Saturday, February 26, 2011

China's Quest for Black Gold with Green Dollars

Way back in October of 2004, Time magazine quoted Chen Huai of the Development Research Center of Beijing as saying, "The world has the oil, and China has the money."  If anything has changed about that statement, it is that it has become more true. China's supply of money and its demand for oil have both grown at an amazing rate.

In 2007, China consumed about 7,578,000 barrels per day (bbl/day), nearly 9% of the world's petroleum. By 2009, China consumed an estimated 8,200,000 bbl/day and its demand continues to rise.

Meanwhile in the United States, over the same time period, the US consumption dropped from 20,680,000 bbl/day to an estimated 18,690,000 bbl/day. While the US is still the number one petroleum consumer by far, its consumption has dropped.

My point for those on the left that blame the US for "Global Warning" is that rising economies such as China and India are quite willing to use petroleum and coal laden with sulphur and they are unencumbered by EPA regulations. A patriotic keepsake sold in the White House gift shop that is made in China - No, I'm not making this example up - will necessarily have been the cause of more pollution than that same item made in the United States - even before we factor in shipping.

Driving up energy costs in the United States doesn't mean less pollution - it means more. Driving up energy costs in the United States means fewer US jobs and more jobs overseas. Even the threat of additional energy costs will encourage companies to expand overseas rather than in the US. Something a rookie US Senator from Illinois never bothered to learn. Remember this?

In an interview with the San Francisco Chronicle back in January of 2008, then-Presidential candidate Barack Obama said:
"You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers."
So when an Obama loyalist says that President Obama is a friend of business and is pro-growth, remind him of this interview. Anyone who aspires to be President should understand that their words have consequences. Combine that foolish statement with the continued ban on drilling - extended through 2017 for the eastern Gulf of Mexico and even off the coast of Virginia back in December. Meanwhile, Russia has plans to drill off of our southern shores and Washington sits idle.

Meanwhile China is aggressively seeking oil contracts around the globe, fueled by interest payments from our own country. So, you hypothetically say, who cares how China spends our old money? I'm glad you asked.

No one buys petroleum just for fun. It's not collectible; it's not ornamental; and it smells funny. People buy petroleum so that they can manufacture energy which is then used to manufacture items that are worth more than they cost to make. It's called making a profit - and producing trade goods.

So who buys those trade goods? The US buys about $273 billion more per year from China than they buy from us. Hey, no problem, we just borrow the money from China. Back in June, 2009, the US Treasury Department owed China only $757 billion just in long-term debt. Is it good news that this is only about five percent of our overall debt? I'll let you work that out.

So how do we get out of debt? Well, we spend less, but in the long-run, we must produce more 
and the only way to produce more is to use energy. Let's face it: a guy living in a cave with a wood-fueled fire is not going to manufacture a new car.

The Obama Administration may have forgotten, but business owners and conservatives know that energy is required to produce things. Back in 1776, Adam Smith wrote a book called An Inquiry into the Nature and Causes of the Wealth of Nations. Smith's "system of natural liberty" was capitalism unfettered by government interference. So, while our government prevents us from using our natural resources, China is making the most of the opportunity. It would appear that what government has forgotten - or chooses to ignore - China has learned.

Thursday, February 24, 2011

Around the World in 80 Lines - Or Less

Gadhafi’s Speech Fails to Set Record

Looking like a refugee from a Star Wars’ bar scene, waning Libyan strong-man Moammar Gadhafi broadcast his confused harangue to an audience of captive Libyans for a mere two hours. He again failed to set a Guinness World Record for speech length by a dysfunctional, megalomaniacal, delusional tyrant. 

The current record is in dispute, but Fidel Castro, Nikita Kruschev and Hugo Chavez all have much longer, documented diatribes. Kim Jung Il’s speeches were disqualified because they are actually delivered by a Disney-manufactured Animatronic “Doc” dwarf with a bad dye job.

Gadhafi is blaming the US for his domestic problems and is vowing to make himself “a martyr” in response. As Oscar Wilde said, “A thing is not necessarily true because a man dies for it,” but if Gadhafi wants to inhale an RPG then I might be willing to think about it.

