King v. Burwell: The Fix was Definitely In

July 2nd, 2015

This Friday, July 3rd Mr. Richard Amerling will be joining me on Your Financial Editor. We will be discussing his article, “King v. Burwell: The Fix was Definitely In.” The article is below. You can listen live from anywhere Saturday morning at 8am on AM 930 WFMD by logging on to www.wfmd.com and clicking the “listen live” button! If you can’t tune into the show, there will be a podcast available the week following the show here.

King v. Burwell: The Fix Was Definitely In

Richard Amerling

Richard Amerling, M.D.

As I predicted back in March, the U.S. Supreme Court ruled for the administration inKing v. Burwell. So I was not surprised by the decision, but that doesn’t mean I am not deeply disappointed. I am.

Beyond the ramifications for the continuation of the abominable Obamacare, the obvious truth is that we are being ruled by a corrupt oligarchy that includes the majority of the Supreme Court. This was driven home on Friday by the discovery by Justice Anthony Kennedy of a right to same-sex marriage in the “shadows and penumbras” of the Constitution, which will certainly ignite another never-ending culture war in the country.

Further legal challenges to federal over-reaching are likely to fail. There are constitutional remedies to this tyranny, as Senator Ted Cruz points out, including action by Congress to either impeach members of the Court, or to limit the Court’s jurisdiction. Neither of these options is feasible, given current lily-livered Republican leadership, and of course, a presidential veto. This leaves a constitutional amendment to overturn the decision, originating either in Congress, or in a convention of the states, as specified in Article V.

We are living, as says radio host Mark Levin, in a “post-constitutional republic,” where rules and laws are concocted by a small group of elites, either unelected or elected in perpetuity by a tiny fraction of the electorate, and who are unresponsive to the will of the people.

What does this decision mean for the medical profession, and for those who depend on us for care? We are in dire straits!

Obamacare, and more recently the Medicare Access and CHIP Reauthorization Act (MACRA) solidify bureaucratic control over the practice of medicine. We have already seen the widespread closing of private practices, with now over two-thirds of physicians working under a hospital umbrella. Those who remain private are under immense pressure, both financial and regulatory, and many will fold their tents. In addition to rigid price controls on their fees, there are never-ending requirements for documentation via the electronic health record of personal clinical details, to be used eventually to centrally direct care.

MACRA cements into place various payment schemes such as bundling, accountable care organizations (ACOs), and other forms of “payment-for-outcomes,” that will be applied to the Medicare program, and ultimately to private insurance.

All of these systems create financial disincentives to caring for truly sick patients, and will have a devastating effect. Patients will be increasingly subjected to one-size-fits-all care, dictated by algorithms inserted into the electronic health record. These will be created by professional groups, such as the American Medical Association, the American College of Physicians, and the American Board of Internal Medicine, and will be labeled as “evidence-based,” or “best practices.”

This will lead to even greater over-prescription of statins, anti-hypertensives, and diabetes medications, based on achieving certain numerical “targets.” Many individual patients will certainly be harmed by this approach.

To maximize revenue, physicians will dutifully click on boxes and comply with the central mandates. Thus will fade the Hippocratic ethic to render their best judgment on behalf of their patients. Over time, the medical profession will devolve from a science-based art into a trade requiring less training and less experience. Doctors are already being indoctrinated away from a commitment to individual patients and towards allegiance to the state, or to “society.” This should be of grave concern to all of us.

To defend what is left of the private, independent practice of medicine, doctors will have to “opt out” of official, government medicine, and go back to the days when we worked for, and were paid by, our patients. This will allow the continued delivery of high quality, personalized care, and the survival of Hippocratic medicine for future generations of physicians.

And given the tyrannical nature of our government, doctors need to opt out while they still can. It is not inconceivable that the federal government would, completely without authority and violating the 10th Amendment insuring state sovereignty, federalize all state medical boards. They could then institute a federal medical license, and make licensure conditional on agreeing to accept all government insurance as full payment. We need a critical mass.

And who would stop such a move? Clearly not the Roberts Court!

