Monday, February 27, 2012
Tuesday, February 14, 2012
Detroit: The Triumph of Progressive Public Policy
Capitol Confidential ^ | 2/14/2012 | Jarrett Skorup
Posted on Tuesday, February 14, 2012 9:04:39 AM by MichCapCon
Imagine a city where all the major economic planks of the statist or "progressive" platform have been enacted:
*A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors. *A school system that spends significantly more per pupil than the national average. *A powerful school employee union that militantly defends the exceptional pay, benefits and job security it has won for its members. *Other government employee unions that do the same for their members. *A tax system that aggressively redistributes income from businesses and the wealthy to the poor and to government bureaucracies.
Would this be a shining city on a hill, exciting the admiration of all? We don't have to guess, because there is such a city right here in our state: Detroit
Detroit has been dubbed "the most liberal city in America" and each of these "progressive" policies is alive and well there. How have they worked out?
In 1950, Detroit was the wealthiest city in America on a per capita income basis. Today, the Census Bureau reports that it is the nation's 2nd poorest major city, just "edging out" Cleveland.
Could it be pure coincidence that the decline occurred over the same period in which union power, the city government bureaucracy, taxes and business regulations all multiplied? While correlation is not causation, it is striking that the decline in per capita income is exactly what classical economists predict would occur when wage controls are imposed and taxes are increased.
Specifically, "price theory" predicts that artificially high business costs caused by excessive regulation and above-market labor compensation rates imposed by so-called "living wages" will lead to an increase in unemployment. Detroit's minimum wage is more than $2 above the federal minimum wage; and pressure groups are pushing for more. Additionally, any company contracting with the city must pay its employees $11.03 an hour if they offer benefits or $13.78 an hour if they do not.
Such high wage mandates are especially hard on individuals with a poor education and low skills. If struggling and heavily taxed businesses cannot pay such high wages, then they are more selective about the few workers they do hire or simply go out of business altogether. Those who have promulgated these polices may be well-intentioned, but mainstream economists have warned for decades that such policies were very likely to bring about the abject poverty and unemployment that characterize Detroit today. The city has the highest unemployment rate among all large U.S. cities.
A similar pattern has played out in public education. It is now conventional wisdom among the political class that higher pay for teachers and increased spending per student lead to improvements in teacher quality and student performance -— Detroit Public Schools strongly suggests that this theory must be rejected. It has chronically underperformed state averages, yet reforms are vehemently opposed by the system's powerful school employee union.
At the same time that union, the Detroit Federation of Teachers, has won rich salary and benefits packages for its members. Detroit spends one of the highests amounts of money per student nationwide and the district's spending per pupil is eighth highest out of Michigan's 551 school districts. For all that, by almost any measure Detroit schools have for decades failed their students: test scores, safety, drop out rates, etc. Detroit's public school students perform among the lowest in the state. On a 2009 test for urban districts from the U.S. Department of Education, DPS students performed "barely above what one would expect simply by chance, as if the kids simply guessed at the answers."
In the private sector such failure would result in mass firings for unsatisfactory performance. No doubt such a response would be condemned by the progressives who support the school employee unions that have made similar actions impossible in their institutions, and have opposed major transformation at every turn.
For example, in 2003 philanthropist Bob Thompson offered $200 million to build 15 charter public schools in the city in which he would guarantee a 90 percent graduation rate. In response, the DFT balked because charter schools are not unionized. The outcome was that the union jobs trumped better outcomes for children.
People vote with their feet, and all the above suggests why, over the past decade, DPS has lost about 10,000 students each year to charter, independent and suburban schools.
Of course it would be unfair to place all the blame for the city's decline on public employee unions. Detroit is home to the Big Three, whose contracts with their own powerful unions provided the model for those public employee arrangements. The UAW successfully extracted wages and benefits estimated at $73 per hour before the recent shake-ups began.
This is about $25 more per hour than the amount foreign-owned U.S. auto manufacturing plants pay their non-unionized American workers. Due to this disparity, Japanese car companies earn some $1,000 to $2,000 more on each car sold than their American counterparts. The outcome has been a relentless loss of market share that, among other things, has devastated the economic engine that once powered Motor City prosperity.
In addition to being a model of progressive economic, labor and education policy, Detroit is also a case study in welfare statism. Tom Bray, former editorial page editor for The Detroit News, has made the following observation:
"Detroit, remember, was going to be the 'Model City' of Lyndon Johnson's Great Society, the shining example of what the 'fairness' of the welfare state can produce. Billions of dollars later, Detroit instead has become the model of everything that can go wrong when you hook people on the idea of something for nothing - a once-middle class city of nearly 2 million that is now a poverty-stricken city of less than 900,000."
Today, Detroit is down 25 percent over the past 10 years; to just over 700,000 and dropping fast.
Progressives will complain that this portrait oversimplifies the factors involved in a great city's decline. Perhaps it does, but with this question in mind: At what point does the weight of evidence and logic make it impossible to avoid concluding that in the case of Detroit, correlation is causation?
