The hottest Economic Policy Substack posts right now

And their main takeaways
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Top World Politics Topics

Smug liberal lockdown supporters should be happy with their skyrocketing grocery bills

Anxiety Addiction & Ascension • 0 implied HN points • 25 Apr 22
🇺🇸 U.S. Politics Economic Policy
  1. Supporters of lockdowns and money printing may face harsh reality with rising grocery bills.
  2. Outsourcing personal agency to bureaucracies and adopting slogans over dialog can lead to negative consequences.
  3. The system may be failing due to cronyism, and a return to true capitalism based on freedom might be necessary.

The Scandinavian Model and Japan

Japan Economy Watch • 0 implied HN points • 08 Mar 08
🌍 World Politics Economic Policy
  1. Japan can aim for both growth and security by adopting a model like the Scandinavian flexicurity, which combines market elements with policies promoting equality and security.
  2. Market-conforming policies that focus on security and equality can increase political tolerance for necessary 'creative destruction' to foster growth - a lesson learned by Nordic countries in the 1990s financial crisis.
  3. Countries like Sweden have seen high productivity growth while ensuring that the benefits are shared with the labor force, unlike scenarios where wage growth lags behind productivity growth.

1200 Hours (working draft)

Logos and Liberty • 0 implied HN points • 17 Jul 23
🇺🇸 U.S. Politics Economic Policy
  1. Consider reducing work hours per year to 1200 from the standard 2000 to balance the needs of families and improve work-life balance for employees.
  2. Implementing a 1200-hour work year would lead to increased bargaining power for workers, better worker productivity, and a potential shift in how the fruits of productivity gains are shared.
  3. Employers could adapt to a 1200-hour work year by paying more, offering flexibility, hiring more workers, adjusting operations, and supporting policies to facilitate the transition.

Political perils of economic policy

America in Crisis • 0 implied HN points • 14 Jul 23
🇺🇸 U.S. Politics Economic Policy
  1. Real wages have not risen as expected under President Biden's economic policies, leading to declining popularity among working-class Americans.
  2. Historical wage trends show a shift in the perceived economic support for working people by political parties.
  3. Democrats face challenges in translating economic gains into benefits for workers due to the primary focus on growing shareholders' equity in the modern economy.

Future prospects in a secular cycle crisis

America in Crisis • 0 implied HN points • 12 Apr 23
🇺🇸 U.S. Politics Economic Policy
  1. The US is experiencing a crisis similar to historical patterns of great nations, but this time, the crises may not be resolved in the same dramatic ways due to modern circumstances like interventions by economic policymakers.
  2. Civil strife in America may resemble the Troubles in Northern Ireland, but the country's size and past responses to radical movements indicate that major turmoil might not lead to political revolution.
  3. The current economic focus is on inflation, with predictions indicating that actions like interest rate adjustments could impact the economy by fall and potentially lead to a soft landing, altering the investment environment.
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Extension of inflation model before 1948

America in Crisis • 0 implied HN points • 07 Feb 23
💰 Finance Economic Policy
  1. The historical analysis shows how money flows, such as trade surpluses and fiscal deficits, can impact inflation and economic stability.
  2. The gold standard had a notable impact on economic conditions, causing deflation and influencing policies like interest rates and money supply.
  3. Active economic policy interventions, like wage and price controls during wartime, demonstrated effectiveness in controlling inflation and stabilizing the economy.

Capital Gains are Labor Income

Something to Consider • 0 implied HN points • 27 Apr 22
💰 Finance Economic Policy
  1. Capital gains should be taxed like regular income because all investments require effort and analysis. It's unfair to give special tax breaks to those who already have wealth.
  2. Investing isn't just sitting back and earning money; it involves making decisions and taking risks. Therefore, it shouldn’t be treated so differently from labor income in tax policy.
  3. While there are suggestions to change how investment taxes work, confusing definitions of investments make it complicated. A simpler solution would be to treat all earnings as labor income and reduce advantages for the wealthy.