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http://www.aapsonline.org/

Richard Amerling, MD (New York City) is an Associate Professor of Clinical Medicine and an academic nephrologist at Mount Sinai Beth Israel in New York.  Dr. Amerling received an MD from the Catholic University of Louvain in 1981.  He completed a medical residency at the New York Hospital Queens and a nephrology fellowship at the Hospital of the University of Pennsylvania.  He has written and lectured extensively on health care issues and is President of the Association of American Physicians and Surgeons.  Dr. Amerling is the author of the Physicians’ Declaration of Independenceand is a seasoned speaker and on-air contributor.

Goldman Sachs Asked Two of the World’s Best-Known Economists If U.S. Stocks Are in a Bubble

June 5th, 2015

It’s Shiller vs. Siegel in the battle over equity market valuations.

By: Julie Verhage

Even if the S&P 500 is only up about 2 percent year-to-date, it’s still sitting at record levels. This means economists, analysts, and investors are inevitably asking one big question: Are stocks overvalued?

Over the weekend, Goldman Sachs published a massive research piece asking if equity market valuations are in “dangerous territory.” To answer the question, the bank pits Nobel laureate Robert Shiller and Wharton professor Jeremy Siegel against each other. First, though, a preface. U.S. equities look expensive by a number of measures, Goldman notes. For a start, the typical stock in the S&P 500 trades at 18.1 times forward earnings, which ranks in the 98th percentile of historical valuation since 1976. The overall index has an aggregate forward price-to-earnings multiple of 17.3, which is a rise of 64 percent since September 2011, compared with the median expansion of 48 percent during nine previous price-to-earnings expansion phases.

You can see click here to view the rest of the article and see the trend in the chart from Goldman’s note .

The Money Secrets of the Super Wealthy

June 5th, 2015

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The “Wealth Matters” columnist of The New York Times reveals the habits, worldviews, and practices that lead to true wealth—and why it’s more important to be “wealthy” than “rich.”

For the better part of the past decade, Paul Sullivan has written about and lived among some of the wealthiest people in America. He has learned how they save, spend, and invest their money; how they work and rest; how they use their wealth to give their children educational advantages but not strip them of motivation. He has also seen how they make horrendous mistakes. Firsthand, Sullivan knows why some people, even “rich” people, never find true wealth, and why other people, even those who have far less are much wealthier.

Sullivan is part of the “The One Percent” today, but he came from far humbler roots, starting life in the bottom twenty-five percent. This personal book shows how others can make better financial decisions—and come to terms with what money means to them. It lays out how they can avoid the pitfalls around saving, spending and giving their money away and think differently about wealth to lead more secure and less stressful lives. An essential complement to all of the financial advice available, this unique guide is a welcome antidote to the idea that wealth is a number on a bank statement.

Tomorrow joining me on Your Financial Editor is author Paul Sullivan. We will be discussing his new book, “The Thin Green Line.” You can listen live from anywhere Saturday morning at 8am on AM 930 WFMD by logging on to www.wfmd.com and clicking the “listen live” button! If you can’t tune into the show, there will be a podcast available the week following the show here.

See more about Mr. Sullivan here

A Conservative and Compassionate Approach to Immigration Reform

May 22nd, 2015

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Tomorrow joining me on Your Financial Editor is author David Strange. We will be discussing his new book, “A Conservative and Compassionate Approach to Immigration Reform” You can listen live from anywhere Saturday morning at 8am on AM 930 WFMD by logging on to www.wfmd.com and clicking the “listen live” button! If you can’t tune into the show, there will be a podcast available the week following the show here.

Although the United States is a nation founded by immigrants, Alberto Gonzales and David Strange believe that national immigration policy and enforcement over the past thirty years has been inadequate. This failure by federal leaders has resulted in a widespread introduction of state immigration laws across the country. Gonzales and Strange assert that the solution to current immigration challenges is reform of federal immigration laws, including common sense border control, tougher workplace enforcement, changes to the Immigration and Nationality Act, and a revised visa process.

Gonzales and Strange embrace many provisions of current pending legislation, but are sharply critical of others. Their proposals call for an expansion of the grounds of inadmissibility to foster greater respect of law and to address the problem of visa overstays, while also calling for a restriction on grounds of inadmissibility in other areas to address the large undocumented population and increasing humanitarian crisis. They explore nationality versus citizenship and introduce a pathway to nationality as an alternative to a pathway to citizenship.

