Economic Analysis

Tax Reform: The Good, the Bad, and the Really Ugly—Part Four

Thoughts from the Frontline

March 1, 2017

“The values to which people cling most stubbornly under inappropriate conditions are those values that were previously the source of their greatest triumphs over adversity.”

– Jared Diamond, Collapse, 2005

Tax reform means, “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”

– Russell B. Long, Democratic Senator from Louisiana, longtime chairman of the Senate Finance Committee (and a strong believer in capitalism who was a champion of tax breaks for businesses)...

“Trump-O-Nomics”—An exploration of the proposals

Outside the Box

February 22, 2017

As readers know, I have been doing a multipart series on the proposed tax reforms for the last three weeks in Thoughts from the Frontline. My intention is to finish this week. In part two I talked about what I like about the Better Way proposal, and in part three I pretty much eviscerated the border adjustment tax (BAT), which I think has the real potential to create a global recession. You’ll need to read the series to see why, but a lot of it has to do with simple game theory, which the...

Tax Reform: The Good, the Bad, and the Really Ugly—Part Three

Thoughts from the Frontline

February 19, 2017

“We have a system that increasingly taxes work and subsidizes nonwork.”

– Milton Friedman

“You must be the change you wish to see in the world.”

– Mahatma Gandhi

“Real change requires real change.”

– Former Speaker of the House Newt Gingrich

Fed Up

Outside the Box

February 15, 2017

Today’s Outside the Box is a special treat. My good friend and fellow Texan Danielle DiMartino Booth’s new book, Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America, was out officially yesterday, on Valentine’s Day, and already there are dozens of reviews all over the internet.

Ten years ago, Danielle left a trading gig on Wall Street to work directly for Dallas Federal Reserve President Richard Fisher. She helped him gain insights into the economy and aided in crafting his...

Tax Reform: The Good, the Bad, and the Ugly, Part Two

Thoughts from the Frontline

February 12, 2017

“Taxation is the price we pay for failing to build a civilized society.”

– Mark Skousen

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

– Ronald Reagan

Hoisington Quarterly Review and Outlook—4Q2016

Outside the Box

February 8, 2017

Longtime readers of Outside the Box know that I am a fan of Dr. Lacy Hunt of Hoisington Investment Management. Lacy and his partner, Van Hoisington, produce a quarterly letter that is a must-read for me, as it reliably informs my thinking in a world drowning in conventional economics – economics that seem to continually miss the mark.

It almost goes without saying that Lacy will be speaking at our Strategic Investment Conference again this year, and he’s just one of a long (and...

Tax Reform: The Good, the Bad, and the Ugly—Part One

Thoughts from the Frontline

February 7, 2017

Vizzini: He didn’t fall?! Inconceivable!
Inigo Montoya: You keep using that word. I do not think it means what you think it means.

– From The Princess Bride

“A tariff is a scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.”
– Ambrose Bierce

“Vast possibilities matured into realities before their very eyes. Nevertheless, they saw nothing but cramped economies struggling with ever-decreasing success for their daily bread.”
– Joseph Schumpeter...

More on Complexity Economics

Outside the Box

February 3, 2017

In last weekend’s Thoughts from the Frontline, I talked about how the economics profession in general and central bankers in particular have consistently failed with their economic projections, and I pointed to the need to deepen our understanding of complex systems behavior. I said that we need to marry complex systems theory and information theory in order to establish a new basis for analyzing the economy and creating economic policy.

I couldn’t have been happier, then, when the new issue...

Post-Real Economics

Thoughts from the Frontline

January 29, 2017

“Too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.” 
John Maynard Keynes

“Simplicity does not precede complexity, but follows it.”
– Alan Perlis

“Stop trying to change reality by attempting to eliminate complexity.”
– David Whyte...

What I Learned in Washington DC

Thoughts from the Frontline

January 22, 2017

I have been in Washington DC for the last three days. The ostensible reason was to participate in a board meeting of a public company, Ashford Inc. (AINC). We manage hotel REITs that own three hotels here in DC, and the group decided to move our board meeting up a few weeks and hold it in DC during the inauguration. That gave me the opportunity to set up a few meetings to try to gain some insight into what the first 100 days, the first six months, and the first year of the Trump administration...