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

Wall Street Journal: Median Pay for CEOs Is a Million Dollars a Month

This article appeared online at TheNewAmerican.com on Monday, March 18, 2019: 

The results of the survey on American CEO (chief executive officer) compensation released on Sunday by the Wall Street Journal aren’t likely to please progressives and socialists such as Bernie [Sanders] and Alexandria Ocasio-Cortez (AOC).

The Journal looked at total compensation being paid to the CEOs of 132 of the 500 companies making up the S&P 500 Index and reported that it reached $12.4 million in 2018, up from $11.7 million a year earlier.

Much of the compensation was driven by improved corporate profits and strong stock market performance that enhanced the value of their stock options. The Journal also reported that not every CEO got a raise: “Pay fell for 47 [of them], or about a third … and more than 10% for 22 of them.”

This isn’t likely to impress socialists and social-justice warriors who will likely use the Journal’s results to focus on some kind of “parity” calculation: comparing CEO compensation to the average guy driving a truck or working a line in a factory. Expect outrage over the disparity, and legislation to “fix” the “inequity.”

How does one justify anyone making a million dollars a month?

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Bernie and AOC Aren’t Going to Like This One Bit

This article was published by The McAlvany Intelligence Advisor on Monday, March 18, 2019:

Every year the Wall Street Journal conducts a survey of top CEOs’ compensation packages. And every year progressives and socialists use the occasion to complain about injustice, inequality, and lack of parity with their workers.

This year the news is even worse for the likes of Bernie and AOC: now the median income of the 132 CEOs the Journal analyzed is a million dollars a month, an increase of 6.4 percent over last year. Expect to hear the whining from these two, among others, that the average worker driving a truck or working a line only saw his or her wages rise by three percent, and that therefore it’s unfair, unjust, etc., etc.

Let’s remember just how successful AOC and Bernie have been in running their own businesses. For example, take AOC (Alexandria Ocasio-Cortez), the House freshman (woman) from the Bronx. Upon graduation from college in 2011 she took jobs as a bartender and waitress to help her mother (who was working as a house cleaner and a bus driver) pay the bills.

She started a business – Brook Avenue Express (BAP) – which published children’s books, but the business failed. New York State closed it down when it failed to file a tax return or pay its corporate taxes. As of March 2019, BAP still owes the state $1,870.36.

AOC now receives $174,000 a year as a member of the House of Representatives, plus benefits. Who’s to say that she’s worth that?

Or take Bernie Sanders. Politico took the time and trouble to explore his business background and then reported on what they found in 2015: He lived hand-to-mouth, stealing electricity from his landlord when he couldn’t pay his electric bill. From Politico:

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How is the Fed Going to Explain Its Giant Miss?

This article was published by The McAlvany Intelligence Advisor on Friday, March 15, 2019:  

The Atlanta Federal Reserve bank is likely to cover its “miss” with this explanation of its GDPNow model:

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.

In other words, if we’re wrong don’t blame us. Blame the math behind the model.

They’re going to need this to cover for their miss:

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Jumps in Durable-goods Orders & Business Investment Confound Forecasters Again

This article appeared online at TheNewAmerican.com on Thursday, March 14, 2019: 

Two measures of the U.S. economy were reported on Wednesday, both of which exceeded forecasters’ expectations. Combined with other measures, the economy is likely to embarrass predictions by the Federal Reserve that it has almost slowed to a stop.

The Atlanta Federal Reserve Bank’s highly-touted GDPNow indicator just moved its first-quarter estimate of the economy’s gross domestic production from 0.1 percent to 0.4 percent. By contrast, the durable-goods and business-investment reports from the Commerce Department for February jumped 0.4 percent and 0.8 percent, respectively, compared to January. Assuming those indicators remain unchanged for the next 11 months, sales of durable goods for the year would increase by nearly five percent, while business investment for the year would increase by almost 10 percent.

Those reports don’t exist in a vacuum.

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President Trump Is the Master Puppeteer with His Budget Proposal

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 13, 2019: 

The slapstick comedy the Punch and Judy show is loved by British audiences, many of whom pay the puppeteer to bring the show into their homes for parties and celebrations. Mr. Punch is abused by his wife Judy during brief sketches, with the audience cheering her on or warning Mr. Punch of what is coming.

On Monday, Mr. Trump was the master puppeteer, bringing his Punch and Judy show to millions in the guise of a serious discussion over government spending. He called it “A Budget for a Better America – Promises Kept. Taxpayers First.”

If his preliminary budget proposal was designed to bait Democrats, it worked.

