Free Markets, Free People
Funny … despite all the impediments the Obama administration has put on oil production on public land, the private sector – the market – has pushed us into a position we’ve never been in before in terms of output of oil and gas. We’ve passed the Saudi’s in output:
In spite of the Obama Administration’s hostility to carbon-rich energy, private actors with private capital deployed on private (and state) land have launched a game-changing revolution in domestic oil and natural gas production.
A scarcely reported milestone conveys the magnitude of this turnaround in the global energy landscape.
The U.S. passed Saudi Arabia as the world’s largest petroleum producer in November 2012, according to recently released data of the federal Energy Information Administration.
Now, imagine where we’d be if we didn’t have an obstructive administration bent on punishing those producers in that market via high taxation and regulation. Or slow-walking permits for drilling on public land. Or any of a myriad of other things this administration does to try to prevent oil and gas production. Well, other than taking credit for the rise in production when they had nothing to do with it.
Had they gotten out of the way, had they helped us take advantage of these new finds, Saudi Arabia would have been in our rear view mirror a long time ago and my guess is, gas wouldn’t cost what it does today.
This week, Bruce, Michael and Dale discuss the events of the week.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here.
Two-thirds of Democrats now believe Obama’s health care reforms will either hurt them personally or have no effect on their daily lives, a Quinnipiac University poll released Thursday shows. In comparison, just 27 percent of Democratic respondents said the reforms would help them.
As for the rest?
Just 3 percent of Republicans and 15 percent of independents believe the president’s overhaul will help them personally, the poll shows. Even worse for the White House, 68 percent of self-identified Republicans and more than a third of all independents said the reforms would hurt them personally.
But a Democratic Congress rammed it through anyway, didn’t it? And a sell-out Chief Justice found it to be “Consitutional”, so now we have to live with it – at least temporarily.
Yet most of the country believes it won’t do what was advertised and will instead cost them more. And most of them have believed that (rightfully so) since the beginning.
Yet we still have it.
How anyone, even Democrats, believed that adding layers of government regulation, taxation and bureaucracy could possibly make the health care system less expensive remains one of those mysteries of life. Well, not really. It’s call delusion. And in this case, it was something they wanted to believe badly and facts and reality just got in the way of that belief. And now what has their secular faith brought us?
Another in a long line of disastrous and costly government programs that we can’t afford.
And now they want to bitch.
Because, you know, we’re in a (perpetual) recovery and stuff like this isn’t supposed to happen:
The number of Americans filing new claims for unemployment benefits hit a four-month high last week, the latest suggestion the labor market recovery lost some momentum in March.
Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the Labor Department said on Thursday.
Economists, who had expected claims to drop to 350,000, said while part of the rise reflected difficulties adjusting the data during the Easter and spring breaks, there was no doubt the pace of job growth had eased.
“What we do know is that the growth momentum has slowed, employment has slowed. The question is how much?” said Millan Mulraine, a senior economist at TD Securities in New York.
How much? Well let’s consider something shall we? What has recently and finally gone into full effect to the point that employers can now finally make some plans with reference to it as to how many they plan to employ (or continue to employ)?
Oh, yeah, ObamaCare. The taxes and penalties kick in this year and – not saying this is the only reason – companies and corporations are finally put in the position of executing their plan to avoid the prohibitive costs and penalties imposed.
That’s right – “avoid”. Again, as is usually the case, the left has ignored Human Nature 101 as they usually do. You have to remember, the purpose of their utopia is to change human nature once and for all from a self-interested and independent being to a hive worker enslaved to the state, er, an enlightened being who thinks of others first … yeah, that’s the ticket.
And when their utopian plans meet human nature, well they call the result “unintended consequences”. We who study human nature call them “entirely predictable outcomes”. They seem surprised by these “unexpected” developments. We simply shake our head at their studied stupidity.
The problem, of course, is they presently have the power of the state in their hands. What that means is they will continue to try to drive the square peg of their utopia into the round hole of human nature and use the power of government to do so.
What that means is at some point, when they’re finally out of power, we’re going to have to pick up their pieces of what they’ve destroyed and try to piece it together in some form or fashion, if that’s possible.
And all the while that’s being attempted, we’ll have to listen to them whining and complaining that what is being done isn’t “fair” or “equitable”.
Well, what you’re suffering now is a result of “fair and equitable” nonsense that ignored Human Nature 101. Maybe it’s time to figure that out if you’re on the left.
Oh yeah, “doing the same thing over and over again and expecting different results”.
Today’s example, via the usual suspects, just boggles the mind:
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.
In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.
This is just, frankly, incredible in its stupidity. We’ve been here, done this and suffered the consequences in terms of a financial meltdown and an economy that seems to be in permanent “recession”. We’d have the T-shirt too, but they took it off our backs.
Consider the administration’s solution to the perception that we’re “leaving too many people behind: Let’s do again what was a major contributor to the last melt down. No prob. They’ll just blame the banks and the “market”. The result: more people “left behind”.
I mean, it hasn’t even been a decade yet. We’re not even doing this with a new administration. These are, for the most part, the same people who crashed it last time.
Why is it that “leaving too many people behind” is the priority, when in the past those who were supposedly left behind, found some way in the future to catch up? Why is it government’s job to “insure” risky loans because of that feel-good claptrap?
Because we’re freakin nuts, that’s why. We’re bound and determined to ruin this country based on an ideology that plays to “feelings” and “emotions” rather than good common sense, the laws of economics and freedom and libery. That’s why.
This is tar and feathers worthy, yet we’ll sit around like lumps while a majority claims it’s a “good idea” because it is “only fair”.
“Fair”. The word that will – is – ruining this country.
I know that’ll come as an absolute stunner, huh? Not really. Regulation costs money. It costs money for compliance enforcement, which comes from taxes, and it costs companies money for compliance in the form of higher costs – costs that are passed on to consumers.
So? So – from the Mercatus Center at George Mason University, find out:
Low-income households benefit the most when they act to reduce their exposure to the greatest risks they face, such as relatively common events and activities that cause illness, injury, and death, many of which can be traced to living in unsafe neighborhoods. In contrast, high-income households generally focus more on small risks—for example, tiny environmental risks that are far less likely to occur and generally affect fewer people at the expo- sure levels regulations address.
LOWER INCOME HOUSEHOLDS BEAR MORE OF THE COSTS OF REGULATION
Regulation focused on small risks delivers benefits to a limited group but spreads the costs across everyone. As a result, regulation effectively transfers money from low income households, who need to prevent larger risks, to high income households, who are concerned about small risks. Low income households are, in a sense, paying for the lifestyle preferences of the wealthy.
Such regulation increases consumer prices and lowers worker wages.
• Regulations act like a regressive sales tax, with middle and lower income households bearing much of the cost of rules that focus on the risk preferences of wealthier households, since they all pay the same, higher prices.
• Cost of regulation as a share of income is estimated to be as much as six to eight times higher for low-income households than for high-income households.
• [Diana] Thomas estimates that households can mitigate the same level of mortality risks privately for about one fifth of the cost of public risk-reduction strategies.
Well, imagine that, the laws of economics at work in a very predictable way. And, of course, completely opposite of the professed claim of the left to be on the side of the poor. Because it is that very group that continually push more and more regulation because, one assumes, they believe if some regulation is good, more has to be better. But, as a group, being mostly economically illiterate combined with unaccountable faith in government power, they end up with these sorts of ‘unintended consequences’ all of the time.
This week, Bruce, Michael and Dale discuss the events of the week.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.
A little delusion on a grand and dangerous scale:
The government, political parties and organizations of the DPRK solemnly declare as follows reflecting the final decision made by Kim Jong Un at the operation meeting of the KPA Supreme Command and the unanimous will of all service personnel and people of the DPRK who are waiting for a final order from him.
1.From this moment, the north-south relations will be put at the state of war and all the issues arousing between the north and the south will be dealt with according to the wartime regulations.
The state of neither peace nor war has ended on the Korean Peninsula.
Now that the revolutionary armed forces of the DPRK have entered into an actual military action, the inter-Korean relations have naturally entered the state of war. Accordingly, the DPRK will immediately punish any slightest provocation hurting its dignity and sovereignty with resolute and merciless physical actions without any prior notice.
You can read the whole thing here. Apparently Marshall Poppin Fresh, aka Kim Jong Un, is a little full of himself and feeling froggy. The mouse has roared. Unfortunately, this mouse had a nuke or two and is threatening to use them. Whether they’ll work or whether he can actually deliver them remain to be seen (and hopefully he’s just as delusional about that as he is actually going to war).
Another in a long line of attempts to use Nork threats to extort money from the West, or is this little fool serious?
Does a duck quack? Of course they were. Were politicians pushing an agenda involved? That’s a rhetorical question:
And yes, we told you so.
As Thomas Sowell pointed out, and I’m paraphrasing, how anyone thought that adding a layer of bureaucracy and regulation to the current system was going to drive costs down was beyond him.
And it was beyond most people who have even a modicum of common sense.
Medical claims costs — the biggest driver of health insurance premiums — will jump an average 32 percent for Americans’ individual policies under President Obama’s overhaul, according to a study by the nation’s leading group of financial risk analysts.
The report could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about the Affordable Care Act. The estimates were recently released by the Society of Actuaries to its members.
While some states will see medical claims costs per person decline, the report concluded the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.
The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.
Well done, Democrats — well done.
Despite the attempt by government and particularly Democrats, to blame the financial meltdown we’ve endured on banks and unscrupulous investment companies, the buck stops with them according to a new study just released:
Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.
But a new study by the respected National Bureau of Economic Research finds, “Yes, it did. We find that adherence to that act led to riskier lending by banks.”
Added NBER: “There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas.
As we’ve mentioned previously any number of times, government policies can set and enforce preverse incentives. And that has nothing to do with a free market. That’s at best a mixed market. So no, the problem wasn’t a “market failure”, it was the usual result of government intruding and setting preverse incentives that are contrary to good business practices and would likely not survive or succeed in an actual free market.
Here’d the bottom line:
The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.
CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.
It passed a law requiring the government-backed agencies to “assist insured depository institutions to meet their obligations under the (CRA).” The goal was to help banks meet lending quotas by buying their CRA loans.
But they had to loosen underwriting standards to do it. And that’s what they did.
Not only that, they guaranteed the bad loans with your money. Why do you think so much money has had to be pumped into those two institutions?
You see the market had determined that certain standards protected their investments. The government decided to ignore reality and push a social agenda using “race” as the basis for throwing out those standards and using their coercive power to implement the social agenda they preferred.
The result was predictable.
And the coverup as well.