Zambia: What really is neoliberalism anyway?

Something to Consider • 0 implied HN points • 01 Apr 22
🇺🇸 U.S. Politics Economic Policy
  1. Zambia's economy heavily relies on copper exports, which makes it vulnerable to price fluctuations. If copper prices rise, the economy does better, but if they fall, it struggles.
  2. The country's government is heavily involved in businesses, which leads to corruption and unfair practices in privatization. This has hurt the working class and limited overall economic growth.
  3. To improve Zambia's economy, reforms should focus on reducing corruption and managing state assets better before jumping into privatization. Just selling off state enterprises without good governance doesn't benefit the country.

Making Payroll

Matt’s Five Points • 0 implied HN points • 09 Dec 11
🇺🇸 U.S. Politics Economic Policy
  1. The payroll tax cut should stay focused on helping the American people, without getting mixed up in other political issues. If lawmakers complicate it too much, it might not go through.
  2. It’s surprising to see Democrats supporting payroll tax cuts now. In the past, they would have been concerned that it could hurt Social Security, but opinions seem to be changing.
  3. Bringing the payroll tax back to its old rates is unlikely because many people depend on it as their only federal tax. Raising it again could feel like a big burden for those who have the least.

A House Divided

Matt’s Five Points • 0 implied HN points • 20 Oct 11
🇺🇸 U.S. Politics Economic Policy
  1. Lincoln faced a divided nation and had to adjust his views, ultimately moving towards abolishing slavery when public sentiment shifted. Obama is in a tough spot because he doesn't have a clear, unilateral action like the Emancipation Proclamation to tackle today's issues.
  2. The call for Obama to adopt more aggressive leftist policies, like higher taxes on the wealthy, might not actually resolve underlying economic problems. It's important to recognize that such actions alone won't fix the economy or reduce unemployment significantly.
  3. Moving to the left could risk alienating moderate voters and lead to more gridlock in government. Lincoln was a savvy politician who adapted to his situation, and it's unclear if moving left is the best strategy for Obama as he approaches upcoming elections.

Deficit Disorder

Matt’s Five Points • 0 implied HN points • 19 Aug 11
💰 Finance Economic Policy
  1. There's a constant struggle between short-term and long-term economic needs. Short-term solutions like stimulus often overshadow long-term plans for dealing with debt.
  2. Any attempt to fix long-term debt issues will usually create short-term problems. Cutting spending or increasing taxes can make people suffer right away.
  3. Getting serious about reducing debt often happens when the economy is in a good place, but that can be the wrong time. It shows the challenges in making good political and economic decisions.

Poelittlekul EKonnome

Matt’s Five Points • 0 implied HN points • 08 Aug 11
🇺🇸 U.S. Politics Economic Policy
  1. When someone says a market movement was 'obvious,' they are probably not telling the truth. People who can predict the market usually keep quiet about it and don't broadcast their insights.
  2. Most market predictions you see on TV are not very reliable. The market is pretty efficient, and the news often just reflects what is already known, not new information.
  3. Political explanations for events like market downgrades can be confusing and often contradict each other. Different sides blame each other without clear logic.

On Market Reactions to Politics

Matt’s Five Points • 0 implied HN points • 24 Jul 11
💰 Finance Economic Policy
  1. Market prices can drop significantly during political turmoil, even if the long-term company value remains stable. It's important to spot these opportunities to invest wisely.
  2. There are two main views on raising the debt ceiling: one prioritizes immediate economic stability, the other focuses on long-term debt control. Both need serious action to back up the talk.
  3. Currently, the market shows increased volatility, meaning potential big shifts up or down. Smart investors might find good deals in stocks if there's a chance of a debt deal soon.

