Fans of J.R.R. Tolkien’s trilogy The Lord of the Rings (LOTR) have long been aware of a possible plot hole. The central narrative concerns the hero, Frodo Baggins, who must destroy a powerful ring by walking through forbidding terrain and defeating or eluding monstrous foes and throwing the ring into a live volcano. The journey takes many months and costs Frodo and his companions dearly.by
by Jason J. Fichtner and Frederick W. Kilbourne
The latest Social Security Trustees’ report shows the projected dates of insolvency for the program’s trust funds remain largely unchanged. Regrettably, some misinterpret this as an indication that Social Security doesn’t require immediate reform. Make no mistake: There is a Social Security crisis.
Misunderstanding the critical state of the program’s financial health will lead to grave consequences for all of the program’s beneficiaries — both current and future.
The 2014 report projects depletion of the combined Old Age, Survivors, and Disability Insurance trust funds in 2033. Social Security has no borrowing authority, and after the trust funds are exhausted there is only enough payroll tax revenue to cover a projected 77 percent of benefits; meaning future benefit payments must be reduced by about 23 percent. But the resulting cut in benefits will actually be much worse for retirees, workers and the economy if we don’t act now to reform Social Security.by
How utterly and completely wrong we can be. Even brilliant minds with all the evidence and trend lines on their side can err. Evidence suggests that the market—that mysterious amalgam of billions of tiny decisions that comes to be instantiated in the reality around us—is infinitely smarter.
In fact, the market constantly outsmarts us.
I submit as evidence the gigantic multiplex cinema that recently opened in my community. It is beautiful. It is dramatic. It is gigantic. It is fashionable. It is expensive to attend. And it is crowded most nights of the week—a madhouse on weekends.
When I travel and look for the movies, my smartphone app always seems to reveal a nice theater down the street from wherever I happen to be, rarely more than 10 miles away. The number of indoor screens has grown every year for 25 years, and today there are twice as many as there were in the pre-digital year of 1987, according to the National Association of Theater Owners.by
by Sam Collins
It is easy to pick up a newspaper, watch television or look on a blog and assume the end is nigh. Between foreign affairs crises, demographic time bombs, debt icebergs and having only hours left to save the NHS (more on that another time…), it would not be unreasonable for us all to assume the world has got a lot worse – that capitalism has failed, inequality has sky-rocketed, and we are living shorter, sadder and more violent lives.by
by Daniel Hinšt
While Croatia has declined to outsource non-core government activities due to labor-union pressure, the U.S. and U.K. governments contract-out even the provision of security services, including military and intelligence functions. This latest trends in the scope of outsourcing should serve as a brake on the Croatian government’s decision to discard its planned limited scope of outsourcing, to create a spin-off government monopoly instead, and to put other market reforms in question. Outsourcing is important for introducing choice, competition, quality, innovation, and economy to “new public management.”by
Since the economic crisis of 2008-2009, the Federal Reserve – America’s central bank – has expanded the money supply in the banking system by over $4 trillion, and has manipulated key interest rates to keep them so artificially low that when adjusted for price inflation, several of them have been actually negative. We should not be surprised if this is setting the stage for another serious economic crisis down the road.
Back on December 16, 2009, the Federal Reserve Open Market Committee announced that it was planning to maintain the Federal Funds rate – the rate of interest at which banks lend to each other for short periods of time – between zero and a quarter of a percentage point. The Committee said that it would keep interest rates “exceptionally low” for an “extended period of time, which has continued up to the present.by
by Sydney Williams
That politicians lie is to be expected; that people believe them is unfortunate, but understandable. But, that a free and independent press ignores them is reprehensible. On September 9th 2009, speaking before a joint session of Congress, newly elected President Obama laid out his healthcare plan. In doing so, he claimed that illegal immigrants would not benefit from his plan. Representative Joe Wilson (R-SC) indecorously called out: “You lie!” The media attacked him as a pariah. For his transgression, Mr. Wilson later apologized. Nevertheless, while ObamaCare theoretically disallows illegals to sign up, states have found ways, such as the DACA (Deferred Action for Childhood Arrivals) to get around the law’s supposed restrictions.by
by John E. Charalambakis
We are dreaming. We desire utopias. We treat ourselves with placebo drugs and we are hypnotized by all of the above. The symptoms started in Japan in the early 1990s. It has been called Japanese malaise and it seems that is spreading. Subpar GDP growth rate, interest rates stuck somewhere in the twilight zone of zero percent, with fixed capital investments awakening only during supper time, a banking sector with huge collateral holes, an inverted asset pyramid whose crown jewel is the derivatives market, with nations suffering from a debt hangover, and ageing populations that have no idea how unfunded liabilities will be covered. Welcome to the age of complex disequilibrium characterized by diminished expectations.by
A sensitively written op-ed by Nicholas Kristoff, in Sunday’s New York Times, had the title: Is a hard life inherited? Mr. Kristoff relates the story of a childhood friend who has had a hard life. His mother died after choking on a bit of bacon. His father left home. This all happened when he was five. With his three siblings, he was raised by a grandmother, growing up in a “ramshackle home in a mire of disadvantage.” Despite having a “first-class” mind, he was suspended for truancy in the 8th grade, drifted through life in a haze of alcohol and drugs, while fathering two illegitimate children.by