Beardless Ben and Bad Bet Summers

Posted on August 13, 2013 by MN Gordon

Plenty of ink has been spilled lately brooding over who’ll be the next Fed Chairman when Ben Bernanke’s term concludes on January 31, 2014.  Here at the Economic Prism we really don’t give a rip who the next monetary Caesar is.  Still, there’s intrigue in the unknown…

We find delight in the spectacle of it all much like a child finds delight watching a circus performer balance a grocery cart on his chin.  We watch in awe of the popular madness over a job that shouldn’t exist to begin with.  Why do we need a bureaucrat fixing the price of money anyway?

Certainly, the world would be a much better place without all the distortions their rate suppression schemes produce.  But we don’t live in a world of what should or what ought to be…we live in what is.  So, thus, in the spirit of constructive mischief, we’ll pause to add some of our own scribbles to the voluminous body of cogitations.

The burden of today’s missive will likely fall squarely on one of two sets of round and droopy shoulders. Continue reading →

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A New Plan to Socialize Losses

Posted on August 8, 2013 by MN Gordon

A New Plan to Socialize LossesPresident Obama’s a man with a plan.  A couple weeks ago he unveiled his plan to save the middle class by calling CEOs.  This week he told people in Arizona he plans to save the housing market by providing government guarantees to securitized mortgage packages.  No kidding…

“The core of Obama’s proposal involves winding down mortgage finance giants Fannie Mae and Freddie Mac, which own or guarantee more than half of all U.S. home loans and are critical to keeping capital flowing to lenders and borrowers,” reported Reuters.

“The administration wants to replace Fannie Mae and Freddie Mac with a system in which the private market buys home loans from lenders and repackages them as securities for investors.”

So far so good, right?  It sounds like the President wants to get government intervention and government price distortions out of the housing market altogether.  But unfortunately he’s not content to leave it at that.  For there’s always room to enter moral hazard into the plan… Continue reading →

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Exercises in Futility

Posted on August 6, 2013 by MN Gordon

Something rather inconvenient is going on.  Quite frankly, we don’t like it one bit.  Despite all the assurances of robust economic recovery, the opposite appears to be happening.

The economy isn’t climbing up.  It’s slipping back.  In fact, last week we received two new data points confirming the slippage.  The first being Friday’s jobs report…

Net jobs growth in 2013 has averaged more than 200,000 a month thus far.  But when the bean counters at the Labor Department tallied them up for July, they ran out of beans at just 162,000.  What’s more, the new jobs to count aren’t the type of jobs that grow the economy.  They are the types that flatten it.

“What you’re seeing now is the spreading of low wage growth,” said Dan Alpert, managing partner at Westwood Capital.  “Really we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages.”

Here at the Economic Prism we don’t discount anybody for showing up to a hamburger stand or a Wal-Mart position each morning. Continue reading →

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10 Reasons Why Obamacare Is Going to Ruin Your Medical Care… and Your Life

Posted on August 2, 2013 by MN Gordon

10 Reasons Why Obamacare Is Going to Ruin Your Medical Care… and Your Life
By Elizabeth Lee Vliet, M.D.

Obamacare is a hodgepodge of new regulations, requirements, and penalties.  I’d like to start by defining three terms, which, while obscure today, should begin to enter our everyday vocabulary as Obamacare continues to take effect:

Health insurance exchanges: Health insurance exchanges are the basket of qualified insurance policies that meet the new healthcare law requirements for expanded coverage.  These may be set up by the states (many are refusing to do so, due to high cost and fear of bankrupting the state) or the federal government.  The Exchanges are supposed to be fully operational by October 1, 2013, but it is questionable whether they will actually be in place by that deadline.

The individual mandate: The individual mandate requires that individuals purchase health insurance that meets the new, expanded federal requirements.  Individuals who do not comply face a financial penalty.  Individuals who fall below minimum income levels will be eligible for taxpayer-funded subsidies to buy health insurance. Continue reading →

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