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

Foreign Affairs: Give Away Free Money!

This article first appeared at the McAlvany Intelligence Advisor on Friday, August 29, 2014:

Foreign Affairs

Foreign Affairs

What happens when a college professor meets up with a graduate student from Oxford University, intending to solve the world’s economic problems? What happens when they consider that the previous attempts to revive the economy have failed and their recommendation is to do more of the same?

The title of their resultant article in Foreign Affairs – the premier publication of the Council on Foreign Relations – explains it all:

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Market Basket Employees Return to Work; Unions Surprised

This article first appeared at TheNewAmerican.com on Thursday, August 28,2014:

English: The new Market Basket Store #32 in Ch...

The new Market Basket Store #32 in Chelsea, Massachusetts

The tone of the announcement from Market Basket’s shareholders late Wednesday night was vastly different from the statement issued by the company’s previous CEOs two weeks ago announcing that any of the striking workers who failed to return to work by Friday of that week would be terminated.

The first statement was harsh: “You must return to [your job] ready to fulfill your duties no later than Friday, August 15, 2014. Should you choose to ignore … these directives, the company will consider you to have abandoned your job, thereby ending your employment with the company.”

The latest announcement was warm and reassuring, and comforting to the nearly 25,000 employees and hundreds of thousands of customers of Market Basket who had boycotted the 71-store chain over the last six weeks:

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Article in CFR Magazine: Give Away Money to Stimulate Economy

This article first appeared at TheNewAmerican.com on Thursday, August 28, 2014:

 

Los Angeles Police Department (LAPD) Bell 206 ...

Mark Blythe, a professor at Brown University, and Eric Lonergan, a hedge fund manager living in London, have conjured the ultimate solution to a stagnant economy: Central banks should give away free money.

These two authors of a lengthy and allegedly erudite article in the September/October 2014 issue of Foreign Affairs, published by the Council on Foreign Relations (CFR), appear to be living in an alternate universe, as their suggestion, if it were fully implemented, would push the world’s economy back to the Dark Ages.

The article, entitled “Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People,” rests on the false assumption that

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DUIs drop when Ride-Sharing Companies come to town

This article was published by the McAlvany Intelligence Advisor on Monday, August 25, 2014:

Franzia, straight from the tap.

Hearty partying

As ride-sharing smartphone apps like Lyft, Uber, and Sidecar continue their inevitable expansion, additional benefits are being felt. Last June Uber announced that DUI arrests dropped 10 percent in Seattle after they entered that market. Other cities noticed similar experiences, so one of the Washington Post’s writers enlisted the help of Nate Good, a statistics expert, to prove it. They looked at Philadelphia: DUIs have been declining there ever since Uber entered the Phillie market in early 2013. The decline is especially notable for those under age 30.

In San Francisco, the birthplace of the ride-sharing phenomenon in June 2010, the results are even more remarkable:

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Market Basket Tells Workers: Return by Friday or You’re Done

This article was first published at TheNewAmerican.com on Wednesday, August 13, 2014:

 

 

Typical Market Basket in Portsmouth, NH.

Market Basket in Portsmouth, NH.

In a carefully worded letter sent to its 25,000 employees on Tuesday, Market Basket’s new co-CEOs Felicia Thornton and James Gooch requested that the workers who have so far been successfully striking the 71-store New England grocery chain cave in and return to work. They should know the workers’ decision by next Monday.

Said the letter:

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Minnesota Café Adds “Minimum Wage” Fee to Customers’ Bills

This article first appeared at TheNewAmerican.com on Friday, August 8, 2014:

Café Café

Craig Beemer, the owner of Oasis Café in Stillwater, Minnesota, employs just six servers, but Minnesota’s minimum wage increase that kicked in on August 1 forced him to make some tough decisions. The wage increase to $8.00 an hour for his workers will cost more than $10,000 a year, and something had to give. Beemer decided that rather than increase his prices he decided to

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Overzealous Consumer Agency Picks Fight with Wrong Guy

This article first appeared at The McAlvany Intelligence Advisor on Friday, August 8, 2014:

English: A constructed NeoCube.

A Neocube constructed with Zen Magnets

In its zeal to proclaim that everything is inherently dangerous and therefore illegal, the Consumer Product Safety Commission (CPSC) – the Goliath in this story – has just run into its David. Shihan Qu, the 27-year-old founder of Zen Magnets, notified the agency that he wasn’t going to take it anymore through a letter on his company’s website:

Take this as official notice that Zen Magnets LLC is going All-in.… We will not settle for any sort of stop-sale of magnets that are perfectly safe when not misused….