Facts that Stun

Matt’s Five Points • 0 implied HN points • 21 Jun 10
🇺🇸 U.S. Politics Economic Policy
  1. Smart people can make big mistakes when they ignore reality, as shown in both The Best and the Brightest and The Big Short. It's dangerous to let outdated views cloud decision-making.
  2. People often avoid facts that challenge their beliefs, which can lead to poor outcomes. Instead of facing uncomfortable truths, they find ways to shield themselves from the information.
  3. Personal memories can also be unreliable, just like beliefs about politics or economics. Our past can be shaped by what we choose to remember or ignore, leading to false narratives.

Paris, may day

do clouds feel vertigo? • 0 implied HN points • 07 May 24
🌍 World Politics Economic Policy
  1. It's important to look beyond simple East-West thinking in global politics. Understanding different perspectives can help us see how countries interact in more complex ways.
  2. Economic challenges like inflation are affecting families all over the world. We need to think about how these factors impact our lives and what we can do to prepare for them.
  3. Valuation can be tricky and depends on many factors, including geography and culture. It's interesting to consider how we might value things differently in various contexts.

Investor Taxes and Stock Prices: Threading the Needle!

Musings on Markets • 0 implied HN points • 11 May 21
💰 Finance Economic Policy
  1. Investor taxes on capital gains and dividends can greatly impact their returns. If taxes increase, investors need to earn more before taxes to maintain their desired profit.
  2. Higher taxes on investors can lower stock prices. This happens because investors adjust their expectations for returns, leading to decreased overall company valuations.
  3. Changes in tax laws affect how companies manage their finances. When taxes change, businesses might choose to keep more cash rather than giving it back to investors, impacting the market.

From Shareholder wealth to Stakeholder interests: CEO Capitulation or Empty Doublespeak?

Musings on Markets • 0 implied HN points • 28 Aug 19
💼 Business Economic Policy
  1. The Business Roundtable announced a shift in focus from just shareholders to all stakeholders, including customers and employees. This means companies should consider the well-being of everyone involved, not just profit.
  2. Different models of how corporations operate exist, like cutthroat or crony capitalism, which prioritize profits over people. Understanding these models can help us see how corporate decisions affect society.
  3. The statement from CEOs could be seen as either a genuine change or just a way to improve their public image in response to criticism. It's important for companies to actually link good treatment of stakeholders with financial success.

Country Risk: A Mid-year 2019 Update

Musings on Markets • 0 implied HN points • 13 Aug 19
💰 Finance Economic Policy
  1. When companies invest abroad, they face risks from changing currency values and unstable economies and politics. It's important to balance the potential for growth with these risks.
  2. Different countries have varying levels of risk based on their political stability, legal systems, and economic diversity. Emerging markets often have higher risks compared to developed ones.
  3. Understanding country risk is crucial for investors and businesses. It's not just about where a company is based but also where it operates and earns revenue.

January 2019 Data Update 8: Dividends and Buybacks - Fact and Fiction

Musings on Markets • 0 implied HN points • 08 Feb 19
💰 Finance Economic Policy
  1. Companies are spending a lot more on stock buybacks compared to dividends. This trend has been growing since the 1980s, with more than 60% of cash returned to shareholders coming from buybacks in recent years.
  2. There's a debate about whether buybacks are good for the economy. Some say they help shareholders while others believe the money should be reinvested in businesses or used to increase wages for workers.
  3. Not all companies use buybacks in the same way. Larger, mature companies tend to buy back more stocks, but many smaller or high-growth companies are still focused on building their businesses instead.

Deja Vu In Turkey: Currency Crisis and Corporate Insanity!

Musings on Markets • 0 implied HN points • 15 Aug 18
💰 Finance Economic Policy
  1. Turkey is facing a severe currency crisis, primarily due to a drop in the value of the Lira. This situation is made worse by poor business practices and lack of proper regulatory oversight.
  2. Many Turkish companies are mismatching their debts, meaning they borrow in foreign currencies while generating cash flows in the Lira. This creates a big risk for them, especially as the Lira declines.
  3. To prevent future crises, changes are needed. This includes the government not bailing out companies with mismatched debts and banks needing to be more careful about the risks they take when lending money.

January 2017 Data Update 5: A Taxing Year Ahead?

