This ain't Hell, but you can see it from here

Category: Economy

  • Maybe Obama’s not so moderate

    Washington Post columnist Michael Gerson comes to a revelation the rest of us  have known for quite some time; Obama is a “false moderate“. It took ABC correspondent  Jack Tapper to enlighten Gerson;

     “Have you ever worked across the aisle in such a way that entailed a political risk for yourself?” Obama’s response is worth quoting in full: “Well, look, when I was doing ethics reform legislation, for example, that wasn’t popular with Democrats or Republicans. So any time that you actually try to get something done in Washington, it entails some political risks. But I think the basic principle which you pointed out is that I have consistently said, when it comes to solving problems, like nuclear proliferation or reducing the influence of lobbyists in Washington, that I don’t approach this from a partisan or ideological perspective.”

    For a candidate running as a centrist reformer, this is pretty weak tea. Ethics reform and nuclear proliferation are important issues, but they have hardly put Obama in the liberal doghouse. When I recently asked two U.S. senators who are personally favorable to Obama to name a legislative issue on which Obama has vocally bucked his own party, neither could cite a single instance.

    I guess the fact that we’ve been saying all along that Obama votes with his party leadership 100% of the time didn’t sink in. He has the highest leftist rating of any Senator – now I suppose he’s a “maverick” in the sense that he votes further Left than anyone else. is that what maverick means these days – just voting further Left than anyone in your own party – that’s what earned the moniker for McCain.

    As I’ve been pointing out the last few days, Obama has proposed nothing but failed policies of the past – that’s hardly consistent with his “reformer” image. He wants to continue blocking our usage of domestic energy sources, he refuses to accept our progress in the war against terror, he clings to 60s radicals of all stripes and all national persuasions. He’s just a younger version of every Democrat President of the last 40 years (luckily there’s only been two).

    I guess the Democrats, with Obama in the lead, are becoming the reactionary conservative party, since reactionary and conservative are terms that refer to policies that return us to the past.  That makes John McCain the forward-looking man in this race. Funny how that works.

  • The failed policies of the past

    Barack Obama is fond of comparing John McCain’s policies to those of President Bush labeling them the “failed policies of the past”, but actually, Obama’s policies are failed policies of a more distant past.

    With gas over $4/gallon, Obama says we should continue to depend on some as yet undiscovered miracle to save us…the same thing Democrats have been saying for nearly forty years. of course, they claim the reason that there’s no new source of energy is because the government hasn’t thrown enough taxpayer dollars at the problem yet.

    I remember too well the failed policies of the past – when we were straining under OPEC embargoes in the early 70s, Democrats stood against the building a pipeline in Alaska to transport our own oil to port. That’s why Jimmy Carter promised in 1979 that he’d build refineries and pipelines…two years later, the Democrat Congress forbade more drilling in the Guld of Mexico when a Republican was president.

    Jimmy Carter never built a refinery, by the way, none have been built in this country since 1977. There are two sites currently approved for refineries, one in New Mexico and another in South Dakota – but they’ll spend years in court battling Luddite environmentalists before a spade of dirt is turned.

    Carter founded the Energy Department in hopes it would slash through the red tape and respond to our domestic energy needs, but it’s just another whale beached in dowtown DC. Obama clings to the same delusions that Democrats have clung to for years.

    AFP/Beitbart quotes Obama yesterday;

    “Much like his gas tax gimmick that would leave consumers with pennies in savings, opening our coastlines to offshore drilling would take at least a decade to produce any oil at all, and the effect on gasoline prices would be negligible at best since America only has three percent of the world’s oil.

    “It’s another example of short-term political posturing from Washington, not the long-term leadership we need to solve our dependence on oil.”

    Obama is pushing for a “windfall tax” on oil companies’ record profits and for federal investment of 150 billion dollars over 10 years in renewable and green energies.

