Too many people think that long-term care planning is just a decision about whether to purchase long-term care insurance. However, long-term care planning is so much more. It is a discussion about how you will fund this expense, where you will receive long-term care, and who will provide the care.
Ask a D.C. insider what’s the best way to solve the debt crisis. Nine times out of ten, they’ll recommend taking on more debt. That’s how things operate in the Potomac swamp. Up is down, right is left, digging yourself into more debt is the best way to get out of it. But it wasn’t always like this. In fact, there used to be common sense when it came to the economy. So where did it all go wrong?
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Every year millions of Americans wait until the last minute to prepare and file their taxes. Regardless of whether you’re one of these people, there are still things you need to be aware of before you send those forms in.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
The government will do whatever it takes to make sure it has enough of your money to fund itself. On the surface you might think that means enduring a grueling audit. But the IRS and the government is more than willing to ignore your privacy in the cold relentless pursuit of the money they think they deserve. As they get bigger and bigger every year, the smaller and smaller your paycheck becomes as they leach off it.
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The saga of All Saints could soon be coming to a community near you. Thanks partly to the scandal surrounding the IRS’ targeting of conservative groups, the agency has proposed a new set of rules for a huge number of social-welfare groups that claim tax exemption under Section 501(c)4 of the tax code.
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.
What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The first principle in dealing with government is: Don't be awed by it. What little the government achieves is almost always due to the voluntary participation of its citizens. Those who don't want to help the government can go their own ways without running into much trouble.
National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
I was out shopping for a new winter coat, hopping from store to store looking for a good deal. To my astonishment, it was almost impossible not to find a good deal. Coats of a quality that once cost hundreds of dollars were everywhere, with prices ranging from $65-150. I’m sure I could have found some at three and four times as much, but I would have had to make a special trip to a specialty shop like Burberry and pay a high price for status shopping.
In times when most everything has gone up in price and down in quality, clothing seems like an outlier.
It made me curious about what’s happened in the world of clothing over the last 25 years or so. In this time, we’ve seen several major trends happen. Anytime between the Great Depression and the end of the Reagan years, the clothing you bought mostly came from the local department store. Or you could order through a gigantic catalog delivered to your home. That was about it.
Today, discount and secondhand stores are everywhere. You can get designer labels at prices that are surprisingly low. Or you can head to the local big box and pick up just about any sports clothes for a song. Or you can decide to shop online, where you can get anything from sports clothes for next to nothing to high-end suits and shirts for $100 or so. If you know what you are doing, you can dress like Savile Row on a pauper’s budget.
This is a dramatic change. The digital age has opened up options for people who once had very few. In addition, billions of people are in the market as producers who were once not part of it. China was closed in the old days. So were Eastern Europe, India, and Russia. Today, they are all part of the mix. This led to screams of outrage on the part of American textile manufacturers. The end of the world was coming, they said. Except that it didn’t come. All that happened was that clothing became cheaper for American consumers.
Check out this 25-year chart of apparel prices versus the consumer price index generally:
This confirms my intuition. What’s more, I don’t think this picture fully explains what has happened. Clothing is no longer a problem for humanity. It is abundant, just like food and technology. The market has triumphed despite every attempt by government to hobble and wreck it. The long-run trends show that the opening up of the world, competition in the industry, and the advance of technology have made clothing more available than ever before at ever cheaper prices.
Matthew 5:40 instructs believers with what once must have been a very hard teaching: “And if anyone wants to sue you and take your shirt, hand over your coat as well.” Today, people might think: Oh, that’s no problem at all. I’ll just snag another one at T.J. Maxx. If that’s all it takes to avoid a lawsuit, I’m in!
And recall too in the story recounted in Genesis, what a gigantic fuss was created over Joseph’s “coat of many colors.” His brothers were so jealous that they plotted his death. When they failed, they stole it and sold their brother into slavery. Then they took the coat back to their father to prove his death, presuming that no one would part with such a thing absent death. These days, Joseph’s brothers would find much more peaceful ways to overcome their jealousy by shopping on eBay.
These instructions are hardly surprising. The struggle to finding clothing to wear was one of the great time- and resource-consuming undertakings of mankind, coming in right after the struggle for shelter and food. It has defined the course of history.
From the beginning of time until 1,000 years ago, clothing consisted of hot and heavy animal skins, horribly scratchy wool, and linen, or so reports William J. Bernstein in A Splendid Exchange. Cotton was relatively rare, and silk even more so (many fleets of ships and thousands of lives were lost in making silk a universal fabric). The synthetic fabrics that are part of everyone’s daily wardrobe were unknown.
Now we take their availability for granted. Only a generation ago, everyone patched jeans to make them last as long as possible. Now people buy jeans that are deliberately scruffy, torn, and patched just to get the look of old clothing, since hardly anything is actually old. (That people buy these things at all is, to me, the ultimate proof of the subjective theory of economic value!)
To be sure, people complain about quality. Nothing lasts like it used to! But that’s actually not true. If you spent today what people commonly spent on a pair of pants in 1980, which was probably about $30, you would spend $85. But mostly, people don’t spend that. If they did, they could obtain some pretty impressive trousers. Instead, people buy cheaper clothing so that they can replace it more often to keep up with fashions. You can always pay more for clothes that will last, but this is not where the consumer preferences currently are.
There is another factor that has made the clothing market more dynamic, progressive, changing, and profitable. Clothing is not encumbered by the problem that afflicts so many other sectors of life, namely the imposition of copyright and patent. There are trademarks, but these have done little to stop “piracy” around the world. A world traveler will find so-called fakes freely sold in every country.
What most people do not know is that copyrights and patents are not part of the fashion market. The absence of copyrights and patents has made the clothing sector supercompetitive. What’s on the runway today is freely knocked off and on sale at a fraction of the designer price in big-box stores only a few months later. By this time, the original manufacturer has moved on to making more unique products in the hope of being first to market.
All this explosive creation and copying has made fashion and clothing superdynamic. This means that manufacturers aren’t having to constantly watch their back for fear of being sued or otherwise getting in trouble with the law. This creates one of the freest sectors of trade in the world today.
It is hardly surprising that one of the freest sectors also happens to one in which prices are constantly falling in service of the consumer, with ever more options for regular people. Clothing is an example of mass manufacturing in service of the masses, and the data reveal just this.
There are lessons here. The freer the sector of economic life, the more it serves society. It illustrates the resilience of the market even in the face of every government attempt to hobble industry and keep economic activity stagnant and predictable. If we applied the same institutional arrangements to health care, education, energy, and transportation, we would see similar progress in these fields, rather than the same old archaic patterns generation after generation.
Further, a look at the clothing industry illustrates that the market is always full of profit opportunities and surprises for those look for them. No one would have predicted that we would today live in a world flooded with clothes, and that even the rarest of things such as coats would be available at low prices to even the poorest in the developing world.
Who is giving the institution of the market economy credit for such wonderful achievements? To understand the cause and effect is to see a path forward for every sector, including health care, education, and even law and justice. Falling prices and rising consumer service are the marks of economic health, and the reverse is the sign that the hand of government is in control.
The Laissez Faire Club
P.S. As I wrote in “Kids Are Smarter Than Adults” it is a proven fact that designer labels actually have value in the marketplace. Fortunately, places like Overstock.com and eBay allow you to get them at extremely low prices. We are living in an age of hyperabundance of clothing. We are crazy not to take advantage of it.
P.P.S. I’ve interview the author of today’s book release, The Concise Guide to Economics.