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: growth

Trump’s Budget Won’t be Balanced, Just Restrained

This article appeared online at TheNewAmerican.com on Tuesday, February 13, 2018:

In his message to Congress describing “An American Budget,” the president started off accurately enough: “The current fiscal path is unsustainable, and future generations deserve better.” Translation: If this budget isn’t approved, wage earners will not only have to hide their wallets but their grandchildren as well.

He added: “Over the next decade, a steady rate of 3-percent economic growth will infuse trillions of additional dollars into our economy, fueling the dreams of the American people and sustaining a new era of American Greatness.” And, hopefully, enough vastly increased tax receipts to pay for it.

He left his Office of Management and Budget (OMB) director Mick Mulvaney to fill in the gaps and pick up the pieces. The budget, apparently, won’t ever be balanced, so we’re changing the goal: grow the economy faster than the budget so that the deficit gap starts to shrink. Said Mulvaney, “As a nation, we face difficult times — challenged by a crumbling infrastructure, growing deficits, rogue nations, and irresponsible Washington spending….  Just like every American family, the budget makes hard choices: fund what we must, cut where we can, and reduce what we borrow.”

Here are the numbers:

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January Jobs Report: Is America Running Out of Workers?

This article appeared online at TheNewAmerican.com on Monday, February 5, 2018: 

The headline numbers from the Bureau of Labor Statistics’ jobs report released on Friday once again caught forecasters by surprise: Predicting job growth of 177,000 for January, they got instead 200,000 — the 88th month in a row of positive job growth, with many recent months where the economy outperformed forecasters.

The other number also caught them by surprise:

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Fracking Revolution Pushes U.S. Daily Crude Oil Production Over 10 Million Barrels

This article appeared online at TheNewAmerican.com on Friday, February 2, 2018:  

English: Logo of the U.S. Energy Information A...

November’s production of crude oil in the United States, according to the U.S. Energy Information Agency (EIA), not only exceeded October’s by four percent, but rose to a level not seen in nearly 50 years: 10 million barrels a day. The agency went even further: At this rate daily U.S. crude oil production will exceed that of both Russia and Saudi Arabia by the end of next year.

If not sooner. The EIA’s forecast is that crude oil production will grow by 10 percent this year, but that could turn out to be much too low. As Todd Staples, head of the Texas Oil & Gas Association, noted:

American crude oil [production] is a game-changer in international trade, global politics and domestic energy security. Crude oil imports are down 20 percent from 2006 and, today, we are competing with the Middle East in the export market.

 

These outcomes were unthinkable a decade ago.

Indeed. As recently as 2011 the United States was only producing about

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“What Hath God Wrought?” Tax Reform and Deregulation Unleashing an Economic Tsunami

This article was published by The McAlvany Intelligence Advisor on Wednesday, January 31, 2018: 

When Samuel Morse asked for suggestions on what his first message over his telegraph should be on May 24, 1844, Annie Ellworth suggested a verse from Numbers 23:23: “There is no magic charm, no witchcraft, that can be used against the nation of Israel. Now people will say about Israel: Look what God has done!” [Good News Bible translation.]

The same might be said about the effect that the magic elixir of deregulation and cuts in tax rates is having not only in the United States, but globally as well. Economists at the International Monetary Fund just announced that, thanks to the combination of those two potent medicines, it has revised its global economic growth estimates for each of the next two years to 3.9 percent.

This is a staggering 70 percent improvement over the average global GDP growth experienced during the unlamented Obama years.

And it’s just getting started. Walmart, Boeing, Apple, Comcast, and more than 200 other companies have announced what they’re doing with their tax savings, impacting directly the paychecks of an estimated three million workers. Now comes ExxonMobil with its announcement: $35 billion of new money is going to be pumped into its operations in the United States. The company’s CEO, Darren Woods, gave credit where credit is due:

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ExxonMobil Announces $35 Billion in New Investments in U.S. Thanks to Tax Reform

This article appeared online at TheNewAmerican.com on Tuesday, January 30, 2018: 

The chief executive of ExxonMobil, the largest of the seven publicly traded “supermajor” oil companies known as “Big Oil,” Darren Woods, posted a blog on Monday announcing that his company would be redirecting $35 billion that would otherwise be headed for Washington, D.C., into much more potentially profitable projects. He gave credit to the new tax reform law just signed into law by President Trump:

These investments are underpinned by the unique strengths of our company and enhanced by the historic tax reform recently signed into law….