Engineering Earth’s thermostat with CO2? (HPI viewpoint Pierre R. Latour, Guest Columnist)
Earth’s temperature is a chemical process system. Review of control system engineering of Earth’s thermostat with anthropogenic CO2 in 1997 proved it will never work because it is an unmeasurable, unobservable and uncontrollable system. CO2 does not affect temperature; temperature affects CO2. There are no greenhouse gases in physics. CO2 is not a pollutant; it is green plant food. Global warming stabilized since 1998.
Purpose.
Physics, chemistry, mathematics, engineering, economics, history and ethics are deployed to identify the barriers to designing the thermostat to control Earth’s atmospheric temperature by adjusting its CO2 input.
Method.
People have beliefs and knowledge. Knowledge of nature is discovered by the scientific method: theory in the language of nature (mathematics), prediction and verification. Such discoveries are held to be true until falsified. I offer claims supported by credible evidence, settled science and warrant how one can know that they are true. Sound engineering requires no less. No opinion, no speculation, no controversy, no politics, no alarmist adjectives. When an unlicensed engineer resorts to name calling and threats, I declare victory and move on.
Credentials.
I built a thermostat to verify my “Time Optimum Control of Chemical Processes” PhD Thesis theory at Purdue in 1966; the first computer control loop in Shell Oil Co., a FCC regenerator thermostat at Deer Park, Texas in 1967; and digital autopilots and spacecraft trajectory controls for NASA’s Apollo Program in 1968. I invented and commercialized hundreds of true boiling cut-point thermostats for petroleum product quality in the hydrocarbon processing industry (HPI) since 1970. I am a registered PE chemical engineer in Texas and control system engineer in California. I was Control Engineer of the Year 1999 and Purdue’s Outstanding Chemical Engineer 2007. I am a contributor to the US Senate Minority Report, “700 Scientists Dissent and Debunk Man-Made Global Warming,” March 16, 2009. I personally financed this presentation; I have no financial incentive in the outcome. I seek no government or business funding. I am an anthropogenic global warming (AGW) skeptic denier.
Science.
• CO2 is not a pollutant; it is harmless green plant food. CO2 is the inert result of complete oxidation. There are only two CO2 gas phase reactions, both are endothermic: arc welding and photosynthesis (CO2 + H2O + sunlight = sugars + O2, catalyzed by chlorophyll). US Navy submarines limit CO2 to < 8,000 ppmv because it displaces O2.
• Halting all combustion of hydrocarbons (oil, gas, coal and wood) by man will not measurably affect atmospheric CO2 content, now 380 ppm. A simple material balance shows man generates 30 billion tons/year (this is neither a big nor a small number, it is just a number) while plants consume 7 trillion tons/year (this is neither a big nor a small number, it is just a number). Forest fires, rotting flora and volcanoes input most of the CO2 to the atmosphere. Total input or output is >7. The ratio is 0.03/7 = 0.0043 (this is a small ratio). Cutting the 30 in half to 15 will drop CO2 by 100 ppm after 70 years.
• CO2 does not affect temperature; rather temperature affects CO2. Data for the past 400,000 years, reported by Al Gore, An Inconvenient Truth in 2005, shows they cycle together but CO2 lags temperature by about 800 years. Solubility of CO2 in water, oceans, beer and champagne decreases with temperature so solar warming of the ocean releases dissolved CO2 and cooling reabsorbs it. Solar radiation drives Earth’s temperature; CO2 has nothing to do with it.
• Atmospheric radiation absorption and emission are dominated by the presence of all three phases of H2O. Like all molecules, CO2 only absorbs and emits specific spectral wavelengths (14.77 microns) that constitute a tiny fraction of solar radiation energy in Earth’s atmosphere. The first 50 ppm of CO2 absorbs about half of this tiny energy, each additional 50 ppm absorbs half of the remaining tiny fraction, so at the current 380 ppm there are almost no absorbable photons left. CO2 could triple to 1,000 ppm with no additional discernable absorption–emission. This is the Beer-Lambert Law: The intensity of radiation decreases exponentially as it passes through an absorbing medium.
• There is no such thing as a greenhouse gas because the atmosphere has no glass house. German physicists Gerhard Gerlich and Ralf D Tscheuschner proved this in their classic paper, “Falsification of The Atmospheric CO2 Greenhouse Effects Within The Frame of Physics,” International Journal of Modern Physics B, v23, n03, January 6, 2009, pp. 275-364. Free download at http://arxiv.org/PS_cache/arxiv/pdf/0707/0707.1161v4.pdf.
• Earth’s temperature increased naturally 0.6°C from 1976 to 1998 and has stabilized since, decreasing nearly 0.1°C from 2005 to 2009. Forecasts of long-term cooling are credible but irrelevant to the claim anthropogenic CO2 does not affect temperature. CO2 content did not accelerate at the onset of the increase in hydrocarbon combustion by man after 1900.
• Warming or cooling, the surface temperature rate of change at a moment in time, does not affect the melting or freezing rate of H2O, only the average temperature of its surroundings > 0°C or < 0°C does. If average temperature is < 0°C, water will freeze even if the temperature is increasing; if average temperature is > 0°C, ice will melt even if the temperature is decreasing. In other words
ice melts because its surroundings are too warm, not because they are warming. This is calculus, Isaac Newton, Principia, 1687.
• Earth’s atmospheric temperature is not measurable. Temperature is a point property of the energy content of vibrating and radiating molecules. Physics has no rigorous definition of average temperature of bulk matter, accounting for changes in temperature, state, composition, pressure, heat capacity, velocity and reactions. Air temperature and pressure change with altitude, latitude, clouds, time of day, season, weather fronts and deforestation. Wien’s Law gives an average surface temperature from radiation emitted by black bodies like stars; it does not apply to bodies dominated by nonuniform, variable reflection, like Earth.
• UN IPCC climate models incorrectly assume Earth’s radiation to space decreases as its temperature increases. The Stefan-Boltzmann Law states all bodies radiate proportional to T**4. In July 2009, Prof. Richard Lindzen, MIT meteorologist, verified Earth obeys this law. Control engineers know all matter reaches an equilibrium temperature due to this change-mitigating effect. Otherwise Earth would have exploded or frozen long ago. UN climate models are empirical and hence, wrong.
• The Waxman-Markey HR2454 CO2 cap-and-trade bill requires the USA to reduce its CO2 production by 83% from 2010 to 2050. Using discredited empirical UN IPCC models, they predict this will reduce CO2 by 20 ppm and temperature by 0.05°C after 40 years. Physics predicts the temperature change approaches zero.
• Sea level is changing slowly and naturally in direct proportion to land ice changes, not floating sea ice. Archimedes proved his buoyancy law about 250 BC. Most Northern Hemisphere glaciers have been receding since the ice age ended 18,000 years ago. They have not accelerated since 1900. All AGW scares, like hurricanes, droughts and dying polar bears, have been competently debunked.
• Arctic ice shrinks annually when Earth is too warm, but Siberian and Canadian snowfall increases, increasing Northern Hemisphere solar reflectivity, causing Earth to cool and ice to grow again. A plausible mechanism for these regular 40,000-year ice age cycles has been related to the shallowness of the Barents Sea south of Spitsbergen where the Gulf Stream can break through to the Arctic Ocean. Data indicate another regular ice age began since 2000. CO2 is not involved.
Engineering.
• Earth’s temperature system cannot be adequately modeled for control. Modeling and control of multivariable, nonlinear, dynamic systems like fluid catalytic cracking, crude distillation, coking, hydrocracking and gasoline blending were commercialized in the 1980s and deployed throughout the HPI and the chemical industry ever since. Control systems engineering has been implemented for mechanical and electrical systems like aircraft and spacecraft since 1960.
• Earth’s temperature system cannot be adequately measured or controlled. Mathematical criteria devised in the 1960’s that ensure a system is measurable, observable and controllable are not satisfied.
• Mankind has no decision process for properly setting global temperature or CO2 targets, or home thermostats either. The rigorous procedure for optimizing risky tradeoffs for HPI control system setpoints like thermostats was published in HP, December 1996.
Ethics.
• Taxing energy production is bad. Energy management is basic to human prosperity and well being. Profitable conversion of heat to work since 1780 has created great comfort and wealth for all who know how. Waxman-Markey HR2454 will never work.
• India, China, Africa and Russia will continue to produce CO2 from coal, oil and gas, to their credit. Their people will prosper.
• Al Gore, at Oxford on July 8, 2009, promoted research to violate the second law of thermodynamics. He condemned power plant and vehicle combustion for wasting 70% of the fuels energy. In 1824 Sadi Carnot proved the maximum theoretical frictionless reversible efficiency is Wo/Qi = 1 – T2/T1, where Qi is total heat in, Wo is net work out, T1 is temperature of the heat source (flame, steam) and T2 is temperature of the surroundings (air, cooling water). Great engineers have labored to approach maximum economic efficiency ever since.
• Corrupting science is bad. Al Gore promotes spending by governments around the globe to finance his multibillion-dollar venture-capital fund, KPCB, which owns 16 Greentech firms and Google. Providing government grants for fraudulent science research promoting caps on CO2 production is a conflict of interest. I personally found flawed science in peer-reviewed papers in Science and Proceedings of The Royal Society and published my findings in a letter to HP in January 2009.
• On April 17, 2009 the US EPA issued instructions for comments on, “Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act,” as it prepared to declare CO2 a pollutant. It claims current law and court precedent authorize them to do so.
Conclusions.
• Knowledgeable environmental engineers support reforestation and efforts to curtail anthropogenic pollutants like SO2, NOx, Bz, CFCs, particulates and surface ozone. They oppose depriving Earth’s flora of their green plant food, choking and starving them for personal gain. I like harmless CO2. I exhale some at 40,000 ppm every 4 seconds.
