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

Category Archives: Economics

Does Decline in Consumer Sentiment Portend a Recession?

This article appeared online at TheNewAmerican.com on Monday, May 16, 2022:  

According to a report released last week by the University of Michigan,

The University of Michigan consumer sentiment for the US fell to 59.1 in May of 2022, the lowest since August of 2011, from 65.2 in April and below market forecasts of 64, as Americans remained concerned over … inflation.

Behind the headline there was little good news:

The current economic conditions index fell to 63.6, the lowest in 13 years while the expectations gauge sank to 56.2 from 62.5….

 

To make things even worse, the index of buying conditions for durable goods, such as household appliances, fell to the lowest level since the survey began in 1978….

 

Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36% of consumers attributing their negative assessment to inflation.

Economic prognosticators make a handsome living explaining the continuing drop in consumer sentiment. Topping the list is rising prices, incorrectly but repeatedly called “inflation.” Rising prices is the result of the inflation of the currency and the Federal Reserve is responsible for that.

Regardless, consumers see the impact every day at the grocery store and the gas pump. Every day they see their paychecks purchasing less and less. And they’re mad at Joe Biden, pushing his job approval rate to ever lower lows.

There are plenty of other “causes,” including the Russian invasion of Ukraine, the invasion of illegals across the nation’s southern border, China’s internal lockdowns disrupting the supply chain, and the Fed’s belated response to the rising prices that its policies have created.

The Fed is playing catch up. Initially Fed Chairman Jerome Powell said last fall that the rise in prices was “transitory.” Now, to quench the fire he started, he is raising interest rates under the assumption that a slower economy will force prices down. There is little talk of the Fed reducing the money supply, which is the only permanent solution.

The Fed’s recent 50 basis point (half of a percentage point) rise in the Fed Funds Rate is not only the largest single increase in 22 years, but Powell has promised a similar half-point rise in interest rates at each of the next two meetings of the Fed’s Board of Governors.

The trick is to avoid raising interest rates too far and too fast, forcing a contraction in economic output. Two quarters of negative growth is the classic definition of a recession.

Some are blaming Wall Street, which has given up about a fifth of its value just since the first of the year. More than $7 trillion has evaporated from the stock market so far this year.

Others are saying that the decline on Wall Street is a predictor of a recession six months out.

Still others point to the recent “yield curve inversion,” that moment in time when short-term interest rates rise above long-term interest rates. The history is unhappy: That “inversion” has preceded every recession since 1955 — and giving only one “false positive” during that time — according to the Federal Reserve Bank of San Francisco.

Another good living is made by those predicting just how far Wall Street will drop in the event of a recession. One firm doing just that is DataTrek, which is saying Wall Street could drop another 25 percent before finding a bottom. That would bring the Dow, currently trading at 32,200, down to 24,000. And the S&P 500 Index, currently at 4,000, would decline to 3,000.

One prognosticator with a remarkable record of calling tops and bottoms is Barry Ritholtz. His asset-management firm, Ritholtz Wealth Management LLC, has over $2.7 billion in assets under management. His blog, The Big Picture, generates half a million page views every month, and he is one of the few who saw the coming housing implosion and derivative mess long before his peers.

Today he is taking the long view. He wrote on Friday that there are many competing explanations for the selloff on Wall Street, including “inflation, war, rising Fed Fund rates, [the] end of cheap capital, [the] fall-off in liquidity, [the] impending recession, and political unrest.”

He thinks there is a simpler answer: a reversion to the mean. Wrote Ritholtz:

Over the past decade, we have enjoyed returns of above 14% per year … the past two years gained 20% and 28%….

 

Over longer periods of time, equity markets generate average returns of 8-9%….

 

Perhaps [the decline] is nothing more complex than mean reversion.

For the long haul, Ritholtz remains bullish:

This market could/should have another good 5-7 years in it (assuming random events do not mess it up).

 

That is how I have been seeing this market for a while: it is one part history, one part secular theory, [and] two parts wishful thinking.

Is Bitcoin Collapse a Setback for Global Cryptocurrency Plans?

This article appeared online at TheNewAmerican.com on Friday, May 13, 2022:  

The collapse in the price of digital currencies, particularly Bitcoin, has not only significantly damaged Americans who invested or traded in the currency but its credibility as a tool for governments to control its citizens.

An estimated one in every six Americans has owned, invested, traded, or used a cryptocurrency at least once, taking advantage of its encrypted property: No outside agency, including government, can track its ownership or use.

The collapse has been staggering: In November Bitcoin (stock symbol BTC-USD) peaked at $67,802. It closed on Thursday at $28,315, a breathtaking decline of nearly 60 percent. At the same time, Wall Street’s S&P 500 Index (stock symbol SPX) declined by just 16 percent.

Commentators blame a combination of factors, including inflation, the decline on Wall Street, and the tweet from Elon Musk that Tesla will no longer be accepting Bitcoin to purchase his company’s cars.

One underlying cause, however, enjoyed scant exposure: the announcement by the White House, by executive order, that it was moving ahead with plans to develop a “central bank digital currency” (CBDC) as a tool to replace not only the dollar but the entire commercial banking system. Once in place, the U.S. CBDC would be melded into CBDCs of other central banks around the globe, making private cryptocurrencies not only irrelevant, but illegal.

It’s already happening in China, where the communists have banned Bitcoin while developing their own CBDC.

The Executive Order released by the White House on March 9 is just now resonating among supporters of cryptocurrencies who are seeing the implications. As that EO states explicitly, America “must play a leading role in international engagement and global governance of digital assets.” It orders Federal Reserve Chairman Jerome Powell “to continue its research, development, and assessment efforts for a U.S. CBDC.”

Powell is only too happy to oblige, declaring that a CBDC “could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollars, such as deposits at commercial banks.”

This is a canard of the first order. Once installed, all financial transactions will take place with the new digital currency, making those commercial banks irrelevant. Norbert Michel, writing in Forbes, makes it clear that CBDCs will not “complement” the existing private banking system in the U.S. but will replace it altogether. He wrote:

I believe that the Fed should not launch a CBDC. Ever.

 

And I think Congress should amend the Federal Reserve Act, just to be on the safe side….

 

[Under a CBDC] the federal government, not privately owned commercial banks, would be responsible for issuing deposits [which is] a major problem for anything that resembles a free society….

 

The problem is that there is no limit to the level of control that the government could exert over people if money is purely electronic and provided directly by the government. A CBDC would give federal officials full control over the money going into — and coming out of — every person’s account.

No less a worthy than Warren Buffet and his partner, Charlie Munger, have come out opposed to digital currencies, but only for practical and not political reasons. Buffet told his audience of shareholders in April that bitcoins aren’t a “productive asset,” that they don’t produce anything tangible:

Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything.

 

It’s got a magic to it and people have attached magic to lots of things.

But with the collapse in the price of Bitcoin and its close relatives, the magic is gone, and along with it the excitement the White House is trying to gin up over replacing the dollar with it.

Buffet made clear that he wouldn’t touch a Bitcoin even if one were handed to him:

If you said … for a 1% interest in all the farmland in the United States, pay our group $25 billion, I’ll write you a check this afternoon. [For] $25 billion I now own 1% of the farmland.

 

[If] you offer me 1% of all the apartment houses in the country and you want another $25 billion, I’ll write you a check. It’s very simple.

 

[But] if you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it. Because what would I do with it? I’d have to sell it back to you one way or another.

 

It isn’t going to do anything. The apartments are going to produce rent and the farms are going to produce food.

Buffet’s partner Charlie Munger added:

In my life, I try to avoid things that are stupid and evil and make me look bad … and bitcoin does all three.

 

In the first place, it’s stupid because it’s still likely to go to zero. It’s evil because it undermines the Federal Reserve System….

 

And third, it makes us look foolish compared to the Communist leader in China. He was smart enough to ban bitcoin in China.

Munger is mostly correct (China is moving ahead with its own CBDC). But the losses the free market has inflicted on cryptocurrencies since last November have severely damaged their credibility along the way. That damage is likely to delay significantly any immediate implementation of the totalitarian scheme by the Fed.

Two Federal Agencies Investigating Musk’s Purchase of Twitter Shares

This article appeared online at TheNewAmerican.com on Thursday, May 12, 2022:  

Just when he thought he might escape a federal investigation into his purchase of shares of Twitter, Elon Musk now has two government agencies looking into his initial purchase of shares of the social-media company back in March.

