On Thursday’s edition of Bloomberg’s “Balance of Power,” House Speaker Nancy Pelosi (D-CA) stated that she wants to provide assistance to airline workers, but “we cannot do that and then lose all leverage to do everything else that we have to do in the bill, which is to crush the virus, honor our heroes, put money in the pockets of the American people.”
Pelosi said, “On the subject of the airlines, I have made the case to my colleagues that this is a special case. Because in order for airline employees to return to the workforce, there are national security concerns. There are concerns about certification and all the rest of that, not just somebody leaving a job and coming back to a job, but having to requalify. … So, I do think that we should pay special attention to that. But they — we cannot do that and then lose all leverage to do everything else that we have to do in the bill, which is to crush the virus, honor our heroes, put money in the pockets of the American people.”
U.S. Attorney John Durham reportedly will not release a report on the findings of his criminal investigation into the origins of the FBI’s counterintelligence into the Trump campaign in 2016. “Attorney General Bill Barr has begun telling top Republicans that the Justice Department’s sweeping review into the origins of the Russia investigation will not be […]
Gun-owning Americans are purchasing additional firearms in response to the violent Black Lives Matter protests that have taken place in many cities and communities across the country in recent months.
What are the details?
A Rasmussen survey published this week found that 22% of Americans who already have a gun in their household have added another since the start of protests and that a large majority feel safer having done so.
In all, 43% of those surveyed told the polling group that they or someone in their household owns a gun. Slightly over half (54%) of those adults who live in a gun-owning household said that they feel safer with a gun in the house, while only 7% said they feel less safe, and 38% said the gun’s presence doesn’t affect their feelings of personal safety.
But among the roughly 1 in 5 people whose households have added another firearm in recent months, a whopping 90% reported feeling safer.
The households who have added guns since late May have predominantly been minority households, Rasmussen noted.
The phone interview survey of 1,000 adults was conducted October 4-5.
Additionally, the polling group reported in September that 42% of likely U.S. voters have had anti-police protests in their communities, and nearly half of those respondents said that those protests became violent.
What else?
This year has been a record-breaking year for gun sales as uncertainty around the coronavirus pandemic and violence at Black Lives Matter protests have left many Americans concerned for their safety.
Despite continued calls for gun control and warnings about the dangers of firearms from Democratic politicians, the numbers prove that Americans have en masse turned to firearms to protect themselves and their families.
More guns were purchased in March 2020 than any other month on record, and every month since then has experienced year-over-year increases.
By August, 2020 gun sales had already topped 2019 sales — and there are four months still to go. Of the nearly 15 million gun sales recorded by that time this year, an estimated 5 million had come from first-time gun buyers.
New polling shows that affirmative action is unpopular among California voters, even as California Democrats move to reinstate the practice at public universities.
Texas Mayoral candidate Zul Mohamed was arrested Wednesday night and charged with 109 counts of voter fraud.
Zul Mohamed was running to become Mayor of Carrollton, just north of Dallas, but he got caught in a mail-in ballot scheme.
“Mail ballots are inherently insecure and vulnerable to fraud, and I am committed to safeguarding the integrity of our elections. My office is prepared to assist any Texas county in combating this form of fraud,” Attorney General Ken Paxton said in a statement.
Investigators were tipped off after someone requested absentee ballots be sent to a PO Box which supposedly belonged to a nursing home.
When investigators contacted residents whose ballots had been requested to be sent to the PO Box, they learned that the individuals never applied for ballots.
Authorities later learned that the PO Box was obtained with a fake Texas driver’s license so they began to surveil the post office.
Wednesday night the box of absentee ballots was picked up at the post office facility.
Law enforcement searched Mohamed’s home and that’s when they found the box of ballots with many already open.
A Texas mayoral candidate was arrested Wednesday night and faces felony voter fraud charges after allegedly sending 84 applications for mail-in ballots.
Zul Mohamed, who’s running to become the mayor of Carrollton, a city roughly one hour north of Dallas, was charged with 25 counts of knowingly possessing a ballot with intent to defraud, a second-degree felony, and 84 counts of providing false info on a voting application, a third-degree felony, according to the Texas attorney general’s office
“Voter fraud is a serious and widespread issue and cannot be tolerated,” Denton County Sheriff Tracey Murphree said in a statement. “The fact an actual candidate for public office would engage in these activities is appalling. We will continue to aggressively investigate allegations of voter fraud.”
If convicted, Mohamed faces up to 20 years in prison.
So when is Democrat Rep. Ilhan Omar getting arrested and charged for carrying out a similar ballot harvesting scheme?
For years, we have been warning about dire consequences if central banks continue to meddle in the economy and financial markets. In December 2013, we wrote
There is a seriouspossibility that the measures taken by the central banks have already created asituation in which theiractions increase rather than decrease financial instability. This is due to the fact that, if the actual price of an asset does not meetits market–based value, the true level of riskis not properly revealed.
During the “Coronavirus rescue” by the major central banks from March through June of this year, we essentially ran down the clock. No viable paths remain to escape the vicious feedback loop between central banks and financial markets – at least without serious repercussions.
Over the years, central banks have created conditions where prices in capital markets—and by implication, the resulting capital allocation structure—have become distorted to a previously unimaginable degree.
This has resulted in three extremely troublesome fragilities at the heart of the world economy.
First, it has led to ‘yield hunting’ among investors, who are forced to seek higher yields from riskier financial products.
Secondly, it has led to a permanent central bank intervention in the financial markets, because without it a crash would surely occur.
Thirdly – and this is something that has received much too little attention – the massive capital misallocations due to unnaturally low interest rates have ‘hollowed-out’ vast sectors of the global economy.
We have been focusing on the fragility of the financial markets frequently lately, so this time we will concentrate on the capital misallocation issue instead, though the two are inherently linked.
The driving force of the economy
In March 2019 we devoted the entirety of the Q-Review to explain why global economic growth has sputtered since 2009.
We explored, extensively, the concept of creative destruction, which describes the process by which capitalist economies evolve and grow over time. In essence, creative destruction enables the flow of technical innovations into the economy through the destruction of old and inefficient production methods and enterprises, and the emergence of new, more productive firms.
The risk-and-reward relationship, that is, the gains and failures of the private sector drive economic progress. The first accumulates income and capital, while the second uncovers sustainable businesses, setting the stage for the creative destruction.
In essence, this is what a capitalist economy is all about. The accumulation of capital is required to provide the funding for sustainable businesses, which provide employment, personal income and tax revenues.
Price discovery in the modern capital markets is essential to accurately evaluate the risk-and-reward relationship of both real economic investments as well as those of financial assets. Price discovery thus guides the efficient allocation of capital to its most profitable employment, based on the information gathered by millions of investors. This idea is part of the bedrock of capitalist theory.
‘Hollowing out’
When central banks pushed both long and short-term interest rates to extreme lows, two things happened:
Less-attractive investments became “profitable”.
Capital allocation started to become distorted.
An interest rate is essentially the “price of time”, as the future tends to be more risky than the present. When we borrow from the future to invest, an interest rate attempts to reflect this risk. The more uncertainty, the higher the interest rate. Or that is how it should go, but central banks have worked against this natural economic law in a determined way.
With either very low or negative interest rates, which became common in early 2010s, funding becomes available to marginal and even unprofitable investments. Even more destructive capital misallocation occurs when unprofitable firms that should fail, do not do so because of artificially cheap funding. These “zombie” enterprises freeze capital which could be used to fund more profitable investments, which in turn would translate into higher worker salaries, dividends and capital gains for shareholders, and a more vigorous and dynamic economy.
This is the burden central banks have laden the world economy with, and it shows in the numbers.
The collapse of productivity growth
Measuring the impact of creative destruction, that is, the flow of technological innovations into the economy, is hampered by the fact that it is – generally speaking – unobservable.
When a profitability-enhancing technological innovation appears, firms acquire new equipment and higher skilled workers to integrate it into production. While we can measure equipment, machinery and even labour quality, the actual productivity-increasing effect of the innovation cannot be observed directly, at least at the “macro” level of the economy.
However, we do know the level of increased production, the investment in acquired equipment and machinery (capital), and the improved quantity and quality of the labour force. That part of the increase in production that cannot be explained by these elements can be interpreted as the economy-wide growth of productivity. This measure is called the Total Factor Productivity, or TFP.
Figure 1 presents TFP in the world since 1990. As one notes, the TFP falls during crises and increases during economic expansions and booms. However, global TFP growth began to stagnate in 2011 and has never recovered.
Figure 1. The regional and global growth of the total factor productivity (in %). Source: GnS Economics, Conference Board
The period we call the “Great Stagnation” from 2011 till now, should not have occurred. Productivity should grow in economic expansions, but since then has not.
The stagnation of TFP growth tells a chilling tale about the destruction of the foundations of our economies. The deep erosion of both the risk-and-reward relationship and free capital allocation by misguided central banks have literally stopped the great engine of global productivity growth.
We have lived in a ‘mirage’ of economic expansion since 2011.
The end is nigh!
Central banks have delivered a ‘double-whammy’ to the global economy.
They have hollowed-out the world economy by seriously undermining the process of creative destruction. In addition, they have destroyed the pricing mechanism in the capital markets, which has led to serious distortions (i.e. ‘bubbles’) in the financial markets.
It is actually quite unbelievable how the central bankers have managed to negatively affect the world economy during the past 11 years. While rather interesting from a dispassionate academic perspective, the resulting fragility of the world economy and financial markets means that we are prone to an epic collapse, which will hurt households, companies and even countries badly.
The collapse may start from the U.S. stock market, some corner of the U.S. credit markets, from the teetering European banking sector, or from some other obscure part of the financial markets. The only question is, how long do we have?
With the second wave of the coronavirus pandemic gathering steam, the only remotely reliable answer we can give is, “not long”.
And, when the collapse occurs, then the fate of our and future generations will be decided. If we let the central banks assume full control of our economies, a truly horrible future scenario emerges, as we warned in the Q-Review 9/2020.
However, if we let the crisis play out and allow the foundations of the market economy, like free price discovery in the capital markets, to return, we are likely to face one of the most prosperous periods in human history.
The simple fact is that is time has come for the central banks to go. The sooner, the better.
* * *
Stay informed how the world economy and the global economic crisis through our Q-Review reports and Deprcon Service
We had plenty of suspicions about social media platforms long before “The Social Dilemma” dropped on Netflix. The streamer’s new documentary breaks down even more reasons to distrust social media behemoths. Be afraid. Be very afraid. But, of course, be suspicious of any Hollywood product purporting to tell the unvarnished truth. “The Social Dilemma” is no exception. The […]
USA Today Washington bureau chief Susan Page failed on Wednesday night. On one of the most consequential questions of the age, whether Democrats in a Biden White House and in the Senate would change 150 years of precedent and pack the Supreme Court, the vice presidential debate moderator NEVER brought the topic up. MRC analysts reviewed every single question Page asked. We found she also never asked about Antifa riots, but instead wondered how a victorious Biden/Harris administration would forcibly evict Donald Trump from the White House.
But first, here is Page NOT asking about packing the Supreme Court. Instead, the moderator highlighted nominee Amy Coney Barrett and pressed Pence on Roe v. Wade: “[Barrett’s] confirmation would cement the Court’s conservative majority and make it likely to more abortion restrictions, even to overturning the landmark Roe v. Wade ruling."
Page lectured, "Access to abortion would then be up to the states. Vice President Pence, you’re the former governor of Indiana. If Roe v. Wade is overturned, what would you want Indiana to do? Would you want your home state to ban all abortions?”
It was left to the Vice President to do the job that Page wouldn’t. He demanded, “The American people deserve an answer, Senator. Are you and Joe Biden going to pack the Court?… You’ve refused to answer the question. Joe Biden has refused to answer the question. I think the American people would really like to know.”
How bad is the journalistic malpractice on ignoring this issue? Even liberal ABC journalist Jon Karl, mid-debate, agreed it was a legitimate topic. He tweeted:
But that question came from Pence. Not the moderator.
Instead of asking pertinent questions about packing the Supreme Court, Page adopted liberal talking points, such as speculating about a victorious Biden/Harris team having to evict Trump and Pence from the White House:
President Trump has several times refused to commit himself to a peaceful transfer of power after the election. If your ticket wins and President Trump refuses to accept a peaceful transfer of power, what steps would you and Vice President Biden then take? What would happen next? .
A liberal-themed global warming query, of course, deserved a follow-up. Page grilled Pence: “Do you believe, as the scientific community has concluded, that manmade climate change has made wildfires bigger, hotter and more deadly and have made hurricanes wetter, slower and more damaging?”
Moments later, the moderator followed up: “Senator Harris just said that climate change is an existential threat. Vice President Pence, do you believe that climate change poses an existential threat?”
Notice the contrast to Harris. A question about the Green New Deal is gentle and open-ended:
Senator Harris, as the Vice President mentioned, you cosponsored the Green New Deal in Congress. But Vice President Biden said in last week’s debate that he does not support the Green New Deal, but if you look at the Biden/Harris campaign website, it describes the Green New Deal as a crucial framework. What exactly would be the stance of a Biden/Harris administration toward the Green New Deal?
The American people deserve to know where the Biden/Harris campaign stands on issues like court packing. But journalists like Susan Page have and continue to refuse to do their jobs and demand answers.
Here are all of Page’s questions during the VP debate. Click “expand” to read more.
Vice Presidential Debate
10/7/2020
9:06 PM ET
SUSAN PAGE: Let’s begin with the ongoing pandemic that has cost our country so much. Senator Harris, the coronavirus is not under control. Over the past week, Johns Hopkins reports that 39 states have had more COVID cases over the past seven days than in the week before. Nine states have set new records. Even if a vaccine is released soon, the next administration will face hard choices. What would a Biden administration do in January and February that a Trump administration wouldn’t do? Would you impose new lock downs for businesses and schools in hot spots? A federal mandate to wear masks? You have two minutes to respond without interruption.
…
9:10 PM ET
PAGE: Vice President Pence, more than 210,000 Americans have died of COVID-19 since February. The U.S. Death toll as a percentage of our population is higher than that of almost every other wealthy nation on Earth. For instance, our death rate is two and a half times that of Canada next door. You head the administration’s coronavirus task force. Why is the U.S. death toll as a percentage of our population higher than that of almost every other wealthy country? And you have two minutes to respond without interruption.
…
9:15 PM ET
PAGE: Vice President Pence, you were in the front row in a rose garden event of what seems to have been a super spreader event. No social distancing. Few masks. And now a cluster of coronavirus cases among those who were there. How can you expect Americans to follow the administration’s safety guidelines to protect themselves from COVID when you at the White House have not been doing so?
9:18 PM ET
PAGE: For life to get back to normal, most of the people that can be vaccinated need to be vaccinated. But half of Americans now say they wouldn’t take a vaccine if it was released now. If the Trump administration approves a vaccine before or after the election, should Americans take it and would you take it?
…
PAGE: Vice President Pence, there have been a lot of repercussions from this pandemic. In recent days, the President’s diagnosis of covid-19 has underscored the importance of the job that you hold and that you are seeking. That’s our second topic tonight, it’s the role of the Vice president. One of you will make history on January 20th. You will be the vice president to the oldest president the United States has ever had. Donald Trump will be 74 years old on inauguration day, Joe Biden will be 78 years old. That already has raised concerns among some voters, concerns that have been sharpened by President Trump’s hospitalization in recent days. Vice President Pence, have you had a conversation or reached an agreement with President Trump about safeguards or procedures when it comes to the issue of presidential disability? And if not, do you think you should? You have two minutes without interruption.
