Blue State Economies Will Soon Crumble – But Will They Take Red States With Them?

Blue State Economies Will Soon Crumble – But Will They Take Red States With Them?

Authored by Brandon Smith and originally published at Birch Gold Group,

Over the past six to eight months, the U.S. has seen perhaps one of the largest migrations of people based on economic and ideological concerns in almost a century. Not since the Great Depression has there been so many Americans relocating in search of a better life. Today, however, those who relocate seem to be largely conservatives and moderates. There is a very good, multifaceted, reason for this.

One of the best recent explanations for the conservative migration is visible in the near-180-degree turnaround by New York Governor Andrew Cuomo on his draconian lockdown mandates. All of a sudden, Cuomo has announced that New York simply cannot stay closed any longer and that businesses need to reopen quickly.

What could have possibly forced the thick-skulled Cuomo to finally see the light?  I think it has a lot to do with the fact that New York has attempted to distribute millions of doses of the COVID-19 vaccine and they have only been able to give out 30% of them. This means that around 70% of people eligible to get the vaccine in New York are apparently refusing to take it (a smart move in my opinion considering the highly experimental and untested nature of the cocktail). Surprisingly, at least 30% of NY healthcare workers are also refusing to take the vaccine. Cuomo has resorted to threatening hospitals with fines if they do not distribute the vaccines fast enough.

In his latest statement Cuomo is trying to send a message that New Yorkers need to take the vaccine so that a reopening can begin. In other words, “take the vaccine or the economy will collapse”.

I don’t believe Cuomo is mending his totalitarian ways, but at least for now, I think he is realizing what most of us in the alternative economic field have been saying for the past year:  Blue state economies are dying because they are oppressive and this stifles trade and business.

Beyond the business factor and the restrictions on people’s daily movements and activities, the lockdowns and subsequent financial crisis have triggered rising crime levels across the country, but predominantly in blue states and democratic controlled cities.

According to the U.S. Postal Service, New York City alone saw over 300,000 residents pick up everything and leave from March to October. This is an unprecedented spike, an exodus the likes of which New York has not seen in a long time.

On the other side of the country, California is witnessing its own exodus, and it started well before the pandemic struck. In 2019, California saw over 653,000 residents escape the state’s suffocating bureaucracy and high taxes. In 2020, the state has hit its lowest population growth rate in history, even after accounting for babies born. More than 200,000 people left the state than moved in in the past year, and before anyone claims that these people are “liberals” invading red states, even the California media admits they are mostly conservatives seeking to escape the socialist sinkhole.

U-Haul, one of the largest moving companies in the nation, has compiled data on the top states which Americans are moving to during the pandemic. The list is loaded with well-known conservative strongholds and red states, with Tennessee, Texas and Florida at the top.

But what does this mean for leftist states in economic terms?  First, a huge loss of tax revenue, and this is dangerous for blue states in particular. California was projecting a $5.6 billion surplus in January of last year, only to face a $54 billion deficit by August. The state’s net tax revenue fell by 42% from March to May year-over-year, far outpacing losses in the rest of the country. Democratic Gov. Gavin Newsom begged Congress for $14 billion in federal aid, claiming that the government has a “moral and ethical obligation to help the states”.

And this seems to be exactly how states like California are surviving, by stealing tax dollars from people in other states that have been more responsible in caring for their economies.

We often hear about states like California and New York as having GDPs comparable to entire countries. We hear about all the manufacturing and agricultural production, and a couple of years ago, there were even calls for secession in California on the grounds that “orange man bad” and that the state could fiscally support itself “easily.”

Nothing could be further from the truth. What leftist cheerleaders often refuse to mention is the deep and insidious debt problems and deficits blue states suffer from. Looking at a list of the most indebted states in the U.S. in terms of total assets and liabilities, you will find that the vast majority of them are Democrat controlled.

Furthermore, blue states tend to have the highest levels of unfunded pension liabilities. In other words, their public pension obligations are only partially funded and are suffering a net loss. California, Connecticut and Illinois top the list and the only red state that comes close in terms of percentages is Alaska. Red states top the list in terms of the best funded pensions and the lowest debt per capita.

These debts are caused by irresponsible spending policies and endless socialist welfare measures, and as with most socialist systems, they always end up spending more money than they can bring in. They also end up wasting money more than they effectively spend money. This translates to much higher taxes, as blue states refuse to admit policy errors and fix their mistakes. Instead, they punish the citizenry with increased taxation. A list of the highest personal income taxes across the country is dominated by blue states.

Blue states like Illinois also stack the list of highest property taxes.

One might assume that with such high taxation that social welfare programs would be in place to help the needy and to reduce poverty, but this is not the case. California and New York have the highest population of homeless people by far (151,278 in CA and 92,091 in NY). The next highest homeless population is in a red state, Florida, with only 28,000.

Add to this the fact that blue states have been the most lockdown-happy during the pandemic despite the fact that the lockdowns have done nothing to stop the spread of COVID-19, and now you know why people are leaving these places en masse.

This dynamic has led to red states outperforming blue states across the board in terms of economic recovery. Job recovery in red states far outpaces blue states, along with recovery in GDP. As a result, a call has been rising for a “Blue State Bailout”, and with Biden ostensibly entering the White House they may very well get what they are asking for.

