first decline since the recession – after barely inching forward by 0.4 percent in 2015. While an assortment of factors come into play here – in particular, slow growth among our trading partners – it should not be ignored that the U.S. has been absent on the world stage in terms of advancing free trade for more than a decade now.President George W. Bush was active and productive on the trade front. In fact, by signing into law nine free trade deals covering…

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The so-called Big Six of Republican policy makers has now laid out general guidelines for tax legislation. The group including House Speaker Paul Ryan, Ways and Means Chairman Kevin Brady, Senate Majority Leader Mitch McConnell, Senate Finance Chairman Orrin Hatch, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn favors a long list of items income tax rate cuts, more generous business deductions, changes to the taxation of foreign income, and so on.
This agreement might seem to make tax changes inevitable. President Trump has said that…

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As if from some bizarro world given what is taking place now, in October 2013, Republicans in Congress actually attempted to force restraint on the Obama administration. The primary issue was Obamacare. No budget agreement could be reached by September 30, as the Senate controlled by Democrats steadfastly refused to negotiate the Republican Houses proposal to defund provisions for the health insurance law. Without an appropriations resolution in lieu, the result was a federal shutdown lasting 16 days in total.
While all that was going on, US T-bill rates rose. The equivalent yields on…

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Governments cannot simply waive a magic wand to create jobs, but that certainly doesnt stop them from trying. The latest entry in the jobs lottery is the state of Wisconsin, which is putting up billions of dollars to lure Foxconn to build a plant. It could be a great deal for Foxconn. But will the taxpayers ever get their moneys worth? A lot less likely.
Foxconn has announced it will be building its first U.S. plant in the former manufacturing hub of Kenosha, Wisconsin. What will the local economy get? A $10 billion investment by the Taiwanese company to build a display panel plant,…

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Theres one big problem with the Trump Administrations strategy for the upcoming NAFTA talks. Its goal is to eliminate free trade.
The U.S. objectives for the NAFTA talks, released by the U.S. Trade Representative (USTR) on July 17, states the overriding goal: Improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries. But once you make balanced trade the objective, you actually make trade less free. Free trade is the process of individuals making individual choices, not national governments trying to impose the results. The USTR premise seems to be…

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President Trump has made advancing American manufacturing the cornerstone of his economic agenda.  And the first six months of the Trump Administration has occurred in concert with positive growth for the U.S. manufacturing sector.  The Institute for Supply Management (ISM) reported that U.S. manufacturing activity expanded in June at the fastest pace in nearly three years and recorded the second highest reading in more than six years. According to the ISM, manufacturing growth in June accelerated and was broad-based, with 15 of 18 manufacturing industries showing growth. Moreover, the…

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GOP lawmakers may eventually throw in the towel on their campaign to repeal the Affordable Care Act. If so, the road to surrender will have been marked by a strange reversal. Less than nine months ago voters elected a Republican President and Congress pledged to reverse Democrats’ signature achievement in the Obama years. Fierce public opposition has so far prevented conservative majorities in Congress from acting on the pledge. This reversal of fortune is odd because until 2017 there was little sign Obamacare enjoyed broad public support. Yet when the insurance expansion was in jeopardy,…

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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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