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Free Markets, Free People

Economic Statistics for 16 Oct 12

The following US economic statistics were announced today:

The Consumer Price Index rose 0.6%. The core rate, ex-food and –energy, rose 0.1%. On a yearly basis, the CPI rose 2.0%, and the core CPI also rose 2.0%.

Net capital inflows to the US were $90 billion in August, with strong demand for corporate bonds among foreign buyers.

US industrial production rose 0.4%, while capacity utilization rose o.1% to 78.3%. Manufacturing production only rose a sluggish 0.2%, which means it’s no longer providing much impetus for recovery.

The housing market index rose 1 point to 41, thanks to record low mortgage rates and rising consumer confidence.

In weekly retail sales, Redbook reports a soft year-over-year sales increase of 1.8%. ICSC-Goldman reports sales were unchanged in the latest week, and up 2.7% on a year-over-year basis, also a fairly soft number, though it’s been steady for the last month.

~
Dale Franks
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Hillary jumps under the Obama bus … or was she pushed?

Seriously.  After spending 8 years holding Bush responsible for everything from 9/11 (it was an “inside job”) to a Pelosi’s hangnail, we now have the left settling on “it’s Hillary’s fault”?

Truman’s “buck” stops at the State Department now?

The point, of course, as any good commander in the military knows, is that everything that happens or doesn’t happen while you are in command is your responsibility.

So this doesn’t cut the mustard:

“I take responsibility,” Clinton said during a visit to Peru. “I’m in charge of the State Department’s 60,000-plus people all over the world, 275 posts. The president and the vice president wouldn’t be knowledgeable about specific decisions that are made by security professionals. They’re the ones who weigh all of the threats and the risks and the needs and make a considered decision.”

Hillary, for political reasons, is trying to fall on Obama’s sword for him.  Someone has to take the blame (and Bush is unavailable for this one) so Obama can once again seem faultless. He does no wrong, you know.  And besides, he has a debate tonight and he wants someone to point his finger at when the subject is inevitably brought up.  Now he has her.

Jumped?  Or pushed?

This episode illustrates how spot on Eastwood’s empty chair metaphor really is.  John McCain, the stopped clock that is right twice a day, actually gets this one right:

“The security of Americans serving our nation everywhere in the world is ultimately the job of the commander-in-chief. The buck stops there.”

Of course the left first tried to blame it on the GOP claiming they’d cut millions from State’s security budget.

Here’s the bottom line on that line of attack: If you have a security contingent of Marines in the Embassy at Barbados, but not Tripoli or Benghanzi, your problem isn’t “funding”.  It’s resource allocation and politics.

Secondly, when something like this happens, you don’t act like a politician, you act like a leader.  IF you’re a leader.

This past weekend we were treated to the spectacle of David Axlerod avoiding answering Chris Wallace’s direct question about whether or not Obama met with his national security advosors and State in the aftermath of the murder of the US ambassador in Libya.

We all knew the answer before Wallace finished the question.  And Axlerod’s non-answer answer confirmed it.

Hell no, he was late for a political fund raiser in Las Vegas, and besides, these are just “bumps in the road”.

Leadership?

While Clinton’s attempt will seem courageous and loyal to some, it is pure, calculated politics.  Hillary knows that by 2016 this will be well behind here and, actually, an advantage, since she’ll have stepped up into the leadership void and acted like a leader.  Obama?  Not so much.

And make no mistake, as the state of the world and our foreign policy have announced loudly this past month – we are indeed suffering from a leadership void.

The empty chair we now have must be filled.  We, nor the world, can afford 4 more years of it remaining empty.

~McQ

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Government picks another loser

I don’t know how many times we have to point these out or how many ways we have to illustrate that government has no business trying to pick winners and losers, because usually, as with most centralized planning organizations, they get it wrong.  Why?  Because they’re absolutely blind to signals from the market.  Government’s picks are founded more in preference than reality:

Obama touted it in 2010 as evidence “manufacturing jobs are coming back to the United States,” but two years later, a Michigan hybrid battery plant built with $150 million in taxpayer funds is putting workers on furlough before a single battery has been produced.

Workers at the Compact Power manufacturing facilities in Holland, Mich., run by LG Chem, have been placed on rotating furloughs, working only three weeks per month based on lack of demand for lithium-ion cells.

The facility, which was opened in July 2010 with a groundbreaking attended by Obama, has yet to produce a single battery for the Chevrolet Volt, the troubled electric car from General Motors. The plant’s batteries also were intended to be used in Ford’s electric Focus.

