Questions and Observations

Free Markets, Free People

Observations: The QandO Podcast for 03 Mar 13

This week, Michael and Dale discuss the sequester, Bob Woodward, and other things.

The direct link to the podcast can be found here.

Observations

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Keystone XL pipeline: How long will Obama delay this time

In the wake of sequestration, an opportunity to do the right thing for this country arises.  Unfortunately, it arises within an administration ideologically, and therefore adamantly, opposed to the idea of more fossil fuel:

Today the State Department released yet another positive environmental review for the northern portion of the Keystone XL pipeline project. The State Department approved the original pipeline route through Nebraska, which was supposedly less environmentally friendly, without any problems.

It is no surprise, then, that the State Department also seems to look favorably on this second iteration of the project in this fourth report—a report that should have been unnecessary. For the record, the pipeline also received a stamp of approval from Nebraskans.

Yes, that’s right, the Obama State Department has given the Keystone XL pipeline favorable reviews before.  It has been the executive, in this case, arbitrarily overruling the reports, inserting himself in a process he really has no business in and delaying the project.

IER senior VP Daniel Kish sums it up pretty well:

"This is, as President Obama says, ‘a teachable moment.’  It teaches us why our government’s policies continue to stifle job creation, investment and new energy sources and instead spends valuable time and increasingly limited resources studying things to death.

"While we welcome this report, we also note this is the 4th such environmental report on the Keystone XL pipeline proposal and since it is only a “draft” there will be at least 5 federal environmental studies before a decision is made by our government on the pipeline. The Canadian government made a decision in 6 months; our government has taken 54 months so far.  This is an abject lesson in why – when it comes to energy – no one wants to deal with our government.  This is evident also by continuing falling production on federal lands at the same time U.S. oil and gas production on non-federal lands makes historic gains.  It is time for our Leaders to make a decision….Canada’s did a long time ago.  Too many are hurting and too much is at stake for any more time or money to be wasted on trivial matters and long addressed and re-addressed chimeras advanced by opponents of any and all affordable sources energy."
54 months, numerous positive reports and counting.  Canada, meanwhile, has moved on, planning, while we dither, to sell it’s product to China.  Pipelines don’t have to run through other countries which make life difficult, they can run only in Canada, to their coast for shipment to the Far East.
 
What is Obama delaying?
The project will accommodate up to 830,000 barrels of oil per day, create some 179,000 jobs on American soil, and continue good trade relations with a close ally. The benefits won’t stop with the oil sector, though—the Keystone project will have a positive ripple effect even in areas without the pipeline that will provide goods and services to support the pipeline.
And where do we stand in the wake of this latest favorable report?
Before any real decision is made, there will be a 45-day comment period and some time for the State Department to consider the comments. Then the notably anti-carbon Secretary of State, John Kerry, will give his recommendation and the final decision will lie with the President.
Any feeling of confidence that this administration, no matter how late in the game, will make the right decision isn’t exactly surging in me right now.
 
More than anything, it’s just sad that the lives and livelihoods of so many Americans rest in the incompetent hands of Barack Obama and John Kerry.
 
~McQ
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Economic Statistics for 1 Mar 13

The following US economic statistics were announced today:

Personal income fell a steep -3.6% in January, while personal spending increased 0.2%. The PCE Price Index was unchanged, but was up 0.1% at the core level. On a year-over-year basis, income rose 2.2% while spending rose 3.2%, and PCE price index is up 1.2% overall, and 1.3% at the core level.

The PMI Manufacturing Index fell to 54.3 in February, from 55.8 last month, while the ISM Manufacturing Index rose 1.1 points to 54.2 in February.

The Reuter’s/University of Michigan’s consumer sentiment index rose 1.3 points to 77.6 in February.

Construction spending fell -2.1% in January, mainly on a -5.1% decline in private nonresidential outlays and a -4.3% drop in residential renovations.

Automakers are reporting their monthly sales today. GM: 7%. Ford: 9%. Chrysler: 4%. Sales are on track for 15.5 million sales this year.

~
Dale Franks
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Economic Statistics for 28 Feb 13

The following US economic statistics were announced today:

Real 4th quarter GDP was revised upwards to 0.1% annualized today, as the commerce Department’s first revision of the preliminary number.The GDP price index, an inflation measure, was revised to a 0.9% annualized rate.

Initial claims for unemployment fell 22,000 last week, to 344,000. The 4-week moving average fell 6,750 to 355,000, Continuing claims fell a sharp 91,000 to 3.155 million, a recovery low.

The Bloomberg Consumer Comfort Index rose 0.6 points to –32.8.

The Kansas City Fed Manufacturing Index fell to –10 from –2 last month as manufacturing activity in the district weakened.

The Chicago Purchasing Managers Index rose 1.2 points to a better-than-expected 56.8 in February.

~
Dale Franks
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The politics – and failure – of going “green”

“Going green” and “climate change” certainly are interlinked parts of a political agenda that have nothing to do with public opinion or will.  In fact:

Seventeen years of continuous surveys covering countries around the world show that people not only do not care about climate change today – understandably prioritising economic misery – they also did not care about climate change even back when times were good. The new information comes in a study released by the National Opinion Research Center at the University of Chicago – a large, long-standing and respected non-profit. The NORC spokespersons said that decades of climate alarmism have had basically no effect on people’s attitude around the world.

