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: Keynesian

A Tea Party House member doesn’t think there will be a fiscal cliff deal

Tim Huelskamp is a House member (R-Ky.) and a member of the Tea Party Caucus who was canned by Speaker John Boehner because he didn’t “toe” the Republican line, a move that Huelskamp called “petty” and “vindictive.” I called it “instructive” about Boehner.

He has strong opinions about government spending, and wasn’t afraid to voice them. Back in February of this year,

Keep Reading…

Latest Move by the Federal Reserve Raises Important Questions

With Federal Reserve Chairman Ben Bernanke’s latest announcement of a new bond-buying program linked to unemployment data instead of the calendar, commentators called it an “historic move,” “another innovation,” and a “surprise” that amounts to a “complete reversal” from the Fed’s days of using Fedspeak to disguise and obfuscate its moves.

After reviewing how the economy looks from the Fed’s point of view, Bernanke announced that his Federal Open Market Committee (FOMC) will

Keep Reading…

Fed’s announcement changes its words, not its actions

It’s hard for me to keep a civil tongue when chief alchemist Ben Bernanke makes an announcement like this. He’s going to buy more government securities in order to lower the unemployment rate, but this won’t affect the inflation rate. If it does, he’ll stop.

For the first time, the Fed has announced a goal for the unemployment rate. By saying that it anticipates that it will keep interest rates extremely low until the unemployment rate falls to 6.5% (as long as inflation doesn’t get out of control), the Fed has become more aggressive about turning the economy around.

It bears repeating:

Keep Reading…

Keynesians are Crazy! Here’s Proof:

English: Japanese Prime Minister Shinzo Abe at...

Japanese Prime Minister Shinzo Abe at the G8 summit in Heiligendamm. (Photo credit: Wikipedia)

For 20 years the Japanese economy has languished. Its stock market, once at 40,000, now is below 10,000. The solution? More of the same medicine that hasn’t worked! It’s insane. At least one intelligent soul has written about it, in The New York Times no less. He calls such policies “unusual”:

For years, proponents of aggressive monetary policy have offered this unusual piece of advice as a way to end Japan’s deflationary slump and invigorate the economy. Print lots of money, they said. Keep interest rates at zero. Convince the market that Japan will allow inflation for a while.

It hasn’t worked. For 20 years it hasn’t worked. So now, Japan’s former prime minister has a great idea:

In a speech in Tokyo on Thursday, Mr. [Shinzo] Abe said he would call for the Bank of Japan to set an inflation target of 2 to 3 percent, far above its current goal of about 1 percent, with an explicit commitment to “unlimited monetary easing” — an open-endedness that has caused jitters among some economists. The bank’s benchmark interest rate should be brought back to zero percent from 0.1 percent, Mr. Abe added.

Abe wants to do even more. He proposes that Japan’s central bank buy construction bonds to

Keep Reading…

Keynesian Economists Nervous About Fiscal Cliff

DAVOS/SWITZERLAND, 25JAN07 - Maria Bartiromo, ...

Maria Bartiromo, Anchor, CNBC’s Closing Bell, and Host and Managing Editor, Wall Street Journal Report, CNBC, USA; (Photo credit: Wikipedia)

Maria Bartiromo is the majorette domo of television investment broadcasting. She is also a Keynesian. From her bio:

She is a member of the Board of Directors of the Young Global Leaders of the World Economic Forum, a member of the Council on Foreign Relations [and] the Economic Club of New York… (my emphasis)

Bartiromo graduated from New York University, where she studied journalism and economics.

Rest assured good friends that NYU doesn’t teach Austrian School economics. And membership in the CFR guarantees that anything she says or writes will be the elite Anglo-American establishment’s view.

And she is getting nervous about the fiscal cliff:

The ongoing fight over the “fiscal cliff” may overshadow everything else as we get closer to the new year. Sadly, compromise seems hard to come by, even though the consequences of going over the cliff — hundreds of billions of dollars of spending programs that are set to expire, along with the largest tax increase since World War II for virtually all income levels — was specifically designed to force compromise.