    First of all, those are OUR pennies, Senator – why can’t we have them? You’re not doing anything useful with them. Secondly, how long is it going to take to invent a new energy source, get it and the vehicles that’ll use it to market? The Democrats have been promising us that for forty years and there’s nothing on the horizon. Oh, and how is a windfall profit tax helping? Are you going to redistribute that money to the people, since we’re the ones from whom oil companies are profiting? Or are you just going to cram in your pockets and then tell us how you know how to spend it better than us?

    The Wall Street Journal writes today that Obama and the Democrats sound a little silly at $4/gallon gas;

    Anticarbon Democrats are on the defensive for once. Their default position – doing nothing – doesn’t have the best resonance amid $4 gas. They’ve been reduced to arguing that more exploration would merely make a difference over the long term. The GOP plan, in other words, is too pragmatic.

    Democrats also claim that land already leased is “sitting idle,” and should be used before any new exploration begins. As put by Maurice Hinchey, a senior member of the House Resources Committee, Big Oil is “trying to take control of as much land now during the oil-friendly Bush Administration years, but are holding off on drilling until the price of oil soars to $200 or $300 a barrel so they can make even greater profits.”

    Conspiracy theories aside, it is true that only 0.46% of the Outer Continental Shelf is producing oil (though only 2.3% is under lease). But because of the exploration ban, oil companies go in more or less blind, not knowing the extent of the available resources. Millions of acres lack oil or gas, which is why it’s called “exploration.” Federal law stipulates that an oil company must sink a producing well within 10 years or lose the lease; it often takes nearly a decade to navigate the geography, not to mention the long process of environmental and regulatory review. Or coping with multiple lawsuits from the green lobby.

    Yes, this campaign is about the failed policies of the past – the failed policies of the seventies and eighties as foisted on the American public by Democrats.

  • Democrats and oil

    This morning, Associated Press writes that President Bush is expected to ask Congress to relieve restrictions on off-shore drilling;

    Then gasoline prices topped $4 a gallon this summer. Drivers and others began clamoring for federal lawmakers to do something about the record price of oil, much of it produced in foreign countries.

    In response, President Bush is renewing his call to open U.S. coastal waters to oil and gas development, arguing that it’s high time to battle high prices with increased domestic production. He is planning to ask Congress on Wednesday to lift the drilling moratoria that have been in effect since 1981 in more than 80 percent of the country’s Outer Continental Shelf and to let states help to decide where to allow drilling.

    But, surprise, the Democrats want to extend the ban into 2009 – when they hope to have the presidency and they can claim they solved the current energy problem.

    For their part, some lawmakers have their own plan: Legislation that would continue the ban into late 2009 was scheduled to be considered Wednesday by the House Appropriations Committee.

    Congressional Democrats, joined by some GOP lawmakers from coastal states, have opposed lifting the prohibition that has barred energy companies from waters along both the East and West coasts and in the eastern Gulf of Mexico for 27 years.

    On Monday, GOP presidential candidate John McCain made lifting the federal ban on offshore oil and gas development a key part of his energy plan. McCain said states should be allowed to pursue energy exploration in waters near their coasts and get some of the royalty revenue.

    Sen. Barack Obama, the Democratic candidate for president, opposes lifting the ban on offshore drilling and says that allowing exploration now wouldn’t affect gasoline prices for at least five years.

    Well, that’s not true, exactly. When President Bush announced his support for tax rebates, in anticipation of the infusion of cash, the economy responded immediately. The same would happen with the oil market.

    When Jimmy Carter was president, the Democrats were anxious to solve the problem. In his famous “malaise speech“in 1979, Jimmy Carter promised;

    To make absolutely certain that nothing stands in the way of achieving these goals, I will urge Congress to create an energy mobilization board which, like the War Production Board in World War II, will have the responsibility and authority to cut through the red tape, the delays, and the endless roadblocks to completing key energy projects.

    We will protect our environment. But when this nation critically needs a refinery or a pipeline, we will build it.

