Venezuela Oil Industry Collapsing & May Take the Gov’t With It

Venezuela has the largest proven oil reserve in the world. However, they are out of gasoline. The government has attributed this to poor management which has led to the stoppage of 80% of the country’s refineries. So much for socialism. The assumption that government is competent of managing anything is proven by this very example.
My old friend, Milton Friedman, said it best:
‘If you put the Federal Government in charge of the Sahara desert, in 5 years there’d be a shortage of sand.’

This post was published at Armstrong Economics on Dec 28, 2017.

$1.5 Trillion GOP Tax Bill Signed By Trump – Housing Largely Uneffected Thanks To Lower Marginal Tax Rates (Ham and Mayonnaise!)

This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
President Trump on Friday signed the Republican $1.5 trillion tax overhaul that is expected to trigger tax cuts for most Americans next year. The GOP/Trump bill undoes some of the damage caused by the tax increases put in place on January 1, 2015 by the Obamacare legislation such as increasing the top bracket from 35% to 39.6%.
Although this is not related to housing per se, the corporate tax rate has been cut to 21%, putting the US in the middle of the G-7 nations instead of being the most heavily tax major nation on earth.

This post was published at Wall Street Examiner on December 26, 2017.

Three Cheers for the GOP Tax Plan

Last night the Senate passed the Republican proposed tax plan, a major political victory for Trump and the GOP-controlled Congress.
At the Mises Wire, we have featured numerous articles pointing out many of the fallacies involved with the general debate on the issue of “tax reform.” For example, the absurdity of “revenue neutral” reform, the danger of raising rates through eliminating loop hopes, the fallacy of trying to address the deficit through eliminating deductions on state and local taxes, and the general notion that tax breaks can be equated to tax subsidies. While the Republican bill does fall for some of these traps, the result of the bill as a whole is a genuine reduction in the tax burden for the majority of Americans. That is always something worth celebrating.
There are additional benefits to be found within the bill as well.
For example, the elimination of the Obamacare individual mandate is a small, but significant, step to improving the American healthcare system. As I noted in March, when Paul Ryan’s attempt at Obamacare reform failed, the rise of direct primary care and other market solutions meant that the best thing the GOP could do is simply provide as much freedom as possible for Americans to opt out of government-managed insurance markets:
Given that this is happening naturally on the market already, the legislative focus for those in Washington concerned about American healthcare should be preventing any future laws and regulations that would destroy this model going forward. Further, rather than trying to completely overhaul Obamacare, simply eliminating the individual mandate tax and allowing Health Savings Accounts to be used for healthcare membership would be subtle ways of empowering the market to revolutionize American medicine. This should be coupled with real tax cuts, not ‘revenue neutral reform’ to help Americans keep their own hard-earned money to help pay for it.

This post was published at Ludwig von Mises Institute on 12/20/2017.

Trump May Delay Signing Tax Bill Until Early Next Year

As the House prepares to hold its second vote on the final version of the Republican tax plan, Fox Business and Dow Jones Newswires are reporting that President Donald Trump might wait until early next year to sign the bill once it reaches his desk. His reason? By delaying the signing, Trump would effectively push certain spending cuts to programs like Medicare until 2019.
At issue are so-called “pay as you go,” or “pay-go,” budget rules that could be triggered by deficits in the tax bill. Congressional Republicans are preparing a separate fix to waive the rules after they finish the tax bill. But – given their already jam-packed legislative schedule – if Congress fails to pass the waiver before its year-end recess, one way to delay the cuts would be to wait until January to sign the bill.
If successful, the waiver would likely be attached to Congress’s ‘continuing resolution’ bill that would keep the government funded through Jan. 19.

This post was published at Zero Hedge on Dec 20, 2017.

House Passes Tax-Reform Bill – 12 Republicans, All Democrats Vote Against

Here are the House Republicans who voted against the tax bill, which of course raises the question: With his NO vote, what secret message was Rohrabacher sending to Putin & Assange? pic.twitter.com/B66BY0uIZC
— Ira Goldman (@KDbyProxy) December 19, 2017

After more than six weeks of frenzied negotiations, the House of Representatives has passed the reconciled version of President Donald Trump’s tax plan, leaving only one major hurdle between Republicans and their biggest legislative accomplishment of the Trump era.
In a 227-203 vote, the House passed the tax plan over united Democratic opposition, as well as a flurry of ‘no’ votes from blue-state Republicans who spoke out against provisions in the bill that eliminate deductions for state and local taxesthat will disproportionately impact taxpayers in high-tax states like California and New York. Ultimately, 12 Republicans joined 191 Democrats in voting against the bill.
The vote followed an empassioned debate with Democrats – who labeled the bill the White House “tax scam” – slamming the bill as an attempt to establish a “permanent plutocracy.” Republicans countered that it would benefit all Americans, and evidence of its sanguine impact on the economy would emerge over the next year.
The contentious debate that preceded the vote was interrupted several times by protesters, including people who shouted “kill the bill, don’t kill us!” The Hill pointed out that one of the protesters was a woman in a wheelchair who said she relies on Medicaid and warned that the bill would “starve” the public.