Obama has dug in his heels: no deal unless

Keep Reading…

What’s to Blame for the Slow Economic Recovery?

Obama: Jesus would back my tax-the-rich policy

(Photo credit: porchlife)

What’s remarkable in this article is not what is said (with which I agree ) but who is saying it: Jerry Dwyer used to work at the Federal Reserve Bank of Atlanta, while James Lothian used to work at Citibank/Citicorp. These are Keynesian guys who have worked in the belly of the beast, and yet have seen the light!

The economic recovery is historically very slow:

Our current recovery has been the weakest since at least World War II.  Thirty-nine months since the recovery started in June 2009, job growth has been  only 2 percent. During the average recovery since 1970, job growth over the  first 39 months has averaged over 8 percent. The current recovery has failed to  keep up with the growth in the working age population. Unlike past recoveries,  much of the drop in the unemployment rate simply reflects people giving up  looking for work. And there is no doubt there was a financial crisis.

But blaming it on the financial crisis is merely political cover for the Obama administration to assume unto itself more powers and excuses to use them, all in the name of

Keep Reading…

Taxmageddon Only Part of the Problem

Explosion

Explosion (Photo credit: Freidwall)

The Heritage Foundation went to the trouble of calculating exactly what will happen to the tax liabilities of taxpayers if Taxmageddon stays in place after the first of the year. Accordingly to Amy Payne, “Taxmageddon” is the

horrifying combination of expiring pro-growth tax policies from 2001 and 2003, the end of the once-temporary payroll tax cut, and just a few of Obamacare’s 18 new tax hikes…

Taxmageddon will be the largest tax increase EVER to hit Americans. It’s nearly $500 billion in one year, starting January 1. That’s two months away.

Here is Heritage’s breakdown of Taxmageddon’s impact on Americans:

  • Families with an average income of $70,662: tax increase of $4,138
  • Baby boomers with an average income of $95,099: tax increase of   $4,223
  • Low-income workers with an average income of $24,757: tax increase of $1,207
  • Millennials with an average income of $23,917: tax increase of $1,099
  • Retirees with an average income of $42,553: tax increase of $857

But even this fails to measure the real impact of Taxmageddon starting January 1. It’s that most of the tax increases will be borne by s

Keep Reading…

Is Hurricane Sandy Good for the Economy?

Broken Window Fallacy

Broken Window Fallacy (Photo credit: KAZVorpal)

It didn’t take long for some ignoramus (as usual, a college professor) to explain one-half of the broken window fallacy concerning the economic impact of Hurricane Sandy: it’s going to be good! All good! Yes!

Here’s the story line from this fellow:

Disasters can give an ailing construction sector a boost, while unleashing reinvestment that actually improves stricken areas and the lives of residents. Ultimately, Americans always seem to emerge stronger and rebuild better in the wake of disaster.

Happily and predictably, my friend (I don’t know him, but I know his thinking, with which I agree) Donald Boudreaux jumped onto the article with a letter to the editor pointing out the

Keep Reading…

Tax Cuts for the Rich or Tax Relief?

English: The Subsidised Mineowner - Poor Begga...

(Photo credit: Wikipedia)

It’s all about how you frame the question, isn’t it? The issue appears to be tax cuts for the rich: should we or shouldn’t we? By framing the question that way, discussion is limited. By re-framing the question, it changes the answers. Thanks to Investors Business Daily for pointing this out.

President Obama warned that GOP hopeful Mitt Romney’s proposed income-tax  cuts will “cost” the government revenue and repeat Bush policies that he says  blew up the deficit.

“The centerpiece of his economic plan are tax cuts,” Obama said at Tuesday’s  presidential debate in New York. “That’s what took us from surplus to deficit.”

