OMG!
Has owning a liberal cheeseball fetish totem like an electric car turned out to be a bad investment?
Who could have guessed? PB
----
From the Wall Street Journal online:
Nissan Motor Co. ’s Leaf electric car has been a big seller for Atlanta car dealer Pat Hoban over the past three years, thanks to its low monthly lease price.
But as those car leases are beginning to expire amid cheap gasoline, the vehicle is becoming a bit of a headache...
The problem: used Leafs aren’t attracting much demand.
With gas prices down 33% from a year ago, and buyers cooling toward electric vehicles, some auto makers are offering deep discounts or attractive leases on battery-powered vehicles and plug-in hybrids.
Nissan, for instance, slashed the price of a new Leaf by $6,400 in 2013 and is now offering a $199-a-month lease, or $3,500 cash back and 0% financing for 72 months, on brand new Leafs.
Buyers who also get a $7,500 federal tax credit on purchase of a new Leaf, see little reason to shop for a preowned model and some worry the expensive batteries could have to be replaced.
“Used Leafs haven’t really taken off,” Mr. Hoban said. “There is really no incentive to buy a used one when you can lease a new one for less.”
This has driven down resale values of plug-in electrics including the Leaf and General Motors Co. ’s Chevrolet Volt, representing another hurdle for auto makers trying to boost sales of alternative-fuel vehicles.
Other electric cars, including plug-in versions of Ford Motor Co. ’s Focus and Toyota Motor Corp. ’s Prius, are depreciating as fast as the Leaf with the average trade-in value in 2014 falling between 22% and 35%, depending on model, according to the National Automobile Dealers Association’s Used Car Guide.
The depreciation rate on plug-in electric cars is nearly twice that of a comparable gasoline-engine car, NADA Used Car Guide found...
----
Link: http://www.wsj.com/articles/resale-prices-tumble-on-electric-cars-1424977378?
Friday, February 27, 2015
Thursday, February 26, 2015
Gas Price Drop puts U.S. into Deflation Territory
Deflation says hello to the U.S. economy.
As published today, consumer prices fell 0.1% year-over-year in January.
What does this mean? It depends on how long deflation lasts.
There are signs the economy is strengthening. Walmart raised wages for its workers.
Rising wages are good for workers and the economy, especially if the prices of goods and services remain steady.
Deflation can be a difficult animal: dangerous if it stays, but merely interesting if it visits and goes away. It is important to watch. PB
----
From the Wall Street Journal:
The consumer-price index, which measures what Americans pay for everything from shirts to haircuts, fell a seasonally adjusted 0.7% in January from December, the Labor Department said Thursday.
From a year earlier, prices declined 0.1%.
It was the first year-over-year decrease since October 2009.
Excluding food and energy, prices were up 0.2% last month and rose 1.6% from a year earlier.
Economists surveyed by The Wall Street Journal had expected a 0.6% decline in overall prices in January from December and a 0.1% gain for core prices on the month...
Judging whether very weak inflation is a temporary phenomenon due to a drop in oil prices or indicative of broader movements in the global economy will weigh heavily on Fed policy makers...
A separate report Thursday showed Americans’ inflation-adjusted wages posted the largest gain in more than six years in January.
Real average hourly earnings move up 1.2% from December, reflecting both a 0.5% increase in wages and falling prices.
The gain was the largest since November 2008, a month when the CPI fell 1.8%...
----
Link: http://www.wsj.com/articles/consumer-price-index-down-0-7-in-january-1424958010
As published today, consumer prices fell 0.1% year-over-year in January.
What does this mean? It depends on how long deflation lasts.
There are signs the economy is strengthening. Walmart raised wages for its workers.
Rising wages are good for workers and the economy, especially if the prices of goods and services remain steady.
Deflation can be a difficult animal: dangerous if it stays, but merely interesting if it visits and goes away. It is important to watch. PB
----
From the Wall Street Journal:
The consumer-price index, which measures what Americans pay for everything from shirts to haircuts, fell a seasonally adjusted 0.7% in January from December, the Labor Department said Thursday.
From a year earlier, prices declined 0.1%.
It was the first year-over-year decrease since October 2009.
Excluding food and energy, prices were up 0.2% last month and rose 1.6% from a year earlier.
Economists surveyed by The Wall Street Journal had expected a 0.6% decline in overall prices in January from December and a 0.1% gain for core prices on the month...
Judging whether very weak inflation is a temporary phenomenon due to a drop in oil prices or indicative of broader movements in the global economy will weigh heavily on Fed policy makers...
A separate report Thursday showed Americans’ inflation-adjusted wages posted the largest gain in more than six years in January.
Real average hourly earnings move up 1.2% from December, reflecting both a 0.5% increase in wages and falling prices.
The gain was the largest since November 2008, a month when the CPI fell 1.8%...
----
Link: http://www.wsj.com/articles/consumer-price-index-down-0-7-in-january-1424958010
Friday, February 20, 2015
Cheap Oil: is Deflation Next?
Further observations from Gary Shilling on the fall of oil prices. PB
----
From Gary Shilling writing at Bloombergview.com:
... [the] last column explained the dangerous game of chicken Saudi Arabia is playing with other major oil producers, including U.S. frackers, to see who can withstand low oil prices the longest before slashing production.
That price may be as low as $10 to $20 a barrel, or even lower.
Start with the winners from the faceoff, which include the U.S. in general -- the country still imports more than a quarter of its energy needs -- and American consumers in particular...
Losers from falling oil prices obviously include U.S. producers and oil-services companies, especially those that took on large amounts of high-yield debt during the oil-price boom...
Among the hardest hit are those nations that rely on oil for much of their government revenue and were in financial trouble before prices plunged.
Venezuela ... African exporters Ghana, Angola and Nigeria, where oil finances 70 percent of the government’s budget... Russia, where Western sanctions over Ukraine and tumbling oil prices are threatening it with a rerun of its 1998 default...
On balance, energy consumers win and energy producers and exporting countries lose.
Yet two important questions remain.
Will energy-driven deflation, now in evidence in almost half of the 34 major developed countries, spread to prices in general?
If so, will that encourage potential buyers to wait for still-lower prices in a self-reinforcing spiral that spawns more deflation and slow, if any, economic growth?
In today’s world, with so many weak and troubled economies, general and chronic deflation is likely.
Second, will the fallout from deleveraging in the energy industry worldwide spawn a major shock and global recession that shifts the investment climate from “risk on” to “risk off”?
As with the financial excesses revealed by the housing collapse, there’s probably much higher leverage among energy-related companies and countries than is now apparent.
As Warren Buffett once said, you don’t know who’s swimming naked until the tide goes out...
----
Link: http://www.bloombergview.com/articles/2015-02-17/enjoy-cheap-oil-fear-the-deflation
----
From Gary Shilling writing at Bloombergview.com:
... [the] last column explained the dangerous game of chicken Saudi Arabia is playing with other major oil producers, including U.S. frackers, to see who can withstand low oil prices the longest before slashing production.
That price may be as low as $10 to $20 a barrel, or even lower.
Start with the winners from the faceoff, which include the U.S. in general -- the country still imports more than a quarter of its energy needs -- and American consumers in particular...
Losers from falling oil prices obviously include U.S. producers and oil-services companies, especially those that took on large amounts of high-yield debt during the oil-price boom...
