The overly complex and opaque Volcker rule is finally getting a review. The Fed and the other agencies tasked with enforcing the Volcker rule are working together on a long overdue examination of the rule's complexity and effectiveness. Lalita Clozel reports at The Wall Street Journal: The Federal Reserve is considering “broad revisions” to how banks comply with a rule that prevents them from engaging in certain types of trading and investing. “I believe the regulation implementing the Volcker rule is an example of a complex regulation that is not working well,” Fed Vice Chairman for … [Read more...]
Companies Top Up Pensions Before Losing Tax Break
After neglecting their pensions for years, companies are racing to use a tax break on debt to shore up their funds before its gone. Bloomberg explains how borrowing now will save companies money. Molly Smith and Katherine Chiglinsky write: If a company acts now, a $1 billion contribution would only cost $650 million after taxes, based on 2017 rates. But once the corporation has passed the due date of its 2017 return, including extensions, the $1 billion contribution would cost $790 million after taxes. On top of that, the cost of government insurance on unfunded pension obligations has … [Read more...]
A New Hope for Truck and SUV Enthusiasts
Here is some good news for truck and SUV enthusiasts. The Trump administration has reopened a review of vehicle emissions standards requiring auto makers to sell vehicles averaging 54.5 miles per gallon (40 mpg in real world conditions) by 2025. If you’ve purchased a truck or SUV lately, you may have been disappointed with the underwhelming power or the gimmicky features intended to add power without increasing fuel consumption to meet those standards. You wouldn't be alone in that view. The Trump review offers new hope for those of us who would gladly sacrifice fuel efficiency for more … [Read more...]
An Economic Report Card on Trump’s First 50 Days
Dan Mitchell, a senior fellow at the Cato Institute, who specializes in fiscal policy and taxes has put together a report card on President Trump's first 50 days in office. The grading is based on Trump's economic progress, and Mitchell says that, 50 days in, it's still anyone's guess. ...we’ve had lots of political wrangling between Trump and the media. We’ve been introduced to the concept of the “Deep State” (yes, there is a permanent bureaucracy that acts to protect its own interests, but it’s silly to call it a conspiracy). There have been some controversial executive orders. And Trump … [Read more...]
This is What Happens When Companies are Threatened with Tariffs
LG Electronics has announced a new washing machine factory in Tennessee, its first major US. facility. LG isn't the first Asian company to bypass domestic production in its home country to instead produce appliances in the U.S. Haier, a Chinese conglomerate, purchased GE's appliance unit in June of 2016 for $5.4 billion. But The Wall Street Journal's Andrew Tangel writes that the plant could help LG avoid U.S. tariffs. LG’s decision to locate production in the U.S. could aid its push into the American home-appliance market, where it has gained share in recent years competing against rivals … [Read more...]
The Workers of Boeing in SC Reject Forced Unionization Drive
Give workers a choice whether to join a union or not and let the chips fall as they may. Right to work states make all the sense in the world. Just ask the workers at Boeing. Reuters (via Fox Business) reports on the rejection of unionization at Boeing's South Carolina plant: Boeing handily defeated a union drive by workers at the company's aircraft factory in South Carolina on Wednesday, as almost three-quarters of workers at the plant who voted rejected union representation. The secret ballot vote, conducted by the National Labor Relations Board (NLRB) at polling locations throughout … [Read more...]
Does Big Business Know How to Make Unearned Wealth with Politics?
Cato Institute’s Senior Fellow Dan Mitchell explains that little companies, all things considered, fight against excessive government. I like small businesses more than big businesses. Not because I'm against large companies, per se, but rather because big businesses often use their political influence to seek unearned and undeserved wealth. The only bad policy associated with modest-sized firms is the Small Business Administration. And I suspect the majority of little firms wouldn't even notice or care if that silly bit of intervention was shut down. Rather than seeking handouts, small … [Read more...]
Why do Big Banks Love Big Government So Much?
Despite the opportunity to repeal the Dodd-Frank financial laws that have plagued the banking industry since their passage, big banks are reluctant to support such a move. It turns out, big government is great for preventing new competition from emerging, and with barriers to entry so high, the big entrenched banks see more risk to their business from repealing Dodd-Frank than from keeping it. The Wall Street Journal writes: J.P. Morgan’s Jamie Dimon and Lloyd Blankfein of Goldman Sachs have urged against repeal, and other bank CEOs are also suggesting policy small-ball rather than wholesale … [Read more...]
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