Mar 06 2009

Israel down to the wire on Iranian nukes?

Category: economy,energy,Iran,Israel — harmonicminer @ 10:08 am

At the link, an op-ed in the Jerusalem Post detailing the reasons why Israel’s “window of opportunity” to take out or slow down Iran’s nuclear program is closing fast, making imminent action likely, especially given the results of the recent Israeli election. It’s a very persuasive case,  and includes this assertion:

American policymakers are now convinced that Iran, despite all protests and charades, is in a mad dash to create a deliverable nuclear weapon. The Obama administration has almost openly abandoned the assertions of the CIA’s much-questioned 2008 National Intelligence Estimate that concluded Iran was not pursuing nuclear weaponry for the simple reason that its atomic program and military programs were housed in separate buildings.

But what if Israel DOES strike Iran? Necessary as that may be, it spells very bad news for the USA.

Iran, of course, has repeatedly threatened to counter any such attack by closing the Strait of Hormuz, as well as launching missiles against the Ras Tanura Gulf oil terminal and bombarding the indispensable Saudi oil facility at Abqaiq which is responsible for some 65 percent of Saudi production. Any one of these military options, let alone all three, would immediately shut off 40% of all seaborne oil, 18% of global oil, and some 20% of America’s daily consumption.

America’s oil vulnerability has been back-burnered due to the economic crisis and the plunge in gasoline prices. However, the price of gasoline will not mitigate an interruption of oil flow. The price of oil does not impact its ability to flow through blocked or destroyed facilities. Indeed, an interruption would not restore prices to those of last summer – which Russian and Saudi oil officials say is needed – but probably zoom the pump cost to $20 per gallon.

American oil vulnerability in recent months has escalated precisely because of oil’s precipitous drop to $35 to $40 a barrel. At that price, America’s number one supplier, Canada, which supplies some 2 million out of 20 million barrels of oil a day, cannot afford to produce. Canadian oil sand petroleum is not viable below $70 a barrel. Much of Canada’s supply has already been cancelled or indefinitely postponed. America’s strategic petroleum reserve can only keep that country moving for approximately 57 days.

THE OBAMA ADMINISTRATION, like the Bush administration before it, has developed no plan or contingency legislation for an oil interruption, such as a surge in retrofitting America’s 250 million gas guzzling cars and trucks – each with a 10-year life – or a stimulus of the alternate fuel production needed to rapidly get off oil. Ironically, Iran has undertaken such a crash program converting some 20% of its gasoline fleet yearly to compressed natural gas (CNG) as a countermeasure to Western nuclear sanctions against the Teheran regime that could completely block the flow of gasoline to Iran. Iran has no refining capability.

The question of when and how this endgame will play out is not known by anyone. Israeli leaders wish to avoid military preemption at all costs if possible. But many feel the military moment must come; and when that moment does come, it will be swift, highly technologic and in the twinkling of an eye. But as one informed official quipped, “Those who know, don’t talk. Those who talk, don’t know.”

Because our leaders have dithered and stonewalled in developing our own oil resources, in the name of “environmentalism” and “global warming” fears, and general eco-pagan-panic, we’re about to be in world of hurt, energy-wise.

I’m keeping my Prius.  And I just put in a wood stove. 

Try to imagine what a true oil-shock will do to our already reeling economy.  Can you imagine a DOW average of 4,000?   Better stuff your nest egg (shrunken though it probably is already) in some VERY SECURE place…  which the stock market sure isn’t.

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Feb 28 2009

Deficit reaction deficit

Category: Congress,economy,left,media,Obama — harmonicminer @ 9:27 am

Powerline points out, in an absolutely fantastic article, how the Left’s reaction to Bush deficits was panic and accusation, but its reaction to 4 or 5 times bigger Obama deficits is ho-hum, when it’s not out and out cheerleading.

Power Line

It’s no secret that there is no intellectual integrity on the Left, but it’s still hard not to be a bit shocked by liberals’ reaction to the budget proposal that Barack Obama unleashed yesterday. Let’s take the example of the New York Times, probably the most prominent voice of the Far Left in the U.S. Throughout the George W. Bush administration, the Times’ editorial board waxed eloquent about the terrible consequences to be expected from the Bush deficits.

There is a deficit in the Left’s reaction to the Obama deficit.

Read the whole thing at the Power Line link above.

