Politicians talk about the uninsured. Special interests argue on behalf of those with pre-existing conditions. But why is no one wondering how doctors are affected by the new law? They’re the ones on the frontlines dealing directly with new patients, as well as the red tape that makes bureaucracies go round.
Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
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.
Technology brought the world together. But has it gone too far? Decades ago, mail was delivered by hand. Now it’s delivered in seconds. How has that changed the way you live your life? How has it changed the way people act with each other? These are just some of the questions we need to ask.
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...
Gun control isn’t a modern idea. The rise of gun control laws and limits on your 2nd Amendment freedom go hand in hand with the increase in the size and scope of government. Politicians want you to think the only people who can keep you safe are government forces. But as one renown libertarian economist and thinker will show you, their misguided laws do nothing but take away your freedoms and leave you less safe.
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.
The Congressional Budget Office said the government needed to reach 7 million people by the end of March. They claim to have reached the goal and now the debate about Obamacare is over. But what does this milestone really mean in the ongoing healthcare discussion? And more importantly, how will it affect reforms going forward?
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...
In an effort to cut costs and keep track of patients' records, governments could institute a medical guideline cookbook. Bureaucrats might think they have the best of intentions in mind, but these new rules would drag down the medical process and destroy whatever quality is left in our current system.
Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
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.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
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.
The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
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.
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 Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
“It is difficult to make predictions, especially about the future,” says a proverb often attributed to Yogi Berra. Imagine the world of freedom, or lack of it. Who could foresee the technologies that make our lives so rewarding and convenient? The same technologies have us all under the government’s giant microscope. Thankfully, the brave have turned the microscope around.
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA's most troublesome behavior has not been a part of the public debate.
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.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The problem for NSA apologist is that when guys like Snowden disclose that the government conducts comprehensive surveillance in ways that would have made 1984’s O’Brien drool, it puts the entire progressive agenda in jeopardy.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
After the bust of 2008, well-connected corporations and banks lobbied for and received many billions in bailouts from the government. The public was outraged. The term “crony capitalism” came into new prominence as a designation for capitalists who live off the taxpayer.
But how far do we want to take this language? In a mixed economy, no one is untainted by some association with government. And in a paper-money economy, every existing enterprise is compelled to ride the waves of economic cycles.
Does getting rich in the boom make you a crony? If you are good at playing the markets, does that make you corrupt, because the system itself is distorted by central bank intervention and a million other impositions? If you buy low and sell high, do you deserved to be demonized?
The critics of Bain Capital, Mitt Romney’s one-time employer, seem to think so. Let’s examine the claim.
The Federal Reserve has flooded the world with money since the last ties to the gold standard were snipped back in 1971, by Richard Nixon, of all people. Interest rates are lower in the unrestricted Fed printing world than they would be in a laissez-faire Shangri-La. In the 2000s, low interest rates and the oceans of liquidity sloshing around in Greenspan’s bathtub led to speculation.
Every old Austrian economist figured this out. And the proprietors at Bain Capital figured it out as well. Buy companies on the cheap with cheap money, make them more efficient, and sell them as quickly as possible for a higher price. Sounds like good work if you can find it, except for one thing: It’s not easy to turn a failing company around. It takes expertise, and when you are dealing with high leverage, timing is everything.
Let’s look at David Stockman’s The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy. The book is the cause celebre of the supporters of Obama for president because it labels Romney a deformer and a crony in the attempt to strip him of his main private-sector claim to fame. This book excerpt matters not only because it is now top fodder in the political war, but also because it ramps up the attacks on anyone who makes it big in the markets, and thereby opens up a new front against private wealth.
Mr. Stockman’s had some great things to say in the past couple years, and crony capitalism is rampant for sure, but taking the private equity business to task as if it were the nation’s greatest threat is painting with too broad a brush.
He writes that “the waxing and waning of the artificially swollen LBO business has been perfectly correlated with the bubbles and busts emanating from the Fed.” Well, sure it has. The same goes for the homebuilding business and a number of other business-cycle dependent industries.
Easy money distorts the economy and makes average businessmen look like geniuses. The social value of crashes, recessions, and depressions is to let capital providers know who, in Warren Buffett’s words, “has been swimming without a suit.” As for Romney, he left the party on time. Good for him. We should all be so lucky.
