A great technology solves a problem that we didn’t know we had. It makes us aware of deprivations we didn’t know existed until we discover the new thing. Once discovered, we can’t go back.People in the 1950s, for example, never missed the smart phone. They were pleased to have a phone at all. But today, […]
Fifty years after the 1929 crash, a group of money managers and investment thinkers put together a collection of essays looking back at that experience. The result was a distillation of some pretty fine investment wisdom. Timely, I think, to review now.One of the contributors was Arthur Zeikel, then with Merrill Lynch. The title of […]
Although the mainstream media have turned its attention away from the wreckage of Obamacare, don’t think for a second that all is well.As the politicos in D.C. focus their attention on the midterm elections in November, now is a great time to study, prepare, and seek out the most affordable, accessible, and highest quality options […]
Turn on the tube and economic ignorance seems to be everywhere. There is constant shilling for more government. Business is demonized. Man is said to be trashing the environment. “Workers and women are oppressed” is the constant mantra.And members of the clueless media nod their heads in unison.Only John Stossel has provided the fresh air […]
In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.The U.S. was already the world’s commercial powerhouse, having eclipsed the British […]
In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
People jacked up about income inequality can find a new hobby. The 1% are victims of a doomsday machine, and the countdown is ticking. Machine, thy name is “family.”This came to mind as I was reading a preview of Columbia Professor Andrew Ang’s forthcoming, must-read book on Asset Management. Ang is that oxymoron, an exciting […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
I want to share some insight and give you a front-row seat to America’s next big shale play.Let’s get to it…Over the past 10 years, the U.S. has turned the ship around, quite literally.We’ve gone from a country that was expecting to import massive amounts of oil and gas — to a country that’s sitting […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Politicians love raising the minimum wage because they don’t have to ask voters to pay more in taxes. They just dump the costs onto shop owners. But they don’t act like politicians and go into debt to pretend like they have all the money in the world. They face real world situations. And sometimes that means replacing workers with more affordable options...
Regulation is supposed to keep you safe and make the economy function smoothly. At least that’s what they tell you in the news. But there’s another cost to regulation. One that you won’t hear about unless you have to deal with directly. And for the people in the economy who do, they’re the ones who have to pay the final cost.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
According to some estimates, one man - whose name you're probably not familiar with - has saved over a billion lives. Who is he? And how has he influenced the current crop of innovators? Josh Grasmick explains...
It’s a destructive cycle that comes around everytime your politicians ask you to take to the polls. The government’s meddling creates unexpected problems that eventually overshadow the planners’ original intentions. But that only leads the way for even more interventions.
Politicians love inflation. It’s a way to pay for the government’s debts without upsetting the public by raising taxes, or their special interests by cutting government. So they’ll flood the economy with easy money and eat away at your savings. But that’s only part of the story...
You can count the number of people who went to jail over the 2008 financial crisis on one hand. Which is strange considering the U.S. loves to put people away in jail. But as one author discovered in his most recent book, having the right connections and a big enough bank account, can protect you from even the worst crimes.
Obama recently claimed this was the “Decade of the Brain”. But it not the first time the government made that promise. The last time they did it, they wasted millions of your tax dollars. Now they’re back for round two. But this time, their failure could mean more than squandered money. It could mean making Alzheimer’s even worse for those who suffer from it.
Gas in Vegas is a dollar cheaper a gallon than in the Golden State, or so a friend and recent LA transplant tells me. He went on to say the top tax rate in California is over 13%, while, of course, Nevada has no state income tax.
Over dinner at Del Frisco’s, he explained how industries are being ruined by runaway government in his old home state. Nevada would surely benefit from businesses making their escape. Plenty of people are leaving California — nearly 700,000, I read somewhere — however, my friend says these 700,000 have been replaced by an equal amount of uncounted “illegals,” as he put it.
The California legislature has democratic supermajorities in both chambers, and of course, California voters have determined that what ails their great state can be fixed with the return of Jerry Brown to the governor’s mansion.
But what really ails California, like many other states, is mathematics. The state’s inflow doesn’t cover its outflow. Like Greece, California can’t print its own currency (although it does resort to IOUs occasionally). Gov. Brown was stunned to find a $28 billion “wall of debt” when he took office.
How’s this happen in a state with so much going for it?