Open Markets Institute (OMI), a George Soros-backed liberal think tank, released a statement in April asking the Federal Communications Commission (FCC), the Department of Justice (DOJ), and the Federal Trade Commission (FTC) to look into Musk’s takeover of Twitter. OMI said “it believes the deal poses a number of immediate and direct threats to American democracy and free speech. Open Markets believes the deal violates existing law, and that the [FCC], the [DOJ], and the [FTC] have ample authority to block it.”

FCC commissioner Brendan Carr rejected the request:

The FCC has no authority to block Elon Musk’s purchase of Twitter, and to suggest otherwise is absurd.… We will not entertain these types of frivolous argument[s].

In an interview with Fox News on Tuesday, Carr supported Musk’s purchase:

I’m hopeful that Elon Musk is going to bend Twitter’s content moderation toward a greater embrace of free speech.

No such support was forthcoming from the other two agencies. Instead, the FTC and the Securities and Exchange Commission (SEC) each have launched their own investigations into Musk’s initial purchases of shares that were later followed by his offer to buy the entire company.

According to the Wall Street Journal, Musk violated an SEC rule requiring a timely disclosure of more than five percent of the company’s outstanding shares. He had until March 24 to file that disclosure.

He didn’t file it until April 4.

Daniel Taylor, an accounting professor at the University of Pennsylvania, thinks the SEC has a strong case against Musk but doubts that they will pursue it:

The case is easy. It’s straightforward.

But whether they’re going to pick that battle with Elon is another question.

Musk got sideways with the SEC earlier when he Tweeted that he had arranged enough financing to take Tesla private. The SEC fined him $20 million and requires him not to Tweet about Tesla without first getting his attorney’s approval. Musk says the SEC pressured him into pleading guilty, threatening to bombard him and his company with endless lawsuits unless he complied.

Jill Fisch, a securities and law professor at the University of Pennsylvania’s Law School, said that it’s unlikely the SEC would attempt to derail the agreement at this late date. The board has already endorsed and approved the purchase, and the SEC lacks the power to stop such “take-private” transactions, according to Fisch.

Aron Solomon, the chief legal analyst for Esquire Digital, a lead-generating company for attorneys, agrees: “There is no way that the SEC, the DOJ, or any other similarly-situated body will even consider laying a finger on this deal.” It is simply “too big to fail,” said Solomon, adding that intervention “at this point would [hurt] the existing shareholders whose shares Musk is acquiring.”

The Federal Trade Commission is also investigating Musk for failing to file certain reports to various anti-trust agencies that he was taking a substantial stake in Twitter. Those rules don’t apply to passive investors, but when Musk filed that he was seeking to take over the company, the rules kicked in.

Musk’s Plans for Twitter: Cut Board Salaries, Make Algorithm Open-source

This article appeared online at TheNewAmerican.com on Tuesday, April 26, 2022:  

In his announcement on Twitter that he was taking the company private, Elon Musk revealed his plans:

Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.

 

I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.

 

Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.

The first thing Musk will do, once the transaction has been completed, is to cut the board members’ salaries to zero. He warned them in this Tweet just days earlier:

Board salary will be $0 if my bid succeeds, so that’s $3M/year saved right there.

The transaction will take months to close, thanks for the need to gain approval from regulatory agencies and the shareholders.

But not from the board. After reflecting on Musk’s original offer, and the legal consequences if it moved ahead with its “poison pill” strategy, it folded like a Hohner accordion. The board was suddenly unanimous in approving Musk’s original offer. Wrote board chairman Bret Tayler:

The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing.

 

The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.

Musk had boxed them in, using his own Twitter account to accomplish his purpose. On April 14, he reminded them of their fiduciary responsibilities:

If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty.

 

The liability they would thereby assume would be titanic in scale….

 

Taking Twitter private at $54.20 [per share] should be up to the shareholders, not the board.

Those shareholders have seen their Twitter stock holdings drop from $80 per share in February 2021 to just over $30 a share a year later. The $54 bid will likely persuade the vast majority of them to agree to Musk’s buyout offer.

Regulatory approval will take longer, but the purchase is scheduled to close before the end of the year.

That will allow disaffected Twitter employees to find other work. They would chafe under Musk’s new open-algorithm policy where users can see exactly where they stand.

Musk is likely to uncover secrets being hidden successfully from shareholders, regulators, and the public until now. A techie named Sundance, writing at The Last Refuge, speculated as to what one of those secrets might be:

I share this perspective having spent thousands of hours in the past several years deep in the weeds of tech operating systems, communication platforms, and the issue of simultaneous users. What Twitter represents, and what Musk is attempting, is not what most would think.

 

In the big picture of tech platforms, Twitter, as an operating model, is a massive high-user commenting system.

 

Twitter is not a platform built around a website; Twitter is a platform for comments and discussion that operates in the sphere of social media. As a consequence, the technology and data processing required to operate the platform does not have an economy of scale.

 

There is no business model where Twitter is financially viable to operate…. UNLESS the tech architecture under the platform was subsidized.

 

In my opinion, there is only one technological system and entity that could possibly underwrite the cost of Twitter to operate. That entity is the United States Government.

If Sundance is correct, then Musk may uncover the greatest secret of all: The U.S. government has infiltrated Twitter, and used it to punish a sitting president of the United States by permanently removing him from the platform.

Judicial Watch’s Tom Fitton agrees that Musk is likely to uncover many such secrets: “Twitter has been lying to shareholders, regulators, and Congress, about its censorship abuses. [It’s no wonder] the [board had] a keen interest in keeping Elon Musk from further exposing this fraud.”

So does Matt Vespa. Writing for Townhall, Vespa noted:

[Musk] did a flank march and outmaneuvered the Left who for years enjoyed censoring and banning conservatives with impunity. We all knew these Silicon Valley types were left-wing and biased. It entered a new and disturbing phase during the 2016 and 2020 elections.

 

Twitter literally censored The New York Post from reporting on the Hunter Biden laptop. They intervened to help Joe Biden win the election.

Hopefully Musk means what he says about the importance of free speech and that, once in control, he’ll fumigate Twitter and turn it into a legitimate public forum where free speech is enjoyed and encouraged on issues of the day.

Trump’s Media Platform “Truth Social” Moves to Rumble

This article appeared online at TheNewAmerican.com on Monday, April 25, 2022:  

The online video-hosting platform Rumble, currently enjoying 44 million visitors every month, is about to get much, much larger. On Friday, the company announced that

Truth Social, the social media platform created by the Trump Media & Technology Group (TMTG), has successfully migrated … to Rumble’s cloud infrastructure. This migration will enable the Truth Social platform to scale significantly on a new and cancel-culture-free cloud platform.

“Scale significantly” is the operative phrase. Prior to being unceremoniously booted from Twitter following the faux Capitol “insurrection” in January 2021, Donald Trump had nearly 90 million followers.

In October Trump formally announced the creation of TMTG, named former California Congressman Devin Nunes to head it up, and initially launched in February using hosting service Mastodon.

So many of Trump’s followers stampeded onto the platform that more than a million were wait-listed while the system underwent its beta testing.

Naturally, the anti-Trump media chortled about the “failure” of Trump’s launch. Chris Cillizza of CNN predicted that it was doomed to fail. Noah Berlatsky of The Independent said that if it were successful Trump’s new platform would be a potential “threat to democracy.” The Forward expressed concerns that antisemitism would pervade the platform, while The New York Times expressed “skepticism” about whether Trump’s platform would be able to compete with other rival social media services like Gettr, Parler, and Gab.

And Wikipedia reported that “some commentators pointed out the similarity with the name of the newspaper Pravda (‘Truth’ in English), a notorious propaganda outlet in the Soviet Union.”

On the other hand, Rumble’s founder and CEO Chris Pavlovski was happy to welcome his newest and largest customer:

We are excited to partner with one of the fastest-growing social media companies on the internet. Providing top-notch cloud infrastructure is essential, and Truth Social users will start to see the fruits of our labors immediately.

More than a million of those wait-listed until the end of the testing period have already been added to the new platform, according to Nunes, who added:

[On Thursday], Truth Social and Rumble took a major stride toward rescuing the internet from the grip of the Big Tech tyrants. Our teams have worked tirelessly to realize this great endeavor.

