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

Category: Economy

  • How to Raise Fuel Prices

    I stumbled across this at BitsBlog. I don’t see any step that was missed…

    Create shortages in the oil markets by ensuring domestic oil supplies can never be used. This will force us to get oil from the least stable spots in the world, thus forcing not only higher prices, but forcing us to fund people intent on destroying us.

    Regulate domestic suppliers out of business with NIMBY, and enviro-whackjob policy, and regulations and of course, the great leveler, taxes.

    Make sure that no new refineries are built over a period 30 years, to meet the need.

    Mandate that everyone buys only governmentally mandated formulations of gasoline, thus creating shortages of the ingredients.

    More at the BitsBlog

  • Bitter in the Rust Belt

    In the Wall Street Journal, Jeff Durstewitz wrote an opinion piece entitled “The Rust Belt Should Be Bitter” in which he examines some of the problems faced by working Americans that Obama referred to as “bitter” and “clinging” to guns and God because of the broken promises of Washington politicians;

    While southern states do have problems, their governments generally don’t smother economic growth by layering on ever-rising taxation, regulation and expenses. They don’t permit workers to be forced to join closed-shop unions. No one in D.C. – Obama, Clinton, McCain or Superman – can fix the Rust Belt’s self-inflicted wounds.

    Western New York offers a prime example. Despite proximity to major markets, a long international border with a major trading partner, a well-developed transport system, untold natural splendors and a well-educated workforce, the Buffalo area’s population shrinks every year. Why? High taxes, high government costs and forced unionization are major factors.

    New York state is run by and for its public-employee unions, particularly teachers, but several others as well. The unions collect dues and then recycle a significant amount of what they collect into politicians’ campaign funds. These contributions (plus state electoral law, which seems designed to protect incumbents and hobble challengers) produce tax-and-expense structures that drive employers away. To varying degrees, the same is true for much of the Rust Belt.

    I grew up in Western/Central New York state in a tiny little town halfway between Rochester and Syracuse. Everyone had jobs – there were small businesses and major industry even in the small towns. When I left high school and moved to Syracuse, there were endless industrial parks full of General Motors, Ford, Carrier and Chrysler enterprises all serviced by constantly growing small businesses. Even through the seventies, while the rest of the country suffered from inflation and fuel costs, Upstate NY chugged right along.

    The impetus of the decline in New York was when the legislature tried to put a six-month residency requirement on receiving state welfare aid. Mario Cuomo, the governor, vetoed the legislation and triggered a massive migration from the South into New York, which in turn brought on State budget deficits, which caused the State to raise taxes on businesses, which caused the businesses to move to areas which had lower taxes, which put more pressure on the State treasury, which caused them to raise taxes again…well, you see where this is going.

    Today, a drive through once-bustling Upstate New York is about as depressing as driving through any ghetto in any major city. My daughter got married in Niagara Falls a few years back and it was the first time I’d been there in decades. The countryside once packed with bustling agriculture lay fallow, dilapidated barns overgrown with weeds and rusty farm implements left in the fields. Buffalo, once an industrial powerhouse was nearly silent, abandoned factories with broken windows and rusty cyclone fences dotted the scenery.

    I still get the county newspaper, the Wayne County Times and it’s chocked full of drug arrests and domestic assaults – the result of a government-instituted malaise. George Pataki finally beat Cuomo in 1994 on the promise of restoring New York, but the State still hemorrhaged jobs and employers. In 12 years, Pataki did little to return the State to it’s former glory – and New Yorkers mistakenly turned to the likes of Eliot Spitzer, Hillary Clinton and Lil’ Chuckie Schumer and got nothing for their efforts.

    Me? I got fed up and left nine years ago. In fact, many of the people I’ve met in the DC area are from Pittsburgh and Buffalo – I’ve never met so many Steelers fans in my life. So not only did the Rust Belt lose it’s industry, it lost the people who made the industry grow.

    New Yorkers want work and they want employers, but it’s been so long and so hard, it seems like a dream at this point. There’s nothing that Federal government can do to fix what State government broke and continues to break. Obama’s promise is an empty promise, much like his whole campaign.

