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: Gary North

Truancy Laws Snag 13-year-old Piano Prodigy

This article first appeared at TheNewAmerican.com on Wednesday, September 10, 2014:

It took just one day for the chancellor of the District of Columbia Public Schools (DCPS) to respond to Petula Dvorak’s column in the Washington Post on Monday. Chancellor Kaya Henderson issued a public statement condemning Dvorak’s column for inaccuracies and claiming instead that she was working with Avery Gagliano’s parents to avoid charging the 13-year-old piano prodigy with truancy.

Gagliano was one of just 12 musicians selected from around the world to

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The Supreme Court’s Docket is Full of Cases that could Endanger Liberty

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, October 9th, 2013:

The potential for liberty’s shrinkage during the Supreme Court’s session that began on Monday is significant, with some exceptions. The cases on the docket range all across the spectrum:

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Warren Buffett’s Railroad is Testing Natural Gas to Drive its Locomotives

The quiet revolution going on in the energy sector as a result of fracking is being punctuated by changes unseen and unappreciated, such as the recent announcement by Warren Buffett’s railroad, BNSF Railway.  The largest railroad in the country, BNSF is testing the use of liquefied natural gas (LNG) to

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Declines in Trust and Revenues Force Sales and Spinoffs of Formerly Prominent Newspapers

The back-to-back announcements of the sale of the Boston Globe to Boston billionaire John Henry and the sale of the Washington Post o Amazon founder Jeff Bezos earlier this week continue to track the shrinkage of the newspaper business that has been going on for more than a decade. Henry bought the Globe from the New York Times for just $70 million, a fraction of the

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NSA disclosures recall days of the East German STASI

When Wolfgang Schmidt learned about NSA leaker Edward Snowden’s revelations concerning its ability to collect personal data on millions of American citizens, he was astonished. As a lieutenant colonel in East Germany’s secret police, the STASI, his department was limited to tapping just 40 phones every day. If a decision was made to tap a new phone, one of the others had to be disconnected. Said Schmidt:

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Once Reviled, Capitalism is Making an Extraordinary Comeback Worldwide

This article originally appeared at McAlvany Intelligence Advisor

 

Hidden inside an obscure study just released by Barclays is a nugget of huge importance that reflects a sea change in the growth of entrepreneurial capitalism. The results of this development could equal if not exceed those of the

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Fox News president’s email to his people about the James Rosen affair

Here is Roger Ailes’ email, if you care to look. He says some nice things that I’m certain were reassuring to his employees who are probably asking themselves whenever they send an email or make a phone call, “am I being watched?”

Let’s remember who Roger Ailes is. He is

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More on Ponzi schemes like Social Security

I haven’t seen much lately about Ponzi schemes, much less about how Social Security is a Ponzi scheme “with a gun”. I first became aware of the nature of Social Security when I got into the life insurance business and was able to discern the difference between insurance, and Social Security which

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Gary North is worth much more than $10 a month

My subscription to Gary North’s newsletter just paid for it self in one commentary. His analysis of this article helped improve my understanding of their conclusion: prices could decline in the near future.

I subscribe to John Mauldin’s free newsletter which today consisted of an outlook by two other very bright guys, Lacy Hunt and Van Hoisington. I have read both of them. And Mauldin used to be a partner of Gary North. Confused? Don’t be. This is just to say that they have immense credibility with me and I would automatically be sympathetic to their point of view.

But with North’s analysis I now have a better understanding:

The Fed is deliberately driving down the velocity of money (how fast money circulates) by keeping the banks’ excess reserves with them rather than letting the banks lend them out. They do that by paying interest on those reserves. Look at it from the bankers’ perspectives: why would you loan your precious reserves to risky customers, even those with excellent credit ratings, when you can make risk-free loans to the Fed and earn interest there? True, it’s less interest than you might get from a customer, but with them you run the risk of not getting your money back. You don’t have to worry about that with the Fed.

