Following a quiescent Monday, the us economic calendar kicks off this week with the following statistics:
In weekly retail sales, Redbook reports a 2.2% increase from the previous year. ICSC-Goldman reports a weekly sales decline of -0.7%, and a 2.5% increase on a year-over-year basis. Sales growth has been slow for two straight weeks, and analysts say consumers are awaiting the final round of pre-holiday bargains before buying.
The U.S. international trade gap in October widened to $-42.2billion as exports declined.
The NFIB Small Business Optimism Index in November fell a steep 5.6 points to 87.5, going deeper into recessionary territory.
Wholesale inventories rose 0.6% in October, with an unexpected -1.2% drop in sales, leaving a stock-to-sales ratio at a troubling 1.22.
You’d think, by now, governments would have figured out how poor they are at picking winners and losers.
Of course, they haven’t as witnessed by the witless California government continuing to push solar energy.
California’s Riverside County is producing more solar energy than anywhere in the U.S., with close to a dozen solar plants either online or proposed.
“On the face of it, it looks like a good deal. They talk about all these huge jobs and long-term benefits to the county. The truth is, it’s a very short term,” Riverside County Supervisor John Benoit said. “We’re going to be carrying the burden of having these types of facilities for decades to come, and because of the incentives that have been provided by federal and state government, there’s virtually nothing left for the county government or the local people to get benefit back after the small number of construction jobs are gone.”
Unlike Riverside’s 500 megawatt natural gas-fired facility, which pays $6 million a year in property taxes, a solar plant being built a few miles away will pay next to nothing, just $96,000. When Riverside balked at its own upfront infrastructure costs and tried to impose an impact fee, the industry sued.
So Riverside has hundreds of square miles carpeted with solar panels and no jobs to speak of and barely any revenue to show for it.
But surely, as promised, this has led to cheap, reliable and renewable energy, right?
Yeah, not so much:
Solar also promised to be a cheap source of power, fueled by the sun. What the industry didn’t say is the technology only converts a fraction of the sun’s energy, and the intermittent nature of sunshine does not produce the power promised.
And Stanford economist Frank Wolak, a California energy expert, said solar could boost consumer energy bills up to 50 percent, a finding similar to the state Public Utilities Commission. Solar power from two recently approved plants range from $100 to $200 per megawatt hour, at least 8 times higher than the $16 consumers pay for natural gas.
“It’s probably 50 percent more (than coal or natural gas) today,” Benoit said. “Five years ago, it was probably a 100 or 150 percent more costly to generate a kilowatt with solar. The cost of these panels has come down dramatically. But still, getting back to the old equation, do you want to spend a little bit more to be green? And the legislature and the governor in California have said clearly, we’re going to do that.”
But at what cost to consumers and to what benefit to much of anything except government’s chosen crony, er, beneficiary? Instead of allowing markets – i.e. consumers and producers – to decide on the mix, government has unilaterally taken that away from them and made the decision itself.
After all, the autocrat has decided:
Answering critics at a solar ribbon-cutting earlier this year, Gov. Jerry Brown laid down the gauntlet, affirming his commitment to solar energy and saying he would “crush” opponents of solar.
“There are going to be screw-ups. There are going to be bankruptcies. There’ll be indictments and there’ll be deaths. But we’re going to keep going – and nothing’s going to stop me,” Brown said.
I can believe that. Somebody needs to tell Brown the whole effort is a ‘screw-up’.
But since government is involved, the crony gets the treatment other industries don’t:
“There’s been a policy to fast-track and install these utility-scale renewable energy installations that are on the scale of five to 10,000 acres each,” said April Sall of the Wildlands Conservancy. “We’ve seen thousands of acres of the desert bladed and now undergoing utility-style construction to basically convert that from pristine habitat that included those sensitive plants and animals, to becoming potentially a dust bowl.”
Now imagine if these actions and plans were those of “Big Oil”. Yup, you don’t have to imagine long, do you? But in this case?