Musings on Markets • 0 implied HN points • 25 Jan 17
💰 Finance Economic Policy
  1. Taxes greatly impact a business's value because they affect cash flows after taxes and the cost of capital. Companies must consider their tax burden when planning finances.
  2. The U.S. has a high marginal tax rate, and its tax policies can lead to situations like trapped cash, where companies hold large amounts of unremitted foreign income to avoid hefty taxes.
  3. Changes in tax law can create winners and losers among companies, depending on how the new regulations affect their effective tax rates and financial structures. This could shift where and how companies choose to operate.

The Trump Effect on Markets: A Financial (not a Political) Analysis!

Musings on Markets • 0 implied HN points • 11 Nov 16
💰 Finance Economic Policy
  1. Market reactions to big political events can be surprising and unpredictable. After the election, there were initial drops but then the markets bounced back, showing that how investors react can change quickly.
  2. Expert predictions are not always reliable. In this case, many experts predicted doom, but the market's actual response showed that the public often trusts their instincts over expert advice.
  3. Stories can influence outcomes more than statistics. The narratives around Brexit and the Trump election resonated with many voters, suggesting that emotional connections can sometimes matter more than hard data.

The Fed, Interest Rates and Stock Prices: Fighting the Fear Factor

Musings on Markets • 0 implied HN points • 04 Sep 15
💰 Finance Economic Policy
  1. The Federal Reserve doesn't directly set all interest rates. They mainly control the Fed Funds rate, which doesn’t affect most people directly.
  2. Low interest rates are not solely because of the Fed. They reflect low inflation and slow economic growth, not just central bank actions.
  3. High stock prices don't only result from low interest rates. They also depend on company earnings and cash flows, which are currently under pressure.

The Tax Story in 2015: Myths, Misconceptions and Reality Checks

Musings on Markets • 0 implied HN points • 19 Jan 15
💰 Finance Economic Policy
  1. Many people think they pay their fair share of taxes while believing that others don't. It helps to look at real data to see how taxes are actually paid.
  2. Even though the U.S. has a high corporate tax rate, companies in the U.S. pay a significant portion of their income in taxes, similar to or higher than companies in other countries.
  3. There's talk of changing the corporate tax code in the U.S. to make it simpler and fairer. Suggestions include lowering the tax rate and only taxing foreign income at local rates.

The insanity of the US tax code: Bad Laws and Predictable Consequences

Musings on Markets • 0 implied HN points • 01 Aug 14
🇺🇸 U.S. Politics Economic Policy
  1. The US tax code encourages companies to move their operations overseas because it taxes their global income. This creates a situation where they might keep cash trapped in foreign countries to avoid extra taxes.
  2. Many US companies are generating more revenue from outside the US, making it tempting for them to relocate to countries with lower tax rates. This trend leads to billions in cash being held abroad instead of being invested back in the US.
  3. Some suggested solutions to the tax issue could make things worse instead of better. It's important to create a fair tax system that makes sense for today's global economy, not just punish companies for trying to minimize their tax payments.

Investment Advice from the Federal Reserve: Unusual, unwise and unseemly!

Musings on Markets • 0 implied HN points • 26 Jul 14
💰 Finance Economic Policy
  1. The Federal Reserve's recent comments on specific sectors like social media and biotechnology could confuse investors. It's unusual for them to give such specific investment advice since they're not experts in company valuations.
  2. Investors often misjudge the potential of high-growth sectors, leading to inflated valuations. It's essential to remember that picking winners in these markets can still yield excellent results, even if the overall sector is overpriced.
  3. The Fed should act more like an umpire in the financial markets and let investors make their choices. Treating investors as adults means they must face the consequences of their investment decisions without expecting constant guidance from the Fed.