We vow to continue this legal, awareness, and lobbying battle until our very last drop of cash-flow blood. We will combat CPSC’s magnet prohibition until triumph, or until a glorious death of insolvency on the legal battlefield….

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Welfare State Costs Taxpayers More Than $2 Trillion a Year

This article first appeared at TheNewAmerican.com on Wednesday, August 6, 2014:

 

Following the release of the latest budgetary statement from the U.S. Treasury, Ali Meyer dove into the statistical morass of charts and graphs to determine just how much the welfare state is paying out in benefits. Meyer, writing at CNS News, concluded that beneficiaries received over $2 trillion from the American taxpayer last year, or almost

 

Tea Party Protest, Washington D.C. September 1...

Taxpayers protesting

60 percent of all federal government spending. This included “means-tested” benefits — which require incomes to be below a certain level to quality for them — as well as “non-means tested” benefits such as Medicare, Social Security, unemployment insurance, workers’ compensation and the like.

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July BLS Jobs Report: The Sound of One Hand Clapping?

This article was first published at TheNewAmerican.com on Monday, August 4, 2014:

MarketWatch

To Jeffry Bartash, writing for the Wall Street Journal’s MarketWatch, Friday’s jobs report looked awfully good: 209,000 new jobs were added in July and in all the right places: mining, construction, manufacturing, transportation, and warehousing. In addition, there was almost no growth whatsoever in the “government” sector: just 11,000 new jobs were created there last month. This, according to Bartash, means that the economy is on a hot streak, having generated more than 200,000 new jobs every month for the last six months — the first time that has happened since 1997.

Added Bartash:

In the first seven months of 2014 the economy has gained an average of 230,000 jobs. That’s the best stretch of job creation since the [Great Recession] ended in mid-2009 and 19% faster than the pace of hiring in 2013.

End of story? Not quite.

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New York Times Calls Out City’s Pension System

This article was first published at TheNewAmerican.com on Monday, Augusts 4, 2014:

NYC Mayor Bill de Blasio

NYC Mayor Bill de Blasio

In a nearly 4,000-word lead article on Sunday, the New York Times clearly articulated exactly what is wrong with the city’s five separate pension plans: too-optimistic investment assumptions, excessive fees, overly generous pension benefits, and political interference. Mere tweaking on the margins will only delay the inevitable Detroit experience: drastic benefit cuts for retirees and higher taxes on taxpayers.

In 2000, the city’s contributions to its five pension plans (general city workers, police, firefighters, teachers, and other school personnel) consumed just two percent of the city’s budget, and the plans were considered to be adequately funded. For instance, the plan insuring the city’s general workers was actually overfunded by 36 percent. Today those pension plans soak up more than

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Friday’s Underwhelming jobs Report

This article first appeared at the McAlvany Intelligence Advisor on Monday, August 4, 2014:

Liar

Criss Jami, the lead singer of the rock band Venus in Arms, may reasonably be accused of having given the president lessons in deceit, especially as they both live in the city where truth-telling is a lost art. Said Jami:

Just because something isn’t a lie does not mean that it isn’t deceptive. A liar knows that he is a liar, but one who speaks mere portions of truth in order to deceive is a craftsman of destruction.

When Friday’s jobs report came out from the Bureau of Labor Statistics (BLS), President Obama spoke “mere portions” of its truth:

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Sage Foundation: Wealth “Inequality” Will Continue to Worsen

This article first appeared at TheNewAmerican.com on Tuesday, July 29, 2014: 

LaSalle Mansion

LaSalle Mansion

In another so-called research study about wealth inequality, the liberal think-tank Sage Foundation said in June that while the super-rich have fully recovered from the Great Recession, the vast majority of Americans have not. Specifically their report shows that median household net worth “was $32,000 lower in 2013 that [it was] 10 years earlier,” a decline of 36 percent. It concluded:

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Detroit Taxpayers Being Set Up by New “Free” Rail Line

This article was first published at the McAlvany Intelligence Advisor on Monday, July 28, 2014: 

Woodward Avenue in Detroit, Michigan

Woodward Avenue in Detroit, Michigan

Construction begins next week on Detroit’s version of a taxpayer “sting” operation: the new M-1 Rail line, also called the Woodward Avenue Streetcar. It’s been in the works for years, but no one could ever figure out how to make it pay, and besides, Detroit is broke. When it was suggested that private money fund most of the $137 million project in the form of gifts and grants rather than as “investments,” it began to get purchase. It’s already $12 million over budget but

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Santa Clara’s Field of Dreams

This article was first published at The McAlvany Intelligence Advisor on Monday, July 21, 2014:

Cover of "Field of Dreams (Widescreen Two...