• CO2 and O2 are the basic molecules of the life cycle between Earth’s flora and fauna. The miracle of life photosynthesis reaction should not be tampered with lightly. Starving and choking plants of their food supply would be a monumental crime against humanity, all fauna and flora, the environment and Earth itself.
• Since there are no graduate or licensed chemical process control engineers in the UN IPCC, US Congress, Cabinet or Supreme Court, these incompetent engineering groups continue to waste time and money since 1997 attempting the impossible, designing Earth’s thermostat using anthropogenic CO2. No one has controlled the climate of an entire planet.
• Climate experts like Richard Lindzen, William Happer, S Fred Singer and ClimateDepot.com are reliable.
• Forecast: This article will remain valid beyond 3000 AD. If engineers consider this report good news, ok. I welcome any proof of errors and apologize if I have offended anyone. If we knew what
Saturday, February 11, 2012
Guest Post: Why Is Gasoline Consumption Tanking?
Submitted by Tyler Durden on 02/10/2012 10:51 -0500
Submitted by Charles Hugh Smith from Of Two Minds
Why Is Gasoline Consumption Tanking?
Gasoline deliveries reflect recession and growth. The recent drop in retail gasoline deliveries is signalling a sharp contraction ahead.
Mish recently posted some intriguing charts depicting a significant decline in gasoline consumption. Then correspondent Joe R. forwarded me this stunning chart of gasoline retail deliveries, from the U.S. Energy Information Administration: (EIA)
As Joe noted, this data is interesting because it is un-manipulated, that is, it is not "seasonally adjusted" or run through some black-box modifications like so much other government data.
Retail gasoline deliveries, already well below 1980 levels, have absolutely fallen off a cliff. Is the plunge inventory-related, i.e. are storage facilities so full that retailers are simply putting off deliveries?
Though I don't have data on hand to support this, I know from one of my correspondents who is in the gasoline distribution/delivery business that gasoline is very much a "just in time" commodity: gas stations are often close to running out of fuel when they get a delivery. Stations aren't holding huge quantities of surplus gasoline; that's not how the business works.
Given the absence of "extra storage" in gas stations (and the fact that the number of gas stations has fallen dramatically since 1980), it is reasonable to conclude that retail delivery is largely a function of demand, i.e. gasoline consumption.
Even if you dismiss the recent plunge as an outlier, the declines in retail gasoline deliveries are mind-boggling. If you look at the data from 1983 to 2011 on the link above, you will note that delivery declines align with recessions.
For example, deliveries jumped from 50.1 million gallons per day (MGD) in November 1983, when the nation was emerging from the deepest postwar recession then on record, to 58 MGD the following November (1984).
Deliveries steadily rose to a peak of 67.1 MGD in July 1998, declined marginally in the 2001-2 recession and then surged to 66.8 MGD in August 2003. If we just look at one month--say November--then we see that deliveries remained in a remarkably consistent channel from 1994 to 2008, between 54 MGD and 63 MGD, with the higher numbers occuring in the "peak bubble years" of 1998 and 2003.
In 2010, gasoline deliveries declined to the low 40s--literally falling off the charts. In November 1983, deliveries were 51.1 MGD; in November 2010, they were 42.8 MGD, and in November 2011 they were 30.9 MGD.
Does this reflect higher fuel efficiencies in the U.S. vehicle fleet? To examine fuel efficiency and other macro-trends, I assembled some charts of fuel efficiency (courtesy of the Early Warning blog) and a graph of employment, a commonly used proxy for economic activity/growth.
Let's start with some basic data about population and vehicles. There are 254 million passenger vehicles registered in the U.S. Some percentage of these are classic cars and other vehicles that aren't driven much, but nonetheless the number of vehicles that are in regular use is large.
U.S. population in 1983 was approximately 234 million. The U.S. Census Bureau estimates the current population at 313 million.
Vehicle sales declined from a record 17.4 million in 2000 to 11.5 million in 2010.
People are driving less: The Road... Less Traveled: An Analysis of Vehicle Miles Traveled Trends in the U.S.. (2008)
Driving, as measured by national Vehicle Miles Traveled (VMT), began to plateau as far back as 2004 and dropped in 2007 for the first time since 1980. Per capita driving followed a similar pattern, with flat-lining growth after 2000 and falling rates since 2005. These recent declines in driving predated the steady hikes in gas prices during 2007 and 2008. Moreover, the recent drops in VMT (90 billion miles) and VMT per capita (388 miles) are the largest annualized drops since World War II.
Here are two charts of U.S. employment which show two periods of strong expansion: in the late 1990s and in 2002-08.
If the number of jobs were correlated to gasoline deliveries, then we would expect deliveries to be close to those registered in 2003 and 1999, since the number of jobs has declined to the levels of those years.
