Vulcan's Hammer

Is the U.S. dollar doomed?

2011-08-14T20:55:00.000-07:00

Only the most naive still believe that we are going to get out of this economic mess without some real pain and consequence.

America's credit rating should be much worse

2011-08-13T18:40:00.000-07:00

Peter Schiff hits the nail on the head as to why S&P should have down-graded U.S. debt even more than it did.

The joy of high speed rail in Cali

2011-08-09T08:36:00.001-07:00

So, it turns out that it is going to cost a lot more than the cheerleaders told us that it would:

The estimated cost of California's high-speed rail project is rising by billions of dollars.

Environmental impact studies released Tuesday and obtained in advance by The Associated Press put the cost of building the initial segment at anywhere from $10 billion to $13.9 billion.

That's sharply higher than the $7.1 billion estimate from 2009 for the Merced-to-Bakersfield section. Rail board executives say the higher costs include more elevated tracks in the Central Valley and more specific data about property values.

What a surprise. Politicians with the aid of environmentalists sold this "feel good" boondoggle to gullible voters and now we're stuck with footing the bill for decades to come. I wish I could say that there was a lesson learned here but I doubt it.

Hope and Change---HAHAHAHAHA!!

2011-07-02T05:27:00.000-07:00

h/t: Captain Capitalism

Enjoy the decline!

2011-06-26T11:02:00.000-07:00

Jim Rogers: "Driving down the value of our own money is lunacy."

Police State?

2011-06-12T17:58:00.000-07:00

You decide.

Another rat leaving ship

2011-06-06T22:53:00.000-07:00

Larry Summers, Christina Romer, and now the guy with the weird name jumps off the pier. I just wish that he could take Jared Bernstein with him.

Bye, bye tax credits

2011-06-06T06:43:00.000-07:00

Here's hoping that this starts a trend across the country . There are a plethora of tax credits for so-called "green" alternatives in California that should be eliminated. One of them is for hybrid cars.

No media bias at MSNBC

2011-06-01T22:57:00.000-07:00

LOL!! MSNBC is hilarious!

We don't need no mind control

2011-06-01T06:44:00.000-07:00

Public education is one of the greatest scams perpetuated on the masses.

He was right.

2011-05-30T10:00:00.000-07:00

Peter Schiff is not perfect but he called the economic debacle that was looming quite nicely. This clip is from 2006 which is just a year or so before The Great Recession. Note that the economist sheeple he debates in this clip can't see the forest from the trees.

Private property rights? Bwhahahaha!!

2011-05-22T13:26:00.000-07:00

So now our wise overlords what to start restricting how much control we have over our 401K plans, eh? They can't manage the federal budget but they are happy to dip their fat hands into your cookie jar. This latest move should disabuse anyone of the notion that private property rights are, or have ever been, cherished by the powers in Washington.

The meaning of economic planning

2010-12-18T14:54:00.000-08:00

HT: Liberty Pen

Thomas Sowell on public service and education

2010-12-12T09:27:00.000-08:00

An excerpt: "Higher education is supposed to teach people to see beyond surface glitter and plausible words. It is supposed to see beyond the fads of today to the broad sweep of history. Most of history is the story of how political leaders have squandered the blood and treasure of the human race."

HT: Liberty Pen

Enjoy the decline!

2010-11-30T21:48:00.000-08:00

This video on Quantitative Easing is terrifying even with funny and cute cartoon dolls.

Even the rich are doing it...

2010-11-28T21:35:00.000-08:00

More Americans opt to rent than to pay a mortgage.

HT: Captain Capitalism

All hail, Al Gore!!

2010-11-28T21:14:00.000-08:00

Here's the kind of news that will have you shaking your head:

Anyone who opposes ethanol subsidies, as these columns have for decades, comes to appreciate the wisdom of St. Jude. But now that a modern-day patron saint—St. Al of Green—has come out against the fuel made from corn and your tax dollars, maybe this isn't such a lost cause.
Welcome to the college of converts, Mr. Vice President. "It is not a good policy to have these massive subsidies for first-generation ethanol," Al Gore told a gathering of clean energy financiers in Greece this week. The benefits of ethanol are "trivial," he added, but "It's hard once such a program is put in place to deal with the lobbies that keep it going."

