My Morning Reads

• Did Monetary Policy Cause the Recovery?(Hussman Funds) but see Eugene Fama: QE Doesn’t do Much (Pragmatic Capitalism)
• TARP, Five Years Later (Conversable Economist)
• Tyson: The Business of Business is More Than Business (Project Syndicate) see also Q&A: How Commerce Secretary Penny Pritzker wants to get foreigners to invest in America (Washington Post)
• The collapse of US infrastructure spending, charted (FT Alphaville) See chart below
• After Fraud, the Fog Around Libor Hasn’t Lifted (NY Times)
Obamacare fiasco: Was building really that hard? (CS Monitor) but see G.O.P. Unveils Own Health-Care Web Site, (New Yorker)
• 15 Facts That Reveal The Utter Insanity Of Britain’s Housing Market (BuzzFeed)
• Still No Evidence Obamacare Is Forcing Large Numbers Into Part-Time Work (WSJ) see also The American Health Care System Sucks (Business Insider)
• ‘Dark Mail Alliance’, Future of surveillance proof email technology (Hacker News)
• There’s no global wine shortage (Reuters)

What are you reading?


US Infrastructure Spending in One Chart

Source: FT Alphaville

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “10 Friday AM Reads”

  1. Internet Tourettes says:

    Not a read but a video; Bill Gross on Bloomberg regarding the dysfunctional tax code and stock market gains. This is pure confirmational bias material for me but I have seen this topic being addressed more and more lately and I hope it becomes part of a larger dialog regarding tax policy….

    • rd says:

      I have always found it baffling that actual work gets taxed at a marginal income tax rate plus FICA etc. while capital gains and dividends are given a rate that is much lower than that.

      There are claims that higher tax rates, closer to the rate applied to actual work, will cause people to dig a hole in their back yard and bury their money there instead of investing it. I have never seen any serious data-based research to back up this claim although there does appear to be billions of dollars paid to lobbyists, PACs, and campaign coffers offered up as proof.

      As far as I can tell, creating a major difference between capital gains/dividends with other forms of income correlates best with increased wealth and income and decreased economic growth. Unfortunately, the TV ads say otherwise.

      • Iamthe50percent says:

        Back when I was a teenager, about half a century ago, we were told that capital gains was taxed at half the regular rate because much of the gain was unreal because of inflation. They never explained why they just didn’t index the cost basis on some inflation index. Back then dividends and interest were taxed at the regular rate. The lower rate on dividends and interest is much more recent. Possibly Bush administration?

      • Berkeley Maven says:

        Most Americans don’t know their own combined marginal tax rate: the aggregate of Federal, State/City, and SocialSecurity/Medicare or self-employment taxes, adjusted by an above-the-line deduction for half the self-employment tax, and itemized deductions of the State/City income tax if you’re not subject to Federal AMT.

        If more Americans did know this number, they would probably work a little less at their jobs, on the margin, except for those that just love their work, or the thrill of their high gross pay.

        Those who make money with money, that know how to harvest losses to offset gains, and enjoy the lighter Federal tax rates on qualified dividends and long term gains, plus tax-exemption on muni bond income and various kinds of retirement accounts, are playing a much better game in the business casino.

      • Anonymous Jones says:

        Nice theory about marginal propensity to work, Berkeley Maven. Had no idea it was because of ignorance of tax rates! Good luck with linking to non-laughable proof for that assertion. I’d bet more is generally more, especially at the current marginal rates, which aren’t even that high on a relative basis if one had the vision to look beyond our own borders (surely that is too difficult for you, so no bother), regardless of ignorance of the actual rates.

        Speaking of ignorance, no one “harvests” losses to offset gains. Real losses are real losses and they are, let me tell you, not “good” no matter how much you avoid paying a marginal tax on such losses. The only losses that are good are losses that are “manufactured” (i.e., not really losses but pulled forward into earlier tax periods that allow for deferral of taxes).

        The ignorance! The misinformation! Kudos! I’m impressed. No, really. Impressive.

  2. RW says:

    What Will the “New Normal” for America Be?: Scenarios

    We are looking forward to a world with high slack, high margins, and low interest rates. The Federal Reserve is likely to continue its extraordinary policies for a number of years. But they are unlikely to return the economy to “old normal” levels of boom. Exports and business equipment investments are back to normal levels. But government purchases are low and austerity is going to continue. Construction spending is also low, and without major reforms that are not going to take place is going to remain low. So where is the demand to push the economy into a large boom going to come from?

    NB: Business has probably already gained what it can from low capital costs, low taxes, increased productivity and stable labor costs (both at the expense of labor AKA consumers) so it either must gain more business by seizing market share and/or with/from faster growing countries abroad (strong competition there will be tough on margins) or it must produce goods and services relevant to health care; i.e., the ACA is adding nearly 30 million new customers and wiping out the drag of inadequate/non-paying insurance plans.

  3. RW says:

    WRT the efficacy of QE, Eugene Fama is a great mathematician and his model of an idealized macroeconomy will doubtless inform many a null hypothesis going forward but he has already provided ample evidence he doesn’t have a clue how the macroeconomy really works so …

  4. hue says:

    The End of Obamaism (Esquire) The Deal With The DC Circuit Courts of Appeals: If We Can’t Have It, You Can’t Have It Either (Talking Points Memo)

    Will the Federal Reserve Disprove Sir Isaac Newton? (Minyanville)

    Survey: 1 in 10 U.S. Drivers Have Had Sex Behind The Wheel (MSN Auto) It also found that 15 percent would consider having sex while driving if no one could see them.

  5. Concerned Neighbour says:

    According to Zero Hedge, JPM has made money trading the market every single day this year.

    They’re just lucky, I guess.

  6. gman says:

    “Eugene Fama: QE Doesn’t do Much”

    When playing for team Republican, even U of C economists are now throwing former hero of the movement, and founder of the department Milton Friedman under the bus!

  7. NoKidding says:

    Jon Stewart skewering, fileting and burning our president for not knowing about the NSA or Obamacare.

  8. willid3 says:

    walmartizing health care?

    if people didnt have insurance, would they even be health care? seems that what we just proved, even if you had insurance, you were likely to not to get any at all, unless you absolutely had too. and having a ‘market’ requires that individuals have some knowledge about medicine. which isn’t very likely to happen this decade. it snot like buying a car. at least you have some idea of what a car does. not so much about medicines or procedures. and considering how much cheaper and better other countries do health care. it doesnt seem like its government intervention, since among those others are those where the government is health care. and while there maybe there are some downsides to it, its not like a free market version wouldn’t have those too . its that its not a market at all.

  9. VennData says:

    Conservative groups driving GOP agenda–election.html

    ​Suicide bombers entering the GOP’s “Big Tent​”

    All the looniness you “cut my taxes” guys have financed has come home to roost.