Questions and Observations

Free Markets, Free People

America’s problem of “contempt for the law”

We’ve recently seen how multiple jurisdictions openly ignoring the law resulted in circumstances that led in the death of Kathryn Steinle at Pier 14 in San Francisco last week. Why? Because, ideologically, they’re opposed to the law as it stands and are refusing to consider its validity, much less enforce it. The results are inevitable. Steinle’s death is just a symptom of a much more wide-spread threat to our nation. The left’s contempt for laws that don’t fit their ideology. Victor Davis Hanson says:

Ultimately, no nation can continue to thrive if its government refuses to enforce its own laws. Liberal “sanctuary cities” such as San Francisco choose to ignore immigration laws. Imagine the outcry if a town in Utah or Montana arbitrarily declared that federal affirmative action or gay marriage laws were null and void within its municipal borders.

Once an immigrant has successfully broken the law by entering and residing in the U.S. illegally, there is little incentive for him to obey other laws. Increasing percentages of unnaturalized immigrants are not showing up for their immigration hearings — and those percentages are higher still for foreign nationals who have been charged with crimes.

The general public wonders why some are selectively exempt from following the law, but others are not. If federal immigration law does not apply to foreign nationals, why should building codes, zoning laws or traffic statutes apply to U.S. citizens?

And that’s the threat. That’s the danger. If our political leadership can ignore the laws at will or only enforce them when the whim strikes them or it is to their political advantage to do so, why should the ordinary citizen follow laws he or she doesn’t like?

If you can’t count on government enforcing the laws on its books, why should one obey those it disagrees with? As Hansen points out, there’s little incentive to do so. And, eventually, you end up with … Greece. Or Mexico. Or any of a number of third world countries who seem to be on the verge of collapse.

There is a process for changing laws one doesn’t like or think need improvement. The fact that the process takes time, leadership and energy doesn’t mean one can arbitrarily ignore laws that aren’t politically useful at the time. But that’s precisely what is happening with immigration laws in this country.

Then there’s the lack of accountability that runs rampant within government circles. Hillary Clinton knew perfectly well that setting up a private email server as Secretary of State was ethically wrong if not illegal. Yet she really had no fear of being held accountable. She merely shrugs the controversy away and cruises along as a potential presidential candidate. She is indicative of an outlaw government, that, we’re finding out, saw the IRS, FBI and other agencies actively meet with an eye to prosecuting political enemies. During the time of this investigation, the IRS has consistently obstructed the investigation, stonewalled and refused cooperation. Has anyone been yet held accountable? Will anyone? If I were a betting man, I’d lay long odds on it ever happening.

Hanson concludes by saying, “Civilizations unwind insidiously not with a loud, explosive bang, but with a lawless whimper.” He’s precisely right. And, given the propensity of this administration to enforce laws by whim or not at all, that’s exactly where we’re headed.

~McQ

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Economic Statistics for 8 Jul 15

The MBA reports that mortgage applications rose 4.6% last week, with purchases up 7.0% and refis up 3.0%.

Consumer credit rose by $16.1 billion in May, with revolving credit up a moderate $1.6 billion, following strong April and March gains.

The FOMC minutes from the last meeting indicates some members are edging towards rate hikes, but most want to see data improve.


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Almost half of all Federal criminal charges are made in 5 southern border districts, but we don’t have a border security or illegal immigration problem

41.7% of all Federal criminal charges come from 5 districts that are on the US southern border.  In one district, West Texas, the US attorney filed 5,832 cases.  That’s more than all the cases filed for the entire length of the US norther border (5,257).  The southern district of Texas ranked 2nd, followed by Arizona, New Mexico and Southern California.

And that’s not all:

“In addition to criminal cases brought before United States district judges, the United States Attorneys also handle a considerable criminal caseload before United States magistrate judges,” explained the U.S. attorneys’ statistical report for fiscal 2013. “The utilization of magistrate judges varies from district to district in response to local conditions and changing caseloads.”

“Magistrate judges are authorized by statute to perform a variety of duties as assigned by the United States district judges, including presiding over misdemeanor trials, conducting preliminary hearings, and entering rulings or recommended dispositions on pretrial motions,” said the report.

In fiscal 2014, according to the Table 2B, 67,401 criminal defendants were determined to be guilty in magistrate proceedings. Of those, 63,253 — or 93.8 percent — were in the five districts along the U.S.-Mexico border.

And yet this administration has, for its entire tenure, ignored the crisis on the border and even encouraged illegal immigrants to enter the country. While some may buy into the argument that the fault lies with Congress (and, more specifically the GOP) for not passing immigration reform legislation, the problem at the border is a law enforcement problem.