No kidding, and Mr. Gore said he knows from experience: "One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for President."

Mr. Gore's mea culpa underscores the degree to which ethanol has become a purely political machine: It serves no purpose other than re-electing incumbents and transferring wealth to farm states and ethanol producers. Nothing proves this better than the coincident trajectories of ethanol and Mr. Gore's career.

Oh, how nice. Mr. Gore now sees the light while the American taxpayer gets to foot the bill for years to come for another environmental pipe dream gone sour. Somehow I doubt that this new revelation by Gore will spur Greens to be a little more skeptical about adopting and advocating every earth saving idea that comes down the pike. Environmentalism is a religion that does not tolerate free thought or dissent.

Ben Bernanke's Dollar

2010-11-11T20:50:00.000-08:00

Unemployment is now 0%...

2010-11-11T20:43:00.000-08:00

...at least for me. I now have a full-time gig after spending two years hustling hard for contract or temp work. I have transitioned into the health-care industry from financial services. There are many things to learn and I am excited at the opportunities. Posting may be light around here for a while. Onward!

Olbermann suspended!

2010-11-05T13:07:00.000-07:00

It couldn't happen to a nicer guy--Hahahahahaha!! I remember the vile schadenfrued that Olbermann exhibited when Rick Sanchez was fired from CNN.

Nullification!

2010-11-04T22:34:00.000-07:00

I just downloaded Thomas Woods' book "Nullification" onto my Kindle. I'm looking forward to reading it. Here is an interview with Prof. Woods on the subject. (38 minutes long.)

Democrats get a beating!

2010-11-03T11:50:00.000-07:00

Democrats got their butts handed to them last night. Here are some of my favorite links:

1) Democrats lose centuries of seniority in the House.

2) Barney Frank won but he lost his powerful financial services seat. Whew!

3) Goodbye, Pelosi.

4) Obama’s former Senate seat goes to a Republican!

5) Chris Matthews and his "tingle."

6) GOP made HUGE gains in state legislatures around the country--This will give them the upper hand in the coming redistricting.

Election Day!

2010-11-02T15:05:00.000-07:00

Election Day 2010. Democrats are going to get a well deserved sock in the eye for their hubris. Then we'll have to hear all the wailing from liberals about how "Americans are stupid," "Fox News is evil," "liberals are fleeing to Canada," "The Koch brothers bought the election," blah, blah, blah. Maybe it's BAD LIBERAL POLICY-MAKING without compromise and their feckless attempts to "fix" the economy that has people voting against Democrats. But I guess having Democrats looking at their own faulty political philosophy would be too easy and obvious, I guess. Don't get me wrong, I have no illusions about Republicans grabbing power in the House. They can be as pathetic as Democrats. I'm just hoping for, at the very least, gridlock. Sweet, sweet, slow-down of the giant resource-sucking behemoth in Washington, D.C.

I'm going to have fun watching the results come in tonight. The bubbly is chilled and ready.

The absurdity of the "Sanity" rally

2010-11-01T18:39:00.000-07:00

I think it's kinda funny how Stewart, as a liberal satirist, stirs up the venomous public discourse with his nightly mis-characterizations of conservatives (sometimes very funny, I'll admit) but on the eve of Democrats getting ready to get socked in the eye, he all of a sudden wants a rally to "restore sanity?" Hilarious. The joke is on the poor sops who spent money travelling from far away places to be at a rally against something that has made Stewart's show popular in the first place and that will continue to be his tool--the re-enforcement of political prejudices in order to be funny. This Reason.tv video highlights my point nicely.

HT: Small Dead Animals

U.S. GDP grows 2% in 3rd quarter--WOW!

2010-10-29T13:52:00.000-07:00

From the L.A. Times:

Reporting from Washington —
The U.S. economy continued to plod along at a sluggish pace in the third quarter, not enough to generate momentum or bring down the nation's high jobless rate.

