Gambling dollars come from somewhere

David MoonBlog

About the only thing more prevalent these days than phone calls about your car’s extended warranty are ads touting online sports betting. Some ads tout free money to place my first bet, like a corner drug dealer offering samples to build his business. Some radio ads are testimonials from the station’s on-air personalities, which seems terribly conflicted. (Does she really believe Maryville College will cover against Averett or is she simply trying to move the line?) Everyone wants a piece of this rapidly growing pie. For decades, the NCAA repeatedly argued that sports betting would be damaging to the integrity … Read More

Make schools liable for unpaid student debt

David MoonBlog

If you believe that the $1.6 trillion in student loan debt is a looming crisis that promises to only get worse, there is a simple change that would not only radically improve the student loan system but would also place a much-needed market discipline on the entire education industry. Schools and universities should be held liable for students who default on their student loans. Schools currently have little-to-no skin in the game. Colleges with consistently low graduation rates or high loan default rates can eventually have their access to federal aid dollars reduced after years of repeated failures. By then, … Read More

SEC charges East Tennessee advisor

David MoonBlog

The Securities and Exchange Commission (SEC) recently charged a Chattanooga investment firm and its high-profile owner in a $110 million Ponzi scheme that, according to court records, lasted more than a decade. First, however, the requisite disclaimer: the SEC has merely charged John Woods and Southport Capital with six counts of securities fraud. Although a judge has named a receiver to oversee frozen assets of Woods and Southport, our court system presumes innocence until a jury determines otherwise. The 400 victims described in the SEC’s August 20 complaint, most of them elderly retirees, are not similarly required to withhold judgement. … Read More

“Work your pay” is bad career advice

David MoonBlog

The manager of a Knoxville retail business told me of a phrase being used by many of her young employees.  Convinced they are worth more than the $12 an hour this business pays its new part-time workers, these twenty-somethings encourage each other to only “work your pay.” How sad. This philosophy almost guarantees a person’s future earnings will be a function of inflation, thus reducing the likelihood of a real increase in standard of living. The best and most predictable way to increase your pay is to produce more than you are currently being paid to produce. Make yourself more … Read More

Stress and gullibility

David MoonBlog

You’ve always heard to never make a significant judgement when you are stressed or anxious – whether you are contemplating an investment or evaluating news about a dog muzzle being used as a weapon in a hate crime. Recent research explains the science behind this sage advice. A July Journal of Neuroscience article described a study explaining why people are quicker to jump to the worst conclusions when they are emotional. As I was recently reading the article, I overheard a perfectly timed television news story was about some backwards Tennessee hillbillies attempting to intimidate the state’s (now former) top … Read More

CPI misses true housing cost

David MoonBlog

The consumer price index (CPI), the government’s official measure of inflation, rose 5.4% in July, the largest 12-month jump since August 2008. If you think the figure understates your actual increase in living expenses, you’re probably right – and you can thank hyperinflation of the 1970s for the mismeasurement. From 1968 to 1982, the CPI increased an average of 7.6% annually, peaking at 13.5% in 1982. The CPI is used to calculate cost-of-living adjustments for many pension programs, including Social Security. Seeking a way to reduce those annual increases, the federal government devised a genius plan: it simply changed how … Read More

Eviction ban is property confiscation

David MoonBlog

On July 23, the 6th U.S. Circuit Court of Appeals ruled that the Center for Disease Control overstepped its authority when in September 2020 it issued a moratorium on residential evictions. Rather than accept the court’s decision, eleven days later the CDC issued another eviction ban. Because the 6th Circuit jurisdiction includes the Eastern District of Tennessee, the eviction moratorium likely doesn’t apply in Knoxville, but that doesn’t mean the CDC’s order isn’t locally important. Regardless of the circumstance, when the government allows someone to occupy private property without paying rent, the government has taken an asset from a landlord … Read More

Home prices reflect decade of underbuilding

David MoonBlog

There have been plenty unintended and unanticipated consequences to the measures associated with lock downs and the government policies designed to mitigate their economic damage. Some were fairly predictable: if you shut down restaurants, restaurant workers and owners won’t make any money. But some of the outcomes were totally unexpected – none more so than the meteoric rise in real estate prices. In June, the median sales price of a single-family Knoxville home was $275,000, a 21.4% increase from a year ago. The Knoxville Area Association of Realtors reports that of the 2,232 Knoxville homes sold in June, half of … Read More

The failure of declinism

David MoonBlog

In his first sermon following a 10-day hospital stint for colon surgery, Pope Francis spoke about the importance of rest, warning of the trap of activism and the “danger to be caught up in the frenzy of doing things.” His message seemed familiar. “Let us put a halt to the frantic running around dictated by our agendas. Let us learn how to take a break, to turn off the mobile phone …” Then I realized where I first heard the sermon: the Andy Griffith Show. In an episode from 1963, Mayberry’s All Souls Church welcomed a traveling minister from New … Read More

New Covid cases prompt market sell-off

David MoonBlog

This past Monday, the Dow Jones Industrial average declined 725 points, or a little more than two percent. If we are to believe the news reports, the selloff was prompted by an increase in Covid cases. I don’t know if I am more disappointed by the investors who sold or the so-called media experts who fed the frenzy. Headlines explained “Virus fears ripple through markets,” “Delta variant will likely create sloppy stock market,” “Covid angst spooks investors” and “Sell-off intensifies amid pandemic fears.” A Wall Street Journal headline screamed, “Stocks tumble as Delta variant sends investors to bonds.” Are zero-point-nothing … Read More