The problem is, the amount of bailout money that would satiate the hunger of blue states would have to be in the multi-trillions. As more and more people and businesses leave these places for more free states, it’s inevitable that tax revenues will dry up. And, as leftists raise taxes to cover the deficit even more people will relocate. It is a vicious cycle that will lead to complete dependency on federal dollars for blue states to survive.

Red states, on the other hand, will not be enforcing strict lockdown mandates. In fact, I suspect that even if Biden tries to institute a Level 4 federal lockdown that many red states will defy him and carry on with business as usual while blue states quickly bow and submit. The only practical option is for blue states to ignore the lockdowns and fully reopen, not just for a couple of months, but permanently. Will they do this?  I doubt it.

It is also important to consider at a fundamental level the types of people that make up the populations of red states versus blue states. Blue states have built a culture of dependency and the majority of leftists have no useful skill sets that would allow them to adapt to an economic crisis. Meanwhile, red state culture encourages independence, self-reliance and productivity.

The most likely reaction among blue states or the federal government under Biden will be to try to “redistribute” the wealth and stability from red states to blue states. This could happen in the form of stimulus measures that unfairly benefit blue states. The resulting dollar devaluation and price inflation might hit red states harder because they would not be receiving bailouts to offset the higher costs. In the worst-case scenario, in which a full spectrum financial collapse occurs, we may even see the federal government attempt to redistribute production and manufacturing from red states to blue states in the name of “national emergency.”

There could also be an attempt to stop people from moving away from blue states entirely. We have already seen a beta test for this in California, where legislators are attempting to pass a bill which would legally require former residents to continue paying taxes to the state for years after they leave.

Of course, this would lead to severe resistance from conservatives, but that is a discussion for another time. The bottom line is this: the economic and pandemic policies of blue states have failed miserably. Their only option is to see the error of their ways, become fiscally responsible and remove totalitarian lockdown measures, or, attempt to leech success from the red states like parasites. Which one do you think they will choose?

*  *  *

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Tyler Durden
Sun, 01/17/2021 – 21:30

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SEC Whistleblower Tips Have Soared 31% Since Most Employees Started Working From Home

SEC Whistleblower Tips Have Soared 31% Since Most Employees Started Working From Home

Sitting around at home with nothing to do during the pandemic? Why not become a corporate whistleblower! It allows you to exact revenge on your boss and co-workers for years of misery and can also pay well!

That must be exactly what many are thinking, as it is being reported that since the work from home boom started, whistleblower tips to the SEC have soared. The SEC received 6,900 tips for the fiscal year ending September 30, 2020, which marked a 31% rise from the previous 12 months, Bloomberg reported

The increase in tips “really started gaining traction in March when Covid-19 forced millions to relocate to their sofas from office cubicles,” the report notes.

Jordan Thomas, a former SEC official who helped set up the agency’s whistle-blower program, said: “You’re not being observed at the photocopy machine when you’re working from home. It’s never been easier to record a meeting when you can do it from your dining room table.”

Adam Waytz, a psychologist and professor at Northwestern University’s Kellogg School of Management, said: “When you feel disconnected from work, you feel more comfortable speaking up.”

And the increase in tips has led to larger and more consistent payouts from the SEC. Since the beginning of the pandemic, the agency has paid out $330 million in awards, including one award of $114 million to a single tipster in October. The payments are likely tied to cases prior to the pandemic, but are indicative of a trend of growing payouts. 

The SEC has been paying whistleblowers since the 2010 Dodd-Frank Act, which was put into effect as a result of massive financial blowups like Madoff and Enron. Bloomberg wrote:

Under the program, tipsters can receive financial awards if they voluntarily provide unique information that results in an enforcement action. Payouts can range from 10% to 30% of the money collected in cases where sanctions exceed $1 million. Awards are paid from a fund set up by Congress — not money owed to harmed investors.

Whistleblowers are never named and, on occasion, when working with lawyers, the SEC may not even know the name of a whistleblower. 

Joseph Grundfest, a former SEC commissioner, said: “Corporations and their lawyers are acutely aware of the fact that tips are flooding in and that whistle-blower awards have ballooned. You pay whistle-blowers more than $100 million, you’re going to get more whistle-blowers.”’

“Making more awards — certainly larger awards — all those things do go toward incentivizing whistle-blowers to come forward,” former SEC Enforcement Director Stephanie Avakian said.

“The problem is that they’re being flooded with tips and don’t have a robust mechanism for separating the wheat from the chaff,” Grundfest concluded. 

Since the program’s inception it has paid out about $737 million.

Tyler Durden
Sun, 01/17/2021 – 21:00

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Conservatives Should Learn From The Left

Conservatives Should Learn From The Left

Authored by Heather Higgins via,

As the political right struggles to regroup after the horrible events at the U.S. Capitol, it should learn from the masters. The left has a consistent pattern when responding to terrible behavior by activists associated with their cause — from the widespread destruction and violence last summer during protests of police brutality to mobbing Republican senators during the Brett Kavanaugh confirmation hearings to the Bernie Sanders acolyte who opened fire at GOP members of Congress in 2017.

The left starts by driving the narrative that their protests or movements were mostly peaceful while amplifying participants’ concerns to give them legitimacy.

They downplay any violence, positioning it as nothing to do with them, a distraction from the cause. Having disassociated themselves from the bad behavior, they never act embarrassed.