The mantra from the Obama camp is annoyingly repetitive and consistently wrong:

The Obama camp has strenuously opposed Romney’s pro-growth strategy, arguing  that tax breaks, especially for the wealthy, “rob” programs for the middle class  and poor because they don’t raise revenues and don’t “pay for themselves.”

“It has never been done before,” Vice President Joe Biden insisted in last week’s debate with Romney running-mate Paul Ryan.

But history has shown that when entrepreneurs are allowed “relief” – to keep more of what they earn – they earn more. What a surprise!

The historical tables in the back of the latest “Economic Report of the  President” show that the Bush tax cuts generated more, not less, federal  revenues — a phenomenon that also held true for Presidents Clinton, Reagan and  Kennedy.

All four leaders, two Republicans and two Democrats, slashed taxes for top  individual earners or investors. And once these rate reductions took effect and  began stimulating economic activity, record individual income-tax receipts  poured into the U.S. Treasury.
A great example is what happened when President Kennedy, against the advice of his Keynesian advisors, cut tax rates on

Keep Reading…

The Second Presidential Debate: Duel of the Dunces

made in china

made in china (Photo credit: mandiberg)

I didn’t watch the second presidential debate between Mitt Romney and Obama. I had something more important to do: ironing pillowcases and doing some laundry.

But my friend (I’ve never met him but I like him) Donald Boudreaux did. And he just had to write a letter to The Wall Street Journal to vent:

Yesterday’s presidential debate further exposed Messrs. Obama’s and Romney’s economic illiteracy (“China a Punching Bag in U.S. Presidential Debate,” Oct. 17).

Each man insists that America’s economy can be harmed by inexpensive imports – in other words, harmed by opportunities for voluntary exchanges that lower Americans’ cost of living.

He starts with Romney:

By promising to raise taxes on Americans who buy Chinese-made goods, Mr. Romney again promised to break his campaign promise to not raise taxes.  That he is unaware of the contradiction isn’t promising.

I must interject here: Romney is following the advice of

Keep Reading…

Is QE3 a Myth?

English: President Barack Obama confers with F...

President Barack Obama confers with Federal Reserve Chairman Ben Bernanke following their meeting at the White House. (Photo credit: Wikipedia)

Graham Summers, writing for ZeroHedge, has pointed out that Fed head Ben Bernanke hasn’t done any new buying of securities despite his promise to do so back in September. The Fed publishes its balance sheet. You can see it here, in graphical form. As Summers said, if Bernanke was buying, how come the measure of money – the adjusted monetary base – is declining?

Would Bernanke lie? Oh, no!

The stock market jumped up nicely at the news, but has retraced most of those paper gains. Maybe the market has figured it out: it was

Keep Reading…

Is China Going Austrian?

Zhang Weiying - Annual Meeting of the New Cham...

Zhang Weiying – Annual Meeting of the New Champions 2011 (Photo credit: World Economic Forum)

In a remarkable article in the Wall Street Journal, the increasing influence of Austrian school thinking in communist China is exposed. It revolves around the efforts of a single individual, Zhang Weiying, the founder of the China Center for Economic Research at Peking University.

This is a mind-altering experience, reading this article. It puts my pre-existing perceptions and prejudices into disarray. When the Chinese government committed an astounding $3.5 trillion – half of the country’s gross domestic product – to stimulate the economy in 2008, it expected great things to happen: it would put people to work, counteract the Great Recession then enveloping the US, and show just how wonderful a state-controlled economy could be.

It didn’t work. Says the Journal:

Ultimately, Beijing’s stimulus fed a false investment boom that stoked asset bubbles – then the morphine [yes! the writer actually said morphine!] wore off while the government tightened.

Officials claim the economy grew at 7.6%…between April and June…Skeptics think the real number is closer to 4%. (One London research house says 1%).