The two largest green groups in the U.S., the Sierra Club and Natural Resources Defense Council, have remained silent on the impact of Big Solar on land use and endangered species, which is not so with gas, oil or coal. Sall and other local environmental groups say the Washington-based organizations see climate change as a bigger threat and therefore won’t get involved.
Shoddy “science” is their excuse and they’re sticking with it.
And that’s your update on the imperial blue state model today. And yes, it’s going down the tubes which is why this cartoon applies to more than small business in the state:
Well, if you’re wondering, just take a gander at what is happening in Michigan.
The Democrats will be the first to tell you “elections have consequences”, usually followed by ” … and Obama won”. Well the same can be said of state level elections and in the case of MI, the GOP won. In fact, they won everything at the state level, enough to pass “right to work” legislation which essentially says one doesn’t have to join a union to work.
The unions, of course, pitched a tantrum.
And, now that he’s solved all the nation’s problems, balanced the budget, reduced the deficit and has long-term debt on a downward trend, President Obama has weighed in on this situation:
“President Obama has long opposed so-called ‘right to work’ laws and he continues to oppose them now,” said White House spokesman Matt Lehrich. “The president believes our economy is stronger when workers get good wages and good benefits, and he opposes attempts to roll back their rights. Michigan — and its workers’ role in the revival of the US automobile industry -– is a prime example of how unions have helped build a strong middle class and a strong American economy.”
The union’s “role in the revival of the US automobile industry”?!
Is he kidding? It is the unions which essentially helped make two of the big three financially unsustainable. Remember, GM and Chrysler went bankrupt and had to be bailed out. And the federal government screwed with the bankruptcy proceedings and handed a large portion of GM to the union while stiffing bond holders.
That’s the “prime example” in reality.
And the president’s “belief” that our “economy is stronger when workers get good wages and good benefits” doesn’t mean those things only happen with unions. Apparently, in right-to-work states, unions continue to lose out when they try to organize because workers are getting both good wage and benefits and seem happy with their situation. What they don’t see is a benefit to unionizing – i.e. paying dues to a union which will be unlikely to do any better.
Finally, how is allowing someone to choose whether or not to join a union “rolling back rights?”
I knew Obama wouldn’t be able to stay out of state level politics, given his base and their demands. The Democrats have become the party of unions. Private unions are dying off and they’re getting pretty desperate. First WI and now MI? My goodness, can NY and IL be far behind? How dare the GOP give workers the right to chose not to join a union as a prerequisite to working. For a party that brags about being the party of choice, other than one particular choice they champion, the Democrats are pretty much opposed to all others.
Unions are the buggy whip of the latest evolution in labor. Improved communications, a global economy and the realization that businesses have options as well have made unions an anachronism. Reality and economics say labor is a commodity – a factor of production. What labor is increasingly realizing is that the jobs they have can be exported or, given today’s technology, mechanized when costs exceed their worth. Wages are leveling out and in today’s economy, the demands that were once commonly made by unions are no longer economically feasible. But additionally, bad companies can no longer exist in the dark of a communications vacuum and pay and treat their workers poorly without there being repercussions. Competition drives wages and benefits as well or better than unions ever did.
It’s a different world. Unions are 19th century holdovers.
Time they shuffled off into Obsolete-land where they belong.
Peter Foster at the Financial Post sums up the Doha “climate change” conference best:
The UN climate conferences have descended into ritual farce, as naked money-grabbing on behalf of poor countries contrasts with finagling impossible solutions to what is likely a much-exaggerated problem. One leading question is how dubious science, shoddy economics and tried-and-failed socialist policies have come to dominate the democratic process in so many countries for so long. The answer appears to be the skill with which a radical minority — centred in and promoted by the UN, and funded by national governments and, even more bizarrely, corporations — has skilfully manipulated the political process at every level.
A fairly succinct and accurate summary of the ongoing effort.
