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

Tag Archives: Economy

Still Waiting for the Recovery

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The economy has gained either 2.5 million jobs or 3.6 million jobs since the Recovery Act was signed into law in January, 2009, depending upon which statistical “model” is used, according to Christina Romer, Chair of the White House‘s Council of Economic Advisers. When compared to the report issued earlier this month by the Bureau of Labor Statistics, neither number is even close.

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Fixing State Budgets will be Painful

Carly Fiorina (MBA 1980), former CEO of Hewlet...

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Pew Research recently polled Americans about ways to bring state budgets into balance and found that respondents did not like any of the options. In its Congressional Connection poll released June 28, Pew Research asked if a federal bailout of financially troubled states should be considered. Barely one in four said yes. Nearly 60 percent said no, that the states should take care of their problems on their own.

Other options offered by Pew included cutting transportation funding, raising taxes, cutting health services, reducing spending for police and fire departments, and slashing the public school budget. Each of those options was also strongly opposed, often by majorities approaching 70 percent.

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The Millennial Generation, Jobs, and Reality

Generation Y

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In a microcosm, Scott Nicholson, at age 24, represents his Millennial Generation well: He graduated from college two years ago and is still looking for work.

But he’s optimistic nevertheless. He moved back into his parents’ home in an upper-middle-class neighborhood outside of Boston, and spends his mornings searching corporate websites for “suitable” job openings. His parents are feeding and clothing him, as well as paying his cell-phone charges and insurance premiums. But they are beginning to get concerned, especially when Scott was finally offered a position at a nearby casualty insurance firm, as a claims adjuster—and he turned it down.

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Fannie and Freddie De-​​listed From NYSE: Now What?

Fannie Mae headquarters

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When ABC News announced that Fannie Mae and Freddie Mac would be de-listed by the New York Stock Exchange on July 8, writer Rich Blake said that “these once mighty enterprises will trade alongside stocks on the Over-The-Counter Bulletin Board, a place where many companies go to die.”

As a eulogy Blake expressed the usual statist paean: “It’s difficult to contemplate how the U.S. mortgage market could function without the nearly $6 trillion in funding they provide to this market and the institutions that comprise it…The housing sector would be in even worse shape if not for those twin…enterprises.”

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The Invisible Recovery

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On Friday Reuters reported that non-government payrolls rose only slightly in June and overall employment fell “for the first time this year…indicating the economic recovery is failing to pick up steam.” This report followed several others last week indicating weakness in consumer spending, housing, and manufacturing which “have heightened fears [that] the economy could slip back into a recession.”

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Financial Reform: Expanding Hubris, Limiting Freedom

Chris Dodd

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When the House passed the 2,319-page Dodd-Frank financial reform bill by a vote of 237-192, all it did was confirm for many the extraordinary hubris of legislators believing they could in fact “fix” the problems they themselves created which resulted in the Great Recession of 2008.

John B. Taylor,  professor of economics at Stanford University says, “The main problem with the bill is that is based on a misdiagnosis of the causes of the financial crisis…the presumption that the government did not [already] have enough power to avoid the crisis.”

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Double Dip Evidence Piling Up

Double Dipped Cones

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When John Hussman, in his Weekly Market Comment, noted that the Economic Cycle Research Institute’s (ECRI) Index “has slumped to the lowest level in 44 weeks and has now gone to a negative reading,” he was confirming other recent signals that the economy was giving off, notably here and here, that the possibility of a double dip recession continues to increase.

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New York’s Plan: Kick the Can

An empty tin can.

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New York Governor David Paterson said in a radio interview on June 10 that his state might have to issue IOUs to pay its bills, or else face “anarchy in the streets.” The state faces a $9.2 billion deficit, and the legislature is two months late in voting on the budget.  An actual shutdown of state services has been avoided, temporarily, by enacting temporary emergency spending bills.  Even if the government shuts down, there is serious question about whether police, firefighters, prison guards and emergency and healthcare workers could continue to work without pay. “You could have anarchy literally in the streets if the government shuts down,” Paterson said.

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50-year-old Book is Amazon Bestseller

Cover of "The Road to Serfdom: Text and D...

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When Glenn Beck urged his listeners, “Please, pick it up. The Road to Serfdom. Make it part of your essential library,” sales of Austrian Economist Frederick von Hayek’s book at Amazon.com pushed it to Number 1 the next day. Prior to the election of President Obama, “The book sold respectably at a clip of about 600 copies a month,” according to Bruce Caldwell, editor at the University of Chicago Press. “But then, in November 2008, sales more than quadrupled, and they haven’t slowed down since.”

When John Stossel, host of Fox Business, featured the book on his show on February 21, sales jumped again.

Opinions as to the remarkable interest in a book published in 1944 by an obscure economist vary, but most center on the book’s uncanny prediction that is now being fulfilled in the United States:

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National Debt at Tipping Point?

Tea Party

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The Wall Street Journal took another look at the $13 trillion national debt written about here last week and announced that, according to a study by economists Carmen Reinhart and Kenneth Rogoff, the economy has now reached the tipping point, the Reinhart-Rogoff Line, better known as the point of no return.

“Once a developed nation’s debt crosses it, its annual growth [tends to be much] lower.” The best estimate is that, once that point is reached, the GDP will be reduced by one-third, with little chance of regaining normal economic output for the foreseeable future.

In their book, This Time Is Different, Reinhart and Rogoff state:

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Mortgage Defaults Increasing

Luigi Zingales

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According to the New York Times, “A growing number of the people whose homes are in foreclosure are refusing to slink away in shame.” They are just refusing to make their mortgage payments but continue to live in their home until the bank evicts them. LPS Applied Analytics says the average borrower in foreclosure “has been delinquent for 438 days before actually being evicted.” This means that the homeowner essentially lives rent-free for nearly 15 months, and can use his mortgage payment to make other payments such as car loans and credit cards.

