Free Markets, Free People

Monthly Archives: July 2012


Economic Statistics for 27 Jul 12

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

The Commerce Department’s initial estimate of 2nd Quarter GDP is that it grew at a disappointing 1.5% annualized rate, down from a revised 2.0% in the 1st Quarter. The GDP Price index, an inflation measure, showed prices increasing at a 1.6% annualized rate. The main cause for the drop in growth was personal consumption expenditures, which fell from 2.4% in the 1st Quarter to 1.5% in the 2nd Quarter. Imports also jumped to 6.0% from 3.1%. On the plus side, as bad as this GDP report is, it was better than expected.

Reuters/University of Michigan’s consumer sentiment index was 72.3, a 0.3 gain from mid-month and a 0.9 decline from June.

~
Dale Franks
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2Q GDP at 1.5% — Annualized to 1.3%

While the media obsesses with MItt Romney’s supposed gaffs in the UK (were some of them gaffs or the usual selective editing?), here at home the GDP sucks:

U.S. economic growth pulled back further during the second quarter of the year as consumer spending slowed–a reading that suggests domestic fiscal worries may becoming a more significant drag.

The nation’s gross domestic product–the value of all goods and services produced–grew at an annual rate of 1.5% between April and June, the Commerce Department said Friday. The reading is down from the upwardly revised 2.0% growth rate during the prior three months and a 4.1% rate in the fourth quarter of 2011.

Economists surveyed by Dow Jones Newswires had expected 1.3% annualized growth during the second quarter.

That performance redefines the word “pathetic”.  But, you know, that’s not something we really want to talk about during this election season, so let’s concentrate on frivolous things instead, shall we (hey, I thought the left hated manufactured controversies?)?

Forward.

~McQ

Twitter: @McQandO


When government chooses not to enforce the law of the land

As you might imagine, it has consequences, and, given this situation, it is very hard to pretend the consequences are unintended.  Why? Because even a 5th grader could have predicted this outcome:

In a startling allegation, the president of the union representing Immigration and Customs Enforcement officers claimed illegal immigrants are "taking advantage" of a new directive allowing some undocumented residents who came to the U.S. as children to stay in the country. Union boss Chris Crane said the policy ends up allowing illegal immigrants to avoid detention without any proof — particularly so-called "dreamers," or those illegal immigrants who would benefit under the "DREAM Act" proposal, which Congress has not passed but the administration  has partially implemented.

"Prosecutorial discretion for dreamers is solely based on the individual’s claims. Our orders are if an alien says they went to high school, then let them go," he said at a press conference with GOP senators. "Officers have been told that there is no burden for the alien to prove anything. … At this point we don’t even know why DHS has criteria at all, as there is no requirement or burden to prove anything on the part of the alien.

"We believe that significant numbers of people who are not dreamers are taking advantage of this practice to avoid arrest," he said.

Whether or not you agree with the immigration laws of the country, executive fiat is not the method the Constitution outlines as legitimate redress.  And, unsurprisingly, those illegals who would benefit, even if not actually eligible, will exploit an opportunity such executive fiat presents.

According to Chris Crane, that’s precisely what is happening. 

The allegations from the union were expressed in unusually blunt terms Thursday.

George McCubbin, president of the National Border Patrol Council union, said the Department of Homeland Security has made it impossible for agents to do their jobs.  

Crane said it’s led to disorganization and "confusion" at ICE.

Not that ICE hasn’t had its share of confusion in the past, but now, it is even more difficult to do their jobs. 

Crane cited one case in which, he said, an immigrant facing criminal charges was let go under the policy. Further, he complained that officers are "under threat of losing their jobs" if they defy the policy.

Anyone who thinks this is how our system should work needs to re-examine the Constitution.  One branch creates the laws (legislative) and one branch enforces the laws (executive).  If you don’t like a law or want it changed or repealed then it’s back to the legislative branch.  And no, inaction by the legislative branch doesn’t mean the executive branch can arbitrarily ignore the law or decide it’s not going to enforce it.  Not and still be a Constitutional republic.

I’m on record saying our current immigration system sucks.  There’s no reason in this day of cyber advances that we couldn’t have the slickest and quickest system on earth.  And yes, I hold Congress directly responsible for the inactivity that has led to the mess at the border. 

But that doesn’t give the executive license to ignore laws or selectively enforce them.   Kings do that, not presidents, and we have no kings.  We just have a president who thinks he’s one.

~McQ

Twitter: @McQandO


Economic Statistics for 26 Jul 12

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

The Bloomberg Consumer Comfort index fell to -38.5 from last week’s -37.9.

The Pending Home Sales Index fell -1.4% in June, to 99.3, as low housing prices keep existing homes off the market, reducing the available inventory.

Initial jobless claims fell sharply, down 35,000 to 353,000. The 4-week average fell 8,750 to 367,250. Continuing claims fell 30,000 to 3.287 million. There is a lot of weekly variation in the numbers, as the auto industry re-tools over the summer, so the 4-week average is the better number to look at right now.

Buoyed mainly by aircraft sales, durable goods orders rose 1.6% in June, up 8.0% from last year. Ex transportation, however, orders fell -1.1%, and were up only 3.0% from last year.

The Kansas City Fed Manufacturing index slipped 6 points to a reading of 3 in Jul.

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Dale Franks
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Prepare for a “sea change” in health care thanks to government intervention

This interview, soon to be forgotten by most who see it and probably unseen by the majority of the country, is a very important and significant interview.

Watch it carefully, because Dr. Louis MacIntyre is about to lay out our future health care system for everyone (for whatever reason the “embed” link is not cooperating, so I’ve linked it).

Three things jump out at you.  One: the fact that costs for insurance and regulatory compliance are rising while reimbursement is dropping has doctors being forced into looking at an entirely new model for health care.

Where now, it is marginally patient centered, the “improvements” are going to drive them and the system to a more process centered care.  Think VA hospital vs. private care.  In a VA hospital the physicians work for the VA.  They are, by contract, required to do things the VA way, even if those things they do don’t necessarily represent the best care for the patient.

In private practice, doctors are “outcome driven” vs. process driven.  Hence they work within standard treatment parameters to address the patients problem but are free to try other methods that are indicated via their training and experience.  We’re headed into a “process driven” environment.

Two: as the costs rise and more and more doctors are driven from private practice, they’ll seek employment in hospitals.   They will then, as Dr. McIntyre notes, unionize to protect their compensation from dropping rates of reimbursement (remember, that’s supposedly one of the driving concerns of reform).  They will then go from being a “profession” to a “trade association”.  And that trade association’s focus will not be patient advocacy, but instead, trade advocacy.

Three: left out of all of this “sea change” that is likely to happen?  The patient.  You.  Your choices are going to be limited.  You’ll have very little to no say in a process driven environment.  And the chances of an actual relationship with a doctor who will intimately know your case are virtually non-existent if, in fact, we end up with a system of VA like hospital care centers. 

Consider all of that carefully.  Then ask yourself this: what bright and talented person, knowing that was the environment they’d have to commit themselves too, would willingly spend the years necessary to obtain an MD just to become an employee of a hospital and not allowed to use any creativity or experience (or anything outside the processes protocols) to treat patients?

Yeah, not many.

But, don’t forget – health care will be “better” and “less costly” because government says so.

~McQ

Twitter: @McQandO


Whether you agree or disagree with Chick-fil-A, government has no role in the debate

Frankly, I think Chick-fil-A has jumped the shark by taking a position at all on a social issue.  The purpose of their business, I assume, is to sell sandwiches. 

However, they have taken one and it is controversial.

Viva la free speech.  Welcome to America.

What is just as controversial however, are government entities deciding to take action based on the company’s exercise of its right to free speech.

This is where I totally disagree.  This is none of any government’s business.  None.

I think Mike Krempasky has it just about right, and this is one of those “let’s put the shoe on the other foot” moments where you have to do a little thinking about how you’d react if such a thing was done to an entity which said something you agree with:

For those of you cheering the mayors of Boston and Chicago for taking such a courageous stance against the creeping horde of Chick-fil-A stores because of the speech and beliefs of its leadership – WHAT THE H#!! IS WRONG WITH YOU?

I presume you’d be outraged and maybe even scared of your government if some arch-conservative mayor or city manager just declared that Ben and Jerry’s stores would no longer be granted building permits.

I’m sure you’d head to the barricades if a governor of state decided that only Republicans or only Democrats were allowed to operate businesses in that state just because of how the voters choose politicians.

If *you* don’t like the values of a company, than *you* shouldn’t shop there. And then you should spend your energy, attention, and yes – money (yay Citizens United!) to encourage your friends and community not to shop there. But enlisting the help of government to punish your competitors, your enemies, or even just those you find distasteful? Rewarding the politicians willing do so so? Might as well just start distributing Little Red Books.

I disagree with the Chick-fil-A stance (and from a business standpoint, find it abysmally stupid, but hey, it is their company and in a free society, they, like Ben and Jerry’s, are free to do stupid things). As Mike points out, I disagree with much of what the owners of Ben and Jerry’s have publicly said.  I also have the ability to do something about that and have.  Because, the right to free speech doesn’t mean there aren’t consequences.  It just means government can’t levy them.

One thing I have never done nor would ever condone is government action or intervention –at any level – in reaction to a social stance by a business.  Instead, I have simply never, ever knowingly put a spoonful of Ben and Jerry’s ice cream in my mouth nor bought a single ounce of it.  I’ll most likely punish Chick-fil-A the same way.  There are lots of choices out there.

But government at any level has no business at all involved in this – none – and anyone who says they should be involved has got to realize the ramifications of such a demand.  It could, at some point, be used against some business you support.  And you wouldn’t have a moral or ethical leg to stand on in protest against such action.

Freedom of speech is there to protect the speaker from government.  Its biggest test comes with speech we don’t agree with.

In the case of Chick-fil-A the calls for government action (and the threats by government against the business) are in contravention of that right and fail that test.

Those calling for government action against speech they don’t agree with be should be ashamed.

~McQ

Twitter: @McQandO


Indicator poll: Democratic enthusiasm way down

We’ve talked about it in the past.  Get Out The Vote (GOTV) efforts are best when voter enthusiasm is high.  In a per dollar spent ratio, GOTV efforts are most efficient when voters are enthusiastic. 

Democrats may have a problem this year according to Gallup:

 

voter enthusiasm

In fact, Democratic voters are less enthusiastic than they were in 2004.  GOP voters, on the other hand, are at the same level as 2004 and much more enthusiastic than in 2008.

That’s not to say overall voter enthusiasm is anything to brag about. 

voter enthusiasm1

The point of the above chart is that voters recognize that the choices they face are not at all that pleasing.  Obviously as in past races, voter enthusiasm will pick up in the next three months.  But it seems clear that the politics of this election are not at all compelling to many voters at this point.  The reasons are most likely varied.  However, what is clear is the GOP base is much more motivated at this point, and by a wide margin, than the Democrat base.

No matter how you slice it or attempt to spin it, that’s not good news for Obama.

~McQ

Twitter: @McQandO


Economic Statistics for 25 Jul 12

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

June’s new home sales annual rate of 350,000 is 20,000 below expectations; however, May was revised upwards 13,000 to 382,000, the highest rate in two years. April was also revised up 15,000 to 358,000.

MBA Purchase Applications rose 0.9%, with purchase applications falling -3.0%, but refinancing applications rising 2.0%. Mortgage rates were unchanged, with conforming mortgages going at 3.74%.

~
Dale Franks
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Ice melt in Greenland exposes different ways media treats the story (Update)

According to the Atlantic’s Rebecca Rosen, Greenland is in the middle of an “extreme ice melt”.  You can read the article and consider the point.  I’ll give her credit.  She reports it pretty objectively including this as a reason for the melt:

NASA says that it is normal for Greenland’s ice to melt a bit in the summer; what is abnormal is the extent. Normally, only about half of the ice sheet’s surface sees any melting. This year, that proportion just about doubled. NASA additionally said that its satellites were recording uncharacteristically high temperatures over the island. Those warmer temperatures were brought by a bubble of warm air (a "heat dome"), the latest in a series of such ridges that have moved over Greenland this year.

In other words, a regional event.

She also mentions:

The last such melt event occurred in 1889, according to data from ice cores, and scientists say they would expect such an event about every 150 years. They’ll be monitoring the ice closely in the years ahead to see if this turns out to be a regular aberration, or an irregular one.

Got it.  Thanks for noting the event which appears to have a history (I’ll cover how much of a history below).

The UK’s Guardian kicks it up a notch with the use of the word “unprecedented” in their title.

“Greenland ice sheet melted at unprecedented rate during July”

No.  It didn’t. As we see from the Atlantic’s treatment,  this event isn’t at all “unprecedented.”  In fact, if I have any gripe about the Atlantic’s coverage is it stopped short of noting a longer history of Greenland’s ice melts:

greenland

 

Greenland, as you can see, has seen periods as warm or warmer than now in its history. One could logically assume then that it would have had the same sorts of weather events during those periods as it experienced during the recent week in early July. 

BTW, here’s an explanation of the numbers you see above:

greenland temp history

“Unprecedented” is obviously a incorrect characterization of the event.  Why did the Guardian seize on the word?
Because some scientist conveniently used it:

However, scientists were still coming to grips with the shocking images on Tuesday. "I think it’s fair to say that this is unprecedented," Jay Zwally, a glaciologist at Nasa’s Goddard Space Flight Center, told the Guardian.

Again, no, it isn’t “unprecedented”.  And obviously the Guardian didn’t take the time to find out if it really was.  A simple Wikipedia check would have produced the above graph.

So why the acceptance of the scientist’s characterization without checking?  I think that too is obvious – it’s scarier than admitting it has a long history of occurring,  many times prior to the industrial revolution.  It lends more immediacy to the story.   The fact that throughout its history Greenland has seen a cycle of warmer and colder weather is “inconvenient” to the scare factor related to AGW.  Certainly the Guardian is careful not to come right out and scream global warming, but by noting this “unprecedented” event, it certainly is clear that global warming, and specifically AGW,  is the dot to which they want you to connect this to.

The NY Times, on the other hand, notes the melt and takes a different approach.  While noting the melt and the high pressure ridge, the Times throws this into the mix:

Nonetheless, the scientists said, the melt was significant because Greenland’s ice sheet is unequivocally shrinking as a result of the warming of the world’s oceans, and the event could help broaden their insights into climate change and earth systems.

While they don’t claim that AGW is the cause for warming oceans (don’t worry, there are plenty of others out there that do), they don’t endeavor to explain why oceans have been warming for the past 100 years.

Here’s a pretty significant clue.  It’s a 2,300 year Hallstatt solar variation cycles graph:

800px-Carbon-14-10kyr-Hallstadtzeit_Cycles

Anyone notice what has been rising for the last 1,000 or so years?

In fact, says Sami Solanki, the director of the Max Planck Institute for Solar System Research in Katlenburg-Lindau, Germany

The sun has been at its strongest over the past 60 years and may now be affecting global temperatures… the brighter sun and higher levels of so-called "greenhouse gases" both contributed to the change in the Earth’s temperature, but it was impossible to say which had the greater impact.

As it is turning out, it appears it may be the Sun.  CO2 has always been a lagging indicator in warming history until it was recently elevated by some “scientists” to a leading cause.  It has not shown the effect on temperature predicted by warmist models, however.  In fact, it hasn’t even been close even while the ppm of CO2 in the atmosphere has continued to rise. 

The point of all of this?  It appears that those traditionally associated with the AGW scaremongering are toning down their rhetoric even while still attempting, through half-truths, incomplete reporting and implication, to push the AGW agenda, albeit much more subtly now. 

Don’t let them get away with it.

UPDATE: And then, of course, there are those who don’t have a clue and don’t care, especially when they can use this to club the GOP.

~McQ

Twitter: @McQandO


Obama plans to carpet the West in solar projects

But open the same amount of federal land to fossil fuel exploration and exploitation? 

Nope.

Instead, we get this:

The Obama administration will open public lands in six Western states to more solar projects as part of a solar energy road map it publicized Tuesday.

The Interior Department set aside 285,000 acres in Arizona, California, Colorado, Nevada, New Mexico and Utah for the initiative. Firms can apply for waivers to develop projects on an additional 19 million acres.

Imagine 19 million acres covered in solar installations.  That won’t have any environmental impact on eco-systems, will it?

And if it does, well, they’ll just “waiver” them, because, you know, this is a favored industry.  Regulation?  Yeah, most likely not at all as stringent as those applied to those old “dirty” fuels. 

Which brings us to an ironic point.  Remember in years past when we fought against the dumping of government subsidized products from other countries on our shores.

Guess what?  We’re now the target for much the same argument:

China’s Commerce Ministry said Friday that it is investigating possible solar equipment subsidies by the U.S. and South Korea and their impact on Chinese manufacturers, widening a trade spat at a time of oversupply and weakening demand for solar power equipment.

The ministry has launched an anti-dumping and anti-subsidy probe into polysilicon imports from the U.S., as well as an anti-dumping probe into imports from South Korea, it said in separate statements on its website.

Yes I know, China is as hypocritical as they come, but, apparently, so are we.

It’s called crony capitalism (or as mentioned previously, venture socialism).  Again government, using your money, is subsidizing an industry that can’t make it alone because in reality there’s no market demand for their product. By subsidizing them, government is socializing their losses.  This administration has heavily subsidized the domestic solar industry (and even then we see industry business failures right and left) and is forcing a product on the market to satisfy a political agenda even when alternate and more viable (but unfavored) products are available much more cheaply.

The administration has since approved 17 major solar projects on public lands producing about 6,000 megawatts of power, Salazar said.

“We have made huge strides in the last three-and-a-half years, but we realize we are only at the beginning of this effort and that there’s a lot more to do,” Salazar said. “I have no doubt that the United States will lead the world in solar energy development.”

My guess is those 17 solar projects will end up on more acreage than has been approved by the administration for oil exploration.

“Huge strides”?  Not in any market sense.  What he’s talking about is the administration making “huge strides” in forcing a product into a market that is not in demand by that market, ignoring the environmental impact of such projects (even while being more restrictive on fossil fuel development) and generally playing the “central planning” game.  Government knows better than you and the markets about what we need, or didn’t you know that?

Sort of reminds me of those new light bulbs they forced on us which are now being found to cause skin damage due to UV light leakage.

But hey, I’m just a prole, what do I know?

Oh, and here’s where you have to read between the lines.  Note the spin involved in this sentence:

The areas selected in the plan minimize “resource conflict,” Salazar noted, meaning they avoid regions where solar development would edge out exploration for other natural resources.

What that also means is the administration has successfully exempted up to 19 million acres of federal land from fossil fuel exploration.

And:

The plan released Tuesday would expedite solar project approval while cutting some up-front costs for developers, Steve Black, counsel to the Interior Department, said Tuesday.

Translation: The favored industry will get favored treatment all paid for by your dollars (or borrowed ones, most likely).

Environmental groups?  Forget about it.  You haven’t a chance on this one.  You’’ll be steamrolled just like the rest of the country.  Save your money and effort for something you can tie up and delay – anything to do with fossil fuels.  You know, the life blood of our commerce?

Yeah, concentrate there.  The administration will be glad to help.

Forward.

~McQ

Twitter: @McQandO

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