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[] CNN's Don Lemon: You Don't Deserve Health Care if You're Not Vaccinated Published:9/2/2021 11:22:31 AM
[Markets] Cruz: Biden's 'Crazy-Ass Ideas' Will Lead To GOP Majority Cruz: Biden's 'Crazy-Ass Ideas' Will Lead To GOP Majority

Authored by Philip Wegmann via RealClear Politics (emphasis ours),

It was Madison Cawthorn’s turn to pay for lunch, and because the freshman congressman bought the barbeque Wednesday, he got to make a short speech behind closed doors.

The North Carolina lawmaker told his more senior colleagues that “our people” only want to “swing for the fences” while Democrats, at least in his limited experience, were happy to move their plans forward “inch by inch.” And then, Cawthorn wrapped his remarks by urging the Republican Study Committee to “be more willing to accept a limited victory.”

Sen. Ted Cruz sat nearby silently picking at his brisket. 

One of the original heroes of the Tea Party and the scorched-earth strategy it embodied, Cruz hadn’t walked over from the Senate to talk about wins on the margins. He warned his House counterparts that “Democrats are deadly serious” about their agenda, and said they would “go to any lengths” to pass it. He complained that too many in the Grand Old Party still treated governing “like we are playing croquet in the back lawn.” Cruz said it was time “to hold the line.”

This was the message the Texas senator delivered to a receptive conservative congregation in the basement of the Capitol on Wednesday. He said things would get worse for them before they got better. Much worse. Cruz has a pendulum theory of politics. So while he came to offer some hope, “to encourage you,” he began with a rather bleak view of things.

The way Cruz sees it, President Biden’s honeymoon has turned into “an absolute train wreck.” At home, illegal immigrants are pouring across the southern border unchecked, gasoline prices continue to climb, and inflation alarm bells are ringing off the hook, ignored. Abroad, things are not much better. The White House surrender on the Nord Stream pipeline amounts to “a generational geopolitical mistake” that will line the pockets of “the next dictator in Russia” long after Vladimir Putin is dead and gone. And the Department of Justice’s dismissal of charges against visiting Chinese researchers was a disturbing sign of an administration trying to “make nice with the Community Party of China.”

The frustrated Republicans in the room nodded along at the doom-and-gloom, waiting on the promised good news. “Why is it that I'm optimistic then?” Cruz asked. “I'm optimistic because there's a natural tendency in politics of the pendulum going too far in one direction.” This is reason for hope, in his estimation, because the White House is overreaching on every front, “and every time we see some crazy-ass ideas, we should be encouraged.”

It will be morning in America soon because “the country is waking up.” Cruz argued that the 2020 electorate was made up of people who couldn’t take any more mean tweets from the last president, so they pulled the lever “for nice Uncle Joe.” He added that those same voters “are now looking at his agenda and saying, ‘This is not what we signed off on.”

“There is a saying that history doesn't repeat but sometimes it rhymes — I think Joe Biden is Jimmy Carter 2.0,” Cruz said, mixing an old maxim with current GOP messaging. “And the good news is it took Jimmy Carter to give us Ronald Reagan,” continued the two-term senator who finished second in the 2016 GOP primary and undoubtedly still harbors White House ambitions.

It is going to be rough for Republicans until someone can get on a debate stage with Biden. With Democrats in control of both houses of Congress, Cruz said, “they can ram through some really bad policy, they can spend a ton of money and raise taxes — and they are going to do it.” Until next year, Cruz told the assembled Republicans, “we have a responsibility to slow the damage.”

He puts their odds of taking the House at “80-20.” The Senate, because of a difficult map with more red seats than blue ones up for grabs, is “50-50.” Until Nov. 8, 2022, comes, Cruz continued, they basically have two choices: Republicans can “go down swinging as the Democrats ram through some terrible policy,” or “we roll over and let them do it to the country.” He didn't tell them that either option would be pleasant — “look, there are consequences when you lose both houses of Congress and the White House.”

But the call to arms is second nature for Cruz. His brand was obstruction during the Obama years, and he came of age in the upper chamber goading the GOP into being more, not less, receptive to the conservative grass roots. These days, his messaging is writ large in Cruz campaign merchandise. During spring break season back in March, there were tank tops and trucker hats that would have been unthinkable a few short years ago. Thirty bucks buys a Cruz supporter a T-shirt emblazed with an exaggerated and clearly self-depreciating image of the senator’s mullet. The caption reads, “McConnell in the front, MAGA in the back.”

The campaign swag drew instant headlines. It also told a story about shifting factions within the Republican Party. As a freshman senator during the Obama years, Cruz irritated not just a Democratic president, but his own party’s leaders as well. Reelected to a second term in the Trump era, Cruz now finds himself simpatico with GOP brass in a political party trying to weather the Biden administration and an aggressive congressional Democratic majority.

Perhaps the invitation to Wednesday’s lunch also underscores the rightward shift of Republicans. After all, the Republican Study Committee is the largest and most influential GOP caucus on Capitol Hill. The group’s chairman, Rep. Jim Banks of Indiana, has rallied the party, huddling regularly with Minority Leader Kevin McCarthy and turning the organization into a forum for potential 2024 contenders to audition. Members of the committee certainly liked what Cruz had to say Wednesday. They were particularly pleased with his pandemic politics.

In short order, Cruz condemned the re-masking recommendation from the Centers for Disease Control as “idiotic, not science,” mocked the speaker of the House as “Queen Pelosi” for fining vaccinated members who don’t don face coverings, and concluded that, with its latest masking policy, the administration “has ‘jumped the shark.’” He added, “We're likely to see no Republicans complying with it in the states.”

While those arguments drew nods of agreement, Cruz spent most of his time railing against the president’s massive infrastructure package. “I'm worried about where the Senate is going to go,” he admitted, “and I recognize the old adage in the House that ‘Democrats are your opponents and the Senate is the enemy.’ There is some truth to that.”

Before he spoke to the RSC, one of the 10 or so Republicans open to the White House spending plan had texted him about the infrastructure funds that would head to Texas. In his telling, Cruz typed back, “I’m like, ‘How about you don’t take our money, then give it back to us?’” The room let out a collective laugh at that, and Cruz related the risk he sees his colleagues taking by backing any part of the initiative.

There are two proposals that make up that package. The first, the so-called $1.2 trillion “hard” infrastructure bill, would fund physical projects like roads and bridges. It has some bipartisan support. The second, a $3.5 trillion bill, takes a much broader definition of infrastructure to fund child care, health care and education priorities. Republicans uniformly oppose that part, which the White House hopes will include a pathway to citizenship for some of those in the country illegally. To circumvent a filibuster, Senate Majority Leader Chuck Schumer plans to pass it by going the budget reconciliation route.