Compare this to those on the right:

Everyone has unambiguously condemned the rioters in the Capitol, as they should. But many have fallen into the trap of accepting that they ought to be embarrassed, as though the rioters represented them, or even most Trump supporters, neither of which is the case. Nor have they defended the right to protest and the importance of recognizing and hearing concerns. Failing to do so has allowed the false equivalence between the rioters and the Trump supporters who were protesting to advance their concerns about election fraud, even though the vast majority of those in Washington on Jan. 6 were peaceful people who revere the Constitution.

The left has used those missteps to play a semantic game of expanding definitions and thus tar an ever widening circle. They start with the remarkable premise that there were no election shenanigans whatsoever, and consequently that it’s heresy to question rule changes or unrequested mailed ballots. Why? To label legitimate issues as merely a “fringe” contentions. 

Over the course of a week we’ve watched this metastasizing of definitions — President Trump “should have known” what his statements would lead to became “he deliberately incited” the rioting. And assertions that “everyone should have known” was expanded to “everyone who supported Trump incited the violence,” which led to “those who were silent and didn’t oppose Trump are enablers” and — when you are on a roll, why stop? — that conservatives are nascent Nazis.

With blame comes punishment — not just deserved penalties for the rioters but threatened retaliation, starting with employment prospects, against the peaceful protesters, those who worked for the administration, and now even anyone who supported Trump and his policies.

They are also ratcheting up censorship of conservatives by de-platforming the president and tens of thousands of others, shutting down alternate platforms, and revoking book publishing deals, all by applying standards that magically do not pertain to others. 

Most toxic is the assault on speech through redefinition — it is no longer what was said or intended, it is how it might be interpreted. That subjective non-standard gives an excuse to those on the left to define what constitutes permitted opinion, not just on this matter but a range of issues where disagreement will be labeled as dangerous. 

The implications of that are dire. It will mean the left  can use social pressure against cowering corporations, and foundations, to cut off the oxygen of speech and commerce — not just  access to social media platforms or hosting servers, but also banking services and funding — for individuals and organizations with a different view. 

To prevent this, the right needs to defend the peaceful participants and their right to protest, explain the roots of their deep legitimate concern (years of fake news, social media suppression, and election rule overrides and ballot proliferation), and use this as an opportunity to unite, not divide. 

Some conservative leaders and commentators, especially Never Trumpers, seem to see this as an opportunity to purge the movement of everyone associated with Trump and mistakenly presume that by feeding him and his allies to the alligator, they will be allowed to escape and achieve the left’s promised unity.  

But as the social media putsch shows, this kind of “unity” really means “accept your guilt and be silenced.” With Trump out of the White House, the alligator won’t go away; his menu will simply shift to any others who won’t shut up and “unify.” The penalty: their platforms, social standing, and sources of funding will all be cut off.

Efforts to force the 74 million people who voted for Trump over Joe Biden to feel ashamed and responsible or to publicly punish and silence their advocates, will be devastating not just to the Republican Party but to our country. We must instead regroup around our positive agenda, defend the tremendous policy gains that have been made — and stand strongly for the right of free speech and association, applied with neutral rules to everyone, including conservatives.

Tyler Durden
Sun, 01/17/2021 – 20:30

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Whole Foods CEO Suggests Americans Wouldn’t Need Healthcare If They Ate Better 

Whole Foods CEO Suggests Americans Wouldn’t Need Healthcare If They Ate Better 

Whole Foods CEO John Mackey said Americans would not need healthcare if they ate better and lived healthier lives. 

“I mean, honestly, we talk about healthcare. The best solution is not to need health care,” Mackey told Freakonomics Radio on Nov. 4 and was first reported on Monday by CNBC.

“The best solution is to change the way people eat, the way they live, the lifestyle, and diet,” he said. “There’s no reason why people shouldn’t be healthy and have a longer healthspan. A bunch of drugs is not going to solve the problem.” 

Whole Foods CEO John Mackey

Mackey dropped some pretty alarming health statistics that show Americans make bad health choices. 

“71% of Americans are overweight and 42.5% are obese. Clearly, we’re making bad choices in the way we eat,” he said. “It’s not a sustainable path. And so, I’m calling it out.” 

The numbers also shed light on why the US has had a relatively difficult time containing the virus pandemic because obese Americans are more at risk of contracting the infection. 

To make matters worse, lockdowns and restrictions have led the most obese nation in the world, the US, to become ever more overweight. About a quarter of Americans gained between five and ten pounds since the coronavirus lockdowns.

The reason for the “Quarantine 15” weight gain has been changes in diet, lack of regular exercise and a more sedentary lifestyle.

Mackey has been vocal about adult health for years. In 2009, he argued in a WSJ op-ed that “the last thing our country needs is a massive new healthcare entitlement.”

“This begins with the realization that every American adult is responsible for his or her own health,” Mackey wrote. “We should take that responsibility very seriously and use our freedom to make wise lifestyle choices that will protect our health.”

Suppose Americans listened to Mackey’s advice. Then how would big pharma make their billions of dollars from obese people who suffer from heart disease, diabetes, cancer, and high blood pressure? 

Tyler Durden
Sun, 01/17/2021 – 20:00

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Russia Advances In The Field Of Autonomous Combat Robotic Platforms

Russia Advances In The Field Of Autonomous Combat Robotic Platforms

Via South,

Russia has been testing autonomous combat robotic platforms.

The experimental robotic platform “Marker” completed a trek of approximately 30 kilometers, entirely in autonomous mode, the Advanced Research Fund (FPI) reported on December 30th. The tests were carried out in the Chelyabinsk region.

