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

Paul Volcker: Insights from an Insider

Paul Volcker, former head of the Federal Reser...

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With the announcement by Reuters that former Federal Reserve Chairman Paul Volcker was going to resign shortly from the Obama administration came the temptation to reminisce about Volcker’s influence during the late ’70s and early ’80s when inflation exceeded 13 percent and interest rates on short-term government Treasury bills hit 21.5 percent.

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Prof. Alfred Kahn, Father of Airline Deregulaton, Passes Away

Pan Am 747-121. Most of its parts have been re...

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Professor Alfred Kahn, best known as “the father of airline deregulation,” died last month at age 93. His obituary from Cornell reminded his students and friends of his surprisingly significant influence in rolling back oppressive government regulation of the airline industry in the late ’70s: “He was largely instrumental in garnering the support necessary for the federal legislation that deregulated the airline industry and was the first thorough dismantling of a comprehensive system of government control since 1935.” (Emphasis added.)

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Boomers Aren’t Booming

Baby Boomers Haven

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Despite their huge numbers and cultural and financial impact on the economy, the Baby Boomers (born between 1946 and 1964) have largely been unwilling to face fiscal reality. Robert Samuelson, a frequent writer for Newsweek, noted back in 2007 that “We [he is a Boomer] are trying to pillage our children and grandchildren, putting the country’s future at risk in the process. On one of the great issues of our time, the costs of our retirement, we have adopted a policy of selfish silence.”

Numbering 76 million, controlling over 80 percent of personal financial assets and more than 50 percent of discretionary spending, they are turning age 65 at the rate of 10,000 every day. And reality is setting in.

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Starving ObamaCare

ObamaCare

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When the new House Budget Chairman Paul Ryan (left, R-Wis.) announced that his budget committee would produce budgets for the agencies of the Executive Branch “that assume Obamacare has been repealed,” Ryan was using the most effective limitation provided by the Founders to keep the Executive Branch under control: its funding.

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What If the Debt Ceiling Isn’t Raised?

Ceiling Fan

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Following the petulant pronouncement from the Obama administration’s chief economics advisor that any suggestion of not raising the debt ceiling was engaging in a “game of chicken,” two other establishment types noisily concurred.

Timothy Geithner, the U. S. Secretary of the Treasury, said that failure to raise the ceiling “could make it impossible for the U. S. to access global credit markets,” while Bill Gross, the co-CEO of PIMCO, the world’s largest bond fund manager, plainly implied that unless the ceiling were raised promptly, the U.S. could lose its coveted AAA credit rating: “Ultimately, if we continue a trillion-dollar-plus [annual deficit] then, yes, your credit rating will be threatened.”

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Austan Goolsbee’s Petulance

Official portrait of CEA member Austan Goolsbee.

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During Sunday’s interview on ABC’s “This Week” with the Obama administration’s chief economics advisor, Austan Goolsbee, he warned opponents not to treat the issue of raising the debt ceiling as a game or a toy.

This is not a game. If we hit the debt ceiling, that’s essentially defaulting on our obligations, which is totally unprecedented in American history.

The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis that anything we saw in 2008. I don’t see why anybody’s talking about playing chicken with the debt ceiling.  [If the debt ceiling isn’t lifted], that would be the first default in history caused purely by insanity.

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Congressional Pushback

Michele Bachmann - Restoring Honor rally

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Now that the 112th Congress has been sworn in and subjected to the reading of the Constitution and its 27 amendments, the direction of that Congress is beginning to take shape. In response to pressure from Americanists, Tea Partiers, Constitutionalists, and other limited-government supporters, Congress’ first effort at legislation will be to vote today to cut its own budget by 5 percent. That would result in savings of a minuscule $35 million, but loyalists are taking heart that the “first olive out of the bottle is always the hardest” and that much bigger targets and greater success lie ahead. Repealing ObamaCare is next on the agenda with passage almost assured. Rep. Fred Upton, (R-Mich), new chairman of the House Energy and Commerce Committee, predicted not only that such a bill pulling ObamaCare “out by the roots” will pass, but might even be able to muster two-thirds of those voting.

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Unfunded Municipal Pensions: Conveyor Belt to Oblivion

Official seal of Prichard, Alabama

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For years the small town of Prichard, Alabama knew they were in trouble. Back in 2004, the city hired an actuary to analyze and summarize their employees’ pension plan. He told the city the plan would run out of money by the summer of 2009: “The plan is projected to exhaust [all of its] assets around [the middle of] 2009.” In September of that year, the city stopped mailing pension checks to its 150 beneficiaries because there was no more money in the account. Nettie Brooks, who had retired from her position as Prichard’s police and fire dispatcher, was unable to keep up with her bills, and filed for bankruptcy. Alfred Arnold, a retired fire captain, took a position as a security guard at a local shopping mall. Eddie Ragland, a retired police captain, hired on as a police officer at the regional airport. And the retired fire marshall ended his life: “When they found him,” said David Anders, himself a retired district fire chief, “he had no electricity and no running water in his house. He was a proud enough man that he wouldn’t accept help.”

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Reality Checks from New Jersey, Illinois

Governor of New Jersey Chris Christie

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Steve Kroft called it “The Day of Reckoning” on his “60 Minutes” segment on Sunday, but many weren’t buying it. Despite persuasive statistics showing that states have overpromised and overspent, Kroft’s conclusion about time having run out on the states was met with denial, even anger. He interviewed Meredith Whitney (who accurately predicted the decline in bank stocks as far back as 2007), who reiterated her conclusion that states’ debts are the next big bubble to burst. Her biggest concern is complacency:

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Top Secret America: Expensive, Chaotic and Dangerous

Headquarters of the NSA at Fort Meade, Maryland.

