Posts by Rick Newman
Rick Newman at Yahoo Finance 2 days ago
A decade or so ago, Honda guessed wrong. It styled the next version of the Pilot, its mainline SUV, after the audacious Hummer H2, at the time one of the hottest vehicles on the road.
Whoops. When the bulky, square-jawed Pilot finally hit the market a few years later, in the spring of 2008, gas prices were soaring toward $4 per gallon for the first time ever. Then the stock market imploded, followed by mounting layoffs and a grueling recession. The Hummer symbolized conspicuous consumption during its heyday in the early 2000s. But by 2008, crass excess was firmly out of favor and Hummer sales tanked. General Motors (GM), which marketed the Hummer, killed it after going through bankruptcy in 2009.
We’re probably better consumers these days, more likely to shop for what we need and less likely to splurge on frills. Good for us. But our sense of adventure has gone AWOL, and marketers know it. Maybe they knew it would happen all along.
Rick Newman at Yahoo Finance 2 days ago
Sure, there are problems with the economy. But there are always problems with the economy, even during the halcyon days. And today, things are better in some ways than they were during past periods we tend to regard as times of peak prosperity.
The unemployment rate has been falling for 6 years and is now at 5.3%, which is lower than the average during the 1990s (which was 5.7%). Layoffs have become so uncommon that initial claims for jobless insurance just came in at the lowest level since 1973. The employee-confidence index maintained by job-search firm Glassdoor is at the highest level since 2009, when the series began. “We are seeing clear signs that the economy is in really good shape,” says economist Joel Naroff of Naroff Economic Advisors.
Meanwhile, gas prices and interest rates are low, inflation is tame, a six-year stock market rally has restored billions in lost wealth, and the world economy barely hiccupped at the much-feared prospect of a financial meltdown in Greece a few weeks ago. If you’re wondering when the economy is going to get hot, the answer might just be -- now.
Rick Newman at Yahoo Finance 5 days ago
Sock it to ‘em!
That’s Hillary Clinton’s attitude toward the wealthy, if you go by the letter of her latest economic proposal. There are a few unstated aspects of her plan, however, that sharply weaken its impact.
The Democratic presidential candidate wants to revamp the capital gains tax in a way that would reduce financial speculation and encourage public companies to focus more on long-term investments. As part of the bargain, the plan would raise taxes on some wealthy investors and funnel a few extra bucks to the U.S. Treasury.
The logic behind the plan is solid. One common complaint of CEOs is the pressure to maximize shareholder value (also known as doing whatever necessary to pump up the stock price), sometimes at the expense of other priorities that would be better for the company in the long term. Not everybody thinks “quarterly capitalism” is a problem, but it’s certainly worth exploring at a time when economic growth is chronically weak.
Her plan, however, is also somewhat disingenuous. Here’s why:
Rick Newman at Yahoo Finance 6 days ago
The CEO of McDonald’s (MCD) has been a regular presence at fast-food protests. Not because he's ever shown up, but because fast-food workers demanding a raise routinely point out that the burger chain paid its chief $7.3 million last year while many of its workers required food stamps to survive.
Highlighting that awkward discrepancy finally seems to have accomplished something, now that a wage board in New York has recommended the state raise the minimum wage for fast-food workers from $8.75 (the minimum for all workers in the state) to $15 by 2021. Not long ago, a 71% hike in any state's minimum wage seemed laughable. But the economy has improved, corporate profits have strengthened--and policy makers finally seem to be buying the argument that if companies can pay CEOs millions, they ought to share more of the wealth with ordinary workers.
Rick Newman at Yahoo Finance 8 days ago
There will probably be more money flowing into the 2016 presidential race than in any election in U.S. history. The most important new trend is the hundreds of millions flowing into “super PACs” and other outside spending groups, which can accept unlimited amounts from rich donors and spend it on ads and other efforts to support favored candidates or help defeat their opponents. The gusher of political money flowing from “economic elites” may even endanger democracy itself, according to a recent study by two leading academics, since it concentrates political influence among a small number of billionaires while disenfranchising typical voters.
