Posts Tagged ‘research’

If You Want $12 A Gallon Gas, Vote for Obama and Democrats

July 7, 2008

The June 22, 2008 program of ABC’s This Week had an interesting panel discussion consisting of George Stephanapoulos (the host of the program and former Clinton communications director); Democrat Rep. Ed Markey, the chairman of the House Select Committee on Energy Independence; Republican Sen. Kay Bailey Hutchison; Jeffery Sachs, director of Columbia University’s Earth Institute; and Red Cavaney, the President of the American Petroleum Institute. Their discussion was a good window into the positions of the Democratic and Republican political positions, as well as into the liberal environmentalist groups and the conservative-friendly oil industry.

GEORGE STEPHANOPOULOS: And let’s play off the summit this morning in Saudi Arabia. The Saudis have announced that they’re going to increase production by 200,000 barrels a day. Say they may even do more. But Congressman Markey, King Abdullah also took off after speculators. Is this increase in production going to be enough to bring prices down?

REP. ED MARKEY: It may have a marginal impact. There is, without question, in my mind, speculation going on. Manipulation going on. The Democrats are going to put bills on the House floor this week to deal with that issue. But in the end, this crisis is really caused by 12 years of Republican control of Congress. We’ve gone from 46% dependence when the Republicans took over the House and Senate in 1995 to 61% dependence upon imported oil today. We’ve had an oil and gas agenda. They’ve thwarted the renewal energy agenda. They are still blocking in the Senate the tax breaks for renewable wind and solar and geothermal and other renewal energy technology. We only have 2% of the oil reserves in the United States. OPEC has 67%. That’s our weakness. Our strength is that we are technological giants. We have not yet unleashed it. The Republican White House and House and Senate are still blocking that revolution.

SEN. KAY BAILEY HUTCHISON: Well of course, I would say that the Democrats have thwarted every effort we have made to increase our supply. This is a supply and demand issue. The demand has skyrocketed mostly because of global increases. And we have not done anything about supply because we’re thwarted in nuclear power, we’re thwarted in using our own national resources. Drilling offshore on a state-by-state option is something that I think we could do very environmentally safely. And yet anything that says production is killed by the Democrats. What I think we ought to do to get the speculators to stop thinking that the prices are going to go up is for Congress to show that we are going to take action with a balanced plan, with renewables, with nuclear power with expanded refineries, with drilling and exploration of our own natural resources. If we did that, yes, it would take five to ten years to get those things in line but the speculators would be out of the market.

RED CAVANEY: It is fundamentally, because unless you had very tight supply and demand, you wouldn’t create the platform that would allow people to think that there was an opportunity here to make an investment, and then that could lead to other kinds of things. So you must address the base global supply and demand situation in order to bring some sort of order. Like right now we’ve had civil disruptions of Nigeria. A million barrels are offline that are not available.

JEFFREY SACHS: We have to move fast on a number of fronts. We need conservation. We need long mileage automobiles which was delayed forever. We do need alternative energy sources, renewables. We need the nuclear. That’s got to be part of the mix. We are going to have to work together internationally. We ducked that issue entirely. Climate change is also part of the equation. This administration hid that from view for eight years. And so we never had a balanced plan. We never had a strategy at all. It was oil from first day. That’s been the big mistake.

Let me come in at this point and say that the basic parameters are all in place here: the Democrats do not view oil as part of the solution to the energy problem. They demand alternatives to oil. The Republicans do – and have for years – viewed domestic oil as a critical part of any solution to our short- and long-tern energy needs, and have tried largely without success due to implement a policy of increased domestic oil production.

Red Cavaney points out that the speculation that drives up prices only enters into the cost equation when the supplies aren’t meeting the demand. When supplies are abundant, you don’t have people betting that the prices will go up.

Rep. Markey attempts to attack Republicans for the increase in dependence on foreign oil; but do you see how absurd that is? It’s analogous to me beating the hell out of you with a baseball bat and then blaming you for being in poor health. Of course we’re more dependent on foreign oil than we were 12 years ago: a determined Democratic minority has been allowed to block any – and I mean ANY – significant effort to increase our domestic oil production. And – in absolute refutation of the Democrat’s mantra – we have NEEDED, now NEED, and will continue to NEED oil for the foreseeable future.