Among the hardest hit are those nations that rely on oil for much of their government revenue and were in financial trouble before prices plunged.
Venezuela ... African exporters Ghana, Angola and Nigeria, where oil finances 70 percent of the government’s budget... Russia, where Western sanctions over Ukraine and tumbling oil prices are threatening it with a rerun of its 1998 default...
On balance, energy consumers win and energy producers and exporting countries lose.
Yet two important questions remain.
Will energy-driven deflation, now in evidence in almost half of the 34 major developed countries, spread to prices in general?
If so, will that encourage potential buyers to wait for still-lower prices in a self-reinforcing spiral that spawns more deflation and slow, if any, economic growth?
In today’s world, with so many weak and troubled economies, general and chronic deflation is likely.
Second, will the fallout from deleveraging in the energy industry worldwide spawn a major shock and global recession that shifts the investment climate from “risk on” to “risk off”?
As with the financial excesses revealed by the housing collapse, there’s probably much higher leverage among energy-related companies and countries than is now apparent.
As Warren Buffett once said, you don’t know who’s swimming naked until the tide goes out...
----
Link: http://www.bloombergview.com/articles/2015-02-17/enjoy-cheap-oil-fear-the-deflation
Wednesday, February 18, 2015
Get Ready for $10 Oil?
Economist Gary Shilling has been preaching a deflationist view for several years.
About one year ago he wrote how deflation will continue to haunt Europe. The Euro has dropped about 20% against the dollar since then.
And two months ago Shilling suggested the price of a barrel of oil would drop to $20. Now he argues for $10.
Is the price of oil ringing a bell we should clearly hear?
The biggest problem deflation brings to a society is slow to absolutely no growth in the economy. Or worse: contraction.
Imagine there's something you want to purchase, but you see that prices keep falling. As you wait, you are reasonably delaying your purchase to capture a lower price.
What impact does that have on companies that want to sell to you now?
Japan has been deflationary, stagnant and suffering for over twenty years.
Is the U.S. next? PB
----
From Gary Shilling writing at Bloombergview.com:
At about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107.
They may fall more, perhaps even as low as $10 to $20. Here’s why.
U.S. economic growth has averaged 2.3 percent a year since the recovery started in mid-2009.
That's about half the rate you might expect in a rebound from the deepest recession since the 1930s.
Meanwhile, growth in China is slowing, is minimal in the euro zone and is negative in Japan.
Throw in the large increase in U.S. vehicle gas mileage and other conservation measures and it’s clear why global oil demand is weak and might even decline.
At the same time, output is climbing, thanks in large part to increased U.S. production from hydraulic fracking and horizontal drilling.
U.S. output rose by 15 percent in the 12 months through November from a year earlier, based on the latest data, while imports declined 4 percent.
Something else figures in the mix: The eroding power of the OPEC cartel...
With new discoveries, stability in parts of the Middle East and increasing drilling efficiency, global oil output will no doubt rise in the next several years, adding to pressure on prices.
U.S. crude oil production is forecast to rise by 300,000 barrels a day during the next year from 9.1 million now.
Sure, the drilling rig count is falling, but it’s the inefficient rigs that are being idled, not the horizontal rigs that are the backbone of the fracking industry.
Consider also Iraq’s recent deal with the Kurds, meaning that another 550,000 barrels a day will enter the market.
While supply climbs, demand is weakening... look for more big declines in crude oil and related energy prices...
-----
Link: http://www.bloombergview.com/articles/2015-02-16/oil-prices-likely-to-fall-as-supplies-rise-demand-falls
-----
Oh, by the way, Warren Buffett sold all of his Exxon stock.
About one year ago he wrote how deflation will continue to haunt Europe. The Euro has dropped about 20% against the dollar since then.
And two months ago Shilling suggested the price of a barrel of oil would drop to $20. Now he argues for $10.
Is the price of oil ringing a bell we should clearly hear?
The biggest problem deflation brings to a society is slow to absolutely no growth in the economy. Or worse: contraction.
Imagine there's something you want to purchase, but you see that prices keep falling. As you wait, you are reasonably delaying your purchase to capture a lower price.
What impact does that have on companies that want to sell to you now?
Japan has been deflationary, stagnant and suffering for over twenty years.
Is the U.S. next? PB
----
From Gary Shilling writing at Bloombergview.com:
At about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107.
They may fall more, perhaps even as low as $10 to $20. Here’s why.
U.S. economic growth has averaged 2.3 percent a year since the recovery started in mid-2009.
That's about half the rate you might expect in a rebound from the deepest recession since the 1930s.
Meanwhile, growth in China is slowing, is minimal in the euro zone and is negative in Japan.
Throw in the large increase in U.S. vehicle gas mileage and other conservation measures and it’s clear why global oil demand is weak and might even decline.
At the same time, output is climbing, thanks in large part to increased U.S. production from hydraulic fracking and horizontal drilling.
U.S. output rose by 15 percent in the 12 months through November from a year earlier, based on the latest data, while imports declined 4 percent.
Something else figures in the mix: The eroding power of the OPEC cartel...
With new discoveries, stability in parts of the Middle East and increasing drilling efficiency, global oil output will no doubt rise in the next several years, adding to pressure on prices.
U.S. crude oil production is forecast to rise by 300,000 barrels a day during the next year from 9.1 million now.
Sure, the drilling rig count is falling, but it’s the inefficient rigs that are being idled, not the horizontal rigs that are the backbone of the fracking industry.
Consider also Iraq’s recent deal with the Kurds, meaning that another 550,000 barrels a day will enter the market.
While supply climbs, demand is weakening... look for more big declines in crude oil and related energy prices...
-----
Link: http://www.bloombergview.com/articles/2015-02-16/oil-prices-likely-to-fall-as-supplies-rise-demand-falls
-----
Oh, by the way, Warren Buffett sold all of his Exxon stock.
Saturday, February 14, 2015
Italy is a dying country as babies no longer replace people who die
Happy St. Valentine's Day all you lovers!
Hey, how's your fertility?
Got any kids planned?
You younger ones, it's time to rethink your retirement.
Ohhhh, when the moon hits your eye like a big pizza pie.... PB
----
From the Daily Telegraph online:
Italy’s birth rate has fallen to its lowest level since the foundation of the modern state in 1861, prompting fresh alarm in a society that has been steadily ageing for decades.
The number of births per 1,000 people has fallen to just 8.4 per cent, down from 38.3 per cent when Italy’s territories and kingdoms were unified a century and a half ago...
Beatrice Lorenzin, the minister of health, said:
“We are at the threshold where people who die are not being replaced by newborns.
"That means we are a dying country.
"This situation has enormous implications for every sector: the economy, society, health, pensions, just to give a few examples..."
----
Link: http://www.telegraph.co.uk/news/worldnews/europe/italy/11411907/Italy-is-a-dying-country-as-babies-no-longer-replace-people-who-die-says-health-minister.html
Hey, how's your fertility?
Got any kids planned?
You younger ones, it's time to rethink your retirement.
Ohhhh, when the moon hits your eye like a big pizza pie.... PB
----
From the Daily Telegraph online:
Italy’s birth rate has fallen to its lowest level since the foundation of the modern state in 1861, prompting fresh alarm in a society that has been steadily ageing for decades.