Cruz warned that this two-track method would lead to the GOP’s own train wreck if enough of his Senate colleagues balked at conservatives’ objections and sided with Democrats. A vote for the “hard” package, he argued, would only grease the skids for the much broader, and far more expensive, component. He offered the RSC a fly-on-the-wall perspective of the contentious closed-door conference meetings, saying that about a dozen Republicans “want to cut a deal with all of their hearts.” He said there has been plenty of yelling.

“We're having, in our lunches, knock-down, drag-out fights, with the rest of us going, ‘What are you doing?’” An infrastructure bill might be bipartisan, but he predicted the result would make the GOP into the president’s stooges: "Joe Biden is gonna run around and say, ‘Look, it's all wonderfully bipartisan — I got these happy little Republicans celebrating the spending.”

If his colleagues don’t fight off both bills, if they cut a deal, they won’t just give Biden a win, Cruz argued; they would “put Republican fingerprints all over the inflation bomb that is exploding right now.” What is worse, they risk opening up “a backdoor way to repeal the filibuster.”

When Republicans controlled Congress and the White House, the rules governing reconciliation ruined many of their plans. Specifically, it was the Senate parliamentarian, who determines the procedure by which the chamber can avoid a filibuster and allow legislation to pass by a simple majority. That official can be overruled with a vote by the vice president — a case Cruz says he made “multiple times” in the Oval Office to then-President Trump and Vice President Mike Pence during the effort to repeal Obamacare. “I got laughed out of the room every time I made it,” Cruz recalled. “They said, ‘No, we're not going to do that because Mitch [McConnell] doesn't want to.” 

Democrats have no qualms about Senate norms. The difference now, he said, is that Vice President Kamala Harris has a more expansive view of the rules. That, and “their side is actually willing to do what it takes to ram their agenda through.” Cruz fears Democrats will use the arcane process as cover to also push through amnesty provisions. After that: HR1, the far-reaching voting rights bill backed by Democrats. “If you hear the phrase ‘election infrastructure,’” he told the room of Republicans, “run and hide.” He was half joking.

What about the other Joe, though? The moderate Democrat from West Virginia who opposes abolishing the filibuster? Cruz said he and Joe Manchin get along just fine, but after nine years in the Senate, he has never seen his colleague “once stand up to Chuck Schumer on any issue that mattered where he was the deciding vote.”

If that happens again, he predicted, the door to abolishing the filibuster would be wide open.

Perhaps Cruz and his colleagues might take inspiration from Texas Democrats, the ones who skipped out of Austin earlier this month to bring the Republican-controlled state legislature to a halt. Rep. Rep. Richard Hudson of North Carolina gave “a tongue-in-cheek" suggestion: “What if all the Republican senators fled to Austin and holed up in The Driskill hotel to deny Democrats a quorum?”

“You had me at Driskill,” Cruz joked, noting how former President Lyndon Johnson “used to sit there on the cowhide sofas drinking bourbon.” But Republicans won’t be sipping whiskey in exile anytime soon, at least not in trying to check Biden. Democrats have the numbers to run rough-shod over them even if they skip town. What should they do then? Cruz told his Republican brethren to lean on Manchin with “the carrot and the stick” — to call the West Virginian’s “oil and gas” donors if need be.

Manchin’s office did not respond to RCP comment request.

To get through the current presidency, to make sure Biden becomes another Jimmy Carter and to make straight the path for another Reagan, Cruz counseled the GOP study committee that they needed to show their base “we're fighting with everything we've got as happy warriors.” But the Texan delivered a dire warning. “From y’all’s perspective,” he cautioned, “don’t count on the Senate to save you.”

Tyler Durden Thu, 07/29/2021 - 22:40
Published:7/29/2021 9:56:26 PM
[Markets] The Ugly And Difficult Hunt For The True Economy The Ugly And Difficult Hunt For The True Economy

Authored by Bruce Wilds via Advancing Time blog,

Good luck with acquiring a clear view of our economic future. It is shrouded and cloaked under an ocean of often irrelevant facts and figures. Somewhere between what we are told is occurring in the economy and what we see happening on Main Streets across America is the real and true authentic economy. It is ironic that every sign the economy is not getting better only reinforces the idea that the Fed needs to goose things and pour even more fuel on the fire. This is exactly what many of us oppose and consider pure insanity.

A false economy of fraud is created by seizing on a few positive numbers that can be spun and hyped to convince people all is well. Even as I'm writing this, a MarketWatch article just came out saying the U.S. stock-index futures were trading higher after a report on June retail sales came in stronger than expected. To that, I say, what do you expect, people are busy spending what they see as "free money." Sadly, people buying goods made in China from Amazon does little to enrich our communities or the American economy.

The justification for continued Fed intervention is often attributed to the idea inflation is not a threat and further action poses little risk. Those behind increased and continued easing say more action is needed or a loop will develop that feeds on itself and ends in a deflationary depression.

Most of us are familiar with former President Bill Clinton's infamous line; “It depends on what the meaning of the word ‘is’ is.” Well, when it comes to the hunt for the true economy, it all depends on your definition of true. In a true economy things such as sustainability matter, deficits matter, savers being able to get a reasonable return on their savings without taking on undue risk also matters. Simply put, the economy currently before our eyes is as false as it can get.

Before us is an illusion created by papering over the truth with unbelievable amounts of newly printed money. Of course, it is not just money, it is a combination of things. Artificially low interest-rates, the creation of new and easy to obtain credit, and promises that these policies will continue. The fact is, since 2008, even after years of expanding money supplies and dropping interest rates the economy has not fared as well as many top politicians have led us to believe. 

We have witnessed some major distortions in the economy since 2008 that have rendered many of the comparisons used in the past as obsolete. An example of this can be found in healthcare. Following the passage of Obamacare, the money flowing into healthcare massively added to America's GDP, this went on for years. While many people are wowed by these huge expensive new buildings, on the flip side, it has resulted in the shuttering of many smaller local and rural hospitals and clinics that were adequate to care for patients at a much lower cost. Today many of these massive new hospitals standing as monuments to Obamacare run far below capacity again confirming that planners with little skin in the game love to overspend the money of others and we have the healthcare bills to prove it.

Those that see beyond the illusion created by easy credit and money printing, often loudly state that in the future both the economy and society will pay dearly for the sins of the Fed and that no options exist to get out of the box they have put us in. The fact is low-interest rates have punished the very people who have done the right thing by saving and sacrificing to put away money for future needs. It must be noted savers have been encouraged and forced to take on risky investments as they search for higher yields that are unavailable in safer more conservative options.

This debate continues to polarized those who study the economy and play in the dangerous land of investments. Meanwhile, the failure of a crash to materialize and bring markets back to reality over the years has caused a breaking in the ranks. The songs of the market sirens that promise both wealth and profit has lulled many into complacency. We have reached the point where many of the nonbelievers in current policy are capitulating and joining with those who live by mantras like, don't fight the Fed, buy the dip, and to the "fear of missing out."  Each day more investors surrender to lure of the markets and buying into what they had only a short time ago seen as the dark-side.

