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I was sitting in a job interview and my interviewer asked me “what more could we be doing for our veterans?” With a genuine look of concern and respect on her face. Those who know me personally know my stance on my veteran status; it’s a private and personal experience for everyone. My favorite response is “it’s not Saving Private Ryan, it’s Pizza Hut and wifi”. No two experiences are the same and mine is no different, but to ask the direct question like that I was forced to really sit back and think about it. The only answer I could come up with was “what’s left?”

We live in an age of respect and concern for our veterans unprecedented by any other time or place in history. Gone are the days of “baby-killers” and “grunts”. A lot of us have seen some horrible stuff, and a lot of us bellyache over working long hours in an office, it’s all a very personal experience. But we all enjoy the benefits; education, home loans, mental health counseling, tax breaks, and preferential hiring. It’s not as simple as throwing money around or saluting at a baseball game. We’re people and just like every adult we will never overcome our experiences or have a good life until we take responsibility for ourselves. 

From my point of view, it’s a self-esteem issue. Soldiers are taught a very unique set of skills through shame and scare-tactics. A lot of veterans are treated like second class citizens for the sake of a larger goal, then return to society greeted with confusion, entitlements, and blind respect; it’s confusing. I can only speak for my experience but there are a lot of us who want no attention whatsoever, we simply want to move on with our lives and deal with our experiences privately. Self-esteem is a systemic problem in the world nowadays and ignoring it makes it worse, but there’s a fine line between codling and being supportive. It’s okay to have conflicting experiences about authority, your place in society, what it means to be an adult, etc… it’s not okay to sit on your ass and complain about it. There’s something to be said for the old adage “go out and get a job”. 

So when you see a veteran and want to say “thank you for your service”, that’s cool, and thank you for your support. But a better question would be “what have you done today to help yourself?” Because with all of the entitlements afforded to us, the only thing standing in the way of our success is ourselves.

This is Why Economists Don’t run for President

The other day I was listening to a rerun of a Planet Money Podcast and it made me want to revisit my stance on the housing market manipulation (Planet Money: Episode 387; article) .  They brought six (6) ideologically divided economists into the studio to discuss what policies they could all agree on, and then jokingly mentioned how “This is why economists don’t run for President”.  I agree that the results of the panel are unpopular and think that they managed to properly address the real reason people don’t want to listen to economists; we use boring language and tell people what they don’t want to hear.  I agree with some of these policies, disagree with others. The policies were: eliminate the mortgage tax deduction; end the tax-deduction companies get for providing health care to employees; eliminate the corporate income tax; eliminate all income and payroll taxes; tax carbon emissions; and legalize marijuana.  Obviously, no voter in their right mind would agree to most of these, especially using words like “eliminate” and “tax”.

Eliminating the mortgage tax deduction:  This is, across the board, agreed to be a positive change by the experts and if you read my other blogs about the housing market you would think I agree.  I do, mostly, but there are flaws in simply “eliminating” a policy that has been on the books for so long and helps a lot of people hold onto their money.  The argument made is that this would decrease the demand for the wealthy to own property, lowering the overall price of real-estate, and thereby making all housing more affordable for everyone.  Sounds nice, but it’s not as simple as it sounds.  Real-estate prices (like wages) are sticky and, as the market always shows, people would rather hold onto a property than sell it for less than they paid for it.  What does that mean exactly? It means that the price of homes may plateau, they may build fewer homes, they may build more rental properties, but the only way to ensure the overall price of housing will not go down is by lowering the amount of homes in the market not lowering the price of existing homes.  This is a key point that we need to understand.  If your home is worth $300,000 today, it will not cost $299,999 tomorrow; the entire economic system would go into chaos, not to mention the deflationary expectations associated with that.  If prices begin to fall, people will expect them to keep falling, taking more people out of the market who are waiting for the price to stabilize.  As more people exit the market, this will send the prices down even further, and then it’s 2007 all over again.  Eliminating this deduction would cause developers to build more rental properties since there would be less demand for purchasing homes.  People need a place to live, so intuitively as the demand to buy homes decreases, the demand for renting would increase, forcing people into higher rents and further creating an imbalance in the market.