Markey goes on to say, “They’ve thwarted the renewal energy agenda. They are still blocking in the Senate the tax breaks for renewable wind and solar and geothermal and other renewal energy technology.” And that is partially true (although Democrats and their environmentalist allies have been responsible for overturning wind technology, and liberal environmentalists recently sued to stop the use of solar technology, so let’s not go too far blaming Republicans); but Democrats ought to look in the mirror when they demonize Republicans for blocking alternative energy by blocking tax breaks.

Democrats routinely shoot the country’s national interests, and then put the gun in the Republican’s hands.

Markey said we have only 2% of the world’s oil reserves. This is patently false, although one can measure “oil reserves” in so many different ways that virtually any figure is true depending upon one’s definitions. However, a significant percentage of the United States domestic oil reserves is contained in fields that will require new or improved technology for cost-efficient production. We are on the verge of being able to cleanly obtain oil from coal (the United States has the largest coal deposits in the world); we are on the verge of being able to obtain oil from shale (we have massive shale oil deposits in the Bakkan , and we are on the verge of being able to profitably employ deep-water drilling and slant drilling techniques. If and when the Demcrats allow the American people to obtain the oil it has, that “2%” figure would increase very dramatically. The fact of the matter is, if the Democrats allowed us to simply access the oil that is already readily available in ANWR and offshore, we could very quickly go from being the 12th largest producer of oil to the 4th largest producer of oil.

Another area that should be considered is the Democrat’s approach to “conservation.” Requiring automakers to produce more fuel-efficient cars is nothing more than an indirect way of forcing Americans to buy small, underpowered cars that they have historically not wanted. It is their way of attempting to force their will on the market – just as preventing domestic drilling is a way for the Democrats to force their will upon the market.

If they came out and imposed legislation requiring Americans to buy dinky little hybrid cars, Americans would be outraged. By trying to force automakers to produce the cars that they want Americans to drive, they are essentially doing the same thing, but most Americans haven’t quite figured that out yet.

I drive the speed limit, and I routinely see two things: 1) a lot of SUVs, trucks, and large-engined performance vehicles on the road; and 2) the aforementioned vehicles and virtually everyone else whizzing past me on the freeway going 10-20 mph beyond the 70 mph speed limit. The fact of the matter is that most Americans simply do not want to have draconian energy conservation policies imposed upon them – which is precisely the approach that Democrats favor.

In their constant attempts to manipulate the oil producers, and to manipulate the automakers, to do their bidding, Democrats show a fundamental distrust of the market and of the market forces that made this country great. And I would ask, based on what do they believe that big government bureaucracy can do a better job than the free market? Senate Democrats couldn’t even run their own cafeteria; just why on earth should we trust them to run anything?

Another interesting exchange:

REP. ED MARKEY: It’s kind of a sad day in American history. We were given one week’s notice to go over to Saudi Arabia today to beg the Saudi Arabians and OPEC to please produce more oil we can purchase. We have 700 million barrels of oil in our strategic oil reserve. The president should say to OPEC, that he is going to begin deploying 100,000 barrels of oil per day out of that strategic petroleum reserve to drive down the price. And he should also say to them like President Kennedy said to Khrushchev in 1961, that we are going to put a man on the moon. We are not going to allow the communists to control the skies. He should announce today a crash program that we are going to have automobiles that are dramatically more efficient. That we’re going to have wind and solar and geothermal. That we are going to use our technology in order to break our dependence upon Saudi Arabia and the rest of these countries. But that is not happening instead we’re over there with a tin cup begging them to sell more of our weakness to us, imported oil.