 

These positive developments will mean more jobs and economic expansion across the United States in a myriad of industries.

This $35 billion is on top of the $23 billion to $27 billion the company said last year that it would be investing globally over each of the next three years. And there’s more to come, said Wood: “We’re actively evaluating the impact of the lower tax rate on the economics of several other projects currently in the planning stages.”

Translation: Monday’s announcement is just the beginning for ExxonMobil. The company has 20 billion barrels of proven reserves of crude oil “equivalent” (oil and natural gas) and a refinery capacity of nearly five million barrels a day. Its 20 refineries are spread across 14 countries, and it operates 100 major exploration projects around the world. It recently purchased $6 billion worth of oil leases from the Bass family on top of the Permian Basin in Texas and New Mexico, and is expected to expand further its operations in North Dakota above the Bakken Formation.

Wood praised tax reform for providing his company the opportunity to redirect its resources to more profitable opportunities:

These are quality investments for our shareholders that are made even better by tax reform. These are all possible because of the resource base developed by our industry along with sound tax and regulatory policies that create a pro-growth business climate here in the U.S.

Wood estimated that the new investments, once completed, will add an estimated 12,000 new workers to his company which already employs 73,500 people. The implications for the economy are obvious, and enormous: Exxon rarely misses an opportunity to move capital into profitable projects, adding to its already enormous $330 billion asset base. It will still pay taxes on those additional profits, just at a much lower level. Those nearly 90,000 people on the payroll will also be paying taxes, also at lower levels than before.

But what is often missed is that ExxonMobil is just one, although one of the largest, of the companies announcing such investments directly as a result of tax reform and its lower tax rates. Walmart, Apple, Boeing, Comcast, and hundreds of others have announced similar plans to reward their employees through bonuses and/or salary increases or through additional expanded employment opportunities. What also is often missed is the “ripple-effect” of monies being redirected from Washington to places where it is much more profitably employed. Every company does business with dozens if not hundreds of other companies that consider those investments as increased business revenue. That new flow encourages further investment at a micro level. It’s the unseen hand of Adam Smith that improves the standard of living for everyone, even as each individual and company seeks its own best opportunities.

All of this is highly annoying to far-left liberal Democrats, who seem to have a death wish, especially during this mid-term election year. California’s House Democrat Nancy Pelosi seems most skilled at self-immolation by calling those salary increases and bonuses “crumbs,” while former DNC chairwoman Debbie Wasserman Schultz (D-Fla.) dismissed them as “chump change.” To this writer’s knowledge, not a single employee offered either a bonus or a salary increase has turned it down. And $35 billion from ExxonMobil alone is hardly “chump change.”

Not only are these new funds being redirected away from Washington, known for its extravagant wastefulness in spending other peoples’ money, it is very likely to be employed in highly profitable projects that have now become viable thanks to tax reform.

Why, even the International Money Fund (IMF) has been forced to admit that these new investments are of such a magnitude that the ripple effect worldwide will be to drive global GDP to close to four percent in 2018 and years following.

U.S. Oil Production Will Soon Overtake Saudi Arabia’s

This article appeared online at TheNewAmerican.com on Monday, January 22, 2018:

Fatih Birol, head of the Paris-based International Energy Agency (IEA), told a congressional committee last week, “What we see is a result of the shale revolution [fracking]. The U.S. is becoming the undisputed leader of oil and gas production worldwide. [U.S.] oil production is growing very strongly and will continue to grow. We think that this growth is unprecedented [both in the] size of the growth and the pace of the growth.”

In 1973, Saudi Arabia punished U.S. citizens with an oil embargo in retaliation for the U.S. government’s support for Israel during the Yom Kippur War. It could do so because it held the biggest hammer: Saudi Arabia controlled the world’s largest reserves of crude oil and the kingdom. Within months, the price of oil quadrupled in the United States, resulting in shortages and rationing. Gas stations were closed, and when they reopened they were forced to restrict gasoline purchases to “odd” and “even” days depending upon their customers’ license plate numbers. The federal government imposed “double-nickel” (55 mph) speed limits on highways, and experimented with “daylight saving” time in order to reduce the impact of the embargo.