This post was published at Zero Hedge on Dec 19, 2017.

Republican Tax Plan Is Headed For Final Round Of Votes

Barring some unforeseen catastrophe (or another floor-vote surprise akin to Sen. John McCain’s last minute decision to strike down the Senate’s plan to repeal and replace Obamacare), Congressional Republicans appear all but certain to pass the reconciled version of President Donald Trump’s tax-cut plan – the first time Congress has successfully passed comprehensive tax reform since 1986.
With their self-imposed Friday deadline looming, the Republicans’ Senate leadership managed to secure commitments from several holdouts, including Maine Sen. Susan Collins, Florida Sen. Marco Rubio and Utah Sen. Mike Lee.
At last count, the only Senator who hasn’t committed to a ‘yes’ vote is Arizona’s Jeff Flake. Flake famously delivered a scathing speech condemning President Trump from the floor of the Senate after announcing that he would not seek another term. He has been an outspoken Republican critic of the Trump agenda, per Reuters.
Meanwhile, Sen. Bob Corker – the only senator who voted against the Senate’s original tax bill – said late last week that he would vote for the current bill after several provisions were added that would benefit him personally, along with a handful of other Republicans.

This post was published at Zero Hedge on Dec 19, 2017.

Will Myanmar Embrace Market Reforms?

The economic growth in Myanmar is now among the highest in Asia, and it’s come a long way since the 1960’s when it was considered one of the world’s most impoverished countries. It’s instructive to understand how this change took place, what some of the current economic metrics indicate, and current pressures being placed on Myanmar from the outside.
For starters, the general history of Myanmar (also known as Burma, and the reason for the two names is interesting in itself) is long and fascinating. More recently, Myanmar was conquered by Great Britain (it was actually a part of British India, which was responsible for much of the administration) in 1855, and became relatively affluent in this part of the world, primarily due to the trade of rice and oil.
However, even before British rule, Myanmar was already relatively well off due to its strategic location along important trade routes. Myanmar is located between India and China – Indian influence is still present, even today, and was resented, along with British control – and this trading activity helped offset a country based on self-sufficient agriculture and centralized control via a king.
Britain ruled Myanmar until independence in 1948, when a series of nationalization and central planning efforts created a welfare state. The results were disastrous. Rice exports fell by two-thirds in the 1950’s, along with a 96% decline in mineral exports. In order to maintain central planning efforts, the government resorted to printing money, and runaway prices resulted from this inflation of the money supply.

This post was published at Ludwig von Mises Institute on Dec 18, 2017.

The Tea Party, Ten Years Later

December 16, 2017 is the tenth anniversary of the modern Tea Party. That fact will surprise many laypersons who uncritically accept the mainstream narrative that the Tea Party began on February 19, 2009 when Rick Santelli, live on CNBC from the Chicago Mercantile Exchange (CME), declared a rebellion against “socialism” one month into the Obama administration.
But wait a minute: Rick Santelli on establishment NBC lighting the spark of an anti-establishment rebellion? An uprising over mere proposed Obama bailouts of mortgage holders coming four months after silence over (if not a defense of) George W. Bush’s $700 billion TARP bailout of Wall Street?
If the mainstream narrative seems fishy, that is because it is. What really happened ten years ago and how was the Tea Party transformed from a libertarian grass-roots movement to today’s controlled (and just-about dead) establishment version? What are some of the lessons that can be learned?

This post was published at Ludwig von Mises Institute on 12/18/2017.