 

Rumble’s cloud infrastructure is second to none and will be the backbone for the restoration of free speech online for ages to come.

Rumble, founded by Pavlovski in 2013, has enjoyed enormous success on its own. It currently hosts Alex Jones of InfoWars, Newsmax, One America News Network (OANN), and Reuters.

Trump’s TMTG has a massive $1.25 billion to ensure the new platform’s success. And, according to Nunes, “engagement” on the new platform is already ramping up:

We have opened the new Rumble cloud. Yesterday … early in the morning … it went off flawlessly….

 

You’ve got half of America [who] should be concerned about being canceled by those crazy woke companies.

With Elon Musk’s pending takeover of Twitter, one of those “woke” companies, it is not clear just how many of Trump’s former followers will migrate over to Rumble. Musk has promised to turn Twitter into a “free speech” subscription platform in order to eliminate corporate influence over its platform’s conversations.

As House Republican Marjorie Taylor Greene — who had her personal Twitter account permanently suspended last month — said after setting up her account on Truth Social: “Options are always good for consumers.”

And likely to be good for Donald Trump, as well, as he continues to tantalize his followers with increasing intimations about running for a second term in 2024.

Musk Obtains Financing to Buy Twitter; Next Move Is Up To the Board

This article appeared online at TheNewAmerican.com on Friday, April 22, 2022:  

In amending his original filing with the Securities and Exchange Commission (SEC) on Thursday Elon Musk in effect said: I’ve got the money. What are you going to do? I’m waiting.

The amended filing served notice on the board that his plan to purchase the company and take it private (he plans to make it “the platform for free speech around the globe”) is serious. He is putting up $21 billion of his own money that, when added to commitment letters from Morgan Stanley, Bank of America, and some European banks, totals $46.5 billion. This is more than enough to buy up every single outstanding share of Twitter (currently trading at $49 a share) and pay off all of Twitter’s bonded indebtedness.

He also warned the board, through his filing, that he is still considering going directly to those shareholders — doing an end run around the board — if it fails to accept his offer.

From the filing:

The Reporting Person [Musk] is exploring whether to commence a tender offer to acquire all of the outstanding share of Common Stock … at a price of $54.20 per share, net to the seller in cash … but [he] has not determined whether to do so at this time.

 

 

He also put the board on notice that he “may engage in discussions with the Board and/or members of [Twitter’s] management team, including … the Proposal, potential business combinations and strategic alternatives … the strategy of [the board] and other matters.” In other words, Musk in essence is saying: I’m not going away; If you fail to deal seriously with me, I have other options; I intend to buy your company and take it private; you have my phone number.

The final warning from the filing was this: “[Musk] reserves the right to change his plans at any time … in light of his ongoing evaluation of numerous factors, including … the relative attractiveness of alternative business and investment opportunities.”

In other words, the clock is ticking. Musk is in a buying mood but that won’t last forever.

If the board fails to respond, or worse, rejects Musk’s original offer altogether and continues to impose its “poison pill” strategy, each member could expose himself or herself to litigation for failing to act as a fiduciary. As an attorney watching the situation closely said: “The directors have to act in a way that’s in the best interests [of shareholders and] not in the way that allows them to keep control of the corporation.”

The only thing missing from Musk’s updated filing is a drop-dead date. Musk is holding all the cards. It’s time for the board to man up and call, or fold.

Musk Reveals “Plan B” for Twitter: Buy Out Shareholders Directly

This article appeared online at TheNewAmerican.com on Wednesday, April 20, 2022:  

When Elon Musk learned of the “poison pill” being adopted by Twitter’s board of directors in an attempt to thwart his bid to take the company private, he tantalized his followers by suggesting he had a “Plan B” in mind.

On April 16 he revealed his plan by tweeting: “Love Me Tender,” the hit song by Elvis Presley in 1956. Plan B: go directly to the shareholders and make them an offer they can’t refuse. That would be, in Wall Street vernacular, a “tender” offer.

If successful, he would circumvent the board and its “poison pill” strategy, fire the board and replace them with his own people, buy out the rest of the shareholders, take the company private, and turn it into a “free speech” entity by charging subscribers a minimal monthly fee. He would stop selling ads, removing corporate influence. And, if his past successes with Tesla and SpaceX are any indication, he would make his investors even richer.

The bidding at the moment is this: The company’s market capitalization (its present share price multiplied by the number of shares outstanding) is $37 billion, not the $43 billion popular commentators keep repeating.

Musk would put up another $10 to $15 billion of his own money (he already has more than $3 billion invested in Twitter shares). If his tender offer is successful, all he needs is for somewhat less than half of the present shareholders to accept his offer. That would require about $19 billion, so Musk might need a little help.

He already has a line of credit at Morgan Stanley, and a slew of private investors who have enjoyed success in investing in Musk’s other ventures.

Musk needs to hurry. It will take time for the board to implement its “poison pill” strategy. The next board meeting is scheduled for May 25. He would like nothing better than to ride the public’s current fascination with his latest move into that board meeting, announce that they are all fired and that he will be putting his own people in place, that the “poison pill” strategy is dead, and that he is taking the company private, selling the company’s San Francisco headquarters building, offering Twitter employees a buy-out option, implementing a subscription model at $3 a month for those subscribers who want to continue to use the service, thus ending all corporate advertising (and influence).

His Plan B, when officially announced within the next few days, puts the board in a difficult position. Collectively, the 13 board members — excluding Twitter co-founder Jack Dorsey, who is leaving — own less than 0.3 percent of the stock. If they proceed with the “poison pill” strategy, they would likely be violating their fiduciary duty to the company’s other shareholders. As Adam Candeub, a law professor at Michigan State University, put it, “[Twitter’s board of directors] have to act in a way that’s in [the shareholders’] best interests, not in the way that allows them to keep control of the corporation.”

So, Musk’s Plan B could be a head-fake, forcing the board to accept his initial offer. Shareholders would pocket a nice gain (Musk is offering $54 a share for the company’s stock, which is currently selling at $46 a share).

In any event, expect the unexpected, which is Musk’s style. The New American will keep its readers informed.

Obstacles Mounting Against Musk’s Takeover Bid for Twitter

This article appeared online at TheNewAmerican.com on Friday, April 15, 2022:  

In covering Musk’s bid to take Twitter private, The New American suggested he might run into trouble. In the last 24 hours, trouble exceeding expectations has arrived.

First, the board spent all day Thursday considering Musk’s bid to take the company private, with Musk offering to buy existing shares at $54 a share. At the time, shares were selling at about $45. But rumors surfaced following the meeting that the board isn’t happy, calling it a “hostile takeover,” and considering putting in place a “shareholder rights plan,” aka a “poison pill.”

A poison pill is a strategy that makes it more difficult, and more expensive, for Musk to complete the acquisition.

Second, although Musk is the world’s richest man, most of his wealth is in shares of Tesla, and much of that he is already using as collateral for loans to fund other ventures, such as SpaceX. That raises the question of how he would find the $40+ billion he would need to buy Twitter.

Third, some of the company’s largest shareholders aren’t likely to go along with Musk’s bid. Saudi Arabian Prince Al Waleed bin Tatal Al Saud bought five percent of Twitter back in 2015 and tweeted:

I don’t believe that the proposed offer by Elon Musk ($54.20) comes close to the intrinsic value of Twitter given its growth prospects. Being one of the largest and long-term shareholders of Twitter … I reject this offer.

Mutual fund company Vanguard Group just announced that it recently increased its holdings of Twitter and they now own more than Musk, at more than 10 percent of the company. Vanguard has a history of siding with management when it is threatened with a hostile or adverse takeover attempt.ncern:

Twitter, like other social media platforms, suspends accounts for violating content standards, including on violence, hate speech, or harmful information. Its suspension of Donald Trump angered the former president’s followers….

 

By saying [that] Twitter is not living up to its potential to be a “platform for free speech,” [Musk] seems to be saying he would scale back content moderation.

“Content moderation” is code for censorship.

Twitter employees aren’t happy either, with some Tweeting their unhappiness that a “transphobe” could buy their company.

Wall Street isn’t bullish either. Initially Twitter stock rose on Thursday morning, only to fall back to below its opening price at the close.

And Musk himself expressed some doubts that the deal would go through. Speaking at a TED conference later on Thursday, Musk demurred: “I am not sure that I will actually be able to acquire [Twitter].”

