Free Markets, Free People

Daily Archives: August 14, 2012


Fossil fuel still the hope for the future

Let this paragraph, given the economic circumstances we now find ourselves in and the policies we’ve suffered under with this administration in reference to fossil fuels, sink in:

U.S. energy supplies have been transformed in less than a decade, driven by advances in technology, and the economic implications are only beginning to be understood. U.S. natural gas production will expand to a record this year and oil output swelled in July to its highest point since 1999. Citigroup estimated in a March report that a “reindustrialization” of America could add as many as 3.6 million jobs by 2020 and increase the gross domestic product by as much as 3 percent.

In case you missed those numbers, that’s plus 3.6 million jobs and kicking up the GDP by as much as 3% by 2020.

And imagine the tax revenues that would bring as well.

Low cost fossil fuel will also do much, much more:

[T]here are signs the economic gains have begun to expand beyond the oil and gas fields and that the promise of abundant, low-cost fuels will give a competitive edge to industries from steel, aluminum and automobiles to fertilizers and chemicals.

In other words, low cost fuels will make our manufacturing sector more competitive which means more of it and more jobs as well.  Right now (and for the foreseeable future) our natural gas is much less expensive than that in the UK and Europe.  And we have literally trillions of cubic feet of it that is recoverable.

That’s starting to drive some massive private investment:

Companies plan to invest $138 billion in more than 700 natural gas storage, pipeline and processing plants in the U.S., and another $88 billion in more than 500 gas-fired power generation units, according to Joseph Govreau, vice president and editor-in-chief of Industrial Info Resources. The

firm tracks projects from planning stages through construction.

That’s only a portion of what this will spur, if allowed to go ahead.  Fertilizer production, petrochemicals, etc., all could see a revival with cheap fossil fuel.

Democrats keeps saying that reviving the manufacturing sector should be a priority.

So here’s a valid means of doing so. 

Yet for 3 plus years, this administration has done everything it can to slow walk or block increased production and exploration on federal lands and off our coasts.   There’s no sign it plans on changing that.

This boom we’re talking about has taken place in a relatively very few areas, mostly privately owned:

So far, the economic benefits have been confined to states such as Louisiana, Texas and North Dakota, while the national jobless rate has stayed above 8 percent for 42 straight months in the wake of the worst recession in seven decades.

Seems like the proverbial “no brainer” doesn’t it?  Open up federal lands and let oil companies responsibly and in an environmentally safe way explore for and exploit the natural resources we have and the country is put in the position to reap the benefits:

“This is one of those rare opportunities that every country looks for and few ever get,” said Philip Verleger, a former director of the office of energy policy at the U.S. Treasury Department and founder of PKVerleger LLC, a consulting firm in Carbondale, Colorado. “This abundance of energy gives us an opportunity to rebuild our economy.”

Or we can repeat these past 3 plus years.

Your choice.

~McQ

Twitter: @McQandO

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Economic Statistics for 14 Aug 12

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

In weekly retail sales, Redbook year-year chain store sales growth came in at a 1.8% rate, the 4th time in five weeks it’s been below 2%. ICSC-Goldman showed a -0.3% sales decrease for the week, but an improved year-on-year rate of 3.6%.

Business inventories in June rose 0.1%, outpacing sales which fell 1.1%. The mismatch for June raised the stock-to-sales ratio to 1.29, the highest in 2 1/2 years. This inventory accumulation will hold down GDP, and slow sales will hold down business confidence.

The NFIB Small Business Optimism Index fell -0.2 points in July to 91.2, after two months of improvement.

The Producer Price Index in July jumped 0.3% percent, following a 0.1% increase in June. The core PPI rose 0.4%, following June’s 0.2% gain. On a year-over-year basis, the PPI is up 0.5%, but the core PPI is up 2.5%.

Retail sales in July jumped 0.8 %, following a weak -0.2% drop in May and a weaker -0.5% decrease in June. Retail sales ex-autos also rose 0.8%, while ex-auto and ex-gas sales rose 0.9%.

~
Dale Franks
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Democratic Senator Ron Wyden tries to delink himself from Ryan Medicare plan

To date it’s been an attempt that mostly gets fussy about word usage, but my guess is it will get more pointed:

Gov. Romney is talking nonsense. Bipartisanship requires that you not make up the facts. I did not ‘co-lead a piece of legislation.’ I wrote a policy paper on options for Medicare. Several months after the paper came out I spoke and voted against the Medicare provisions in the Ryan budget. Governor Romney needs to learn you don’t protect seniors by makings things up, and his comments today sure won’t help promote real bipartisanship.

That’s obviously in reaction to a statement by Romney in which he talked about legislation, not a policy paper.

So Wyden is right, the quote is incorrect.

But Wyden is being a bit disingenuous too.  You don’t vote for parts of a budget so claiming you voted “against the Medicare provisions” of a budget are a bit of nonsense as well.  Democrats voted against the entire Ryan budget, the Medicare provisions being only  a part of that.

Even Think Progress has some problems with the attempted delinking driven by the inconvenient politics of having a Democratic Senator’s name on a plan that Democrats have chosen to mischaracterize and demonize:

The plan Sen. Wyden co-authored with Ryan does bear a striking resemblance to the proposed Medicare changes in Ryan’s latest budget for the House GOP. Both keep traditional Medicare as a kind of public option, in an exchange where it would compete with private plans offering insurance to seniors. The government would give seniors support for purchasing these plans, and that support would be benchmarked to the cost of the second-least expensive plan. The plans would also be prohibited from discriminating based on pre-existing conditions.

Where they begin to differ is Paul supports more market based solutions while Wyden wants government based solutions.

But this sort of linkage is inconvenient when you’re claiming the GOP ticket is “trying to end Medicare as we know it” (even though it is ObamaCare which is pulling $700+ billion out of Medicare).  Avik Roy has the “bottom line” on that meme:

The bottom line: if Romney and Ryan leave you the option to remain in the 1965-vintage, fee-for-service, traditional Medicare program, and you claim that Medicare has “ended as we know it,” what you’ve really ended is the English language as we know it.

Pretty much. 

The point?  Ron Wyden did indeed “co-author” a Medicare plan with Paul Ryan.  There’s no question about that.  And it was indeed a bipartisan plan, by definition.  In fact the paper is entitled “Bipartisan Options for the Future” and lists both Wyden and Ryan as the authors.

Finally, their plan contains this paragraph:

We are a Democrat and Republican; a Senator and a Representative; senior members of our respective Budget Committees; and members of the committees that have jurisdiction over Medicare and health care costs. As budgeteers, we understand the difficulty presented by demographic changes over the next several decades. As members with policy oversight, we recognize and encourage the potential for innovation to improve care and hold down costs. And most important, as representatives of hardworking Americans in Oregon and Southern Wisconsin, we realize our absolute responsibility to preserve the Medicare guarantee of affordable, accessible health care for every one of the nation’s seniors for decades to come.

Sounds like a pretty bipartisan effort to me.

Here’s the problem for the Democrats.  They need badly to demonize Paul Ryan as an extremist who is out to push granny over the Medicare cliff and end Medicare as we know it.  That’s because “Medicscaring” seniors is a tried and true method of gaining votes, and Democrats know it.  They’ve deployed it many times in the past.

And bipartisan cooperation?  No way, no how, can’t let that sort of thing become public knowledge when you have an active campaign beginning to label Ryan as an extremist ideologue.

But the facts don’t support that sort of branding campaign.  Not only has Ryan not attempted in any form or fashion to end Medicare, he’s teamed up with a liberal Senator to put forward a plan to actually save it (even while the loudest critic is pulling that $700+ billion from the program via ObamaCare) and make it sustainable.

How inconvenient. 

That is why Wyden is trying his best to delink from Ryan. And you can imagine from whence the pressure to do so is coming.  But it’s a hard sale to make when his name is clearly associated with Ryan’s on a plan he claimed will “preserve the Medicare guarantee of affordable, accessible health care for every one of the nation’s seniors for decades to come”, isn’t it?

Not that it will stop them from trying.

~McQ

Twitter: @McQandO

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