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

Trump Tax Reforms Allow Companies to Expand Benefits, Increase Wages

This article appeared online at TheNewAmerican.com on Monday, July 30, 2018: 

More and more U.S. companies are using benefits from President Trump’s tax reform program to enhance their employees’ benefits, from paying more of their health-insurance premiums to contributing more to their retirement plans. Instead of going to pay higher salaries to company CEOs, those tax savings are increasingly going into longer paid family leaves, adoption assistance, and contributions to local charities.

Initially, it was all about tax savings. According to Americans for Tax Reform (ATR):

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The Trump-Juncker “Deal” Isn’t Such a Great Deal

This article appeared online at TheNewAmerican.com on Thursday, July 26, 2018:  

Following the issuance of the joint U.S.-EU statement after the meeting on Wednesday between President Trump and European Commission President Jean-Claude Juncker, Juncker was understandably delighted: “When I was invited by the president to the White House, I had one intention: I had the intention to make a deal today. And we made a deal today.”

Except that the deal Juncker was celebrating had little to do with paper promises to cut tariffs and reduce trade barriers, and everything to do with persuading Trump to agree to “reform” the World Trade Organization (WTO). From the joint statement:

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China’s Slowing Economy Comes at Perfect Time for Trump

This article appeared online at TheNewAmerican.com on Monday, July 16, 2018:

According to China’s National Bureau of Statistics (CBS), China’s economy slowed in the second quarter. Unofficial numbers show it slowed a lot.

The numbers coming from the country’s CBS have long been held as spurious, more wishes and hopes reflecting political policy rather than economic reality. For example, the agency has reported for at least the last two years that the country’s economic growth has stayed comfortably above the government’s stated target of 6.5-percent annual GDP growth. Imagine what’s happening behind the scenes at the bureau when it was forced to report a slight decrease in the country’s economic performance in the second quarter compared to the first.

The bureau is essentially the official voice of the communist government as it reports directly to the government’s State Council and is charged with the collection and publication of statistics related to the country’s economy, population and society. So not only must anything and everything reported by the agency be taken with a large dose of salt, it puts special pressure on those determined to find out what’s really happening behind those government numbers.

Officially the Chinese economy

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Federal Deficit Up 16 Percent Following Tax Reform

This article appeared online at TheNewAmerican.com on Friday, July 13, 2018:  

In the first nine months of the present fiscal year (from October 2017 through June 2018), total revenues (gross receipts) to the federal government were $2.54 trillion, while total government spending was $3.15 trillion, leaving a gap — a deficit — of $607 billion. That’s 16-percent higher than it was at the same time a year ago.

But when just the first six months of 2018 are considered

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More Evidence of the U.S. Economic Juggernaut’s Acceleration

This article was published by The McAlvany Intelligence Advisor on Friday, July 13, 2018: 

As expounded three times in this space just in the last week, the U.S. economy is on a tear, setting new records along the way. On July 4, the article titled “U.S. Crude Oil Production Growing so Rapidly Even Insiders Can’t Keep Up” is now old news, as the American energy industry is forecast to exceed the production from every other country, with the exception of Saudi Arabia, by no later than 2019. On July 6, Gallup polls reflected Americans’ state of mind: “Americans are Employed and Happy.” And on Monday, July 9, the American economy continues to outstrip economic forecasters’ estimates: “The American Economic Pie Continues to Grow Faster than Economists’ Forecasts.”

Thursday was no different: as reported by the government jobless claims, a proxy for layoffs in the U.S. economy, dropped by 18,000 last week to 214,000, a low close to levels last seen in the late 1960s. Economists polled by Reuters got it wrong once again, predicting a decline in jobless claims of just 6,000 for the week.

Not only did the economy’s performance exceed forecasters’ expectations, but the number of unemployment claims filed last week was the third lowest of the current nine-year-old economic expansion that began in mid-2009.

Concurrent with this report are other indicators

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Claims for Unemployment Insurance Drop Again, Near 50-year Low

This article appeared online at TheNewAmerican.com on Thursday, July 12, 2018:  

Jobless claims, a proxy for layoffs in the U.S. economy, dropped by 18,000 last week to 214,000, a low that is close to levels last seen in the late 1960s. Economists polled by Reuters got it wrong once again, predicting a decline in jobless claims of just 6,000 for the week.

Not only did the economy’s performance exceed forecasters’ expectations, but the number of unemployment claims filed last week was the third-lowest of the current nine-year-old economic expansion that began in mid-2009.