So North thinks it’s a deliberate policy to keep the banks from lending, which keeps price inflation from hitting the grocery stores. He says it’s the best of all possible worlds for the Fed: they can continue to finance the government deficits with digital money without price inflation.

If, however, the Fed decides to stop paying interest on those reserves, or worse, decided to start charging interest on those reserves, this action would force the banks to take back those reserves and start lending them out. This would result in price inflation almost immediately. North thinks that if the Fed does that (reverses course), we could see prices double in a matter of months. For the time being, however, the Fed has no interest in doing that. I’m not sure why the Fed would ever start charging interest on those reserves. So price inflation is highly unlikely, and we might even see some small decrease in the overall price level. This is helpful information. It agrees with the conclusion by Hunt and Hoisington but I have a better understanding, thanks to North.

Here’s the link to North’s analysis. You’ll see that it’s a paywall. I pay $9.95 a month to get over that wall and read his stuff. This single analysis of a well-written article which could have misled me and my understanding of the world has paid for my subscription for a least a year. I think North is way undercharging. Don’t tell him I said so.

A very smart guy reviews Stockman’s massive new book

Whenever someone as smart as David Stockman (President Reagan’s Director of the Office of Management and Budget) writes a 768-page book (The Great Deformation), it makes me nervous, for two reasons: I don’t have the time to read 768 pages, but if I don’t I might miss something important. So I was gratified that

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Here’s another reason I’m not going to see Lincoln

Tony Kushner is the screenwriter for the movie Lincoln. Gary North has uncovered a video of Charlie Rose interviewing Kushner. It won’t take you long to come to the same conclusion: this guy is so far off the mark that anything he might have to say about Lincoln is going to be

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There is Only One “Natural Resource”

Rendering of human brain.

Rendering of human brain. (Photo credit: Wikipedia)

Donald Boudreaux wrote an article honoring Julian Simon five years ago and it’s just as relevant today as it was then. In it he notes that Simon was persuaded that there are no natural resources, save one: the human mind.

Simon’s most important contribution was to crystallize and explain an insight that even the best economists before him only glimpsed — namely, that human  beings in free societies are “the ultimate resource.” Nothing — not oil, not  land, not gold, not microchips, nothing — is as valuable to the material well-being of people as is human creativity and effort.

In this day of iPhones and fracking, the internet and hybrid automobiles, I think people take an awful lot of it for granted. We have enjoyed the benefits of freedom without understanding really how it works. We just expect it to

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Groupon no longer offers gun-related coupons. Who cares?

Groupon decided that ideology was more important than profits and halted offering any discount coupons related to guns or the gun industry such as training programs. They may be having second thoughts.

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Amazing Nullification News from Wyoming

wyoming welcomes you

(Photo credit: tango.mceffrie)

A modest little bill, H.B. 0104, called the “Firearms Protection Act” has the potential to re-ignite the whole states’ rights issue that  many think was long settled by the Civil War. All it says is this:

Any official, agent or employee of the United States government who enforces or attempts to enforce any act, order, law, statute, rule or regulation of the United States government upon a personal firearm, a firearm accessory or ammunition that is owned or manufactured commercially or privately in Wyoming and that remains exclusively within the borders of Wyoming shall be guilty of a felony and, upon conviction, shall be subject to imprisonment for not less than one (1) year and one (1) day or more than five (5) years, a fine of not more than five thousand dollars ($5,000), or both.

That’s all. Simple. Easy. Clear. And profoundly important in the freedom fight. Alex Newman, writing for The New American, says it exactly right. This is “nullification legislation that would void unconstitutional infringements on the right to keep and bear arms, even providing prison time for any federal agents who may try to enforce Washington, D.C., gun control in the state.”

The key word here is

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How I’m learning to love Mayor Bloomberg and Senator Schumer

And it’s not because I’m originally from the east coast, either. As my bumper sticker used to say: “I’m not a native but I got here as fast as I could.” No, it’s because their actions are wonderfully self-defeating. Bring it on!

