Technology, Oil, and Government

Falling oil prices are a good thing. Except when they’re not. Or….

The irony in the falling prices is that the success of US producers using hydraulic fracturing and horizontal drilling technologies is partly responsible, along with slowing demand by struggling Asian and European markets. Now that success could come back to bite the so-called fracking industry and other drillers in America.

[Wyoming Governor Matt, R] Mead acknowledged that in the short term, lower gas prices will benefit businesses and residents in his sparsely populated state, where distances between towns are often calculated in hours instead of minutes.

Taxes and Congress

The 113th Congress, in its last days, has passed and sent to President Barack Obama for signature (or veto) a bill extending expired tax breaks through the end of this year. It’s retroactive because the expiration occurred at the end of last year. And the extension is good only for a couple more weeks. The breaks are an amalgam of exemptions that

benefit big corporations and small businesses, as well as struggling homeowners and people who live in states without a state income tax.

Why Would Anyone Want To Do Business with the Illinois Government?

A bit less polemic (but only a bit); however, the Illinois government is being openly dishonest in its business dealings.

The Land of Lincoln has accrued a $111 billion unfunded liability for government workers’ pensions—up 75% from five years ago. There is an additional $56 billion of unfunded debt to cover health benefits for the state’s retirees. Illinois today is already spending more of its general fund on pensions than on K-12 education. One in four tax dollars pays for its retired workers’ benefits. Last year the state had to defer paying $7 billion owed to contractors. All this after Democrats in 2011 raised income taxes and corporate taxes by 67% and 30%, respectively.

“Green” Energy, Competition, and Consumers

Technologies that can’t compete in the market place aren’t ready for market, nor are they ready for our consumption. Subsidizing these not-ready techs is one way of plusing them up. Another way is to penalize their competition for being too successful.

The New York Times tells this tale, albeit carefully buried in the nether regions of Katharine Seelye’s article. Overarching all of this is this:

New England [Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont] already pays the highest electricity rates of any region in the 48 contiguous states because it has no fossil fuels of its own and has to import all of its oil, gas, and coal.

Good for Amazon

‘Way last July, amazon asked the FAA for expanded outdoor testing permits (Amazon Petition for Exemption – Docket No. FAA-2014-0474) so the company could engage in serious testing of its planned drone-based delivery system. To date, the FAA has chosen not to respond. Amazon has renewed its request and advised the agency that continued unresponsiveness will force amazon to take its development out of the country [emphasis added].

Another Argument for Disbanding Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac on Monday announced details of a controversial plan to allow some first-time homeowners to obtain a mortgage while putting down just 3% of the price of the home.

We’ve not finished recovering from the Panic of 2008, and these entities want to resume an underlying component of the last housing bubble and burst that contributed so heavily to that.

But wait:

Fannie Mae said the loans that allow for 3% down payments will be held to the same eligibility requirements as other Fannie loans, including underwriting, income documentation and risk management standards.

Massachusetts’ Native American Senator Elizabeth Warren Objects

The Democrat from Massachusetts is saying that

House Republicans were threatening to shut down the government if they didn’t get a chance to repeal part of the 2010 Dodd-Frank law.

What Warren objects to is a provision in the proposed House funding bill—which funds the entire government, mind you—that would “undo the Dodd-Frank provision that prohibited bank units within the federal financial safety net from betting on derivatives.” This is critical because only Progressives like Warren know how to run a bank, or any other private enterprise. We’re seeing today how well government-run (VA) hospital businesses are doing, how well government-directed medical practices are working out, how well government-mandated health coverage plan businesses are doing.

Obamacare and Doctoring

If you liked your doctor, you could keep your doctor. Maybe. If you were lucky, and your Obamacare Plan still had him on its cut-rate, cut-service list of acceptable (to the government) doctors.

Or, if you like the hospital that now employs him (which doesn’t guarantee you get to see him; the hospital will make that decision). After all, the government’s Obamacare

architects believe that doctors, to better bear financial risk, need to be part of larger, and presumably better-capitalized institutions.

Meanwhile

I wrote earlier about one small subset of regulatory barriers to US investment. Here’s another side.

The Australian Business Review headline pretty much tells the story, and they stand in sharp contrast with the burgeoning US regulatory environment.

Indonesian President Joko Widodo Pledges to Cut Investment Barriers

And the lede:

The new leader of the world’s fourth-largest nation promised to move aggressively to lower barriers to investment and overcome decades of unmet potential that have left Indonesia lagging behind more dynamic Asian nations.

Recognizes the man himself:

…we need investment, we need investors, to boost our economic growth….

More Thoughts on Minimum Wage

And actual data. Econbrowser pointed out a quasi-controlled study by PhD candidate Michael Wither and Professor Jeffrey Clemens that compared populations of workers in states that had minimum wage laws with higher minimum requirements than Federally passed wage requirements at the time the Federal legislation was enacted with populations of workers in states that did not. They also compared populations of workers starting out with wages higher than the new mandates with populations of workers with wages lower than the new mandates (workers with wages less than $7.50/hr and workers with wages between $7.50 and $10.00 at the time of a then-newly Federally mandated minimum wage of $7.25) over the three years following the Federal mandate.