Free Markets, Free People
The following statistics were released today on the state of the US economy:
Personal income rose 0.4% in March, while personal spending rose 0.3%. The PCE Price index, an inflation measure, rose 0.2%. One a year over year basis, personal income rose 3.2%, personal spending rose 4.0%, and the PCE Price index rose 2.1%.
The Dallas Fed Mfg Survey shows slowing growth, with the business activity index falling to -3.4, while the production index fell to 5.6.
The Chicago PMI shows growing business activity in the Chicago Area, with the Business Barometer Index at 65.2. This report is widely seen as a precursor to the national PMI due out tomorrow, but there is often substantial divergence between the Chicago and nationwide reports.
Jeffery Folks at American Thinker begins his article with:
Imagine a president who gets behind drilling, welcomes the cutting-edge technology of companies such as ExxonMobil, and offers generous 15-year tax breaks to ensure that new drilling projects move forward. That’s the kind of energy policy America needs in order to achieve energy-independence.
I’d love to imagine that. In fact and unfortunately, we have a president who does exactly the opposite.
If you want someone like Folks is wishing for, you’ll have to go to Russia:
Unfortunately, it’s not Barack Obama who’s behind those positive energy policies; it’s Vladimir Putin.
As Russian president-elect, Putin has made it clear that he intends to open his country’s arctic and Black Sea regions to drilling. The potential is so great, and the necessary investment so immense, that even Russia’s giant state-run oil companies, Rosneft and Gazprom, lack the resources and technology to proceed. So, with Putin’s blessing, Rosneft and Gazprom have entered into joint-production agreements with Exxon, Italian major Eni, and other Western companies. The stakes are huge — not just for these companies, but for the Russian economy.
The arctic and Black Sea fields being jointly developed by Rosneft and Eni contain an estimated 36 billion barrels of oil equivalents. Those under development by Rosneft and Exxon, which may ultimately require an investment of as much as $500 billion, contain estimated reserves of 36 billion barrels in the arctic Kara Sea fields alone. (Total recoverable arctic reserves have been estimated at 134 billion barrels of oil equivalent but will likely go higher as exploration proceeds.) In addition to the arctic and Black Sea fields covered in the Exxon and Eni agreements, president-elect Putin has expressed an interest in the possibility of joint ventures to develop vast Siberian tight shale formations.
The US has an incredible amount of natural resources including huge reserves of oil and natural gas. We’re already the number 3 oil producer in the world. And guess who actually leads the world with recoverable fossil fuel reserves? Yes, that would be the US. Imagine an energy policy that made extraction of that fuel a priority? With aggressive exploration and drilling (as well as approval of the Keystone XL pipeline) we could have a 92% secure liquid fuel sources by 2030. Not to mention, in a time of high unemployment, a jobs bonanza.
But what do we get?
Not that, that’s for sure. We instead get a president who talks about an “all-of-the-above” energy policy while his actions belie his claims. He’s turned lose a executive agency (EPA) on the fossil fuel industry that has already been slapped down numerous times by the judiciary for over-reach. Drilling and permits on federal land have gone down dramatically.
In an oil market that has seen supplies tightening and prices going up, his administration has done everything to keep it that way.
And voters aren’t happy with his performance at all.
If this is going “Forward”, I’d hate to see backward.
And, they were right:
- The current President of the United States campaigned on a platform that included the closing of the prison for international terrorists at Gitmo.
- Gitmo is, in fact, still open. But they’ll get to it Real Soon Now (SPOILER WARNING: they won’t).
- The Right noted at the time that Gitmo was going to remain open. On more than one occasion. We, in fact, told people time again and again and again and again that Barack Obama was not going to close Gitmo. Which means that nobody really has an excuse for being surprised.
One of the minor points of record that Barack Obama is going to be reminded of in the next few months.
The Obama campaign has decided on a new campaign slogan – “Forward”.
As you might imagine, the right is having a ball with that on Twitter under the hashtag #FORWARD.
You might want to join in the fun.
More whining from the baby boomers (and yes, I’m a boomer). Joe Nocera of the NYT is 60 and his 401 (k) has just failed to provide for his retirement:
The only thing I haven’t dealt with on my to-do checklist is retirement planning. The reason is simple: I’m not planning to retire. More accurately, I can’t retire. My 401(k) plan, which was supposed to take care of my retirement, is in tatters.