Law enforcement is not a Congressional duty, but instead, the job of the Executive branch.  However, despite their being laws on the books concerning illegal immigration, this administration refuses to enforce them and has, in fact, has defied them.  Compound that with blue cities offering sanctuary to illegals (again, in defiance of existing law) and you have a situation out of control.

While it is certainly true that some form of immigration reform needs to be legislated, that doesn’t excuse the lax or non-existent enforcement of existing laws by the administration.  It is clear to most that this crime wave that has engulfed the southern border is squarely the responsibility of the Obama administration, and no amount of attempted blame shifting will change that.

~McQ

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Economic Statistics for 07 Jul 15

The US trade deficit rose $1 billion in May to $41.9 billion, with a goods deficit of $61.5 billion, and a services surplus of $19.6 billion.

The Labor Department’s JOLTS survey shows job openings rose 0.5% in May to a record 5.363 million.

Redbook reports that last week’s retail sales rose to a still-sluggish 2.0% on a year-ago basis, from the previous week’s 1.7%.

The Gallup Economic Confidence Index fell for the 5th straight month, down -1 point to -8 in June, the lowest reading since November, 2014.


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Culture War 4.0 – the “overreach” cycle

Benjamin Domenech and Robert Tracinski have an intriguing article up at The Federalist in which they opine the left in general, and Social Justice Warriors in particular, are setting up a huge cultural backlash by their triumphalism and overreach following the SCOTUS finding in favor of gay marriage.  They site the “iron law of the cultures wars” as their premise.

The iron law of the culture wars is that the public hates overreach—and each side will always overreach.

Domenech and Tracinski take us through the history of our recent culture wars.  1.0 was the ’60s and 70’s “counterculture”.

[C]onsisted of a combination of two things: a promise of “liberation” from restrictions that seemed overly Puritanical and outmoded, combined with an ideological goal of the destruction of existing social institutions such as church, family, and capitalism.

The first aim had a broad appeal, promising freedom from blue-nosed moral scolds and a liberating revolution in human behavior. But the second was a more aggressive and provocative attack on institutions that had endured since before the country existed. By the late 1970s, the effects of the Counterculture were hitting with full force, and people didn’t like what they saw.

Which led to the backlash of 2.0.  The birth of the “Religious Right” which became the “Moral Majority” and a move back toward more traditional values.

Reagan Democrats partnered with Republicans to pursue a law-and-order agenda. Overwhelming bipartisan majorities passed religious freedom laws, which Bill Clinton dutifully signed.

Then came the overreach:

Political wives started a crusade against violent and sexually explicit television, movies, and popular music.

The desire to “ban” what isn’t “acceptable” by the culture driving the train at the moment seems overwhelming, regardless of the side.

On to 3.0 which is a bit more complex.  Clinton was impeached, which much of the country saw as overreach (it was none of the business of politicians, they figured), especially in light of those condemning him (remember Jimmy Swaggart and the Bakkers?).  But again, what it primarily did was put the “counterculture” kids back on the offensive and the more traditional side, guilty of the overreach, on the defensive again:

The Counterculture kids from the 1960s and 70s were now ensconced in positions of power. They had taken over the universities in the 1990s and began to assert a campus culture of conformity on issues involving religion and sex. They had established themselves as the leaders in entertainment and popular culture. The nostalgic and implicitly conservative pop culture of the 1980s and 1990s, where villains were Nazis, Communists, feckless bureaucrats, and irresponsible reporters—gave way to influential depictions designed to press a change in social norms. 1998 brought Bill Clinton’s impeachment, but it also brought “Will & Grace” and a push for greater tolerance and acceptance of homosexuality. The crusade for gay marriage—a key change in goals for the gay-rights movement—threw religious conservatives into a defensive posture, causing them to fight to maintain their mores as public policy via gay-marriage bans.

Boom – here we are, and we’ve entered 4.0 and the beginnings of overreach by the left:

Today we live in the early stages of that triumph, and as a small number of public intellectuals and media commentators predicted, it is a bloody triumph indeed. Culture War 4.0 brings the Counterculture full circle: now they have become the blue-nosed, Puritanical establishment. Once they began to achieve their goals and saw the culture moving their way, they moved from making a plea for tolerance and freedom to demanding persecution of anyone who dissents against the new orthodoxy in even the smallest way.

Whichever side believes it is winning will tend to overreach, pushing too far, too fast, and alienating the public.

In just the past two years, the Counterculture’s neo-Puritanical reign has made things political that were never thought to be: Shirtstorms and Gamergate, Chik-fil-A and Brandon Eich, Indiana and Sad Puppies, and don’t you dare say Caitlyn Jenner isn’t a hero.