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Feb 16 2009

The Keynes-stoned cops are in control now

Category: Congress,economy,government — harmonicminer @ 10:45 am

Read this next paragraph carefully.   If people who believe such things are ever in control of our government and you are not frightened by the implications, then you simply didn’t understand what you read.
Keynes Returns

“The time has already come when each country needs a considered national policy about what size of population, whether larger or smaller than at present or the same, is most expedient. And having settled this policy, we must take steps to carry it into operation. The time may arrive a little later when the community as a whole must pay attention to the innate quality as well as to the mere numbers of its future members.”

The problem, as is pointed out in the article at the link above, is that people who believe this ARE in control of government, right now. Read the whole article. Then pray.

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Feb 15 2009

I give up. We’re doomed. REDUX

Category: economy,government,taxes — harmonicminer @ 10:40 am

The California legislature is about to drive California straight off the Santa Monica cliffs into the Pacific Ocean.  They appear to be driving blind, in the fog, with their eyes shut, on icy roads, without seat belts in a vehicle without airbags….  or doors, or brakes, for that matter.

They are essentially refusing to make any significant cuts of any kind in state spending (a couple of cosmetic reductions, but nothing that matters, or will actually make a difference…  remember they call it a “cut” when all they’ve done is increase it by less than they’d planned).  And they are making a HUGE tax increase, across the board, in a state with very high taxes already.  They’re reducing the child deduction credit, hugely, directly increasing the tax bill of families.  They’re doubling the annual car tax.  They’re adding 12 cents per gallon gas tax, to an already high gas tax, compared to other states, and it ain’t for roads, it’s to fund bizarro offices and bureaucrats who do nothing but sit around dreaming up new regulations to harass people and business.  And, of course, to reward all the special interest groups and entitlement leeches who put them in office.  They’re raising the SALES TAX by 2 cents per dollar (some accounts say “only” 1 cent, but the 2 cent report persists), and California’s sales tax is already 8% in most places.  And there will be a 2.5% “surcharge” on income tax.  Holy Moley.

I am not rich by any stretch, just pretty middle class, and a quick tally leads me to believe that between all these things, I’ll spend about $2000 more in just California taxes per year in the new regime….  and one of my cars is a 2005 Prius (with about 120K miles on it now)!

What do all these taxes have in common?  They are very regressive taxes, meaning they hit lower income people the hardest, percentage wise, and families with children get hit the worst.  Whatever happened to the Democrats being the “party of the people”?

As with the federal government, all they know how to do is spend money they don’t have.  They have apparently no sense of how economics actually works.  They have no concept of what damage they’re doing to the business environment in California.  Businesses are leaving in droves, and other states are chortling at their windfall of new businesses.

I am in mind boggle.

And just to complete the picture, they’re about to approve ridiculous environmental regulations, and “endangered species” regulations, that will make it possible for the eco-pagans to sue just about everyone for just about everything.  THAT will really help the economic recovery, won’t it?

I’m crawling into a hole and pulling the lid in after me.  Then I’m getting out the shovel and digging deeper.

The California Republican party is just about the most pitiful entity since, I dunno, the Roman Viola Ensemble featuring Nero the violinist as guest performer.  They are simply gutless.

I didn’t know when we elected him that Arnold was planning to TERMINATE California as a viable state.

I think my ten year old would do a better job of running the state.  She actually counts her money to see if she can afford things.

But Arnold (RINO that he is) and the Democrats are throwing us to the lions…  who are very hungry, even though they were just fed yesterday.

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Feb 13 2009

Stimulus to bad behavior

Category: Congress,economy,society — harmonicminer @ 9:51 am

What gets rewarded is repeated. Everyone knows it, from parents to teachers to employers.

And disguised as a stimulus bill, the Stimulus Bill Abolishes Welfare Reform and Adds New Welfare Spending

Both the Senate and House stimulus bills are Trojan horses that deliberately exploit anxiety about the current recession to conceal their destruction of the foundation of welfare reform and a massive expansion of the welfare system. Since its enactment in the mid-1990s, such reform has proven to be a very successful policy that dramatically reduced welfare dependency and child poverty. The fact that the stimulus proponents seek to conceal the bill’s massive permanent changes in welfare is a clear indication that they understand how unpopular these changes would be if the public became aware of them. Far from an exercise in “unprecedented transparency”–as President Obama claims–the stimulus bills are an example of unprecedented deception.