The route of the vehicle was laid through an unprepared territory – a forest-steppe with a snow cover. The autonomous platform motion control system, having received a route assignment with the coordinates of a given point, ensured the platform’s arrival at the finish line in an hour and a half. The vehicle relied on the data of the technical vision system built on new neural network algorithms.

The autonomous control system of the platform movement provides autonomous laying and adjustment of the route of movement in the event of obstacles – trees, rises, ravines, bushes, etc.

The technical characteristics of the platform provide the possibility of autonomous operation for up to 48 hours on paved roads and up to 24 hours on rough terrain. As part of the next tests, the “Marker” platform will have to cover 50, 100 and 200 kilometers.

The “Marker” experimental robotic platform was developed as part of a project by the Advanced Research Foundation, which was launched in 2018. The goal of the project is to create and conduct a full-scale development of technologies and basic elements of ground-based robotics.

The “Marker” in the version on a tracked platform completed movement trials in July 2019, and then moved towards the firing practice. the Marker platform was developed and produced by the NPO Androidnaya Tekhnika as part of the first stage of the FPI project. The “Marker” uses two types of platforms: tracked and wheeled. A total of five robotic complexes will be manufactured to test the technologies.

The robotic platform “Marker” is a joint project of the Foundation for Advanced Study and NPO “Android Technology”. It is assumed that this combat robot will become the basis for working out the joint interaction of ground robots, unmanned aircraft and special forces. The “Marker” is positioned as a constructor for creating models of warfare in the future.

The evolution of modern ground-based robotic systems for military purposes is moving towards increasing the ability to perform tasks in an autonomous mode with a gradual decrease in the involvement of the operator in the process of controlling. To increase the level of autonomy of ground-based robotic systems, the development of a number of key technologies is required, which together determine the appearance of promising robotic system. Therefore, it is relevant to develop robotics technologies and bring them to the level of readiness that allows the technologies being created to be applied on promising autonomous robotic systems in real conditions.

To test the technologies being created, to bring their level of readiness, a mobile demonstrator of robotics technologies was created using the modular design principle, with an open information architecture of construction, which provides the possibility of carrying out a full-scale development of technologies and basic elements of ground-based robotics.

Tyler Durden
Sun, 01/17/2021 – 19:30

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There’s Now A 12 Minute $175 Chopper Ride From Westchester Or Greenwich To Manhattan

There’s Now A 12 Minute $175 Chopper Ride From Westchester Or Greenwich To Manhattan

The irony of New York City getting new helicopter travel options is that the traffic these rides once sought to avoid has thinned out significantly. As a result of both Covid-19 and a general exodus from the city that is taking place as a result of the wonderful job Mayor Bill de Blasio is doing, the once super-crowded streets of Manhattan have been downgraded to simply just crowded.

Regardless, those with the means in NYC may be happy to hear there is a new 12 minute helicopter ride option for those who want to travel between Westchester County Airport and Manhattan. The ride, put into service by Blade Urban Air Mobility, can carry five and will cost $175, according to Bloomberg.

Rob Wiesenthal, the company’s CEO, said: “We believe people will be willing to pay to go once a week by Blade, because we’re saving so much friction. These people are working remotely four days a week, and it can feel comfortable to do this once a week.”

A Blade chopper / Photo: BBG

The program comes after the success of a pilot program in and out of the Hamptons last year. The chopper’s helipad will be in Ross’s terminal in Westchester.

Blade is looking to introduce even more helipads that it calls “vertiports” alongside of electric choppers within four years. The expansion, especially in NYC, could come as more people start meandering back to the office daily for work. 

Mitchell Moss, director of the Rudin Center for Transportation Policy and Management, concluded: “The helicopter and vertical technology are going to surge, because of the savings in time. It’s one of the best investments, because you can be twice as productive when you’re in your Manhattan high rise office: You can do far more in face to face, which makes the helicopter worth it.”

He concluded: “There’s a new hierarchy of how you commute. The helicopter is superseding the limousine and the SUV for hedge-fund executives and high-tech leaders.”

Tyler Durden
Sun, 01/17/2021 – 19:05

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Stockman: Why Does Sleepy Joe Think We Need Another $850 Billion Of Transfer Payments?

Stockman: Why Does Sleepy Joe Think We Need Another $850 Billion Of Transfer Payments?

Authored by David Stockman via,

In light of Sleepy Joe’s swell new $1.9 trillion package of more free stuff, it’s time to get out our magnifying glasses again. The purpose is to compute the size of the hole in  America’s collective paycheck that purportedly requires such continued, extraordinary beneficence from our not so rich Uncle Sam.  

To repeat: There is no reason in the world why the February (pre-Covid) level of wage and salary disbursements is not a solid and appropriate benchmark for measuring the pocketbook hit from the Covid-Lockdowns that have wreaked havoc on the US economy since March. That is, from the point at which the evil Dr. Fauci convinced the Donald to pull the plug on MAGA and his own tenure in office, too (of course, 80-year old Dr.  Fauci is still there, fixing to bamboozle yet another notionally “elected” president).  

Still, back in February the Donald was boasting to one and all that he had delivered the greatest economy the world had ever seen and Wall Street apparently agreed, pushing stocks high into the nose-bleed section of history.  