RED CAVANEY: Look, our concern is that what you need are permanent solutions. That’s the signal the market’s looking for. Opening up, providing some access, doing everything. We support all of the alternatives. Our companies are some of the largest players in that. Any scenario you look at, you will find that you need all the energy we can get of every kind and to take some off or to marginalize others is going to end up hurting the consumer. The consumer, when we went past $3 a gallon of gasoline, up to $4, they connected the dots. And that’s why you’re now seeing them asking for urgent action on the part of the Congress. They understand that we need more energy.

JEFFREY SACHS: It’s so interesting how there’s a, you know, a rough consensus on the things that need to go into this. But there’s been nothing that’s been done during this whole administration. Because they basically just turned away from realities, turned away from the alternatives, turned away from massive investments that are needed in the science and technology. They turned away from really investing in long mileage automobiles, millions of dollars rather than billions that are needed to get these going.

SEN KAY BAILEY HUTCHISON: Well first of all, we have made major investments in renewables and research. We have. We have increased huge amounts. However, let me just say look at the last month just as an example. We, the Republicans, have put forward a balanced plan. The Democrats came forward with a plan that had no energy production at all. It was sue OPEC. Congressman Markey has just said oh, we’ve gone over there with a tin cup. Well, at the same time, the Democrats are passing in the United States Senate a bill that would sue them. Now what kind of reaction are we going to expect from Saudi Arabia which is today, looking at trying to help the world market if we are going to sue them? That’s not a way to try to make friends and increase our supply. In addition the Democratic plan had two other things. A windfall profits tax which has been shown not to work and form a commission to investigate price gouging which is being done by the CPSC right now. So I do think we could come together. But not if the Democrats refuse to have any increase in supply. And the Republicans are willing to certainly do more in research, more in renewables, more in conservation, and I think you have a point. We haven’t done enough in conservation. But make those investments.

What is truly sad is that the United States has to go to Saudi Arabia and beg them to produce more oil when we could have been producing that oil ourselves. In a way, Markey – who is ostensibly blaming this situation on Bush and the Republicans – is actually lamenting that Democrats have been successful in implementing their agenda!!! If Republicans had had their way – and if they had not had their bills blocked by Democrats – we would not have had to go beg the Saudis, would we? Even by the liberals incredibly stingy figures on our oil reserves (the oil companies who actually know what they’re talking about claim we have much more), there is no question that we could have produced the amount of oil in question just by opening up ANWR.

One of the things that I always marvel at about Democrats is that they believe that only government money matters. They despise the free market system, and therefore consistently seek to impose big government bureaucracy in place of the free market system they fear, hate, and misunderstand.

The reality is this: why does the government have to invest in all these alternative energy sources? Why aren’t private investors doing it? I mean, by all accounts Barack Obama is going to raise $500 million dollars for his campaign; why can’t all these people put their money where their mouth is and invest in their vision of alternative energy? Answer: because their solutions don’t work, won’t work, and the market knows that.

I remember several years back when the State of California obtained $6 billion dollars for government-sponsered research in embryonic stem cells. How many cures has that $6 billion resulted in? ZERO. NADA. NEIN. BUTKUS. We needed that huge sum of money because private money wasn’t going into embryonic stem cell research. Apart from the fact that embryonic stem cell research has killed innocent human life, it hasn’t produced squat. So government money came in to fill the void, and the government funding hasn’t produced squat either. We might as well have dug a big hole, thrown in $6 billion, and then filled in the hole.

If a research program actually promises to produce a positive outcome that will result in an investment profit, private money will pour in. You can always spot a financial black hole by the cries for government funding. And the greater the cries for government funding, the bigger the black hole it is.

Contrast this with financing for oil exploration, drilling, and alternative source techniques. First of all, we are talking about a proven resource that WILL work, not some pie-in-the-sky useless liberal crap, and not some product that will require a massive overhaul of our entire energy infrastructure. But second, the reason these areas are underfunded is not because they won’t produce a positive return on investment, but due to the fact that they can’t produce any return at all because Democrats block any oil production! When the government won’t allow oil companies to produce oil, there is far less incentive for investment to fund the new technologies they will need. If Democrats would just get the hell out of the way, our market system would start working and producing the vital oil and energy that this country desperately needs.

