Monthly Archives: January 2018

Martin Feldstein Thinks the Markets are Headed for a Fall

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He’s right, to an extent.  The Price-Earnings ratio for aggregated publicly owned businesses is at historic highs.  His reasoning centers on four factors: the Fed’s raising of its benchmark interest rates, which will make money cost more for businesses; the Fed’s reducing its own government bond holdings, which will contribute to upward pressure on interest rates generally; the Federal government’s needing to borrow to cover its still enormous deficits; and heretofore easy money has made the labor market too tight.

However.

There are a couple things about Feldstein’s four reasons. One is that the improving economic activity will greatly mitigate (albeit not eliminate) stock price falls by raising business earnings to meet those falling stock prices—both the numerator and the denominator of the P/E ratio, after all, are dynamic, not only the numerator (albeit the one is capable of moving faster than the other).  Prices won’t fall as far as Feldstein seems to think.

Another thing is that Feldstein’s third reason is a prime argument for the Progressive-Democratic Party to get out of the way and allow Federal spending to be cut.

A third thing is that Feldstein is overstating the case in his fourth reason.  The labor market isn’t as tight as it might seem, given that the underemployed per centage remains at elevated levels, as does the number of workers who’ve left the labor market because they’ve given up; the latter is a population that can be persuaded to return to the labor force.

A Bad Deal

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And all for the sake of a personal legacy, apparently.

Republic of Korea President Moon Jae-in has cut an Olympic-sized deal with northern Korea concerning the latter’s participation in next month’s Winter Olympics.  According to the deal,

South Korean athletes and performers [will go] north of the demilitarized zone for training at a North Korean ski resort and a cultural event at a scenic mountain resort.

Further,

[T]he two Koreas will walk into the opening ceremony of next month’s Winter Games in Pyeongchang, South Korea, under one flag—the unification flag that depicts all of Korea. The two countries’ women’s ice hockey teams will unite to form a joint Korean squad.

It’ll be interesting to see how many ROK athletes and performers will be willing to go north and the quality of those who do.  It’ll also be interesting to see what the single flag looks like; here’s what the “reunification” flag looked like at the 2006 Winter Olympics:

It’ll be even more interesting to see how many of the RoK women’s hockey team actually show up.  There’s considerable disgruntlement among the team, Olympic athletes generally, and athletic sphere leadership over Moon’s agreement here, both over the agreement and over the RoK players who will be cut or denied ice time to make room for the north’s players.

And: the agreement seems not to have been done with athletes’ input or even warning that it was coming.  Moon certainly is setting his legacy.

An Exam

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President Donald Trump had his annual physical earlier this week, and at his request, a mental acuity exam was administered to him as well.  The White House doctor, Navy Rear Admiral Ronny Jackson, who performed the exams was the same White House physician for George Bush the Younger and for Barack Obama.  The results were presented by Jackson at a Tuesday presser, and at Trump’s insistence, Jackson stayed to answer, completely—no doctor patient confidentiality—every question the NLMSM (my term; Trump has a different term for that subset of the nation’s press) might ask.

In short, Trump has high cholesterol and needs to take his cholesterol meds, and he’s overweight.  Trump also got a perfect score on the mental acuity exam.

In long, the press spent an hour quizzing Jackson about the exam’s results.  An hour to get the results of an exam.

That hour demonstrates the NLMSM’s desperation to find something—anything—with which to smear the President.  It’ll be interesting to see if the NLMSM will let go of this particular bit of dishonesty.

Nope.  Jackson hadn’t even left the briefing room when MSNBC‘s Rachel Maddow put out this.

You know what? I’m gonna go out on a limb here and raise the possibility that this statement was not written by the White House physician. […]

I’m not basing my skepticism on the authorship of this statement on the “Trumpiness” of the statement itself. The reason I think this might not have actually been written by the White House physician, Dr. Ronny Jackson, is because that is not how your spell Ronny Jackson.

This is the offending tweet that formed the stuff of Maddow’s fevered nightmare:

Jackson’s misspelled first name proves—proves!—that the whole thing is a stinking lie and Trump, according to the NLMSM, really is crazier than a hoot owl.

