One of the truisms of political campaigns is that candidates send out surrogates to make the tough jabs at their opponents, and then deny that the campaign had anything to do with it.
General Wesley Clark is the liberal's general, and a senior advisor to the Obama campaign. He is trotted out whenever the left wants someone in uniform to make their points. Yesterday, General Clark went after John McCain's qualifications to be President. he said that John McCain had never held an executive command in wartime conditions (John McCain commanded the largest air squadron in the Navy, but not during wartime). He hasn't "ordered the bombs to fall". He further said that getting shot down over Vietnam does not qualify him to be President. It was a revolting performance. George McGovern, John J. Rockefeller and others have made similar "hits". It is no accident.
Do the Democrats really think this is a winning strategy - to attack McCain's decorated military record? If the Democrats are going to run on the issue of Senator McCain's experience and military record then they've already lost. Every time they make statements like this they accentuate Barack Obama's lack of experience in both public and private service - made even more stark when compared to Senator McCain.
Today, speaking in Independence, Missouri, Barack Obama said, "I will never question the patriotism of others in this campaign. And I will not stand idly by when I hear others question mine." It reminded me a great deal of the scene in The Godfather when Al Pacino sits innocently in church while his soldiers, following his orders, assassinate the key leaders of the other New York crime families to consolidate power for the Corleone's.
Monday, June 30, 2008
Sunday, June 29, 2008
Clearing Up Confusion About Types and Uses of Energy
The national debate on energy is a confusing mish-mash. I hear both private individuals and pundits talking about nuclear, clean coal, ethanol, new domestic drilling, synthetic gas, and every other sort of fuel in the same breath. The fact is that it is very important to separate the sources of energy from the uses - and how that use may change over time.
The most important differentiation is to always separate energy used for transportation verses energy used for electricity - our two biggest needs. We can build nuclear plants to greatly expand the generation of emission free electricity. But for now, this is largely irrelevant to our consumption of oil and the resulting distillates.
80% of the oil consumed in our country is for transportation - gasoline, diesel, jet fuel, etc. The current ethanol mandate is diverting 30% of our corn crop to produce 3% of our automotive transportation fuel. Plus, ethanol consumes as much energy as it produces, or worse. We can produce all the electricity in the world, while having zero effect on the price of gas.
51% of our electricity in the United States is generated using thermal coal. Without a rapid build out of additional generating capacity, we will limit our economic growth and our standard of living. Without an accelerated build out in new electricity generation we may begin to experience countrywide what is occurring in California - a lack of reliable electricity and rolling brown-outs. Right now nuclear energy is the only technology that can scale quickly enough to provide baseline power to the grid. In fact, nuclear power gives us a much better short term solution than we have for transportation fuel. Solar and wind are important components but solar in particular is years away from being cost effective.
There are currently no economical substitutes for transportation fuel. Longer term, there is great hope that electricity will fuel our cars, but that is a still a long while off. We need to greatly improve plug-in and hybrid technology. In the meantime, we need to continue to develop new sources of oil to bridge the gap. Synthetic fuel produced from coal is a technology that already exists but is currently not cost competitive - even with gas at $4.25 per gallon. Hydrogen fuel cells are extremely expensive to operate and free hydrogen is not free.
I don't think we need to worry about oil prices falling to a level where it will impede research and development. We need to keep pushing on all fronts - electricity and transportation - traditional and alternative.
The most important differentiation is to always separate energy used for transportation verses energy used for electricity - our two biggest needs. We can build nuclear plants to greatly expand the generation of emission free electricity. But for now, this is largely irrelevant to our consumption of oil and the resulting distillates.
80% of the oil consumed in our country is for transportation - gasoline, diesel, jet fuel, etc. The current ethanol mandate is diverting 30% of our corn crop to produce 3% of our automotive transportation fuel. Plus, ethanol consumes as much energy as it produces, or worse. We can produce all the electricity in the world, while having zero effect on the price of gas.
51% of our electricity in the United States is generated using thermal coal. Without a rapid build out of additional generating capacity, we will limit our economic growth and our standard of living. Without an accelerated build out in new electricity generation we may begin to experience countrywide what is occurring in California - a lack of reliable electricity and rolling brown-outs. Right now nuclear energy is the only technology that can scale quickly enough to provide baseline power to the grid. In fact, nuclear power gives us a much better short term solution than we have for transportation fuel. Solar and wind are important components but solar in particular is years away from being cost effective.
There are currently no economical substitutes for transportation fuel. Longer term, there is great hope that electricity will fuel our cars, but that is a still a long while off. We need to greatly improve plug-in and hybrid technology. In the meantime, we need to continue to develop new sources of oil to bridge the gap. Synthetic fuel produced from coal is a technology that already exists but is currently not cost competitive - even with gas at $4.25 per gallon. Hydrogen fuel cells are extremely expensive to operate and free hydrogen is not free.
I don't think we need to worry about oil prices falling to a level where it will impede research and development. We need to keep pushing on all fronts - electricity and transportation - traditional and alternative.
The Supreme Court Affirms An Individual Right To Bear Arms
http://www.nytimes.com/2008/06/27/opinion/27fri1.html?_r=1&ref=opinion&oref=slogin
I seems to me that the New York Times editorial page used to be more intelligently reasoned and better written. The above link to their editorial on the Heller decision is a combination of the absence of legal reasoning, lots of examples of why guns are bad (interesting but irrelevant), and out and out falsehoods and misrepresentations.
Let us start with the examples of why guns being bad and are used for evil purposes. Great detail is provided in a number of example such as the shootings at Virginia Tech and more recently at Northern Illinois University and statistics about the large number of guns in the country. All of this is interesting, and factual, but it has nothing to do with whether the Constitution recognizes an individual right to bear arms. I believe the term is “red herring”.
How about the absence of legal reasoning? The New York Times claims a “radical break form 70 years of Supreme Court precedent”, but offers no legal facts. The truth is the Supreme Court has never ruled directly on whether the Second Amendment is an individual or collective right, and there is no radical break. The 70 year old case to which they are referring is United States v. Miller. Miller litigated a law enacted after the St. Valentine’s Day massacre where warring mobsters were machine gunned down a Chicago alley. The law restricted ownership of certain types of weapons that were not in general use, such as the fully automatic weapons used in the massacre. The Court agreed that the restriction was Constitutional, but in no way impeded individuals to own most types of guns.
There are only two other cases in Supreme Court history that directly rule on the second amendment. Both cases occurred after the Civil War, and neither addressed the individual verses collective right issue. The Supreme Court in Presser v Illinois did point out that the overall intention of the Bill of Rights was to restrict the federal government from infringing on individual rights. All three cases have affirmed that the right to bear arms is not unlimited, and have supported reasonable gun regulation. But the New York Times assertion that the Supreme Court ignored precedent is blatantly false.
The District of Colombia law required that any weapons kept in the home be rendered inoperative, such as by having them unloaded and disassembled. The Supreme Court ruled that such a restriction effectively bans an individual from bearing arms in the protection of his home, and is therefore effectively a ban on the individual right to bear arms.
If ever there was a case that you think would be ruled on 9 to 0, this was it. Even if you set aside the most radical members of the court, Justices Stevens and Bader-Ginsberg, the ruling should be 7 to 2. Let’s think about Justice Stevens assertion that this ruling “creates a new Constitutional right”. All of the rights enumerated in the Bill of Rights are intended to limit the government from restricting individual actions. The drafters of the Constitution were very wary of a strong federal government. The Bill of Rights was added as amendments to the Constitution in order protect of individual rights and weaken the power of the federal government. Research shows that the founding members of the country clearly believed in an individual’s right to bear arms, separate from government service.
Antonin Scalia, who authored the majority opinion, is an originalist. He interprets the constitution on the strict construction of what it says, but also the plain original meaning of the day. In other words, when the Constitution and the Bill of Rights were drafted, what was the common public meaning of the day? Justice Scalia brilliantly parses the prefatory and operative clauses of the second amendment to show how the right to bear arms is an individual right, and that maintaining an effective militia is one purpose, but not an exclusive purpose. The liberal argument that the second amendment is only a collective right that is controlled solely for the purposes of the federal government flies in the face of original intent.
If the right to bear arms, even with the use of reasonable restrictions, is untenable for our country, then we should change the constitution to make it so. Liberal judges, like Stevens, conjure up new meanings from the constitution as if it was some sort of legal ouija board. Liberal judges rely on a “right to privacy” for justifying all sorts of individual actions and behaviors. The “right to privacy” as a broad, individual right is nowhere to be found in the Constitution. Using the excuse that the times have changed as cover to “reinterpret” the Constitution is the hallmark of legislating from the bench. The Constitution is not a living document. If it needs to be changed because circumstances have changed, then we should change it. In fact, many individual rights issues are not Constitutional issues at all. They are legislative issues.