Concurrent with this report are other indicators reporting on a robust and growing U.S. economy. For instance

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EIA: U.S. Shortly to Become “the World’s Leading Producer of Crude Oil”

This article appeared online at TheNewAmerican.com on Wednesday, July 11, 2018:

The U.S. Energy Information Administration (EIA) proclaimed on Tuesday that, if its forecasts are correct, “the United States will average nearly 12 million barrels a day (mbd) … in 2019 … mak[ing] the U.S. the world’s leading producer of crude [oil].”

Those forecasts could understate the U.S. oil industry’s production, as it builds into its calculations the present bottlenecks of pipeline capacity, being experienced especially in the Permian Basin.

One month ago, IHS Markit, the global information marketplace, focused on what’s happening in the Permian Basin and concluded that, even with those bottlenecks currently slowing the flow of crude from wellheads to refineries along the Gulf Coast, it expects a “stunning” increase in production there between now and 2023. Total crude-oil production will nearly double over that time to 5.4 mbd once the 41,000 new wells and $308 billion in new investment have been completed. Said Daniel Yergin, IHS Markit’s vice chairman: “In the past 24 months, production from just this one region — the Permian — has grown far more than any other entire country in the world. Add in another 3 mbd by 2023 — more than the total present-day production of Kuwait — and you have a level of production that exceeds the current production of every OPEC nation, except Saudi Arabia.”

One key assumption IHS Markit is making is that oil prices will stay around $60 a barrel or higher. And its forecast is “far from a best case” scenario, according to Raoul LeBlanc, HIS Markit’s executive director, who added, “That the outlook still expects the Permian to exceed existing (and already lofty) expectations speaks to the region’s unique and growing prominence in the world’s oil market. The level of growth — from 0.92 mbd in 2010 to 5.4 mbd in 2023 — is truly stunning.

The New American made just such a prediction about the U.S. oil industry way back in 1990, as we noted in a 2015 article:

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The American Economic pie Continues to grow Faster than Economists’ Forecasts

This article was published by The McAlvany Intelligence Advisor on Monday, July 9, 2018:

Economist Milton Friedman famously said, “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” Perhaps that is why, once again, forecasters were left behind when Friday’s jobs report was released by the Bureau of Labor Statistics (BLS). Those so-called experts guessed that the U.S. economy added 195,000 jobs last month. It actually added 213,000, according to the BLS, but even that number might be too low. The agency revised upwards its estimates of job growth in April and May by 37,000 jobs and June’s numbers could easily be revised upwards next month.

This confirmed the jobs reported released by ADP a day earlier, with 177,000 new jobs being added in June, and May’s number also being revised upward to 189,000.

Noting that the jobs report from the BLS showed more than 600,000 people entering or re-entering the workforce, Kate Warne, an economist at investment firm Edward Jones, concluded:

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Gallup: Americans are Employed and Happy

This article was published by The McAlvany Intelligence Advisor on Friday, July 6, 2018: 

Just two weeks ago in this space, the question was asked, “Will Americans Vote Their Pocketbooks this November.” The article reflected on the high level of satisfaction voters were enjoying according to Gallup, the highest percentage recorded since September 2005. It also noted that the president was enjoying “his highest approval rating since shortly before he took office” according to Gallup, which was confirmed by a similar poll by Rasmussen.

So the folks are happy, content, and satisfied. But are they employed? Gallup provided that answer as well, noting on Thursday that “Americans continue to recognize a robust U.S. job market, with 65% [of those polled from June 1 through June 13] saying that it is a good time to find a ‘quality job,’ similar to May. These are the highest readings in Gallup’s 17-year history of tracking this measure of Americans’ view of the employment situation.”

In addition, according to Gallup, a majority of Americans say the economy is getting even better, “as high as that measure has been since 2004.”

Along comes ADP, the national payroll company, which reported on Thursday that

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ADP: U.S. Economy Added 177,000 Jobs in June; May’s Numbers Revised Upward to 189,000

This article appeared online at TheNewAmerican.com on Thursday, July 5, 2018: 

ADP’s National Employment Report for June shows a robust jobs market, with the U.S. economy adding another 177,000 new jobs, while revising May’s numbers up by 11,000 to 189,000.

More than 60 percent of the job growth is happening in small- and medium-size companies, and it is taking place in every sector of the economy. The only exception is Information Technology (IT), which shrank by a nearly imperceptible 2,000 jobs in June. Small and medium-size companies added more than 100,000 jobs, while the goods-producing sector (natural resources, mining, construction, and manufacturing) added 29,000 jobs in June. In the service sector, every category except IT (trade, financial, business services, education, health service, and leisure and hospitality) showed job gains for the month.

