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

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?

Vice President Joe Biden takes the oath of off...

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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

Moses with the tablets of the Ten Commandments...

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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

Portrait of John Locke, by Sir Godfrey Kneller...

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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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Will America Get a Value Added Tax (VAT)?

President's Advisory Panel for Federal Tax Reform

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Former Federal Reserve Chairman Paul Volcker sent up a trial balloon at the New York Historical Society April 6 when he said that a Value-Added Tax (VAT) needed to be considered in light of the huge deficits facing the country. According to Volcker, the VAT is “not as toxic an idea” as many have considered it to be in the past, and “if at the end of the day we need to raise taxes, we should raise taxes.”

He wasn’t the first one to float this recently. Charles Krauthammer wrote late last month that “as the night follows the day, the VAT cometh” and that “a national sales tax near-universal in Europe is inevitable.” Because of the huge deficits facing the nation, exacerbated by the newly passed ObamaCare bill, there is no way out except to raise taxes, according to Krauthammer.

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Strategic Defaults: Morality vs. Reality

Stuffed

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According to RealtyTrac, nearly 3 million foreclosures were filed in 2009. And with almost 10 percent of all mortgages now delinquent nationally, those homeowners are faced with a painful decision: continue to make payments even if they are underwater, or do a “strategic default.”

In January, 2006, a young professional couple with two children bought a three-bedroom home in Salinas, California, for $585,000.  With excellent credit, they signed the papers for a no-money-down, 30-year, fixed-rate mortgage, with payments of $4,300 a month. Today, the balance they owe is $560,000, but the present market value of their home is estimated to be about $187,000. Here is their dilemma: They made a promise, and signed on the dotted line, fully expecting to make timely payments over the term of the loan. But there is a home for rent just down the street with payments of just $1,000 a month.

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Fed Ends MBS Intervention

The Federal Reserve: The Biggest Scam In History

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The Federal Reserve ended its largest intervention in the housing market on April 1, ceasing its purchase of Mortgage-Backed Securities (MBS) that began in September of 2008 in order to keep the housing market from imploding.

According to the New York Times, the program succeeded in keeping “mortgage interest rates at near-record lows and slowing the nationwide decline in home prices.” Professor Susan Wachter at the Wharton School explained: “We were in a deflationary spiral, causing mortgages to go underwater, more foreclosures and a further decline in housing prices. The potential maelstrom of destruction was out there, bringing down not only the housing market but the overall economy. That’s what [this program] stopped.” She added that this Fed program was “the single most important move to stabilize the economy and to prevent a debacle.”

Wachter’s statements reveal many errors in her thinking, but especially her belief in interventionism as a cure for the inevitable effects of previous inflationary policies.

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Can ObamaCare Be Repealed, Nullified?

Repeal ObamaCare

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U.S. Representative Michele Bachmann (R-Minn.), who has earned a “Freedom Index” rating of 90 percent in the current Congress to date, has introduced a bill in the House to repeal ObamaCare. In her press release, Bachmann reminded her constituents that “the government already owns or controls about one-third of U.S. economic activity through the takeover of General Motors, the bankruptcy reorganizations of Chrysler, the partial ownership of two of the country’s largest banks in Bank of America and Citigroup, and the seizure of mortgage giants Fannie Mae and Freddie Mac as well as AIG. Taken all together, [with ObamaCare] we’re looking at half of the American economy in the grip of the federal government.” Bachmann said that it “will do nothing to spur economic growth … [but] will serve only as an obstacle to actual recovery and smother the spirit of innovation and freedoms that made this country great.”

Her bill is simplicity itself:

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Sestak Coverup

Congressman Joe Sestak's official Congressiona...

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The main reason Rep. Darrell Issa (R-CA), the top Republican on the House Oversight Committee, is pressing the issue over Rep. Joe Sestak (D-PA.) is owing to the reticence of the White House to be forthcoming about the matter. Most of the time, plausible deniability and the passage of time work well to make any potentially contentious or dangerous issue “go away.”  But not this time.

