Collect Your First "Presidents' Paycheck" on Thursday, July 24, 2014
President Obama has quietly been collecting as much as $5 million thanks to a very surprising source over the past few years... Bill Clinton and George H.W. Bush have been cleaning up too... Naturally, they're reluctant to talk about all this cash. But now, you can start benefiting from this situation as well, starting with as little as $11... And you'll see cash deposits in your brokerage account literally within the next 45 days! To get your "fair share," just click here. | |
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| Friday, July 18, 2014 | Issue #2336 | |
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Is Your Stock Portfolio Threatening the Nation? Alexander Green, Chief Investment Strategist, The Oxford Club
 The stock market hit another all-time high this week.
If you're an investor, that's cause to celebrate. For others, it's a reason to grumble. Why? Because rising asset values increase economic inequality, enhancing the wealth of the "haves" and leaving the "have-nots" further behind.
Don't scoff. This is becoming a major issue in this country.
Capital in the Twenty-First Century - a thick, dry academic tome about income inequality by French economist Thomas Piketty - is a No. 1 best-seller. Politicians are making campaign speeches, promising to do something about it. (Better touch your wallet.) And in a December 2013 speech, President Obama called economic inequality "the defining challenge of our time" and "a fundamental threat to the American dream."
Who would have imagined that risking your hard-earned money to secure your own retirement could threaten and undermine the nation?
Fortunately, income inequality is not nearly as bad as the pundits would have us believe. And it's not true that the poor are getting poorer.
From Rich to Poor
Let's start with the fact that academic studies on income inequality routinely fail to take taxes and transfer payments into account.
For instance, if you're a high-income earner in this country, you face a 39.6% top marginal income tax rate, an average 6% state-income tax, Social Security taxes (both sides if you're self-employed) and unlimited Medicare taxes. That means your income can easily be half of what academics calculate.
Those on the opposite end of the spectrum generally receive federal and state benefits including welfare payments, food stamps (and other federal food subsidies), subsidized housing and Medicaid.
When you subtract taxes paid by income earners and include transfer payments to non-income and low-income earners, income inequality is far less than redistributionists claim.
However, tax data from the Congressional Budget Office do show that - from 1979 through 2010 - income for the top quintile of income earners grew faster than it did for everyone else. Yet the rest of us have not gotten poorer. The income of the other quintiles increased by 49%, 37%, 36% and 45%, respectively. In short, every income group has gotten richer.
Permanent Unemployment
But that may change as there are now fewer and fewer full-time workers in America. In her testimony on Capitol Hill this week, Fed Chairman Janet Yellen said the biggest economic risk facing the country is the emergence of a new permanent class of unemployed workers.
Much of the blame can be laid at the feet of our increasingly regulatory state.
According to The Heritage Foundation's latest "Index of Economic Freedom," the U.S. is currently 10th in the world in economic freedom, behind Hong Kong, Singapore, Australia, New Zealand, Canada, Chile and - egads - even Denmark.
According to Freedom House's "Freedom in the World" report, the freest countries have the highest incomes (especially for the poor), the least unemployment and even longer life expectancies.
Capitalism - the private ownership of the means of production (exemplified by the stock market) - is the greatest wealth creator of all time. It has vastly improved our quality of life and standard of living. Yet today the U.S. economy is overburdened with regulations, mandates, prohibitions, an inscrutable tax code and the world's highest corporate tax rate.
Part-Time Work Force
Making matters worse is the Affordable Care Act, which gives businesses a perverse incentive to hire part-time workers over full-time ones.
Two weeks ago, the administration trumpeted that the unemployment rate declined to 6.1% last month and total nonfarm payroll employment increased by 288,000 jobs.
But this is a bit of a distortion as the number includes part-time jobs. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics.
We currently have the slowest economic recovery in modern history and a shocking statistic: Fewer than half of U.S. adults are now working full time. (Indeed, there are now more Americans on federal food aid than full-time private sector workers.)
A lot of this can be tied to hostility in Washington toward business, entrepreneurs and the free market.
Sounds like an overstatement?
Speaking to a Kansas audience a couple of years ago, President Obama said, "The market will take care of everything, they tell us... But here's the problem: It doesn't work. It has never worked... I mean, it's not as if we haven't tried this theory."
Indeed, we have.
The shame is that so many presumably intelligent folks don't understand how punitive taxes and regulations undermine economic incentives, increase inequality... and sicken the goose that lays the golden eggs.
Good investing,
Alex
Editor's Note: If you think Washington's economic ineptitude is outrageous, wait till you hear what a top investigative journalist recently uncovered. Every 30 days, a handful of lucky Americans are allowed to "raid" the Fed, which sits on more than $3 trillion. It's all perfectly legal.
And the best part? You can access this cash hoard, too. For details, click here. | |
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The Coming "Crisis" in the U.S. Has Obama Terrified
"We're not as prepared as we should be," Obama sheepishly said recently.
What the president is referring to is an event that could cripple the U.S. economy ... It's also one Oxford Club editor Sean Brodrick had previously predicted. On April 27, he proclaimed, "Sometime very soon in 2014, we're going to see the first major (*word redacted*) in the United States."
Click here for the full story. | |
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Hotels handled $17 billion in transactions last year. This year, analysts expect that to top $25 billion. As a result, hotels have been able to increase rates. The positive effects are showing up in reports and earnings statements, and investors are lining up. Here are the stocks of hotel chains with a knack for getting heads in beds. Read On... | |
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At a recent investment conference, Scientific American columnist and Skeptic magazine founder Michael Shermer argued that we are living in the best of times. Yet some in the audience disagreed, arguing that things were better for consumers, businessmen and investors "back in the good old days." Read On... | |
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Off the river, fly fishing and investing hold some surprising connections. To keep your investments from getting snagged, here are some fly-fishing lessons (most of which I learned the hard way) that also provide some valuable investing insight. Read On... | |
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All over the U.S., bans are popping up on what we consider our safest investment. 
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