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: Free Market

Jobless Claims at 50-year Low, but Raising Minimum Wage Would Stop That

This article appeared online at TheNewAmerican.com on Friday, April 12, 2019: 

Following its monthly poll of economists, the Wall Street Journal reported on Thursday that many respondents believed “even a small boost to [the] federal minimum wage [currently $7.25 an hour] would cause some job loss.” And if the mandated wage was increased to $15 an hour, as some are demanding, job losses would be greater.

The results of the survey were published a day before the Department of Labor released its report on initial unemployment claims for the prior week: Those claims were “196,000, a decrease of 8,000 from the previous week … [and] the lowest level for initial claims since October 4, 1969 when [they were] 193,000.”

In addition, the four-week moving average of initial jobless claims fell to 207,000, “the lowest level for this average since December 6, 1969.”

Translation:

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Socialist Misery Deepens in Formerly Prosperous Venezuela

This article appeared online at TheNewAmerican.com on Tuesday, April 2, 2019: 

When Venezuela’s Marxist dictator Nicolas Maduro addressed his citizens on Sunday, he told them that their electric power would be rationed: “I have approved a 30-day plan to regulate the output.” He called the plan “a load management regime.”

Unfortunately, owing to the rolling power outages that have plagued Venezuela over the last month, most of those citizens, if they had television, weren’t able to view his speech because their power was out.

That is the end point of socialism: When government interferes, products and services formerly provided by the free market become limited. Prices go up and price controls follow. The price controls further limit supply, and the final step is rationing what’s left.

Maduro admitted to two failures in that short sentence: His government is unable to provide for his people; and those shortages are likely to last for a long time. The unspoken message being delivered is that socialism, no matter what it might be called, always ends in tyranny, misery, and death.

Venezuela’s power industry was nationalized in 2007 under the socialist administration of Maduro’s predecessor and mentor, Marxist Hugo Chavez. The ideology of socialism, termed Chavismo, continued under Maduro following Chavez’s death in 2013. Consequently, those professionals running the energy grid were removed and replaced with political appointees as rewards for their loyalty to the socialist regime. Since then some 25,000 technicians skilled in running the power industry have left the country, leaving the incompetent in charge.

As Maduro’s economy spiraled downward, funds for maintenance dried up. In early March a grassfire burned some trunk lines feeding power from the country’s Guri dam, causing turbines generating power to fail. This plunged the populace into darkness for days. On March 25, another outage led to more misery, and more socialist intervention in the form of rationing the remaining electricity that the power plant is able to produce.

The impacts are predictable, and widely known:

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U.S. Shale Revolution Continues: Shale Oil Production to Set Record in March, Says EIA

This article appeared online at TheNewAmerican.com on Wednesday, February 20, 2019: 

The report from the U.S. Energy Information Administration (EIA) on Tuesday merely confirmed what the agency predicted just a week earlier: The shale revolution in the United States will not only keep prices of oil and gas low into the foreseeable future, it will make the U.S. a net exporter of energy within 18 months.

The agency expects shale oil production from the seven major shale formations in the country to set a record in March at 8.4 million barrels per day (bpd). This will push total U.S. crude oil production to nearly 12 million bpd, ahead of both Saudi Arabia and Russia.

Bank of America predicts that

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Messages From Maduro’s Military Posturing

This article appeared online at TheNewAmerican.com on Monday, January 28, 2019:  

The hosting of a parade of Russian military hardware in Caracas on Sunday by Venezuela’s President Nicolas Maduro delivered at least three messages: 1) I am in charge here; 2) With the help of my Russian, Chinese, and Cuban friends, that is; and 3) No tyranny remains in power very long unless it is maintained by force or the threat of force.

The show was enhanced with tank rounds being fired into a nearby hillside and by Maduro exclaiming, “Nobody respects the weak, cowards [or] traitors. In this world what’s respected is the brave, the courageous [and] power.” It was further enhanced with video of soldiers kneeling before the dictator and Maduro bellowing “Are you coup plotters?” and their response: “No!”

