The View from Right Field

Break

As I said at the end of the last post, I will be on break until early August.  In the meantime, Go Cubs!

The Stock Market: Real or Addicted? – A Follow Up

This is a follow up on last Friday’s post, “Is the Stock Market for Real or Just Addicted to Low Interest Rates and Easy Money?”  In writing it, I realized I have been saying the same thing for years.  In looking back at my past posts on the economy, I found I even used the “Christiane F.” analogy, about the problems the stock market would have trying to kick its addiction to low interest rates, before. 

Which gets to the first point of this post: Maybe I’m wrong about the economy.  Maybe things have changed.  Maybe low interest rates are appropriate, and maybe the stock market is for real.  You would have lost a lot of money betting against the stock market over the last ten years.

President Trump’s Foreign Policy Claims Are Often Bizarre, But It’s Not the First Time We’ve Seen That

The foreign policy follies (and worse) of Donald Trump are so bad, it sometimes makes us forget bizarre positions that prior administrations have taken.  For example, in 2011, when the United States was involved in the bombing of Libya (because, inter alia, Moammar Gaddafi was threatening to massacre Libyan civilians), the question of the War Powers Act arose.  The War Powers Act was passed over President Nixon’s veto in 1973.  It provided that presidents are to get Congress’s approval or authorization within 60 days¹ after they send troops into hostilities.

The Obama administration, however, did not want to seek Congressional approval of our operations in Libya.  But it also did not want to say, as other presidents have said, that the War Powers Act was an unconstitutional limit on the President’s power.² So, the State Department legal advisor, a politically appointed position, came up with the theory that the War Powers Act did not apply to the bombing of Libya because we were not engaged in “hostilities” since the other side could not effectively shoot back at us.  (See here and here,)

Is the Stock Market for Real or Just Addicted to Low Interest Rates and Easy Money?

Federal Reserve chairman Jerome Powell indicated in Congressional hearings on Wednesday that the Fed could be cutting its benchmark interest rate later this month – and the stock market promptly went up.  So, a “Powell Put”?  (See here.) 

In addition to a possible U.S. rate cut, interest rates in Europe remains at historic lows.  The European Central Bank’s rate for overnight deposits by banks is -0.4% (where it has been for over three years), which means you would get back less than you put in.  In June, five-year bonds issued by mortgage banks in Germany were priced at -0.2%, which means you would have to pay the bank in order to lend them money.¹  And in Denmark some banks are even offering mortgages at negative rates,¹ which means … well, you get the idea.

The 2019 Political World - In Two Cartoons

The one on the left is from Tuesday's Financial Times.  The one on the right is from today's Wall Street Journal.

Climate Change: A Bonus Question

This is to follow up on Tuesday’s post, “Climate Change Is a Two-Part Question.”  In June, The Economist wrote about “Green New Democrats” and in particular about Joe Biden’s and Elizabeth Warren’s plans for climate change.  While neither of them has endorsed the “Green New Deal,” they both have big dollar/big concept environmental plans. 

After reading the article, however, my question is this: How can you seriously claim to have a plan for climate change and not address a carbon tax or some kind of a plan for carbon pricing?  I know that cap-and-trade couldn’t pass the Democratic Congress of 2009-10, that the Liberal/National Coalition (i.e., center right) in Australia won re-election twice after repealing Australia’s carbon tax (here and here), and that the "yellow vests" in France were protesting a gasoline tax increase that was part of a climate change program. 

Climate Change Is a Two-Part Question

The Democratic debates, the European heat wave (not to mention the 90 degrees in Anchorage), et al, are getting people to talk even more about climate change, assuming that is possible.  Many of the Democratic presidential candidates support the “Green New Deal.”  Even those that don’t, have their own plans for dealing with climate change (and getting votes from those for whom this is the number one issue). 

The thing to remember about climate change, however, is that it is a two-part question.  Just because you’re right about mankind affecting the climate through increased CO₂ emissions, etc., doesn’t mean you are right about what the solution is.  The second question is not whether we need to reduce emissions.  The second question is how we reduce emissions – and how much we need to reduce them.  Do we need to reduce emissions to zero or can we just reduce annual emissions to 25% of current levels?  Or do we need to get them to below zero, because we need to reduce the amount of CO₂ in the atmosphere?

Here’s Why Self-Driving Cars May Be a Long Way Off

A column in Wednesday’s Financial Times by Brooke Masters noted:

“Consolidation is sweeping through the self-driving cars sector like the last dance at a high school disco – everyone seems to be grabbing a partner or two for fear of being left out.”¹

Car companies are joining with each other and/or with technology companies in a race to get to the size necessary to compete in the self-driving race.  But I wonder how soon self-driving cars are really going to happen for one reason: lawsuits.

Does President Trump’s Hard Line Go Away in Person?

An article in The Washington Post this morning, with the headline “Trump’s hard line approach appears to soften in meetings with world leaders,” starts out:

“President Trump entered his meeting with President Xi Jinping over the weekend promising to take a tough approach on trade negotiations and pressure his Chinese counterpart into a sweeping deal.

But the meeting did not produce an agreement – and Trump’s stance seemed to only soften as he announced he was relaxing limits on Chinese telecommunications giant Huawei and delaying new tariffs on Chinese goods in hopes of restarting trade talks with Beijing.”