…
9:21 PM ET
PAGE: Senator Harris, let me ask you the same question that I asked Vice President Pence, which is, have you had a conversation or reached an agreement with vice president Biden about safeguards or procedures when it comes to the issue of presidential disability and if not, and if you win the election next month, do you think you should? You have two minutes uninterrupted.
…
9:24 PM ET
PAGE: Thank you, Senator Harris. Neither President Trump nor Vice President Biden has released a sort of detailed health information that had become the modern norm until the 2016 election. And in recent days, President Trump’s doctors have given misleading information about his basic health. And my question to each of you in turn is, this is information voters deserve to know? Vice President Pence, would you like to go first?
…
9:25 PM ET
PAGE: I want to give Senator Harris a chance to respond to the same question I asked, which is, do voters have a right to know more detailed health information about presidential candidates and especially about presidents, especially when they are facing some kind of challenge?
…
PAGE: You know, that’s a good segue into our third topic, which is about the economy. This has been another aspect of life for Americans, it’s been so affected by this coronavirus. We have a jobs crisis brewing. On Friday, we learned that the unemployment rate had declined to 7.9 percent in September, but the job growth had stalled and that was before the latest round of layoffs and furloughs in the airline industry, Disney and elsewhere. Hundreds of thousands of discouraged workers have stopped looking for work. Nearly 11 million jobs that existed at the beginning of the year haven’t been replaced. Those hardest hit include Latinos, blacks and women. Senator Harris, the Biden/Harris campaign has proposed new programs to boost the economy and you would pay for that new spending by raising $4 trillion in taxes on wealthy individuals and corporations. Some economists warn that could curb entrepreneur ventures that create jobs. Would raising taxes put the recovery at risk? And you have two minutes to answer, uninterrupted.
…
9:31 PM ET
PAGE: Vice President Pence, your administration has been predicting a rapid and robust recovery. But the latest economic report suggests that’s not happening. Should Americans be braced for an economic comeback that is going to take not months, but a year or more? You have two minutes to answer, uninterrupted.
…
9:38 PM ET
PAGE: Vice President Pence. Once again, you provided the perfect segue to a new topic, which is climate change. And Vice President Pence, I’d like to pose the first question to you. This year, we’ve seen record-setting hurricanes in the south. Another one, Hurricane Delta, is now threatening the gulf. And we have seen record-setting wildfires in the west. Do you believe, as the scientific community has concluded, that manmade climate change has made wildfires bigger, hotter and more deadly and have made hurricanes wetter, slower and more damaging? You have two minutes, uninterrupted.
…
9:40 PM ET
PAGE: Senator Harris, as the Vice President mentioned, you cosponsored the Green New Deal in Congress. But Vice President Biden said in last week’s debate that he does not support the Green New Deal, but if you look at the Biden/Harris campaign website, it describes the Green New Deal as a crucial framework. What exactly would be the stance of a Biden/Harris administration toward the Green New Deal? You have two minutes uninterrupted.
…
9:43 PM ET
PAGE: Senator Harris just said that climate change is an existential threat. Vice President Pence, do you believe that climate change poses an existential threat?
…
9:47 PM ET
PAGE: I’d like to talk about China. We have, as our next topic, we have no more complicated or consequential foreign relationship than the one with China. It is a huge market for American agricultural goods. It’s a potential partner in dealing with climate change and north Korea. And President Trump blamed China once again for the coronavirus, saying they will pay. Vice President Pence, how could you describe our relationship with China? Competitors, adversaries, enemies? You have two minutes.
…
9:50 PM ET
PAGE: Thank you. Senator Harris, let me ask you the same question that I asked the Vice President. How would you describe our fundamental relationship with China? Are we competitors, adversaries, enemies? You’ll have two minutes, uninterrupted.
…
9:53 PM ET
PAGE: Senator Harris, we’ve seen changes in the — in the role of the United States in terms of global leadership over the past four years. And, of course, times do change. What’s your definition — we’ve seen strains with China, of course, as the Vice President mentioned, we’ve seen strains with our traditional allies in NATO and elsewhere. What is your definition of the role of American leadership in 2020?