This immigration policy blueprint examines the political landscape in Washington and makes the argument that progress will require compromise and the discipline to act with compassion and respect.

This is a book that conservatives and liberals will find compelling in its arguments and the depth of careful, comprehensive research. Yet the issues are so divisive that advocates for change will be taking copious notes from the text and sources. The authors have crafted arguments so skillfully that politicians of every stripe must deal with the implications for revision of the statutes.

—Gordon Morris Bakken, from the foreword

About Mr. Strange:

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David N. Strange is a managing partner at the law firm of Whittenburg, Strange, & Walker, P.C., and adjunct professor of law at the Texas Tech University.

Alberto R. Gonzales is former counsel to the President and United States Attorney General under the George W. Bush administration. He is currently the Dean of the Belmont University College of Law, where he holds the Doyle Rogers Distinguished Chair of Law.

Bootleggers and Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics

May 8th, 2015

Bootleggers and Baptists

Policy analysts, academics, journalists, and even politicians lament the influence of money on politics. But in the political economy, politicians often carefully design regulations so that two very different interest groups will be satisfied. The Bootlegger and Baptist theory, an innovative public choice theory developed more than 30 years ago, holds that for a regulation to emerge and endure, both the “bootleggers,” who seek to obtain private benefits from the regulation, and the “Baptists,” who seek to serve the public interest, must support the regulation. Economists Adam Smith and Bruce Yandle provide an accessible description of the theory and cite numerous examples of coalitions of economic and moral interests who desire a common goal. The book applies the theory’s insights to a wide range of current issues, including the recent financial crisis and environmental regulation, and provides readers with both an understanding of how regulation is a product of economic and moral interests and a fresh perspective on the ongoing debate of how special interest groups influence politics.

Adam Smith and Bruce Yandle are economists at Clemson University in South Carolina.

Tomorrow joining me on Your Financial Editor is author Adam Smith. We will be discussing his new book, “Bootleggers and Baptists” You can listen live from anywhere Saturday morning at 8am on AM 930 WFMD by logging on to www.wfmd.com and clicking the “listen live” button! If you can’t tune into the show, there will be a podcast available the week following the show here.

 

Deja Vu for Lax Lending Standards?

May 8th, 2015

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By: Dustin Prial – Published May 05, 2015 – Fox Business

Housing experts are growing increasingly concerned that lenders have very short memories.

Signs have begun to emerge in recent months that banks, eager to attract large numbers of borrowers in an effort to boost profits, are lowering their lending standards to levels that warrant comparisons to the wild and crazy days that preceded the 2008 financial crisis.

In those days, as everyone from the average homeowner to top Wall Street CEOs was profiting from skyrocketing home values, banks were so eager to lend that all rational underwriting standards were jettisoned, allowing millions of unqualified borrowers to obtain mortgages without offering a shred of proof they could pay the money back.

The fear now is that once the Federal Reserve bumps interest rates higher — possibly later this year or in early 2016 — and mortgage rates follow suit, the volume of mortgages and home loan refinancings will slip as borrowing becomes more expensive. In response, as this line of thinking goes, banks will lower their lending standards in an effort to offset the higher costs of borrowing and attract customers.

“That’s exactly what happened in 2004 and 2005,” said Leif Thomsen, founder and former chief executive of Walpole, Mass.-based Mortgage Master Inc., a home loan lender he sold earlier this year.

Banks ‘Reaching for Volume and Yield’

The situation has hardly reached the extreme conditions of the early and mid-2000s, but red flags are starting to pop up, leading to some expressions of deja vu.

Consider that the Office of the Comptroller of the Currency (OCC) reported late last year that an annual survey conducted by the financial regulator found that the largest U.S. banks have lowered their standards for some of the riskiest loans to levels not seen since the mid-2000s.

The OCC said 2014 was the third year in row during which underwriting standards “have eased within both commercial and retail products. This compares to very similar results noted in the 2006 underwriting survey, just prior to the most recent credit crisis.”

The regulator said the increasingly lax standards were a result of banks “reaching for volume and yield,” and added that while loan quality “is currently sound, credit risk is increasing through the continued easing of underwriting standards and accelerated loan growth.”

In other words, in order to make more loans and generate more profits, lenders are making it easier for borrowers to get loans. That’s not necessarily a bad thing, unless the pendulum swings too far back in the direction of pre-crisis conditions.