The number of births per 1,000 people has fallen to just 8.4 per cent, down from 38.3 per cent when Italy’s territories and kingdoms were unified a century and a half ago...
Beatrice Lorenzin, the minister of health, said:
“We are at the threshold where people who die are not being replaced by newborns.
"That means we are a dying country.
"This situation has enormous implications for every sector: the economy, society, health, pensions, just to give a few examples..."
----
Link: http://www.telegraph.co.uk/news/worldnews/europe/italy/11411907/Italy-is-a-dying-country-as-babies-no-longer-replace-people-who-die-says-health-minister.html
How Civilizations Die (and Why Islam is Dying, Too) by David P. Goldman
The following is an excerpt from the preface of David Goldman's book:
Population decline is the elephant in the world's living room.
As a matter of arithmetic, we know that the social life of most developed countries will break down within two generations.
Two out of three Italians and three of four Japanese will be elderly dependents by 2050.
If present fertility rates hold, the number of Germans will fall by 98% over the next two centuries.
No pension and health care system can support such an inverted population pyramid.
Nor is the problem limited to the industrial nations.
Fertility is falling at even faster rates - indeed, at rates never before registered anywhere - in the Muslim world.
The world's population will fall by as much as a fifth between the middle and the end of the 21st century, by far the worst decline in human history.
The world faces a danger more terrible than the worst Green imaginings.
The European environmentalist who wants to shrink the world's population to reduce carbon emissions will spend her declining years in misery, for there will not be enough Europeans alive a generation from now to pay for her pension and medical care.
For the first time in world history, the birth rate of the whole developed world is well below replacement, and a significant part of it has passed the demographic point of no return.
But Islamic society is even more fragile.
As Muslim fertility shrinks at a rate demographers have never seen before, it is converging on Europe's catastrophically low fertility as if in time-lapse photography.
The average 30-year-old Iranian woman comes from a family of six children, but she will bear only one or two children during her lifetime.
Turkey and Algeria are just behind Iran on the way down, and most of the other Muslim countries are catching up quickly.
By the middle of this century, the belt of Muslim countries from Morocco to Iran will become as gray as depopulating Europe.
The Islamic world will have the same proportion of dependent elderly as the industrial countries - but one-tenth the productivity.
A time bomb that cannot be defused is ticking in the Muslim world.
Imminent population collapse makes radical Islam more dangerous, not less so.
For in their despair, radical Muslims who can already taste the ruin of their culture believe that they have nothing to lose...
----
Link: http://www.atimes.com/atimes/Global_Economy/ML13Dj05.html
Population decline is the elephant in the world's living room.
As a matter of arithmetic, we know that the social life of most developed countries will break down within two generations.
Two out of three Italians and three of four Japanese will be elderly dependents by 2050.
If present fertility rates hold, the number of Germans will fall by 98% over the next two centuries.
No pension and health care system can support such an inverted population pyramid.
Nor is the problem limited to the industrial nations.
Fertility is falling at even faster rates - indeed, at rates never before registered anywhere - in the Muslim world.
The world's population will fall by as much as a fifth between the middle and the end of the 21st century, by far the worst decline in human history.
The world faces a danger more terrible than the worst Green imaginings.
The European environmentalist who wants to shrink the world's population to reduce carbon emissions will spend her declining years in misery, for there will not be enough Europeans alive a generation from now to pay for her pension and medical care.
For the first time in world history, the birth rate of the whole developed world is well below replacement, and a significant part of it has passed the demographic point of no return.
But Islamic society is even more fragile.
As Muslim fertility shrinks at a rate demographers have never seen before, it is converging on Europe's catastrophically low fertility as if in time-lapse photography.
The average 30-year-old Iranian woman comes from a family of six children, but she will bear only one or two children during her lifetime.
Turkey and Algeria are just behind Iran on the way down, and most of the other Muslim countries are catching up quickly.
By the middle of this century, the belt of Muslim countries from Morocco to Iran will become as gray as depopulating Europe.
The Islamic world will have the same proportion of dependent elderly as the industrial countries - but one-tenth the productivity.
A time bomb that cannot be defused is ticking in the Muslim world.
Imminent population collapse makes radical Islam more dangerous, not less so.
For in their despair, radical Muslims who can already taste the ruin of their culture believe that they have nothing to lose...
----
Link: http://www.atimes.com/atimes/Global_Economy/ML13Dj05.html
Overpopulation? Nope - too few babies is the real problem
From Jonathan Last, author of "What to Expect When No One is Expecting:"
For years, we have been warned about the looming danger of overpopulation: people jostling for space on a planet that’s busting at the seams and running out of oil and food and land and everything else.
It’s all bunk.
The “population bomb” never exploded.
Instead, statistics from around the world make clear that since the 1970s, we’ve been facing exactly the opposite problem: people are having too few babies.
Population growth has been slowing for two generations.
The world’s population will peak, and then begin shrinking, within the next fifty years. In some countries, it’s already started.
Japan, for instance, will be half its current size by the end of the century. In Italy, there are already more deaths than births every year.
China’s One-Child Policy has left that country without enough women to marry its men, not enough young people to support the country’s elderly, and an impending population contraction that has the ruling class terrified.
And all of this is coming to America, too. In fact, it’s already here.
Middle-class Americans have their own, informal one-child policy these days.
And an alarming number of upscale professionals don’t even go that far—they have dogs, not kids.
In fact, if it weren’t for the wave of immigration we experienced over the last thirty years, the United States would be on the verge of shrinking, too...
----
Link: http://jonathanlast.com/books/
For years, we have been warned about the looming danger of overpopulation: people jostling for space on a planet that’s busting at the seams and running out of oil and food and land and everything else.
It’s all bunk.
The “population bomb” never exploded.
Instead, statistics from around the world make clear that since the 1970s, we’ve been facing exactly the opposite problem: people are having too few babies.
Population growth has been slowing for two generations.
The world’s population will peak, and then begin shrinking, within the next fifty years. In some countries, it’s already started.
Japan, for instance, will be half its current size by the end of the century. In Italy, there are already more deaths than births every year.
China’s One-Child Policy has left that country without enough women to marry its men, not enough young people to support the country’s elderly, and an impending population contraction that has the ruling class terrified.
And all of this is coming to America, too. In fact, it’s already here.
Middle-class Americans have their own, informal one-child policy these days.
And an alarming number of upscale professionals don’t even go that far—they have dogs, not kids.
In fact, if it weren’t for the wave of immigration we experienced over the last thirty years, the United States would be on the verge of shrinking, too...
----
Link: http://jonathanlast.com/books/
And what does Walmart need from Texas?
Walmart vs. Texas.
Sounds like a heavyweight bout. Or an MMA brute match.
I can see there's a cut man in each corner. Full 15. The bell rings. PB
----
From Time.com:
No state is more “real America” than Texas.
No retailer is more “real America” than Wal-Mart.
And no political opinion is more “real America” than “regulation bad.”
So it might come as something of a shock to learn that Wal-Mart stores in Texas are forbidden by law from selling booze—anything other than beer and wine.
Wal-Mart is paying trial lawyers to sue the Texas Alcoholic Beverage Commission in the U.S. District Court in Austin, challenging the law that forbids all publicly held corporations, hotels excepted, from selling hooch.
