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For a few months there I wrote a series of weekly posts I called This ‘n That dealing with various stories from the week that was. Over the summer I abandoned that format for a weekly podcast. Well, I plan to keep the podcast going, but I thought I restart the weekly review post as well under the updated name The Week in Review.

I know, I know, that’s not really the most imaginative title in the world. But I think it’s certainly appropriate for the subject matter. So, without further ado, let’s get started…

They Just Don’t Get It

The Washington Post and the liberals who love it just don’t get it. They can’t figure out why Mrs. Clinton isn’t totally dominating the presidential race and let show their frustrations in a story titled, “Democrats wonder and worry: Why isn’t Clinton far ahead of Trump?” According to the article,

With Election Day less than two months away, Democrats are increasingly worried that Hillary Clinton has not built a formidable lead against Donald Trump despite his historic weaknesses as a national party candidate.

The piece goes on to quote former South Dakota Senator Tom Daschle saying, “Generally, I’m concerned, frankly…all the things that Trump has done, the numbers should be far more explicitly in her favor, but they’re not.”

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Ruth_and_Naomi_Leave_Moab

Ruth and Naomi Leave Moab, 1860, by Julius Schnorr von Carolsfeld (1794-1872).

Of all the issues roiling Western electorates, immigration may well be the most emotional. Proponents of mass, government subsidized third-world immigration see themselves as compassionate promoters of the social justice and the common good. On the other hand, those who stand in opposition to the immigration policies currently popular among Western elites see their way of life under attack.

 

Here is the United States, Donald Trump won the Republican presidential nomination largely on the strength of his tough-on-illegal-immigration-stance. Trump has galvanized support by rejecting amnesty for those who have violated US immigration law, promising instead to deport them, especially those who have been convicted of other crimes while in the US. He also has indicated that he wants to make it harder for those in the country illegally to obtain jobs, to significantly restrict Muslim immigration and, most notably of all, to build a wall along the US-Mexico border to stanch the flow of illegal border crossings from Central and South America into the US.

While Trump’s stance has won him widespread support among rank-and-file Republicans, the Republican party leadership, Democrats and the overwhelming majority of those in the mainstream press quickly become apoplectic when it comes to anything Trump related, especially when it comes to his immigration stance. One of the most extreme offenders in this regard is The Huffington Post, which lends a serious and dignified tone to the immigration debate by placing the following paragraph at the bottom of every column it runs about the Republican nominee:

Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims – 1.6 billion members of an entire religion – from entering the U.S (Links in the original).

And the HuffPo is hardly alone. According to the New York Times, it is Trump, not the reporters and pundits who write about him, who is responsible for “testing the norms of objectivity in journalism.”

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uncle_sam_supplying_federal_reserve_fiat_debt.jpg

Ever since the spring of 2009 when The-Powers-That-Be (TPTB) were out there claiming to see “green shoots” everywhere, the public has been treated to a non-stop propaganda campaign pushing the narrative of economic recovery.

President Obama himself proclaimed his belief in the strength of the American economy, stating for all the world to hear in his 2016 State of the Union Address that anyone who doubted everything was awesome in the main street economy was, to use his words, “peddling fiction.”

And surely Obama couldn’t be wrong. After all, good doctor Ben Bernanke spent several years injecting the US economy with his concoction of Zero Interest Rate Policy (ZIRP) and three rounds of Quantitative Easing (QE). How could anyone doubt but that the wise heads at the Fed have cured what ails us? The stock market just set a new record!

But if you dig down beneath the surface, you’ll find that everything is not awesome. Corporate earnings are down for the fifth quarter in a row. According to the report on Factset, “The second quarter [2016] marks the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.” In other words, corporate earnings haven’t had a losing streak this long since the height of the last financial crisis.

Or take worker productivity, a measure of hourly output per worker, which has declined now for three straight quarters. As the Reuters article pointed out, “U.S. nonfarm productivity unexpectedly fell in the second quarter, pointing to sustained weakness that could raise concerns about corporate profits and companies’ ability to maintain their recent robust pace of hiring.” No kidding.

But why is worker productivity in the US declining? The Reuters article fails to provide a reason. So let me suggest one possibility: businesses are no longer investing in property, plant and equipment, the very things that drive productivity. As Forbes reports, “Corporate executives now shy away from capital spending. Companies are spending money to cut costs – labor cost especially, and also electricity – but few companies are increasing productive capacity.”

So what have executive been spending on if not new productive capacity? Stock buybacks that serve to boost earnings per share and increase bonuses. “Stock buybacks by big American companies are near a historical peak [as of May 2014], but the practice appears to do little to improve their underlying operations and robs them of money for research and future growth. USA Today’s John Waggoner calls stock buybacks a ‘sugar high’,” as John Morgan reports.

Morgan goes on to cite a 1999 quote from Warren Buffett, who said, “Repurchases are all the rage, but are all too often made for an unstated and, in our view, an ignoble reason: to pump or support the stock price.”

Let’s see then, we have stock markets at near record levels, while at the same time corporate earnings are on the decline as worker productivity erodes, which very likely is a consequence of businesses showing greater interest in engineering stock buy-backs rather than in capital spending. Sure sounds like a plan for long-term economic success to me.

I’ve mentioned only a few data points to illustrate that the economy, far from being robust, is in reality quite weak. But for more of the same, consider the following nine ugly charts. Obama’s term in office is highlighted in red.


Things that should be going up in a healthy economy – Labor Force Participation Rate, Median Family Income, Home Ownership – are all going dramatically down. Those items that one would expect to see going down if the economy really were as good as The-Powers-That-Be tell us – Food Stamps, Federal Debt, Money Printing, Healthcare Costs – are going straight up.

These charts tell a very different story from what Obama’s putting out. Maybe he’s the one peddling fiction.

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