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Trump’s Preliminary Budget Is Aspirational Only

This article appeared online at TheNewAmerican.com on Tuesday, March 12, 2019: 

In his preliminary budget proposal for Congress released on Monday, President Trump touted his accomplishments during his first two years in office — five million new jobs, five million off food stamps, lowest unemployment in 50 years, etc. — and then expressed, with breathtaking hubris, his plan: “[It] provides a clear roadmap for the Congress to bring Federal spending and debt under control. We must protect future generations from Washington’s habitual deficit spending.”

This was addressed to precisely those habitual spenders who are increasingly ignoring not only budgetary constraints but practical real-world concerns about massive deficits and a growing national debt.

Russell Vought, the acting director of the Office of Management and Budget (OMB), touted the plan as

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Nationwide Power Outages Sending Venezuela Back to the Dark Ages

This article appeared online at TheNewAmerican.com on Monday, March 11, 2019: 

Most of Venezuela is without power, and what little is available is unreliable and intermittent. It started last Thursday with the failure of the San Geronimo B power station that transmits electric power from the country’s enormous Guri hydroelectric power plant. Guri supplies 80 percent of the country’s power, while a smaller substation, used for backup, has been able to provide only a small percentage of what was lost on Thursday.

The country’s dictator, Marxist Nicolás Maduro, has blamed the Trump administration for the outage, calling it sabotage, the result of an “imperialist electromagnetic attack.” The New York Times reported the real cause: An uncontrolled grass fire beneath the power station burned a major trunk line, which caused one of its 10 turbines to fail, and when workers tried to restart it, others failed. After four failed attempts, workers were told to take Monday off, leaving Venezuela in the dark for the foreseeable future.

A supervisor in charge of the facility was told by his managers that the plant’s critical infrastructure was heavily damaged following an explosion at a nearby secondary power station during the fourth attempt to restart the turbines. Said Luis Aguilar, a Chicago-based expert on the Venezuelan power industry, “Every time they attempt to restart, they fail, and the disruption breaks something else in the system, destabilizing the grid yet further.”

The Times explained the breakdown in layman’s terms: “Restarting the turbines requires skilled operators who can synchronize the speed of rotation on as many as nine of Guri’s operational turbines.”

The Times explained further that the real problem is socialism that has destroyed the normal operations of a healthy economy: “Experts said the most experienced operators had long left the company because of meager wages and an atmosphere of paranoia fed by Mr. Maduro’s ever-present secret police.”

This is what socialism looks like. In Venezuela,

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U.S. Economy Adds New Jobs for 101 Straight Months

This article appeared online at TheNewAmerican.com on Friday, March 8, 2019: 

The latest employment report from the Department of Labor’s Bureau of Labor Statistics (BLS) on Friday provided more evidence of the U.S. economy’s remarkable growth and continued vitality. The gain in new jobs (20,000 from its business establishment survey and 300,000 from its household survey) in the month of February was the 101st month in a row that the economy added new jobs.

Unfortunately most commentators focused on the establishment numbers — 20,000 new jobs — while ignoring the 300,000 new jobs revealed by its household survey. They also ignored

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Chinese Business Owners Worried That Their Country Will Become Venezuela

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 6, 2019:  

For years China has been bailing out Venezuela’s failed socialist experiment. At last count, Venezuela is into China for more than $70 billion. What an irony it would be if the roles were reversed!

With Maduro’s regime on the ropes, and a new president taking the reins upon his departure, Venezuela’s vast proven crude oil reserves could easily put the country back where it was just a few years ago: one of the most prosperous in South America.

The process of China becoming Venezuela is well under way, to the point where wealthy Chinese entrepreneurs are looking for a way out. That would include Chen Tianyong, a Chinese real estate developer in Shanghai, who has already left.

He explained his reasons in a 28-page article on the internet that he titled “Why I Left China – an Entrepreneur’s Farewell Admonition.” He wrote:

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China’s Super Rich Exiting as Economy Fades

This article appeared online at TheNewAmerican.com on Tuesday, March 5, 2019:

A popular online meme perfectly expresses where China’s economy is headed: “The year 2019 may be the worst year in this decade, but it will be the best year in the next decade.”

China’s economy is decelerating so rapidly that the super-rich are getting out while the getting is good. One of them is Chen Tianyong, a real estate developer in Shanghai, who posted this on the Internet: “China’s economy is like a giant ship heading to the precipice. Without fundamental changes, it’s inevitable that the ship will be wrecked and the passengers will die. My friends, if you can leave, please make arrangements as early as possible.”