Part of that has to do with the fact that they’ve heard it all before.  Dire predictions about population growth that have come to naught.  Warnings about using up the earth’s resources which have proven to be false. Ozone holes. Melting icecaps. Yatta, yatta.

Climate change is just the latest among the apocalyptic prophesies and as the real science – not Al Gore “science” – comes out, fewer and fewer people are staying on the bandwagon.

Of course the promise was a “green economy” in which everyone would benefit.  How’s that worked out?  Well we know how it has worked out in Spain.  Germany is now finding out how mistaken they were to go in that direction.  In fact:

Energy, manufacturing and agriculture are playing a major role in the corridor states’ revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an “American Ruhr.” Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.

Interesting.  It is another reason why they’re also putting manufacturing plants in the US, mostly in Red States.  Skilled labor, right to work and cheap energy.  Obviously neither the “right to work” nor cheap energy are part of any Obama administration design.

And how is it going for green jobs more locally?  Well, the usual state can be consulted for an update on what such a move has wrought and demonstrate for all to see why “going green” is a foolish road to travel – at least in the near future.

It was supposed to be the next big thing. California built decades of broad-based prosperity from the Gold Rush, then Hollywood, then aerospace, and later Silicon Valley. At the turn of the century, “green jobs” were supposed to be the wave of the future. How is that going for them? According to the best numbers from the Bureau of Labor Statistics, fewer than 2,500 green jobs have been created in California since 2010.

Wow … bask in the success!  Government again demonstrates how poorly it does picking winners and losers.  Not that such failures ever hinder the central planners from using your dollars to try again.  What’s Einstein’s definition of insanity?

Meanwhile, the “success” of green energy has brought California to a point where it will have to fish or cut bait very soon:

California is weighing how to avoid a looming electricity crisis that could be brought on by its growing reliance on wind and solar power. At Tuesday’s meeting, experts cautioned that the state could begin seeing problems with reliability as soon as 2015.

Of course, had we heeded the experience of others, we likely wouldn’t see California going through this nonsense:

The former chancellor Lord Lawson has urged the Government to keep Britain’s coal-fired power stations working for as long as was needed to avoid any short-term power shortages. In a House of Lords debate on energy policy and electricity generation Lord Lawson also called on ministers to give “every encouragement  it can” to the quickest possible development of shale gas supplies. Lord Lawson urged energy and climate change minister Baroness Verma to assure the House that “if the need arises our coal-fired power stations will be kept open as long as is necessary, regardless of the European combustion plants directive”.

But our dauntless leaders never learn from others.  Just as with healthcare, they seem bound and determined to recreate the failure of others.

We have abundant fossile fuel resources.  They would generate both jobs and revenue for government.  Wind and solar, while great in theory, have in practice been shown to be woefully inadequate to our needs.  We even have communities wanting wind turbines taken down due to health concerns.

Yet our government and this administration continue to pursue an “energy policy” which is detrimental to the welfare of this nation despite a state that has done everything they want to do nationally and is a dismal failure because of it.  They are bound and determined to make all 50 states Californias.

~McQ

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Economic Statistics for 27 Feb 13

The following US economic statistics were announced today:

Durable goods orders plunged -5.2% in January due to a -19.8% drop in transportation orders. Ex-transportation, orders rose a strong 1.9%.

The Pending Home Sales Index rose 5.4% to 105.9 in January, solidly above expectations.

The MBA reports mortgage applications declined again last week, down -3.8%, with purchase apps falling -5.0% and re-fis down -3.0%.

~
Dale Franks
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How bad do you have to be NOT to be hired?

I wondered, when Barack Obama was re-elected, how bad you had to be to be fired.  Apparently worse than Obama, if that’s possible.

Now, with the confirmation of Chuck Hagel – another politician who has never run a large or complex organization and who was abysmal in his confirmation hearings – I have to wonder how bad you have to be NOT to be hired.

Apparently, worse than Chuck Hagel, if that’s possible:

Republicans siding with Democrats, the U.S. Senate voted Tuesday to confirm Chuck Hagel as President Obama’s secretary of defense, a nomination that drew strong opposition within the Republican former senator’s own party, with some troubled by past statements on Israel and Iran.

GOP Sens. Rand Paul (Ky.), Thad Cochran (Miss.), Mike Johanns, (Nebr.) and Richard Shelby (Ala.) supported Hagel in the 58-41 vote. No Democrats opposed him.

Again, let down by the GOP (the ‘good old boy club’ just couldn’t say no to a former member).

Anyone seeing a pattern here?

~McQ

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Economic Statistics for 26 Feb 13

The following US economic statistics were announced today:

New home sales in January rose 15.6% to an annualized 437,000 in January, though large seasonal factors may exaggerate the winter months. Monthly supply dipped to 4.9 months from 5.6 months in December, as supplies constrain sales.

The Conference Board’s consumer confidence index rose a steep 10 points in February, to a better than expected 69.6.

The S&P/Case-Shiller home price index rose a strong 0.9% in December, and is up 6.8% on a year-over-year basis. Similarly, the FHFA House Price Index rose 0.6% in December, and is up 5.8% on a year-over-year basis.

In weekly retail sales, Redbook is reporting a respectable 2.7% year-over-year sales growth. ICSC-Goldman Store Sales are up only 0/1% from last week, but up 2.9% from last year.

~
Dale Franks
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