With crony capitalism and income inequality likely to be prominent issues in the election, Yahoo Finance will track the big donors funding each candidate, and why they might be doing that. Below is our list of who’s donating to each candidate so far, with the candidates grouped by party and listed according to their fundraising prospects. (Click on each name for a more complete funding profile):
Prominent donors: Unions
Rick Newman at Yahoo Finance 8 days ago
With 15 prominent Republicans already running for president, is it possible there’s any money left for No. 16?
Actually, yes. Ohio Gov. John Kasich—probably the last big name to jump into the 2016 presidential race—might be a latecomer, but he’s got respectable financial resources. Ohio is the seventh-most populous state, after all, and it’s home to big companies such as Kroger (KR) and Procter & Gamble (PG), plus Ohio State University, a beacon of the Midwest. And as a key swing state, Ohio gets an outsized share of attention from political heavyweights. Maybe that’s why Cleveland will host the Republican National Convention next year.
David Brennan. This retired Akron attorney and his wife Ann gave $70,000 to Kasich and $1.4 million to the state GOP between 2009 and 2014.
Karen Buchwald Wright. The founder and president of Ariel Corp., a family-run energy and engineering firm near Columbus, has given $35,000 to Kasich and more than $1.3 million to the Ohio GOP since 2009.
Rick Newman at Yahoo Finance 9 days ago
By Rick Newman and Emma Peters
Bernie Sanders is far behind Hillary Clinton in the polls, but the liberal curmudgeon is tied with Clinton in one interesting contest: the number of Google (GOOGL) employees donating to the campaign. Each candidate has received money from 26 Googlers, according to the latest federal fundraising records.
The 2016 presidential election is still 16 months away, but the fundraising push is in high gear, given that the winner may need $1 billion or more to win the White House. Candidates and groups supporting them are likely to spend the most money ever in a presidential campaign, partly because the Faustian innovation known as super PACs allows rich donors to give unlimited amounts to groups affiliated with candidates they support.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.
Rick Newman at Yahoo Finance 14 days ago
The government’s forms aren’t big enough to handle Donald Trump.
In a statement accompanying financial disclosures required of presidential candidates, Trump’s campaign mocked the inadequacy of the federal reporting process for candidates. “This report was not designed for a man of Mr. Trump's massive wealth,” the campaign said in a statement. The forms, you see, include multiple-choice answers in which the largest amount of wealth a candidate can declare is “$50 million or more.” Since Trump claims a net worth of more than $10 billion, his riches bury the government’s measly forms.
Some financial analysts say Trump is vastly exaggerating his wealth, though it’s impossible to know for sure, since his companies are private and aren’t required to disclose financial details. But even if Trump is worth $10 billion, he’s still an underdog when it comes to the cash required to run for president, because at least two other candidates—and maybe more—seem all but certain to outspend him. Probably by a lot.
Rick Newman at Yahoo Finance 15 days ago
Doorbuster? Or tag sale?
That’s the question many Amazon (AMZN) customers seem to be asking as they browse the retail site during a shopping extravaganza Amazon has hyped as bigger than Black Friday. Prime Day, as Amazon calls it, is supposed to be a mid-summer opportunity to get killer prices on some of the year’s hottest products. But many shoppers are logging on to find underwhelming deals on oddball offerings such as beer coolies, nose vents, shoehorns and cat-training aids.
Given Amazon’s heft, some retail analysts have speculated that the online dealfest could reshape the whole retail landscape. Instead, Prime Day seems to be shaping up as a flop, as social media posts such as those posted below suggest.
#AmazonPrimeDay is like shopping a garage sale - you go in with high expectations and walk away with more junk.
Rick Newman at Yahoo Finance 16 days ago
If you only read the words and didn’t hear the voice delivering them, you could easily believe Barack Obama just laid out his economic vision.
But it was Hillary Clinton, explaininghow she’d boost the economy and strengthen the middle class if elected president in 2016. Her plan includes a few new twists, but many ideas are similar to ones Obama has been pushing for most of his presidency—including a bunch that never had a realistic chance of getting through a Republican-controlled Congress.
If Clinton succeeds Obama as president, she’d bring fresh political capital and a nominally new agenda to Washington. But with Republicans likely to hold onto the House of Representatives and perhaps the Senate in 2016, she’d be fighting the same strident opposition that Obama has been. " It’s not obvious that she’d have a much different experience with this Congress than that of the President," says Jared Bernstein of the Center for Budget and Policy Priorities, former chief economist to vice president Joe Biden.