3 Stock Market Tips from an Economist

Recent volatility has Americans talking about the stock market — and getting a lot of things wrong in the process. Let’s discuss some general principles to help clear things up.

(Let me say up front that I won’t be disclosing which stocks are going to go up next month. Even if I knew, it would ruin my advantage to tell everybody.)

1. Money doesn’t go “into” or “out of” the stock market in the way most people think.

On NPR’s Marketplace, after the recent big selloff, host Kai Ryssdal said, “That money has to go somewhere, right?”

This language is misleading. Let me illustrate with a simple example.

Suppose there are 100 people who each own 1,000 shares of ABC stock. Currently, ABC has a share price of $5. Thus, the community collectively owns $500,000 worth of ABC stock. Further, suppose that each person has $200 in a checking account at the local bank. Thus, the community owns $20,000 worth of checking account balances at the bank.

Now, Alice decides she wants to increase her holdings of cash and reduce her holdings of ABC stock. So she sells a single share to Bob, who buys it for $4. There is no other market action.

In this scenario, when the share price drops from $5 to $4, the community suddenly owns only $400,000 worth of ABC stock. And yet, there is no flow of $100,000 someplace else — certainly not into the local bank. It still has exactly $20,000 in various checking accounts. All that happened is Alice’s account went up by $4 while Bob’s went down by $4.

2. Simple strategies can’t be guaranteed to make money.

Suppose your brother-in-law says: “I’ve got a great stock tip! I found this company, Acme, that makes fireworks. Let’s wait until the end of June, and then load up on as many shares as we can. Once the company reports its sales for July, we’ll make a fortune because of the holiday numbers.”

Clearly, your brother-in-law would be…


Jet leaving Las Vegas catches fire

(REVIEWJOURNAL) — At least 14 people were hospitalized after a British Airways plane caught fire Tuesday afternoon at McCarran International Airport.

Passengers used emergency slides to get off the plane, Federal Aviation Administration spokesman Ian Gregor said.

The fire was reported at 4:13 p.m., the airport said. It was out by 4:18 p.m.

All 159 passengers and 13 crew members on the 275-seat aircraft were off by then, the airport said.


Social Enterprises Are Fixing What Government Destroys

Why should the poor have to live in a blurry world? VisionSpring’s mission is to ensure that “equitable and affordable eyeglass is available to every individual to live a productive life.” The company has sold over a million cheap, ready-made eyeglasses to people throughout the world who typically earn less than $8 per day.

VisionSpring exemplifies the idea of “social enterprise.” But what exactly does it mean to be social, and how do social ventures compare with ordinary businesses?

Enterprises are labeled “social” when they seek to address broad public needs in addition to the narrow needs of their customers. In practice, this usually means running a conventional business in a special way in order to solve a social problem. VisionSpring, for example, is an enterprise in the sense that it operates as a profit-seeking business rather than as a charity. But it’s social in that it prioritizes helping people to regain their sight over maximizing profits.

The varying motivations of social enterprises sometimes clash and often leave them without clear measures of success and failure. As a result, reactions to social ventures are mixed: some see them as exciting alternatives to corporate bureaucracy and greed, while others dismiss them as naïve attempts to replace traditional business with misguided social philosophy.

Neither position captures what social enterprise really does.

It’s true that philosophies of social enterprise are sometimes based on faulty reasoning. One common confusion involves treating the pursuit of profit as if it were at odds with social goals. As economists have argued for centuries, the profit motive is actually a powerful source of peaceful cooperation and human flourishing. Yet, social entrepreneurs frequen…


Kim Davis speaks to supporters from jail

Kim Davis

Kim Davis

Jailed county clerk Kim Davis had a tear-filled message for supporters on Monday: “God did not give us the spirit of fear, but of power and love and self-control.”

Liberty Counsel’s Chief Litigation Counsel, Harry Mihet, visited Davis, 49, at the Carter County Detention Center in Grayson, Kentucky. Mihet said Davis, who is be held on oral contempt charges, was moved to tears by the outpouring of prayer support just outside her prison walls.

“I had an amazing visit with Kim. She exudes gentleness and is at peace. Her spirits remain high. She was brought to tears when she heard that so many people outside the jail and around the country are praying for her,” Mihet said in a statement released by the religious nonprofit.

The Christian clerk told Mihet to share 2 Timothy 1:7-8 with her supporters: “God did not give us the spirit of fear, but of power and love and self-control. Therefore, do not be ashamed of the testimony about our Lord, nor of me his prisoner, but share in the suffering for the gospel and the power of God.”