There is much more at the link above, including a brief review of the history of welfare reform, and an account of its successes. There is also a description of what the changes to welfare spending will be in the “stimulus bill”, and the Trojan Horse method Democrats have used to sneak it in.

Well worth reading.

Then check this out, and ask yourself why people who claim to be concerned about “social justice” don’t seem especially worried about creating conditions that encourage the proliferation of fatherless children, surely the single biggest predictor of everything from poverty to criminal behavior.

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Feb 12 2009

I give up. We’re doomed.

Category: Congress,economy,Obama — sardonicwhiner @ 10:48 am

Just to put really large numbers in perspective, it’s only about 25 trillion miles to the next STAR system, the Centauri system.

U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs – Yahoo! News

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month.

Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed.

Store food. Store water. Heck, DRILL for water. PLANT food…. it may be all you have. Lay in a lifetime stock of antibiotics and pain meds, and anything else you need to stay alive. Consider purchasing large amounts of clothing from the Salvation Army local store. Enough to last the rest of your life.  Store gasoline.   Store fertilizer and diesel fuel.   Store AMMO.  Decide which of your neighbors look edible….  they’re doing the same for you.  Buy a nice stock of books on wilderness survival, farming the old fashioned way, medical care, lots and lots of medical supplies, and a nice commentary on the Bible.  Get a good old fashioned encyclopedia in book form.  And some basic educational texts in math, English, history, science, etc., so you can teach your children and grand children what the world used to be like.  Get a piano, and extra strings, and tuning gear.  And a guitar.  And more strings for it.

Oh, and a copy of the US Constitution you can waive in the air as the tanks roll over you.

Where is Mad Max when you need him?

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Feb 08 2009

Words that rhyme with stimulus… sort of

Category: Congress,economy,Obama — harmonicminer @ 10:53 am

Words and phrases that rhyme with stimulus (well…  sort of).

under the bus —  Where Obama has thrown all his big talk about new energy investment making the USA energy independent in ten years.  No nuclear.  No exploration.  No drilling.  No tens or hundreds of billions for research into alternate energy sources.  No “Manhattan project” for energy.  (If not now, when?)  Nothing but overpriced “green” cars for the government that no one else can buy, or wants to.

incubus —  Don’t open your door to strangers, whether or not they claim to be elected.

succubus —  Ditto.

upper crust —  What all the congress critters think they are

full of pus —  Well, the “stimulus” does stink, to put it politely.

makes me cuss —  when I think about how much my kids and grandkids will spend paying back this payoff to Democrat-supporting special interest groups.

In God We Trust —  But for some folks, not lately.

money lust —  ’nuff said

no muss no fuss —  Obama’s idea of “bi-partisanship” is “give me what I want because I won the election.”

tremulous —  The feeling I have when I think about how disastrous the “stimulus” plan is for our future.

C++ —  The object oriented computer programming language that will be used to calculate how much money the stimulus will REALLY cost.  Consider:  when you buy a house over thirty years you may pay as much as three times the actual cost of the house when you include interest on the loan, at common interest rates.  More, much more, if the rates go up.  The stimulus package is going to cost two or three times its face value before it’s paid back.  In essence, we’re “borrowing” (well, stealing) a couple trillion from our kids and grandkids so we can have congress give away a trillion today.

There’s no rush —  to pay it back.  So they want us to believe.

minibus —  what I’ll have left to live in when it’s all over.  I call shotgun.

moondust —  the street name for the substance some of our congress creeps have been ingesting?

necklace —  The very latest in multicultural jewelry.  But you have to buy extra carbon credits to wear it….  or give it as a gift.

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Feb 06 2009

Another really, really inconvenient truth

Category: Congress,economy,politics — harmonicminer @ 10:25 am

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Feb 05 2009

The “stimulus” again

Category: Congress,Democrat,economy — harmonicminer @ 10:09 am

Today the Senate defeated, on a party line vote, a proposal by John McCain and some others to modify the “stimulus” plan.   Since more than half of the “stimulus” spending is planned for more than two years from now, by which time a recovery of the economy is likely even if very little is done, and since much of that spending is on pet projects and interest groups that Democrats had wanted to spend money on for quite some time, but couldn’t quite find the excuse, the Republican proposal was simply this:

If two quarters of consecutive growth in the economy are experienced after the “stimulus” plan is passed, then further spending plans in the “stimulus” bill would be cancelled, as being obviously no longer “necessary”.    Specifically, this would apply to all plans to spend money more than two years in the future, obviously too late to be a “stimulus” for us now, anyway.

