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

Hybrid Owners Trading Them in for SUVs

This article was first published by The McAlvany Intelligence Advisor on Friday, April 24, 2015:

English: A Tesla Roadster, Reva i and Ford Th!...

A Tesla Roadster, Reva i and Ford Th!nk electric

 

Back before his credibility had been so greatly tarnished along with his confidence in government as a solution to every problem, President Obama made a promise in his 2011 State of the Union speech that realists knew he couldn’t keep: he was going to put one million electric and hybrid vehicles (EVs) on the road by 2015:

With more [government funded] research and [tax credit] incentives, we can break our dependence upon oil … and become the first country to have a million electric vehicles on the road by 2015.

The Department of Energy (DOE) called his proclamation a “key milestone toward dramatically reducing dependence on oil and ensuring that America leads in the growing electric vehicle manufacturing industry.” The agency boasted that already those manufacturers were ramping up to produce more than 1.2 million EVs by 2015, thanks to government subsidies, consumer tax credits, federally funded programs to help cities prepare for the growing demand for EV charging stations, as well as continued and increasing “support” [read: grants and loans] for R and D.

It’s 2015. The manifesto proclaimed from on high in January 2011 has fallen a little short:

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Cachet Fades: Hybrid Owners Trading for SUVs

This article first appeared online at TheNewAmerican.com on Thursday, April 23, 2015: 

 

2004-2008 Toyota Prius photographed in Bethesd...

Toyota Prius

 

Tuesday’s announcement from Edmunds.com, the car-shopping website, that twice as many EV (electric and hybrid) owners are trading in their cars for gas-guzzling SUVs as they were just two years ago shouldn’t have caught anyone by surprise. The math never really made sense, and with gas prices half what they were two years ago, reality is neutering the “cachet” of owning an “environmentally friendly” automobile.

When gas was $4.67 a gallon in October 2012 it would take five years of gasoline savings to make up the difference between a Toyota Camry LE Hybrid ($28,230) and a Toyota Camry LE ($24,460). But with gas prices half that, it now takes more than 10 years to break even.

Not only is market reality disrupting and removing the “cachet,” it is also

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Hillary Finally Comes Clean: The Economy Is “Stalled”

This article first appeared online at TheNewAmerican.com on Tuesday, April 21, 2015:

During Hillary Clinton’s road trip to New Hampshire on Monday, something remarkable occurred: She told the truth about the economy, telling her supporters that the economy has “stalled out” and, adding, “It’s not enough to tread water.”

A month ago while she was busy not running for president, Clinton never uttered a word about the weakening economy, giving mute evidence that she was unwilling to risk telling the truth and offending both the president and her Democrat supporters. This despite evidence that Americans have put economic worries at or near the top of their concerns for months on end. This despite the fact that the nation’s GDP fell off a cliff in January and February. This despite the fact that job growth since the start of the Great Recession has been half what it was during the Reagan recovery in the 1980s. This despite evidence that new business startups have continued their decline since 2009, and evidence that business investment in new enterprises has dropped sharply at the same time.

But evidence just released has so overwhelmed the Democrat stance that everything is ducky that it apparently has forced Clinton to admit what is obvious to the voters whose support she is seeking:

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House Votes to Repeal Federal Estate Tax

This article first appeared online at TheNewAmerican.com on Friday, April 17, 2015: 

English: Official photograph of John Thune, U....

U.S. Senator John Thune from South Dakota

On Thursday the House voted, 240-179, to repeal the federal estate tax, setting the stage for a confrontation with the Senate and a veto threat by the president. Identical bills were presented in both houses of Congress, by Representative Kevin Brady (R-Texas) and Senator John Thune (R-S.D.). Brady’s bill passed with the support of all but three Republicans and the defection of seven Democrats. Thune’s bill is expected to die in the Senate.

Said Brady: 

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Trinity Church Lawsuit Threatens Walmart’s Freedom to Sell Guns

This article first appeared online at TheNewAmerican.com on Wednesday, April 8, 2015: 

Trinity Church in Lower Manhattan

Trinity Church in Lower Manhattan

If Walmart’s appeal of a court’s ruling last November fails, it would not only set the stage for huge changes in how corporate America runs its operations, but also represent a victory for anti-gunners interested in removing guns from Walmart’s shelves.

