Tag Archives: Economy

What They Didn’t Tell You About The Jobs Report

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On Friday, The Daily Caller posted an article about the September jobs report. The article took a look a some of the trends in American employment in recent years.

The article reports:

More than 800,000 fewer native-born Americans are employed than last year as job gains among Americans continue to lag behind those of foreign-born workers, according to data from the Bureau of Labor Statistics (BLS).

The number of foreign-born workers employed increased by approximately 1.2 million year-over-year in September, while 825,000 fewer native workers were employed, BLS data shows. The large annual difference is in spite of the roughly 920,000 upward employment fluctuation for native-born workers in September compared to August, after a 1,325,000 drop from July to August.

The article also notes:

Real wages have decreased by 1.3% in real terms between the first quarter of 2021 and the second quarter of 2024 as Biden-era inflation continues to dog American wallets. Prices have risen more than 20% since Biden took office in January 2021, with the rate of inflation rising from 1.4% at the conclusion of former President Donald Trump’s administration up to roughly 9% in June 2022.

To combat skyrocketing inflation, the Federal Reserve hiked rates to a 23-year high range of 5.25% and 5.50% in July 2023 before proceeding to hold rates steady until issuing a 0.5% cut in September. The combination of elevated rates and high inflation helped push many Americans into bankruptcy, with delinquent credit card balances reaching their highest level since at least 2012 in the first quarter of 2024.

It should also be noted that the majority of growth in the number of jobs created is in government jobs–not in the private sector. When the government is growing, the private sector is shrinking. That is not good for the future American economy.

The Cost Of Bidenomics

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On Monday, The Daily Signal posted an article that provides some insight into the actual state of the American economy.

The article reports:

Small-business bankruptcies are up 61% on the year. It is a cackle-nomics miracle.

The data comes from bankruptcy analyst Epiq, which reports that commercial filings for Chapter 11 bankruptcies soared to 4,553 so far this year.

Meanwhile, total corporate bankruptcies are also rising, hitting the highest since the COVID-19 pandemic, according to S&P Global Market Intelligence, which is hitting especially hard in retail, with a parade of chains going under this year, including Red Lobster and its beloved endless shrimp. Never forget what they have taken from us.

What’s causing it? Simple: Inflation, high interest costs, and COVID-19 loans.

Inflation, of course, drives up business costs to the point they have to hike prices, which chases consumers out.

High interest rates are well-known to strangle business. In fact, that’s why the Fed does them, to strangle household spending enough that federal spending has inflation all to itself.

And then the COVID-19 loans: During the pandemic, the Small Business Administration pumped out 4 million loans—worth about $380 billion—in so-called economic-injury disaster loans. Note these were separate from the Paycheck Protection Program loans, where $800 billion were handed out to bribe voters into lockdowns.

While many of the PPP loans were fraudulent—actually, most of them, according to NPR—96% of those loans were forgiven.

Incidentally, one gang member recently killed in a Baltimore shootout had, it turned out, an outstanding PPP loan for a nanotech company. Not a joke.

Thing is, those $380 billion in injury loans actually do have to be paid back.

And it turns out a lot of companies can’t. Eighty percent are still outstanding—$300 billion—so, we’re probably just seeing the tip of the injury-loan bankruptcies.

As Tim Walz stated at a recent Pennsylvania rally, “We can’t afford four more years of this!”

Please follow the link above for further details.

Political Or Good Policy?

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At a time when Americans are still dealing with inflation, the Federal Reserve has cut interest rates by half a percentage point.

On Wednesday, Breitbart noted:

The Federal Reserve moved to cut interest rates by a half percentage point—the first reduction since the central bank cut rates to near zero when the pandemic struck in 2020—in a vote of confidence that inflation will continue to moderate and an attempt to fend off a further increase in unemployment.

“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated,” the Fed said in a statement.

…Fed officials have also said that they now view the risks to their mandate to maintain full employment to be greater than the risks of a resurgence of inflation. Earlier this summer, the unemployment rate tripped the Sahm Rule threshold by rising more than a half a percentage point above its recent low, typically a signal that the economy is already in a recession. Claudia Sahm, whose research is behind the rule, has said she does not think the economy is currently in a recession but worries that restrictive monetary policy could unnecessarily increase unemployment even more.

The article concludes:

The longer-run projection for the fed funds rate rose to 2.9 percent, four-tenths of a point above the 2.5 percent the Fed had consistently projected from 2019 through the end of last year. In the June projections, officials had indicated an expectation for a longer run rate of 2.8 percent.

On the other hand, unemployment is now seen as going higher. When the Fed last released projections in June, officials forecast a four percent rate of unemployment at year-end. The new projections have unemployment rising to 4.4 percent. Next year, unemployment is seen as staying at 4.4 percent, up from the earlier estimate of 4.2 percent. Similarly, the median projection for economic growth ticked down to two percent from 2.1 percent this year.

Eleven officials voted for the rate cut. One Fed governor, Michelle Bowman, dissented, preferring a quarter-point cut.

I am not an economist, so I don’t have a lot to say about this. However, I do think inflation has continued to be a problem that cutting interest rates might exacerbate. I am hoping that the Federal Reserve has made the right decision for the right reasons and that this is not a political move.

What It Takes To Be A Never-Trumper

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On September 19th, Don Surber at Substack posted an article explaining what you have to believe to be a never-Trumper. He totally captures the spirit of the movement.

The article explains:

If after a full term of a Trump presidency and nearly four years of this one, you are a Never Trumper, then this is what you really believe.

You believe abortion not only is a constitutional right but one superior to all other rights. The federal government send protesters at abortion clinics to prison for years. Contrast and compare with the catch-and-release of illegal aliens.

You believe liberals should be running the judiciary. President Trump’s appointment — and a Republican Senate’s confirmation — of three justices ended Roe, overturned Chevron and reined in the EPA. Without Trump, Merrick Garland would be a lifetime justice abusing his power for political purposes.

You believe censorship is constitutional because we must protect butt-hurt feelings and stop people from receiving disinformation — also known as the truth.

You believe the government should be allowed to pay Twitter and others to block a sitting president’s account to prevent him from communicating directly to the people.