As the New York Times noted,

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Commerce Department: Economy Grew 2.9 Percent Last Year, Likely to Accelerate in 2019

This article appeared online at TheNewAmerican.com on Thursday, February 28, 2019: 

According to the Commerce Department, the U.S. economy grew by 2.9 percent last year. The economy grew at a 2.6-percent annual rate in the fourth quarter of 2018, beating forecasters’ expectations of 2.2 percent. After all, they looked at 4.2 percent growth in the second quarter, 3.4 percent growth in the third quarter, and so they just assumed that the economy would continue to trend downwards in the fourth. Some even began to use the “r” word (recession), predicting such an event for late 2019 or early 2020.

Instead, economic growth in the fourth quarter clocked in at 3.1 percent, ahead of the same period a year ago.

Non-professional observers see a much different picture than the professional naysayers. Brian Coulton of Fitch Ratings said:

Consumer spending continued to grow solidly and, most encouragingly, business investment growth recovered sharply after a dip in the third quarter.


Despite big external headwinds and financial market volatility in the fourth quarter, U.S. firms are not retrenching sharply on capex [capital expenditures]. Labor market strength and ongoing fiscal stimulus should see domestic demand expanding [into 2019].

Avery Shenfeld of CIBC Economics reprised Coulton:

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Yellen’s Chance to Respond to Trump’s Criticism of the Fed

This article was published by The McAlvany Intelligence Advisor on Wednesday, February 27, 2019: 

Following its fifth interest rate hike last June, President Trump exploded, complaining that the Federal Reserve was deliberately interfering not only with his economic recovery but with his trade strategies in reducing tariffs. On Twitter he almost yelled: “China, the European Union, and others have been manipulating their currencies and interest rates lower, while the U.S. [the Federal Reserve] is raising rates … the dollar gets stronger and stronger with each passing day – taking away our big competitive advantage. As usual, not a level playing field.”

His newly minted Fed Chair, Jerome Powell, said only that “We don’t take political considerations into account” when making policy.

On Monday, former Fed chairwoman Janet Yellen (whom Powell replaced) was given the opportunity to respond more completely to Trump’s criticisms. Rather than answering them directly, she took the “ad hominem” approach. In a radio interview on Marketplace with host Kai Ryssdal, she said, “President Trump’s comments about Chair Powell and about the Fed do concern me, because if that [criticism] becomes concerted, I think it … could undermine confidence in the Fed. I think that would be a bad thing.”

Ryssdal asked: “Do you think the president has a grasp of macroeconomic policy?”

Yellen: “No, I do not.”

Ryssdal: “Tell me more.”


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Former Fed Chair Yellen Doesn’t Appreciate Trump’s Criticism of the Nation’s Central Bank

This article appeared online at TheNewAmerican.com on Tuesday, February 26, 2019:

Janet Yellen, likely still miffed at being passed over by President Trump in favor of Jerome Powell as head of the Federal Reserve last February, had a chance to vent about the president’s ignorance on Monday. In a radio interview on Marketplace with host Kai Ryssdal, she said, “President Trump’s comments about Chair Powell and about the Fed do concern me, because if that [criticism] becomes concerted, I think it … could undermine confidence in the Fed. I think that would be a bad thing.”

Ryssdal asked: “Do you think the president has a grasp of macroeconomic policy?”

Yellen: “No, I do not.”

Ryssdal: “Tell me more.”

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AOC’s Green New Deal Will Hasten U.S. Bankruptcy

This article was published by The McAlvany Intelligence Advisor on Friday, February 22, 2019:

Once Boston University economics professor Laurence Kotlikoff presented his findings – based on “generational accounting” – his readers and students knew that the United States government was headed for bankruptcy. The numbers were so huge – $210 trillion (the amount that one generation owed to another thanks to politicians’ promises) – that there was simply no way the U.S. economy could throw off enough tax revenue to come even close to keeping them.

The latest report from the Congressional Budget Office (CBO) reflects its tinkering around the edges of what’s owed – building sand castles on the beach while a tsunami is rapidly building just offshore.

The authors assume

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CBO: National Debt to Nearly Double by 2029

This article appeared online at TheNewAmerican.com on Thursday, February 21, 2019: 

The national debt clock just clicked over $20 trillion. But according to the latest report from the Congressional Budget Office (CBO), wait ‘til 2029! That clock will be approaching $36 trillion. And that’s under the assumption that laws now in place stay in place. Add in the Green New Deal and the clock will have to add another digit: $100 trillion.

But not to worry. The new math — Modern Monetary Theory — will take care of everything.