Those days are long gone and not likely ever to return. Saudi Arabia and its OPEC cartel are slowly being reduced to bit players in the global energy market. Saudi Crown Prince Mohammed bin Salman saw that coming more than two years ago when he announced

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Apple’s Repatriation of Its Profits: Talk About Stimulating the Economy!

English: Apple's headquarters at Infinite Loop...

Apple’s headquarters at Infinite Loop in Cupertino, California

This article was published by The McAlvany Intelligence Advisor on Monday, January 22, 2018:

After paying the world’s largest tax bill – $38 billion – Apple, Inc., the world’s largest company by market capitalization and now the government’s largest taxpayer, will have $214 billion left over.

It is making plans for that $214 billion. In its announcement on Wednesday, the company said it would be making “a new set of investments to build on its commitment to support the American economy and its workforce, concentrated in three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fueling the fast-growing app economy that Apple created with iPhone® and the App Store®.”

It added:

Apple is already responsible for creating and supporting over 2 million jobs across the United States, and expects to generate even more jobs as a result of the initiatives being announced today.

The numbers are almost incomprehensibly large. Apple generates worldwide revenues of $230 billion, making profits of nearly $50 billion. It employs 124,000 people worldwide, 84,000 of them in the U.S. It has independent contractual arrangements with another 1.6 app designers, to whom it paid $5 billion last year. It operates 500 retail stores worldwide.

Apple’s biggest problem is that

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Apple to Repatriate Its Foreign Profits and Put Them to Work in America

This article appeared online at TheNewAmerican.com on Thursday, January 18, 2018:  

Apple announced Wednesday that not only would it repatriate nearly all its foreign cash holdings under the new tax reform law, but it was going to put a lot of it to work right away. This puts the lie to anti-capitalists who predicted that such a plan would only further enrich the already rich.

Instead Apple is going to spread the repatriated funds around, announcing that it would not only be creating new jobs but would be building new facilities and expanding its financial commitment to the company’s “innovation” fund. It also is expanding its efforts to reach students in high school to teach them coding language (for free) so that many of them will be able to provide Apple with the coders and software developers it will need as it expands into the future.

In the process it will also pay the largest single tax bill in history:

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Credit Card Debt Hits $1 Trillion; Wall Street and Michael Snyder Yawn

This article was published by The McAlvany Intelligence Advisor on Wednesday, January 10, 2018: 

Michael Snyder rivals only David Stockman in his pessimistic economic outlook, reflecting that outlook by naming his blog “The Economic Collapse.” On the first day of the New Year, Michael dug into his files for the most “crazy” numbers from 2017. He found 44, including these:

One out of every ten young adults in the United States has been homeless at some point over the past year;

 

The United States has lost more than 70,000 manufacturing facilities since China joined the WTO in 2001;

 

A total of 6,985 store locations were shut down last year, and we are expected to break the record again in 2018:

 

Only 25 percent of all Americans have more than $10,000 in savings right now; and

 

44 percent of all U.S. adults do not even have enough money “to cover an unexpected $400 expense,” according to the Federal Reserve.

What’s missing from Michael’s list? Credit card debt, student loan debt, and vehicle financing debt. Surely he was aware of these numbers, but for some reason didn’t include them in his list. For the first time in history, credit card debt last year hit $1 trillion, eclipsing the record set back in 2008 following the real estate collapse and the beginning of the Great Recession. Snyder didn’t mention the nearly $3 trillion in “non-revolving” debt (i.e., auto and student loans) either. Seeking Alpha called these numbers “scary” but Snyder ignored them.

A closer look behind the numbers reveals that these may not be such “scary” numbers after all. Perhaps that’s why Snyder ignored them, simply because, by his definition, they didn’t qualify as “crazy.” For one thing, fewer than 40 percent of all households carry any sort of credit card debt. Among millennials ages 18 to 29 only a third even have a credit card.

Next, the ratio of income to credit card debt at the end of 2017 (before the new tax cuts) was already declining with the ratio of credit card debt compared to the nation’s gross domestic economic output at about 5 percent, compared with 6.5 percent in 2008.

Also, credit card delinquencies remain way below the 9 percent historical average, at just 7.5 percent, and far below the rate of 15 percent touched following the 2008 financial crisis.