Instead, we find deliveries are dramatically lower:
November 1999: 59 MGD
November 2003: 63.8 MGD
November 2010: 42.8 MGD
Once again, this is not an outlier: deliveries for all of 2010 were between 42 and 46 MGD, compared to deliveries in the high 50s/mid 60s in 1999 and 2003.
There are all kinds of other things that influence the number of miles driven, but there is little evidence that any one factor can account for a 47% drop in retail gasoline deliveries. For example, it is well-known that the U.S. economy has shifted to a digital, service economy in the past 30 years, and since more people can "consume" (via shopping at amazon.com, etc.) and "produce" (work from home) without driving, then it makes sense that people are driving less.
But if we examine the data, it's difficult to attribute the massive recent drops to people ordering stuff online or working from home more. After all, people were working from home and ordering stuff online in 2003, when gas deliveries reached 63 MGD, and in November 2006, when deliveries were 58.8 MGD.
Deliveries in November 2011 were 30.9 MGD, a staggering 47% decline.
What about fuel efficiency? here are two charts from the Early Warning blog. They show a significant increase in the 1980s, but only modest improvement through the 1990s and 2000s.
If we use the same year as in the employment analysis, 1999, we see there was a 6% rise in efficiency from 1999 to 2010. This would suggest 6% of the decline in gasoline deliveries can be attributed to increased efficiency. But what about the other 40% of the decline? That cannot be attributed to higher efficiency.
I've marked up the first chart to show the secular trends in efficiency and employment.
There are no data-supported broad-based drivers for dramatically lower gasoline consumption other than austerity and lower economic activity. The code-word for "austerity and lower economic activity" that is verboten in the Mainstream Media is "recession." Indeed, if you examine the EIA data, the only causal factor that has backing in the data is recession--or if you prefer, austerity and lower economic activity.
Then there is the price of fuel. People have to go to work, pick up the kids, get their meds, etc., and few urban centers in the U.S. have mass transit systems that are up to the task of replacing autos. So most Americans have what we might call non-discretionary driving. But as the price of fuel rises, people find ways to lower their discretionary driving by combining trips, shopping less often, shortening or eliminating vacations, etc. Enterprises reduce costly business travel with teleconferences and other digital technologies.
Data supports the notion that high oil prices lead to recession. For example, Chris Martenson recently made a compelling case for this in Why Our Currency Will Fail ("Note that all of the six prior recessions were preceded by a spike in oil prices.")
Household income doesn't rise just because oil is climbing in cost, and so the extra money spent on fuel is diverted from other consumption or saving (capital accumulation). Higher fuel costs lower household capital formation and reduce consumption/economic activity.
Oil has been elevated for months, kissing $100 and rarely dipping below $90/barrel. Do higher oil costs explain the decline in gasoline consumption? Once again, they undoubtedly influence consumption, but that cannot explain the 40% drop in consumption. After all, when oil spiked in 2008 to $140/barrel, deliveries only dropped by a few million gallons: from 58.8 MGD in July 2007, before the spike, to 54.8 MGD at the point of maximum pain in July 2008.
The cost of oil has declined sharply from mid-2008, yet consumption has tanked from 54.8 MGD in July 2008 to 42.4 MGD in July 2011. That's a hefty 21% decline.
What other plausible explanation is there for the decline from 42.4 MGD in July 2011 to 30.9 MGD in November 2011 other than a dramatic decline in discretionary driving? That 27% drop in a few months in unprecedented, except in times of war or sharp economic contraction, i.e. recession.
If we stipulate that vehicles and fuel consumption are essential proxies for the U.S. economy, then we can expect a steep decline in economic activity to register in other metrics within the next few months.
Such a sharp drop would of course be "unexpected" given the positive employment data of the past few months. But as the data above shows, employment isn't tightly correlated to gasoline consumption: gasoline consumption reflects recession and growth.
In other words, look out below.
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Friday, February 10, 2012
Gotta Love Those Muslims!!!
Cops arrest suspects in alleged case of forced underage prostitution
 Naib Ali Soilihi, Mohammed Rami Taha, Abdul Karim Nassereddine, while Mehdi Mohamed Hamza Mezri (right) is still being sought.){kind=small}
View larger image
The men arrested are, (from left) Naib Ali Soilihi, Mohammed Rami Taha, Abdul Karim Nassereddine, while Mehdi Mohamed Hamza Mezri (right) is still being sought.
Updated: Thu Feb. 09 2012 5:05:28 PM
ctvmontreal.ca
MONTREAL — The Montreal police Child Sexual Exploitation Investigations Section has announced the arrest of six young men in a case of human trafficking and prostitution.
Two underage girls allegedly met the suspects in February 2011 and were forced into prostitution.
The girls told police that they managed to flee to their freedom a week later.
Police have arrested Abdul Karim Nassereddine, 20, Naib Ali Soilihi, 20 and Mohammed Rami Taha, 19. Mezri Mehdi Mohamed Hamza, 21, turned himself in Thursday after being sought by authorities.