I love the part where the New York Times states, “This audaciously harmful decision, which hands the far right a victory it has sought for decades…” Maybe these are the same "far right" people that make up working class families in middle America that are bitter and clinging to their guns and religion. So it is now “far right” to simply believe the constitution means what it actually says? Even Barack Obama believes that the right to bear arms is an individual right – subject to reasonable regulation, of course.
I seems to me that the New York Times editorial page used to be more intelligently reasoned and better written. The above link to their editorial on the Heller decision is a combination of the absence of legal reasoning, lots of examples of why guns are bad (interesting but irrelevant), and out and out falsehoods and misrepresentations.
Let us start with the examples of why guns being bad and are used for evil purposes. Great detail is provided in a number of example such as the shootings at Virginia Tech and more recently at Northern Illinois University and statistics about the large number of guns in the country. All of this is interesting, and factual, but it has nothing to do with whether the Constitution recognizes an individual right to bear arms. I believe the term is “red herring”.
How about the absence of legal reasoning? The New York Times claims a “radical break form 70 years of Supreme Court precedent”, but offers no legal facts. The truth is the Supreme Court has never ruled directly on whether the Second Amendment is an individual or collective right, and there is no radical break. The 70 year old case to which they are referring is United States v. Miller. Miller litigated a law enacted after the St. Valentine’s Day massacre where warring mobsters were machine gunned down a Chicago alley. The law restricted ownership of certain types of weapons that were not in general use, such as the fully automatic weapons used in the massacre. The Court agreed that the restriction was Constitutional, but in no way impeded individuals to own most types of guns.
There are only two other cases in Supreme Court history that directly rule on the second amendment. Both cases occurred after the Civil War, and neither addressed the individual verses collective right issue. The Supreme Court in Presser v Illinois did point out that the overall intention of the Bill of Rights was to restrict the federal government from infringing on individual rights. All three cases have affirmed that the right to bear arms is not unlimited, and have supported reasonable gun regulation. But the New York Times assertion that the Supreme Court ignored precedent is blatantly false.
The District of Colombia law required that any weapons kept in the home be rendered inoperative, such as by having them unloaded and disassembled. The Supreme Court ruled that such a restriction effectively bans an individual from bearing arms in the protection of his home, and is therefore effectively a ban on the individual right to bear arms.
If ever there was a case that you think would be ruled on 9 to 0, this was it. Even if you set aside the most radical members of the court, Justices Stevens and Bader-Ginsberg, the ruling should be 7 to 2. Let’s think about Justice Stevens assertion that this ruling “creates a new Constitutional right”. All of the rights enumerated in the Bill of Rights are intended to limit the government from restricting individual actions. The drafters of the Constitution were very wary of a strong federal government. The Bill of Rights was added as amendments to the Constitution in order protect of individual rights and weaken the power of the federal government. Research shows that the founding members of the country clearly believed in an individual’s right to bear arms, separate from government service.
Antonin Scalia, who authored the majority opinion, is an originalist. He interprets the constitution on the strict construction of what it says, but also the plain original meaning of the day. In other words, when the Constitution and the Bill of Rights were drafted, what was the common public meaning of the day? Justice Scalia brilliantly parses the prefatory and operative clauses of the second amendment to show how the right to bear arms is an individual right, and that maintaining an effective militia is one purpose, but not an exclusive purpose. The liberal argument that the second amendment is only a collective right that is controlled solely for the purposes of the federal government flies in the face of original intent.
If the right to bear arms, even with the use of reasonable restrictions, is untenable for our country, then we should change the constitution to make it so. Liberal judges, like Stevens, conjure up new meanings from the constitution as if it was some sort of legal ouija board. Liberal judges rely on a “right to privacy” for justifying all sorts of individual actions and behaviors. The “right to privacy” as a broad, individual right is nowhere to be found in the Constitution. Using the excuse that the times have changed as cover to “reinterpret” the Constitution is the hallmark of legislating from the bench. The Constitution is not a living document. If it needs to be changed because circumstances have changed, then we should change it. In fact, many individual rights issues are not Constitutional issues at all. They are legislative issues.
I love the part where the New York Times states, “This audaciously harmful decision, which hands the far right a victory it has sought for decades…” Maybe these are the same "far right" people that make up working class families in middle America that are bitter and clinging to their guns and religion. So it is now “far right” to simply believe the constitution means what it actually says? Even Barack Obama believes that the right to bear arms is an individual right – subject to reasonable regulation, of course.
Wednesday, June 25, 2008
Our Upside Down Government
So much of what our government does is upside down.
The Democrats want to confiscate profits from oil companies, which have one of the lower profit margins as an industry at 9%. This is money that we badly need for the oil companies to plow back into further exploration and production.
But now we turn around to the banking and mortgage industry, which is losing huge sums of money due to reckless lending, and are going to bail them out to the tune of $300B! Not only that, some of the key provisions of the bill were written by banking lobbyists. Never mind that the chairman of the Senate banking committee, Chris Dodd (D-CT) got a special mortgage deal from Countrywide, the largest benificiary of this bailout.
This bill will allow these mortgage companies, like Countrywide, to cherry pick the worst loans in their portfolio and dump them on the FHA. How's the FHA doing? Darn it, the FHA has experienced loan defaults at more than twice the industry rate for the last 6 years! And this bill will place on the FHA balance sheet all of the worst ARM loans made by the mortgage industry, for the taxpayers to cover.
It gets better. This bill will let certain non-profit groups originate loans with no documentation and no down payments and then hand them off to the FHA. Didn't we just do this? Have we learned nothing? I thought the Democrats were against "corporate welfare"? Get your checkbooks out.
Our government's upside down governing goes on and on. The newly passed farm bill will funnel hundreds of billions of dollars to the farm industry at a time where crop prices at are an all time high. Most farmers have never made so much money. Even worse, the "floor" price for crops has been raised to the level of the new incredibly high levels. That means that if crop prices later come down the taxpayers are on the hook for the difference. All of this nonsense raises prices for everyone on everything from cheese to grains and everything in between.
On the flip side, our government then turns around and has to pay out subsidies to lower income families who can't afford the food that the government made more expensive. What many people don't know is that the farm bill legislation is always "bundled" with the food stamp bill. Not all members of Congress have agriculture as a major constituency, but all have people that benefit from the food stamp subsidy. This is how the farm bill always gets broad support.
Going back to energy, Obama wants to seize oil company profits, and redistribute the money to families who are being challenged by high fuel prices, among other things. But it is Congress' energy policies that have directly contributed to high energy prices and have placed us in a situation where there are no short term solutions.
Too often our government is like the woman who swallowed the fly, with each action striving to fix the problem caused by the last problem, and causing the next.
Disclosure: at the time of this publications, the author was long BAC.
The Democrats want to confiscate profits from oil companies, which have one of the lower profit margins as an industry at 9%. This is money that we badly need for the oil companies to plow back into further exploration and production.
But now we turn around to the banking and mortgage industry, which is losing huge sums of money due to reckless lending, and are going to bail them out to the tune of $300B! Not only that, some of the key provisions of the bill were written by banking lobbyists. Never mind that the chairman of the Senate banking committee, Chris Dodd (D-CT) got a special mortgage deal from Countrywide, the largest benificiary of this bailout.
This bill will allow these mortgage companies, like Countrywide, to cherry pick the worst loans in their portfolio and dump them on the FHA. How's the FHA doing? Darn it, the FHA has experienced loan defaults at more than twice the industry rate for the last 6 years! And this bill will place on the FHA balance sheet all of the worst ARM loans made by the mortgage industry, for the taxpayers to cover.
It gets better. This bill will let certain non-profit groups originate loans with no documentation and no down payments and then hand them off to the FHA. Didn't we just do this? Have we learned nothing? I thought the Democrats were against "corporate welfare"? Get your checkbooks out.
Our government's upside down governing goes on and on. The newly passed farm bill will funnel hundreds of billions of dollars to the farm industry at a time where crop prices at are an all time high. Most farmers have never made so much money. Even worse, the "floor" price for crops has been raised to the level of the new incredibly high levels. That means that if crop prices later come down the taxpayers are on the hook for the difference. All of this nonsense raises prices for everyone on everything from cheese to grains and everything in between.
