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

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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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

Bumper sticker

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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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Social Security: No COLA for You

Seal of the United States Social Security Admi...

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When the Social Security Administration announced that there would be no cost-of-living-adjustment for 2011, Betty Dizik, Claire E., John Walker, Nancy Pelosi, and the AARP all agreed it would be difficult for the 58 million beneficiaries currently receiving checks. Betty’s only source of income is her $1,200 monthly payment from Social Security. At age 83, she exclaimed, “I’m like a lot of other people in my predicament who live on Social Security. It’s hard. We cannot make ends meet.”

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Study: VAT Will Cost More Jobs, Reduce Living Standards

The VAT cometh

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Time is running out on the Obama administration to pass a value-added tax: The mid-term elections are two weeks away with Democrats anticipating heavy losses, the lame-duck session is due to start on November 15, President Obama’s National Commission on Fiscal Responsibility and Reform publishes its report on December 1, and Congress already faces a long list of “must-pass” legislation. A just-released study about the negative impacts of a VAT isn’t going to help.

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Fed Plans to Increase the Money Supply—Again

Federal Reserve Bank of New York Building

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The notes of the latest meeting of the Federal Reserve, released on Tuesday, clearly show the Fed’s next step in trying to solve the problem it has created: Quantitative Easing II, or QE2 (qualitative easing is Fed-speak for increasing the money supply). The meeting lasted more than five hours and consisted of a debate about when to start the process: now, or later.

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A Primer in Protectionism

Tariff - Anti-Tariff

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Despite opaque and dissembling arguments that what the world needs now is a world currency to replace the weakening dollar, there are significant obstacles confronting that elitist dream. After the IMF (International Monetary Fund) annual meeting in Washington ended, leaders could only conclude that the IMF needed to keep “a close watch on currencies,” using “candor” and an “evenhanded” approach to such observations.

While departing amidst platitudes, the “leaders'” real issue is rising protectionism being waged by its members through currency manipulation. Simply put,

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Greenspan’s Fear and Trembling

CHICAGO - APRIL 08:  Former Chairman of the Fe...

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Alan Greenspan, former chairman of the Federal Reserve, is worried about many things. In March he worried about the future of the economy. “The important lesson,” he wrote, “is that bank regulators cannot fully or accurately forecast whether, for example, subprime mortgages will turn toxic…A large fraction of such difficult forecasts will invariably be proved wrong…Anticipating the onset of crisis…appears out of our forecasting reach.”

In June he worried about a revival of inflation:

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Translating Bernanke-Speak About the Great Recession

WASHINGTON - DECEMBER 07:  Federal Reserve Ban...

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When Fed Chairman Ben Bernanke says the country is in trouble, many aren’t listening, partly because the media wasn’t there reporting on it, and partly because those listening can’t understand what he’s saying. Speaking at the Annual Meeting of the Rhode Island Public Expenditure Council on Monday, the best he could do was “There is no way around it—meeting these challenges will require…the public to make some very difficult decisions and to accept some sacrifices.”

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The Real Cost of the Wars

military cemetary

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When the book The $3 Trillion War debuted in 2008, it was roundly criticized by such notables as John Lott, Richard Zerbe and Edgar Browning, who held that estimates of the cost of the war in Iraq were overstated. But in a conference call earlier this week, authors Joseph Stiglitz (Nobel Prize winner) and Linda Bilmes (Harvard University professor), said they underestimated those costs by at least one third.

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Third Trillion-Dollar Bailout: The States

Meredith Whitney, CIBC Sr. Financial Instituti...

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It was appropriate for Meredith Whitney to title her latest 600-page report for her investment clients The Tragedy of the Commons. That title was borrowed from an article written in 1968 by Garrett Hardin and published in Science magazine, illustrating the ultimate failure of people hoping to live off the incomes of others eternally.

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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.
Copyright © 2018 Bob Adelmann