Meanwhile, industries dominated or favored by the state, such as steel or solar power [No!], are idling from overcapacity. Countless sheets of copper are reportedly stacking in warehouses, blocking doorways and exemplifying Hayek’s notion of malinvestment.

Zhang somehow escaped the state indoctrination of Keynesianism and started thinking on his own. His influence has grown so remarkably, and the economic disaster enveloping China now becoming so obvious – there are now

Keep Reading…

National Review Doesn’t Speak For Me

Arthur C. Brooks – Why the Stimulus Failed

Ask most Americans about the big-spending government policies of the last few years, and they will tell you the programs have failed. In a February 2012 poll from the nonpartisan Pew Research Center, 66 percent of Americans said the federal government is having a negative impact on the way things are going in this country (versus 22 percent who say the impact is positive). A majority disapproves of the president’s 2009 stimulus, and according to a 2010 CNN poll, about three-quarters of Americans believe the money was mostly wasted.

National Review Covers Jan-Jun 2008

National Review Covers Jan-Jun 2008 (Photo credit: AlaskanLibrarian)

This, I agree with. I’m glad to see, according to the polls at least, that more and more Americans also agree: government stimuli didn’t stimulate.

What I disagree with is Brooks’ contention buried later on in the article about conservatives (I generally consider myself one, if defined properly) and safety nets:

Conservatives today understand the importance of a reliable safety net for the truly indigent and the necessity of dealing with certain market failures.

Further, there is universal support on the political right for opportunity-equalizing government policies, such as publicly funded education (ideally, administered for the benefit of children as opposed to rent-seeking bureaucrats and teachers’ unions).

Wow! I didn’t realize that I believed in and supported all these things! But this is National Review, the supposedly “conservative” voice of reason in today’s world.

The most reliable safety net in the world is…are you ready…the family. That’s why socialists the world over consider the family as the enemy of the state: everyone must be dependent on the state or else their socialist plans fail.

And “universal support” for “publicly funded education?” All I see is that the more that is spent by governments on such education is lower scores and more acceptance of big government on the part of the kids.

So somewhere along the way I got off the bus on “conservatism,” at least the style supported by National Review.

A Former Fed Official Goes Rogue

CATO - The Fed’s New Round of Quantitative Easing

By introducing another program to buy MBSs [mortgage-backed securities], to the tune of $40 billion per month, the FOMC [Federal Open Market Committee, headed by Fed Chairman Bernanke] is supporting the long-standing federal policy of special aid to housing, real estate and mortgage interests.

These federal policies were the largest single contributor to the financial crisis. Why would the Federal Reserve want to encourage continuation of these federal policies?

Modern-day meeting of the Federal Open Market ...

Modern-day meeting of the Federal Open Market Committee at the Eccles Building, Washington, D.C. (Photo credit: Wikipedia)

My, my, the landscape does look a little different from the outside, doesn’t it, Mr. Poole?

He is about my age. He attended Swarthmore (I attended Cornell) and received a BA degree in 1959 (I got mine in 1963). He got his MBA from the University of Chicago in 1963 (I got mine in 1964, also from Cornell), and then went on to get his PhD in economics at the University of Chicago. (I didn’t. I went to work in the private sector.)

He started his career in government by working for the Federal Reserve’s Board of Governors from 1964 to 1974. Then he joined the faculty at Brown University, chairing the economics department there.

Fast forward: in 1998 he served as CEO of the Federal Reserve Bank of St. Louis, and left in 2008, and now is a Senior Fellow at Cato(!).

Somewhere along the way he got religion. I have great respect for Cato and they wouldn’t hire a fool. Nor would they bring in a Keynesian to undermine their efforts to expose that fraud unless he was an escapee from the reservation.

But listen to what Poole said:

The Federal Reserve says that it is apolitical but this decision is directly supportive of continuation of the current status of Fannie Mae and Freddie Mac. This action is not monetary policy but fiscal policy, extending credit to a favored industry. This policy is crony capitalism, whether practiced by the federal government or by the Federal Reserve.