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Is the Census Bureau Double Counting Jobs? [VIDEO]

Seal of the United States Census Bureau. The b...

When John Crudele quoted numerous Census Bureau workers about being hired, fired, and then rehired repeatedly, he called them “horror stories.” James O’Keefe, notorious and fearless investigative reporter, calls it part of a trend: “These days, Americans know that people in backrooms are taking advantage of their power. And they’re fed up with it.”

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Jobs? What Jobs?

Henry Hazlitt

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When CNBC announced that the number of workers filing new claims for unemployment benefits fell last week while private employers added new jobs in May, this was “further evidence [that] the labor market was improving.” In more muted fashion, the Associated Press called it a “slow-motion recovery,” but a recovery nevertheless.

This was in line with Vice President Joe Biden’s prediction back in April that the economy would be adding between 250,000 and 500,000 jobs “in the next couple of months.” Similar sentiments were echoed by President Obama on Wednesday in a speech at Carnegie Mellon University:

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Economic Forecast: Summer of Discontent

Frowny

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After six straight months of gains in consumer spending the April numbers showed no change from March, according to the Commerce Department. This was a surprise to some who have been tracking such things as the University of Michigan’s index of consumer confidence (higher), consumers’ expectations on the economy over the next 12 months (higher), moderate real job creation (higher), savings rate (higher) and manufacturing activity (higher).

Others remained sanguine, holding that “We do not expect household spending to flatline in the coming months,” according to Michelle Girard, senior economist at RBS in Stamford, Connecticut.

Consumers themselves, however, are not a happy lot. According to Rasmussen Reports, only 35 percent of Americans are planning to take a summer vacation this year, and those who are, aren’t planning on spending as much as they have in the past.

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$13 Trillion and Counting

Tax Day Debt Protest 2009

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When former Comptroller General Bill Walker, who headed the U.S. Government Accountability Office, said two years ago that the “official” debt of the United States “is only around $10 trillion,” he wryly suggested that since this number was produced by “government accounting, which…allows one to ignore Social Security, Medicare and the new prescription drug benefit [it was like] ignoring rent, food and utilities in your household budget [and] it will lead to a few bounced checks.” However, he added, “Our real debt is about ten times higher,” or about $100 trillion.

At the time this was a breath-taking number, but Walker was just repeating what Richard Fisher, President of the Dallas Federal Reserve, had said just a couple of months earlier.

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Biden Predicts Job Growth—but Where’s the Evidence?

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Vice President Joe Biden predicted job growth of 250,000 to 500,000 jobs a month in the next two months, according to CNBC on Monday. Biden was speaking at a political fundraiser in Pittsburgh, where he said, “We caught a lot of bad breaks on the way down. We’re going to catch a few good breaks because of good planning on the way up…All in all, we’re going to be creating somewhere between 100,000 and 200,000 jobs next month.”  Even though some have cautioned Biden about his excessive and premature enthusiasm, Biden continued:  “I’m here to tell you some time in the next couple of months we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.”

However, the evidence and logic backing up Biden’s prediction are clearly lacking.

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Dow Theory’s Russell Says Major Crash Coming

Charles Dow -an American journalist who co-fou...

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The day after the “flash crash” in the stock market on May 6th, Richard Russell, the octogenarian author of the Dow Theory Letterssaid:

Something dramatic lies ahead…Most players believe that yesterday’s “sell-off” was a direct result of the mess in Greece…but that seems too simple and obvious to me. The far more important question is whether the entire advance from the March 2009 low is fated to be wiped out…my suspicion is that the stock market is back in the grip of the bear.

Russell founded the Dow Theory Letters in 1958 and has a remarkable record of calling tops and bottoms in the markets ever since.  He believes in the basic tenets of Dow Theory which were first discovered, refined, and then explained by Charles Dow who began publishing a little newspaper in 1889 called The Wall Street Journal.

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SENATOR Rand Paul?

Rand Paul

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If Rand Paul’s poll numbers are confirmed in today’s Republican primary in Kentucky, it will, according to the New York Times, “mark one of the most important moments yet for the Tea Party.”  Establishment Republicans such as Mitch McConnell (R-Ky.) and former Vice President Dick Cheney have endorsed Paul’s opponent, Trey Grayson. But it is Paul who is leading by double-digits in thelatest polls, and the polls also show Rand leading his potential Democrat challengers, state Attorney General Jack Conway and Lt. Gov. Daniel Mongiardo. That is, it appears likely that Rand Paul will not only win today’s primary but will go on to win the Senate seat now held by retiring Senator Jim Bunning in November.

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10,000 Commandments—The Hidden Tax

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When the Competitive Enterprise Institute (CEI) announced the conclusions of its annual “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State” earlier this week, it came as no surprise to learn that the rules and regulations placed on the economy by illicit agencies of the “fourth branch of government” constitute an enormous burden that is largely uncounted.

What was surprising was the horrendous cost of that burden which constitutes an additional tax on the economy.

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The Income Tax and Sovereignty

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April 15th is the day when American taxpayers must file their income tax returns, and Tea Partiers are protesting those taxes all across the country. One question not being raised is: If these citizens are sovereign over their government, who can explain the income tax? How did this happen? Are the citizens not sovereign after all?

When Thomas Jefferson wrote the Declaration of Independence, he clearly relied on the thinking of his mentors, especially including John Locke. According to Jim Powell,writing for The Freeman, Locke “expressed the radical view [at the time] that government was morally obligated to serve people, namely by protecting life, liberty, and property. He explained the principle of checks and balances to limit government power. He favored representative government and a rule of law.”

Locke published two treatises on government in 1689 in which he said:

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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.