Chicago understates pension funds by $11.5 billion, causing liabilities to jump by 168% . . .5/20/2016 Chicago Pension Liabilities Jump 168%, Understated by $11.5 Billion | MishTalk
. . . don't worry, this dog and pony show is coming to your state soon!
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Dining Out on Empty Virtue
. . . and picks the scab off of an ugly aspect of human nature. Much more below the fold! Venezuela is so broke is does not have the money to pay to print money
. . . and leaves me nonplussed! The past few quarters autos and home construction have buoyed the economy, that is about to end.5/12/2016 Toyota Warns Stronger Yen Will Drive Profits Down
Japanese auto makers are feeling a strengthening Yen, and the US is feeling a strengthening dollar. Add to that the fact that home construction is down and one finds the power points in the economy are seriously weakening. Are we in a recession? MoM thinks so, and Mish has been forecasting either recession or zero growth for a while. Recession! 'Everyone’s outraged': angry Greeks foresee Grexit and drachma's revival
. . . so why did Greece wait so long? More below the break. A Tax on Social Mobility
. . . because those running our cities are stupid. Read more below the fold! The minimum wage backlash will come from the lower middle class, and the working class . . .5/7/2016 Seniority and Skills Not Worth Anything; Unhappiness Spreads With Minimum Wage Hikes | MishTalk
. . . but Mish is correct the beatings will continue until morale improves. Read more after the break! Doug Ross @ Journal: OUR FEDERAL HOUSING VOUCHER PROGRAM: The Poverty Creator
. . . last time we found that government antipoverty programs create poverty. This time we will find out that government housing assistance programs create poverty. I'm detecting a pattern. Timeless wisdom about free trade and protectionism. . . . Trump, Sanders, and Clinton get this one wrong. "Given all of the political hysteria and misguided mercantilist thinking recently about international trade (especially from Trump, Hillary Clinton, and Bernie Sanders), I thought it would be a good time to re-post Milton Friedman’s 1978 lecture above at Kansas State University (posted previously on CD back in September of 2012), where he discussed free trade, and explains why trade protection and interference in international trade are so widespread, despite the almost universal condemnation of such measures by the economics profession. Professor Friedman also addresses the political obsessions with: a) increasing exports (remember President Obama’s goal in 2010 to double exports by 2015, which failed miserably by the way — real exports of goods and services have increased less than 24%) and b) achieving a “favorable balance of trade.” Here’s a quote from Friedman’s lecture, demonstrating the timeless nature of his economic wisdom, which is as relevant today as it was in 1978 almost 40 years ago (at about 20:40 in the video above): In the international trade area, the language is almost always about how we must export, and what’s really good is an industry that produces exports. And if we buy from abroad and import, that’s bad. But surely that’s upside-down. What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation as Adam Smith put it, is to arrange things, so we get as large a volume of imports as possible, for as small a volume of exports as possible. This carries over to the terminology we use. When people talk about a favorable balance of trade, what is that term taken to mean? It’s taken to mean that we export more than we import. But from the point of view of our well-being, that’s an unfavorable balance. That means we’re sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don’t regard it as a favorable balance when you have to send out more goods to get less coming in. It’s favorable when you can get more by sending out less. MP: Here’s a formula summarizing Milton Friedman’s insights: 1. The stuff we importMINUS 2. The stuff we export = 3. Our standard of living In other words, in economic terms, our standard of living is highest when we maximize imports and minimize exports, which is exactly the opposite of the political thinking, rhetoric and mercantilist policies we about from Trump and Sanders, which generally seek to maximize exports and minimize imports." |
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