Just 14 Stocks Have Created 20% of All Stock Market Gains Since 1924

Yahoo Finance: “In what truly is one of the most amazing statistics to ever come across our desks here at 24/7 Wall St., we recently saw a chart that showed that just 14 stocks have created 20% of all stock market gains in dollars since 1924. That is a phenomenal figure, considering the sheer number of companies that have come and gone in that time, and the overall wealth created in the stock market in the past 93 years.”

“In a remarkable and striking similarity, all the companies on the list are still incredibly relevant and are still outstanding investment ideas, depending on your risk tolerance.”

Two Tax Ideas That Can Revive the American Dream

Joshua Rosner: “One idea: Create a new, tax-free ‘housing personal savings account.’ Similar to a health savings account or the 529 plans that people use to save for college expenses, it would allow prospective home buyers or their immediate relatives to set aside money for a down payment on a first home, or for the upfront cost of a first-time rental.”

“A second idea: Grandfather existing mortgages and then phase out the mortgage-interest tax deduction and replace it with an ‘equity principal tax credit,’ which would allow people to deduct a portion from their tax bill of the amount of principal that they paid down each year.”

“Taken together, the two programs would significantly increase the number of first-time home buyers with larger down payments, reducing the risk of defaults and potentially lowering mortgage rates. By creating incentives to get out of debt quickly, they might also reduce demand for the 30-year fixed-rate mortgage, allowing the government to reduce its role in the market. No less important, they could enable more Americans to retire in prosperity, without having to rely on government safety-net programs to make ends meet.”

Even in a Digital World, Globalization Is Not Inevitable

Pankaj Ghemawat: “…a significant number of experts continue to believe in the virtually unlimited potential of globalization. Most of them focus on digitalization specifically and on communications technology, though some attention continues to be paid to transportation infrastructure (e.g., Parag Khanna’s Connectography).”

“I like to refer to such exaggerated perceptions of globalization as ‘globaloney,‘ a term coined in the 1940s by Clare Boothe Luce. Thomas Friedman’s famous proposal that, thanks to the internet, the ‘world is flat’ (advanced in a 2005 book bearing that title) articulates this idea in a way that is clear and simple — and wrong.”

“While I agree that digitalization can facilitate globalization in certain respects (e.g., by making it easier for small firms to export) here are eight reasons why I am unconvinced that digital technologies are sufficient, given everything else that is going on in the world, to drive globalization forward…”

Grading Obamacare: Successes, Failures and ‘Incompletes’

New York Times: “For those who believe the primary goal of the law should have been to bring health insurance to more Americans, the rational answer should be: Yes, Obamacare succeeded. More than 20 million Americans gained health coverage through the law.”

“For those who believe the primary goal of the law should have been to make health insurance affordable to all who want it, the rational answer is: No, Obamacare did not achieve uniform affordability. Health care in the United States remains the most expensive in the world, and coverage remains out of the financial reach of many Americans.”

“For those who believe the primary goal of the law was to make Americans healthier, the answer has to be: It is too soon to tell.”

“One thing is clear, though — the Affordable Care Act has shifted the nation’s baseline expectations for how health care should work. Its successes have pushed Republican politicians, like Mr. Trump, into making expansive promises to provide insurance to all Americans. Its failures have become focal points, too, leading to calls for lower insurance deductibles and for more choices in doctors and hospitals.”

Is the U.S. Economy Too Dynamic, or Not Dynamic Enough?

New York Times: “The economy has become too volatile and uncertain. Perhaps the dissatisfaction is driven by globalization, automation and the decline of employers’ implicit promises to offer workers jobs through thick and thin. These factors have made it harder for people to get good-paying jobs and to hold onto them for decades. High levels of inequality mean many of the benefits of growth don’t accrue for people at the middle and bottom of the pay scale.”

“Robert Johnson, the president of the Institute for New Economic Thinking, argues that the cumulative impact of rapid technological change and shifts in work can have downsides that economists should try to account for more rigorously… In short, one could summarize this set of complaints as the economy’s having become too dynamic for its own good.”

“But a different line of research offers an alternate theory.”