Instead:

The 650,000-square-foot, $300 million facility was slated to produce 15,000 batteries per year, while creating hundreds of new jobs. But to date, only 200 workers are employed at the plant by by the South Korean company. Batteries for the Chevy Volts that have been produced have been made by an LG plant in South Korea.

Talk about outsourcing.

Workers are furloughed for one week every month.  And guess who pays for that week?

Boileau pointed out the workers who are on furloughs one week a month are eligible to collect unemployment for that week, and he said the company covers the contributions to their individual benefits during the period.

Reality check commonly ignored when it comes to government:

“Had it been private investors rather than government bureaucrats making the decision, there either would have been a reality check about the industry, or only those who made individual decisions to invest would have lost their money, not taxpayers.”

Instead, government has “socialized” the loss.

The market has moved on – natural gas is cheap and plentiful.  It is the future, at least the near future.  That’s where everything is going.

Meanwhile, the government continues its near unbroken string of picking losers … not that anyone who knows a thing about economics and markets should be the least surprised.  Unlike many other things, this is not “unexpected”.

~McQ

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Obama Administration shuts down half of Alaskan National PETROLEUM Reserve

Note the capitalized word in the title?

The WSJ fills in any blanks:

President Obama is campaigning as a champion of the oil and gas boom he’s had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department’s little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.

The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the “energy needs of the nation.” Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four potential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.

Why?  Because Ken Salazar in his infinite wisdom, knows more about all of this that you proles, especially the proles in Alaska. The excuse?

Interior Secretary Ken Salazar says his plan “will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives.” He added that the proposal will expand “safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that’s needed to bring supplies online.”

Got that?  Restricting use of a area designated by Congress for a specific purpose, a purpose backed by the state in which the area is located, will “help industry” and expand “safe and responsible oil development”.

Really?

George Orwell, call your publisher.  Time to update Newspeak.  Up is now down, and restrictions now “help industry” and “expand” development.

Meanwhile in coal country:

Two coal companies in Pennsylvania blamed President Obama and his Environmental Protection Agency (EPA) for the layoffs announced last week.

“[T]he escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry,” said PBS Coals Inc. President and CEO D. Lynn Shanks in a statement on Friday, as noted by the Pittsburgh Post-Gazette. The company also cited weaker-than-normal demand for coal.

Shanks’ comment on the EPA came as he announced a 28 percent work force reduction. “PBS Coals Inc. and its affiliate company, RoxCoal Inc., laid off about 225 workers as part of an immediate idling of some deep and surface mines in Somerset County,” Post-Gazette added. “The company now employs 795 workers.”

Yes, the Obama promise to essentially put coal out of business is indeed making progress.

So wait, we have the administration restricting the oil industry in Alaska and the EPA causing layoffs in coal country, and my guess is Obama will attempt to brag about how many jobs he’s created tomorrow night.  Any takers?

That said, guess who is getting “fast tracked”?

The Interior Department set aside about 285,000 acres for commercial-scale solar in Arizona, California, Colorado, Nevada, New Mexico and Utah. The federal government will offer incentives for development, help facilitate access to existing or planned electric infrastructure and ease the permitting process in the 17 zones.

“Energy from sources like wind and solar have doubled since the president took office, and with today’s milestone, we are laying a sustainable foundation to keep expanding our nation’s domestic energy resources,” Interior Secretary Ken Salazar said. …

The development program approved Friday cuts some up-front costs for developers, as the federal government already has performed National Environmental Policy Act assessments for the sites.

I’ve been writing about the plan to carpet the desert with solar panels for a while.  But there’s a bit of irony here as Erica Johnsen of Hot Air points out.  First the news:

The administration fired the most recent volley Wednesday by affirming tariffs on Chinese imports. The Commerce Department determined Chinese solar panels were sold below fair value and that its solar businesses unfairly received direct government support.

Now for the irony:

Yes, you read that correctly — even with all of the many types of subsidies and special government treatment the solar industry receives, they still can’t compete, so the government affords the domestic industry protectionist tariffs… purportedly because China gives its own industry unfair government help.

Amazing.

Anyone who still thinks this isn’t the most political, inept, corrupt, ideologically driven and opaque administration in the history of this country has to have been living under a rock for a few hundred years.

This bunch makes one pine for Jimmy Carter.