Ray Kinsella, meet the Mayor of Santa Clara, California, home of the brand new Levi’s Stadium where the San Francisco 49ers are scheduled to play their home games starting this fall. And where, it is predicted, their fans will come to watch.

Whether enough of them will is an open question.

Already nearly a third of the 49ers’ season ticket holders have

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D’Souza Should have Named it America: Imagine a World Without Zinn and Alinsky

This article was first published at The McAlvany Intelligence Advisor on Wednesday, July 23, 2014:

Saul Alinsky

Saul Alinsky

After viewing the movie and reading the book entitled America: Imagine a World without Her, one is inclined to suggest a new title. For starters, D’Souza, the author and producer of his first film 2016: Obama’s America, never explains what the world would look like without America’s presence. That is left up to the reader and viewer. He starts off badly, as well, naming his first chapter Suicide of Nation. This presumes that American citizens are doing themselves in deliberately, with malice aforethought.

But, as D’Souza shortly points out, that is hardly the case. There are evil forces afoot attempting to

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Tennessee Restaurant Welcomes Guns — Holstered “Unless Need Arises”

 This article first appeared at TheNewAmerican.com on Monday, July 21, 2014:  
Colt clone in 45 cal. with Fastdraw Holster

Colt clone in 45 cal. with Fastdraw Holster

When Sharma Floyd, owner of Shiloh Brew and Chew in Maryville, Tennessee, read about a shooting at a convenience store in North Carolina that had posted a sign on its front door banning guns on the premises, she considered it both a warning and an opportunity:

They had put up a sign that said “No Weapons Allowed” and they were robbed at gunpoint two days later. The … store manager was shot.

And that got me thinking.

First, she determined that, while she herself doesn’t own a gun, her customers certainly had a right to do so if they wished. Second, she had lost some business to a large group of motorcyclists “because they thought I didn’t allow weapons. But I believe it’s ok to carry as long as you have a permit.”

Third, she decided how best to make her position clear. She posted the following sign:

 

 

Guns are welcome on premises.

Please keep ALL weapons holstered unless need arises.

In such case, judicious marksmanship is appreciated!

Thank you. Shiloh Management.

Almost immediately she began to get not only positive feedback but also a boost in business:

I can honestly say I have gotten way more support than the one person who really gave me a lot of grief over it.

I have had so many customers take pictures of the sign, ask to meet me in person, and thank me.

Perhaps without knowing it, Floyd borrowed the language for her sign from Shooters Grill in Rifle, Colorado, owned by Lauren Boebert. Boebert posted her sign months earlier, and business grew so much that it caught the attention of the Daily News, USA Today, and Denver’s 9News. Boebert goes one step further: Her waitresses openly carry while on duty, and they’re trained to protect themselves if necessary. When asked if this was just for show, Boebert was firm in her denial: “[The guns are] real and they’re loaded and we know what we are doing. I fear for anyone who tries to rob us.”

She added:

We encourage [carrying] and customers love that they can come here and express their rights.

This country was founded on our freedom. People can come in carrying their gun, and they can pray over their food.

Her establishment even offers gun safety classes once a month for those customers who don’t carry, but want to.

Over the last year a few major chains have been targeted (pun intended!) by anti-gun groups for allowing their customers to carry while shopping, drinking coffee, or eating, with modest success. Target, Starbucks, and Chipotle have each announced that they “respectfully request” that those who carry guns leave their sidearms outside. In each case the language of the announcements was carefully crafted so as to offend as few people as possible. This example from Howard Schultz, CEO of Starbucks, will suffice:

In recent months, Starbucks stores and our partners who work in our stores have been thrust unwillingly into the middle of this debate. That’s why I am writing today with a respectful request that customers no longer bring firearms into our stores or outside seating areas.

In each case it was a “request” and not a “demand,” leaving the option to carry open to their customers, or to shop elsewhere. As noted elsewhere, this is perfectly consistent with all freedoms guaranteed under the Constitution’s Bill of Rights.

Some have started having regrets over making such requests. Just a month ago, Jack in the Box restaurants announced its “preference” that customers leave their firearms outside:

Creating a warm and inviting environment for all of our guests and employees is a top priority for Jack in the Box. The presence of guns inside a restaurant could create an uncomfortable situation for our guests and employees and lead to unintended consequences.

While we respect the rights of all our guests, we would prefer that guests not bring their guns inside our restaurants.

The irony of that request was made clear within days at one of their stores in Houston. Customers and employees were placed into “an uncomfortable situation” with “unintended consequences” when four thugs who didn’t get the memo entered the restaurant with guns drawn and forced the customers and employees to give up their wallets and purses. What’s more, this was the third armed robbery at a Jack in the Box restaurant since the company’s announcement. Perhaps thugs can read, after all?