Death and Taxes at year end: Unpredictable Certainties

Musings on Markets • 0 implied HN points • 30 Dec 12
💰 Finance Economic Policy
  1. The goal of investing is to make more money after taxes, not just to pay less in taxes. It's better to focus on good investments rather than making choices just to avoid taxes.
  2. When looking at the value of a company, ignore your personal tax situation at first. You should think about taxes later when comparing similar investment options.
  3. The best way to reduce taxes on your investments is to have a long-term investment strategy. Holding on to investments longer means you pay less in taxes overall.

The "dividend tax" cliff approaches: Implications for stocks

Musings on Markets • 0 implied HN points • 27 Sep 12
💰 Finance Economic Policy
  1. The potential increase in dividend tax rates could lead to lower stock prices, especially for high-dividend stocks. If taxes go up, investors may demand higher returns, which could make stocks less appealing.
  2. Different types of stocks will be affected differently by tax changes. High dividend-paying stocks might see larger price drops compared to those that don't pay dividends.
  3. Investors might already expect tax law changes to affect stock prices. However, companies may not change their dividend policies even if taxes increase, as they usually stick to their dividend practices.

Risk free rates and value: Dealing with historically low risk free rates

Musings on Markets • 0 implied HN points • 30 Sep 11
💰 Finance Economic Policy
  1. Lower risk free rates mean lower discount rates, which can make assets look more valuable. However, this can be complicated for valuers who want to keep a low value for an asset.
  2. The risk free rate reflects general economic expectations, combining views on inflation and growth. When it's low, it often signals a lack of confidence in the economy's future.
  3. How you value assets today can vary widely. You can stick with current rates for a more dynamic approach or try to normalize past rates for a different perspective, but be careful not to mix inconsistent inputs.

Chill, dude! It is not the ratings downgrade.. It is how you react to it!

Musings on Markets • 0 implied HN points • 06 Aug 11
💰 Finance Economic Policy
  1. A ratings downgrade doesn't bring new information; it's usually something people already knew. Instead of panicking, it's best to recognize the downgrade as confirmation of existing issues.
  2. Ratings agencies measure risk but don’t provide real solutions. It's important to remember they are not decision-makers, and relying on them could hurt long-term planning.
  3. The downgrade can actually offer a chance to focus on better decision-making. Instead of being fixated on maintaining ratings, leaders can prioritize effective policies that improve the economy.

Default and Bankruptcy: Black, white and shades of grey

Musings on Markets • 0 implied HN points • 14 Jul 11
💰 Finance Economic Policy
  1. Default is not just about missing a payment; it can also involve lenders accepting losses to help borrowers avoid a formal default. This can include restructuring loans or adjusting payment terms.
  2. Lenders may prefer implicit default over explicit default because it allows them to avoid recognizing their mistakes in assessing credit risk. It makes the situation less transparent and allows them to delay acknowledging losses.
  3. For borrowers, sometimes it might be better to face explicit default and make necessary changes rather than stay in a cycle of implicit default, which can lead to worse problems down the line.

Merck and Pfizer: Thoughts on investing as a patriotic duty and market efficiency

Musings on Markets • 0 implied HN points • 20 Feb 11
💼 Business Economic Policy
  1. Investing in R&D and building factories isn't always the best choice, especially if companies don't have a good reason to do so. It's important to create a strong economic environment rather than just relying on patriotism.
  2. Market reactions to investment announcements can be mixed. Sometimes, a company's stock goes up after announcing investments, but that doesn't always mean it's a good decision. The history of the company can affect how investors feel about those choices.
  3. It's too early to tell which company, Pfizer or Merck, made the better decision. Investors need to watch how their actions play out over time and whether they can deliver results that make sense.

Dividend Policy for the 21st century

Musings on Markets • 0 implied HN points • 18 Feb 11
💰 Finance Economic Policy
  1. Companies are often hesitant to cut dividends because it sends a bad signal. They prefer to keep dividends stable, even if their earnings fluctuate.
  2. With more global competition and uncertainty, sticking to fixed dividends might lead to lower payouts as companies retain more cash for safety.
  3. There are alternative dividend policies, like tying dividends to earnings or cash flow, which give companies more flexibility and can reduce the risks of being locked into high payouts.