Markey cites Kennedy vs. Khrushchev, when the United States beat the communists to the moon. The problem is, Markey and his fellow Democrats are today playing the role of Khrushchev and the communists, rather than actually helping the United States of America to accomplish its goal of energy independence. They are blocking the free market and imposing their bureaucracy in a matter very reminiscent of the communist state-managed economy (i.e. the folks who lost in the race to the moon, and then went bankrupt and collapsed altogether).

The real problem is, as Sen. Hutchison says, “The Democrats came forward with a plan that had no energy production at all.”

We need to make oil prices the albatross that we hang around the neck of Democrats. Barack Obama is in lock step with Senate Majority Leader Harry Reid, who says:

“Coal makes us sick, oil makes us sick, it’s ruining our country, it’s ruining our world.”

(See my article discussing that little pearl of wisdom).

Democrats routinely demonize oil. They routinely demonize oil companies who produce the vital resource we desperately need. They steadfastly refuse to allow the United States to increase either it’s domestic oil production or its refining capacity. It is directly due to their “commonsense plan” that we are in the situation we are in, and that we will continue to remain in the situation we are in.

If you want $12 a gallon gasoline, vote Democrat. They will offer “global warming” solutions up the whazoo that will undermine and eventually gut the American economy by starving our economy of the oil we need for our survival. If you want to lower the price of gasoline by means of effectively increasing our oil supply, vote Republican.

It’s as simple as that.

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How to Demagogue the Economy

May 17, 2008

Want some good news that you probably haven’t heard? The United States has the best economy on the planet!

Here’s the May 15, 2008 story by CNN.Money.com:

GENEVA (AP) — The United States topped world competitiveness rankings for the 15th straight year, but its economy is showing the same signs of weakness that sank booming Japan in the early 1990s, according to an annual survey released Thursday.

Asian tigers Singapore and Hong Kong ranked just behind the U.S., as they did last year. Switzerland jumped two places to fourth, while Luxembourg rounded out the top five most competitive national economies, said the Lausanne, Switzerland-based IMD business school, publisher of the World Competitiveness Yearbook.

“The big question is whether the United States will be No. 1 after this year,” project director Stephane Garelli said, adding that the report was based on 2007 data that do not fully reflect all of the problems in U.S. financial markets. “Everyone is catching up very quickly, but so far the U.S. economy is showing a lot of resilience.”

The study lists 55 economies according to 331 criteria that measure how the nations create and maintain conditions favorable to businesses.

The U.S. position was cemented by its domestic economy, which is the world’s strongest, topping all others in its amount of investments, stock purchases and commercial service exports. The U.S. also ranks as the easiest place to secure venture capital for business development and dominates all other economies in key technology criteria such as computers in use, according to the report.

But Garelli warned that U.S. economic health is vulnerable because of its heavy reliance on the financial sector for corporate profits.

The 2008 report says there are parallels between now and two decades ago, when the business school first started to study competitiveness and “Japan’s competitiveness seemed unassailable, with a strong domination in economic dynamism, industrial efficiency and innovation.”

“Then all hell broke loose,” it added. “The stock market went into reverse in 1989, land prices collapsed in 1992, credit cooperatives and regional banks came under attack in 1994, large banks teetered on the edge of bankruptcy in 1997, and a major credit crunch occurred in 1998. Does this ring a bell?”

While the report called the similarities “frightening,” Garelli said there are important differences between the Japan that stagnated for nearly a decade and the U.S. economy teetering on the brink of a recession now.

Japan’s decision-makers were bureaucrats or politicians who reacted too slowly. The U.S. administration, by contrast, is full of business and financial experts that know when things need to be shaken up.

“The U.S. always seems to find the means to reinvent itself in ways that Japan – and much of Europe – often lacks,” he said.

Rounding out the top 10 most competitive nations were Denmark, Australia, Canada, Sweden and the Netherlands. Slovenia rose eight places to 32nd – a jump matched by Poland, which is now 44th. Greece slipped the furthest, six places down to 42nd.