My solution: Eliminate the deduction but wait until there is another structural shift in the market.  In economics, if prices of final goods are trending upwards as most do, changing a piece of that market won’t make a big difference; i.e. lowering the price of tires won’t cause the price of cars (a final good) to go down; lowering the price of gas won’t make airfare cheaper; and lowering the demand for home loans won’t cause the price of homes to go down. Unless you catch the trending price when there is a market correction.  We saw one in 2007, that would have been the time to eliminate the deduction since the housing market was already changing structurally.  Doing it now would be white-noise and may possibly slow the growth of the price of housing but not cause the intended multiplier effect the economists in the podcast are discussing.

End the tax-deduction companies get for providing healthcare to employees:  This is wildly unpopular but hear me out.  Everyone needs healthcare and it has become a part of an employee’s compensation, but incentivizing companies to provide more and more comprehensive healthcare coverage instead of paying employees causes stagnation of wages (which we are currently experiencing) and unsustainable healthcare costs (which we are also current experiencing).  Someone with a “Cadillac” health insurance plan is more likely to go to the hospital for small ailments and doctors are more likely to run unnecessary test since they know their insurance will pay.  X-rays do not cost $500, bandages do not cost $250, and it does not cost $600 for an ambulance to drive ½ of a mile.  Hospitals charge these insane prices because for every seven (7) people who use these services and can’t pay, there’s one person with a Cadillac plan who can, eliminating their marginal loss.  So Cadillac plans pay out more, making them cost more, but companies keep offering them and people are happy to accept them as part of their compensation.  Eliminating a deduction for employer-provided healthcare would decrease the unchecked pricing of hospital services and the price of insurance overall.

Eliminate the corporate income tax: Sounds like a terrible idea, and it probably is, but it just might work if done correctly.   Corporate income tax keeps companies from redistributing their earnings back into growth and their stakeholders.  Even if they keep it in the bank and do nothing with it, it will increase the amount of loanable funds on the market, lowering the interest rates, and helping everyone else get access to better loans.  We want people to pay their fair share, but blanket-taxing corporations for simply doing business here is an oversimplification of the problem. We need to tax the individuals receiving dividends on corporate profits.  It’s a delicate balance of taxing companies enough to maintain a healthy revenue stream and preventing them from leaving and going overseas.  Regular citizens can’t vote with their feet and relocate, corporations can.  It’s unfair and upsetting but it’s the world we live in.

Eliminate all income and payroll taxes, tax carbon emissions, and legalize marijuana: Eliminating payroll taxes would be an easy sell.  Nobody likes paying taxes and it would increase the real wage.  Companies would be pressured to raise wages since taxes are lower and people would have more income to spend on goods. This would have to be done in stages to eliminate too much inflation at once, but switching to a consumption tax rather than an income tax would redistribute the tax burden to the wealthy, who buy more stuff, and less on the poor, who don’t.

Taxing carbon emissions is a natural conclusion to the times we live in.  Taxes serve two purposes – raise revenues and create disincentives for that activity by raising the price.  Seems like a no-brainer.

Legalizing Marijuana is inevitable, people are doing it anyways and it’s less dangerous than drinking.  Legalize it, tax it, get rid of the underground market, tell people not to drive while on it, penalize them if they do, and move on to other issues.

These proposals are universally recognized and systemic problems in the current economy.  The panelists have excellent ideas with sound economic reasoning.  I got hung up on the housing deduction proposal because of the follow-through, but if these policies are worded correctly to the public and implemented responsibly there’s no reason why they couldn’t be successful.

Thank you for you time.

Giving the Market a Push

The Great Recession has shown us that markets have equilibrium, but that we sometimes need to give it a little push in the right direction or else we could spiral out of control; again.  The Hoover Dam got money circulating and caused a multiplier effect that helped rejuvenate the economy, World War II (unfortunately) got men and women back to work and provided a much needed sense of purpose, the fiscal stimulus of 2009 (arguably) saved the United States from calamity, and automatic stabilizers such as unemployment insurance help to minimize the effects of a loss of wages on the overall economy. We have come a long way since 1929 and still have a long way to go. As an economist and a fiscal-conservative I disagree with an over-regulated market, price-floors, and an overreaching government; but as recent economic events have shown, markets are more complicated and synthetic to adjust appropriately on their own.

