Elizabeth Warren's Line of Credit

February 25, 2020 at 10:37 pm

The Washington Post reports on Elizabeth Warren's campaign finances: "New financial reports show the campaign took out a $3 million line of credit and drew out $400,000 that it ended up not using."

I scoured her campaign's latest Federal Election Commission report and other press coverage of this line of credit. The name of the person or financial institution providing this $3 million line of credit is not something I was able to find.

If it's a bank, though, it's a good example of how the financial industry provides valuable services to customers in ways that Warren and her ideological comrades are often too reluctant to acknowledge.

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The Refugee "Burden"

February 24, 2020 at 7:53 pm

A New York Times editorial about tension on the Syria-Turkey border says "Turkey is already burdened by almost four million Syrian refugees, whose presence is increasingly becoming a political liability for Mr. Erdogan."

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France Meddles in U.S. Election

February 23, 2020 at 8:56 pm

"Two French economists," the New York Times reports, "are the driving force behind proposals for a wealth tax, an idea embraced by Senators Bernie Sanders and Elizabeth Warren."

The Times reports that "Four years ago, Mr. Saez and Mr. Zucman pitched the leading Democratic candidates, Hillary Clinton and Mr. Sanders, on their wealth tax proposal, but both campaigns passed. This cycle has been different. Mr. Sanders and Ms. Warren have both proposed wealth taxes."

The New Yorker in October 2019 ("The French Economist Who Helped Invent Elizabeth Warren's Wealth Tax") reported more details of how Zucman and Saez interacted with the presidential campaigns:

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Buffett on Stocks for the Long Run

February 22, 2020 at 9:33 pm

Warren Buffett's latest annual Berkshire Hathaway shareholder letter, out this weekend, is the usual mix of self-serving hype and genuinely insightful commentary. In the insightful category seems to be this, on why stocks are a "much better long-term choice" than bonds:

If something close to current [interest] rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments. That rosy prediction comes with a warning: Anything can happen to stock prices tomorrow. Occasionally, there will be major drops in the market, perhaps of 50% magnitude or even greater. But the combination of The American Tailwind, about which I wrote last year, and the compounding wonders described by Mr. Smith, will make equities the much better long-term choice for the individual who does not use borrowed money and who can control his or her emotions.

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Krugman Gets Bloomberg Wrong

February 22, 2020 at 9:03 pm

Paul Krugman writes in his New York Times column about Michael Bloomberg:

he got rich by selling equipment to destructive wheeler-dealers.

For those who don't know what I'm talking about, I'm referring to the famous Bloomberg Terminal, a proprietary computer system that gives subscribers real-time access to large quantities of financial data. This access is incredibly expensive — a subscription costs around $24,000 a year. But it's a must-have in the financial industry, because traders with Bloomberg Terminals can react to market events a few minutes faster than those without.

It's an extremely profitable business. But is it good for the economy? No.

After all, does getting financial information a few minutes earlier do anything significant to improve real-world business decisions that affect jobs and productivity? Surely not. Bloomberg has, in effect, made his billions off a financial arms race that costs vast sums but leaves everyone pretty much back where they started.

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Bloomberg's Philanthropy and Politics Intersect

February 19, 2020 at 8:14 pm

Mayor Bloomberg's charitable giving is the topic of a new article I have up at Education Next, headlined, "On Education, Bloomberg Is Everywhere." It begins:

The nation's two largest teachers unions, the American Federation of Teachers and the National Education Association, teamed up this month to warn schools against "active shooter" lockdown drills that wind up doing more to scare students than to increase their preparedness.

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A Pardon for Michael Milken

February 18, 2020 at 7:40 pm

Back on September 4, 2017, I wrote a column headlined "Trump's Next Pardons: A Short List of Convicts Deserving To Be Cleared."

There were seven names on the list in that column: Michael Milken, Martha Stewart, Conrad Black, Dinesh D' Souza, I. Lewis "Scooter" Libby, Larry Franklin, Sholom Rubashkin.

With this week's pardon of Michael Milken, President Trump has now either pardoned or commuted the sentences of five of those seven.

As I wrote back in 2018, when the Dinesh D'Souza pardon was announced:

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What Would Samuel Adams Make of Mike Bloomberg?

