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Economist Art Laffer offers up this outstanding editorial about the topic of tariffs, increasing taxation, how the dollar’s devaluation was crushing during the depression era, and why we could experience something similar today.

Link:  WSJ

Yahoo Finance – Based on past history of bear markets, [Ken] Fisher says the current rally is only about 50% done in terms of duration, although the steepest part of the advance has probably already occurred.

In sum, he believes in the V-shaped recovery – for the stock market: “The beginnings of bear markets are about fundamentals.  The back part [is] nothing but panic,” Fisher says.  “The rate of descent on the downside actually gives you the rate of ascent on the upside.  It’s an almost perfect V [and] that ‘V’ runs for fully a year, always.”

That’s encouraging news for those who feel like it’s too late to get in on the rally…

Additional Recommended Viewing:  Brian Wesbury offers a similar argument that we are still in a V-shaped recovery. 

Wall Street Journal – From the beginning, our representatives in Washington have approached this economic downturn with old-fashioned, Keynesian economics.  Keynesianism- named after the British economist John Maynard Keynes — is the theory that you fight an economic downturn by pumping money into the economy to “encourage demand” and “create jobs.”  The result of our recent Keynesian stimulus bills?  The longest recession since World War II — 21 months and counting — with no clear end in sight.  Borrowing close to a trillion dollars out of the private economy to increase government spending by close to a trillion dollars does nothing to increase incentives for investment and entrepreneurship. 

The fallacies of Keynesian economics were exposed decades ago by Friedrich Hayek and Milton Friedman.  Keynesian thinking was then discredited in practice in the 1970s, when the Keynesians could neither explain nor cure the double-digit inflation, interest rates, and unemployment that resulted from their policies.  Ronald Reagan’s decision to dump Keynesianism in favor of supply-side policies — which emphasize incentives for investment — produced a 25-year economic boom.  That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson’s throwback Keynesian stimulus in early 2008. 

Mr. Obama showed up in early 2009 with the dismissive certitude that none of this history ever happened, and suddenly national economic policy was back in the 1930s.  Instead of the change voters thought they were getting, Mr. Obama quintupled down on Mr. Bush’s 2008 Keynesianism.

Producing long-term economic growth will require a fundamental change in economic policies – lower, not higher, tax rates; reliable, low-cost energy supplies, not higher energy costs through cap and trade; and not unreliable alternative energy surviving only on costly taxpayer subsidies.

Unfortunately, Mr. Obama seems to be wedded to his political talking points, and his ideological blinders seem to be permanently affixed.  So don’t expect any policy changes.  Expect an eventual return to 1970s-style economic results instead.

One Final Point: Consider this line from Keynes’ 1919 book THE ECONOMIC CONSEQUENCES OF THE PEACE: “[The Soviet Union's] Lenin was certainly right.  There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.  The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

It now seems the federal thinking that uninsured citizens cannot “afford” medical coverage is best left to be explained by the Marx Brothers and the Three Stooges. 

For a breakdown of this analysis, see here.

Far too many investors are waiting for IT to happen.  IT is that fictional moment when the economy is “normal” thus signaling the moment when one can safely increase their stock market positions. 

Here’s the problem:  By the time they react the ship will have sailed and this could very well be the biggest ship we have ever seen. 

INVESTOR REALITY CHECK:  There is no magic potion you take that instantly teleports you the best time to invest.  As a wise investor once said, “Markets don’t settle down; they settle up.”  And that is precisely why you must make investment decisions with your head and not with your gut.

BAD NEWS:  There are countless investors out there standing on the sidelines waiting for someone to hand them the magic potion.

Not having enough money to fund your retirement is not a problem.  It’s a symptom.  And it’s caused by not having enough assets allocated to ownership positioned to outpace inflation over the long haul.

GOOD NEWS:  The smart investors today are taking action before they spend too much time rationalizing why they should not. 

GREAT NEWS:  You have the opportunity to do the same.

Or maybe someone will eventually discover that magic potion for you.

Economist Brian Wesbury at First Trust makes a convincing case that we are in this video.

From Political Math: