Tag: economy

Egg Prices Catapult Into ‘Blue-Sky Breakout’ As Bird Flu Sparks Worsening Shortage

An ongoing and devastating avian influenza outbreak has severely dented the nation’s egg-producing hen population, driving wholesale prices into record-high territory and far surpassing the price explosion seen a few years ago when the bird flu first emerged. This is an alarming trend, and egg prices at the supermarket will likely rise further in the weeks and months ahead.

The latest wholesale data from Urner Barry shows that the price for a dozen eggs has jumped to a record high of $5.4, exceeding the previous peak of $4.65 set in December 2022. Rising wholesale prices are expected to continue pressuring supermarket prices higher.

Keep reading

New York Times Complains Labeling Mexican Cartels Terrorist Organizations Will ‘Hurt The U.S. Economy’

As Donald Trump gets to work on his agenda, left-wing media organizations like The New York Times are already making fools of themselves.

On his first day in office, Trump signed an executive order designating Mexican drug cartels as foreign terror organizations.

His order stated:

The Cartels have engaged in a campaign of violence and terror throughout the Western Hemisphere that has not only destabilized countries with significant importance for our national interests but also flooded the United States with deadly drugs, violent criminals, and vicious gangs.

The Cartels functionally control, through a campaign of assassination, terror, rape, and brute force nearly all illegal traffic across the southern border of the United States.

In certain portions of Mexico, they function as quasi-governmental entities, controlling nearly all aspects of society.

The Cartels’ activities threaten the safety of the American people, the security of the United States, and the stability of the international order in the Western Hemisphere.

Their activities, proximity to, and incursions into the physical territory of the United States pose an unacceptable national security risk to the United States.

However, The New York Times is now arguing that this move will damage the U.S. economy because of the risk of businesses in both countries violating sanctions against terrorist groups.

Their article states.

The foreign terrorist designation could lead to severe penalties — including substantial fines, asset seizures and criminal charges — on companies and individuals found to be paying ransom or extortion payments.

U.S. companies could also be ensnared by standard payments made to Mexican companies that a cartel controls without the American companies’ knowledge.

As a result, companies in the risk-averse American financial sector may simply refuse to wire money to a Mexican factory, for example, to facilitate cross-border production and trade, or to wire money between personal accounts.

…

If money transfer companies like Western Union also stop transactions to Mexico over worries about properly vetting Mexican clients, it could affect the remittances the country relies on.

That would be devastating for the Mexican economy, which received $63.3 billion in remittances in 2023, nearly 5 percent of the country’s gross domestic product.

The Mexican peso has suffered as a result of the designation, as well as the looming threat of tariffs and trade barriers.

Keep reading

Joe Biden’s farewell letter is full of classic Biden whoppers

On Joe Biden’s way out of office, he and his puppet masters are doing everything they can to tie Trump’s hands so they can blame him for failing to lower inflation, eliminate unnecessary federal workers, lower energy prices, and deport as many illegals as he promised and should.

They are also rewriting history, pretending that Biden’s four years in office made the world and America safer and more prosperous.

And now, Biden has issued a farewell letter, which was full of class Biden whoppers. Biden has been a serial liar throughout his fifty years in office so it’s completely expected, but he’s really outdone himself this time, starting out with one of his biggest, continuous lies, i.e. that he inherited the worst economic crisis since the Great Depression and his policies turned it around. From a report at Fox News:

Biden began his letter by writing that four years ago when he took office, ‘We were in the grip of the worst pandemic in a century, the worst economic crisis since the Great Depression….’

The media know, or should know, that Biden inherited a rapidly growing economy, yet we see very few who correct Biden’s lies—so most Americans probably believe he actually did inherit a disaster. What Biden was actually handed though was a rapidly growing economy, low energy prices, overall inflation of 1.4%, a fairly secure border, and a relatively peaceful world—his executive orders and policies instantly undid all of that, and made things much worse for the last four years.

Keep reading

Seattle’s new $20 minimum wage claims 6th restaurant casualty since New Year

Seattle’s new $20 minimum wage for 2025 has caused a 6th restaurant to close since the new year.

Pike Place Market bakery The Confectional closed on Sunday after 18 years in business.

Owner Destiny Sund told KIRO News Radio, “I wanted my team to have a wonderful holiday season, so I didn’t mention to them that we would be closing until after New Year’s Day. So this has been a long week for all of us at The Confectional.”