As it happened, the February run rate (annualized) of wage and salary disbursements was $9.659 trillion, which computes to about $805 billion per month. So we would suggest that if $805 billion of monthly wages was enough to justify celebration of the  Greatest Economy Ever, then the shortfall from that benchmark is a solid measure of the hit to US worker earnings that has occurred since February.  

Based on the red bars in the chart below and translated to actual monthly numbers, the  Covid-wage and salary loss computes as follows:  

  • March: -$25b;  

  • April: -$76b;  

  • May: -$61b;  

  • June: -$43b;  

  • July: -$31b;  

  • August: -$19b;  

  • September: -$12b;  

  • October: -$6b; 

  • November: -$3b;  

  • December est: $0b;  

  • 10-month total: -$276b 

The total of $276 billion of lost paychecks compares to $8.05 trillion of wages and  salaries which would have been earned during that period at the February rate ($805  billion). So the cumulative shortfall through year-end amounted to just 3.4%. 

More importantly, the $0-$6 billion monthly shortfall since September has been so small as to constitute a rounding error in the scheme of things, as suggested by the fact that American households spend far more—about $8 billion per month—-on pet food and pet care alone.  

Yet Sleepy Joe has now teed up another $850 billion of direct aid to households, which in the aggregate are no longer suffering any material paycheck shortfall. And what is  especially egregious about filling a non-existent income hole in this manner is  that 53% of this amount goes to “stimmy” checks and child tax credits, which are  essentially not even mean-tested except at the tippy-top of the income scale ($200,000  for a married couple):  

Sleepy Joe’s $850 Billion of Direct Handouts to Households: 

  • Stimmy checks and child tax credits: $450b;  

  • Unemployment benefits: $200b;  

  • Health insurance aid: $100b;  

  • Rental assistance: $35b;  

  • Child care aid: $40b  

  • Safety net: $20b  

Still, to paraphrase Walter Mondale’s famous campaign slogan from 1984: Another  $850 billion for income replacement but “Where’s The Hole?” 

Compensation of All US employees, Annualized Run Rate, February 2020- November 2020

Of course, there are other ways to measure the hit to the national economy stemming from the Covid-Lockdown impact, as we will amplify below. But first it would be well to summarize the “solution” that Washington’s fiscally incontinent politicians have heaved at the “problem” during the last 11 months—a “problem” that they have never bothered to quantify.  

With the new Biden package, spending authorized by the five major Covid relief  measures can be summarized as follows (billions):  

  • Families First act: $192b;  

  • CARES act: $2,200b;  

  • Paycheck Protection Program: $733b;  

  • Response and Relief Act: $935b;  

  • Biden Jan. 14th plan: $1,900b;  

  • Five package total: $5,960b. 

That’s right. The Washington pols are fixing to heave nigh onto $6 trillion at a $274  billion hole in the nation’s wage bucket. That’s a solution 22X bigger than the putative problem!  

Of course, we do not mean to dwell lightly on the “putative” part, nor embrace the notion that government owes citizens reparations for the damage its actions have caused.  

Yes, the overwhelming share of the actual economic harm since March is due to the misguided (and unconstitutional) lockdown policies of the government and the vastly disproportionate and unwarranted public hysteria fanned by Dr. Fauci and the Virus  Patrol, not the disease itself. But if the state gets into the business of fully indemnifying the public for the endless harm wrought by its policies, insolvency would be thereafter guaranteed, and in short order, too.  

Besides, why does Washington have the right to burden future taxpayers with permanent debt service payments in order to make-whole a $276 billion loss of income and 3.4% inconvenience among taxpayers today?  

And don’t stiff us with the humanitarian relief bit. The simple fact is that the overwhelming share of this $276 billion of wage losses has been visited upon low-wage and part-time workers in the social-congregation sectors of the economy (bars,  restaurants, gyms, hotels, movies, ball parks etc.) that the Virus Patrol in its wisdom has shutdown. The right solution is to send the Virus Patrol packing and let these unfairly penalized employees go back to work.  

Moreover, even if you want to plug that “hole” beyond what the in-place safety net is already providing (see below), well, then, tax the more affluent section of today’s citizenry to pay for it, not unknowing, unborn and voiceless future taxpayers.  

Then again, the bipartisan duopoly is not about to give that fiscally honest approach the  time of day; they specialize in the joint gang-mugging of voiceless future taxpayers.  

Even if you think that the total wage and salary loss computed above understates the  economic damage caused by the lockdowns, the massive fiscal overkill owing to the  Everything Bailouts cannot be gainsaid.  

For instance, GDP is the most comprehensive measure of economic activity that we have  (despite its manifest flaws), but the loss of GDP after February has also been only about  3.6%. In fact, based on the Atlanta Fed’s GDPNow forecast, we project that nominal  GDP during Q4 will post at about $21.650 trillion, a figure only 0.46% below the  Greatest Economy Ever level of Q4 2019.  

So, again, if we assume that Q4 2019 is a reasonable pre-Covid benchmark for the level  of total economic activity in the USA, we get the following shortfall, including an  estimate for Q4 based on the Atlanta Fed’s latest outlook.  

Quarterly GDP Change From Q42019 Benchmark: 

  • Q1 2020: -$47b;  

  • Q2 2020: -$559b;  

  • Q3 2020: -$144b;  

  • Q4 2020E: -$25b;  

  • 4-quarter total: -$775b

So even if you want to count everything including losses from the $2.5 trillion of  imputed activity in the GDP, the pending $6 trillion of Everything Bailouts is 7.7X the  size of the problem!