~McQ

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Economic Statistics for 15 Oct 12

The following US economic statistics were announced today:

US retail sales for September rose a better-than-expected 1.1%. Ex-autos, sales were still up 1.1%, and Ex-autos and –gas, up 0.9%.

The Empire State manufacturing index rose from -10.41 to -6.16 for the month, as the ongoing contraction in business conditions eased.

Business inventories rose 0.5% in August versus a 0.6% rise for business sales which kept the stock-to-sales ratio unchanged at 1.28.

~
Dale Franks
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ICYMI: Global warming appears to have stopped 16 years ago

But, of course, it is one of the Obama administration’s priorities (could it be because a carbon tax would most likely kill even more jobs?).  Bottom line?

The world stopped getting warmer almost 16 years ago, according to new data released last week. The figures, which have triggered debate among climate scientists, reveal that from the beginning of 1997 until August 2012, there was no discernible rise in aggregate global temperatures.The new data, compiled from more than 3,000 measuring points on land and sea, was issued quietly on the internet, without any media fanfare, and, until today, it has not been reported. This stands in sharp contrast to the release of the previous figures six months ago, which went only to the end of 2010 – a very warm year.

Of course the figures, as mentioned, were “quietly” released without an media fanfare.  None.  They were just plopped out there.

Die-hard warmists aren’t going to pay any attention to it though.  Just watch.  Those who claim “science” should trump and we should be doing something to curb our carbon footprints really don’t care about science.

Does it matter that campaigners and the media are actively peddling disinformation? For the most part, probably not, as the public is by now used to such nonsense on just about every subject from unemployment figures to Barack Obama’s birth certificate. But there is one group that should be very concerned about the spreading of rampant misinformation: the scientific community. It is, of course, thrilling to appear in the media and get caught up in highly politicized debates. But leading scientists and scientific organizations that contribute to a campaign of misinformation — even in pursuit of a worthy goal like responding effectively to climate change — may find that the credibility of science itself is put at risk by supporting scientifically unsupportable claims in pursuit of a political agenda.

Absolutely.  But back to Roger Pielke Jr’s question at the beginning.  Does it matter that politicians and the media are actively peddling disinformation?  Yes, in fact it does.  Because they are able, if they convince enough people, to force us to pay for one of their revenue schemes with the false science they peddle.  So yes, it does matter.   But his point about scientists is important as well.  It is the scientific community that should be up in arms about the fiasco that global warming, or as warmists now prefer, “climate change”, has been presented.  Pure, grant peddling, hogwash.

Dr. Judith Curry at Georgia Tech says:

The data confirms the existence of a ‘pause’ in the warming. The impact of this pause within the climate dynamic community has been to focus increased attention on the impact of natural variability, particularly the impact of internal multi-decadal oscillations in the ocean.  The new climate model calculations for the AR5 have focused on trying to assess what it would take to accurately simulate these multi-decadal ocean oscillations and how predictable they might be.  These new observations and climate modeling results will hopefully impact the the IPCC AR5 deliberations so that we do not see the same overly confident consensus statements that we saw in the AR4.

Got that?  They don’t even know what it will take to simulate the “multi-decadal ocean oscillations”.  That should tell you all you need to know about the efficacy of the previous models which so “over confidently” claimed both viability and consensus.  As we’ve since learned, they had neither.

Final nail?  Oh, no.  Zombie warmism will be with us until the newest man-made apocolypse is “discovered”.

~McQ
Twitter: @McQandO
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Observations: The QandO Podcast for 14 Oct 12

This week, Michael, and Dale talk about the vice presidential debate and game the electoral college.

The direct link to the podcast can be found here.

Observations

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.

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2012 California Ballot Propositions

Once again, it’s time to take a look at the biennial crap that various idiots try to foist on us here in California at election time, known as the ballot propositions. This election there are ten of them. Let’s see what they’ve cooked up for us this year.

PROP 30: TEMPORARY TAXES TO FUND EDUCATION. GUARANTEED LOCAL PUBLIC SAFETY FUNDING. INITIATIVE CONSTITUTIONAL AMENDMENT.

Increases taxes on earnings over $250,000 for seven years and sales taxes by ¼ cent for four years, to fund schools. Guarantees public safety realignment funding. Fiscal Impact: Increased state tax revenues through 2018–19, averaging about $6 billion annually over the next few years. Revenues available for funding state budget. In 2012–13, planned spending reductions, primarily to education programs, would not occur.

