Tag Archives: economics

Ignorance

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Or hypocrisy, you pick ’em.

The House passed, with a significant majority (and so, on the whole, a bipartisan majority), a bill that would repeal the oil export ban that’s long outlived its usefulness, and especially so in the last several years.

I’ve already noted how the head Progressive, President Barack Obama, has threatened to veto this bill out of his own timidity.

Congresswoman Kathy Castor (D, FL) decried the bill during debate, saying this:

This bill is an unconscionable giveaway to Big Oil at the expense of American consumers[.]

Because lower energy costs, including lower gasoline costs, for American consumers from the increased global oil supply is such an unconscionable expense.

Castor either is hugely ignorant about basic high school economics or she’s breathtakingly hypocritical in demanding that oil supplies continue to be limited, so energy and gasoline prices can continue to be elevated, so Castor and her fellow Progressives in Congress can continue to maintain the dependency of their constituents through these Progressives’ welfare programs.

Lower energy costs means less need for welfare payouts, which mean less dependency on government, which means more freedom for an American to make his own choices. Progressives—Democrats—can’t have that.

White House Timidity

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President Barack Obama says he’ll veto a bill making its way through the House of Representatives that would repeal the oil export ban in place since Gerald Ford’s administration. Obama thinks he’s acting from a position of strength in saying “No” to anything Republican.

He’s actually acting from weakness and timidity. Leaving aside the destruction of potential American jobs such a veto, if carried through, would represent, there are a couple of foreign policy/national security aspects to lifting the oil.

The free flow of oil to Europe that lifting the ban would facilitate would go a long way toward weaning Europe in general and Ukraine, Poland, and Germany in particular from their current dependence on Russian oil exports.

Freely flowing oil will hold down the cost of energy and of materials industries: plastics are made from oil. Those lower costs strength the economies of all of the nations that use energy in their industries or that import other nations’ production—which is to say the economies of nearly every nation on the planer.

Both Russia and Iran need oil prices above $100/barrel in order to balance their national budgets and so to better fund their attacks on their neighbors, in Russia’s case, and to fund their terrorist clients and attacks on Israel, in Iran’s case. Freely flowing oil would keep oil prices in their current $50-ish range, if not push those prices lower.

But neither Putin nor Khamenei would like that.

Clinton and TPP

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Democratic Presidential candidate Hillary Clinton has decided she doesn’t like the TransPacific Partnership free trade pact just agreed and now before the Senate for acceptance or rejection.

As of today, I am not in favor of what I have learned about it[.]

Just what is it she thinks she’s learned about it that the rest of us aren’t allowed to know—since the text of the agreement hasn’t been published, yet? Or is she just another Know Better Democrat?

Oh, wait….

Obamacare Strikes Again

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The Obamacare law set up “risk corridors” for insurers in an effort to smooth the transition from quasi- (albeit very quasi) free markets for health insurance coverage to Obamacare’s government mandated health welfare coverage. Health plan providers that did relatively well in the transition were supposed to pay a taste of their profits into a pool—the risk corridor—from which health plan providers struggling with the transition were supposed to be able to draw to ease their losses.

There’s this snippet in Anna Wilde Mathews’ and Stephanie Armour’s piece in The Wall Street Journal on these risk corridors [emphasis added].

Federal authorities said that insurers will at first receive only about 12.6% of the money that they requested from the program, known as risk corridors, for 2014, its first year of operation. Insurers have requested approximately $2.87 billion in payments from the program based on their 2014 results. But the pool available to make those payments is just $362 million, which came from collections from other insurers that did relatively well on their marketplace business.

That doesn’t look like very many health plan providers did well last year. That does look like most of the plan providers were harmed by Obamacare. And through them, lots of Americans are going to be harmed by this Democratic Party’s law, as health plan providers withdraw from ObamaMart or from health plan provision entirely.

Debt Risk

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The PRC’s debt, at various levels, is a well-known risk to the country’s economic health. Existing loans to companies and households amounted to 207% of GDP at the start of this summer. Households had in the region of 38% of that debt as of last year. Municipal debt is approaching $25 trillion yuan ($3.9 trillion).

Now the People’s Bank of China is moving to cut the down payment required to get a loan to buy a house. The public claim the PBOC is making is that this is supposed to spur house buying and through that the economy. While it’s true enough that the cut—from 30% down to 25% down—seems like small potatoes, it still will result in an increase in household debt.

By what logic is it a useful spur to the PRC’s economy by increasing an already outlandish and out of control debt?