Posts by Rick Newman

  • Republicans need new economic ideas if they want to win in 2016

    Rick Newman at Yahoo Finance 1 day ago

    For the last six years, Republicans have hammered President Obama for a slow-motion economic recovery that left the middle-class winded and anxious. But that strategy seems likely to flop just when Republicans need it most: in the crucial months and weeks before the 2016 elections.

    Obama won’t be running in 2016, of course, but his record will be a proxy for Democrats who are -- most notably, the likely Democratic presidential nominee, Hillary Clinton. And with the economy sharply improving, Obamanomics could leave Democrats with a significant advantage over Republicans come Election Day.

    The unemployment rate has fallen from 10% in 2009 to 5.5% today, which is far lower than it was when Obama was elected in 2008. Moody’s Analytics predicts that by the time of the 2016 elections, it will be close to 5%, a level consistent with widespread prosperity. There are still problems with depressed wages, the quality of new jobs and a high portion of people who seem to have dropped out of the labor force. But if job growth continues at the blistering pace of the last year, improvements ought to be tangible to many ordinary people as November 2016 approaches.

  • Here’s where Ted Cruz gets his campaign money

    Rick Newman at Yahoo Finance 3 days ago

    Texas Sen. Ted Cruz, the first Republican to officially declare he’s running for president in 2016, is married to a managing director at financial titan Goldman Sachs (GS). But he’s unlikely to reel in much Wall Street cash to help fund his campaign.

    Cruz is the darling of many Tea Party groups and social conservatives drawn to his preacherlike ardor. He wants to kill Obamacare, put strict limits on abortion rights, allow states to deny gay marriage, and aggressively deport illegal immigrants. He was a vocal backer of the 2013 government shutdown, which was a hit with small-government advocates even though it was unpopular with voters.

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    Club for Growth: $706,000

    Senate Conservatives Fund: $316,000

    Woodforest National Bank (community bank based in Houston): $112,000

    Goldman Sachs: $69,000

  • Obamacare's next 5 years will be better than the first 5

    Rick Newman at Yahoo Finance 3 days ago

    When the Affordable Care Act became law five years ago, nobody foresaw the bungled rollout in 2013 or the huge row over canceled plans for several million people whose policies didn’t comply with the new law. But the next five years ought to be far smoother for the health reform law known as Obamacare.

    It still won’t provide “universal coverage,” since there will be about 26 million uninsured Americans in 2020. That’s because the law allows many exemptions from the requirement for all adults to have coverage. But the ACA has pushed down the portion of Americans without insurance to 12.9%, the lowest level in 40 years. The uninsured rate is likely to stay there.

  • Self-driving cars are almost here — but only for 1 percenters

    Rick Newman at Yahoo Finance 6 days ago

    Car geeks are buzzing about the prospect of cars driving themselves around — no human required — as early as this summer. Tesla (TSLA) CEO Elon Musk announced recently that a software upgrade to the company’s Model S sedan will allow owners to “summon” the vehicle in self-driving mode from a garage or driveway, as long as it’s on private property. Delphi (DLPH), the huge automotive supplier, is about to launch a self-driving Audi SUV on a coast-to-coast test drive that will be the longest ever for an autonomous vehicle. And by next year, Cadillac will offer a “supercruise” feature allowing cars to steer, brake and accelerate themselves.

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  • Why Putin is more popular than Obama, even though the Russian economy stinks

    Rick Newman at Yahoo Finance 8 days ago

    Imagine if inflation hit 17%, banks were poised to collapse and the economy were sinking into a recession worse than the one that followed the 2008 financial meltdown. The president might have some explaining to do.

    This is the actual condition of the Russian economy, which was wheezy to start with and is now reeling from plunging oil prices, western sanctions laid on to punish Russia for its incursion into Ukraine and foreign capital fleeing the country before things get even worse. The economy could shrink by 10% this year, with unemployment soaring and imported products becoming scarce.