And Old Joe was a fan of 401 (k)s too:
Like millions of other aging baby boomers, I first began putting money into a tax-deferred retirement account a few years after they were legislated into existence in the late 1970s. The great bull market, which began in 1982, was just gearing up. As a young journalist, I couldn’t afford to invest a lot of money, but my account grew as the market rose, and the bull market gave me an inflated sense of my investing skills.
I became such an enthusiast of the new investing culture that I wrote my first book, in the mid-1990s, about what I called “the democratization of money.” It was only right, I argued, that the little guy have the same access to the markets as the wealthy. In the book, I didn’t make much of the decline of pensions. After all, we were in the middle of the tech bubble by then. What fun!
But the tech bubble knocked the poo out his tech heavy portfolio (yeah, everyone took a bit of a soaking, but much of it came back).
Here’s the part that gets me. While you can kinda, sorta, give him a pat on the back for the tech stock thing and say “aw, poor thing”, that’s not why his 401(k) is in “tatters”:
A half-dozen years later, I got divorced, cutting my 401(k) in half again. A few years after that, I bought a house that needed some costly renovations. Since my retirement account was now hopelessly inadequate for actual retirement, I reasoned that I might as well get some use out of the money while I could. So I threw another chunk of my 401(k) at the renovation. That’s where I stand today.
Or said another way – he spent most of it on things that have nothing to do with retirement while also losing half to a divorced spouse.
How is that that fault of the 401(k)?!
Of course, it’s not.
But Nocera spends the rest of his article blaming all of this on the inadequacies of 401(k)s. So what does he do … find an “expert” to buttress his obvious conclusion:
What, then, will people do when they retire? I asked Ghilarducci. “Their retirement plan is faith based,” she replied. “They have faith that it will somehow work out.”
I laughed, but it’s not funny. “The 401(k),” she concluded, “is a failed experiment. It is time to rethink it.”
Uh, no, it’s not.
It’s certainly not as failed an experiment as Social Security. And, by the way, for those for whom it is a failure, it’s a failure with their own money (and not mine or millions of other tax payers). Anyone who looks at Nocera’s explanation as to why there’s nothing in his 401(k) today knows better than to claim it’s the fault of the program or somehow a “failed experiment”.
Clue: when you make huge withdrawals to buy and renovate houses prior to your retirement, you might be gutting your retirement program – you know, the program in which you were able to save a large amount of money for after you retired that you chose to use today? And someone should also clue Mr. Nocera into the fact that his interpersonal relationships which end in divorce aren’t the fault of the 401(k) either.
But hey, in today’s world, it is hip to be a victim, isn’t it? Everyone has to have something or someone to blame for their stupid decisions in life. And Nocera provides a great example of the type. Blame the fund, not the fool making the dumb decisions.
This week, Bruce and Dale talk about what the Trayvon martin case says about the media.
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.
I am on record saying that Joe Biden is full of crap when he tried to sell Obama’s decision to okay the raid that killed bin Laden as “gutsy”. Biden’s claim is that had the raid failed, his presidency would have been over.
Nonsense. We’d have simply never heard about it. There was no risk to Obama or his presidency to okay the raid and tremendous upside (which he continues to try to cash in on) if it succeeded. Most reasonable people know and understand that. It is the usual Biden hubris.
But, this new claim which has been floated by Big Peace is also nonsense. The claim is a memo that authorized the raid also was used to cover the President’s rear if it failed. Here’s the memo that is being touted as proof:
Received phone call from Tom Donilon who stated that the President made a decision with regard to AC1 [Abbottabad Compound 1]. The decision is to proceed with the assault.
The timing, operational decision making and control are in Admiral McRaven’s hands. The approval is provided on the risk profile presented to the President. Any additional risks are to be brought back to the President for his consideration. The direction is to go in and get bin Laden and if he is not there, to get out. Those instructions were conveyed to Admiral McRaven at approximately 10:45 am.
The decision to shift operational command to McRaven is being characterized as a CYA move by the president who, if the raid failed, would or could throw McRaven under the bus.
What was done is exactly what should have been done by standard operating procedure for any operation – unless, of course, you want people who have no situational awareness, haven’t been in on the planning and are thousands of miles away, making minute-to-minute operational decisions. You know LBJ designating targets in North Vietnam or Jimmy Carter trying to run the Iranian operation.
Of course you give operational control to the operational commander for heaven sake. He’s the guy who has planned, rehearsed and is most familiar with the operation. He knows the operators, he knows the terrain, he has helped configure the force, he knows the best time to go in.
He is the guy best qualified to have operational control and the shift noted at 10:45 am means at that point it was up to the best qualified man to make the call “go”.
The sort of nonsense that Big Peace is running is, unfortunately, done out of apparent ignorance. This is not a story. It has nothing to do with CYA. It is how operations are done. When the command authority, who retains the right to make the decision of “go” or “no go”, makes the decision to proceed they then hand the operation off to the operational commander.
That’s what was done here. It was the correct thing to do.
As anyone who reads this blog knows, I am no fan of Obama’s. And I remember when he criticized another campaign for using bin Laden to “score political points”. But this sort of attack is just nonsense.
The following statistics were released today on the state of the US economy:
The Commerce Department’s initial estimate of 2012 first quarter GDP is a below-trend—and lower than expected—2.2% annualized rate of GDP growth, down sharply from the 4Q 2011 rate of 3.0%. The GDP price index rose 1.5%. The GDP decline is mainly due to a 3% drop in government purchases. Strength was largely in personal consumption expenditures, which rose 2.9%.
Consumer sentiment is inching up, with the index rising to 76.4 for the month.
The Employment Cost Index rose 0.4% last quarter, mainly due to wage increases, though the increase is down from last quarter’s 0.5%. Year over year, the ECI is up 1.9%.
Call it anecdotal evidence of the survey below and the point made about eroding Democratic support. There are obviously many reasons for that, but let’s look at one of them.
Recently some Republican pollsters hit 11 swing states and organized focus groups composed mostly of Democrats and Independents. What they found support the results of the Pew survey below. The reasons are fairly interesting:
McLaughlin handled blue collar and Catholic voters in Pittsburgh on April 3 and Cleveland on March 20. He found that they are very depressed about the economy and feel that their tax dollars are being sucked up by both the rich and those living on government assistance.
During the focus group discussions about debt and spending cuts, many in his group volunteered criticism of the presidential vacations as something that should be cut. Among the lines McLaughlin wrote down was one from a Democratic woman who said, “Michelle Obama spends $1 million to take the kids to Hawaii,” and another who said, “President Obama was the only president to take so many trips.”
The theme, said McLaughlin, is that the first family “is out of touch” with working class voters.
As has been said, in politics, “perception is reality” and the perception being reported by these focus groups is not one a president who is going to have to rely on populist arguments to hang on to power wants out there.
Now will that be enough to have them drop support for Obama or not turn out to vote? Obviously, we don’t have enough data to determine that. But, what you don’t see here is blind support for him either. The criticism, in this case, works against his populist posturing, however, and that’s not a good thing.
You may be questioning my assertion that Obama is trying build a populist campaign to help him retain power. However, his only other option is to run on and tout his record. And any sane political consultant would likely say, “are you kidding”?
So instead he’s engaged in a populist campaign. Demonizing the rich, Big Oil, student loans, etc. And his demonization of the rich is working, at least in Democratic circles. However, that success is being negated by the perception voiced above:
He added that the president’s attack on the rich and GOP presidential challenger Mitt Romney’s wealth is working, but the voters were also lumping in the president’s vacation spending in with the General Services Administration’s Las Vegas scandal and federal spending for those who aren’t looking for work.
Again, the populist campaign is being blunted by the president’s behavior and the spending scandal(s) surrounding his administration.
Oh, and another indicator to tuck away:
“There really wasn’t a real dislike for Romney. It was just that he is too rich. But on the other hand there is a start of resentment of the government,” he said. “What surprised me is that these were Democrats back biting on their own president,” added McLaughlin.
It doesn’t surprise me. There’s a sense of entitlement with this president and his family that is off-putting. And that is being picked up by potential voters and they don’t like it. They most likely wouldn’t like it in good economic times, but could likely shrug it off. But in bad economic times when they’re suffering, they deeply resent their president blithely ignoring their plight and essentially using his office (and their tax dollars) to indulge himself with something they can’t do.
Some analysts have a tendency to wave things like this off as nonsense. But it isn’t. A vote is made up of a lot of small things driven by their perceptions. When added up, that leads to a decision. Who knows what other perceptions these Democrats have to add to this obvious resentment they hold?
The point, of course, is are they enough to erode their support for Obama? We’ll see. But note, when Republican pollsters get this sort of reaction from blue collar Democrats in focus groups, it’s probably not a isolated feeling among that group.
It has never been particularly high (except in 2003 apparently), but in the last few years, it has taken the same route as the economy. The Pew Research Center has published a survey has taken a look at the favorability ratings for local state and the Federal government, and the Fed is in Congress and Nancy Pelosi territory when it comes to that.
Governments in general have seen their favorability rating slip over the past decade, but none like the federal government. And the “hope and change” administration has apparently managed to drive the unfavorable view of government even deeper than that mean old Bush guy.
I bring this survey up for a reason. Many things factor into a vote. Or a decision not to vote for that matter. Getting an idea of how voters may feel about such institutions as government is important in trying to figure out how the vote has a whole will go.
The perception they have – favorable of unfavorable – of government is one of those good indicators.
Look, for instance, at the point on the chart around 2008. Of course we all know what happened then. But the unfavorability number then wasn’t as bad as it is now.
It climbed after that mainly on the “hope and change” smoke and mirrors show. But then reality set in. Bailouts, trillion dollar debts for as far as the eye could see, failed stimulus, a huge increase in unemployment, passage of a hugely unpopular, expensive and possibly unconstitutional health care act along with cratering housing prices, an economy that continues to bounce along the bottom and an administration that frankly seems clueless.
Reaction? Favorability takes a dive to a new low – 33%.
Now there are those who will tell you that this is no big deal. Well it is. What this helps do is frame the debate for one side and tailor it to a receptive electorate. Big government, intrusive government, expensive government has failed. And there’s a three year record for everyone to see. The federal government has tried, for the most part, to do everything the blue model of government says it should do. It hasn’t worked.
Or said another way, this survey points to an issue that should be popular for one side of the political spectrum and require the other side to defend their model, if they can.
So why is this a problem for the current administration? Because of where the most significant changes have taken place:
Since Barack Obama’s first year in office, public assessments of the federal government have dropped nine-points, with most of the change among Democrats and independents. In 2009, 61% of Democrats and 35% of independents had favorable opinions of the federal government in Washington, those figures stand at 51% and 27%, respectively, today. Republicans’ views, already low in 2009, have shown less change.
Everyone and their brother knows that the Republicans are going to have a less favorable view of a Democratic administration (just as the numbers were reversed when Bush was in office). No big deal. The significance comes in the eroding numbers among Democrats and, of course, independents.
In fact, the number for independents is below the average for favorability on the whole. Indies are in the 73% range of being dissatisfied with the federal government. And Democrats are in danger of seeing the number slip under 50% if they’re not careful.
What do these numbers impact?
What they’ll possibly impact, on the one hand, is enthusiasm. Especially among Democrats. The 10 point change between July of 2009 and today among Democrats sends a distressing signal to the administration. They’re losing even their stalwarts. And you have to figure that if there are 10% who’ve grown dissatisfied with the federal government as run by their own party, there are probably a good percentage leaning toward that as well.
Independents already had a pretty low opinion of the federal government in July 2009 at 35%. This administration has done nothing to win independents over and in fact, independents now have a lower opinion of this version of the federal government (27%) than they had under Bush (35%). In the case of Independents, the lower number may motivate more independents to go to the polls and vote for the opposition.
That’s hardly what the administration wants.
So file this survey away as an important data point and indicator of the mood of the electorate. At this date, It doesn’t point to good times for the administration regardless of what candidate polls say at this stage of the race (they’re worthless). This sort of information, along with direction of the country polls, etc. give one the mood of the country. As you can see, the mood – when it comes to the federal government – isn’t good. It reminds one of the mood prior to the “wave elections” we’ve seen in the recent past.
How that will translate in November is still hard to say – but it will become clearer as we get closer. In the meantime, take all the spin of who will win with a grain of salt. There’s deep seated underlying dissatisfaction with Washington DC and those who run it.
That could mean big trouble for incumbents – especially the one in the White House.