Category Archives: economics

Updates and tidbits

Back from Space

SpaceX’s Dragon Demo-2 flight has ended with the successful return to earth of NASA astronauts Bob Behnken and Doug Hurley after spending more than two months on the International Space Station. As I wrote at the time of their launch, this flight marks the return to America of the ability to send humans into space.

After the retirement of the Space Shuttle in 2000, Americans who wanted to go the the ISS had to buy a seat on a Russian rocket. NASA began, during the Obama-Biden administration, what is called the “Commercial Crew” program effectively outsourcing this task to private industry. SpaceX is the first to successfully demonstrate this capability. This flight was named “Demo-2.” The first regularly contracted flight of the Crew Dragon is set to take four astronauts, three Americans and one Japanese, to the space station later this year.

As they left the capsule Behnken and Hurley thanks the SpaceX team. The SpaceX communicator said, “Thanks for riding SpaceX.” For America’s space program, a new day has begun.

There’s always something

And while we are at it, what the heck is wrong with some people. The Coast Guard had, at NASA’s request, cleared out the splashdown area in the Gulf of Mexico west of Pensacola, Florida, and posted marine hazard warnings. But that didn’t stop a bunch of idiots in pleasure boats from pulling in close after the landing to take in the scene.

It is not clear where the Coast Guard had disappeared to, but SpaceX’s recovery boats had to chase the civilians away from the potentially dangerous area, spacecraft just back to earth are loaded with toxic fuels and prone to release hazardous vapors. NASA and the Coast Guard say they’ll do better next time.

And speaking of some people

Here is our little friendly friend, the Covid-19 virus. This is the little monster which has killed hundreds of thousands, injured others, severely damaged our society and devastated our economy.

The best way to control the spread of this killer is to social distance, self-quarantine, and when you must be out in public, wear a mask. Refusing to wear a mask is crazy.

This is not a matter of personal liberty. Personal liberty does not give you the right to hurt others. There’s an old aphorism, “Your liberty ends where my nose begins.” Which means something like you can swing your arms around all you want. But if you hit me I get to clobber you. Or better yet, sue you for everything you’ve got. Ditto the Covid. Come within six feet of me without wearing a mask and it’s an assault.

Out of juice

Why is it that storm after storm produces hundreds of thousands of people without electricity for a week or more? I actually lost power for only seven hours. But that’s because I sued my local electric company, PSE&G, a decade ago and as a result they rerouted the power supply for my block to a newer, more reliable circuit. Mine had been on a 100 year old wire running across a ridge surrounded by trees which were always shorting the wire. The people across the street were without power for five days. I did lose my Internet for a week.

Verizon explained that their FiOS fiber runs on PSE&G’s poles and until the electric company had restored their service and declared the poles safe Verizon couldn’t gain access to fix their own circuits. Storms happen. With global warming, they are happening more often. Things can be done. Trees an be trimmed. Wires rerouted. Wires can also be buried. All it takes is money. Aha!

Biden – Harris

I’ll certainly have more of this as the campaign progresses but for now I’ll just say this is a great choice. Kamala Harris is, most importantly, ready to step in if something should happen to President Biden. She will be able to work with Congress, especially if the Democrats can win back the majority in the Senate. One of her legislative specialties is desperately needed criminal justice reform. She is also close to Biden’s position on the ideological spectrum, a left of center moderate with a history as a prosecutor.

But putting all that aside, this would still be a historic decision, and one which puts the Biden-Harris ticket in sharp contrast to the incumbents, Trump-Pence. Harris is the first woman of color to be on a national major party ticket. She is the daughter of two immigrants. Her father, Donald Harris, is a well known Stanford economics professor. He is from Jamaica. Her mother, Shyamala Gopalan Harris was a cancer researcher at UC Berkeley and a civil rights activist. She was from British India. She died in 2009 from colon cancer.

As Biden himself learned during the debates, Harris can be an aggressive opponent on the campaign trail. I can see her easily filling the traditional role of a vice-presidential candidate, dishing it back to Trump as fast as he throws it. Biden is 77 years old, Harris is 55. The Biden-Harris ticket reflects the changing of America. Trump-Pence continue to dream of the return of the 1950’s past.

####

apple 1 – eu 0

It was a win for Apple. A loss for the European Union. And a case study for the rest of us.

