France is Catching On

France has a new Prime Minister, Mr. Manuel Valls.  He spoke before France’s Parliament and announced that he will work to make their economy more competitive by cutting taxes and federal spending.  He said those spending cuts will not amount to austerity, but they will slow the rate of growth in federal spending and hopefully trim the budget deficit to 3.0% of the GDP by the end of 2015 (it is currently at 4.3%).  Doing so will keep France within EU guidelines.

Examining CEO Wages

Do you remember last week’s USA Today headline article about CEO wages?  CEOs making $10 million a year?  Others were reported at earning over $100 million a year.  That’s right; I said “earning” because they are being paid to do a job.  Their pay is set by the Board of Directors, and the Board is established by stockholder/investors.  They decide whether the pay is reasonable or not.  A salary level is not a function of voter referendum or public opinion.  The people who have a financial stake in the financial success of the firm determine whether the CEO

A Closer Look at the Job Numbers

The February-to-March increase in jobs, at 0.73%, was just shy of the upper-side normal trend characteristic and very consistent with March increases over the last four years.  I am bringing this up because some broadcast media were saying that the number was disappointing after the poor January and February job numbers associated with the polar vortex.  The reality, based on Bureau of Labor Statistics not-seasonally-adjusted data, is that the January and February numbers were good and consistent with historical norms.

A Strengthening Hand in the EU

The Euro Zone showed an improving current account surplus with the release of the January data according to the European Central Bank.  The EU-27 surplus rose to a record high $34.9 billion in January.  The current account balance is a broad measure of an economy’s international financial positive.  Think of it as cash flow.  What this mean is that the EU-17 is exporting more than it is importing, and currency is moving into the zone.  This is good news for them and for the US in that a stable/mildly expanding EU provides for markets for US goods and removes a finan

Rethinking the Proposed Tax Overhaul

It is never fun to admit you were wrong about something, but it happens. I wrote a blog on February 28th that said I was pleased with the tax overhaul proposal put forth by David Camp, Chairman of the House Ways and Means Committee, (R-MI). I read the published overviews of the proposal and came away believing there were things that both sides would like and things they would not like, but overall, it deserved consideration even though it has not had a chance of being seriously considered.

A Look at February Factory Output

The February US Total Manufacturing Index (not seasonally adjusted) bounced back nicely from a disappointing January.  The January decline was the steepest since 2007, and the February rebound was the best since 2005.  A way to smooth out the sharp monthly movements is to look at the three-month moving average (3MMA).  The 3MMA has been experiencing an average seasonal decline off an October 2013 high.  The annual moving average (12MMA) has risen to the highest level in just over five years.

China: Spending Too Much

The US government is not the only place where too much spending could bring about a financial reckoning.  China is facing some credit and spending problems that may threaten the nation’s health, though not immediately.

Employment is Climbing

The February employment data is out, and the number is good.  Using the BLS Household Survey data (not seasonally adjusted) we saw a 1.3% climb in employment from one year ago.  This is a reasonable number; not great, but good enough to indicate that the economy is still expanding in terms of jobs.  Private sector employment (derived from a different BLS payroll survey) was up 1.9% year-over-year.  Government employment (also derived from the payroll survey) was down 0.2% year-over-year.

The Economic Impact of the Situation in Ukraine

Events in the Ukraine have captured the attention of political leaders and the media.  Russia’s move into the Crimea Peninsula has set off a wave of protests from the US and other nations.  The isolation of Russia and sanctions against them are being talked about in Washington if Mr.

Camp’s Tax Reform Plan

It is too bad that Dave Camp’s (Chairman of the House Ways and Means Committee, R-MI) tax reform plan doesn’t have much chance (and that is putting it optimistically) of surviving a Senate vote after it clears the House.  I think it should receive serious consideration because it has some benefit for most groups and some pain for most groups.  It reminds me of the essentially even-handed approach taken by the Ryan-Murray budget.  In my opinion the plan does not simplify the tax code nearly enough, but I favor the Fair Tax over all other tax plans.  Nevertheless, Camp’s p

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