On the flip side, our government then turns around and has to pay out subsidies to lower income families who can't afford the food that the government made more expensive. What many people don't know is that the farm bill legislation is always "bundled" with the food stamp bill. Not all members of Congress have agriculture as a major constituency, but all have people that benefit from the food stamp subsidy. This is how the farm bill always gets broad support.
Going back to energy, Obama wants to seize oil company profits, and redistribute the money to families who are being challenged by high fuel prices, among other things. But it is Congress' energy policies that have directly contributed to high energy prices and have placed us in a situation where there are no short term solutions.
Too often our government is like the woman who swallowed the fly, with each action striving to fix the problem caused by the last problem, and causing the next.
Disclosure: at the time of this publications, the author was long BAC.
...what do you do, sir?
The Democrats gained the House of Representatives and the Senate on the strength of their opposition to the war in Iraq. Barack Obama was fortunate enough to not be in the U.S. Senate when the vote to authorize military force against Saddam Hussain was cast. It has provided him the luxury of opposing the war from the start. Who knows what he would have really done in the "line of fire" on the big stage.
Barack Obama has made withdrawing from Iraq on a fixed timeline starting on day one of his presidency a core policy of his campaign. Unfortunately, for the Democrats, the story in Iraq has changed dramatically. The talking points on which they have successfully attacked Bush and the GOP are being rapidly eroded by the facts.
The surge has succeeded beyond the most optimistic expectations. Violence has dropped dramatically. Anbar's Sunni province has been transformed. Al Qaeda is on the run. The Iraqi Army has taken the lead in successful miltary operations to clear Shiite insurgents from Basra and Sadr city. Sadr himself is refocusing his attention on political rather than military power. Oil revenues are being distributed fairly to the provinces. Oil production is increasing. Most of the legislative benchmarks have been met. Even the fact that the Iraqi's have driven a tough negotiation regarding a long-term security agreement with the U.S. is a positive sign that Iraq is comfortable asserting its national sovereignty.
Despite all of this, Senator Obama has doggedly stuck to his plan to withdraw our forces, without regard to what is happening on the ground. John Maynard Keynes, the famous British economist, was once challenged about changing his position on a particular issue. Keynes responded, "When the facts change, I change my mind - what do you do, sir?"
The success of a democratic Iraq in the most dangerous and autocratic region of the world is now within sight. It is worrisome that the man who may be president will not adapt his position to a situation when the facts change - or be so invested in defeat that he cannot admit he was wrong.
Barack Obama has made withdrawing from Iraq on a fixed timeline starting on day one of his presidency a core policy of his campaign. Unfortunately, for the Democrats, the story in Iraq has changed dramatically. The talking points on which they have successfully attacked Bush and the GOP are being rapidly eroded by the facts.
The surge has succeeded beyond the most optimistic expectations. Violence has dropped dramatically. Anbar's Sunni province has been transformed. Al Qaeda is on the run. The Iraqi Army has taken the lead in successful miltary operations to clear Shiite insurgents from Basra and Sadr city. Sadr himself is refocusing his attention on political rather than military power. Oil revenues are being distributed fairly to the provinces. Oil production is increasing. Most of the legislative benchmarks have been met. Even the fact that the Iraqi's have driven a tough negotiation regarding a long-term security agreement with the U.S. is a positive sign that Iraq is comfortable asserting its national sovereignty.
Despite all of this, Senator Obama has doggedly stuck to his plan to withdraw our forces, without regard to what is happening on the ground. John Maynard Keynes, the famous British economist, was once challenged about changing his position on a particular issue. Keynes responded, "When the facts change, I change my mind - what do you do, sir?"
The success of a democratic Iraq in the most dangerous and autocratic region of the world is now within sight. It is worrisome that the man who may be president will not adapt his position to a situation when the facts change - or be so invested in defeat that he cannot admit he was wrong.
Leniency For Depravity
In a 5-4 decision today the Supreme Court overturned a Louisiana law allowing for capital punishment in cases of child rape. I can think of nothing on this earth more disturbing and reprehensible than raping a child.
"With respect to the question of moral depravity, is it really true that every person who is convicted of capital murder and sentenced to death is more morally depraved than every child rapist?" —Justice Alito writing in dissent, in which Chief Justice Roberts and Justices Scalia and Thomas joined.
"With respect to the question of moral depravity, is it really true that every person who is convicted of capital murder and sentenced to death is more morally depraved than every child rapist?" —Justice Alito writing in dissent, in which Chief Justice Roberts and Justices Scalia and Thomas joined.
Green To the Max, No Matter What It Costs!
Here is a link to an article in today's Wall Street Journal regarding the Democrat's "Green Convention" in Denver.
http://online.wsj.com/public/article/SB121434145793701111.html?mod=blog
Back in the day the Democratic Party was the party of working, middle class Americans. These families, and the Democratic Party, had what today are considered conservative values. Now the Democratic Party is so consumed with paying tribute to radical fringe groups that they are no longer relevant to middle America.
This article is a great vignette of a good idea taken to extremes. Not only does everything at the convention have to be environmentally correct, but politically correct too. One example: only products produced by American unionized labor can be used. It is apparent more and more that the far left wing of the Democratic Party is pushing harder than ever to do two things: promote a government takeover off all significant segments of the economy (recent nationalization proposals include: healthcare, mortgages, oil companies, refineries, student loans, etc.), and mandate behavior based on liberal beliefs through rationing and legislative fiat. For the convention, they have even mandated what colors the food has to be on the plate. If Obama wins in November, and the GOP loses a filibuster quorum in the Senate (both very possible scenarios), then it is almost certain that the government will have to begin rationing electricity within a number of years.
New York City has banned transfats from all restaurants. So I no longer have the right to choose to eat something cooked with transfat, even once a year? I’m all for requiring disclosure so that consumers can make an informed decision. But a total ban? The Democratic convention has banned all fried foods, regardless of color or type of oil. How long until my Emeril Lagasse deep fryer is outlawed and I have to deep fry my occasional guilty pleasure in secret under the threat of a fine or even arrest?
Locally produced food is a good idea, to the extent it is practical. But it is hard to see how an ever growing global population can be fed solely by local food. The world’s population has outgrown that. There is a certain productivity in industrialized agriculture that cannot be avoided. OK, maybe off-season fruit from Chile delivered by jetliner is something to debate. But I’d still like to have my Spanish Rioja, Italian Parmesano Reggio, bread made from Kansas grown wheat, and black peppercorns from Indonesia.
What the radical liberals never consider is the cost of their obsessions. Flex-fuel transportation fueled by beer waste. Products from low productivity union shops. A crew of 900 sorting all the garbage by hand. A very expensive event to be sure.
As an aside, the Denver Democratic organization responsible for raising money for the convention has come up short. I guess it’s harder to obtain money for all this radical stuff when you have to ask nicely instead of seizing it from society’s producers by threat of force.
http://online.wsj.com/public/article/SB121434145793701111.html?mod=blog
Back in the day the Democratic Party was the party of working, middle class Americans. These families, and the Democratic Party, had what today are considered conservative values. Now the Democratic Party is so consumed with paying tribute to radical fringe groups that they are no longer relevant to middle America.
This article is a great vignette of a good idea taken to extremes. Not only does everything at the convention have to be environmentally correct, but politically correct too. One example: only products produced by American unionized labor can be used. It is apparent more and more that the far left wing of the Democratic Party is pushing harder than ever to do two things: promote a government takeover off all significant segments of the economy (recent nationalization proposals include: healthcare, mortgages, oil companies, refineries, student loans, etc.), and mandate behavior based on liberal beliefs through rationing and legislative fiat. For the convention, they have even mandated what colors the food has to be on the plate. If Obama wins in November, and the GOP loses a filibuster quorum in the Senate (both very possible scenarios), then it is almost certain that the government will have to begin rationing electricity within a number of years.
New York City has banned transfats from all restaurants. So I no longer have the right to choose to eat something cooked with transfat, even once a year? I’m all for requiring disclosure so that consumers can make an informed decision. But a total ban? The Democratic convention has banned all fried foods, regardless of color or type of oil. How long until my Emeril Lagasse deep fryer is outlawed and I have to deep fry my occasional guilty pleasure in secret under the threat of a fine or even arrest?
Locally produced food is a good idea, to the extent it is practical. But it is hard to see how an ever growing global population can be fed solely by local food. The world’s population has outgrown that. There is a certain productivity in industrialized agriculture that cannot be avoided. OK, maybe off-season fruit from Chile delivered by jetliner is something to debate. But I’d still like to have my Spanish Rioja, Italian Parmesano Reggio, bread made from Kansas grown wheat, and black peppercorns from Indonesia.