Surging inequality is not an indicator of economic health and neither is the sign that millions of jobs are about to vanish due to automation. Economic inequality is not only a profound social and economic issue but flows into forces that affect financial-market stability. Unfortunately, current trends indicate we should not expect improvement in economic equality.

Wealth inequality now stands at the worst it has been during the entire U.S. post-war period. Studies show that the U.S. middle class has been “hollowed out.” In terms of income "by manufacturing jobs" it appears any gains made by the lower-middle class were sharply reversed after 2007. Using certain data we get the picture that racial economic-equality disparities are as bad as they were before the civil rights era. Driving a decent car doesn't make a person middle-class or economically equal, especially if they are up to their eyeballs in debt to do so. 

Covid-19 has moved into the rear-view mirror for many of us but for political reasons Washington will not move on. When all is said and done many people object to the way the pandemic was handled and the huge financial burden it created. Still, it is difficult to deny the damage wrought by Covid-19 continues to remain an excuse for continuing a rash of policies that are responsible for bringing us where we are today.

It is likely the true state of the economy will only be resolved after abundant solid undisputed growth is evident or we have sunk into a mess so dire that financial Armageddon is upon us. Our current perplexing economic state continues to confound and confuse. It seems every time the numbers fail to meet expectations or fall short those in power or the media raise the bar and crank out the fairy dust, some hype, or spin a tale of coming promises and stories of better times soon to come. This has postponed the day of reckoning and a resolution to this debate.

The Spring of 2020 Sell-off

The conundrum we face is how to resolve this toxic mess in the least damaging way. To those of us troubled by the direction the Fed has chosen to take, the massive problem of how to exit the current path remains. Adding to our concern is that rather than warning politicians of the danger involved in spending trillions of dollars on "human infrastructure," a program that sounds akin to welfare, the Fed has remained silent. Going forward with such spending is likely to yield little other than weaken the dollar and endanger its status. Grant’s Interest Rate Observer founder and editor, Jim Grant, has stated; “I think that the 40-year bond bull market is arguably over or ending and what lies ahead of us is important inflation with rising interest rates.”

The original formula for measuring economic growth was full of flaws but over the years we have allowed even more numbers that mean "nothing" to seep into how the GDP is calculated. The motivation for such adjustments has always been to move forward the illusion of growth. In 1962 Kuznets, the chief architect of how to measure the GDP again emphasized the importance of keeping in mind the difference between quantity and the quality of growth. We need to face the fact the illusion the economy is continuing to strengthen is completely based on "government deficit spending" coupled with the Fed's very easy monetary policy.

To say the economy we witnessed during 2020 was a bit bizarre is an understatement. Nobody ever predicted anything like what unfolded. As money continues to be created out of thin air we are witnessing bailouts and crony capitalism on full display. Every trillion dollars the Federal Reserve and our government injects into the economy adds approximately $3,333 per man woman and child in America. Recently aid packages from Washington alone have put about three times that into the mix. With this in mind, the whopping ten thousand dollar bang dished out for each of us was bound to move the economic needle.

Adding to this distortion is Fed policy has enabled countries throughout the world to enact similar stimulus packages without lowering the value of their currencies in relation to the dollar. Adding to the bizarre nature of this economy is that this is the first recession where incomes have gone up rather than down. Many seasoned investors feel we have entered the area of  “peak insanity.” We are in the kind of market that only emerges during credit bubbles and no method exists to adjust the skewed data we are fed. One lesson we have learned is we should not expect things to revert to normal anytime soon.

Tyler Durden Sun, 07/18/2021 - 11:40
Published:7/18/2021 10:47:19 AM
[Markets] Biden Plans Anti-Monopoly Executive Order Targeting Big Business Biden Plans Anti-Monopoly Executive Order Targeting Big Business

Yesterday, a US district judge tossed out an anti-trust case brought against Facebook by the federal government and a coalition of states (swiftly sending the tech giant's market cap past the $1 trillion mark). At the same time, reports emerged claiming the DoJ's anti-trust division was preparing to revive a Trump-era anti-trust push targeting Google's display ad business.

With Lina Khan in charge at the FTC and Tim Wu installed as special assistant to the president on competition, increasing attention is being paid to the Biden Administration's anti-trust plans now that breaking up Big Tech has become an issue with bipartisan support in Congress, with lawmakers of both parties supporting more scrutiny (while others said to be in the pocket of Big Tech have dutifully pushed back). As curiosity about the administration's next steps mounts, WSJ reported Tuesday evening (following an earlier report from Reuters) that the White House is planning a sweeping executive order that would direct federal agencies to strengthen oversight of industries that they perceive to be dominated by a small number of companies.

The order comes as House lawmakers are pushing ahead with a package of anti-trust legislation aimed at restraining Big Tech. The order reportedly builds on a 2016 report by the White House Council of Economic Advisors. A similar anti-trust order handed down by President Barack Obama in 2016 failed to "move the needle" on the competition front.

The order will direct regulators of industries from airlines to agriculture to rethink their rule-making process to inject more competition and to give consumers, workers and suppliers more rights to challenge large producers.

Based on what we know so far, it doesn't look like the order will pressure regulators to push for the outright breakup of industrial conglomerates, large corporate farms or American tech giants.

The goal is to broaden the way policy makers approach business concentration in the U.S., going beyond conventional antitrust enforcement focused on blocking big mergers. For example, companies in industries controlled by a small number of big firms might face new rules for disclosing fees to consumers or for their relationships with suppliers, the people familiar with the effort said.

Opponents of tighter anti-trust rules are hopeful that the conservative SCOTUS will weigh in to block Biden's attempts to override Congress and unilaterally impose new restrictions on American corporations (while at the same time working out a new global minimum corporate tax that would, if ever implemented, likely increase the tax bills of American multinationals).

Big business groups and some Republicans will likely protest any new Biden measures. Businesses and conservative legal groups could challenge the rules in court, as they already have with administration moves to limit oil and gas drilling on federal lands and to extend a pandemic-related moratorium on evicting renters. Regulatory opponents are hopeful that conservative judges appointed by former President Donald Trump will make it easier to challenge Biden administration rules.

"I find the way this is being framed questionable," said Douglas Holtz-Eakin, an economist who worked in the George W. Bush administration and who has advised GOP lawmakers and candidates. "They’ve decided the economy isn’t competitive, but when you look closer at the data, you just don’t see a radical increase in concentration."

However, the supposedly "conservative" SCOTUS that Democrats spend an inordinate amount of time railing against hasn't come through for conservatives on a handful of recent rulings, including declining to strike down the CDC's eviction moratorium while also refusing to strike down Obamacare for the third time.