This is a reflection of most Americans’ view of the jobs market, as reported by Gallup in its latest poll:

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U.S. Crude Oil Production Growing so Rapidly Even Insiders Can’t Keep Up

This article was published by The McAlvany Intelligence Advisor on Wednesday, July 4, 2018:  

Scott Sheffield, the Chairman of Pioneer Natural Resources, was interviewed by CNNMoney on June 20. At that moment in time, according to the U.S. Energy Information Administration (IEA), the U.S. oil industry was pumping 10.3 million barrels a day (bpd). By the time the interview ended and the article was published, the latest report for that week on U.S. crude oil production showed Sheffield and CNNMoney already dreadfully out of touch: U.S. production that week topped 10.9 million bpd, with little to keep new records from being set on a weekly basis going forward.

Sheffield, the head of an oil company with revenues exceeding $5 billion and assets in recoverable oil reserves approaching $20 billion, went on to say that he expects U.S. crude oil production to surpass 11 million bpd “within the next three or four months.” It looks like that milestone will be exceeded this month. He went on to predict that,

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Retaliatory Tariffs on American Exports Announced by Canada, EU

This article appeared online at TheNewAmerican.com on Monday, July 2, 2018: 

Canada and the European Union retaliated when President Trump’s tariffs kicked in on July 1. The Canadian government began imposing tariffs on a long list of U.S. consumer goods, ranging from ketchup to pizza to dishwasher detergent to lawn mowers, totaling about $12.6 billion of U.S. exports into the country. Left-wing Canadian Prime Minister Justin Trudeau urged his citizens to “make their choices accordingly” when deciding whether or not to purchase American-made imported products.

On Monday, the European Union threatened retaliatory tariffs on nearly $300 billion of U.S. auto exports should the Trump administration go ahead with tariffs on European autos coming to the United States. It submitted its threat to the U.S. Commerce Department, claiming that Trump’s tariffs on automobiles could have a $13-14 billion negative impact on the U.S. gross domestic product (GDP). This would be in addition to the retaliatory tariffs the EU levied against the United States after the Trump administration imposed tariffs on steel and aluminum coming from the EU.

Ironically, the EU seemed to ignore the fact that the EU exported $43.5 billion worth of cars to the United States last year, while U.S. automakers only were able to export $7.2 billion worth of cars to the EU, because of the EU’s enormously unfair tariffs on American made cars. Said Trump, “It’s terrible what they [the EU] do to us.… They send their Mercedes [into the U.S. but] we can’t send our cars [into the EU].”

In the grand scheme of things, the impact of these tariffs on the U.S. economy will likely not only be tiny, but temporary. And it’s that “grand scheme” that the mainstream media refuses to discuss, focusing instead on the potential economic impact on the country and disregarding and ignoring what the president is attempting to do: restore national sovereignty that trade deals have significantly and deliberately damaged.

While still a candidate, Donald Trump told his audience what he was going to do to make things fairer if he were elected president. In June 2016 he laid out his plans, and his purposes behind them, to a rapt audience in Monessen, Pennsylvania. It was a long speech, carefully crafted, and so just the most relevant extracts appear here:

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Schumer Says it’s a Plot; Portman Says Americans Shouldn’t be Worried

This article was published by The McAlvany Intelligence Advisor on Friday, June 29, 2018: 

At issue is the latest report from the Congressional Budget Office (CBO), which is increasingly sounding more and more like the boy who cried wolf. Most remember the fable: a shepherd boy repeatedly tricks nearby villagers into thinking that wolves are attacking his flock. When a wolf actually does appear and he again calls for help, the villagers believe that it is just another false alarm. They ignore the boy’s warning and the wolf devours the sheep.

The “2018 Long Term Budget Outlook” released by the Congressional Budget Office (CBO) earlier this week said that if current conditions hold (same tax policy, no recession, etc.) in the next ten years, the national debt will equal the national output of goods and services. In 30 years the national debt will be 50 percent larger than the country’s economic output. That’s double the national debt relative to GDP now, at 78 percent:

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Latest CBO Report: Government Debt to Double by 2048

This article appeared online at TheNewAmerican.com on Wednesday, June 27, 2018: 

The “2018 Long Term Budget Outlook” released by the Congressional Budget Office (CBO) earlier this week said that if current conditions hold (same tax policy, no recession, etc.) in the next 10 years, the national debt will equal the national output of goods and services. In 30 years, the national debt will be 50 percent larger than the country’s economic output and double what it is now relative to the GDP:

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OPEC is Losing Its MoJo

This article was published by The McAlvany Intelligence Advisor on Monday, June 25, 2018:  

It’s premature to consider the weekend meeting of OPEC in Vienna as the cartel’s final death rattle. However, it’s clear that its effort to end its production cut agreement amounted to little more than birthing a gnat.