This is not to say that the deal is stillborn. As Adam Candeub, a law professor at Michigan State University, told The Epoch Times:

Twitter is owned by its shareholders, and the directors have to act in a way that’s in their best interests, not in the way that allows them to keep control of the corporation.

 

If they turn down a very favorable price, there will be dereliction of their legal duty, and there could be lots of legal consequences.

Bidenflation? No! Putinflation? No! Fedinflation? Yes!

This article appeared online at TheNewAmerican.com on Tuesday, April 12, 2022:  

Anticipating the worst inflation numbers in four decades, White House Press Secretary Jan Psaki tried not only to get ahead of it but to deflect from its root cause. On Monday, the day before the Bureau of Labor Statistics (BLS) announced that, year-over-year, inflation rose by 8.5 percent, she stated:

Because of the actions [that] were taken to address the “Putin Price Hike,” we are in a better place than we were last month, but we expect March … CPI headline inflation to be extraordinarily elevated due to “Putin’s Price Hike.”

In March she said there was a “consensus” among economists that the coming report “was caused by the building of Putin’s troops at Ukraine’s border.”

On the other hand, Spencer Brown, writing for Townhall, called the surge “Bidenflation,” indicating that policies enacted during the present administration’s first term were largely, if not totally, responsible.

However, Inflation predates both Psaki and Brown by decades. Wrote Milton Friedman in 1992 in Money Mischief: Episodes in Monetary History, “Inflation is always and everywhere a monetary phenomenon.”

Friedman explained:

Inflation is always and everywhere, a monetary phenomenon. It’s always and everywhere, a result of too much money, of a more rapid increase in the quantity of money than in output.

 

Moreover, in the modern era, the important next step is to recognize that today, governments control the quantity of money. So that as a result, inflation in the United States is made in Washington and nowhere else.

Friedman puts the blame where it belongs:

If you listen to people in Washington and talk, they will tell you that inflation is produced by greedy businessmen or it’s produced by grasping unions or it’s produced by spendthrift consumers, or maybe, it’s those terrible Arab Sheikhs who are producing it.

 

Now, of course, businessmen are greedy. Who of us isn’t? Trade unions are grasping. Who of us isn’t? And there’s no doubt that the consumer is a spendthrift. At least every man knows that about his wife.

 

But none of them produce inflation for the very simple reason that neither the businessman, nor the trade union, nor the housewife has a printing press in their basement on which they can turn out those green pieces of paper we call money.

Former Federal Reserve Chairman Alan Greenspan told the unvarnished truth about inflation and its consequences in his article “Gold and Economic Freedom,” published in 1967:

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold….

 

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

 

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth.

 

Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Inflation is part of the attack on the foundations of the American Republic. Wrote Robert Welch in his monumental presentation that later became The Blue Book of the John Birch Society in 1958:

Here are the Communists’ aims for the United States:

 

(1) Greatly expanded government spending, for missiles, for so-called defense generally, for foreign aid, for every conceivable means of getting rid of ever larger sums of American money – as wastefully as possible.

 

(2) Higher and then much higher taxes.

 

(3) An increasingly unbalanced budget, despite the higher taxes….

 

(4) Wild inflation of our currency, leading rapidly towards its ultimate repudiation.

 

(5) Government controls of prices, wages, and materials, supposedly to combat inflation.

 

(6) Greatly increased socialistic controls over every operation of our economy and every activity of our daily lives.

 

This is to be accompanied, naturally and automatically, by a correspondingly huge increase in the size of our bureaucracy, and in both the cost and reach of our domestic government.

 

(7) Far more centralization of power in Washington, and the practical elimination of our state lines….

 

(8) The steady advance of Federal aid to and control over our educational system, leading to complete federalization of our public education.

 

(9) A constant hammering into the American consciousness of the horror of “modern warfare, ” the beauties and the absolute necessity of “peace” — peace always on Communist terms, of course.

 

And (10) the consequent willingness of the American people to allow the steps of appeasement by our government which amount to a piecemeal surrender of the rest of the free world and of the United States itself to the [communist] tyranny.

As Representative Byron Donalds (R-Fla.) expressed it, “Inflation is taxation.” But it is much more than that. It is a tool used to impoverish the middle class, reducing its ability to resist the onslaught of tyranny.

And it all starts with the Fed.

ADP Jobs Report: U.S. Economy Almost Back to Pre-pandemic Levels

This article appeared online at TheNewAmerican.com on Wednesday, March 30, 2022:  

Despite the enormous headwinds placed on the U.S. economy by the present administration, the latest jobs report from ADP (often an accurate precursor to the government’s jobs report to be released on Friday) reveals, the economy has almost completely recovered from the pandemic-inspired recession.

The private group, using information from its enormous database of 460,000 employers covering nearly 26 million workers, said on Wednesday that the U.S. economy added 456,100 jobs in March (including franchise jobs).

Said Nela Richardson, ADP’s chief economist:

Job growth was broad-based across [all] sectors in March, contributing to the nearly 1.5 million jobs added for the first quarter in 2022.

 

Businesses are hiring, specifically among the service providers which had the most ground to make up due to early pandemic losses.

Specifically, small businesses (employing fewer than 50 people) added 90,000 jobs last month, while medium-sized businesses (fewer than 500 workers) added 188,000 jobs. Large businesses (more than 500 workers) added 177,000 jobs.

By industry the news was equally good. Goods producers — natural resources/mining, construction, and manufacturing — added 79,000 jobs. The services sector — professional and businesses services, education, leisure and hospitality, and other services — added 377,000 new jobs in March.

ADP’s numbers confirm what the St. Louis Federal Reserve reports. In February 2020, just before the pandemic restrictions kicked in, more than 164,500,000 people were working. Two months later, at the nadir, just 156,358,000 were working. Put another way, Covid cost the U.S. economy more than 8,142,000 jobs.

Eighteen months later (December 2021), 162,300,000 people were working. Since then, the U.S. economy has added another 1,700,000 jobs. And government economists are expecting the report from the Bureau of Labor Statistics (BLS) to confirm today’s report from ADP.

At that rate — 500,000 new jobs a month — the U.S. economy will have fully recovered from the Covid-inspired and government-mandated shutdown by June, perhaps even sooner.

Other indicators are showing just how robust — and resilient — the U.S. economy really is. Corporate profits rose in 2021 by an astonishing 25%, the largest gain since 1976. The economy itself grew by 5.7% in 2021, while GDP growth (gross domestic product) in the fourth quarter of 2021 rose 6.9% on an annual basis.

Fewer than a third of economic forecasters are predicting a recession in 2022, and the consensus among them — called the “Blue Chip consensus” — forecasts the economy to continue to grow modestly into the rest of the year, with some suggesting another three-percent growth in the economy by the end of the year.

Considering the various headwinds placed on the economy by the present administration, these numbers are remarkable. Most are familiar with the present administration’s attack on fossil fuels and its out-of-control spending showing up as price increases at the gas pump and the grocery store. And those concerns are showing up in the polls.

But beneath the surface the recovery is taking place, especially in the once-quiet oil fields. And opportunities are beginning to show up for the country’s greatest investor: Warren Buffett. The founder of Berkshire Hathaway (the eighth-largest public company in the world), Buffett has been biding his time, waiting for promising opportunities to arise out of the Covid-inspired wreckage.

On Monday his company announced its purchase (Buffett doesn’t buy stocks; he buys companies) of Alleghany Corporation, a Nebraska-based insurance conglomerate, for $11.6 billion. What’s telling is this: Buffett paid a premium of 16% above what Wall Street thought the company was worth, indicating his enthusiasm for his latest acquisition to add nicely to his company’s (and his investors’) already significant bottom line in the future.

Friday’s report from the BLS should confirm not only ADP’s results announced today, but also Buffett’s confidence in the future growth of the overall economy in the months and years to come.

Americans Fleeing High-tax, High-crime, Democrat-run Blue States

This article appeared online at TheNewAmerican.com on Wednesday, January 12, 2022:  

Editors at Issues & Insights, an unashamedly pro-free market research firm, wrote on Monday that it’s common knowledge that people “leave areas known for authoritarian tyranny, stagnation, stultification, crime, and excessive regulation in order to find the opposite somewhere else: economic freedom, dynamism, social diversity, and good [read: limited] government.”

I & I’s editorial board reviewed the latest data from U-Haul, the Census Bureau, and economist Mark Perry’s work at the American Enterprise Institute (AEI) and concluded that “the mass exodus of more than a million Americans moving largely from Blue States to Red States expresses [their] dissatisfaction with high taxes, rampant crime, lockdowns, vaccine mandates, excessive state government regulations, a politically stifling ‘woke’ culture, and the lack of economic opportunity and freedom.”

Readers are increasingly familiar with the U-Haul Growth Index, which revealed last week that Texas overtook Florida in the largest net gain of one-way U-Haul trucks for the year 2021. Tennessee ranked third, South Carolina ranked fourth, and Arizona rounded out the top five.

On the other hand, the demand for U-Haul trucks leaving California was so great that many of the franchisees ran out of equipment. That kept the former “Golden State” at the bottom of the U-Haul Growth Index, with Illinois not far behind in 49th position.

U-Haul’s vice president for the Dallas Fort-Worth area, Matt Merrill, reported:

We see a lot of growth coming from the East and West Coast. A lot of people moving here from California [and] New York. We also see a lot of people coming in from the Chicago markets.

 

I think that’s a lot due to the job growth — a lot of opportunity here. The cost of living here is much lower than those areas. Texas is open for business.

While U-Haul measures equipment flow, the Census Bureau counts people flow. Last year Texas, Florida, Arizona, North Carolina, and Georgia enjoyed astonishing numeric growth of nearly 800,000, while New York, California, Illinois, Massachusetts, and Louisiana shrank by a similar amount.

Statistical economist Mark Perry, however, drilled down into the question of “why?” Why did they leave? What did they find when they got there?

Perry examined which political party controlled the states most- and least-favored. He reviewed the business climate in each state. He looked at individual and corporate income-tax burdens, each state’s fiscal health, energy and housing costs, the economic performance and outlook, and the labor market.

He noted the importance of “right-to-work” laws versus forced-unionism laws and found that “all ten of the top inbound states in 2021 are Right-to-Work states, while eight of the top ten outbound states are forced-unionism states.”

He looked at which political party controlled the states and learned that Republicans control the legislatures in nine of the top 10 “inbound” states and eight of them have Republican governors. But for the “outbound” states, he learned that Democrats control the legislatures in seven out of the top 10 “outbound” states and eight out of 10 of those states had Democrat governors.

Therefore, concluded Perry:

Just based on political party control at the state level, millions of Americans are moving away from blue-controlled states to red states.

He looked at each state’s tax burden and discovered a similar disparity: The average tax burden for the top ten inbound states was 7.7 percent, while the average for outbound states was 9.9 percent.

When looking specifically at income-tax rates, he found that the average top individual income-tax rate in the top 10 inbound states was 3.8 percent, compared to a top tax rate among the top 10 outbound states to be more than double, at 8 percent. He noted that four of the top 10 inbound states — Florida, Texas, Tennessee, and Nevada — have no state income tax at all.

On the other hand, California sports the nation’s highest top marginal tax rate at 13.3 percent, with Hawaii and New Jersey not far behind, at 11 percent and 10.75 percent, respectively.

He looked at Forbes magazine’s rating of the best states for doing business and learned that its average ranking for the top 10 inbound states was eight out of 50, whereas its average ranking for the top 10 outbound states was 33 out of 50.

When considering each state’s economic performance and outlook, Perry saw the same thing: The average ranking among the top 10 inbound states — on a scale of one (best) to 50 (worst) — was a 10, while for the top 10 outbound states, it was a 39.

Perry concluded:

There is empirical evidence that Americans and businesses “vote with their feet” when they relocate from one state to another, and the evidence suggests that Americans are moving from blue states that are more economically stagnant, fiscally unhealthy states with higher tax burdens and unfriendly business climates with higher energy and housing costs and fewer economic and job opportunities, to fiscally sound red states that are more economically vibrant, dynamic and business-friendly, with lower tax and regulatory burdens, lower energy, and housing costs and more economic and job opportunities.

There are significant political implications for the mass migration away from blue states to red states as well. It “portends major shifts in America’s voting clout,” wrote I&I’s editorial board. “Red States will get redder while Blue States get bluer.” It expanded:

Because of the Red States’ population growth, their relative clout in future elections should be bigger. They’ll have more seats in the House of Representatives and, assuming it’s a trend across most states, it might turn Congress slightly more to the right of the political spectrum.

Senator Manchin Has Buried Biden’s Build Back Better Bill

This article appeared online at TheNewAmerican.com on Monday, December 20, 2021: 

West Virginia Democrat Senator Joe Manchin removed all doubt anyone might have had about Senate passage of Joe Biden’s massive signature legacy bill, Build Back Better, on Saturday. After informing the White House, Senator Majority Leader Chuck Schumer, and House Speaker Nancy Pelosi that he was withdrawing from any further negotiations over the bill, he went public on Fox News:

When you have these things coming at you the way they are right now, I’ve always said this: if I can’t go home and explain it to the people of West Virginia, I can’t vote for it.

 

And I can’t vote to continue with this piece of legislation. I just can’t.

 

I’ve tried everything humanly possible. I can’t get there.

 

Fox News host Bret Baier asked: “You’re done? This is a no?”

Manchin replied: “This is a no on this legislation.”

What “things?” Manchin referred to “inflation,” “geopolitical unrest,” “the COVID variant,” leaving unsaid the most important “thing”: the impact BBB would have on the voters in West Virginia.

West Virginia is the nation’s fifth-largest energy-producing state. It has the nation’s third-largest reserves of national gas. The state’s economy revolves around energy. And Biden’s BBB would eviscerate West Virginia.

The ultimate result of BBB would be to end West Virginia’s dependence upon fossil-fuel generation. What Manchin did was respond to the simple fact that geology trumps ideology.

In a statement following the interview, Manchin’s office said that the BBB was a lie: “The non-partisan Congressional Budget Office [CBO] determined the cost is upwards of $4.5 trillion, which is more than double what [its] ardent supporters have claimed. They continue to camouflage the rest of the cost … behind this bill.”

He expanded:

If enacted, the bill will also risk the reliability of our electric grid and increase our dependence on foreign supply chains….

 

I will never forget the warning from then Chairman of the Joint Chiefs of Staff … during my first year in the Senate. He testified that the greatest threat facing our nation was our national debt.

 

Since that time our debt has doubled.

White House Press Secretary Jen Psaki assured Manchin’s implacable resistance to any further bills the Biden administration might care to present in the future by calling him a liar:

Senator Manchin’s comments this morning on Fox are at odds with his discussions this week with the president, with White House staff, and with his own public utterances….

 

They represent a sudden and inexplicable reversal in his position, and a breach of his commitments to the President and the Senator’s colleagues in the House and Senate.

She then dismissed Manchin’s claim that the bill would add trillions to the national debt by repeating the canard: “The plan is fully paid for, is the most fiscally responsible major bill that Congress has considered in years, and reduces the deficit in the long run.”

She followed by denying reality: “We will continue to press him to see if he will reverse his position yet again, to honor his prior commitments and be true to his word.”

The White House will press on, regardless, said Psaki: “We will not relent in the fight … Build Back Better is too important to give up. We will find a way to move forward next year.”

Senate Majority Leader Chuck Schumer took the lead from Socialist Senator Bernie Sanders by announcing that when the Senate returns early next year he will press for a vote on BBB, forcing Manchin to “go public” with his decision. Said Sanders:

We’ve been dealing with Mr. Manchin for month after month after month. If he doesn’t have the courage to do the right thing for the working families of West Virginia and America, let him vote no in front of the whole world.

If this happens, it will cement Manchin’s opposition to anything Schumer or Sanders care to present next year. Manchin is the single lawmaker who now controls the debate and the conversation, without whose support Biden cannot pass a single new law or confirm a single nominee.

Taxpayers can breathe again. Most of them oppose many of the items in the massive bill, including making reparation payments to illegal immigrants, expanding the power and reach of the Internal Revenue Service (IRS), weakening work requirements for welfare benefits, forcing the transition to electric vehicles, expanding Medicare further, and providing federal funding for abortions.

Thanks to the scorched-earth statements issued by Psaki and Schumer, there is virtually no chance that BBB will be resurrected next year, leaving Democrats with little to brag about as the November midterm elections approach.

