Tag Archives: political parties

Oil and the Economy

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Here are some numbers on the impact of oil in our economy—and so why the government’s oil policy is important to our economic future.  These data have been collected for a Fox News article on a related subject.

Our economy grew at an anemic 1.7% for 2011.  This performance is especially poor in context: that rate did not come at the end of an extended period of prosperity, but at the beginning of a “recovery” from an especially deep recession—a time when growth normally is much stronger, in the 5%-8% range.

Global oil demand is expected to increase by 1.5% (to 89.25 million barrels a day) in 2012, and against this backdrop, the price of North Sea oil (comparable to Middle east oil, but which supply is more stable) is up 11% over last year, to $119 per barrel, while oil produced in Texas is up 19% to $103 per barrel.  This is apart from Iranian shenanigans.

This has driven gasoline prices, nationally, to $3.53 a gallon, up a quarter of a dollar just since the start of 2012, and it could well go $4.25 by April—just in time for the summer driving season, such as it will be.  That’s also up nearly $1.65 per gallon since the 2009 beginning of the present administration.

And the money (sorry) datum: each 25-cent jump in the price of gasoline over the course of a year represents an annual total of $35 billion that’s spent on gasoline and so is not available for use in other parts of the economy. Those $35 billion equate, roughly, to a bit over a third of the cost of the just-passed payroll tax cut.  Thus, in President Obama’s three years, we’ve already had to spend that payroll cut on gasoline.  Indeed, just last year, we spent 8.4% of our household income on gasoline alone—double the per centage of 10 years ago.

Karl Rove, former senior advisor to President Bush the Younger, notes that

One out of every six Americans is unemployed, working part-time, looking for full-time work or so discouraged they’ve dropped out of the workforce altogether.

As the saying goes, work is somewhere else, and you get there in a car.

The government’s oil policy?  President Obama, through his campaign spokesman Robert Gibbs, insists

Our domestic oil production is at an eight-year high, and our use of foreign oil is at a 16-year low.  So we’re making progress.

Others, though, don’t see the increase, or the progress.  John Hofmeister, former CEO of Shell Oil and founder of Citizens for Affordable Energy, points out that national oil production today is 7 million barrels per day—down from 10 million a few short years ago.  Furthermore, Obama has killed the Keystone XL pipeline that, aside from the tens of thousands of jobs the pipeline’s construction would have represented, also would have brought nearly 625,000 barrels per day from Canada into the US.  The current oil policy’s negative impact on oil production only worsen our economy.

Taxes, Again

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Once again, a tax cut for Americans is being held hostage against a demand to offset that cut by a commensurate tax increase imposed on a government-disfavored group.  Senate Majority Leader Harry Reid (D, NV) has announced, at this late date,

We know there’s gonna have to be mandatory cuts, we understand that but also going to have to be something done with tax incentives, enhancements, revenues[.]

Unfortunately, this also is the wrong fight.  Both Democrats and Republicans are agreed that a two per centage point reduction in individuals’ taxes (or a three per centage point reduction both for individuals and businesses, if President Obama can be believed) is good for Americans.  Economists are agreed that temporary tax cuts, such as the proposed payrolls cuts, are not at all stimulative for the economy as a whole—a stimulus effect requires the cuts to be permanent.

The discussion, then, shouldn’t be a debate at all, nor should it concern payroll tax reductions, which serve only to further gut, and so to hasten the demise of, the Social Security system.

This discussion should be about a permanent income tax reduction for both individuals and businesses of two to three per centage points.  This much seems doable within the month since the idea of a tax cut and its present size already are agreed by all.  And who can understand the logic of “paying for” a tax cut with a tax increase (leaving aside the fact that there’s no need to pay for a reduction in the government’s receipt of something—our money—which doesn’t belong to it in the first place)?

This cut then should be followed by further discussion with a view to deeper income tax cuts.

Contradictions

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In an energy policy article in The Daily Caller, Deneen Borelli raises some interesting disconnects between President Obama’s rhetoric and his actions.  She points out the failures engendered by his contradictions:

Despite his class-war rhetoric, Obama’s command-and-control energy policy drains our budget to reward crony capitalists such as General Electric CEO Jeff Immelt and his fellow presidential jobs panel member and billionaire venture capitalist John Doerr.

Ironically, the Obama war on fossil fuels hurts hard-working Americans because high energy prices have a disproportional impact on middle- and lower-income households and jeopardizes U.S. manufacturing.

And although Obama has called for fairness and a level playing field, the mandates and subsidies for renewable energy he favors would stifle competition by picking winners and losers.”

Then she gets specific.

on energy

Obama’s call for more oil and gas drilling in his State of the Union address was meant to deflect attention away from his failure to approve TransCanada’s Keystone XL pipeline.

