03/24/19

Modern Monetary Theory v Magic Money Tree

So, your Big Red Car is taking a break from the NCAA Championship and was reading an excellent article on MMT (Modern Monetary Theory) on Bloomberg Businessweek.

MMT is, of course, the economic theory upon which folks like Congresswoman Alexandria Ocasio-Cortez base the idea that the government can afford all the things in her Green New Deal.

Image result for north carolina basketball team images

Can you guess for whom I am rooting?

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01/4/19

Jobs

Big Red Car here on a Jobs Report Friday. Hey, have a great weekend.

So, I was a little concerned about the December jobs report — because of the dipping stock market, the election results, the Fed’s moves, the general tenor in the air.

No reason to be alarmed, apparently.

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11/12/18

Strength of the Economy

Big Red Car here, snowing in the Panhandle and going to be 30F in the ATX tonight? Yes. Snow tonight? Nah.

So, I like to take a look at information below the surface to prove or disprove what the surface currents seem to indicate. One of my favorites is to plumb the depth of the job market and its inverse, unemployment.

Anybody with a brain knows that U-3 — the measure of unemployment that the media uses — is not very accurate for a number of structural reasons. While, folks also know that BLS U-6/7 is a better snapshot.

One other area I like to look at is full time v part time employment.

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09/12/18

Attitude = Altitude

How high you go in life sometimes is created by your attitude, your confidence. Economies have similar linkages.

How confident, how optimistic is American small business – the engine of new job creation in the US – today?

Turns out they’re very confident, very optimistic.

The National Federation of Independent Business has been tracking the optimism of its members for a long time, seventy-five years. They are the voice of small business.

Monthly, they survey their owners to gauge business sentiment.

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09/12/18

Jobs USA

Big Red Car here with a prayer on my lips for the Carolinas and the impending Florence hurricane. Evacuate if y’all are along that coast. Do not risk your life to ride it out.

So, one of the most interesting elements of the current economy is the status of jobs and job openings. Unfortunately, we do not have sufficient data to track this back through prior business cycles because the data was simply not collected back in the day.

There are four data points of interest:

 1. Job openings – positions for which a company is seeking an immediate hire

 2. Hires – former job openings for which a company made a hire

 3. Quits – current employees who voluntarily left a job with a company

 4. Layoffs and discharges – company terminated jobs and firings

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08/28/18

NAFTA – Rebranding?

Big Red Car here on a cloudy Texas day. Don’t get me wrong, it’ll crack 100F, but it’s a little cloudy today.

So, the big news on trade coming out of Washington and Mexico City is that the US and Mexico have agreed on a “new” trade deal. Have they?

The new deal is a bi-lateral deal between the US and Mexico. Mexico is on the verge of inaugurating a new president (1 December 2018), so the timing is a little dicey. The outgoing Mexican President, Enrique Peña Nieto, will have to obtain approval from the Mexican legislature. He is more likely to be an ally given his long history with the negotiations.

President Trump, reiterating his historic disaffection with NAFTA, has taken to calling this bi-lateral agreement the US-Mexico Trade Agreement.

Image result for images trump trade

“Yeah, so I told you I would re-negotiate NAFTA and, with Mexico, I have. Now, we need to get Canada into the deal. I can do it.”

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08/22/18

Universal Basic Income

Universal Basic Income, Big Red Car? Huh?

Big Red Car here lobbying for a paint job while talking up the latest experiments in the Universal Basic Income – also known as basic income, basic income guarantee, basic living stipend, or universal demogrant. They are all the same thing.

Advocates of UBI have for years sold the idea as a campaign to “eradicate poverty” while others have championed it as a means of unlocking the creative potential locked deep within all of us.

Those who lean right may consider it as a means to consolidate and eliminate all other welfare programs and thereby make government welfare more efficient.

You can get a discussion on a lot of different implications including poverty, unlocking potential, freedom from wage slavery, reducing crime, a response to technology and automation unemployment, welfare administration, gender equality, the recognition of uncompensated home work by women, and a ton of other ideas.

Please take a second to identify your thoughts on the subject.

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08/4/18

Employment Structural Change

Big Red Car here on a Saturday morning getting ready to go out for blueberry pancakes at the Counter Cafe.

I have always been interested in delving beneath the covers of employment in the United States. The average person focuses on BLS (Bureau of Labor Statistics) U-3 – the widely reported level of unemployment which is currently at 3.9%, but that paints a very shallow picture of the employment status of the economy. Perhaps, an overly optimistic one.

Let me give you the bottom line first – the US economy is undergoing a huge structural change as the Baby Boomers begin to retire and younger folk have a different attitude toward employment.

I have often observed that the prospect of long term, stable employment is a thing of the past and the “gig” economy is here to stay. Talking to you, Mr. Internet.

My favorite source of useful data and analysis is dshort.com which is run by Doug Short, PhD, under the banner of Advisor Perspectives. You should be reading this guy’s stuff. The best in the business.

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