Private equity firms virtually never buy happy, fast-growing companies with glistening profits. After all, such companies have access to other kinds of capital; they don’t need private equity. And frankly, private equity is generally not in the business of polishing things up for a low-multiple return. It’s in the business of reinvention and rebirth, with fireworks at the end. More |
Byzantine 'bank structuring' law catches small firms in its net. More |
Public pension funds across the country are facing a painful reckoning. Their investment projections look increasingly out of touch in today’s low-interest environment, and pressure is mounting to be more realistic. But lowering their investment assumptions, even slightly, means turning for more cash to local taxpayers — who pay part of the cost of public pensions through property and other taxes. More |
Subsidizing electric vehicles has been a devil's bargain, making the development of other alternative technologies like conventional hybrids and advanced gasoline engines more difficult. Since 2008, taxpayers have spent or provided loan guarantees of $6.5 billion for electric vehicles. Read more here:... More |
The debate over the federal budget shows how politicians use fuzzy math to hide fiscal realities from voters. More |
In place of actual prosecutions, the Justice Department has aggressively pursued what are blandly called “deferred prosecution” or “non-prosecution” agreements -- DPAs and NPAs, for short -- through which prosecutors and companies negotiate terms to avoid a criminal trial. This approach may be avoiding the sort of corporate death sentence visited upon Arthur Andersen for what proved to be... More |
Very little evidence exists on the effects of regulation or its efficacy. It is extremely difficult to isolate the impact of any proposed regulatory change from everything else that is occurring simultaneously within financial markets. Studies claiming to analyze those effects are almost always confounded by other factors, such as the environment that led to a given regulation; the response of market participants to regulation... More |
It took the longest recession since World War II and a financial calamity that the U.S. Census Bureau says wiped out 23 percent of public retirement plan assets in 2009 to show how politicians long promised richer benefits without setting aside sufficient funds. More |
Almost all our teen mothers are low-income, poorly educated and low-skilled. Ever since teen pregnancy was defined as a major social concern, policymakers have tried to put a brake on the trend on the reasonable presumption that having a child in the teen years limits a girl's -- not to mention her baby's -- chances. Considerable evidence shows that girls from poor families who avoid pregnancy outside of marriage and finish high... More |
We may be witnessing the beginnings of a new era, in which the dividing line is not between conservatives and progressives, as much as it is between two kinds of conservatives, whom I call “managerial optimists” and “constitutional realists.” Or to put it more provocatively, between Paul Ryan technocrats and Rand Paul federalists. More |
Two years after President Obama signed the Dodd-Frank financial-reform law, lawmakers, reporters, and the public are uncertain about whether the law has achieved its goals, even as JPMorgan's surprise trading loss highlights the economy's remaining vulnerability to financial-industry shocks. By focusing on the Volcker Rule, lawmakers are missing an opportunity to sharpen financial regulations so that markets, not... More |
There are two main ways to define fairness: fairness in terms of opportunity, and fairness in terms of outcomes. The first means leveling the playing field, and the second means spreading the wealth around. The first means lifting people up on the basis of merit, and the second means bringing successful people down. More |
In 2008, candidate Obama referred to the Export-Import Bank as "little more than a fund for corporate welfare." But after four short years, President Obama looks set to sign off on three more years and a $40 billion increase in that corporate welfare fund. Where is the change promised to Americans? More |
There is plenty of government force channeling money toward the coffers of the big tech companies. It's not all warm and fuzzy corporate slogans, cool workplaces, and upscale company cafeterias in Silicon Valley. More |
More gimmicks, less honesty in budget. More |
To reform the federal student-loan program, the Department of Education should start targeting student loans: giving cheaper loans, not to every student from low-income families, but to needy students with good prospects for repaying the loans they take out. More |
Income and educational attainment in America are highly correlated. Individuals have a strong financial incentive to gain additional education because the present value of the increase in lifetime earnings exceeds the cost of tuition. Subsidies to encourage prospective students to enroll in college are therefore not necessary and very likely counterproductive. More |