This is perfect: “crony capitalism” – “extending credit to a favored industry” – “not monetary policy but fiscal policy.” Amazing!

My questions for Mr. Poole: how long did it take you to overcome your Keynesian mindset and enter the real world? Are you a “recovering Keynesian?” Are you just an opportunist? When and how did you see the light? Is there hope for others still on the reservation?

I’d sure like to know.

Impact of QE3 is Doubtful

Robert J. Samuelson – Bernanke on the Brink

Even before [last week’s announcement by the Fed that it would initiate Quantitative Easing Strategy Number Three, or QE3], there was skepticism that it would do much to lower the unemployment rate, which has exceeded 8 percent for 43 months. The average response of 47 economists surveyed by The Wall Street Journal was that a similar program might cut the jobless rate 0.1 percentage point over a year.

Paper Tiger

Paper Tiger (Photo credit: cucchiaio)

Oh, boy! One tenth of one percent! Over an entire year! That’s worth debauching the currency over, isn’t it?

Samuelson has captured the entire fraudulent Keynesian insanity in one pithy paragraph:

At a news conference, Fed Chairman Ben Bernanke explained what the Fed hopes will happen:

By buying mortgages, the Fed would push interest rates down. They’re already low (3.6 percent in August for a 30-year fixed-rate mortgage) and would fall further. Lower rates would stimulate more home buying and construction. Greater housing demand would raise home prices. Fewer homeowners would be “underwater” (homes worth less than mortgages). Banks would refinance more existing mortgages at lower rates because the collateral — the homes — would be worth more.

Feeling wealthier, homeowners would spend more and cause businesses to hire more.

This is the mantra of Keynesianism. It’s also provably false. But that doesn’t matter. Part of the mantra is: If something doesn’t work, do more of it. That proves that it’s insane.

Samuelson is a Keynesian, Harvard-trained, with years of writing for establishment outlets like Newsweek and the Washington Post. So he isn’t allowed, by training, education or experience, to stray too far off the reservation. But he comes close to heresy here:

Explanations [as to why these Keynesian strategies aren’t working] abound. One is that the stimulus programs were still too timid…

Another…is that the trauma of the financial crisis and recession made households and businesses deeply cautious…

To these might be added a perverse possibility: the stimulus programs themselves. Intended to inspire optimism by demonstrating government’s commitment to recovery, they could do the opposite. If consumers and companies interpret them as signaling that the economy is in worse shape than they thought, they might retrench even more…

Close, Mr. Samuelson, but no cigar! I think people have figured out that the Fed is a toothless, paper tiger, all bluster and no power. Or my favorite: All hat and no cattle.

As Samuelson said, “There is a desperate air to Bernanke’s latest move…the Fed is on the brink of moving beyond what it understands and can control.”

The Unintended Consequences of Low Interest Rates

Interest rate vs money balance

Interest rate vs money balance (Photo credit: RambergMediaImages)

Complaints from savers about low rates of return on their money have reached the business page of the New York Times. According to the Times, when Bill Taren, a retiree living near Orlando, Florida, learned that his credit union would pay just 0.4 percent interest on his savings, he decided to take the money out of the bank and put it into his mattress because, he said, “at least there we can see the cash.”

It was worse for Julie Moscove of Fort Lauderdale, Florida. Over the last four years, she has watched her interest income drop from $2,000 a month to $400 a month. She said, “It’s ridiculous. I cut coupons now.”

And Dorothy Brooks has been forced to go back to work in order to supplement what’s left of her retirement income, after being retired for the last 10 years:

I got hit a couple of years ago pretty badly in the stock market, so now my savings are weighted mostly toward bonds. Now both investments are terrible. And I can’t put my money in a money-market account because that’s crazy. That just pays nothing.