Attorneys for Davis put in an official appeal with the 6th Circuit U.S. Court of Appeals on Sunday. She was sent to jail five days ago under a contempt ruling by U.S. District Judge David Bunning, though the contempt ruling was an oral one and not written. The judge ordered Davis to issue marriage licenses to homosexual couples in August, but she refused on religious grounds. Her request for a stay of his order was denied by a U.S. appeals court and by the U.S. Supreme Court, Reuters reported.

“Today is a holiday where most people are spending time with family and friends. But for Kim Davis this is day five of her incarceration. While she is content no matter her circumstances because of her deep faith and Jesus, she should be free,” said Mat Staver, founder and chairman of Liberty Counsel, in a statement released to the press.

The religious liberty organization also filed a request for an order providing relief for Davis that would set her free.

“The governor’s refusal to take elementary steps to protect religious liberties has now landed Kim Davis in jail. As a prisoner of her conscience, Davis continues to request a simple accommodation and exemption from the governor,” Staver added.

Davis, an elected official, cannot lose her job unless she loses a special session called by the governor or she is impeached by the state legislature, NBC News reported Monday.


Don’t Assume I’m Smarter Than My Contractor

“So, I figured I’d ask you,” said my contractor. “You’re a lot smarter than me and—”

That’s when I stopped him.

Tom knows I am a college professor, and he wanted to ask my advice on his daughter’s education. He’s an ex-Marine who never went to college. It makes sense to ask an educator for advice about education, but why does that make me smarter?

I thought about all the times I’ve asked Tom’s advice about the house we are renovating, and about all the times he answered with a tone that implied, “Well, obviously you should…”

“Tom,” I said, “I wouldn’t say I’m smarter than you. It depends on the topic.”

He smiled politely and moved on to his question.

But even if he dismissed my objection as perfunctory, I can’t let it go. Why does our culture trivialize nonacademic intelligence and knowledge?

I think the existing structure of schooling plays a big part.

Why does our culture trivialize nonacademic intelligence and knowledge?

Fantasy Football

Let me tell another story, this one from my days as a high school special educator. I was teaching a study-skills class to students with learning disabilities. Partly, this course provided students extra time on assignments for other classes. One day, I sent two students to the library to work on a written project assigned for another course. About 10 minutes later, I received a call from the school librarian.

“You should come up here and get these kids, because they are off task and disturbing others!”

When I got to the library, I didn’t want to confront my students immediately. I wanted to see how, exactly, they were being disruptive.

What were they doing? Adjusting their fantasy football rosters.

As anyone who’s really played fantasy football knows, adjusting your weekly roster involves contemplating a lot of statistics: What are this player’s chance…


Lawyers for jailed Christian clerk take action

Rowan County Clerk Kim Davis

Rowan County Clerk Kim Davis

An appeal was filed Sunday afternoon for Kim Davis, the Rowan County, Kentucky, clerk who is sitting behind bars for not issuing marriage licenses to same-sex couples.

Davis was jailed on Thursday for defying a federal court order to issue the licenses to homosexuals following the U.S. Supreme Court’s ruling in Obergefell v. Hodges in June, saying doing so would run counter to her deeply held Christian beliefs. She is in her fourth day of incarceration at the Carter County Detention Center in Grayson, Kentucky.

Attorneys for Liberty Counsel, a Florida-based Christian religious advocacy organization, are working on the legal brief that will be filed with the Sixth Circuit Court of Appeals and will ask to expedite the appeal and set the Contempt Order aside.

“While most Americans are enjoying the extended holiday weekend with family and friends, Kim Davis sits in isolation for the fourth day in jail,” said Mat Staver, founder and chairman of Liberty Counsel. “We are working through the holiday to secure Kim’s freedom.”

Judge Bunning has not yet entered a written order, even though Davis is already confined. The Notice of Appeal is directed to the Contempt Order verbally given from the bench last Thursday.

“The contempt order itself was unlawful,” Roger Gannam, a lawyer for Davis, told Reuters.

Davis’ stance has come to symbolize the cultural gap over “gay” marriage. Reuters noted, “Some social conservatives say she is being denied religious freedom. Others say that with the U.S. Supreme Court decision in June making same-sex marriage legal nationwide, Davis is defying her duty as a public servant by refusing to implement the law of the land.”

“Mrs. Davis is entitled to proper notice and due process when she is threatened with the loss of her freedom,” said Staver. “There was no indication that she would be incarcerated. We will be presenting our arguments on appeal and asking for an expedited ruling.”

Deputy clerks in Morland, Kentucky, issued marriage licenses to at least four same-sex couples in Davis’ absence.

Davis, an Apostolic Christian, broke down in tears during her testimony in federal court on Thursday, telling the judge she was “always a good person” but that she gave her heart to the Lord in 2011 and “promised to love Him with all my heart, mind and soul because I wanted to make heaven my home.”

