Keeping an eye on numerous individual companies, as well as a broad array of economic data, I am far more optimistic about the next ten years than I was this time last month. Yes, there will still be challenges, but it looks like much of the worst-case scenario has been averted. Now, it’s about navigating the problems we will encounter due to the specific policy decisions made in the midst of the pandemic.
A Round-Trip Flight from California to Kentucky and Reading Middlemarch, a Study of Provincial Life by George Eliot
The masterpiece Middlemarch, a Study of Provincial Life is considered by many literary critics and academics to be the greatest novel written in the history of the English language. A work of historical fiction, the story is set during the years 1829-1832 and follows the lives of the inhabitants of a fictional town, Middlemarch, as threads, both visible and invisible, weave the fate of their their homes, marriages, businesses, fortunes, happiness, and misery together.
Tiny Inflation Calculation Methodology Changes Are Going to Result in Billions of Dollars in Wealth Transfers
Politicians, central bankers, and academics around the world are engaging in a conversation that could have massive real-world consequences for both middle class families and retirees; conversations that could result in substantially higher taxes, and/or substantially reduced benefits for entitlement programs such as Social Security, depending upon how the matter is resolved. The average American is not paying attention to this at all. It matters. This is a technical debate that will transfer huge amounts of wealth from various stakeholders depending upon who prevails.
For as long as I can remember, one of my “must read” annual reports has been that of a regional bank called M&T Bank Corporation. This particular bank is legendary among investors for several reasons.
You Cannot Understand the Rise of Wealth Inequality Without Acknowledging the Role of Interest Rates
In August of 2014, I wrote a post called Lies, Damn Lies, and Statistics. I penned it because, at the time, I was seeing a lot of situations in the media in which data was being used to push a political agenda on either the far right or the far left. I’m now seeing this same sort of deception in discussions about wealth inequality.
As many of you know, Elizabeth Warren has been getting a lot of press lately after proposing a wealth tax equal to 2.00% on fortunes above $50 million and 3.00% on fortunes above $1 billion. As an academic exercise, it’s useful to consider what that would mean for the United States.
The Federal Government Collects More Absolute Tax Revenue Than During Any Other Period in American History
In recent years, the United States Federal Government has found itself in the fortunate position of collecting more inflation-adjusted, real purchasing power tax revenue than it has during any other period of its 242 year history. For the government’s 2019 fiscal year, tax receipts at the Federal level are expected to balloon to an almost unfathomable $3.422 trillion.
As the top 20% and bottom 80% further divide, one of the things I’ve found interesting over the past few years is the difference in how both groups use something called the subjunctive mood in their speech and writing. The top 20% nearly always uses it correctly. I suspect it’s become a sort of subconscious signaling code without the people doing it even realizing what is happening.
I’ve avoided speaking about the Brexit situation because I ultimately believe that it is not my place to tell British citizens how their country should be run even though I am a stakeholder in their success. While there are what I could consider extraordinarily high probabilities that the decision to leave the European Union will lead to lower GDP, the fact remains that GDP isn’t everything. Money, and the economy, exists to serve a civilization.
You may already know the Census Bureau data shows there are 115,610,216 households in the United States and, that, as per the Federal Reserve data, roughly 1 out of every 5 of these households earns $100,000 or more per year; that 1 out of every 25 of them has a net worth of $1,000,000 or more. What about substantial wealth excluding houses, cars, furniture, jewelry … actual investment portfolios stuffed with cash, stocks, bonds, mutual funds, real estate investment trusts, master limited partnerships, tax-lien certificates, or any of the other numerous securities one can own to compound capital?