Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Neo-Luddites in Paris are Losing to Uber

This article was published by The McAlvany Intelligence Advisor on Monday, June 29, 2015:

Although the definition of “neo-Luddism” is a “movement of passive resistance to the … frightening technologies of the computer age,” in Paris the resistance is hardly passive. Last week taxi-drivers shut down entrances to and exits from the Charles De Gaulle International Airport, attacked cars driven by Uber drivers (including their passengers), overturned some of them, and set tires on fire. All this to express their frustration over how Uber is slowly, inexorably, putting them out of business. Since they were on strike, even when customers wanted a ride, the cartel members turned them down. After all, they were on strike! (Shown above are passengers toting their own luggage away from De Gaulle airport.)

As the head of taxi company G7 said on French television,

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More Proof People Are Moving From High Tax States

This article appeared online at TheNewAmerican.com on Friday, June 26, 2015: 

The latest interactive graph from CNBC  shows more people moving from high tax states such as Connecticut, New York, New Jersey and Illinois to lower tax states such as Texas, Tennessee, Colorado, and Arizona. The authors of the latest study reviewed data from United Van Lines and Atlas Van Lines over the last 10 years and concluded that Connecticut was the poster child for out-migration from a high tax state.

For the year 2013, and for the 10 years prior, 55 percent of all moves by these movers took people out of Connecticut. The Nutmeg State levies more than

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OECD Issues Pessimistic Forecast for France

This article appeared online at TheNewAmerican.com on Wednesday, June 24, 2015: 

The OECD — the Organization for Economic Cooperation and Development — put the best face possible on France’s declining economy in its just-released forecast. The report was full of optimism about the future but admitted that the present reality is discouraging. Note the use of words “projected” and “should” in its opening paragraph:

Economic growth is projected to gain momentum in 2015 and 2016. Lower energy prices, improving financial conditions, slowing fiscal consolidation, strengthening external demand and a pro-competitive reform agenda should underpin an increase in consumption and export volumes.

But the reality is far different, said the OECD: 

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Greece: Capital Controls Threat Increases as Deadline Approaches

This article first appeared online at TheNewAmerican.com on Monday, June 22, 2015:

The announcement last week by Greece’s central bank that it may be forced to start implementing capital controls — eliminating the ability of Greeks who still have any money in the bank to withdraw it or send it to another country for safekeeping — may just be a ploy to bring more pressure on the Troika (European Central Bank, IMF, and eurozone countries) to release the last batch of funds from Bailout Number Three.

Withdrawals by nervous Greeks began last fall as Bailouts Number One, Two, and Three were only pushing the country further into recession. Withdrawal from the eurozone itself became increasingly likely, with the result that the euro would be replaced in Greece with a new currency with much less purchasing power.

Ever since Greece joined the European Community, later to be called the European Union, it has enjoyed far better credit ratings than it deserved. Assured that default was now no longer an option, central banks and other international financial institutions were more than willing to

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Pelosi Reacts to CBO Report Before Reading it

This article was published by the McAlvany Intelligence Advisor on Monday, June 22, 2015: 

Former Speaker of the House Nancy Pelosi (D-Calif.) was one of the first to react to the report just released by the Congressional Budget Office (CBO) on Friday. She was so quick to comment that there was suspicion she had had no chance to read it. When the details behind the report came out, that suspicion was confirmed.

The House member most responsible for garnering the 219 votes needed in the House in March 2010 to pass ObamaCare – the Affordable Care Act, or ACA – is remembered for her comment made during a 20-minute speech just prior to passage:

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CBO Issues Ambiguous Report on Impacts of Repealing ObamaCare

This article first appeared online at TheNewAmerican.com on Monday, June 22, 2015: 

On Friday the Congressional Budget Office, the nonpartisan government agency that is tasked with predicting economic and budgetary impacts of various government programs, issued its analysis of what would happen if ObamaCare (the misnamed Affordable Care Act) were repealed. Its first questionable assumption was that it would be totally repealed effective January 1, 2016.

Its ambiguous, halting, and heavily discounted conclusions served as fodder for the statist media such as CNBC and NBC to warn of huge deficit increases if the socialized medical care program were repealed. NBC headlined a disaster ahead:

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FCC Fines AT&T $100 Million

This article first appeared online at TheNewAmerican.com on Thursday, June 18, 2015: 

In its ruling adopted on June 3 and released for public viewing on June 17, the Federal Communications Commission (FCC), chaired by Tom Wheeler (pictured), announced that it was not only fining AT&T $100 million for violating its so-called “transparency rule” but also was going to mandate that AT&T install numerous “requirements to bring AT&T into compliance” with that rule.

At issue was AT&T’s repeatedly stated policy that at certain times and under certain specifically stated circumstances, subscribers to its “unlimited” data services would experience a slowdown (called either “congestion” by its supporters or “throttling” by its enemies such as Consumers Union) in connectivity. AT&T bent over backwards to make sure that every one of its customers was aware of the possibility, including 

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U.S. Financial Outlook has “Worsened Dramatically”

This article first appeared online at TheNewAmerican.com on Wednesday, June 17, 2015: 

English:

This graph is outdated but revealing

 

In its just-released report “The 2015 Long-Term Budget Outlook,” the Congressional Budget Office stated bluntly:

The long-term outlook for the federal budget has worsened dramatically over the past several years, in the wake of the 2007-2009 recession and slow recovery…. If current law remained generally unchanged in the future … growing budget deficits … would push [the national] debt above its current high level.