States that have followed Europe’s economic policy model of unbridled spending are getting Europe’s economic results: low growth and looming fiscal catastrophe. As big government, low-growth states fall deeper into the fiscal hole, the question becomes whether Washington politicians will force taxpayers in more prudent states to bail them out. This cannot be allowed to happen. As the 2008 financial crisis proved, bailouts... More |
We should look to markets, not men, to govern the economy. More |
Right now, in nearly every state, insurance is regulated at the state level. If you live in New York, like I do, you can’t buy insurance from a company in Connecticut or New Jersey, or even better, Texas. Why does this matter? Because state governments, at the behest of lobbyists, enact insurance mandates requiring all plans in a state to cover, say, acupuncture or fertility treatments. More |
The U.S. tax code is more progressive and European than you think. More |
Of all the "bubble states" -- those slammed hardest by the housing market's collapse -- only the Sunshine State has shown robust signs of recovery in domestic migration. More |
We must liberalize labor markets, not rely on macroeconomic “fixes.” More |
This year's edition of Best Cities For Jobs found that small and midsized metropolitan areas, with populations of 1 million or less, accounted for 27 of the 30 urban regions in the country that are adding jobs at the fastest rate. The three largest metropolitan statistical areas that made the top 30 — Austin, Houston and Salt Lake City — are themselves highly dispersed with sprawling employment sheds. More |
With French and Greek voters saying "au revoir" and "andio" to their governments, the big question now is what will happen to the euro, the currency shared by almost two dozen European countries. More |
Imagining how the next generation will fare in the Obama administration’s scenario of how government influences our lives. More |
A nationwide study compares occupational licensing requirments for low and moderate income professions in 50 states and finds that on average licensing forces workers to spend up to nine months and invest $200 in fees to gain approval for certain types of work. More |
New French President Francois Hollande bears little resemblance to the socialist firebrands France embraced through the era of François Mitterrand, president from 1981 to 1995. His views are closer to the German Social Democrats or British Labor than to the obsolete Marxist tradition. He did not propose nationalizing industries and banks, the core of Mitterrand’s 1980s platform More |
Over the last decade, a novel form of federal government regulation has emerged, prompted not by new congressional legislation or administrative agency action but rather by aggressive assertion of prosecutorial authority over business. Without any actual criminal trials and little to no judicial supervision, government attorneys in the U.S. Department of Justice have pressured corporations to pay significant fines, to... More |
Thinking of TARP as a successful investment program rather than a necessary evil invites expanded government credit initiatives. Any worthwhile commercial activity or research that appears – to anyone – to be underfunded could be a candidate for a government loan. More |
Despite shedding jobs, cutting pay, trimming benefits, curbing services and expanding the tax base (on top of an 11% tax rise last year), Providence still faced a shortfall of $21m or so. There was no way to set its finances to rights without tackling the city’s huge pension costs. Eleven towns in Rhode Island have pension shortfalls even more dire than Providence’s. One, Central Falls, has already declared... More |
In a world of mobile capital, corporate-tax rates matter, and business decisions about how and where to invest are increasingly sensitive to national differences. America’s relatively high rate encourages US companies to locate their investment, production, and employment in foreign countries, and discourages foreign companies from locating in the US, which means slower growth, fewer jobs,... More |
With student-loan interest rates set to spike in July, Democrats in Congress and President Obama are pushing a bill that would keep rates low. Instead of seizing the opportunity to stick up for free markets—and students—and distinguish himself from his opposition, presumptive Republican presidential candidate Mitt Romney is joining the sleight-of-hand game. That’s a mistake that a supporter of free markets... More |
Last week, a debate erupted about whether the government’s massive Troubled Asset Relief Program (TARP) made or lost taxpayers money. Assistant Secretary for Financial Stability Timothy Massad and his colleagues at the Treasury Department argue that TARP is going to end up costing a lot less than originally expected and may even end up turning a profit for taxpayers. Breakingviews Washington columnist Daniel Indiviglio... More |
Most Californians would be surprised to learn that 100 percent of education’s share of the tax increase proposed by Governor Jerry Brown will go to pensions instead of classrooms. Why? Because the California teachers' pension fund has earned only 60 percent of its forecasted investment return since 1999, it needs school districts to boost contributions by more than $100 billion. More |