By Thomas E. Brewton
Why does much of New Orleans still look as if the 2005 devastation of Hurricane Katrina had occurred just a few weeks ago?
Huge areas of New Orleans still are wastelands. New Orleans's liberal-progressive-socialist Senator Mary Landrieu has grabbed far more than her share of Congressional pork. Hundreds of millions of Federal dollars spent for rehabilitation have produced far too little beneficial result. People were without electric power for months; the police department contained more thieves than honest law enforcers; drug-dealing and prostitution remain major enterprises; and the city still retains its crown as the nation's murder capital.
One of the city's few "legitimate" businesses is casino gambling.
City and state administrations have yet to coordinate rebuilding plans, as politicians fight over who gets what share of the spoils.
The best that the city's Mayor Nagin can do is to demand that the Democratic-socialist Party presidential candidates pledge to send even more pork to New Orleans.
What accounts for this dismal record?
The answer is simple. New Orleans abandoned God and personal moral responsibility, turning instead to worshipping the atheistic, secular political state. That secular god has failed miserably, notoriously so in the aftermath of Katrina.
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Posted by Walt as Economics, Government Corruption, Natural Disasters at 12:02 AM EDT
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By Thomas E. Brewton
Today's clamor for more regulation of financial institutions to prevent another subprime mortgage meltdown is an exercise in self- deception.
Congress, led by Representative Barney Frank, is planning to overhaul regulation of the financial community, and Treasury Secretary Paulson has already proposed a broad program for that purpose.
No doubt, much of what is proposed is needed. But it should be obvious from repeated experience over the decades that regulations alone will not prevent periodic economic booms and busts.
Only by dealing with the root cause will we moderate economic cycles. And that root cause is the ineluctable human tendency to over-expand bank credit when the money supply is artificially enlarged.
Today's proposed subprime mortgage regulations may prevent tomorrow's repetition of that phenomenon, but they will have no restraining impact upon whatever the next speculative bubble may be. Sarbanes- Oxley regulation was instituted after the dot.com bubble-burst and the corporate collapse of Enron, but it had no restraining effect upon the speculative housing bubble, of which subprime lending is merely a symptom, not a cause. Before that, we had the speculative explosion of commercial real estate over-building that ended with the collapse of the savings and loan institutions in the 1980s.
Beginning with our nation's first financial panic in 1819, similar boom-and-bust patterns appear every five to ten years, except in extraordinary circumstances such as wartime.
In one respect, Karl Marx's economic analysis was on the mark.
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Posted by Walt as Communism, Economics at 11:46 PM EDT
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From 1789 to 1815 Congressmen received $6.00 daily, but only on the days they showed up. From 1815 to 1855 Congressmen received a modest salary, compared to the massive salaries of the Congressmen today. In 1855 their salaries increased to $3,000 annually. Then in 1865 they gave themselves a 66% increase to $5,000 annually. 6 years later they boosted their salaries another 50% to $7,500 per year. The American People became so outraged by the greed that congressmen were showing, that congress was forced to take a 33% paycut, which lasted 34 years until 1907, at which time they gave themselves another 50% increase back to $7,500 annually. They took two other paycuts, both of which were during the Great Depression, for a total of 15%. These are the only 3 times in American History that any Congressmen have ever taken salary cuts.
In 1935, Congress voted themselves a 19% increase, then they didn't receive another pay raise until 12 years later, when they gave themselves a 25% increase in 1947. In 1955 Congress gave themselves a whopping 80% increase. In the years 1987, and 1991 Congress received 2 raises per year. 3% + 20% in 1987, and 4% and 25% in 1991. Within the last 10 years Congress has raised their salaries 8 times for a total of 26%. While the lowest paid American Workers have only received 1 raise within the last 10 years.
In the last 25 years Congress has seen 18 salary increases totaling 277%. While the lowest paid American Workers have only seen 5 wage increases in 25 years totaling a mere 166%. In the last 25 years the cost of living has increased 251%. The Minimum Wage has not been increased since 1997. While Congressmen's pay has increased 8 out of the last 10 years. To see what Minimum Wage would be, if Congress had given American Workers the same amount of increases they took, click here.
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Posted by Walt as Economics, U.S. Political Issues at 7:42 AM EDT
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The High Cost of Climate Lies
By Alan Caruba
An energy-rationing bill has been introduced to address “global warming.” The “Climate Security Act” would impose caps on how much carbon dioxide (CO2) emissions can be allowed and would institute an elaborate program to “trade” allowances among the industries and business affected.
Americans better hope that some members of Congress will ask if there truly is a threat of global warming and why a similar program in Europe has proven to be a resounding failure.
If you really wanted to undermine the nation’s economy, you could not devise a better way. It is the Kyoto Climate Change Protocol on steroids.
Little noted during all the headlines concerning Al Gore’s Nobel Peace Prize was the fact that it was shared with the United Nations Intergovernmental Panel on Climate Change. Among skeptical scientists I know, the emails were flying. Several had served as part of the vast array of scientists whose opinions on the various IPCC draft reports were requested and then ignored.