Walter Russel Mead also has a take on it with which I agree:
Climate negotiators at the most recent conference on global warming were unable to reduce expectations fast enough to match the collapse of their agenda. The only real winners here were the bureaucrats in the diplomacy industry for whom endless rounds of carbon spewing conferences with no agreement year after year mean jobs, jobs, jobs. The inexorable decline of the climate movement from its Pickett’s Charge at the Copenhagen summit continues. The global green lobby is more flummoxed than ever. These people and these methods couldn’t make a ham sandwich, much less save Planet Earth.
And, while I agree that is so, the UN, these conferences, 3rd world nations and the so-called “green agenda” continue attempts to exert control over advanced countries and extort a chunk of their GDP as “compensation” for what no one is sure. There desires in this regard have never been more obvious than in their questionable opposition to the boom in natural gas (something, one could argue, that would be helpful to developing 3rd world countries while satisfying the “green agenda”).
It’s green, it’s cheap and it’s plentiful! So why are opponents of shale gas making such a fuss? If it were not so serious there would be something ludicrous about the reaction of the green lobby to the discovery of big shale gas reserves in this country. Here we are in the fifth year of a downturn. We have pensioners battling fuel poverty. We have energy firms jacking up their prices. We have real worries about security of energy supply – a new building like the Shard needs four times as much juice as the entire town of Colchester. In their mad denunciations of fracking, the Greens and the eco-warriors betray the mindset of people who cannot bear a piece of unadulterated good news.
Obviously, it would be even harder to sell their extortion attempts if advanced countries are able to develop a source of energy that is indeed “green, cheap and plentiful”. And, apparently, even they realize they’re not going to get too far attempting to demonize natural gas per se. So they’ve instead focused on the process used to extract it (hydraulic fracturing – “fracking”) and are in the usual mode of demonizing it instead. That, despite the fact that the process has been used in the US, at least, since 1948 on over 1,000,000 wells without negative results to ground water (the supposed threat that fracking poses). But as we’ve all learned, facts are not the currency this group uses.
The point? This circus will continue for the foreseeable future because the majority of the UN sees an extortion opportunity that is just too good to pass up. Their initial success in scaring the world with “shoddy science” continues to motivate their efforts. They haven’t quite accepted that it is failing.
Of course, real science has never really been a part of this process. All they needed was a veneer to successfully launch the project. Al Gore and “consensus” provided that. The assembled then declared the “science” to be “settled” (Science never attains consensus and is never “settled”). After that, the participants in this extortion attempt have simply stated that further review is essentially unneeded. The argument is over, just STFU and accept it. Meanwhile that “science” continues to come apart at the seams as real data is collected and demonstrates the underlying climate “science’s” shortcomings and outright falsehoods.
Natural gas provides a new alarming problem for these folks. When it was thought to be a fairly scarce resource, enviros embraced it (the Sierra Club touted it for years before turning against it when it became plentiful and cheap). Now that it threatens to undermine their entire culture of extortion and control, they’re rabidly against it – or at least what it requires to extract it.
One can only hope that the failure in Doha signals the end game of this farce, but that’s doubtful. No dissenting word is allowed. As Lord Monckton learned when he tried to bring up the fact that there has been no warming for the past 16 years and was summarily ejected for doing so. This is no longer about science. This is no longer about an imminent threat. It’s about extortion, plain and simple. And anyone with the least bit of honesty will recognize that and should join in the call to end this farce for good.
Ignoring the fact that there’s been no rise in global temperatures for 16 years, 3rd world countries at the UN’s Doha climate conference are proceeding with their plan to make richer countries pay for their perceived (perhaps “mythical” is a better word?) damages wrought by “climate change”.
Basing their claim on the discredited “science” generated by nothing more than inaccurate climate models, they’ve decided what was promised previously just isn’t enough:
There has been a historic shift in the UN climate talks in Qatar, with the prospect of rich nations having to compensate poor nations for losses due to climate change.
The US has fiercely opposed the measure – it says the cost could be unlimited.
But after angry tussles throughout the night the principle of Loss and Damage is now in the final negotiating text.
