Friday, January 20, 2012

Zipping down the Mitt-way to Oblivion

Initial unemployment claims fell by 50,000 last week to 449,000. The last time the number was that low, Barack Obama was the surprise winner of the Iowa Caucus four years ago. Speaking of surprise winners in Iowa: according to the Republicans there was no winner in Iowa as the official tally now shows Santorum won by 43 votes. Their rationale to declare “no winner” is that there are eight precincts whose reports are missing, so there couldn’t be a final determination, but these missing ballots were all in counties where Santorum did well. The real margin of victory for Santorum was probably higher, but we still aren’t talking landslide. [update: Iowa declared Santorum the winner on Saturday]

To avoid admitting that Romney didn’t win, the Republicans then fell back to saying that Romney and Santorum each got six RNC delegates, so it was a tie (stop looking at us and move on). They also awarded six delegates to Ron Paul. Funny that nobody mentions that Paul also won Iowa. Of course none of these delegates are actually committed to anybody as they were “awarded” by the state party, and weren‘t elected by the Caucus (the GOP term for this is “soft committed“).

Back to the economy: manufacturing continues to show growth, albeit with lower wages; retail sales were up 6.6% last year, but the 4th quarter was nearly flat; and housing starts are generally up, but almost all in apartment units.

West Texas Intermediate crude oil was down more than 2% today. You would think when Obama killed the pipeline that oil prices would spike on the basis of the anticipated shortages. Funny how just the opposite is happening. It might have something to do with domestic production being above 50% of consumption for the first time since the mid 1990s. The fact is that Obama is keeping oil produced in Canada and most of the Midwest from being exported to China. The reality of that will never sink into the “drill baby, drill” crowd however.

A variety of reports on the condition of American highways point to the folly of 30 years' neglect. Internationally we rank 20th in highway infrastructure behind several countries that most Americans would assume to be 3rd world. Nearly half of all traffic accident reports cite the poorly maintained or obsolete highways as the cause. The cost to commuters caused by the neglected highway system is estimated at $110 billion each year.

Over all, the lack of modern infrastructure is slicing a trillion dollars off the top of our GDP. That’s about 7% of unrealized potential economy that would put an awful lot of people to work. Then there is the three trillion dollars' worth of infrastructure repairs that have been piling up for decades. These include bridges, dams, levees and other constructs that have the potential for mass casualties when they fail.

So highways are yet another indicator that we have sunk to third world status under Republican domination. The problem with correcting any of this is that the education system was one of the first things to go. The Republican solution for the roads is the same as for everything else: privatize them. President Eisenhower built the Interstate Highways, President Romney wants to own them.

Wednesday, January 18, 2012

It all comes back to economics 0.001

The right wing talking heads that serve the 0.001 are screaming about Obama betraying the country by killing the Keystone Excel Pipeline project in order to pander to his liberal base. Liberals who are so crazed by this pipeline issue as to allow Romney to become President over it, will not support Obama anyway. They will not support him, either because of other issues, or because they believe he will simply approve Keystone the day after the election regardless. His weasel words in order to appear centrist on the issue give them good reason to think this, but I'll bet 10,000 Romney’s that this pipeline is dead as long as Obama is President. 

Most people with any inclination to vote for Obama either don’t care about the pipeline, or think he should approve it. He did himself no favors by not approving it on the basis of a simple vote count. Obama is thinking bigger than that.

The only logical conclusion is that he killed the project on its merits, and not just the environmental concerns. The biggest problem for the US isn't just the massive pollution this pipeline will cause; but rather the economic damage it will create. All of the oil currently produced in the central states and in Canada are refined in Midwestern refineries for domestic consumption. 

This is not an insignificant amount oil, and in fact our biggest export is currently gasoline, diesel and jet fuels. Through every energy price run up we have been exporting vast amounts of gasoline, we always have. This will not change if this truly massive pipeline were built across the middle of the country, it will become a giant drain. This pipeline would connect to all existing pipelines and drain everything directly to the Texas export zones. Surprisingly, this would even include oil produced in north Texas and Oklahoma that currently flows north exclusively. The oil companies would also avoid all taxes, and for good measure, be able to create a massive shortage anytime they chose to. 

Simply approving the pipeline would kill all the smaller independent refineries in the Midwest who would see the writing on the wall. There will be a race to be the first to sell out to the big monopolies to keep from simply being put out of business, and this would immediately start driving up gasoline prices just in time for the election. 

You can still say Obama did it just for the votes, but it’s also crucial for the economy that this drain be plugged. The oil companies seem to think they should be able to go ahead with the southern leg anyway, which makes it clear this is exactly their strategy. It makes no sense to build only part of the pipeline if they really needed it just to get "new" oil from Canada, it's because it lets them grab off the southern part of the Midwestern oil fields and put several refineries out of business. It might not give them a complete monopoly of the oil supply, but they’ve done well for themselves with the degree of control they already have.

Tuesday, January 17, 2012

Pretend this website is blacked out

It's too hard for an old fossil like me to shut down for today's protest, so just read this statement, shut it off yourself, and come back Thursday.

These so called copyright infringement laws are simply intended to walmartize the internet. Nobody who doesn't have the ability to stand up the major corporations will be able to put anything up on the net. All competition will simply be squashed. The mere accusation of infringement will cost more in legal fees than any small company or individual can withstand. Even if the government doesn't shut down the falsely accused, as these bills would allow them to do with no hearing or trial. The corporations can simply bring more charges of infringement until the lawyers own your house.

These are exactly the same tactics that Franken-food companies are using on farmers that grow their own seed. Massive lawsuits for patent infringement if your seed becomes contaminated with "their" DNA (through their corporate misconduct). The Supreme Court took the side of the corporations of course. In India these companies are being prosecuted for piracy. Too bad India is so crowded. We could all move there, and get jobs in the call centers until there is no one here to talk to.