The self-proclaimed “Mad Dog of the Middle East” decides upon martyrdom just as a former Libyan Justice Minister states that Gadhafi was much more involved in downing the Lockerbie, Scotland, downing of Pan Am Flight 103 than previously believed. I’m sure there are Americans - especially those related to the 259 innocents killed, as well as Libyans, who would gladly help Gadhafi toward his stated goal of assuming room temperature.

Remember the Federal Debt

With the focus of Americans split between the Middle East and the Wisconsin teachers’ drama, the federal debt has slipped from the view of many. Republicans are in a position to use an agreement to a continuing resolution to wring spending cuts from Democrats. The questions will be: 1) Will the Democrats believe they can bluff Republicans into approving a series of continuing resolutions that fail to cut spending; and, 2) If, as is almost certain, they do believe so, will Republicans then fold?

Washington’s addiction to spending taxpayers’ money is obvious – as is the fact that Congress is in denial. Is there a 12-step program for governments?

Democrat State Legislators Continue Hide-n-Seek Marathon

Rumor is that the missing Democrat Wisconsin state senators are hiding on loony leftist Keith Olbermann’s TV show. This will likely come to light as soon as Olbermann has a viewer. 

Correction and Amplification: It turns out Olbermann's scheduled show on Current (aka Albert Gore, Jr.) TV has not yet aired. Who knew?

Democrat state legislators from Indiana are also in hiding rather than vote on legislation which they do not have the votes to stop. At this rate Democrats may want to change the name of their party to reflect something they actually believe in; and it’s obviously not representative Democracy. I’m accepting nominations for a new, more appropriate name and symbol. One nomination is the “Denial Party” and their mascot would be an ostrich.

Harry Reid and Prostitution

Senate Majority Leader Harry Reid (D-NV) is working on a way to continue to fund the federal government rather than work on ways to cut federal spending. Reid is also calling for an end to legal prostitution in Nevada. Having just run a political campaign there, isn’t Reid a hypocrite?

Beautiful, Sleepy, Deadly Mexico

Recent tragic events have brought home the point that Americans are no longer safe in Mexico. It appears that warring drug cartels are a large part of this, but this is a departure from their previous strategies that avoided violence toward Americans. It begs the question, “What happens when those drug cartels change their strategies to include distribution in the United States?”

For Mexican drug cartels, it’s a business decision. There are those who argue this will never happen, but for the drug lords, it’s simply “vertical integration”. Like all business decisions, it’s a matter of risk and reward and the only way to halt it is to either increase risk or reduce reward so that it’s not a profitable project.

Part of that strategy to increase drug cartel costs might be to do a much better job of halting illegal border crossings. So obviously the Obama Administration will . . . file another lawsuit against Arizona! Yes, the Arizona legislature has proposed new anti-illegal immigration legislation, which will inevitably be challenged by the Obama Administration as soon as it is passed. Good luck on that, Arizona.

Tuesday, February 22, 2011

Where are the Adults? Obama's Big Adventure in the Middle East

It isn't so much that President Obama appears to be doing nothing about the Middle East's rolling riots. It's that feeling of dread that he might attempt to do something and the near-certain knowledge that it will end badly. This is a man who is so far out of his depth that his administration has a chronic case of the Bends - sort of a "Rapture of the Dweeb".

Less than a single term as a US Senator, eight years as a state senator, no executive branch experience, no business experience, but experience as a "community organizer" is not the dream resume' of a US President in troubled times. In fact, Obama would not qualify to be an advisor to himself.

The problem with a democratic republic is that you get the government you deserve. So, we have an inexperienced, ideologically-blinded leader who either does not understand the importance of the current events in the Middle East or is unable to fathom a response beyond issuing meaningless statements.

I don't need to tell you that oil prices are going through the roof. I don't need to remind you that oil rigs have been floated off from the Gulf of Mexico to locations where a profit is to be had. I'm sure you realize that even if the drilling moratorium is lifted today, that it will be at least 18 months before directional drilling from current oil platforms might deliver more petroleum - and then there will be a bottleneck because we haven't built an oil refinery in this country in over 30 years.