The two others arrested cannot be named, as they were minors at the time of the alleged offences.
The suspects were charged with a variety of crimes related to sexual assault and prostitution of minors Thursday.
Wednesday, February 8, 2012
Sunspot-cycle Chart Shows Strong Cooling Ahead (From Iceagenow.info)
By Robert On February 7, 2012 · 7 Comments
After looking at this chart, can there be any question as to where our climate is headed?
Temperatures went up in sync with the sunspot cycle, and temperatures went down in sync with the sunspot cycle.
Down, down, down into the Dalton Minimum.
Down, down, down, into the Maunder Minimum and The Little Ice Age.
- Source: Dr Timo Niroma
Let me ask it again. Can there be any question as to where our climate is headed?
Thanks to David Spurgeon for this info.
Dr. Niroma is highly respected Finnish climatologist who has been linking solar activity with temperature in a series of many papers.
Tuesday, February 7, 2012
Whither the US Economy?
Huge Plunge In Petroleum and Gasoline Usage
Global Economic Trend Analysis ^ | 2/6/12 | Mish Shedlock
Posted on Monday, February 06, 2012 12:00:17 PM by DeaconBenjamin
Reader Tim Wallace writes
Hello Mish
As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market - I mean stock market.
This past week I actually had to reformat my graphs as the drop off peak exceeded my bottom number for reporting off peak - a drop of ALMOST 4,000,000 BARRELS PER DAY off the peak usage in our past for this week of the year.
I have added a new graph to my distillates report, a "Graph of Raw Data" to which I have added a polynomial trendline. You can easily see that the plunge is accelerating and more than rivals 2008/09 and in gasoline is greatly exceeding the rate.
An amazing thing to note is that in two out of the last three weeks gasoline usage has dropped below 8,000,000 barrels per day.
The last time usage fell that low was the week of September 21, 2001! And you know what that week was! Prior to that you have to go back to 1996 to have a time period truly consistently below 8,000. We have done it two out of the last three weeks.
The second graph once again shows the year on year change in usage of distillates. The Obama "stimulus" package and Fed monetary actions masked the underlying systemic problems.
The third and final graph shows the changes in usage off the peak year of 2007. Once again you can see the effect of the stimulus and how now we are heading below 2008/09 in an accelerating fashion.
Looking at these numbers I believe we are about to have a surge in unemployment - by the end of April latest, possibly as early as beginning of March.
Tim
Petroleum Distillates and Gasoline Usage in Barrels per Day
Note that on a best curve fit, petroleum usage is back to 1997 level and gasoline usage is back to 2001 level. Moreover, as Wallace points out, two out of the last three weeks gasoline usage has dropped below 8,000,000 barrels per day.
Year-Over-Year Petroleum and Gasoline Usage (Compared to Peak Usage)
Note the trough of the recent recession, the rebound, and now a sudden plunge in gasoline and petroleum usage once again.
Decline from Peak Usage
A mild winter can explain part of the drop in petroleum usage (heating oil), but it does not explain the declines in gasoline usage or the overall trends
Monday, February 6, 2012
A Defining Moment (Sowell on Romney & minimum wage)
Creators Syndicate ^ | February 7, 2012 | Thomas Sowell
Posted on Monday, February 06, 2012 1:56:14 PM by jazusamo
Governor Mitt Romney's statement about not worrying about the poor has been treated as a gaffe in much of the media, and those in the Republican establishment who have been rushing toward endorsing his coronation as the GOP's nominee for president — with 90 percent of the delegates still not yet chosen — have been trying to sweep his statement under the rug.
But Romney's statement about not worrying about the poor — because they "have a very ample safety net" — was followed by a statement that was not just a slip of the tongue, and should be a defining moment in telling us about this man's qualifications as a conservative and, more important, as a potential President of the United States.
Mitt Romney has come out in support of indexing the minimum wage law, to have it rise automatically to keep pace with inflation. To many people, that would seem like a small thing that can be left for economists or statisticians to deal with.
But to people who call themselves conservatives, and aspire to public office, there is no excuse for not being aware of what a major social disaster the minimum wage law has been for the young, the poor and especially for young and poor blacks.
It is not written in the stars that young black males must have astronomical rates of unemployment. It is written implicitly in the minimum wage laws.
We have gotten so used to seeing unemployment rates of 30 or 40 percent for black teenage males that it might come as a shock to many people to learn that the unemployment rate for sixteen- and seventeen-year-old black males was just under 10 percent back in 1948. Moreover, it was slightly lower than the unemployment rate for white males of the same age.
How could this be?
The economic reason is quite plain. The inflation of the 1940s had pushed money wages for even unskilled, entry-level labor above the level specified in the minimum wage law passed ten years earlier. In other words, there was in practical effect no national minimum wage law in the late 1940s.
My first full-time job, as a black teenage high-school dropout in 1946, was as a lowly messenger delivering telegrams. But my starting pay was more than 50 percent above the level specified in the Fair Labor Standards Act of 1938.
