Category Archives: Economics

Surprise: New York Times Writer Says Rich Don’t Pay Enough Taxes

Wednesday, 16 October 2019 14:36

This article appeared online at TheNewAmerican.com on Wednesday, October 16, 2019:

In his zeal to prove the specter of “income inequality” that has been talked about by every Democrat running for the presidency, New York Times writer David Leonhardt turned out a 1,400-word book report. The book in question, The Triumph of Injustice, written by a couple of left-wing professors at the University of California, Berkeley, claims that, thanks to Trump’s tax policies, the rich pay a lower tax rate on their income than do the rest of us. Wrote Leonhardt,

The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income….

President Trump’s 2017 tax cut helped push the tax rate on the 400 wealthiest households below the rates for almost everyone else.

This is proof positive of the present inequity of the system since the “overall rate was 70 percent in 1950 and 47 percent in 1980.” In other words, in the upside-down world of liberal economic thinking, higher taxes on the wealthy is a good thing, while allowing them to keep more of their wealth for themselves is a bad thing.

Leonhardt added that it’s a class struggle between the “haves” and the “have-nots” of classical Marxist theory:

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CNN Learns There Really Is No Such Thing as a Free Lunch After All

Wednesday, 16 October 2019 14:28

This article was published by The McAlvany Intelligence Advisor on Wednesday, October 16, 2019:

Many readers of science fiction consider Robert Heinlein’s “The Moon is a Harsh Mistress” his finest work. Book Three is entitled TANSTAAFL, perhaps the core of Heinlein’s economic libertarian philosophy. It simply means that one cannot get something for nothing.

It’s a lesson that CNN has been slow to learn.

Two years ago, CNN was delighted to learn that Target was going to increase the minimum wage it was paying its employees: “Target is giving its workers a raise.” It explained that the company would start paying $11 an hour while committing to additional raises over the next few years to $15 an hour by the end of 2020.

Nothing was said at the time about just who was going to be paying for those increased wages.

On Monday, CNN answered that question:

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Reality Check for CNN: Target’s Wage Increase Being Offset by Fewer Hours

Tuesday, 15 October 2019 17:05

This article appeared online at TheNewAmerican.com on Tuesday, October 15, 2019:

Two years ago, CNN was delighted to learn that Target was going to increase the minimum wage it was paying its employees: “Target is giving its workers a raise.” It explained that the company would start paying $11 an hour while committing to additional raises over the next few years to $15 an hour by the end of 2020.

Nothing was said at the time about just who was going to be paying for those increased wages.

On Monday, CNN answered that question:

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Chinese Imports, Exports Drop Further in September While Trade Talks Pause

Monday, 14 October 2019 13:41

This article appeared online at TheNewAmerican.com on Monday, October 14, 2019:

China made clear its reticence to do anything more than stall, delay, dither, and otherwise put off any serious discussions on items of real importance in its announcement on Friday. Said the Chinese Communist Party’s mouthpiece People’s Daily: “China’s position of safeguarding the nation’s core interests and the fundamental interests of its people cannot be shaken. On issues of principle it is impossible to engage and impossible to solve the problem by exerting pressure on the Chinese side.”

Translation:

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Rise in Consumer Sentiment Bodes Well for Trump’s Reelection

Friday, 11 October 2019 15:01

This article appeared online at TheNewAmerican.com on Friday, October 11, 2019:

Once again, U.S. consumers have surprised forecasters with their resiliency and positive economic outlook. Polls of economists showed them expecting consumer sentiment, according to the Consumer Sentiment Index published by the University of Michigan every month, to drop to 92 in October from September’s 93.2. Instead, consumers’ positive outlook rose to 96.

Forecasters continue to be flummoxed

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Strong Jobs Report Quashes Recession Fears

Saturday, 05 October 2019 04:33

This article appeared online at TheNewAmerican.com on Friday, October 4, 2019:

Friday’s jobs report from the Bureau of Labor Statistics (BLS) confirmed Wednesday’s release from ADP: The U.S. economy remains strong and robust, employing record numbers of Americans and paying them more than ever.