Per WSJ, the order will likely focus on pressuring companies to disclose more information, including fees, that would provide more transparency about pricing.

While both WSJ and Reuters reported that the executive order could land as soon as next week, White House spokeswoman Emilie Simons said no final decision has been made.

She added that the president has in the past called for giving small farmers more protection from large concentrated farms. Biden has also called for restricting the ability of employers to force workers to sign non-compete agreements limiting their ability to go work for competitors.

Tyler Durden Tue, 06/29/2021 - 21:05
Published:6/29/2021 8:17:57 PM
[Democrats] FLASHBACK: Senate Dems Call Barrett Nomination a Threat to Obamacare

The Supreme Court affirmed the Affordable Care Act in a 7-2 decision on Thursday, dismissing the challenge to the law and leaving Obamacare intact. Justice Amy Coney Barrett was among the justices who ruled in favor of the decision. During Barrett's confirmation hearings in October 2020, Democrats claimed that the very existence of the Affordable Care Act was in jeopardy if she were confirmed to serve on the High Court, as she would vote to overturn the law.

The post FLASHBACK: Senate Dems Call Barrett Nomination a Threat to Obamacare appeared first on Washington Free Beacon.

Published:6/21/2021 1:59:55 PM
[Uncategorized] Supreme Court loves it some Obamacare

SCOTUS has performed mouth-to-mouth resuscitation and chest compressions on Obamacare for almost a decade, including recently in California v. Texas. Alito Dissent: "No one can fail to be impressed by the lengths to which this Court has been willing to go to defend the ACA against all threats."

The post Supreme Court loves it some Obamacare first appeared on Le·gal In·sur·rec·tion.
Published:6/19/2021 8:17:42 PM
[Affordable Care Act] [Ilya Somin] Three Years of Commentary on California v. Texas An index of my writings on what may be the last major Obamacare case to get to the Supreme Court. Published:6/19/2021 10:13:49 AM
[World] [Jonathan H. Adler] Why the Texas aCA Suit Was Always Destined to Fail (Even on a 6-3 Court) The latest Obamacare challenge was a clever lawsuit without an underlying principle. Published:6/19/2021 9:13:55 AM
[Markets] Will Senate Democrats Now Apologize To Justice Barrett? Will Senate Democrats Now Apologize To Justice Barrett?

Authored by Jonathan Turley,

During the confirmation hearings of now Justice Amy Coney Barrett, I repeatedly objected to the clearly false narrative that she was nominated to vote to strike down the Affordable Care Act in the pending case of California v. Texas. The case was highly unlikely to result in such a decision and the Democrats knew it. The case was a focused on a highly technical and limited issues of severability. It would either be resolved on that limited basis or dismissed for standing. While Barrett might view the ACA as unconstitutional (as many do), I noted that she was more likely to dismiss the challenge or sever the individual mandate than to strike down the Act in the case. That is what she did in joined the 7-2 decision to dismiss the case.

During the confirmation, the Senate Democrats surrounded the room with giant pictures of people who would lose their health care if Barrett was confirmed and struck down the Act. They were portrayed as her future victims as members pummeled Barrett with accusations that she was just an ACA-killing shill. Barrett retained her composure and did not state the obvious — that she was more likely to vote to dismiss the case than to strike down the Act. She also refused to take the bait in responding to President Trump’s call for the Act to be struck down.

The shameful attacks were unrelenting. Democrats insisted that there was no question that Barrett would vote in the case to strip away health care for millions. Senate Democratic Leader Chuck Schumer, D-N.Y., claimed in a press release that “a vote by any Senator for Judge Amy Coney Barrett is a vote to strike down the Affordable Care Act and eliminate protections for millions of Americans with pre-existing conditions.”

Senate Democratic Whip Dick Durbin, D-Md., claimed that Barrett was on an “assignment” by Trump to get rid of Obamacare:

“We just chatted for a minute, and I really wanted to try to understand her experience as a person when it came to health care because she is being sent on assignment to the Supreme Court by President Trump. And we know what that assignment is, eliminate the Affordable Care Act.”

Sen. Sheldon Whitehouse, D-R.I., referred to Barrett as a “judicial torpedo” aimed at destroying Obamacare:

“This Supreme Court nominee has signaled in the judicial equivalent of all caps that she believes the Affordable Care Act must go, and that the precedent protecting the ACA doesn’t matter,” Whitehouse said. He claimed that the “influences behind this unseemly rush see this nominee as a judicial torpedo they are firing at the ACA.”

Sen. Mazie Hirono, D-Hawaii, claimed in an interview during Barrett’s confirmation hearings that

Republicans “want her on that court to hear the Affordable Care Act case… so that she can strike it down. This nominee poses a clear and present danger, an immediate danger, to the healthcare of over 20 million Americans who have healthcare thanks to the Affordable Care Act.”

Sen. Elizabeth Warren (D-Mass.) declared that:

Barrett would “work to gut” the ACA and called Barrett a “right-wing ideologue who does not represent the majority of Americans.”

Sen. Bob Casey, D-Penn., insisted that Barrett’s nomination was being “fast-tracked” due to the pending case:

“This nominee is being fast-tracked, first of all, because this nominee has been vetted by the two groups that matter: the Federalist Society and the Heritage Foundation,” Casey said. “Both groups totally committed to undoing, striking down the Affordable Care Act. So she’s already passed that test, and she apparently passed with flying colors as she moved very quickly to a likely confirmation.”

Sen. Patty Murray (D-Wash.) tweeted.

“Make no mistake, a vote to confirm a Supreme Court nominee who meets President Trump’s tests is a vote to take away people’s health care and vital rights.”

Legal and media experts echoed the narrative that confirming Barrett meant no health care for Americans.  Professor Charles Tiefer wrote with complete confidence that “[a]s a textualist, she will find that the whole ACA is dead. It will be somber reminder that however the Presidential race comes out, Republicans have set up a 6-3 Court conservative court that will reign supreme for decades to come.”  He and others like NYU Professor Stephen Gillers said that Barrett should consider recusal from the case.

Barrett sat through days of such baseless attacks and predictions. She even had to endure Ibram X. Kendi, the director of the Center for Antiracist Research at Boston University, claiming that her adoption of two Haitian children raised the image of a “white colonizer” and suggested that the children were little more than props to their mother.

I do not seriously expect apologies. That is something that does not happen in our age of rage. Spurious attacks and false claims are simply ignored by the media when they are later proven to be untrue.  They served their purpose in the staging of the confirmation. By the time the “judicial torpedo” proved to be a dud, the members and the media had moved on to the next target and orchestrated narrative.  All that was left was the sound of a hallow clank hitting the side of the ACA as Barrett joined six other justices to dismiss the case.