The Pendulum Swinging Back

Since the housing bubble burst, sending the U.S. into a deep recession, lenders have been enforcing far tighter credit standards, making it difficult for many first-time home buyers to scrape together a down payment and qualify for a mortgage.

Consequently, despite historically low interest rates that have brought mortgage rates to their lowest levels in decades, many consumers haven’t been able to get approved for a mortgage and the U.S. housing market has struggled to gain traction as the economic recovery slowly moves forward.

Critics of the tighter lending standards say it’s an example of the pendulum swinging too far in the opposite direction from 10 years ago, and that the tougher rules have acted as a drag on the economic recovery. But now the fear is that the pendulum is swinging back in the other direction.

Fannie Mae and Freddie Mac struck precisely that nerve late last year when in an effort to jump-start the sluggish housing market, the two quasi-government housing finance giants announced a controversial plan to allow some first-time homeowners to obtain a mortgage while putting down just 3% of the price of the home.

The decision to return to low down payments has drawn intense criticism from an array of legislators and lending and housing experts who say the plan revives the same lax lending practices that led to the 2008 financial crisis.

Mark Calabria, a housing policy expert and director of financial regulation studies at the Cato Institute, said, “In terms of Fannie, Freddie and the FHA, I do believe we are getting back to the lending standards (low FICO and low down payment) that contributed to the crisis.”

Fannie and Freddie Respond to Criticism

The Federal Housing Administration, he added, “may well be worse in terms of standards than pre-crisis.”

Calabria said the big difference between now and a decade ago is that so far private housing lenders have yet to return to their subprime ways, or the risky loans made to less-than-creditworthy borrowers that nearly blew up the global economy in 2008.

Fannie, Freddie and the FHA, in response to criticism of the return to 3% down payments, have said the loans will be held to the same eligibility requirements as other Fannie loans, including underwriting, income documentation and risk management standards. In addition, the housing lenders said the loans will require mortgage insurance “or other risk sharing” similar to Fannie loans that require a 20% down payment.

Anthony Sanders, a finance professor at George Mason University who studies housing policy, agrees that “lenders and government mortgage insurers have expanded their credit boxes” primarily by reintroducing low down payments and loosening credit score requirements.

But, he added, “It won’t matter much unless households can reclaim their lost income and wage growth from the past decade,” touching on larger concerns tied to the economic recovery.

The original article can be found here: http://www.foxbusiness.com/industries/2015/05/01/deja-vu-for-lax-lending-standards/

America In Retreat- Bret Stephens

April 24th, 2015

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Tomorrow joining me on Your Financial Editor is author Bret Stephens. We will be discussing his new book, “America In Retreat: The New Isolation and the Coming Global Disorder.” You can listen live from anywhere Saturday morning at 8am on AM 930 WFMD by logging on to www.wfmd.com and clicking the “listen live” button! If you can’t tune into the show, there will be a podcast available the week following the show here.

About the book:

“A world in which the leading liberal-democratic nation does not assume its role as world policeman will become a world in which dictatorships contend, or unite, to fill the breach. Americans seeking a return to an isolationist garden of Eden—alone and undisturbed in the world, knowing neither good nor evil—will soon find themselves living within shooting range of global pandemonium.”—From the Introduction

In a brilliant book that will elevate foreign policy in the national conversation, Pulitzer Prize–winning columnist Bret Stephens makes a powerful case for American intervention abroad.
In December 2011 the last American soldier left Iraq. “We’re leaving behind a sovereign, stable, and self-reliant Iraq,” boasted President Obama. He was proved devastatingly wrong less than three years later as jihadists seized the Iraqi city of Mosul. The event cast another dark shadow over the future of global order—a shadow, which, Bret Stephens argues, we ignore at our peril.
America in Retreat identifies a profound crisis on the global horizon. As Americans seek to withdraw from the world to tend to domestic problems, America’s adversaries spy opportunity. Vladimir Putin’s ambitions to restore the glory of the czarist empire go effectively unchecked, as do China’s attempts to expand its maritime claims in the South China Sea, as do Iran’s efforts to develop nuclear capabilities. Civil war in Syria displaces millions throughout the Middle East while turbocharging the forces of radical Islam. Long-time allies such as Japan, Saudi Arabia, and Israel, doubting the credibility of American security guarantees, are tempted to freelance their foreign policy, irrespective of U.S. interests.