    Well, Democrats, we need to cut through red tape, we critically need refineries. Is it only a good idea when Democrats use the issue to expand government?

    Jimmy Carter even admitted that coal is a solution, that we have enough shale oil to be independent from the Middle East oil;

    We have more oil in our shale alone than several Saudi Arabias. We have more coal than any nation on Earth. We have the world’s highest level of technology. We have the most skilled work force, with innovative genius, and I firmly believe that we have the national will to win this war.

    Apparently, we only have a national will when the Democrats own the seats at both ends of Pennsylvania Avenue.

  • Obama economics = willful blindness

    Obama outlined his economic policy yesterday on his campaign bus among (fawning) reporters. Apparently, his palns consist of ignoring proven principles and clinging to politically expedient promises of more class warfare (Wall Street Journal link);

     Sen. Barack Obama shed new light on his economic plans for the country, saying he would rely on a heavy dose of government spending to spur growth, use the tax code to narrow the widening gap between winners and losers in the U.S. economy, and possibly back a reduction in corporate tax rates.

    Um, a heavy dose of spending means a heavy dose of taxation.

    He didn’t say how deeply he would cut the [capital gains tax] rate, but said it could be trimmed in return for reducing corporate tax breaks, simplifying the tax system. With existing loopholes, he said, “How much you pay in taxes as a corporation a lot of times is going to depend on how good your lobbyist is.” With “a level playing field,” he said, the rates could be reduced.

    “Level playing field” is Marxist code for redistribution of wealth. The redistribution of misery.

    He stressed the idea was not a move toward Sen. McCain’s broader tax-cutting philosophy. While Sen. McCain has argued that tax cuts — particularly on business — spur growth, Sen. Obama rejected that as flawed economics. “I’ve seen no evidence that…would actually boost the economic growth and productivity,” he said.

    No evidence? In order to see now evidence of reduced taxation spurring growth you have to slam your eyelids shut and stick your fingers in your ears for the last three decades. Just between 2003 and 2006;

    revenues.bmp

    The New York Times was even admitted that the economy and tax revenues expanded after tax cuts;

    An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.

    On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year’s levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year.

    The unemployment rate dropped and has stayed low – well, until the Democrats raised the minimum wage and priced many young workers right out of the market.

    So Obama’s economic plans are a mix of willful blindness and political rhetoric. That’s change you can believe in.

  • A clear choice

    Now that the presidential race has begun, the choice between candidates becomes even clearer. Although most Americans think that Barack Obama will do a better job on the economy than John McCain, the more Obama talks, the more Americans will doubt he can. Take this from the Wall Street Journal’s Washington Wire;

     Obama economic advisor Austan Goolsbee outlined three key principles of the economic plan, which includes a $50 billion additional economic stimulus package, the creation of a $10 billion fund to ward off home foreclosures, and middle class tax cuts which include a $1,000 tax cut for families earning $150,000 or less.

    “This slowdown is not a random, business-cycle event. It is very much the result of a failed philosophy,” Goolsbee said. He criticized President Bush, and alternately McCain, for a tax system that he argues favors the wealthy over “ordinary Americans.”

    Advisors said Obama’s agenda would not increase the federal deficit and would be paid for by repealing tax cuts to the wealthiest of Americans, as well as funds that would become available when the war effort in Iraq is scaled down. McCain Senior Policy Advisor Doug Holtz-Eakin disputed that claim, countering that the agenda does not offer enough specifics to verify precisely how it will be paid for. “It’s an assertion without a foundation,” he said.

    The Washington Times reports that the McCain campaign confidently predicts tax hikes in an Obama administration;

     On the difference between Mr. McCain – who opposed Mr. Bush’s tax cuts as too skewed toward the wealthy but now says their extension is the only way out of the economic mess – and Mr. Obama, Mr. Burr said more taxes are a foregone conclusion.