Tyler Durden Fri, 06/18/2021 - 14:44
Published:6/18/2021 2:07:49 PM
[Law] In Third Obamacare Decision, Supreme Court Didn’t Decide Whether Obamacare Was Constitutional or Not

On Thursday, the Supreme Court handed down its decision in California v. Texas, the third challenge to the Affordable Care Act (colloquially called “Obamacare”).  The... Read More

The post In Third Obamacare Decision, Supreme Court Didn’t Decide Whether Obamacare Was Constitutional or Not appeared first on The Daily Signal.

Published:6/18/2021 9:40:05 AM
[] Remember When the Left Predicted the End of Obamacare if Amy Coney Barrett Was Confirmed? Published:6/18/2021 8:31:02 AM
[] The Supreme Court Ducks Another Foundational Issue By Claiming Obamacare Litigants Have No Standing to Sue The Supreme Court has permitted Obamacare to stand, not by ruling on it by the merits, but by disqualifying a lawsuit filed against it by claiming the litigants had no standing to sue as they incurred no concrete harm. The... Published:6/17/2021 5:01:18 PM
[] Sen. Sheldon Whitehouse does 'not for a minute' regret his rhetoric against Justice Amy Coney Barrett concerning the ACA Published:6/17/2021 4:31:10 PM
[Health Care] With Obamacare Still on the Books, People Are Still in Dire Need of Better Insurance Options

Now that the Supreme Court has just—yet again—left the Affordable Care Act on the books, it’s a good time to ask just how well the... Read More

The post With Obamacare Still on the Books, People Are Still in Dire Need of Better Insurance Options appeared first on The Daily Signal.

Published:6/17/2021 3:31:43 PM
[Politics] Op-Ed: Another conservative attack on Obamacare, another loss at the Supreme Court

Thursday's Supreme Court ruling in favor of Obamacare has enormous practical significance — it means 21 million people will keep their health insurance.

Published:6/17/2021 1:00:54 PM
[The Courts] Supreme Court Upholds Obamacare in Full

The Supreme Court on Thursday again upheld the entirety of the Affordable Care Act, rebuffing a constitutional attack on the law from a group of red states backed by the Trump administration. 

The post Supreme Court Upholds Obamacare in Full appeared first on Washington Free Beacon.

Published:6/17/2021 10:30:27 AM
[Uncategorized] SCOTUS Upholds Obamacare 7-2 With Kavanaugh, Barrett Joining the Majority

Breyer said the plaintiffs, including 18 states, "failed to show that they have standing to attack as unconstitutional the Act’s minimum essential coverage provision."

The post SCOTUS Upholds Obamacare 7-2 With Kavanaugh, Barrett Joining the Majority first appeared on Le·gal In·sur·rec·tion.
Published:6/17/2021 10:30:27 AM
[Markets] The Supreme Court has upheld the constitutionality of Obamacare in a 7-2 vote The Supreme Court has upheld the constitutionality of Obamacare in a 7-2 vote Published:6/17/2021 9:29:46 AM
[Politics] BREAKING: Supreme Court votes to leave Obamacare in tact after challenge from certain states The Supreme Court voted 7-2 today to uphold Obamacare after some states brought a Constitutional challenge to the high court: BREAKING: The Supreme Court rejects the constitutional challenge to Obamacare in 7-2 . . . Published:6/17/2021 9:29:46 AM
[Markets] Supreme Court Saves Obamacare Again After GOP Challenge Rejected Supreme Court Saves Obamacare Again After GOP Challenge Rejected

The Supreme Court on Thursday rejected a GOP challenge to Obamacare, upholding the Affordable Care Act for the third time.

In a 7-2 decision, the Court found that Texas and 17 other states lack legal standing to sue, as they had not suffered a direct injury, according to the New York Times.

The Justices did not touch on the larger issues in the case, however, namely whether the majority of Obama's signature legislation could stand without a provision that forces Americans to obtain insurance or pay a penalty.


Tyler Durden Thu, 06/17/2021 - 10:19
Published:6/17/2021 9:29:46 AM
[Politics] BREAKING: Supreme Court votes to leave Obamacare in tact after challenge from certain states The Supreme Court voted 7-2 today to uphold Obamacare after some states brought a Constitutional challenge to the high court: BREAKING: The Supreme Court rejects the constitutional challenge to Obamacare in 7-2 . . . Published:6/17/2021 9:29:46 AM
[Markets] "Wholly-Owned Subsidiary Of The Gun Lobby": Newsom Attacks Federal Judge Who Ruled In Favor Of Gun Rights "Wholly-Owned Subsidiary Of The Gun Lobby": Newsom Attacks Federal Judge Who Ruled In Favor Of Gun Rights

Authored by Jonathan Turley,

Remember when networks and legal experts (correctly) denounced President Donald Trump for his attacks on judges who ruled against him?

Two years ago, I ran a column noting that Democrats were adopting the same attacks on conservative judges but the media was entirely silent.

Now,  California Gov. Gavin Newsom and Democrats are lambasting a federal judge who ruled in favor of gun rights in a recent decision — accusing him of being in the pocket of the NRA and a danger to the country.  The response to Newsom’s attack from all of those same media and legal experts has ranged from outright support to conspicuous silence.

We recently wrote about the decision of U.S. District Judge Roger Benitez to strike down the ban on “assault weapons.”  In Miller v. Bonta, Benitez found that the ban on weapons like the AR-15 are based on both a misunderstanding of the weapons and a misinterpretation of the Constitution.  I previously discussed many of the same issues surrounding the AR-15 which remains one of the most popular weapons in the United States

The recent decision led to a barrage of personal attacks from Newsom, state Attorney General Rob Bonta and legal experts.  Newsom called Benitez a “stone-cold ideologue” who writes “press releases on behalf of the gun lobby.”  He warned that everyone needs to “call this federal judge out” because “he will continue to do damage.”

Benitez has indeed ruled for gun owners in the past.  However, he was upheld in that decision (which is still on appeal). In 2017, he struck down the state’s nearly two-decade-old ban on the sales and purchases of magazines holding more than 10 bullets. As recently discussed, the Ninth Circuit upheld his decision, which is now scheduled to be reheard by an 11-member panel. These cases have a very strong chance for review before the Supreme Court given the division across the country and the 6-3 conservative majority on the Court.

One can have good-faith reasons to disagree with both decisions.  Indeed, I am all in favor of passionate and pointed analysis of judicial rulings. Moreover, there are occasions where a judge’s personal bias is an issue.  Despite previously praising Judge Emmet Sullivan, I wrote columns that later criticized him for what appeared bias in his handling of the Flynn case. This is not such a case. Newsom is attacking this judge because he ruled in favor of gun rights arguments that are supported by many judges, lawyers, and citizens. These arguments have never been rejected by the Supreme Court. Indeed, he was relying on strong case law in favor of the Second Amendment claims raised by the litigants.

