Free Markets, Free People

Monthly Archives: January 2011


December Unemployment

The employment numbers from this morning are no cause for any sighs of relief, yet.  The number of persons employed increased faster than the increase in population–which seems to be unusually small compared to recent months.

In any event, according to my calculation method, this is where we stand (all numbers in thousands):

DECEMBER 2010
Civilian Non-Institutional Adult Population:
238,889
Average Labor Force Participation Rate: 66.2%
Proper Labor Force Size: 158,145
Actually employed: 139,206

UNEMPLOYMENT RATE: 13.6%

The labor force participation rate continues to decline, coming in at 64.3% this month, a 30-year low.  The actual size of the labor force was 153,690.  Using the historical average participation rate of 66.2%, that means the current labor force is running with about 4.45 million fewer workers than it should.

This month’s non-farm payroll increase of 103k new jobs is really just a drop in the bucket. We would need 11 million jobs created to get the unemployment rate back to 5%.  Even if there were no increase in population at all, we would need to create 300k new jobs per month for 37 months to get those 11 million jobs back. The only possible bright spot is that, this year, the first of the baby boomers hit 65 and begin retiring. So maybe the actual labor force participation rate is due to naturally drop, as is the size of the labor force.

All we have to do, then, is figure out how to pay social security to more retirees with a shrinking labor force.  That should be fun.


House Judiciary Committee to investigate DoJ issues surrounding New Black Panther voter intimidation case

Jennifer Rubin reports that the House Judiciary Committee under new Chairman Lamar Smith (R-TX) has issued its first oversight letter to the Department of Justice.  Subject?  The New Black Panther Party voter intimidation case as race based enforcement guidelines within the DoJ.

To quote the letter:

"Allegations that the Civil Rights Division has engaged in a practice of race-biased enforcement of voting rights law must be investigated by the Committee."

Indeed.  He gives Holder and DoJ until the 21st to respond to a list of questions including whether Julie Fernandez of DoJ "explicitly or implicitly direct Voting Section staff not to enforce any section of any federal rights statute" or "not to enforce Section 8 of the National Voter Registration Act."   This question stems from the claim by J. Christian Adams that Fernandez  directed DoJ attorneys "not to bring cases against black defendants for the benefit of white victims."

With an all Democratic Congress, DoJ was able to weather the storm these revelations brought as Democrats successfully blocked any attempts to look into the matter officially.  That has obviously changed.

Rubin makes some observations about the letter:

The letter is noteworthy on a number of levels. First, administration flacks and liberal bloggers have insisted that the New Black Panther Party case is much to do about nothing. But as Smith has correctly discerned, the issue of enforcement or non-enforcement of civil rights laws based on a non-colorblind view of those laws is serious and a potentially explosive issue for this administration. Second, Holder’s strategy of stonewalling during the first two years of Obama’s term may have backfired. Had he been forthcoming while Democrats were in the majority, he might have been able to soften the blows; Smith is not about to pull his punches. And finally, Smith is demonstrating the sort of restraint and big-picture focus that is essential for the Republicans if they are to remain credible and demonstrate their capacity for governance.

Bingo on all three.  A worthy issue to investigate, a worthy reason to investigate and it will indeed play to the benefit of Republicans and detriment of Democrats – particularly Holder – but also those who tried to wave it away as “no big deal”.

~McQ


GOP plans on reining in the EPA

Between screaming birthers, edited Constitutions and not-yet members of the House voting, the House of Representatives under GOP rule got off with some fits and starts.

However, there was something of note besides the mostly symbolic attempt to repeal ObamaCare  (something that the CBO says would “cost” us about 230 billion  – well at least until they further revise it down to nothing after it fails), something of actual importance seems to be emerging:

Dozens of Republicans used the opening day of the new Congress on Wednesday to introduce legislation that would bar the Environmental Protection Agency from regulating greenhouse-gas emissions.