Liberals were of course appalled that the federal minimum wage law had lagged so far behind inflation — and, in 1950, they began a series of escalations of the minimum wage level over the years.
It was in the wake of these escalations that black teenage unemployment rose to levels that were three or four times the level in 1948. Even in the most prosperous years of later times, the unemployment rate for black teenage males was some multiple of what it was even in the recession year of 1949. And now it was often double the unemployment rate for white males of the same ages.
This was not the first or the last time that liberals did something that made them feel good about themselves, while leaving havoc in their wake, especially among the poor whom they were supposedly helping.
For those for whom "racism" is the explanation of all racial differences, let me assure them, from personal experience, that there was not less racism in the 1940s.
For those who want to check out the statistics — and I hope that would include Mitt Romney — they can be found detailed on pages 42 to 45 of "Race and Economics" by Walter Williams.
Nor are such consequences of minimum wage laws peculiar to blacks or to the United States. In Western European countries whose social policies liberals consider more "advanced" than our own, including more generous minimum wage laws and other employer-mandated benefits, it has been common in even prosperous years for unemployment rates among young people to be 20 percent or higher.
The economic reason is not complicated. When you set minimum wage levels higher than many inexperienced young people are worth, they don't get hired. It is not rocket science.
Milton Friedman explained all this, half a century ago, in his popular little book for non-economists, "Capitalism and Freedom." So have many other people. If a presidential candidate who calls himself "conservative" has still not heard of these facts, that simply shows that you can call yourself anything you want to.
Caterpillar the Bad Guy???
Listening to Oakley this morning, I heard that the contract offered by Caterpillar was NOT voted on. That means that a handful of union activists sealed the fate of their co-workers and a large number of others. I heard an estimate of 2,100 total jobs were lost.
How is it that Caterpillar is the villain for our news media? They made a good faith offer to keep the plant going. On the other hand, 2,100 people had their livelihoods curtailed by faceless goons.
If I were one of those people I would attempt a class action lawsuit against those INDIVIDUALS involved.
Why own a gun?(SC) (American but true Everywhere)
thetandd.com ^ | 5 February, 2012 | Dr. John Rheney
Posted on Monday, February 06, 2012 9:20:50 AM by marktwain
The 2nd Amendment to the Constitution of the United States: "A well-regulated militia, being necessary for the security of a free state, the right of the people to keep and bear arms shall not be infringed."
That sentence above all else seems to cause more debate than any other in the Constitution. In 2008 The Supreme Court found, and I think correctly so, that the founding fathers meant this to mean that individuals had the right to possess firearms to protect themselves from an overzealous and dictatorial government. Gun control advocates seem to think it means only the Army or National Guard has the right to bear arms to protect us from outside aggression.
At the time of the below writings in 2010, The Supreme Court further found that cities such as Chicago didn't have the authority to disarm law-abiding citizens. This case came before the high court before the appointment of radical and liberal Judges Suttomayor and Kagen.
I was reading an email from a friend the other day and he referenced an article written by a retired Marine major. The subject was on gun control, or more appropriately the lack thereof for private citizens when faced with excessive control or even confiscation of firearms as was in the case in the state of Illinois. I thought that Maj. Caudill's retort was poignant and concise, so I'llshare it with you.
If anyone thinks that the appointment of one more liberal judge to the Supreme Court would not adversely affect gun ownership, then you are kidding yourself. Presidents come and go but their judicial appointments affect the courts for the entirety of a justice's life. Without getting overly political, I think this upcoming election will support or break the back of the Constitution. Do you as an individual have the right to possess a firearm for protection? Can the government force you to buy health insurance even if you can't afford it and fine you if you don't? Can the government interfere with and force churches such as the Catholic church to administer health care plans that include abortion, contraception and day-after medications that go strictly against their core beliefs?
Read and decide for yourself:
The Gun Is Civilization," by USMC Retired Maj. L. Caudill
Human beings only have two ways to deal with one another: reason and force. If you want me to do something for you, you have a choice of either convincing me via argument or force me to do your bidding under threat of force. Every human interaction falls into one of those two categories,without exception. Reason or force, that's it.
In a truly moral and civilized society, people exclusively interact through persuasion. Force has no place as a valid method of social interaction and the only thing that removes force from the menu is the personal firearm, as paradoxical as it may sound to some.
When I carry a gun, you cannot deal with me by force. You have to use reason and try to persuade me, because I have a way to negate your threat or employment of force.
The gun is the only personal weapon that puts a 100-pound woman on equal footing with a 220-pound mugger, a 75-year-old retiree on equal footing with a 19-year old gang-banger, and a single guy on equal footing with a carload of drunken guys with baseball bats. The gun removes the disparity in physical strength, size or numbers between a potential attacker and a defender.
There are plenty of people who consider the gun as the source of bad force equations. These are the people who think that we'd be more civilized if all guns were removed from society, because a firearm makes it easier for a [armed] mugger to do his job. That, of course, is only true if the mugger's potential victims are mostly disarmed either by choice or by legislative fiat - it has no validity when most of a mugger's potential marks are armed.