The law violates the U.S. Constitution, Wal-Mart argues...
Wal-Mart argues in the lawsuit “No other state in the nation allows private corporations to engage in the retail sale of spirits but prohibits some but not all publicly traded companies from doing so.”
And indeed, the distinction does seem odd—”irrational,” as Wal-Mart puts it. But as it turns out, it’s just another instance of one business interest versus another.
In the lawsuit, Wal-Mart singles out the Texas Package Stores Association as the lobbying group that has fought hard to keep the law in place. It represents about half of the state’s approximately 2,500 liquor stores...
----
Link: http://time.com/3709606/walmart-texas-lawsuit-liquor/
Sounds like a heavyweight bout. Or an MMA brute match.
I can see there's a cut man in each corner. Full 15. The bell rings. PB
----
From Time.com:
No state is more “real America” than Texas.
No retailer is more “real America” than Wal-Mart.
And no political opinion is more “real America” than “regulation bad.”
So it might come as something of a shock to learn that Wal-Mart stores in Texas are forbidden by law from selling booze—anything other than beer and wine.
Wal-Mart is paying trial lawyers to sue the Texas Alcoholic Beverage Commission in the U.S. District Court in Austin, challenging the law that forbids all publicly held corporations, hotels excepted, from selling hooch.
The law violates the U.S. Constitution, Wal-Mart argues...
Wal-Mart argues in the lawsuit “No other state in the nation allows private corporations to engage in the retail sale of spirits but prohibits some but not all publicly traded companies from doing so.”
And indeed, the distinction does seem odd—”irrational,” as Wal-Mart puts it. But as it turns out, it’s just another instance of one business interest versus another.
In the lawsuit, Wal-Mart singles out the Texas Package Stores Association as the lobbying group that has fought hard to keep the law in place. It represents about half of the state’s approximately 2,500 liquor stores...
----
Link: http://time.com/3709606/walmart-texas-lawsuit-liquor/
America Needs Texas Economy to Keep Growing
From Joel Kotkin at Forbes.com:
In the last decade, Texas emerged as America’s new land of opportunity — if you will, America’s America.
Since the start of the recession, the Lone Star State has been responsible for the majority of employment growth in the country.
Between November 2007 and November 2014, the United States gained a net 2.1 million jobs, with 1.2 million alone in Texas.
Yet with the recent steep drop in oil prices, the Texas economy faces extreme headwinds that could even spark something of a downturn...
It is unlikely that the American economy can sustain a healthy rate of growth without the kind of production-based strength that has powered Texas, as well as Ohio, North Dakota and Louisiana...
But in my mind, the biggest asset of Texas is Texans. Having spent a great deal a time there, the contrasts with my adopted home state of California are remarkable.
No businessperson I spoke to in Houston or Dallas is even remotely contemplating a move elsewhere; Houstonians often brag about how they survived the ‘80s bust, wearing those hard times as a badge of honor.
To be sure, Texans can be obnoxiously arrogant about their state, and have a peculiar talent for a kind of braggadocio that drives other Americans a bit crazy.
But they are also our greatest regional asset, the one big state where America remains America, if only more so.
----
Link: http://www.forbes.com/sites/joelkotkin/2015/02/11/america-needs-the-texas-economy-to-keep-on-rolling
In the last decade, Texas emerged as America’s new land of opportunity — if you will, America’s America.
Since the start of the recession, the Lone Star State has been responsible for the majority of employment growth in the country.
Between November 2007 and November 2014, the United States gained a net 2.1 million jobs, with 1.2 million alone in Texas.
Yet with the recent steep drop in oil prices, the Texas economy faces extreme headwinds that could even spark something of a downturn...
It is unlikely that the American economy can sustain a healthy rate of growth without the kind of production-based strength that has powered Texas, as well as Ohio, North Dakota and Louisiana...
But in my mind, the biggest asset of Texas is Texans. Having spent a great deal a time there, the contrasts with my adopted home state of California are remarkable.
No businessperson I spoke to in Houston or Dallas is even remotely contemplating a move elsewhere; Houstonians often brag about how they survived the ‘80s bust, wearing those hard times as a badge of honor.
To be sure, Texans can be obnoxiously arrogant about their state, and have a peculiar talent for a kind of braggadocio that drives other Americans a bit crazy.
But they are also our greatest regional asset, the one big state where America remains America, if only more so.
----
Link: http://www.forbes.com/sites/joelkotkin/2015/02/11/america-needs-the-texas-economy-to-keep-on-rolling
Tuesday, February 10, 2015
Will the real Gene Epstein please stand up!
Gene Epstein is a very good economics writer for Barron's.
I recall that over ten years ago Epstein wrote a few articles about the differences between two government employment surveys: the household and the establishment surveys. That was first time the distinction between the two was made clear to me.
Epstein also over time would occasionally correct the hostile and political Paul Krugman of the New York Times for his serial distortions.
Those critiques of Krugman always provide enjoyment.
This past weekend Epstein wrote about the most recent employment numbers and gives them a hearty endorsement.
What drew my attention was remembering this past August Epstein wrote the opposite of what he now observes in the employment data.
Below are two excerpts: one from this month, which is highly positive. The other from last August, which is cautionary.
Maybe six months time has made a real difference. PB
----
Jobs Report Shows Growing Economic Strength
Barron's: February 7, 2015
Another month, another record—and this month, a record that is really robust.
The January employment data, released on Friday by the Bureau of Labor Statistics, signaled momentum for the U.S. economy going into 2015, despite head winds from the global slowdown...
Nonfarm payroll employment rose by a solid 257,000 in January, and private-sector employment, by 267,000.
With huge upward revisions to prior months, the 12-month gain in total payroll employment ran 2.3%, just as it did in December.
The back-to-back 2.3% gains are nearly 15-year records.
The laggard in the data has been increases in average hourly earnings, but even that has perked up, rising by 0.5% in January, the largest monthly advance in more than six years...
Link:http://online.barrons.com/articles/SB51367578116875004693704580437760312354180
------
Work's for Squares
Barron's: August 30, 2014
The job market has made a comeback over the past year, but the American labor force hasn't, and the prospects don't look good.
Work seems to be on the wane in the U.S., with worrisome consequences for economic growth.
While the unemployment rate slipped to 6.1% in June -- its lowest level in six years -- the percentage of adult American workers who are actually in the workforce is at its lowest level in 36 years, with no rebound in sight.
No one in government is facing up to the severity of the problem.
In her recent talk at the Jackson Hole Economic Policy Symposium, Federal Reserve Chair Janet Yellen posed the question of whether weak labor-force participation is due to cyclical factors that will pass with a stronger expansion or to structural factors likely to endure. She offered no sure answer.
Barron's will answer that question for her.
The problem increasingly appears to be structural.
Following the devastating recession of 2008-09, the "jobless recovery" drove many workers out of the labor force, as often happens when the economy is in a downward cycle and then struggles to recover.
But now that the expansion is starting its sixth year, the rebound in the job market is beginning to make the decline in participation look anomalous and therefore likely to persist...
Link: http://online.barrons.com/articles/SB50001424127887323949604580113811574041250
I recall that over ten years ago Epstein wrote a few articles about the differences between two government employment surveys: the household and the establishment surveys. That was first time the distinction between the two was made clear to me.