NO: California already has incredibly steep income taxes. The top rate of 9.8% hits at $38,000 per year. And the sales tax rate is already over 7%. This is just insane, and they want to make it…insaner. Hey, here’s an idea, how about we stop cops and CDF firemen retiring at 50 with 85% of their top salary? How about we randomly fire half the Administrators in our schools, who ,in many districts, outnumber the actual teachers? Or, how ’bout weekly tarring and feathering of state legislators until they figure out how to cut spending?

PROP 31: STATE BUDGET. STATE AND LOCAL GOVERNMENT. INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE.

Establishes two-year state budget. Sets rules for offsetting new expenditures, and Governor budget cuts in fiscal emergencies. Local governments can alter application of laws governing state-funded programs. Fiscal Impact: Decreased state sales tax revenues of $200 million annually, with corresponding increases of funding to local governments. Other, potentially more significant changes in state and local budgets, depending on future decisions by public officials.

NO: The California Democratic Party opposes it. I can’t imagine anything the California Democratic Party opposes that I would not automatically be for. Except maybe this. This seems like a disaster in the making. It’s so fricken’ complicated and gives so much power—including tax power—to unelected bureaucrats, that I can’t see how this could possibly do anything but make things worse. The GOP is for it, but the California Federation of Republican Women and some TEA Party groups are against it. This one is just all over the map. Absent something clearer and less complicated, I’m saying "No". There’s a way to fix Sacramento, but this ain’t it.

PROP 32: POLITICAL CONTRIBUTIONS BY PAYROLL DEDUCTION. CONTRIBUTIONS TO CANDIDATES. INITIATIVE STATUTE.

Prohibits unions from using payroll-deducted funds for political purposes. Applies same use prohibition to payroll deductions, if any, by corporations or government contractors. Prohibits union and corporate contributions to candidates and their committees. Prohibits government contractor contributions to elected officers or their committees. Fiscal Impact: Increased costs to state and local government, potentially exceeding $1 million annually, to implement and enforce the measure’s requirements.

YES: This is a similar bill to the one that Gov. Scott Walker got passed in Wisconsin. The unions that currently own Sacramento HATE it. They can go screw.

PROP 33: AUTO INSURANCE COMPANIES. PRICES BASED ON DRIVER’S HISTORY OF INSURANCE COVERAGE. INITIATIVE STATUTE.

Changes current law to allow insurance companies to set prices based on whether the driver previously carried auto insurance with any insurance company. Allows proportional discount for drivers with some prior coverage. Allows increased cost for drivers without history of continuous coverage. Fiscal Impact: Probably no significant fiscal effect on state insurance premium tax revenues.

YES: Right now, if you have auto insurance, and you switch companies, your new company can’t offer you a discount for being continuously covered. Now, this could mean that if you voluntarily stop driving for a while, your new rates won’t be discounted. The opponents act like this is a Big Deal, and the Democrats shriek in horror at the very idea. I, on the other hand, would like to be able to switch companies without having a big premium increase.

PROP 34:  DEATH PENALTY. INITIATIVE STATUTE.

Repeals death penalty and replaces it with life imprisonment without possibility of parole. Applies retroactively to existing death sentences. Directs $100 million to law enforcement agencies for investigations of homicide and rape cases. Fiscal Impact: Ongoing state and county criminal justice savings of about $130 million annually within a few years, which could vary by tens of millions of dollars. One-time state costs of $100 million for local law enforcement grants.

YES: I don’t have any philosophical problem with the death penalty. Some people need killin’. On the other hand, I have no great respect for the system of criminal justice here in California, either. For whatever reason, we just don’t have a very good system for ensuring that the only people we execute are people who actually need killin’. Until we do, we probably shouldn’t be killing anybody.

PROP 35: HUMAN TRAFFICKING. PENALTIES. INITIATIVE STATUTE.

Increases prison sentences and fines for human trafficking convictions. Requires convicted human traffickers to register as sex offenders. Requires registered sex offenders to disclose Internet activities and identities. Fiscal Impact: Costs of a few million dollars annually to state and local governments for addressing human trafficking offenses. Potential increased annual fine revenue of a similar amount, dedicated primarily for human trafficking victims.