Quarterly GDP At Annual Rates

Of course, the real point of the bailouts is to compensate the private sector for the economic harm done by the government in its exertions in furtherance of the public health. But when you look at the impact of the Covid-Lockdowns on value-added of the non-financial business sector, the hit compared to pre-Covid levels is also quite small.  

Again, using Q4 2019 as the pre-Covid benchmark and actual results through Q3 2020  and the Atlanta Fed estimates for Q4, the loss in business output relative to Q4 2019 is  just $594 billion or 2.7% of total GDP. So by this measure of the “problem”, the  impending Everything Bailouts would amount to 10X the size of the hole in the bucket.  

Likewise, our Atlanta Fed-based estimate of Q4 nonfinancial business value added of  $10.251 stands at fully 99.1% of the Q1 2019 level. That’s hardly a setback that warrants  burying future taxpayers in $6 trillion of new debt, and most especially not the $1.9  trillion part recommended by our day-late-and-dollar short incoming POTUS, who has  just emerged from his Delaware bunker.  

Quarterly Change In Business Value-Added Versus Q4 2019 Benchmark: 

  • Q1 2020: -$23b;  

  • Q2 2020: -$347b;  

  • Q3 2020: -$142b;  

  • Q4 2020E: -$82b; 

  • 4-Quarter total: -$594b

Quarterly Nonfinancial Business Sector Gross Value Added (Annualized):

By contrast, it is well worth looking at the other side of the coin: Namely, the surge in transfer payments since last February stemming from a combination of the built-in safety net (principally unemployment insurance, foods stamps and Medicaid) and disbursements of stimmy checks, enhanced Federal UI benefits and the rest authorized by the Everything Bailouts.  

At the pre-Covid level in February, total government transfer payments (including state  and local) were running at a $3.165 trillion annual rate or about $265 billion per  month. As shown in the chart below, however, that monthly figure skyrocketed by 107%  to $546 billion in the month of April alone.  

And, no, that latter figures is not the annualized rate: In their infinite generosity,  government programs pumped more than one-half trillion dollars into the household  sector during April alone. That’s $18.2 billion per day! 

Thereafter, the tsunami of transfer payments began to abate, but were still running at a  $400 billion monthly level in July and $306 billion level in November. Overall, the 10- month total of incremental transfer payments above the February level totaled $1.05  trillion.

You can’t make this up. Transfer payments to households during the past 10 months have exceeded the loss of household wages and salaries ($276 billion) by nearly four times.  

So the question recurs: Why does Sleepy Joe think we need another $850 billion of transfer payments to households on top of the immense generosity already dispensed per the chart below?  

The answer is simple: He’s doing it because he can—because the nation-wreckers in the  Eccles Building have determined to purchase $120 billion of government debt and  GSE securities per month for the indefinite future. As JayPo rattled on at his presser this week, they are not even thinking about thinking about tapering this tsunami of fake money plucked from thin air by the Fed’s digital printing presses.  

Accordingly, under this crooked regime of massive debt monetization, there is no here  and now economic sting to rampant Federal borrowing; no “crowding-out” as in times  of yore before the Fed went off the deep-end with Keynesian money-pumping; and no  

surging interest rates to rouse Wall Street and the business community from their happy  slumber in the lap of ultra-cheap borrowing costs.  

Stated differently, when it comes to the rampant fiscal incontinence in the Imperial City  enabled by the Fed, did the election outcome make any difference?  

It did not. Sleepy Joe is about to give the once and former King of Debt a run for his money when it comes to the annals of fiscal infamy in America.

Total Government Transfer Payments, Annualized

Even if you set-aside things like increased Medicaid and food stamp spending embedded in the above figures for total government transfer payments and focus just on the change in Federal-state unemployment insurance disbursements since February, the sheer fiscal madness at loose on Capitol Hill is baldly evident.  

To wit, prior to the Covid-Lockdown battering of the US economy, which has so far caused the filing of an incredible 70 million in new unemployment benefit claims, the  Federal-state unemployment systems was pumping out benefit payments at a $27.8  billion annual rate in February or about $2.3 billion per month. 

Here is the subsequent increase in UI payments from both existing state programs and the Federal pandemic assistance benefits and $600 per month topper payments. They total $518 billion or nearly two-times the $276 billion cumulative loss of wages and salaries during the same 10-month period.  

Moreover, the alacrity with which the system poured money into the ranks of unemployment claimants is a wonder to behold. By April the February payment level of  $2.3 billion had soared to $41 billion, per month and by July the figure came in at an astounding $117 billion per month.  

That’s right. At the June peak rate of $117 billion per month ($1.4 trillion annualized per  the chart below), the monthly payment rate was 51X higher than it had been in  February, and exceeded the full year UI payout rate during the depths of the Great  Recession.

Monthly UI Payments Annualized

But consider this: If the Federal-State unemployment system was already overcompensating for actual lost wages and salaries by 2X, why did we need to send helicopter checks, or what Washington now fondly calls “stimmy checks”, to 155 million households on top of that, when most of these households had not lost their jobs or paychecks?  

Nevertheless, here is the “stimmy check” and related non-means tested money in the  five Everything Bailouts including Sleepy Joe’s new edition to the Fiscal Demolition  Derby:  

Non-Means-Tested Stimmy Funding: 

  • Families First act: $105b;  

  • CARES act: $315b;  

  • Response & Relief Act: $191b;  

  • Biden Jan. 14th plan: $625b;  

  • Total non-means tested stimmy: $1.235 trillion.

