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

Latest Jobs Report Shows Economy at Cruising Altitude and Speed

This article appeared online at TheNewAmerican.com on Friday, April 5, 2019:  

It takes three tons of jet fuel to drive a Boeing 747 aircraft weighing nearly 20 tons from a dead stop to cruising speed at an altitude of 41,000 feet. Then the pilots can throttle back, putting it on autopilot for the rest of the trip.

That metaphor is apt for the U.S. economy.

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Before Embarrassing Herself Further, AOC Should Visit Caracas

This article was published by The McAlvany Intelligence Advisor on Wednesday, April 3, 2019: 

Never letting an opportunity pass to speak to a group or in front a microphone, Alexandria Ocasio-Cortez has acquired a following of adoring fans along with a long list of oft-repeated quotes. Some of them reflect an abysmal understanding of history, no thanks to Boston University from which she graduated cum laude with degrees in economics and international relations but nothing in history.

A few of the more choice selections include these:

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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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Stephen Moore’s Senate Confirmation Hearings Could Get Ugly

This article appeared online at TheNewAmerican.com on Friday, March 29, 2019: 

When President Trump announced that he was inviting his presidential campaign’s economic advisor, Stephen Moore, to accept his nomination to fill a vacancy on the Fed’s Board of Governors last week, The New American suggested that it was likely that his sharp criticism of the Fed would become muted if and when he was confirmed.

Within days of that announcement, however, the powers that be decided that even his muted voice would not be welcome, and the knives came out. Those knives could very well signify the battle Moore is going to face during his confirmation hearings before the U.S. Senate. Senator Ben Sasse (R-Neb.) said that “Steve is a sunny optimist and a thoughtful economist [but his] nomination has thrown the card-carrying members of the Beltway establishment into a tizzy.… That says little about Steve … but a lot about central planners’ devotion to groupthink.”

Moore has repeatedly challenged that groupthink as the central bank continued to raise interest rates to head off what it perceived to be incipient inflation (i.e., price increases). Those price increases never materialized, but the Fed’s actions nevertheless slowed the economy and knocked 4,500 points off the Dow Jones Industrial Average late last year.

Moore was livid:

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This Is No “Sugar High” for the U.S. Economy

This article was published by The McAlvany Intelligence Advisor on Friday, March 29, 2019: 

Last August the supposedly non-partisan Joint Committee on Taxation expected the benefits of President Trump’s tax cuts to peter out after a year or so. It argued, said Kevin Brady, writing in the Wall Street Journal, that the tax law (the Tax Cuts and Jobs Act, or TCJA), “would stoke inflation and force the Federal Reserve to raise rates, counterbalancing the pro-growth effects of the tax cut.”

The committee got it half right:

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Repatriation of Overseas Profits Surged in 2018, Bodes Well for Strong 2019

This article appeared online at TheNewAmerican.com on Thursday, March 28, 2019:  

Once again, economic forecasters are embarrassed. Last August the highly regarded Penn Wharton School at the University of Pennsylvania predicted that Trump’s tax law, and the resultant repatriation of profits that America’s largest corporations had stashed overseas, would have only a modest impact on the U.S. economy. The authors of the study wrote that “direct economic effects from repatriated income are likely to be very small … that TCJA (Trump’s Tax Cuts and Jobs Act) will raise $254 billion in revenue over the next ten years [and its] indirect impact will be to increase GDP by less than 0.2 percent after ten years.”

Wednesday’s report from the Commerce Department completely obliterated the folks’ forecast at Penn Wharton:

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Larry Kudlow Needs to Reread Hans Christian Andersen’s “The Emperor’s New Clothes”

This article was published by The McAlvany Intelligence Advisor on Monday, March 25, 2019: 

Last month this writer concluded that, if passed into law, AOC’s Green New Deal would hasten the bankruptcy of the United States of America. He noted that for all intents and purposes the U.S. is already bankrupt, but that the credit rating agencies are overlooking the obvious by keeping their top ratings on U.S. government debt.

Now it appears that this writer was wrong. According to Larry Kudlow, Trump’s chief economic guru, “I don’t think good growth policies have to obsess [interesting word choice], necessarily, about the budget deficit.”

He apparently had been reading how Modern Monetary Theory – MMT – makes deficits irrelevant, as written by a professor in public policy and economics from an obscure university. That professor, Stephanie Kelton, at Stony Brook University, said the only thing standing in the way of spending our way into the green new world is politicians’ will to spend it:

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Government Deficits Running $100 Billion a Month; Lenders Not Concerned

This article appeared online at TheNewAmerican.com on Sunday, March 24, 2019:  

The U.S. Treasury announced on Friday that the federal government has spent $1.8 trillion since October 1, the start of fiscal year 2019, while tax receipts were only $1.3 trillion. This leaves a deficit of a little over $500 billion.

It would have been only $489 billion, except that in the month of February the IRS began sending out refund checks, and personal and business tax returns aren’t due until April.

Only $489 billion? On an annual basis, if nothing changes, the federal government will ring up deficits of $1.2 trillion this fiscal year, pushing the national debt to over $23 trillion by October.

As The New American reported last month, the Congressional Budget Office (CBO) estimated that in less than 10 years the national debt will be close to $36 trillion if nothing changes.

A lot of things can change in 10 years:

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Wall Street Journal: Median Pay for CEOs Is a Million Dollars a Month

This article appeared online at TheNewAmerican.com on Monday, March 18, 2019: 

The results of the survey on American CEO (chief executive officer) compensation released on Sunday by the Wall Street Journal aren’t likely to please progressives and socialists such as Bernie [Sanders] and Alexandria Ocasio-Cortez (AOC).

The Journal looked at total compensation being paid to the CEOs of 132 of the 500 companies making up the S&P 500 Index and reported that it reached $12.4 million in 2018, up from $11.7 million a year earlier.

Much of the compensation was driven by improved corporate profits and strong stock market performance that enhanced the value of their stock options. The Journal also reported that not every CEO got a raise: “Pay fell for 47 [of them], or about a third … and more than 10% for 22 of them.”

This isn’t likely to impress socialists and social-justice warriors who will likely use the Journal’s results to focus on some kind of “parity” calculation: comparing CEO compensation to the average guy driving a truck or working a line in a factory. Expect outrage over the disparity, and legislation to “fix” the “inequity.”

How does one justify anyone making a million dollars a month?

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Bernie and AOC Aren’t Going to Like This One Bit

This article was published by The McAlvany Intelligence Advisor on Monday, March 18, 2019:

Every year the Wall Street Journal conducts a survey of top CEOs’ compensation packages. And every year progressives and socialists use the occasion to complain about injustice, inequality, and lack of parity with their workers.

This year the news is even worse for the likes of Bernie and AOC: now the median income of the 132 CEOs the Journal analyzed is a million dollars a month, an increase of 6.4 percent over last year. Expect to hear the whining from these two, among others, that the average worker driving a truck or working a line only saw his or her wages rise by three percent, and that therefore it’s unfair, unjust, etc., etc.

Let’s remember just how successful AOC and Bernie have been in running their own businesses. For example, take AOC (Alexandria Ocasio-Cortez), the House freshman (woman) from the Bronx. Upon graduation from college in 2011 she took jobs as a bartender and waitress to help her mother (who was working as a house cleaner and a bus driver) pay the bills.

She started a business – Brook Avenue Express (BAP) – which published children’s books, but the business failed. New York State closed it down when it failed to file a tax return or pay its corporate taxes. As of March 2019, BAP still owes the state $1,870.36.

AOC now receives $174,000 a year as a member of the House of Representatives, plus benefits. Who’s to say that she’s worth that?

Or take Bernie Sanders. Politico took the time and trouble to explore his business background and then reported on what they found in 2015: He lived hand-to-mouth, stealing electricity from his landlord when he couldn’t pay his electric bill. From Politico:

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How is the Fed Going to Explain Its Giant Miss?

This article was published by The McAlvany Intelligence Advisor on Friday, March 15, 2019:  

The Atlanta Federal Reserve bank is likely to cover its “miss” with this explanation of its GDPNow model:

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.

In other words, if we’re wrong don’t blame us. Blame the math behind the model.

They’re going to need this to cover for their miss:

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Jumps in Durable-goods Orders & Business Investment Confound Forecasters Again

This article appeared online at TheNewAmerican.com on Thursday, March 14, 2019: 

Two measures of the U.S. economy were reported on Wednesday, both of which exceeded forecasters’ expectations. Combined with other measures, the economy is likely to embarrass predictions by the Federal Reserve that it has almost slowed to a stop.

The Atlanta Federal Reserve Bank’s highly-touted GDPNow indicator just moved its first-quarter estimate of the economy’s gross domestic production from 0.1 percent to 0.4 percent. By contrast, the durable-goods and business-investment reports from the Commerce Department for February jumped 0.4 percent and 0.8 percent, respectively, compared to January. Assuming those indicators remain unchanged for the next 11 months, sales of durable goods for the year would increase by nearly five percent, while business investment for the year would increase by almost 10 percent.

Those reports don’t exist in a vacuum.

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President Trump Is the Master Puppeteer with His Budget Proposal

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 13, 2019: 

The slapstick comedy the Punch and Judy show is loved by British audiences, many of whom pay the puppeteer to bring the show into their homes for parties and celebrations. Mr. Punch is abused by his wife Judy during brief sketches, with the audience cheering her on or warning Mr. Punch of what is coming.

On Monday, Mr. Trump was the master puppeteer, bringing his Punch and Judy show to millions in the guise of a serious discussion over government spending. He called it “A Budget for a Better America – Promises Kept. Taxpayers First.”

If his preliminary budget proposal was designed to bait Democrats, it worked.

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Trump’s Preliminary Budget Is Aspirational Only

This article appeared online at TheNewAmerican.com on Tuesday, March 12, 2019: 

In his preliminary budget proposal for Congress released on Monday, President Trump touted his accomplishments during his first two years in office — five million new jobs, five million off food stamps, lowest unemployment in 50 years, etc. — and then expressed, with breathtaking hubris, his plan: “[It] provides a clear roadmap for the Congress to bring Federal spending and debt under control. We must protect future generations from Washington’s habitual deficit spending.”

This was addressed to precisely those habitual spenders who are increasingly ignoring not only budgetary constraints but practical real-world concerns about massive deficits and a growing national debt.

Russell Vought, the acting director of the Office of Management and Budget (OMB), touted the plan as

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Nationwide Power Outages Sending Venezuela Back to the Dark Ages

This article appeared online at TheNewAmerican.com on Monday, March 11, 2019: 

Most of Venezuela is without power, and what little is available is unreliable and intermittent. It started last Thursday with the failure of the San Geronimo B power station that transmits electric power from the country’s enormous Guri hydroelectric power plant. Guri supplies 80 percent of the country’s power, while a smaller substation, used for backup, has been able to provide only a small percentage of what was lost on Thursday.

The country’s dictator, Marxist Nicolás Maduro, has blamed the Trump administration for the outage, calling it sabotage, the result of an “imperialist electromagnetic attack.” The New York Times reported the real cause: An uncontrolled grass fire beneath the power station burned a major trunk line, which caused one of its 10 turbines to fail, and when workers tried to restart it, others failed. After four failed attempts, workers were told to take Monday off, leaving Venezuela in the dark for the foreseeable future.

A supervisor in charge of the facility was told by his managers that the plant’s critical infrastructure was heavily damaged following an explosion at a nearby secondary power station during the fourth attempt to restart the turbines. Said Luis Aguilar, a Chicago-based expert on the Venezuelan power industry, “Every time they attempt to restart, they fail, and the disruption breaks something else in the system, destabilizing the grid yet further.”

The Times explained the breakdown in layman’s terms: “Restarting the turbines requires skilled operators who can synchronize the speed of rotation on as many as nine of Guri’s operational turbines.”

The Times explained further that the real problem is socialism that has destroyed the normal operations of a healthy economy: “Experts said the most experienced operators had long left the company because of meager wages and an atmosphere of paranoia fed by Mr. Maduro’s ever-present secret police.”

This is what socialism looks like. In Venezuela,

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U.S. Economy Adds New Jobs for 101 Straight Months

This article appeared online at TheNewAmerican.com on Friday, March 8, 2019: 

The latest employment report from the Department of Labor’s Bureau of Labor Statistics (BLS) on Friday provided more evidence of the U.S. economy’s remarkable growth and continued vitality. The gain in new jobs (20,000 from its business establishment survey and 300,000 from its household survey) in the month of February was the 101st month in a row that the economy added new jobs.

