Posts by Rick Newman

  • Trump's plan to declare victory on the economy

    Rick Newman at Yahoo Finance 1 day ago

    The alternative-fact alerts are blaring.

    President Donald Trump is reportedly preparing forecasts for economic growth that considerably exceed those published by most mainstream economists. So what, you may say. It’s just a forecast. There’s no harm in being more optimistic than the rest.

    But fudging the numbers can cause plenty of harm. Trump, as becomes more apparent every day, creates his own data when the facts don’t suit him. (See: greatest electoral victory since Reagan, widespread voter fraud, highest murder rate in 45 years, unreported terrorist attacks, etc.) And economic policy is highly dependent on the best possible understanding of what’s going on. Bogus economic data can be used to justify new policies that might appeal to Trump personally—and appease his populist supporters—while failing to address real economic problems and even damaging the economy.

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  • Two dudes test drive: The Honda CR-V

    Rick Newman at Yahoo Finance 5 days ago

    Here’s a head-turner for those who follow automotive trends: Kelley Blue Book just published its annual list of the 10 best family vehicles, and for the first time not a single sedan made the cut.

    The staid old family sedan has been losing ground to crossovers, for good reason. These mini SUVs are more practical, with a rear tailgate instead of a trunk, for bulky items and awkward piles of gear. They’re a bit taller, offering a more commanding view of the road. Mandatory electronic stability control makes them safer than the rollover-prone SUVs of yore. And perhaps above all, they’re cooler, conveying the go-anywhere mindset of an adventurer, even if they never depart from pavement.

    Rick Newman is the author of four books, including  Rebounders: How Winners Pivot from Setback to Success . Follow him on Twitter:  @rickjnewman

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    5 hot cars for 2017 (and a couple disappointments)

  • Alternative energy doesn’t need help from President Trump

    Rick Newman at Yahoo Finance 6 days ago

    When President Barack Obama took office in 2009, renewable energy sources such as solar and wind power relied on tax credits and other government subsidies to get traction in the marketplace. These days, however, alternatives to carbon energy are becoming cost-effective on their own, without government aid.

    “It’s a very attractive dynamic for businesses trying to isolate themselves from the cost variability of a carbon-based energy complex,” alternative-energy investor Matthew Weatherley-White, managing director of the investment firm Caprock Group, tells Yahoo Finance in the video above. Alternative energy, he says, is “here to stay”—with or without subsidies from the new Trump administration.

    But the costs of wind- and solar-energy production have been falling as well, similar to the way electronic components get smaller, cheaper and more capable over time. In areas where sun and wind are plentiful and electrical grids are modernized, energy from non-carbon sources can be cheaper than that produced by burning coal or gas.

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  • Let's give Trump credit for this

    Rick Newman at Yahoo Finance 6 days ago

    President Trump left official Washington flabbergasted with his latest press conference, a rambling sparring match with reporters that was the political equivalent of a professional wrestling smackdown.

    Trump mostly fulminated on leaks that have undermined his Cabinet nominees and other aides. But Trump made a passing reference to one important economic issue—jobs—while taking credit for jawboning a handful of companies to invest more in the United States.

    There’s some debate about that. The automakers, to some extent, repackaged prior news to make it seem like they were making new investments in US plants that probably would have happened anyway. Intel and Walmart may or may not have ramped up US hiring without Trump.

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    Trump wants to block immigrant workers companies need

  • Trump wants to block immigrant workers companies need

    Rick Newman at Yahoo Finance 6 days ago

    Immigrants are an underappreciated force in the US economy: They help boost economic growth, even though many Americans think they steal jobs and sap economic vitality.

    President Trump wants to reduce immigration to the United States, starting with his attempted ban on immigrants from 7 predominantly Muslim countries—Iraq, Iran, Syria, Yemen, Libya, Sudan and Somalia. That ban has been temporarily blocked, as courts debate whether it’s legal. But Trump says a revised immigration order is coming soon–and reduced immigration is one part of Trump’s agenda economists worry about. “We already see a fairly subdued outlook for the pace of measured potential growth,” Goldman Sachs said in a recent note to clients. “Immigration restrictions could reduce the economy’s ‘speed limit’ still further.”