Back in July of 2009, well before liberal Sestak (Freedom Index rating of 0) decided to make a run for Arlen Specter’s (D-PA) Senate seat in November of 2010, he was approached by someone from the Obama administration who asked him to back off.  As incentive to leave Specter alone, Sestak said in an interview on Larry Kane’s Voice of Reason show in February this year, that the White House offered him a federal job.  Here is that conversation:

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Greenspan’s Implausible Denial

Alan Greenspan, former chairman of the Board o...

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In his 48-page paper presented on March 19 to the Brookings Institution, former Federal Reserve Chairman Alan Greenspan now blames the collapse of the Soviet Union and the resurgence of the Chinese economy as causes of the Great Recession that was ushered in on his watch. And his arguments have just enough plausibility to be considered, if only briefly. But looking more closely is another matter.

When the Soviet Union collapsed, millions of workers were then free to “enter the global marketplace,” creating huge demand for consumer goods. And with the Chinese government allowing a modicum of free enterprise to placate their workers, many of them have created such significant savings that many billions of dollars were looking for a home. And consequently, many of those dollars returned to the United States in the form of mortgage capital that helped fund the housing boom. Greenspan said, “In short, geopolitical events ultimately led to a fall in long-term mortgage interest rates that in turn led, with a lag, to the unsustainable boom in house prices globally.”

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Free Markets, Deregulation, and Blame

Quarterly Journal of Austrian Economics

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Free markets, in the full sense of the phrase, exist only in the minds and imaginations of free-market economists from the Austrian School, such as Ludwig von Mises and Murray Rothbard.

The classic definition is simply a market without intervention or regulation by government. In truth, commerce in any developed country is always controlled to some extent by government. A free market requires the right to own property, which means that the wages, earnings, profits, and gains obtained by providing products and services to others belongs to the individual generating them. The assumption is that an individual with this kind of freedom would only make an exchange that gained him a benefit.

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Jobs Bill: The Law of Intended Consequences

London | 2009

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With great fanfare, the Obama administration celebrated its first policy victory of the year—the $17.6 billion jobs bill. Eleven Republican Senators helped push the bill through the Senate, 68-29.

The economically flawed and unconstitutional law provides employers an exemption from Social Security tax withholding through the end of the year on any employees added to the payroll who have been unemployed for at least 60 days. And if the employees stay on that payroll for at least a year, the employers would receive an additional $1,000 tax credit. In addition, the law spends $20 billion on federal highway construction and other public improvement projects.

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Social Security’s Nest Egg is Officially Cracked

Broken Egg

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In a misleading article by Associated Press that IOUs “stashed away” in an investment account in Parkersburg, West Virginia, were going to have to be sold to meet Social Security shortfalls, all the attention was on the location of the account instead of what was in it.

Analyzed here and elsewhere, Social Security is now suffering in the open as a result of unconstitutional and unsound financial assumptions starting in 1935. First of all, the gigantic welfare program, the largest government transfer program in the world, was sold to the American people during the Great Depression as an annuity guaranteed by the federal government. In fact, it still retains the early efforts to link Social Security to the insurance industry (which, at that time, still retained a high degree of public trust) by calling it the Federal Insurance Contributions Act, or FICA.

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Lehman Bros.: Pinprick That Burst the Bubble

Balloon POP !!!

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The culprits blamed for the failure of Lehman Brothers in September of 2008 included the company’s top executives, their accountants, their highly-leveraged loans that had started going bad, their success at hiding those bad loans by cooking the books, and their lenders demanding more and better collateral, according to Anton Valukas in his 2,200 page report released Thursday.

There is certainly plenty of blame to go around, and it looks like there will be criminal charges filed too. The biggest lie, however, wasn’t mentioned: that this implosion of Lehman Brothers caught everyone by surprise.

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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.