According to the latest BLS data, average hourly wages for all US workers rose at a respectable 2.9% relative to the previous year, if still below the Fed's "target" of 3.5-4.5%, as countless economists are unable to explain how 4.3% unemployment, and "no slack" in the economy fails to boost wage growth. Another problem with tepid wage growth, in addition to crush the Fed's credibility, is that it keeps a lid on how much general price levels can rise by. With record debt, it has been the Fed's imperative to boost inflation at any cost (or rather at a cost of $4.5 trillion) to inflate away the debt overhang, however weak wages have made this impossible.
Well, not really.
Because a quick look at US housing shows that while wages may be growing at a little over 2%, according to the latest Case Shiller data, every single metro area in the US saw home prices grow at a higher rate, while 15 of 20 major U.S. cities experienced home price growth of 5% or higher, something which even the NAR has been complaining about with its chief economist Larry Yun warning that as the disconnect between prices and wages hits record wides, homes become increasingly unaffordable. Paradoxically – the higher prices rise, the more unaffordable US homes become for the average American as we showed this weekend. In fact, as of this moment, homes have never been more unaffordable, which even more paradoxically hasn't stopped priced from hitting new all time high virtually every month for the past year.
And while this should not come as a surprise, one look at the chart below suggests that something strange is taking place in Seattle where prices soared by a bubbly 13.2% Y/Y, and which has either become "Vancouver South" when it comes to Chinese hot money laundering, or there is an unprecedented mini housing bubble in the hipster capital of the world.
Putting the above data in context, here are two charts courtesy of real-estate expert Mark Hanson, the first of which shows how much household income increase is needed to buy the median priced home in key US cities…
… while the next chart shows the divergence between actual household income, and the income needed to buy the median priced house.
Every Halloween people are engaging in free-market anarchism whether they like it or not.
To the economist, it’s clear that the child values receiving candy, even if it means dressing up in a funny or scary costume and going door-to-door, sometimes for hours, saying “trick or treat”.
It’s clear that for the adults, joining in for the festive evening is valued more-so than the monetary value of the candy, or else they wouldn’t be giving it away. And some don’t. Some people, adults and children alike, shy away from Halloween night neither tricking nor treating nor allowing their homes to be used as candy repositories. Those partaking in the activity simply go about their business, ignoring the houses with the lights off.
Halloween isn’t like most other market activities where exchanges can be marked in monetary value. Yet an exchange is taking place, and no aggression is required for participation or non-participation.
To the free-market anarchist, Halloween is a perfect example of a non-coercive display of voluntary goodwill. Critics of anarchism typically showcase the Hobbesian idea that without a coercive monopoly, people would rob, rape and kill one another. Yet, what is Halloween if not free-market anarchism? There is no central bureaucracy dictating what kids should dress up as, where they should go or at what time and for how long. Likewise, there are no bureaucrats telling adults what types of candy they should offer (“the Davidson’s are giving away Kit-Kats, so the Gibbons’ should offer M&Ms”). Every Halloween any person giving away candy is an entrepreneur; the individual must decide how much candy to stock up on and how much to give away to each child. These decisions may be influenced by past experiences and future uncertainties. A neighbourhood with fewer children may warrant fewer candies, or a larger supply of individual candy units to each child. It can even be explained by marginal utility: If the supply of candy at the Davidson’s house is fixed at x, then the marginal utility of each candy unit will rise as more kids arrive and the supply dwindles. Likewise, if fewer children are visiting, the utility of each candy unit will fall, allowing the Davidson’s to give two or more units of candy away to just one child. This, of course, assumes the Davidson’s don’t want the candy for themselves. Fewer children and a large stock of candy may rest higher on their value scales than vanquishing their supply of Halloween candy by the end of night.
Halloween mirrors the principles inherent in free-market anarchism through its spontaneity. There is no fixed time when to start or stop, but clearly there are limits to when one can or can’t trick or treat. There are no candy cops, testing candy or pre-approving adults who are giving away candy. There are no licences or regulations involved with Halloween. And yet, despite some fear-mongering, the candy given away by strangers to be consumed by children is poison-free.
A dedicated Hobbesian will denounce a stateless society as unrealistic and at odds with human nature. Yet what is more unrealistic than children dressing up in costumes, visiting stranger’s doorsteps, getting free candy, and then consuming that candy without it being laced with poison? Not to mention that the ritual happens every year, without any central authority forcing it on people, without any detailed plan on who will supply candy, what types of candy, how much per household, how many kids per street at a certain time, etc, etc.