48 Republicans and one Democrat (Boren- OK) are co-sponsoring the effort (that one Democrat makes it a “bi-partisan” effort under the definition of the term last Congressional session /sarc).    Read the next part carefully:

The bill would amend the Clean Air Act to declare that greenhouse gases are not subject to the law, according to a brief description in the Congressional Record.

What that’s not saying is “greenhouse gases are not subject to the law” – it is saying greenhouse gases are not something that the Clean Air act has the jurisdiction to legislate.  What Congress is trying to say to the EPA is “you stay out of the greenhouse gas business until we pass a law authorizing you to be in it”.

This is actually good news for the taxpayer.  If passed it will prevent EPA from unilaterally imposing emissions standards and defacto taxes on emitters via fines and fees.  The EPA’s primary targets would have been large emitters like power companies.  And any “fees” charged would have gone directly to power customers.  Effect?  It would have hit those who can afford it least the hardest.

Of course, the other good news is the incoming GOP majority is less enthralled with the pseudo-science of climate change and thus less likely to impose economic penalties than was the former Congress.  So we should see some backing away from the former trend of trying to tie energy and climate change together.  Or as the Hill notes:

While GOP leadership’s specific legislative approach to attacking EPA remains to be seen, the quick introduction signals that blocking climate rules is plainly on the agenda for the new GOP majority.

That gets a hearty “good” from me.

This also signals – or at least I hope it does – some intent on the part of the House to do some regulatory oversight.  You know, actually make the bureaucrats justify their regulations and their existence.  If you want an area that is fat for reduction, many of the bureaucracies are a wonderful place to start.

~McQ


Howard Dean endorses Daley and smacks outgoing Obama staff

The Sarah Palin of the Democratic party – Howard Dean – has endorsed a product of the Chicago Machine’s favorite family as Obama’s chief of staff.   He feels William Daley would be a “huge plus” for the Obama  because he is someone “who knows Washington, but he also is not of Washington."

Yeah, that’s kinda the point – he’s from Chicago.  Just like the guy in the Oval office who supposedly “knows Washington” but isn’t of there.

That’s worked out real well so far hasn’t it?  In fact, it appears we’re going to see them shuffle one set of Chicagoans out while another comes in.

Dean also took a shot at the departing members of Obama’s staff for being contemptuous of the “professional left” – i.e. the liberal left:

Noting that many officials are "either out of the White House or going," Dean blasted Obama’s current officials who he says have treated the left wing of the Democratic Party with "contempt."

"As they say, don’t let the door hit you in the you-know-what on the way out," Dean said.

That is mostly pointed at Axelrod and Gibbs.  That said, and Daley endorsed, Dean then even complained a bit about Daley (John Podesta was Dean’s first choice) not being left enough for him:

Dean acknowledged that he has big differences with Daley, who according to Dean has "been moving to the right over the last five to 10 years," but he said that Daley is "a grown-up who doesn’t treat people like they don’t know anything and you know everything."

Dean claims, however, that Daley will bring an “adult” mindset to the White House, a shot at the administration, saying that such a mindset hasn’t existed thus far, at least in the minds of the “professional left”(of which Howard Dean is a charter member).

It is fairly common for administrations to shuffle their staff after an electoral loss.  In the days of Bush, Rumsfeld was the big news, but other changes also happened.  That’s really not the point.   Watch the appointments carefully to try to discern how the administration is trying to set itself up for the next two years.  Hardliners or compromisers?  “Liberal” or, as Dean claims of William Daley, more to the “right” (I think that’s a very relative term in this case)? Etc.

What’s going to be interesting is to see who Obama names to take probably the most visible spot being vacated, that of Bagdad Bob Gibbs.  Like it or not the Press Secretary sets the tone for the administration and is its daily face.   I think more can be discerned from that pick than just about any other (other than at department secretary level).

Meanwhile it is useful to note Dean’s remarks only because they quickly tune you in to the feelings of the “professional left” on most subjects.  My guess he’s spot on in his condemnation of the staff leaving (as far as its dealing with the more liberal wing).  I’d further guess that the criticism won’t stop with the incoming staff either – none of them will ever be left enough for the Howard Dean/Firedoglakes of this world.

~McQ


Constitutional cites, NYT and “fundamentalism”

The New York Times editorial board wasted little time in attempting to attack the new Republican led House in the way smug elitists usually do … by invoking “fundamentalism”.   In this case the fundamentalism is an apparent attempt by a party to refocus the legislation it plans on debating and passing on the “fundamental” legal document of the land.

That just won’t do:

In any case, it is a presumptuous and self-righteous act, suggesting that they alone understand the true meaning of a text that the founders wisely left open to generations of reinterpretation.

Really?  Is that what it means?  If that were the case, I’d suggest no cite would be necessary – they’d simply do as Democrats have done for four years and pass whatever they wanted to with the implicit assumption that it is Constitutional.  Frankly, I see the move as one that says exactly the opposite of what the editors of the Times claim.  I see it as a bow to the fact that much of what has been passed lately has no relation to those powers granted Congress and the “assumption” that they do is simply unfounded.   It is a check on the validity of the legislation before it ever arrives on the floor of the House.

So what is this nonsense from the Times then?  Well it is an obvious attempt – at least to me – to lobby for business as usual because if the requirement to cite Constitutional authority for legislation were really honestly applied, I’d guess about 75% of the garbage that has been run through the place would never have been passed. 

And notice the word they choose – not “interpretation”, but “reinterpretation”.  We all know what interpretation means and it isn’t at all the same thing as reinterpretation.  One implies clarifying the original intent of the document/law/writer.  The other means making it up as you go along and as you see fit.

So it comes as no surprise that the NYT finds this “fundamentalism” both egregious and horribly inconvenient.  ”My goodness … if they really do this why, ObamaCare and …oh my!” 

Can’t have that can we?

Instead we get a catty editorial that takes cheap shots at everyone and raises the scare word of which the left is so fond.

Fundamentalist.

The Republicans’ antics are a ghastly waste of time at a moment when the nation is expecting real leadership from Congress, and suggest that the new House leadership is still unable to make tough choices. Voters, no less than drama critics, prefer substance to overblown theatrics.

The same editorial board watched the previous Congress toss trillions of dollars up into the wind of a financial storm half of it to land who knows where and then ignore the critical employment concerns of the voters and the economic crisis in general in order to pass their ideological agenda and the Times takes issue, on the first day of the new Congress, with “Republican’s antics”?

Good lord I am tickled to death that someone woke the editorial board up in time to dash this bit trash off and throw it out there.  Welcome back!  

And here’s a poser for the board -  why do you suppose the “nation is expecting real leadership from Congress” as you state?

Could it be because the last one exhibited none?   They totally ignored the wishes of the American people to instead focus selfishly on their own legislative wants.  Where was the NYT during those “antics”?  Silent as a tomb.

You have to wonder if the thought ever entered the heads of the editorial writers that perhaps the “ghastly” waste of time these “antics” take is something the American people desperately want to see – a visible return to fundamentals, to reason, and to responsibility instead of the absurdity that was Congress for the past 4 years?  Maybe these antics are a comforting demonstration that the incoming Congress “gets it” — something the NYT editorial board rarely achieves as this editorial demonstrates.

I think they might be surprised by an entirely different attitude outside the ivory tower about what they find to be “ghastly … overblown theatrics”. 

But it is always nice to see the editors, who are clueless as usual, have retained their fighting edge when in comes to being petty, smug, dismissive and ignorant.  Wouldn’t be the old Grey Lady if that wasn’t so.

~McQ


Quote of the Day–Nancy Pelosi’s final lie edition

Seriously, this is just a shameless lie.  Nancy Pelosi at her final news conference as Speaker of the House summing up the House’s priorities under he leadership:

"Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go."

No. It hasn’t.

When the Pelosi Democrats took control of Congress on January 4, 2007, the national debt stood at $8,670,596,242,973.04. The last day of the 111th Congress and Pelosi’s Speakership on December 22, 2010 the national debt was $13,858,529,371,601.09 – a roughly $5.2 trillion increase in just four years. Furthermore, the year over year federal deficit has roughly quadrupled during Pelosi’s four years as speaker, from $342 billion in fiscal year 2007 to an estimated $1.6 trillion at the end of fiscal year 2010.

~McQ


The energy policy choices

Yesterday was a rather interesting day for me.  Besides being a mild and pleasant day in Washington DC, a new Congress was being sworn in and an vital industry group was making the “state of American energy” known via a presentation and news conference at the Newseum – a museum about the history of gathering of news (and a place you should definitely put on your “must visit” list the next time you’re there).

The American Petroleum Institute’s Jack Gerard made a very sound and clear argument for the development of an energy policy which will best benefit this country and economy.  Backed by a Wood Mackenzie study, the choices seem stark and the best one seems obvious.  As he laid them out, choice one is to continue the policy of limited or no access to domestic drilling areas both on and off-shore and taxation of the industry at an increased percentage in order to generate revenue for government use.   That will certainly generate revenue – no doubt.  But at what real cost to the economy?  That is the question.

Choice two is to open up access and focus on safe and environmentally sound drilling to boost production here in the US.  That, of course, would have the critical side benefit of creating hundreds of thousands of jobs and, by the way, producing more revenue for government than choice one.

The numbers for the two options come from the Wood Mackenzie study as cited in an API press release.

The study calculates that increased access to America’s oil and natural gas reserves could, by 2025, create 530,000 jobs, generate $150 billion in taxes, royalties, and other revenue for the government, and “boost domestic production by four million barrels of oil a day.

The other choice?   Not so good: “Raising taxes on the industry with no increase in access could reduce domestic production by 700,000 barrels of oil equivalent a day (in 2020), sacrifice as many as 170,000 jobs (in 2014), and reduce revenue to the government by billions of dollars annually”

That latter policy choice would reduce our domestic oil production, cost jobs, raise the cost of doing business for the oil and gas industry of which most will be passed along to those who can least afford it.  Plus:

An additional 1.7 million barrels of oil equivalent a day in potential production that is currently of marginal economic feasibility would be at greater risk of not being developed under the modeled tax increase.

So again we see some pretty stark examples of how government enabling an industry would be vastly more beneficial to the economy and its own revenue coffers than would government using regulatory restrictions, denial of access and a straight up scheme of taxation. 

Yet right now we have an administration which is choosing the latter course and is seemingly at war with that industry- an industry that “supports more 9.2 million U.S. jobs and 7.5 percent of the U.S. economy, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.”

Does that make sense to you? 

The energy policy choice that enables Americans to increasingly address their own domestic energy needs with good paying jobs and will actually provide more in revenue for the government than taxation alone seems the obvious choice.

So why aren’t we seeing it being made?

~McQ


The Obama Administration’s war on American petroleum

I’m in DC for a energy speech by American Petroleum Institute President Jack Gerard.  Disclaimer – API provided for my transportation, hotel, etc.  That, of course, will not change or even influence the fact that I am a strong proponent of the America petroleum industry and feel we should be exploiting our own native petroleum resources to the maximum.  Instead we seem to be on a reverse course.  Our government seems to be at war with the industry.  And, of course, those who’ll pay the price are you and me at the gas pump. 

If you noticed lately gas prices are going up.  Steve Everley of American Solutions gives you the top 5 reasons why that’s the product of the Obama administrations actions and policies.

It began right after President Obama took office in 2009 – Ken Salazar, the Secretary of the Interior, cancelled 77 oil and gas leases in Utah.  A year later 61 were cancelled.  Salazar also unilaterally extended the “public comment” period for new offshore drilling by another 6 months, thereby again delaying the process.

Meanwhile in Congress, the Democratic House passed a very harsh cap-and-trade bill.  It imposed taxes on CO2 which would have significantly raised the price of gasoline had it passed the Senate.  In fact, as Everley mentions, a less stringent cap-and-trade scheme studied by Harvard University would have raised gas to $7 a gallon.  Thankfully, the House bill died with the 111th Congress.  However, it now appears the EPA is prepared to do what Congress couldn’t and via regulation, impose a carbon cap.

Then came Deepwater Horizon and the excuse to shut down offshore drilling for a 6 month period.   That was quickly done by Salazar and we began to suffer the results in lost jobs and product.  Since the first moratorium has expired, the administration has unilaterally imposed a second one of 6 months.

The effect has been devastating to the industry (especially in the Gulf states) and it has put the US in an energy hole.l   The Energy Information Administration projects that we’ll see a decline of 220,000 barrels per day from offshore sources in 2011.  Prior to the Obama administration’s shut down of that source, EIA had projected increases in production for 2011.

Why this is happening should come as no surprise to anyone who has acquainted themselves with candidate and now President Obama’s energy policies.  They simply don’t include gas and oil.  In fact, as most should remember, when a candidate for the presidency Obama said he knew what he wanted to do in the energy arena would drive up the cost of gas, but he thought that was necessary for environmental reasons and because he thought it would help incentivize the green energy industry.

If I’ve said it once, I’ve said it a thousand times – any comprehensive energy policy must include the exploitation of all traditional energy sources to include oil and gas.  They are key and critical to our economy and way of life, and cheap energy is what helps fuel the economy.  Any energy plan must be reality based and recognize that you can’t abruptly cut off oil, gas and coal without wreaking havoc on that economy.   And you have to have a plan to transition the economy from the traditional fuels to the greener and more renewable fuels as they become viable and affordable.

None of the alternate fuels that the environmental crowd wants to replace traditional fuels fits either of those two criteria yet.  Until they do we must maintain and expand our traditional fuel exploitation.  To not do that, especially in a time of recession, is absurd.

Lift the ban on offshore drilling, support the oil, gas and coal industries and integrate them into any energy plan produced.  Do that now.  And then take a look at the state of alternate energy sources and make an honest, not political, assessment of where we are today, when those technologies and fuels will be viable and affordable, and plan accordingly.

That’s how it should be done.  That is not, however, how it has been done.

~McQ


The major tasks for the incoming GOP House

As the GOP takes control of the House, one of the first things they’ll do is try to pass a bill repealing ObamaCare.   It won’t get anywhere after the House as everyone knows. I.e. it has more symbolism than real chance of passing.   That symbolism is an important  way for Republicans to underline the rest of their agenda.  The GOP will own the “funding” mechanism in the House.  And that will be significant.  Part of that will be obvious in some of the packages they plan to offer, such as a package of recissions.

Republicans in the House say they plan to move on to offer a far more sweeping package of "recissions," or elimination of spending previously approved, that will aim to bring domestic spending back to where it was before Mr. Obama became president. The skirmish over that proposal for spending cuts, coupled with related fights over government regulation and health care, will set the battle lines for the next two years, as Washington returns to divided government.

If, in fact, the Republicans do this correctly and continue to push it through 2012 regardless of what the Senate or President do to the product of their work (refuse to pass it or veto it), they will set themselves up well for that year’s elections.  As the WSJ notes, if there was a mandate in this election it is “cut spending”.

Additionally:

House Republicans have also set their sights on scaling back environmental regulations and tightening border security.

Actually all regulation should be examined, especially the newly passed regulation.  It should be examined in light of whether it helps create jobs or hinders such creation.  That includes those the EPA is poised to implement or has implemented as well as regulations by other agencies such as the FCC, and any departments which have decided to rule by regulatory fiat.  Again if they do that, the GOP will position themselves well for the next election.

A word of caution though.  Investigations, while proper and necessary to perform the oversight function that Congress is charged with must be kept under strict control and not wander into what most would see as “witch hunts” that are based in partisan politics.  Republican Darrell Issa of California is the incoming chair of the House Oversight and Government Reform Committee.  He plans extensive hearings on a broad range of subjects, to include Freddie Mac, Fannie Mae, Medicare fraud, TARP and other issues.  He also intends to look into the practices of the DoJ.

All well and good and definitely necessary – but he needs to conduct all of them as an adult and avoid even the appearance of partisanship unless he wants what he is trying to do to become the headline issue which masks the other work the GOP is attempting.  Do the job, avoid witch hunts, avoid the appearance of partisanship and avoid fiery rhetoric that he has to walk back or explain away, and it is a procedure that again can benefit the GOP in 2012.

This is the Republican’s one-shot chance to show they’ve listened, heard and will put into practice the will of the people.  If not, they’re  on temporary assignment for two years as it should be clear the voters have committed to 3 successive wave elections and are certainly not averse to a 4th.

~McQ


2010–a year of non-solutions, wrong solutions and wrong focus

Dave Barry takes a humorous look at 2010 and finds it was the worst year ever – well except that year during the Cretaceous Period when an asteroid hit the Earth wiping out 75% of the planet’s living things.  But other than that …

Heh.  Barry, in his own way, does point out that for most everything that happened in 2010, the political leadership seemed clueless as to how to handle it.  For instance, the BP oil spill:

Time and again, top political leaders personally flew down to the Gulf of Mexico to look at the situation firsthand and hold press availabilities. And yet somehow, despite these efforts, the oil continued to leak. This forced us to face the disturbing truth that even top policy thinkers with postgraduate degrees from Harvard University — Harvard University! — could not stop it.

Now certainly that’s a bit tongue-in-cheek, but in fact, our “top policy thinkers” accepted the job of stopping the leak (or at least they claimed it was their job) and then, unsurprisingly, were unable to do anything about it.  Call it a metaphor for the expansion of government in areas it has no business.

But how about those in which it supposedly does have business or has at least been conducting business for quite some time – such as the economy:

But by then our faith in our leaders had been shaken, especially because they also seemed to have no idea of what to do about this pesky recession. Congress tried every remedy it knows, ranging all the way from borrowing money from China and spending it on government programs, to borrowing MORE money from China and spending it on government programs. But in the end, all of this stimulus created few actual jobs, and most of those were in the field of tar-ball collecting.

Clueless again.  I spot a trend.  And it didn’t get any better in foreign affairs:

North Korea continued to show why it is known as "the international equivalent of Charlie Sheen." The entire nation of Greece went into foreclosure and had to move out; it is now living with relatives in Bulgaria. Iran continued to develop nuclear weapons, all the while insisting that they would be used only for peaceful scientific research, such as — to quote President Mahmoud Ahmadinejad — "seeing what happens when you drop one on Israel."

Barry’s fisking of the political year is quite pointed and demonstrates, with his own brand of humor,  what we were saying all year.  For instance:

[January] which begins grimly, with the pesky unemployment rate remaining high. Every poll shows that the major concerns of the American people are federal spending, the exploding deficit, and — above all — jobs. Jobs, jobs, jobs: This is what the public is worried about. In a word, the big issue is: jobs. So the Obama administration, displaying the keen awareness that has become its trademark, decides to focus like a laser on: health-care reform.

Read the whole thing.  It is a pretty good indictment of how inept, misguided and clueless the current leadership has been.  It is the recurring theme and it has a recurring theme as well:

In U.S. politics, President Obama, responding to the mounting public concern about jobs, invites Democratic and Republican congressional leaders to the White House for a historic day-long summit on: health-care reform.

To include November:

[November] the elections turn out to be a bloodbath for the Democrats, who lose the House of Representatives, a bunch of Senate seats, some governorships, some state legislatures and all of the key student council races. Also, a number of long-term Democratic incumbents are urinated on by their own dogs. Obama immediately departs for a nine-day trip to Asia to see if anybody over there wants to hear about the benefits of health-care reform.

Barry’s humorous retrospective on the year not withstanding, he demonstrates something very important to be remembered as 2012 approaches.  When people go to the polls that year, and assuming President Obama is indeed the Democratic candidate, he’ll be forced to do something he’s never had to do.

Run on a record.  

If Barry’s recounting is any indication, it isn’t a shining one.

~McQ

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