You believe that Elon Musk buying Twitter is bad because no one man should control the flow of information; the deep state should.

You believe NATO is unworthy of consultation. The surrender of Afghanistan not only made meaningless the deaths and disabling of thousands of American soldiers, but desecrated the lives of thousands of U.S. allies.

You believe we should protect the borders of Ukraine but not the borders of our own country. Maybe America should do a GoFundMe to pay off Hunter and get a few hundred billions of dollars to build walls north and south, and kick the invaders out.

You believe Israel should stop killing terrorists but Ukraine should fight Russia until the last drop of blood.

You believe that a small town in Ohio should be forced to accept 15,000 immigrants from Haiti (a nation that eradicated its white population in 1804) but Martha’s Vineyard should not take in any of the 52 illegal aliens sent there.

You believe that assassination is justifiable because Trump is just an object that is a danger to the world just as Hillary said. You wanted Hillary to win in 2016. Her reaction to Assassination Attempt No. 2 was, “The late great journalist Harry Evans one time said that journalists should try to achieve objectivity. The object in this case is Donald Trump. His demagoguery. His danger to our country and the world.”

You believe that borrowing money and paying it back with interest constitutes fraud.

You also believe that taking out a loan to pay for college (including travel to Spain and elsewhere) and not paying it back constitutes victimhood and deserves to have the loan forgiven.

You believe we should ban gas stoves, as well as gas-powered cars, as well as plastic straws, as well as pipelines, as well as drilling for oil not because of the debunked climate change myth but because the oil industry is too capitalistic for your tastes.

You believe the only way to keep the economy afloat is by fudging unemployment numbers and flooding the nation with money that comes from thin air.

You believe that men should enter the girls’ bathroom, shower with girls in the locker room, and beat the crap out of a woman to win an Olympic gold medal.

You believe that boys should be castrated and girls have their breasts removed in the name of transgenderism.

You believe that people should be fired or jailed (or both) for calling a man sir or calling a woman ma’am.

You believe that rioters are peaceful protesters while peaceful protesters are insurrectionists unworthy of their constitutional rights to a fair trial.

You believe in everything that Hillary, Biden and Kamala believe in because you worked to elect them over Trump.

Above all, the one thing that you do not believe is that America should be great again.

Wow! Please follow the link to the article for further details.

The New Jobs Report

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On Friday, The Epoch Times posted an article about the latest jobs report. The economy is cooling down, which will probably provide the Federal Reserve with an excuse to lower interest rates in the hope of providing a Democrat election victory.

The article reports:

The U.S. economy created fewer jobs than the market projected in August as the overheated labor market of the past few years continues to show signs of cooling off.

Last month, payrolls increased by 142,000, falling short of the consensus estimate of 160,000, according to the Bureau of Labor Statistics (BLS).

The unemployment rate eased to 4.2 percent, down from 4.3 percent in July. This was in line with economists’ expectations.

Average hourly wages surged at a higher-than-expected pace of 0.7 percent, up from a 0.1 percent drop in July—this was revised from the initial report of 0.2 percent growth. Average hourly earnings also climbed to a better-than-expected year-over-year rate of 3.8 percent, up from 3.6 percent.

The labor force participation rate was unchanged at 62.7 percent. Average weekly hours ticked up to 34.3 from 34.2.

Much of the job creation was concentrated in construction (34,000), health care (31,000), government (24,000), and social assistance (13,000).

There were some other interesting numbers in the report:

So far this year, the total number of downward job revisions equals 372,000.

The number of people working two or more jobs increased by 65,000 to 8.538 million.

In August, full-time jobs plummeted by more than 400,000, and part-time employment increased by 527,000.

Inflation is hurting all Americans, and until the government stops its runaway spending, inflation will continue to be a problem.

 

 

This Won’t Be A Surprise To Most Americans

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On Wednesday, The Daily Caller posted an article about the Biden administrations’ reporting of the jobs reporting during the past year or so.

The article reports:

The federal government overestimated the number of jobs in the U.S. economy by 818,000 between April 2023 and March 2024, according to data from the Bureau of Labor Statistics released Wednesday, stoking fears of a slowdown in the U.S. economy.

Economists at Goldman Sachs (GS) and Wells Fargo anticipated the government had overestimated job growth by at least 600,000 in that span, while economists at JPMorgan Chase had predicted a lesser decline of 360,000, according to Bloomberg. The downward revision follows a trend of the BLS overestimating the number of nonfarm payroll jobs added, with the cumulative number of new jobs reported in 2023 roughly 1.3 million less than previously thought as of February 2024

The article concludes:

Wednesday’s downward revision has also heightened concern that the Federal Reserve has waited too long to begin cutting interest rates, Bloomberg reported. If the FOMC hesitates to cut rates for too long, it could result in recession instead of a soft landing — an economic slowdown in which inflation is brought down without causing recession.

The Federal Open Market Committee (FOMC) decided to hold its target federal funds rate between 5.25% and 5.50% in July, marking the eighth meeting in a row the FOMC has decided to keep rates at their current 23-year high.

“Wall Street is increasingly waking up to the fact that the economy post-covid has never been as good as the government bean counters claimed, and a recession may have already begun,” Antoni told the DCNF. “These revisions are a violent shove in the direction of reality.”

The economic rebound has been slowed by government policies that are not totally related to interest rates. Government regulation and tax policy play a big role in America\s economy. If a Democrat is elected President in November, you will see tax rates skyrocket and the economy stumble.

If The Economy Is Strong, Why Are So Many Businesses Going Bankrupt?

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On Thursday, The Conservative Playlist posted an article about the state of the American economy.

The article reports:

(The Economic Collapse Blog)—Businesses are declaring bankruptcy at a much faster rate than they did last year.  Thousands upon thousands of once thriving businesses are failing, but this just must be another sign that the economy is “fine”.  No matter how bad the numbers get, we are assured that the people running things have everything under control and that the outlook for the future is wonderful.  Of course I understand that this is an election year and virtually everyone is trying to put their own unique spin on things.  But there is no possible way that you can make numbers like these look good…

Personal and business bankruptcy filings rose 16.2 percent in the twelve-month period ending June 30, 2024, compared with the previous year.

According to statistics released by the Administrative Office of the U.S. Courts, annual bankruptcy filings totaled 486,613 in the year ending June 2024, compared with 418,724 cases in the previous year.

Business filings rose 40.3 percent, from 15,724 to 22,060 in the year ending June 30, 2024. Non-business bankruptcy filings rose 15.3 percent to 464,553, compared with 403,000 in the previous year.

Business bankruptcy filings were up by more than 40 percent in just one year. But don’t worry. Everything is “fine”.

The article concludes:

Employers all over the country are conducting mass layoffs, but the government is telling us that unemployment is low.

Thousands upon thousands of businesses are declaring bankruptcy, but the government is telling us that the economy is booming.

You can believe them if you want.

But they aren’t going to be able to hide the truth for long.

Decades of very bad decisions are starting to catch up with us in a major way, and unprecedented chaos is ahead.

You can believe what you see or what you are being told. It’s that simple.

Remove The Income Tax On Social Security? Horrors!

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President Trump has suggested that he would like to remove the income tax on Social Security income. Let’s look at the history of taxing Social Security income.

The first time Social Security benefits were subject to federal income taxes was after the passage of the 1983 Amendments to the Social Security Act, starting in 1984. That law made 50 percent of Social Security benefits taxable for recipients with incomes above $25,000 for an individual and $32,000 for married couples filing jointly. To provide some perspective, $30,000 in 1984 would be approximately $91,000 today. The people supporting the new tax claimed that it would only tax the rich (a claim that is always made when taxes are increased–a claim that was made in 1913 when the personal income tax was introduced).

In 1993, more taxes were placed on Social Security income. A second tier of taxation was introduced under the Clinton administration. Using the same formula as above — i.e., MAGI plus one-half of benefits — single filers and couples filing jointly with more than $34,000 and $44,000, respectively, will be subjected to this second tier. This new tier allows up to 85% of Social Security benefits to be taxed at the federal ordinary income tax rate. The $44,000 in 1993 would be equal to about $96,000 in today’s dollars. These rates have never been adjusted for inflation, so the tax originally intended for ‘the rich’ impacts the middle class. Unfortunately, that is the way it always works.

Now, let’s look at how taxing Social Security has impacted the federal deficit.

In the first year Social Security was taxed, the federal deficit actually went down. After that, Congress simply concluded that they had more money to spend and spent it. When the second taxation of Social Security happened, it coincided with Newt Gingrich’s Contract With America–a tax plan that actually did lower the deficit for a number of years.

Taxing or not taxing Social Security is really NOT the issue. Until the government learns to spend less, the deficits will grow. The problem with asking the government to spend less is that in Washington, control of money equals power. The more money you control, the more powerful you are. It’s the spending–not the income. The only difference not taxing Social Security will make is to give senior citizens more spending power, which might in the long run help the economy.

The Problem Really Isn’t President Biden

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On Friday, The Federalist posted an article reminding us that the inflation, lack of border security, and rising crime rates are not solely the responsibility of President Biden. President Biden represents (and his policies represent) the platform of a particular political party.

The article notes:

CNN spent the hour after Thursday’s presidential debate in an emotional tailspin. But at the heart of their desperate “analysis” was speculation about whether the fumbling Biden should step down to let another Democrat jump in to carry the torch of “DEMOCRACY.”

The jig is up. Here’s what disillusioned Democrats and independents and moderates need to know. What all the blue-state refugees who now live in Texas and Florida instead of California and New York City need to admit. What all the fed-up middle-class families and forgotten nonwhite voters in the suburbs need to remember: These aren’t just Joe Biden policies that are disastrous. They’re Democrat policies.

Abortion. Economy. Crime. Immigration. Lawfare. Foreign policy. Health care. It doesn’t matter what pet issue has voters down in the dumps. Democrats are in lockstep on the losing side. And anywhere they aren’t in lockstep — like on whether Israel is a victim of terrorism or a group of oppressive “colonizers” — they tow the radical line.

The article concludes:

And our two-tiered system of justice — led by the deep state, rogue state prosecutors, and a leftist executive — wouldn’t stop just because Biden isn’t on the ticket. The same people who raided the homes of pro-lifers while seeking immunity for the Biden family; prosecuted one man for “classified documents” while letting other worse offenders go free; and made up novel legal theories and new statutes of limitations to gag, fine, and ultimately imprison their chief political opponent are beholden to a party, not just the sitting president.

So when the Democrat armchair class suddenly gets weepy about Biden’s decline, saying Democrats “‘HAVE A PROBLEM’ AFTER BIDEN’S DEBATE PERFORMANCE,” don’t buy the spin that a shiny new Democrat could bail America out.

It isn’t just Biden that’s ruined America. It’s his party.

It’s very easy to focus on personalities instead of party platforms. I suggest that voters read each party’s platform before they vote. Which platform best represents your views? The answer to that question is as important as the individual candidate.

What A Difference An Election Made

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On Monday, Breitbart posted the following headline:

Argentina Logs First Week with No Inflation in Food Prices in 30 Years

This is one of many positive results of the election of President Javier Milei, who began his term as President in December 2023.

The article reports:

A study published on Sunday by Econométrica, a private Argentine consulting firm, first reported the no-inflation week. In its study, Econométrica analyzed 8,000 prices in local online supermarkets and found no change when compared to the preceding week — something that has not happened in Argentina in three decades. In addition to the lack of variation in prices in one week, the study found that the prices of food and drinks only experienced an increase of 0.1 percent in the past 15 days.

…Upon taking office in December, Milei enacted a series of “shock therapy” economic policies to restore Argentina’s economy after nearly two decades of socialist rule left it in a precarious state and on the verge of a hyperinflation spiral.

Since then, monthly inflation rates in Argentina have experienced a dramatic and continued downward trend, going from 25.5 percent in December to 4.2 percent in May, the lowest rate experienced in the country in over two years. In April, Argentina recorded a surplus of its gross domestic product (GDP) during the first quarter of the year — something that the South American nation had not seen since 2008.

Milei is in the Czech Republic on the final stop of a four-day tour of Europe that began on Friday with a visit to Spain, followed by a two-day stop in Germany over the weekend that included an encounter with German Chancellor Olaf Scholz. Milei is slated to meet with Czech Prime Minister Petr Fiala on Monday morning.

The article concludes:

Milei also confirmed that his administration would not promote a devaluation of the Argentine peso, echoing statements by Economy Minister Luis Caputo last week where he ruled out such plans. Caputo instead said he would continue implementing the current plan, which focuses on maintaining a good relationship with the International Monetary Fund (IMF) and upholding a currency exchange system that allows companies to sell 20 percent of their income in U.S. dollars in the financial market and settle the remaining 80 percent at the official exchange rate.

“There are professionals who, in order to justify and wash their mistakes, make unfortunate arguments, which speak more about what they want to happen than what really has to happen,” Milei said. “There are sectors that find it convenient to have low dollar salaries and more poor and indigent people, and we believe that the situation works in a different way.”

This could happen in America with the proper election results.

Revising The Numbers

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On Wednesday, The Conservative Treehouse posted an article about the rapidly decreasing job numbers.

The article quotes The Washington Times (behind the paywall):

WASHINGTON DC – […]  Job growth was overestimated by more than 770,000 last year. Put differently, about 1 in 4 jobs that were supposedly added last year never existed. That’s like eliminating all of the jobs gained in three whole months of 2023.

Overly optimistic employment estimates help explain why polling of people’s perceptions of the economy has been so terrible yet the official data from the Biden administration has looked so robust, at least in terms of the number of jobs. Much of the other data has been downright rotten.

With prices rising faster than earnings, the average worker’s weekly paycheck buys 4.4% less today than when President Biden took office. Homeownership affordability has plummeted because the monthly mortgage payment on a median-price home has more than doubled. Three-quarters of Americans now view fast food as a luxury they can’t afford. Gasoline prices are up 46%.

And now, even the job numbers have lost their luster, especially when you consider that millions of those added jobs are from double counting. Whenever someone who is already employed has to get a second — or even a third — job just to help make ends meet, that increases the number of payrolls, without increasing the number of people employed.

The Biden administration is very adept at lying with statistics. They consistently claim that President Biden has simply not been given enough credit for the wonderful economy he has created. I guess the people saying that don’t shop at the grocery store or buy gasoline.

Biting The Hand That Feeds You

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On June 18th, The Gatestone Institute posted an article that illustrates the difference between the Israeli and Palestinian cultures. First of all, the Palestinians are simply another Arab tribe. They have never had a country, and if they want one, it would behoove the Arabs to give them one–they have no claim to Israel. The cultural differences between the Palestinians and the Israelis are significant.

The article reports:

    • Prior to the October 7 massacre, more than 170,000 Palestinians were working in Israel, constituting an important source of income for the Palestinian economy…. The Palestinians from the Gaza Strip who were permitted to work in Israel received many of the same rights as Israeli workers, including health insurance and pension plans.
    • “I will be able to earn about $120 dollars a day [in Israel], while I cannot even earn $250 dollars a month in Gaza. Due to the difficult political and economic conditions, the people of the Gaza Strip suffer greatly from poverty and are unable to build a future for their children like their parents.” — Mohammed Kamal, a 38-year-old father of four from the Gaza Strip, newarab.com, March 24, 2022.
    • It appears that the murderers and rapists from the Gaza Strip saw Israel’s goodwill gestures as an indication of Israel’s weakness. In addition, they apparently saw the controversy in Israel surrounding the Israeli government’s judicial reform plan as a sign that Israel had become extremely weak, especially when anti-government protesters threatened to boycott military reserve service.
    • The October 7 atrocities serve as a reminder that the Israeli-Palestinian conflict is not about improving the living conditions of the Palestinians or strengthening their economy. Instead, the conflict is about the desire of the majority of Palestinians to slaughter Jews and destroy Israel.
    • Pre-and post-October 7 public opinion polls have consistently demonstrated that the majority of Palestinians back Hamas and believe that the atrocities committed on that day were “correct.”
    • Now, Palestinians can blame Hamas not only for dragging them into a disastrous war with Israel, but also for having left tens of thousands of families jobless in the wake of their loss of permits to work in Israel.
    • Instead of brainwashing and indoctrinating their people against Israel and Jews, Palestinian leaders need to be required to focus on creating job opportunities and boosting the Palestinian economy, which the flow of international handouts have relieved them from doing.
    • The Palestinians would also greatly benefit if they would realize that there are actually dire repercussions when they “bite the hand that feeds them.”

The attack of October 7th illustrates the damage that propaganda can cause. The people in Gaza was so indoctrinated with hate for Israel that they did not fully consider the consequences of their actions. There was no consideration of how to support their families once they killed their employers and their families.

There was a post today on Twitter that suggested that all we need to do to bring peace to the Middle East is replace the government of Iran with a western-leaning republic. I think that makes sense.

The Impact Of Bidenomics

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On June 18th, Just the News posted an article about the impact of Bidenomics. Essentially Bidenomics is excessive spending creating inflation and rising federal deficits combined with interest rates rising in an attempt to curb inflation without dealing with the spending.

The article reports:

More companies are declaring bankruptcy and shutting down operations, citing inflation and high costs. Inflation and the economy remains a top issue among all voters, according to a recent The Center Square Voters’ Voice Poll.

Retailers are closing nearly 3,200 stores this year, according to a recent analysis from CoreSight Research. The closures are a 24% increase from 2023.

U.S. drug stores and pharmacy closures led to 8 million square feet of shuttered retail space this year, the research company said. It also notes that retailers are losing inventory and customers due to retail theft. “Retail shrink” is closely connected to “organized retail crime,” it notes.

Out of the 3,200 being closed, the majority are being closed by roughly 30 retailers, with Family Dollar closing the most of over 600, according to the data, CBS News reported.

The article concludes:

One key indicator of economic health is consumer spending, and while it hasn’t yet slowed, warning signs are there because it’s largely being financed by debt, economists have explained. And consumers are also struggling to pay it off, they add. Earlier this year, economist David Rosenberg of Rosenberg Research warned that as total credit card debt reached a new all-time high of $1.13 trillion, credit card and auto loan delinquencies were also up. “As far as consumer credit is concerned, the default cycle isn’t merely looming, it’s arrived,” he wrote in an economic report.

According to a recent The Center Square Voters’ Voice Poll, conducted in conjunction with Noble Predictive Insights, inflation/price increases (45%) and the economy/jobs (24%) are top concerns among voters.

“Inflation is a high-ranking issue among Democrats and Republicans and True Independents,” David Byler of Noble Predictive Insights told The Center Square. “Every political group thinks this matters.”

The rise in retail theft is also a factor in store closings. How much does it cost to put candy behind plastic so that it cannot be stolen? How many extra man hours are needed to help customers access products that are now locked away? These are also things that lead to higher prices and continuing inflation. Curtailing government spending and prosecuting retail theft would be a good first step in lowering prices for consumers.

When Radical Isn’t Radical–It’s Original

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I am not an economist, but I am an observer of the obvious.

In a recent speech, President Trump talked about ending the Income Tax and restructuring the Federal Reserve. Either or both of those things would be good for all Americans and for the American economy.

Before 1913, the United State had neither the Federal Reserve nor the Income Tax. Both measures were passed in 1913. On February 25, 1913, the 16th Amendment (Income Tax) was certified as part of the U.S. Constitution. On December 23, 1913, the Federal Reserve Act created the Federal Reserve.

The men who met at Jekyll Island to create the Federal Reserve represented 25 percent of the wealth of the entire world. They met in secret, and their identities were concealed for many years afterward. Their goal was to keep that 25 percent of wealth in their hands. They created the system for the purpose of keeping New York City banks as the center of America’s wealth. The federal reserve created a system where money could be created out of nothing and loaned out through a leverage system to create interest. For example, over a 30-year mortgage, a bank can earn more from the sale of a house than any contractor who worked on the house.

The Income Tax was supposed to only impact the top 1 percent of Americans. Before 1913, the government’s expenses had been handled through tariffs.

To end the Income Tax, you would have to end the Welfare State. One way to do that would be to tax welfare benefits but not wages. When it becomes more lucrative to work than to collect welfare, it is possible that the work ethic that used to be part of American culture might be revived. You would also have to slash the bloated bureaucracy. The economic boom created by ending the Income Tax would give those who lose their jobs in government a great job market in which to search for new jobs. We need to get rid of any government department that is not successful–has education improved since the Department of Education was created? What has Housing and Urban Development accomplished? How many people in the Justice Department would have to be fired to end the corruption? You no longer need the Internal Revenue Service. You see where I am going with this.

The opposition to this plan would come from federal workers (fear of losing their jobs). Opposition would also come from Washington swamp creatures who would see it as a threat to their power (in Washington controlling money is power). It would also come from welfare recipients.

The other issue would be Social Security and its related taxes. That could be worked out easily by balancing payments to people who have paid into the program for more than forty years with alternatives for younger workers. With a retirement age of 70, most Americans pay the most into Social Security from about the age of 30.

This is all possible if Americans are willing to elect a businessman who has the economic knowledge to put it all together.

Imagine a world where you get to keep all of what you earn and the government cannot intimidate you about your taxes.

The Choice Is Between Bad And Awful

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On Wednesday, Armstrong Economics posted an article about inflation and recession.

The article reports:

Federal Reserve Bank of Minneapolis President Neel Kashkari has advised against anticipating near-term rate cuts. While speaking to the Financial Times, the Fed president stated that people would simply prefer a recession to continued inflation.

“I have learned that the American people—and maybe people in Europe equally—really hate high inflation. I mean, really viscerally hate high inflation,” he told the Financial Times’ The Economics Show podcast. Kashkari is speaking as if we are not already in a recession. It is not difficult to understand the “visceral” hatred people around the world feel toward rising prices. The effects of inflation are felt with every purchase, causing the average person to adjust their entire lifestyle.

The article concludes:

Real prices have far surpassed anything they calculate in CPI. Everyone understands that prices have risen far more than the arbitrary number the Fed provides us. Taxes are continually increasing for everyone in every tax bracket. The government not only adds to inflationary issues with their spending but then expects their citizens to foot a portion of the bill with taxes, which will simply never be enough.

Then we have Washington telling the masses to blame corporations for price gouging while raising their taxes and making it increasingly difficult to conduct business and maintain a large workforce. It is not that the people would prefer to be in a recession, the real issue is that countless people are entering survival mode. People everywhere want to hold onto whatever they may have out of fear for the future, but they are unable even to hoard as real prices now demand they hand over whatever they have to maintain their lives.

In a recession, consumer spending drops, and people lose their jobs. A service economy such as the one America currently has is more vulnerable to recession than a manufacturing economy. A recession creates hardship for working families.Inflation impacts both working families and retirees. Either one is a bad deal. The most practical way to deal with inflation in America would be to cut government spending and to resume domestic oil production. Both of those things would help revive a miserable economy.

A Study in Entropy

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Entropy is defined as the trend of the universe toward disorder. Entropy is illustrated by what happens to a farmer’s field if he ignores it for a few years. It is also what happens to a tractor or wagon that is left out in a field unattended. Crops do not automatically grow in straight lines, and weeds do not pick themselves. It is not a good idea to let children raise themselves. It takes human effort to keep things moving forward.

Does entropy apply to nations? If freedom and liberty are not carefully nurtured, do they degrade? If the culture is not properly guarded and maintained, does it degrade into unhealthy places?

Recently there was something of an uproar about a commencement speech given by a National Football League player. In his speech, Harrison Butker praised the virtues of motherhood. He praised his wife for the role her support has played in his success. He stated that many of the women in the audience that day will eventually become mothers. They will struggle with balancing their roles as wives, mothers, and corporate employees. All those roles are important, but has our culture devalued the role of wife and mother? A poem by William Ross Wallace states, “The Hand That Rocks the Cradle Is the Hand That Rules the World.” In the past, children learned basic foundational things from their mothers—baking cookies, shopping, language skills and values. In a world where career is valued over motherhood, children may or may not learn these things at daycare. There is nothing wrong with daycare, but I can guarantee that a child’s daycare provider does not love the child the way his/her mother does. I understand that in today’s economy staying home with your children is something of a luxury, but it can be done. Is devaluing motherhood a step forward or a step backward?

The speech given by Harrison Butker would have merely been a statement of the obvious in 1970. What changed?

The programs of the Great Society and the War on Poverty came into their own in the 1970’s. In 1965, “The Negro Family: The Case for National Action, the Moynihan Report,” was written by Daniel Patrick Moynihan. He warned against the collapse of the black family unit, noting a rise in single-parent families. The Great Society programs exacerbated that problem by making payments to women only if there was not a man living in the house. The destruction those programs created in the black population later spread to the white population. The 1970’s also gave rise to the Feminist movement and created what was then the cottage industry of daycare—now a billion-dollar industry. This further weakened the family structure—the foundation of a healthy society.

The overspending of the 1960’s and 1970’s and beyond created an inflationary cycle that forced many women into the workforce. One positive aspect of this is that educational and professional opportunities for women increased. That at least was a positive thing.

Is America now experiencing a state of entropy? How many Americans voted in the last primary election? How many Americans voted in the last Presidential election? Are you willing to take an active role in your government? What impact will the dramatic increase in population from places that do not share our culture have on our own already degrading culture?

If Americans want to save our country from entropy, they need to stand up and fight for the values and culture that made this country great. If we do not do that soon, we will go the way of Ancient Greece and Ancient Rome.

It Didn’t Do What It Said It Did

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On June 3rd, Breitbart posted an article about the impact of the Inflation Reduction Act on Medicare Part D premiums.

The article reports:

One of the classic strategies in the Obama/Biden playbook is policy that sounds good in the short-term, but whose long-term consequences won’t be felt until after an election. That way if Democrats win, they’re insulated from voters holding them accountable; but if they lose, they can blame Republicans when things go south.

This was undoubtedly one of the plays the Biden administration had in mind for the gallingly misnamed Inflation Reduction Act (IRA). But this disastrous legislation hasn’t just sabotaged Americans’ wallets, it’s sabotaged their health as well.

Snuck into the IRA was a poorly drafted provision that attempted to lower out-of-pocket expenses on prescription drugs. The IRA lowers the out-of-pocket maximum for seniors from about $3,300 to $2,000 by shifting the responsibility for the $1,300 difference to insurance companies. To no one’s surprise, the insurance companies pass that cost to consumers in the form of higher premiums and restricted access to prescription drugs.

This year, premiums for Medicare Part D are up more than 20 percent for the more than 50 million Americans enrolled. In 2025, they could increase again by more than 50 percent! We hope people are paying close enough attention during open enrollment in October to compare this price spike as President Biden campaigns on how he “fought Big Pharma to lower drug costs!”

The article concludes:

One large health plan, Mutual of Omaha, recently hinted that it will pull out of the Part D market in 2025. Almost 200,000 seniors – who one hopes are all high-information voters living in Rust Belt swing states – will be forced to find a new plan from increasingly fewer options. As time goes on, unless changes can be made, this will get worse and worse, leaving seniors with fewer options as they’re told by uncaring Democrats how much they’ve helped them.

The Biden administration has screwed – along with the economy, immigration, foreign policy, the future of the human race, etc. – the American healthcare system. And it seems like most people have gotten wise to the schemes in their dirty playbook, as everyone knows they’re lying about this issue. When they likely lose in November, President Trump and his allies will have their hands full undoing the damage. Luckily, they’re up to the task.

Let’s simply vote out all Democrats this November.

Economic Growth Has Significantly Slowed

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On Thursday, The Daily Signal posted an article about the revised downward economic growth in the first quarter of 2024. America is not doing well economically.

The article reports:

The U.S. economy grew less than previously thought in the first quarter of 2024 amid a slowdown in consumer spending, the Bureau of Economic Analysis announced Thursday.

Gross domestic product was revised down in the first quarter from 1.6% to 1.3% year-over-year in a sign that the economy is not as strong as initial estimates indicated, according to a release from the BEA. Economists originally expected growth in the first quarter to be around 2.2%, more in line with the above trend growth seen in the third and fourth quarters of 2023, which were 4.9% and 3.4%, respectively.

The revision was due to new information that shows that consumer spending, private inventory investment, and federal government spending were lower than initial estimates, while state and local government spending, nonresidential and residential fixed investment, and exports were slightly greater than original tallies, according to the BEA.

Current-dollar GDP was also revised down to 4.3% from 4.8%, and real gross domestic income totaled just 1.5% in an initial estimate from the BEA.

Consumer spending is down because consumers are being forced to spend more on necessities and less on extras.

The article concludes:

In an attempt to bring inflation back down to around 2%, the Fed has placed its federal funds rate in a range of 5.25% and 5.50%, a 23-year high, which has put pressure on consumers and businesses to slow spending. The hike in the federal funds rate has increased the cost of credit across the board, making it more expensive to take out debt, such as through credit cards.

The cumulative amount of debt held by Americans totaled $17.69 trillion in the first quarter, with $1.12 trillion of that being on credit cards. The share of people who were behind 90 days or more on their credit card payments in the quarter jumped to 10.7%, outdoing the pandemic high of 10% in the first quarter of 2021.

Job growth has also slowed as of late, with the U.S. adding just 175,000 nonfarm payroll jobs in April, far lower than the 242,000 that were expected, while the unemployment rate ticked up slightly to 3.9%. In April, there were fewer gains in government jobs than in previous months, contributing largely to the slowdown, with March adding 303,000 new jobs.

This problem was government-caused and can be government-solved. Cut taxes and cut spending–that is the solution if Congress ever has the integrity to do it.

The Root Causes Of The Current Inflation

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On Wednesday, Breitbart posted an article about the cause of the level of inflation Americans are currently dealing with.

The article quotes Neel Kashkari, who runs the Federal Reserve Bank of Minneapolis.

The article reports:

Surging immigration is keeping inflation and interest rates high, Fed honcho Neel Kashkari said in an interview with the Telegraph.

Kashkari, who runs the Federal Reserve Bank of Minneapolis, said he’s not ready to consider cutting rates until he sees “several months of real progress on inflation.” The flood of immigrants, he argued, is hindering that progress.

U.S. borrowing costs are likely to stay put for “an extended period of time,” Kashkari warned.

He’s particularly freaked out by the booming demand for housing, which just won’t cool off despite sky-high rates.

Kashkari’s immigration bombshell runs directly contrary to the claims by the Biden administration and its allies that surging immigration is keeping down inflation by depressing wages.

Kashkari said that “dramatic increase in immigration” is boosting housing demand. More people working from home and years of underbuilding aren’t helping either. It’s a perfect storm that’s keeping the housing market red-hot.

The article concludes:

He (Kashkari) also noted that services inflation had been “much stickier” in the past few months, making it even tougher to justify rate cuts.

“In the second half of last year, we saw very rapid disinflationary progress, and that was comforting for all of us because the economy was strong and inflation was falling quickly. I expected and hoped that that was going to continue in the first quarter of this year [but] inflation has more or less moved sideways,” Kashkari said.

Like other Fed officials, Kashkari said he needs solid proof that inflation is heading back to 2 percent before he’s comfortable with rate cuts.

“I want to see evidence that inflation is headed well back down towards the 2 percent target. I’m not saying that we have to get all the way back down to 2 percent before we start cutting, but I need to be convinced that that’s where we’re headed before I would be comfortable normalizing interest rates,” he said.

Rate cuts could result in people feeling better about the economy (a good thing in an election year), but they could also create even more inflation.

 

Does Anyone On The Political Left Go Grocery Shopping Or Buy Gasoline?

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On Thursday, BizPacReview posted an article about the mainstream media’s spin on America’s current economy. If it were not sad, it would be funny.

The article reports:

MSNBC host Stephanie Ruhle is telling Americans not to believe their lying eyes, that President Biden’s economy is fantastic and they are better off economically than they mistakenly believe.

The condescension and gaslighting have kicked into full gear as the presidential election nears. Despite Americans struggling to put food on the table, a roof over their heads, and clothes on their children’s backs, Ruhle is telling them they are basically dimwitted and don’t appreciate how good they have it.

“We need an economic explainer,” Ruhle told the president and CEO of the Federal Reserve Bank of Chicago, Austan Goolsbee. “People are confused, they’re exhausted, but they’re also doing quite well.”

“Ruhle, who hosts MSNBC’s ‘The Eleventh Hour,’ had been discussing a recent Federal Reserve report that ‘shows people are still struggling to cover day-to-day expenses, even as inflation has slowed.’ She noted how some major brands are responding by enticing consumers with slashed prices, ‘Target says it is cutting prices on 5,000 essential items, things like milk, butter, pet food. Wendy’s is now offering a $3 breakfast deal. And rivals like McDonald’s are offering new lower-priced value meals,’” Fox Business reported.

The article includes the following screenshot:

This is not the result of corporate greed as President Biden likes to claim–it is the result of companies trying to stay in business after their operating costs skyrocket. Anyone who eats and drives knows that we were much better off four years ago. The problem with inflation is that prices very rarely go back down to where they were.

What Four More Years Of Bidenomics Would Look Like

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On May 14th (sometimes it takes me a while to get to things), Stephen Moore posted an article at BizPac Review detailing some of the economic plans the Biden administration has if they win the election in November. If you like trying to stretch your dollar because of inflation, you will love the new challenges.

The article reports some of the plans:

1. Tax rates on investment up to 70%.

2. $2 trillion in new debt spending.

3. A “net zero” energy policy eliminating production of nearly all our abundant fossil fuels.

4. An end to state “right-to-work” laws in 26 states.

5. The antitrust assault against Silicon Valley and corporate mergers ramps up.

The article also concludes:

There is more to worry about under Bidenomics in a second term. One worry is that Dems will agree to eliminate checks and balances in our system of government by overturning the filibuster rule of at least 60 votes in the Senate to pass legislation. Another concern is that Dems will lock in their electoral strength by making Washington, D.C., and Puerto Rico states to add four more Democratic senators. Remember Kyrsten Sinema of Arizona and Joe Manchin of Pennsylvania heroically voted to save the filibuster — but they won’t be around in January 2025 to stop the court packing.

Could American businesses and families survive getting smashed by these gale-force winds of another Bidenomics hurricane in 2025 without capsizing the ship of state? I wouldn’t bet on it.

Stephen Moore is a visiting fellow at the Heritage Foundation and a senior economic advisor to Donald Trump. His latest book is: “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy.”

Your vote counts. We need enough votes against Joe Biden to overcome the fraud that is already being planned.

April Inflation Statistics

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On Tuesday, CNN reported that according to Bureau of Labor Statistics data released Tuesday inflation in April was the highest it has been all year.

The article reports:

Wholesale inflation picked up in April to its highest rate in a year, according to Bureau of Labor Statistics data released Tuesday.

The Producer Price Index, which measures the change in prices that manufacturers pay to suppliers, was 2.2% for the 12 months ended in April, according to Bureau of Labor Statistics data released Tuesday.

That gain is higher than what was seen in March, which was downwardly revised from 2.1% to 1.8%.

On a monthly basis, prices rose 0.5%, a faster pace than March’s 0.1% loss (also downwardly revised) and ran much hotter than what economists had anticipated. Economists were expecting a monthly gain of 0.3%, according to FactSet consensus estimates.

“The concern here is that we now have a trend, an upward trend in producer prices, which can only be passed through to consumers and result in upward pressure on consumer price inflation over the coming months,” Kurt Rankin, senior economist for the PNC Financial Services Group, told CNN in an interview.

And that means interest rates will stay higher for longer and could further delay the Federal Reserve’s plans for cuts on that front, he said.

…While higher energy costs (up 2% in April) helped to push goods prices higher, services inflation is what drove up the overall PPI last month. Nearly three-quarters of the April monthly gain was attributable to price hikes seen by producers of services, according to the report.

Services providers saw a 0.6% increase in prices for the month, the fastest pace seen for that category since March 2022, Rankin noted.