It’s clear to me that Halloween is nothing short than free-market anarchism at its best. Here is a spontaneous order of people partaking in a festive holiday without any expectation of monetary gain. Not that wealth is something to be shunned, I’m merely just pointing out that money doesn’t always buy happiness. With that said, I ask again: what is Halloween if not free-market anarchism at its best?
Our political system is dominated by two major political parties with serious identity crises.
J.D. Tuccille writes:
The state of the Republicans is particularly parlous,” The Economist noted last year, before our country’s political fissures further deepened and widened, “But the contradictions among Democrats, though less obvious, also run deep.”
How much deeper and wider those fissures now run was demonstrated last week with Sen. Jeff Flake’s (R-Ariz.) announcement that he won’t seek reelection. It was the latest evidence that American electoral politics are fracturing in ways that offer less and less to people who reject tribal contests and think live-and-let-live is an attractive philosophy. Actually, it’s a big problem for anybody who just wants clear choices.
With his poll numbers tanking after his outspoken attacks on President Trump’s protectionism, saber-rattling, and xenophobia, the junior senator from Arizona publically conceded that “a traditional conservative who believes in limited government and free markets, who is devoted to free trade, and who is pro-immigration, has a narrower and narrower path to nomination in the Republican party.” It was time for him to try his luck at something else.
The animal spirits among American consumers has not been this 'high' since the year 2000…
The only time in US history that confidence was this high… was the dotcom bubble… but it's different this time…
“Consumer confidence increased to its highest level in almost 17 years (Dec. 2000, 128.6) in October after remaining relatively flat in September,” said Lynn Franco, Director of Economic Indicators at The Conference Board.
“Consumers’ assessment of current conditions improved, boosted by the job market which had not received such favorable ratings since the summer of 2001. Consumers were also considerably more upbeat about the short-term outlook, with the prospect of improving business conditions as the primary driver.
Confidence remains high among consumers, and their expectations suggest the economy will continue expanding at a solid pace for the remainder of the year.”
Interestingly, consumers’ outlook for the job market, however, was somewhat less favorable than in September.
The proportion expecting more jobs in the months ahead decreased marginally from 19.2 percent to 18.9 percent, however, those anticipating fewer jobs declined from 13.0 percent to 11.8 percent.
Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased marginally from 20.5 percent to 20.3 percent, however, the proportion expecting a decrease declined from 8.6 percent to 7.4 percent.
For years, actor and former child star Corey Feldman has been warning anybody who would listen that Hollywood is a place where adults have more inappropriate contact with children than probably anywhere else in the world.
So it’s unsurprising given the renewed focus on sexual assault and harassment brought about by the Harvey Weinstein scandal that Feldman’s accusations would receive renewed attention, considering he made the media rounds as recently as 2016 to talk about how a pedophile ring in Hollywood abused him and his friend, fellow actor Corey Haim – actions Feldman blames for Haim’s eventual death from a drug overdose.
And yesterday, he returned to the “Today” show and, during an interview with Matt Lauer vowed to release the names of six men who he alleges participated in the abuse of himself, Haim and other young stars. The interview followed Feldman’s announcement in a YouTube video last week that he was launching an Indiegogo page to try and raise money for a feature film about pedophilia in Hollywood that he hopes to direct. However, as Lauer pointed out, Feldman’s target budget – $10 million – appears lofty. But the former child star appears determined to tell his story the way he wants it to be told.
Here's an excerpt from his interview:
LAUER: “Why are you talking to me? Why aren’t you talking to the police right now?”
FELDMAN: “I told the police. In fact if anyone wants to go back to 1993, when I was interviewed by the Santa Barbara Police Department. I sat there and gave them the names. They are on record. They have all of this information, but they were scanning Michael Jackson. All they cared about was trying about to find something on Michael Jackson.”
LAUER: “Who you said, by the way, did not abuse you.”
FELDMAN: “Who Michael was innocent. And that was what the interview was about with the pollice in 1993. I told them, he is not that guy. And they said, maybe you don’t understand your friend. And I said, no, I know the difference between pedophiles and somebody that is not a pedophile because I have been molested. Here’s the names, go investigate. And let me push this forward, there are thousands of people in Hollywood that have the same information. Why is it all on me? Why is it, if I don’t release the names in the next two months, six months or a year, I’m the bad guy. I’m the victim here. I’m the one who has been abused. I’m the one who is trying to come forward and do something about it.”
LAUER: “But —“ [crosstalk]
FELDMAN: “Please, I’m sorry. There are thousands of people out there, Matt, who have this information. Any one of those child actors that went to the teenage soda pop clubs with me when I was a kid, know who those people are and the people who ran it. Anybody can go back through history and look at the Teen magazines and say what was the name of that venue they were promoting and who ran that venue own who endorsed it.”