    Overall, workers from the Targeted 7 hold more bachelor’s and advanced degrees than US workers as a whole, as this chart shows:

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  • Trump now owns Obamacare

    Rick Newman at Yahoo Finance 8 days ago

    President Trump seems gleeful every time the Affordable Care Act, aka Obamacare, encounters some new difficulty. But these are now becoming Trump’s problems, not his predecessor’s, and he’s likely to get most of the blame if some 20 million Americans who get health coverage under the ACA suffer from the program’s demise.

    Health insurer Humana (HUM) recently said it would pull out of the ACA in 2018, a development Trump reveled in. Here’s the tweet:

    Obamacare continues to fail. Humana to pull out in 2018. Will repeal, replace & save healthcare for ALL Americans.

    — Donald J. Trump (@realDonaldTrump) February 14, 2017

    Uncertainty for insurers

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    A better way to spend Trump’s border wall money

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  • A better way to spend Trump's border wall money

    Rick Newman at Yahoo Finance 10 days ago

    When he officially announced his plan to build a wall on the southwest border in late January, President Trump read the names of five parents in attendance whose children had been killed by people in the United States illegally. The border wall, Trump said, would “save thousands of lives.”

    The wall Trump wants to build to cut down on such crimes will cost at least $21.6 billion, according to government estimates obtained by Reuters. Trump insists Mexico will pay for the wall, but any taxes imposed on Mexico are likely to be borne mostly by American companies and consumers. So here’s the question: If Trump spends $22 billion on his wall, will American taxpayers get a good return on their money?

    So it’s reasonable to ask if there might be better ways to spend $22 billion. And if the goal is to save and protect American lives, the answer is possibly yes.

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  • Why Trump deserves extreme vetting—from the press

    Rick Newman at Yahoo Finance 13 days ago

    With President Trump now in the White House, I’ve written several pieces criticizing his economic plan, predicting key proposals such as a huge infrastructure plan may never materialize, and asking skeptically when Trump will get around to helping the “forgotten men and women” he championed while campaigning.

    Many Trump supporters have attacked those articles, deriding me as a liberal hack criticizing their man in Washington prematurely, for purely ideological reasons. “Did you really expect immediate progress, especially with the pouting Democrats not yet over the election?” one reader emailed. “Your article is the exact reason there is so much hysteria in today’s America. Too many ignorant ‘journalists’ writing BS articles.”

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  • Here's the problem with border taxes

    Rick Newman at Yahoo Finance 14 days ago

    To cut the corporate tax rate, as President Trump and virtually all Republicans want to do, legislators have a big choice to make: offset the lost federal revenue with another kind of tax, or add to the deficit and hope a faster-growing economy produces more tax revenue in the future.

    Budget hawks are a powerful part of the GOP, and they insist tax reform be “revenue-neutral,” which means it won’t add to budget deficits or the national debt. If you’re cutting one type of tax, that means you have to increase other types of taxes or come up with some new ones, to keep the net cost to the government at 0.

    That’s why the leading Republican tax plan in Congress — backed by House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady — includes a “border adjustment tax,” or BAT, that basically amounts to an across-the-board tariff on imports. If enacted, new revenue from this tax would allow Congress to cut the corporate tax rate from 35% now to something closer to 20%, putting US rates in line with those in other developed countries.

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  • Trump's rich-first economic policy

    Rick Newman at Yahoo Finance 16 days ago

    If Donald Trump had campaigned for president by promising to make bankers richer, boost real-estate speculation and put Goldman Sachs in charge of the economy, would he have won?

    Maybe not, yet these types of moves are among Trump’s first major actions as president. Trump, in fact, may be nation’s first ironist-in-chief, given that he ran a populist campaign focused on helping the “forgotten men and women of America,” but has greatly aided elites since winning last November. Eventually, Trump seems to think, the help will trickle down to the little guy.

    On the day Trump signed that order, he said, “I have so many people, friends of mine, with nice businesses, they can’t borrow money, because the banks just won’t let them borrow because of the rules and regulations and Dodd-Frank.” He seems to be saying that banks would otherwise be helping profitable businesses grow and hire more people, except federal rules won’t let them.

    The Goldman Sachs influence

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