Epstein also over time would occasionally correct the hostile and political Paul Krugman of the New York Times for his serial distortions.
Those critiques of Krugman always provide enjoyment.
This past weekend Epstein wrote about the most recent employment numbers and gives them a hearty endorsement.
What drew my attention was remembering this past August Epstein wrote the opposite of what he now observes in the employment data.
Below are two excerpts: one from this month, which is highly positive. The other from last August, which is cautionary.
Maybe six months time has made a real difference. PB
----
Jobs Report Shows Growing Economic Strength
Barron's: February 7, 2015
Another month, another record—and this month, a record that is really robust.
The January employment data, released on Friday by the Bureau of Labor Statistics, signaled momentum for the U.S. economy going into 2015, despite head winds from the global slowdown...
Nonfarm payroll employment rose by a solid 257,000 in January, and private-sector employment, by 267,000.
With huge upward revisions to prior months, the 12-month gain in total payroll employment ran 2.3%, just as it did in December.
The back-to-back 2.3% gains are nearly 15-year records.
The laggard in the data has been increases in average hourly earnings, but even that has perked up, rising by 0.5% in January, the largest monthly advance in more than six years...
Link:http://online.barrons.com/articles/SB51367578116875004693704580437760312354180
------
Work's for Squares
Barron's: August 30, 2014
The job market has made a comeback over the past year, but the American labor force hasn't, and the prospects don't look good.
Work seems to be on the wane in the U.S., with worrisome consequences for economic growth.
While the unemployment rate slipped to 6.1% in June -- its lowest level in six years -- the percentage of adult American workers who are actually in the workforce is at its lowest level in 36 years, with no rebound in sight.
No one in government is facing up to the severity of the problem.
In her recent talk at the Jackson Hole Economic Policy Symposium, Federal Reserve Chair Janet Yellen posed the question of whether weak labor-force participation is due to cyclical factors that will pass with a stronger expansion or to structural factors likely to endure. She offered no sure answer.
Barron's will answer that question for her.
The problem increasingly appears to be structural.
Following the devastating recession of 2008-09, the "jobless recovery" drove many workers out of the labor force, as often happens when the economy is in a downward cycle and then struggles to recover.
But now that the expansion is starting its sixth year, the rebound in the job market is beginning to make the decline in participation look anomalous and therefore likely to persist...
Link: http://online.barrons.com/articles/SB50001424127887323949604580113811574041250
Monday, February 9, 2015
'We are gutting government'
The intelligent Robert Samuelson writes cogent articles about government, business and the economy.
The 'We are gutting government' opening line from his Washington Post column grabbed me, but another phrase later in the article really struck me.
Samuelson wrote that a 'proud liberal - someone who believes in government's constructive role' is gutting government. He is describing the president and his administration.
Proud liberal?
But, there is no disconnect between Obama and the gutting of government.
The president is not a 'proud liberal.' President Obama is a left wing ideologue who fully knows the impact and intent of the actions of his presidency.
Samuelson correctly calls the president 'an agent of gutted government.'
Liberals for decades have been little more than enablers for the subtle, poisonous ideology of the left.
The left wing President knows how to play liberals whose youngest grandchildren about mid-century will begin waking into anger. PB
----
Twisted Priorities of a Graying Nation
From Robert Samuelson at the Washington Post:
We are gutting government.
It is an extreme irony of the Obama presidency that a proud liberal — someone who believes in government’s constructive role — is presiding over the harshest squeeze on government since World War II.
What’s happening is simple: Spending on the elderly and health care is slowly overwhelming the rest of the federal government.
Spending on other vital activities (from defense to financial regulation) is being sacrificed to cover the growing costs of a graying nation.
This is the central budget issue of our time...
We are allowing demographics to determine national priorities.
Nowhere is this more apparent than defense, which is scaling back (the Army alone is cutting an estimated 120,000 active-duty troops from its wartime peak) just when foreign threats seem to be rising.
So demographics even shape global strategy...
Ideally, we would eliminate nonessential and ineffective programs (farm subsidies, Amtrak), begin to trim Social Security and Medicare benefits (gradual increases in eligibility ages and lower benefits for wealthier recipients), and pay for the rest of government with higher taxes.
But both Obama and Republicans evade this unpopular exercise...
We all ought to want effective and efficient government.
But government is being strangled as the rising costs of baby-boomer retirees reduce the capacity of other programs to fulfill their missions. Obama would worsen the problem.
Unable to pay for existing programs, he would add more (for “free” community college and more preschool programs, among other things) that would intensify the competition for scarce funds.
Obama imagines himself a champion of better government. In reality, he is an agent of gutted government.
----
Link: http://www.washingtonpost.com/opinions/the-twisted-priorities-of-a-graying-nation/2015/02/08/
The 'We are gutting government' opening line from his Washington Post column grabbed me, but another phrase later in the article really struck me.
Samuelson wrote that a 'proud liberal - someone who believes in government's constructive role' is gutting government. He is describing the president and his administration.
Proud liberal?
But, there is no disconnect between Obama and the gutting of government.
The president is not a 'proud liberal.' President Obama is a left wing ideologue who fully knows the impact and intent of the actions of his presidency.
Samuelson correctly calls the president 'an agent of gutted government.'
Liberals for decades have been little more than enablers for the subtle, poisonous ideology of the left.
The left wing President knows how to play liberals whose youngest grandchildren about mid-century will begin waking into anger. PB
----
Twisted Priorities of a Graying Nation
From Robert Samuelson at the Washington Post:
We are gutting government.
It is an extreme irony of the Obama presidency that a proud liberal — someone who believes in government’s constructive role — is presiding over the harshest squeeze on government since World War II.
What’s happening is simple: Spending on the elderly and health care is slowly overwhelming the rest of the federal government.
Spending on other vital activities (from defense to financial regulation) is being sacrificed to cover the growing costs of a graying nation.
This is the central budget issue of our time...
We are allowing demographics to determine national priorities.
Nowhere is this more apparent than defense, which is scaling back (the Army alone is cutting an estimated 120,000 active-duty troops from its wartime peak) just when foreign threats seem to be rising.
So demographics even shape global strategy...
Ideally, we would eliminate nonessential and ineffective programs (farm subsidies, Amtrak), begin to trim Social Security and Medicare benefits (gradual increases in eligibility ages and lower benefits for wealthier recipients), and pay for the rest of government with higher taxes.
But both Obama and Republicans evade this unpopular exercise...
We all ought to want effective and efficient government.
But government is being strangled as the rising costs of baby-boomer retirees reduce the capacity of other programs to fulfill their missions. Obama would worsen the problem.
Unable to pay for existing programs, he would add more (for “free” community college and more preschool programs, among other things) that would intensify the competition for scarce funds.
Obama imagines himself a champion of better government. In reality, he is an agent of gutted government.
----
Link: http://www.washingtonpost.com/opinions/the-twisted-priorities-of-a-graying-nation/2015/02/08/
Sunday, February 8, 2015
Let's Get Real: Unemployment Rate is 9%
Liars figure and figures lie?
How does the government distort economic 'progress' with its figures?
A look below at what would happen if millions of real people were no longer ignored, but included in the government figures.