    On commenter to the WSJ article reflects the “bitterness” but perhaps not the way Obama would hope;

    Sat May 17, 2008 5:23 pm Post subject: Re: The Rust Belt Should Be Bitter
    As a long time resident of western N.Y. (Jamestown), I pray every night for Obama or Hillary to win the next presidential election. I’m hoping that they will be able to drag the rest of the nation down to our level of economic stagnation. Then maybe we can compete and retain the industry and jobs that still remain.

  • The “Equal Misery” solution

    Last week, the House of Representatives passed legislation designed to bail out homeowners who irresponsibly bought more house than they can afford. The bill, in essence, lets government agencies take over bad loans if the lender agrees to take less than the full amount of the loan in payment.

    Of course, the President has vowed to veto the bill and John McCain has said he’ll vote against it. According to the Wall Street Journal, the public is sharply divided;

    A Gallup Poll in late March found that 56% of Americans favor government intervention to prevent people from losing their homes because they can’t pay their mortgages, while 42% oppose it. The partisan divide was sharp: 58% of Republicans opposed intervention; 71% of Democrats and 55% of independents supported the idea.

    Republicans in Congress, of course, generally oppose the bill;

    The line was drawn sharply in last week’s House debate. Rep. Tom Feeney (R., Fla.) said less than 1% of homeowners would get help while the rest “will pay the price of this bill.”

    Rep Feeney said, “This bill is a bailout — from American taxpayers — of speculators and imprudent borrowers.” Among the winners, he said, are lenders who would otherwise lose the entire value of a loan and people who put no money down to get a home.

    Not only that, but how long will it take government to structure the actual regulations, accept application? How long from today will the first loan be taken over by any government agency? Look how long it took Congress to simply send out tax rebates by direct deposit – nearly five months. This is a bit more complicated.

    But the Democrats think this is real solution for real people. After all, it has the most important element for Democrat social bailouts – equal misery;

    Rep. Barney Frank (D., Mass.), who wrote the legislation, and other Democratic lawmakers insisted the bill nicks both sides. Said Rep. Jim Marshall (D., Ga.), “The deals that the borrowers get are not particularly good. The deals that the lenders get are not particularly good…. In my view, it’s a bailout for the entire economy and all of these people that have been dragged into it.”

    Borrows don’t win…check, lenders don’t win…check, the taxpayers don’t win…check – perfect! That’s what makes good socialist legislation – the equal application of misery to every problem. When everyone loses, they lose equally. That’s what the Left means when they mention equality.

    The Wall Street Journal took an indepth look at the bill and decided that CBO low balled Barney Frank’s numbers on the real cost of the legislation;

    Looking at the details in Mr. Frank’s 45-page first draft of this bill, FIS Applied Analytics estimated that taxpayer losses could reach as high as $27 billion, more than four times Mr. Frank’s estimate. The next draft, clocking in at 72 pages when it passed Mr. Frank’s committee, was miraculously scored by the Congressional Budget Office at “only” a $2.7 billion cost to taxpayers.

    According to the WSJ, CBO scored the cost lower because few lenders might not want to join in the love-fest because they might not want to only get back 85% of their loan. But Frank knows the figures are low and that it will cost taxpayers even more because the threatened lenders during the debate over the legislature;

    “I want to put the servicers on notice,” the celebrated liberal declared at a recent hearing. “If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.”

    Stalin couldn’t have said it better.

  • Flip this House

    Today, the House of Representatives voted 239-188 to give grants and loans, to the tune of $15 billion to states that have been hardest hit by foreclosures in the recent spate of dumbass to hit some American consumers according to the Associated Press;

    Supporters say the legislation will prevent neighborhoods around foreclosed homes from sliding into blight.

    […]

    [President Bush, who says he’ll veto the legislation] says Democrats’ housing proposals reward lenders and speculators instead of helping homeowners.

    Not to mention that it’s not even a function of government to get into the business of buying houses no else wants. Suppose no one buys the houses from the government, are they going to administer the property in perpetuity? Or, more likely, they’ll sell the damn things on the cheap to donors and political pals.

    It’s just window dressing to make it appear as though Congress is doing something about the economy. If they want to do something, give me more of my own money and stop acting like government is business.