Why is it that these countries think that what was previously promised ($100 billion by 2020 in Copenhagen) isn’t sufficient? Because President Obama just asked Congress for $60 billion for hurricane Sandy relief. Obviously, using that as a baseline, these countries want more.
And you have to love this attitude:
Saleem ul-Huq, from the think-tank IIED, told the BBC: “This is a watershed in the talks. There is no turning back from this. It will be better for the US to realise that the principle of compensation is inevitable – and negotiate a limit on Loss and Damage rather than leave the liability unlimited.
“The principle of compensation is inevitable?” Really? For what, given there’s been no evidence of damage?
It is a point of principle that is at stake here for developing countries. In the end it’s questionable how much extra money a Loss and Damage Mechanism might bring.
Already poor nations are bitter that rich nations, particularly the US are dragging their feet over a promise made at the failed Copenhagen climate summit to mobilise $100bn by 2020 to help poor nations get clean energy and adapt to climate change.
A “point of principle” my rear end. It’s UN sponsored extortion. It is based on faulty science and given hope by weak willed politicans, all supervised by the bandits in the UN.
We don’t own them anything.
Not. One. Red. Cent.
I find this story to be fairly astonishing.
We’ve talked about immigration policy before and we’ve certainly noted the Federal government’s outright refusal to enforce our nation’s laws concerning some illegal immigrants. But what about those legally here and in violation of the law or deemed a threat?
Wasn’t that supposed to be the breaking point, the point at which this administration would step in and take action?
Back on Sunday I broke the news here at PJ Media of the arrest of Abdullatif Aldosary in connection with the bombing of a Social Security Administration office in Casa Grande, Arizona, last Friday morning. I noted that while the bombing and Aldosary’s arrest had received local news coverage, there was a virtual blackout by the national media on the Iraqi refugee’s identity.
Yesterday I reported on details provided to the federal court on Monday during Aldosary’s initial court hearing, which included information on what was found when the FBI conducted a search of his Coolidge, Arizona, home last Friday night. Among the items recovered was a bomb-making manual that had been hidden behind a photograph on the wall. Also discovered were an AK-47 and a 9mm Ruger handgun, along with more than a thousand rounds of ammunition. Kerry Picket at the Washington Times also reported that they recovered several gallons of chemicals typically used in bomb making.
When authorities checked Aldosary’s bank statements, they found he had more than $20,000 despite the fact that he was a convicted felon, only worked as a day laborer, and had no visible means of supporting himself sufficient to warrant having that kind of balance.
Sounds like a terrorist doesn’t he?
Well, that’s where the “bombshell” comes in:
But a bombshell report came out today based on information obtained by Rep. Paul Gosar (R-AZ), who had received a request from Aldosary in November 2011 for assistance in obtaining a “green card.”
According to today’s news report, the Department of Homeland Security responded to Gosar’s request on behalf of Aldosary last year by saying that he was ineligible for a change in status because of “terrorism-related grounds of inadmissibility”.
So DHS knew about this guy last year and yet he was still in this country?
Yes he was and last Friday he attempted to blow up a Social Security office.
As you might imagine Gosar wants to know why:
Gosar said DHS responded by saying Aldosary was not eligible for a permanent change to citizenship “pursuant to the terrorism-related grounds of inadmissibility, and that “individuals who engage in terrorism-related activity … are barred from receiving various immigration benefits.”
DHS did not elaborate on what the activity was. Gosar wrote that to be barred from permanent status, under federal law the immigrant must have engaged in activity “indicating an intention to cause death or serious bodily injury, a terrorist activity; to prepare or plan a terrorist activity; to gather information on potential targets for terrorist activity” or belong to “a terrorist organization” among other actions.
In light of the Casa Grande bombing, Gosar questioned why Aldosary was not detained and processed for deportation in November 2011, after it was determined he had engaged in terrorism-related activity.
The bombing happened about a block away from Gosar’s office.
“But for the grace of God, no one was injured in the bombing,” Gosar wrote.
Gosar also asked what efforts were made to track and monitor “a known terrorist.”
Of course this is all happening after the freaking guy bombed a building!
