Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Gary North

Financial Reform: Expanding Hubris, Limiting Freedom

Chris Dodd

Image via Wikipedia

When the House passed the 2,319-page Dodd-Frank financial reform bill by a vote of 237-192, all it did was confirm for many the extraordinary hubris of legislators believing they could in fact “fix” the problems they themselves created which resulted in the Great Recession of 2008.

John B. Taylor,  professor of economics at Stanford University says, “The main problem with the bill is that is based on a misdiagnosis of the causes of the financial crisis…the presumption that the government did not [already] have enough power to avoid the crisis.”

Keep Reading…

New York’s Plan: Kick the Can

An empty tin can.

Image via Wikipedia

New York Governor David Paterson said in a radio interview on June 10 that his state might have to issue IOUs to pay its bills, or else face “anarchy in the streets.” The state faces a $9.2 billion deficit, and the legislature is two months late in voting on the budget.  An actual shutdown of state services has been avoided, temporarily, by enacting temporary emergency spending bills.  Even if the government shuts down, there is serious question about whether police, firefighters, prison guards and emergency and healthcare workers could continue to work without pay. “You could have anarchy literally in the streets if the government shuts down,” Paterson said.

Keep Reading…

Economic Forecast: Summer of Discontent

Frowny

Image via Wikipedia

After six straight months of gains in consumer spending the April numbers showed no change from March, according to the Commerce Department. This was a surprise to some who have been tracking such things as the University of Michigan’s index of consumer confidence (higher), consumers’ expectations on the economy over the next 12 months (higher), moderate real job creation (higher), savings rate (higher) and manufacturing activity (higher).

Others remained sanguine, holding that “We do not expect household spending to flatline in the coming months,” according to Michelle Girard, senior economist at RBS in Stamford, Connecticut.

Consumers themselves, however, are not a happy lot. According to Rasmussen Reports, only 35 percent of Americans are planning to take a summer vacation this year, and those who are, aren’t planning on spending as much as they have in the past.

Keep Reading…

Biden Predicts Job Growth—but Where’s the Evidence?

Vice President Joe Biden takes the oath of off...

Image via Wikipedia

Vice President Joe Biden predicted job growth of 250,000 to 500,000 jobs a month in the next two months, according to CNBC on Monday. Biden was speaking at a political fundraiser in Pittsburgh, where he said, “We caught a lot of bad breaks on the way down. We’re going to catch a few good breaks because of good planning on the way up…All in all, we’re going to be creating somewhere between 100,000 and 200,000 jobs next month.”  Even though some have cautioned Biden about his excessive and premature enthusiasm, Biden continued:  “I’m here to tell you some time in the next couple of months we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.”

However, the evidence and logic backing up Biden’s prediction are clearly lacking.

Keep Reading…

Fed Ends MBS Intervention

The Federal Reserve: The Biggest Scam In History

Image by CityGypsy11 via Flickr

The Federal Reserve ended its largest intervention in the housing market on April 1, ceasing its purchase of Mortgage-Backed Securities (MBS) that began in September of 2008 in order to keep the housing market from imploding.

According to the New York Times, the program succeeded in keeping “mortgage interest rates at near-record lows and slowing the nationwide decline in home prices.” Professor Susan Wachter at the Wharton School explained: “We were in a deflationary spiral, causing mortgages to go underwater, more foreclosures and a further decline in housing prices. The potential maelstrom of destruction was out there, bringing down not only the housing market but the overall economy. That’s what [this program] stopped.” She added that this Fed program was “the single most important move to stabilize the economy and to prevent a debacle.”

Wachter’s statements reveal many errors in her thinking, but especially her belief in interventionism as a cure for the inevitable effects of previous inflationary policies.

Keep Reading…

Housing: Washington Only Delaying Inevitable

Foreclosure Sign, Mortgage Crisis

Image via Wikipedia

Friday’s announcement of more intervention in the housing mortgage market will result in a deeper, longer, and more painful delay in the inevitable decline in housing prices that are necessary to clear the market. According to the Obama administration, the “broad new initiatives” will help troubled homeowners to refinance their existing mortgages with more favorable affordable ones provided directly by the government. Part of the new program is “meant to temporarily reduce the payments of [those] borrowers who are unemployed [but are] seeking a job.” In addition, the enhancements include inducements to “encourage lenders to write down the value of loans [already] held by borrowers in modification programs.”

In simple English, HAMP (the Home Affordable Modification Program), announced with great fanfare and high expectations early on in the Obama administration, isn’t working, and so more of the same is required.

Keep Reading…

ObamaCare: The Final Nail, or the Last Straw?

Barack Obama addressing a joint session of Con...

Image via Wikipedia

In responding to House Speaker Nancy Pelosi’s (D-Calif.) incredulous “Are you serious?” about the constitutionality of Obamacare, many have written persuasively that the healthcare law is in fact unconstitutional.

Michelle Morin in her blog reminded her readers that Article 1, Section 8 limits the federal government to specific and enumerated powers, with all other unenumerated powers being left to the states or to the people. Michael Boldin of the Tenth Amendment Center analyzed the purpose of the Constitution and the Bill of Rights as limitations and restrictions on the power of the federal government. He concludes his analysis with these words:

Keep Reading…

Social Security’s Nest Egg is Officially Cracked

Broken Egg

Image by Samuel M. Livingston via Flickr

In a misleading article by Associated Press that IOUs “stashed away” in an investment account in Parkersburg, West Virginia, were going to have to be sold to meet Social Security shortfalls, all the attention was on the location of the account instead of what was in it.