It is the strikingly different response to the attacks on the judge that caught my attention. As discussed in the earlier column, legal experts expressed outrage over attacks by Trump of judges as “Obama judges” or “political judges” during his term. There was however no push back on Democratic members denouncing “Trump judges” and “Trump Justices.”  Esquire magazine published a column denouncing judges who ruled against ObamaCare, declaring that the Republican arguments “don’t need to make sense. They just need the right judges — and they’re everywhere in the federal judicial system.” One Nation article explained how Trump jurists “swarming our judicial system . . . will linger, like an infected wound poisoning the body politic.” CNN ran headlines about “Republican-appointed judges” supporting the ObamaCare challenge, while Democratic members of Congress denounced federal judges ruling for the Trump administration as examples of why new judges must be appointed by Democrats.

Benitez ruled on arguments that have long been discussed by many of us as raising serious questions over the constitutionality of these laws. Again, one can disagree with the arguments but they are not fringe or fanciful positions. Indeed, Newsom’s demand for an appeal may be great news for the gun rights groups. Liberal states and cities have repeatedly pushed appeals that resulted in magnifying their losses. The District of Columbia is a great example of such poor choices in triggering the decisions in Heller. Later the Supreme Court expanded on its pro-gun rights case law in  McDonald v. City of Chicago. The Supreme Court just took up a new major gun rights case out of New York.

Benitez and his family fled communist Cuba and remains a powerful American success story.  He was able to get through law school as a first generation American. Benitez was confirmed 98-1 and had the strong support of Sen. Dianne Feinstein and other Democrats. (Only Sen. Dick Durban voted against him). Feinstein rejected the negative review of the ABA based on his “temperament” and noted that her own inquiries found that lawyers “say he is a man of the highest ethical standard, that he has superb demeanor, intelligence, pragmatism, and fairness. And the chief public defender notes that he has good judicial temperament and is courteous to his employees and the attorneys who appear before him.”

Newsom’s attack omits that Benitez was upheld by other judges in his earlier decision. That does not mean that the opinion is manifestly right (Indeed, it is being appealed). However, the opinion advanced well-established arguments and authority in reaching its conclusion. A majority on the Supreme Court would likely agree with much of the opinion. It is not about him. It is about the law.  That is why I criticized Trump for his attacks on judges and why we should be equally critical of Newsom and Democratic leaders doing the same thing now.

Tyler Durden Fri, 06/11/2021 - 19:00
Published:6/11/2021 6:17:52 PM
[World] [Josh Blackman] Update on Predicting SCOTUS Assignments for the November Sitting Justice Kagan wrote Borden. The Chief likely has the Obamacare case, and Justice Alito likely has Fulton. Published:6/10/2021 9:38:47 AM
[Markets] Supreme Court decision on legality of ‘Obamacare’ could be a day away Supreme Court decision on legality of ‘Obamacare’ could be a day away Published:6/9/2021 10:33:06 AM
[World] [Josh Blackman] Predicting SCOTUS Assignments for the November Sitting Who will write Fulton and the Obamacare case? Published:6/6/2021 4:12:52 PM
[Politics] “The real issue is not how did COVID happen, but how we protect ourselves from the next pandemic” – The man who brought you Obamacare The man who brought you Obamacare and now serves as Biden’s COVID adviser actually said that figuring out how COVID happened isn’t all that important. No, he says the real issue is . . . Published:5/27/2021 8:32:12 PM
[Politics] “The real issue is not how did COVID happen, but how we protect ourselves from the next pandemic” – The man who brought you Obamacare The man who brought you Obamacare and now serves as Biden’s COVID adviser actually said that figuring out how COVID happened isn’t all that important. No, he says the real issue is . . . Published:5/27/2021 8:32:12 PM
[Markets] Biden's Jobs Plan: How Some Jobs Destroy Wealth Biden's Jobs Plan: How Some Jobs Destroy Wealth

Authored by Gary Galles via The Mises Institute,

It seems that every time something adverse happens in the labor market, it restarts the partisan battle between those currently in and out of power as to who is a better steward of the economy.

That was illustrated by the Bureau of Labor Statistics's (BLS) release of the job numbers for April, which made headlines when job growth, which was expected to surge, came in “unexpectedly” low. The 266,000 jobs created were only a quarter of some forecasts, which topped 1 million. Further, March job creation was also revised down by 146,000. And unemployment ticked up for the first time since the lockdown, despite a reportedly massive shortage of workers, as illustrated by the 7.4 million unfilled job openings reported for February.

The Biden administration, put on its heels by the poor results and the finger-pointing at its policies that followed (particularly the $300 weekly unemployment bonus), insisted the economy is improving, and tried to claim credit for it (even though the economy was recovering far faster than anticipated before he took office) but that the magnitude of the problems faced means that still more government aid is necessary, almost as if they are trying to introduce quadrillion as a measure in common use when talking about deficits and debt, rather than trillion.

This battle, like many before, include skirmishes about a multitude of measurement issues—whether employment or unemployment measures are more accurate, which unemployment measure is the best, reasons for changes in labor force participation, part-time versus full-time jobs, discouraged workers, how many officially unemployed workers are really gaming the system, seasonal adjustments, and more. Other discussions include whether government programs create jobs or just move them, given that the resources must come from elsewhere, whether that transfer produces increased or decreased value, etc.

However, the discussion generally overlooks a further factor. Many of the jobs created directly or indirectly by government policies impose costs on society rather than producing benefits. Such job creation worsens rather than improves Americans’ well-being.

The most obvious illustrations come from the vast (and getting vaster) crazy-quilt of federal executive agencies, mandates, regulations, czars, etc. Peaceful wealth creation arises from voluntary agreements among people, but the primary activity of the regulatory state is often to interfere with mutually productive jobs, undermining social coordination and destroying wealth. Imposing added constraints on voluntary productive arrangements does create some jobs, but that acts as a massive regulatory tax on jobs that benefit other people.

Professors Susan Dudley and Melinda Warren have studied federal regulatory agencies that explicitly restrict private sector transactions. They found 277,000 such regulators in 2015 (substantially larger than General Motors’ worldwide workforce) and an eighteenfold increase in those agencies’ inflation-adjusted budgets since 1960, to over $57 billion (in 2009 dollars).

Government’s forcible interventions also create private sector jobs to comply with its expanding range of dictation. For example, many human resources and healthcare industry jobs were created to comply with Obamacare. But for ill-advised programs and restrictions, those jobs entail costs rather than benefits for society.

Government’s increasing redistributive power over every wallet also means more lobbyists are hired to help special interests benefit at others’ expense. That, in turn, pushes others to hire more lobbyists to minimize the extent of robbery they will be forced to bear. The expanded fight to control federal government theft creates influence industry jobs, which have dramatically stimulated the economy in Washington, DC, but which produces a negative-sum game that destroys wealth for people everywhere else.