Deploying his characteristic stylistic flair and intellectual prowess, Stephens argues for American reengagement abroad. He explains how military intervention in Iraq and Afghanistan was the right course of action, foolishly executed. He traces the intellectual continuity between anti-interventionist statesmen such as Henry Wallace and Robert Taft in the late 1940s and Barack Obama and Rand Paul today. And he makes an unapologetic case for Pax Americana, “a world in which English is the default language of business, diplomacy, tourism, and technology; in which markets are global, capital is mobile, and trade is increasingly free; in which values of openness and tolerance are, when not the norm, often the aspiration.”
In a terrifying chapter imagining the world of 2019, Stephens shows what could lie in store if Americans continue on their current course. Yet we are not doomed to this future. Stephens makes a passionate rejoinder to those who argue that America is in decline, a process that is often beyond the reach of political cures. Instead, we are in retreat—the result of faulty, but reversible, policy choices. By embracing its historic responsibility as the world’s policeman, America can safeguard not only greater peace in the world but also greater prosperity at home.
At once lively and sobering, America in Retreat offers trenchant analysis of the gravest threat to global order, from a rising star of political commentary.

Meet Bret Stephens:

Bret Stephens writes “Global View,” the Wall Street Journal’s foreign-affairs column, for which he won the Pulitzer Prize for commentary in 2013. He is the paper’s deputy editorial page editor, responsible for the international opinion pages of the Journal, and a member of the paper’s editorial board. He is also a regular panelist on the Journal Editorial Report, a weekly political talk show broadcast on Fox News Channel.

Mr. Stephens joined the Journal in 1998 as an op-ed editor and moved to Brussels the following year, where he wrote editorials and edited a column on the European Union. He left Dow Jones in January 2002 to become editor-in-chief of The Jerusalem Post, a position he assumed at age 28. At the Post he was responsible for the paper’s news, editorial, international and digital editions. He also wrote a weekly column.

Mr. Stephens returned to the Journal in late 2004 and has reported stories from around the globe. In addition to the Pulitzer Prize, he is the winner of a South Asian Journalists Association award for his writing on the Kashmir earthquake (2006), the Breindel Prize for excellence in opinion journalism (2008), the Bastiat Prize for his columns on economic subjects (2010) and the University of Chicago’s Alumni Board of Governors Professional Achievement Award (2014). In 2005 he was named a Young Global Leader by the World Economic Forum.

Mr. Stephens was born in the U.S. and raised in Mexico City. He has an undergraduate degree, with honors, from the University of Chicago, and a Master’s from the London School of Economics. He lives in New York City with his wife Corinna, a music critic, and their three children

Chris Sits down with JP Morgan

April 17th, 2015

Join Chris tomorrow on Your Financial Editor as he talks with JP Morgan’s Vice President, Client Portfolio Manager, Phil Camporeale. They will be discussing the markets on a global level and the impacts that has on your wallet.

 

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About Philip Camporeale:

Phil is a Client Portfolio Manager in the Global Multi-Asset Group based in New York, focusing on a variety of the group’s retail strategies. An employee since 2000, Philip was previously a member of the New York Fixed Income group before joining GMAG in 2011. Philip was responsible for developing duration and yield curve overlay strategies across approximately $7 billion in assets covering a wide range of investment mandates using cash, exchange traded futures, non-dollar and OTC derivative products using macro-economic variables. Philip was also the primary alpha portfolio manager for many of the firm’s Central Bank relationships, which invested in AAA rated Agency MBS, Agency debentures, CMBS, ABS and Supra/Sovereign debt. Philip has a B.S. in accounting and an M.B.A. in finance from Fordham University and holds a Series 3 license.

 

Ben Bernanke’s Latest Defense of the Fed’s Failures

April 17th, 2015

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Fed officials have been busy lately spreading the view that incessantly low interest rates are symptomatic of a still-dim economic reality rather than a result of their own monetary experimentation. Indeed they are full of self-praise for not having been hasty to raise rates given the overwhelming evidence that the natural or neutral level is indeed very low. They even weep for the plight of the small saver.