China and India both dropped two places in the report, to 17th and 29th, respectively. Russia fell four spots to 49th.

Venezuela was ranked last for the third year in a row, immediately preceded by Ukraine, South Africa, Argentina and Indonesia.

The United States economy is rated as the strongest and most competitive in the world for the fifteenth year in a row. This is frankly astounding news, given the fact that we are routinely told that President Bush has horribly mismanaged the economy, that we are in a terrible recession, and that no president has been this incompetent since Herbert Hoover (and go ahead and have one from the Washington Post for the road).

Former Clinton Labor Secretary Robert Reich is actually talking about a depression, proving he’s diminutive in more than just height. Goodness sakes people, it’s really quite remarkable how stupid and irrational people with average to above-average IQs can become when they buy into a completely warped view of the world.

Another interesting story is the economic mythology that we are continually presented about the Clinton years. If you believe what you are routinely spoon fed, you know that President Clinton left President Bush with a budget surplus and a strong economy. False and false again.

First of all, President Clinton did not balance the budget; what he did was fiddle with the numbers by paying off the public debt by borrowing from the intergovernmental debt (particularly from the Social Security Trust Fund). If you think that’s a legitimate way to balance the budget, kindly check yourself in to the nearest mental health facility for evaluation. But even with such shenanigans, the last Clinton budget was $133.29 billion in the red.

It is simply not true that President Bush balanced the budget in anything resembling a meaningful or legitimate sense.

Furthermore, President Clinton left President Bush an economy that was already stumbling into recession.
The GDP declined into the negative range in the third quarter of the year 2000.

Wikipedia points out, “The U.S. economy shrank in three non-consecutive quarters in the early 2000s (the third quarter of 2000, the first quarter of 2001, and the third quarter of 2001).

Using the stock market as an unofficial benchmark, a recession would have begun in March 2000 when the NASDAQ crashed following the collapse of the Dot-com bubble.”

According to the U.S. Department of Commerce’s Bureau of Economic Analysis, the GDP was at a negative growth of 0.5% in the third quarter of the year 2000. There was another 0.5% negative GDP growth in the first quarter of 2001, and a -1.4% quarter in the third quarter of 2001.

A document from the state of Ohio says, “In the second half of 2000, traditional manufacturing has experienced negative growth, which qualifies as a recession using the definition of two consecutive quarters of decline.”

Media Matters, the well-funded liberal hate site and attack operation, has cried foul over the National Bureau of Economic Research’s revision of economic data to indicate that there really was a “Clinton recession” that began in the latter half of the year 2000. But, even if the original figures of negative growth given as March-November 2001, it’s still on President Clinton’s record. The simple reality is that the Bush administration’s first fiscal year did not begin until October 1, 2001. There is simply no getting around the fact that Clinton most definitely did NOT leave Bush a strong economy.

Why is there such an overwhelming belief in things that are simply false?

Because the media – which is and has been firmly on the side of the left – is routinely disingenuous with statistics, which can often be tricky even for people who aren’t trying to lie.

The research confirms it:

During the 2000 election, with Bill Clinton as president, the economy was viewed through rose-colored glasses. According to polls, voters didn’t realize that the country was in a recession. Although the economy started shrinking in July 2000, most Americans through the entire year thought that the economy was fine.

But over the last half-year, the media and politicians have said we were in a recession even while the economy was still growing.

Gas prices are going up. The economy is slowing. Talk of recession is seemingly everywhere. While the majority of people rate their personal finances positively, consumer confidence in the economy has plunged to a 16-year low, well below what it was during the last year of the Clinton administration when we were in a recession.

A Nexis search on news stories during the three-month period from July 2000 through September 2000 using the keywords “economy recession US” produces 1,388. By contrast, the same search over just the last month finds 3,166. Or, even more telling, take the three months from July through September last year, when the GDP was growing at a phenomenal 4.9 percent. The same type of Google search shows 2,475 news stories.

Over 78 percent more negative news stories discussed a recession when the economy under a Republican was soaring than occurred under a Democrat when the economy was shrinking.