And a Newsweek headline, via Yahoo!:

Trump at Risk for a Heart Attack With Dangerous Weight and Skyrocketing Cholesterol

The Party Wants No Deal

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The Progressive-Democrats in Congress don’t want a deal, neither on the budget nor on DACA.  They want the Federal government shut down so they can blame the Republicans for it during this fall’s elections.  They also want to keep the DACA situation and immigration in general alive as a debating question for those same elections.

Democrats said Mr Trump’s dismissal of “shithole countries” in Africa in a closed meeting last week with lawmakers positioned him as the person who upset the negotiations.

Notice that.  The Progressive-Democrats are doing two things here: masquerading a claim of certain words being spoken as a fact that those words were spoken, and then using those words as an excuse to refuse to deal on DACA rather than actually dealing on DACA.

That the Progressive-Democrats do not want a DACA deal at all is illustrated by a third thing to notice, a matter that’s being carefully ignored by both those Progressive-Democrats and the NLMSM.  Such words spoken publicly would be damaging to our national reputation; on that we’re all agreed.  What’s ignored is that, having been said in that closed meeting (if they were said), no one outside the meeting would know about them and no damage would be done—but for a meeting participant (Senator Dick Durbin (D, IL) comes to mind) running screaming to the press as soon as the meeting broke up to bruit about those words.  This is a deliberate move to blow up any DACA negotiations.

Nor is a DACA agreement needed in the current budget debate.  President Donald Trump’s rescission of ex-President Barack Obama’s (D) DHS memorandum gave Congress, where such a matter belongs, until next March to enact a DACA program legislatively, or explicitly decline to do so, before Trump’s rescission takes effect.  The lack of urgency is further well-known to the Progressive-Democrats: a Federal judge has blocked Trump’s order.  Demanding a DACA deal in the current budget debate is simply a mechanism to block a budget deal.

Too, the Progressive-Democratic Party must come before children.  That Party is more important than children is demonstrated by two outcomes of the Progressive-Democrats’ obstructionism.  The DACA children will get nothing from any government shutdown.  The Progressive-Democrats’ rejection of a budget deal also will reject the CHIP program, whose funding is renewed for six years, in the deal on offer.  Millions of children will be denied access to health insurance.

Remember that in the coming elections.

Poverty and Concern for the Rich

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Recall the Progressive-Democratic Party-controlled legislature with their Progressive-Democrat governor who run things in California.  In response to the just-passed tax reform bill’s capping of state and local tax deductions on the Federal income tax form at $10,000, these worthies have introduced a bill that would create a State-run “charity” foundation into which California citizens could make “donations” and receive a dollar-for-dollar tax credit that they could then apply to their SALT requirements that exceed those $10,000.

Never mind that, as The Wall Street Journal‘s Editorial Board pointed out last Friday,

According to IRS data, California’s 71,000 taxpayers with million-dollar incomes deducted on average $462,500 in 2015 compared to $6,940 for individuals making between $50,000 and $100,000. Few California middle-class taxpayers will be harmed by the $10,000 deduction cap since the standard deduction has doubled to $12,000.

Kevin De León, President Pro Tempore of the California State Senate, and the Progressive-Democrat who introduced the bill, knows this full well.  These worthies are interested in protecting their rich buddies and donors.

Couple this with what the Los Angeles Times published last Sunday.  Twenty per cent of California residents are poor according to the Census Bureau’s Supplemental Poverty Measure, which considers the cost of housing, food, utilities, and clothing.  The Measure, importantly, also includes noncash government assistance in its income measure.  This 20% poverty rate is the highest rate in our nation.  It gets worse:

California recipients of state aid receive a disproportionately large share of it in no-strings-attached cash disbursements. It’s as though welfare reform passed California by, leaving a dependency trap in place.

But think about that in conjunction with the California progressive elite’s protection of their rich buds.  It’s not “as though welfare reform passed California by,” it has been by design that those elites created that dependency trap.  That’s how they get the votes—the poor have far more votes than their wealthy friends—and with those votes the elites can stay in power, exchanging favors and money with their wealthy associates.

Of course, the LAT laid most of this travesty for the poor part of the balance off on an exploding social-services community with its 883,000 full-time-equivalent state and local employees (as of 2014).  But who hires and provides the payroll and other budgets for these folks?  Yewbetcha.