Is this crony capitalism? No. Compare with Citicorp and Goldman Sachs lining up for TARP money and dozens of other government giveaways that saved them from the clutches of capitalism’s death grip. Crony capitalism is creating money out of nowhere to pay 100 cents on the dollar for AIG’s obligations, saving not only the insurance giant, but dozens of other financial firms foreign and domestic.
Bain Capital did not receive a bailout. Bain continually bought low and sold high. Most of the time, the firm earned a return lower than a passive investor in the S&P 500. But there were 10 deals that amounted to 75% of the firm’s earnings during Romney’s tenure.
Stockman offers this up as proof that some sort of skullduggery went on, but anyone who has invested in private partnerships knows that all successful investors strike out occasionally, hit mainly singles and doubles, and a small percentage of the time hit home runs. It’s the home runs that make the money managers worth their money.
Stockman further kvetches that “four of the 10 Bain Capital home runs ended up in bankruptcy.” The company had the bad form to sell out before the companies became victim to the 2000-02 downturn. Was Romney really so clairvoyant as to do this using sheer business acumen? If so, he probably should be president. Hardly anyone predicted that 2000-02 recession.
(By the way, the other guy under consideration on Nov. 6 has displayed the bad timing of funneling taxpayer money to companies like Solyndra and A123 Systems just before each firm filed for bankruptcy. If we must fill the Oval Office, I’ll take the guy with good timing any day.)
Stockman further takes Romney to task for rebranding Stage Stores Inc. to make it appealing to investors. The company’s stock price doubled, and again, Bain had the good sense to sell out, for an 1,800% gain. Bain was able to put little money down toward these purchases and occasionally had big winners. But the key point here is that Bain was investing its own money. The other guy on the ballot has been “investing” taxpayer money.
And as distressed as Stockman is about LBO debt, it’s nothing compared with the $16 trillion that Uncle Sam has racked up. Borrowing money at low interest rates to turn businesses around and turn quick profits can only be considered good business.
What Bain did was no different than the person who buys a fixer-upper, does the repairs, obtains a cash-out refi based on the appreciated value, and then sells the house at the top of the market. Would that seller be vilified if the buyer of the house lost it to foreclosure because they paid and borrowed too much? Stockman’s piece seems to indict anyone who has refinanced their home or business at a lower rate and eventually sold out for a profit.
LBOs “are dangerous because when they fail, they leave needless economic disruption and job losses in their wake,” writes Stockman. But these businesses were failing to begin with. Some were using poor business plans, others outmoded technology, some had bloated managements. Either way, what’s the disruption? The bankruptcies redistributed the assets (including labor) to more efficient uses, unlike, say, the GM or Wall Street bailouts.
Stockman claims that LBOs “would be rare in an honest free market — it’s only cheap debt, interest deductions, and ludicrously low capital gains taxes that artificially fuel them.” In an honest free market, the debt would be cheap because the money would be stable like gold or silver. There would be no capital gains taxes at all, so interest deductions wouldn’t matter.
(And what is this about low capital gains taxes? Fact: “U.S. corporations face long-term capital gains tax rates almost 80% higher than those of their competitors in other countries. The U.S. tax rate on long-term corporate capital gains is higher than that of all but two of the other countries surveyed.”)
One 50-1 home run for Bain was due to “massive leverage, fancy accounting, and bubble finance, not entrepreneurial prowess,” Stockman sniffs. Wait just a minute. Buying a company that’s undervalued, using every tax loophole the government allows, and marketing and selling the stock at the market price is the definition of entrepreneurship: whether it’s the Hayekian processes of discovery, Kirznerian alertness, Schumpeterian innovation, Schultzian adaptation, or Misesian foresight of consumer wants.
The U.S. economy is anything but a free market. It’s absurd to judge the Republican candidate’s entrepreneurial acumen in a mythical free-market world that doesn’t exist. Mitt Romney and Bain Capital played the hand they were dealt, and they played it spectacularly well. Election or not, it’s deeply dangerous to blame entrepreneurs for the statist environment they must operate in.