There’s another way to look at credit card debt: compare outstanding balances to incomes.ValuePenguin performed such a service, showing that households with annual incomes of between $25,000 and $100,000 have less than $7,000 in outstanding balances on their credit cards. Further, that analysis showed that the average has increased only slightly since 2013.

With almost two million more people working today than held jobs a year ago, and others enjoying wage and salary increases, that $1 trillion in credit card debt becomes far less “scary.” In a $20 trillion economy that is growing at three percent a year, $1 trillion in credit card debt may reflect that growth as banks are willing to issue more cards to more credit-worthy individuals and those individuals, having perhaps learned lessons from the Great Recession, are using them more prudently. That “trillion” dollar number may instead reflect a growing and increasingly healthy economy employing more people making more money who are using credit opportunities more wisely.

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Sources:

USATodayCredit card debt hits new record, raising warning sign

SeekingAlpha.comCredit card debt on watch

Michael Snyder: 44 Numbers From 2017 That Are Almost Too Crazy To Believe

ValuePenguin.com:  Average Credit Card Debt in America: 2017 Facts & Figures

Credit Card Debt Hits $1 Trillion, Raising Alarms

This article appeared online at TheNewAmerican.com on Tuesday, January 9, 2018: 

For the first time in history credit card debt hit $1 trillion last year, reported the Federal Reserve on Monday. This eclipsed the previous record set almost 10 years ago, just before the housing and credit bubbles burst. In addition, “non-revolving” (i.e. auto and student loans) debt is approaching $3 trillion.

These numbers have put credit card debt on “watch” at Seeking Alpha, which said that that trillion dollar number is “scary.”

A closer look behind the numbers reveals that these may not be such “scary” numbers after all.

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What the Latest Jobs Reports Really Mean

This article appeared online at TheNewAmerican.com on Monday, January 8, 2018:

There were three jobs reports released last week: two from the Labor Department’s Bureau of Labor Statistics (one based on its “household” survey, the other on its “establishment” survey), and one from ADP based upon its payroll data.

ADP’s numbers came in first on Thursday, showing job growth in December exceeding forecasters’ predictions at 250,000. This was followed by the Bureau of Labor Statistics (BLS) report on Friday, showing 148,000 new jobs in December. They both said that the unemployment rate held steady at a record low 4.1 percent.

Mark Zandi, the establishment economist at Moody’s, was “disappointed” in Friday’s numbers from the BLS and thinks they’re going to get worse going into the New Year. First,

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Economist Mark Zandi Exposes His Statist Worldview

This article was published by The McAlvany Intelligence Advisor on Monday, January 8, 2018:

Mark Zandi should be embarrassed. Not because he is an establishment economist. Not because he is a Keynesian. And not because he’s not a smart guy. He should be embarrassed that someone allowed him to publish nonsense about the state of the economy in order to promote his worldview.

He lives in a world that is behaving much differently than he expected or than he apparently wants. He wants the Trump tax reform law to fail. He must admit that the economy is working much better than he ever expected it to. But, in the end, he says that it’s all a mirage, temporary, that the resurgence measured by nearly every metric isn’t going to last.

He is establishment to the core, and perhaps that’s why he’s willing to go to the mat for a worldview that is being overturned and increasingly discredited: that statists can control things much better than an uncontrolled “free” economy can.

He admitted in an article for CNBC that things are going just swimmingly:

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Trump Economy Making Democrats Look Increasingly Foolish

This article was published by The McAlvany Intelligence Advisor on Friday, January 5, 2018:

The kept media dutifully reported California Democrat Nancy Pelosi’s disgust over President Trump’s tax reform program, even though it made her look foolish. Said Pelosi, “If this goes through, kiss life on earth goodbye. The debate on health care is life/death. This is Armageddon.” This was followed by the media quoting Democrat Chuck Schumer: “Tax breaks don’t lead to job creation … [this bill is a] punch in the gut for the middle class.”

It may be a little early to tell, but at the moment the middle class is doing just fine. Life goes on; if Armageddon occurred, the media missed it. That “punch in the gut for the middle class” is about to be caused by heavier wallets, thanks to tax cuts showing up in their February paychecks.

