The Economics Of Cruise Ships (& Why They Don’t Deserve A Bailout)


21-03-20 09:07:00,

Authored by Zachary Crockett via,

In the wake of coronavirus and tanking stocks, cruise companies have sought assistance from the US government. But for decades, the industry has done everything in its power to avoid paying into the system.

Cruise ships are often called “monsters” of the sea.

If you’ve ever seen one in action, you’ll understand why: A vessel like Royal Caribbean’s Symphony of the Seas is longer than 12 blue whales. At 228k gross tons, it is 5x the size of the once-formidable Titanic. It can hold 6,680 passengers and 2,200 crewmembers, the population of a small American town.

In 2018, 28.5m passengers — the bulk of them from America — spent more than $46B on cruises globally. The biggest players see annual profits in the billions.

But cruise companies have done more to earn the “monster” moniker than churning out huge ships and market gains.

For decades, these companies have utilized century-old loopholes to avoid paying corporate taxes. They’ve gone to great lengths to bypass US employment laws, hiring foreign workers for less than $2/hour. They’ve sheltered themselves as foreign entities while simultaneously benefitting from US taxpayer-funded agencies and resources.

Now, in the wake of a coronavirus crisis that has sunk cruise stocks by double digits, these companies are lobbying for federal assistance.

To better understand the dynamics of this wild industry, we spoke with maritime lawyers, legislators, and cruise experts in 3 countries.

The cruise industry at large

Before we get into how cruise companies circumvent US taxes and regulations, let’s take a quick look at the major players, the money they make, and how they make it.

The global market comprises dozens of cruise lines and more than 250 ships. But 3 players — Carnival Corporation & PLC, Royal Caribbean Cruises LTD, and Norweigan Cruise Line HLD — control roughly 75% of the market.

Zachary Crockett / The Hustle

These companies, which preside over an empire of subsidiary cruise lines, collectively raked in $34.2B in revenue in 2018.

 » Lees verder

The Economics Of Pandemics And Quarantines


29-01-20 09:02:00,

Authored by Vincent Geloso via The American Institute for Economic Research,

News out of Wuhan in China generated a wave of fears regarding the spread of the coronavirus. Public health organizations issued guidelines on how to minimize risks of infection and China’s government took the drastic step of sealing off Wuhan. 

The story is unfolding in a manner very similar to the Ebola outbreak a few years back. Authorities react with strong measures such as quarantines and travel bans to restrict contagion. On its face, such measures appear – purely from the vantage point of public health issues – reasonable. However, economic theory suggests the possibility that extreme measures such as sealing off a city, a travel ban or quarantines may actually make things worse.

First, it is necessary to point that pandemics have, since the 19th century, fallen in importance. For example, a 2006 article in Emerging Infectious Diseases compared the influenza epidemics of 1918, 1951, 1957 and 1968 in England, Wales, Canada and the United States and found that death rates at each outbreak kept falling relative to the previous one. 

Using a longer time horizon that has some uncertainties about case fatalities, a 2001 article in the Journal of Applied Microbiology documents a rapid collapse in influenza-related deaths (which when combined with population figures suggests a faster collapse in death rates). Other articles find that, since the 1950s, death rates from different strains of influenza have stabilized at historically low levels in spite of the fact that we live in a world with more travel, more exchange and more social connections (i.e. more chances to transmit infectious diseases). 

And these numbers speak only to influenza. Deaths from other forms of infectious diseases are at historically low levels if they have not disappeared entirely. Thus, it is necessary to place the current situation in a historical context. This does not invalidate the idea that there are serious costs from currently observed pandemics: estimates place this figure at 0.6% of global income which is not a trivial figure especially in lower-income countries where the costs are more than twice as high.

 » Lees verder

Gangster Economics Against Huawei & Nordstream 2 | New Eastern Outlook


04-04-19 07:56:00,


Many Americans base their entire view of the world, and their understanding of the relationship of the United States to other countries, on the contents of a college-level “Economics 101” course. They view the world market as a land of “free competition” in which different countries and international corporations “compete.” They then believe that consumers, communities and countries “vote with their dollars” rewarding the best products and services.