Without the distortions, the real unemployment number would be 9%. PB
----
Economic Policy Institute blog post:
...the unemployment rate still understates the weakness of job opportunities.
This is due to the existence of a large pool of “missing workers”—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job.
In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger.
The number of missing workers has been hovering around 6 million for over a year.
They fell slightly in January, which could be the start of a positive trend.
As the economy gets stronger, I would expect more people to start looking for work.
At this point, the fact remains that there are still 5.8 million missing workers.
And, if the missing workers were actively looking for work, the unemployment rate would be 9.0 percent...
----
Link: http://www.epi.org/blog/increasing-labor-force-participation-leads-to-fewer-missing-workers/
How does the government distort economic 'progress' with its figures?
A look below at what would happen if millions of real people were no longer ignored, but included in the government figures.
Without the distortions, the real unemployment number would be 9%. PB
----
Economic Policy Institute blog post:
...the unemployment rate still understates the weakness of job opportunities.
This is due to the existence of a large pool of “missing workers”—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job.
In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger.
The number of missing workers has been hovering around 6 million for over a year.
They fell slightly in January, which could be the start of a positive trend.
As the economy gets stronger, I would expect more people to start looking for work.
At this point, the fact remains that there are still 5.8 million missing workers.
And, if the missing workers were actively looking for work, the unemployment rate would be 9.0 percent...
----
Link: http://www.epi.org/blog/increasing-labor-force-participation-leads-to-fewer-missing-workers/
How are you doing financially and economically? Are others doing as well?
How about a little check up?
As you read the New York Times excerpt - copy the link for the full article - you should imagine a 20 year roller coaster ride.
The carnival that runs this ride: "Government Housing Policy." What creates the thrills - the turns, drops and sudden stops - is mostly from the economic distortions such government policy created.
What I see promoted today are policy prescriptions that overwhelmingly involve more of the same government based solutions. Why?
When are the government caused thrill ride distortions going to finally stop? PB
----
From the New York Times:
The Great American Dream, Still Deferred
The housing market has shown signs of life recently...
But recall where the market has been over the last 20 years and you’ll start to see a less cheerful picture.
...from a longer perspective, it appears that the housing market, as it stands now, isn’t stable or sustainable.
It is, arguably, still on artificial life support.
Return for a moment to November 1994.
That’s when President Bill Clinton told the National Association of Realtors that many more Americans should own their own homes, because homeownership went “to the heart of what it means to harbor, to nourish, to expand the American dream.”
He called on the nation to embark on a public-private effort to lift the homeownership rate, which then stood at just above 64 percent...
The housing market is now much improved. But the trauma of the public-private housing industry isn’t entirely over.
That is evident in a startling statistic reported last month by the Census Bureau: The homeownership rate dropped all the way to 63.9 percent at the end of 2014.
That’s lower than it was when Mr. Clinton said homeownership was too low...
----
Link: http://www.nytimes.com/2015/02/08/business/the-great-american-dream-still-deferred.html
As you read the New York Times excerpt - copy the link for the full article - you should imagine a 20 year roller coaster ride.
The carnival that runs this ride: "Government Housing Policy." What creates the thrills - the turns, drops and sudden stops - is mostly from the economic distortions such government policy created.
What I see promoted today are policy prescriptions that overwhelmingly involve more of the same government based solutions. Why?
When are the government caused thrill ride distortions going to finally stop? PB
----
From the New York Times:
The Great American Dream, Still Deferred
The housing market has shown signs of life recently...
But recall where the market has been over the last 20 years and you’ll start to see a less cheerful picture.
...from a longer perspective, it appears that the housing market, as it stands now, isn’t stable or sustainable.
It is, arguably, still on artificial life support.
Return for a moment to November 1994.
That’s when President Bill Clinton told the National Association of Realtors that many more Americans should own their own homes, because homeownership went “to the heart of what it means to harbor, to nourish, to expand the American dream.”
He called on the nation to embark on a public-private effort to lift the homeownership rate, which then stood at just above 64 percent...
The housing market is now much improved. But the trauma of the public-private housing industry isn’t entirely over.
That is evident in a startling statistic reported last month by the Census Bureau: The homeownership rate dropped all the way to 63.9 percent at the end of 2014.
That’s lower than it was when Mr. Clinton said homeownership was too low...
----
Link: http://www.nytimes.com/2015/02/08/business/the-great-american-dream-still-deferred.html
Saturday, February 7, 2015
Going on strike? Average annual pay: $147,000 Plus + Employer paid healthcare: $35,000 Another Plus + Pensions: $80,000 ... Inequality, anyone?
Yes, the dockworkers are going on strike.
Are they being victimized? No, they're not.
Here is a better question: Why aren't those jobs made available to the disadvantaged? Those jobs pay $100,000 over and above the average American's annual income.
Where is the redistribution of those salaries, and healthcare plans and pensions to those who have been under-served?
Why the Inequality? Why the unfairness of it all? PB
----
From Investors.com:
The entire port system on America's West Coast could shut down within a week due to a labor impasse...
So what is the union fighting for?
...according to the union's own material, the average dockworker makes $147,000 in annual salary and pulls in $35,000 a year in employer-paid health care benefits.
Pensions pay $80,000 a year.
That salary is well beyond the average American's personal income — about $43,000 annually — and we doubt that the average dockworker is worth $147,000 a year to his employer. A few might be, and they deserve their generous earnings.
But many aren't deserving, and they're riding on the coattails of their more productive, harder-working associates.
This, of course, is one of the problems with unions: equal pay for unequal effort and production.
It's the sort of work environment that drives productivity down.
Why work as hard as the next guy when there's little or no difference in wages? Let him put out the extra effort, and you enjoy the fruits of his labor.
Eventually, though, the hard workers will cut back their productivity because why keep up the good work if the unindustrious guys get the same pay?
It's a race to the bottom.
The private-sector union membership rate in 2014 was 6.6%, with 7.4 million private workers belonging to organized labor.
That's a steep decline from the 35% rate of union dominance in the mid-1950s — and it's a favorable trend.
Today, unions are neither friends nor helpful partners with the American worker.
Those tempted to be sympathetic to the longshoremen's demands need to consider who will pay for whatever package the union gets.
It's not the shipping companies, truckers, railroads or merchants who sell the products that pass through the ports.
No, the union will not be sticking it to "the man." It will be sticking it to the consumers. That's you. Pay up.
----
Link: http://news.investors.com/ibd-editorials/020615-738418-dock-workers-union-demands-hurt-consumers.htm
Are they being victimized? No, they're not.
Here is a better question: Why aren't those jobs made available to the disadvantaged? Those jobs pay $100,000 over and above the average American's annual income.
Where is the redistribution of those salaries, and healthcare plans and pensions to those who have been under-served?
Why the Inequality? Why the unfairness of it all? PB
----
From Investors.com:
The entire port system on America's West Coast could shut down within a week due to a labor impasse...
So what is the union fighting for?
...according to the union's own material, the average dockworker makes $147,000 in annual salary and pulls in $35,000 a year in employer-paid health care benefits.
Pensions pay $80,000 a year.
That salary is well beyond the average American's personal income — about $43,000 annually — and we doubt that the average dockworker is worth $147,000 a year to his employer. A few might be, and they deserve their generous earnings.