In addition to reporting that the U.S. economy added 136,00 new jobs in September, other key takeaways from the BLS report include:

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None so Blind as Those Who Refuse to See: Seven-Year Car Loans Just Asking for Trouble

Saturday, 05 October 2019 04:28

This article was published by The McAlvany Intelligence Advisor on Friday, October 4, 2019:

When the average buyer enters a car dealership, there are at least two factors asking for disaster: the dealer makes more money on selling car loans than he does on the car itself; and the buyer is only interested in the payment. Other details, like how long the loan will last, what the interest rate is, what the buyer is actually paying for the car over the life of the loan, or what happens when the car doesn’t last as long as the loan, are overcome by the aphrodisiac of the new car smell.

This writer was once overcome by that aphrodisiac and learned his lesson the hard way: a downturn in the economy forced him to sell the car back to the dealer. After making payments on it for three years, he still had a balance to pay off at the closing.

It’s called the “illusion of affordability” – the idea that

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Seven-year Car Loans: Invitation to Disaster?

Thursday, 03 October 2019 20:53

This article appeared online at TheNewAmerican.com on Thursday, October 3, 2019:

Longer and longer car loans are creating an illusion of affordability that could lead to disaster in the event of a downturn in the economy. Most new car buyers consider only the monthly payment, not the total amount they will spend on that shiny new SUV or how long those payments will last. When the payments outlast the vehicle, more and more borrowers (nearly a third of them, at last count) roll over the remaining balance into a new loan, creating perpetuity of debt for themselves.

Dealers now make more money selling loans than they do selling the cars themselves. A decade ago, according to J.D. Power, a new car dealer made an average of

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Don’t Listen to Establishment Economists on September Jobs Numbers

Wednesday, 02 October 2019 20:33

This article appeared online at TheNewAmerican.com on Wednesday, October 2, 2109:

Moody’s Analytics chief economist Mark Zandi never saw a jobs report under the Trump administration that he liked. September was no exception. In a statement accompanying the release of jobs numbers by accounting firm ADP on Wednesday, Zandi said: “Businesses have turned more cautious in their hiring. Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise.”

During a conference call following the release of the September jobs numbers, Zandi expanded on his disdain:

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Taxpayers Have Been Lied To About Their State’s True Financial Condition

Monday, 30 September 2019 15:20

This article was published by The McAlvany Intelligence Advisor on Monday, September 30, 2019:

Until just a few years ago, states were able to hide the real condition of their finances. Now, however, the truth is coming out. Thanks to new rules that states are required to follow, and efforts by a Washington, DC think tank, full accounting for all pension and healthcare benefit promises is now available for every taxpayer to see. The news isn’t good.

In its latest report, Sheila Weinberg, head of Truth in Accounting (TIA), which prepares and publishes its Financial State of the States report every September, said:

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Maduro Reversal? Price Controls Not Being Enforced, Leading to Economic Revival in Venezuela

Wednesday, 18 September 2019 19:50

This article appeared online at TheNewAmerican.com on Wednesday, September 18, 2019:

Almost unnoticed by the mainstream media are recent decisions by Venezuela’s Marxist dictator, Nicolás Maduro, to relax some of the more debilitating of his economic policies. That relaxation is already leading to economic revival in the country’s cities.

As reported by Kejal Vyas from Caracas and published by the Wall Street Journal on Tuesday, Maduro “has quietly and cautiously begun implementing free-market policies … [his regime has] largely stopped enforcing the price controls that had led to dire food shortages … [which is] giving some life, even if limited, to the economy.”

The economy under Maduro is worse than America’s was at the bottom of the Great Depression, and the IMF is forecasting it will shrink by another 35 percent this year. More than four million of Venezuela’s 30 million residents have left the country, leaving the rest behind to cope with lack of food, medical services and supplies, disease, and starvation.

But, thanks to Maduro’s silent lifting of some of his more onerous restrictions, the economy is beginning to recover, at least in Caracas. Wrote Vyas: “Here in the capital … new stores have popped up, selling everything from boxes of Cheerios to bottles of water.” Reappearing on stores’ shelves are multiple brands of sugar, pasta and flour.