What the radical liberals never consider is the cost of their obsessions. Flex-fuel transportation fueled by beer waste. Products from low productivity union shops. A crew of 900 sorting all the garbage by hand. A very expensive event to be sure.
As an aside, the Denver Democratic organization responsible for raising money for the convention has come up short. I guess it’s harder to obtain money for all this radical stuff when you have to ask nicely instead of seizing it from society’s producers by threat of force.
Tuesday, June 24, 2008
Scapegoat, er, Election Season Is Here
Congress is frantically looking for an election year scapegoat for high oil and gas prices. Saudi Arabia is breathing a sigh of relief as Congress' focus on speculators diverts attention from the treasure that is flowing into OPEC coffers.
Obama, and many Democrats, has been thundering from the campaign podium that we must close the "Enron loophole", that allowed some types of energy futures trades to fly beneath the regulatory radar. Even John McCain has been drawn into the prospect that it must be speculators that are driving up the price of oil. Whoops, it turns out that the Enron loophole was closed in a provision inserted into last year's farm bill. The surge in oil prices occurred after that.
Some Democrats "on the case" announced that their own committee investigations show that 50% of the current price of oil is due to spectators. Enough of these aspiring "Colombo's". Time to bring in the expert government regulators that oversee futures trading.
Enter Walter Lukken, acting chairman of the Commodity Futures Trading Commission. Mr. Lukken, testified before Congress that there is "no smoking gun" indicating speculators are behind the rapid rise. The conclusion of his commission's investigations is that rising global demand and inelastic supply are to blame. Interviewed on CNBC's Kudlow & Company tonight Mr. Lukken stated that there are as many short positions as long positions with traders that can be classified as speculators.
Many of the so called "speculators" are pension funds that are actually investing in broad-based commodity indexes. They are not trading in the futures market at all. I personally have been both long and short the USO, an ETF that tracks the price of oil. And I don't have a futures trading account.
Obama, and many Democrats, has been thundering from the campaign podium that we must close the "Enron loophole", that allowed some types of energy futures trades to fly beneath the regulatory radar. Even John McCain has been drawn into the prospect that it must be speculators that are driving up the price of oil. Whoops, it turns out that the Enron loophole was closed in a provision inserted into last year's farm bill. The surge in oil prices occurred after that.
Some Democrats "on the case" announced that their own committee investigations show that 50% of the current price of oil is due to spectators. Enough of these aspiring "Colombo's". Time to bring in the expert government regulators that oversee futures trading.
Enter Walter Lukken, acting chairman of the Commodity Futures Trading Commission. Mr. Lukken, testified before Congress that there is "no smoking gun" indicating speculators are behind the rapid rise. The conclusion of his commission's investigations is that rising global demand and inelastic supply are to blame. Interviewed on CNBC's Kudlow & Company tonight Mr. Lukken stated that there are as many short positions as long positions with traders that can be classified as speculators.
Many of the so called "speculators" are pension funds that are actually investing in broad-based commodity indexes. They are not trading in the futures market at all. I personally have been both long and short the USO, an ETF that tracks the price of oil. And I don't have a futures trading account.
Saturday, June 21, 2008
Bush's Stealth Manhattan Project for Energy
Anyone who says we need a “Manhattan Project” for energy doesn’t realize that we already have one. The Bush Administration has accomplished more than any other administration regarding alternative energy. This is in sharp contrast to the Democrats who would have you believe all Bush and Cheney care about is enriching the oil companies. The facts say otherwise.
Under the direction of the Bush White House vast amount of research and work that is going on across both renewable and traditional fronts including solar, clean coal, hydrogen fuel production and fuel cells, cellulose ethanol, wind, battery technologies and many other topics. A few facts:
- The Department of Energy ('DOE') is the largest supporter in the U.S. of basic research in the physical sciences. The DOE provides more than 40% of the total funding for physics, chemistry, materials science and other physical sciences.
- There are 17 national laboratories under the jurisdiction of the DOE performing both theoretical and practical research.
- The DOE funds more than 7,000 individual research projects at universities, national laboratories, U.S. industry and the non-profit sector.
- The DOE estimates that with focused government coordination and assistance solar might provide 21% of electricity generation by 2030 (1% is the pessimistic case). This includes utility use of advanced concentrator technologies.
- A recent study published by the DOE estimates that as much as 20% of the country's electricity could come from wind energy.
For all the oratory from the Democrats about a Manhattan Project for energy, I have yet to hear a specific proposal regarding research or other action that the Bush Administration is not already doing. The next time Obama or another liberal politician says we need a Manhattan Project for energy, realize that we essentially already have one. Ask for specifics.
Maybe the White House should take a page out of the Big Oil's playbook. Hardly a day goes by without seeing a new TV commercial by the oil companies touting their green research on alternative fuels. Meanwhile, the administration quietly proceeds while getting no credit for leading a massive effort to develop all these technologies.
Democrats Call for Nationalizing the U.S. Oil Industry
The Democrats recently had the oil executives up on the hill again for 2 days of grandstanding (by Congress, not the oil executives). Senator Dick Durban (D-IL) was practically apoplectic in a grand piece of political theater. The ultra-liberal Maxine Walters (D-CA) actually threatened the oil companies with nationalization.
Now there are calls from some within the Democratic Party to nationalize our nation's refineries. Rep. Maurice Hinchey (D-NY), member of the House Appropriations Committee, and a strong opponent of off-shore drilling, stated last week that, “We (the government) should own the refineries. Then we can control how much gets out into the market.”
Maybe we should check with Hugo Chavez and see how that’s going. Oh, that’s right. Venezuela’s oil is heavy, high sulphur stuff that is hard to refine. The country’s oil fields are in decline and will need major investment and sophisticated technology and know-how to maintain production going forward. But now El Presidente has guaranteed that no one who has the technology and know-how will touch Venezuela with a 39 ½ foot pole.
It was quite clear from the give and take during the hearings that none of the Democrats had the slightest idea about how oil markets work - frightening and discouraging.
Here’s the best part. Most people know that new domestic oil exploration has been largely prohibited for 30 years, and that we have not built a new refinery for 35 years. But what you may not know is that India is close to putting the finishing touches on a brand new refinery that will be the largest in the world. It is a short tanker ride from the Persian Gulf to India. So now not only will we have to send an ever increasing amount of money to our enemies for oil but we will then send even more money to India to refine it before they ship it to us.
Brilliant!
Now there are calls from some within the Democratic Party to nationalize our nation's refineries. Rep. Maurice Hinchey (D-NY), member of the House Appropriations Committee, and a strong opponent of off-shore drilling, stated last week that, “We (the government) should own the refineries. Then we can control how much gets out into the market.”
Maybe we should check with Hugo Chavez and see how that’s going. Oh, that’s right. Venezuela’s oil is heavy, high sulphur stuff that is hard to refine. The country’s oil fields are in decline and will need major investment and sophisticated technology and know-how to maintain production going forward. But now El Presidente has guaranteed that no one who has the technology and know-how will touch Venezuela with a 39 ½ foot pole.
It was quite clear from the give and take during the hearings that none of the Democrats had the slightest idea about how oil markets work - frightening and discouraging.
Here’s the best part. Most people know that new domestic oil exploration has been largely prohibited for 30 years, and that we have not built a new refinery for 35 years. But what you may not know is that India is close to putting the finishing touches on a brand new refinery that will be the largest in the world. It is a short tanker ride from the Persian Gulf to India. So now not only will we have to send an ever increasing amount of money to our enemies for oil but we will then send even more money to India to refine it before they ship it to us.
Brilliant!
Manhattan Project Equivalency
Obama and the Democratic "talking point" gang speak often of a “Manhattan Project” for our energy future. The WWII Manhattan Project cost was $2B between 1941 and 1946. That translates into about $24B in 2008 dollars.
The Department of Energy's ('DOE') budget request for 2009 is about $25B. If you strip out money for security and defense (nuclear non-proliferation, navy nuclear, etc.) the DOE budget is about $16. At this run rate we will spend $80B over the next five years, the length of the Manhattan Project if you throw out 1941, a ramp-up year. In other words, we are already spending more than three times as much on government energy spending as we did on creating the atomic bomb – just by the DOE.
Now, think about all the tax credits for solar and wind. Then add the ethanol subsidies. None of this is in the DOE budget. They are just giveaways to promote certain behaviors. And of course none of this includes the costs that are externalized from the federal budget via mandates for everything from cleaner emission requirements for coal plants, increased spending by car companies to meet mileage and emission requirements, and increased costs of food due to diverting vast agricultural resources away from food to fuel. The Pentagon is spending huge sums of money to buy synthetic fuel (coal gasification – even with today’s oil prices it still costs 50% more than refining oil into transportation fuel).