California is one of many despotic states that are losing residents in favor of those that are less despotic.
People are leaving the red for the green, and none is redder than the one-time golden state. Here is a picture of what freedom does (it attracts people) and what tyranny does (it drives people away). Fear not: pick up and move! It’s more effective than political action.
In general, state governments don’t seem to be the best negotiators when putting together pay and retirement packages. There’s something about spending someone else’s money that makes one less careful than if spending his own.
“It starts with the governor and the legislature and wanders down the line. These people are playing with the taxpayers’ money,” said Steven Frates, research director of Pepperdine University’s Davenport Institute.
States paid out more than $711 million to 111,000 people who left jobs as employees of the 12 most populous U.S. states last year for unused vacation and other paid time off, according to payroll data on 1.4 million public workers compiled by Bloomberg.
Employees from California accounted for 39% of that total. Since 2005 the Golden State has shelled out $1.4 billion for unused vacation and other paid time off. That kind of money would put a lot of cops on the beat and teachers in classrooms. Instead, this taxpayer dough is ensuring cushy retirements for government workers who are no longer on the job.
For instance, the state of California cut a $608,821 check to psychiatrist Gertrudis Agcaoili, who retired last year from a state mental hospital in Napa, Calif. Ms. Agcaoili kept her nose to the Freudian grindstone for 30 years, not taking vacation, and now she’s cashing in. She makes no apologies, telling Bloomberg, “It was my prerogative, I did not go on vacation.” End of interview.
But in the private sector, vacation is a use-it-or-lose-it proposition. Or maybe a few weeks can be banked, but not 72 weeks like Ms. Agcaoili had, who pulled down $2.4 million in pay from the state since 2005. And there should be no fear that Ms. Agcaoili will be dining on cat food in her retirement: The California Public Employees’ Retirement System (CalPERS) will be paying her $199,000 a year in pension payments.
Since the state is so short on money, employees have actually been encouraged not to take their vacations. In fact, the state is happy to accommodate them, because filling in for vacationers is costly.
“Requiring employees to take all of their leave would have increased overtime costs at state prisons and hospitals, lowered reimbursements in tax collection and other fee-generating programs, and reduced services in other settings,” state of California HR man David Gay told Bloomberg.
Prison guards in California can now accrue unlimited vacation time courtesy of Gov. Brown. According to California’s nonpartisan Legislative Analyst’s Office, the average prison guard has accumulated 19 weeks of unused vacation, a liability estimated at $600 million. These are the same prison guards that received a 34% raise in pay from Gov. Gray Davis when he was in office.
“Of the 100 biggest payments in 2011 in the dozen [most populous] states, all but 10 went to California state workers. The average payout for the top 100 was $178,267, in addition to regular wages,” says Bloomberg.
There’s a rule limiting the accrual of unused leave to 640 hours, but everyone ignores it. Well, evidently, as Bloomberg reports, unused leave grew from $1.4 billion in 2003 to $3.9 billion in 2011.
Paying out for the accrual of unused leave would bankrupt a private company. While government workers are always believed to be underworked, many assumed they’re underpaid as well. Not hardly, as Michael B. Marois & Rodney Yap explain:
“The lump-sum retirement payments, seldom granted in private industry, mirror a broader trend in which California’s public employees receive far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base salary to overtime. California, the world’s ninth- biggest economy, has set a pattern for lax management, inefficient operations, and out-of-control costs, the Bloomberg data show.”
In addition to Ms. Agcaoili, other state employees are cashing in big. A highway patrol officer collected $484,000 in pay and pension benefits while 17 employees received checks of more than $200,000 for unused vacation and leave. According to Bloomberg’s data, the best-paid staff in other states earned far less for the same work.
But California is hardly alone with inflated government salaries. Firemen in Clark County, Nev. (Las Vegas), routinely make well into six-figure salaries and overtime pay. The first several pages of these salaries compiled in 2009 by Las Vegas Channel 8 are firefighters making well over $100,000.
Ms. Agcaoili is 79, but many cops and firefighters retire in their 50s, collect nearly 100% of their salary as a pension, and then start new careers.This leaves cities and states to pay for two or three cops to have only one on the beat.
The math just does not work. The clock is ticking on California. People are fleeing. Soon it will not be so golden.