THE JOURNAL OF LIBERTARIAN STUDIES

Libertarians tend to focus on two important units of analysis: the individual and the state. And yet, one of the most dramatic and significant events of our time has been the reemergence-with a bang-in the last five years of a third and much neglected aspect of the real world, the “nation.” When the “nation” has been thought of at all, it usually comes attached to the state, as in the common word, “the nation-state,” but this concept takes a particular development of recent centuries and elaborates it into a universal maxim. In the last five years, however, we have seen, as a corollary of the collapse of communism in the Soviet Union and in Eastern Europe, a vivid and startlingly swift decomposition of the centralized State or alleged nation-State into its constituent nationalities. The genuine nation, or nationality, has made a dramatic reappearance on the world stage.
I. THE RE-EMERGENCE OF THE NATION The “nation,” of course, is not the same thing as the state, a difference that earlier libertarians and classical liberals such as Ludwig von Mises and Albert Jay Nock understood full well. Contemporary libertarians often assume, mistakenly, that individuals are bound to each other only by the nexus of market exchange. They forget that everyone is necessarily born into a family, a language, and a culture. Every person is born into one or several overlapping communities, usually including an ethnic group, with specific values, cultures, religious beliefs, and traditions. He is generally born into a “country.” He is always born into a specific historical context of time and place, meaning neighborhood and land area.

This post was published at Ludwig von Mises Institute on 12/09/2017.

Homeless Swedes Out In The Cold

Authored by Bruce Bawer via The Gatestone Institute,
One reason there are so many immigrants in Sweden, both legal and illegal, is that the country’s welfare system is a bonanza for foreigners. Far from not being covered by the system, immigrants often enjoy preferential treatment These Swedes should not be sleeping on the streets. The Scandinavian welfare states were founded on a compact between the citizens and their government: the people would pay outrageously high taxes, and in return their government would guarantee them a magnificent safety net should they get sick or get fired. But ever since these countries chose to open their doors to mass Muslim immigration, that compact has been broken. A state-employed paper-pusher who gives citizens something for which they have already paid can hardly feel particularly virtuous, whereas handing out free stuff to aliens who have done absolutely nothing to deserve it can make that same government paper-pusher feel like a world-class Good Samaritan. Even more shattering is that millions of those Scandinavian citizens accept it. Marinated from birth in multiculturalism, millions of them dare not demand what they have coming to them — what they have paid for, what they deserve — lest they be viewed by others, and even by themselves, as bigots. The other day, I reported about the Church of Sweden’s strenuous efforts to appease Islam. Now comes the news that from December 15 to March 15, churches in the diocese of Gothenburg will be used at night as shelters for the homeless.
Lovely idea. But there is a catch. The only homeless people who will be allowed in are foreigners — either immigrants from elsewhere in the EU, who are by definition legal, or illegal immigrants from outside the EU. In other words, native Swedes need not apply, even though the initiative is being paid for by taxpayer money.

This post was published at Zero Hedge on Dec 8, 2017.

GOP Releases All 479 Pages Of The Tax Reform Bill – “Vote-A-Rama” Begins

The Senate tax bill is headed for a potentially unlimited series of decisions on possible amendments – known as ‘vote-a-rama’ – as the full text of the revised bill has just been released.
As Bloomberg reports, it’s unclear how long that process might take, though we do note that unlike Obamacare, Senators will at least get to see what’s in the bill before they vote on it.
Democrats could spend hours offering numerous amendments meant to highlight any flaws they believe the bill contains.

This post was published at Zero Hedge on Dec 1, 2017.

Nobel Laureate Stiglitz Says Bitcoin Should Be ‘Outlawed’

Bitcoin has soared this year by more than ten-fold, defying all of the Wall Street veterans who have compared it to the Tulip Bubble and/or a Ponzi scheme. That doesn’t mean that Bitcoin is a legitimate investment; it just means that bubbles have no set expiration date.
The Nobel laureate economist, Joseph Stiglitz of Columbia University, appeared on Bloomberg television yesterday and had this to say about Bitcoin:
‘One of the main functions of government is to create currency. And Bitcoin is successful only because of its potential for circumvention, lack of oversight. So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function.’
Consider the remarks Stiglitz made yesterday to our more detailed assessment along the same lines back in 2014. We wrote:
‘The business writers at Reuters are also dead wrong on Bitcoin being like other currencies whose ‘value depends on people’s confidence in it.’ Let’s take the U. S. dollar. Backing the use of the U. S. dollar as a world currency is the following: a Congress made up of 435 Representatives in the House and 100 Senators in the Senate; 535 people elected from all over the United States who have the power to tax the income of every American receiving wage, dividend, interest or even Social Security income at whatever rate they see fit in order to pay the Nation’s bills and debt obligations to other countries.

This post was published at Wall Street On Parade on November 30, 2017.

