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

Magistrates Vs Politicians in Italy

This is likely to be a hot issue tomorrow. Today, Italy’s highest court of appeals is hearing Berlusconi’s appeal of his conviction for tax evasion and embezzling from his firm. As I wait for their decision, I write about the issue in general. Things are very different here East of the Channel. There is a […]

Inequality: Obama’s Speech, Detroit’s Bankruptcy, Taxes

by Linda Beale Inequality: Obama’s Speech, Detroit’s Bankruptcy, Taxes Was Obama’s speech on inequality really what Michael Lind claims in “The Day the Right Lost the Economic Argument” (July 25, 2013)? The right, both here and internationally, has been pushing for austerity for most while those at the top reap unparalleled rewards from upward-moving […]

The trend in US corporate profits is what you think it is

by Rebecca Wilder The trend in US corporate profits is what you think it is In my research for an article about the cross section of national income, I ran across this piece in Forbes by Tim Worstall. In this article, he uses proprietary Bloomberg and WSJ data for 2012 corporate offshore cash holdings to assess […]

Not Spending is Not Investment

I see this logical error so constantly, almost every day, that I feel the need to reiterate. Personal saving, virtuous and useful as it is for individuals, does not increase investment. This is what I call the “lump of money” fallacy (a.k.a. the loanable funds model). Ask yourself: If you transfer $10K from your bank […]

What is the story of wages and growth?

Lifted from comments: Run 75411 reacts to Daniel Alpert at Economonitor. : It appears much of the job growth has been in low wage opportunity which forces people to do with less and detracts from demand led economic growth. The economic bump in taking a lower wage paying job is just not that great; average Unemployment […]

Offshoring profits with captive reinsurance

by Linda Beale Offshoring profits with captive reinsurance One of the ways that corporations manage to cut their federal income tax bills way, way below the statutory rate is by setting up reinsurance affiliates offshore.  While some of these reinsurance affiliates may actually function as full-service reinsurance companies to many different customers, those truly taking […]