Behind the headlines, the CBO adds details, clarifying who has loaned the $20 trillion to the federal government. Seventy-three percent has been loaned by

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U.S. Shale Revolution Continues: Shale Oil Production to Set Record in March, Says EIA

This article appeared online at TheNewAmerican.com on Wednesday, February 20, 2019: 

The report from the U.S. Energy Information Administration (EIA) on Tuesday merely confirmed what the agency predicted just a week earlier: The shale revolution in the United States will not only keep prices of oil and gas low into the foreseeable future, it will make the U.S. a net exporter of energy within 18 months.

The agency expects shale oil production from the seven major shale formations in the country to set a record in March at 8.4 million barrels per day (bpd). This will push total U.S. crude oil production to nearly 12 million bpd, ahead of both Saudi Arabia and Russia.

Bank of America predicts that

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“Modern Monetary Theory” Will Pay for AOC’s Green New Deal

This article appeared online at TheNewAmerican.com on Monday, February 18, 2019: 

Stephanie Kelton, professor of public policy and economics at Stony Brook University, served as an advisor to Bernie Sanders’ presidential campaign. She gave similar advice to Alexandria Ocasio-Cortez as she was preparing to be sworn in as a member of the House of Representatives: You can have it all!

Writing in the Huffington Post last November, Kelton said:

We have the outline of a plan. We need a mass mobilization of people and resources, something not unlike the U.S. involvement in World War II or the Apollo moon missions — but even bigger. We must transform our energy system, transportation, housing, agriculture and more.


What we don’t (yet) have is the final, vital ingredient — a critical mass of politicians prepared to unleash the enormous power of the public purse to save the planet.

To Kelton’s way of thinking, the only thing standing in the way of spending billions the government doesn’t have to solve problems many think don’t exist, is to change just how we think about the federal budget: “To save the planet and fix historical inequities … we must change the way we approach the federal budget. We must give up our obsession with trying to ‘pay for’ everything with new revenue or spending cuts.”

It starts with discarding that old canard about how inflation

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Consumer Confidence Up, Food Stamp Use Down in Trump Economy

This article appeared online at TheNewAmerican.com on Friday, February 15, 2019: 

Economists expected a rebound in consumer sentiment in February but the index reported by the University of Michigan (UMich) on Friday morning exceeded their expectations. They predicted a reading of 94 (up from January’s 91.2) but got 95.5 instead.

The news behind the headlines was even better: Consumers’ future expectations index jumped from 79.9 to 86.2 while their real (inflation-adjusted) wage gains expectations index was higher “than at any time in more than 15 years,” according to UMich.

In other words,

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Another Small Step Towards Sound Constitutional Mone

This article was published by The McAlvany Intelligence Advisor on Friday, February 8, 2019: 

Doug Casey, writing for his blog International Man, gave his readers a history lesson including the most important one: nearly every currency that blew up through inflation was replaced by sound money, usually gold and silver.

Wrote Casey:

In late 18th-century America, something of minimal value was often described as being “not worth a continental,” which referred to the continental dollar, the American currency at the time of the revolution.


The continental was paper money. It had occurred to the colonists that, as their revolution was costing quite a bit to maintain, they could go into “temporary” debt to finance the war.


Soon it became clear that the debt could not be repaid. Also, the printing of paper banknotes resulted in inflation. The solution? Print more of them. Further devaluation of the continental motivated the colonists to print more … then more … then still more. The continental became worthless, either for local trade or for repayment of debt.

The Founders learned the lesson:

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New York Governor Cuomo Blames Exodus of Wealthy on Trump

This article appeared online at TheNewAmerican.com on Tuesday, February 5, 2019: 

New York Governor Andrew Cuomo blamed his state’s revenue shortfall of $2.8 billion on Donald Trump during a press conference on Monday, stating,

There is no doubt that the budget we put forward [$175 billion for fiscal year 2019-20] is not supported by the revenues. It’s as serious as a heart attack….


SALT [which capped deductions for state income and local property taxes for the wealthy in Trump’s tax reform act] was an economic civil war. It literally restructured the economy to help red [Republican] states at the cost of blue [Democrat] states.


That’s exactly what it did. It was a diabolical, political maneuver.

Cuomo could have accepted the blame for the state’s ongoing exodus (out-migration) of wealthy individuals by pinning the blame where it belonged: on his state’s increasingly unfavorable environment for them thanks to its high taxes. Instead, he said he did the right thing by extending the temporary “millionaires’ tax” levied following the financial crisis a decade ago, and signing into law a bill raising sales tax rates to 8.82 percent.

In other words,

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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.
Copyright © 2018 Bob Adelmann