The nation's gross domestic product, or the value of all goods and services produced inside U.S. borders, grew at an annualized rate of 2% in the July-to-September quarter, the Commerce Department said Friday.

That was a tad higher than the 1.7% GDP growth in the second quarter, but overall still paints a picture of a lackluster economy that expanded at a 3.25% annual rate in the second half of last year coming out of the recession, only to see a slowing since spring...

Uncertainties about the expiring Bush administration's tax cuts loom as a potential negative, but analysts say even that could provide a lift in the next two months as people move some of their planned spending for 2011 to this year because of the risks of higher taxes.

Wowza! The stimulus, the threat of higher taxes, and more regulation for everything that moves is really working!

Not.

The above is only one reason why Democrats are going to have their butts handed to them this coming Tuesday. Hang in there, America.

The secret of American prosperity

2010-10-27T21:39:00.000-07:00

This cartoon from 1948, encapsulates the reason why the American system is so prosperous. Most importantly, it tells us to beware of a smooth talker trying to sell a fantasy that is really a nightmare.

HT: Cafe Hayek

With 6 days till mid-term elections...

2010-10-27T13:51:00.000-07:00

The latest odds from Intrade, the prediction market:

Control of the House of Representatives after 2010 midterms:

Democrats 11.1% (no change from yesterday)
Republicans 88.9% (+0.7 from yesterday)

Number of seats in the House gained by Republicans in 2010 midterms:

50 or more House seats gained 79.9% (+8.0 from yesterday)

Control of the Senate after 2010 midterms:

Democrats 55.0% (-2.7 from yesterday)
Republicans 12.5% (-3.5 from yesterday)

Number of Senate seats held by Republicans after 2010 midterms:

45 or more Senate seats held 97.5% (+2.5 from yesterday)
46 or more Senate seats held 96.9% (+8.8 change from yesterday)
47 or more Senate seats held 89.0% (+3.9 from yesterday)
48 or more Senate seats held 78.9% (+3.8 from yesterday)
49 or more Senate seats held 48.5% (-0.5 from yesterday)
50 or more Senate seats held 30.0% (+2.5 from yesterday)

Sharon Angle currently has a 67.5% chance of bumping off Harry "the war is lost" Reid in Nevada.

The power of language

2010-10-27T13:39:00.000-07:00

HT: LibertyPen

It's OK when our guy does it--Part one

2010-10-25T10:31:00.000-07:00

1) The Left keeps blaring that conservative groups are heavily funded by rich billionaires like the Koch brothers. Yet, there is plenty of evidence of left-wing groups and their agenda being funded by liberal rich people too. George Soros quickly comes to mind as a major contributor to left-wing causes; Mr. Soros has even contributed heavily to causes that may influence judicial selection in states like Nevada. Strangely, there are no loud and large headlines about this on the Huffington Post.

2) From the WSJ:

The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections, thanks to an 11th-hour effort to boost Democrats that has vaulted the public-sector union ahead of the U.S. Chamber of Commerce, the AFL-CIO and a flock of new Republican groups in campaign spending.

The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats' hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push. The group is spending money on television advertisements, phone calls, campaign mailings and other political efforts, helped by a Supreme Court decision that loosened restrictions on campaign spending.

"We're the big dog," said Larry Scanlon, the head of AFSCME's political operations. "But we don't like to brag."

HA!

Anybody wanna free lunch?

2010-10-22T23:58:00.000-07:00

When corporations are taxed, who really pays?

Thank you, Greenpeace!!

2010-10-19T15:22:00.000-07:00

This nasty Greenpeace video demonstrates the fear-mongering that pervades the environmental movement.

The chinese rare earth embargo?

2010-10-19T13:23:00.000-07:00

I've been commenting on this likely episode for several months on liberal and "green" blogs but most Progressives are either dismissive or simply look for any excuse to avoid the harsh reality of this issue: the environmental movement is essentially trading one precious commodity (petroleum) for another precious one (Rare earth elements) that our economic competitors have a near monopoly on. The more things change, the more they stay the same.

With 15 days to go...

2010-10-19T13:15:00.000-07:00

...the odds of Republicans taking the House remain strong.