In short, the wage loss hole in the bucket was already filled two-times over by the  increase in UI benefit payments since February, but this massive drop of cash on the  American public will have filled it again by another 4.5X. 

As we said, free lunches for one and all……except, except the debt is never going away  and future generations will surely rue the day. 

* * *

The above originally appeared at David Stockman’s Contra Corner.

Tyler Durden
Sun, 01/17/2021 – 18:40

via ZeroHedge News Tyler Durden

Parler Back From The Dead As CEO Posts New Message

Parler Back From The Dead As CEO Posts New Message

Authored by Jack Phillips via The Epoch Times (emphasis ours)

Parler’s website suddenly appeared online Sunday with a message from its CEO, John Matze, who said, “Hello world, is this thing on?”

The message suggests Parler was able to find another hosting service, coming about a week after Amazon Web Services booted the social media website from its services, taking the site down. It came as Parler—billed as a “free speech” platform—was seeing an unprecedented surge in users as prominent conservatives, among others, were being banned from Twitter, Facebook, and other platforms.

Matze also issued a temporary status update.

Now seems like the right time to remind you all—both lovers and haters—why we started this platform,” Matze. “We believe privacy is paramount and free speech essential, especially on social media. Our aim has always been to provide a nonpartisan public square where individuals can enjoy and exercise their rights to both. We will resolve any challenge before us and plan to welcome all of you back soon. We will not let civil discourse perish!

A screenshot of on Jan. 16, 2020. (Screenshot/Parler)


Amazon Web Services’ rationale behind jettisoning Parler was due to a lack of moderation and came in the backdrop of the Jan. 6 U.S. Capitol riots. Parler, in a court filing, citing text messages between Matze and an Amazon representative, claimed Amazon was primarily concerned with whether President Donald Trump would migrate to Parler after his Twitter account was banned last week.

The same filing asserted that Amazon didn’t appear to care much about alleged violent threats that were made by Parler users.

Last week, Parler asked a federal court in Washington state to block Amazon’s decision, while maintaining that Amazon engaged in monopolistic practices by booting the platform. Twitter is also a major client of Amazon Web Services.

This illustration picture shows the social media website from Parler displayed on a computer screen in Arlington, Va., on July 2, 2020. (Olivier Douliery/AFP via Getty Images)

According to a WHOIS search, Parler appears to be hosted by Epik, which also hosts social media website Gab.

While it did not confirm Parler was seeking its services, Epik in a statement last week blasted Big Tech companies’ “kneejerk reaction” of “simply deplatforming and terminating any relationship that on the surface looks problematic or controversial.” The statement noted that Epik is “not quick to abandon our administrative positions,” as it attempted to contrast it and Amazon.

Other than Amazon’s decision, Google and Apple removed Parler from its respective app stores.

Earlier on Sunday, Matze said there was no indication Amazon, Google, and Apple would pull their services.

In the days up to the suspension, “Amazon, as usual, [was] basically saying, ‘Oh, I never saw any material problems. There’s no issues.’ You know, they played it off very nonchalantly. And so we had still even, you know, on the 8th and the 9th, you know, we had no real indication that this was, you know, deadly serious,” Matze told Fox News.

Tyler Durden
Sun, 01/17/2021 – 18:34

via ZeroHedge News Tyler Durden

Fox News Ratings Plummet After Abandoning MAGA Viewers

Fox News Ratings Plummet After Abandoning MAGA Viewers

Before the 2020 election, Fox News was dominating its cable rivals – in large part due to Tucker Carlson and Sean Hannity, whose pro-Trump messaging and coverage of the Russiagate and Biden scandals helped lead the network to its #1 ratings spot for several years.

Then, after host Chris Wallace ‘moderated’ the first Presidential debate by overtly protecting Joe Biden while attacking Trump, the network’s establishment bias upstaged even their ratings darlings. Disgusted MAGA viewers began turning to alternatives such as One America News and Newsmax for pro-Trump coverage after Fox made clear where they stand.

According to the Daily Beast, Fox News’ ratings have plummetedas the network finished third to both CNN and MSNBC in the ratings on Friday for the third straight day, their poorest showing since September 2000.

On Wednesday, CNN averaged 5.941 million total viewers and 2.074 million in the key 25-54 demographic for the entire day, compared to MSNBC’s 4.543 million viewers overall and 1.106 million demo audience and Fox News’ total audience of 3.464 million and 852,000 in the demo.

The disparity increased on Thursday, with CNN drawing 3.854 million total viewers, MSNBC averaging 3.321 million, and Fox pulling in 1.935 million for the day. CNN also led in the demo, nabbing 1.193 million with MSNBC finishing second at 653,000 and Fox bringing in the rear at 384,000.

The streak continued on Friday as CNN finished first once again with 3.121 million total viewers, followed by MSNBC’s 2.816 million and FNC’s 1.702 million. In the total day demo, CNN drew 878,000 viewers, compared to MSNBC’s 512,000 and Fox News’ 320,000. MSNBC, meanwhile, experienced its highest-rated week ever, averaging a total of 3.1 million viewers. –Daily Beast

Fox is trying to salvage their ratings disaster. Last Monday they announced a massive overhaul of its daytime and early primetime weekday lineup – shifting Martha MacCallum from 7 p.m. to 3 p.m., and moving anchors Dana Perino and Bill Hemmer out of their early afternoon broadcasts for a co-anchored segment from 9-11 a.m. with a rebooted America’s Newsroom.