Maduro is also cutting back on the prime driver that has led his socialist regime to install price controls:

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National Public Radio, Meet Murray Rothbard

Wednesday, 18 September 2019 19:44

This article was published by The McAlvany Intelligence Advisor on Wednesday, September 18, 2019:

Economist Murray Rothbard was a central intellectual figure in economic thinking called the Austrian School. He brilliantly applied common sense to the study of economics that Keynesians had distorted out of all proportion.

One of his primary principles rankles Keynesians to this day: Consumers determine prices, not producers. Accordingly, those producers exist at the mercy and discretion of consumers.

Staffers at National Public Radio (NPR) bought the Keynesian line.

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NPR Shops at Walmart to Learn Cost of Trump’s Tariffs, Gets Big Surprise

Tuesday, 17 September 2019 21:18

This article appeared online at TheNewAmerican.com on Tuesday, September 17, 2019:

Staffers from NPR (National Public Radio) went shopping at Walmart to confirm that Trump’s tariffs are already costing American consumers a lot of money. They couldn’t hide the results: The impact is hardly noticeable.

In announcing the results of a year-long study of prices at a local Walmart, NPR boldly announced: “Shoppers beware: the tariffs will bite.” The bite turned out to be a nibble.

In August 2018, NPR staffers began tracking the prices on some 70 items at a Walmart store in Liberty County, Georgia, ranging from toilet paper and black beans to lightbulbs and TVs. They learned that of those 70 common everyday items, only 24 of them saw increased prices, while 12 of them saw decreased prices, and the remaining 34 had no price changes.

The staffers had to backtrack on their preconceived notions:

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Democrat Bill to Prop Up Social Security Likely to Pass the House

Wednesday, 11 September 2019 21:14

This article appeared online at TheNewAmerican.com on Wednesday, September 11, 2019:

Social Security is in trouble. It has been in trouble for 84 years. Representative John Larson’s (D-Conn.) plan to prop it up is a mixture of the same old brew offered by past Congresses to keep the Ponzi-like scheme afloat for a few more years.

Called the Social Security 2100 Act, Larson claims to have 210 Democrat cosponsors for it in the House, which means it’s almost certain to pass the House later on this fall. It’s also all but certain that the Republican-controlled Senate will ignore the issue in light of it being the third rail of politics and as the 2020 elections draw ever closer.

On the surface the mixture appears enticing:

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Two Latest Jobs Reports Confirm Healthy, Growing U.S. Economy

Saturday, 07 September 2019 05:28

This article appeared online at TheNewAmerican.com on Friday, September 6, 2019:

The two latest jobs reports confirm that the U.S. economy remains on solid footing, growing across every sector (including manufacturing) and putting additional pressure on China to come to terms in the tariff war with President Trump.

Wednesday’s jobs report from ADP, one of the country’s largest payroll processors, showed that the U.S. economy added 195,000 jobs in August, with gains across every sector and every company size. And that didn’t include the 17,200 jobs that were added in the franchise sector in August.

Friday’s jobs report from the Bureau of Labor Statistics (BLS) showed that

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The Plans of the Crown Prince of Saudi Arabia Are Likely to Fail

Wednesday, 04 September 2019 17:03

This article was published by The McAlvany Intelligence Advisor on Wednesday, September 4, 2019:

There’s just no other way to say it: the Crown Prince of Saudi Arabia, Mohammad bin Salman, or MBS, is a thug. Upon taking control of the country in 2017, he spent the next two years consolidating his power. Human rights groups have complained loudly about the detentions he ordered and the tortures of dissidents he mandated, about the murders he orchestrated, his bombings of Yemen causing the starvation of millions, the arrest of members of the royal family (confiscating their wealth in exchange for their lives), and, last but not least, his ordering the murder of dissident journalist Jamal Khashoggi last October.

But he has big plans. He wants to turn his country into an international showplace, an uber-tourist attraction, a manufacturing mecca, and the economic centerpiece of the Middle East.

It’s going to take billions of dollars and he knows just where to get the money:

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Million-dollar Homes in Aspen Aren’t Selling. Recession Ahead?