One example of this is from a recent article by The Brookings Institute that shows a serious, yet ubiquitous, problem in predatory lending: pay-day loans. I have already blogged about some other industries that thrive on predatory lending and pay-day loans are subject to the same nefarious business practices.  The article summarizes that the Consumer Financial Protection Bureau (CFPB) passed legislation changing the nature of the vetting process for pay-day loan-sharking from debt-to-income ratios to a more reasonable ability-to-pay matrix for non-prime lenders as well as limiting the amount of loans they are able to take out.  Will this industry change? Absolutely. Will market innovation create new opportunities to lend to non-prime borrowers? Absolutely.  This market is littered with moral hazards so the only option is to keep a close eye on predatory financing.  George Akerlof and Robert Shiller did a great job bringing phishing scams to light (Phishing for Phools), showing that with every market comes an opportunity to take advantage.

Another such push is the Department of Labor’s Wage and Hours Division’s expansion of the Fair Labor Act that increased the overtime salary exemptions from a minimum of $23,660/year ($455/week) to $47,476/year ($913/week).  This should affect over 4 million people in the country and give a “meaningful boost to many workers’ wallets”.  I am of two minds about this legislation and my fellow blogger Adam posted about this recently in THIS BLOG POST.  The economic forces behind the need for price floors are tricky and sometimes self-defeating.  A higher nominal wage could overheat the market and cause a lower real wage; meaning that if employers are forced to pay people more they will simply hire less people in an attempt to return to a balanced aggregate wage.  This is not a one-for-one exchange, and often leads to lower aggregate wages and higher unemployment in the big picture.  Over-time exemption criteria increases are a synthetic aspect of the labor wage market but necessary nonetheless.  The unemployment rate has been lowering and overall consumption is up (www.bls.gov), this should (if Keynes was right) cause an increase in wages and inflation in the market, but it hasn’t.  A higher wage will give existing employees a much-needed break, and it’s time, but this could also create a disincentive to hire future employees.  I guess we’ll wait and see.

Fiscal policy is a relatively new addition to economics and we’re all trying to make sense of a post-recession world.  Obviously, letting markets adjust naturally doesn’t work, but how far do we push regulation to make course corrections? It’s easy to see effects of fiscal policy with the luxury of hindsight and, as an armchair quarterback, I could write a dissertation on changing policies after the Great Recession, but we live in a world of uncharted waters and need to simply do the best we can with the information we have.  Hopefully we can get it right once in awhile.

Predatory Financing is Here to Stay

With the release of the movie The Big Short along with Akerlof and Shiller’s new book, Phishing for Phools on behavior economics, I am reminded of the optimistic teachings of Milton and Rose Friedman. They were Adam Smithian economists from the 80’s and 90’s that wrote definitive works on the positive aspects of capitalism. If the Friedmans could see what became of their coveted Invisible Hand they would probably throw their hands up in disgust and frustration. 

The movie shows the ugly side of capitalism; how overzealous and arguably well-meaning (at the time) brokers tried to enable the common man to fulfill the American Dream, while still making a quick buck for themselves. This is the very definition of Adam Smith’s interpretation of capitalism, just the flip side of the coin- call it the Invisible Back-Hand. As we all saw, and most experienced, when you combine an emotional desire such as owning a home and growing your family, with predatory financing and securitization of America’s debt, you end up with a house of cards that even a toddler would be able to tell you is unsustainable. The Big Short is an excellent narrative of the events leading to the recession of 2008; the how, who, what, when, and where are a matter of history, but the why is what Akerlof and Shiller successfully communicated in Phishing for Phools, saying that all free market activity inevitably will have participants whose role is to prey on those less familiar and looking for a better life. Adam Smith and the Friedmans were correct when they said that economic freedom is important to a sound economy; what they didn’t see was its effects on mass media and access to credit that didn’t exist in their respective eras (at least not like today). 

The crash of 2007 was built on a foundation of deceit by the people who knew better but didn’t care, to the mortgage holders just looking to raise a family and be left alone. Phishing for Phools shows how the Invisible Back-Hand will smack you if you aren’t paying attention. Anyone who has bought a car from a dealership, gambled, gotten a credit card without providing income information, or gotten an email offering sweepstakes winnings, knows that sinking feeling of being taken advantage of without being able to communicate exactly how. 

