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Connecting the Dots Archive, October 2020

Help the Economy by Going Outside
  • July 7, 2020

Help the Economy by Going Outside

COVID-19 cases are growing fast in large parts of the US. The same folks who said the virus would just go away now say not to worry because fewer people are dying.

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Travel Virus Strikes Economy
  • June 30, 2020

Travel Virus Strikes Economy

We’ve escaped the frying pan and found the fire. COVID-19 cases are now growing faster than they were when the first US lockdowns occurred last March.

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The Corona Depression Is Here
  • June 23, 2020

The Corona Depression Is Here

The US economy entered recession at the end of February, according to the economists who officially define such things. But will it get even worse?

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To Stay Informed, Watch Less TV
  • June 9, 2020

To Stay Informed, Watch Less TV

Pop math quiz: What is 1918 + 1932 + 1968?

Your calculator may say 5,818, but the real answer is 2020. This year has turned into a combination of those three historic years. In the US, we have

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The Great Reopening Gamble
  • May 12, 2020

The Great Reopening Gamble

We knew the April US jobs data would be ugly. Speaking on ABC’s “This Week” program last Sunday, Minneapolis Federal Reserve Bank President Neel Kashkari predicted “the worst is yet to come.”

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Coronavirus Socialism
  • April 7, 2020

Coronavirus Socialism

When (hopefully soon) we all get out of coronavirus lockdown and try to resume normal life, we will probably find a different “normal.”

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Coronavirus Clarifies Priorities
  • March 17, 2020

Coronavirus Clarifies Priorities

Bought any groceries lately? You probably weren’t alone. Nor were you surrounded by crazy people. The store mobs are perfectly rational, given recent events.

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Lockdown Risk and Viral Attitudes
  • March 10, 2020

Lockdown Risk and Viral Attitudes

Financial professionals talk about all kinds of risk: credit risk, interest rate risk, political risk, inflation risk… the list goes on. Now, we have a new one.

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US Prepares to Monetize Its Debt
  • October 29, 2019

US Prepares to Monetize Its Debt

The US government spent almost a trillion dollars more than it received fiscal 2019. And that’s just the official, on-budget deficit. Fair accounting would look even worse.

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The Dumbest Tax Cut Ever
  • October 8, 2019

The Dumbest Tax Cut Ever

No one really likes paying taxes. At best, we wish we got more for our money.

A tax system should raise the necessary revenue fairly and with minimal economic distortion. Things go off the rails when governments use tax policy to reward (or punish) certain behaviors.

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To Fix the Economy, Fix Healthcare
  • September 17, 2019

To Fix the Economy, Fix Healthcare

If you are American and you have health insurance, you probably get it from either your employer or some kind of government program. Or possibly both, if the government is your employer.

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Trump’s Trade War Is Over and Nobody Won
  • August 13, 2019

Trump’s Trade War Is Over and Nobody Won

“You break it, you own it.”

Then-Secretary of State Colin Powell cited this Pottery Barn rule back in 2002. He was advising President George W. Bush of the consequences should an Iraq invasion go badly.

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Financial Success Formula Failure
  • July 30, 2019

Financial Success Formula Failure

The US economy grew at a 2.1% annualized pace in the second quarter, according to data released last week. That was better than economists expected but hardly impressive.

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Trump, ZIRP, and the Fed
  • July 2, 2019

Trump, ZIRP, and the Fed

Investors are in a buying mood despite many economic warning signs. Why?
For some, it’s because they expect the Federal Reserve to cut interest rates and otherwise “stimulate” the economy. They believe (correctly) it would drive stock and real estate prices higher. 

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Trade War Will Trigger Inflation, Then Recession
  • June 4, 2019

Trade War Will Trigger Inflation, Then Recession

The logic of Donald Trump’s multi-front trade war, if there is any, is increasingly obscure. The tangled mix of policies isn’t accomplishing its stated goals and seems unlikely to ever do so. Meanwhile, it hurts the Americans it should supposedly help.

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Trade War and Real War
  • May 28, 2019

Trade War and Real War

To wrap up Memorial Day weekend, here’s a column I wrote last December. Recent trade war developments make it still highly relevant.

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Men’s Room Job Automation
  • May 21, 2019

Men’s Room Job Automation

People are worried robots will take their jobs. That’s a legitimate fear sometimes, but it’s not new. It is just another step in a process that started long ago.

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The Worst Parts of MMT Are Already Here
  • March 5, 2019

The Worst Parts of MMT Are Already Here

Many Americans are worried about “modern monetary theory.” They fear a future Congress will use it to justify sharply higher spending and enlarge the national debt to unsustainable levels.