Economies of scale don't apply

2010-10-19T13:12:00.001-07:00

Experts predict that any substantial economies of scale will elude battery powered cars. Does anyone believe that this will stop politicians from continuing federal subsidies to battery makers? Nah.

With 21 days to go...

2010-10-12T10:23:00.000-07:00

...till mid-term elections, Intrade has Republicans getting 40 or more seats to control the House at 80%.

A waste of taxpayer funds

2010-10-12T10:15:00.000-07:00

Harrison Price captures the "rent-seeking" of large automotive firms and their government enablers perfectly:

Chevrolet received about $52 billion from the U.S. taxpayer and another $9.5 billion from the Canadian taxpayer. The company is still a mess and its newest product – touted by Liberals everywhere and driven for ten feet by President Obama – is the Volt… an electric car. The car will be sold (at huge losses) for about $41,000.00. each.

During the height of the bailout, President Obama touted the Volt as a symbol of how Chevy was going to “make it” thanks to the help of great products like it and the wallets of the American taxpayer. The Volt’s batteries are made by a South Korean company (which received $150 million in U.S. taxpayer monies).

Now, it turns out, the Volt isn’t even an electric car… it’s a fancy hybrid like the Civic or Prius.

What?

TARP Lives!

2010-10-06T12:03:00.000-07:00

I've been seeing a lot of cheer leading on liberal blogs lately claiming that TARP is a great big success story. Ha! Here is a revealing video on TARP by Larry Kudlow:

1) $460 billion of commitments were doled out.
2) $386 billion were paid out to banks.
3) $200 billion has been re-paid.
4) $70 billion is still owed by GM and Chrysler.
5) $100 billion was lent to AIG of which $50 billion is TARP funds.

Was TARP really necessary? Kudlow suggests that 1) FDIC loan guarantees for all bank debt--short, medium, long--calmed markets even before TARP and also 2)The Feds money market guarantee eased market fears.

Beyond the pale

2010-10-05T22:39:00.000-07:00

Another gem from Jeff Perren at Pajamas Media:

To win against mainstream environmentalists and their political enablers requires essentially the same approach as in the purely economic realm. What’s needed is, to paraphrase the crusading attorney in Terence Rattigan’s play The Winslow Boy: “Cold, clear logic. Buckets of it.”

How to balance the budget

2010-10-05T18:51:00.000-07:00

Socialists at the liberal "one nation" rally in D.C.? No!

2010-10-03T00:31:00.000-07:00

Expect more class warfare

2010-09-27T12:49:00.000-07:00

From yesterday’s San Francisco Chronicle:

Soaring unemployment has poured salt into a long-festering economic wound - the widening gap between rich and poor Americans, a trend that has been accompanied by a hollowing out of the middle class.

One unimpeachable view of this wage gap comes from a Federal Reserve report that examined the period leading up to the housing bust and recession, and noted that "income became more 'unequally' distributed over the 1988-2006 period."

A more provocative analysis emerges from research co-written by UC Berkeley economist Emmanuel Saez.

After studying Internal Revenue Service records since 1913, Saez found that the fraction of total income reported by the top 1 percent of tax filers peaked at 23.94 percent in 1928.

Thereafter, income for this elite group fell for decades, only to rise from the 1980s through 2007, when this top strata took in 23.5 percent of all reported income.

Economist Emmanuel Saez, the author of this study, is a left wing progressive that constantly manipulates data to achieve his self serving political views. He’s done this before. Back in 2003, he released the original version of this study (the recently released data reported in the Chronicle is simply an expansion of the original study and not a whole new study) which was lauded by liberal pundits everywhere as hard proof that George W. Bush, the GOP, and capitalism, were wreaking havoc on the middle class. But in a public takedown, Alan Reynolds of the Cato Institute unraveled many of the allegations in Mr. Saez’ study in a well written article for the Wall Street Journal. One of the salient points Reynolds summarizes, and which Saez fails to address in his retort, is that counted in the upper 1% of the Saez study are business profits from S-corporation returns. Needless to say, counting business profits for one group in a study that purports to evaluate the income gap among different groups is going to predictably skew results; this of course, was all conveniently overlooked by Saez and class warfare cheerleaders.