But the tears are crocodile tears so long as the designers and implementers of the wildest monetary experiment in contemporary US history continue to deny in this way their lead role in creating the interest income famine. Ben Bernanke in his first blog piece for the Brookings Institution has joined the campaign to exonerate the Fed of any responsibility for the famine. This is an exercise in great deception.

Is This Time Different?

The ex-Fed chief claims that his “great monetary experiment” has been successful despite the non-appearance of strong economic expansion. Small savers suffering income famine right now is not due to monetary policy failure, we’re told, but is due to a harshness of the economic environment which has turned out to be greater than what anyone could imagine. Bernanke told a reporter at his first press conference (April 2011) that “this time would be different.”

What Bernanke meant then by “different” was that “this time” economic recovery would be vigorous due to his deploying “non-conventional” tools of monetary policy. This Fed-induced vigor would be in contrast to a history of US economic upturns following great recessions which are slow and fitful, he claimed.

Bernanke’s history lesson on that day has always been questionable in the light of 150 years of US evidencesuggesting that the reverse is generally true.

Now in the midst of the slowest ever economic expansion following the Great Recession, the ex-Fed chief boasts that his particular skill was to resist the premature calls to raise short-term rates from near zero, thus preventing a relapse of the US economy into recession.

Amazingly, Bernanke, the notorious advocate of using long-term rates as a policy instrument, now contends in his blog that the Fed’s power to influence real rates of return, especially long-term real rates, is transitory and limited. The weakness of these instruments, Bernanke tells us, has little to do with the Fed and much to do with the “Wicksellian interest rate” (which he defines as the real interest rate consistent with full employment of labor and capital, perhaps after some period of adjustment).

Hence the blame for retirees able to obtain only very low rates of return on those savings does not rest with the Fed. Bernanke rejects criticism that he threw seniors under the bus. Rather, he writes:

Indeed, if the goal was for retirees to enjoy sustainably higher real returns, then the Fed’s raising interest rates prematurely would have been exactly the wrong thing to do. In the weak but recovering economy of the past few years, all the indications are that the equilibrium real interest rate has been exceptionally low, probably negative. A premature increase in interest rates engineered by the Fed would have likely led after a short time to an economic slowdown and consequently lower returns on capital investment. Ultimately the best way to improve the returns attainable by savers was to do what the Fed actually did: keep rates low (closer to the low equilibrium rate) so that the economy could recover and more quickly reach the point of producing healthier investment returns.

This view that the Fed is not responsible for interest income famine and that it has the small saver’s plight at heart could become the leading popular narrative unless the advocates of monetary stability mount a powerful retort. What should this include?

What Might Have Happened

First of all, Fed critics should point out that if the Fed has abandoned its relentless plan to gain 2 percent inflation, and instead allowed prices to fall, savers would have made real gains on their savings even though nominal interest rates would have remained low. In turn, expectations of price recovery further ahead would have stimulated spending both by consumers and businesses.

Nominal rates would have remained positive throughout the cycle. Cumulatively, small savers would have been ahead in real terms even though interest rates in real terms would have been negative during the early expansion phase.

Yield-Hungry Investors Turn to Speculation

But, that didn’t happen, and instead, the actual monetary policy of zero rates and inflaming inflation expectations strengthened irrational forces in the marketplace as investors frantic for yield pursued one speculative story after another. In particular they chased in those early years of the Great Monetary Experiment the story of emerging market economic miracles, and most of all, a China miracle. Linked to this were claims of an oil shortage and an insatiable demand for iron ore. Commodity extraction industries boomed. Carry trades into emerging market currencies ballooned and fed vast consumer credit and real estate booms across the emerging market world. The steep fall of speculative temperatures now occurring across those specific asset classes, the related severe slowdown in emerging markets (including China), and the downturn in commodity extraction industries explains the decline in Bernanke’s “Wicksellian interest rate.”

