The recent discussions surrounding the next Federal Reserve Chairman, set to take over after Ben Bernanke’s term ends on January 31, 2014, have captured a lot of attention. At Economic Prism, our interest isn’t truly centered on who takes this mantle, yet the uncertainty brings a certain fascination.
The unfolding drama is reminiscent of a child enchanted by a circus performer balancing a cart on their chin. We are both entertained and bewildered by the public frenzy surrounding a position that arguably shouldn’t even exist. Why do we even need a bureaucrat manipulating the price of money?
Indeed, our world would likely be far better off without the economic distortions brought on by rate suppression policies. Yet, this is not a world of idealism—we must navigate the realities we face. Thus, in the spirit of playful critique, we pause to contribute our own thoughts to the ongoing dialogue.
Ultimately, the focus of today’s discussion seems destined to rest upon one of two pairs of rather heavy shoulders. Continue reading
President Obama has unveiled a fresh initiative aimed at supporting the middle class. A few weeks ago, he announced his strategy to reach out to CEOs, and just recently, during a visit to Arizona, he revealed plans to bolster the housing market by offering government guarantees for securitized mortgage packages. It’s astonishing, really…
According to Reuters, the crux of Obama’s proposal is to phase out mortgage finance giants Fannie Mae and Freddie Mac, which are responsible for owning or guaranteeing a substantial portion of U.S. home loans and play a vital role in ensuring that capital circulates among lenders and borrowers.
The administration’s aim is to substitute these entities with a framework where the private sector acquires home loans from lenders and repackages them as securities for investors.
So far, so good, right? It appears that the President is attempting to eliminate government intervention and price distortions from the housing market altogether. However, he’s not content to simply stop there. The introduction of moral hazards into the plan always seems to lurk around the corner… Continue reading
A rather troubling development is unfolding, and frankly, we are not pleased with it at all. Despite the constant assurances of a strong economic recovery, indicators suggest the contrary.
The economy is not on the upswing; it seems to be retracting. Just last week, we received two alarming data points underscoring this regression, beginning with the jobs report released on Friday…
This year, job growth has averaged more than 200,000 monthly. However, when the Labor Department finalized the July figures, the result was a mere 162,000 new jobs. More concerning is that the new jobs being created are not the kind that promote economic growth; instead, they are the ones leading us in the opposite direction.
As expressed by Dan Alpert, managing partner at Westwood Capital, “What you’re witnessing is the spread of low wage growth.” He notes, “Essentially, we have transformed into a nation of hamburger flippers, Walmart cashiers, bartenders, and other low-wage workers.”
We at Economic Prism hold no disdain for anyone who commits to showing up for a job at a hamburger stand or Walmart each day. Continue reading
10 Reasons Why Obamacare Is Going to Ruin Your Medical Care… and Your Life
By Elizabeth Lee Vliet, M.D.
Obamacare has become a jumble of new regulations, requirements, and penalties. To provide clarity, let’s define a few key terms that, while not commonly understood today, will likely gain prominence as the law continues to unfold:
Health insurance exchanges: These are platforms intended to offer a selection of qualified insurance policies that comply with the new healthcare regulations. They can be established by individual states (though many are hesitant due to financial concerns) or by the federal government. Ideally, these exchanges should be operational by October 1, 2013, yet it remains uncertain if this timeline will be met.
The individual mandate: This provision requires individuals to obtain health insurance abiding by the new federal standards. Failure to do so results in a financial penalty. Those below certain income thresholds may qualify for taxpayer-funded subsidies to help purchase insurance. Continue reading
