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Five Think Tanks on the National Debt Problem

May 28, 2015 at 12:14 pm

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NPR has a story and a link to an even more fascinating report by the Peter G. Peterson Foundation. The Foundation asked five think tanks — the center-right American Action Forum (Douglas Holtz-Eakin and C. Boyden Gray, among others) and American Enterprise Institute, the centrist Bipartisan Policy Center, and the left-of-center Center for American Progress and Economic Policy Institute — to come up with policy plans for the next administration and for tackling the national debt.

The results may make you chuckle, or cringe. As NPR put it:

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Elizabeth Warren, House-Flipper

May 27, 2015 at 1:16 pm

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Elizabeth Warren's lucrative side business buying foreclosed-upon houses and flipping them for a profit is the subject of an article in National Review. This was in the days before she was a senator. It reminds me a bit of Hillary Clinton's commodities trading and service on the corporate board of Walmart. File under "moral balancing" or "capitalist enemies of the predicates of capitalism," or something like that. I think I would have liked both senators better when they were in their capitalist mode than in their current "public service" mode, though both women have also managed to combine the public service with the wealth accumulation. Anyway, on some level you just have to marvel at it.

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The Feds Versus Buses

May 26, 2015 at 12:40 pm

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In my column last week about Amtrak, I mentioned how the Transportation Security Administration's intrusive searches for airline passengers may help push some customers toward the government-subsidized railroad, where passengers aren't searched. Another non-financial way that the government helps Amtrak is by making life more difficult for inter-city bus lines. The Boston Globe has an update today on the discount Fung Wah bus line, which the Federal Motor Carrier Safety Administration shut down in 2013.

Massachusetts regulators were unwilling to allow it to resume operations...Prior to its reinstatement, Fung Wah complained in a letter posted on its website that regulators were treating the company unfairly with drawn-out evaluations that cost the company more than $3 million — amounting to a "death sentence," the company's president wrote.

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Schwarzman's Gift

May 26, 2015 at 12:21 pm

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Dylan Matthews is usually pretty sharp, but his attack on Stephen Schwarzman for his $150 million gift to Yale strikes me as misguided. Mr. Matthews writes, at Vox, under the headline, "For the love of God, rich people, stop giving Ivy League colleges money":

It's hard to imagine a worse way to use the money that still entitles Schwarzman to a charitable tax deduction. Yale is not a charity. It is a finishing school that overwhelmingly serves children of wealth and privilege. Supporting its scientific and particularly biomedical research is worthwhile, but the school is already far richer than all but one of its peer institutions and has access to considerable federal funds in that area, as well. And, of course, Schwarzman isn't supporting Yale's biomedical research. He's giving its dancers a nicer stage upon which to pirouette....

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Disinherited

May 26, 2015 at 11:53 am

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Disinherited: How Washington Is Betraying America's Young is the title of a newly published book by Diana Furchtgott-Roth and Jared Myer. Ms. Furchtgott-Roth, who is a senior fellow at the Manhattan Institute for Policy Research and the director of its Economics21 project, was kind enough to answer some questions about the book for FutureOfCapitalism.com:

1. Your book describes the way that in education policy and entitlement programs, older Americans have structured a system that gives them an advantage at the expense of younger ones. Given the systemic tilt that you write about — older people vote, while younger people don't — is there any chance that this system will change for the better? How would that happen?

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Buffett's Minimum Wage Alternative

May 26, 2015 at 11:43 am

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Warren Buffett's preferred alternative to a big increase in the minimum wage, an adjustment to the earned-income tax credit, is the subject of my column this week:

The earned-income tax credit may indeed be better than a nationwide minimum wage increase to some level as high as $15, which is what Los Angeles City Council just passed. But — and here is the key point often omitted — the EITC has its own formidable problems, perverse incentives, and unintended consequences. Anyone — politicians, Warren Buffett, economists — recommending an expanded EITC as an alternative to a minimum wage increase would do well to keep those problems in mind, because tinkering with the details of the EITC has the potential to create plenty of trouble.

Read the whole column at the New York Sun (here) or Newsmax (here).

