Monthly Archives: September 2019

Oil Strikes and our Economy

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“Economists” cited by The Wall Street Journal say that the Iranian/Houthi strikes against a couple of major Saudi Arabian oil production facilities are unlikely to do much to our economy. Despite their anonymity, those…sources’…assessment is accurate.

Among other things, we’ve made ourselves essentially self-sufficient in oil and natural gas production, have become the world’s leading producer, and we’re a net exporter of oil and natural gas.  That last, especially, means we’ll easily be able fill any shortfall from the Saudis’ damage.  (Production cuts from that damage are likely to be short-lived in any event.)

In addition,

Today, energy accounts for about 2.5% of household consumption, down from around 8% in the 1970s

The Federal Reserve still has its misconception regarding the proper execution of its role, though:

The Saudi oil-field attack adds a new factor to consider for Federal Reserve officials, who have been weighing how a variety of geopolitical risks will influence the economic outlook, including the US-China trade war, unrest in Hong Kong, and Britain’s impending departure from the European Union.

Those things are irrelevant to the Fed’s task, which is to maintain stable pricing and full employment. The optimal way to achieve this is simply to set its benchmark interest rates at levels consistent with its inflation rate goal, and then—rather than chasing market responses to this or that “geopolitical risk,” or trying to anticipate and preempt them—sit down and be quiet.  The resulting sound economy will produce full employment.

The Fed’s inconstancy is a bigger problem for our economy than hits, even major ones, on another nation’s energy production capability.

On the other hand, the People’s Republic of China burns through three times the oil that it produces; it badly needs oil imports, much of which it got from Saudi Arabia.

Japan imports nearly all of the oil and natural gas that it consumes.  That’s a shortfall we easily can, and should, fill.

The VA Strikes Again

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Several times.

First up is this petty (and more) move by the Veterans Administration.

Congressman Brian Mast (R, FL)a retired Army Ranger, spoke out on Thursday after he was evicted from his congressional office space in the West Palm Beach Veteran Affairs Medical Center.
The move came after Mast, who lost his legs in an explosion in Afghanistan in 2010, grilled a Department of Veteran Affairs official at a hearing earlier this year.

After a spate of veteran suicides in VA facilities, Mast questioned a number of VA officials last April.  Now the VA wants him out of that office space:

The department will use the space previously dedicated to 6 members of congress for the provision of medical care services.

Which might actually be plausible, except for the timing of the move. And the fact that, were the office space actually needed, the facility could have declined to lease the space to Mast in the first place.

 

Next is this, even more egregious, item. It seems the VA has been refusing to reimburse veterans who go to an emergency medical facility that’s not a VA hospital.  Never mind the “emergency” part of that.  It took a judge’s order in a lawsuit to force the VA to pay the bills.  And this isn’t the first time on this specific matter.

The Department of Veterans Affairs has been ordered to reimburse veterans for the cost of their emergency care at non-VA hospitals—something the agency has actively told veterans they are not entitled to, an appeals court ruled this week.
The VA has wrongfully been denying veterans’ claims while also misrepresenting a regulation that entitles them to reimbursement, the U.S. Court of Appeals for Veterans Claims said Monday.

The appellate court was not impressed with this deliberate misbehavior [emphasis added].

A previous regulation ended up excluding “nearly every type of expense a veteran could have incurred if he or she had insurance covering the non-emergency VA medical service at issue” from reimbursement, the court said, which violates a 2010 federal law.
“The Agency has effectively rolled back the clock and, with no transparency, essentially readopted a position we have authoritatively held inconsistent with Congress’s command,” the judges said, according to court documents. “Recognizing this is what has happened is—quite frankly—startling enough.
“It’s difficult to conceive how an agency could believe that adopting a regulation that mimics the result a federal court held to be unlawful is somehow appropriate when the statute at issue has not changed[.]”

That deliberate illegality ought to get some VA folks into jail.

 

And this, the worst of the lot.