For hundreds of thousands, that punch in the gut was immediate:

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Dow Smashes Through 25,000; to Smash Dems in November?

This article appeared online at TheNewAmerican.com on Thursday, January 4, 2018:

The surprising thing about the Dow’s volcanic eruption through the 25,000 level on Thursday is that it was matched by all-time highs in other key stock market indexes such as the S&P 500 Index, the NASDAQ, and the Russell 2000. Even more surprising is that this isn’t happening in an American vacuum: Japan’s Nikkei Stock Average hit a new 26-year high, rising above 23,000 for the first time since January 1992. The Hang Seng (Hong Kong) Index just touched a new 10-year high, while major stock market indexes in New Zealand, the Philippines, and Thailand also set new records on Thursday.

The reasons why aren’t surprising:

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Trump’s Regulatory Rollback: Not 2 to 1, but 22 to 1!

This article appeared online at TheNewAmerican.com on Monday, December 18, 2017:

In his first 11 months in office, President Donald Trump is keeping another of his campaign promises: reducing regulations so that the economy can breathe again. Speaking in the Roosevelt Room — an irony that may have been intended — Trump summarized brilliantly exactly how the greatest economic miracle in history got bogged down:

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Where Will 50,000 Former Deutsche Bank Employees Find Work?

This article was published by The McAlvany Intelligence Advisor on Friday, November 10, 2017:

The short answer is: they will find other work. They will also find that other work to be more rewarding, higher paying, more satisfying, and providing greater benefits to others than they did while working for the bank. That’s how the free market operates, when it is allowed to.

It’s not that those DB employees didn’t have fair warning. In September, DB’s CEO, John Cryan, hired in 2015 to turn the bank around, told them:

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“Trump’s” Stock Rally Best Since 1945

This article appeared online at TheNewAmerican.com on Wednesday, November 8, 2017: 

Before the market opened on the day after Donald Trump won the election a year ago, futures were predicting a precipitous drop in the Dow Jones Industrial Average of 900 points. By the close of business that day, sentiment reversed and the market closed up 250 points, to 18,500.

That was 5,000 points ago,

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The GOP Tax Reform Bill: Sausage-making on the Titanic

This article was published by The McAlvany Intelligence Advisor on Monday, November 6, 2017:

John Godfrey Saxe. Library of Congress descrip...

John Godfrey Saxe

The oldest attribution isn’t to Otto von Bismarck, the Iron Chancellor of Germany, but to an American poet, John Godfrey Saxe. Back in 1869, he said it best: “Laws, like sausages, cease to inspire in proportion as we know how they are made.”

Imagine, then, making sausages on the deck of the Titanic just after it hit an iceberg on the glassy sea of the North Atlantic in the early morning hours of April 15, 1912. The wonderful smells might have distracted the passengers from the reality that within two hours and forty minutes the unsinkable ship would disappear beneath the surface of the icy waters, taking 1,550 passengers with her.

That picture may be too dramatic for our purposes. But

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U.S. Economy Continues to Surprise to the Upside

This article appeared online at TheNewAmerican.com on Tuesday, October 31, 2017: 

One measure of how the U.S. economy continues to exceed expectations is the Economic Surprise Index published by Citigroup. It’s a tool that is used to measure how the economy compares to those expectations and, at the moment at least, it reflects the ebullience reported elsewhere. Any reading above zero indicates that the economy’s performance is exceeding projections. On Tuesday it hit 40 — its highest level since April.

That performance has repeatedly been reported in The New American and elsewhere, with these notable results:

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Looking a Gift Horse in the Mouth: Pence, Trump to cut UN Funding, give it to USAID Instead

This article was published by The McAlvany Intelligence Advisor on Monday, October 30, 2017: 

US National Security Memorandum: paramount imp...

First attributed to St. Jerome (400 AD) is “Noli equi dentes inspirere donati” which, roughly translated, means: Don’t look too closely at a gift you received for you might be disappointed. Just be grateful you got the gift. That’s how those supporting the movement to “Get the US out of the UN, and the UN out of the United States” must feel hearing VP Mike Pence speak last Wednesday night. He was addressing the Solidarity Dinner sponsored by In Defense of Christians in Washington, D.C. when he announced that the Trump administration was going to be cutting funding to the United Nations:

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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.