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

Bernanke: No Economic Recovery Yet; Diesel Index Confirms It

Big Rig stopped on the 405

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In what could be one of the understatements of 2011, Fed Chairman Ben Bernanke, speaking at the International Monetary Conference in Atlanta on Tuesday, remarked, “U.S. economic growth so far this year looks to have been somewhat slower than expected…. A number of indicators also suggest some loss of momentum in the labor market.” A number of those indicators were reviewed here and every one of them showed weakness in the economy. However, each of them suffers from a critical disadvantage: They are backward-looking indicators, or “rear-view mirror” views of the economy. None of them is “real-time,” giving a true picture of the economy at that moment in time. As a result, Bernanke left his audience with glittering generalities and modest hopes for the future:

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The Food Crisis Explained (Away)

Logo of the Food and Agriculture Organization

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Hysterics and Manipulation

When the UN’s Food and Agriculture Organization (FAO) announced its latest round of increases in the cost of food, analysts were nearly breathless in their recommendations for solutions that involved—what else?—more international “cooperation,” under the tender ministrations and control of the UN.

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The Federal Reserve for Kids: Deceptive Q&A

Big Brother (David Graham) speaking to his aud...

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In 2006 the Federal Reserve decided it was time to begin to reach out and influence middle schoolers with the party line about the Fed, and launched the Federal Reserve Kids Page. Consisting of 10 harmless-appearing questions, either in English or Spanish, the Fed’s answers gloss over, and sometimes deliberately misstate, the correct answers:

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The Economy Also Weakens Obama’s Reelection Hopes

Obama leaves the stage

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The trickle of bad news about the economy has turned into a torrent, and is now threatening Barack Obama’s chances at reelection. On Wednesday the Institute for Supply Management issued its manufacturing index, which was expected to rise. Instead, it fell, to 53.5, perilously close to the edge of recession in manufacturing. John Silva, an economist at Wells Fargo, was blunt:

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Fair Tax? Flat Tax? The Case for No Tax

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Stephen Moore’s math in his Wall Street Journal article is compelling: by the time the Democrats’ proposed three-percent surtax on incomes over $1 million a year is added to all the other taxes people pay, those at the high end would be paying 62 percent of their income in federal and state income taxes.

He adds together the current 35 percent top income tax bracket to the three percent surtax, along with the expected repeal of the Bush “tax cuts” in 2012, payroll taxes, Social Security and Medicare taxes, the 0.9 percent Medicare surtax, the hidden 3.8 percent sales tax in ObamaCare which begins in 2014, and state income taxes, and he comes out, inevitably, to

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Greek Austerity, Privatization Programs Won’t Be Enough

George Papandreou

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In its efforts to avoid restructuring (i.e., defaulting on) its debt, Greece announced the sale of some of its assets to raise funds and to satisfy the austerity requirements imposed on the country last March. It is trying to raise $70 billion by 2015. Its efforts won’t be nearly enough.

For sale is the country’s 1/6th interest in OTE, Europe’s largest telecom company, its one-third interest in the Post Savings Bank, all of its interest in the country’s two largest port operators. It will also reduce its ownership shares significantly in

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Tax Breaks, Subsidies, and Big Oil

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Echoing the Obama administration’s characterization of the tax breaks being enjoyed by the five major oil companies (Exxon, ConocoPhillips, BP America, Shell, and Chevron) as “subsidies,” the Senate tried to remove them on Tuesday, but failed.

The White House said,

The administration believes that, at a time when it is working with the Congress on proposals to reduce federal deficits, the nation cannot afford to maintain these wasteful subsidies.

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Social Security: Way Beyond Tweaking

Scanned image of author's US Social Security card.

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Just one year ago this week the Senate Special Committee on Aging, headed up by wealthy and aging Senator Herb Kohl (D-WI), announced that massive shortfalls in funding for Social Security could be papered over with just a few modest “tweaks“:

Modest changes can be made over time that will keep the program in surplus. They are not draconian, as the report points out, and they can be done and [they] will be done.

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Insider Scoffs at Default Concerns, Blasts Geithner, Bernanke

Barack Obama and Timothy Geithner

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Although Monday, May 16th is the day the financial world was supposed to end as the federal government’s spending hit the debt ceiling, Treasury Secretary Timothy Geithner (left) announced that he was able to put off that day of reckoning until August 2nd. In a letter to Congress, Geithner said that by borrowing from a pension fund belonging to federal workers and from an emergency fund set up to “help deal with foreign financial crises” coupled with slightly higher tax revenues than expected, he is able to stave off the inevitable until

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Runaway Inflation on the Cusp?

2012  VOTE LIKE YOUR LIFE DEPENDS ON IT ..BECA...

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Buried in the latest report from the Bureau of Labor Statistics (BLS) on the Consumer Price Index was some disconcerting news. On the surface, there appeared to be little to be concerned about, with the index “for all items, less food and energy” rising just 0.2 percent in April. On an annual basis, the BLS “all items” index increased just 3.2 percent over the past 12 months.