People who argue for the banning of arms ask for automatic rule by the young, the strong, and the many, and that's the exact opposite of a civilized society. A mugger, even an armed one, can only make a successful living in a society where the state has granted him a force monopoly.
Then there's the argument that the gun makes confrontations lethal that otherwise would only result in injury. This argument is fallacious in several ways. Without guns involved, confrontations are won by the physically superior party inflicting overwhelming injury on the loser.
People who think that fists, bats, sticks or stones don't constitute lethal force watch too much TV, where people take beatings and come out of it with a bloody lip at worst. The fact that the gun makes lethal force easier works solely in favor of the weaker defender, not the stronger attacker. If both are armed, the field is level.
The gun is the only weapon that's as lethal in the hands of an octogenarian as it is in the hands of a weight lifter. It simply wouldn't work as well as a force equalizer if it wasn't both lethal and easily employable.
When I carry a gun, I don't do so because I am looking for a fight, but because I'm looking to be left alone. The gun at my side means that I cannot be forced, only persuaded. I don't carry it because I'm afraid, but because it enables me to be unafraid. It doesn't limit the actions of those who would interact with me through reason, only the actions of those who would do so by force. It removes force from the equation ... and that's why carrying a gun is a civilized act.
n Dr. John Rheney has been writing his outdoors column for The Times and Democrat for more than 25 years.
Friday, February 3, 2012
Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low (Zerohedge.com)
You can’t make this stuff up, but Obama can!
Submitted by Tyler Durden on 02/03/2012 08:51 -0500
A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.
Chart below shows it all - that jump is not a fat finger!
And Labor Force Participation:
This is the largest absolute jump in 'Persons Not In Labor Force' on record...and biggest percentage jump in 30 years.
Chart: Bloomberg
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Thursday, February 2, 2012
Read Between the Lines: Hollywood Mogul Buys 2,600 Acres of Farmland; Moving to New Zealand
Posted By Mac Slavo On February 1, 2012 @ 9:26 pm In Emergency Preparedness | 75 Comments
James Cameron, the Hollywood producer responsible for blockbuster films like Terminator, Titanic and Avatar, is reportedly preparing to exit stage left. While the move for the Canadian born Cameron may initially be perceived as a rejection or denouncement of American policies and ideals, Cameron, who has made campaign donations to the Democrat Party [1] in the past, most notably during the 2004 Presidential election where he supported democrat John Kerry, may have ulterior motivations, as evidenced by where he’s planning on moving and what he’s planning on doing once he gets there.
From time to time we get a glimpse into the goings on of the well connected. This may be one of those moments:
Cameron has successfully applied to buy 1,067 hectares (2,636 acres) of farmland in New Zealand. In an application filed with the New Zealand Overseas Investment Office, Cameron says he and his family “intend to reside indefinitely in New Zealand and are acquiring the property to reside on and operate as a working farm.”
Source: Associated Press [2], via Matt Drudge [3]
As we’ve outlined before, farmland is one of the only reasonable physical assets to hold in the event of a major crisis [4], as you’ll be outside of highly populated metropolitan areas, you’ll have the ability to produce your own food, generate your own energy, and, more so than your urbanite and suburbanite counterparts, stay away from the chaos that will ensue during a major upheaval.
Liberty Media CEO James Malone, like director James Cameron, has also taken refuge outside of major cities at his ranch [5] on the Quebec border, giving him and his family an immediate international bug out plan in the event of an emergency. Another sign from the elite is that large net worth individuals and investment managers are buying up and taking physical delivery of precious metals [6], which in our humble opinion, is a leading indicator that large in-the-know investors are preparing for a loss of confidence in the stability of the global economic, monetary, financial and/or political systems.
Congressman Roscoe Bartlett recently warned that Those Who Can, Should Move Their Families Out Of the City [7], and insiders are worried about game changing riots [8] stemming from the Occupy movement.
The theory that elite members of society know something is amiss is further strengthened by comments such as those of financier George Soros who publicly declared in a recent interview with Newsweek that he expects violent riots on the streets of America [9] in coming months and years.
Furthermore, we have federal agencies and local police departments actively training for urban conflict [10], and the Pentagon has been war gaming scenarios that include large scale economic breakdown and civil unrest [11].
The stories reported over the last several years point to a growing consensus among elite business leaders, politicians, and military generals that we’re headed into a situation that is wholly unpredictable. They know the system is on the brink, [12] have said so repeatedly [13], and are actively taking steps to manage a crisis should it ever come to that.
Short of the mainstream media coming out and broadcasting to the American people that the system is about to destabilize and to expect nothing short of total meltdown and pandemonium, reading between the lines and watching the actions of those who are interconnected with the money and power structures on which the system is built will be our only warning signal for the difficult times we face in the near future.
The message is loud and clear. Are you listening?
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