These messages were delivered after the defection of Colonel Jose Luis Silva, Maduro’s Washington attaché for the last five years. He told Reuters on Saturday that “the top brass of the military and the executive branch are holding the armed forces hostage. There are many, many, who are unhappy.”

And then he addressed them directly:

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VW Expanding its Chattanooga Plant Again, Investing a Billion Dollars and Creating Jobs

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

Following the announcement that Volkswagen America was going to be expanding its Chattanooga plant to build electric vehicles (EVs), President Trump was delighted. He tweeted: “Congratulations to Chattanooga and Tennessee on a job well done. A big win.”

It was a big win for the president, who invited the CEOs of VW, BMW, and other foreign car manufacturers to the White House in December to persuade them to invest more in the United States. At the same time VW made its announcement at the Detroit Auto Show on Monday, BMW management announced its own expansion plans of its production facilities in the United States. With VW’s financial commitment of $800 million for Tennessee and BMW’s financial commitment of $600 million added to the $340 million VW announced last March for its Chattanooga facility, those two automakers are investing almost $2 billion in their U.S. automobile manufacturing plants. Their expansion plans will require more than 2,000 additional workers, adding to the already robust manufacturing resurgence taking place in the United States.

That resurgence has added nearly 500,000 manufacturing jobs in just the last two years, the most in more than 20 years.

Following the announcement by VW’s CEO Herbert Diess, CEO of Volkswagen AG, his American counterpart, Scott Keogh, CEO of Volkswagen Group of America, added, “We could not be prouder to build the future of mobility here in the United States. We’re known as ‘the peoples’ car’ for a reason, and we plan to build EVs for millions, not millionaires.”

What Keogh didn’t say was that

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Maduro’s Second Six-Year Term Won’t Last Six Months

This article was published by the McAlvany Intelligence Advisor on Wednesday, January 16, 2019:

This writer is happy to declare that his prediction (see Sources below) about Maduro’s longevity appears to be dead wrong. Washington has just issued credible threats that it will turn off Maduro’s cash flow by prohibiting exports of crude from his state-owned PdVSA oil company to U.S. Gulf Coast refineries.

Last Friday, this writer thought that Maduro could not only remain as Venezuela’s dictator for another six-year term, but for as long as he wished. Now his tenure is likely to be measured in months.

An unnamed White House official told the Wall Street Journal on Monday that, “until now, we have been going around the edges. Now, it’s a new dynamic: we are no longer going to be tinkering around the edges.”

Earlier the Journal pointed out that

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Downloads of 3D-Printed Firearms Increase After Judge Tries to Stop Them

This article appeared online at TheNewAmerican.com on Wednesday, December 26, 2018: 

A federal judge’s ruling to limit the transfer of files allowing citizens to print their own guns using 3-D technology has resulted in exactly the opposite: The number of downloads of those files has exploded since his ruling in August.

It was Western Washington’s District Court Judge Robert Lasnik who ordered the settlement between the Justice Department and Cody Wilson’s company Defense Distributed to be suspended. He should have known better. He and other gun-grabbers such as New Jersey Governor Chris Murphy and Massachusetts Democrat Edward Markey are trying to play catch-up and instead are falling farther and farther behind.

It isn’t that gun grabbers haven’t tried.

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Latest NFIB Report Confirms Robust Health of U.S. Economy

This article appeared online at TheNewAmerican.com on Wednesday, November 14, 2018:  

Just when concerns over the future of the U.S. economy have reached fever pitch thanks to the recent volatility on Wall Street, along comes the National Federation of Independent Business (NFIB) to calm those concerns. Its October report, “Small Business Economic Trends”, was summed up thus:

Overall, small businesses continue to support the 3 percent plus growth of the economy and add significant numbers of new workers to the employment pool.

 

The percent of owners with one or more unfilled openings is at a 45 year record high level.

 

Employment is growing faster than the population (210,000 per month this year to date), so the gains in jobs are being “fueled” in part by increased labor force participation.

 

Consumer optimism is also running at near-record levels, supported by rising wages and plentiful job openings.

After reviewing the numbers in each category (from “plans to increase employment” to “earnings trends”), the authors of the study concluded: “Bottom line, the October report sets the stage for solid growth in the economy and in employment in the fourth quarter, while inflation and interest rates remain historically tame. Small businesses are moving the economy forward.”