The Fed Caused Widespread Uncertainty

There’s more to the story, however. The second effect of Fed policy is the huge monetary uncertainty which the great experiment has created. Almost everyone and their dog realizes that the Fed has been deliberately creating asset-price inflation with a view to stimulating the economic upturn. They know also that there has been much speculative froth across a wide range of markets — not all at the same time but partly in sequence. They can think of the private equity bubble, the sky-high prices for junk bonds and European periphery sovereigns and most of all, the Wall Street equity boom. They realize that all this may very well end badly in another crash and recession. In turn, corporate decision-makers find that they satisfy their shareholders best by paying out huge amounts of cash (equity buy-backs and dividends) rather than investing in long-term risky projects whose payoffs may come in the feared recession. Thus the monetary uncertainty— including the likelihood of eventual crisis — enfeebles the investment activity in the economy (except in those highly leveraged areas where the cost savings on debt trump other concerns). The weak investment which, according to Bernanke and his fellow travelers, explains low real interest rates is actually a direct consequence of their policies.

Bernanke in his consulting work since leaving the Fed has made much of the weak investment spending and low productivity growth in the US and elsewhere, albeit in another recent blog post he takes issue with the “secular stagnation hypothesis.” Many Investors suffering from interest income famine have been firmer believers in this hypothesis to justify their search for yield in the long-maturity US Treasury bond market. Investors who have convinced themselves about secular stagnation in their bond market strategies are not inclined to embrace long-run economic optimism elsewhere. In fact their intuitive sense of a “day of reckoning” ahead becomes sharper. This is the third piece linking the great monetary experiment to weak economic outcomes: low interest rates and small-saver blight.

Image source: iStockphoto
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

5 Best States for Retirement

April 17th, 2015

You have saved and planned and are looking forward to retirement. And now comes the million-dollar question: Where should I retire? Deciding where to retire might be simple, but no location fits every dream.

According to a recent Bankrate.com report, Wyoming is the best state for retirement. Bankrate ranked all 50 states based on cost of living, taxes, health-care quality, crime rate, well-being and climate.

“Deciding where to live in the golden years is still a very personal decision,” said Bankrate.com research and statistics analyst Chris Kahn. “This list is meant to help inform, rather than choose a state for you. For example, if you want to retire on the beach and need top-notch health care, this can help narrow down your choices.”

These are the top 5 states to retire — and here’s why, according to Bankrate.

No. 1: Wyoming

  • Taxes: Wyoming is the lowest-taxing state in the country when you combine income, sales, property and other taxes.
  • Weather: Yes, the winters are frigid. But Wyoming also can boast better-than-average levels of sunshine. Cheyenne, for example, enjoys an average 68% of its maximum possible sunshine, according to government records from 1981 to 2010. That compares with a national average of 60%. Wyoming’s climate is relatively dry. Its humidity levels in the morning and afternoon are both below the national average at 67.8 and 45.5 percent.

No. 2: Colorado

  • Weather: Good weather isn’t only about the warmth. What Colorado lacks in heat, it makes up in low humidity (67.4% in the afternoon vs. a national average of 77.7%), and it’s very sunny. Pueblo, Colo. gets as much sun as Key West, Fla., and it’s actually sunnier than Honolulu or Miami.
  • Community pride/satisfaction: National surveys of individual wellness show that seniors (65 and older) in Colorado are exceptionally satisfied with their community. The surveys, sponsored by the Healthways well-being company, ask questions such as “are you satisfied or dissatisfied with the city or area where you live” and “did you smile or laugh a lot yesterday.” Given the responses, Colorado is ranked as the sixth best in the country when it comes to personal well-being.

No. 3: Utah

  • Health care: The federal Agency for Healthcare Research and Quality gives each state an annual scorecard on how well its health care system is operating. It tracks more than 150 different quality indicators in every state. This year, AHRQ says that Utah’s health care system is the seventh best in the country.
  • Weather: Just like other Rocky Mountain states, Utah makes up for its cold winters with mild summers, lots of sunshine and low humidity. Milford, Utah, for example, gets more sunshine than Tampa, Fla.

No. 4: Idaho

  • Crime: Idaho has the second-lowest crime rate in the country, just behind Vermont, with 217 violent crimes and 1,864 property crimes per 100,000 people recorded in 2013.
  • Cost of living: Idaho has the third-lowest cost of living in the U.S., ranking behind Mississippi and Tennessee.

No. 5: Virginia

  • Crime: Virginia has the fourth-lowest crime rate in the country, with 196 violent crimes and 2,066 property crimes per 100,000 people recorded in 2013.
  • Health care: Virginia’s health care system is among the best in the country.