In this delusional fantasy, championed by figures like as George Soros and Anne-Marie Slaughter as an ideal “Open International Market,” the United States and western countries occupy their dominant position, simply because they are the best. The products and services offered by western financial institutions and international corporations are simply superior to those found anywhere else. This delusional fantasy goes on to present the western financial elite as somehow mentoring and assisting the world, by helping it “develop” and perhaps someday be more like the superior west.

The “Energy Dominance” Scheme

Those who argue that this western narrative is false have no greater confirmation than the recent actions of the US government. The response to Nordstream 2 pipeline and the recent crackdown on Huawei technologies confirms that the US government has no interest in free competition among international corporations.

Nordstream 2 is a natural gas pipeline that is currently under construction, scheduled to be completed later this year. It will enable Russia’s state-run energy corporations to sell natural gas to countries inside the European Union. The people in various EU countries favor the construction of Nordstream 2, because it will expand and ad greater convenience to their access of Russian natural gas.

However, in the United States, the Trump administration is joined by Democratic Party “resistance” leaders in demanding that the people of Germany and other European nations not purchase gas from Russia. They foolishly demand that the European community purchase gas from the United States, and import it across the Atlantic Ocean.

It is simple common sense to know that importing natural gas from across the planet will be far more expensive for central Europe than simply pumping it over the border from Russia. However, in a shrill atmosphere of hysteria, invoking all kinds of unrelated issues and allegations against the Russian government,

 » Lees verder

Fake News: Economics Edition — Steemit


02-02-19 09:24:00,

by James Corbett
February 2, 2019

Just when you thought “fake news” was only about those dastardly Russians hiding under every bed, Japan comes out and admits that 40% of its economic data is bogus. That’s right, a report from Japan’s Internal Affairs Ministry this week reveals that 22 of the 56 key economic statistics reported by the government are faulty and “that irregularities in 21 of the 22 sets amount to violations of the statistics law.”

The story is set to become yet another political scandal plaguing the beleaguered reign of Prime Minister Abe. Not only did the government’s use of the faulty statistics lead to an underpayment of unemployment benefits, but, worse yet (according to opposition members in the Japanese Diet), the news is threatening to deliver a serious blow to Japan’s global reputation.

“There is no telling how far the impact has spread,” one senior BOJ official has ominously warned.

But fret not, dear Japanese. This scandal doesn’t make you stand out from the crowd at all. In fact, quite the contrary. It’s a well-known fact that every nation in the world fudges the numbers and cooks the books to make things seem rosier than they really are.

Take China. I’ve discussed this at length before, but it bears repeating: If you believe a word that comes out of Beijing’s mouth about China’s economic data then you need your head examined. But don’t take my word for it, take Li Keqiang’s.

Li Keqiang is the Premier of the State Council of the People’s Republic of China, sometimes less formally referred to as China’s “prime minister.” For those unacquainted with the Byzantine hierarchy of the glorious ChiCom system, that means Li occupies the highest administrative position in China and is the formal head of government. And in 2007 he casually admitted that the country’s GDP numbers are “man-made” and “unreliable.”

Now the idea that China’s GDP numbers are man-made and unreliable is hardly STOP THE PRESSES! material, but it’s always nice to hear it from the horse’s mouth,

 » Lees verder

Economics Everywhere, Politics Nowhere: Switzerland’s Six Pointers Towards Hope For Western Civilization

Economics Everywhere, Politics Nowhere: Switzerland’s Six Pointers Towards Hope For Western Civilization

05-10-18 10:00:00,

Authored by Hunter Hastings via,

Is there any hope in the Western World that individual citizens can win some release from the relentless and imprisoning growth of government? In the US, government spending, a reasonable proxy for their power over us, increases every year, except for a few minor blips. The citizens’ situation becomes more and more dire. We have precious little say and little influence over our taxes, our health care, our energy and water supplies and costs, not to mention the social rules with which the government constrains us. The number of rules and regulations, using the proxy of pages in the Federal Register, also increases every year, and very few rules are removed. The government closes in on us more and more every day.

There is one western country that we might look at to see a glimpse of hope. That country is Switzerland. In a small landlocked country with precious little in the way of natural resources except water, the people have created a high level of prosperity based on innovation and creative capitalism.