Obviously, this isn't all Obama's fault. The conservatives we have elected to office have been timid and backed down before the mostly-imagined wrath of the environmentalist lobby. Where, by the way, have those jackals been lately? I don't see them on TV bragging about what a great job they have done in preventing the construction and implementation of oil refineries, nuclear energy plants and oil drilling rigs.

Apparently mouthy environmentalists are as scarce as Keith Olberman, who is now on some faux channel, and Albert Gore, Jr., the owner of said faux channel. In the meantime we live in the land wrought by these over-achieving, climate-change mongering, pseudo-science promoting socialists. Welcome to the land where people with common sense sit at home on election day.

Back in the Middle East, those despots who can maintain the death-grips on their countries are about to reap a fortune as we pump our livelihoods into our gas tanks in the form of $5 per gallon gasoline. Why? Because we have made mostly poor decisions for the past century and forgotten that in order to prosper some Americans must be allowed to make a profit. Now, with a crumbling economy, deep debt and an oncoming energy crisis; we have little need to worry about Americans making a profit.

As always, someone somewhere will make a profit, but he won't be an American. In fact, he probably won't even like America and will gladly support those who would destroy us. It's time to send in the adults - and there are apparently none in this administration.

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Monday, February 21, 2011

Dance with Who Brung Ya – The GOP and the TEA Parties

The complicated dance between the Georgia GOP and the TEA Party groups will continue on the morning of March 12th when all counties hold their county conventions at 10 AM and even earlier when smaller counties hold their mass precinct meetings at 9 AM. This is a great opportunity for the GOP that will eventually play out across all 50 states, but some are worried about who will call the tune.

The GOP meetings are open to all legally registered voters of each county who believe in Republican principles. This would, in almost all instances, include TEA Party members. Some in the Republican Party are concerned about this, but there is no reason to worry.

The TEA Party people are here. I don’t believe they are going anywhere anytime soon. The only question is if they will operate from inside the Republican Party or from without. There are a lot of advantages to having the TEA Partiers within the GOP.

For county chairmen who want to grow their parties, this is a great opportunity. For county chairmen who are worried more about personal control than growth of the party, then it may be time for someone else to take the reins. It’s about leadership, not control. Welcome these folks aboard, do a good job and they will likely allow you to lead them. Block them or attempt to diminish them and you may find yourself the leader of a lifeless party or even outside looking in.

You can’t shake hands with a clenched fist; let go and clasp hands.

Friday, February 18, 2011

The Strategy to Begin Balancing the Budget

Entitlements are the 800-pound, beer-chugging, Angel Dust-snorting, psychotic gorilla in the room. It may be too late, but people are beginning to get a little nervous. Because of their size, we all know that entitlement programs, such as Social Security, Medicare and Medicaid must be addressed if we are to balance the budget. The question is: Will Congress do so?

Even minor changes in Social Security, though, have met with surprising resistance from politicians on the left and from recipients. Some sensible suggestions phase in minor changes and don’t affect anyone within 10 years of retirement and affects no current recipients. The overblown reaction to such suggestions are emotional rather than logical, and this must be taken into account.

I am convinced that Americans will accept changes to entitlement programs if – and only if – they are convinced that all other measures have been undertaken. So while entitlement benefit payouts must be reduced, but only after other programs have taken their hits.

Before taking on Social Security, Medicare and Medicaid; Republicans in Congress should work to eliminate the Department of Energy, the Department of Education, Fannie Mae, Freddie Mac and that’s just a beginning. Funding can be eliminated or reduced, for Obamacare, the Corporation for Public Broadcasting, the Department of Agriculture, the Department of Defense and others.

If the GOP-led House fails to accomplish this, then the burden shifts to the Democrats. Republicans can even, somewhat believably, claim that transfer payments might have taken a lighter hit if the other cuts had not be stone-walled by Democrat legislators in the US Senate.

If these cuts or eliminations are made, then the recipients of transfer payments will know that the task of balancing the budget won’t be completely on their backs. They will also understand that the current fiscal problems are, indeed, serious. For that reason, these other programs must go first, even if they are a lesser part of the deficit.

Interestingly, it has mostly been the Democrats that have accused Republicans of making “meaningless cuts” – small cuts that the Democrats could have made when they controlled both bodies of the legislative branch and the executive branch. Democrats are challenging Republicans to take on transfer payments by minimizing other GOP-suggested cuts. These accusations also go along with a strategy that some have openly accused the Democrats of undertaking.

President Obama’s suggested budget was described in newspapers as everything from “not serious” to “a joke” partly because it failed to address entitlement spending at all. Obama has been accused of playing political games with the deficit; almost daring Republicans to address transfer payments. The theory is that whatever changes the Republicans suggest, Democrats will accuse Republicans of “putting Grandma on a 9 Lives diet”.

My belief is that if Republicans follow my suggestion and eliminate money-pit federal programs first, the Democrats' high-level hypocrisy on the budget will stand starkly highlighted against a background of self-serving demagoguery. If that happens then the corrections to entitlement spending has a chance to be made law.

The 800-pound gorilla won’t go away until he is dealt with properly, but the political game of “Economic Chicken” needs to be made meaningless first. The only way to do that is to address other spending cuts first and to do so brutally.

Monday, February 14, 2011

The Jim Marshall Farewell Tour, Robo-Calls and Other Political Mysteries

The Jim Marshall Farewell Tour

Welcome back, my friends,
To the show that never ends
We’re so glad you could attend
Come inside, come inside.
– Karn Evil 9 First Impression by Emerson, Lake and Palmer

The third month of the Jim Marshall Farewell Tour is now well underway with no end in sight. Marshall’s eight years of Congressional service weren’t exactly the stuff of legends, so why the big fuss? After all Democrat Marshall just lost a popular election to Republican Austin Scott.

At this rate, the celebration of Marshall’s relatively short Congressional career may continue into 2012. Then the question will become, “Ummm, isn’t this campaigning?” Redistricting may take care of that question, but apparently many residents of Macon, especially the editorial board of the Macon Telegraph, are jonesing for a resident US Representative. I’m willing to lay odds that wish won’t be granted within this decade.

On the bright side, Marshall is receiving praise for his professional and helpful attitude in the transition of the GA-8 Congressional offices and constituent services. This is a good thing.

On the other hand, In a single story, The Macon Telegraph flubbed both the Warner Robins physical address of GA-8’s new congressman, Austin Scott, and the telephone number for Scott’s Tifton office. The correct Warner Robins address is 230 Margie Drive, and the correct Tifton phone number is 229 396-5175. Everyone makes mistakes, but combined with their editorials and the flubbed election coverage (to Scott’s detriment), the continued errors are beginning to look like a pattern. Only liberals can manage to use incompetence as a weapon.

Mystery Robo-Calls

Last week many Georgians received robo-calls reminding them that “most Georgia counties” were conducting their mass precinct meetings on Saturday, February 12th and that all Georgia voters should attend. Most people receiving the automated calls assumed that the calls were paid for by the Georgia GOP. They weren’t.

This explains a couple of obvious mistakes. For example, less than 20 Georgia counties had their mass precinct meetings in February. The remainder – counties with a population under 80,000 as of the 2000 census - will have their meetings on March 12th. In addition, the call encouraged all registered voters to attend the meetings, not as the GOP Georgia Call to Convention states: “. . . residents who are legally registered to vote and believe in the principles of the Republican Party are urged to participate in this process.” No word yet on who paid for the robo-calls. Honest mistakes or something a little more sinister? Either way, it’s Georgia politics as usual.

High-Speed Rail in Georgia?

While I love the idea of high-speed rail in Georgia, unless the state government indulges in widespread mass-discount lobotomies, it shouldn’t happen. We don’t have the population density to support mass transit rail and we don’t have the need for high-speed rail. If the needs were there, then private companies would provide it.

We don’t need to spend money to build a public service that will cost us more money every year. The mystery here is why anyone would seriously consider the state building a rail system. When the rail enthusiasts call, “All aboard!” just remember that the trestle down the track is out and the state can’t afford to fix it.

James Clapper: Director of National Intelligence or Human Oxymoron?

From the “Never trust a man named after an ‘As Seen on TV’ product” department comes Director of National Intelligence James Clapper. Clapper proclaimed, "The term Muslim Brotherhood is an umbrella term for a variety of movements. In the case of Egypt, a very heterogeneous group, largely secular, which has eschewed violence and has decried al-Qaeda as a perversion of Islam.”