They want to ban guns. More precisely they want to keep private citizens from

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Idaho to allow private online classes to teach the kids

This is a wonderful breakthrough:

Starting next fall, Idaho students could have the option of taking math, history  and other online classes provided by the Khan  Academy, the online content nonprofit that provides courses free to anyone,  anytime and anywhere.

Eric Kellerer, a spokesman for Northwest Nazarene University (NNU), tried to downplay the implications:

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Establishment Economist Greg Mankiw Speaks Some Truth

N. Gregory Mankiw

N. Gregory Mankiw (Photo credit: Wikipedia)

Economist Greg Mankiw is a study in contradictions. His establishment credentials are impeccable: a graduate of Princeton – summa cum laude – with a degree in economics, then on to MIT and Harvard Law. He chaired President George W. Bush’s Council of Economic Advisors, advised Mitt Romney, and now teaches economics at Harvard.

But every now and then he speaks the truth, or at least some part of it. In his article in the New York Times, Mankiw was clear about who’s paying the taxes in the country: the rich, by a country mile:

In 2009, the most recent year for which data are available, the richest 1 percent of Americans paid 28.9 percent of their income in federal taxes, according to the Congressional Budget Office. (That includes income taxes, both individual and corporate, and payroll taxes.) Members of the middle class, defined as the middle fifth of households, paid 11.1 percent of their income in taxes.

Some of this difference in tax rates is attributable to temporary tax changes passed in response to the recent recession. But not all. In 2006, before the financial crisis, the top 1 percent paid 30 percent of their income in taxes, compared with 13.9 percent for the middle class.

These data suggest that the rich are not, as a general matter, shirking their responsibilities to support the federal government.

Wow! Considering the source, this is an amazing admission. The rich are paying more than their fair share! And then he goes on to explain that even if Obama has his way with Congress – which he is largely getting – the proposed increases on the richest Americans will

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Eliminate the Debt Ceiling altogether, says Senior Fellow at Brookings

Isabel Sawhill, Senior Fellow at The Brookings Institute, wrote on Tuesday that “the fiscal cliff…is not the most worrisome economic issue facing the country. The real cliff is the debt ceiling, and if we go off that cliff, it will be catastrophic.”

At $16.4 trillion, the current debt ceiling is likely to be hit before the end of the year but with “extraordinary measures” the Treasury can put off the day when it will no longer be able to pay the government’s bills until the end of February. That will give the Congress plenty of time to consider getting rid of the regular debt ceiling charade altogether.

Said Sawhill,

Those who believe that a refusal to raise the debt ceiling will somehow put limits on spending and shrink the size of government are confusing the need to pay obligations already incurred by Congress with the need to rein in future expenses…

The debt ceiling itself is an anachronism.

This is precisely the point made from the other side of the political spectrum. Peter Schiff, author of numerous books about the current economic crisis and the head of a precious metals company, recommended doing away with the debt ceiling “drama” altogether by giving in to the suggestion that the president be given the power to raise the debt ceiling whenever it is necessary. Wrote Schiff:

Most Republicans have dismissed the proposal as a blatant executive power grab that will significantly weaken both the Congress and the minority party.

While this is certainly true, Congress will only lose a power that it has never shown the slightest courage to actually use.

But in truth, the proposal has the merit of refreshing honesty. By telling U.S. taxpayers, and the world in general, that the U.S. government has no intention of ever balancing its budget or limiting its accumulation of unsustainable debt, then perhaps we can begin to have an honest discussion about our economic future.

He reiterates Sawhill’s contention that the debt ceiling has little to do with reining in government spending but instead merely allows the Treasury to pay the bills the Congress has already authorized. The debates have instead become merely a sham and a fraud, kabuki theatre that provides entertainment only, “full of sound and fury, signifying nothing.”

Simply put, Schiff says, “If Congress wants to control the debt, let them do so. If they don’t care, just continue on the current path. Dropping the pretense is at least more honest.”