I don’t know how much all these subsidies and externalized costs add up to but let’s say conservatively that it is another $100B over 5 years (it is probably much, much more). The point is that the government is spending enormous sums of money on energy research, alternative fuel subsidies, and even greater sums are being spent on unfunded government mandates.
Now I’m not debating the validity of any of these efforts. I’m just pointing out that there are enormous taxpayer and consumer monies being spent on all of this – far in excess of “Manhattan equivalency”. So when Obama talks about a Manhattan Project for energy, just exactly what is it he thinks can be accomplished and how much will it cost? I don’t think that anyone is suggesting that there is some energy source just waiting for the government to discover that will suddenly solve the problem, like the atomic bomb ended WWII.
In the case of the Manhattan Project, the theory was understood. The nature of critical mass had been established at the University of Chicago. As long as Oakridge could produce the enriched uranium, Los Alamos just had to figure out how to trigger a critical reaction on queue.
With energy the list of alternatives is well known. With oil at $130/barrel and climbing there is a strong profit motive for venture capitalists and entrepreneurs to develop better execution of these alternatives. In many ways, this is an easier problem to solve than the atom bomb.
The government can, and already does, fund a great deal of research to help alternative technologies reach commercial scale. The government can also apply a little common sense and enable us to attack the problem across the board using all of the resources at our disposale, both new and traditional.
The Department of Energy's ('DOE') budget request for 2009 is about $25B. If you strip out money for security and defense (nuclear non-proliferation, navy nuclear, etc.) the DOE budget is about $16. At this run rate we will spend $80B over the next five years, the length of the Manhattan Project if you throw out 1941, a ramp-up year. In other words, we are already spending more than three times as much on government energy spending as we did on creating the atomic bomb – just by the DOE.
Now, think about all the tax credits for solar and wind. Then add the ethanol subsidies. None of this is in the DOE budget. They are just giveaways to promote certain behaviors. And of course none of this includes the costs that are externalized from the federal budget via mandates for everything from cleaner emission requirements for coal plants, increased spending by car companies to meet mileage and emission requirements, and increased costs of food due to diverting vast agricultural resources away from food to fuel. The Pentagon is spending huge sums of money to buy synthetic fuel (coal gasification – even with today’s oil prices it still costs 50% more than refining oil into transportation fuel).
I don’t know how much all these subsidies and externalized costs add up to but let’s say conservatively that it is another $100B over 5 years (it is probably much, much more). The point is that the government is spending enormous sums of money on energy research, alternative fuel subsidies, and even greater sums are being spent on unfunded government mandates.
Now I’m not debating the validity of any of these efforts. I’m just pointing out that there are enormous taxpayer and consumer monies being spent on all of this – far in excess of “Manhattan equivalency”. So when Obama talks about a Manhattan Project for energy, just exactly what is it he thinks can be accomplished and how much will it cost? I don’t think that anyone is suggesting that there is some energy source just waiting for the government to discover that will suddenly solve the problem, like the atomic bomb ended WWII.
In the case of the Manhattan Project, the theory was understood. The nature of critical mass had been established at the University of Chicago. As long as Oakridge could produce the enriched uranium, Los Alamos just had to figure out how to trigger a critical reaction on queue.
With energy the list of alternatives is well known. With oil at $130/barrel and climbing there is a strong profit motive for venture capitalists and entrepreneurs to develop better execution of these alternatives. In many ways, this is an easier problem to solve than the atom bomb.
The government can, and already does, fund a great deal of research to help alternative technologies reach commercial scale. The government can also apply a little common sense and enable us to attack the problem across the board using all of the resources at our disposale, both new and traditional.
The Spector of Speculators
When it comes to oil we are in a parabolic run up not dissimilar to the Nasdaq bubble of 1999/2000. The thing about bubbles is that they can inflate for a lot longer than you’d ever imagine. There are a lot of companies who have significant energy costs or are otherwise impacted by the price of oil that are rushing in to lock in prices for the future. It is a lot like a short squeeze. Everyone is panicking that if they don’t lock in now they are going to get hurt even more.
Joe Lieberman says he is going to introduce a bill that will prohibit anyone from trading in oil futures that are not able to take physical delivery. So I guess this means that for companies where managing their energy exposure, like airlines, but do not take physical delivery, will be barred from the future exchanges?
Other bills are being introduced by the Democrats to prohibit index funds from trading commodity futures. Are we really going to say Party A can invest in only these types of investments and Party B can invest in others? Is this the Soviet Union?
It is doubtful that speculators are materially affecting oil prices. There are many traders taking short position in oil right now, expecting the bubble to pop. It is not a long only market when it comes to traders. If fact, speculators, let's call them commodity traders (investing in futures without intending to take delivery of the physical commodity), create liquidity that is highly beneficial to the price discovery and companies being able to efficiently move in and out of positions.
If traders that do not take physical delivery are the cause of rising prices, then consider this. Eventually, these traders have to sell their futures contracts before the commitment date to take delivery. If speculators were such a powerful force, then this selling should cause the price to fall dramatically at the point when the contracts have to be "rolled forward". Last week was futures expiration for the quarter and options expiration for the month. No drop in price was experienced.
The global daily production of oil peaked in 2005 at 85 million barrels. The current demand is about 85 to 87 million barrels. Since 2005 emerging economies such as China and India are consuming ever greater amounts of energy and commodities. Without more supply, and growing demand, the price goes up. Certainly there will be some downward pressure in short term prices as the high costs cause demand destruction and substitution behavior. We have already seen some of this in the U.S. over the last several months.
A clue to determining if speculation is a factor is to look at other commodity prices that are not traded on futures markets. Iron ore and coal are good examples. Both of these commodities are traded through contracts between private parties. Neither of these are traded on a futures exchange. But the cost of both of these commodities have skyrocketed more than the price of oil due to global demand.
In fact, all the commodities that are needed to build out the surge in global infrastructure and racing up due to skyrocketing demand in the face of a long lead time to increase supplies. Why do steel companies have sustainable pricing power for the first time in generations? It is because China and Russia used to be able to flood the market with cheap steel. Now China is making as much steel as they can and importing much more. Why has the price of coal more than doubled recently. China used to be a net exporter of coal. Now they are a net importer. Not only are they now a net consumer of coal but all the other countries in Asia that used to buy coal from China are now scrambling to obtain substitute supplies from Australia and the United States.
Congress, having created the lack of supply, and frantically looking for political cover, will undoubtedly make the situation worse. If Congress wants to close the "Enron loophole" then I'm fine with that. And it might have some short term effect. But it will not change the fundamental supply and demand dynamics of the market.
The U.S. Congress always feels compelled to "do something". But that something rarely solves the problem, makes it worse, and has severe unintended consequences. Take Enron for example. Congress' solution was to pass Sarbanes-Oxley. "Sarbox" has solved nothing and has had the unintended consequence of driving new companies to IPO in London and Hong Kong instead of New York. Sarbox has had a chilling affect on attracting capital to the U.S. and has been financially untenable for smaller U.S. companies.
If Congress has its way with making the U.S. commodities exchanges non-competitive in the world market then oil futures trading will simply move to the Dubai exchange. Nothing will have been solved. But the Nymex will be damaged irreparably. Like with Sarbox, Congress is always fighting the last war.
Joe Lieberman says he is going to introduce a bill that will prohibit anyone from trading in oil futures that are not able to take physical delivery. So I guess this means that for companies where managing their energy exposure, like airlines, but do not take physical delivery, will be barred from the future exchanges?
Other bills are being introduced by the Democrats to prohibit index funds from trading commodity futures. Are we really going to say Party A can invest in only these types of investments and Party B can invest in others? Is this the Soviet Union?
It is doubtful that speculators are materially affecting oil prices. There are many traders taking short position in oil right now, expecting the bubble to pop. It is not a long only market when it comes to traders. If fact, speculators, let's call them commodity traders (investing in futures without intending to take delivery of the physical commodity), create liquidity that is highly beneficial to the price discovery and companies being able to efficiently move in and out of positions.
If traders that do not take physical delivery are the cause of rising prices, then consider this. Eventually, these traders have to sell their futures contracts before the commitment date to take delivery. If speculators were such a powerful force, then this selling should cause the price to fall dramatically at the point when the contracts have to be "rolled forward". Last week was futures expiration for the quarter and options expiration for the month. No drop in price was experienced.
