Just a few weeks ago, US talk show host Stephen Colbert was asked if he thought that Donald Trump had a chance of becoming President of the United States. Colbert responded sincerely. “Honestly, he could. And that’s not an opinion of Trump. That’s my opinion of our nation.” He’s right. The Land of the Free may very well be ready for something completely different. And Trump certainly seems able to deliver.
"What can we do?"
Political attacks on short-termism, and reforms to fix it, are beyond confused. They ignore financial market participants’ clear incentives to take future effects into account. They are clueless about what provides evidence of short-termism. There is little to Clinton’s criticism and alleged solutions beyond misunderstanding and misrepresentation. We should recognize, with Henry Hazlitt, that “today is already the tomorrow which the bad economist yesterday urged us to ignore,” and that expanding government’s power to do more of the same is not in Americans’ interests.
Earlier this week I told you about Social Security’s Disability Insurance Trust Fund (DI), which will become insolvent in a matter of months. The DI problem (just like the rest of Social Security) has been a long time coming. But rather than form some meaningful solution, Congress has instead opted to commit financial fraud by commingling DI monies together with the other Social Security funds. Now comes the Highway Trust Fund. The difference between DI and the Highway Trust fund is that this one won’t be insolvent in a matter of years or months. Their own data shows that it may very well be toast… today.
The quarterly increase in US wages was just 0.2% - a third of the 0.6% rise expected - and a meager 2% increase Y/Y in line with all the other depressed BLS data, which dashes the "wage growth is looming" meme and crushed the 0.7% rise in Q1 that had so many hopeful of escape velocity any day now.
- Stocks sour as Apple results leave bitter aftertaste (Reuters)
- Awkward Alliance Running Germany Exposed by Greek Crisis (BBG)
- Apple Faces Old Question of What’s Next After Record Profit (BBG)
- Lawmakers, White House Explore Tax Revamp for U.S. Firms Overseas (WSJ)
- Digital Misfits Link JPMorgan Hack to Pump-and-Dump Fraud (BBG)
- More Debt Traders at Risk as European Banks Report Results (BBG)
- Iran rejects sanctions extension beyond 10 years (Reuters)
This is how democracy has died in America. The formula is simple: billionaires + their (and their many clergy’s) suckers = aristocracy. The result is, in any case, an aristocratic dictatorship, no sort of authentic democracy whatsoever. And, when even the Democratic candidate has gotten there by a string of lies and no substantive record on which voters can know that his assertions don’t match his real beliefs or commitments, the voters are trapped by the aristocracy: they’ve got nothing else to go on but the aristocracy’s lies, and the aristocratically owned ‘news’ media’s stenographic transmissions of their politicians’ lies to the public. The American Revolution (1765-83) overthrew Britain’s aristocracy here. But now, the American people need to overthrow America’s own aristocracy, or else simply accept fascism (rule by an aristocracy).
If there was any doubt just who Obamacare was created to serve from day one (spoiler alert: it was never America's population), we now have the answer and it is so simple, even a 5-year-old can get it. Moments ago Politico reported that former Medicare chief Marilyn Tavenner, and the infamous former administrator of the Centers for Medicare and Medicaid Services who was responsible for writing many of Obamacare’s rules and regulations for the insurance industry, only to be fired following the disastrous rollout of the HealthCare.gov enrollment website, has been hired as the new CEO of America’s Health Insurance Plans, the "powerful K Street lobbying group."
Spain has over $1.0 trillion in debt outstanding… and Italy has €2.6 trillion. These bonds are backstopping tens of trillions of Euros’ worth of derivatives trades. A haircut on them would trigger systemic failure in Europe.
While China is scrambling to launch a plunge protection team after every other initiative to support its burst stock market bubble has failed, one wonders when the real asset bubble will go pop: that, of course, is the global - but mostly US - merger and acquisition bubble.
Greece just took a hit… and once again it’s depositors that will take it on the chin. But this process is only just begun. Similar Crises will be spreading throughout the globe in the coming months.
America is better off when President Obama is out on the stump bloviating and boasting rather than in Washington actively doing harm. But the whoppers he just told the students at the University of Wisconsin are beyond the pale. Said our spinmeister-in-chief: "And the unemployment rate is now down to 5.3 percent. (Applause.) Keep in mind, when I came into office it was hovering around 10 percent. All told, we’ve now seen 64 straight months of private sector job growth, which is a new record — (applause) — new record — 12.8 million new jobs all told." That’s a pack of context-free factoids.
Assuming "growth" will fund all promised pensions and entitlements is magical thinking. We're going to have to do better than indulge our Spoiled Brat Economy mindset because "we wuz promised." What we were promised based on faulty assumptions, faulty projections and wishful thinking no longer matters.
Ideas Have Consequences... In Nazi Germany and Fascist Italy, in Great Britain, in Japan, and in the United States, there was a shift of opinion away from the free market in favor of government economic planning. The supreme mark of this transformation was the acceptance of John Maynard Keynes' unreadable book, The General Theory of Employment, Interest, and Money, which was published in 1936. A new generation of younger economists adopted this book and its outlook, which prevails today. The fascist economic idea of an alliance between government and business became almost universally accepted.
"A judicial victory doesn’t automatically translate into a political victory, let alone a policy success."
In a free society, debate is over only when the people decide it’s over.