The rich rule over the poor, and the borrower is slave to the lender.
Most economists and investors believe our economy recovered from the Great Recession. They and the mainstream media say our economy is strong and that the Federal Reserve’s monetary policy worked. Conservatives seem convinced that Trump’s tax cuts signal the beginning of a new prosperity in America. Read more
Two years ago I wrote an article that poked fun at President Obama’s notion that America’s economy was strong and that it would adapt to the global economy. Since then the elephant in the room that President Obama and most of America ignored has only gotten fatter. Swamped by debt, (more…)
Few topics invoke a maddening response like income and wealth inequality does. Just as Pavlov’s dogs salivated in response not only to food but also to stimuli (like lab coats and bells) associated with food, the mere mention of inequality causes many of us to salivate at the opportunity to make our ideological opponents look stupid or immoral. Read more
President Trump has referred to the tax relief plan he signed into law yesterday as “a giant Christmas present” for the American people. I’m convinced he really believes it is.
It certainly looks like one. I don’t know anyone who will refuse the hundreds or thousands of dollars this tax bill affords them. Yet we need to ask this question—who is this present really from? Read more
The Road to Economic Ruin
In Part 1, I asked if the economic havoc wreaked by socialist dictators can be replicated in a capitalist democracy. I also stated that while Venezuela exports oil to fund their social programs, we, in part, export dollars to fund ours.
But what if the price of our main source for funding our social programs drops dramatically, will we experience the same problems as Venezuela did when the price of oil plummeted? Read more
How Much Socialism Does It Take to Collapse An Economy? Part 1
Economic and societal collapse in any nation is a tragedy. Inflation at 700% (expected to reach 2000% by 2018) devours the life savings of every Venezuelan. Food shortages along with high food prices caused the average poor Venezuelan to lose 19 pounds last year. Violent protests wrack Venezuela leaving some no choice but to flee their homes hoping to find a better life in a neighboring country. Others, with medical or engineering degrees in hand, have fled to Columbia but have found no work except as prostitutes. Economic sanctions squeeze Venezuela, restricting its ability to borrow money, though some nations, for political reasons, may lend at punitive rates. Meanwhile, President Maduro apparently has no intention of stepping down or declaring bankruptcy. Read more
According to some economists and government leaders, parents all across America have evidently been wrong for decades. Money actually does grow on trees. Read more
Stolen Jobs, Stolen Future
Stagnating wages, American job losses to overseas workers, underemployment and inequality have all been front-and-center issues for both Democrats and Republicans in this year’s presidential election. Read more
My recent article, America’s Level of Prosperity is Not Sustainable, dealt mainly with the yet to come lowering of living standards in the U.S. due to having to pay back external debt to our trading partners. Read more
The proposition that the level of prosperity the U.S. enjoys is unsustainable will inevitably draw scorn from patriots and economists alike. Wealth creation, to many, has no fixed ceiling. Whether because of faith in the idea of American exceptionalism or in Yankee ingenuity or that America possesses an unsurpassed entrepreneurial spirit, or in our military might or that the good times will continue because we are the recipients of God’s favor, many cannot be convinced that our fortunes will decline significantly and for a considerable length of time. Read more
Cashless transactions are nothing new; they are part of the fabric of modern society. Online bill paying, credit cards and our phones allow us to make transactions without touching paper money. But, is a totally cashless society something we should embrace or should the idea alarm us? Read more
On January 29, 2016 the Bank of Japan announced it would join the European Central Bank (ECB) and three national banks in the negative interest club. Members in this exclusive club pay their own nation’s banks negative interest to keep excess reserves at the central bank in hopes that losing money will overcome the risk aversion banks have during uncertain economic times. Coercing the member banks to buy assets in this manner increases asset prices and decreases borrowing costs. By loosening credit the central banks believe they will spur economic growth and win the fight against their dreaded enemy – deflation.1 Read more
Do you feel repressed? No? Well, maybe you should.
Please let me explain. If you live in a nation that has a central bank (and who doesn’t?) then you are probably subjected to some form of financial repression. Read more
“…all the talk of America’s economic decline is political hot air.” – President Obama
It is odd that the president said this about the economy last Tuesday in his State of the Union Address. Read more
Recently, some Republican Candidates have begun to acknowledge that income inequality is a legitimate issue. They, for the most part, differ from Democrats mainly by blaming inequality more on government policy than on the actions of the wealthy. Read more
In part 1 of this series on inequality, I proposed that an abnormally high level of income and wealth inequality is a sign of a dangerously sick economy. Read more
Is inequality the defining moral issue of our time as Bernie Sanders suggests on his website? Or, is inequality a normal outcome in an economy based on people making free choices?