February 18, 2020 at 7:26 pm

When a presidential candidate's wealth becomes a political issue—as it did with Mitt Romney, Donald Trump, and now Michael Bloomberg—it reminds me of John Hancock. My column this week tackles this issue. Please read the full column at the New Boston Post (here), New York Sun (here), Reason (here), and Newsmax (here).

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Bezos Blocks the Competition

February 11, 2020 at 9:50 pm

Here is a business idea. Raise some very large amount of capital and use it to launch a website — call it, say, cheaperthanAmazon.is — whose entire business consists of offering to customers products and services sold at Amazon.com for a price that is consistently exactly 5 percent less than you'd pay for the same product or service at Amazon.

Technology makes it not that hard to scrape prices from the Amazon website and dynamically adjust the prices on the same products at cheaperthanAmazon.is

In 2019, Amazon sold about $280.5 billion worth of products and services and reported net income of about $11.6 billion, which is a profit margin of about 4.1%. If you charged 5% less to customers than Amazon does, you'd still be nearly breaking even. You could cover the losses with whatever startup capital you raised for as long as it takes for either Walmart, Target, or Amazon itself to decide they'd like to purchase your business.

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Michelle Caruso-Cabrera

February 11, 2020 at 8:12 pm

Michelle Caruso-Cabrera announced today that she will challenge Alexandria Ocasio-Cortez in the primary for the Democratic nomination for Congress. The race is to represent New York's 14th Congressional District, which covers parts of the Bronx and Queens in New York City. Caruso-Cabrera's campaign website is here.

In 2010, reviewing Caruso-Cabrera's book You Know I'm Right: More Prosperity, Less Government, I wrote, "There's a lot of policy substance in this book and a lot of clear writing and clear thinking to go with it."

Caruso-Cabrera is a professional at being on television, and if there are televised debates between her and the socialist AOC, they will be worth tuning in to.

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The Borking of Biden

February 10, 2020 at 10:08 pm

"Paradoxically, in the current moment — a moment Biden helped to create by blocking Bork — being unqualified for the presidency is the best qualification a candidate can have," I write in my column this week. Please check the full column out at the New York Sun (here) and Reason (here).

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The Tax Angle on Tom Brady

February 10, 2020 at 10:01 pm

Tonight as I was driving around Boston I caught a bit of the sports talk radio, which was full of speculation about where the GOAT, as Greatest Of All Time quarterback Tom Brady is known locally, might wind up playing if not for the New England Patriots.

Among the leading possibilities, at least according to the radio show: the Las Vegas Raiders, the Dallas Cowboys, and the Miami Dolphins. The WEEI hosts noted that all three of these teams are in states where the state income tax is zero, versus the 5.05% rate that obtains in Massachusetts. States go after athletes with so-called "jock taxes," so Brady can wind up paying state tax when he plays away games in other states, anyway, but a zero state income tax versus 5.05% on home games could amount to more than half a million dollars a year for a guy like Brady.

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Republican 2024 Presidential Candidates

February 6, 2020 at 9:28 pm

The Democratic 2020 race may be in the headlines, but talk among Republicans is already turning to the party's 2024 field. I look ahead and sketch the possibilities in a column for the New York Sun here.

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Max Singer

February 6, 2020 at 9:25 pm

From Michael Ledeen comes the sad news of the death, at age 88, of Max Singer. His passing was also marked by the Hudson Institute, the Wall Street Journal, and by Gil Troy in the Jerusalem Post.

Among Singer's many distinctions is that he was responsible for what the New York Sun, in a 2007 editorial, called "one of the most remarked upon" op-ed articles that "we've ever run." As the Sun editorial put it, Singer argued for splitting off the oil-rich Eastern Province from the rest of Saudi Arabia.

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Trump State of the Union 2020

February 4, 2020 at 11:13 pm

President Trump did quite a good job, I thought, in striking a balance between appealing to his and the Republican Party's traditional base — awarding a Medal of Freedom to Rush Limbaugh, "we will never let socialism destroy American health care," the "Justice for Victims of Sanctuary Cities Act" — and expanding his base or appealing to undecided voters. In the "expand" category might be put "always protect Medicare and Social Security," "taking on the big pharmaceutical companies," "eradicate AIDS by the end of the decade," and "first woman on the moon."

I saw Senator Schumer clapping when Trump touted the "second chance" criminal justice reform he enacted, and also when Trump spoke of "rural high speed internet." Speaker Pelosi clapped when Trump talked about infrastructure spending.

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