New York’s Trinity Wall Street Church, a historic, well-endowed (with an estimated $2 billion in assets), and politically liberal church, asked Walmart in early 2014 to include a proposal in its proxy materials for the company’s annual meeting. On the surface, the proposal seemed innocuous enough. All the church (which owns about $280,000 worth of Walmart stock) wanted was to make a slight change in the company’s board of directors charter: 

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Mayor Rahm Emanuel’s Election Win Will Cost Chicago Even More

This article first appeared online at TheNewAmerican.com on Tuesday, April 7, 2015:

, former White House Chief of Staff

Going into Tuesday’s runoff election, Mayor Rahm Emanuel held nearly a 20-point advantage over his rival, Jesus “Chuy” Garcia, a hard-left progressive member of the Cook County Board of Commissioners. Four years ago Emanuel won in a walk, taking 55 percent of the vote. In February he couldn’t even manage a majority, with just 46 percent, forcing Tuesday’s runoff. As a North Side small business owner explained:

[In February] I cast an “anybody-but-Rahm” vote. Rahm is not a likeable guy. Sadly, he has no competition. Chuy is a nice guy but doesn’t seem to have a clue what he would do if elected.

When I go back for the final vote, I will vote for Rahm. Maybe he has a chance of fixing some of the [city’s] financial problems.

That’s hardly likely. In the past four years, Emanuel’s abrasive personality and his leftist worldview have added immensely to Chicago’s woes:

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Little Old Lady About to Make History in the Oil Patch

This article first appeared at The McAlvany Intelligence Advisor on Thursday, April 2, 2015:

Cover of "Well-Behaved Women Seldom Make ...

Historians like people who make history. People like Rosa Parks (the “first lady of civil rights”), and Suzette Kelo (see Kelo v. City of New London). So much so that Laurel Thatcher Ulrich made herself known by writing “Well-Behaved Women Seldom Make History,” in which she said:

Some history-making is intentional; much of it is accidental. People make history when they scale a mountain, ignite a bomb, or refuse to move to the back of the bus.

It may be that historians will someday add Sandra Ladra to that list.

Sandra Ladra was sitting in her recliner in her home in Prague, Oklahoma, on the evening of November 5, 2011, when

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Is NewSat the next Solyndra?

This article first appeared at The McAlvany Intelligence Advisor on Friday, March 27, 2015:

English: Export-Import Bank of the United Stat...

In 2012 and 2013, the Export-Import Bank unanimously agreed to guarantee loans by Lockheed Martin to a small private Australian satellite company called NewSat, whose president was ecstatic at the news. NewSat’s CEO Adrian Ballintine celebrated:

It is fantastic to receive the support of the U.S. Ex-Im Bank. They are backing our … satellite with a direct loan, with a favorable low-fixed interest rate and long tenure.

 

The deal is an Australian first for Ex-Im Bank and a major milestone towards the launch of Australia’s first commercial satellite.

His was a company worth $50 million before Ex-Im guaranteed $304 million in loans by Lockheed Martin to provide it with a satellite designed to reach all across the South Pacific and rake in millions. Ex-Im was simply following its charter: make loans no one with any sense would consider making.

Of course, that isn’t exactly what the bank’s charter really says;

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Huge Ex-Im Bank Loan Defaults Imperiling Bank’s Reauthorization

This article first appeared online at TheNewAmerican.com on Thursday, March 26, 2015: 

Seal of the Export-Import Bank of the United S...

Seal of the Export-Import Bank of the United States

On January 21, NewSat, a private satellite communications company headquartered in Australia, defaulted on a $21 million payment to its primary satellite provider, Lockheed Martin. That default is triggering an avalanche of defaults that could sink not only NewSat but also very likely the bank that guaranteed the loans financing the deal, the Export-Import Bank, whose charter is up for renewal on June 30.

The Ex-Im Bank has touted its ability and willingness to provide financing for American companies seeking to do business abroad but which couldn’t arrange financing the regular way: through private banking channels. According to the bank’s charter,

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Tax-credit Private-school Scholarship Funding Explodes in Oklahoma

This article first appeared online at TheNewAmerican.com on Tuesday, March 24, 2015:

Many Oklahoma taxpayers are paying less in state income taxes, thanks to contributions made to scholarship granting organizations (SGOs) last year.