  • Democrats, oil and guns

    In 1979, Jimmy Carter gave his famous “Malaise Speech” in which he announced that the US had an oil crisis and he outlined his plan to correct it. Gasoline had gone from about $.30/gallon to nearly a dollar in the space of about six years and it was mainly because of the OPEC nations and their delight at holding the US economy hostage. Carter promised that America would never be dependent on foreign oil;

    Beginning this moment, this nation will never use more foreign oil than we did in 1977 — never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade — a saving of over 4-1/2 million barrels of imported oil per day.

    Carter went on to promise;

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

    With that, Carter formed the Energy Department and it’s all been downhill since. The Democrats have blocked every proposal to build refineries, to drill oil in Alaska or off our coastlines. We’ve been so dependent on foreign oil that this week, the Democrat Senate has demanded that the President threaten the end of Middle East military aid until those nations increase production, according to the Wall Street Journal;

    Speaking of energy, we can’t help but give more attention to a recent press release from some of the Senate’s leading liberals. Charles Schumer, Byron Dorgan, Bernie Sanders, Bob Casey and Mary Landrieu are demanding that President Bush tell OPEC nations to increase their oil supplies or risk losing arms deals with the United States. The Senators say U.S. consumers need the price relief that only increased oil production can bring.

    Yes, that Senator Schumer and that Senator Dorgan, both of whom voted against increasing U.S. oil production because they couldn’t abide drilling across 1% of Alaska’s wilderness. Yes, that Senator Casey, who has called for mandatory reductions in emissions of carbon dioxide. At least Senator Landrieu of Louisiana has fought to allow more offshore drilling in the Gulf of Mexico.

    All of these Senate Democrats are willing to accept greater carbon emissions, as long as we can also outsource jobs in the petroleum industry to Middle Eastern dictatorships.

    Quite a contrast between what Democrats say and what Democrats do. Jimmy Carter formed the Energy Department to wean us off of foreign oil, and the current Senate wants us increase our dependence on foreign oil. It seems to me that the best way to lower prices of gas would have been to follow the Bush energy proposals seven years ago instead of playing keep-away with investigations into the participants of the Vice President’s advisers.

    The Democrats can’t see past the ends of their collective nose; they want “alternate fuels” but they fail to see the reality of our current energy needs. They’re all about intentions without a thought to the results of their intentions in the interim.

    Just for the record, I’m all for cutting military aid to the Middle East, but it’s been my experience that people who want to buy guns and can’t buy them from us will just go somewhere elese.

  • Windfall tax blather

    I wrote yesterday about Obama’s opposition to the suspension of the federal tax on gasoline in a bit of political theater by Clinton and McCain. but Obama’s plan for lowering gas prices is even more laughable. It’s pure class warfare – a windfall tax on oil companies to punish them for record profits. From the Wall Street Journal Review and Oulook;

    Mr. Obama is right to oppose the gas-tax gimmick, but his idea is even worse. Neither proposal addresses the problem of energy supply, especially the lack of domestic oil and gas thanks to decades of Congressional restrictions on U.S. production. Mr. Obama supports most of those “no drilling” rules, but that hasn’t stopped him from denouncing high gas prices on the campaign trail. He is running TV ads in North Carolina that show him walking through a gas station and declaring that he’ll slap a tax on the $40 billion in “excess profits” of Exxon Mobil.

    The idea is catching on. Last week Pennsylvania Congressman Paul Kanjorski introduced a windfall profits tax as part of what he called the “Consumer Reasonable Energy Price Protection Act of 2008.” So now we have Congress threatening to help itself to business profits even though Washington already takes 35% right off the top with the corporate income tax.

    In the Senate, Li’l Chuckie Schumer wants to do the same according to the Plattsburgh Press Republican;

    U.S. Sen. Charles Schumer is proposing a windfall-profits tax on oil companies.

    “Once again, consumers’ pain is Exxon’s gain,” Schumer said in a statement.

    “Oil companies are wracking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices. It’s high time for big oil to pay its fair share. It’s time for a tax on their windfall profits.”

    Schumer’s measure, co-sponsored by Sen. Sherrod Brown (D-Ohio), would levy a tax on the windfall profits of American oil companies and foreign companies with substantial operations in the United States in 2008 and 2009.

    The legislation provides a formula for calculating the earnings that are subject to the tax.

