Underdog Obama – No, really
The campaign that never really stopped to govern is gearing up again and Barack Obama is out there saying things now in an attempt to defuse them and make them “old news” when the election nears.
Calling himself an "underdog," President Obama today said the faltering economy is a drag on his presidency and seriously impairing his chances of winning again in 2012.
"Absolutely," he said in response to a question from ABC News’ George Stephanopoulos about whether the odds were against him come November 2012, given the economy. "I’m used to being the underdog. But at the end of the day people are going to ask — who’s got a vision?"
The American people, he conceded, are "not better off" than they were four years ago.
The next thing you know, he’ll try to pass himself off as an “outsider”.
Here’s the cold, hard truth – no incumbent is really an underdog and especially when that incumbent is President of the United States and owns the bully pulpit. Oh they’ve certainly lost reelection bids in the past, no question. But, as is evident now by watching the GOP field of candidates, if Barack Obama is in trouble it is because of Barack Obama, not anyone else.
He understands why – people are indeed not better off than they were four years ago. But what he doesn’t seem to understand yet is that most Americans have seen his “vision” and aren’t buying.
He seems to think that his grandiloquent rhetoric is going to again save him as he stands before bedazzled crowds and snows them with his “vision”. Right now, however, his vision has gotten us into $14 trillion of debt, 9.1% unemployment and the distinct probability that the economy will suffer a double dip recession. He’s made us more energy starved with his policies and he’s taken over a good portion of the economy with his health care law and it appears it will be bending the cost curve up. Yes, records are a bitch and this time he actually has one.
Not only are we not better off than we were four years ago it appears to be getting even worse. And Mort Zuckerman, a former Obama supporter has some thoughts on the subject as he discusses why businesses aren’t getting back to the business of growing the economy:
When governments are shown to be powerless or incompetent, ordinary people suddenly realise that their elected officials have neither the understanding, the political power and sometimes not even the will to do what is necessary. In part this is because they are scared of voter backlash. At that point despair and alienation takes control of public opinion and they concentrate on preserving what little of their long-term prospects and savings they can.
This dismal point we have reached today. Confidence in the US government has fallen so far that a recent Gallup poll found only 26 per cent approving the president’s management of the economy. And there is a sense that there are not too many effective tools left in the toolbox of the government.
So what is the Obama vision he plans on selling given Zuckerman’s spot on assessment. Is he going to sell he has suddenly become competent and his administration has finally figured out how to govern? That he’s now a leader? That his ideas aren’t warmed over leftovers that have failed every time they’ve been tried?
No wonder independents are deserting him.
What is Obama’s vision? Well if what we’ve been hearing from many on the left, it certainly isn’t a liberty lovers idea of utopia, but it appears that desperate times knocks the veneer off the “democratic” left:
One of them, former White House Budget Director Peter Orszag, penned a piece this week in the New Republic arguing, as the title says, "Why we need less democracy." Orszag wrote that "the country’s political polarization was growing worse — harming Washington’s ability to do the basic, necessary work of governing." His solution? "[W]e need to minimize the harm from legislative inertia by relying more on automatic policies and depoliticized commissions for certain policy decisions. In other words, radical as it sounds, we need to counter the gridlock of our political institutions by making them a bit less democratic."
Orszag’s view is typical of Obama White House alumni. Last year, former auto czar Steve Rattner wrote in his book, "Overhaul," "Either Congress needs to get its act together or we should explore alternatives. … If our country wants to do a better job of solving its problems, it needs to find a way to let talented government officials operate more like they do in the private sector." True to the founding ideals of the progressive movement, both men are suggesting that enlightened technocrats who know best should be allowed to operate the federal government independent of popular will.
Perhaps know-it-all bureaucrats can be forgiven for harboring such contempt for the voting public. But elected officials cannot. That’s why similar comments by Gov. Bev Perdue, D-N.C., are far more troubling. "I think we ought to suspend, perhaps, elections for Congress for two years and just tell them we won’t hold it against them, whatever decisions they make, to just let them help this country recover," Perdue told a Rotary Club gathering in suburban Raleigh this week. "I really hope that someone can agree with me on that."
Perdue’s office at first claimed her comments were made in jest. The subsequent release of the audio conclusively demonstrates otherwise.
For those of you agreeing with Rattner, democracy is a messy business and while there are certainly aspects of the private sector which should be integrated into government, hierarchical management is not one of them. We don’t work for the government, it is supposed to work for us. And I damn sure am not going to agree to giving that up for temporary convenience.
But it does sort of give you a righteous peek under the sheep’s clothing and a glimpse of the wolf, doesn’t it?
~McQ
Twitter: @McQandO
The government’s war against cheap fuel
Harold Hamm, CEO of the country’s 14th largest oil company, Continental Resources, is featured in the WSJ today. He talks about oil, gas and his belief, given what he knows about our reserves, that we could be completely energy independent from OPEC if we’d exploit them.
Or, as the title of the piece says, North Dakota could be the Saudi Arabia of the 21st century. He thinks our technology for recovery of oil and gas is at such a state now that we could economically extract gas and oil that was previously unrecoverable and do it at a very nominal price.
So Mr. Hamm goes to Washington and has a chance to meet President Obama. He has a moment alone with him and tries to get the message across.
When it was Mr. Hamm’s turn to talk briefly with President Obama, "I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this."
The president’s reaction? "He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’" Mr. Hamm holds his head in his hands and says, "Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing."
Disappointing? It’s vesting our future in a myth (or at minimum a hope) while ignoring what we have in front of us upon which our economy runs.
With all the excitement over renewable energy, it might be reasonable to assume that fossil fuels such as coal, oil, and natural gas will go the way of the steam engine in the next 20 years.
Not so fast, says Daniel Yergin, author and one of the most influential voices in the world of energy.
"There is always the possibility that something big will happen very quickly, but probably not," Yergin said in an interview this week before delivering a lecture at the Free Library of Philadelphia.
"On a worldwide basis, about 80 percent of energy today is oil, gas, and coal. You say, What’s it going to be in 2030? Most studies say somewhere about 75 percent of the bigger pot."
Said another way, we should be doing everything we can at this moment to do two things – increase our oil and gas supplies and create jobs. The oil and gas industry promise an abundance of both.
As for our alternate or green fuels – yeah, maybe some day as Yergin, who has spent years researching them, admits, but not anytime soon:
"I’m convinced there will be major changes," he said. "But given how massive the energy system is, how complex it is, things just don’t happen overnight."
Existing energy systems contain an enormous amount of embedded capital. New technologies have long lead times. Automobile fleets take a decade to turn over. And world energy demand is expected to grow 35 to 40 percent by 2030.
Wind turbines, after decades of development, are only now cost-competitive, he said. Photovoltaic cells, first used in spacecraft in 1958, still require subsidies.
"It’s not a light switch where you can go from one to another," he said.
Precisely. It’s like trying to turn an aircraft carrier around that is going full speed … it not only requires miles and miles of ocean but a lot of time. We’re not going to transition to any alternate or green energy source in the foreseeable future – gas and oil will continue to play a dominant role in our economy. And it is high time we began to earnestly exploit our reserves.
Anyway, back to Harold Hamm. Why is Mr. Hamm so excited about North Dakota? Bakken shale:
How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: "No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels."
If he’s right, that’ll double America’s proven oil reserves. "Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska," he continues. According to Department of Energy data, North Dakota is on pace to surpass California in oil production in the next few years. Mr. Hamm explains over lunch in Washington, D.C., that the more his company drills, the more oil it finds. Continental Resources has seen its "proved reserves" of oil and natural gas (mostly in North Dakota) skyrocket to 421 million barrels this summer from 118 million barrels in 2006.
"We expect our reserves and production to triple over the next five years." And for those who think this oil find is only making Mr. Hamm rich, he notes that today in America "there are 10 million royalty owners across the country" who receive payments for the oil drilled on their land. "The wealth is being widely shared."
The fact is that over the next few years, Bakken is going to provide huge employment opportunities, taxes, you name it – all of the positives that get an economy going again.
How much? Well that’s still to be determined, but if our experience with the Barnett shale formation down Texas way is any example, lots. Here are the results of a recent study of the impact of the exploitation of Barnett shale by the Perryman Group [pdf]:
More than 9 trillion cubic feet of natural gas have been produced from the Barnett Shale. Currently, 24 counties have producing wells, with permits issued for a 25th county.
Although exploration activity slowed during the economic downturn, production from the Barnett Shale continued to rise, topping 1.8 trillion cubic feet in 2010.
More than 70 rigs are currently drilling in the Barnett Shale.
The Perryman Group estimated the positive effect of Barnett Shale related activity on the regional and state economies. This economic stimulus stems from (1) exploration, drilling, and related activity; (2) pipeline investments and related operations; and (3) royalties and lease bonuses. In addition, the oil and gas companies involved donate millions to area charities and pay substantial ad valorem taxes.
The Perryman Group estimated the 2011 total effect of Barnett Shale activity to include $11.1 billion in annual output and 100,268 jobs in the region. While the majority of the stimulus comes from exploration and drilling, pipeline development and royalty and lease payments also contribute to the overall impact.
For the state as a whole, Barnett Shale-related activity leads to estimated 2011 gains in output (gross product) of almost $13.7 billion as well as 119,216 jobs.
The Perryman Group estimates that the cumulative economic benefits during the 2001-2011 period include $65.4 billion in output (gross product) and 596,648 person-years of employment in the region. For the state as a whole (including the Barnett Shale region), the total benefits over the 2001-2011 period were found to include $80.7 billion in output (gross product) and 710,319 person years of employment.
Approximately 38.5% of the incremental growth in the economy of the region over the past decade has been the result of Barnett Shale activity. Moreover, the overall economic contribution of this phenomenon now constitutes about 8.5% of the local business complex.
Activity in the Barnett Shale is also an important source of tax revenues to local entities as well as the State. The Perryman Group estimates that in 2011, counties, cities, and school districts in the region will receive some $730.6 million in additional fiscal revenues due to the Barnett Shale and related activity.
The State will likely receive another $911.8 million, for a total gain in local and State taxes of an estimated $1.6 billion.
Over the entire 2001-2011 period, The Perryman Group estimates that local taxing entities received an additional $5.3 billion in tax receipts, with another $5.8 billion to the State.
It would seem to most reasonable and rational people that encouraging this would be the smartest and one of the most effective ways to help the economy recover.
But apparently that’s just not the priority – at least when it comes up against the political agenda pushing the myth of instant green energy if we’ll just pour more money into it.
So, instead we get this:
Washington keeps "sticking a regulatory boot at our necks and then turns around and asks: ‘Why aren’t you creating more jobs,’" he says. He roils at the Interior Department delays of months and sometimes years to get permits for drilling. "These delays kill projects," he says. Even the Securities and Exchange Commission is now tightening the screws on the oil industry, requiring companies like Continental to report their production and federal royalties on thousands of individual leases under the Sarbanes-Oxley accounting rules. "I could go to jail because a local operator misreported the production in the field," he says.
The White House proposal to raise $40 billion of taxes on oil and gas—by excluding those industries from credits that go to all domestic manufacturers—is also a major hindrance to exploration and drilling. "That just stops the drilling," Mr. Hamm believes. "I’ve seen these things come about before, like [Jimmy] Carter’s windfall profits tax." He says America’s rig count on active wells went from 4,500 to less than 55 in a matter of months. "That was a dumb idea. Thank God, Reagan got rid of that."
A few months ago the Obama Justice Department brought charges against Continental and six other oil companies in North Dakota for causing the death of 28 migratory birds, in violation of the Migratory Bird Act. Continental’s crime was killing one bird "the size of a sparrow" in its oil pits. The charges carry criminal penalties of up to six months in jail. "It’s not even a rare bird. There’re jillions of them," he explains. He says that "people in North Dakota are really outraged by these legal actions," which he views as "completely discriminatory" because the feds have rarely if ever prosecuted the Obama administration’s beloved wind industry, which kills hundreds of thousands of birds each year.
Continental pleaded not guilty to the charges last week in federal court. For Mr. Hamm the whole incident is tantamount to harassment. "This shouldn’t happen in America," he says. To him the case is further proof that Washington "is out to get us."
And everything we’ve seen seems to agree with Hamm’s assessment. He’s completely right about the wind power point. In fact, the California condor, which was finally removed from the endangered species list, is probably going to end up going back on because so many have been killed by wind mills. Not a peep from the Feds.
The government floods green energy—a niche market that supplies 2.5% of our energy needs—with billions of dollars of subsidies a year. "Wind isn’t commercially feasible with natural gas prices below $6" per thousand cubic feet, notes Mr. Hamm. Right now its price is below $4. This may explain the administration’s hostility to the fossil-fuel renaissance.
This administration’s policies are simply absurd to say the least.
We have the means, the technology and the will to exploit these natural resources. They will provide millions of jobs (both direct and indirect) – good, high paying jobs. That also means increased revenue at all levels of government, not to mention more and more energy security.
Mr. Hamm calculates that if Washington would allow more drilling permits for oil and natural gas on federal lands and federal waters, "I truly believe the federal government could over time raise $18 trillion in royalties." That’s more than the U.S. national debt, I say. He smiles.
Even if that’s only half true, what’s not to like or want, especially now in our current economic situation?
I have no idea …. ask President Obama.
~McQ
Twitter: @McQandO
Economic Statistics for 3 Oct 11
Today’s economic statistical releases:
We await the releases of vehicle sales, which will come from the manufacturers throughout the day.
Increases in employment and production pushed the ISM Manufacturing Index up slightly to 51.6.
Construction spending rose by 1.4% in August, led by a 3.1% increase in public sector construction.
~
Dale Franks
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Fat tax: Do the ends justify the means?
Or are they just another example of unjustified government overreach and a loss of freedom?
The question – who should decide what you eat? You or the government?
In Denmark, it appears the government will decide:
Denmark has introduced what’s believed to be the world’s first fat food tax, applying a surcharge to foods with more than 2.3 percent saturated fats, in an effort to combat obesity and heart disease.
Danes accordingly hoarded the foods which will see increased taxes, buying out stores which carried them.
Who should decide your diet?
The new tax of 16 kroner ($2.90) per kilogram (2.2 pounds) of saturated fat in a product will be levied on foods like butter, milk, cheese, pizza, oils and meat.
Obviously the Danish government isn’t saying you can’t eat these things, but it is saying it will make it markedly more expensive to do so. And, of course, those it hits hardest with this sort of tax are those who can least afford it.
“We get the taxes, but never a reduction on anything to complement the increases, such as on healthy foods,” said Clausen.
End result – those with less income will be able to afford less meat, oil, milk etc.
But that’s not the main point, of course. It is government deciding something as basic as what you’ll be able to put in your mouth. And it all derives from one thing – the fact that in the case of health care, the Danish government, via intrusion in that area long ago, now justifies its further intrusion in the name of “public health”. Once a people allow that, all sorts of intrusion is then “justified” under the guise of “public health” or driving the cost of health care down.
“Denmark finds every sort of way to increase our taxes,” said Alisa Clausen, a South Jutland resident. “Why should the government decide how much fat we eat? They also want to increase the tobacco price very significantly. In theory this is good — it makes unhealthy items expensive so that we do not consume as much or any and that way the health system doesn’t use a lot of money on patients who become sick from overuse of fat and tobacco. However, these taxes take on a big brother feeling. We should not be punished by taxes on items the government decides we should not use.”
But that right – the right to decide what they eat – was given up by Dane’s decades ago when they voluntarily gave up the right to decide their means of health care for the convenience of a government single payer system.
Liberty traded for convenience and security. The problem, as always, is the trade is never complete with the first installment. Give up the right to your health care options and you’ll eventually give up your right to decide on what you eat. Etc.
What Ms. Clausen points out is a dawning awareness that Danes have done exactly that. Taxes, instead of being a means of raising revenue to fund government, have become a tool of social engineering. And while she acknowledges the supposed good intentions involved she seems to have recognized what she’s traded for them. And I think she’s beginning to realize how much worse it can (and most likely will) get.
If you think Denmark is an isolated example of this pernicious threat to liberty, think again:
Speaking on the government’s role in diet and health last week, Bloomberg told the UN General Assembly, “There are powers only governments can exercise, policies only governments can mandate and enforce and results only governments can achieve. To halt the worldwide epidemic of non-communicable diseases, governments at all levels must make healthy solutions the default social option. That is ultimately government’s highest duty.”
Earlier in his address Bloomberg lauded the past dietary efforts of NYC, “In 2009 we enacted the first restriction on cholesterol-free artificial trans fat in the city’s food service establishments. Our licensing of street green card producer/vendors has greatly increased the availability of fresh fruits and vegetables in neighborhoods with high rates of diet related diseases. And we’ve led a national salt reduction initiative and engaged 28 food manufacturers, supermarkets and restaurant chains to voluntarily commit to reducing excessive amounts of sodium in their products. ”
In the end, the only guardian of your liberty is you. And it is the nature of government to pursue power. The two must clash. Sometimes a loss of liberty may seem to be a good thing initially, such as when Danes traded their liberty to make their own health care decisions for the security of the government doing so. But, as mentioned, it never stops there, does it? Once you begin trading liberty for security, government decides when that trading stops, not you.
Denmark is just the first. Michael Bloomberg describes the future as we’re allowing it to be set – trading liberty for security, and in the end, getting neither.
~McQ
Twitter: @McQandO