Keynesian economic policies allegedly designed (and sold to the American people) to stimulate the economy are actually having the perverse effect of

Keep Reading…

A Keynesian Tells the Truth!

Bill Gross: Cult Figures

The 6.6% real [rate of] return [on stocks since 1912] belied a commonsensical flaw much like that of a chain letter or yes—a Ponzi scheme…

If an economy’s GDP could only provide 3.5% more goods and services per year, then how could one segment (stockholders) so consistently profit at the expense of the others?

The…”illogic” of such an arrangement when carried forward another century to 2112 seems obvious as well. If stocks continue to appreciate at a 3% higher rate than the economy itself, then stockholders will command not only a disproportionate share of wealth but nearly all of the money in the world!

In his Investment Outlook newsletter for August, Bill Gross, a Keynesian and the president of PIMCO, the world’s largest bond fund, says that not only will stock or equity investors not be able to make the average 6.6 percent returns of the past, neither will bonds. His argument is very persuasive:

With long Treasuries currently yielding 2.55%, it is even more of a stretch to assume that long-term bonds — and the bond market — will replicate the performance of decades past.

He reminds his readers that the great bull market in bonds began in 1981 when interest rates were 14½ percent. The long slow decline in interest rates has resulted in bond value appreciation that more than made up for the decline in interest rates. And besides, most of those capital gains were taxed at lower rates than the interest they paid. So bondholders enjoyed a double benefit: capital appreciation, and lower taxes on that appreciation.

But that game is over. Explains Gross:

Private pension funds, government budgets and household savings balances have in many cases been predicated and justified on the basis of 7-8% minimum asset appreciation annually.

One of the country’s largest state pension funds, for instance, recently assumed that its diversified portfolio would appreciate at a real rate of 4.75%. Assuming a goodly portion of that is in bonds yielding at 1-2% real [inflation-adjusted returns], then stocks must do some very heavy lifting at 7-8% after adjusting for inflation.

And that, according to Gross, just simply isn’t going to happen.

What will be the result? The greatest pension “bust” the world has ever seen. The forced haircuts we’re just beginning to see in cities in California and Wisconsin are just the tip of the iceberg. I’m sorry, but it’s better to know it now than be surprised by it later.

ADP Jobs Numbers are Anemic, at Best

ADP: National Employment Report, July 2012

Carlos A. Rodriguez, president and chief executive officer of ADP, said: “According to this month’s ADP National Employment Report, the U.S. economy added 163,000 jobs in July. This increase marks two-and-half years of positive job growth.

According to our data, businesses across the country have restored nearly 4 million jobs during this period with an average of 131,000 new positions a month. Although encouraging, we’d like to see continued growth but at more robust and consistent levels.”

ADP

ADP (Photo credit: Joits)

This is called “spin.” 4 million jobs in two-and-a-half years? That’s 133,000 jobs per month. He calls this “encouraging.” I called it stalled.

Parsing the numbers, nearly all the growth in jobs, according to ADP, is taking place in the service sector, not the “goods-producing” sector. 90 percent of those 163,000 jobs created in July were in the service sector.

But employment among small businesses with fewer than 50 employees, where the bulk of job creation ought to be taking place, just 73,000 jobs were created, and 69,000 of them were in the service sector. The remainder, in the goods-producing sector, was just 4,000 jobs.

In an economy which employs more than 110 million people, this is a rounding error.

Nevertheless, the “spin” continues. This is from the chairman of Macroeconomic Advisors which works with ADP in developing this monthly report:

According to Joel Prakken, chairman of Macroeconomic Advisers, LLC, “July’s increase was the thirtieth consecutive monthly advance, and higher than the consensus forecast for today’s release and for the official jobs number due out Friday from The Bureau of Labor Statistics.

Although recent employment gains likely have been restrained by heightened uncertainty over the European financial crisis and by growing concerns about domestic fiscal policy, July’s increase of 163,000 new jobs reinforces that the pace of hiring has picked back up after slowing sharply during the Spring.”