…
10:01 PM ET
PAGE: I did not create the rules for tonight. Your campaigns agreed to the rules for tonight’s debate, with the Commission on Presidential Debates. I’m here to enforce them, which involves moving from one topic to another, giving roughly equal time to both of you, which is what I’m trying very hard to do. I want to go ahead and move to the next topic, which is an important one, as the last topic was, and that is the Supreme Court. On Monday, the Senate Judiciary Committee is scheduled to open hearings on Amy Coney Barrett’s nomination to the supreme court. Senator Harris, you’ll be there as a member of the committee. Her confirmation would cement the Court’s conservative majority and make it likely to more abortion restrictions, even to overturning the landmark Roe v. Wade ruling. Access to abortion would then be up to the states. Vice President Pence, you’re the former governor of Indiana. If Roe v. Wade is overturned, what would you want Indiana to do? Would you want your home state to ban all abortions? You have two minutes, uninterrupted.
…
10:04 PM ET
PAGE: Senator Harris, you are the senator from and former attorney general of California. Let me ask you a parallel question to the one I posed to the Vice President. If Roe v. Wade is overturned, what would you want California to do. Would you want your home state to enact no restrictions on access to abortion? And you have two minutes, uninterrupted.
…
10:07 PM ET
PAGE: Thank you, senator Harris. You mentioned earlier, Vice President Pence, that the president was committed to maintaining protections for people with pre-existing conditions. But you do have this court case that you are supporting, your administration supporting, that would strike down the Affordable Care Act. The President says, President Trump says that he’s going to protect people with pre-existing conditions, but he has not explained how he would do that. And that was one of the toughest nuts to crack when they were passing the Affordable Care Act. So, tell us specifically, how would your administration protect Americans with pre-existing conditions to have access to affordable insurance, if the Affordable Care Act is struck down?
…
PAGE: In March, Breonna Taylor, a 26-year-old emergency room technician in Louisville was shot and killed after police officers executing a search warrant on a narcotics investigation broke into her apartment. The police said they identified themselves. Taylor’s boyfriend said he didn’t hear them do that. He used a gun registered to him to fire a shot which wounded an officer. The officers then fired more than 20 rounds into the apartment. They say they were acting in self-defense. None of them have been indicted in connection with her death. Senator Harris, in the case of Breonna Taylor, was justice done? You have two minutes.
…
10:15 PM ET
PAGE: Thank you, Senator Harris. Vice President Pence, let me pose the same question to you. In the case of Breonna Taylor, was justice done? You have two minutes uninterrupted.
10:23 PM ET
PAGE: I’d like to pose the first — I would like you to respond first to the question on our final topic, the election itself. President Trump has several times refused to commit himself to a peaceful transfer of power after the election. If your ticket wins and President Trump refuses to accept a peaceful transfer of power, what steps would you and vice president Biden then take? What would happen next? You have two minutes.
…
10:25 PM ET
PAGE: Vice President Pence, President Trump has several times refused to commit himself to a peaceful transfer of power after the election. If vice president Biden is declared the winner and President Trump refuses to accept a peaceful transfer of power, what would be your role and responsibility as vice president? What would you personally do? You have two minutes.
…
10:28 PM ET
PAGE: You know, I wrote all the questions that I asked tonight, but for the final question of the debate, I’d like to read a question that someone else wrote. The Utah Debate Commission asked students in the state to write essays about what they would like to ask you and I want to close tonight’s debate with a question posed by Brecklin Brown from Utah. She’s an eighth grader at Springview Junior High in Springview, Utah. And she wrote, quote, “When I watch the news, all I see is arguing between Democrats and Republicans. When I watch the news, all I see is citizen fighting against citizen. When I watch the news, all I see are two candidates from opposing parties trying to tear each other down. If our leaders can’t get along, how are the citizens supposed to get along?” And then she added, “Your examples could make all the difference to bring us together.” End quote. So, to each of you, in turn, I’d like you to take one minute and respond to Brecklin. Vice President Pence, you have one minute.