Five Democrats Sink Biden’s Comptroller Nomination

This article appeared online at TheNewAmerican.com on Friday, November 26, 2021: 

Just one Senate Democrat would have sunk the confirmation of Saule Omarova, Joe Biden’s nominee to be comptroller of the currency. Instead, she got five — Senators Jon Tester (D-Mont.), Mark Warner (D-Va.), Kyrsten Sinema (D-Ariz.), John Hickenlooper (D-Colo.), and Mark Kelly (D-Ariz.). This, wrote Axios on Wednesday, “effectively kills her nomination.”

Every senator should have opposed her nomination. All Republicans would likely have voted against her if the Senate Banking Committee had moved her nomination to the floor. And every Democrat should have. In fact, the White House should never have offered her nomination in the first place.

But no. The powers that be want so desperately to change the United States into a carbon copy of the old Soviet Union, or Venezuela, that they continued to support her nomination even as it was sinking.

When three of the five senators — Tester, Warner and Sinema — told the committee’s chairman, Sherrod Brown (D-Ohio), that they were bailing, he informed the White House that her nomination was, for all intents and purposes, dead in the water. The White House, fully under the control of leftists who are working to change America into a socialist state, continued to back Omarova: “The White House continues to strongly support her historic nomination. Saule Omarova is eminently qualified for this position.”

And then the White House spokesman told Axios: “She has been treated unfairly since her nomination with unacceptable red-baiting from Republicans like it’s the McCarthy era.”

“Red-baiting” is a disparaging term often used by communist sympathizers to deflect legitimate criticism of an individual harboring communist views in an attempt, often successful, of painting the accuser of being driven by xenophobic or fanatical right-wing ideologies. It’s an attempt at smearing opponents to communism and its forced imposition on America.

So, too, is the phrase the White House spokesman used — “like it’s the McCarthy era” — referring to legitimate attempts in the 1950s to expose communists who were infiltrating sensitive and influential agencies of the federal government. 

The senators were no doubt influenced by the letter they received from 41 state banking associations and the Independent Community Bankers of America. They might not have seen her as part of the plan to turn America into a socialist nightmare but they certainly saw that, if successful, private banking, and their profession, would disappear.

 

“We take this unusual step,” they wrote, “based on the nature of Prof. Omarova’s public positions and the impact they would have on community banks … [her] proposal [to eliminate all private banking in the United States] is anathema to community banks and would undermine the role they play in driving local economic activity and development.… [She] stands well outside of … consensus … and could seek as Comptroller to undermine it and thereby jeopardize American economic growth.”

They failed to mention her ultimate purpose, as exposed by the Wall Street Journal:

She proposed that the Federal Reserve take over consumers’ bank deposits, effectively ending [private] banking as we know it. [Her plan would] become the ultimate public platform for generating, modulating, and allocating financial resources … [just as] Venezuela and China are doing.

Senator Bill Hagarty (R-Tenn.) wasn’t so inhibited. He told Fox News:

President Biden’s choice for banking regulator is a Marxist academic who wants to destroy the American banking and energy sectors and implement socialism in the United States, proving once again that this White House is beholden to the radical left elements of the Democrat party.

Senator Pat Toomey (R-Pa.), in a speech on the floor of the Senate, said:

There’s a lot that’s extraordinary and radical here — but maybe the heart of it is that Ms. Omarova doesn’t just want tightened regulation of banks. What she wants is to, and I quote — this is her words — “effectively end banking as we know it.” Those are words she wrote just last year.

Much has been written about her Marxist positions on banking. Something little known is her 2020 paper, “The Peoples’ Ledger: How to Democratize Money and Finance the Economy,” in which she offers a “blueprint for a comprehensive restructuring of the central bank’s balance sheet as the basis for redesigning the core architecture of modern finance.”

She expanded on that theme in a lecture she gave in January 2021:

There will be no more private bank deposit accounts, and all of the deposit accounts will be held directly at the Fed.

 

And there are very interesting implications from that thought experiment; for example, with the much more direct and proactive tools of monetary policy, like helicopter money, which is, you know, considered radical, primarily because economists really do not know how to manage the issue of what would happen in the inflationary environment when the central bank needs to contract the supply of money.

 

How is it politically feasible for the central bank to effectively take money away from people’s accounts?

Her plan answers that question: The Fed could simply remove a quantity of those heretofore privately held dollars and thus “shrink” the money supply to fight inflation.

At this writing, the White House hasn’t officially announced that they are pulling her nomination, nor has Omarova decided that the battle is lost and officially withdrawn her nomination. But, for all intents and purposes, it’s over.

New York Times Video asks: “What do Democrats do when they have all the Power?”

The opinion video produced by The New York Times and posted on Thursday reveals not only what Democrats do when they have all the power (see California), but what politicians in general do when given the opportunity: they mess things up. The greater the power, the greater the mess (see California).

The Times’ video journalist Johnny Harris teamed up with the Times’ lead writer on business and economics Binyamin Appelbaum to create the 14-minute-long video available on YouTube.

Harris focused on California where the mess is the greatest. The Democrats running the state follow the general Democratic Party platform which informs its progressive constituency that its three core values are “affordable housing,” “economic equality,” and “educational opportunity.”

But when focusing in on how California actually looks, Harris discovered that “liberal hypocrisy is fueling … inequality” in the state. In a written report supplementing the video the writers said:

In key respects, many blue states are actually doing worse than red states.

 

It is in blue states [like California] where affordable housing is often hardest to find, [where] there are some of the most acute disparities in education funding and [where] economic inequality is increasing most quickly….

 

Blue states are where the housing crisis is located.

 

Blue states are where the disparities in education funding are the most dramatic.

 

Blue states are the places where tens of thousands of homeless people are living on the streets.

 

Blue states are the places where economic inequality is increasing most quickly in this country.

They point out that nine of the 15 most expensive metropolitan areas in the country are located in California (for instance the median price of a house in San Diego is $830,000, more than twice the national median).

The report exposes the bottomless hypocrisy of liberals who claim one thing and behave in another. Take Palo Alto, for example. The Democrat-controlled city council voted unanimously to rezone a 2½ acre site to allow construction of a high-rise housing development. The liberal community was outraged and voted it down, 85-15. Not in my neighborhood!

As Applebaum wrote, “I think people [there] aren’t living their values. There’s an aspect of greed here.”

Of course. Human beings seek their own best interests first, ideology be damned.

The report missed several opportunities to inform its readers. It’s not just Democrat hypocrites who are ruining blue states like California. Republicans have a long and tawdry record of ruining things as well, just more slowly.

That’s why limits must be placed on all politicians, not just in blue states. They must apply to all politicians everywhere or liberty is threatened and eventually lost.

As the author of Federalist 51 (either James Madison or Alexander Hamilton, writing under the name “Publius”) noted:

It may be a reflection on human nature, that such devices [as separation of powers] should be necessary to control the abuses of government.

 

But what is government itself but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

But, as Lord Acton said, men are not angels: “All power tends to corrupt; absolute power corrupts absolutely.”

That is the message that is missing from the Times’ opinion video.

 

 

Omarova Not Likely to Become Biden’s Comptroller of the Currency

This article appeared online at TheNewAmerican.com on Friday, November 19, 2021:  

It is increasingly clear that Joe Biden’s nomination of a hard-core communist to the office of comptroller of the currency is too much even for far-left Democrat senators on the Senate Banking Committee. According to Politico, at least seven Democrat senators are having second thoughts after hearing her testimony on Thursday.

That testimony got feisty. Senator John Kennedy (R-La.) asked nominee Saule Omarova about her membership in a communist organization while she was growing up in the Soviet Union: “It’s commonly referred to as ‘Young Communists.’ Were you a member?”

When Omarova replied, “everybody in that country was a member,” Kennedy then asked pointedly if he should refer to her as “comrade” rather than “professor.” The chairman of the committee, Sherrod Brown (D-Ohio), took umbrage and interrupted Kennedy. Kennedy shot back: “You’re not the witness, she is!”

Omarova answered Kennedy, “I am not a communist. I do not subscribe to that ideology.”

But everything in her background proves that she is, especially her plans to put every personal and private checking account for every American into the Federal Reserve so they can be monitored and managed.

She wants to create a “National Investment Authority” [NIA] that would direct private and government funds to support businesses that mesh with her totalitarian green agenda, and starve and bankrupt those that don’t.