“God’s moral law conflicts with my job duties,” Davis told the judge before she was taken away by a U.S. marshal. “You can’t be separated from something that’s in your heart and in your soul.”

As WND reported this weekend, the left-leaning fundraising site GoFundMe has declined to accept a fundraising campaign for Davis.

Supporters attempted to initiate a GoFundMe campaign for her defense, but were thwarted by the site’s Terms and Conditions, which were updated on April 29 to specify the site can choose not to allow “campaigns in defense of formal charges or claims of heinous crimes, violent, hateful, sexual or discriminatory acts.”


NATO facility in Georgia evokes Russian threat

NATO muscle

NATO muscle

WASHINGTON – Russia’s warning that the opening of a NATO training center in the Republic of Georgia is a “serious destabilizing factor” in the region that arises from a “provocative policy” should be taken seriously as a threat reminiscent of the 2008 Russian invasion of Georgia, contends a prominent Georgian parliamentarian in a new report in Joseph Farah’s G2 Bulletin.

Russian Foreign Ministry spokeswoman Maria Zakharova said at a news conference Aug. 27 in Moscow that the opening of the NATO-Georgia Joint Training and Evaluation Center outside the Georgian capital of Tbilisi represented a continuation of NATO’s “provocative policy” to bring countries of the former Soviet Union into the Western alliance.

“Those who actively continue dragging Tbilisi into NATO should realize their share of responsibility taking into account (the) regrettable experience from 2008,” Zakharova said.

“We consider this step as a continuation of the alliance’s provocative policy, which aims at expanding its geopolitical influence,” she said. “Deployment of such a military facility of the North Atlantic alliance in Georgia will become a serious destabilizing factor for the security in the region.”

The warning has grabbed the attention of a prominent Georgian parliamentarian.

“This is a warning that what happened in 2008 may be repeated in the future,” said Tedo Japaridze, chairman of the Georgian parliamentary Committee for Foreign Affairs. “In 2008, there was an invasion in which Georgia lost 20 percent of its territory, so that is a threat. Russian military are literally just 40 kilometers from Tbilisi, capital of Georgia.”

In August 2008, Russian troops captured much of Georgia, resulting in the military occupation of Georgia’s breakaway provinces of Abkhazia and South Ossetia, both of which Moscow wants to annex.

At the time, Georgia, under its then-president, Mikheil Saakashvili, was actively seeking entry into NATO. While the U.S. under then-President George W. Bush backed the effort, other NATO members, particularly Germany and France, objected out of concern that it would prompt Russian military action.

There also was a push to include Ukraine in NATO as part of the Western alliance’s post-Cold War eastern expansion. But the prospect of Ukraine’s entry also raised concern of a Russian reaction.

Get the rest of this report, and others, at Joseph Farah’s G2 Bulletin.

By then, NATO had welcomed as members a number of former East Bloc countries, which Moscow regarded as a threat. Since then, Russia has sought to create a buffer between itself and NATO, which has been part of the rationale for its intervention in Ukraine.

Russian ‘soft power’

In an exclusive interview with G2Bulletin, Japaridze, who was the Georgian ambassador to the U.S., Canada and Mexico from 1994 to 2002, said he doubted Russia would intervene “with a scope or scale that would add to the cost of an already dear standoff with the West, especially if there is no clear benefit at all, other than disruption of Georgian governance for the strategic ‘pleasure’ of making this point.”

“But such exercises are never neat,” he said. “On the other hand, Russia would intensify the use of so-called ‘soft power,’ (through its) ‘weaponized’ propaganda machine.”

Japaridze said the “bottom line” is that Georgia is not a threat to Russia “and will never be a threat to Russia.”

He pointed out that Georgia, as a small country, has a national defense posture founded on deterrence, reinforced through cooperation with the international community and especially “Euro-Atlantic allies.”

“As a strong ally and friend of Georgia,” he said, “the United States can be expected to take a leading role in this regard. We are confident that Georgia remains a priority for the United States with respect to NATO. Our relationship benefits from sustained bipartisan support for a number of years in Congress, as well as successive administrations. For that we are, of course, grateful.”

Despite Japardize’s optimism of U.S. support, repeated requests by G2Bulletin to the U.S. State Department for comment on the Russian threat to Georgia went unanswered.

Japaridze said the NATO training facility “builds on the experience Georgia has developed through its engagement in NATO operations, whilst aiding Georgia to develop a niche capability of value to NATO.”

He said the training center builds an interoperability scope that isn’t threatening to Russia “in any way,” since Georgia has made “abundantly clear at all times” that such a capability focuses on deterrence.

“Russia clearly does not fear Georgia as a threat to its territorial integrity,” Japaridze said. “That would be absurd. Each step Georgia takes toward NATO and European integration is seen by Russia as a threat, not to its security. Our objective is to reinforce our defense posture, to contribute to regional stability, not to provoke Russia.”

