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Howard Richman

 
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  • Bloomberg Spins Case Shiller Numbers As Positive Trend [View article]
    Tack,

    You are astute in your economic understanding. Rental equivalence is an appropriate way to evaluate home prices, just as extrapolating expected dividend returns is an appropriate way to evaluate stock values. I argue with the incompetent economists who contend that expected capital gains should be included in the equation.

    However, I am also correct. It is appropriate to adjust house prices for inflation. After all, rents tend to go up and down with inflation!

    As Shiller demonstrated with data going back to the 1890s, house prices (for the same houses) have stayed quite constant, when adjusted for inflation.

    Howard
    Apr 26 12:23 PM | Likes Like |Link to Comment
  • Why House Prices Will Resume Their Fall [View article]
    I see that my link to how Clinton triggered the house price bubble no longer works. Here's a replacement link:

    http://bit.ly/Iw4uqc
    Apr 25 04:54 PM | Likes Like |Link to Comment
  • Bloomberg Spins Case Shiller Numbers As Positive Trend [View article]
    Ha! When Cramer was calling the end of the decline, I was predicting its resumption. See my commentary from July 31, 2009: "Why House Prices will Resume Their Decline":

    http://seekingalpha.co...
    Apr 25 04:37 PM | 1 Like Like |Link to Comment
  • The Strange Notion That U.S. Trade Is Balanced [View article]
    Ben Gee,

    If faced with a tariff in proportion to their trade deficit, China could respond by buying more American products. If they wished, that they would do all of the following:

    1. Find that they could permit American imported meat to enter their country.

    2. Find that they could eliminate their tariffs on American vehicles, bull dozers, and motorcycles.

    3. Find that they could place American products in the catalogs that are allowed for public procurement.

    4. Find that they could quickly expedite the import of American software, movies, games, and music, instead of delaying legitimate imports while permitting rampant piracy of the same items.

    How long a list would you like?

    Howard
    Apr 9 10:37 PM | 1 Like Like |Link to Comment
  • The Strange Notion That U.S. Trade Is Balanced [View article]
    When Triffin made his claim that the country with the world's currency must run deficits, he did not foresee Bernanke's currency swaps in the fall of 2008. The Federal Reserve can provide the dollars for financing international transactions either through currency swaps with fellow central banks or through buying foreign currencies whenever foreign central banks buy dollars.
    Apr 9 10:31 PM | 1 Like Like |Link to Comment
  • Mexico Getting Set To Impose High Tariffs On U.S. Chicken Legs [View article]
    Trade balances don't result from poor productivity. What normally happens is that the currency value of the trade surplus country strengthens and that of the deficit country weakens, and then trade becomes balanced at the new exchange rate.
    Apr 8 11:11 PM | Likes Like |Link to Comment
  • Bernanke Shows Common Sense, Deviates From Obama Administration Goal [View article]
    Weliqwk,

    Have you taken a look at how fast proven natural gas reserves have been growing lately? Once we substitute Compressed Natural Gas (CNG) for oil, we will no longer be importing energy.

    Plus my son who lives in Norfolk tells me that the only thing slowing our coal exports to Brazil, China and other places is insuficient port facilities.

    When American demand purchases American production instead of foreign, American incomes increase instead of foreign incomes.

    Of course, I am not saying that fossil fuel production is the answer to all our problems. There are three factors needed to do that: (1) balanced trade, (2) balanced budgets, and (3) balanced monetary growth.

    Increased fossil fuel production will help with balancing trade, which would be a step in the right direction.

    Howard
    Mar 3 07:46 PM | Likes Like |Link to Comment
  • Bernanke Shows Common Sense, Deviates From Obama Administration Goal [View article]
    TakeFive,

    When running for President Texas Governor Perry gave the following examples:

    "In the Gulf of Mexico, the median time for review of permits for combined deepwater exploration and development has increased 400 percent, while deepwater exploration and development plan approvals have dropped by nearly 80 percent.

