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

Is Breakfast Now a Luxury Item?

Breakfast - By the time I got around to eating...

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With the wholesale prices of orange juice and coffee increasing by 20 percent and 41 percent respectively just over the past six months, it’s not surprising to see the reflection in increased prices for them on grocery store shelves. Keith McCullough of Hedgeye asked “What’s for breakfast?” and then answered “Inflation.”

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Removing Geithner’s Temptation to Play Chicken with Debt Ceiling

Official portrait of United States Secretary o...

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When Austan Goolsbee, chief economic advisor to the Obama administration, was asked about the impact not raising the debt ceiling would have on the country, he said, “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.” He continued:

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Financial Crisis Inquiry Commission Report: Classic Misdirection

Money

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After nearly two years of investigation, reviewing millions of documents and conducting hundreds of interviews, the Financial Crisis Inquiry Commission (FCICreleased its report, pinning the blame for the Great Recession largely on Wall Street and alleged deregulation of the financial markets in the 1990s.

The report of the panel of 10 (six Democrats and four Republicans) was delayed by a month as the final report became more of a partisan attack on Wall Street and a push for more regulation of the financial markets. The Republicans ultimately decided not to endorse the report, but instead issued their own report on the cause of the financial crisis.

According to the official report issued today by the FCIC, blame for the financial meltdown beginning in 2007 can be placed on:

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Is the Housing Market Beginning to Clear?

Logo of the National Association of Realtors.

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The conflicting news reports on the housing market can give the casual observer a headache: “December Sales of U.S. Existing Homes Jump to 7-Month High,” shouts Bloomberg. “Housing Starts Decline, [but] Building Permits Rise,” exults the National Association of Home Builders (NAHB). Google news drearily reports that “2010 Ends as 2nd Worst Year for Home Builders,” while CNNMoney.com warns that “Shadow Inventory Threatens Housing Recovery.”

It’s enough to “cross a Rabbi’s eyes,” as Tevye profoundly concluded in Fiddler on the Roof.

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S&P Downgrades Japan: Harbinger for US

Japanese 10,000 Yen Note, Macro Photo

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Standard and Poor’s gave plenty of reasons for its downgrade of Japan’s credit rating yesterday such as increasing annual deficits and soaring national debt, an aging population, shrinking workforce, and a government in gridlock. With their national debt approaching $11 trillion and a gross domestic product of just under $5.5 trillion, Japan’s ratio of debt to GDP is now

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Federal Deficit Outrage

A lot of digits

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Back in August of 2010, the Congressional Budget Office estimated the federal deficit for 2011 to be $1 trillion. On Thursday, after revising its assumptions, the CBO announced they missed the mark by $500 billion.  The deficit number has been revised upward to $1.5 trillion, and could bring the national debt to $20 trillion by 2021.

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Military Spending: The New Third Rail

Jet Fighter Escorts

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When the Spending Reduction Act of 2011 was unveiled by House Republicans Scott Garrett (R-N.J.), Jim Jordan (R-Ohio), and Senator Jim DeMint (R-S.C.), U.S. News and World Report called it “eye-popping,” referring to the bill’s attempt to rein in government spending by $2.5 trillion over the next 10 years. Rep. Jordan, who is the Chairman of the Republican Study Committee (RSC), explained the need for such sharp cuts:

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HAMP Failure, Unemployment Numbers, and Suffering Banks

housing bubble..if i pop, you're screwed!! ......

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Keeping in mind that the “beige book” report from the Federal Reserve yesterday is only a compilation of anecdotal reports from businesses across the country, any conclusions in that report that the economy “continued to expand moderately,” and that it “continued to improve, on balance,” should be viewed with extreme caution. For buried in the report were the comments that “the housing sector remains a significant drag on the economy” and that “activity in residential real estate and new home construction remained slow across all Districts.”

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Housing Prices to Fall Further

FOR SALE BY OWNER (if you can find it)

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When Bloomberg polled so-called real estate “experts” about the housing market, they expected a slight pull-back in housing prices of perhaps 0.2 percent when compared to a year ago. Instead, the Case-Shiller Index showed prices dropped four times greater than expected: “The biggest year-over-year decline since December 2009,” according to the group.

This caused many of those observers to confirm the worse than expected result.

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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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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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The Chicago Merry-Go-Round

William Daley

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When President Obama announced the appointment on January 6 of former Clinton administration Commerce Secretary William Daley as his new Chief of Staff, he had nothing but high praises for him, calling him a “patriot” who represented a position of moderation without histrionics. It also smacked of nepotism, continuing the circular flow of Obama insiders from the political machinery of Chicago to Washington and back again. The chorus of approval came from the usual sources, such as the U.S. Chamber of Commerce. Chief Executive Officer Thomas J. Donahue exulted:

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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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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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FCC Ruling is Irrelevant

Internet Map. Ninian Smart predicts global com...

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There have been sighs of despair and much hand-wringing coming from observers of the latest attempt by the FCC to intervene in the operations of the Internet. The noisiest came from one of the two commissioners who voted against the ruling, Robert McDowell.

Despite a court ruling earlier this year which limited the FCC’s jurisdiction over the Internet, and Congressional pressure to leave well enough alone, McDowell warned that the FCC’s decision yesterday is “likely to have the perverse effect of inhibiting capital investment, deterring innovation, raising operating costs, and ultimately increasing consumer prices.” He concluded that this decision “may end up marking the beginning of a long winter’s night for Internet freedom.”

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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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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.