Japaridze said the development of Georgia as a modern European state “is not a danger to our neighbors.”

“Inversely, it will bring prosperity and growth to the region, for the benefit of all, including Russia.”

Yet, Russia threatens countries in its periphery “that do not put their policies in the Kremlin’s orbit,” Japaridze said.

“This is the case from Finland to Georgia. Sometimes, this is about reminding the world that it can do so. Sometimes, it is about an interest it considers ‘vital,’ as in the case of the Crimea,” he said.

The former diplomat said that he didn’t think Georgia fit into the category of Crimea, which Russia annexed in March 2014. But the Caucasus country has become an issue for Moscow, since it is involved with NATO “in the space it considers ‘Near Abroad,’ from Lithuania to Georgia.”

He said Moscow could take “action – whatever that is – if it has a calculable and limited cost with a verifiably beneficial effect.”

“‘Beneficial’ is key here,” Japaridze said. “Russia is motivated to disrupt Georgia’s relative economic and institutional success; but a broader standoff would fail that ‘calculable’ part of the equation, which in the short-to-medium term is a significant factor.

“So, if we speak about Georgia, the reasons of Russia’s irritation are not only about Georgia’s commitment to join (NATO or the European Union) but Georgia’s success to become a capable, strong state,” he said. “Russia prefers to have a weak neighborhood and control, dominate it that way.”

Get the rest of this report, and others, at Joseph Farah’s G2 Bulletin.


Jorge Ramos on defensive over role as immigrant activist

(Los Angeles Times) After a testy encounter with Donald Trump at a press conference last week, Univision anchor Jorge Ramos has found himself on the defensive, trying to explain how his self-proclaimed position as an advocate for immigration reform does not undercut his role as a journalist.

“In the aftermath of this incident, I was accused of being an activist,” Ramos wrote in an online post Wednesday. “That’s not the case — I’m simply a journalist who asks questions. And journalists have an obligation to take a stand when it comes to racism, discrimination, corruption, public lies, dictatorships and human rights violations.”

Jorge Ramos appeared on Fox News’ “The O’Reilly Factor” Wednesday, responding to accusations that he has become an activist and is not a journalist.

Ramos is one of the most trusted news source among American Latinos, and when he appeared on Fox News’ “The O’Reilly Factor” on Wednesday, he said he was simply doing his job when he confronted Trump.


Missionary for Free Markets

Each week, Mr. Reed will relate the stories of people whose choices and actions make them heroes. See the table of contents for previous installments.

(Author’s note: This essay is a slightly revised version of an article that appeared in the October 2007 issue of FEE’s magazine, the Freeman.)

“The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires.” 
—William Arthur Ward

After a long and productive life, a man of great faith passes on and is welcomed into heaven. He is greeted with an invitation. “What would you most like to do?” he is asked.

“I always enjoyed giving speeches about what it was like to live through the Johnstown Flood,” he responds. “I’d love to tell everyone up here all about it.”

“That’s fine,” the man is advised. “But remember that Noah will be in the audience.”

With that story, Rev. James Seeley of Holy Trinity Lutheran Church in Grove City, Pennsylvania, began his remarks at services on June 26, 2007, for one of the most colorful and revered economists in the free-market firmament, Hans F. Sennholz.

Well-known to readers of this magazine as one of its more prolific authors for 50 years and a former president of the Foundation for Economic Education for five years, Dr. Sennholz had departed this world three days before.

Dr. Sennholz, Rev. Seeley explained, was one of the first members of his new congregation that he came to know when he began pastoring at Holy Trinity nearly two decades earlier. During one of his first sermons, the young minister dared venture into economic matters, though for only a few moments. Afterward, a distinguished-looking gentleman with a thick German accent admonished him: “Young man, the next time you talk about economics,…


Trump signs GOP’s 2016 pledge to back nominee

(Image: WND)

(Image: WND)

Donald Trump has pledged “allegiance to the Republican party” and vowed not to run as an independent candidate.

“The best way for the Republicans to win is if I win the nomination and go directly against whoever [The Democrats] put up and for that reason I have signed the pledge,” the billionaire told a crowd in New York City on Thursday, the Washington Times reported.

“So, I will be totally pledging my allegiance to the Republican party and the conservative principles for which it stands, and we will go out and we will fight hard and we will win. We will win, and most importantly we will make our country great again.”

Trump has refused for weeks to definitively rule out a third-party run, much to the chagrin of the the Republican National Committee. He was the only candidate at Fox’s GOP debate last month who said he would not be willing to agree to such an agreement.

“If I’m the nominee, I will pledge I will not run as an independent,” Trump added, the newspaper reported.