Indeed they are. The NFIB boasts membership of 325,000 small business owners, reflective of the estimated 28 million small-to-medium-sized businesses in the United States with fewer than 500 employees. That’s compared to about 20,000 companies with 500 employees or more.

And they swing a big hammer.

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OPEC: Do “Whatever it Takes” to Balance Oil Market

This article appeared online at TheNewAmerican.com on Monday, November 12, 2018:

Following the emergency meeting attended over the weekend by members of the OPEC cartel and its non-members in Abu Dhabi, Saudi Arabia’s Energy Minister Khalid al-Falih said “We need to do whatever it takes to balance the oil market.” That goal is indicative of OPEC’s increasing nervousness that it is running out of options to counter increasing U.S. oil production. Last month, the EIA (Energy Information Administration) announced that the United States now leads the world in crude oil production, ahead of both Saudi Arabia and Russia.

For many years, the cartel was able to dictate oil policy and prices globally, bending the world oil markets to the cartel’s needs and purposes. Ten years ago,

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OPEC is in a Pickle, Thanks to U.S. Oil Producers

This article was published by The McAlvany Intelligence Advisor on Monday, November 12, 2018:  

In this space a week ago, this writer panned King Hubbard’s “Peak Oil” theory as fracking technology and favorable market conditions for U.S. producers continued to drive world crude oil prices lower. In early October, the price of oil for November delivery was over $76 a barrel. At the market close on Friday, November 2, the price for December delivery was below $63, pushing the oil market close to bear market territory.

The oil market continued its remarkable decline, with December oil futures trading at the close on Friday, November 9, below $60 a barrel.

This has gotten the attention of the oil ministers of OPEC and its hangers-on (like Russia and Oman), and on Saturday they held an emergency meeting in Abu Dhabi, UAE to see what could be done to stop the decline. On Sunday, Saudi Arabia’s oil minister told Oman’s oil minister that, come December, the cartel will cut oil production by a million barrels a day.

Everything was running along smoothly right up through August.

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U.S. Officially the World’s Largest Crude Oil Producer

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

In an interview with CNNMoney in June, Pioneer Natural Resources Chairman Scott Sheffield said he expected U.S. crude oil production to surpass 11 million barrels a day by this fall, making the United States the world’s top oil producer. Right on schedule the Energy Information Administration announced on Thursday that the U.S. oil industry produced 11.3 million barrels of crude oil a day during August, an increase of 416,000 barrels from the previous month and topping production from Saudi Arabia and Russia. That level of crude oil production is more than 2 million barrels a day ahead of August 2017, the largest increase over any 12-month period in U.S. history.

Sheffield told CNNMoney that “we’ll be at 13 [million] very quickly” and predicted that that number could jump to 15 million in a very few years.

On Wednesday U.S. Interior Secretary Ryan Zinke told Fox News that officially “today we are the largest oil and gas producer on the face of the planet, rolling through 11 million … on our way to 14.”

In less than 10 years, thanks largely to the development of, and continued improvement to, fracking technology, U.S. crude oil production has more than doubled, from 5 million bpd (barrels per day) in 2008 to more than 11 million today.

This has immediate as well as long-term ramifications that extend far beyond gas prices at the pump.

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So Much for King Hubbard’s “Peak Oil” Theory

This article was published by The McAlvany Intelligence Advisor on Monday, November 5, 2018: 

When M. King Hubbard concluded in 1956 that the world would shortly run out of oil, his theory was adopted by environmentalists and government meddlers as the basis for interference in the energy business.

Hubbard’s theory initially predicted that U.S. crude oil production would peak at around 1970. Revisions to the theory pushed the peak date out to 2000 when U.S. crude would hit 12.5 billion barrels per year and then start its inevitable and irreversible decline.

For 2018, U.S. crude oil production will hit 30 billion barrels. So much for Hubbard’s “peak oil” predictions.