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Last July the Washington Post published a three-part story on “the huge security buildup in the United States after the Sept. 11, 2001 attacks.” This week, the Post published “Monitoring America,” the fourth installment of its “Top Secret America” series, describing security efforts at the local level.

After two years of research, hundreds of interviews, and thousands of hours poring over documents, the Washington Post investigation was unable to determine anything for sure—except, of course, that the security system is massive:

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The College Graduate Bubble: One Student’s Story

The entrance to the Gallatin School of Individ...

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Cortney Munna bought the lie, hook, line and sinker. The College Board has been selling it for years: “Over the course of a 40-year career, the average college graduate earns about 66 percent more than the typical high-school graduate.” At age 17, Cortney and her mother, Cathryn, decided they “would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it,” as researcher Ron Lieber told their story:

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Obama/CEO Summit: Sweetness and Light

President Barack Obama listens to Safeway Pres...

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Despite being verbally abused and legislatively hamstrung ever since the start of the Obama administration, those CEOs arriving at the Blair House Wednesday for another Summit meeting with the President seemed in good spirits. In a pre-announcement, White House spokeswoman Jen Psaki, was all smiles:  “[This] working session is an opportunity for the president to continue building strong partnerships in the business community.”

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College Education: Is It Worth it?

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Back in September, The College Board published an update of its report, “College Pays,” confirming what most have considered inarguable and revealed truth: Whatever it costs to obtain a sheepskin will be worth it in the long run. The Executive Summary states flatly that “students who attend institutions of higher education obtain a wide range of personal, financial, and other lifelong benefits.”

These include:

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Counting the Costs of Unemployment Insurance

Bismarck ca. 1875.

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As part of the backroom deal to extend the Bush tax cuts for another two years, the GOP gave the progressives an extension of one of their favorite welfare-state building blocks: unemployment insurance—which will undoubtedly add to the long lines of suffering Americans in our country.

Otto von Bismarck, the “Iron Chancellor” of Germany in the 1880s, first introduced the concept of state-mandated unemployment insurance. It was then forcibly introduced in the United States during the Great Depression under the Roosevelt administration and has been expanded regularly ever since. In fact, the proposed extension would be the sixth such expansion since June of 2008.

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States’ Budget Shortfalls: Pressure from Above and Below

Recovery.gov

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With all the attention being focused on extending the “Bush tax cuts,” granting additional unemployment benefits, and the arrival in Washginton of newly minted congressional Representatives and Senators, a major piece of the fiscal puzzle has been ignored altogether: states’ increasingly pressured budgets for next year. As noted by the Center on Budget and Policy Priorities (CBPP), the Great Recession “has caused the steepest decline in state tax receipts on record.”

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The Fed’s Bernanke: Hubris and Dissimulation

President Barack Obama confers with Federal Re...

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Fed Chairman Ben Bernanke’s recent 60 Minutes interview raised more questions than it answered. Some even questioned the questions. Gary North explained that the Fed chair was being pushed to defend his decision to purchase more government securities in order to stimulate the economy. Interviewer Scott Pelley was at an admitted disadvantage, and failed to ask Bernanke exactly why he thought additional stimulating would work when past stimulations haven’t.

As North suggested, Pelley should have asked Bernanke “Why?”

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American Austerity and the End of “Wars of Choice”

Looking south from Top of the Rock, New York City

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Foreign Affairs, the mouthpiece of the Council on Foreign Relations, is like a 500-pound canary: When it speaks, people listen. Gary North referred to the article in the November-December 2010 issue entitled “American Profligacy and American Power” as “a turning point…the first official announcement…that the Federal deficit is out of control…which threatens the survival of America’s position as the world’s most influential political-military participant.”

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Breaking Hauser’s Law

Hoover Institution

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Writing in the Wall Street Journal, chairman emeritus of the Hoover Institution, Kurt Hauser, strongly disagreed with the Obama administration’s claim that by raising taxes on just the top two percent of all taxpayers there would be a significant increase in tax revenues to the government. He claimed that Hauser’s Law would limit any anticipated increase in revenues, and it might even reduce them.

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Bloodbath Coming?

Mel Gibson as William Wallace anachronisticall...

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White House deficit commission co-chairman Alan Simpson spoke at a Christian Science Monitor roundtable on Friday morning saying, “I can’t wait for the blood bath in April. It won’t matter whether two of us [on the commission] have signed this or 14 or 18. When debt limit time comes, they’re going to look around and say, ‘What…do we do now? We’ve got guys [House freshmen] who will not approve the debt limit increase unless we give ’em a piece of meat, real meat, off of this package.’ And boy the blood bath will be extraordinary.”

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The National Debt: Scary Facts, False Conclusions, and Gumption

Cropped version US national debt clock / billb...

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When Anthony Mason, CBS News’ senior business correspondent, visited the Treasury Room, he called it the location of “essentially the American credit card machine.” It’s where traders buy and sell United States’ treasury bills, notes, and bonds in order to finance government operations. Mason’s revelation was profound: “I found that room kind of spooky. If we can’t [sell] those IOUs—which keep the government running on a day-to-day basis—then we can’t run the country anymore. We [won’t] have the money.”

CBS then went on to review the repetitive and increasingly tiresome litany of disasters that await if those IOUs can’t be sold:

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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.