    How does Putin do it? Is he politically invincible? Are Russian voters constantly drunk? The answers are no, Putin’s not invincible, and no, many Russians are not constantly drunk. But western political norms don’t apply in Russia, which is why contrary to our experience, a worsening economy may actually strengthen Putin and his grip on power — which nobody understands better than Putin himself.

  • If Obamacare survives, this is what needs to be fixed

    Rick Newman at Yahoo Finance 13 days ago

    The huge question about the Affordable Care Act at the moment is whether it will survive a Supreme Court challenge that could eviscerate the law’s central provisions. If the justices side with the plaintiffs in the case, known as King v. Burwell , roughly 7 million Americans could lose health insurance. The ACA would become endangered, literally overnight.

    But what if the Supreme Court upholds Obamacare, as the ACA is known, when it issues its King v. Burwell decision in June? In that case, Obamacare will be here to stay, which means it will be time to start fixing the parts of it that don’t work so well. Even President Obama, who championed the ACA, has said “continuous improvement” is an important part of implementing the law.

    The higher estimate for household savings -- $1,594 -- is only enough to cover 27% of the average family deductible for a silver plan, and 15% for a bronze plan. Here’s a summary of the numbers:

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  • Obama’s worst economic promise

    Rick Newman at Yahoo Finance 14 days ago

    The dollar is soaring against other currencies, which will eventually reduce U.S. exports, since stuff made here is getting more expensive overseas. This brings to mind one of President Obama’s biggest—and most wayward--economic promises, from back when he was a newbie in his first term: Doubling exports between 2010 and 2015.

    During his State of the Union speech on Jan. 27, 2010, Obama laid out a list of priorities to jump-start a still moribund economy. This was number three: “We need to export more of our goods,” Obama declared. “So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America.”

    During the next 12 months, exports jumped by 17%, a growth rate that would have nailed Obama’s target (thanks to compounding) had it held up for 5 years. The following year produced a 14% gain, also impressive. After that, however, the export boom stalled, as this chart shows.

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  • SxSW tops Yahoo Finance boondoggle rankings!

    Rick Newman at Yahoo Finance 15 days ago

    If you scrutinized the hundreds of conferences on the agenda this year and decided South by Southwest was one you couldn’t miss, congratulations—you are a shrewd and seasoned exploiter of corporate opportunity. Assuming your company is footing the bill, that is.

    South by Southwest, which kicks off this weekend in Austin, Texas, has grown from a local music festival into a Top 5 annual event for honchos in technology, film, and the arts, very broadly defined. Hip-hop artists Snoop Dogg and Wyclef Jean will be there this year. So will Al Gore, Commerce Secretary Penny Pritzker, New York Times columnist David Brooks and a band named Elvis Depressedly. Roughly 70,000 attendees will stumble around Austin for nine days watching films, listening to bands, snoozing through panel discussions and searching desperately for a deliverable to bring back to the boss, justifying the expense.

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    10 (tie). TED. March, various cities on the West Coast; this year, Vancouver. Boondoggle rating: 8.

  • Obamacare gets cheaper

    Rick Newman at Yahoo Finance 16 days ago

    The Affordable Care Act gets less disastrous every day. The latest boost: Overall costs are now likely to be $14 billion per year lower than estimated just two months ago, and $56 billion per year cheaper than the first official estimate in 2010. That's a 30% reduction, compared with the 2010 numbers.

    The Congressional Budget Office regularly updates its cost projections for all big federal programs, and its latest numbers show an improvement related to Obamacare, as the ACA is known, that few supporters or critics saw coming. In 2010, the year Congress passed the law, the CBO said the annual cost of administering the law and providing subsidies to enrollees to help them purchase insurance would be about $172 billion in 2019, when all the provisions of the law are fully in effect. In January of this year, CBO dropped its 2019 estimate to $135 billion per year. It has now dropped that even lower, to $121 billion per year. This chart shows the changes: