Relevant and even prescient commentary on news, politics and the economy.

Paul Ryan wouldn’t recognize a free market if one bit him

Dan Crawford | December 23, 2018 5:23 pm

Politics
Taxes/regulation
US/Global Economics

(Dan here…lifted from Robert’s Stochastic Thoughts)

Paul Ryan wouldn’t recognize a free market if one bit him

Robert Costa and Mike DeBonis wrote an excellent retrospective on the career of Paul Ryan‘He was the future of the party’: Ryan’s farewell triggers debate about his legacy

They are quite harsh, but not, I think, quite harsh enough.

My comment:

This is an excellent article. Tough but fair with no sugar coating but also no discourtesy. However, there is one clear error. Costa and DeBonis wrote ” to apply free-market principles to create opportunities in impoverished communities. The tax bill included a provision creating low-tax “opportunity zones,””

Establishing opportunity zones might be good policy, but such zones are completely inconsistent with free market principles. The idea is to tilt the playinf field in order to favor the poor. The free market principle utterly rejected by advocates of opportunity zones is that the government shouldn’t play favorites and should leave market incentives unaffected except as absolutely necessary to raise funds for necessary purposes.

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The Fed scrapes Scylla after careening into Charybdis

Dan Crawford | December 23, 2018 9:23 am

US/Global Economics

by New Deal democrat

The Fed scrapes Scylla after careening into Charybdis

In the past several years, I have described the Fed as trying to steer in between the Scylla of a yield curve inversion and the Charybdis of higher rates wounding the housing market.Recently several trends have reversed. This offers some relief to housing, but more risks to the economy as a whole. This post is Up at Seeking Alpha.

By the way, several times yesterday and today, the yield curve inversion has spread to the one year vs. five year yield.

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The Transportation Slowdown

Dan Crawford | December 20, 2018 9:14 pm

US/Global Economics

by New Deal democrat

The Transportation Slowdown

Well over 100 years ago, Charles Dow (he of the Dow Jones Industrial Average) posited a theory that industrial and transportation stock prices should move in tandem. Why? Because everything that factories produced had to be transported to market for delivery.

So it is of interest that FedEx said yesterday that its business has been slowing down. And an important trucking transportation metric softened in November, as reported last week.

But readers of my “Weekly Indicators” columns got a heads up over two months ago.

I explain why in a post over at Seeking Alpha.

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Real retail sales very positive; industrial production decent

Dan Crawford | December 16, 2018 3:09 pm

Taxes/regulation
US/Global Economics

Real retail sales very positive; industrial production decent

Real retail sales for November, together with the revisions for October, were very positive.

While November sales, both nominally and adjusted for inflation, increased +0.2%, October sales were revised upward to a nominal +1.1%. On an inflation adjusted basis, that translates to +0.8%.

As a result, as of November both real retail sales and real retail sales per capita set new records:

 

The latter has turned negative more than one year before both of the last two recessions, and so supports the case for no recession in 2019.  The former, on a YoY% basis, tends to be a decent if noisy short leading indicator for employment. Here what YoY growth in real retail sales looks like:

 

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Arctic Report Card

Dan Crawford | December 16, 2018 8:20 am

Climate Change

Via NPR on the Arctic:

The Arctic has experienced the “most unprecedented transition in history” in terms of warming temperatures and melting ice, and those changes may be the cause of extreme weather around the globe, according to the National Oceanic and Atmospheric Administration’s 2018 Arctic Report Card.

The annual report released Tuesday says rapid warming over the past three decades has led to a 95 percent decline of the Arctic’s oldest and thickest ice. This research comes as world leaders convene at the U.N. climate summit in Poland this week where they are debating whether to embrace the findings of an October report by the International Panel on Climate Change.

The melting of sea ice is one of the most conspicuous examples of climate change in the Arctic, and scientists say it may be the catalyst for extreme environmental events across the world.

According to NOAA, the Arctic is warming at twice the rate of the rest of the globe, which is melting some of the region’s oldest ice.

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