However, that 3.2 percent was the highest since October of 2008, reflecting increases in energy of

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Greece is Out of Options

Greek Flag

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Writers for The Wall Street Journal’s lead article on Tuesday expressed surprise that Greece’s fiscal problems are “coming to the boil once more.” After all, when Greece went hat in hand to members of the eurozone last year, they were able to secure a $158 billion bailout whose strings attached required severe austerity measures on the Greek citizens to resolve the matter. The matter has obviously not been resolved, and Greece is back to the table, asking for more assistance. This time it’s a much tougher sell.

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Boehner Caught in the Middle

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House Speaker John Boehner’s speech to the Economic Club of New York on Monday night revealed much about the pressures he is facing in the fight over increasing the debt ceiling. In attendance were investors, bankers, and other Wall Street suits looking for reassurance that Congress wasn’t going to spoil their party by taking away their punch bowl of profligate government spending, but also that any cuts in spending would be modest and deferred into the future. Such reassurance would

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Chile’s Privatized Social Security Program is 30 Years Old, and Prospering

The Coat of arms of Chile

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As a quiet example of how privatizing Social Security works in the real world, Chile’s 30-year experiment is succeeding beyond expectations. Instead of running huge deficits to fund the old “PayGo” system, private savings now exceed 50 percent of the country’s Gross Domestic Product.

Prior to May 1, 1981, the Chilean system required contributions from workers and was clearly in grave financial trouble. Instead of nibbling around the edges to shore up the program for another few years, José Piñera, Secretary of Labor and Pensions under Augusto Pinochet, decided to do a major overhaul of the system:

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Evidence for Double Dip is Growing

Recession

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Establishment economists and other economic cheerleaders were disappointed to learn that, despite the government’s best efforts to revive the economy through Keynesian interventions and stimuli, the GDP (Gross Domestic Product) for the first quarter of 2011 was half the rate of growth in the last quarter of 2010.

As noted by the Wall Street Journal,

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States’ Pension Woes Worsening

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The latest study by The Pew Center on the States shows not only that states have not funded the promises they made to their employees when they retire, but that the gap between those promises and the states’ contributions to pay for those promises is widening.

According to Pew, the shortfall is at least $1.26 trillion (with a t), but could approach $5 trillion depending upon rate of return assumptions. Because of the precipitous decline in revenues in 2009, states were able to pay only

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High Gas Prices Set to Cause Double Dip Recession

Fuel Guage

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“I’m sure the rising cost of energy is bothering the market,” said Fred Dickson, chief investment strategist at D. A. Davidson & Company last week. “I do think the uptick in gasoline prices will have an impact on consumer spending in the next few quarters.”

One could scarcely call it an “uptick,” with gasoline prices up by $.70 a gallon since the first of the year, and approaching $4 a gallon. The American Automobile Association said at that level consumers “will have to start cutting back to pay their fuel expenses. This could adversely affect restaurants, malls, and entertainment venues that count on people driving to get there.”

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Speculators and High Oil Prices Explained

Super Contrails as the 767 flies through cloud...

Super Contrails as the 767 flies through cloud… (Photo credit: AvgeekJoe)

Last Thursday, speaking in Reno, Nevada, President Obama announced that the Department of Justice was going to examine the role of “traders and speculators in the gasoline and oil markets,” and how they contribute to high gas prices.

The Attorney General [is] putting together a team whose job it is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators. We are going to make sure that no one is taking advantage of American consumers for their own short-term gain.

What do speculators do? Here is a cogent explanation by Victor Niederhoffer, a well-known speculator and author of The Education of a Speculator:

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Gold at $1,500 an Ounce and Moving Higher

gold cast bar

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The price of one ounce of gold exceeded $1,500 yesterday, and immediately the media was filled with explanations. Jan Harvey, writing for Reuters, said gold was benefiting from “the threat of a downgrade to the United States’ triple-A credit rating this week and fresh worries over euro zone debt [that] fueled fears over the outlook for both the dollar and the euro.”

The possible termination of the Federal Reserve’s program of buying U.S. Treasuries (called Quantitative Easing, or QE2) in June adds uncertainty to the markets, and “There is still going to be a lot of uncertainty over the strength of growth in the United States,” according to Macquarie analyst Hayden Atkins. Simon Weeks, head of precious metals at the Bank of Nova Scotia, added:

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Government to Sell GM Stock Before It Declines Further

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When the federal government took over General Motors in July of 2009, it was “the only way to avoid an economic calamity,” according to President Obama.

Stuffed full of $50 billion of taxpayers’ money, GM began to revive, a little. It had lost an amazing $103 billion over the previous five years, partly by acceding to union demands for generous compensation packages (including payments to workers even when the plants where they worked weren’t even running!), and partly by

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Standard & Poor’s: Clock is Ticking on U.S. Debt

NEW YORK - NOVEMBER 16:  A trader works on the...

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Within minutes of Monday morning’s announcement by the credit-rating agency Standard & Poor’s that “we have revised our outlook on the long-term rating [for US government debt] to negative from stable,” the Dow Jones Industrial Average dropped 200 points.

In its announcement, the agency tried to soften the blow:

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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.