A lot of these expert reviewers are among the 2,000 scientists that the IPCC and Al Gore are always citing as being part of the “consensus” on global warming. The problem for both is that many really, really, really disagree that any planet-threatening global warming is occurring.
One of them is Dr. Vincent Gray, a New Zealand-based climate scientist who has been a part of the reviewing process since the IPCC came into being. He is one of those scientists who will not and cannot be shut up despite the din of the IPCC propaganda.
Briefly, Dr. Gray has a Ph.D. in Physical Chemistry from Cambridge University, England, and his long career has included stints in France, Canada, China, and New Zealand. He has published more than a hundred scientific papers on energy and materials, plus a dozen in climate science.
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Posted by Walt as Economics, Environmental Issues, Global Warming at 11:12 PM EDT
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By Alan Caruba
Having written about the energy industry and issues now for a long time, I hope I can be forgiven for being enraged by the comments by Sen. Charles Schumer (D-NY) in response to President Bush’s press conference Tuesday morning. There is simply no way to describe them other than false.
The Democrat Party has long made “Big Oil” their favorite punching bag, confident that the public has no idea what influences the price and supply of oil. Saying anything favorable to Big Oil is immediately deemed evidence that one is in their pay and whatever facts are offered are therefore invalid.
There are, however, some simple truths about Big Oil that cannot and should not be ignored. To do so leaves everyone at the mercy of energy policies that have created the situation in which the United States finds itself today.
Fact #1. The combined ownership of oil reserves by the independent, investor-owned oil companies such as ExxonMobil, Conoco-Phillips, BP, Chevron and others is barely 4% of the total known oil reserves in the world. By itself, ExxonMobil’s share is 1.08%.
Fact #2. Oil is a global commodity sold on mercantile exchanges for whatever price it can command. Speculation in oil prices is the primary reason they have been driven to utterly insane costs per barrel. It has nothing to do with actual supply and demand.
Fact #3. No nation on Earth is or can be “energy independent.” The geopolitics of oil is complex, but as nations such as China and India have seen their economies grow, their need for oil grows with it and thus they compete with long established industrialized nations for existing oil supplies. This competition has an impact on prices.
Fact #4. The OPEC nations, those in the Middle East and including Venezuela, control 77% of the world’s known oil reserves. Like Russia and Mexico, where the oil industry is controlled by the state, it is generally poorly managed. Several Big Oil companies that were induced to undertake exploration and development in Russia and Venezuela actually had their assets nationalized or stolen at prices well below their investment and value.
Fact #5. Energy is the master resource. All nations with any hope of growing their economies require it, mostly in the form of electricity, but also for oil’s role in transportation. The failure to have a national long-range energy policy that is based in reality can severely impact energy prices.
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Posted by Arthur as Economics, Environmental Issues, Oil Production at 7:04 PM EDT
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By Alan Caruba
When the government of the Soviet Union collapsed in 1991, the fall was attributed to all kinds of reasons. There was the failed invasion of Afghanistan, the symbolic fall of the Berlin Wall in 1989, and, after some desperate efforts by Mikhail Gorbechev, Communism as a guiding principle and economic system simply imploded. That’s the thumbnail version that passes for history, but Michael J. Economides and Donna Marie D’Aleo have another answer and it’s one you may not want to hear.
“In the second half of the 1980s the Soviet leadership came face to face with the problems that arose as a result of the dramatic drop in oil prices, and the necessity of increasing the volume of capital investments in western Siberia’s oil industry. They failed to provide adequate solutions to these problems. The consequences were a rapid decrease in oil production, a collapse of the consumer market, a growing deficit of the most basic consumer goods, and the bankruptcy of the Soviet Union.”
“From Soviet to Putin and Back: The Dominance of Energy in Today’s Russia” by the two authors cited above is not likely to leap on the bestseller lists, but for anyone who takes a serious interest in America’s future and in current world affairs, it is the book to read, not only for its excellent history of the rise and fall of the Soviet Union, and what replaced it, but for its unique insights regarding the role of energy.
Economides is Editor-in-Chief of Energy Tribune, a magazine for those who understand that (1) energy is the master resource, (2) is the primary force behind the rise of human civilization, and (3) is the grand determinant in geopolitical affairs. From our earliest times when muscle power was the only source to the modern era, energy in its many forms has ruled the affairs of man.
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Posted by Walt as Communism, Economics, Oil Production at 9:25 PM EDT
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By Alan Caruba
There was a Washington Post news report in late March that the United Nations had “presented its top donors with a request for nearly $1.1 billion in additional funds over the next two years—boosting current U.N. expenses by 25 percent and marking the global body’s highest-ever administrative budget, according to internal U.N. memos.”
Since I am no fan of the United Nations, my first thought was to ask why the U.S. and other “top donors” would toss more money at this bloated and morally corrupt international bureaucracy when it is manifestly unable to prevent wars—its primary mission—and remains a platform for belligerence, bigotry, and intolerance?
According to the report, the request for more money is blamed on the Bush administration’s “demands for a more ambitious U.N. role around the world.” That seems a rather convenient explanation given the poor performance of most of the U.N.’s so-called peace-keeping missions, some of which degraded into the rape of the women it was supposed to be protecting; its 60-year support of the Palestinians, making them the oldest refugee group in history; and its deplorable environmental program, a platform for the most appalling lies about the climate.
We have the final years of the Roosevelt administration for the creation of the United Nations as World War Two wound down. The failure of the League of Nations to prevent the war should have been sufficient reason not to go down that path again, but perhaps it was seen as the very reason to create a new, international organization to prevent wars?
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Posted by Walt as Economics, Government Corruption, U.S Foreign Policy at 6:32 AM EDT
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By Alan Caruba
Recently I emailed a gentleman who is highly regarded, nationally and internationally, as one of the top strategic, military and economic long-range thinkers of our times. He is the author of several bestselling books about the way globalization is impacting the lives of the Earth’s population.
In addition to having read his books and magazine articles, I occasionally visit his blog to read what he is thinking about currently. I noticed that he was casually referencing “global warming” in a post, so I emailed to let him know that there is no scientific proof or basis for the endless global warming claims. I cited all the usual data that disputes it and I provided the URLs of several websites that could provide him with even more.
His response was quite revealing. “It doesn’t matter one way or the other. All the same fixes are required for sheer pollution reasons on a global scale given population increase and consumption increase. You’re arguing the past.” He would later post that, so far as the data debunking global warming, he was “beyond caring.”
As I interpret this, no matter how utterly false the justifications are for the global warming hoax given by Al Gore, the United Nations Intergovernmental Panel on Climate Change, and others, leading to efforts to replace, slow or deter the use of energy sources such as coal, natural gas and oil, this particular influential intellectual was beyond caring because the world’s population was responsible for pollution and consuming too much of everything.
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Posted by Walt as Economics, Environmental Issues, Global Warming at 9:44 PM EDT
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By Alan Caruba
Okay, let’s say that President Obama or Hillary is in office and Congress has passed a bill that requires everyone to have health insurance. Gas is up over $4.00 a gallon, food prices are sky high, and, if you’ve recently graduated from college, you are paying off loans at $1,000 per month.
If you’re a homeowner, you have a mortgage, property taxes, and a stack of other bills. You’ve got to decide between paying the mandated premium or being able to drive to work, buy food, holding onto your home, or keeping the bill collector from your door.
All of a sudden, mandatory health insurance doesn’t seem like such a great idea. In fact, your big worry is that Social Security will be able to send you a monthly check and that Medicare and Medicaid won’t go flat broke before you die. Trustees for these massive entitlement programs just announced Social Security will be depleted by 2041, while Medicare goes bust eight years from now in 2019.
According to a March 18 Policy Analysis published by the Cato Institute, health care consumers are annually spending “more than $1.8 trillion dollars for overall health costs, more than what Americans spend on housing, food, national defense, or automobiles.”
Moreover, “because of the way health care costs are distributed, they have become an increasing burden on consumers and businesses alike. On average, health insurance now costs $4,479 for an individual and $12,106 for a family per year. Health insurance premiums rose by little more than 6 percent in 2007, faster on average than wages.”
The news gets worse. “Moreover, government health care programs, particularly Medicare and Medicaid, are piling up enormous burdens of debt for future generations. Medicare’s unfunded liabilities now top $50 trillion.”
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Posted by Walt as Economics, Health at 11:47 PM EDT
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By Alan Caruba
“The tripling of oil prices since the summer of 2003 has unleashed forces that within the next two or three years will bring oil prices tumbling back down to below $50 a barrel.” So said John Cassidy, writing about “The Coming Oil Crash” in the January issue of Conde Nast Portfolio. Yes, the price of oil will come down, though no one knows exactly when. It has topped $100 a barrel and there are indications it could go higher.
There are vast forces at work regarding the price per barrel of oil and one of them is the speculation that has driven up the cost despite the fact that there are ample supplies. The problem is not lack of oil, but whether it can be shipped to a waiting world. The potential for conflicts in the Middle East and elsewhere worries the marketplace.
Sebastian Abbot, an Associated Press reporter, points out that, “Hedge funds and other financial institutions have been buying and selling oil contracts in an attempt to generate profits.” Such trading has little to do with actual supply and demand and more to do with the kind of gambling that led to the sub-prime mortgage meltdown. And what goes up will go down. The cost of a barrel of oil is also tied to the value of the U.S. dollar whose decline against other currencies adds to the cost at the pump.
It is likely, too, that the lack of production capacity in the world oil market plays its role in the profits being made these days, primarily by national, as opposed to publicly owned oil companies. Rarely noted are the huge risks and huge investments taken by publicly owned oil companies. This is in marked contrast to the national oil companies representing some 70% of the world’s known oil reserves that, with the exception of the Saudis and other Gulf states, are almost universally failing to make adequate investments in exploration or the upgrade of their facilities.
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Posted by Walt as Economics, Environmental Issues, Oil Production at 7:45 PM EDT
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