If I were to buy this claim, then I would expect to see large numbers of Christians and Jews as members. I’m betting there is not a Southern Baptist wing of the Muslim Brotherhood or an Orthodox Jewish wing or a Hindu wing. I’m betting they are pretty much all Muslim and pretty much all anti-Israel and pretty much all fans of Iran, and to quote the Eagles from Victim of Love, “I could be wrong, but I’m not.”

A spokesman for Clapper – they weren’t going to let Clapper near a microphone twice that day – later said that Clapper meant that the Muslim Brotherhood was willing to work through secular political system. look out Michael Phelps, because in Clapper’s little world everything that swims is a fish.

The truth is that for a Director of National Intelligence, James Clapper is certainly lacking intelligence. You can take that either way and be right.

Wednesday, February 9, 2011

Congress: Act or Fail

Let’s be clear about one thing. The phrase “reduce the deficit” is a nice way to say “raise the debt more slowly.” Many voters don’t understand the difference between the “debt” and the “deficit” and quite a few think they mean the same thing. It is in everyone’s best interests that people understand the meaning of the terms and why they are so important.

The federal debt is the accumulation of every budget deficit this nation has ever had minus the extremely rare budget surpluses. If we “reduce the deficit” it just means that we added less debt than we added the previous year. Does that really sound like a good thing?

The only way to reduce the federal debt is to have annual budget surpluses. We’re not even close to having a surplus and a surplus has not been proposed by anyone in a position to make it happen.

If annual budget surpluses were a kind of animal, then they would be on the endangered species list and believed extinct. Seeing a federal budget surplus would be like sighting a flock of Passenger Pigeons being chased by Saber-Toothed Tigers as Wooly Mammoths watched. To see a federal budget surplus with the Democrats controlling the US Senate and occupying the White House would be like sighting a flock of Passenger Pigeons wearing I-Pods being chased by unicycle-riding Saber-Toothed Tigers as Wooly Mammoths watched while doing the Hula.

In normal situations, to produce a budget surplus, the federal government must do some combination of three things: increase its income, decrease its spending or sell its assets. In this instance, there is another thing that can and must be done first: we must reduce the risk to American businesses from government.

There is always risk in conducting business, and there will always be risk. Risk can be mitigated, to a degree, depending upon the amount of control the business has over the threat. A farmer can’t control the weather, but he can invest in an irrigation system and buy insurance in case of natural disasters.

What a farmer, or other businessman, cannot do is control a rogue federal government that stubbornly refuses to understand the reality of commerce. President Obama says he wants business growth but his actions are anti-growth. Of course business is concerned and reluctant to spend money in a bad economy with a clueless administration whose identity is wrapped in anti-business policies such as Cap and Trade, Obamacare, increased taxes and increased restrictions on energy production.

If the Obama Administration really wants to encourage business growth, which is a much more efficient way to increase revenues, then it would simply halt its actions that increase risks to business. That course of action would not only increase production, it would reduce costs to business and government.

Another threat to business is the looming federal debt and this is where we must rely on Congress. That debt, and the federal government’s failure to take it seriously, discourage investments. A reduction in spending would allow the private sector access to resources which it could use for productive means.

There are predictions of economic doom if the federal government reduces spending too quickly. It would make sense if economic shocks were to happen, and there is a strong argument that reducing entitlements too quickly would almost certainly be chaotic.

On the other hand, as we rack up more debt daily, we are reducing our available options to control our own future. I mentioned earlier that there are various combinations of things that can be done to begin reducing the debt. The final option is to default on our debt and every day that passes without actions to reduce spending and the debt we are a day closer to complete failure.

Taking bold action in the face of an oncoming crisis is risky. Failure to take bold action in the face of an oncoming crisis is not risky because the outcome is known; it is a guarantee of total failure.

Congress, the time has come: Act or Fail.

Saturday, February 5, 2011

Reagan said "Nyet!"

Official Portrait of President Ronald Reagan.
President Ronald Reagan
Image via Wikipedia
The new Soviet Premier was popular with citizens and the media, even in the west. President Ronald Reagan was a former actor and California governor whom the American press deemed unpolished and uninformed about foreign policy. The press accused Reagan of ignoring the voices of the American people; meaning themselves, of course.

