Pipelines

The Canadian government has approved a proposed pipeline to the Pacific Coast that would allow Canada’s oil to be shipped to Asia.

This is oil that would be flowing to American refineries through a pipeline that would be up and running today, if the Obama administration hadn’t stonewalled the Keystone XL pipeline proposal all these years.

Remember this in the fall and in 2016.

In Which Russia Creates an Opportunity

Russia on Monday cut gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices and unpaid bills amid continued fighting in eastern Ukraine.

Ukraine’s Naftogaz company head Andriy Kobolev said Russia had cut the supply of gas to Ukraine, but that Ukraine can manage without Russian gas until December.

There’s no reason at all we can’t fill this newly created market with American natural gas, even if it will take longer than next December to get the delivery chain up and running.

Another Reason to Reduce Financial Support for the IMF

[T]he [IMF] said there is significant slack in the [US] economy and authorities must do more to stimulate growth in the near term. At the same time, Washington must cut spending and raise revenue in the long term to avoid public debt overwhelming the country’s finances.

The best option is for the government to boost spending, notably on infrastructure, the IMF said.

This is a clear misunderstanding of the role of government in a free nation’s free market economy—by folks who should know better. Hence the need to reduce support: these folks are merely squandering what they have.

Our Economic Future

James Pethokoukis, at AEIdeas, has some thoughts. Oddly, so do I.

Pethokoukis first. He paraphrases Binyamin Appelbaum in New York Times:

…economist accept slower growth is partly the result of long-term trends…. [Y]ou have (a) the demographically-driven decline in labor force participation and (b) an apparent productivity slowdown starting in the mid-2000s as the pace of technological innovation and diffusion has slowed.

But these two are easily corrected. The “demographically-driven decline in labor force participation” is largely, if not primarily, the retirement of us Baby Boomers without associated replacement from births into existing and new families, much less an increase in that rate. (The long-term departure from the labor force by those who’ve given up finding work in this economy is a separate matter that policy corrections will resolve.)

Can’t Win for Losing

Economists were pleased that the economy created 217,000 jobs in May. That sent US payrolls to a record high. It was the first time since the late-1990s boom that the economy created more than 200,000 jobs a month for four consecutive months.

This despite fact that, as of the last jobs report, the US economy had—finally—”rehired” all the workers fired since the start of the Panic of 2008: “US total employment passed its previous peak of 138.4 million, set in January 2008.”  Normal recoveries regain their pre-recession levels after several months to a couple of years.

“Green” Energy Loans Have Consequences

Fisker Automotive—the US electric car company that failed to repay roughly $139 million in federal loans [out of an original loan total of $192 million] before going bankrupt—is now owned by a Chinese company eager to unleash its cut-rate acquisition on the American auto industry.

The company’s assets were acquired earlier this year by China’s biggest auto parts supplier, Wanxiang Group, for $149.2 million in a US bankruptcy auction.

And

Wanxiang acquired A123 Systems [Fisker's battery supplier] in a 2012 bankruptcy sale, after the company failed to repay millions to the same federal loan program that helped Fisker.

A Thought on Wages

Wall Street is now starting to complain that wages are too low.

“Without a real acceleration in wages it is hard to get a meaningful pickup in consumer spending,” explained Michelle Meyer, senior US economist at Bank of America Merrill Lynch.

Weak consumer spending holds back profits and economic growth….

And

Weak wage gains also are making it hard for the housing market to return to normal, Mr [Jack, Executive Vice President and Chief Investment Officer at BMO Private Bank] Ablin said.

He calculates that new single-family home construction is running at less than 500,000 a month. Demographics say it should be twice that….

The State of the Obama Recovery

…now that we’re in the fifth year of it.

Real gross domestic product—the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 1.0% in the first quarter according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6%.

It might not get better soon:

Personal consumption—which captures spending on goods and services—fell a seasonally adjusted 0.1% from March[.]

Nanny State and School Lunches

The fight over school lunches intensified Tuesday as first lady Michelle Obama defended her signature school-nutrition program during a meeting with school officials and decried efforts in Congress to allow schools to delay the program.

“Now is not the time to roll back everything we have worked for,” Ms Obama said[.]

Part of the fight, presently, is over a House proposal to waive the school “nutrition” program’s requirements for those schools that can’t afford to comply. Part of the fight is over puny servings that leave the student hungry—and so just as distracted from learning as if he had eaten a sugar-laden lunch. Part of the fight is over who should pay for the mandated lunching system, even by those schools able to “afford” those costs.

College, and What Degree Are You Looking For, Again?

From Millennial Branding and their report The Multi-Generational Job Search (done in conjunction with Beyond.com), centered on a survey of “job seekers and HR professionals,” come these tidbits.

On the matter of whether going to college is, of necessity, for everyone:

[T]he majority of hiring managers (64% [2,978 respondents]) would still consider a candidate who hadn’t even attended college.

And

73% feel that college is only somewhat preparing students for the working world.

Then, this:

Liberal Arts majors (who are historically more focused on communications [and communications skills sought by 83% of respondents]) were shown to be the least likely to land a job, with only 2% of companies actively recruiting those graduates.