No Billionaire left Behind!

Monthly Market Commentary: May 1, 2019

In the context of income and wealth inequality in the US, some of the new-rich billionaires (a large number of which made their money through the asset inflation, which the Fed created with its quantitative easing policies) now provide advice on how to reduce the inequality. Usually, the advice centres on higher taxes for the super-rich (except for their own taxes, which they hope to lower with even more loopholes), and education.

Specifically, these billionaires seem to know how the government should spend more money on education.

I find these proposals quite amusing except for the fact that the cost of education in the US may actually have contributed to growing wealth and income inequality.         

The US is already spending far more on education than any other OECD country. Unfortunately, the productivity of education (spending per student and academic achievement) seems to confirm that the US not only has an extremely expensive educational system but also one that produces poor results.          

According to Professor Richard Vedder, College Wouldn’t Cost So Much if Students and Faculty Worked Harder. Vedder further opines that, "One reason college is so costly and so little real learning occurs is that collegiate resources are vastly underused. Students don’t study much, professors teach little, few people read most of the obscure papers the professors write, and even the buildings are empty most of the time.” 

I am also enclosing a link to an interview with Kevin Smith of Crescat Capital, which reflect my views as well, and lays out the bear case. [Crescat Global Macro Hedge Fund was up 41% in 2018, and the Crescat Long/Short Hedge Fund was up 32%.] I strongly recommend my readers to take 15 minutes of their time to watch the interview because Kevin Smith is one of the few people who really knows what he is talking about: 
https://www.realvision.com/tv/videos/end-of-the-cycle    

With kind regards   
Yours sincerely   
Marc Faber

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