Similarly, when laws or rules of questionable constitutionality or legality are promulgated, it increases the number of lawyers and legal resources government employs. It also increases the number employed by those who would be abused. Such opposition can be one of the most valuable investments for Americans in stopping such inroads on people’s rights, but even fighting them to a standstill leaves Americans no better off than if those overstepping initiatives had not been advanced in the first place.

While the battle over President Biden’s job creation underachievement continues, we should remember that in one area, he clearly aims to overachieve—creating jobs in government (as well as because of government) that harm Americans’ ability to mutually benefit one another. Such job creation may boost the employment numbers Biden desires, but they block rather than boost our well-being.

Tyler Durden Tue, 05/25/2021 - 14:21
Published:5/25/2021 1:41:31 PM
[Markets] 'Sickcare' Is The Knife In The Heart Of Employment... And The Economy 'Sickcare' Is The Knife In The Heart Of Employment... And The Economy

Authored by Charles Hugh Smith via OfTwoMinds blog,

We need to change the incentives of the entire system, not just healthcare, but if we don't start with healthcare, that financial cancer will drag us into national insolvency all by itself.

American Healthcare is a growth industry in the same way cancer is a growth industry: both keep growing until they kill the host, which in the case of healthcare is the U.S. economy.

While a great many individuals in the system care about improving the health of their patients, the healthcare system itself only cares about one thing: maximizing profits by any means available, including sending many patients to an early grave via medications which corporations declared "safe" and rigged the political-regulatory-research systems to comply.

I call this maximizing profits by any means available system sickcare, for obvious reasons: this system profits by managing sickness, i.e. chronic diseases, rather than addressing the causes, which in most chronic disorders trace back to lifestyle: SAD (standard American diet), poor fitness and a generally unhealthy lifestyle of convenience (i.e. sedentary), heavy work/financial stress and addictions to meds, drugs, social media, etc.

Sickcare's single-minded profiteering would be bad enough if we could afford its spiraling ever higher cost, but we cannot: as I noted way back in 2011, Sickcare Will Bankrupt the Nation all by itself. three years ago I noted that U.S. Healthcare Isn't Broken--It's Fixed (5/26/18), as generic meds that cost $22.60 for a month's supply are pushed by Big Pharma as branded meds for $1,120 per month. Such a deal!

I've been discussing employment recently, and one of my patrons pointed out the enormously negative impact sickcare costs have on employment. I covered the incredibly negative impact of soaring sickcare insurance costs on small business back in 2011: Here's Why Small Business Isn't Hiring, and Won't be Hiring (7/11/11), but the same soaring-costs dynamic makes Corporate America reluctant to hire anyone in America, too.

You'd have to be insane to pick America as your global base, given the grossly asymmetrical cost of healthcare in the U.S. compared to our developed-world competitors in Europe and East Asia (Japan and South Korea). Sadly, the treatment for your insanity will be so costly in America that your psychiatric problems will soon be exacerbated by financial ruin.

Those with heavily subsidized healthcare insurance may not realize that insurance for a family can cost more than a wage earner's entire monthly net income. This generates a perverse incentive (from the perspective of a healthy economy, as opposed to a corrupt, rigged economy run for the exclusive benefit of profiteers, fraudsters, speculators and political fixers) for one spouse to quit their jobs or cut their hours to reduce the household income to the point that federal subsidies (ObamaCare) kick in and pay much or most of the insanely overpriced sickcare insurance tab.

The subsidies are of course ultimately paid by the taxpayers; sickcare profiteers thank you.

Needless to say, employers facing monthly healthcare insurance costs of $1,500 for an employee earning $2,500 will be looking for automation or overseas alternatives. How can the employer afford to keep paying healthcare insurance costs that spiral far above the Consumer Price Index (CPI)? Ultimately these higher costs come out of the employee's paycheck, as employers could have given raises but instead had to fork over all the dough to the sickcare profiteers.

One driver of wages' ever-declining share of the national income is trillions of dollars have been siphoned off by sickcare. As the comparison chart below shows, the U.S. pays roughly $5,000 more per capita (per person) per year for healthcare than other equally developed nations: the U.S. pays $10,966 per person per year and the average paid by other developed nations pay roughly half: $5,697 per person per year.

330 million Americans X $5,000 is $1.65 trillion a year. No wonder wages have gone nowhere for decades and corporations couldn't wait to offshore jobs in America. (Not that the Corporate America needed much more of an incentive to offshore U.S. jobs, but let's recognize that sickcare costs put American companies at a huge global disadvantage.)

Please examine the chart below of healthcare expenses per capita (per person) in the U.S. from 2000 to 2018 (the last year available on the St. Louis Federal Reserve database). I've marked up the chart to indicate where healthcare costs per capita would be if healthcare had tracked the Consumer Price Index (CPI) for the past two decades.

Strikingly, the cost had U.S. healthcare risen by the same percentage as everything else--$5,852 per capita per year--is very close to the average costs in comparable developed nations: $5,697 per capita per year. Instead, U.S. healthcare costs per person were $9,000 per year as of 2018.

The third chart shows that the results of this asymmetric expenditure on health hasn't done much in terms of life expectancy or other broad measures of national health and well-being. America is Number One in costs but far down the list of life expectancy and other measures of well-being.

The human and financial costs of this sick system are pervasive. Those trying to provide care within the sickcare system's perverse incentives are burning out (see last chart), and businesses are crushed by ever-higher costs for everything related to healthcare. The "solution" for employers is to push more of the insane cost increases onto employees, who are already staggering under the weight of stagnant wages and skyrocketing inflation in sectors other than healthcare.

Small business entrepreneurs end up not hiring any workers because they can't afford to provide the mandated healthcare. Having to do all the work needed to keep the business afloat burns out the owners and they close the business, to the detriment of their community and the local government, which loses the tax revenues generated by the enterprise.

Here's a real-world example of how healthcare has become unaffordable for employers: in the mid-1980s I could buy comprehensive healthcare insurance for my single employees (mostly young) for 6 hours' pay for the average employee and 4 hours of my pay. (My partner and I paid all the healthcare insurance costs, the employees paid zero, I'm just using the hours and pay as a means of measuring the cost of healthcare in terms of the purchasing power of wages.)

Can an employer buy equivalent comprehensive healthcare insurance today for 6 hours' of the employees' pay? No, not even close. (Note that I'm talking about real insurance, not bogus simulacra of insurance, i.e. catastrophic coverage.)

Sickcare is a win for the sickcare profiteers and a loss for employers, employees, communities, government and the nation. Like cancer, sickcare will keep growing until it kills the host. We're getting close.

Sickcare is the knife in the heart of employment. Sickcare puts the nation at a tremendous competitive disadvantage, crushes small businesses and generates perverse incentives to automate and offshore jobs just to get out from underneath the dead weight of ever-higher sickcare costs.