It’s all about government spending that’s baked into the cake:

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Schumpeter’s Gale Blows Away Colt

This article was published by the McAlvany Intelligence Advisor on Wednesday, June 17, 2015:

Glock 17 9mmPara (erste Ausführung - Februar 1986)

Glock 17

 

Schumpeter’s Gale is the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Often credited with first developing this first axiom of the free market, Austrian economist Joseph Schumpeter was merely expanding on Karl Marx’s hopeful prediction that capitalism would eventually destroy itself. Out of the ashes would rise communism.

Marx and Schumpeter were half right:

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Colt Gun Maker Declares Bankruptcy

This article first appeared online at TheNewAmerican.com on Tuesday, June 16, 2015:

Colt Defense, the once high-flying iconic manufacturer of the Colt .45 single action Army revolver known as the “Peacemaker” — the “gun that won the West” — and the 1911 semi-automatic pistol designed by John Moses Browning, ran out of airspeed and altitude on Sunday, and declared bankruptcy.

In his press release, Keith Maib, chief restructuring officer of Colt Defense, LLC, put the best face he could on a disaster that has been unfolding for years: 

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Kansas Considers Tax Increases Just as Its Economy Revives

This article appeared online at TheNewAmerican.com on Friday, June 12, 2015:

English: Aerial view of Kansas City, Kansas, l...

Aerial view of Kansas City, Kansas, looking southwest. The Kansas River (right-center) joins the Missouri River (left). A small piece of Kansas City, Missouri is visible on the left of the Missouri River.

 

Kansas House members debated until midnight Thursday whether to raise sales and cigarette taxes in order to close the state’s budget deficit. The House had just resoundingly defeated a previous measure that would have raised those taxes even more, but the state is facing a deadline to balance its budget, required under its constitution.

There’s a roughly $400-million shortfall this year, which is estimated to increase for the next several years.

Left-wing pundits have had a field day taking Governor Sam Brownback to task for calling his massive tax cuts enacted in 2012 an “experiment,” a “shot of adrenalin,” and similar to Ronald Reagan’s experiment based on the Laffer Curve: Reducing tax rates will increase tax revenues as the economy grows.

Paul Rosenberg, senior editor of Random Lengths News, a tiny weekly newspaper operating out of Long Beach, California, is a good example. His paper describes itself as an “independent progressive newspaper” with a readership of 63,000 that “is proud of the support from the Harbor Area labor unions, who allow us exclusive distribution inside most of their union halls.”

Rosenberg managed to get a screed attacking Brownback published in the hard-left Salon magazine in which he describes the Kansas governor as

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“The most Bullish thing the Stock Market can do is go up.”

This article was published by The McAlvany Intelligence Advisor on Wednesday, June 10, 2015: 

Charles Dow -an American journalist who co-fou...

Charles Dow -an American journalist who co-founded Dow Jones & Company with Edward Jones and Charles Bergstresser.

 

Right up until early April, that is. The Value Line Geometric Index, the unweighted index of approximately 1,700 stocks that fund manager Dana Lyons likes to watch, topped out at 522 and has declined by almost 10 percent since then.

By Monday, June 8 the Dow’s decline had wiped out all of its gains and is now flat for the year. The Dow Transportation Index fell 2 percent that day, its worst day since January 6, wiping out its 11 percent year-to-date gain. The Dow Utilities Index has suffered an even greater decline, erasing all of its 16 percent gain.

The Dow is one of the primary leading indicators used by financial advisors like Bruce Bittles, the chief investment strategist at RW Baird. Bittles manages $100 billion of other peoples’ money, and he’d better be right. Now, he’s getting nervous:

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Stock Market Wipes Out All Gains for the Year

This article first appeared online at TheNewAmerican.com on Tuesday, June 9, 2015:

On Monday, June 8, the Dow Jones Industrial Average (DJIA) declined by enough to wipe out all gains investors thought they had made in stocks since January 1. It was confirmed by action in the Dow Jones Transportation Index (DJTA), which is even older than the Dow and reflects the price performance of the stocks of 20 transportation companies such as Avis, Delta Airlines, and FedEx. On Monday that index fell by two percent, its worst day since January 6, bringing that index to a loss of nearly 11 percent from its high earlier in the year.

The decline in the Dow was further confirmed by

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Tuition-Free Community College? Yea or Nay?

This article was published by The McAlvany Intelligence Advisor on Monday, June 8, 2015: 

Students at a table in Muscatine Community Col...