It’s a new wrinkle, and many of those opening envelopes from the Oklahoma Tax Commission are in for a pleasant surprise. A single taxpayer contributing $2,000 to an SGO last year will save $1,000 in state income taxes. A couple contributing $4,000 will save $2,000. These are credits, not deductions, based on one-half the contribution. Translation: Every dollar of credit saves one dollar in state taxes.

For those able to give more — think successful small business owners, lawyers, accountants, physicians, software engineers, farmers, ranchers, and other business owners operating as regular C corporations — that letter in the mail this month could generate even greater excitement.

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Memphis Police, Firemen Quitting Following Pension Plan Reductions

This article first appeared online at TheNewAmerican.com on Monday, March 16, 2015: 

English: Memphis, Tennessee skyline from the a...

Memphis, Tennessee skyline from the air

Last July more than half of Memphis’ police officers took sick days off to protest the reductions in the city’s contributions to their pension plan and increases in their contributions to the city’s health benefits plan. The national media was sympathetic with cases of “blue flu,” instead of recognizing the new economic reality: Because public pensions are underfunded, everyone expecting benefits from the city will now take a hit, not just new hires.

Some of those who took sick days in July now are quitting altogether, finding other better opportunities elsewhere. In fact, other departments from nearby states are advertising in local papers and setting up job fairs to entice the discontented to new positions.

In a word, those unhappy with the new reality are adjusting.

Most solutions proposed to bring underfunded pension plans back into balance have involved

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Oil Production Still Increasing — Confounding Experts

This article first appeared online at TheNewAmerican.com on Monday, March 16, 2015: 

Logo of International Energy Agency

A month ago the International Energy Agency (IEA) began hedging its bet that declining oil prices would cut production: “U.S. supply [of crude oil] so far shows precious little sign of slowing down. Quite to the contrary, it continues to defy expectations.” 

This is how economists say “Oops!” 

On Friday the IEA was still astonished at the resilience of the oil industry as it continued to produce at record levels, despite predictions that declining rig counts would force production cuts. Instead, total U.S. crude oil production hit a high of 9.4 million barrels a day during the week ending March 6. 

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US Crude Production Sets Record in March, Surprises the IEA

This article first appeared at The McAlvany Intelligence Advisor on Monday, March 15, 2015: 

Just a quick look at the history of the International Energy Agency should convince anyone of its inefficacy: founded in 1974 at the suggestion of Henry Kissinger, its focus is on management of other peoples’ resources. Its mandate: the “3Es”: energy security, economic development, and environmental protection. The fact that it lacks any understanding of how the free market automatically addresses these issues showed up a month ago when its prediction of lower oil production in the US fell flat: “The U.S. supply [of crude oil] so far shows precious little sign of slowing down. Quite to the contrary, it continues to defy expectations.”

On Friday it confirmed its ignorance of how the free market works when it announced – surprise of surprises – that

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China’s Economic Bubble Ready to Burst?

This article first appeared online at TheNewAmerican.com on Friday, March 13, 2015: 

 

The latest numbers out of China no longer mask its economic decline. Chinese industrial production “slowed at its sharpest rate in the first two months of the year since the global financial crisis” shouted the Financial Times on Wednesday.

Wang Tao, UBS’ chief economist on the Chinese economy, was dour: “Today’s disappointing data release highlights just how quickly domestic demand is deteriorating as the ongoing [real estate] downturn continues to spread its negative impact through the economy.”

In China that impact is huge,

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Boston University Economist Calls Out Congress on Enormous Fiscal Gap

This article first appeared online at TheNewAmerican.com on Thursday, March 12, 2015:

Logo of the United States Government Accountab...

Logo of the United States Government Accountability Office

During his annual trek to Washington, D.C., to lecture Congress on its spendthrift habits, Boston University economist Laurence Kotlikoff took the gloves off this year. He dressed down Senator Mike Enzi, chairman of the Senate Budget Committee, along with the committee’s members:

Let me get right to the point. Our country is broke. It’s not broke in 75 years or 50 years or 25 years or 10 years.

 

It’s broke today.

 

Indeed, it may well be in worse fiscal shape than any development country, including Greece.

It isn’t just Enzi, or his committee, or the present Congress, that’s responsible for a fiscal gap that’s vastly larger than that projected by the Congressional Budget Office (CBO). It’s the idea that the country can borrow without limit because

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Latest Jobs Report Deceptive; Jobs Exported Overseas

This article first appeared online at TheNewAmerican.com on Saturday, March 7, 2015:

English: A North American Free Trade Agreement...