The proposal was defeated 54-42, with two Democrats joining all the Republicans voting for it, and only Democrats voting against it.

That’s because they’re determined to take this chance to do spending they’ve wanted to do all along, and are just burying tons of it in this giant, steaming piece of half-boiled pork of a “stimulus bill”, without regard for whether it wil actually stimulate the economy in any sustainable way, or not.

Of course, what produces sustainable stimulation is anything that encourages businesses to expand, and to spend money themselves on equipment/supplies (which creates/maintains employment for the providers of those) and to directly hire people themselves.

Spending tons of money on tons of entitlements, giveaways, etc., doesn’t stimulate the local small business (where 2/3 of US jobs are) to hire another person, or buy more equipment, or expand a store, or advertise more, or whatever.  What stimulates business is tax cuts, changes in tax rules that allow them to totally expense equipment purchases (instead of having to depreciate over 5 or 7 years), relaxations in the rules surrounding hiring new employees (some states have regulated small business into outer space, and there are lots of federal rules, too), maybe a flat three month tax holiday, maybe some direct tax credit for hiring new employees, etc.

But the Democrats, too many of them hostile to business for ideological reasons, I guess, aren’t interested in any of those things.  They want to reward their interest groups, pure and simple.

As before:  I told you so.

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Jan 16 2009

Irrational choice theory

Category: economy,government — harmonicminer @ 10:41 am

On rational choice theory, risk aversion in economic behavior, and what happens to risk aversion when the risks are someone else’s, not yours:  Irrational Economic Man by Michael Shermer

research in behavioral economics has revealed that many, if not most, of our economic choices are driven not by rational calculations but by deep and unconscious emotions that evolved over the eons. Among these irrational emotions is “risk aversion,” a psychological effect that is actually part of the reason that financial markets work so well. People are more averse to risk than traditional economics would dictate, and that restraint helps keep most speculative market behavior in check.

As everyone knows by now, many of our major financial institutions weren’t nearly averse enough to risk over the last decade and a half. In seeking quick and carefree profits, along with trying to appease politicians pushing for wider homeownership, they tossed all restraint out the window, with devastating economic consequences. How did this happen, and how can we keep it from happening again?

It’s all worth reading, but here’s the payoff, pretty obvious to anyone who’s been paying attention:

By entering the business of risk protection, the government has reconfigured the economic game: in profits, we’re capitalists; in losses, we’re socialists.

Let’s be brutally honest. The CEOs, CFOs, and COOs of the Wall Street financial giants who signed up for our new corporate welfare program are now welfare queens. They’re on the dole. In an ideal world, they would all be put on a very public welfare-to-work program—as in the welfare-reform movement of the 1990s—that tethered salaries directly to the amount of money paid back, with interest, to the people who earned the money in the first place: taxpayers. The corporate leaders could even appear on a new Fortune 500 list, ranked by how much of our money they had returned.

What would help ameliorate future financial crises? The government should not be in the business of hiding real risks through political imperatives, or of insulating corporations from the risks that they have freely taken. Doing so confounds the normal risk signals that keep the market in balance. For risk aversion to keep markets working, people and corporations have to be allowed to assess real risks and to fail if they take inappropriate risks. Only the people who produce wealth can properly assess how best to risk it in future investments. The Warren Buffetts of the world can do that. The Ben Bernankes cannot.

Yep. As I’ve written many times before, the laws of economics are as real as gravity, and as unforgiving, and cannot be repealed by government fiat. But just as you have a few glorious seconds of freedom with an incredible view after leaping off the top of the Grand Canyon, government interference in market mechanisms can produce a real rush… for a short time.

Unfortunately, I have the distinct impression that the economic policies of the administration of President-elect Obama are going to involve simply climbing a bit higher (maybe quite a bit higher)  before jumping (or being pushed)…  sort of like erecting the Space Needle next to the Grand Canyon, and then jumping off that.  It’ll be a glorious ride, with a really exhilarating dénouement.  Think of it as printing enough money to build a 40 story tower, lighting a match, and then jumping off as the flames rise.

I wish I could just stay home from this particular vacation, but I have the feeling we’re all in for a wild ride.

UPDATE:  Privatized Profit, Socialized Risk discussed here.

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