Reagan had the reputation of being a genial, likeable man in person, but of making policy decisions with little regard for how they would be accepted by Washington power brokers or the press. Especially, the press.

Soviet Premier Mikhail Gorbachev and his wife, Raisa, had been hailed as the living symbols of the new and improved Soviet leadership. They were featured on the covers of celebrity magazines in the US. Raisa’s shopping trips in Paris were covered on television. Even Britain’s great “Iron Lady”, Prime Minister Margaret Thatcher, said she could “work with” Gorbachev.

Many liberals openly wished that the US had such an open-minded, intelligent and worldly leader. Instead we were stuck with a “cowboy”, a talentless B-movie actor, an undoubted simpleton who used his acting ability to appeal to an ignorant American public. For nearly a decade, the Soviet Union had been on the rise, the US and its western allies were in a tailspin. It didn’t look good for “truth, justice, and the American way” – and Reagan was certainly no Superman. In fact, according to the Washington intelligentsia, Reagan didn’t even make a decent Clark Kent.

During the 1980 Presidential campaign, Reagan had promised the American people that the US would pursue the development of a “shield” against intercontinental ballistic missiles (ICBMs) that were the method of delivering nuclear warheads by both the Soviets and the US. If ICBMs could be stopped, then the threat of all-out nuclear war was erased. For the first time since the late 1940s, the world would have no fear of nuclear war and a possible, catastrophic “nuclear winter” to follow. To Reagan, using peaceful technology to reduce the threat of destructive technology was an obvious solution.

In Reykjav√≠k, Iceland, during treaty negotiations, Soviet Premier Mikhail Gorbachev demanded that the US stop the “Star Wars” program or there would be no further treaty negotiations. Reagan refused. “Nyet," he stated in Russian.

Reagan said he would not halt a technological breakthrough that might put a practical end to nuclear warfare. This advance would forever remove the nuclear arms threat from American and Soviet children. Gorbachev responded that “Star Wars” would give the US a strategic advantage that would put the Soviet Union at its mercy, so its plans must be scrapped. There could be no treaty with the US unless the space-based missile interceptor program was discontinued immediately. Again, Reagan said, “Nyet” – and added that “Star Wars” was a program of peace, not war. The US would gladly share the “Star Wars” program with its Soviet friends. It was a brilliant strategy by Reagan.

In the US, it seemed everyone was outraged. The left was angry because Reagan didn’t capitulate and do as the Soviets demanded. The right, Reagan’s base, was stunned that we would even consider sharing technology that could assure America of space and military dominance for generations. Reagan was content to continue negotiations under his own terms.

When Reagan called the Soviet bluff, all over Manhattan and Boston, weak-kneed, weak-willed and weak-bladdered liberals had to change their suddenly damp undies. They were certain the world had come to an end. Reagan knew better.

In the Soviet Union, Reagan’s statement was taken much differently. Reagan was the little boy who said, “The emperor has no clothes!”

The Soviets were in dire economic straits. Soviet scientists did not have the resources - computing power or financial – to match the US commitment to “Star Wars.” Despite the Soviet Union’s wealth of natural resources, centrally planned economies are always far less efficient than free enterprise. The Soviet Union was crumbling from within and only continued concessions from the west would have secured its survival as a superpower. Ronald Reagan’s firm “Nyet” was vastly different than the acquiescence of Gerald Ford or the eager agreement of an ingratiating Jimmy Carter.

In effect, Reagan’s offer to share “Star Wars” told the Soviets that not only did the US not fear the Soviets, but that the Soviets were irrelevant to the future of the United States or of the free world. The Soviets yielded.

Reagan’s belief in the ability of the American people to out-think, out-innovate and out-perform a people enslaved by communist dictators seems obvious now. It wasn’t back then. For years the left tried to give Gorbachev credit for the eventual peace accord that was exactly what Reagan wanted: “Trust, but verify.”

Ronald Reagan wasn’t perfect. He made mistakes; but he was never mistaken in what he believed and in what he knew to be true. Reagan believed in an America that, given the opportunity, could do anything. In this year marking the 100th anniversary of Ronald Reagan’s birth, let’s strive to see our country through his eyes; the eyes of a believer.
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