Another important point that Reynolds makes that Saez weakly replied to is the matter of transfer payments: The lower tiers of the income distribution tend to depend more on Social Security checks, disability checks, welfare checks, housing assistance, etc. Since the income data that Saez relied upon does not really take these transfer payments into account as income, the income data for the lower tiers will be much lower; this is simply dismissed by Saez as irrelevant in his response to Reynolds.

Lastly, Saez never acknowledges in his study, or the retort to Reynolds, that many in the lower tiers tend to work fewer hours than the upper echelons (see Income and Wealth by Alan Reynolds, pp.26-27). There are many part-time workers and fewer year-round workers in the bottom 20 percent by income. Saez never takes this obvious reality of those living in the lower distribution into account. Hence, a gnawing income gap appears in the Saez study.

You see these types of studies from time to time all claiming the growing wealth of the upper classes at the expense of the American middle class. I find it curious that these sorts of studies always seem to hit the news cycle right around election time. The original Saez study was released 8-9 months before an election but got much more press as the election date got closer. Now we see the expanded Saez study making the news rounds before mid-terms. Make no bones about it, this newly expanded study will be used as firm and incontrovertible data for left wing politicians to advance their arguments for wealth distribution and higher taxes.

November 2nd can't get here fast enough

2010-09-24T19:53:00.000-07:00

With 40 days or so to go till mid-term elections, Intrade prediction markets have Republicans controlling the House of Representatives at an all time high.

Even when you lose, the taxman wins

2010-09-22T00:05:00.000-07:00

Let's make some real change

2010-09-16T14:55:00.000-07:00

Jeff Perren of Shaving Leviathan writes on the Progressive hold on America and how to break their grip. An excerpt:

..the influence on American culture of progressive ideas goes far beyond and far beneath politics. They represent a full-scale assault on all classical liberal values: reason, objective ethics, natural rights, capitalism, and their products — freedom and industrial production. Cleaning up Washington will be the barest beginning to reversing a century-long slide in America, one that has accelerated in the last four decades.
Ending bailouts, lowering federal spending, and tinkering with Social Security will give everyone some economic breathing room. But these actions won’t right a country that’s been increasingly tilting left for the past 40 years. And without fundamental change even those victories will be too small, and woefully short-lived.

Conservatism is dead?

2010-09-16T14:16:00.000-07:00

With less than 50 days to go till mid-term elections, Intrade prediction markets has the Republicans at a high of at least 72.7 on controlling the House.

Oh no! It's the Tea Party!!!

2010-09-16T13:54:00.000-07:00

They are just regular Americans, folks. They are not the demons that HuffPo, MSNBC, and the Daily Kos make them out to be.

HT: Beers with Demo

What's it gonna cost us to regulate that industry?

2010-09-15T16:07:00.000-07:00

So the latest news that has progressives all excited is that the Obama administration is set to tap Elizabeth Warren to head the Consumer Financial Protection Bureau. Progressives LOVE her. But Warren is another example of the endless cult of personality theme that runs through leftist political thought: If you just install the right person into a leadership position, the smart and caring person that says all the things you like to hear, then all will be fixed just as right as rain. BWAHAHAHA!

I don't care for Warren. Her answer to everything is "let's regulate it," while never discussing what the cost is to wanton regulating. Just because an industry is heavily regulated doesn't mean that it will be more safe, efficient, or less costly: Public Choice economists figured that out long ago.

So, how's TARP doing these days?

2010-09-15T12:53:00.000-07:00

Um...not so good for small banks that received taxpayer funds. From The Washington Post:

Big Wall Street firms have the most bruised public reputations, but it's a collection of smaller banks that continues to plague the Treasury Department's bank bailout program.

The latest report from the agency shows that more than 120 institutions - nearly all of them small banks - have missed their scheduled quarterly dividend payments, which is more than a sixth of the banks that received federal aid during the financial crisis.