    “It’s impossible for Senator McCain to run from a 20-plus-year career in the United States Senate, thousands of votes, but it’s very easy to focus on the 94 times in just three years Barack Obama has voted to raise taxes. I think there are certain things that America voters can predict, and raising taxes on the part of Senator Obama is a pretty certain thing,” the senator said.

    I think we all know who Democrats consider “rich” when it comes to raising taxes. Bill Clinton promised a middleclass tax cut in 1992, but then raised our taxes in 1993. We can expect the same from Barack. Obama also promises to tax oil companies to the tune of $50 billion – who thinks the oil companies will pay that? Again, working Americans will get shafted with increased gas prices. Now Obama cn claims increased taxes will only be levied on families making over $150,000/year – but how easy is it to make it $75k after making excuses like Bill Clinton?

    The Obama campaign claims that this isn’t a normal business cycle downturn that we’re in (at least they stopped labeling it a recession), but what is it when we’ve had growth in the GDP every month since March 2001? When unemployment fell and sustained it’s rate for the longest period ever?

    The Democrats blamed the stalled economy in 2000 on candidate Bush’s “talking down the economy” – well, what are these clowns in the Democrat party doing these days?

    So the choice for President becomes clearer –  do you want to pay more for goods and services with less money in your paycheck…and lose your 401k savings – or do you want sustained economic growth with more money in your pocket?

  • Our Congress-managed economy

    Earlier today I wrote how Congress can’t even manage their own dining system on Capitol Hill. Now I find this at Liberty Pundit (who, by the way, named us his “Blog of the Day“);

    He has a point:

    Ask yourself a few questions: Why did unemployment surge at a time when unemployment compensation claims are historically low? More to the point, how could unemployment spike this much without a coinciding spike in corporate lay-offs?

    The answer to all of these questions is same: because very few people lost jobs last month. This huge jump in the size of the unemployed comes from new entrants to the economy – hundreds of thousands of them. In short, well over 600,000 people who were not job seekers in April became job seekers in May. And who starts looking for work at the end of Spring? That’s right – students. Hundreds of thousands of students are looking for work right now, and they’re not finding it.

    Congress is to blame. Last year Congressional Democrats (along with some Stockholm-Syndromed Republicans) passed the Fair Minimum Wage Act of 2007, which started a phased hike of the minimum wage from $5.15 an hour to $7.25. Free market economists warned them that this would increase unemployment – that rapid increases in unemployment compensation hit teens and minorities the hardest. But the class-warriors are running the people’s house now, and they would hear none of that, so they took to the floor, let loose the dogs of demagoguery, and saddled America’s pizza parlors, municipal swimming pools, house painting businesses and lawn mowing services with a huge cost increase.

    We were pooh-poohed when we suggested this might happen. In fact, nearly a year ago, I wrote about the demographics of minimum wage earners and predicted the same outcome;

    So who are those 1.7 million low-income workers scheduled to be rolling in dough in a few weeks? Well, according to the Bureau of Labor Statistics, in 2006, the number is actually 1.692 million out of the total workforce of 76.517 million workers – 2.2% of the workforce earn minimum wage or less. 1.2 million of that 1.6 number (3/4) earn less than minimum wage now – so how’s a minimum wage increase going to help them?

    866,000 of them (over half) are between 16 and 24 years old – high school and college kids. 1.24 million of the total work in service related industries, the largest occupational group of minimum wage workers, out of that number, 880,000 are in food service and preparation (um, MacDonald’s), 24,000 are security guards, 52,000 are janitors. Only 340,000 work 40+ hours every week (less than 1 in 5 minimum wage earners) at the job for which they’re paid minimum wage.

    477,000 have less than a high school diploma, 127,000 have college degrees (how many of those are grad students I wonder). 8,000 have master’s degrees, but there are no Phds making minimum wage – some kind of correlation there?