The minimum wage for all employees in the city limits, regardless of business size, jumped to $20.76 on January 1. Last year, if a worker earned at least $2.72 per hour in medical benefits or tips, the business only had to pay its employees $17.25 per hour, but now, for those businesses that featured tips, the change to the minimum wage was a 20 percent increase. The Emerald City’s increase is $4 more than Washington State’s minimum wage requirement.

Sund added, “That allowed businesses 50 employees or under to subtract $2.00 from the minimum wage. If they could make it up in tips and or benefits. And my employees did make that up in tips.”

She continued, “And just doing the math with the additional increase and the loss of the tip credit, it would cost my business an additional $18,000. And that’s just not sustainable.”

At least five other restaurants in Seattle have closed or are closing just days after the city council’s new minimum wage law went into effect.

Keep reading

Government Spending Will Cause the Next Financial Crisis

Crises are never caused by building excessive exposure to high-risk assets. Crises can only happen when investors, government bodies, and households accumulate risk in assets where most believe there is little to no risk.

The 2008 crisis did not occur due to subprime mortgages. Those were the tips of the iceberg. Moreover, Freddie Mac and Fannie Mae, state-owned entities, guaranteed a sizable portion of the subprime mortgage packages, which prompted numerous investors and banks to invest in them. Nobody can anticipate a crisis stemming from the potential decline in the Nvidia share price or the value of Bitcoin. In fact, if the 2008 crisis had been created by subprime mortgages, it would have been absorbed and offset in less than two weeks.

The only asset that can really create a crisis is the part of banks’ balance sheets that is considered “no risk” and, as such, requires no capital to finance their holdings: government bonds. When the price of sovereign bonds swiftly declines, the banks’ balance sheet rapidly shrinks. Even if central banks conduct quantitative easing, the spillover effect on other assets leads to the abrupt destruction of the money base and lending.

The collapse in the price of the allegedly safest asset, government bonds, comes when investors must sell their existing holdings and fail to purchase the new supply issued by the states. Persistent inflation consumes the real returns of previously purchased bonds, leading to the emergence of evident solvency problems.

In summary, a financial crisis serves as evidence of the state’s insolvency. When the lowest-risk asset abruptly loses value, the entire asset base of commercial banks dissolves and falls faster than the ability to issue shares or bank bonds. In fact, banks are unable to increase capital or add debt due to the declining demand for sovereign bonds, as banks are perceived as a leveraged bet on government debt.

Banks do not cause financial crises. What creates a crisis is regulation, which always considers lending to governments a “no-risk,” “no capital required” investment even when solvency ratios are poor. Because the currency and government debt are inextricably linked, the financial crisis first manifests in the currency, which loses its purchasing power and leads to elevated inflation, and then in sovereign bonds.

Keynesianism and the MMT fallacy have driven global public debt to record levels. Furthermore, the burden of unfunded liabilities is even larger than the trillions of dollars of government debt issued. The United States’ unfunded liabilities exceed 600% of GDP, according to the Financial Report of the United States Government, February 2024. In the European Union, according to Eurostat, France and Germany each accumulate unfunded liabilities that exceed 350% of GDP.

According to Claudio Borio of the Bank for International Settlements, a government debt glut may cause a bond market correction that could spill over into other assets. Reuters reports that large government budget deficits suggest that sovereign debt could rise by a third by 2028 to approach $130 trillion, according to the Institute of International Finance (IIF) financial services trade group.

Keep reading

H-1B Visa Undermines American Students and Workers

Last year, I committed to spending this year exploring the education-to-workforce pipeline. Higher education has long been seen as the start of that pipeline, with graduates transitioning from classrooms to careers. My interest in this topic dates back to my time working for Governor Phil Bryant in Mississippi, where I assisted Laurie Smith in studying how the state’s community colleges and training programs prepared graduates for the workforce. The results were underwhelming—a topic for another day. For now, a more pressing issue is the role of the H-1B visa in this pipeline.

In this week’s top article, Rob Jenkins connects higher education to the H-1B visa program, framing the debate over whether to support the program as a proxy for assessing the quality of U.S. education. He poses a critical question: Are colleges and universities producing enough top-tier talent to meet economic demands—and if not, why?