In addition, five banks that received capital injections from the $700 billion Troubled Assets Relief Program have failed altogether, making it highly unlikely that taxpayers will recover the nearly $3 billion poured into those institutions.

The Treasury report showed that at the end of August, a record six banks each missed six dividend payments...

...The rising number of "deadbeat" banks, as they are known, has prompted calls for Treasury officials to take action to protect taxpayers' investment.

The bailout legislation gives the Treasury the authority to appoint two members to the boards of banks that miss six or more dividend payments, but the agency has refrained from doing so.

Strangely, you don't hear much from the crowd that thought that TARP was a great idea these days. Heck, now we have the Obama administration and Democrats pushing for a TARP-like deal for small banks to lend to small businesses. Anybody want to take a wild guess on how that ends?

Can the news around here get any worse?

2010-09-13T00:01:00.000-07:00

So many articles, so much news, so little time; here are the more interesting links from my weekend perusal:

1) According to this HuffPo report, the poverty rate has jumped along with the number of families in shelters. Hmm, it looks like Obamanomics is working to perfection. Soon we will all be much poorer and Democrats will come to the rescue with even more government social engineering and fiscal interventions. Happy days.

2) Randall Hoven over at American Thinker soberly summarizes the extent of debt and future fiscal liability that our country faces.

3) For some weird reason Obama gear is not selling as much as it used to. How strange.

4) Obama has installed another Keynesian hack, Austan Goolsbee, to pull levers and plan great big plans to “fix” our economy--at our expense, of course. God help us. Goolsbee has already started to create a narrative of low expectations by announcing that unemployment will stay high for a long time. Thanks a lot, dude. We have already figured that out by simply taking a gander at your economic policy to see that you are creating a train wreck. Goolsbee said this:

"This recession is the deepest in our lifetimes, the deepest since 1929…more than 8 million people lost their jobs. It's going to take a significant push on our part -- and time -- before that comes down…I don't anticipate it coming down right away."

Mr. Goolsbee, there is no doubt that this past recession was severe but we are no longer in a recession. The economy is in a slow lull caused by the anticipation of higher taxes, regulations, de-leveraging, and federal debt. It is obvious from the above quote that you will “push” for more government planning to solve a problem created by government. Please stop helping before it's too late.

Political arguments couched as economic arguments

2010-09-09T09:19:00.001-07:00

"Parasitic human infants."

2010-09-01T20:38:00.000-07:00

Can you imagine if this guy had been wearing a Tea Party shirt or had any remote conservative viewpoints? CNN, ABC, NBC, CBS, PBS, and MSNBC would have 24 hour coverage at the scene and endless panels of experts, pundits, and liberal activists denouncing anything and everything to do with conservatism. Blogs like Huffpo would have exploded. IMHO, the Maryland police should be commended for their quick actions.

Seeing red elephants

2010-08-30T21:40:00.000-07:00

The Intrade Prediction Market has the possibility of Republicans taking the House at an all time high.

The clause that progressives lean on

2010-08-28T08:31:00.000-07:00

The commerce clause!

Economy slowing down more than expected

2010-08-27T09:18:00.000-07:00

From the WSJ:

The U.S. economy grew more sluggish than initially estimated in the second quarter, and corporate profits nearly dried up, further evidence that the recovery is losing steam.

Gross domestic product, the value of all goods and services produced, rose at an annualized seasonally adjusted rate of 1.6% from April to June, the Commerce Department said Friday.

In the government's first report of the economy's benchmark indicator a month ago, the growth rate was estimated to have slowed to 2.4% after a 3.7% expansion in the first quarter.

Still, the revised estimate for the second quarter was above expectations for a 1.3% gain among economists polled by Dow Jones Newswires.

Friday's report also showed that companies barely managed to post profit gains, following several very profitable quarters. After-tax earnings edged up 0.1%, well off the previous quarter's gain of 11.4%. First-quarter profits were revised down from the initial estimate of a 12.1% increase.

Year over year, profits remained 37.7% higher, with companies cutting costs by trimming payrolls.

