Economy

A Dysfunctional System That Bankrupts A Generation

Tuition did it again: up 8.3% for universities and 8.7% for community colleges. For many students, the increases are even steeper. Here in California, they’re outright ridiculous. Student loans will cover much of it, though student loan debt already exceeds $1 trillion. Why? It’s the system.

Obama’s Refi: Special Tax For People Who Can’t Do Math

President Obama’s expansion of a mortgage refinancing program is a way for underwater homeowners to reduce their monthly payments. That would save them some money, he said, “…and it gets those families spending again.” But there is an insidious hook buried inside….

Tough Day For Our Calamity Economy

The ugly numbers speak volumes on how the Fed’s policies hurt the real economy. But those policies enable Congress and the White House to run up ruinous budget deficits that make those of the Eurozone look benign.

That’s inflation—not jobs, wages, or GDP.

The Brutal Trade Deficit

At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall economy.

When False Premises Become Economic Policy

“A shame that we can’t see Japan because of the marine layer” is an old joke in San Francisco. The premise that the fog over the Pacific keeps you from seeing Japan is just as false as the premise that running up huge deficits and printing trillions of dollars can create a healthy economy. Yet, that’s the line propagated by the status-quo media and its economists.

The Ugly World Of Auto Sales

The media giddily reported the September auto sales numbers—though there was little to be giddy about. They were still 20% lower than September 2006. Toyota and Honda got slammed, but don’t blame post-earthquake inventory shortages. They have been resolved. It’s a shift in the market.

Deflation In Japan and its Chances in the US

Deflation phobia broke out again. Fed governor Bullard grumbled about inflation expectations being too low and threatened to print more money, while deflationistas paint the Japanese “deflation spiral” as sheer horror. So here is my experience with that horror.

Alas, in one category, deflation has hounded us for 10 years.

Inflation As Solution: Hosing The Middle Class

The FOMC’s often and clearly stated policy of creating sufficient inflation has been effective: up 36% from January 2000. But there are victims: the middle class and ultimately the economy.

Cutting The Deficit: A Bipartisan Joke

President Obama’s proposal to cut the deficit by x trillion dollars is another punch line in the serial joke that our political machinery has been telling us for too long: that deficits will be “cut” in ten years, while the opposite (the jobs bill, for example) is needed immediately.

The scary graph of our gross national debt will look even scarier.

Snapshot Of Our Calamity Economy

The economy is going back to hell, but stock markets are surging. Nothing new. It always ends in tears. But this time, the Fed’s money-printing strategy will make things only worse. Today’s horrid numbers show us why.