The sixth of the Ten Commandments is “You shall not murder.” However, ancient Hebrew texts clearly make a distinction between murder and killing. Murder involves “bloodguilt,” because it is unlawful. Killing is not murder, when done legally, such as combat or home invasion. My native state of Virginia has just adopted the Sixth Commandment, which eliminates the death penalty. In effect, both murder and killing…
When I was teaching economics in Texas, I was required to teach from a state-approved textbook. Like most economics textbooks, international economics was explained only in the last chapter. It is always short, with barely a mention of currency exchange rates. Invariably, time for currency exchange rates was rushed. Besides, that important subject would glaze the eyes of most people, especially students. But such rates…
During my Political Science 101 course in the last century, the professor repeatedly reminded us that majority rule was easy, but protecting minority rights was hard. This was after the Kennedy years, when there was apparently some concern about the rights of Catholics being protected by a Protestant majority. While all that seems quite unlikely today, it was an issue to my professor. But I…
My favorite right-wing website on economics is the American Institute of Economic Research (www.aier.org ). Right-wing media usually focuses on any potential loss of personal freedom, AIER focuses on any potential loss of economic freedom. If you have a steady diet of MSNBC or even CNN, I recommend a weekly visit to AIER’s website. While I have great respect for its adherence to classical economics,…
In a time when the mundane face mask is a fealty test to Trump, the experience of the Federal Reserve has been interesting. Like all real estate developers, Trump argued for lower interest rates (think: construction costs) and lambasted Jerry Powell, Chairman of the Federal Reserve. Fighting to maintain some tiny piece of the Fed’s traditional independence, Powell raised rates late in 2018, creating a…
Why is necessary to be a victim, in order to be respected or to be fashionable? I had a conversation with a person demographically like myself, who honestly feels victimized in our culture. I don’t understand? I am a man. Therefore, I am a victim? I am white. Therefore, I am a victim? I am an American. Therefore, I am a victim? I am a…
For three straight years, during her Spring Break, I took my daughter rafting down the Rio Grande River and often witnessed Mexicans crossing the river into our nation. Once, in Santa Elena Canyon, they even fired at us, as we floated by them. At night, we often slept on the Mexican side of the river, if that bank was higher and dryer than the U.S…
It has been decades since I was last in Argentina, but I remember it as a beautiful country, as well as the breadbasket of South America, supplying grain and livestock. However, it has been plagued with severe boom-bust cycles. Here are a few current factoids: GDP dropped 10% last year. Their stock market has dropped 90% over the last 3 years. Companies may not layoff…
I’m glad Congress has approved the President’s recovery plan, even though we’re borrowing the $1.9 trillion from our children. A big deficit to pull us out of last year’s “flash-depression” is justified, but the normal annual deficits are not. Republicans believe tax cuts are guaranteed to jumpstart the economy. Democrats believe increased spending is guaranteed to jumpstart the economy. They’re both wrong . . .…
Wall Street is over-reacting to the recent spike in long-term interest rates, but I’m not. In introductory economics, students are taught that the Fed controls short-term rates but not long-term rates, and that was true . . . until quantitative easing (QE), which followed the Great Recession or Global Financial Crisis, as I prefer to call it. Normally, long-term rates should be higher than short-term…
When your skin gets scarred, it becomes thicker and less elastic. That is physical scarring. Everyone knows there is also emotional scarring, such as from divorce, especially among the children. In additon, there is economic scarring from divorce, when living expenses double and lawyers must be paid, among the many other costs. Every time a restaurant closes, there is economic scarring — to the owner,…
Surely, some good things will come out of this terrible pandemic. For myself, with fewer people around, I have come to know those fewer people better. For example, I discovered how interesting our cleaning lady is — who knew? I learned that 24/7 news (as well as documentaries) are worse for your mental health than expected. For example, I learned that romantic comedies aren’t as…
Growing up in a beach community, I could predict the weather by remembering: “Red sky in morning, sailor take warning. Red sky at night, sailor’s delight.” Growing up in the economics community, I could predict the economy by remembering: “A steepening yield curve is bullish. A flattening yield curve is bearish.” The yield curve is the difference between short-term interest rates and long-term interest rates. …
Wall Street likes to say they move from one Wall-of-Worry to the next Wall-of-Worry. The current Wall is inflation. Why should inflation be worrisome? In the short run, inflation is good for stocks, as earnings increase and debt becomes easier to repay. In the long run, however, the Fed will be forced to raise interest rates enough to reduce inflation. This often triggers a recession,…
Financial planners are trained to help their clients in retirement planning, tax planning, education planning, and estate planning, but it is not enough to simply teach clients. Sometimes, a planner should push a client to make a decision. Funeral planning is a prime example. It is hard enough to get a client to visit an estate planning attorney, but it is a real struggle to get…
Conservative media, like Fox, NewsMax, and OAN, were the among the first to identify the problem of the Cancel Culture. Apparently, it grew out of college campuses where conservative speakers had been invited to campus. Then, social media on campus became offended and angry, demanding the invitation be cancelled. To the students, they viewed such conservative perspectives as insultingly stupid. To conservatives, they saw it…