So, it is now clear that GDP is in a downward trend after a brief sugar high in the 4th quarter of 2009 from the so-called stimulus package. Here are the GDP numbers:

1st quarter of 2009: -4.90%

2nd quarter of 2009: -.70%

3rd quarter of 2009: 1.6%

4th quarter of 2009: 5%

1st quarter of 2010: 3.7%

2nd quarter of 2010: 1.6% (revised downward from 2.4%)

Bad economic policy ideas continue to abound: The very same people that trumpeted from the highest tree tops that the stimulus was and has worked are now running around telling us that it simply wasn't big enough. Now we have liberals in Congress making noise about a second package. The first one didn't work so they want to try it again! We even see liberal economist Paul Krugman calling to use Fannie and Freddie, agencies that are in conservatorship and that currently carry $5.5 trillion in public liabilities, in more useless transfer schemes. My lord, when will the madness end?

Affordable housing

2010-08-25T09:20:00.000-07:00

The news on Tuesday that sales of existing homes fell a record 27% in July spooked the Dow to decline by a mere 133 points. I guess all of those short term tax credits and fancy programs initiated by the Obama administration to prop up prices has been essentially a big waste of tax dollars. Oh well. Another lesson in hubris, I suppose. The funny thing is that as prices go down, the more affordable housing becomes for more people which is what our government has been telling us they want and why they have spent a treasure in tax dollars to create. It turns out that if you just leave the market alone, it will sort out affordability on its own. Amazing.

About those Bush eight years...

2010-08-24T20:57:00.000-07:00

Here's a video reminder of who contributed to the housing bust.

We are better off...

2010-08-23T05:46:00.000-07:00

Matt Ridley, author of "The Rational Optimist," makes the case that human beings are far better off now than in the past and make significant advances when free exchanges of ideas and trade flourish.

Carter created more jobs than G.W. Bush?

2010-08-21T16:27:00.000-07:00

So this is the new spin that I found on some Progressive blogs: More jobs were created under Presidents that were Democrats than Republicans. (This is similar to the claim I heard during the 2008 Presidential election that stated that the stock market does better under Democratic presidents--a misleading argument that gets debunked nicely by Don Luskin.) And a Wall Street Journal blog entry is used with hefty legitimacy to prove their point. The problem with this argument is that 1) The Executive branch does not control the public purse, Congress does. For example, a Democrat president with a Republican majority in Congress can not take all the credit or blame for the performance of the economy. 2) In the case where an incoming president inherits a recession from the previous administration, the crude statistics will encumber the unlucky incoming president with low and even negative job creation. President George W. Bush inherited the pop of the dot-com bubble from Bill Clinton and then had to deal with the September 11 terrorist attacks which also hit the economy hard. His first 3 years or so in office were economic disasters not of his doing. Since liberals love telling that Obama inherited a bad economy from G.W. Bush wouldn’t it be consistent to blame some of the low job creation numbers of George W. Bush to Bill Clinton?

This whole propaganda campaign by liberals to attempt to forestall losses in the November elections is based on poor analysis and a crude reading of statistics. I’m not surprised.

The skinny on Social Security

2010-08-18T22:56:00.000-07:00

Dan Mitchell hits one out of the park and makes Mark Walsh look like a partisan hack in this clip. Yes, Sweden, the country that liberals love to hold up as the paragon of civilization, has Personal Retirement Accounts and they have not fallen into the ocean, folks. Sooner or later, we are going to have to do something about Social Security.

The evolution of America

2010-08-17T09:04:00.000-07:00

This year is the year of the census. Here is a neat look at the history of what the census questions looked like since the late 18th century.

Batteries in hybrid cars fail early!