But, as Eric Peters (who blogs at EricPetersAutos.com) laments, government interference based on the discredited “peak oil” theory remains firmly in place:

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White House Issues Attack on Socialism in Response to Sanders’ “Medicare for All”

This article appeared online at TheNewAmerican.com on Friday, October 26, 2018: 

It’s highly unlikely that Harvard-trained economist Justin Wolfers has ever been to Caracas, Venezuela. It’s also unlikely that he took the time to read the 72-page report “The Opportunity Costs of Socialism” issued by President Trump’s Council of Economic Advisers (CEA) explaining the dangers in enacting Bernie Sanders’ socialist healthcare takeover called “Medicare for All.” But he has an opinion, nevertheless: he called it “dreck” in his tweet: “For several generations the CEA harnessed the best and brightest to serve their country, ensuring White House policy was informed by modern [i.e., Keynesian] economic thinking. It’s sad to see [the present Trump CEA] debase that tradition, spending their time on this dreck.”

Merriam-Webster offers various synonyms for “dreck,” including chaff, deadwood, debris, dross, dust, garbage, junk, litter, offal, refuse, riffraff, rubbish, scrap, trash, truck, and waste. In other words, Wolfer doesn’t think much of the CEA’s effort.

On the other hand,

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Think Amazon’s “Fulfillment Centers” are High Tech? Try Blimps and Drones!

This article was published by The McAlvany Intelligence Advisor on Friday, October 19, 2018: 

Over the last two or three years, tens of thousands of people have watched YouTube videos (see Sources) of the unbelievable technology that companies like Amazon and British online grocery company Ocado are using to cut delivery costs and times for their customers. Each of Amazon’s “fulfillment centers” ships upwards of a million orders every single day, with nary a human in sight.

Give Amazon credit. It saw the technology it would need as far back as 2012 when they bought Kiva Systems, the developer of the little Kiva robots that look like oversized Roombas. Kiva was leasing their robots and their technology to companies like The Gap, Walgreens, Staples, Office Depot, Crate & Barrel, and Saks 5th Avenue. But when those leases ended, Amazon didn’t renew them. It wanted the Kiva technology for itself.

Today, in its more than 100 massive distribution or “fulfillment” centers, there are hundreds of thousands of Kiva robots doing the work humans used to do just a few years ago.

The million-square-foot fulfillment center in Baltimore is typical, as Christopher Mims explained in The Wall Street Journal:

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Amazon Robotics Is Automating Everything

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

When Amazon, the largest Internet retailer in the world, purchased Kiva Systems in 2012, it paid almost a billion dollars for it; and it transformed, and continues to transform, the company. Amazon wanted the technology behind the Kiva robots that were previously being used by The Gap, Walgreens, Staples, Office Depot, Crate & Barrel, and Saks 5th Avenue. When the contracts with those companies ran out Amazon didn’t renew them.

It wanted Kiva’s technology for itself.

Today, in its more than 100 massive distribution or “fulfillment” centers, there are hundreds of thousands of Kiva robots doing the work humans used to do just a few years ago. There are YouTube videos depicting this transformation from human “pickers” to robotic pickers.

The million-square-foot fulfillment center in Baltimore is typical, as Christopher Mims explained in the Wall Street Journal:

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White House Forecasts 3.5 Percent GDP Growth in Third Quarter

This article appeared online at TheNewAmerican.com on Wednesday, September 5, 2018: 

Kevin Hassett, chairman of President Trump’s Council of Economic Advisors, said on the Fox News program “Countdown to the Closing Bell” on Tuesday that “three and a half [percent annualized GDP growth in the third quarter] is looking like a pretty comfortable number right now,” but added, “I would hope it would come in above that.”

It certainly could, and it might even hit five percent GDP growth in the second half of the year. According to the Atlanta Federal Reserve’s forecast model, GDPNow, third-quarter growth is estimated to be 4.4 percent, with previous weekly forecasts ranging from 4.6 percent to 5.0 percent.

Even those could be too conservative.

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Ivanka Has Drunk the Washington Kool-Aid

This article was published by The McAlvany Intelligence Advisor on Wednesday, September 5, 2018: 

A White House official described the transformation of the president’s first daughter from a normal, intelligent common-sense individual into a socialist. While on the campaign trail with her father:

She would meet with moms who wanted to support their family but didn’t either have a skill set or wanted to go back into the workforce [but] weren’t sure how to find a job.