LAUER: “You said you have death threats because you have this information.”
FELDMAN: “Yes.”
LAUER: “And have threatened to expose it. Another reason I think to go to police. That’s a crime to threaten someone’s life.”
FELDMAN: “I’ve gone to the police with that, as well.”
LAUER: “And what would be wrong about going to the police now again? Didn’t work out in Santa Barbara.”
FELDMAN: “There’s a statute of limitations, Matt, in the state of Claifornia which protects people. It’s not that way in New York. It’s that way only where the movie industry is, conveniently enough in California. That’s the seriousness of this. You cannot. Because if I were to go to the police, I would be he one who’s getting sued. Henceforth, I need a team of lawyers and I need a team of security to be around me at all times, to keep me safe so I can get this message done.”
LAUER: “Really, really quickly.”
FELDMAN: “I’m not playing around. It’s serious stuff. I vow I will release every name that I have any knowledge of, period. And nobody’s going to stop me this time, as long as people support this.”
* * *
Of course, legal problems stemming from sexual-harassment or -assault allegations are a major problem for Hollywood’s victims, as the Weinstein scandal helped to expose. Yet Feldman, who starred in 1980s classics like “Stand By Me” and “The Goonies”, is wrong about the California statute of limitations on sexual abuse cases – it was thrown out late last year by Gov. Jerry Brown. Still, it’s not altogether unreasonable – particularly for somebody who is not accustomed to having his allegations taken seriously – for Feldman to be afraid of legal repercussions of outing powerful pedophiles.
But after simmering on the backburner for years, the levee of public outrage over pedophilia in Hollywood could very well be about to break. Case in point: Over the weekend, actor Anthony Rapp – famous for his roles in “Rent” and “Dazed and Confused” – accused actor Kevin Spacey of molesting him when he was 14. In an unprecedented development, Netflix cancelled Spacey’s show House of Cards, and the actor has suffered tremendous reputational damage that could threaten his ability to find work.
In the shuffle of the Weinstein allegations, some have pointed out that Bryan Singer, who directed the X-Men movies and other mega-budget blockbusters, has been repeatedly accused of pedophilia, has been able to easily find work despite the stigma. Two lawsuits alleging abuse by Singer were eventually dismissed, but actors have continued to single him out.
Regardless of whether Feldman ever comes forward, it appears Hollywood is finally being forced to acknowledge that both men and women are subjected to sexual abuse and coercion, though perhaps not in the same numbers.
Another day, another 'soft' survey shows improvement. Following Dallas Fed's surge yesterday, Chicago PMI printed a dramatically better than expected 66.2 (60.0 exp) – the highest since March 2011.
This print is above the highest estimate (forecast range 58 – 64.7 from 31 economists surveyed) and is a 4 standard deviation beat…
To the highest since March 2011…
Under the hood it was oddly disappointing…
Prices paid rose at a slower pace, signaling expansion
New orders rose at a faster pace, signaling expansion – highest since Feb 1974
Employment fell and the direction reversed, signaling contraction
Inventories rose at a slower pace, signaling expansion
Supplier deliveries rose at a slower pace, signaling expansion
Production rose at a faster pace, signaling expansion
Order backlogs rose at a faster pace, signaling expansion
Business activity has been positive for 12 months over the past year.
Oddly, only 3 factors rose in October compared to September (compared to 7 in September)
Having fled to Brussels to escape rebellion charges and perhaps a lengthy prison sentence, Catalan (ex?) leader Carles Puigdemont, who quietly fled Catalonia over the past few days, held a press conference at the Brussels Press Club. Puigdemont said that the Catalan government sees the upcoming regional elections, called after the imposition of Article 155, as a “democratic challenge” and will accept the results.
In a multi-lingual, rambling speech, Puigdemont – who appears to have almost capitulated in his crusade against Madrid – said he would respect the results of the snap election called by Madrid in response to the declaration of independence by the province’s parliament. He then called on the Spanish PM Mariano Rajoy to say if he would do the same. Puigdemont also reiterated his support for democracy and peaceful resistance to Madrid’s pressure on Catalonia, and said he arrived in the Belgian capital to put the issue of Catalan independence “in the heart” of the European Union.
Confirming that beggars can at least pretend to be choosers, Puigdemont said that "I want a clear commitment from the State, will you respect the results or not?”
Puigdemont said he and his government, which has been sacked by the central government in Madrid, were denouncing “the polarization of the Spanish justice system” in dealing with the political crisis and wanted to “show the world the serious democratic deficit that exists in the Spanish state.”He said the province’s deposed leadership would submit to Madrid’s order to hold an emergency parliamentary election on December 21, and respect its result. “I would like to ask the Spanish government a question: Will it do the same?”