A little perspective on the economy would be helpful. The average unemployment rate during President Clinton was 5.2 percent. The average under President George W. Bush is just slightly below 5.2. The current unemployment rate is4.8 percent, almost half a percentage point lower than these averages.

The average inflation rate under Clinton was 2.6 percent, under Bush it is 2.7 percent. Indeed, one has to go back to the Kennedy administration to find a lower average rate. True the inflation rate over the last year has gone up to 4 percent, but that is still lower than the average inflation rate under all the presidents from Nixon through Bush’s father.

Gas prices are indeed up 33 percent over the last year, but to get an average of 4 percent means that lots of other prices must have stayed the same or gone down. On other fronts, seasonally adjusted civilian employment is 650,000 people greater than it was a year ago. Personal income grew at a strong half of one percent in just February.

Despite all that, this last week, Barack Obama proclaimed “As most experts know, our economy is in a recession.” Hillary Clinton made similar staements last fall. Yet, as any economist knows, a recession is two consecutive quarters of negative growth, and we haven’t even had one single quarter of negative growth reported. The economy slowed down significantly during the end of last year, but that was after a sizzling annual GDP growth rate of 4.9 percent in the third quarter.

Housing has obviously been a big drag on the economy, but many other sectors of the economy, such as exports, have been doing well, some extremely well. For example, aerospace exports increased by over 13 percent last year.

The media’s focus on the negative side of everything surely helps explain people’s pessimism. In a recent interview Fox’s Neil Cavuto claimed this bias “is all part of the media’s plan to get a Democrat in the White House.”

Indeed, research has indicated that media bias is real. Kevin Hassett and I looked at 12,620 newspaper and wire service headlines from 1985 through 2004 for stories on the release of official government releasing numbers on the unemployment rate, number of people employed, gross domestic product (GDP), retail sales, and durable goods.

Even after accounting for how well the economy was doing (e.g., what the unemployment rate was and whether it was going up or down), there was still a big difference in how positive or negative the headlines were. Democratic presidents got about 15 percent more positive headlines than Republicans for the same economic news.

Yet, the hysteria created by this coverage can have another cost. It creates pressure for government to “do something,” even if that rush to do something actually ends up hurting the economy. For example, Obama’s promises last week “to amend our bankruptcy laws so families aren’t forced to stick to the terms of a home loan” will only further drive down the value of mortgage-backed securities, making any unstable financial institutions that hold them even more likely to fail. In the long term, who is going to want to loan money when the contract can be rewritten at a later date?

The news media have generated a lot of fear. Ben Stein has a point when he says “The actual economic conditions are not that bad. I think if we have a recession, if we have a serious recession, a great deal will lie at the media’s feet.” Hopefully a little perspective will enter the picture before even more harm is done.

John Lott is the author of Freedomnomics and a senior research scientist at the University of Maryland.

In particular we can see the fudging of economic perception by one particular media outlet – CNN – in a recent poll they did.

Fox News reported the story this way under the title, “The “R” Word“:

It appears that CNN has decided the U.S. is in a recession even though the economic data do not support that claim.

On its Web site, CNN posted the exit poll results from Tuesday’s West Virginia primary which asked voters if and how the “recession” has affected their family. All the major television networks use the same exit poll questionnaire.

And, while that generic survey asked voters, “Has the current recession or economic slowdown affected you and your family?”

Other networks, including this one, used the term “economic slowdown” when reporting the results. A recession is defined as at least two consecutive quarters of negative economic growth. The last quarter of 2007 and the first quarter of 2008 were marked by slow, but positive economic growth.

A blogger is a little angrier about this bias, and backs his temper up with solid data:

Adolph Hitler described the propaganda technique known as the “big lie” in his Mein Kampf as a lie so colossal that no one would believe that someone “could have the impudence to distort the truth so infamously.”

The liberal American media have mastered this technique in a way that would have had Nazi Minister of Propaganda Joseph Goebbels slapping his forehead and saying, “I should have thought of that!”