The vast majority of restaurant chains, however, have decided not to touch the issue, granting local franchisees the power to make a decision in line with state laws. According to CNBC, McDonald’s, Dunkin’ Donuts, Baskin-Robbins, Olive Garden, Red Lobster, and LongHorn Steakhouses remain “gun friendly” in states that allow them to be so. In addition, TGI Friday’s, Subway, and Cheesecake Factory also allow customers to carry concealed if they so desire.

Pro-gun groups are springing up to help gun owners find restaurants that are friendly. There’s the Tennessee Firearms Association (TFA), whose members have canvassed most of western Tennessee and confirmed that Olive Garden, Lonestar, Picasso’s, Chili’s, O’Charley’s, Red Lobster, and Red Robin all are happy to seat gun owners and greet them with a smile.

There’s Brian Crosswhite, the owner of Cajun Experience in Leesburg, Virginia, who has just opened a website — 2Amendment.org — with the intention of having gun-friendly businesses sign up and receive a “2AO – 2014” sticker for their front door. In addition, gun owners are able to use an iPhone app to find local establishments friendly to their interests.

Crosswhite is also taking advantage of the current furor over guns in restaurants by offering his customers an “Open Carry Wednesday” where those with permits get 10-percent off regular menu prices.

Leave it to entrepreneurs to see an advantage and press forward with it. Whether with clever signage, stickers, apps, or just plain word-of-mouth, restaurateurs are taking advantage of the free market to continue to serve their customers. The current debate is only helping things along.

 

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Taxpayers On the Hook for New 49ers Stadium in Santa Clara

This article first appeared at TheNewAmerican.com on Monday, July 21, 2014:

A custom San Francisco 49ers GMC Yukon XL at t...

A custom San Francisco 49ers GMC Yukon XL at team headquarters in Santa Clara, California.

Last Thursday every politician, every bigwig, every banker, every individual with any interest whatsoever in the new Levi’s Stadium in Santa Clara, California, showed up for the invitation-only celebration of its grand opening. The beer was flowing, the confetti was flying, and self-congratulatory exuberance was on every lip.

Present were Santa Clara Mayor Jamie Matthews, San Francisco 49ers CEO Jed York, John York (Jed’s father and co-chairman of the team), 49ers president Paraag Marathe, NFL Commissioner Roger Goodell, 49ers coach Jim Harbaugh, and some of his star players including Patrick Willis and Joe Staley. In the background were executives from Levi Strauss, who paid big bucks to name the stadium.

The only people not in the audience were the ordinary taxpayers, who could find themselves on the short end of one of the most massive financial disasters in modern history.

In a toast to the fans who are expected to fill the 70,000-seat extravagance starting with preseason games in early August, Jed York said, “You deserve to have the best stadium in the world. And now you have it!” 49ers president Marathe added, “You can feel the difference [here] and you know the fans are going to feel the difference.”

At one point in the ceremony, noted Mike Rosenberg, a writer for the San Jose Mercury News who attended the affair,

Hundreds of workers wearing white “I built Levi’s Stadium” shirts and hard hats marched down two red-carpeted giant staircases. Thousands of white, red and gold pieces of confetti burst into the air at the end of the event, as dozens of cheerleaders waved their pom-poms and guests rushed to take selfies in front of a giant screen on stage.

The deal has been in the works for years, with initial plans to demolish Candlestick Park and replace it with an updated version in its parking lot. Financial squabbles and traffic glitches finally deep-sixed those plans, and in 2006 the team’s new owners announced they were moving 40 miles south to the tiny burg of Santa Clara, home of the 49ers’ administration offices.

Negotiations with the city council began in earnest the next year, with promises that no new taxes would be needed and that the huge stadium would bring in additional revenues without liability. Free money, in other words.

On June 8, 2010 Measure J was passed, with 15,000 voters in favor and 10,000 against. Those voting for it were persuaded by the language in the ballot which said, in part:

No use of City General or Enterprise funds for construction; no new taxes for residents for stadium; private party pays all construction cost overruns; no City/Agency obligation for stadium operation/maintenance.

Within a year that ballot language had already been breached: Twelve percent of the cost of the $1.3 billion stadium was provided by the city, with another $330 million to be borrowed by the city’s Stadium Authority. Goldman Sachs headed up a consortium of banks that provided some $850 million in construction financing (with Goldman taking its usual 10-percent fee) while Levi Strauss ponied up another $200 million to be paid out over the next 10 years. The NFL itself loaned the Stadium Authority $200 million to help out, expecting to be paid back out of gate revenues, seat leases, trinket and beer sales, and so on.

