Recap: December 3, 2015 Investment Seminar
January 19, 2016
On December 3, 2015, portfolio managers Ron and Jeff Muhlenkamp provided an update on the checklist they use to monitor the investment climate. Over the past several years, the stock market, in general, has been acting as though we’ve had a normal recovery from a normal recession. The items on their checklist indicate otherwise: there is a gap between how the stock market is performing and how the economy is performing.
Effects of Currency Manipulation
January 14, 2015
This article explains the ripple effect that could occur when one country devalues its currency. It also examines who “wins” and who “loses” in the game of currency manipulation.
The Frugal Consumer: Will It Last?
November 1, 2009
Any time you talk about recession, be aware there are multiple definitions — and if you are using one definition and listening or talking to someone with a different definition, you are not going to come to a common ground. Regardless of definition, it’s my observation that during a recession people tend to work a little harder, spend a little less, save a little more, and the pattern tends to heal itself.
January 5, 2003
Consumer spending and consumer debt are often used as indicators of the health of the economy. If consumer spending is strong, the economy continues to grow. If consumer debt is under control, then the consumer spending is sustainable. In this essay, Ron takes a look at consumer spending over the last 55 years to gain perspective not only on the strength of the economy overall, but to evaluate changes in spending patterns over those 55 years.
Social Security Revisited: A Plan to Fix It
January 20, 2001
This essay is a follow-up to Social Security by the Numbers. “How much did I pay into it?” and “What can I expect to get out of it?” In order to address these questions, we need to review Social Security in the aggregate—that is, what does the whole program look like?
Economics and Why Election 2000 Is Important
October 20, 2000
This essay is the capstone of Ron’s writings on economics. It weaves together his theories on inflation and its effects on the bond and stock markets, interest rates and what drives them, taxation and work incentive, and government spending. The common thread is the idea that people drive the economy.
Taxes: Choose Your Poison
January 20, 2000
In 2000, Steve Forbes was campaigning to be the Republican candidate for president. One of his campaign promises was to reform the federal income tax, replacing it with a “flat” tax of 17%. We have printed the tax return you would have to file should Steve Forbes be elected president and get his programs enacted. When you have completed your tax return, you might want to fill out the form to determine the difference in dollars, time, and frustration between his proposal and our current system.
October 20, 1999
What does “prosperity” mean to you? When I ask this question, people respond in terms of a better lifestyle, home, car, or vacation; a secure retirement; funding college education; and so on. But these responses describe how we consume prosperity. I believe we can’t consume prosperity unless we produce prosperity.
Ron’s Reading List
January 5, 1998
Ron's reading list for life and investment fundamentals includes recommended books on the topics: the way things work; why you’ll never understand the other sex; values; the evolution of moral standards; why global warming is unlikely; the difference between modern liberals and conservatives; how the best and the brightest can be totally wrong. Recommended authors include: McCaulay, Wanniski, Tannen, Pirsig, Browning, Sowell, and Halberstam.
Muhlenkamp Musings on Economics
January 5, 1998
Themes include free will and the government, the effects of inflation and recession on spending patterns, the effects of investment on the economy, and the effect of income taxes on work incentive. There is no free lunch. Prices are set by the buyer. We are all volunteers.
Competition for the Consumer
October 20, 1997
We often hear the argument that a company or a country must do certain things “to compete” or “to be competitive.” This goal “to be competitive” is stated as the rationale for much of the cost cutting and downsizing in industry, as well as the privatizing of various tasks previously done by government, both in the United States and in other countries.
Why Did the Fed Raise Short-Term Rates?
April 5, 1997
In April 1997, the Federal Reserve had just raised short-term rates in response to fears of inflation. Some people expected inflation because the GDP was growing, and Keynesian economic theory says that GDP growth causes inflation. The opposing school of thought, Classical economic theory, says that printing money causes inflation. Since in 1997 the GDP was growing but the government wasn’t printing money, it was a good time to take a look at the two theories.
The Trouble With Government Spending
October 20, 1996
In 1996, as in any election year, there was much discussion of taxes and government spending. But the discussion often dissolved into political attacks and sound bites instead of furthering any true understanding of the underlying economic issues. In this essay, Ron offers his own perspective on taxes, federal spending, and their effects on the economy.
Why I Like the Flat Tax
April 5, 1996
The first reason I favor a flat tax is because I just did my taxes. Despite my being fairly knowledgeable about taxes and my having a fairly simple tax return, it took me the better part of a day to do it. This day’s work produced nothing of value to me, to the government, or to anyone else. It didn’t affect what I earn or what I pay in taxes. It was simply the time I spent in calculating the tax. And I am not alone.
Social Security by the Numbers
October 20, 1992
As with all government programs, the numbers are much more understandable when viewed on a per-person or per-family basis. The numbers in this essay are from 2004. The Social Security Web site states that a single person retiring in 2004 at age 66, who had always paid in the maximum, would receive $21,924 per year. A married couple with a nonworking spouse (“Family”) would receive $32,880.
How We Benefit From Free Trade
January 2, 1992
At the time of the writing of this essay, there was much debate whether or not the United States should sign the North American Free Trade Agreement (NAFTA). There was concern that such a large free-trade zone would hurt the U.S. economy. Unions feared jobs going to Mexico and Canada. Companies feared their prices would be undercut and they would lose business. Ron presented the following on the benefits of a large free-trade zone.
Open Letter to My Congressman
October 1, 1990
I am disturbed by the current state of affairs in Washington, D.C. You and your colleagues in Congress are addressing issues important to the future of our nation and our economy. Here are my thoughts on these issues.
One Family’s Perspective On the US Federal Budget
April 1, 1988
This essay looks at the federal budget and entitlement programs on a per-person basis, which allows people to review them in terms they understand. It points out that government spending is a concern not just because of debt, but because it removes money from the private sector. It also discusses the growth of entitlements in the federal budget.
Worker Capitalism Triumphs
October 1, 1987
As reflected in literature and the popular media from Dickens and Marx to Studs Terkel and Jesse Jackson, people have always viewed themselves as workers. As workers, they think of themselves as being in direct competition with owners and managers for a share of the wealth created by business enterprise. People naturally think in terms of net “take-home” pay, money that is then spent on the day-to-day necessities and luxuries of life. Yet take-home pay is only a part of the benefits received for work.