But many aren't deserving, and they're riding on the coattails of their more productive, harder-working associates.
This, of course, is one of the problems with unions: equal pay for unequal effort and production.
It's the sort of work environment that drives productivity down.
Why work as hard as the next guy when there's little or no difference in wages? Let him put out the extra effort, and you enjoy the fruits of his labor.
Eventually, though, the hard workers will cut back their productivity because why keep up the good work if the unindustrious guys get the same pay?
It's a race to the bottom.
The private-sector union membership rate in 2014 was 6.6%, with 7.4 million private workers belonging to organized labor.
That's a steep decline from the 35% rate of union dominance in the mid-1950s — and it's a favorable trend.
Today, unions are neither friends nor helpful partners with the American worker.
Those tempted to be sympathetic to the longshoremen's demands need to consider who will pay for whatever package the union gets.
It's not the shipping companies, truckers, railroads or merchants who sell the products that pass through the ports.
No, the union will not be sticking it to "the man." It will be sticking it to the consumers. That's you. Pay up.
----
Link: http://news.investors.com/ibd-editorials/020615-738418-dock-workers-union-demands-hurt-consumers.htm
Friday, February 6, 2015
Who Got Jail for Tax Evasion in Amounts Lower than What the Reverend Al Sharpton Owes
A different kind of inequality? PB
----
From Elizabeth MacDonald at Fox Business:
Serial tax avoidance appears to be a hallmark of Al Sharpton’s operations.
But there’s a warning here: Others have gone to prison for lesser amounts.
The list includes rock legend Chuck Berry, Grammy winner Lauryn Hill, Ron Isley of the Isley Brothers, Survivor reality star Richard Hatch, hotel queen Leona Helmsely, and baseball’s Pete Rose (see below)...
According to a New York Times' review of government records last fall, the MSNBC host and civil rights activist personally faces federal tax liens for more than $3 million in back taxes owed, and state tax liens of $777,657.
So in total, Sharpton reportedly owes more than $3.7 million in back taxes...
Sharpton’s National Action Network also owed more than $813,000 in federal back taxes as of December of 2012, according to the nonprofit’s recent filings.
At one point, the National Action Network's tax liability more than doubled last decade, jumping from $900,000 in 2003 to almost $1.9 milion in 2006...
Chuck Berry ($200,000)
In 1979, the rock legend served a five-month sentence at California’s Lompoc Prison Camp after he was found guilty of evading $200,000 in taxes. Berry was also ordered to do 1,000 hours of community service upon his release.
Pete Rose ($354,968)
In 1990, the former Cincinnati Red star and manager pleaded guilty to two felony charges of filing false federal tax returns. Rose spent five months in a Marion, Ill., federal prison; he was also fined $50,000. Rose had failed to report on his tax returns $354,968 in income from selling memorabilia and autographs, as well as personal appearances (his gambling resulted in a lifetime ban from baseball).
Richard Hatch ($1 million+)
In 2006, this “Survivor” reality star was convicted of tax evasion and tax fraud for failing to pay taxes on his $1 million-plus in “Survivor” winnings. Hatch was sentenced to 51 months in federal prison. He served just over three years before his release in 2009. Hatch was then ordered to refile his 2000 and 2001 tax returns, but did not do so. He was eventually ordered back to jail in 2011 to serve nine months, and left jail on supervised release. By that time, together with penalty and interest, Hatch owed close to $2 million in back taxes.
Leona Helmsley ($1.7 million)
In 1992 a federal judge sentenced Leona Helmsley to four years in prison (an initial 16-year sentence was reduced on appeal) after her tax evasion conviction. The billionaire real estate heiress was charged with avoiding $1.2 million in taxes after claiming $2.6 million in ineligible business expenses, including personal items. Helmsley also was ordered to do 750 hours of community service and was slapped with a $7.1 million fine. Helmsley served 21 months and was released in January 1994. She was quoted by her maid at trial as saying: “We don’t pay taxes, only little people pay taxes.”
Lauryn Hill ($1.8 million)
In 2012, Hill pleaded guilty to three counts of failure to file tax returns on $1.8 million in earnings between 2005 to 2007. Even though the founding member of the Fugees had argued she nearly paid off her taxes before sentencing, Hill was sentenced to three months in prison. Her sentencing also took into account unpaid state and federal taxes in 2008 and 2009, which brought the total owed to roughly $2.3 million. Hill served her three-month sentence in a federal prison in Danbury, Conn. in 2013. Upon release, she also spent three months in home confinement as part of her parole.
Ron Isley ($3.1 million)
In 2006, the lead singer of The Isley Brothers (“Who’s That Lady”) was found guilty of five counts of tax evasion and one count of willful failure to file tax returns for tax years 1997–2002, amounting to $3.1 million not reported. Isley was sentenced to three years and one month, served three years behind bars, and was released in April 2010. Isley’s attorney had pleaded for leniency because Isley had been attempting to pay down his IRS debt. Defense attorney Anthony Alexander also had argued that the 65-year-old singer should receive probation instead of prison time because of complications from a stroke and a bout with kidney cancer. But the judge on his case, U.S. District Judge Dean Pregerson, declined to sentence the R&B singer to less time than called for under federal guidelines. "The term serial tax avoider has been used. I think that's appropriate," Pregerson said.
----
http://www.foxbusiness.com/personal-finance/2015/02/05/people-jailed-for-owing-less-taxes-than-al-sharpton/?
----
From Elizabeth MacDonald at Fox Business:
Serial tax avoidance appears to be a hallmark of Al Sharpton’s operations.
But there’s a warning here: Others have gone to prison for lesser amounts.
The list includes rock legend Chuck Berry, Grammy winner Lauryn Hill, Ron Isley of the Isley Brothers, Survivor reality star Richard Hatch, hotel queen Leona Helmsely, and baseball’s Pete Rose (see below)...
According to a New York Times' review of government records last fall, the MSNBC host and civil rights activist personally faces federal tax liens for more than $3 million in back taxes owed, and state tax liens of $777,657.
So in total, Sharpton reportedly owes more than $3.7 million in back taxes...
Sharpton’s National Action Network also owed more than $813,000 in federal back taxes as of December of 2012, according to the nonprofit’s recent filings.
At one point, the National Action Network's tax liability more than doubled last decade, jumping from $900,000 in 2003 to almost $1.9 milion in 2006...
Chuck Berry ($200,000)
In 1979, the rock legend served a five-month sentence at California’s Lompoc Prison Camp after he was found guilty of evading $200,000 in taxes. Berry was also ordered to do 1,000 hours of community service upon his release.
Pete Rose ($354,968)
In 1990, the former Cincinnati Red star and manager pleaded guilty to two felony charges of filing false federal tax returns. Rose spent five months in a Marion, Ill., federal prison; he was also fined $50,000. Rose had failed to report on his tax returns $354,968 in income from selling memorabilia and autographs, as well as personal appearances (his gambling resulted in a lifetime ban from baseball).
Richard Hatch ($1 million+)
In 2006, this “Survivor” reality star was convicted of tax evasion and tax fraud for failing to pay taxes on his $1 million-plus in “Survivor” winnings. Hatch was sentenced to 51 months in federal prison. He served just over three years before his release in 2009. Hatch was then ordered to refile his 2000 and 2001 tax returns, but did not do so. He was eventually ordered back to jail in 2011 to serve nine months, and left jail on supervised release. By that time, together with penalty and interest, Hatch owed close to $2 million in back taxes.