The Friedmans were right in saying that the government needs a limited role in capitalism for it to thrive. “Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion (Friedman et. al, Free to Choose. Pg 2. 1980).” This statement is incomplete as it applies to the markets of today. True, the perfect economy exists free of political interference, but somebody has to keep the inevitable Ponzi schemes and out-of-control lending in check. The government has to provide for the social good, for its citizens but you can’t help those who won’t help themselves. We scream for laissez-faire economic policy but the depression of 1929 proved that is as unhealthy for the economy as heavy government regulation. We need to stop looking at the government to solve our problems. The recession of 2008 should be an alarming example of how citizens need to educate themselves when dealing with sleazy salesmen giving them a deal that’s too good to be true. We all want a smaller government then demand that they do something about our problems; we can’t have it both ways. As long as we keep looking to mom and dad to pay off our credit card bills, we’ll never be able to stand on our own two feet. We demand the government does something then we’re shocked when they end up being just as corrupt and self-serving as the people who got us into this mess in the first place. 

In today’s world of predatory financing, we need to believe nothing of what we hear and only half of what we see. We’re sold cigarettes then die of lung cancer, we’re sold automobiles we can’t afford, given mortgages we can’t sustain, and are told that we can be fulfilled in life by living like the Kardashians. Then all of that debt is packaged nicely into a security and tied to your pensions and 401ks. The only way out of a bad situation is to ensure we don’t get ourselves into one in the first place. The sleazy salesmen of the world exist because there’s a market for them to succeed, governments are in bed with the banks because it serves their interests. We need to wake up and smell the bullshit.

Thank you for your time.

Tax Incentives and Housing Market Inflation

A tax incentive is a manipulation in the price of a good in an attempt to increase or decrease demand.  For example, if you’re willing to pay $900 for a new television but it costs $1,000, you’re less likely to purchase that television.  But if the government were to allow that item to be tax-free or make it cheaper through tax incentives, in the overall population the television company would ultimately sell more televisions.

Tax incentives are a tool used to increase aggregate spending in the economy by putting more money in your pocket as well as creating an incentive to invest in certain markets.  Examples are the deductions for having children and the tax credit for first time homeowners.  Getting a deduction per child is mainly to help aggregate spending; nobody in their right mind will have a child simply because they get a tax deduction. That money saved by the individual goes directly into the economy in the form of groceries, childcare, clothing, and other necessities; which are then taxed accordingly. Since parents and homeowners have the largest propensity to consume, it makes sense to put money in their pockets to stimulate to economy.  In 2012, the tax credit of $1,000 per eligible child was extended through 2017 under the 2010 Tax Relief Act. (TurboTax). Helping out households with children is one thing; it’s the incentive in the housing market that alarms me. Considering we just got ourselves out of a very deep hole dug by the access to credit and unreasonable demand on housing, maybe we need to let the housing market adjust naturally for a while.

If the housing market bubble is partly to blame for the recession, why are we back to our old tricks of encouraging people to invest in housing?  The first time homebuyer incentives in 2009 was an $8,000 stimulus authorized by the American Recovery and Reinvestment Act and a tax credit of up to $8,000 for first-time homebuyers and $6,500 for existing homeowners was issued in 2010 for review in 2017 (TurboTax). I agree that these incentives were needed initially to keep the market afloat so the effects wouldn’t be worse than what we all experienced; but is it still necessary or even wise to encourage people to buy homes?  Seven years after the recession began we are back to increasing demand on housing through the same tax incentives and access to credit as before, with an interest rate of 0.05% for a 3 year T-bill (www.barchart.com/economy/treasuries.php), banks have even more incentive to lend.  Realtor.com was nice enough to spell out incentives for buying a home in this click-bait worthy article.  In the article, low interest rates, tax credits, and energy efficiency credits are all terrific reasons to purchase a home.  Luckily, we have done away with adjustable-rate mortgages as well as having a heavily regulated financing industry. We have made progress, but there is still a long ways to go before the housing market will recover.

My argument mainly focuses on areas where tax incentives have further manipulated the price of the market and increased demand from an already high level, causing inflationary pressures.  Case in point: Washington DC and New York City.  A $120,000 home in Buffalo, NY would sell for over $500,000 in Washington, DC.  In New York City; Manhattan dwellers pay, on average, $4,081 per month in rent on an island with an occupancy rate of 98.93% (New York Post). With an average 2014 annual income of $58,878 for the State of New York. That’s 83% of the average New Yorker’s (state) income and 34% of the average New York City resident’s income at $2,749 per week, which only recently spiked 12% from 2013 figures and is more than 2 ½ times the national average (Bureau of Labor Statistics).  This can also be attributed to rent-control that has caused developers to create more condos for purchase than rental properties, but the message is clear; if there is already a large demand for something, increasing an incentive will cause inflation and severe inequality.