NO: First, we already have stiff penalties against human trafficking. We’re pretty serious about it. But this goes way too far. It reminds me of the Federal law in place for the military, where if you go to a strip club, and it’s later found to be engaged inn human trafficking, you could go to jail for many, many years. It’s draconian, and unnecessary, and will result in a lot of innocent people getting labeled as sex offenders and human traffickers who never actually engaged in human trafficking. It’s a wild over-reaction to an admittedly serious problem.

PROP 36: THREE STRIKES LAW. REPEAT FELONY OFFENDERS. PENALTIES. INITIATIVE STATUTE.

Revises law to impose life sentence only when new felony conviction is serious or violent. May authorize re-sentencing if third strike conviction was not serious or violent. Fiscal Impact: Ongoing state correctional savings of around $70 million annually, with even greater savings (up to $90 million) over the next couple of decades. These savings could vary significantly depending on future state actions.

YES: OK, I’m starting to come off like some bleeding heart, soft-on-crime, 60s liberal here, but this is a better application of the three strikes law. Right now, a guy with two strikes could a life sentence if his third strike is having an ounce of weed on him. Any third felony counts as a third strike. This would limit the third strike to a violent felony, which is who we really want in prison, anyway. There’ve been some ridiculous third strike convictions here in CA, and this would stop that, while ensuring violent offenders get put away.

PROP 37: GENETICALLY ENGINEERED FOODS. LABELING. INITIATIVE STATUTE. 

Requires labeling of food sold to consumers made from plants or animals with genetic material changed in specified ways. Prohibits marketing such food, or other processed food, as “natural.” Provides exemptions. Fiscal Impact: Increased annual state costs from a few hundred thousand dollars to over $1 million to regulate the labeling of genetically engineered foods. Additional, but likely not significant, governmental costs to address violations under the measure.

NO: More costly green crap. It’ll be a boon for trial laywers, make food in California more expensive, and will drive farmers out of the state, and small grocers out of business. Sheer idiocy.

PROP 38: TAX TO FUND EDUCATION AND EARLY CHILDHOOD PROGRAMS. INITIATIVE STATUTE.

Increases taxes on earnings using sliding scale, for twelve years. Revenues go to K–12 schools and early childhood programs, and for four years to repaying state debt. Fiscal Impact: Increased state tax revenues for 12 years—roughly $10 billion annually in initial years, tending to grow over time. Funds used for schools, child care, and preschool, as well as providing savings on state debt payments.

NO: I don’t have any kids. Give ‘em gruel, and let ‘em know in no uncertain terms that children are to be seen, not heard. Preferably with beatings. And get Sacramento’s hand out of my pockets. This state wastes a shocking amount of money, then when they come up short, somehow it becomes my problem.

PROP 39: TAX TREATMENT FOR MULTISTATE BUSINESSES. CLEAN ENERGY AND ENERGY EFFICIENCY FUNDING. INITIATIVE STATUTE.

Requires multistate businesses to pay income taxes based on percentage of their sales in California. Dedicates revenues for five years to clean/efficient energy projects. Fiscal Impact: Increased state revenues of $1 billion annually, with half of the revenues over the next five years spent on energy efficiency projects. Of the remaining revenues, a significant portion likely would be spent on schools.

NO: Another tax. This time on out of state businesses, to force them to pay CA income tax if they do business here. Well, guess what, they just won’t do business here, you dolts. So, A) you won’t get the tax revenue you say you will, B) people in CA who work for those companies will join the ranks of the unemployed, losing us even more tax revenue, and C) if you do get any revenue, you’ll blow it on wind-powered solar sails, or some such nonsense. And if there’s another Solyndra-style black hole to pour money into, you can bet the rocket scientists in Sacramento will unerringly find it.

PROP 40: REDISTRICTING. STATE SENATE DISTRICTS. REFERENDUM.

A “Yes” vote approves, and a “No” vote rejects, new State Senate districts drawn by the Citizens Redistricting Commission. If rejected, districts will be adjusted by officials supervised by the California Supreme Court. Fiscal Impact: Approving the referendum would have no fiscal impact on the state and local governments. Rejecting the referendum would result in a one-time cost of about $1 million to the state and counties.

YES: Even the sponsors of the proposition have withdrawn their sponsorship. The CA Supreme Court has already kept the old Senate districts in place for 2012, thwarting the will of the people on getting the redistricting out of the hands of the Democrats in Sacramento.  They’ll do it again in 2014 without it. Jeebus, this is such a corrupt state.

Well, that’s the run-down for this election. Now that you know how to vote properly, do your duty.

~
Dale Franks
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