Obamacare’s Revenge: The IRS Will Not Process Your Tax Return Unless You Tell Them Whether You Have Health Insurance Or Not

Yes, this is a true story. I was completely shocked when I learned about this too, and this just underscores the importance of repealing the individual mandate immediately. Shortly after taking office, President Trump issued an executive order which was intended to move the IRS away from enforcing Obamacare’s individual mandate, but now the IRS has found a way around that executive order. According to the official AARP website, the IRS has announced that it will not process any tax returns from individuals that are not willing to disclose whether they currently have health insurance or not…
The Internal Revenue Service won’t process individual tax returns in 2018 unless taxpayers indicate whether they have health insurance coverage or an exemption.
The move, announced last month, reverses course from this year, when the IRS said it would not require filers to indicate on 1040 tax forms whether they had health insurance. Filers were still required to have medical insurance or pay a penalty, but the IRS accepted and processed returns even if taxpayers didn’t indicate coverage status.
So what this means is that you will not get your refund until you tell the IRS if you have health insurance.
And if you don’t have health insurance and you don’t qualify for an exemption, you could be hit with a very painful financial penalty.

This post was published at The Economic Collapse Blog on November 26th, 2017.

Fun on Friday: The Definition of Insanity and a Lesson from the Pilgrims

As the saying goes, ‘Insanity is doing the same thing over and over again, and expecting different results.’
Albert Einstein is usually credited with that statement, although there isn’t any proof that he ever said it. Nevertheless, it’s certainly a good working definition of insanity. And by that definition, I have to conclude that socialists are insane.
When I was a kid, we used to say some things only ‘sound good on paper.’ In other words, they seem like good plans, but there is no way they’re going to work in the real world.
That’s socialism in a nutshell.
I mean, socialism really does sound good on paper, right? We’re all going to own everything together and take care of each other. It sounds so nice. And we all want to be nice right? Just think about the expression, ‘From each according to his ability, to each according to his need.’ That’s so positive. So nice. So warm and fuzzy.
Except when people start dying.
And you know what’s not nice?
Corpses.

This post was published at Schiffgold on NOVEMBER 24, 2017.

Birthday of a Bloodbath

This October-November 2017 marks the 100th anniversary of the launch of the Bolshevik Revolution in Russia – the bloody communist state that would produce a political-ideological killing spree unlike any the world has ever seen.
And yet, communism continues to find supporters. Here are three personal anecdotes:
I did a conference this past week on the legacies of communism. One liberal professor complained that no pro-communist speakers were included. I wasn’t surprised.
Another case: a former student of mine this week told me of his professor (at a local college in Pittsburgh) who was hailing Karl Marx for his ‘brilliance.’ Again, no surprise.
One more: A student from the University of Wisconsin called in to a talk-show I did last week insisting that capitalism is just as lethal as communism.
That all happened just this past week, and it’s not unusual in my world.
Anecdotes aside, an October 2016 poll by the Victims of Communism Memorial Foundation generated a stunning finding: almost one-third of Millennials ‘believe more people were killed under George W. Bush than under Joseph Stalin.’ And it isn’t only those silly Millennials. More than one in four Americans generally believe Bush was the bigger killer.

This post was published at Ludwig von Mises Institute on November 24, 2017.

Lessons From Squanto

Authored by MN Gordon via EconomicPrism.com,
Governments across the planet will go to any length to meddle in the lives and private affairs of their citizens. This is what our experiences and observations have shown. What gives?
For one, politicians have an aversion to freedom and liberty. They want to control your behavior, choices, and decisions. What’s more, they want to use your money to do so.
Here in the United States, bureaucrats, flush with authority, will stand in the way of a fellow who’s striving to find his own way by his own means. Licenses, permits, fees, employer identification numbers, state board of equalization registrations, workers compensation insurance…you name it. All this – and more – are needed prior to hanging out your shingle and making your first sale.
Many cities in the land of the free require school kids to get a permit just to operate a lemonade stand. And don’t even think of opening an auto shop, let alone a medical practice. You’ll spend your first year’s profits getting your hazardous materials business plan approved by the fire department. What a waste of time and resources so you can store a couple tanks of oil and gas and keep a couple waste drums to put the dirty rags in. Does all this rigmarole make you safer?
After that, your time will be spent keeping up the requisite documentation and reporting. Actually acquiring and serving customers will be secondary. Then, after paying federal, state, and local taxes, you’ll be left with less money than if you’d just kept your day job. Why bother with the risk if there’s no reward?
Perpetuating Mistakes Certainly, some government programs were initiated with well-meaning intentions. Food stamps, for instance, are issued so people can buy food so they can eat. Isn’t that a good thing? On surface, the answer is yes. But below the surface unintended consequences simmer.