We need a whole new approach to healthcare that includes every aspect of American culture, society, education, economics and governance. We need to ditch SAD (standard American diet) and our unhealthy lifestyle, and incentivize improving health from the ground up rather than generating chronic lifestyle diseases such as metabolic disorders and then managing these disorders as a means of maximizing profits. The national goal should not be profiting from an over-medicated populace, it should be eliminating the need for medications. (A healthy person has no need for handfuls of medications.) Rather than profit from 74% of the populace being overweight and 40% being obese, the national goal should be to eliminate lifestyle diseases entirely by changing behaviors and incentives, not costly procedures and medications. That would free healthcare to serve those suffering from non-lifestyle diseases.

As Charlie Munger famously noted, "Show me the incentive and I will show you the outcome." That's how humans operate: we respond to the incentives presented, even if they diminish the health of the populace and bankrupt the nation. We need to change the incentives of the entire system, not just healthcare, but if we don't start with healthcare, that financial cancer will drag us into national insolvency all by itself.

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Tyler Durden Tue, 05/18/2021 - 20:45
Published:5/18/2021 7:51:43 PM
[Markets] Exposed: The Myth Of "Efficient Markets" Exposed: The Myth Of "Efficient Markets"

Authored by James Rickards via The Daily Reckoning,

What took Wall Street so long to figure out something I’ve been saying for months?

Six months ago, even before the presidential election in November, I began warning my readers that Joe Biden was going to double the capital gains tax.

It wasn’t a difficult prediction. Biden said so himself in his campaign website as one of a long list of policy proposals.

Of course, the mainstream media didn’t report this because they were all-in for Biden and were determined to beat Donald Trump (remember how they covered up the Hunter Biden laptop report?).

The media were careful to cover-up any Biden policies that might prove unpopular with voters. Still, Democratic Party progressives knew about the plan and were all for it.

One Simple Rule

My rule for making policy forecasts is simple. If a politician tells you he’s going to do something, believe him.

Policies don’t drop out of the sky. They’re the result of intense internal debate and compromise by competing factions. Once a policy makes it to a candidate’s website, you can bet they will try to deliver.

This doesn’t mean that every proposal becomes law because there can be opposition in Congress and the courts. However, it does mean the politician will work to achieve his stated goals.

With the White House and both houses of Congress in the Democrat’s hands, the odds of this doubling of the capital gains tax becoming law look very good.

Despite my forecasts (which fortunately left my readers well-prepared), Wall Street didn’t seem to pay attention until last Thursday, when the Dow Jones index plunged 210 points in a matter of hours after the Biden tax plan was formally announced.

That’s a good example of how so-called “efficient markets” are not efficient at all.

Not so Efficient After All

Mainstream economists have insisted for decades that markets are highly efficient, and they do a nearly perfect job of digesting available information and correctly pricing assets today to take account of future events based on that information.

In fact, nothing could be further from the truth. Markets do offer valuable information to analysts, but they are far from efficient.

Markets can be rational or irrational. Markets can be volatile, irrationally exuberant, or in a complete state of panic depending upon the emotions of investors, herd behavior, and the specific array of preferences when a new shock emerges.

If markets were so efficient, why was Wall Street surprised when it was obvious to anyone paying attention that Biden was going to raise the capital gains tax?

The capital gains tax increase information had been there for all to see for six months, but it took a press release to get Wall Street to sit up and take notice.

It should have been priced in long before, and the announcement just would have confirmed market expectations.

So the next time you hear about efficient markets, take it with a large grain of salt.

But my forecast from six months ago was wrong in one respect.

Even Worse Than I Thought

I said the tax rate on capital gains would almost double from 20% to 39.6%. It turns out the rate will actually be 43.4% once a 3.8% investment income surtax is added on top. That surtax is a holdover from Obamacare.

If one were to add state and local income taxes, the combined rate on capital gains could exceed 50%, depending on the jurisdiction.

Of course, capital gains taxes are imposed on investments you make from after-tax dollars, so even the initial investment has already been taxed. And the corporations whose stock you buy pay corporate income tax too.

When those burdens are included, you’re lucky to get even 25% of your gains back net of taxes. This will be a headwind to stock markets for the foreseeable future.

The big question is, is the stock market in a bubble?

A $100 Million Deli?

When I first saw a recent story about a deli in New Jersey that was worth $100 million, I couldn’t believe it.

I assumed the deli must have a big-ticket franchising deal with McDonald’s or Subway to expand to 1,000 locations under the original name brand. That type of deal might justify a sky-high valuation for a one-store operation.

But, no, there was no franchise deal or other licensing deal that might explain the price. It’s just a deli with about $35,000 in annual sales.

As one analyst said, “The pastrami must be amazing.” Does anyone in their right mind think a deli with $35,000 in annual sales could be worth $100 million?

Well, it turns out that the owner of the deli created a company called Hometown International, and its shares trade over-the-counter. Recently, investors have bid up the stock price from $9.25 per share to $14.00 per share, giving the deli company a market capitalization of $113 million.

Hoping For a Greater Fool

But this story is not really about delis or pastrami. It’s about market bubbles and ridiculous valuations that can result when retail investors bid up stocks in the hope that a greater fool will pay them even more when they cash out.

In these situations, the market capitalization becomes completely detached from fundamental value, projected earnings or any other tool used in securities analysis.

It’s just a bubble with inevitable losses for the last buyers. But does that mean you should sell all your stocks now because the bubble will pop any day now?

No, not really. Bubbles can last longer than many believe because there is a continual flood of new buyers who hope that they won’t be the last ones to run for the exits.

The bigger issue is whether this kind of bubble in one stock indicates a broader market indices trend.  The Dow Jones Industrial Average, the S&P 500 and the NASDAQ Composite are all at or near all-time highs.

But this does not automatically mean the stock market indices are in bubble territory, although, many objective metrics, including the ratio of market cap to GDP and the Shiller CAPE price-earnings ratio, indicate that is the case.

No One Rings a Bell at the Top

Saying that markets are overvalued is not the same as saying they’re ready to crash.

It will take some external shock such as higher interest rates, a geopolitical crisis, or an unexpected bankruptcy of a major company to bring markets back to earth.

We know that such events do occur with some frequency. But, it’s probably not a good idea to short the market, because it could go even higher. That’s the way bubbles work. No one rings a bell at the top. There’s no precise formula to tell you the day they’ll pop.

So, I’m not suggesting that you sell everything and head for the hills. Having said that, it’s a good idea to reduce your exposure to stocks, diversify with cash and gold and just bide your time.

When the crash comes, you’ll be greatly outperforming those who are all-in with stocks – including delis.

Then we’ll see how efficient markets really are.

Tyler Durden Fri, 04/30/2021 - 08:02
Published:4/30/2021 7:12:17 AM
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