Instead of being content and modest in their victory for gay rights, the left has chosen instead to be aggressive and intolerant.  Overreach begins:

Within hours of the Supreme Court’s resolution of the battle over same-sex marriage—the triumph of a generation of gay-rights activists—some were already calling for further steps to take tax exemptions away from churches, use anti-discrimination laws to target religious non-profits, and crack down on religious schools’ access to voucher programs. We learned media entities would no longer publish the views of those opposed to gay marriage or treat it as an issue with two sides, and the American Civil Liberties Union announced it would no longer support bipartisan religious-freedom measures it once backed wholeheartedly. A reality TV star pushed the transgender rights movement into the center of the national dialogue even as Barack Obama’s administration used its interpretation of Title IX to push its genderless bathroom policies into public schools. And we learned that pulling Confederate merchandise off the shelves isn’t enough to mitigate the racism of the past—we must bring down statues and street signs, too, destroying reminders of history now deemed inconvenient and unsafe.

On college campuses and in the workplace, across mass media and social media, for American celebrities and private citizens, every comment, act, or joke can make you the next target for a ritual of daily attack by outraged Twitter mobs. It is now an unavoidable fact of life that giving money to the wrong cause, making a “clumsy attempt at humor,” or taking the wrong side on a celebrity, religious debate, or magazine cover can lead to threats of violent death, end your career in an instant, or make you the most hated person in America for 15 minutes—longer if you bungle the apology.

American society is, for the most part, an incredibly tolerant society.  However, there is a point beyond which it won’t be pushed.  It reacts, sometimes subtly and sometimes more forcefully.  It is that innate tolerance that drives this reaction.  Tolerance cannot abide the intolerance of those who would impose their cultural values on others by force – i.e. the force of law, bans, infringement on rights, etc.  There are lines drawn by society at large and it doesn’t care what side the culture warriors are on, it refuses to let them cross those lines.

We’re again seeing a coalition forming in opposition to the current “victors” of the culture wars, interestingly including many on the left.  We’re also beginning to see the SJWs and their like begin to “eat their own” as their rigid orthodoxy is applied to their own kind.  It was inevitable and it is somewhat humorous to watch.  But the bottom line is they’ve overreached and are now beginning to reap the backlash they have sown.

Frankly, that is long overdue.  As Domenech and Traciski conclude:

This is the hopeful side of the culture wars—a call for engagement, not retreat. Religious believers weighing the option of withdrawing from a culture increasingly hostile to their values should redouble their efforts to cultivate their ideas within active subcultures that influence the nation and the next generation of Americans. Those who share a commitment to the freedom to think, speak, associate, publish, and express their beliefs may not have the American Civil Liberties Union in our corner any more—but that just means that we get to take up the noble cause, and the moral authority, they have abandoned.

Yes, this can be a dangerous time to be active in the culture. But it’s very hard to make speech codes, safe spaces, and other anti-thoughtcrime measures work in the long term. Sometimes all it takes for the whole apparatus to come crashing down is a handful of people brave enough to speak their minds without fear.

~McQ

 

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Economic Statistics for 06 Jul 15

The ISM Non-Manufacturing Index rose 0.3 points in June to 56.0.

The Gallup US Consumer Spending Measure reports that Americans’ daily self-reports of spending fell $-1 to $90 in June.

The PMI Services Index declined by -2 points to 54.8 in June.

The Fed’s Labor Market Conditions Index fell to a subdued 0.8 in June, with May’s reading revised down to 0.9.


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The power of the market, proven again …

We were told that while oil prices were high, shale oil could be produced at enough of a profit to drill, but to expensive to continue if the prices dropped.

But efficiency and technical innovation have overcome that bit of conventional wisdom as Shale Energy Insider reports:

US shale companies have increased the number of rigs in the field for the first time in nearly seven months when oil prices were trading around $70 per barrel, compared to under $60 per barrel in the current market.

The number of rigs rose in almost every main shale basin across the US according to data gathered by Baker Hughes.

Industry experts have suggested that as a result of last year’s price crash, shale exploration firms have cut their break even costs by anything up to $20 per barrel.

As much as anything else, the rise this week is a testament to break-evens coming down just over the course of this year,” said James Williams, president of energy consultancy WTRG Economics.

Shale is a lot more resilient than we thought it was, and it means we’re going to be able to keep producing shale oil at a lower cost than we thought we could.”

Adding rigs is the primary way to gauge whether or not it is economically profitable for energy companies to drill for and pump the oil  According to one analyst, the companies have been able to streamline their operations to the point their breakeven costs have dropped by about $20 a barrel.  That’s huge:

A Bloomberg analyst suggested that the cost of drilling services have fallen between 20% and 50% with break even prices in parts of the Permian and Eagle Ford below $40 per barrel.

And what does it mean overall?

Director of upstream research for Wood Mackenzie, Scott Mitchell forecast that producers could add up to 100 oil rigs by the end of the year.