There should not be an equal tax incentive to purchase a home in Detroit, Michigan than downtown Washington, DC; but according to the current tax code that is exactly what we have.  The logical policy approach would be to attempt to deter people from buying property in DC to adjust the equilibrium of the market and help mitigate the inflation we already see. My macroeconomics teacher once referred to flipping houses in an inflated market as the “biggest idiot dilemma”.  Meaning that flipping a house is risky and irresponsible, but the industry exists because there’s always a bigger idiot who will buy the house from you.  One day, just like every ponzi scheme, the amount of participants will no longer grow and the biggest idiot will be left with the worthless property.

The recession was caused, in part, by access to credit and an overall incentive and social attitude towards purchasing houses. People need a place to live and a home is an excellent investment, but it isn’t that simple, not everywhere.  Through the creativity of the Federal Reserve Bank, automatic entitlements like unemployment insurance, fiscal stimulus in 2009 by the Obama administration, and the solidarity of industry leaders we were able to avoid a catastrophe in 2007.  Had we let it, the recession of 2007 could have been another global depression. Today, the Federal Reserve Bank’s ledger is full of everyone else’s bad investments that they purchased through quantitative easing, the interest rates are at an unprecedented constant low at below 1%, and people as a whole want to get back to the way things were. The economy cannot survive another asset bubble popping; we called in every favor, the national deficit keeps growing, and we are running on fumes as it is.  The Federal Reserve and market leaders are playing this one close to the chest because they know that a bad attitude about the economy can be a self-fulfilling prophecy. We, as consumers, need to realize how bad things could have been in 2007 and be more fiscally conservative, not go back to a system that was doomed to fail in the first place. The government has created blanketed tax incentives to purchase homes and the effects are being felt regionally.  Now that we are out of the weeds, we should focus tax incentives regionally based on market projections to get a more sustainable and effective adjustment to the market.  The first time homeowner credit is good until 2017, we need to review this legislation and either let it expire or adjust our approach to create a better future for our citizens in a more sustainable economy.

Thank you for your time.

The Export-Import Bank and it’s Abolishment!

American taxpayers have been funding the bad decisions of top US exporters since 1934!

The Export-Import bank (EX-IM Bank) of the United States is, essentially, a self-sustaining agency that provides loans and credit guarantees for exporters’ products being shipped and sold overseas.  It was started in 1934 through an Executive Order by President Franklin D. Roosevelt to assist with the failed economy of the Great Depression (www.exim.gov).  The EX-IM bank was an ambitious attempt to stimulate exports by providing loans and backing for the exporting companies within the United States.  This bank was founded under the principles of economic security and stability under the Keynesian School of Economics but has evolved into a loan-machine for top companies; its fate is now tied to the national security of the United States.

1934 also saw the dramatic decrease of bank reserve requirements and a spike in the FED’s interest rate; this was all an aggressive attempt to stimulate economic growth by providing an incentive to lend in the economy.  What happened was quite the opposite; the seemingly improving economy received the wrong attention at the wrong time, triggering a deflationary spiral, and slipping America into a deeper depression than it had originally experienced (Bartlett, 2009).

2014 General Ledger graph showing the top ten borrowers of the EX-IM Bank

This is a graph showing the 2014 general ledger of the EX-IM Bank’s loan recipients.  There is a clear disconnect in record keeping and a lack of austerity in the bookkeeping process.  They have reported several figures on their website and to the Congressional Budget Office, but were unable to provide documentation for many of these loans and their recipients. (Source:http://mercatus.org/publication/biggest-beneficiaries-ex-im-bank).

