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Aetna’s ObamaCare Shock
Government economists thought Obamacare would be a boon for insurers, so did the Keynesian economists in the industry. It is not a boon, but a bust. This seemed obvious at the outset, but Keynesian's look at the world through a fantasy lens. The industry thought that Obamacare was a no lose proposition since the government stood to help out if things went awry. But it has proven to be the disaster the Austrian economists forecast. Tick tock Obamacare, tick tock.
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More Japanese Stimulus
. . . it didn't work then, it won't work now. But being true believers in the Keynesian model, Japan will continue try right up to the point it collapses. But perhaps the demographic bomb will go off before then. Millennial Home Ownership: Disappointment Ahead in Some Places? | Newgeography.com
This is listed as a Millennial issue, but the problem has been created by Boomers who want to keep their property values high by retaining destructive urban growth and/or services boundaries, and highly limiting zoning, and construction/development policies. "Millennial renters overwhelmingly plan on buying their own homes, though affording them could be far more challenging than they think." More after the fold! What Is It About Trade That Makes People Spout Nonsense?
. . . but because our political betters do not understand this we are saddled with the nonsense emanating from The Bern, and The Donald, and the Hillary, and likely from a large number, perhaps a majority of our politicians. "Suppose Toyota sells a $20,000 car to an American and then immediately uses that $20,000 to buy software from Microsoft. Because the value of additional U.S. imports (a car) equals the value of additional U.S. exports (software), there’s no change in the U.S. trade deficit. Now tweak the example just a bit. Toyota sells a $20,000 car to an American, then uses that $20,000 to buy stock in AT&T from another American. The American who sold the AT&T stock, in turn, spends the $20,000 on software from Microsoft as part of his effort to launch a new business. Because Toyota spent none of the $20,000 on U.S. exports, the U.S. trade deficit rises by $20,000. Is the second situation worse than the first? If the pronouncements of the mainstream media and of most politicians are to be believed, the answer is a resounding yes. A rising trade deficit is bad! But look more closely. In both cases, Americans get an additional car worth $20,000, and Microsoft produces and sells additional software worth $20,000. In both cases, the amount of extra American-made output produced and sold as a consequence of Toyota selling that car to an American is the same: $20,000 worth of Microsoft products. If you’re a Microsoft employee, shareholder or creditor, it matters not a whit to you whether that company’s increased sales are made to foreigners or to Americans. Clearly, a rising U.S. trade deficit does not necessarily mean less demand for American-made goods and services." The wanker candidates do not understand this. It really is simple, but apparently impossible for people of above average or better intelligence, once they become politicians. The article is worth a read. It shows one of the harebrained ways the progressives analyze trade. Trade, and immigration are pillars which make America Great, not mercantile protectionism, and border walls. We do need to create an orderly mechanism for entry, but we should simply fully, and permanently renounce all trade barriers. The real problem with immigration is the way the welfare state is constructed, and implemented. Unfortunately, it is designed to destroy the incentive to work, and family formation. We need better candidates. Stockman Slams "Simple Janet"'s Incoherent Babble
. . . right now! "Listening to even a small portion of Simple Janet’s incoherent babble makes very clear that the nation’s central bank is well and truly impaled on its own petard. According to the dictionary, the latter term refers to... ...a small bomb used for blowing up gates and walls when breaching fortifications. It is of French origin and dates back to the 16th century. A typical petard was a conical or rectangular metal device containing 2–3 kg (5 or 6 pounds) of gunpowder, with a slow match for a fuse." I always thought it meant jockstrap, ok, I jest. The article is worth a read, it is short, and pretty thorough. Yellen made a mistake last year raising the rate. But as the article so clearly establishes, the rate is completely artificial. We need a return to serious, thoughtful, non-keynesian economic policy. Until that happens expect negative economic outcomes, recessions, and imperceptible "recoveries." Boy howdy, I can hardly wait! Economic policymakers are at sea on inflation
Here, let me fix that for you, "Economic policymakers are adrift on a sea of stupid." Better! "Imagine that in a brief period, inflation expectations around the industrial world, as inferred from the indexed bond market or the inflation swaps market, rose by nearly 50 basis points to a level well above the 2 percent target, with larger increases foreseen at longer horizons. Imagine that at the same time, survey measures of inflation expectations such as those calculated by the University of Michigan and New York Fed in the United States were rising sharply. Imagine also that commodity prices were soaring and that the dollar experienced a once-every-15-years decline. Imagine that the market anticipated future monetary policy in the United States that was far tighter than the Fed’s own policy projections. Imagine that measures of gross domestic product growth were accelerating, with increasing signs of a worldwide boom. Imagine also that no serious efforts were underway to reduce budget deficits. Finally, suppose that policymakers were comfortable with current policy settings based on the argument that Phillips curve models predicted that inflation would revert over time to target due to the supposed relationship between unemployment and price increases. I think it is fair to assert that in this hypothetical circumstance, there would be pervasive concern that policy was behind the curve — that much was at risk as inflation expectations were becoming unanchored and that a substantial set of policy adjustments were appropriate. The key point would be that allowing not just a temporary increase in inflation but also a shift to above target inflation expectations could be very costly. We are living in a world that is the mirror image of the hypothetical one I just described. Market measures of inflation expectations have been collapsing and, on the Fed’s preferred inflation measure, are now in the range of 1 to 1.25 percent over the next decade. Inflation expectations are even lower in Europe and Japan. Survey measures have shown sharp declines in recent months. Commodity prices are at multi-decade lows, and the dollar has only risen as rapidly as it has in the past 18 months twice during the past 40 years when the value of the dollar has fluctuated freely. The Fed’s most recent forecasts call for short-term interest rates to rise almost 2 percent in the next two years, while the market foresees an increase of only about 0.5 percent. Consensus forecasts are for U.S. GDP growth of only about 1.5 percent for the six months from October to this month. And the Fed is forecasting a return to its 2 percent inflation target on the basis of models that are not convincing to most outside observers." It's enough to give a Keynesian economist the vapors! And Larry is nothing, if not a card carrying Keynesian. The proposed solutions to all of our problems from these people is always the same, more debt, more government expenditure, more monetary pumping, and more Keynes. After decades of easy money, Keynesian policies, progressive governance, and fiscal irresponsibility, these yammerheads cannot believe their policies have failed. So, they double, or triple down. The last doubling down gave us the slowest recovery in US history. Do we really need another go at slow? It is time to take economists like Summers unseriously, for they are unserious. It is time to return to sane, rational monetary policy, responsible fiscal policies, and frugal governance. But I expect none of this, instead, I expect more foolishness. The nation is being run by a clown college of fools, elected by us. We truly get the government we richly deserve. |
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