This post was published at Zero Hedge on Nov 23, 2017.

The Daily Hell of Life in the Soviet Bloc

This month is the 100th anniversary of the Communist Party’s seizure of power in Petrograd, Russia. British Guardian columnist Paul Mason recent declared that the Soviet revolution provided ‘a beacon to the rest of humanity, no matter how short lived.’ The New York Times has exalted the Soviet takeover in a series of articles on the ‘Red Century’ – even asserting that ‘women had better sex under communism’ (based largely on a single dubious orgasm count comparison of East and West German women.)
Professor Hunt Tooley’s November 1 Mises article on ‘The Bolshevik Great Experiment: 100 Years Later’ vividly captured the stunning death tolls communism produced in Russia and elsewhere. Stalin reputedly said that one death is a tragedy, a million deaths is a statistic.
Communism’s mortality toll does not capture its full horror – the daily degradation that its victims suffered. In the mid-1980s, there were plenty of Soviet apologists writing in the western media. Practically any Soviet Bloc reform was touted as the turning of the corner to sustained economic progress. I was mystified why people living in freedom would idealize a system of state slavery.
In 1986 and 1987, I slipped behind the Iron Curtain a half dozen times to study economic perversity and political slavery, writing articles for The New York Times, Wall Street Journal Europe, Freeman, Journal of Economic Growth, and other publications. My final trip – in November 1987 – began in Budapest, Hungary, before heading on to the most repressive regime in Europe.

This post was published at Ludwig von Mises Institute on 20 Nov 2017.

How to Face the Housing Crisis in Expensive Cities

The lowest hanging fruit of them all: Airbnb and its ilk. By John E. McNellis, Principal at McNellis Partners, for The Registry: There are problems and then there are ‘high-class’ problems. Being unemployed is a problem. Getting hit with a huge tax bill is a high-class problem. Not qualifying for food stamps is a problem while discovering your favorite bistro is fully booked is a high-class problem. Being chased by debt collectors is qualitatively different than being hounded by paparazzi. You get the picture.
Perhaps explaining why we hear so much about it, our housing crisis is another high-class problem. There is no housing crisis in the bottom 20% of our zip codes. According to the Economic Innovation Group, a business-backed DC think tank, the vacancy rate in distressed America is 14.4%, a rate guaranteed to floor rents and prices. The elite zip codes – the top 20% – have a vacancy rate a bit under 5% and no doubt approaching effective zero in the white-hot coastal zip codes.
And elite neighborhoods have – you guessed it – high class problems. One is Airbnb.
In order to continue its phenomenal growth, Airbnb has been forced to shed its sheep’s clothing and admit its essence. With the recent announcement of a joint venture with Newgard Development Company, a Florida builder, the company has all but proclaimed that it’s nothing more than a hotel operator. A poorly-regulated hotel operator, as much about grandma renting out her sewing room as Uber is about helping drivers earn pocket money. Hand-in-hand with Airbnb, Newgard intends to build a couple thousand apartments where tenants can Air-out their units 180 days a year and split the profits three ways.

This post was published at Wolf Street on Nov 19, 2017.

Spain’s Pension System Hits Crisis Point (and Everyone Ignores it)

But how did things get this bad?
By most measures sun-blessed Spain is an idyllic place to grow old in. Life expectancy is among the highest in the world, and the national pension fund’s payout ratio (pension as percent of final salary) is the second highest in Europe after Greece. But if current trends are any indication, that may soon be about to change.
The country’s Social Security Reserve Fund, which was meant to serve as a nationwide nest egg to guarantee future pension payouts, given Spain’s burgeoning ranks of pensioners, has been bled virtually dry by the government. This started ever so quietly in 2012 when the government began withdrawing cash from the fund. Some of it was used to fill part of the government’s own fiscal gaps while billions more were tapped to cover the Social Security system’s growing deficits. As a result the pension pot has shrunk from over 66 billion in 2011 to just 15 billion in 2016.
To avoid wiping out the fund altogether this year, the Spanish government extended a 10.1 billion interest-free loan to Spain’s social security system, which enabled it to pay out the two extra pension payments due in June and December. That way, only 7-7.5 billion will be tapped from Spain’s public pension nest egg. Emptying the pot altogether this year would have been politically unpalatable, says El Pas. Instead, it will be emptied next year as the social security system racks up yet another massive annual shortfall.

This post was published at Wolf Street on Nov 18, 2017.