“Services has been the issue over the past year as consumers continue to spend money, and costs for services-oriented businesses is still stronger than goods inflation; but goods producer prices are now also rising after having fallen through most of 2023,” he said.

This is bad news for consumers and also bad news for the Biden administration that wants to get re-elected in November. The promise of cutting the interest rate before the election to bring consumer costs down will not be kept if inflation continues on its current path.

What Impact Does This Have On America’s Future?

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On Monday, Breitbart reported that according to the Center for Immigration Studies (CIS), only 46 percent of the migrants who had arrived in America in 2022 or later were employed at the beginning of 2024.

The article reports:

“Immigration clearly adds workers to the country, but it just as clearly adds non-workers who need to be supported by the labor of others,” Steven Camarota and Karen Zeigler, researchers with the CIS, wrote.

This was the case in the past, it is true today, and it will surely be the case for immigrants who arrive in the future. Those who simply see immigration as a source of labor need to understand it is also a source of school children, retirees, and many other non-workers.

The data from the CIS report undermines arguments that supporters of illegal immigration have used to try to point out that migrant workers help the economy by working hard.

The article also includes a chart showing the rapid increase in the foreign-born population in America:

The article also notes:

The report also found that, since Biden took office in January 2021, the migrant population in the U.S. increased by roughly 6.6 million over the course of 39 months.

As of March 2024, there were 51.6 million foreign-born migrants, 5.1 million more than in 2022. This number made up 15.6 percent of the population in the U.S.

…Another report from the CIS in February found that Biden’s job growth centered around hiring millions of foreign-born immigrants while the number of American citizens with jobs decreased from pre-COVID-19 levels.

Controlled immigration is a good thing. However, when immigrants make up nearly one quarter of the population, assimilation is nearly impossible. What occurs is enclaves of ethnic groups that do not identify as Americans and are not necessarily inclined to work for the good of the country. In a recent election, a member of Congress declared that they would represent the interests of Somalia. The problem with that is that they are not supposed to represent the interests of Somalia–they are supposed to represent the interests of their constituents in America. The immigration policies (or lack thereof)  of the Biden administration are going to come back to bite us. It is only a matter of time.

 

Can Lies Get Him Re-elected?

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Recently President Biden did a sit-down interview with CNN’s Erin Burnett. She didn’t ask him any really hard questions, but she did ask about his current low standing in the polls. On Wednesday, Red State posted some highlights from the interview and also did some fact checking.

The article reports:

Burnett said that the polls showed that voters trusted former President Donald Trump more on the economy. She ticked off several problems with the Biden economy including the cost of buying a home which has doubled, real income is down, economic growth is down “far short of expectations,” and consumer confidence was at a “two-year low.”

“With less than six months to go until Election Day, are you worried you’re running out of time to turn that around?” she asked him. Biden looked out of it while she was talking, and his response was pure denial of reality.

…”We’ve already turned around,” Biden claimed falsely. He simply refuses to accept the facts, claiming the polling data “has been wrong.”

Bottom line? Trump is ahead in the polls, including in all the swing states. That’s what Joe can’t deal with.

…Then he straight-up lied and said that inflation was at 9 percent when he came into office.

In fact, inflation was at 1.4 percent when he came in and he helped to drive it up above 9 percent.

Recently President Biden blamed corporate greed for the inflation problem. What he fails to note is that corporations are in business to make money. It is not up to him to decide how much money corporations make. Generally speaking, the free market determines profit margins. If the government would get out of the way of the free market, they might see the beginning of a true economic recovery.

Regulations Matter

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On Thursday, Issues & Insights posted an article about the regulatory nightmare that is being created by the Biden administration.

The article reports:

Just after Ronald Reagan won the presidential election in November 1980, economic adviser David Stockman wrote a memo warning the president-elect that he faced an “economic Dunkirk” thanks to the disastrous economy he was inheriting.

Among Stockman’s warnings was that the Carter administration had set a “ticking regulatory time bomb” that would blow up the economy.

“They have spent the past four years ‘tooling up’ for implementation through a mind-boggling outpouring of rulemakings, interpretative guidelines, and major litigation – all heavily biased toward maximization of regulatory scope and burden,” Stockman wrote.

Stockman – who would later serve as head of the Office of Management and Budget and ended up losing Reagan’s trust – had that part wrong. While Carter was a disaster as president, at least he showed an ability to learn on the job. And so late in his term, Carter embarked on a deregulatory campaign to fight inflation. Among other things, he freed the trucking and airline industries from onerous government mandates.

“Carter gave Reagan the phenomenal gift of deregulation. Combined with the (Reagan) tax cuts that largely took effect in 1983, the economy went on a growth tear,” wrote Brian Domitrovic, a scholar at the Laffer Center, in Forbes. “All the capital that Reagan freed up via his tax cuts found room to roam in the deregulated world which Carter had set up.”

Unfortunately the Biden administration has not studied the lessons of history. The article lists some of the regulations the Biden administration has put in place:

  • Force car owners into inconvenient, expensive, range-deficient EVs.
  • Impose emission standards on large trucks that, the industry says, will be “the most challenging, costly and potentially disruptive heavy-duty emissions rule in history.”
  • Sharply raise the cost of drilling for oil and gas on public lands and raise the cost of water.
  • Make it nearly impossible to get permits to expand or build new facilities in most areas of the country without violating impossibly strict clean-air standards.

The article concludes:

In his 1980 memo, Stockman said avoiding an economic Dunkirk required “an initial administration economic program that is so bold, sweeping, and sustained that it totally dominates the Washington agenda (and) holds promise of propelling the economy into vigorous expansion and the financial markets into a bullish psychology.”

Reagan delivered.

It will take even greater levels of boldness today. And while there is hope for such a comprehensive program under the return of Donald Trump, if Biden wins in November there will be no rescuing the economy this time.

Deregulation will be one of the keys to reviving the struggling economy. Despite the fact that the Biden administration keeps telling us that the economy is strong, people are working two jobs to keep up with inflation, there are layoffs in a number of industries, and high interest rates are making it very difficult for new home owners to afford a home.