The Wall Street Journal noted that in a recent paper she authored, “she proposed that the Federal Reserve take over consumers’ bank deposits, effectively ending [private] banking as we know it. [The NIA would] become the ultimate public platform for generating, modulating, and allocating financial resources … [just as] Venezuela and China are doing.” 

Senator Bill Hagarty (R-Tenn.) told Fox News about his “many concerns” over the nomination of a Chinese communist to the position:

 

President Biden’s choice for banking regulator is a Marxist academic who wants to destroy the American banking and energy sectors and implement socialism in the United States, proving once again that this White House is beholden to the radical left elements of the Democrat party.

Norbert Michel, who heads up the Cato Institute’s Center for Monetary and Financial Alternatives, said that Omarova would make every effort to “federalize” the private banking sector in America, adding:

[The Comptroller of the Currency] has enormous discretion to direct banking activity through examination and enforcement actions, including types of customers banks lend [money] to….

 

It is clear that her policies would turn all private banks into state-run institutions.

Earlier Michel wrote, “It is true that the free enterprise system [is] not perfect, but the fact remains that there are countless examples of Omarova’s preferred approach making millions of people miserable.”

Naturally, the White House stands foursquare behind the communist that Biden has nominated to “federalize” America’s banking system:

Saule Omarova is eminently qualified and was nominated for this role given her strong track record on regulation and strong academic credentials [she is a professor at far-left Cornell University].

 

The White House strongly supports this historic nomination.

At least seven Democrats have their doubts after hearing her testimony, including Senators Jon Tester (D-Mont.), Krysten Simena (D-Ariz.), Mark Warner (D-Va.), and Joe Manchin (D-W.V.). Each of them has constituencies that would be severely hurt, if not totally destroyed, if Omarova is confirmed and has her way.

Biden Blames Oil Companies for High Gas Prices. Oil Industry Blames Biden. Both Are Wrong.

This article appeared online at TheNewAmerican.com on Thursday, November 18, 2021:  

Joe Biden’s incendiary letter to the head of the Federal Trade Commission (FTC) accused oil companies ExxonMobil and Chevron of profiting at the expense of the average American who has seen gas prices at the pump jump 60 percent over the last year.

In response, both oil industry trade groups — the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM) — blamed Biden.

Both are wrong. The people running the printing press are to blame.

Whomever wrote the letter that Biden signed and sent on Wednesday said the bottom line is this: “Gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining.”

Even worse, they’re profiting at drivers’ expense:

In the last month, the price of unfinished [wholesale] gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period….

 

Meanwhile, the largest oil and gas companies in American [ExxonMobil and Chevron are the two largest] are generating significant profits off higher energy prices….

The letter ended with the threat:

I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct.

 

I therefore ask that … you bring all of the Commission’s tools to bear if you uncover any wrongdoing.

The spokesman for the American Petroleum Institute got it partially right when he called the Biden letter “a distraction.” That is the usual tool politicians use when they want to deflect attention away from themselves and their destructive policies. In the instant case, the target is the oil industry — those big, bad, dirty, polluting, selfish and, as a result, highly profitable companies. The same companies that have provided gas at competitive rates to American motorists for decades. 

The API spokesman got it wrong when he blamed “the ill-advised government decisions that are exacerbating this challenging situation.”

 

The spokesman for the AFPM also blamed government policy:

Federal policy is discouraging supply by shutting down pipelines, putting future production off limits, talking down the future of the petroleum business, and imposing expensive requirements on refineries….

 

The administration is blaming others when it ought to take a sober look at its own energy policy.

If gas prices were the only commodity going up 60 percent in a year, then perhaps Biden and the FTC might have a case. Something fishy would be going on.

And because a barrel of oil is used for more than 6,000 products (from umbrellas to bicycle tires, from shampoo to house paint), when the price of a barrel goes up, so do the prices of those products. To a consumer of those products, it looks like oil is the prime, or even the only, driver of those price increases.

But it’s not. Everywhere else one looks, prices are going up, not only at the pump but at the grocery store, home improvement centers, and big box retailers. Overall, the Consumer Price Index (CPI), a faulty but still often-used measure of inflation, is up more than six percent in a year.

Something else is going on, and free market economist Milton Friedman nailed it: “Inflation is always and everywhere a monetary phenomenon.”

And who is in charge of that “monetary phenomenon”? The Federal Reserve. As it purchases government bonds from the federal government it increases the supply of money in circulation, and rising prices follow.

According to the Fed (which isn’t shy about revealing what it’s doing), the amount of money in the U.S. economy has grown at nearly a 20 percent annual rate. If that’s so, then consumers should be happy that their cost of living is only up six percent! It could be much worse!

Here’s how the printing press at the Fed works: The U.S. Treasury sell bonds to the Federal Reserve which pays for them by putting new digital currency into its checking account. The government then pays its bills with the new money. That way politicians can pay for spending without raising taxes or borrowing. Instead, the tool they use is far more insidious and difficult for the average consumer to fathom: the new spending is paid for by the loss in the purchasing power of their dollars.

As former Fed Chairman Alan Greenspan explained:

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold….

 

The law of supply and demand is not to be conned. As the supply of money … increases relative to the supply of tangible assets in the economy, prices must eventually rise.

 

Thus the earnings saved by the productive members of the society lose value in terms of goods….

 

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.

 

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth.

For the record, Greenspan was in charge of this “scheme for the confiscation of wealth” as chairman of the Federal Reserve, serving five terms from 1987 to 2006.

Don’t pay attention to those distractions or deflections away from the principal cause of rising gas prices. It’s the Fed. It’s always the Fed.

Mainstream Poll Showing Collapse in Approval of Biden, Democrats

This article appeared online at TheNewAmerican.com on Monday, November 15, 2021:  

The latest poll, produced by Langer Research for ABC News and the Washington Post, reveals what other more balanced polls have been reporting:

The Democratic Party’s difficulties are deep; they include economic discontent, a president who’s fallen 12 percentage points under water in job approval, and a broad sense that the party is out of touch with the concerns of most Americans: 62 percent say so.

Langer is no friend of conservatives. It boasts a long list of “research partners” supporting its work, including ABC News, the Alfred P. Sloan Foundation, Bloomberg L.P., Cornell University, ESPN, and Facebook, among others. To have Langer Research declare that its most recent poll results present a “profound challenge” to the Democrats reveals the party’s accelerating race to irrelevancy in politics.

For once, the numbers coming from Langer and ABC News/Washington Post are believable:

  • 31 percent of registered voters surveyed say Biden is keeping most of his campaign promises;
  • 35 percent think he’s accomplished much overall;
  • 59 percent worry he’ll do too much to increase the size and role of government, up 6 points since spring;
  • 70 percent say [the economy] is in bad shape, up from 58 percent last spring;
  • His approval for handling the economy overall is down to 39 percent, off 6 points just since early September and 13 points from last spring.

His job approval has fallen off the charts:

In terms of Biden’s job performance overall, a new low of 41 percent approve, while 53 disapprove.… Biden [has] lost 11 points in approval since spring.

These dismal and accelerating numbers flow over to the midterms:

58 percent of all adults (and 59 percent of registered voters) are inclined to look around for someone new to vote for … [they] currently favor Republican over Democratic candidates by 20 points.

Langer sought clarity for the Senate races as well. It focused on eight states where Senate seats are open in November — Arizona, Florida, Georgia, Nevada, New Hampshire, North Carolina, Pennsylvania, and Wisconsin — and learned that “Biden’s overall job approval rating [among them] is 33 percent, compared with 43 percent elsewhere. On his handling of the pandemic, his approval is 11 points lower [there] than in the rest of the country.”

The bad news for Democrats affected every group and demographic, according to Langer, especially including independents:

 

Independents, often swing voters in national elections, favor GOP candidates by 50-32 percent; they voted +12 point Democratic in 2018.

Suburban voters now favor Republicans by 54-39 percent while rural voters support Republicans by 66-26 percent. And the advantage Democrats had in 2018 over Republicans among urban voters (65-32), is down 13 percentage points, to 52-38.

Among non-college educated white men and women, Republicans now hold an advantage over Democrats that is 20 percent wider than it was in 2018. Among Hispanics, who voted Democratic in 2018 by a 40-point margin, now favor Democrats by just 15 points — a collapse of a jaw-dropping 25 percent.