The news story itself is simple. In 2016, the European Commission ordered Apple to pay Ireland 13 billion euros ($14.9 billion) for ten years of back taxes. The Commission claimed Apple benefited from illegal state aid via two Irish tax rulings that artificially reduced its tax burden for over two decades, to as low as 0.005% in 2014.

Read more

Medicare for All: The Possible Dream

Oh, “The Impossible Dream”. How were we to know that David Brooks, a true compassionate conservative torn asunder by the Trump led takeover of the Republican agenda, is a Luddite at heart?

New York Times columnist Brooks is one of my favorite writers. I never miss a column. And I never miss his Friday joint appearances with liberal syndicated writer Mark Shields on the PBS NewsHour. Brooks usually writes from a unique perspective, but his recent effort branding Medicare for All “The Impossible Dream” seems to have been written from the Twilight Zone.

The Blank Slate

“If America were a Blank Slate,” Brooks writes, “Medicare for all would be a plausible policy, but we are not a blank slate.” The problem, Brooks goes on to explain in detail, is that Medicare for all would require vast segments of America to “transition”, and that would, according to Brooks, be unacceptably disruptive.

The devil is in the details and in truth, as Brooks admits, we don’t know just what Medicare for all means or how we would plan to get there. He tends to cherry pick the proposals to focus on the most disruptive versions. But there is nothing in the history of this great nation to suggest that we will be unable to face whatever challenges the endeavor might raise.

Read more

Financial Market Reporting, Part 9: Exchange Traded Funds

In my recent post on mutual funds, I noted that John Bogle disrupted that industry with Vanguard, a mutual fund company that specialized in low cost index funds designed to mimic rather than outperform major market indexes. The other mutual fund companies responded with their own index funds, and there is intense competition between them

Mutual fund shares vs. ETFs

Exchange Traded Funds, ETFs, are another refinement of the fund category. They will certainly figure into your reporting on the fund asset class because they are by some measures the most popular of all exchange traded securities.

For my primer on ETFs, see businessjournalism.org.

Financial Market Reporting, Part 8: Mutual Funds and Index Funds

In a previous post about indexes, I identified the Dow Jones Industrial Average and the Standard and Poor’s 500 as the two most frequently referenced. They originated as short-cuts that summarized market trends, and are often used as a benchmark against which investment performance can be judged.

There has been an explosion in the number of indexes in recent years. There are hundreds if not thousands available, enough to slice and dice the markets in as many ways as can be imaged. Some are broad-based, like the NASDAQ Composite with more than 3,000 stocks. Others might track a region, like the EURO STOXX 50, based on 50 large companies in the Eurozone. Some follow companies of a certain size, like the Wilshire US Small Cap. And still others focus on an industry, such as the NYSE Arca (originally AMEX) Semiconductor Index.

Continues at businessjournalism.org….

Trump and the Employment Report, fact and fiction, Pt. 2

Numbers are funny things. Even though they appear to be absolute, a clever manipulator can twist them to make pretty much any point he wants to make. Take President Trump’s statement from February: “Ninety-four million Americans are out of the labor force.” It might seem preposterous but it is correct, as the great sage Obi-Wan-Kenobi once said, “from a certain point of view.”

It is the number you get if you take the total U.S. population 16-years of age and older and subtract the people the BLS says are in the labor force. That number includes everyone who is retired, and most high-school, college, graduate or vocational school student. It also includes the disabled, homemakers, some self-employed and those living off their investments.

My guide to reporting the employment report continues at businessjournalism.org….

Trump and the Employment Report, fact and fiction, Pt. 1

The Bureau of Labor Statistics released its Employment Situation Report for February on March 10, showing a healthy 235,000 gain in payroll employment. Asked what President Trump thought about the numbers, White House press secretary Sean Spicer said, “I talked to the president prior to this, and he said to quote him very clearly,” Spicer said. “They may have been phony in the past, but it’s very real now.”

Many of the reporters present laughed. I cringed.

Over the years on public television’s Nightly Business Report, I filed countless “numbers” pieces. The monthly employment reports were most closely watched. For better or worse these reports often had an immediate financial market moving impact, making them lead stories for a market driven broadcast.

I cringed because I believe attempts to undermine the credibility of these reports do a great disservice.

Continues at businessjournalism.org….