Where was DHS in all of this? Why was this guy still wandering around? Why hadn’t he been immediately deported?
And why in the hell isn’t this all over the news?
The following US economic statistics were announced today:
The Monster Employment index rose 2 points to 158 in November.
The Reuter’s/University of Michigan’s consumer sentiment index a very steep 8.2 points to 74.5.
Nonfarm payroll employment in November increased by a lackluster 146,000 new jobs. Average hourly earnings increased by 0.2%. The average workweek was unchanged at 34.4 hours. Turning to the household survey, the unemployment rate fell to 7.7%, as 350,000 workers left the labor force, bringing the labor force participation rate back down to 63.6. At the historical rate of labor participation, the unemployment rate would actually have jumped by 0.2% to 11.4%. In all, the labor market remains moribund, as job creation remains weak and labor force participation remains at historic lows.
Well, here’s a use of 911 I didn’t foresee:
A suspected burglar called 911 after the owner of the home he broke into caught and held him at gunpoint.
The suspect, Christopher Moore, placed the emergency call in Springtown, Texas, during the botched burglary attempt early Tuesday after James Gerow, the homeowner, and Gerow’s son pointed guns at him as he sat in his pickup truck parked in the driveway.
“I’m out in the country somewhere,” Moore told the 911 operator during the 10-minute call. “Some guy’s got a gun on me.”
Gerow’s wife, Lindy, placed a concurrent call to 911 that confirmed Moore’s account.
“You better come quick,” she said, “or my husband’s going to shoot him.”
“If he gets out of the truck, shoot him in the legs,” James Gerow told his son, according to the Dallas Morning News Crime Blog. “You ain’t gotta kill him—just shoot him in the legs.”
When police arrived, both Moore and Lindy Gerow were still talking to 911 dispatchers.
According to CBS’ Dallas-Fort Worth affiliate, Moore was arrested and charged with burglary. He’s currently being held on a $35,000 bond.
So, uh, Bob Costas, what’s your take on this? These “bitter clingers” just protected themselves and their property and brought a law breaker to justice. All with guns. And not a person was killed … or even shot.
The direction the country is taking bothers me. Increasingly, I see little hope for a bright prosperous future. Frankly, things cannot continue going in the direction they’re heading without a disastrous result.
Mark Steyn wrote earlier this week:
Generally speaking, functioning societies make good-faith efforts to raise what they spend, subject to fluctuations in economic fortune: Government spending in Australia is 33.1 percent of GDP, and tax revenues are 27.1 percent. Likewise, government spending in Norway is 46.4 percent, and revenues are 41 percent – a shortfall but in the ballpark. Government spending in the United States is 42.2 percent, but revenues are 24 percent – the widest spending/taxing gulf in any major economy.
This is unsupportable, by any measure, and should be seen to be so by anyone with common sense, irrespective of political party, but apparently is not. And it’s important to recognize that the reason revenues are at a historically high 24% of GDP—the historical average is around 18%—is that GDP growth for the last 4 years has been atrociously bad, and well below the 3% historical trend rate of growth.
In a rational world, we would make a decision to settle on a continuum somewhere between cutting government spending to 24% of GDP, and raising taxes to 42.2% of GDP, which would necessarily imply massive tax increases on the middle and, yes, even the lower class.
At the moment, however, it is impossible to cut spending to 24% of GDP. Not just politically impossible, though that appears to be true also, but I mean impossible impossible. The reason it is impossible is that 24% of current GDP will not cover the cost of mandatory entitlement spending and service on the national debt. More than 62% of government spending is mandatory spending on essentially social security and Medicare. Another 6% is interest on the national debt, and it’s only that low because 1) the Fed has been buying massive amounts of US treasury bonds, and 2) interest rates are historically low.
In other words, 68% of the federal budget is taken up by entitlements and debt service, alone. We could eliminate the entirety of the rest of the federal government and, at current rates of taxation, would still run a deficit.