Langer summed up the results:

Republican congressional candidates [now] hold their largest lead in midterm election vote preferences [51 percent to 41 percent] … dating back 40 years.

For the record, in the 1982 midterm elections, the party holding the White House (Republicans) lost 26 seats in the House and broke even in the Senate.

Biden Nominee Wants to Starve, Bankrupt America’s Oil and Gas Industry

This article appeared online at TheNewAmerican.com on Wednesday, November 10, 2021:  

Saule Omarova, the communist Cornell law professor whom Biden has nominated as Comptroller of the Currency, has big plans not only for banks and private bank accounts but for oil and gas companies as well.

Thanks to research done by the American Accountability Foundation (AAF), a conservative group that does deep research into nominees such as Omarova, Democrat senators on the bubble over her nomination now have additional proof of her disqualifications for the position.

The AAF found a virtual seminar that occurred in March where Omarova held forth on the topic of America’s oil and gas industry. Speaking at the Jain Family Institute’s “Social Wealth Seminar” in March, she said:

Here’s what I’m thinking about … primarily the coal and oil and gas industry. A lot of smaller players in that industry are going to probably go bankrupt in short order.

 

At least, we want them to go bankrupt if we want to tackle climate change, right?

Presumably there was abundant applause from her audience supporting the institute. It bills itself as “an applied research organization in the social sciences … including research in … guaranteed income.”

AAF found another treasure: In speaking at another Jain Family function in May, Omarova said, “So, the way we basically get rid of those carbon financiers is, we starve them of their sources of capital.”

 

Under her plan for the banks, all capital would be controlled, allocated, and dispersed according to a national plan. The plan, of course, would eliminate financing for any industry that doesn’t fit into the green agenda. Viola! The U.S. would have completely clean air, and become a complete financial communist dictatorship in the process.

 

The Wall Street Journal dismembered her nomination: “Omarova thinks … prices, pay scales [and] capital and credit should be dictated by the federal government.” The Journal excoriated her positions, which would “effectively end banking as we know it,” putting every checking and savings account held privately in the country into the Federal Reserve. After all, it would avoid all the messiness of having to deal with that friendly but highly inefficient bank around the corner.

That’s the communist premise: The federal government runs everything, for the good of everybody, based on decisions made by unelected and unaccountable bureaucrats.

Thomas Jones, the co-founder of the AAF, said the evidence now available proves that she is an outright communist: “Saule Omarova has a classical Marxist view [she graduated from Moscow State University on a Lenin Personal Academic Scholarship; her thesis is entitled “Karl Marx’s Economic Analysis and the Theory of Revolution”] where she wants the government to run all sectors of the economy and part of that is implementing the Green New Deal. And you can only do that by destroying the oil and gas industry.”

Democrat senators on the Senate Banking Committee are having second thoughts. Senators Jon Tester (D-Mont.), Krysten Simena (D-Ariz.), and Mark Warner (D-Va.) each have major constituencies in the energy industry in their state. It will take just one of them to deep-six Omarova’s nomination, as not a single Republican supports it.

U.S. Economic Growth Slows to a Crawl in Third Quarter

The Commerce Department on Thursday morning reported that on an annualized basis the U.S. economy slowed to just a two-percent growth rate. Economists were hugely disappointed, as the majority of them initially expected the surge in the economy in the first two quarters to continue into the third.

The U.S. economy grew, on an annualized basis, in the first quarter at 6.3 percent, and 6.7 percent in the second quarter. Many expected the third quarter to show similar, if not even better, results, reaching perhaps a nine-percent annualized growth rate.

Those experts cut their ratings as the economy visibly slowed thanks to supply-line disruptions, inflation roaring back to life, consumers hunkering down, and vaccine mandates pushing people onto unemployment lines. A week ago, they forecast that the economy grew at an annualized rate of 2.9 percent.

Consumers are indeed hunkering down. Their spending rose at an annual rate of 12 percent in the second quarter. In the third quarter, it slowed almost to a dead stop, at just 1.6 percent. In February, thanks to government stimulus checks and little chance to spend them, consumers piled into savings at an annual rate of $1.4 trillion. But, instead of spending as the economy loosened somewhat, in August their savings rate increased to annualized $1.7 trillion.

Consumer confidence in the future of the economy is dismal. According to Gallup, two thirds of them said the economy is getting worse, not better. The Economic Confidence Index fell to a negative 25 in October, the lowest reading since April 2020 when it hit a negative 33.

Since then it has slowly recovered slightly, hitting a high of plus two in April. But then the economy headed south. The October decline is its fourth consecutive retreat.

 

This confirms what The New American reported on October 23. Two Dartmouth College professors noted that declines in consumer confidence in both the Conference Board’s index and that of the University of Michigan portend a coming recession. They were quite specific: The U.S. economy entered recession in August.

 

This was confirmed at the time by GDPNow — a “nowcast” of the U.S. economy on a real-time basis from the Federal Reserve Bank of Atlanta — which showed growth plummeting from 6.1 percent in August to 3.7 percent in September. Last week, the Atlanta Fed reported the GDPNow at 0.5 percent.

Thursday morning, that “nowcast” dropped further, to 0.2 percent, approaching stall speed for the U.S. economy.

All of this portends ill for the Democrats and President Biden, whose policies have made a bad situation under COVID vastly worse. The midterm elections are just a year away, and if the professors and the Atlanta Fed are correct, the U.S. economy could then be in the throes of a massive recession.

Since most elections are “pocketbook” elections, the Democrats will likely suffer what some are predicting to be an historic defeat in November 2022.

As the old Latin proverb states, “It’s an ill wind that blows no one any good.” It’s likely to get very windy for the Democrats a year from now.

Is the U.S. Economy Already in Recession?

This article appeared online at TheNewAmerican.com on Saturday, October 23, 2021: 

Two professors from Dartmouth College think the U.S. economy entered recession in August. One of them, Bruce Blanchflower, served on the Bank of England’s Monetary Policy Committee, lending additional credence to their conclusion:

We show [that] consumer expectations indices from both the Conference Board and the University of Michigan predict economic downturns up to 18 months in advance in the United States….

 

Downward movements in [both of these] consumer expectations [indices] in the last six months suggest the [U.S.] economy entered recession [in August].

The professors reported that any time those indices fall by more than 10 points, they accurately predict a recession in the next year to 18 months. The Conference Board’s consumer expectations index has reported at 25.3-point drop in 2021 while the University of Michigan’s index recorded an 18.4-point drop.

Even worse, those two indices predicted the 2008 global financial crash with numbers that weren’t as alarming: just a 19-point drop in the Conference Board index and a 21-point decline in the University of Michigan’s index.

Other measures of the U.S. economy confirm the professors’ conclusion. U.S Industrial Production (reported by Bloomberg) dropped 1.3 percent from the previous month (August), which itself was revised downward to negative territory.

The production of motor vehicles fell by 7.2 percent in September, following a decrease of 3.2 percent in August. And U.S. Manufacturing (again, hat tip to Bloomberg) dropped by 0.7 percent in September compared to August.

Back in May, Jim Paulsen, chief investment strategist for the Leuthold Group, said the coming recession would be caused by “the overuse and abuse of economic policy” by the Biden administration.

According to the Federal Reserve Bank of Atlanta, Paulsen is spot on. Its GDPNow model — a real-time measure of the health of the U.S. economy — was above seven percent in May. By August the model had dropped to 6.1 percent; by the middle of September it declined further to 3.7 percent.

Today GDPNow is reporting U.S. economic growth at just 0.5 percent.

Its next report is due on Wednesday.

Wall Street is also looking ahead to a flatlined economy. Although the popular averages are setting records, they only measure a part of the stock market. The Russell 2000, instead, has remained flat since March.

The political ramifications of such a sharp decline in U.S. productivity can scarcely be overestimated: the midterm elections will turn on “pocketbook” issues, as they always have. With gas prices at the pump jumping, with grocery stores increasingly showing empty shelves, with employment falling far below expectations, and with logjams at ports in California being blamed on the lack of truck drivers, it appears that the Dartmouth professors called it correctly. Not only that, but the precipitous fall from grace by the present occupant of the White House, as measured by recent polls, appears to spell disaster for the Democrats in November.

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2021 Bob Adelmann