Matt Lewis points us to a very-special birthday video from the NRSC…
Hey Al, here’s to #58 seeing you back home in New York City.
The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.
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Matt Lewis points us to a very-special birthday video from the NRSC…
Hey Al, here’s to #58 seeing you back home in New York City.
If I were smart, I would’ve done this one last week…
As a reminder, I’ll be gone for a week starting Saturday on my Great Canadian Walleye Hunt. Shoebox is back from his fishing trip, and I should have the usual guest-blogging crew in.
The price of a barrel of oil has increased nearly 50% since the first of the year. There has been much speculation as to what is driving the increase. The drop in the value of the dollar, increased usage from developing countries, tension in the Middle East, speculators and numerous factors have been pointed to as causing the run up. Certainly, each of these have impact on the price increase but I think one factor has been missed entirely.
Let me start with some background, in poker playing. When playing poker it’s important to not tell your opponent what you have in your hand. That seems pretty obvious. What’s not obvious to most folks is that telling another player what you have in your hand doesn’t typically involve spoken words. Good poker players can tell what their opponents think of their hands based on “tells.” “Tells” are unconscious body gestures, stroking your chin, pulling an ear, scratching your nose or a host of other things that the player may do each time they have a good, or a poor hand. A good poker player will identify and use those “tells” to determine what kind of hand their opponent has. Based on that information, they know how to bet.
So why has oil been increasing? The world oil market has been reading the “tell” of the US political system.
Look at this chart that shows the price of Light Sweet Oklahoma Crude (it tracks pretty close to the NY traded crude) by day of 2008.
oil-prices
OK, this would be a lot easier if I could draw arrows on graphs but….
Let me give you the events of a few dates:
So what happened to oil prices along those same dates?
I’m not saying that there is a direct cause and effect between the outlined activities and the move of oil. I am saying that the world oil market is getting consistent and repetitive ”tells” that the US government, at all levels, is unwilling to do anything to increase the world’s oil supply. As examples, all of the remaining Presidential candidates have refused to drill for oil in ANWR and the Senate Energy and Natural Resources Committee recently caved to environmentalists and refused to expedited leasing for oil shale in Colorado.
Worse yet, the governement is giving “tells” that indicate that along with not increasing supplies, they will increase the costs of doing business for US oil companies. Examples of this are the Cap and Trade systems being proposed by the leading Presidential Candidates and demanding excess profits taxes on oil companies. Markets know that the impact of these items is that impacted companies will either reduce the availability of their products or increase their costs to the consumer.
The worse thing a beginning poker player can do is let their emotions get the better of them and bet irrationally hoping that that will improve the situation. The US has shown that trait with their multiple demands to Saudi Arabia for increased oil production as well as Congress’s passage of a bill that would allow it to sue OPEC for price setting and limiting supplies. Both of these are clearly actions of a frustrated player who sees no good options in their current hand.
Until the US starts a new hand and resets the odds by increasing the world oil supply by exploration and development within US territories, the world oil market will continue to hold a royal flush. If they hold a royal flush and know that we hold 5 unmatched cards, they will continue to bet into the pot and we will see continued increases in the price of oil.
Today, Rep. Paul Ryan (R-WI, my Congresscritter) released a plan to deal with the looming financial crisis that is facing the federal government, “A Roadmap for America’s Future. Yesterday, I highlighted a Congressional Budget Office report on the long-term future of the federal government’s finances. To recap yesterday’s analysis; doing either nothing or attempting to match the required spending increases with tax increases was found by the CBO to be unsustainable.
They also did an analysis of a third scenario; the not-yet-released Roadmap. I chose not to discuss that at that time because the details of the plan weren’t out yesterday, and because the CBO limited its analysis to the overall numbers. The CBO found that the then-not-specific spending targets requested by Ryan and the minority on the House Budget Committee is ultimately sustainable, with debt as a percentage of GDP briefly peaking above 100% around 2040 and falling back to a slightly-more-manageable number as deficit spending is replaced by surpluses, and economic growth continuing at a pace not possible otherwise.
On to some of the specifics:
There’s a lot more than I’ve included here. It truly is a sweeping proposal.
(H/T - Jim Hoft)
No, I’m not going to apologize for the language. This is some seriously fucked-up repugnant shit.
By a vote of 324-84, including the entire Wisconsin delegation in the aye column, the House of Representatives passed a law designed to do two things that will do everything but reduce gas prices:
- Allow anti-trust suits against OPEC.
- Demand the 932nd investigation into price-fixing by Big Oil.
I’ll briefly take the second item first. Because of the jackasses in Congress, including the fucktards in the Senate that refused to open up the Colorado oil shale fields, we’re at the extreme high end of the supply-demand curve. OF COURSE there’s going to be massive speculation when demand outstrips supply, and said speculation is going to leverage prices beyond what it would if there was a better balance between demand and supply. I will point out the 931 previous investigations all found that there was no collusion between the traders to keep the price high; what the fuck is gong to be different with the 932nd?