    "The Department of Interior has stopped off-shore exploration off the coast of Virginia over the objections of the Virginia congressional delegation, which has passed a bill in the House to achieve the will of their people. That bill is also supported by their Democratic senators, Webb and Warner."
    Mar 2 10:41 AM | Likes Like |Link to Comment
  • U.S. Merchandise Trade Deficit With China Set A New Record In 2011 [View article]
    Caymagnate,

    You miss the fact that the scaled tariff causes the mercantilists to take down the barriers to American products. If they don't, we end up trading more with those countries that buy more from us when we buy more from them. Usually tariffs decrease imports and exports. The scaled tariff reduces imports and increases exports.

    Howard
    Feb 11 05:23 PM | Likes Like |Link to Comment
  • U.S. Merchandise Trade Deficit With China Set A New Record In 2011 [View article]
    Ben Gee,

    The trade-balancing dollar-yuan rate is a moving target. As China continues to get manufacturing investment while we do not, Chinese yuan can move up and the dollar can move down without bringing trade toward balance.

    Howard
    Feb 11 05:21 PM | Likes Like |Link to Comment
  • U.S. Merchandise Trade Deficit With China Set A New Record In 2011 [View article]
    Ray,

    Yes the 1971 tariffs were legal and they worked.

    You ask if the worldwide downside be worth it. If you want the U.S. to still be economically powerful enough in the future to influence world events, the answer is yes.

    Differences in wage rates don't cause trade deficits. That's a common misconception. Normally, they just result in other countries producing things that are more labor intensive and the U.S. producing things that are less labor intensive and more capital intensive. We are dealing with mercantilists who keep trade out of balance as a strategy in order to gain industry and power at our expense.

    Howard
    Feb 11 05:18 PM | 1 Like Like |Link to Comment
  • Real House Prices Will Probably Keep Falling [View article]
    rm: Eliminating capital gains taxes encourages speculation because the capital gain is tax free and also because the capital gain liability does not have to be considered when taking out a second mortgage. In contrast, the roll-over treatment encourages accumulation of capital as home owners plan to devote the capital gain of one home to the purchase of the next.
    Jan 2 10:50 AM | 3 Likes Like |Link to Comment
  • Why Obama's Job Speech Failed [View article]
    Vuke,

    Ricardo's theory of comparative advantage was an important contribution to economics. But like most initial theories of a field, it has been subject to refinement by later contributions. There have been two major improvements in his theory:

    1. Gomory (fomer IBM VP) and Baumol showed that comparative advantantages could themselves be acquired.

    2. Keynes, and then later Viner, and then later Richman (my father) demonstrated that when trade is kept unbalanced by mercantilist countries it helps the mercantilist countries and hurts the trade deficit countries in the long-term.

    Greece, Portugal, Spain and the U.S. are all suffering trade-deficit caused depressions at the moment.
    Sep 9 09:33 AM | 3 Likes Like |Link to Comment
  • Why Obama's Job Speech Failed [View article]
    Ben,

    I disagree. The rate of the scaled tariff is adjusted quarterly with each country so as to take in 50% of our trade deficit with that country as revenue. It is thus higher with countries that actively keep out U.S. imports and is non-existent for countries like Brazil and Canada with which the U.S. has balanced trade or a trade surplus.

    Thus China would face the situation that if it kept keeping American products out of China, its products would become less and less competitive in American markets, as compared to products produced by countries that don't actively keep out American products.

    As a result, China might do some of the following actions:

    1. Take down its 25% or so tariffs on American vehicles including motorcycles and small bulldozers.
    2. Take down its 25% or so tariffs on American raisins
    3. Stop keeping American meat out of China through tariffs and subterfuges.
    4. Add American-made products to its government-published catalogs of products that are eligible for government procurement.
    5. Stop delaying permission for sales of legitimate American copyrighted materials, including DVDs, CDs and computer games, while at the same time freely permitting the sale of pirated copies.

    And that is just a start...

    Howard
    Sep 9 08:43 AM | 4 Likes Like |Link to Comment
  • QE2 Could Have Worked If Bernanke Had Bought Forex, Not Treasury Bonds [View article]
    yes
    Aug 25 09:04 PM | 1 Like Like |Link to Comment
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