At the current rate of spending, we can expect to add over $12 trillion dollars in debt over the next decade. To combat this, the president has requested an additional 1.6 trillion in new revenue, which he expects to gain by increasing tax rates on only the upper class. Even assuming, arguendo, that such a taxation plan would actually result in that much additional revenue—which it likely would not—we would still add an additional $10 trillion in debt.
And that, of course, assumes interest rates would not rise from their current low levels. A rise to the historical rates of interest would increase debt service costs from $250 billion per year to $650 billion per year, or approximately 15% of the budget.
Neither Congress nor the President are proposing a serious plan to balance the budget, which would require a politically impossible mix of massive budget/entitlement cuts, and/or massive tax increases on the middle and lower classes.
Absent such a plan, we will inevitably default on our debt, or hyperinflate our way out of it, both of which are merely two sides of the same coin. In either case, the dollar will lose its status as the world’s reserve currency, and the life savings of every single person in the country—except, perhaps, those embodied in some classes of hard asset—will be rendered worthless. There will be massive unemployment, and a high possibility of civil strife. Imported goods will essentially be unobtainable, and I’m not just talking about BMWs and Land Rovers, but everyday things we never even think about, like fresh fruit from Chile in the winter, or clothes from Singapore and Taiwan at any time.
The least damaging course of action would be a massive reduction in government spending. A more damaging course would be a massive increase in taxation. The most damaging course would be to do nothing but nibble at the edges of spending and taxation until we default, either formally, or de facto through hyperinflation. So far, we are set on the third course.
We are set on a path to completely destroy the currency and economic life of the Republic, and we will inevitably do so without massive tax increases, massive spending cuts, or some mixture of the two.
Meanwhile, in Washington, DC, the Fiscal Cliff negotiations—by which I mean "farce"—continue. Personally, I’m a charter member of the Let It Burn club. The Democrats have set up a narrative in which, no matter what happens, Republicans will get the blame. And yet, 18 months ago, what we’re now calling the Fiscal Cliff was unilaterally hailed as a wise, bipartisan, and far-seeing compromise that would set the country on the road to financial rectitude. And quite frankly, the president is giving every indication that he wants to go over the Fiscal Cliff, and that he can weather the political and economic fallout from it.
OK. Then let’s test that theory.
This is not a risk-free strategy. As Ace of Spades points out:
The Walk Away/Let It Burn option is growing on people. One cautionary note, though: This will provoke a serious constitutional crisis and may undo the Republic. So a soft Let it Burn could turn into a genuine collapse of the Republic.
Obama is a tyrant. If Republicans do not lift the debt ceiling, it is perfectly obvious what he will do, as he’s argued for it before: Like Putin, he will begin unilaterally asserting power he doesn’t have.
And what will be the recourse? Court, I suppose. Impeachment, sure, but Democrats will block conviction. So whether or not the President can suddenly assert sweeping power over the purse — sweeping aside the last real check on his power granted to the House of Representatives — will depend on the vote of Justice Go Along to Get Along Roberts.
President Obama has already asked for it. It’s that one exception I mentioned before: He is asking for unilateral power to raise the debt ceiling and no president should ever have that power.
Our constitution is clear that the money bills must originate in the house. Equally clear is the principle of Congressional supremacy, in that Congress may pass laws even over a presidential veto. The debt ceiling is clearly a Congressional, not a presidential prerogative.
Congress, of course, has already amended the Constitution’s strictures in practice. For instance, the Senate takes House bills, say, for building a dam, and strips the original language, then loads it up with budgetary items. The House accepts them in conference. Additionally, we have operated without a federal budget—though one is required annually by law—since 2009. This is a…constitutional novelty.
But giving unilateral budgetary power to the president goes far beyond novelty. In my view, granting this power to any president will mark the end of the Republic, just as surely as the creation of the First Triumvirate marked the death knell of the Roman Republic.
The American people elected President Obama. It is only right that they should reap the full measure of the consequences of that decision. Ace is right. Going over the Fiscal Cliff may undo the Republic. But if that is true, then I’m entirely unconvinced that the Republic should be saved.