Berry Laker pretty much predicted the response of the market to this piece of horseshit. I missed the intraday charts, but oil closed at $133.17/barrel and wholesale reformulated gas closed at $3.3965/gallon. I’d say that’s a shot across the bow.
Now to the suing OPEC item. There’s a slight problem with that; they’re sovereign nations not subject to territorial law. When the Justice Department comes a-knocking, what do you suppose the reaction of Venezuela, Iran, Saudi Arabia and the rest of OPEC is going to be? If you think they’ll boost production just because a couple lawyers threatened them, I’ll point out that Saudi Arabia brushed off a friendly request from President Bush a couple weeks ago. When some judge decides to try to seize those countries’ assets in the US, what’s more likely; a capitulation from OPEC or a complete shutoff of the spigot and a “FUCK YOU!”? I’ll remind you that we’re more-dependent on OPEC now than we were the previous two times they shut off the spigot, and they shut it off for more-trivial reasons than all of them having their assets seized.
Then there’s the whole question of enforcement. If we’re serious about forcing the OPEC spigots open, it’s going to take a military operation that makes both theaters of WWII look like a training exercise. Talk about your blood for oil. Oh yeah, that’s going to cost a lot.
I do have to take a moment to ask Paul Ryan and Jim Sensenbrenner, two Congresscritters who usually know better, “What the fuck are you thinking by signing onto this smelly piece of shit?” There is nothing, I repeat, nothing that could possibly make this worth voting for.
(H/T - Owen)
The Milwaukee Area Technical College district wants to jack up budgeted spending by 6.2% over last year’s budget to $333 million, supported by a 4.9% property tax levy increase. Let’s run some numbers:
- Last year, despite budgeting “only” $314 million, they actually spent $331 million because of various unbudgeted construction projects.
- The 4.9% property tax levy increase asked for is, according to the article, mostly for increases in salary and benefits. That would be an additional $1.5 million in wages/salary, $2+ million in health care and $2.5 million in current-year non-health-care fringe benefits (an additional $2 million in increased fringe benefits is related to a new requirement to put future retirement benefits on the books the year they’re accrued instead of the year they’re paid out). Who here outside of government has had a 4.9% increase in wages and benefits?
- Tuition (set by the state) is going up 5.5%.
Jeanette Bell (ex-mayor of West Allis and proven tax-and-spender) had the audacity to claim that MATC cut to the bone. Again, I ask, who outside of government is getting a 4.9% increase in their compensation packages? Say, maybe it’s time to take another look at the $600,000 public safety initiative as well.
Ever since I was a young boy…
(H/T - Greg Mankiw via Brian Faughnan via Charlie Sykes)
At the request of Rep. Paul Ryan, the ranking member on the House Budget Committee, the Congressional Budget Office prepared an analysis of the long-term economic effects of doing absolutely nothing to either spending or revenues (other than making the Bush tax cuts permanent and indexing the AMT), using a very-long-term plan to slow and ultimately eliminate deficit spending, and using tax increases to attempt to match the increases in spending.
Table 1, which outlines the projected changes in spending as a percentage of Gross Domestic Product (SocSecurity/Medicare/Medicaid operate under current law, “discretionary” spending essentially matches the growth in GDP, interest payments on debt increases to match the increased debt), has some scary numbers. By 2030, Medicare and Medicaid together will account for a larger percentage of GDP than Social Security. By 2050, they’ll account for a larger percentage of GDP than “discretionary” spending, interest payments will be the single largest item on the budget at 13.6% of GDP, and total government spending will account for 41.8% of GDP. By 2082, more than 75 cents of every dollar produced by the economy would go to the federal government, with 40 cents of that going to pay interest, and Medicare/Medicaid spending outstripping the rest of the budget.
Bear in mind, that is with no “universal health care”, no adjustments in the Social Security/Medicare/Medicaid formulae, and no adjustment other than the change in GDP in the remainder of government spending.
As for the debt, by (approximately) 2030, it would be more than 100% of GDP, a situation only experienced in and immediately after World War II. Shortly afterward, it will zoom past the all-time high of 110% of GDP, blowing past 290% of GDP by 2050 and 400% of GDP by 2060.
A textbook analysis of the effect of the exploding deficits on the real Gross National Product per person is similarily ugly. The CBO acknowledges that the textbook analysis is too rosy, but by the late 2040s, the GNP/person will begin to drop due to the effects of the deficits. By 2060, and a drop of 17% from the peak, the debt will be so large, the future effects are incalculable.
Regarding the thought that increased taxes would save us, the focus on the blogs I linked to was on the 88% top tax rate and 25% bottom tax rate required to support a non-interest spending rate of 35% of GDP (and the associated 40% of GDP spent on interest). The CBO notes the following regarding that more-than-doubling of the tax rate: “Such tax rates would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion. Revenues would probably fall significantly short of the amount needed to finance the growth of spending; therefore, tax rates at such levels would probably not be economically feasible.”
The CBO also ran some numbers on the assumption that non-interest government spending would somehow be held at 28% of GDP (the projections for 2050). Even that would necessitate a higher-than-90% increase in taxes; the lowest rate would go up from 10% to 19%, the current 25% rate would go up to 47%, and the top 35% rate (both individual and corporate) would go up to 66%. That tax increase is estimated to reduce real GNP per person by between 5% and 20% from what it would be if the 2007 levels of spending and taxation would be maintained.
since late last year, the MSM has been gleefully reporting that the US economy was in a recession. Never mind that the threshold has yet to be crossed, we were in a recession because they said so. But are we?
NEW YORK (Reuters) - An imminent recession could cost New York City 59,400 jobs between now and the middle of next year, with the profit-stricken financial sector the “epicenter” of the downturn, a new report said on Tuesday.
An “Imminent” recession? Even Reuters put it in quotes. I thought we were already in a recession? The real fun though is that this recession, which hasn’t happened yet, might, if it does happen cost jobs in NYC.
Let’s see if I can play the “create a catastrophe” game as well as the MSM…
An Imminent recession may cost NYC LOTS of jobs. If LOTS of jobs are not created or perhaps lost in NYC, taxes will possibly DRAMATICALLY decrease for the city. This DRAMATIC decrease in taxes might be enough to cause NYC to be unable to satisfy its general obligations and you may find that NYC DELCARES BANKRUPTCY. If something that dramatic were to occur, well, who knows what the effect on the overall US economy could be. In fact, if bad enough and if it rippled across the US we could find that in the extreme it’s possible that THE US DOLLAR BECOMES WORTHLESS.
But I may be a bit a head of the game:
Although the data are still too ambiguous to determine whether New York City is already in a recession, the report said the “Independent Budget Office is forecasting that a local recession is imminent, if it has not begun already.” No recovery is seen until the second half of 2009
Huh? The data is too ambiguous to know if they are in a recession but obviously clear enough to show that they will be and, that when they are, it won’t get better until late 2009!
Wait, this sounds vaguely familiar….
I guess when you already know how the story will end, the interim plot points are just so many superfluous words.
I hate the chopped, MTV-friendly version of this song, so enjoy the Matrixed version…
A programming note; the Scramble will not happen next week, at least not with my name attached to it. I will be out of the country on the great walleye hunt north of the border.
Barack Obama is complaining that the Republicans are targeting his wife in the general election.
Um, Barack, your wife is campaigning for you:
Michelle Obama campaigned in Durham before heading to Asheville. North Carolina will hold its primary Tuesday.
Not that I agree with Hillary often but, if you can’t stand the heat, get out of the kitchen.
If Michelle is campaigning, she’s fair game as she is telling people that they should vote for Barack based on her credibility.
If you want to keep her out of the campaign, keep her off of the campaign trail. Short of that, welcome to the big leagues.
(H/T - Zip)
Der Spiegel reports that the German KSK special forces assigned to capture a rather bloodthirsty Taliban commander simply let him walk away. The KSK and the Afghan troops they were working with conducted a brilliant surveillance, right down to the color of his turban. However, when it came time to take him down, they were spotted a couple hundred yards from their target. Because the KSK is under orders to not use lethal force unless fired upon, all the commander had to do was run, which he did.
The larger policy of not firing unless fired upon is causing some serious friction between the Germans and the remainder of the NATO force in Afghanistan. Quoting an unnamed British officer, “The Krauts are allowing the most dangerous people to get away and are in the process increasing the danger for the Afghans and for all foreign forces here.”
No wonder why most of the Taliban “resurgence” has happened in German-controlled areas. I wonder what the Germans would have done had the Soviets decided to charge through the Fulda Gap.
It is still morning, isn’t it?
No fancy attempts at putting like items together today; too many and too little time…
The Scramble is getting out of control. It is out of control and I’ll be lucky to live through it.
Sorry I don’t have video, but the county signs are in the way.
Since this portion promises to be quick-hitting, I’ll fire up the CoverItLive….
Because I burned much of the last hour catching up on the speakers to the convention-goers, I have but a half-hour before things start back up. Good thing there’s an Arby’s on the same property.
Of note, Rep. Sensenbrenner hit Assembly Speaker Mike Huebsch rather hard on the budget repair bill.
This is actually the second speech from the convention chair; I missed the first. Greg Bump didn’t.
Time to burn the lunch hour catching up; once we got toward the end, I could not offload the audio fast enough…
Because of all the potholes in Wisconsin and his continued raids on the transportation fund meant to fix those potholes, National Committeewoman Mary Buestrin is now calling the governor Pothole Doyle.
I like it.
Revisions/extensions (8:52 pm 5/20/2008) - I apologize to those expecting video here. I did not know how long speeches would last, or whether I’d be able to offload the speeches from my camera in time in between speeches, so I simply took a couple pictures while my digital voice recorder caught the audio.
I’m a bit late because I had to head back to the bunker overnight, but I’m back in town. Owen had me covered though. Troy Fullerton is also in the room.
I missed out on the row with the power strip, so I’ll have to be brief with my updates. A brief word on the suites last night, Scott Walker’s Milwaukee-themed suite was the best-decorated, while Paul Ryan’s/John Gard’s suite won for best food (stuffed mushrooms and tasty meatballs).
The promised Gard speech will be up shortly.
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