“The pace of hiring has picked back up…?” Show me the numbers, Joel!

And yet he thinks this report, acting as a precursor to the Bureau of Labor Statistics report due out on Friday (which everyone focuses on), is a harbinger for a drop in the unemployment rate:

This gain in private employment is strong enough to suggest that the national unemployment rate may have declined in July. Today’s estimate from ADP, if re-enforced by a similar reading on employment from the BLS on Friday, will alleviate concerns that the economy has slipped into a downturn.

Pardon my cynicism but I don’t think Friday’s report is going to “alleviate” anyone’s concerns.

Please remember that the 1920-21 recession was just as severe as the Great Recession of 2008, but the economy had rebounded by some 60 percent within two years of the bottom, bringing the unemployment rate down to normal levels. Here’s the relevant quote from Wikipedia:

The AT&T Index of Industrial Productivity showed a decline of 29.4%, followed by an increase of 60.1%–by this measure, the recession of 1920–21 had the most severe decline and [the] most robust recovery of any recession between 1899 and the Great Depression. (emphasis added)

Of course, this was before “experts” in the government determined that Keynesian “solutions” would make things better quicker. Thanks for that, Mr. Keynes.

The Robin Hood Tax Scam Is Back

robinhood_june19_DSC_1766

In a burst of uninformed enthusiasm, William La Jeunesse, writing for Fox News, announced that the bill offered by Senator Tom Harkin (D-Iowa) and Representative Peter DeFazio (D-Ore.)—the “Wall Street Trading and Speculators Tax Act”—was the Robin Hood tax.

If he knew better, La Jeunesse would have called it by its correct name: the Tobin Tax, first offered 40 years ago by a Keynesian economist, following the collapse of the Bretton Woods agreement when President Nixon took the United States off the gold standard. That bit of information would no doubt have helped to curb his enthusiasm.

La Jeunesse wrote:

The measure would impose a tiny three-hundredths-of-a-penny tax on financial trades. Supporters say the bill would cost the average investor just $1 per year, but could raise up to $35 billion annually.

This painless way of extracting funds from its owners would then allow further spending to stimulate the economy, according to DeFazio:

It’s .03 percent. But it will still generate about $35 billion a year in income—income that could be used to rebuild the real economy, infrastructure [and make] other investments.

Any proposal to increase taxes, direct or indirect (the Tobin tax qualifies as an indirect tax), can be examined at least three ways. Who is proposing it and what is his agenda? Who has analyzed its impact impartially and has the intestinal fortitude to tell the truth about the bill? And are taxes in general moral, and indirect taxes specifically? 

Keep Reading…

Latest ADP Jobs Report Confirms Slowing Economy

Christine Lagarde

On Thursday, accounting firm ADP issued its National Employment Report noting that jobs in the non-farm private business sector increased by 176,000 in June. ADP’s CEO, Carlos Rodriguez, said, “It is encouraging to see companies creating jobs, particularly in the goods-producing sector where we see positive growth following two months of job loss.” Reuters jumped on the alleged positive news, calling it a “hopeful sign.”

Unfortunately, one month does not make a trend. When June’s numbers are compared to January’s, ADP’s total nonfarm private jobs growth has increased from 110 million to 110.9 million, a gain of 77-100ths of one percent, or about 142,000 new jobs each month. A closer look reveals that most of those jobs were in the highly volatile service sector, in small businesses, usually fast-food or similar businesses, known for their high turnover. In fact, the goods-producing sector gained just one half of one percent employment since January, translating into less than 16,000 job gains each month. These numbers are hardly a “hopeful sign,” but more reflective of an economy that has flat-lined.

Another report from the Department of Labor showed that new claims for unemployment insurance dropped by 14,000 last week to 374,000, the lowest level in six weeks. But that was offset by an upward revision from

Keep Reading…

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