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

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

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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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Restoring the American Dream

1957... After the Prom - by Norman Rockwell

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The incessant and never-ending drumbeat of bad news about the economy was deftly summarized here, which concluded that 16 new records had been set over the past 12 months, “and they are all bad.”

These records included:

  • more than 100,000 homes were repossessed in September;
  • 41 million Americans are on food stamps;
  • 43 million are living in poverty;
  • Sales of new homes in July declined to the lowest level ever recorded;
  • Banks are holding an inventory of more than 1 million foreclosed homes; and

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John Allison: Free Market Banker

BB&T

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When asked during an “Online with Terry Jeffrey” interview about how to solve the debt crisis facing the country, former Branch Banking & Trust (BB&T) CEO John Allison, was direct:

If you run the numbers…the United States goes bankrupt. It’s a mathematical certainty.

Now countries don’t go bankrupt the way companies do. They don’t file [for] bankruptcy. They usually hyper-inflate. They print a bunch of paper money, or they become Third World economies like Argentina—unless [they] change direction. So, we absolutely have to change direction.

When challenged about how to change direction, Allison was refreshingly candid:

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GM’s IPO: Where’s the Weevil in the Hardtack?

Logo of General Motors Corporation. Source: 20...

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Steven Rattner, former counselor to Treasury Secretary Timothy Geithner, celebrated in Huffington Post, “In the end, it was a blow out!” With the old General Motors successfully selling shares in its new General Motors at $33 per share, taxpayers will allegedly be getting back part of the $50 billion in bailout money used to rescue the company 17 months ago.

As Rattner exulted:

The mother of all initial public offerings—that of the refreshed, revitalized and revamped General Motors—went off better than almost anyone expected….

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American Ideals Still Highly Favored

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ABC News reported the results of its latest poll indicating that the American public’s optimism had just hit a 36-year low. A quick scan of the headline, however, revealed that 75 percent of those polled “still call America the greatest country in the world.”

What’s remarkable is that this belief in America remains so high in the face of the many assaults sustained by its citizens not only over the past two years of the Great Recession but over the past several decades. For instance, a recent post reviewed 10 signs that the “U.S. is becoming a third world country,” including:

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Roubini v. Rockwell on the Gold Standard

Nouriel Roubini, Turkish economist, professor ...

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New York University economics professor Nouriel Roubini made a name for himself back in 2005 by predicting the Great Recession long before others did. Fortune magazine wrote “In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy.” The New York Times said he predicted “homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt.” In September, 2006 Roubini warned that “the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence, and, ultimately, a deep recession.”

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Deficit Commission Report: Deficit Reduction Lite

The Deficit Reduction Whopper

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The co-chairs of President Obama’s Deficit Commission, Erskine Bowles and Alan Simpson, announced many of the possible recommendations that could appear in the report of the Commission due December 1. They included just enough to arouse the ire of partisans on both sides, without making any serious inroads into real deficit reduction. Calling it a “politically provocative and economically ambitious package,” the New York Times said the initial proposals are “igniting a debate that is likely to grip the country for years.”

The co-chairs aren’t expecting much to happen but they claimed they wanted to “start the conversation” now.

Some of the proposals on the reduced spending side include:

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Bi-Partisan Effort to Cut Spending: A First Step Only

F-35 in flight

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When the conservative National Taxpayers Union (NTU) and the liberal U.S. Public Interest Research Group (USPIRG) announced their report “Toward Common Ground: Bridging the Political Divide to Reduce Spending,” the authors acknowledged that “while these proposals won’t get us all the way [to significantly reduced government spending], it is a start that could establish some common ground and make government more accountable in the process.”

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Chevy Volt Misses the Mark

Chevrolet Volt plug-in

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Now that the Chevy Volt, General Motors’ electric car, is about to arrive in selected dealers’ showrooms around the country, it has been getting a lot of press. Some are puff pieces, one of which appeared in USA Today, while others are much more critical.

According to James Healey of USA Today, the Volt “represents a staggering amount of engineering…which combines an electric motor…and a small gasoline engine to create a drive train that uses no gasoline for 25 to 50 miles, [and] then sips it.”

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World Bank’s Trial Balloon Pops

Deputy Secretary of State Robert Zoellick

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Before the Internet, Robert Zoellick’s brief outline of suggested topics for the G20 meeting this week in Seoul, Korea, might have been considered just an interoffice memo. It appeared in London’s Financial Times, contained obscure references to arcane subjects that would be of interest only to international bankers determined to push their agenda for a world currency, and was written by a certified member of the internationalist “insider” cabal. But when Zoellick wrote that the “cooperative monetary system…should also consider employing gold as an international reference point…,” Internet bloggers picked up on it immediately, and the cover was blown.

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Behind the Numbers: October Employment Report

Spiekermann House Numbers

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Even though 151,000 new real jobs were added in October, according to the Bureau of Labor Statistics, the unemployment rate stayed at 9.6 percent. This announcement not only successfully masked the fact that fewer people were looking for work, which made the rate look better, but also that more people are staying unemployed longer.

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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.