There are certain expressions—like “trust me” or “I can handle this”—that should raise immediate red flags. When an untrustworthy contractor asserts, “trust me, your kitchen renovation will be finished before Christmas,” it’s wise to remain skeptical. It’s unlikely the job will be completed until late spring.
Similarly, when an incompetent client insists, “I won’t need your services right now; I’ve got this,” prepare for a frantic phone call at 5 PM on Friday. “This is far more than I can manage,” your client will lament, “please take care of it.”
This past Monday, amid widespread concern, the Chinese yuan dropped past 7 per dollar for the first time in over ten years. This significant movement prompted U.S. Treasury Secretary Steven Mnuchin to make a notable comment, branding China a “currency manipulator.”
Mnuchin’s reasoning seems to imply that China’s lack of intervention to uphold the yuan signifies manipulation. Yet, when the government directly intervenes in the market to sustain a centrally determined price acceptable to Mnuchin, it is not considered manipulation. Go figure! Continue reading
As we move into the sweltering days of summer, the sun shines brightly across North America. Cold, sweet lemonade becomes the favorite drink—widely enjoyed at ballparks and swimming pools, as well as after mowing the lawn, or whenever a bit of refreshment is needed to escape the heat.
After a decade of economic growth, it seems the economy is also poised for a pause. Current earnings reports from S&P 500 companies for the second quarter indicate a mixed bag. However, sectors focused on manufacturing and industrials are experiencing double-digit declines.
Practically speaking, these declines in earnings stem from a contraction in manufacturing. Just this week, the Chicago Purchasing Managers’ Index (PMI) dropped dramatically in July to 44.4, marking the second weakest reading since the Great Financial Crisis. Continue reading
“Facilis descensus Averno.” – Virgil
Delivering Tomorrow’s Curses
The Roman poet Virgil wrote these words in his epic, The Aeneid, about a generation before the birth of Jesus Christ. They can be loosely interpreted as, “the descent to hell is easy.” Those who have traveled this path can attest to the truth of this statement.
Although not explicitly stated in the context of Virgil’s poem, we can apply it here to the troubling trend of currency debasement. What better phrase encapsulates the slow degradation perpetuated by today’s government?
Just yesterday [Thursday], the House acted with disconcerting ease to facilitate America’s troubling trajectory. They increased federal spending and suspended the debt ceiling for two years with hardly any opposition. With the future burdens now in place, the nation’s Representatives can leave town without a second thought as summer recess begins. Continue reading
According to Finagle’s corollary of Murphy’s law, “Anything that can go wrong, will—at the worst possible moment.” When combined with O’Toole’s corollary and the second law of thermodynamics, we find that “the perversity of the universe tends toward a maximum.”
Indeed, the negative effects of central planning on the economy are reaching their peak. This detrimental trend can be traced back over a century, originating with the establishment of the Federal Reserve and the federal income tax in 1913. Today, however, we’ll reflect on the past decade, which aptly illustrates O’Toole’s law in action.
Take, for example, June 1, 2009, when General Motors filed for Chapter 11 bankruptcy protection—the fourth largest bankruptcy in U.S. history. Rather than disappearing entirely, GM was nationalized, with Washington acquiring a 60 percent ownership stake through a $50 billion taxpayer-funded bailout. At that time, President Obama remarked:
“We are acting as reluctant shareholders because that is the only way to help GM succeed.” Continue reading