The global daily production of oil peaked in 2005 at 85 million barrels. The current demand is about 85 to 87 million barrels. Since 2005 emerging economies such as China and India are consuming ever greater amounts of energy and commodities. Without more supply, and growing demand, the price goes up. Certainly there will be some downward pressure in short term prices as the high costs cause demand destruction and substitution behavior. We have already seen some of this in the U.S. over the last several months.
A clue to determining if speculation is a factor is to look at other commodity prices that are not traded on futures markets. Iron ore and coal are good examples. Both of these commodities are traded through contracts between private parties. Neither of these are traded on a futures exchange. But the cost of both of these commodities have skyrocketed more than the price of oil due to global demand.
In fact, all the commodities that are needed to build out the surge in global infrastructure and racing up due to skyrocketing demand in the face of a long lead time to increase supplies. Why do steel companies have sustainable pricing power for the first time in generations? It is because China and Russia used to be able to flood the market with cheap steel. Now China is making as much steel as they can and importing much more. Why has the price of coal more than doubled recently. China used to be a net exporter of coal. Now they are a net importer. Not only are they now a net consumer of coal but all the other countries in Asia that used to buy coal from China are now scrambling to obtain substitute supplies from Australia and the United States.
Congress, having created the lack of supply, and frantically looking for political cover, will undoubtedly make the situation worse. If Congress wants to close the "Enron loophole" then I'm fine with that. And it might have some short term effect. But it will not change the fundamental supply and demand dynamics of the market.
The U.S. Congress always feels compelled to "do something". But that something rarely solves the problem, makes it worse, and has severe unintended consequences. Take Enron for example. Congress' solution was to pass Sarbanes-Oxley. "Sarbox" has solved nothing and has had the unintended consequence of driving new companies to IPO in London and Hong Kong instead of New York. Sarbox has had a chilling affect on attracting capital to the U.S. and has been financially untenable for smaller U.S. companies.
If Congress has its way with making the U.S. commodities exchanges non-competitive in the world market then oil futures trading will simply move to the Dubai exchange. Nothing will have been solved. But the Nymex will be damaged irreparably. Like with Sarbox, Congress is always fighting the last war.
Friday, June 20, 2008
No, No, No!
http://www.breitbart.com/article.php?id=D91DVH680&show_article=1
Obama's first comment says it all. John McCain's proposal to allow offshore drilling "makes absolutely no sense at all". Then he proceeds to run out a couple of the Democratic talking points. I’m not worried if drilling on the continental shelf will only lowering gas prices by cents. I’m much more worried about gas being $10 per gallon in 10 years if there is not dramatic action to develop domestic supplies.
Why not let the oil companies explore? If it really turns out that in 2030 we don’t need the oil, then the oil companies took the risk and get screwed. Obama should love that.
So Obama is against developing new domestic oil supplies. He is against nuclear, which is the only technology available for the foreseeable future that can provide baseline electricity with no carbon emissions.
True plug-in cars are still science fiction. The battery technology simply does not exist. No one has figured out how to produce free hydrogen economically, or without fossil fuels. There is no technology on the horizon for truly clean coal. The technology exists to eliminate most of the non-carbon emissions. But there is no technology available to eliminate carbon emissions – even though the Bush Administration is working on it. Under the Bush Administration, the DOE has already been put on track to spend $150B in alternative fuel technologies in Obama's 10 year timeframe.
Obama and the liberals, and some Republicans, suffer from “miracle thinking”. They think that we are close to a breakthrough. That if we “just spend a little more money, the solution will be achieved.” They also suffer from “all or nothing” thinking. The only answer is breakthrough alternative technologies, and nothing else. They also think that conservatives also suffer from “all or nothing” thinking – favoring only the development of new fossil fuel production. This is demonstrably false. And politicians of all strips all suffer from an inability to understand that long term problems require long term solutions. Politicians always grab at the “quick fix”, which is usually no fix, or makes the problem even worse.
Only conservatives seem to be able to lay out a balanced attack that is actually realistic. Liberals can’t make the “least bad choice”. We are in a situation where there is no miracle waiting around the corner. We have to employ every technology as well as appropriately use fossil fuels and rapidly accelerate nuclear. John McCain called this week for building 45 new nuclear plants by 2030. Spend the $150B on alternative technologies. But if that’s all we do we will effectively put a cap on our economic development – which is probably what Obama really wants anyway. Obama policies will create an energy crisis in electrical energy generation that will simply lead to more coal being burned.
Here is an amusing point. The one of the anti-nuclear crowd‘s main objections is what to do with the waste. Of course you store it in the ground under Yucca mountain, if Harry Reid wasn’t such a nuclear obstructionist. Until then it is being stored underground or underwater on site at our nation’s 104 nuclear plants. But the “alternative technology” for truly clean coal is some form of carbon sequestration. In other words, they want to figure out how to bury it underground!
Do you really think that a relatively small amount of nuclear waste, much of which is reprocessed in the newer plants, is a greater danger that the hundreds and hundreds of millions of pounds of carbon that we are pumping into the atmosphere each year?
Obama's first comment says it all. John McCain's proposal to allow offshore drilling "makes absolutely no sense at all". Then he proceeds to run out a couple of the Democratic talking points. I’m not worried if drilling on the continental shelf will only lowering gas prices by cents. I’m much more worried about gas being $10 per gallon in 10 years if there is not dramatic action to develop domestic supplies.
Why not let the oil companies explore? If it really turns out that in 2030 we don’t need the oil, then the oil companies took the risk and get screwed. Obama should love that.
So Obama is against developing new domestic oil supplies. He is against nuclear, which is the only technology available for the foreseeable future that can provide baseline electricity with no carbon emissions.
True plug-in cars are still science fiction. The battery technology simply does not exist. No one has figured out how to produce free hydrogen economically, or without fossil fuels. There is no technology on the horizon for truly clean coal. The technology exists to eliminate most of the non-carbon emissions. But there is no technology available to eliminate carbon emissions – even though the Bush Administration is working on it. Under the Bush Administration, the DOE has already been put on track to spend $150B in alternative fuel technologies in Obama's 10 year timeframe.
Obama and the liberals, and some Republicans, suffer from “miracle thinking”. They think that we are close to a breakthrough. That if we “just spend a little more money, the solution will be achieved.” They also suffer from “all or nothing” thinking. The only answer is breakthrough alternative technologies, and nothing else. They also think that conservatives also suffer from “all or nothing” thinking – favoring only the development of new fossil fuel production. This is demonstrably false. And politicians of all strips all suffer from an inability to understand that long term problems require long term solutions. Politicians always grab at the “quick fix”, which is usually no fix, or makes the problem even worse.
Only conservatives seem to be able to lay out a balanced attack that is actually realistic. Liberals can’t make the “least bad choice”. We are in a situation where there is no miracle waiting around the corner. We have to employ every technology as well as appropriately use fossil fuels and rapidly accelerate nuclear. John McCain called this week for building 45 new nuclear plants by 2030. Spend the $150B on alternative technologies. But if that’s all we do we will effectively put a cap on our economic development – which is probably what Obama really wants anyway. Obama policies will create an energy crisis in electrical energy generation that will simply lead to more coal being burned.
Here is an amusing point. The one of the anti-nuclear crowd‘s main objections is what to do with the waste. Of course you store it in the ground under Yucca mountain, if Harry Reid wasn’t such a nuclear obstructionist. Until then it is being stored underground or underwater on site at our nation’s 104 nuclear plants. But the “alternative technology” for truly clean coal is some form of carbon sequestration. In other words, they want to figure out how to bury it underground!
Do you really think that a relatively small amount of nuclear waste, much of which is reprocessed in the newer plants, is a greater danger that the hundreds and hundreds of millions of pounds of carbon that we are pumping into the atmosphere each year?
Thursday, June 19, 2008
On the Brink of Success
Obama said unequivocally that the “surge” could never work. He stated that he could not find a general who could tell him how many more troops it would take to succeed. I guess he never bothered to talk to General Petreaus. He does not believe there is any point to him traveling to Iraq to see for himself what is happening on the ground. Susan Rice, a top Obama foreign-policy adviser, says that the GOP argument that he should do so is "complete garbage."
He is doggedly insisting that regardless of how much progress has been made he will immediately begin withdrawing troops on a fixed schedule. This sort of arrogance is disturbing for someone who may be Commander in Chief.
Now Senator Obama is hinting that he may travel to Iraq. And in a conversation with the Iraqi Foreign Minister, Obama was implored not to act recklessly. A Washington Post editorial quoted the foreign minister as saying "my message" to Mr. Obama "was very clear. . . . Really, we are making progress. I hope any actions you will take will not endanger this progress."
