Some people on isteve and elsewhere like to criticize Facebook and Google, but these companies are meritocracies in that they only hire the best and the brightest out of very large application pools, actively screening for high-g candidates. The left wants just the opposite: promotion based on connections (unions) and skin color instead of qualifications.
A funny list of tweets compiled by Barry. Here’s one:
LOL kinda reminds me of the left when they say that the stock market, web 2.0 valuations, or real estate is a bubble. They sound like sore losers that missed out (which they are). Now is a great time to be alive with so much wealth creation in the world. No bubble in equities. Dow 18k soon.
Not so sure about #1. We’re in an era of endless liquidity and free money. When the Fed buys U.S. Treasuries, it allows the government to borrow more while keeping interest rates low. Yields are at historic lows allowing for spending with impunity without the consequences of hyperinflation. Aside from the doom and gloom on the blogs and media, global confidence in the US economy is high and this is bullish for treasuries. Taxes still at historic lows, despite rising debt, which illustrates this point. Taxes did go up slightly in 2013, not out of economic necessity, but to due politics. As we argued earlier, government spending could help the economy if it represents an optimal transfer of capital that otherwise wouldn’t have occurred on its own. Monetary and fiscal policy should be about creating economic conditions conducive to growth and wealth creation.
This can be ignored, like the endless other failed predictions of crisis by the doom and gloomers. A useful rule of thumb when evaluating geopolitical or economic events is that the most probable outcome is that things stay unchanged or get better. This worked well in 2009 with the financial crisis, in 2011 with Greece debt crisis and debt ceiling, in 2013 with the fiscal cliff and sequester, and in 2014 with Crimea. It’s rare for things to continuously get worse because it’s in the financial interests of politicians and leaders to make things get better. This is why we need more millionaires in congress because these people have a personal vested interest in not pursuing policy that would destroy wealth. However, this does not work for evaluating company specific risk, in which things can often keep getting worse until eventual bankruptcy. Sovereign governments have many more financing options available and greater systemic risk associated with failure than companies, so they tend to get bailed out while preserving the bond holders in the process. The way to profit off this would be to buy distressed, high-risk bonds, like Greek bonds in 2010-2012.
China has too much to lose economically by pursuing aggression. That’s one of the benefits of globalization in that it reduces global conflict, because the stakes are too high for anyone to act impertinent. What we get is this Kabuki theater of aggression but no follow-through. This ties into neocon foreign policy that, in theory, spreading democracy and capitalism can create long term peace.
They coordinated through the G20 group of nations to launch a worldwide stimulus program, avoided protectionism in trade policy, and pushed for stricter international standards for banks. Rather than a repeat of the Great Depression, when trade withered and economies adopted beggar-thy-neighbor policies, we got away with just a Great Recession—and one that many emerging markets bounced back from quickly.
In the spirit of utilitarianism and pragmatism, effective policy is about doing what is best for the greater good, rather than appeasing a single constituency. In 2008, the left was whining about moral hazard; but if given a choice, keeping the crisis as brief and contained as possible seems preferable to having it protracted to placate the liberals’ doubts. Why should we acquiesce to the Luddites that want the system to fail? That’s why I applauded congress bailing out the banks and compromising to avoid defaulting on the debt because these decisions, while unpopular with a sizable portion of the population, where in the best interests of the economy and wealth creation.