Obama’s energy policy excludes coal. Coal now provides approximately 45 percent of our electricity, but regulations generated by the Obama EPA are imposing significant costs on utilities, costs that are forcing some power plants to close and others to spend billions of dollars in order to comply. Those compliance costs will be passed on to consumers in the form of higher electricity prices.

Fossil fuels — coal, oil and natural gas — provide roughly 85 percent of America’s energy needs. Yet, despite the failure of companies such as Solyndra, Obama is doubling down on renewable energy by calling for a national renewable energy mandate, forcing the Department of Defense to buy enough renewable energy to power a quarter of a million homes

on jobs

The president’s refusal to allow construction of the Keystone XL pipeline, at a cost of an estimated 20,000 jobs….

Full Credit

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In MSNBC’s pre-Super Bowl interview with President Obama, Matt Lauer had this exchange with him.

Lauer: Three years ago we sat for this interview on Super Bowl Sunday; you had been President for just 10 days, and we talked about the state of the economy, which was in dire straits, and you said this to me, quote, If I don’t have this done in three years, then it’s going to be a one-term proposition.  You got good news on Friday in terms of jobs, the unemployment rate went down to 8.3%.  But I think if you go out on the street, you ask Americans “is the recovery done?” Overwhelmingly they will tell you it is not.  So do you deserve a second term?

Obama: I deserve a second term, but we’re not done.

There’s also this from Obama’s State Department concerning the nearly year-long situation in Syria [emphasis added]:

“We’re going to work with countries around the world to call out those who are still sending him weapons, and expose that,” [State Department spokeswoman Victoria] Nuland said. The [contact group of countries] will look at helping Syria “plot a way forward and also to do what we can about the humanitarian situation.”

Still, she recognized the limitations of that strategy.

“It’s frankly not clear how much we’re going to be able to do, but we want to help.“

And that makes it all better.  We’re just trying to help.  We deserve a prize for effort.

Here are a couple of results from this Progressive focus on credit for “trying really hard” as opposed to actual results.  The outcomes indicate both their out of touch-ness and their lack of understanding of what’s important and where true value lies.  Obama speaking, again:

I think what Americans want to hear more than anything else is, “How are you going to help me right now.  If they’re hearing a persuasive argument about how we’re gonna recreate a solid path for middle-class success in this country then I think I’ll win….”

and

What’s frustrated people is that I have not been able to force Congress to implement every aspect of what I said in 2008.

The fact is, we aren’t asking, “How are you going to help me right now?”  We don’t want to hear “how you’re going to create anything for a particular class;” though we do notice that you’re only concerned about the middle class, to the exclusion of Lauer’s “underclass.”

We are asking, “When are you going to get out of our way so we can go back to helping ourselves and helping each other?”  We are asking, “How is your government going to get out of our way so all Americans can be successful–middle class, poor, and rich alike?”  We don’t care—in fact, we’re overjoyed—that you “haven’t been able to force the people’s representatives to roll over and be your lapdog.”

But Progressive self-esteem is so important.

Hypocrisy, Part II

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Health and Human Services Secretary Kathleen Sebelius has an opinion piece in USA Today.

In her apologia for an Obamacare regulation that requires health insurance programs provided by a vast range of Catholic, Protestant, Jewish, and so on institutions to provide contraception, sterilization and abortifacients in direct, open contravention of the teachings and beliefs of those institutions (and that requires those institutions to offer those insurance plans exclusively), she writes

One of the key benefits of the 2010 health care law is that many preventive services are now free for most Americans with insurance. … So is the full range of preventive health services recommended for women by the highly respected Institute of Medicine, including contraception.

So, no one is paying any taxes, or being forced to change their existing health insurance policies, to pay for this.

Nor is there any cancellation of religious teachings or thought or fundamental tenets by this Federal government, which used to be on the other side of a “wall of separation between Church & State.”  There’s an interesting view of “free.”

That’s why in the rule we put forward, we specifically carved out from the policy religious organizations that primarily employ people of their own faith. This exemption includes churches and other houses of worship, and could also include other church-affiliated organizations.

Umm, no.  Not hospitals, not doctors’ offices, not clinics.  These employ (quite properly) far too broad a range of employees to be able to fit within the carefully and deliberately narrowly drawn limits of this rule.

In choosing this [extremely narrow religious] exemption, we looked first at state laws already in place across the country. Of the 28 states that currently require contraception to be covered by insurance, eight have no religious exemption at all.

The religious exemption in the administration’s rule is the same as the exemption in Oregon, New York and California.

Of course, far be it from the Federal government to set an example.  Oh, wait….