Two different bills are being proposed in the House of Representative in regards to the abolishment or restructuring of the EX-IM Bank.  Unfortunately, neither of them has made it through the House of Representatives as of today’s date. H.R.2263, also called the “Export-Import Bank Termination Act” was introduced to the 113th Congress in the Senate and House of Representatives, calling for the abolishment of the bank.  The bill states that the government must freeze all future expected loans, restructure the terms of existing loans, re-staffing the members of the bank into the Department of the Treasury, and allowing the Inspector General to dissolve relationships and agreements as he sees fit, within the confines of the law.  This bill calls for the total abolishment of the bank and spells out, oin detail, how it will succeed in doing so.

The second bill: S.819, calls for restructuring, not abolishment, and was introduced in the first session of the 114th Congress.  This bill is a little more realistic, in that it calls for a review of fraud controls, the implementation of a Risk Officer that reports to an independent auditor, and an increase in loss reserves.  It also shows an ambitious proposal to eliminate discrimination in the industries the bank funds and an increase in small business lending.  As responsible as this bill sounds, reading through it doesn’t provide any realistic accountability measures or addressing the economic implications of reforming the lending practices.  Abolishment of the bank may cause an investment vacuum; meaning that where there is a demand for this type of service and the bank is abolished, it is inevitable that someone else will step in to provide the exact same service. With that, an entirely new set of problems may arise; sometimes the Devil we know is better than the Devil we don’t know.  But like all government funding programs, once it is created it is next to impossible to kill, so maybe reforming the bank is the only realistic proposal in the current political climate?

Nobody of consequence even paid attention to the EX-IM Bank until the Congressional Budget Office (CBO) published that, with new accounting techniques called Fair-Value Accounting, the bank was showing a $200 million loss based on future projections, as opposed to the $675 million profit that was reported for 2014 (www.exim.gov).  $200 million dollars may seem like a lot of money but when the top borrower (Boeing: refer to above graph) is responsible for $8.3 billion and the total lending balance is $27.4 billion, this is only a loss of 0.73% as compared to the reported profit of 2.5%. This information only came to light only after reliable sources determining an accounting loss as well as the unpopular lending practices of the bank, it’s no wonder there has been a call to abolish the bank and its unsavory lending practices. The EX-IM Bank website continues to advertise that over 164,000 domestic jobs are supported by the bank’s activities. Considering the US economy, whose 2014 GDP was $17.4 trillion (World Bank) added 215,000 jobs in the month of July alone and 3,116,000 (Bureau of Labor Statistics) jobs in 2014; 164,000 jobs is a drop of water in the ocean compared to any serious contribution to the state of the economy.

The EX-IM Bank exists today to provide loans and guarantees for exporters that couldn’t otherwise find funding in the private sector.  In 1934, we desperately needed economic stimulation with exporters and it’s understandable why Roosevelt felt compelled to create this bank. However, the principles of free market enterprise suggest that if nobody in the private sector will fund a project, maybe it’s not a lucrative investment.  Allowing the markets to adjust naturally is the backbone of the Classical School of Economics, created by Adam Smith, which fundamentally worked up until about 1929. Five years later, we adapt untested principles by a man named John Maynard Keynes and he is a celebrity overnight.  I’m not undermining Keynes’ brilliance or contribution to the world; I’m saying that the EX-IM Bank was founded with untested principles that were successful in the short-run, but highly volatile and unpredictable in the long-run. In response to Adam Smith’s paradigm stating that over time, markets will adjust; Keynes’ response was that over time, we’re all dead.  Meaning that long-run faith in markets adjusting to their natural levels has little traction when people are hungry today.  Adam Smith’s school omitted behavior economics entirely, assuming that people will always produce what demand dictates and had no concept of credit; Keynes micro-managed the economy until every aspect of the markets were saturated with fiscal and monetary policy.

The role of the government is not to grow wealth, create jobs, manipulate markets, or determine which industries and corporations get a pass on bad investments through handshake agreements; the role of the government is to protect freedoms and provide for the common good. The idea of this bank existing in the first place is unethical, unconstitutional, and terrible economics.  Boeing is threatening to take its business out of the United States if the EX-IM Bank is abolished (Forbes magazine).  This makes politicians nervous and is arguably a detriment to national security; however, in the long run, the system will adjust or they will come to agreement through other means.  Empty promises and shallow threats by politicians and industry leaders mixed with fear and uncertainty are not reason enough to keep a bank as corrupt, un-American, and unsustainable as the EX-IM bank in power.