Drilling rigs and fracking require a quite specific technical workforce, and there were a lot of layoffs as a result of the drop in activity.

We may find the supply of people becomes short very quickly if activity ramps up, leading to price increases again,” he predicted.

That’s right … jobs and less expensive gas.  Of course, most if not all of the shale oil drilling has taken place on non-federal land, and the market has been able to function without a great deal of governmental interference.  It is providing both employment and a very important commodity at less expensive prices.  Additionally, as it lowers its breakeven point, it buffers us against volume drops as the price of oil comes lower and other sources stop producing oil.  With the lower breakeven point, they’ll continue to pump past the point where they’d have quit previously because doing so is still profitable for them.  That helps ensure lower prices at the pump will be more common and more stable.

The market … a wonder we need to allow to work without interference much more often than we do.

~McQ

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As the Obama economy continues to tank and unions become more desperate, socialism seems more attractive

Well, sorta.  Union leadership apparently isn’t as comfortable with the Sanders brand of socialism as it is with the Clinton brand.  Richard Trumpka, President of the AFL-CIO, sent out a memo this week:

His message wasn’t anything new for the federation’s state leaders: They know that endorsement decisions belong to the national leadership. Still, it was unusual for Trumka to call them out in a memo. “I’m not sure I’ve ever seen one before like this,” said Jeff Johnson, the president of the AFL-CIO’s Washington state labor council.

Johnson agreed that it was important for the AFL-CIO to speak with a single voice. But “there’s a lot of anxiety out there in the labor movement,” he said, “and we’re desperately searching for a candidate that actually speaks to working-class values. The Elizabeth Warren/Bernie Sanders camp is very, very attractive to many of our members and to many of us as leaders, because they’re talking about the things that need to happen in this country.”

Things like making sure unions regain their pre-eminent and privileged spot they used to hold. Oh, and free stuff! And then there’s the pension mess … something a Sanders or Warren would likely be willing to help bail out so what’s going on in Chicago won’t go on later on a larger scale in more unions:

About 1,400 Chicago public school teachers and staff are expected to lose their jobs in order to finance a pension debt of $634 million, the city announced Wednesday.

The layoffs are part of an aggressive $200 million budget cut to help finance the pension payment, which is required of Chicago Public Schools by Illinois law. The rest of the pension payment is coming from heavy borrowing, as the district already has a massive $1.1 billion budget deficit.

Rahm Emanuel is pretty sure this is everyone else’s fault for not pitching in more.  Most people, other than union members and lefty politicians, know better:

Thousands of retired Illinois teachers receive a six-figure pension, and the typical teacher received more in pension payments than they personally paid in within 20 months of retirement. Most teachers retire at age 59 or younger, and the lifetime pension cost per teacher in the state is estimated to exceed $2 million. Not helping things for the state is an annual 3 percent cost of living adjustment that is fully guaranteed and totally untethered from actual inflation rates.

Or, as usual, an over-promised, underfunded benefit which the union and politicians now want to shift onto everyone else.  You see, they promised it, your job is to shut up and pay up.  The left only ever has one answer to this – higher taxes, fees, whatever, to fund their promises.  The fact that you weren’t consulted, nor did they at all care what you might think, when this nonsense was “negotiated” never weighs into the equation.

But they’re for the middle class – or so they claim.

It is going to be fun to watch the left this year as they try to reconcile the mess this country is in with what they demand.  As usual, the blame game will be in full effect as the left tries to point to everyone else as the fault even as it becomes more and more obvious, even to low information voters, that the blue model of just about everything is a failure.

But … racism!  Confederate flag!  Christian bakeries!

~McQ

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Economic Statistics for 2 July 15

The June Employment Situation was weaker than expected, with 223,000 net new jobs created. The unemployment rate fell sharply to 5.3%, mainly due to 432,000 people leaving the labor force. The household survey also indicates an overall decline in employment, with 56,000 fewer employed than in May. The labor force participation rate fell sharply by -0.3% to 62.6%, the lowest since October of 1977. Average hourly earnings were unchanged, as was the average work week, at 34.5 hours. the previous two months of job growth were also revised down by -60,000 new jobs.

Factory orders continued to fall in May, declining by -1.0%, far worse than expectations, which were for an already weak -0.3%.

Initial weekly jobless claims rose 10,000 to 281,000. The 4-week average rose 1,000 to 274,750. Continuing claims rose 15,000 to 2.264 million.

The Bloomberg Consumer Comfort Index rose 1.4 points to 44.0 in the latest week.

The Fed’s balance sheet fell $-15.9 billion last week, with total assets of $4.479 trillion. Reserve bank credit fell $19.3 billion.

The Fed reports that M2 money supply rose by $40.9 billion in the latest week.


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