…a Vietnam War veteran was reportedly found last week covered in ants and ant bites before he died at a Georgia VA nursing home.
Joel Marrable, who served in the Air Force, had more than 100 ant bites when his daughter visited him at the Eagle’s Nest Community Living Center in Decatur, the Atlanta Journal-Constitution reported. Laquna Moss said her father died shortly after being bitten in two incidents while battling cancer.

The VA still is actively killing through neglect our veterans.

The VA apologized, though. Like that makes everything all better.

Actions, not pretty words, and after all this time since the VA was first discovered falsifying appointment records and veterans were dying while on those fake appointment lists, nothing has changed.  Not a single item.

 

Veteranos Administratio delende est.

Personal Responsibility

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Business executives lack it. Or at least those who sent a letter to members of the Senate demanding action on gun control.

The letter asks senators to pass legislation requiring background checks on gun sales and said failing to take action on the issue is unacceptable.

With no trace of irony, the letter insists

We are writing to you because we have a responsibility and obligation to stand up for the safety of our employees, customers and all Americans in the communities we serve across the country[.]

So you have to satisfy our responsibility for us.

Cue Bill the Cat.

There’s nothing stopping these executives from barring firearms from their places of business on their own responsibility. Federal—and State—laws only authorize individual carry; they do not mandate it, nor do they prevent private businesses from saying, “not in our house.”

However, it’s easier for some to demand Government do something in their name than it is for those some to act on their own responsibility.

Interest Rate Foolishness

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Mario Draghi, in his last act as European Central Bank MFWIC, has lowered ECB benchmark interest rates and set the central bank on a long-term campaign of bond-buying.  His…idea…is to stimulate inflation and push the inflation rate to more normal levels.

Couple things about this.  The Wall Street Journal thinks this commits Draghi’s successor to this foolishness for the long term.  Of course, it does not.  His successor can undo this business when he takes office.  The difficulty will be solely within that successor’s political courage.

The larger problem though, is this. Interest rates are inherently inflationary.  While lowering the cost of money—especially to the point of negative interest rates—encourages borrowing and spending the borrowed money, it does little to nothing to inflation.  This is the case especially for a polity as dependent on international trade—whether within the EU or with nations outside the EU—as is the EU and its member nations.

Lower interest rates devalue the euro relative to non-EU nations, which drives up the cost of importing goods and services necessary to domestic production and sales.  Domestic prices won’t rise as much, even with the increased demand represented by the spending increases encouraged the lower (domestic) cost of money.

The ECB’s pre-emptive move was aimed at insulating the eurozone’s wobbling economy from a global slowdown and trade tensions.

The move won’t work any better today than similar moves have the last several years. Just as would be optimal in the US, if the ECB wants a stable, healthy, growing economy in the EU, it needs to set its benchmark interest rates at levels historically consistent with the inflation rate that has been optimal for the EU economy, and then sit down and be quiet.

Unfortunately, European bureaucrats and politicians are even more addicted to doing something than are our own.

Especially when the best something to do is nothing.

Intransigence

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Israeli Prime Minister Benjamin Netanyahu says that if he’s reelected later this month, he’ll begin annexing territories in the Jordan Valley and northern Dead Sea.  Naturally, the Palestine Liberation Organization and its European Union apologists are in a snoot over it. An anonymously presented EU spokesperson says

The policy of settlement construction and expansion…is illegal under international law and its continuation, and actions taken in this context, undermine the viability of the two-state solution and the prospects for a lasting peace[.]

The PLO’s Hanan Ashrawi says that

Netanyahu exposed his “real political agenda of superimposing ‘greater Israel’ on all of historical Palestine [and] carrying out an ethnic cleansing agenda.”

And so on.

Yet, this is what Palestinian intransigence, along with the steady drumbeat of the PLO’s Hamas terrorism, lately enhanced by Iran’s Hezbollah attacks from within Syria, have pushed Israel into.  The Israelis have nothing to lose with this move, and there is nothing possible to gain from continuing the past policies of failure.