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Lawsky

May 21, 2015 at 1:23 pm

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New York state's financial regulator, Benjamin Lawsky, is leaving his job to start a firm that "will provide compliance and risk management advice to a range of companies," the New York Times reports. It's yet another case of a regulator cashing out by going to work for the people he used to regulate. The Times article reports further:

the fines Mr. Lawsky collected became a revenue stream for the state. Mr. Cuomo recently trumpeted the money as "basically a gift from above" that he will use for infrastructure upgrades and other expenses.

This formulation of the fines as "a gift from above" is pretty priceless.

It's not a "gift" — gifts are voluntary, while these settlements are extracted from companies by force. As the Times puts it later in the article: "Banks complained that the threat amounted to a shakedown. Faced with the choice of settle or die, the banks understandably chose to settle."

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Defending Buffett

May 21, 2015 at 12:43 pm

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Regular readers of this site know that I'm not shy about criticizing Warren Buffett when I think he deserves it. But on two items recently in the news, I think his critics are on shaky ground.

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Clinton in Haiti

May 21, 2015 at 12:07 pm

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Earlier this month we linked a New York Times account of how Hillary Clinton's brother Tony Rodham was hoping to earn $1 million on post-earthquake Haiti recovery efforts. Now the Providence Journal has an op-ed from the head of a school in Haiti raising more questions about what the Clintons were doing there:

One example of Bill Clinton's dressing a wolf in lamb's clothing with his win-win spell is the Irish telecom mogul Denis O'Brien. Clinton cannot seem to praise his billionaire friend and foundation donor enough. In an article he penned for Time, Clinton wrote, "In Haiti ... phones have revolutionized the average person's access to financial opportunity," and goes on to write glowingly about O'Brien's role in Haiti's mobile "revolution."

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Krugman's Failures

May 20, 2015 at 11:12 am

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The Foundation for Economic Education has posted an article by Robert P. Murphy documenting "the empirical failures" of Paul Krugman, the New York Times' Nobel laureate columnist. It's a nice example of accountability journalism applied to a journalist, if that is what Professor Krugman is.

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Levin's Payout

May 20, 2015 at 10:21 am

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Yale's $8.5 million payout to its former president Richard Levin is the subject of a news article in the Wall Street Journal, which adds some interesting context to two other articles: this one from Tablet magazine on the current Yale president, Peter Salovey, calling on Yale's graduating seniors to go fix the world, and this one, a column by Frank Bruni in the New York Times, on what Mr. Bruni calls "the shockingly lucrative deals that have become almost commonplace among college presidents." Mr. Levin's payout was even larger than the one E. Gordon Gee got from Ohio State, which Mr. Bruni also writes about.

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Magnet Versus the Kleptocrats

May 19, 2015 at 12:05 pm

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Myron Magnet is brilliant, but I'm not so sure I buy his argument in this article in the Manhattan Institute's City Journal. He says developers' concern for the 421a tax abatement is preventing them from fighting the extension of rent stabilization laws:

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Sell Amtrak to Make It Safer

May 19, 2015 at 11:45 am

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How the experience of the for-profit, safety-obsessed Genesee & Wyoming railroad can add to the discussion of the fatal Amtrak crash is the topic of my column this week. Please check it out at the New York Sun (here), Reason (here), and Newsmax (here).

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More Non-Bank Lenders

May 14, 2015 at 10:44 am

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Further to the post here last month about the rise of non-bank lenders, the New York Times has more:

risk-taking and jobs are flowing to dozens of new alternative lenders. The start-ups aim to reinvent small-business and consumer lending by offering quicker approvals, relying on automated credit checks that include data feeds from bank accounts and tax returns, salted with inputs from social media....Bond Street is one of 25 digital small-business lenders that rely heavily on data analysis in making decisions, aiming at a market with $300 billion in outstanding loans, according to a report in April by Autonomous Research. Lending Club and several dozen other new lenders compete for an additional $450 billion in consumer and student loans. ...the loan approval rate of new small-business lenders is 62 percent, much higher than the 21 percent at traditional big banks

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Ramen and Bagels

May 14, 2015 at 10:10 am

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From a New York Times restaurant review earlier this month, explaining why a chef decided to close a pop-up ramen shop that had been open after-hours inside a bagel store:

Last week, Joshua Smookler, Mu Ramen's chef and its owner, told me "the real reason" he had decamped from the bagel shop.
"I was scared of the government finding out what we were doing," he said, even though he believed it was legal...

Either Mr. Smookler is paranoid or would-be businessmen in New York City have a well-founded fear of excessive government regulation.

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