On Tuesday White House Press Secretary Jay Carney was asked at a press briefing about the debt ceiling. He responded similarly:

It’s certainly not good government … to even hint at the possibility of holding the American economy hostage again to the ideological whims of one wing of one party in Congress. That’s unacceptable. Congress has its responsibility: payment of bills that the United States incurs because Congress passes bills that incur those debts.

What Sawhill, Carney and Schiff are doing is confirming what Treasury Secretary Timothy Geithner said back in November, that the US should get rid of the debt ceiling as soon as possible: “It would have been time a long time ago to eliminate it. The sooner the better.”

Joe Weisenthal, in what many perceived to be a tongue-in-cheek article at Business Insider supporting the notion, said:

This almost completely prevents a debt ceiling crisis ever again, while keeping the ceremonial aspect that people like. There would still be votes, but they’ll mainly serve as a way to let politicians play politics, without putting anything at risk.

One of the last times Congress tried to throw its weight around on the debt ceiling issue was in 1995 when the House refused to raise the limit, forcing the government to stop spending money on nonessentials on November 14th. As Gary North explained:

 That stand-off lasted five days. The House then passed another [continuing resolution], but the next vote was scheduled for early January. The crisis was merely deferred.

In January, 1996, the final showdown could no longer be postponed. The House refused to increase the debt ceiling or pass a new CR. The government officially had to stop all spending over the debt ceiling. Certain checks stopped being printed. Clinton’s popularity rose. The stand-off lasted only a few days. Clinton did not capitulate. The House Republicans did.

It was over. The debt ceiling was raised. Again.

Echoes from that confrontation reverberated in August 2011 when a new congress tried to leverage its influence to force the White House to cut spending in exchange for raising the debt ceiling. The result was a decision to put off the hard work until December 2012 by setting up the current “fiscal cliff.”

The political damage done at the time to various reputations was considerable. Here, from Wikipedia, is a cogent summary:

The aftermath of the debt-ceiling crisis caused the Tea Party, which was seeing its support somewhat wane prior to the crisis to lose support among many Americans as many House Republican supporters of the movement opposed raising the debt ceiling under any circumstances…

In a poll taken shortly after the deal was signed by the President, 40 percent of Americans held an unfavorable view of the [Tea Party] movement, with only 20 percent supporting it.

Republicans were viewed as holding most of the responsibility for the dispute … The aftermath of the crisis caused the approval ratings of both the Speaker of the House John Boehner and Senate Minority Leader Mitch McConnell to drop respectively from 43 percent in July to 33 percent in August and from 27 percent to 21 percent in the same time span…

The Republican Party, [which] controlled the House, saw its approval ratings drop from 41 percent in July to 33 percent in August.

Prior to that confrontation in 2011, Rep. Ron Paul (R-Texas) predicted the outcome:

It is predictable that Congress will once again merely delay the inevitable and raise the debt ceiling, after the usual rhetoric about              controlling spending, making cuts, and yes, raising taxes…

If the new Republican majority in the House of Representatives gives in to establishment pressure by voting to increase the debt ceiling once again, you will know that the status quo has prevailed. You will know that the simple notion of balancing the budget, by limiting federal spending to federal revenue, remains a shallow and laughable campaign platitude.

If the debt ceiling legislation enacted back in 1917 to keep government spending in check is repealed, the president is hopeful that it will send a message of comfort to its lenders that they needn’t worry about a default. Such a hope may in turn explode in the president’s face as it will reveal, once and for all, the inability of the government of the United States to maintain any sort of control over or limitation on its spending.

As Schiff noted: “Such a development many [instead] be the shock therapy our creditors need to finally cut us off for good.”

That will be the true day of reckoning, when the ritual kabuki theatre ends and reality sets in.

 

 

Dependence on Government Continues to Grow

Sheople Man

Sheeple (Photo credit: AZRainman)

The Heritage Foundation just published its latest report on its “Index of Dependence on Government” and it doesn’t look good: Romney was right, there are more riders in the boat than pullers at the oars:

The Index of Dependence on Government, which measures dependence on government  programs for housing, food, income, student aid, or other assistance, has risen dramatically since 2007.