100% Economics, Zero % Politics.

Prior to its 1848 constitution, Switzerland was a confederation of states, each of which was sovereign and independent, bound together by a treaty of mutual defense from external aggression. As a country, it was the most economically developed in Europe. It was religiously and ethnically diverse, highly innovative and highly productive. Huguenots expelled from France in religious wars started the Swiss watch industry, and German protestants escaping Catholic oppression founded major industrial companies. There was a focus on knowledge and education to compensate for the lack of natural resources, and the Swiss were globally networked and energetic traders.

“Economics was everywhere and politics nowhere” was a phrase used to describe this productive, energetic, innovative, decentralized trading nation in the mid nineteenth century. What a wonderful picture of economic freedom unencumbered by political extraction is conjured up by that description.

Switzerland has been able to retain some of these characteristics despite the predations of the twentieth century. It stayed on a gold standard until 1999, and resisted internationalization until it joined the UN in 2002.

 » Lees verder

Armstrong Economics | research the past to predict the future

Armstrong Economics | research the past to predict the future

21-09-18 03:47:00,

  • New: China on the Rise Report

    By 2032, China will dethrone the United States to become the world’s leading economic powerhouse. This cycle has been exasperated by government mismanagement and failed economic policies centered in socialism. With special attention to the Chinese yuan and Shanghai composite, this report examines how, when, and why China will become the new financial capital of the world.

    By 2032, China will dethrone the United States to become the world’s leading economic powerhouse. This cycle has been …

    Read Post

  • Subscribe to Our YouTube Channel

    Stay up to date on the latest videos from Armstrong Economics by subscribing to our YouTube channel!

    Stay up to date on the latest videos from Armstrong Economics by subscribing to our YouTube channel!

    Read Post

  • Tickets on Sale Now!

    Join Us at the 2018 World Economic Conferences

    Singapore: June 15-16, 2018

    Orlando, Florida: November 16-17, 2018

    Join Us at the 2018 World Economic Conferences

    Singapore: June 15-16, 2018
    Orlando, Florida: November 16-17, 2018

    Read Post

  • The 2018 Share Market Report

    The 2018 Share Market Report is now available.

    See what our models have forecast for the Dow Jones Industrial Index, S&P 500, and the Nasdaq.

    The 2018 Share Market Report is now available.

    See what our models have forecast for the Dow Jones Industrial Index, …

    Read Post

  • The Forecaster DVD

    “The Forecaster” DVD is now available for purchase!

    “The Forecaster” DVD is now available for purchase!

    Read Post

  • How to Trade a Vertical Market

    One of the most difficult, yet potentially rewarding, trading opportunities to unfold is the vertical market. This special report examines the two different types of vertical markets (Phase Transitions and Plateau Moves) and discusses how to differentiate and successfully trade each one respectfully.

    One of the most difficult, yet potentially rewarding, trading opportunities to unfold is the vertical market. This …

    Read Post

 » Lees verder

GDPR – It’s Here Like it or Not | Armstrong Economics

GDPR – It’s Here Like it or Not | Armstrong Economics

24-05-18 09:37:00,

We have sent out emails to our clients and request that you respond to them ASAP. We do not flood people with constant emails. We do not require even registering to view the site. We also DO NOT sell your personal information to ANYONE. We have always respected everyone’s privacy and we are not desperate for money so you need not milk every single penny from everything.

Nevertheless, politicians get bored and when they do, they write laws that sometimes are far too ambiguous that allows them to reinterpret just about anything. As the Duke of Richelieu and Fronsac (1585–1642) once said:

“If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him.”

(Source: The Cyclopedia of Practical Quotations (1896) by Jehiel K̀eeler Hoyt, p. 763 : some dispute this quote)

The deep concern many have had is that the real purpose of this is to be able to shut down anyone who creates email campaigns against the EU. It will be flatly illegal to simply send out bulk emails for political purposes and you can bet they will be the first prosecuted. The revelations of the use of emails by Cambridge Analytica Ltd during the US 2016 campaign has been the real motivation behind this legislation.

 » Lees verder