Progress in Iraq is accelerating. We can now begin to see a future where there is a stable and democratic country in the center of the most dangerous and autocratic region of the world. Iraq may have as much oil as Saudi Arabia. Under Saddam Hussain the countries oil infrastructure was broken and crumbling. Now it is (slowly) being rebuilt. How’s that for a Bush legacy?
He is doggedly insisting that regardless of how much progress has been made he will immediately begin withdrawing troops on a fixed schedule. This sort of arrogance is disturbing for someone who may be Commander in Chief.
Now Senator Obama is hinting that he may travel to Iraq. And in a conversation with the Iraqi Foreign Minister, Obama was implored not to act recklessly. A Washington Post editorial quoted the foreign minister as saying "my message" to Mr. Obama "was very clear. . . . Really, we are making progress. I hope any actions you will take will not endanger this progress."
Progress in Iraq is accelerating. We can now begin to see a future where there is a stable and democratic country in the center of the most dangerous and autocratic region of the world. Iraq may have as much oil as Saudi Arabia. Under Saddam Hussain the countries oil infrastructure was broken and crumbling. Now it is (slowly) being rebuilt. How’s that for a Bush legacy?
U.S. Manufacturing - Stronger Than Ever
One of the concepts that I’ve come to recognize recently is that American manufacturing is stronger than ever. But there has been a seismic shift from dumb, mass produced manufacturing to smart, solve the world’s problems manufacturing. Some are calling these manufacturing companies “new tech”. Where silicon valley is focusing on the next version of Grand Theft Auto to teach our children how to be better felons, these new tech companies are making the world a better place.
Since 1950 manufacturing output has soared in the United States. But manufacturing jobs have steadily decreased due to vast advances in productivity. When people lament the loss of manufacturing jobs, they are missing the big picture that we are producing more than ever and growing our GDP - to the benefit of all.
Aside from the obvious large cap companies like Boeing and Caterpillar, there are multitudes of companies that Joe Mainstreet has never heard about that are driving American’s manufacturing success in the global economy. The specialized heavy equipment for mining coal and other minerals is a global duopoly: Bucyrus and Joy Global, both based in Wisconsin. The world’s premier crane manufacturer: Manitowoc , also based in Wisconsin. Owens Illinois doesn’t just make pink insulation. It also manufactures the carbon composites for the blades of wind turbines. The list is long and distinguished: Flowserve, Gardner Denver, Parker-Hannifin, Deere, Emerson Electric, Otter Tail, Eaton, National Oilwell…
Obama’s view of our country is so negative – where success and wealth must be punished (“Reward work, not wealth.” is his stump speech line – why not reward both?), where racism is endemic, where corporations are evil, where valid public service does not include the military (made clear by his commencement address at Wesleyan), where manufacturing is dead.
His populism doesn’t embrace change for the future. He wants to return to a world where uneducated people could join a union and earn ridiculous money in dumb manufacturing. He has this redistributionist scheme to confiscate profits from companies he considers un-American and give it to companies he considers pro-American. Obama’s vision for our economy is a Soviet-style central planning model where he takes away and redistributes based on his belief of what is fair.
Since 1950 manufacturing output has soared in the United States. But manufacturing jobs have steadily decreased due to vast advances in productivity. When people lament the loss of manufacturing jobs, they are missing the big picture that we are producing more than ever and growing our GDP - to the benefit of all.
Aside from the obvious large cap companies like Boeing and Caterpillar, there are multitudes of companies that Joe Mainstreet has never heard about that are driving American’s manufacturing success in the global economy. The specialized heavy equipment for mining coal and other minerals is a global duopoly: Bucyrus and Joy Global, both based in Wisconsin. The world’s premier crane manufacturer: Manitowoc , also based in Wisconsin. Owens Illinois doesn’t just make pink insulation. It also manufactures the carbon composites for the blades of wind turbines. The list is long and distinguished: Flowserve, Gardner Denver, Parker-Hannifin, Deere, Emerson Electric, Otter Tail, Eaton, National Oilwell…
Obama’s view of our country is so negative – where success and wealth must be punished (“Reward work, not wealth.” is his stump speech line – why not reward both?), where racism is endemic, where corporations are evil, where valid public service does not include the military (made clear by his commencement address at Wesleyan), where manufacturing is dead.
His populism doesn’t embrace change for the future. He wants to return to a world where uneducated people could join a union and earn ridiculous money in dumb manufacturing. He has this redistributionist scheme to confiscate profits from companies he considers un-American and give it to companies he considers pro-American. Obama’s vision for our economy is a Soviet-style central planning model where he takes away and redistributes based on his belief of what is fair.
Why Can't We Drill?
I have watched closely the recent case for and against expanding domestic oil production. The Democrats have a carefully constructed set of talking points. How do I know? Because every single Democrat that comes on TV to debate the issue runs through the exact same points. Here they are:
We can’t drill our way out of this problem. This statement is inane on its face. We’ll need supplies of oil for a long time. Any additional domestic production, which will also be new production to the world supply, is better than not having any additional production. Maybe the Democrats are trying to imply that the only energy solution that the GOP supports is drilling for oil – which is absolute nonsense.
We shouldn’t drill in ANWR because it will take 10 years before new oil will be available to the country. Also a silly statement. Are the Democrats suggesting that 1 million barrels of oil a day in new production will not be helpful in 10 years? Would it be better to continue buying oil from Hugo Chavez or the Arab dictators? Are they assuming that 10 years from now that there will be no need for oil in this country? The entire global oil production peaked in 2005 at 85 million barrels a day. 1 million barrels a day is not insignificant.
ANWR is a pristine wilderness that must be protected. ANWR is a vast 19 million acre section of northeastern Alaska. Only a small area in the northeastern corner of ANWR is needed to drill. Current drilling technology is much less invasive and ecologically protective than in the past. The Bush administration has done the homework to confirm that innovative methods of drilling can be used that will have almost no impact on the environment or wildlife in this small corner of ANWR. Anyone who is making this point doesn’t understand the facts, or has some other agenda.
If we were to bring ANWR supplies on-line, it would only reduce gas prices by 1 cent a gallon. I haven’t had a chance to validate this point. Regardless, providing 5% of our needs from a new domestic source certainly is smart. I'm not so worried about lowering the gas price as I am that it will double in 10 years, or sooner, without significant new domestic supply. China, India, and the rest of the emerging markets are going put greater and greater demand pressure on prices for years to come.
Big Oil is sitting on thousands of leases on 68 million acres of federal land and are not drilling on it. Congress needs to pass a “use it or lose” it law in regard to these leases. What is the point of opening up new areas to drilling when they are not even drilling on the land they already have access to? It is true that oil companies have leases on this land, which may or may not turn out to be productive. But having leases on land does not mean a company has an approved permit to drill. The Democrats make sure it is a very difficult and lengthy process to have a permit approved. Environmental groups also file endless lawsuits to block the permits from being approved. So much of this land is not really approved for drilling. Plus, the Democrats’ 10 year argument for ANWR is the same here. The truth is that all of the highest potential areas have been removed from development. For example, in last year’s budget, Congress put in prohibition on developing the most promising oil shale areas – areas that appear to have several more times the oil that Saudi Arabia has – 800 billion barrels in shale oil in the U.S. And “use it or lose it”? How does this solve anything? It you take the lease away they there still is no domestic production. Stupid. And in fact, where permits are grudgingly granted, this land is being developed.
We need a Manhattan Project to develop new sources of alternative energy. Bill Clinton and Al Gore were in power for 8 years and did absolutely nothing about alternative energy. Former Clinton insiders say that Clinton was terrified of offending the Saudis. He wanted them to pump as much oil as possible. The truth is, and I’ve done the homework, that the Bush administration has done more to develop alternative sources of fuel than any other administration. Under the Bush Administration the Department of Energy has thousands of projects underway with private and public organizations to conduct research and solve the intractable problems of alternative energy. Examples include clean coal using carbon sequestration, solar concentraor technology, and hydrogen fuel creation. Bush has pushed for the development of non-food based ethanol, such as switch grass (closer to sugarcane than corn in energy conversion). But Congress, Democrats and Republicans both, have pandered to the corn lobby instead. We are diverting 30% of our corn crop, with huge consequences to the food supply chain, to produce 3% of our “gasoline”. I have not heard a single concrete proposal from the Democrats about what ”Manhattan Project” research needs to be done that is not already being done by the Bush administration.