“A new report from the Economic Innovation Group, a research outfit funded largely by technology executives, suggests that the real problem isn’t too much dynamism but too little. The authors describe trends that have blocked the formation of new businesses and jobs and that are having a stultifying effect on the economy.”

School Gun Violence Is Linked to Economic Insecurity

“Episodes of gun violence at America’s schools are both heartbreaking and disturbingly frequent, but the circumstances that inspire them remain elusive. A new Northwestern University study comes up with at least a partial answer,” Tom Jacobs writes for Pacific Standard.

“It finds such incidents are more common during periods of high unemployment. During an economic downturn, the assumption that a diploma leads to a good job is revealed as false (at least for the moment), leading to frustration, disillusionment, and, sometimes, violence.”

Why Donald Trump Shouldn’t Neglect ‘Invisible Infrastructure’

Julius Genachowski: “In his early days in office, true to his campaign promises, President Donald Trump is promoting a $1 trillion plan to upgrade the nation’s aging physical infrastructure. To maximize job creation, investment and benefits to all Americans, he should also focus on our ‘invisible infrastructure’ — the unseen airwaves that enable wireless connections.”

U.S. May Export More Oil in 2017 Than Four OPEC Nations Produce

Bloomberg: “U.S. crude exports are poised to surpass production in four OPEC nations in 2017 and may grow even more if President Donald Trump honors pledges to ease drilling restrictions and maximize output.”

“The world’s largest oil-consuming country could sell as much as 800,000 barrels a day of crude overseas this year, according to four analysts surveyed by Bloomberg. That’s more than OPEC producers Libya, Qatar, Ecuador and Gabon each pumped in December. The U.S. exported 527,000 barrels a day in the first 11 months of 2016, Energy Information Administration data show.”

The Case Against the American Constitution

Ryan Cooper: “Everyone agrees that the American Constitution is perfect, an exceptional document akin to holy writ. It is the absolute essence of freedom distilled, committed to parchment for the eternal benefit of all mankind… right?”

“Wrong. The Constitution is janky. It’s antiquated. It’s poorly designed. And it’s falling apart before our very eyes.”

“1. The Constitution is anti-democratic.”

“2. The Constitution’s separation of powers is a boondoggle.”

“3. The Constitution is basically impossible to fix.”

How Immigrants Have Made America a Leader in Technology Innovation

“The vital role of immigrants in American technology innovation is so well documented that it shouldn’t need repeating. But in light of last week’s executive order that blocks access to the United States by citizens of seven countries with a collective population of well over 200 million, a few reminders might be timely,” John Villasenor writes in The Chronicle of Higher Education.

“America’s well-deserved reputation as a global leader in technology innovation is inseparable from its tradition of welcoming people from other countries. The list of American companies co-founded by immigrants includes Google, Yahoo, eBay, Qualcomm, VMware, Facebook, and many more. A 2016 study by the National Foundation for American Policy found that over half of the 87 tech start-ups valued at over $1 billion at the time of the study were co-founded by immigrants and that each of these companies had created an average of 760 jobs.”

“When children of immigrants are included, the impact on job creation and economic prosperity is even larger: A 2012 report from a group of business leaders and mayors from across the political spectrum noted that ‘more than 40 percent of America’s Fortune 500 companies were founded by an immigrant or a child of an immigrant.‘”

 

Stability Is Good for Business. Trump’s Whims Threaten It.

Matt Levine: “This is a widespread pattern. Many people in the business and financial and technology communities listened to what Trump said and cheerily assumed he’d do something completely different. Sure, he talked about restricting trade and banning Muslim immigrants, but what they heard was that he’d enact ‘sensible immigration policy’ and pro-growth trade agreements, reduce taxes, cut back regulation, and generally improve conditions for business. In the runup to the presidential election, billionaire Peter Thiel and other Trump supporters said the candidate should be taken ‘seriously but not literally.’ As I wrote in my Bloomberg View column, taking Trump literally means believing that he’ll do what he says; taking him seriously means believing that he’ll do what you want.”

“The reason the U.S. is a good place to do business is that, for the past two centuries, it’s built a firm foundation on the rule of law. President Trump almost undid that in a weekend. That’s bad for business.”