Unfortunately most commentators focused on the establishment numbers — 20,000 new jobs — while ignoring the 300,000 new jobs revealed by its household survey. They also ignored

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Chinese Business Owners Worried That Their Country Will Become Venezuela

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 6, 2019:  

For years China has been bailing out Venezuela’s failed socialist experiment. At last count, Venezuela is into China for more than $70 billion. What an irony it would be if the roles were reversed!

With Maduro’s regime on the ropes, and a new president taking the reins upon his departure, Venezuela’s vast proven crude oil reserves could easily put the country back where it was just a few years ago: one of the most prosperous in South America.

The process of China becoming Venezuela is well under way, to the point where wealthy Chinese entrepreneurs are looking for a way out. That would include Chen Tianyong, a Chinese real estate developer in Shanghai, who has already left.

He explained his reasons in a 28-page article on the internet that he titled “Why I Left China – an Entrepreneur’s Farewell Admonition.” He wrote:

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China’s Super Rich Exiting as Economy Fades

This article appeared online at TheNewAmerican.com on Tuesday, March 5, 2019:

A popular online meme perfectly expresses where China’s economy is headed: “The year 2019 may be the worst year in this decade, but it will be the best year in the next decade.”

China’s economy is decelerating so rapidly that the super-rich are getting out while the getting is good. One of them is Chen Tianyong, a real estate developer in Shanghai, who posted this on the Internet: “China’s economy is like a giant ship heading to the precipice. Without fundamental changes, it’s inevitable that the ship will be wrecked and the passengers will die. My friends, if you can leave, please make arrangements as early as possible.”

As the New York Times noted,

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Commerce Department: Economy Grew 2.9 Percent Last Year, Likely to Accelerate in 2019

This article appeared online at TheNewAmerican.com on Thursday, February 28, 2019: 

According to the Commerce Department, the U.S. economy grew by 2.9 percent last year. The economy grew at a 2.6-percent annual rate in the fourth quarter of 2018, beating forecasters’ expectations of 2.2 percent. After all, they looked at 4.2 percent growth in the second quarter, 3.4 percent growth in the third quarter, and so they just assumed that the economy would continue to trend downwards in the fourth. Some even began to use the “r” word (recession), predicting such an event for late 2019 or early 2020.

Instead, economic growth in the fourth quarter clocked in at 3.1 percent, ahead of the same period a year ago.

Non-professional observers see a much different picture than the professional naysayers. Brian Coulton of Fitch Ratings said:

Consumer spending continued to grow solidly and, most encouragingly, business investment growth recovered sharply after a dip in the third quarter.


Despite big external headwinds and financial market volatility in the fourth quarter, U.S. firms are not retrenching sharply on capex [capital expenditures]. Labor market strength and ongoing fiscal stimulus should see domestic demand expanding [into 2019].

Avery Shenfeld of CIBC Economics reprised Coulton:

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Yellen’s Chance to Respond to Trump’s Criticism of the Fed

This article was published by The McAlvany Intelligence Advisor on Wednesday, February 27, 2019: 

Following its fifth interest rate hike last June, President Trump exploded, complaining that the Federal Reserve was deliberately interfering not only with his economic recovery but with his trade strategies in reducing tariffs. On Twitter he almost yelled: “China, the European Union, and others have been manipulating their currencies and interest rates lower, while the U.S. [the Federal Reserve] is raising rates … the dollar gets stronger and stronger with each passing day – taking away our big competitive advantage. As usual, not a level playing field.”

His newly minted Fed Chair, Jerome Powell, said only that “We don’t take political considerations into account” when making policy.

On Monday, former Fed chairwoman Janet Yellen (whom Powell replaced) was given the opportunity to respond more completely to Trump’s criticisms. Rather than answering them directly, she took the “ad hominem” approach. In a radio interview on Marketplace with host Kai Ryssdal, she said, “President Trump’s comments about Chair Powell and about the Fed do concern me, because if that [criticism] becomes concerted, I think it … could undermine confidence in the Fed. I think that would be a bad thing.”

Ryssdal asked: “Do you think the president has a grasp of macroeconomic policy?”

Yellen: “No, I do not.”

Ryssdal: “Tell me more.”


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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