Free Markets, Free People

Daily Archives: October 16, 2012


Economic Statistics for 16 Oct 12

The following US economic statistics were announced today:

The Consumer Price Index rose 0.6%. The core rate, ex-food and –energy, rose 0.1%. On a yearly basis, the CPI rose 2.0%, and the core CPI also rose 2.0%.

Net capital inflows to the US were $90 billion in August, with strong demand for corporate bonds among foreign buyers.

US industrial production rose 0.4%, while capacity utilization rose o.1% to 78.3%. Manufacturing production only rose a sluggish 0.2%, which means it’s no longer providing much impetus for recovery.

The housing market index rose 1 point to 41, thanks to record low mortgage rates and rising consumer confidence.

In weekly retail sales, Redbook reports a soft year-over-year sales increase of 1.8%. ICSC-Goldman reports sales were unchanged in the latest week, and up 2.7% on a year-over-year basis, also a fairly soft number, though it’s been steady for the last month.

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Dale Franks
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Hillary jumps under the Obama bus … or was she pushed?

Seriously.  After spending 8 years holding Bush responsible for everything from 9/11 (it was an “inside job”) to a Pelosi’s hangnail, we now have the left settling on “it’s Hillary’s fault”?

Truman’s “buck” stops at the State Department now?

The point, of course, as any good commander in the military knows, is that everything that happens or doesn’t happen while you are in command is your responsibility.

So this doesn’t cut the mustard:

“I take responsibility,” Clinton said during a visit to Peru. “I’m in charge of the State Department’s 60,000-plus people all over the world, 275 posts. The president and the vice president wouldn’t be knowledgeable about specific decisions that are made by security professionals. They’re the ones who weigh all of the threats and the risks and the needs and make a considered decision.”

Hillary, for political reasons, is trying to fall on Obama’s sword for him.  Someone has to take the blame (and Bush is unavailable for this one) so Obama can once again seem faultless. He does no wrong, you know.  And besides, he has a debate tonight and he wants someone to point his finger at when the subject is inevitably brought up.  Now he has her.

Jumped?  Or pushed?

This episode illustrates how spot on Eastwood’s empty chair metaphor really is.  John McCain, the stopped clock that is right twice a day, actually gets this one right:

“The security of Americans serving our nation everywhere in the world is ultimately the job of the commander-in-chief. The buck stops there.”

Of course the left first tried to blame it on the GOP claiming they’d cut millions from State’s security budget.

Here’s the bottom line on that line of attack: If you have a security contingent of Marines in the Embassy at Barbados, but not Tripoli or Benghanzi, your problem isn’t “funding”.  It’s resource allocation and politics.

Secondly, when something like this happens, you don’t act like a politician, you act like a leader.  IF you’re a leader.

This past weekend we were treated to the spectacle of David Axlerod avoiding answering Chris Wallace’s direct question about whether or not Obama met with his national security advosors and State in the aftermath of the murder of the US ambassador in Libya.

We all knew the answer before Wallace finished the question.  And Axlerod’s non-answer answer confirmed it.

Hell no, he was late for a political fund raiser in Las Vegas, and besides, these are just “bumps in the road”.

Leadership?

While Clinton’s attempt will seem courageous and loyal to some, it is pure, calculated politics.  Hillary knows that by 2016 this will be well behind here and, actually, an advantage, since she’ll have stepped up into the leadership void and acted like a leader.  Obama?  Not so much.

And make no mistake, as the state of the world and our foreign policy have announced loudly this past month – we are indeed suffering from a leadership void.

The empty chair we now have must be filled.  We, nor the world, can afford 4 more years of it remaining empty.

~McQ


Government picks another loser

I don’t know how many times we have to point these out or how many ways we have to illustrate that government has no business trying to pick winners and losers, because usually, as with most centralized planning organizations, they get it wrong.  Why?  Because they’re absolutely blind to signals from the market.  Government’s picks are founded more in preference than reality:

Obama touted it in 2010 as evidence “manufacturing jobs are coming back to the United States,” but two years later, a Michigan hybrid battery plant built with $150 million in taxpayer funds is putting workers on furlough before a single battery has been produced.

Workers at the Compact Power manufacturing facilities in Holland, Mich., run by LG Chem, have been placed on rotating furloughs, working only three weeks per month based on lack of demand for lithium-ion cells.

The facility, which was opened in July 2010 with a groundbreaking attended by Obama, has yet to produce a single battery for the Chevrolet Volt, the troubled electric car from General Motors. The plant’s batteries also were intended to be used in Ford’s electric Focus.

Instead:

The 650,000-square-foot, $300 million facility was slated to produce 15,000 batteries per year, while creating hundreds of new jobs. But to date, only 200 workers are employed at the plant by by the South Korean company. Batteries for the Chevy Volts that have been produced have been made by an LG plant in South Korea.

Talk about outsourcing.

Workers are furloughed for one week every month.  And guess who pays for that week?

Boileau pointed out the workers who are on furloughs one week a month are eligible to collect unemployment for that week, and he said the company covers the contributions to their individual benefits during the period.

Reality check commonly ignored when it comes to government:

“Had it been private investors rather than government bureaucrats making the decision, there either would have been a reality check about the industry, or only those who made individual decisions to invest would have lost their money, not taxpayers.”

Instead, government has “socialized” the loss.

The market has moved on – natural gas is cheap and plentiful.  It is the future, at least the near future.  That’s where everything is going.

Meanwhile, the government continues its near unbroken string of picking losers … not that anyone who knows a thing about economics and markets should be the least surprised.  Unlike many other things, this is not “unexpected”.

~McQ