I will be on either a brief Q&A segment with Joe Cristiano’s Liberty Talk Radio or I’ll be releasing a short podcast this evening. I know many of you are not in the US so my apologies for the short notice. Please email your questions when you can and we’ll go from there.
Topics? While I have medical training, I am not qualified to speak on the issue of COVID-19 beyond the most general of terms. I would like to focus on the global financial markets and the very strong likelihood that another 2008-style event was imminent as early as last summer.
Now, with global markets shredded, economies left in doubt, and the population of a growing number of countries behind closed doors, what needs to happen next? We’ve heard some solutions. Are they the right ones?
We’ll be addressing these issues – and your questions – tonight. Don’t miss it!
We appreciate the large number of inquiries, questions, and comments regarding our recent paper on ‘MMT’. We’d also like to thank www.marketoracle.co.uk for giving it such a favorable position on their website, we truly appreciate it. We do this not for accolades, however, but to raise awareness.
Along that thread, we’ve decided the best way to handle the communications we’ve received is with a brief audio transmission, which we will post on this site – within the next week – to give us more time to read additional emails and reflect on the material in general.
Once again we are blessed to have such great readers. The questions asked originated from points we’d made during our research and actually caused us to ask even MORE questions regarding this material. This is critical thinking at its absolute finest and we are again reminded that this is far more than just two guys – this is truly a TEAM. You are doing far more for the advancement of the science of Economics than you can ever imagine.
This is the second post in a week on Chicago’s epic financial train wreck. That’s a lot of attention and it probably won’t happen again, given the target-rich world we live in.
But jeeze, talk about not learning from past mistakes.
This latest chapter begins with the Chicago mayoral race and the two candidates’ stances on the Jussie Smollett controversy – one is on his side, the other on that of the Chicago PD.
That’s interesting but otherwise irrelevant.
The race is between two African American women, one gay and the other presumably not, one from deep in the local political machine, the other from outside it. So far so good. The tent is getting bigger, more categories of people can aspire to high office, go Chicago.
But this is also apparently irrelevant, because when it comes to saving the city from pension-driven financial collapse, well, here’s a snippet from today’s Wall Street Journal:
There’s little daylight between the two Democrats on policy. Both support higher taxes to pay for pensions, though they differ on which levies to increase. Ms. Lightfoot this week endorsed a value-added tax on legal and accounting services. She’s also proposed an increase in the city hotel tax—already among the highest in the nation—and a real-estate transfer tax. Ms. Preckwinkle is supporting Democratic Gov. J.B. Pritzker’s proposal for a graduated state income tax. Both oppose modifying worker pensions and want to impose a moratorium on charter schools.
Trailing in the polls, Ms. Preckwinkle and her supporters have resorted to weaponizing identity politics. Last weekend U.S. Rep. Bobby Rush smeared Ms. Lightfoot at a Preckwinkle rally as a killer of black people and champion of police because she has served on the Chicago Police Board and Police Accountability Task Force. “Everyone who votes for Lori, the blood of the next young black man or black woman who is killed by the police is on your hands,” Mr. Rush declared.
Ms. Preckwinkle declined to denounce the comment. She may believe fomenting racial discord will help her turn out the vote in the city’s heavily black South and West sides, where she performed well during the primary. Thus, Ms. Preckwinkle may not want to be seen supporting the police investigation of Mr. Smollett, who claims to be innocent and a victim of racial discrimination.
The Journal reporter concludes:
“Neither candidate appears likely to arrest the city’s spiral into insolvency. But stopping its descent into cynicism and racial grievance may be an equal imperative.”
Wrong, WSJ. The financial spiral is everything. Chicago is experiencing an already catastrophic rate of out-migration, as people who can afford to (a.k.a. the tax base) move to less rapacious places. And the two mayoral candidates both oppose scaling back union benefits while proposing much higher taxes and more stringent regulations, which will turbo-charge the descent into financial chaos.
And this, recall from the post that appeared here a few days ago, comes as both Chicago and its host state Illinois begin massive and sustained borrowing campaigns to cover existing shortfalls.
The conclusion? They can only behave this way in a financial market that assumes no matter how badly they mess up, national taxpayers will be coerced into saving them and their investors. Look up “moral hazard” in the dictionary and you might find a picture of the Illinois state seal.