The meeting was supposed to be contentious, with Iran, Libya, and Venezuela promising to scuttle any agreement to raise crude oil production. Oil ministers arrived in Vienna days before the official opening in order to quell that opposition and enlist support. Investors anxiously waited for the final announcement, ready to trade on the news.

Most expected the cartel to end the agreement by promising to raise production by a million barrels of oil a day, reversing the 1.8 million bpd production cut agreement that was installed in January 2017. But after all was said and done, the net “effective” increase is only about 600,000, and that agreement hadn’t been inked by the end of the meeting.

Call it a relief rally:

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Crude Oil Price Rise in Wake of OPEC Agreement Likely to be Short-lived

This article appeared online at TheNewAmerican.com on Sunday, June 24, 2018:  

Crude oil prices rose nearly five-percent in a single day Friday, when OPEC, meeting in Vienna, failed to raise production as much as many feared.

The last time the price of crude oil for future delivery jumped this much was when OPEC announced its decision in November 2016 to cut production. That agreement, met at the time with much skepticism that the cartel could enforce it, was to remove about 1.8 million barrels a day of world supplies. Trading at $50 a barrel in early November 2016, crude oil for future delivery jumped to $57 a barrel by January 1, 2016.

Then reality, helped along by U.S. share producers, set in, with new supplies pushing crude oil futures down to $45 a barrel by July 2016.

The same scenario could play out once again:

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Koch Brothers Launch Big-money Campaign Against Trump Tariffs

This article appeared online at TheNewAmerican.com on Friday, June 21, 2018: 

The Koch brothers, head of the enormous multinational corporation founded by their father 75 years ago, launched a two-pronged attack against President Trump’s tariff policies on Wednesday: a six-figure television ad now running in the Washington, D.C. market coupled with a letter to every member of Congress demanding they rescind powers they gave to the executive branch concerning regulation of commerce with foreign nations.

The announcement of the brothers’ multi-million dollar campaign in early June seemed innocuous enough, with James Davis, executive vice president of Freedom Partners (part of the Koch network) stating:

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Economic Ignorance Driving California Rents Ever Higher

This article was published by The McAlvany Intelligence Advisor on Friday, June 21, 2018: 

The Sacramento Bee has performed an excellent public service not only by asking why rents are rising so fast in California, but by publishing many of the answers it received in response. Some of them are nearly staggering in their lack of understanding of basic fundamental economic law. For example, Angie Wei, Chief of Staff of California Labor Federation, told the Bee:

Allow local governments to adopt rent control policies. Incentivize home ownership, not investors. Increase housing production. Create good jobs near housing.

Rent control is the very last thing to use to “increase housing production.” Why would a builder, already faced with massive overregulation by California’s various codes, build something that politicians guarantee would not be profitable for him? History is replete with examples where rent controls have stopped all new residential building, but apparently Wei is free from the burden of any such knowledge.

In addition, if somehow home ownership could be “incentivized” beyond where it is currently, this would accelerate rent increases, not reduce them.

Wei is not alone. Daniel Zingale, Senior Vice President of The California Endowment, had his lengthy, abysmally ignorant answer published by the Bee:

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Increasing Rents Driving Middle Class Out of Silicon Valley

This article appeared online at TheNewAmerican.com on Thursday, June 21, 2018: 

An article appearing in the liberal U.K. Guardian told half the story: Increases in rents in apartments close to the Facebook facilities in Silicon Valley are driving the renters out. Sandra Zamora, a 29-year-old preschool teacher and restaurant worker, told her half of that story to Guardian reporter Sam Levin: “Facebook is taking everything we have … and giving us what? Nothing. Just pain in our lives. Facebook is just ruining the community.”

Zamora and others living in the Menlo Park apartment complex (about a mile from Facebook’s headquarters) just received notices from the complex’s new owners that their rents would soon rise from $1,100 a month to $1,900 a month, and they would have 90 days either to sign a new lease, or move out.

Levin milked the story:

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Oil Ministers Gathering in Vienna for “Contentious” OPEC Meeting

This article appeared online at TheNewAmerican.com on Wednesday, June 20, 2018:  

Oil ministers from OPEC and non-OPEC producers are already gathering in Vienna, Austria, in advance of what is touted to be one of the most contentious meetings in recent memory. On Friday they will discuss current output levels, compliance, and the impact its agreement to cut production by 1.8 million barrels a day has had on world oil prices. On Saturday, the discussion will focus on the future.

The primary issue will be whether to

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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.