Asked on several occasions if he would return to Spain to face criminal charges where he could be behind bars for up to 30 years, Puigdemont said he would return once he had "legal guarantees", and that was the reason for the group's decision to travel to Brussels.
When asked whether he will be seeking political asylum in Belgium, Puigdemont said he did not go to Brussels for that reason. Puigdemont is facing criminal charges for disobeying the Spanish government in pursuit of Catalan independence, including for appropriation of budget funds to hold a referendum on the issue. Puigdemont said he and his government left Barcelona to avoid possible violence, should the Spanish government try to arrest them. He added that he would return to Catalonia, if given “guarantees” of safety.
On its Twitter site, The Spain Report, translated some of Puigdemont’s sound bites from the press conference:
Puigdemont says there was a declaration of independence on Friday.
Catalan government chose "avoiding violence" as its priority after declaring independence on Friday.
Catalan government could have chosen to "force civil servants" into confrontation with Spain, but chose not to…republic cannot be built from violence.
Puigdemont says he is the legitimate President of Catalonia
…he does not want to elude his legal responsibilities
Puigdemont says Catalan people have in front of them a state that only understands violence
…title of Public Prosecutor's document, "harder will be the fall", shows Spain looking for "revenge", not justice.
BBC asks Puigdemont if he is ready to go to jail for 30 years, Puigdemont hands microphone to other former regional ministers, who waffle
Former Catalan regional interior minister Forn says (in French) that Spanish government wants to jail them "like terrorists".
Puigdemont says the problem started on October 1 with "violence from the Spanish side".
Meanwhile, it’s clear that there’s no softening of Madrid’s stance as the Catalan government website remains offlineshutdown.
Northern California has been devastated by a series of vicious wildfires over the past month. Some 8,900 buildings have been destroyed, 43 people have been killed, and another 100,000 were forced to evacuate their homes. The fires have hit agribusiness hard as well, with the flames sparing neither the region’s famous vineyards nor its newly legal marijuana fields. (California legalized recreational marijuana by ballot initiative last year.)
Many of these farms will be back up on their feet soon, courtesy of generous insurance payouts and easy-to-access savings and loans. But California’s cannabis cultivators won’t have that help. Thanks to the persistent federal prohibition on their product, they have been denied access to the basic financial services that allow other agricultural interests to guard against the risk of wildfires and to rebuild after disaster strikes.
“We have members that have lost their farms, that have lost their crops, that have lost their homes,” says Josh Drayton of the California Cannabis Industry Association. Thanks to federal pot prohibition, he adds, many members have lost their entire savings as well.
Since marijuana is still illegal at the federal level, most banks refuse to do business with the cannabis industry. Of the 12,000 or so banks and credits unions in the United States, fewer than 400 are willing to service the needs of marijuana dispensaries, growers, and wholesalers. That left many growers without bank accounts where they could deposit the returns from their operations.
“A lot these folks who were living at their cultivation sites tended to actually keep their cash in their home,” Drayton tells Reason, “whether it was in their safe or in a barrel.”
The Los Angeles Times tells the story of one cannabis cultivator who buried $40,000 in the form of gold and silver coins. Another stashed “tens of thousands of dollars” in an underground safe. The fires destroyed both.
That loss of savings is compounded by the cannabis industry’s restricted access to insurance. They are unable, for obvious reasons, to purchase crop insurance directly from the federal government, and getting it from a private provider can be exceedingly tricky. Remarkably few insurance policies exist specifically for marijuana. And while general commercial liability and crop insurance is available, even then there is no guarantee that these business will be covered if something happens to their product.
Of the cannabusinesses that do have insurance, “50 percent are covered by policies that flat out exclude marijuana,” says Michael Aberle, senior vice president of Next Wave Insurance Services. His company has been underwriting commercial insurance policies for the cannabis industry for the past decade.
Years of prohibition have seen insurance companies insert clauses to guard against having to cover “health hazards,” “contraband,” or even Schedule I drugs. These disqualifying terms can be easily missed by marijuana business owners unfamiliar with buying insurance, and by insurance agents unaccustomed to having clients whose companies violate federal law. “When you have ‘Schedule I’ or ‘health hazard,’ those are two words in a policy that could be 5,000 or 10,000 words,” Aberle notes.
As a result, countless cannabis farms have lost multi-million-dollar crops to California’s conflagrations. “The fires came at a horrible time. This has been a very emotional learning experience,” says Drayton.
It’s a learning experience whose lessons cannot be fully adopted as long as federal marijuana prohibition is in place.