During the Bush Admission oil prices have surged – which is no surprise since the oil industry wrote the Bush Administration’s energy policy. The Democrats love to point out that the majority of the people that worked with Dick Cheney on the White House’s energy strategy were connected to the oil or energy industry in some way. Really? What experts should we engage to develop an energy strategy? The hospitality and food service industry maybe? Or perhaps some investment bankers? Have you actually read the White House’s energy strategy for our country? I have. It is a comprehensive and balanced plan that focuses heavily on alternative fuels as well as being realistic regarding fossil fuel needs. No one on the talking points circuit, mind you, points to a single action or policy of the Bush Administration that has contributed to the rapid escalation of oil and gas prices. Has Bush caused the surging economies of emerging markets such as China and India, that have pushed oil and commodity demand beyond supply? Of course not. But in the Democrats’ playbook, correlation does equal causation.
The coasts of Florida and California are important to tourism and are environmentally sensitive. The truth is that the drilling is much more environmentally safe than in the past. Today’s ability to drill horizontally opens up all sorts of possibilities. Ultra deep water drilling off of the coast of Brazil has discovered the largest oil reserve in a generation. There has not been a major, or minor, environmental issue in the Gulf of Mexico, the one area where offshore drilling is allowed (so long as it is not off the Florida coast), in decades. Even Katrina did not cause any oil to be spilled from offshore rigs. Plus, these rigs would be so far off the coast as to never be seen by anyone.
There are plenty of off-shore areas available to explore. All of the Atlantic coast, all of the Pacific coast, and one third of the Gulf of Mexico coast is banned from exploration and production. No one has even been allowed to perform a survey of these banned areas in almost 30 years.
The Democrats talking points don’t make any sense if you are semi-intelligent and have some basic understanding of the facts. There are only two possible explanations that I can come up with for the Democrats’ unrelenting obstruction in developing our domestic energy sources (assuming they’re not complete idiots). The first is that they are so obsessed with a fear of global warming that they place this in greater importance than having sufficient energy to grow our economy. The second is that by creating an energy crisis, enough political capital will be created to seize government control of another major segment of the economy, and increase their power as a result.
While #1 is probably in play with some, #2 is almost a certainty. There is more and more talk within the Democratic Party of nationalizing the U.S. oil industry. Of course, “Big Oil” controls less than 5% of the world’s oil reserves. If the oil industry was nationalized, and placed under Democratic control, it is a certainty that we will have even less energy and higher prices. But the Democrats will have the most powerful of all powers – the power to ration. Having done everything possible to block domestic supply, given total control of the country’s oil industry would mean they could reduce it even more.
We can’t drill our way out of this problem. This statement is inane on its face. We’ll need supplies of oil for a long time. Any additional domestic production, which will also be new production to the world supply, is better than not having any additional production. Maybe the Democrats are trying to imply that the only energy solution that the GOP supports is drilling for oil – which is absolute nonsense.
We shouldn’t drill in ANWR because it will take 10 years before new oil will be available to the country. Also a silly statement. Are the Democrats suggesting that 1 million barrels of oil a day in new production will not be helpful in 10 years? Would it be better to continue buying oil from Hugo Chavez or the Arab dictators? Are they assuming that 10 years from now that there will be no need for oil in this country? The entire global oil production peaked in 2005 at 85 million barrels a day. 1 million barrels a day is not insignificant.
ANWR is a pristine wilderness that must be protected. ANWR is a vast 19 million acre section of northeastern Alaska. Only a small area in the northeastern corner of ANWR is needed to drill. Current drilling technology is much less invasive and ecologically protective than in the past. The Bush administration has done the homework to confirm that innovative methods of drilling can be used that will have almost no impact on the environment or wildlife in this small corner of ANWR. Anyone who is making this point doesn’t understand the facts, or has some other agenda.
If we were to bring ANWR supplies on-line, it would only reduce gas prices by 1 cent a gallon. I haven’t had a chance to validate this point. Regardless, providing 5% of our needs from a new domestic source certainly is smart. I'm not so worried about lowering the gas price as I am that it will double in 10 years, or sooner, without significant new domestic supply. China, India, and the rest of the emerging markets are going put greater and greater demand pressure on prices for years to come.
Big Oil is sitting on thousands of leases on 68 million acres of federal land and are not drilling on it. Congress needs to pass a “use it or lose” it law in regard to these leases. What is the point of opening up new areas to drilling when they are not even drilling on the land they already have access to? It is true that oil companies have leases on this land, which may or may not turn out to be productive. But having leases on land does not mean a company has an approved permit to drill. The Democrats make sure it is a very difficult and lengthy process to have a permit approved. Environmental groups also file endless lawsuits to block the permits from being approved. So much of this land is not really approved for drilling. Plus, the Democrats’ 10 year argument for ANWR is the same here. The truth is that all of the highest potential areas have been removed from development. For example, in last year’s budget, Congress put in prohibition on developing the most promising oil shale areas – areas that appear to have several more times the oil that Saudi Arabia has – 800 billion barrels in shale oil in the U.S. And “use it or lose it”? How does this solve anything? It you take the lease away they there still is no domestic production. Stupid. And in fact, where permits are grudgingly granted, this land is being developed.
We need a Manhattan Project to develop new sources of alternative energy. Bill Clinton and Al Gore were in power for 8 years and did absolutely nothing about alternative energy. Former Clinton insiders say that Clinton was terrified of offending the Saudis. He wanted them to pump as much oil as possible. The truth is, and I’ve done the homework, that the Bush administration has done more to develop alternative sources of fuel than any other administration. Under the Bush Administration the Department of Energy has thousands of projects underway with private and public organizations to conduct research and solve the intractable problems of alternative energy. Examples include clean coal using carbon sequestration, solar concentraor technology, and hydrogen fuel creation. Bush has pushed for the development of non-food based ethanol, such as switch grass (closer to sugarcane than corn in energy conversion). But Congress, Democrats and Republicans both, have pandered to the corn lobby instead. We are diverting 30% of our corn crop, with huge consequences to the food supply chain, to produce 3% of our “gasoline”. I have not heard a single concrete proposal from the Democrats about what ”Manhattan Project” research needs to be done that is not already being done by the Bush administration.
During the Bush Admission oil prices have surged – which is no surprise since the oil industry wrote the Bush Administration’s energy policy. The Democrats love to point out that the majority of the people that worked with Dick Cheney on the White House’s energy strategy were connected to the oil or energy industry in some way. Really? What experts should we engage to develop an energy strategy? The hospitality and food service industry maybe? Or perhaps some investment bankers? Have you actually read the White House’s energy strategy for our country? I have. It is a comprehensive and balanced plan that focuses heavily on alternative fuels as well as being realistic regarding fossil fuel needs. No one on the talking points circuit, mind you, points to a single action or policy of the Bush Administration that has contributed to the rapid escalation of oil and gas prices. Has Bush caused the surging economies of emerging markets such as China and India, that have pushed oil and commodity demand beyond supply? Of course not. But in the Democrats’ playbook, correlation does equal causation.
The coasts of Florida and California are important to tourism and are environmentally sensitive. The truth is that the drilling is much more environmentally safe than in the past. Today’s ability to drill horizontally opens up all sorts of possibilities. Ultra deep water drilling off of the coast of Brazil has discovered the largest oil reserve in a generation. There has not been a major, or minor, environmental issue in the Gulf of Mexico, the one area where offshore drilling is allowed (so long as it is not off the Florida coast), in decades. Even Katrina did not cause any oil to be spilled from offshore rigs. Plus, these rigs would be so far off the coast as to never be seen by anyone.
There are plenty of off-shore areas available to explore. All of the Atlantic coast, all of the Pacific coast, and one third of the Gulf of Mexico coast is banned from exploration and production. No one has even been allowed to perform a survey of these banned areas in almost 30 years.
The Democrats talking points don’t make any sense if you are semi-intelligent and have some basic understanding of the facts. There are only two possible explanations that I can come up with for the Democrats’ unrelenting obstruction in developing our domestic energy sources (assuming they’re not complete idiots). The first is that they are so obsessed with a fear of global warming that they place this in greater importance than having sufficient energy to grow our economy. The second is that by creating an energy crisis, enough political capital will be created to seize government control of another major segment of the economy, and increase their power as a result.
While #1 is probably in play with some, #2 is almost a certainty. There is more and more talk within the Democratic Party of nationalizing the U.S. oil industry. Of course, “Big Oil” controls less than 5% of the world’s oil reserves. If the oil industry was nationalized, and placed under Democratic control, it is a certainty that we will have even less energy and higher prices. But the Democrats will have the most powerful of all powers – the power to ration. Having done everything possible to block domestic supply, given total control of the country’s oil industry would mean they could reduce it even more.
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