    Oh, yeah, you want to blame Bush for gas prices, too? British Petroleum’s Tony Hayward says (what we’ve been saying here for years) that the reason prices of gasoline has soared is because there’s been no investment in production capacity is what drives the price up (Times of London link);

    “Producers are being hampered by 25 years of low investments, because of low prices,” Mr Hayward told the Asia Oil and Gas Conference in Kuala Lumpur today. “The result is a supply chain being stretched to breaking point.”

    And why has there been no investment in production capacity in the US? because Congress and environmentalists have blocked expanding refinery capacity and exploration – claiming that “alternate sources” are right around the corner. Of course the only reason there hasn’t been a clean alternate source of fuel is because we haven’t thrown more money at the problem, yet.

    Why isn’t the media holding the Democrat Congress responsible for their missteps in this election year?

  • …And yet they tell us how to live

    Every time there’s a debate about the economy, the Congress trots out all of these high-minded solutions hammered out in committees and caucuses telling each other how much Americans can afford to pay in taxes and how that money can be distributed to best serve the needs of the nation. But do they really know how markets work? Do they even pay their own bills?

    From the Washington Post;

    Year after year, decade upon decade, the U.S. Senate’s network of restaurants has lost staggering amounts of money — more than $18 million since 1993, according to one report, and an estimated $2 million this year alone, according to another.

    The financial condition of the world’s most exclusive dining hall and its affiliated Capitol Hill restaurants, cafeterias and coffee shops has become so dire that, without a $250,000 subsidy from taxpayers, the Senate won’t make payroll next month.

    The embarrassment of the Senate food service struggling like some neighborhood pizza joint has quietly sparked change previously unthinkable for Democrats. Last week, in a late-night voice vote, the Senate agreed to privatize the operation of its food service….

    Imagine that – it costs us, the tax payers two-hundred and fifty thousand dollars just to make payroll for feeding a hundred senators (actually 99, because Ted Kennedy is at home)  – and that’s JUST PAYROLL it doesn’t include napkins, food, overhead…just paying the people who work there. And tax payers are expected to subsidize their poor management of their own facilities. What?

    ph2008060802241.jpg

    They don’t make enough money to order some Papa John’s? Steak and egg breakfast at the Hawk and Dove (two blocks away) is twelve bucks. two blocks in the other direction is Union Station, there’s a McDonald’s there where they get the Egg McMuffin breakfast for 3 bucks.

    The same people who called George Bush’s tax cuts “for the rich” need a 1/4 million dollar subsidy every month to pay the people who cook and bring them their food?

    If they gave a rat’s ass about the people they serve, they’d go out into the economy and eat and close down their stupid exclusive eatery – put some money in the people’s pockets. And they can pay that stupid 10% restaurant tax the rest of us pay in DC.

  • Gas price climbs while oil falls

    The Associated Press writes this morning that even though oil prices are falling, prices for gasoline continue climbing;

    Oil prices fell back Thursday ahead of a report expected to show U.S. inventories of crude and petroleum products grew last week.

    Prices remained volatile, though, buffeted about by threats against Nigerian oil facilities, worries about falling gasoline demand in the U.S. and a strengthening U.S. dollar.

    That’s those big, bad oil companies getting rich on the backs of working Americans, right? Wrong. The problem is the bottleneck at the refinery stage. OPEC can pump oil as fast as they want and the price for each barrel will fall, but refineries are working at full capacity and can’t meet the demand which drives gas prices up.

    We haven’t built a refinery in this country since 1977 – our demand for gasoline has increased, but our capacity to meet the demand hasn’t. Last year, the Democrats in Congress could’ve authorized the building of more refinery capacity, but instead, they chose to send back defeatist legislation for the war and focus on healthcare for the rich.

    The President in the meantime, did all he could do by authorizing more exploration of domestic sources for oil, but without Congressional approval, he can’t authorize the building of refineries. So, the Democrats, the party of working people, the party that declared in 1979 they’d wean us off of foreign oil and increase our production capacity, has been more interested in undermining the national economy for purely political reasons.