If you click on the link above you’ll see their graph. It’s exponential. Not only is it rising, it’s rising at an increasingly rapid rate. As Herb Stein says, if something can’t continue, it will stop.

Here is a restatement of the graph from Heritage:

 The updated Index reveals:

  • Government dependency jumped 3.28 percent in 2011, with the largest increases in higher education loans and grants and in retirement spending.
  • This is the fourth year in a row that the Index has risen, rising 31.73 percent in that time.
  • At the same time, nearly half of the U.S. population (48.47 percent) does not pay any federal income taxes.

This is why the welfare state is so destructive. It removes personal responsibility from individuals who then become more like

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Skyscraper Announcement Confirms Impending Chinese Recession

Empire State Building all

Empire State Building all (Photo credit: Wikipedia)

I thank Gary North for alerting me to this. It’s far more than just historical coincidence. The announcement that China is going to build the world’s tallest building is a strong indicator that it is going into (if it hasn’t already gone into) recession. Tall buildings signal the top.

Mark Thornton, a senior fellow at the Ludwig von Mises Institute, wrote about this in July, 2004:

This 4th of July will mark the groundbreaking of the Freedom Tower at ground zero of the World Trade Center. The design of the building calls for a height of 1,776 symbolic feet, which will capture the title of world’s tallest building when it is completed in late 2008 or 2009.

Groundbreakings, opening ceremonies, and certainly July 4th are all causes for celebration, but the Freedom Tower may be a signal that something much more sinister is afoot. For more than a century there has been a correlation between the building of the world’s tallest building and severe economic downturns.

That correlation is eerie, but here it is:

The correlation is as follows. The announcement and groundbreaking for the world’s tallest building takes place at the end of a long boom or sustained bubble in the economy. The stocks go into a
bear market; the economy goes into recession or worse. The building is completed. The economic turmoil that ensues is either severe, drawn out, or as in the case of the Great Depression, both.

There’s this:

The Panic of 1907 which helped bring about the Federal Reserve Act was signaled by the building of the 612 foot Singer Building completed in 1908 and the 700 foot Metropolitan Life completed in 1909. There was only a short, sharp downturn in 1913 when the 792 foot Woolworth building was completed, as the establishment of the Fed and WWI intervened.

And then this:

The Great Depression was signaled by a series of three record-breaking skyscrapers. The 927 foot Wall Street building was completed in 1929; the 1046 foot Chrysler Building was completed in 1930; and the 1250 foot Empire State Building was completed in 1931. The Great Depression helped bring on Roosevelt’s New Deal.

And this:

The 1970s were characterized by high rates of unemployment and inflation. This “stagflation” was signaled by the building of the 1368 foot high World Trade Towers which were completed in 1972 and 1973. The Sears Tower set a new record at 1450 feet when it was completed in 1974.

Then Thornton explains why the correlation is valid, in economic terms. Faulty price signals at the top of a boom cause bad decisions to be made, often very bad:

At first glance the association of record-setting skyscrapers and economic crisis would seem to be a spurious correlation. Surely, the building of such skyscrapers does not cause economic crisis. However, there is good reason to believe that skyscrapers and crisis are linked via the business cycle. Long periods of easy credit create economic booms, particularly in investment, speculation becomes pronounced, and entrepreneurs lose their compass of economic rationality and make big mistakes. The biggest mistakes — record-setting skyscrapers — comes toward the end of the long boom and signal the bust. (my emphasis)

The Chinese economy, like ours, has been running on paper money for years and giving out false and misleading signals to investors. They have made the mistake which I characterize as “straight line thinking in a curvilinear world.” Here’s a link to the announcement that not only are they going to build the world’s tallest building, they’re promising to do it in 90 days!

Stay tuned and watch for the coming recession in China.

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