Saturday, 31 August 2019 05:05

This article appeared online at TheNewAmerican.com on Thursday, August 29, 2019:

On its face, the claim that since million-dollar homes in Aspen are taking up to three years to sell means that a recession is coming is ludicrous. But if it comes from the mouth of an establishment economist, the mainstream media gives such a silly claim credibility.

Mark Zandi fits the mold of an establishment economist perfectly. With economics degrees from the Wharton School at the University of Pennsylvania, he has been steeped in Keynesian economics from infancy.

He has thrived in the culture,

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Establishment Economists Continue to Get It Wrong

Saturday, 31 August 2019 05:01

This article was published by The McAlvany Intelligence Advisor on Friday, August 30, 2109:

Establishment economists consistently bring a negative cast to their forecasts. Perhaps it’s because their worldview precludes any thought that people allowed to operate in an environment of lower taxes and fewer regulations can actually outperform their models. Perhaps it’s their excessive hubris springing from their Keynesian belief system that they can accurately predict (and thus manage) the future through econometric modeling.

Instead, many of them would benefit from just going shopping at, say, Walmart, Target, Kohl’s, Lowe’s, or Home Depot, and taking note of what’s going on there.

When they make predictions, they embarrass themselves and expose their so-called “profession” for what it really is: not much more than crystal ball gazing mixed with a negative worldview.

Consider Mark Zandi.

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Former Fed Official: Fed Should Try to Hurt Trump’s 2020 Chances

Thursday, 29 August 2019 15:33

This article appeared online at TheNewAmerican.com on Wednesday, August 28, 2019:

When William Dudley, a bona-fide insider and tool of the Deep State, wrote that the Federal Reserve should work against the president’s agenda, even if it cost him next year’s election, the reaction came from all quarters: The Fed’s political bias has finally and permanently been exposed for all to see.

Dudley’s credentials are impeccably Deep State: He is a graduate of UC-Berkeley who worked for Goldman Sachs for more than 20 years, a member of the Council on Foreign Relations, a member of the board of directors of the Bank for International Settlements (BIS) and the Committee on the Global Financial System, and serves as president of the Federal Reserve Bank of New York and vice-chairman of the Fed’s Open Market Committee.

Thanks to Dudley’s forthright op-ed at Bloomberg on Tuesday, that veil has been lifted, and many insiders aren’t happy about it. It seems that he has unwittingly exposed the pervasive and carefully crafted myth that the Fed is “objective,” “unbiased,” “neutral,” and removed from all political considerations in conducting its policies. Those policies have been sold as guiding the U.S. economy on paths of low inflation (even as the bank itself is the engine of inflation) and full employment, and nothing more.

Dudley gave lip service to the myth before exploding it: “Staying above the political fray helps the central bank maintain its independence.” But then comes the bombshell: “[Fed] officials should state explicitly that the central bank won’t bail out an administration that keeps making bad choices on trade policy, making it abundantly clear that Trump will own the consequences of his actions.”

Dudley explains just how the Fed could derail the president’s strategy in dealing with the communists running China:

First, it would discourage further escalation of the trade way, by increasing costs to the Trump Administration.

Second, it would reassert the Fed’s independence by distancing itself from the administration’s policies.

Third, it would conserve much-needed ammunition [lower interest rates in the future to restimulate an economy in recession], allowing the Fed to avoid further interest-rate cuts at a time when rates are already very low.

It’s clear from Dudley’s op-ed that he’s miffed that the president had the audacity to criticize repeatedly the actions of the Fed. Other presidents have studiously avoided any public appearance of pressuring the Fed, but not The Donald. Wrote Dudley:

Keep reading…

Million-dollar Homes in Aspen Aren’t Selling. Recession Ahead?

Thursday, 29 August 2019 15:26

This article appeared online at TheNewAmerican.com on Thursday, August 29, 2019:

On its face, the claim that since million-dollar homes in Aspen are taking up to three years to sell means that a recession is coming is ludicrous. But if it comes from the mouth of an establishment economist, the mainstream media gives such a silly claim credibility.

Mark Zandi fits the mold of an establishment economist perfectly. With economics degrees from the Wharton School at the University of Pennsylvania, he has been steeped in Keynesian economics from infancy.

He has thrived in the culture,

Keep reading…

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