Further Information:

http://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth

http://mercatus.org/publication/biggest-beneficiaries-ex-im-bank

http://exportersforexim.org/national-security-and-ex-im/

http://americansforprosperity.org/article/afp-letter-of-support-for-terminating-export-import-bank-h-r-2263-s-1102

https://www.cbo.gov/publication/43027

http://economics21.org/commentary/critics-export-import-bank-have-new-weapon-their-disposal-fair-value-accounting

http://www.exim.gov/about/facts-about-ex-im-bank

http://www.politico.com/story/2015/06/bill-flores-export-import-bank-culturally-corrupt-119561

http://www.forbes.com/sites/lorenthompson/2015/07/29/boeing-says-ex-im-bank-demise-may-force-it-offshore/

Ben Bernanke: Being in the Military Won’t Actually Help You in The Real World (Foreign Policy Magazine)

Ben Bernanke is a bit of a celebrity among economists and is undeniably brilliant. His creativity prevented a depression and his reputation kept America in charge. We all owe him our livelihoods. He isn’t saying that serving is pointless; he’s saying don’t believe the recruiter when they tell you it’s like ‘Call of Duty’ and you’ll fall into a high-paying job afterwards. He’s a man of numbers, not opinions. The reality is that veterans have to fight their way back into the job market just like everyone else does, and it’s an uphill battle. The Army is downsizing and everyone in our generation who didn’t serve has more experience and is more qualified; that’s the hard truth. The other hard truth is that everyone may be appreciative and supportive, but when it comes to a job interview, nobody gives a shit. It’s up to the media and policy-makers to create an incentive to hire veterans, but it’s up to us to do the work. So go back to school; it’s free. The military did a bang up job screwing up our 20s, our relationships, our attitudes, and our health. Take control and don’t ruin our 30s…

Ben Bernanke: Being in the Military won’t Actually Help You in The Real World

The Irony of the Welfare State

Once upon a time there was a little red hen who scratched about the barnyard until she uncovered some grains of wheat. The little red hen calls on her neighbors and asks who will help her plant the wheat, that they might have some bread. The cow, the duck, the pig, and the goose beg off. So the hen plants the wheat herself. It grows tall and bears ripe grain. She asks who will help harvest the wheat.

“Not I,” says the duck.
“Out of my classification,” says the pig.
“I’d lose my seniority,” says the cow.
“I’d lose my unemployment compensation,” says the goose.

So the hen harvests the wheat herself. In time she asks who will help her bake the bread.

“That would be overtime for me,” says the cow.
“I’d lose my welfare benefits,” says the duck.
“I’m a dropout and never learned how,” says the pig.
“If I’m the only helper, that’s discrimination,” says the goose.

The hen bakes the bread herself. She shows it to her neighbors. They each demand a share. The hen refuses and keeps the bread for herself.

“Excess profits!” says the cow.
“I demand equal rights!” yells the goose.
“Capitalist leech!” screams the duck.
“But I earned the bread?!” retorts the hen.

The neighbors grovel with the barn leader, who is elected by the neighbors. The hen is forced to share her bread with the neighbors by the barn leader.

“I’m grateful!” Declares the pig.
“I’m happy!” Proclaims the duck.

Her neighbors wondered why she never baked the bread again.

-Ronald Reagan, 1976

Sitting on Cash

This article relates to my blog entry about corporate inversion. Bringing cash into the country has so many barriers that companies are simply letting it sit. An infusion of corporate cash in the economy may cause some issues but far fewer than keeping the cash in a vault. America has a right to provide a disincentive to keeping cash overseas, it undermines the tax structure and removes it from circulation; but it has to realize that people are doing it anyways and getting that money back would benefit everyone. It’s an interesting policy debate that has been ongoing for years, it’ll be interesting to see what happens.

Barataria - The work of Erik Hare

If you’re like most people living paycheck to paycheck, you have a simple problem at the end of the month – not enough cash. There’s nothing to be embarrassed about here – it’s a common problem that is faced by a large number of families as the economic recovery struggles on.

But if you’re an S&P 500 company, you may have a different problem – too much cash. Not precisely too much cash on hand, that is, since that’s never a problem. You may have something like cash sitting around somewhere in the world that you have trouble bringing home to make use of the way you want to.

Therein lies the problem with this economy – not that there isn’t enough to go around, but that it isn’t going around.

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The new economy has changed everything, one man's attempt to make sense of it all