Jenkins argues that American higher education bears responsibility for leaving graduates behind their international peers. He cites a June 2024 Gallup poll showing that only a third of Americans have confidence in U.S. universities to prepare students for the workforce. This crisis of confidence, Jenkins contends, stems from a combination of social promotion in K-12 schools, the dilution of college curricula, and the prioritization of “diversity, equity, and inclusion” (DEI) over academic rigor—all of which, he believes, contribute to the nation’s reliance on foreign labor.

Keep reading

Lessons From Germany’s Economic Contraction

Germany’s once-envied efficient economy is in freefall, and the climate change cult and European Green Deal are directly to blame. State policies subsidizing EVs and other products, shutting down coal and nuclear plants, and mandating forced conversion to untested, unimplemented “renewables” resources for energy have decimated industrial efficiency. Industries and blue-collar jobs are fleeing Germany for polluting, profitable operations in China, India, and elsewhere abroad. Will the United States follow suit?

As natural gases skyrocket during a European cold snap, and Russian gas pipelines through Ukraine are shut down for the first time since 1991, Germany has transitioned from Europe’s economic darling to its leading economic anchor. Followed closely by France and the UK, similarly weighted by economically destructive climate fantasies that are crashing to Earth like ideological meteors, the latest blow to gas supplies compounds the crisis occasioned by the mysterious sabotage of Nord Stream 1 and 2.

The results of this disastrous state-controlled economic carbon dioxide experiment continue to be as evident as explosives in a controlled demolition. Germany terminated massive EV subsidies at the end of 2023; EV sales promptly fell 69%. Despite gushing economic promises of “high-paying jobs” in the renewables industry, Germany announces more layoffs almost daily. Chinese companies, unhindered by escalating energy and regulatory costs, are leading in EV and other manufacturing technologies while spewing more chemicals into the ecosystem than German manufacturing industries.

Keep reading

Why America Is in So Much Trouble

Shortly before Milton Friedman’s death in 2006, I had the privilege of interviewing him over dinner in San Francisco. The last question I asked him was: What are the three things we have to do to make America more prosperous?

His answer I have never forgotten: “First, allow universal school choice; second, expand free trade; third and most importantly, cut government spending.” That was long before Barack Obama and Joe Biden came along.

There aren’t too many problems in America that can’t be traced back to the growth of big and incompetent government.

It is notable that the two big bursts of inflation during modern times both occurred when government spending exploded. The first was the gigantic expansion of the Lyndon B. Johnson “war on poverty” welfare state in the 1970s with prices nearly doubling. Second was the post-COVID-19 spending blitz in the last year of Donald Trump’s first term, followed by the Biden $6 trillion spending spree, with the Consumer Price Index sprinting from 1.5% to 9.1%.

Coincidence? Maybe. But I doubt it.

The connection between government flab and the decline in the purchasing power of the dollar is obvious. In both cases the Washington spending blitz was funded by Federal Reserve money printing. The helicopter money caused prices to surge. (I still find it laughable that 11 Nobel Prize-winning economists wrote in the New York Times in 2021 that the Biden multitrillion-dollar spending spree wouldn’t cause inflation. Were they on hallucinogenic drugs?)

The avalanche of federal spending hasn’t stopped even though the COVID-19 pandemic ended over a year ago. We are three months into the 2025 fiscal year and on pace to spend an all-time-high $7 trillion and borrow $2 trillion. If we stay on this course, the federal budget could reach $10 trillion over the next decade.

This road to financial perdition cannot stand. It risks blowing up the Trump presidency.

Upon entering office, Trump should on day one call for a package of up to $500 billion of rescissions — money the last Congress appropriated but has not been spent yet. Canceling the green energy subsidies alone could save nearly $100 billion. Why are we still spending money on COVID-19?

We could save tens of billions of dollars by ending corporate welfare programs — such as the wheelbarrows full of tax dollars thrown at companies like Intel in the CHIPS Act. The Elon Musk Department of Government Efficiency is already identifying low-hanging fruit that needs to be cut from the tree.

Along with extending the Trump tax cut of 2017, this erasure of bloated federal spending is critical for economic revival and for reversing the income losses to the middle class under Biden.

This is especially urgent because the curse of inflation is NOT over. Since the Fed started cutting interest rates in October, commodity prices are up nearly 5%, and mortgage rates have again hit 7%, in part because the combination of cheap money and government expansion is a toxic economic brew — as history teaches us.