Leona Helmsley ($1.7 million)
In 1992 a federal judge sentenced Leona Helmsley to four years in prison (an initial 16-year sentence was reduced on appeal) after her tax evasion conviction. The billionaire real estate heiress was charged with avoiding $1.2 million in taxes after claiming $2.6 million in ineligible business expenses, including personal items. Helmsley also was ordered to do 750 hours of community service and was slapped with a $7.1 million fine. Helmsley served 21 months and was released in January 1994. She was quoted by her maid at trial as saying: “We don’t pay taxes, only little people pay taxes.”
Lauryn Hill ($1.8 million)
In 2012, Hill pleaded guilty to three counts of failure to file tax returns on $1.8 million in earnings between 2005 to 2007. Even though the founding member of the Fugees had argued she nearly paid off her taxes before sentencing, Hill was sentenced to three months in prison. Her sentencing also took into account unpaid state and federal taxes in 2008 and 2009, which brought the total owed to roughly $2.3 million. Hill served her three-month sentence in a federal prison in Danbury, Conn. in 2013. Upon release, she also spent three months in home confinement as part of her parole.
Ron Isley ($3.1 million)
In 2006, the lead singer of The Isley Brothers (“Who’s That Lady”) was found guilty of five counts of tax evasion and one count of willful failure to file tax returns for tax years 1997–2002, amounting to $3.1 million not reported. Isley was sentenced to three years and one month, served three years behind bars, and was released in April 2010. Isley’s attorney had pleaded for leniency because Isley had been attempting to pay down his IRS debt. Defense attorney Anthony Alexander also had argued that the 65-year-old singer should receive probation instead of prison time because of complications from a stroke and a bout with kidney cancer. But the judge on his case, U.S. District Judge Dean Pregerson, declined to sentence the R&B singer to less time than called for under federal guidelines. "The term serial tax avoider has been used. I think that's appropriate," Pregerson said.
----
http://www.foxbusiness.com/personal-finance/2015/02/05/people-jailed-for-owing-less-taxes-than-al-sharpton/?
Monday, February 2, 2015
Boomer retirements will challenge businesses
From the Kansas City Star via the Detroit News:
Every 10th worker in America is eligible to retire this year or next.
If you're in an organization that cut staff more than that during the recession, or in a venture populated by young people, you might shrug off impending retirements.
But in many organizations, the loss of experienced employees — presumably workplace survivors because of their needed skills — could pack a punch.
The U.S. Bureau of Labor Statistics forecasts that nearly 1 in 4 members of the U.S. labor force will soon be 55 years old or older.
That's up from about 1 in 8 in 2002.
Some boomers were downsized and haven't returned to work.
Some left because of disability. Many others voluntarily are taking early or planned retirement because they are financially comfortable...
Already, the percentage of retired baby boomers has nearly doubled just since 2010. At the same time, every member of the big "baby boom echo" — the millennial generation — is now of working age.
Is the boomers' "institutional memory" being passed along?
Will their "mature experience" be missed?
And is the boomers' well-regarded work ethic replicable?
----
Link: http://www.detroitnews.com/story/business/personal-finance/2015/02/02/boomer-retirements-will-challenge-businesses/22722563/
Every 10th worker in America is eligible to retire this year or next.
If you're in an organization that cut staff more than that during the recession, or in a venture populated by young people, you might shrug off impending retirements.
But in many organizations, the loss of experienced employees — presumably workplace survivors because of their needed skills — could pack a punch.
The U.S. Bureau of Labor Statistics forecasts that nearly 1 in 4 members of the U.S. labor force will soon be 55 years old or older.
That's up from about 1 in 8 in 2002.
Some boomers were downsized and haven't returned to work.
Some left because of disability. Many others voluntarily are taking early or planned retirement because they are financially comfortable...
Already, the percentage of retired baby boomers has nearly doubled just since 2010. At the same time, every member of the big "baby boom echo" — the millennial generation — is now of working age.
Is the boomers' "institutional memory" being passed along?
Will their "mature experience" be missed?
And is the boomers' well-regarded work ethic replicable?
----
Link: http://www.detroitnews.com/story/business/personal-finance/2015/02/02/boomer-retirements-will-challenge-businesses/22722563/
Privacy is Dead: how Twitter and Facebook Expose your Privacy
They know who you are!
It's not just government entities, it's also corporations.
Even if you think you have privacy, they know what you do.
And if you have taken some measures to remain private, the veil or curtain you pulled down is easily ripped and you are easily exposed.
This will only become more widespread. PB
----
From Yahoo! Finance online:
They know who you are, what you like, and how you buy things.
Researchers at MIT have matched up your Facebook likes, tweets, and social media activity with the products you buy.
The results are a highly detailed and accurate profile of how much money you have, where you go to spend it and exactly who you are.
The study spanned three months and used the anonymous credit card data of 1.1 million people.
After gathering the data, analysts would marry the findings to a person’s public online profile.
By checking things like tweets and Facebook activity, researchers found out the anonymous person’s actual name 90% of the time...
Yahoo Finance’s Henry Blodget thinks the majority of people are okay with their information being gathered.
“Most people [are fine with it], as long as it is regulated. In other words, it’s within our legal system. I think we should all be fine with it. It can be very helpful in certain ways...”
Yahoo Finance’s Jeff Macke is on the opposite side of the privacy debate.
"We’re giving away our personal liberties all over the place and we really have no check and balance system.
"When the government is allowed to do these types of tracking systems in secret, all of a sudden you have to figure out what secrets you’re not figuring out because there’s never one cockroach.”
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Link:http://finance.yahoo.com/news/privacy-is-dead--how-twitter-and-facebook-are-exposing-you
It's not just government entities, it's also corporations.
Even if you think you have privacy, they know what you do.
And if you have taken some measures to remain private, the veil or curtain you pulled down is easily ripped and you are easily exposed.
This will only become more widespread. PB
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From Yahoo! Finance online:
They know who you are, what you like, and how you buy things.
Researchers at MIT have matched up your Facebook likes, tweets, and social media activity with the products you buy.
The results are a highly detailed and accurate profile of how much money you have, where you go to spend it and exactly who you are.
The study spanned three months and used the anonymous credit card data of 1.1 million people.
After gathering the data, analysts would marry the findings to a person’s public online profile.
By checking things like tweets and Facebook activity, researchers found out the anonymous person’s actual name 90% of the time...
Yahoo Finance’s Henry Blodget thinks the majority of people are okay with their information being gathered.
“Most people [are fine with it], as long as it is regulated. In other words, it’s within our legal system. I think we should all be fine with it. It can be very helpful in certain ways...”
Yahoo Finance’s Jeff Macke is on the opposite side of the privacy debate.
"We’re giving away our personal liberties all over the place and we really have no check and balance system.
"When the government is allowed to do these types of tracking systems in secret, all of a sudden you have to figure out what secrets you’re not figuring out because there’s never one cockroach.”
----
Link:http://finance.yahoo.com/news/privacy-is-dead--how-twitter-and-facebook-are-exposing-you
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