When the Cheshire Romney fades away, only the creepy smile remains

What is it that’s so creepy about Willard? It’s because Romney gets a certain look on his face when he thinks he’s said something overwhelmingly clever; it’s like he expects a certain reward. You see this a lot with right wingers; it’s something hardwired into their brains.  It’s occurred to me where I first saw this: his expression looks just like the one the old WB animators would put on the faces of the two human characters that Bugs Bunny always encountered stranded on the desert island. It’s when the one castaway would look at the other and see him as a pork chop; it’s insatiable hunger, barely contained anticipation and utter madness all rolled into one facial expression.

It’s probably not true that when Romney kisses a baby that he’s tasting the little dumpling. It’s really absolute power and complete domination over others that he craves. If he had absolute power, he probably would be in competition to break the records of Emperor Caligula. Bush showed the same behavior, but he was at least able to hide it in campaign appearances, and his handlers kept his meds up, most of the time. Romney has even less discipline than Bush. I never thought I’d say that about somebody with a real shot at being President, unless you count VP candidates.

Mitt admitted today that his income tax rate is “probably around” 15%. How could somebody who obsesses with lowering the tax rate to zero not know to the penny how much he pays? Maybe because it‘s much less than that? He says he’ll release his tax returns after the primaries are over. Romney says his rate is so low because his income is almost entirely from “investments made a long time ago”. As if the ancient history aspect of it made this okay. (that creepy grin again)

Mitt said he makes “a little” from giving speeches that gets taxed the way you or I get taxed. Try $375,000 last year, that’s just “a little” to Mitt, and it probably really is to him. That amount alone is enough to put him at the threshold of The One Percent, but it’s pocket change if you’re in the top one tenth of one percent. Mitt probably never had an income that low since that first day out of Harvard Business when he became the CEO of Bain Capital. At least not after he looted his first company.

Reports are that Bain under Romney took ten of millions in government subsidies as they played local governments against one another in a vain attempt to save jobs. He also had a habit of making a deal to buy a company, and then would “talk down the deal” after all other bidders went home. Romney’s Bain would find fault over what were really just nitpicking details to get a much better price, knowing that it would panic other potential buyers if they pulled out. These are just a couple of the things you do to get an 85% return on investment. Every time that worked, you can imagine that creepy little smile.

Sunday, January 15, 2012

Quiet Rooms

A new Pew Research study came out this past week that focuses on how Americans’ view of the class war has changed over the past two years. The numbers showed a dramatic shift toward more awareness of the inequality and this cut across all demographics. Most notably the change occurred no matter what the party affiliation was, with independents having the biggest increase. Going from 45% to 68% increasing by more than half. Democrats increased 18 points to 74%, and even Republicans increased 17 points to 55%. These numbers don’t make any distinction as to why the respondents felt this way. It’s possible that the Republican and independent numbers may reflect some who see a conflict, but see the rich as the victims in this class struggle, despite their “suffering” taking place in the lap of luxury.

Mitt Romney says any talk of such inequality “is just the politics of envy”. When challenged by Matt Lauer on the Today Show to back away from the use of the word “envy” in the previous day’s speeches, Romney doubled down. He said, “You know, I think it’s about envy. I think it’s about class warfare. When you have a president encouraging the idea of dividing America based on 99 percent versus one percent, and those people who have been most successful will be in the one percent [he felt he needed to point that out, Freudian slip?] , you have opened up a wave of approach [reproach?] in this country which is entirely inconsistent with the concept of one nation under God. The American people, I believe in the final analysis, will reject it.”

So Mitt believes we’re one nation under God, but all the blessing should go exclusively to the one percent, and all Americans in the final analysis will simply accept this as God‘s will. He went on to pooh-pooh the very idea that this should even be discussed in public, Romney said, "You know I think it's fine to talk about those things in quiet rooms“. Presumably out of earshot of the rabble who demand bread; after all they could eat cake if they really wanted to.

It appears from the just released minutes of Federal Reserve Board meetings in 2006 that the people who put themselves in charge of our economy were completely oblivious to the approaching tsunami in the financial sector. They sat in their quiet room discussing all the bad news that was coming in and drew exactly the wrong conclusions. To a person, they went on about “the problem being small”, “the landing will be soft”, “this will be good for the overall economy” and “inflation is the real problem”. Not a word about the tens of trillions in deflation looming in the distance when all the markets collapsed wiping out the middle class and plunging the country into a depression.

 At least this is the official record; I find it hard to believe these people were that oblivious. I think that in the meetings without stenographers, in the really quiet rooms, the tone was somewhat different. The apologists for the Fed are saying that the economists got it wrong too and didn‘t see any problem, but that simply isn‘t true. A lot of them were sounding the alarm, the rest of economists who speak in public just said what they were paid to say by the very people who didn‘t suffer from the collapse.

I wasn’t surprised at the time to see Alan Greenspan leave unexpectedly before his term as Fed Chairman ended. If you were paying attention, you could see the what was happening. This was the exact time when the Fed stopped publishing the M3 report that shows how much money is in circulation. The Federal Reserve was already propping up the banks by printing more and more money. On the right they were screaming about hyper-inflation, but just the opposite was going to happen.

Tim Geithner (still at the NY Fed in 2006) was revealed in these minutes as lauding Alan Greenspan’s great success for having presided over the longest period of uninterrupted growth in history. While Tim is talking, Greenspan is glancing nervously at his watch to see if he can get out of the door before the bubble burst. Greenspan wrote his thesis on the real-estate bubble of the 1920s; he knew exactly what was happening. But this apparently wasn’t fit talk even for the quietest of rooms, at least not where notes would be taken.