Keep reading

Seattle Set Minimum Wage Over $20 and You’ll Totally Believe What Happened Next

Seattle closed the door on the subminimum wage for people who work for small businesses, earn tips, or enjoy medical benefits under a punishing new minimum wage law. This forced one popular spot to close up shop the same day the new ordinance went into effect.

“Previously, if an employee earned at least $2.72 per hour in medical benefits or tips,” Fox 13 Seattle reported, “a business could pay its workers $17.25 per hour.” As of New Year’s Day, all the exceptions and exemptions are gone. Seattle’s new no-excuses minimum wage is now a payroll-busting $20.76 an hour.

Bebop Waffle Shop threw a big party on Dec. 31 and permanently locked its doors on Jan. 1. My shocked face was last seen sipping a brandy by the fire and reading a dog-eared copy of Milton Friedman’s “Why Government Is the Problem.” That’s my amusingly wordy way of saying that I totally believe it happened.

The local diner’s finances were already suffering due to inflation and lower downtown foot traffic. It was against this economic backdrop that the city chose to impose a 20% pay hike on restaurant workers because politicians put moral preening and virtue signaling ahead of any other considerations.

Then there’s the part I didn’t believe at first but, on reflection, seemed almost inevitable. “I hate to close a safe space for queer people at this time,” Bebop Waffle Shop owner Corina Luckenbach explained on Instagram, “but the money just isn’t there after the minimum wage increase (which I fully support).”

Emphasis added because some folks are just too far gone ever to take the red pill. Still, you want to grab Corina by the hoodie and explain things to her in words she’ll understand, tell her, “Minimum wage laws are bad for queer people and other living things, mmkay?”

Anthony Anton, head of the Washington Hospitality Association, estimated that Seattle will see 5%-8% of its restaurants go out of business — in 2025 alone.

Keep reading

Fiat Money And Dark Forces At Work

The Bible recounts how the Holy Spirit led Jesus into the wilderness to be tempted by the devil. The devil appeared and first wanted Jesus to turn stones into bread. (In fact, Mises criticized Keynesianism, saying, “the stones do not turn into bread”). Jesus refused. Then, the devil challenged Jesus to throw himself from the pinnacle of the temple in the holy city, asserting that the angels would catch him. Again, Jesus refused. But the devil did not give up. In Matthew 4:8–11, it says:

Again, the devil took Him to a very high mountain and showed Him all the kingdoms of the world and their splendor. 9And he said to Him, “I will give you all these things if you will fall down and worship me.” 10Then Jesus told him, “Go away, Satan! For it is written: Worship the LORD your God, and serve only Him.” 11Then the devil left him, and angels came and began to serve him.”

The last temptation is particularly significant. The devil promises Jesus “all the kingdoms of the world and their splendor,” meaning all power and wealth there is. Jesus resisted this temptation as well. However, humans, in their imperfection, often and all too easily fail in resisting similar temptations. For instance, the rulers and the ruled in the Western world have long succumbed to a particularly devilish temptation: replacing commodity (or precious metal) money with state-issued, unbacked money, known as fiat money. In a sense, they have been seduced by the tempting prospect of securing “all the kingdoms of the world and their splendor,” that is, the power to increase the quantity of money arbitrarily and in unlimited amounts at any time. The temptation to centrally control the economy was irresistible.

The transition from gold to fiat money happened quite some time ago. Many people probably no longer remember August 15, 1971, when the end of the gold-backed monetary system was announced. On that day, the US administration under President Richard Nixon (1913-1994) declared that the US dollar would no longer be redeemable in gold. And, with the end of the dollar’s gold backing, a global fiat money system was effectively created, a system in which all major currencies are literally produced “out of thin air.” But why did the shift away from commodity, or gold-backed, currencies occur?

The US took this step to avoid impending insolvency. The amount of US dollars it had issued over the years far exceeded the amount of gold the US Treasury had in its vaults, and which was redeemable at 35 US dollar per ounce (31.10… grams) of physical gold. By the late 1960s, more and more countries with US dollar reserves began converting their greenbacks into physical gold at the Federal Reserve Bank in New York. It became evident to the Nixon administration that sooner or later the US would no longer be able to fully redeem the dollar for gold. To avoid insolvency, the Americans simply suspended the gold convertibility of the US dollar “temporarily.”

Keep reading