Tyler Durden
Sun, 01/17/2021 – 18:15

via ZeroHedge News Tyler Durden

An Abject Apology Highlights the Legal Exposure for Promoters of Trump’s Election Fraud Fantasies


American Thinker has unreservedly apologized to Dominion Voting Systems for publishing “completely false” statements about the company’s involvement in an imaginary anti-Trump plot that supposedly delivered a phony victory to President-elect Joe Biden. The conservative website, one of several right-wing outlets that promoted the wacky conspiracy theory, was responding to a letter in which Dominion demanded a retraction and threatened to sue for defamation if one was not forthcoming.

American Thinker and contributors Andrea Widburg, R.D. Wedge, Brian Tomlinson, and Peggy Ryan have published pieces…that falsely accuse [Dominion] of conspiring to steal the November 2020 election from Donald Trump,” says a statement that Thomas Lifson, the website’s editor and publisher, posted on Friday. It continues:

These pieces rely on discredited sources who have peddled debunked theories about Dominion’s supposed ties to Venezuela, fraud on Dominion’s machines that resulted in massive vote switching or weighted votes, and other claims falsely stating that there is credible evidence that Dominion acted fraudulently.

These statements are completely false and have no basis in fact. Industry experts and public officials alike have confirmed that Dominion conducted itself appropriately and that there is simply no evidence to support these claims.

It was wrong for us to publish these false statements. We apologize to Dominion for all of the harm this caused them and their employees. We also apologize to our readers for abandoning 9 journalistic principles and misrepresenting Dominion’s track record and its limited role in tabulating votes for the November 2020 election. We regret this grave error.

Lifson notes that “we received a lengthy letter from Dominion’s defamation lawyers explaining why they believe that their client has been the victim of defamatory statements.” Former Trump campaign lawyer Sidney Powell, a conspicuous promoter of the “completely false” story about fraud-facilitating software that supposedly changed Trump votes to Biden votes, received a similar letter from Dominion on December 16. Four days later, Powell tweeted that she was “retracting nothing,” because “we have #evidence” that the people running the company are “#fraud masters.” On January 8, Dominion sued Powell for defamation in the U.S. District Court for the District of Columbia, seeking $1.3 billion in compensatory and punitive damages.

Powell also has been sued by Dominion executive Eric Coomer, who figures prominently in her conspiracy theory, which alleges that he participated in “an antifa conference call” in late September or early October, during which he supposedly bragged that “Trump is not gonna win” because “I made fucking sure of that.” The defendants in Coomer’s lawsuit, which he filed in Denver County District Court on December 22, also include conservative activist Joseph Oltmann (who claimed to have “infiltrated” that alleged conference call), Trump attorney Rudy Giuliani, Conservative Daily, The Gateway Pundit, Newsmax, One America News Network, OANN White House correspondent Chanel Rion, Gateway Pundit owner Jim Hoft, blogger Michelle Malkin, and radio host Eric Metaxas.

The most prominent promoter of conspiracy theories involving Dominion, of course, is President Donald Trump, whom the company has not yet sued for defamation. In the 1982 case Nixon v. Fitzgerald, the Supreme Court ruled that presidents have “absolute immunity” from civil (but not criminal) liability based on their “official acts.” Trump’s liability for damage to Dominion’s reputation therefore would seem to hinge on whether his wild claims about Dominion count as “official acts.”

In 2019, Elle magazine columnist E. Jean Carroll, who has publicly accused Trump of raping her in the mid-1990s, sued him for defamation because he falsely denied knowing her and implied that she had invented the incident. A federal judge in Manhattan last year ruled that Trump’s statements about Carroll, which he made while he was president, “were not within the scope of his employment,” which implies that he is not entitled to immunity from her lawsuit under Nixon or the Federal Tort Claims Act. The Justice Department recently asked the U.S. Court of Appeals for the 2nd Circuit to reverse that decision.

Pro-Trump attorneys like Powell, Giuliani, and Lin Wood are shielded from liability for defamation based on statements they have made in court on behalf of their clients. But “the litigation privilege doesn’t cover all out-of-court statements,” says UCLA law professor Eugene Volokh, a First Amendment specialist, although “in many states the fair report privilege does cover lawyers’ public discussion of claims made in their lawsuits.” The extent of that privilege varies from state to state, Volokh says, and it is not yet clear which state’s standard would apply to the lawsuits filed by Dominion and Coomer, since “this whole ‘choice of law’ question is itself quite complicated.”

The legal exposure for media outlets and journalists is not complicated by the litigation privilege. Assuming that Dominion and its executives qualify as “public figures,” the plaintiffs would have to show that the non-lawyer defendants acted with “actual malice,” meaning they knew their defamatory statements were false or published them with “reckless disregard” for their accuracy. That standard, Dominion and Coomer argue, is easily met in this case, since the defendants made highly implausible claims that were not supported by credible evidence and were contradicted by multiple authoritative sources, such as the “industry experts and public officials” cited in American Thinker‘s retraction.

Newsmax and Fox News have aired corrective reports debunking election conspiracy theories amplified by some of their employees. Both outlets have received demand letters from Dominion and Smartmatic, another company that figures in the fantasy peddled by Trump, Powell, Giuliani, and Wood.

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