Free Markets, Free People

Daily Archives: March 16, 2012

Krugman: Half-truths and logical fallacies litter his denouncement of drilling for oil

But that shouldn’t come as a particular surprise for anyone who has watched this economist turn into a political hack over the years.

He starts with this:

To be a modern Republican in good standing, you have to believe — or pretend to believe — in two miracle cures for whatever ails the economy: more tax cuts for the rich and more drilling for oil. And with prices at the pump on the rise, so is the chant of “Drill, baby, drill.” More and more, Republicans are telling us that gasoline would be cheap and jobs plentiful if only we would stop protecting the environment and let energy companies do whatever they want.

You’ll not see such a broad field of strawmen erected in such a short paragraph for quite some time.

Anyone know any Republicans who are calling for “more tax cuts for the rich” (as I recall, Republicans are saying no tax increases for anyone)?  That’s the first strawman.

Second? Not a single “Republican” I know is claiming that we should “stop protecting the environment” and “let energy companies do whatever they want”.  I defy Krugman to produce them.  Instead what I see are those that want more drilling point out that the technology exists to do it safely and in an environmentally friendly way and thus there’s no real reason to stop it other than ideology.  Nor do I know of any who oppose the pursuit of alternative fuels.  They just are realistic about the fact that none of those being pursued are anywhere yet ready for prime time, unlike our President.  So they naturally look to what we have as the main staple of our economy’s energy demand now and in the near future. 

It’s called “common sense” for the Krugman’s of the world who seem to have not been blessed with much of it.

As for jobs and cheaper gas, you should be able to ask an economist if increased supply of a commodity would have the effect of downward pressure on cost and expect to get an honest answer – unless it’s this guy.

Oh, and you’d also expect an economist to understand that if you expand production of any such commodity which is labor intensive, you’re going to create a lot of jobs.  You may expect that, but you too can read this so-called economist’s words.  When the choice is between political hackery and economic integrity, guess which he chooses?

Charles Krauthammer lays out a little ground truth about why “drill, baby, drill” hasn’t been able to have the effect it might have had if allowed.  Yes, “allowed”:

President Obama incessantly claims energy open-mindedness, insisting that his policy is “all of the above.” Except, of course, for drilling:

●off the Mid-Atlantic coast (as Virginia, for example, wants);

●off the Florida Gulf Coast (instead, the Castro brothers will drill near there);

●in the broader Gulf of Mexico (where drilling in 2012 is expected to drop 30 percent below pre-moratorium forecasts);

●in the Arctic National Wildlife Refuge (more than half the size of England, the drilling footprint being the size of Dulles International Airport);

●on federal lands in the Rockies (where leases are down 70 percent since Obama took office).

But the event that drove home the extent of Obama’s antipathy to nearby, abundant, available oil was his veto of the Keystone pipeline, after the most extensive environmental vetting of any pipeline in U.S. history. It gave the game away because the case for Keystone is so obvious and overwhelming. Vetoing it gratuitously prolongs our dependence on outside powers, kills thousands of shovel-ready jobs, forfeits a major strategic resource to China, damages relations with our closest ally, and sends billions of oil dollars to Hugo Chavez, Vladimir Putin and already obscenely wealthy sheiks.

The opportunity to see gas at a lower price, plentiful jobs created and supply increased have been squandered by this administration and Krugman, as if channeling our President, is trying to pass this failure off on the GOP. He’s essentially trying too claim the laws of supply and demand have been suspended.

The irony here is that these claims come just as events are confirming what everyone who did the math already knew, namely, that U.S. energy policy has very little effect either on oil prices or on overall U.S. employment. For the truth is that we’re already having a hydrocarbon boom, with U.S. oil and gas production rising and U.S. fuel imports dropping. If there were any truth to drill-here-drill-now, this boom should have yielded substantially lower gasoline prices and lots of new jobs. Predictably, however, it has done neither.

Again, a half-truth.  The boom is a boomlet compared to what it might have been had Obama and his merry permit slow-walkers gotten out of the way.  The only thing that has saved Obama is the boom on state and private land.  What Krugman won’t say is it is most likely true that had that boom not materialized on non-Federal land, gas prices would be even higher.  And so would unemployment.  Don’t forget the tens of thousands of jobs lost due to the Obama administration’s Gulf “permatorium”.

Krauthammer points out what should have been obvious to an economist but are inconvenient truths to a political hack:

“The American people aren’t stupid,” Obama said (Feb. 23), mocking “Drill, baby, drill.” The “only solution,” he averred in yet another major energy speech last week, is that “we start using less — that lowers the demand, prices come down.” Yet five paragraphs later he claimed that regardless of “how much oil we produce at home . . .that’s not going to set the price of gas worldwide.”

So: Decreasing U.S. demand will lower oil prices, but increasing U.S. supply will not? This is ridiculous. Either both do or neither does. Does Obama read his own speeches?

Obama says of drilling: “That’s not a plan.” Of course it’s a plan. We import nearly half of our oil, thereby exporting enormous amounts of U.S. wealth. Almost 60 percent of our trade deficit — $332 billion out of $560 billion — is shipped overseas to buy crude.

Drill here and you stanch the hemorrhage. You keep those dollars within the U.S. economy, repatriating not just wealth but jobs and denying them to foreign unfriendlies. Drilling is the single most important thing we can do to spur growth at home while strengthening our hand abroad.

It is truly wondrous to me how poorly Krugman comes off in these sorts of debates.  He concludes his hack job with:

And intellectual bankruptcy, I’m sorry to say, is a problem that no amount of drilling and fracking can solve.

The irony is so thick you could cut it with a knife.

~McQ

Twitter: @McQandO

Economic Statistics for 16 Mar 12

The following statistics were released today on the state of the US economy:

Overall consumer prices rose sharply last month, with the CPI up 0.4%. The "core" rate, ex-food and  -energy, was up 0.1%. Energy prices jumped by 3.2% in the month.

Due to weakness in mining and utilities, Industrial production is unchanged from last month. Capacity utilization rose 0.2% to 78.7%. Despite the disapointing production figure, manufacturing rose 0.3% for the month.

The Reuters/University of Michigan’s consumer sentiment index fell 1 point to 74.3, as consumers responded to rising energy prices.

~
Dale Franks
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5th Circuit rules guns aren’t “property-like”

The war against private property proceeds apace with the 5th US Circuit Court of Appeals deciding that while you have a right to keep and bear arms, that right doesn’t extent to you keeping or bearing a particular arm.  Check out how the AP professionally and reports this in an unbiased manner:

A federal judge correctly dismissed a lawsuit against the city of New Orleans by a man who claimed that local law-enforcement authorities violated his constitutional right to bear arms, a divided panel from the 5th U.S. Circuit Court of Appeals ruled Wednesday. With the backing of the American Civil Liberties Union of Louisiana, Errol Houston Jr. sued after the Orleans Parish district attorney’s office refused to return a registered gun that police seized when he was arrested in 2008 on drug and firearms charges that were later dropped.

Emphasis mine.  “Correctly”?  No opinion injected there, huh?

At least one judge didn’t share that opinion on the panel.  But back to the majority point:

U.S. District Judge Jay Zainey dismissed the claims in December 2010, saying Houston failed to allege sufficient facts to show how authorities violated his right to bear arms by retaining his pistol.

In its majority opinion, a three-judge panel from the 5th Circuit said some regulation of firearms falls outside the reach of the Second Amendment, just as obscenity and defamation aren’t protected as free speech by the First Amendment.

"The right protected by the Second Amendment is not a property-like right to a specific firearm, but rather a right to keep and bear arms for self-defense," Judge Rhesa Hawkins Barksdale wrote.

Emphasis mine. Well how the hell do you do that if you don’t enjoy a right to property, i.e. the right to the freakin’ gun necessary to exercise the right?

Imagine the police setting up a roadblock and confiscating all weapons while telling you that you’re still entitled to your 2nd amendment rights, just not the right to this particular gun for whatever reason they choose to invoke?

Seems to me the 5th Circuit would endorse that.

The dissenting judge wrote:

In her dissenting opinion, however, Judge Jennifer Walker Elrod said she disagrees with the majority’s conclusion that the Second Amendment doesn’t protect an individual’s right to a specific firearm unless the government has prevented that person from acquiring others.

Elrod argued the majority impermissibly treated the Second Amendment as a "second-class right" by carving out an exception.

"It is particularly unfortunate for our circuit to endorse the atextual, ahistorical rule that the Second Amendment does not protect particular firearms," she wrote.

More importantly, this is government deciding it can violate the property rights of a gun owner whenever it wishes too with no penalty for doing so. This isn’t a 2nd amendment case.  It’s a property rights case.

Remember my “hypothetical” about the traffic stop above.  It’s not too far off the mark:

Houston sued the city, District Attorney Leon Cannizzaro and former Police Superintendent Warren Riley in July 2009, nearly a year after Cannizzaro’s predecessor dropped the charges against him stemming from a traffic stop.

Houston claimed Cannizzaro’s office had a policy of retaining firearms following arrests regardless of whether charges are filed. During an interview in 2009, Cannizzaro said his office decides on a "case by case basis" whether to return confiscated guns.

"There is no policy that we will not return weapons," he said.

Screw your policy or lack there of.  The point is, Mr, Cannizzaro, you have no right to keep it.  Keeping it is theft and a violation of the owner’s property rights, plain and simple.

For once, I’m with the ACLU  … appeal this.  This is a gross miscarriage of justice.

~McQ

Twitter: @McQandO