Analyzed here and elsewhere, Social Security is now suffering in the open as a result of unconstitutional and unsound financial assumptions starting in 1935. First of all, the gigantic welfare program, the largest government transfer program in the world, was sold to the American people during the Great Depression as an annuity guaranteed by the federal government. In fact, it still retains the early efforts to link Social Security to the insurance industry (which, at that time, still retained a high degree of public trust) by calling it the Federal Insurance Contributions Act, or FICA.

Keep Reading…

Bernanke’s Kudos, Criticisms Miss the Point

Description unavailable

Image by @mjb via Flickr

A preliminary vote today for Ben Bernanke’s reappointment to a second four-year term as chairman of the Federal Reserve is expected to clear the way for a final favorable vote by the Senate.

Bernanke’s first term record was subjected to criticism and praise during confirmation hearings in December, and  he was selected as Time magazine’s Person of the YearTime magazine’s Michael Grunwald was kind to a fault, calling Bernanke “our mild-mannered economic overlord” (a reference, no doubt to Superman’s mild-mannered Clark Kent), and “the most powerful nerd on the planet.”  In that lengthy tribute, Grunwald summarized the Fed’s role:

Keep Reading…

U.S. Debt Level Unsustainable, Report Says

Graffiti: Debt

Image by Franco Folini via Flickr

“The debt level of the United States is unsustainable, something has to give,” said the co-author of a new joint report released last week by the National Research Council and the National Academy of Public Administration. The committee that prepared the 268-page study, entitled Choosing the Nation’s Fiscal Future, included three former heads of the Congressional Budget Office.

A WorldNetDaily article by Jerome Corsi, entitled “Forecast: Debt to Dwarf GDP,” provided key quotes from the study as well as from Rudolph Penner, one of the former CBO heads. “The fundamental problem is that we have these three very large programs—Medicare, Medicaid and Social Security— that…are growing faster than tax revenues and faster than the economy,” Penner told WorldNetDaily. This is creating an “unsustainable federal budget deficit [that continues to grow] ever onward and upward.”

Keep Reading…

The Fed: Forever Blowing Bubbles

Girl blowing bubbles

Image via Wikipedia

An article in the New York Times asked that since the Federal Reserve “failed to recognize the last bubble…why should Congress, or anyone else, have faith that future Fed officials will recognize the next [one]?”

The roots of the present Great Recession stretch back to the bursting of the last bubble—the tech bubble—in the late 1990s. As the stock market declined sharply, the Fed under then-chairman Alan Greenspan lowered interest rates in an attempt to keep the economy from collapsing. The Times succinctly noted in its overview of the credit crisis that “lower interest rates make mortgage payments cheaper, and demand for homes began to rise, sending prices up. In addition, millions of homeowners took advantage of the rate drop to refinance their existing mortgages. As the industry ramped up, the quality of the mortgages went down.”

Keep Reading…

Is Social Security a Ponzi Scheme?

Mug shot of Charles Ponzi (March 3, 1882 – Jan...

More than $16 billion of investors’ money evaporated in Ponzi schemes in 2009, according to the Associated Press. Although the names Bernie Madoff and Allen Stanford were in the headlines in 2009, many other Ponzi schemes were uncovered as the economy declined, making continued payouts to investors impossible.

As Warren Buffet said, “Only when the tide goes out do you discover who’s been swimming naked.”

Keep Reading…

Economic Reality vs. Cheerleaders

Timothy Franz Geithner, President of the Feder...

When MSNBC headlined the report that existing home sales surged by 7.4 percent in November (according to the National Association of Realtors), it suggested that such an improvement boosted “recovery hopes.” Others jumped on the recovery bandwagon, including Treasury Secretary Timothy Geithner, and former Vice Chairman of the Federal Reserve Board Alan Blinder.

According to Geithner, it’s now reasonable to expect “positive job growth” by spring and correct to assert that people should have confidence in an improving economy.  “I think most people would say the economy actually is strengthening now,” he added.

Keep Reading…

Double Dip Recession Coming?

Double Dip Package

If Will Rogers didn’t say “Those who don’t read the papers are uninformed; those who do are misinformed,” he probably should have.

Witness this headline from The Wall Street Journal: “Jobs, Spending Bode Well for Growth.”

Compared to this from Bloomberg: “Orders for Durable Goods in U. S. Unexpectedly Fall.”

Or this from APNews: “Jobless claims off, spending up in sign of rebound.”

Finally, to confound the confusion, see this from the Denver Post: “Good news raises hopes that recovery won’t fizzle.”

How does one make any sense of it all? Dr. Kenneth McFarland (named America’s Number One Public Speaker by the U. S. Chamber of Commerce in 1965) once quipped that he had read so much about the harmful effects of tobacco and alcohol that he just decided to give up reading!

There is another option: dig deeper.

Keep Reading…

Inflation? What inflation?

Huff and puff and...

Image by gorbould via Flickr

We dont have to hire historians to see where deficit spending will take us. We have only to look around now. Since the end of World War II, some of history’s greatest national disasters have taken place right here in the Americas. North Americans used to laugh or shake their heads at the economies of the south that seemed always on the brink of collapse.  Banana republics, we derisively called them. We’re not laughing now.

Here are some examples he provides of inflation lag time:

Keep Reading…

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