Democratic Socialism and the End of Interventionism

A second group seems to be less radical. They reject socialism no less than capitalism. They recommend a third system, which, as they say, is as far from capitalism as it is from socialism, which as a third system of society’s economic organization, stands midway between the two other systems, and while retaining the advantages…

From the Ancien Regime to the Fabian Socialists and Beyond: The Rise of Statism

The End of the Old Order The 18th century marked a stunning challenge to the millennia of anti-individual and anti-liberty despotism, tyranny, and century-long economic stagnation.  Before this transitional era to the modern systems, societies were defined largely by the decision making power of the ruler in charge.  Such a ruler was especially susceptible to…

Minimum Wage: A Common Rhetorical Trick

Under the title “Target increases minimum wage to $10 an hour,” Reuters reports that Target is increasing its “minimum wage:” Discount retailer Target Corp has started raising employee wages to a minimum of $10 an hour, its second hike in a year, pressured by a competitive job market and labor groups calling for higher wages…

The Tragic Bull Market Culture

“Like champagne, bull markets remove inhibitions.” –James Grant My readings over the last several weeks have consisted primarily of David Stockman and Jim Grant– two sane voices in the insane financial world. Each have contributed wondrous thoughts and reflections on the nature of 21st century finance, which is primarily a story of the “corruption of…

The Discrepancy between Stocks and the Economy

Adapted, with some changes and edits, from my recent Letter to Investment Clients.  In the last week, several economically important things have happened and they can be summarized together as a discrepancy between the stock market and “the economy.”  First, and of primary importance, on Monday we got the 2016 first quarter GDP forecast number,…

Economy on the Deathbed, Good Riddance

Writes Barrons: Standard & Poor’s reported Thursday that the average corporate credit rating is double-B, two notches below investment grade. That’s near a 15-year low. More ominous — S&P sees this as a sign that defaults could spike and the corporate credit cycle has peaked. Given  easier lending conditions since the financial crisis, companies with weaker…

Investing and “the Economy” as Such

“The economy is doing well” or “the economy has reached a stand-still” or many other myriad ways to refer to “the economy” should always be taken as a metaphor. And yet, quite obviously, this is not actually the way that the mainstream economic thinking works. For them, the economy is treated as an entity independent…

The Needed Pain Wrought by Saving

The endgame of monetary side manipulations is upon us. Since 2008, central banks have done what they thought was needed to bring the markets back from the pain they experienced during the crash. The problem, of course, is that these Keynesians and Monetarists placed the high level of stock markets as the goal of “policy”…

Bloomberg: robo-advisors increasingly popular

Bloomberg reports: Banks are watching wealthy clients flirt with robo-advisers, and that’s one reason the lenders are racing to release their own versions of the automated investing technology this year, according to a consultant. Millennials and small investors aren’t the only ones using robo-advisers, a group that includes pioneers Wealthfront Inc. and Betterment LLC and…

On Inflation, Rate Hikes, and Falling Markets

There are a handful of themes out there on recent market action that are either totally wrong or otherwise highly misleading. For instance, regarding the recent calamity in the capital markets, one especially apparent dichotomy has presented itself as offering two choices as to what, exactly, is causing the painful turbulance. There are some who, in a complete…