    Oil companies would calculate their annual profit for each year from 2003 to 2007, subtract the year that saw the greatest profit and take an average of the four remaining years.

    That figure, plus 10 percent, would represent the “reasonably inflated average profit.”

    And how does that lower gas prices? What does it prove? How does it provide relief for consumers? Well, it doesn’t – it just fills government coffers and it drives the price of gas up because the oil companies will just pass along the cost of the tax to us. The Wall Street Journal notes that Jimmy Carter and the Democrat Congress tried this in 1980;

     We tried this windfall profits scheme in 1980. It backfired. The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3% to 6% and increased oil imports from OPEC by 8% to 16%. Mr. Obama nonetheless pledges to lessen our dependence on foreign oil, which he says “costs America $800 million a day.” Someone should tell him that oil imports would soar if his tax plan becomes law. The biggest beneficiaries would be OPEC oil ministers.

    So why would Obama and the rest of the Democrat Congress propose this if we all know it’ll fail? For the same reason a man drowning in quicksand flails his arms and legs – just because they feel like they should do something while we’re sinking.

    The Wall Street Journal reports that help is on the way, though;

    Late this week, a group of Senate Republicans led by Pete Domenici of New Mexico introduced the “American Energy Production Act of 2008” to expand oil production off the U.S. coasts and in Alaska. It has the potential to increase domestic production enough to keep America running for five years with no foreign imports. With the world price of oil at $116 a barrel, if not now, when? No word yet if Senators Clinton and Obama will take time off from denouncing oil profits to vote for that.

    Five years without imports – hmm that would drive the price down, which, in turn, would drive down profits, too. Naw, it might actually accomplish something, Democrats won’t vote for that.

  • Unemployment rate falls, crickets chirp

    This morning, all of the regular idiots at CNBC were giddy with pleasure that the unemployment rate was expected to rise as the Bureau of Labor Statistics were scheduled to to release it’s weekly report. How terrible they must feel that unemployment fell back instead;

    Employers cut far fewer jobs in April than in recent months and the unemployment rate dropped to 5 percent, a better-than-expected showing that nonetheless reveals strains in the nation’s labor market.

    For the fourth month in a row, the economy lost jobs, the Labor Department reported Friday. But in April the losses totaled 20,000, an improvement from the 81,000 reductions in payrolls logged in March. Job losses for both February and March turned out to be a bit deeper than previously reported.

    So, let’s recap – as late as last week, all of the “experts” were saying we’re in the middle of a recession (which is defined as two consecutive quarters of negative GDP growth), yet the GDP actually increased .6% last quarter (even though growth was anemic, it was still growth) and the unemployment rate falls by .2%. Oh, did I mention that the dollar got stronger yesterday and that oil prices fell (actually, oil prices fell because the dollar got stronger)?

    I wonder what they’re saying on CNBC now?

  • Need a reason to be angry today?

    Are you feeling just a little too happy today? Do yo need a reason to be angry? Well then just shoot over to Big Dog’s Weblog who links to a WCBSTV article on Congress members who abuse their taxpayer-funded leased vehicles;

    It seems there is a loophole that allows them to lease vehicles at the expense of taxpayers and there appears to be no limit as to how much they spend on the lease. Taxpayers also foot the bill for registration, insurance and the GAS. No wonder these chowder heads are not concerned about the price of gasoline. It is not bad enough we have to pay a fortune to fill our vehicles but we also pay to fill theirs.

    Charlie Rangel of New York drives a Cadillac DeVille, and taxpayers are charged $774 per month ($9288 a year) to cover the lease.

    Then there was Congressman Jose Serrano, getting out of his Buick LaCrosse, which he leases for $317 per month. And how about this one: Congressman Gregory Meeks was recently seen waiting for Congressman John Conyers to step out of Meeks’ Lexus LS460, which Meeks leases for $998 per month.

    Big Dog points out that Rangel is always calling for tax hikes, it must be because he needs spinners for his DeVille.

    My wife owns a Chevy Cobalt (35 mpg and we paid cash – lease is for suckers) and I use a BMW (that stands for Bike, Metro and  Walking, not the Bavarian Motor Works) and we pay over $250/week in taxes. Now I know why; so Rangel can cruise Southeast DC in pimped-out, airconditioned luxury. No wonder they think they’re better than us.