Archive: Econtrarian

February 12, 2018 | Econtrarian

No Sugar High from Tax Cut Unless the Fed and Banking System Provides the Sugar

There has been chatter about whether the Tax Cuts and Jobs Act of 2017 (TCJA) will result in a temporary stimulus, or sugar high, to U.S. economic activity because of the increase in corporate after-tax profits and the increase in household disposable income that will flow from the tax-rate cuts. How can putting this extra […]

January 20, 2018 | Econtrarian

An Alternative Explanation for Walmart’s Announced Employee Bonuses and Wage-Rate Increase

On January 11, Walmart announced that it was raising its starting wage rate to $11 an hour, giving a one-time bonus up to $1,000 to employees, expanding its parental/maternal leave policy and providing employees adopting a child up to $5,000 per child in fees associated with the adoption. In making these announcements, Doug McMillon, Walmart […]

December 19, 2017 | Econtrarian

Festivus 2017 Airing of Grievances: I Gotta Lot of Problems with You, Taylor Rule

In 1993, John Taylor, a Stanford University economics professor, published a research paper in which he purported to describe how the Federal Reserve had conducted monetary policy in terms of its movement of the federal funds interest rate from 1987 through 1992. Essentially what Taylor did was estimate a Fed reaction function to consumer goods/service […]

December 11, 2017 | Econtrarian

Don’t Expect an Investment Boom if the Corporate Tax Rate Is Cut

It appears as though the rate on U.S. federal corporate profits is going to be reduced. Although U.S. corporations may be considered “people” in terms of the First Amendment, they are not “people” when it comes to paying taxes. Corporations are de facto tax collectors, not tax payers. Real people ultimately pay the taxes in […]

December 01, 2017 | Econtrarian

The S&P 500 Is Not Expensive According to the Kasriel Valuation Model

In each of the first three quarters of 2017, there have been double-digit year-over-year percentage increases in the quarterly average level of the S&P 500 stock-price index – 19.3% in Q1, 15.5% in Q2 and 14.2% in Q3. Although there were year-over-year contractions in the S&P 500 index of 5.6% in Q1:2016 and 1.3% in […]