North American Free Trade Agreement logo

The employment report from the Labor Department on Friday was hailed as more evidence that the worst from the Great Recession is now in the rear view mirror, and receding. The unemployment rate in February dropped to 5.5 percent, lower than economists were predicting, while job growth added nearly 300,000 jobs, pushing the streak of gains of 200,000-plus new jobs per month out to a full year, the longest such streak since 1995.

The news caused stocks to lose more than one percent of their value, as Wall Street expected the robust numbers to hasten the day when the Fed would increase interest rates, potentially slowing the sluggish economy even further. Investors needn’t worry: Friday’s report was a head-fake.

If the recovery were real,

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Politics and Mathematics Collide in Chicago

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, March 4, 2015:

English: Downtown Chicago, Illinois at night. ...

Downtown Chicago, Illinois at night.

Chicago is a microcosm of Illinois: it has a determined unwillingness to face reality. Even Moody’s, in its latest downgrade of Chicago debt, has failed to grasp the enormity of the shortfalls facing the city and the state.

Moody’s tried to be realistic, using unrealistic numbers:

[Our rating] incorporates expected growth in Chicago’s already highly-elevated unfunded pension liabilities and continued growth in costs to service those liabilities, even if recent pension reforms proceed and are not overturned….

The “expected growth” will likely surprise to the downside even the realists at Moody’s, as the real shortfall in the five pension plans the state is funding is vastly greater than even the $100+ billion the state faces. A “special pension briefing” performed back in November by the state’s Commission on Forecasting and Accountability showed the accrued liabilities on those plans to be

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Moody’s Downgrades Chicago Again

This article first appeared online at TheNewAmerican.com on Tuesday, March 3, 2015:

English: in Chicago, Illinois, USA.

Downtown Chicago, Illinois

Within hours of Moody’s Investors Service announcing another downgrade to Chicago’s general obligation bonds last Friday, Mayor Rahm Emanuel’s administration responded, saying that Moody’s was out of touch with reality:

We strongly disagree with Moody’s decision to reduce the city’s credit rating and would note that Moody’s has been consistently and substantially out of step with the other rating agencies [Standard & Poor’s and Fitch Ratings], ignoring progress that has been achieved.

At the moment those other two agencies rate Chicago’s debt at A-plus or A-minus, each with a negative outlook. But in light of an imminent court ruling that could invalidate efforts to cut pension benefits, along with the crushing and increasing burden of those benefits, observers are just waiting for the next two shoes to drop.

As Moody’s noted, its downgrade will stand even if the court validates those pension modifications: 

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China’s Internet Censorship Efforts Continue to Fail

This article first appeared at The McAlvany Intelligence Advisor on Friday, February 27, 2015:

The Courtship of Princess Leia

Princess Leia

At that moment in Star Wars when Princess Leia is threatened by Governor Tarkin, the following dialogue takes place:

Princess Leia: Governor Tarkin, I should have expected to find you holding Vader’s leash. I recognized your foul stench when I was brought on board.

 

Governor Tarkin: Charming to the last. You don’t know how hard I found it, signing the order to terminate your life.

 

Princess Leia: I’m surprised that you had the courage to take the responsibility yourself.

 

Governor Tarkin: Princess Leia, before your execution, I’d like you to join me for a ceremony that will make this battle station operational. No star system will dare oppose the Emperor now.

 

Princess Leia: The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.

Chinese President Xi Jinping and his little tyrant, Lu Wei, really ought to get out more. Instead, they are issuing threats of censorship in a war they cannot win. Xi holds that the internet is a battleground. He starts off in a tone mild and gentle:

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China’s Failing Attempts to Censor the Internet

This article first appeared online at TheNewAmerican.com on Thursday, February 26, 2015:

Chinese President Xi Jinping and his Internet censorship czar, Lu Wei, are learning that Princess Leia was right when she said in the movie Star Wars about extending increasing totalitarian political control, “The more you tighten your grip, the more star systems will slip through your fingers.”

When Wei visited Silicon Valley heavyweights last December, he noted that Facebook’s CEO, Mark Zuckerberg, had an anthology of President Xi’s speeches on his desk. Included in that book was a speech in which Xi laid out his vision of the Chinese Internet: 

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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.