The assumptions underlying the project are mind-boggling: First, it is assumed that the 49ers will continue to have a winning team for as far as the eye can see into the future, drawing fans from not only San Francisco but also other cities within a 100-mile radius of the stadium. That expectation, however, is already flawed, as more than 30 percent of those loyal fans in San Francisco holding season tickets have given them up, as the 40-mile drive each way and the potential traffic jams on game day were just too daunting.

Second, the interest rate on the financing is short-term, and most of the loans will have to be refinanced no later than 2015. Even a small uptick in short-term interest rates could put debt service requirements out of reach of the authority.

Third, the cost of subsidies negotiated to bring the 49ers to Santa Clara haven’t been measured but include the NFL’s requirement that all revenue from its events “be exempt from sales, amusement or entertainment taxes or other surcharge obligations.”

Judith Long, who teaches urban planning at Harvard, concluded that even these costs are usually underestimated when proposed to the taxpayers:

Governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land and infrastructure, and the ongoing costs of operations, capital improvements, municipal services and foregone property taxes.

Adjusting for these omissions increases the average public subsidy by $50 million.

That would bring the taxpayers’ cost for the “free” Levi’s Stadium to more than $200 million, not counting any obligation incurred by the Stadium Authority. Another part of the risk is that Santa Clara itself is such a small town, with such a small tax base. Even adding in the county, its population is just 10 percent of the 17 million populating metro San Francisco. No matter how one does the math, the town is making a massive bet on everything turning out just right. As writers Darrell Preston and Aaron Kuriloff of Bloomberg expressed it, “The city is taking what may be the largest per-capita risk for any municipal sports facility [in the country].” The budget for the city itself is just barely $140 million a year.

Roger Noll, a retired professor of economics at Stanford University, looked at the numbers and came to the same conclusion:

The thing that makes this such a dog is that Santa Clara first of all is a small town. There’s some amount of financial hit the city could probably pay [if things don’t pan out as projected], but the probability that it’s going to exceed that is certainly not zero.

That is how a retired college professor says that Santa Clara is taking a huge risk. Within the next three to five years, after “normalization” about attendance, winning games, traffic congestion, interest rates, and maintenance expenses, the taxpayers will know.

Now that the stadium is finished, all the people behind the massive project are counting on those fans to come. Just because they built it doesn’t mean they will.

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The New Third Rail: Cutting Government Spending

This article was first published by The McAlvany Intelligence Advisor on Monday, July 14, 2014:

 

Historical government spending in the United S...

Historical government spending in the United States from 1902 to 2010

Back in February the Congressional Budget Office (CBO) estimated that the deficit for the 2014 fiscal year would be $514 billion, or about 3 percent of the total economic output of the country. Since this was a nearly 27 percent drop from last year, the implication is that all is well, nothing to see here, move along please. After all, the perception has been that the White House has been spending money faster than at any time in history, running up deficits and the national debt to staggering levels. Half a trillion? Is that all? Pocket change!

Greg Valliere, the chief political strategist for the Potomac Research Group, said at the time that this guaranteed that there would be no pressure for any sort of entitlement reform this year. Jack Lew, Obama’s Treasury Secretary, said the numbers bought some time: “We have a little time to deal with the long term.”

Last week both the White House and the CBO revised downward even further the expected deficit, with Obama taking full credit for the result:

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Tax Cuts of Kansas Already Improving the State’s Economy

This article was first published at TheNewAmerican.com on Monday, July 14, 2014:

Kansas City Skyline 1

Kansas City, Missouri’s Skyline

When Kansas Governor Sam Brownback signed into law the first of several reductions in his state’s income taxes back in May 2012, he wrote:

Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy. It will pave the way to the creation of tens of thousands of new jobs, bring tens of thousands of people to Kansas, and help make our state the best place in America to start and grow a small business.

By cutting the top tax bracket by 25 percent and eliminating taxes on small businesses altogether, he expected great things to happen:

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Texas 7, California Nothing

This article was first published at TheNewAmerican.com on Wednesday, July 9, 2014:

Moving Day.

Moving to Texas from California

One would think the good doctor is running for Congress from Texas, but he’s not. He’s running to boot a hard-left Democrat who’s been representing the 24th District in California for 15 years by touting all the good things Texas has been doing compared to California. In a letter to the Wall Street Journal, Dr. Brad Allen, a pediatric heart surgeon from Paso Robles, wrote:

As a Californian, I am pained to say that three of the nation’s five fastest-growing cities – and seven of the top 15 – are in Texas.

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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.