 

She met dads who wanted to earn wages where they could support their families but didn’t have the right skills.

 

She spent two years on the campaign trail and heard firsthand how people felt like they were the forgotten man or woman and how nobody was looking out for them.

 

That really resonated with her.

And so, unencumbered with any understanding of or commitment to Constitutional limitations on such things as federally funded job training programs, she pushed her father and members of Congress to take taxpayer money and spend it on those “forgotten” men and women she felt sorry for.

It’s called the Carl D. Perkins Vocational and Technical Education Act,

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The Trump-Juncker “Deal” Isn’t Such a Great Deal

This article appeared online at TheNewAmerican.com on Thursday, July 26, 2018:  

Following the issuance of the joint U.S.-EU statement after the meeting on Wednesday between President Trump and European Commission President Jean-Claude Juncker, Juncker was understandably delighted: “When I was invited by the president to the White House, I had one intention: I had the intention to make a deal today. And we made a deal today.”

Except that the deal Juncker was celebrating had little to do with paper promises to cut tariffs and reduce trade barriers, and everything to do with persuading Trump to agree to “reform” the World Trade Organization (WTO). From the joint statement:

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EIA: U.S. Shortly to Become “the World’s Leading Producer of Crude Oil”

This article appeared online at TheNewAmerican.com on Wednesday, July 11, 2018:

The U.S. Energy Information Administration (EIA) proclaimed on Tuesday that, if its forecasts are correct, “the United States will average nearly 12 million barrels a day (mbd) … in 2019 … mak[ing] the U.S. the world’s leading producer of crude [oil].”

Those forecasts could understate the U.S. oil industry’s production, as it builds into its calculations the present bottlenecks of pipeline capacity, being experienced especially in the Permian Basin.

One month ago, IHS Markit, the global information marketplace, focused on what’s happening in the Permian Basin and concluded that, even with those bottlenecks currently slowing the flow of crude from wellheads to refineries along the Gulf Coast, it expects a “stunning” increase in production there between now and 2023. Total crude-oil production will nearly double over that time to 5.4 mbd once the 41,000 new wells and $308 billion in new investment have been completed. Said Daniel Yergin, IHS Markit’s vice chairman: “In the past 24 months, production from just this one region — the Permian — has grown far more than any other entire country in the world. Add in another 3 mbd by 2023 — more than the total present-day production of Kuwait — and you have a level of production that exceeds the current production of every OPEC nation, except Saudi Arabia.”

One key assumption IHS Markit is making is that oil prices will stay around $60 a barrel or higher. And its forecast is “far from a best case” scenario, according to Raoul LeBlanc, HIS Markit’s executive director, who added, “That the outlook still expects the Permian to exceed existing (and already lofty) expectations speaks to the region’s unique and growing prominence in the world’s oil market. The level of growth — from 0.92 mbd in 2010 to 5.4 mbd in 2023 — is truly stunning.

The New American made just such a prediction about the U.S. oil industry way back in 1990, as we noted in a 2015 article:

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U.S. Crude Oil Production Growing so Rapidly Even Insiders Can’t Keep Up

This article was published by The McAlvany Intelligence Advisor on Wednesday, July 4, 2018:  

Scott Sheffield, the Chairman of Pioneer Natural Resources, was interviewed by CNNMoney on June 20. At that moment in time, according to the U.S. Energy Information Administration (IEA), the U.S. oil industry was pumping 10.3 million barrels a day (bpd). By the time the interview ended and the article was published, the latest report for that week on U.S. crude oil production showed Sheffield and CNNMoney already dreadfully out of touch: U.S. production that week topped 10.9 million bpd, with little to keep new records from being set on a weekly basis going forward.

Sheffield, the head of an oil company with revenues exceeding $5 billion and assets in recoverable oil reserves approaching $20 billion, went on to say that he expects U.S. crude oil production to surpass 11 million bpd “within the next three or four months.” It looks like that milestone will be exceeded this month. He went on to predict that,

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann