Free Markets, Free People

Monthly Archives: August 2012


Economic Statistics for 17 Aug 12

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

The Reuter’s/University of Michigan’s consumer sentiment index rose slightly to 73.6, on improved current conditions. But optimism seems to be waning as the expectations index fell 1.1 points to 64.5.

The Conference Board’s index of leading indicators rose 0.4% in July, led by improvements in jobless claims and building permits.

~
Dale Franks
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Election indicators: voter registration

It’s not a poll, but it certainly is an indicator:

Across Florida on Wednesday, President Obama’s campaign scheduled 53 field events to register voters. Last weekend in Virginia, there were at least 78 such events — typical of drills in the past several months on behalf of the incumbent Democrat in the battleground states that are likely to decide the Nov. 6 election.

But a Globe analysis of voter registration data in swing states reveals scant evidence that the massive undertaking is yielding much fresh support for Obama.

In stark contrast to 2008, when a strong partisan tailwind propelled Democratic voter registration to record levels, this year Republican and independent gains are far outpacing those of Democrats.

Specifics:

In Florida, Iowa, North Carolina, Colorado, and Nevada — tossup states where direct election-year comparisons could be drawn — the numbers are striking. Democratic rolls increased by only 39,580, less than one-tenth the amount at the comparable point in the 2008 election.

At the same time, GOP registration has jumped by 145,085, or more than double for the same time four years ago. Independent registration has shown an even stronger surge, to 229,500, almost three times the number at this point in 2008.

Whistling past the graveyard:

“The fact is, there are currently many more Democrats registered in battleground states now than there were before the 2008 primary campaign began, which means there are fewer eligible voters left to register because of the gains we made in 2008,” campaign spokesman Adam Fetcher said in an e-mail.

“We have largely preserved the huge gains we built in 2007 and 2008 and increased our advantage in some areas, while Republicans have failed to make significant gains despite having the primary to themselves this year,” he said.

Support for “whistling past the graveyard”:

Jan Leighley, an American University professor of political science with a specialty in voter turnout, sees merit in the Obama camp’s explanation. “To say ‘We did a lot in 2008 and we’re not going to repeat those numbers in terms of a percentage increase’ is a legitimate point,” said Leighley. “Registration is not the endgame; the endgame for the campaign is to get people to the polls,” she said.

Reality?  It’s about enthusiasm.  It’s about motivation.  Clearly voter registration enthusiasm (which will likely produce actual voters) is up on the side of Republican efforts. 

Secondly, it seems the Democrats are prepared to totally ignore what happened in 2010.  Guess who made “significant gains” then?  Claiming that 2008 gains have been “preserved” is just that, a claim.  It certainly didn’t prove itself true during the midterms did it?

Add to that the huge crowds turning out to see Romney and Ryan and the large number of Democratic politicians who’ve decided to skip the Democratic convention and you begin to see a picture that the left is desperately trying to paper over.

Indicators.

~McQ

Twitter: @McQandO

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Economic Statistics for 16 Aug 12

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

The general business conditions index of the Philadelphia Fed’s Business Outlook Survey improved to-7.1 from July’s -12.9. In other words, the rate of contraction isn’t as bad as it was less month.

Housing starts in July fell -1.1% after rising 6.9% in June. The July pace of 0.746 million units was up 21.5% on a year-ago basis.

Initial jobless claims rose 2,000 last week to 366,000, but the 4-week average, at 363,750, was down 5,500 from the prior week.

The Bloomberg Consumer Comfort Index fell to -44.4, which is its lowest reading since January 29.

E-commerce sales rose 3.3% in the second quarter, with year-on-year growth at 15.3%. E-commerce sales were 5.1% of total retail sales.

~
Dale Franks
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Obama handling of economy garners 36 percent approval

Another indicator poll.  Again, these polls, at this point, are much more valuable than the horse race polls at this point.

They indicate the mood of the public.  They tell you what is bothering them (or what is pleasing them).  They allow you then to consult electoral history to get an idea of what these sorts of indicators usually mean.

So, to Gallup:

Gallupecon

The one issue that Obama gets a majority approval on is really not even on the radar screen for most Americans.  Terrorism is there but unless there’s a big event involving America, it’s not a major issue for this campaign.

Next comes education.  What Obama gets there is a passing grade – barely.  But again, that’s not a top issue in this campaign.  Nor are foreign affairs.

Immigration is important in certain regions of the country and he’s doing poorly there.

But his worst job approval comes in the three top issues for 2012.  Jobs, the economy and the budget deficit.

In all three categories Obama’s is dismal.  His disapproval rating is very high.

While most of the issues above pertain to the country, the jobs and economy categories are much more personal in nature.  They have a great impact on individuals.  And it is individuals who vote.  Right now, only 37% of voters think he’s doing a good job creating jobs (and 58% think he’s doing a poor job), 36% approve (60% disapprove) of his handling of the economy and only 30% (64% disapprove) of his handling of the budget deficit.

That means he now “owns” the economy.  And note the percentages of approval he gets are just about the same percentage of those who self-identify as Democrats.

So, what must Obama do?  Well here’s Gallup’s advice:

Nearly six in 10 Americans approve of Obama’s handling of terrorism; however, that is where majority approval of the president ends in the current poll. He earns his lowest issue ratings on the economic issue areas tested in the survey, with approval on the federal budget deficit the lowest at 30%, and his approval on the economy not much higher, at 36%.

While Obama’s issue ratings are largely unchanged from where they have been over the past year, that stability may be a problem given his overall job approval rating is 45%. Historically, presidents who won a second term had near-50% job approval ratings or better prior to the election. To move closer to that range, Obama may want to focus singularly on raising his approval rating on the economy, as with previous presidents it seems to have been the issue approval most closely linked to overall job approval.

However, Team Obama wants to do anything but focus on the economy since doing so would also focus on how poorly it has performed and provide an opportunity to the GOP to point out why (policy, etc.).  He wants nothing to do with that sort of focus.  Thus the alternate campaign of distraction characterized by “small ball” where Obama et al try to divert attention from these issues to irrelevant issues that have no real bearing on these issues but capture the media’s attention and are exploitable by the Obama campaign.

Result?  Well, we’ll see.  I don’t believe he can hide from this forever.  And as the election nears, it will become more and more difficult to avoid these issues (and more obvious if he attempts it).  He’s eventually going to have to explain the 8.3% unemployment rate, the failure of the stimulus, the dramatic increase of the deficit (to no avail) and the planned trillion dollar deficits for the future. 

And when that happens, and since its obvious the public now charge him with responsibility for the economy, it’s unlikely his ratings are going to improve.

~McQ

Twitter: @McQandO

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Media bias? Majority of likely voters say yes

This can’t help the mainstream media’s already battered reputation or it’s constant claim of objective political reporting:

Likely voters, by a five-to-one margin, believe that America’s media is in President Obama’s pocket and will treat his candidacy better than challenger Mitt Romney’s as the election nears, according to a new Rasmussen Reports poll.

The startling numbers point to an even more disturbing trend for the media: Reporters just aren’t trusted to deliver the news in an unbiased fashion. The proof: Rasmussen found that when it comes to information about the presidential campaign, 48 percent of likely voters trust friends and family while just 26 percent trust reporters.

In fact, it’s even worse than those two lead paragraphs in the story:

The poll found that 59 percent of likely voters believe that the media has given Obama better treatment than Romney, a view Team Obama doesn’t agree with. Just 18 percent believe the media has treated Romney better.

Whether or not “Team Obama” agrees is irrelevant.  In politics, perception is reality.  And the reality is a large majority of likely voters (the key demographic) find the media both bias and wanting in terms of fair, objective and balanced political reporting.

So what is the impact of this?

Well, for one, tuning the media out.  Few people are likely to keep listening to or watching coverage don’t trust.  One of the reasons for the rise of the new media is it provides an important “other side” to the coverage of politics.

Despite their protestations to the contrary, the mainstream media has been unable to convince almost 60% of the likely voters they’re unbiased and trustworthy.  That has to come from somewhere when you talk those numbers.  And it is unlikely it is only a figment of that 60%’s imagination.  They see the bias as real and they don’t like it or trust what they consider the biased outlets.

If you’re wondering why CNN’s numbers are at an all time low or why newspapers are failing this is part of it.  Meanwhile the new media is thriving.  It may not be objective, but readers and viewers know that, because new media outlets make no bones about it.  What these outlets provide is “the rest of the story”.  And when the rest of the story comes out, and all the facts are on the table, not just what the mainstream media chose to use,  it makes the mainstream medias bias apparent.

Another reason the mainstream media is considered to be in Obama’s pocket is that instead of asking hard questions and follow up, and researching a story, they’ve become a transcription service.  Whatever the campaign or White House put out is dutifully published or announced with little or any questioning.  When that is shot full of holes by blogs and on-line news services and pundits, they again look to be biased (when, in many cases, they’re just not doing their job).

The question, of course, is with almost 60% of likely voters believing that the mainstream media is in Obama’s pocket, what effect will that have on the election.

In the past the media has, of course, played a large role in helping determine who the next president would be.  Will the 60% disregard and ignore the media?   Will they treat it as a propaganda arm of the campaign and seek their information elsewhere?  Because of the perception held by a majority of the likely voters, will the media play a diminished role in this election?

All interesting and entertaining questions which we’ll have to monitor during this election cycle. 

I remember years ago, after QandO got started and blogs began having some visibility and impact, media organizations sniffing down their arrogant noses at these upstarts who dared to question their dominance and reminding everyone the difference between some loser in the basement in his pajamas churning out his stuff and a professional organization, with trained journalists and 3 layers of editors.

Well as it turns out, that difference hasn’t mattered.  The pajama clad are still around (and pretty well established now) and the professional organizations with trained journalists and 3 layers of editors have seen their reputations and followings dwindle.

You’d think, by now, they’d be clued into the ‘why’, but apparently its like economics to the left – it just doesn’t compute.

~McQ

Twitter: @McQandO

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Economic Statistics for 15 Aug 12

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

The consumer price index was unchanged in July, after being unchanged in June and falling -0.3% in May. Excluding food and energy, the core CPI rose 0.1%, following 0.2% in the last two months. On a year-over-year basis, the CPI is up 1.7%, with the core CPI rising 2.2%

Industrial production rose 0.6% in July following a 0.4% increase in June. Overall capacity utilization improved to 79.4% from 78.9% in June.

The Empire State manufacturing index for August fell sharply to -5.85 from July’s 7.39, indicating weakness in the manufacturing sector.

The net capital inflow of long-term securities rose only $9.3 billion in June, the the weakest since October, 2011.

The NAHB housing market index rose 2 points this month to 37, nearly the highest since early 2007.

The MBA reports mortgage applications declined last week, falling a sharp -4.5%. Purchase apps fell -2.0%, while re-fi apps fell -5.0%.

~
Dale Franks
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What part of “health care is a finite resource” does the left not understand?

Regardless of all the promises made by ObamaCare, there are still only 24 hours in a day and there are a finiteobamacarethumb number of doctors available to fulfill the starry-eyed promises the law makes.

That’s reality, something the left routinely attempts to pretend doesn’t exist.

Some examples of the point – ObamaCare will put 30 million more people on insurance rolls  Yay, problem of health care solved, right?

No, of course not.  There will still be the same number of doctors and hours in a day.  As we’ve been saying repeatedly, getting insurance does not mean you’ll be able to see a doctor.

And then there are the new requirements placed on doctors by ObamaCare that further exacerbate the problem.

For instance:

Take preventive care. ObamaCare says that health insurance must cover the tests and procedures recommended by the U.S. Preventive Services Task Force. What would that involve? In the American Journal of Public Health (2003), scholars at Duke University calculated that arranging for and counseling patients about all those screenings would require 1,773 hours of the average primary-care physician’s time each year, or 7.4 hours per working day.

So, a doctor either commits to 10 or 12 hours of work a day or she sees patients for other reasons for 2/3rds an hour a day.

Or try this:

Meanwhile, the administration never seems to tire of reminding seniors that they are entitled to a free annual checkup. Its new campaign is focused on women. Thanks to health reform, they are being told, they will have access to free breast and pelvic exams and even free contraceptives. Once ObamaCare fully takes effect, all of us will be entitled to a long list of preventive services—with no deductible or copayment.

Of course, none of that is “free”, but much of it will also tie up a doctor’s time.  Preventive care costs money – lots of money – and when you have someone else paying for it, even more people will try to take advantage of that.

The left thinks that’s a feature, not a bug.

Here’s the real-world problem, however:

If the screenings turn up a real problem, there will have to be more testing and more counseling. Bottom line: To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it, leaving no time for all the other things they need to do.

In effect, it is government mandating treatment that fills up the doctor’s time when much of that treatment may not be necessary.  But that call has been taken out of the doctor’s hands with this law.  If a patient demands all their “free” stuff, then what?

I often harp on the fact that the left seems sublimely ignorant on how the laws of economics work.  Well, what ObamaCare has set up are exactly the same conditions that plague most government run healthcare systems:

When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level. But in this country, as in other developed nations, Americans do not primarily pay for care with their own money. They pay with time.

Prepare yourself for long waits for what you now consider to be routine problems.  If it is routine you will likely have less of a chance of seeing a doctor than you do now.  Best hope you can self- medicate or just wait out the problem.   If it is a serious problem, you’ll most likely still be in for a wait. 

Why?

As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare’s newly created health insurance exchanges.

Econ 101.  So what is likely to happen?

When people cannot find a primary-care physician who will see them in a reasonable length of time, all too often they go to hospital emergency rooms.

Uh, wasn’t that a big part of the impetus behind creating ObamaCare?  To “solve” that problem?  In fact, it is likely to exacerbate it.

Of course the solution to the government made problem will be what?  Most likely more government.  Those patients who are in those plans that pay below-market reimbursement will complain to whom?  Politicians.  And vote hungry politicians will try to do what? "Fix” the problem they created.  And who will they make the bad guys?  Well, certainly not them – greedy doctors or insurance companies most likely.

You can see this coming from a mile off – well if your eyes aren’t full of moon dust and you have even a passing acquaintance with how the real world works.

As P.J. O’Rourke so aptly said, “If you think health care is expensive now, wait until you see what it costs when it’s free.”

Unless this monstrosity of a law is repealed, we’re about to find out.

~McQ

Twitter: @McQandO

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Government cronyism in full bloom is the US west

Last month I pointed this out:

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.

At the same time the administration opens those lands up (19 million acres!?  For solar?), it has essentially closed federal land to oil and gas exploration and exploitation.

The Wall Street Journal (subscription) explains:

Several weeks ago in a remarkable but little-noticed policy directive, the Interior Department announced that it will allow construction permitting on 285,000 acres of public land in Arizona, California, Colorado, Nevada, New Mexico and Utah for solar energy projects. Even more remarkable, Interior said that energy firms can petition Interior to build solar installations "on approximately 19 million acres"—a larger land mass than Connecticut, Massachusetts, New Hampshire and Vermont combined.

Interior boasts that "this represents a major step forward in the permitting of utility-scale solar energy on public lands throughout the west." This means opening up huge chunks of U.S. desert and wilderness to the installation and long-term placement of hundreds of thousands of solar panels. The dirty secret of solar and wind power is that they are extremely land intensive, especially compared to coal mining, oil and gas drilling or building a nuclear power plant.

Question: Where are the environmentalists?  I can’t imagine anything more disruptive to “fragile eco-systems” and endangered species than carpeting hundreds of thousands or millions of acres with solar panels.  And yet I’m finding little to nothing in the press about their protests of projects of such a scale.

What’s surprising is that few if any nature groups are protesting this regulatory rush to approve renewable energy projects. Environmental groups have never hesitated to block a dam to save a snail darter, or oppose a forest-clearing to save an owl, but desert tortoises and bighorn sheep are apparently expendable as sacrifices to the gods of green energy. So much for protecting wildlife from big, bad profit-making industry.

Those groups are complicit in the cronyism and have abandoned their so-called calling (protecting the environment and wild life) for politics.  Like happened to the National Organization of Women during the Clinton years, the environmental movement’s complacency and silence regarding this move by the administration destroys their credibility.

Not only that:

That’s only part of the special treatment for solar companies. Interior says it plans to expedite solar-project approval and cut up-front costs for developers. The agency is also streamlining National Environmental Policy Act approval and facilitating the linking of solar electricity generation to transmission lines that will carry the electricity to substations. All of this is on top of the $9 billion in taxpayer handouts for solar and wind projects that were approved between 2009 and 2011.

In short, green energy is getting an EZ Pass through the Administration’s costly regulatory tolls. Since taking office in 2009, the Obama Administration has approved 17 major solar projects on public lands. All of this is facilitated through a program called the "roadmap for solar energy development."

Apparently the costly and lengthy environmental impact studies required of fossil fuel or nuclear projects just don’t need to be done by “approved” energy sources, even if it is clear that in terms of real environmental impact (just by footprint alone) these projects are far more intrusive than fossil fuel projects.

But hey, that’s where cronyism comes in.  That’s where we socialize (subsidize) the cost and privatize the profit.  That’s where the taxpayer pays the difference while the government streamlines its procedures (or doesn’t enforce its own regulations) in favor of its chosen industry.

Interior is just not going to entertain the same sort of nonsense it imposes on fossil fuel projects when it is a project it favors.

Oil shale though?  Oh, we have regulatory hoops, more hoops and requirements out the wazoo if you want to do that:

Meanwhile, the Institute for Energy Research notices that the new solar policy is "in sharp contrast to the Obama Administration’s canceling lease sales for oil shale deposits in Colorado, Wyoming and Utah early in the President’s term and significantly downsizing development plans for those resources since then."

This is roughly the same list of western states that got the green light for solar, but with different results. Oil shale—not to be confused with shale oil, which is extracted through hydraulic fracturing—is recovered by heating rock at high temperatures, which releases petroleum. The U.S. has the largest oil shale deposits in the world, totaling a little under one trillion recoverable barrels, or about 150 years worth of supply. But most of it is located on public lands and is still off limits.

Consider the 2005 Energy Policy Act that authorized oil shale leasing on public lands. In 2008 the Bush Administration issued rules on oil shale exploration, but in February 2009 Interior Secretary Ken Salazar said those rules would be delayed. Only this year, says Mary Hutzler, former acting administrator of the Energy Information Agency, "did the Interior Department announce its plan for shale drilling, but the administration closed off 75% of the federal land containing oil shale resources that were to be offered for lease under the Bush rules."

Remember the post from yesterday in which I pointed to the promise of fossil fuel if government would just get out of the way?  3.6 million jobs and a 3% increase in GDP by 2020.

Instead, this is the way this administration has chosen to go.  An unproven and land intensive energy source instead of backing a tried and true one.   Like it has done in the medical field it is wreaking havoc in the energy field pushing its favored industry that can only survive by government subsidy.

And this administration has the gall to call anyone else “ideologically” driven?

Really?

~McQ

Twitter: @McQandO

Facebook: QandO


Fossil fuel still the hope for the future

Let this paragraph, given the economic circumstances we now find ourselves in and the policies we’ve suffered under with this administration in reference to fossil fuels, sink in:

U.S. energy supplies have been transformed in less than a decade, driven by advances in technology, and the economic implications are only beginning to be understood. U.S. natural gas production will expand to a record this year and oil output swelled in July to its highest point since 1999. Citigroup estimated in a March report that a “reindustrialization” of America could add as many as 3.6 million jobs by 2020 and increase the gross domestic product by as much as 3 percent.

In case you missed those numbers, that’s plus 3.6 million jobs and kicking up the GDP by as much as 3% by 2020.

And imagine the tax revenues that would bring as well.

Low cost fossil fuel will also do much, much more:

[T]here are signs the economic gains have begun to expand beyond the oil and gas fields and that the promise of abundant, low-cost fuels will give a competitive edge to industries from steel, aluminum and automobiles to fertilizers and chemicals.

In other words, low cost fuels will make our manufacturing sector more competitive which means more of it and more jobs as well.  Right now (and for the foreseeable future) our natural gas is much less expensive than that in the UK and Europe.  And we have literally trillions of cubic feet of it that is recoverable.

That’s starting to drive some massive private investment:

Companies plan to invest $138 billion in more than 700 natural gas storage, pipeline and processing plants in the U.S., and another $88 billion in more than 500 gas-fired power generation units, according to Joseph Govreau, vice president and editor-in-chief of Industrial Info Resources. The

firm tracks projects from planning stages through construction.

That’s only a portion of what this will spur, if allowed to go ahead.  Fertilizer production, petrochemicals, etc., all could see a revival with cheap fossil fuel.

Democrats keeps saying that reviving the manufacturing sector should be a priority.

So here’s a valid means of doing so. 

Yet for 3 plus years, this administration has done everything it can to slow walk or block increased production and exploration on federal lands and off our coasts.   There’s no sign it plans on changing that.

This boom we’re talking about has taken place in a relatively very few areas, mostly privately owned:

So far, the economic benefits have been confined to states such as Louisiana, Texas and North Dakota, while the national jobless rate has stayed above 8 percent for 42 straight months in the wake of the worst recession in seven decades.

Seems like the proverbial “no brainer” doesn’t it?  Open up federal lands and let oil companies responsibly and in an environmentally safe way explore for and exploit the natural resources we have and the country is put in the position to reap the benefits:

“This is one of those rare opportunities that every country looks for and few ever get,” said Philip Verleger, a former director of the office of energy policy at the U.S. Treasury Department and founder of PKVerleger LLC, a consulting firm in Carbondale, Colorado. “This abundance of energy gives us an opportunity to rebuild our economy.”

Or we can repeat these past 3 plus years.

Your choice.

~McQ

Twitter: @McQandO

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Economic Statistics for 14 Aug 12

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

In weekly retail sales, Redbook year-year chain store sales growth came in at a 1.8% rate, the 4th time in five weeks it’s been below 2%. ICSC-Goldman showed a -0.3% sales decrease for the week, but an improved year-on-year rate of 3.6%.

Business inventories in June rose 0.1%, outpacing sales which fell 1.1%. The mismatch for June raised the stock-to-sales ratio to 1.29, the highest in 2 1/2 years. This inventory accumulation will hold down GDP, and slow sales will hold down business confidence.

The NFIB Small Business Optimism Index fell -0.2 points in July to 91.2, after two months of improvement.

The Producer Price Index in July jumped 0.3% percent, following a 0.1% increase in June. The core PPI rose 0.4%, following June’s 0.2% gain. On a year-over-year basis, the PPI is up 0.5%, but the core PPI is up 2.5%.

Retail sales in July jumped 0.8 %, following a weak -0.2% drop in May and a weaker -0.5% decrease in June. Retail sales ex-autos also rose 0.8%, while ex-auto and ex-gas sales rose 0.9%.

~
Dale Franks
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