Tax policy

Musings on Markets • 0 implied HN points • 29 Jan 11
💰 Finance Economic Policy
  1. The average U.S. company pays about 29% in taxes on its taxable income, which is higher than many companies in other countries.
  2. U.S. companies experience much more variation in tax rates due to a complicated tax code, which can lead to unequal tax burdens.
  3. Investment and borrowing decisions should focus on economics rather than the tax code, but simplifying taxes might require sectors to shift their tax responsibilities.

Stock Buybacks: What is happening and why?

Musings on Markets • 0 implied HN points • 25 Jan 11
💰 Finance Economic Policy
  1. Stock buybacks are becoming more popular than dividends among US companies. This shift has been happening for decades, with companies preferring to buy back their shares instead of paying out dividends.
  2. Several reasons explain this trend. One reason is that managers often prefer buybacks because their performance is tied to stock prices, which can drop when dividends are paid.
  3. Buybacks are more flexible for companies because they don't create ongoing expectations like dividends do. Companies that face uncertain earnings may choose buybacks to avoid the commitment of paying dividends in the future.

How do you evaluate risk taking?

Musings on Markets • 0 implied HN points • 19 Nov 10
💰 Finance Economic Policy
  1. Risk taking should be judged not just by the outcome but also by the process and information available at the time. Good decisions can sometimes lead to bad outcomes, and bad decisions can lead to success.
  2. It's important to consider the side effects of risk taking, like how it impacts others. A decision might be profitable for one person but harmful to society as a whole.
  3. How we reward or punish risk taking now can influence future behavior. If taking risks is consistently rewarded, more people will take risks in the future.

Greece, EU and more on Implicit Backing for Debt

Musings on Markets • 0 implied HN points • 22 Dec 09
💰 Finance Economic Policy
  1. Implicit guarantees for debt can be both helpful and risky. Greece's situation shows how these guarantees can support countries but also create big problems.
  2. Being part of the EU has improved Greece's credit standing, but it has also led to a mix of benefits and challenges for stronger EU countries like Germany and France.
  3. While a single currency makes business easier across Europe, it also introduces more regulations that can limit competitiveness against emerging markets like India and China.

A tax on financial transactions: Good or Bad Idea?

Musings on Markets • 0 implied HN points • 27 Nov 09
💰 Finance Economic Policy
  1. A tax on financial transactions might raise a lot of money for the government since there’s a lot of trading happening. But it's important to realize that a small tax on many trades can add up quickly.
  2. The idea behind the tax is to discourage risky trading and punish those who are seen as speculating rather than investing. However, it's tricky to differentiate between what's speculation and what's genuine investing.
  3. If this tax isn't well thought out, it could make trading more expensive and push traders to find ways around it, like moving to places without the tax. This could hurt the markets we rely on.

The Agency for Financial Stability? Good idea?

Musings on Markets • 0 implied HN points • 10 Nov 09
💰 Finance Economic Policy
  1. Creating a new Agency for Financial Stability may not be a good idea. The Federal Reserve already has competent people managing banking regulations, so restructuring might not improve things.
  2. Systemic risk is a problem because it affects everyone but only a few get the rewards. We should focus on making sure that those who take big risks also face the consequences if things go wrong.
  3. Instead of establishing a new agency, we should empower existing banking authorities to monitor risks better. It's important for regulators to be proactive rather than just reacting to past crises.

Insider Trading: My Perspective..

Musings on Markets • 0 implied HN points • 24 Oct 09
💰 Finance Economic Policy
  1. Insider trading is when some investors trade using secret information not available to everyone. It's legal for company insiders to buy stock if they don’t do it right before big news, but illegal if they do.
  2. Studies show that insider trading doesn't always lead to big profits. Insiders might have better info, but they don't always make more money from it, and relying on tips can be risky.
  3. Instead of banning insider trading, we could make trading more transparent. This way, everyone can see what insiders are doing, which might level the playing field a bit.