Free Markets, Free People

Monthly Archives: February 2013

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Economic Statistics for 28 Feb 13

The following US economic statistics were announced today:

Real 4th quarter GDP was revised upwards to 0.1% annualized today, as the commerce Department’s first revision of the preliminary number.The GDP price index, an inflation measure, was revised to a 0.9% annualized rate.

Initial claims for unemployment fell 22,000 last week, to 344,000. The 4-week moving average fell 6,750 to 355,000, Continuing claims fell a sharp 91,000 to 3.155 million, a recovery low.

The Bloomberg Consumer Comfort Index rose 0.6 points to –32.8.

The Kansas City Fed Manufacturing Index fell to –10 from –2 last month as manufacturing activity in the district weakened.

The Chicago Purchasing Managers Index rose 1.2 points to a better-than-expected 56.8 in February.

~
Dale Franks
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The politics – and failure – of going “green”

“Going green” and “climate change” certainly are interlinked parts of a political agenda that have nothing to do with public opinion or will.  In fact:

Seventeen years of continuous surveys covering countries around the world show that people not only do not care about climate change today – understandably prioritising economic misery – they also did not care about climate change even back when times were good. The new information comes in a study released by the National Opinion Research Center at the University of Chicago – a large, long-standing and respected non-profit. The NORC spokespersons said that decades of climate alarmism have had basically no effect on people’s attitude around the world.

Part of that has to do with the fact that they’ve heard it all before.  Dire predictions about population growth that have come to naught.  Warnings about using up the earth’s resources which have proven to be false. Ozone holes. Melting icecaps. Yatta, yatta.

Climate change is just the latest among the apocalyptic prophesies and as the real science – not Al Gore “science” – comes out, fewer and fewer people are staying on the bandwagon.

Of course the promise was a “green economy” in which everyone would benefit.  How’s that worked out?  Well we know how it has worked out in Spain.  Germany is now finding out how mistaken they were to go in that direction.  In fact:

Energy, manufacturing and agriculture are playing a major role in the corridor states’ revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an “American Ruhr.” Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.

Interesting.  It is another reason why they’re also putting manufacturing plants in the US, mostly in Red States.  Skilled labor, right to work and cheap energy.  Obviously neither the “right to work” nor cheap energy are part of any Obama administration design.

And how is it going for green jobs more locally?  Well, the usual state can be consulted for an update on what such a move has wrought and demonstrate for all to see why “going green” is a foolish road to travel – at least in the near future.

It was supposed to be the next big thing. California built decades of broad-based prosperity from the Gold Rush, then Hollywood, then aerospace, and later Silicon Valley. At the turn of the century, “green jobs” were supposed to be the wave of the future. How is that going for them? According to the best numbers from the Bureau of Labor Statistics, fewer than 2,500 green jobs have been created in California since 2010.

Wow … bask in the success!  Government again demonstrates how poorly it does picking winners and losers.  Not that such failures ever hinder the central planners from using your dollars to try again.  What’s Einstein’s definition of insanity?

Meanwhile, the “success” of green energy has brought California to a point where it will have to fish or cut bait very soon:

California is weighing how to avoid a looming electricity crisis that could be brought on by its growing reliance on wind and solar power. At Tuesday’s meeting, experts cautioned that the state could begin seeing problems with reliability as soon as 2015.

Of course, had we heeded the experience of others, we likely wouldn’t see California going through this nonsense:

The former chancellor Lord Lawson has urged the Government to keep Britain’s coal-fired power stations working for as long as was needed to avoid any short-term power shortages. In a House of Lords debate on energy policy and electricity generation Lord Lawson also called on ministers to give “every encouragement  it can” to the quickest possible development of shale gas supplies. Lord Lawson urged energy and climate change minister Baroness Verma to assure the House that “if the need arises our coal-fired power stations will be kept open as long as is necessary, regardless of the European combustion plants directive”.

But our dauntless leaders never learn from others.  Just as with healthcare, they seem bound and determined to recreate the failure of others.

We have abundant fossile fuel resources.  They would generate both jobs and revenue for government.  Wind and solar, while great in theory, have in practice been shown to be woefully inadequate to our needs.  We even have communities wanting wind turbines taken down due to health concerns.

Yet our government and this administration continue to pursue an “energy policy” which is detrimental to the welfare of this nation despite a state that has done everything they want to do nationally and is a dismal failure because of it.  They are bound and determined to make all 50 states Californias.

~McQ

Economic Statistics for 27 Feb 13

The following US economic statistics were announced today:

Durable goods orders plunged -5.2% in January due to a -19.8% drop in transportation orders. Ex-transportation, orders rose a strong 1.9%.

The Pending Home Sales Index rose 5.4% to 105.9 in January, solidly above expectations.

The MBA reports mortgage applications declined again last week, down -3.8%, with purchase apps falling -5.0% and re-fis down -3.0%.

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Dale Franks
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How bad do you have to be NOT to be hired?

I wondered, when Barack Obama was re-elected, how bad you had to be to be fired.  Apparently worse than Obama, if that’s possible.

Now, with the confirmation of Chuck Hagel – another politician who has never run a large or complex organization and who was abysmal in his confirmation hearings – I have to wonder how bad you have to be NOT to be hired.

Apparently, worse than Chuck Hagel, if that’s possible:

Republicans siding with Democrats, the U.S. Senate voted Tuesday to confirm Chuck Hagel as President Obama’s secretary of defense, a nomination that drew strong opposition within the Republican former senator’s own party, with some troubled by past statements on Israel and Iran.

GOP Sens. Rand Paul (Ky.), Thad Cochran (Miss.), Mike Johanns, (Nebr.) and Richard Shelby (Ala.) supported Hagel in the 58-41 vote. No Democrats opposed him.

Again, let down by the GOP (the ‘good old boy club’ just couldn’t say no to a former member).

Anyone seeing a pattern here?

~McQ

Economic Statistics for 26 Feb 13

The following US economic statistics were announced today:

New home sales in January rose 15.6% to an annualized 437,000 in January, though large seasonal factors may exaggerate the winter months. Monthly supply dipped to 4.9 months from 5.6 months in December, as supplies constrain sales.

The Conference Board’s consumer confidence index rose a steep 10 points in February, to a better than expected 69.6.

The S&P/Case-Shiller home price index rose a strong 0.9% in December, and is up 6.8% on a year-over-year basis. Similarly, the FHFA House Price Index rose 0.6% in December, and is up 5.8% on a year-over-year basis.

In weekly retail sales, Redbook is reporting a respectable 2.7% year-over-year sales growth. ICSC-Goldman Store Sales are up only 0/1% from last week, but up 2.9% from last year.

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Dale Franks
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Why won’t this administration look at this revenue source?

Because of their false agenda, that’s why.   They’re still convinced that, despite 17 years of no warming (as recently admitted by the head of the IPCC), oil is bad and “green” is good and that they’re doing something to save the world.  Disregard the fact that green is still unviable.  Disregard the fact that everywhere it has or is being pushed, energy costs are skyrocketing.  Nevermind the fact that we are sitting on a sea of fossile fuel products that we only need to access.  Screw the fact that science can find no discernable warming.  Their minds are made up.

That said, there’s also the fiscal side of the house.  The debt.  The deficit.  And the demand by Democrats to raise more revenue.

Unfortunately, because of their agenda, they’re likely to completely screw up a golden opportunity to bring in much more revenue and drive energy prices down, because their agenda is against fossile fuel.  And we all know the party agenda comes before what is best for the country.

Enter the administration with a renewed plan to tax oil companies instead of opening access to the vast natural riches we enjoy.  The result?  Well this chart will help you comprehend the vast differences in the two policy choices (full size here):

So the either/or is “tax ‘em or open access”.  The difference:

According to a 2011 study by Wood Mackenzie, increased oil and natural gas activity underpro-access policies would generate an additional $800 billion in cumulative revenue for government by 2030. The chart puts into perspective the size of these accumulating revenues – enough to fund entire federal departments at various points along the timeline. By contrast, Wood Mackenize also found that hiking taxes on oil and natural gas companies would, by 2030, result in $223 billion in cumulative lost revenue to government.

It only proves the old saw -”If you want more of it, reward it and if you want less, tax it”.  Think about it – money to help run government and pay down the debt (not to mention the thousands, if not millions of jobs created) being passed up in the name of false science and agenda politics.

Meanwhile, we’ll be left in the cold and the dark, thanks to agenda driven policies with no foundation in reality.

~McQ

Damned “Southernomics”

In light of Michal Lind’s fantasy about the South, another indicator of how wrong he is:

State Farm, the nationally-known insurance chain headquartered in Bloomington, Illinois, has apparently had its fill of “The Land of Lincoln’s” confiscatory taxes.  The 800 million dollar company is reported to have purchased “substantial workspace” in the Dallas, Texas area. The giant insurance firm’s workers are being kept in the dark reportedly to avoid “alarming them”; but is it their workers or the State of Illinois they would like to keep in the dark about this move? If this doesn’t signal State Farm’s coming dash out of Illinois’s clutches, what could it mean?

A knowledgeable Dallas real estate insider has called this impending move “a major business relocation” of record-breaking proportions. The numbers involved are approximately 2.5 million square feet of workspace and thousands of workers. No company in Dallas’ history has made a move this large.

Texas isn’t the only state State Farm is running to. There has also been a report that it has leased office space in Atlanta. The combined amount of both new locations roughly equals the 3.5 million square feet it has in Bloomington.

Why?

These moves should come as no surprise to anyone.  In spite of (or maybe because of) raising its corporate and personal income tax rate by 67% in 2010, Illinois has seen its credit rating fall and its deficit raise.  A review of the tax structure in Georgia shows the personal and corporate income tax is 4% as compared to Illinois’ 6.25%.

Texas has no personal or corporate income tax.

But, you know, the South has just replaced physical slavery with economic slavery – and all those Texans and Georgians who will benefit from employment with State Farm after the move know that only too well, don’t they? /sarc

I’m sure the taxes are just part of the reason.  Most likely the complete business atmosphere in the South is more likely the draw.  A welcome mat instead of a outstretched hand have to be appealing.  The same thing is happening in a number of northern states – the difference being the fiscal mess of today coupled with the difference in Blue state remedies vs. Red state remedies has started to turn a trickle exiting Blue states into a flood.

~McQ

Economic Statistics for 21 Feb 13

Here are today’s statistics on the state of the economy:

Consumer prices were unchanged in January, but the core CPI (ex-food and energy) rose 0.3%. On a year-over-year basis the CPI is up 1.6%, and the core CPI is up 1.9%.

The Conference Board’s index of leading economic indicators rose 0.2% in January, though the consumer expectations component is still depressed.

The Philadelphia Fed survey fell from -5.8 to a worse than expected -12.5 for February, as mid-Atlantic regional business conditions worsened.

Initial jobless claims surged by 20,000 to 362,000 last week. The 4-week average rose 8,000 to 360.750, and continuing claims rose 11,000 to 3.148 million.

The Bloomberg Consumer Comfort Index rose to -33.4, the highest level of the year so far.

Existing home sales rose slightly, up 0.4% to an annual rate of 4.92 million. Sales are up 9.1% on a year-ago basis.

The PMI Manufacturing Index Flash fell -0.3 points to 55.2, though this is still firmly in positive territory.

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Dale Franks
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