Students at a table in Muscatine Community College courtyard

 

In 2008 the city council of Knoxville, Tennessee created “Knoxville Achieves”, a philanthropically-funded free tuition program for lower income families who couldn’t afford college. It blended private funds with requirements that students receiving “last dollar” benefits (tuition expenses remaining after grants, scholarships and personal resources were used up) would be guided by volunteer mentors through regular consultations and planning sessions. If the students didn’t meet certain minimum performance standards, the mentoring stopped and so did the money.

This was a local response to the pitiful results, in general, that community college students were obtaining. Barely 20 percent of them obtain their associate’s degree after three years. It’s supposed to take two.

The first year 496 students received tuition assistance, with good results appearing almost immediately. It wasn’t the money – it was the mentoring and the tracking, following, and monitoring that made the difference. Students were, some for the first time, being held personally accountable to a friendly volunteer, along with receiving a financial incentive.

It worked so well that

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Proposed Federal Tuition-free Community College Likely to Be a Bust

This article first appeared online at TheNewAmerican.com on Monday, June 8, 2015: 

Buried in the fine print of President Obama’s State of the Union speech last January was an idea that the federal government should make community college tuition-free. It’s loosely based on a Tennessee program that seems to be working without federal funding or intervention.

The federal program would add $6 billion to the government’s already bloated educational assistance programs, which already run $70 billion (not counting the $100+ billion in student loans) every year. Anything for the kids, it seems, and according to promoters, the taxpayers won’t feel a thing.

According to the federal program, an estimated nine million students attending community colleges could avoid up to $3,800 a year in tuition, with three-quarters of the largesse coming from Uncle Sam and the balance put up, under federal mandates, by the states. In his speech, Obama called community colleges “essential pathways to the middle class,” adding,

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EPA: No “Widespread, Systemic” Fracking Impact on Drinking Water

This article first appeared online at TheNewAmerican.com on Friday, June 5, 2015: 

Following the EPA’s release of the initial draft of its “Hydraulic Fracturing Drinking Water Assessment” on Thursday, expressions of joy exuded from fracking industry officials and pro-fracking politicians while anger erupted from environmentalists.

Responding to pressure from Congress to “study the relationship between hydraulic fracking and drinking water,” the EPA spent years and millions of taxpayer dollars to conclude, tentatively at least, that fracking doesn’t pollute or poison drinking water in areas close to fracking wells.

It was also tasked to uncover any “potential for hydraulic fracturing to change the quality or quantity of drinking water resources … [and to identify] factors affecting the frequency or severity of any potential changes.”

After exploring all possible mechanisms by which fracking might possibly negatively impact local drinking water supplies, the EPA reported:

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Where Else but America?

This was published by The McAlvany Intelligence Advisor on Wednesday, June 3, 2015: 

Since 1979, editors at International Living’s magazine and website have offered indulgent fantasies for its readers, many of whom are looking to escape to places that are warmer, cheaper, friendlier, safer, and have cheap healthcare. Some of them have no doubt decided that the freedom fight is over, that freedom has lost, and it’s time to get out of Dodge while the getting is still good. It’s Playboy for the Boomers.

In its latest iteration of “The World’s Best Places to Retire in 2015,” they write:

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U.S. Economy Goes Negative in the First Quarter

This article first appeared online at TheNewAmerican.com on Friday, May 29, 2015: 

The Commerce Department reported on Friday that the U.S. economy shrank at an annual rate of 0.7 percent, a sharp downward revision from its previous tepid estimate that it would grow by 0.2 percent.

It caught most mainstream economists off guard once again, with many predicting positive growth right up until Friday, and more remaining doggedly optimistic that growth will return. Economists polled by the Wall Street Journal just 10 days ago were holding to a 3-percent growth rate in the economy for 2015, while analysts polled by the AP just prior to the release on Friday were still predicting growth of between 2 and 2.5 percent for the year.

Paul Ashworth, chief U.S. economist at Capital Economics, is waiting for evidence that growth will return in the second quarter:

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SAVs are Raising Existential Questions for Car Companies

This article was first published at The McAlvany Intelligence Advisor on Friday, May 22, 2015:

SAVs are “shared autonomous vehicles” – driverless, robotic automobiles – and they are already raising serious questions that GM and Ford are just starting to address. Questions like: what business are we in today? What business will we be in tomorrow? Twenty-five years from now? Will we be in the car business or the transportation business? What does that mean? What do we do now so we’re still around and profitable then?

GM spokesman Jim Cain put the SAV revolution in the best possible light:

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Driverless Cars to Disrupt Industry, Benefit Consumers

This article first appeared online at TheNewAmerican.com on Thursday, May 21, 2015: 

English: Google driverless car operating on a ...

Google driverless car operating on a testing path

 

Brian Johnson, in his “Disruptive Mobility” report issued by Barclays Bank on Tuesday, sees that a future with driverless cars will mean far fewer cars on the road, a much smaller GM and Ford, and consumer travel costs cut by two-thirds. A generation from now there will be just 100 million cars on American roads (compared to 250 million today), and new car sales will fall below levels touched at the bottom of the Great Recession: less than 10 million a year.

This means that, unless they adapt and adopt new strategies, and perhaps a new business model, General Motors and Ford will likely be vastly smaller enterprises than they are today. He predicts that

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.