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Trade Power Goes with Military Power
  • February 12, 2019

Trade Power Goes with Military Power

Five years ago this month, Ukraine’s “Euromaidan” Revolution led to Russian forces occupying the Crimean peninsula and parts of Eastern Ukraine. The US and Europe imposed economic sanctions in response. Pundits like me proclaimed a new Cold War.

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Business Confidence Is Starting to Crack
  • January 22, 2019

Business Confidence Is Starting to Crack

Actions speak louder than words. That’s why surveys asking people what they think about the economy aren’t always useful. Their actions might not match what they tell pollsters.

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Wages Are Still the Key
  • January 8, 2019

Wages Are Still the Key

Here we are in 2019, our last chance to make the Twenty-Teens a decade that worked. Whether you think it worked depends partly on whether you worked… and how well you were paid for it.

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Lonely Boomers Are an Economic Opportunity
  • December 18, 2018

Lonely Boomers Are an Economic Opportunity

Baby Boomers get blamed for all kinds of problems. Much of the blame is unfair, but there is no doubt the first postwar generation brought a lot of changes—culturally, economically, and otherwise.

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Trade War and Real War
  • December 11, 2018

Trade War and Real War

We have a temporary truce in the trade war. No one is quite sure if it will last, especially financial markets, which after a short-lived rally saw little to celebrate in the latest Trump-Xi meeting. 

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Economic Sugar High Will End with a Crash
  • November 27, 2018

Economic Sugar High Will End with a Crash

By most measures, the US economy is performing okay. New data tomorrow will likely show real GDP growth still near 3.5%. Unemployment is below 4%. Inflation is up a bit but still historically low.

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Healthcare Is Eating the Economy
  • October 16, 2018

Healthcare Is Eating the Economy

Being sick is no fun, whether you’re a patient or the economy. Illness disrupts people’s lives and, economically speaking, diverts scarce resources from more productive uses.

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NAFTA Isn’t Gone Yet
  • October 9, 2018

NAFTA Isn’t Gone Yet

To hear some people talk, the North American Free Trade Agreement is practically dead. Soon a newly negotiated revision will take its place.

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Wage Growth Surging? Not Really
  • September 18, 2018

Wage Growth Surging? Not Really

The US economy is at “full employment,” says the official 3.9% unemployment rate. Every educated person who wants to work has at least one job. Some of us have several.

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Do We Really Know What Causes Events?
  • September 4, 2018

Do We Really Know What Causes Events?

Suppose we asked 100,000 random people to flip a coin until it landed on tails. 50,000 would get tails on the first flip.  On the next flip, 25,000 would get tails, then 12,500, and so on.

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Productivity Riddle May Be Simple
  • August 21, 2018

Productivity Riddle May Be Simple

Finding more and better-trained workers is the top challenge for many US business owners. They say current workers can’t produce enough to meet growth objectives.

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Gasoline and Free Money
  • August 14, 2018

Gasoline and Free Money

Gasoline prices have been strong this summer, though they’re still below last May’s peak, when the national average was near $3 a gallon.

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No Shoes, No Shirt, More Money
  • August 7, 2018

No Shoes, No Shirt, More Money

A penny saved is a penny earned, goes the old saying… but that’s not true. In today’s world, a penny saved is better than a penny earned.

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Pet Care Is a Recession-Proof Industry
  • July 10, 2018

Pet Care Is a Recession-Proof Industry

Americans may be bitterly divided on everything else, but we all agree on one thing: We love our dogs. Our cats, too, plus a few other companion species. We’ve made them part of the family.

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Face It: Social Security Is Welfare
  • July 3, 2018

Face It: Social Security Is Welfare

According to the dictionary, “welfare” is a word that describes our health, happiness, and fortunes. But in the US, it usually refers to government support, which many consider shameful. No one wants to be “on” welfare.

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How to Save Social Security
  • June 12, 2018

How to Save Social Security

Some things you just don’t question. For American workers, Social Security is one of them. You pay into it your whole career, and you expect to get paid when you retire. No politician dares say you won’t.

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Fear, Starbucks, and FDR
  • May 22, 2018

Fear, Starbucks, and FDR

Financial markets move when humans (or machines programmed by them) decide to buy or sell. In theory, these decisions are rational, but in reality, they’re often driven by emotions.

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Overheated Highways
  • May 15, 2018

Overheated Highways

This month, my wife and I drove from Austin to Memphis. Going across Arkansas on I-30 and I-40, the number of trucks seemed quite high.

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Moving Millionaires
  • May 8, 2018

Moving Millionaires

You’ve heard the old line about three kinds of falsehoods: lies, damned lies, and statistics. All three are easy to find on the Internet.

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