Former Vice President Dick Cheney is not my favorite former vice president, as I think he was a bad influence on a good man. Likewise, Congresswoman Liz Cheney is not my favorite congresswoman, as I think she is unfairly harsh on environmentalists. However, French philosopher Francois-Marie Voltaire (1694-1778) is one of my favorite philosophers. He is often credited with saying “I disapprove of what you…
For many years, I have railed against Big Tech companies, like Google and Facebook, who spy on their customers, gathering ever-increasing amounts of data, and selling that data to whomever will pay the tech company for that data. Until now, we have lacked a name for this business model. Thanks to Harvard Business School professor, Dr. Shoshana Zuboff, the handy label has become Surveillance Capitalism. …
The “jobs report” issued by the Bureau of Labor Standards has always been the most watched economic report each month and has often moved the stock market, sometimes violently. Naturally, I have monitored it closely for decades now, during both booms and busts. However, Covid-19 has shattered both the labor force and the study of labor economics. I have never seen the labor force so…
Long-time readers know of my undying respect for the late Senator John McCain. He was a genuine hero, who spent 5 1/2 years as a prisoner-of-war. I saluted him! Today, my respect is rapidly increasing . . . for a Russian, of all people . . . Alexei Navalny. He is the charismatic 44-year-old opposition leader in Russia, who is described as “the man that…
Republicans and Democrats agree that wealth inequality, as well as income inequality, are very unhealthy for this country. In fact, they have spent decades complaining about it. However, while they were complaining, anger was building. Millions of blue-collar workers were double-crossed by politicians who wouldn’t protect them from globalization. Anger among those Americans still continues to build. Maybe, our bicameral system of government was not…
Political science professionals chuckle that the majority of people hate Congress but like their local Congressman/woman. Journalists chuckle that the majority of people hate the national media but like their local media. Investment analysts chuckle that a normal behavioral bias is a strong preference to invest in locally-based stocks. We like local . . . but then ignore it. Why do we know so much…
I have written a quarterly column for Inside Business for over fifteen years. It is a sister-publication to The Virginian-Pilot. The most recent column can be found here: A year like no other, indeed | Expert column – The Virginian-Pilot – Inside Business (pilotonline.com)
During the 1970’s and the 1980’s, the Federal government had been fighting a war in Vietnam, building a Great Society, and running up the national debt for years. In 1992, President Clinton has ambitions to increase deficit spending, which means adding even more debt, before he was blind-sided by the Great Bond Massacre. Interest rates rose from 6% to 8%, causing a trillion dollar decrease…
Bob Doll is the Chief Equity Officer for investment giant Nuveen. He may not be the best known person on Wall Street, but he is certainly one of the best-liked. Each year, he is brave enough to make ten predictions and has an enviable track record. Here are his ten predictions for 2021: Our GDP growth rate will be the fastest in twenty years Inflation…
I don’t ever recall hearing so much worry about inflation . . . while still in a recession. Inflation does not jump after a recession. It usually takes quite a while for the economy to get out of recession and to build up excess demand or develop supply problems before inflation is discussed. Everybody is pointing to home prices going up, but that is only…
Maybe it was my strict Southern Baptist upbringing, but I always feel some responsibility when bad things happen, and not many things are worse than the attack on our Capitol last week. Of course, my responsibility is tiny, but I do feel some tiny sympathy for the thugs and hooligans attacking us. Most of them come from small towns with limp economies, which were badly…
At first, Google’s search engine was a modern-day-miracle, enabling almost anybody to quickly find almost anything. And, it was FREE! Later, it was disappointing to learn their business model was legalized spying on their users, by selling information on what each user searched for. During that same period, there were increasing number of job openings for “big data analysts” and there were articles about new…
The most common question I receive is how can the stock market do so well, when the economy does so poorly? The short answer is that the economy reflects the present, while the stock market reflects the future. A better answer is that the price of stocks reflects the supply and demand for stocks. The supply of stock is not fixed, but it increases slowly. …
There was a light summer rain that day in 2002, when I had a late meeting in the Rosslyn area, across the Potomac from the District of Columbia. Listening to WTOP, the local traffic radio station, I learned the “spaghetti bowl” (the area between Rosslyn and the Pentagon) was jammed and not moving. Deciding to read instead of waiting in traffic, I pulled off on Mead…
Last year, the most common question was — how can the stock market be doing so well, when the economy is doing so badly? The short answer, of course, is that the economy is focused on the present, while the stock market is focused on the future. The object lesson is that, while the stock market and the economy are related, they are still very…
Just as there are good Democrats and bad Democrats, there are good Republicans and bad Republicans. The Georgia Secretary of State, Brad Raffensperger, is a good Republican. He is also smart enough to tape phone conversations with a bad Republican. America will be in a better place, when good Republicans retake the Grand Old Party.
Just as a person can consume too much food, a person can consume too much news. I have long advocated for a one-news-free day every week (except for business news). For myself, I avoid all news on Saturdays. It doesn’t really matter which day of the week you avoid the news – just one day to let your natural optimism to bubble back up. However,…