2010-08-16T08:42:00.000-07:00

From The Los Angeles Times:

When Honda Motor Co. rolled out its latest-generation Civic hybrid, it was sold as the automaker's green car of the future.
But five years into production, Honda has discovered that its high-tech batteries can die years early, a potentially expensive flaw that the automaker has been addressing with a software update that many owners claim has made the car less environmentally friendly.
Jason Marchesano of Overland Park, Kan. said the battery in his 2007 Civic hybrid started losing its ability to hold a charge last year. Rather than replace the battery, which was under warranty, Honda loaded a software program into the car's computer that he said made the car sluggish and slashed the vehicle's gas mileage.
When he complained again several weeks ago, Honda installed a second software update, cutting efficiency further. Today he gets just 33 miles per gallon, compared with 45 when the car was new.
"I've been sitting here scratching my head and asking, why did I get a hybrid?" said Marchesano, a computer consultant whose hybrid's gas mileage these days is scarcely better than the conventional Civic, which is rated about 30 mpg and costs several thousand dollars less.
Marchesano and other hybrid owners fear that Honda has decided to sacrifice their vehicles' performance in order to avoid the huge cost of replacing thousands of faulty batteries, which are still under eight- or 10-year warranties and cost as much as $3,000 each to replace.

Oh just wait until the Toyota Prius starts to show early battery wear. There will be congressional hearings on C-Span for weeks.

One of our cars is a Toyota Echo that we bought used for 8K. It gets about 35-36 MPG. Now compare that to a hybrid Toyota Prius that can cost 25-27K out-the-door. Do the math. Even with federal and state rebates/credits which would bring the price of the Toyota hybrid down to about 20K, gas would have to be at 4 bucks a gallon for more than EIGHT years before any real "savings" in gasoline costs were realized. The odds that gas prices are going to be at $4 for 8-10 years are long at best. And in 8-10 years, if you have to deal with waning battery power all of the savings on gas will essentially go up in a large puff of CO2. It is amazing that there are so many people that have been taken in by the advertising and the "green" culture that surrounds these very expensive vehicles.

Must read articles on fascism

2010-08-14T08:04:00.000-07:00

Our friend Jeff Perren over at Shaving Leviathan has written eloquently on fascism, General Motors, the Chevy Volt, and federal press subsidies. Please take some time out and read these fine articles.

Can you tell which stimulus program is fake or real?

2010-08-13T06:27:00.000-07:00

Unbelievable.

The odds that Democrats will lose the House

2010-08-12T15:49:00.000-07:00

Intrade shows Democrats losing control of the House as being very likely.

Obamaville

2010-08-12T15:22:00.000-07:00

So, this is the "summer of recovery?"

1) Thousands showed up for Section 8 public housing applications in the hot Atlanta sun yesterday. We should get used to crowds like this as long as the White House believes that a super-regulated command economy will solve all our woes.

2) Some in New York City were protesting for MORE jobless benefits. I say what these people need are jobs. Where are the jobs Mr. President?

Congress continues to write checks on our behalf

2010-08-10T15:00:00.000-07:00

The House (mostly Democrats) just passed a $26 billion "emergency" bill to attempt to save their butts from political ruin in November:

Summoned back from summer break, the House on Tuesday pushed through an emergency $26 billion jobs bill to protect 300,000 teachers, police and others from election-year layoffs. President Barack Obama was to sign the measure by day's end.
Lawmakers streamed back to Washington for a one-day session as Democrats declared a need to act before children return to classrooms minus teachers laid off because of budgetary crises in states that have been hard-hit by the recession.

Republicans saw it differently, calling the bill a giveaway to teachers' unions and an example of wasteful Washington spending that voters will punish the Democrats for in this fall's elections. The legislation was approved mainly along party lines by a vote of 247-161.

The aid for the states is to be paid for mostly by closing a tax loophole used by multinational corporations and by reducing food stamp benefits for the poor.

House Speaker Nancy Pelosi said the bill was being immediately sent to the White House so Obama could sign it into law. Obama, joined by teachers at a Rose Garden ceremony earlier in the day, said, "We can't stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe."

Uh-huh. So, what happens next? What if the economy doesn't improve over the next year? Then what? More "emergency" bills signed for the benefit of the public service unions while those of us without union cards get stuck with the bill? Jeez.

BTW, this is yet another example of the failure of the "stimulus" package. It has done little to get our economy rolling again. I swear that we are all better off when congress is away on vacation where they can do little damage to the public finances.

Cartoon of the day

2010-08-04T21:04:00.000-07:00

HT: Carpe Diem

On vacation!

2010-07-24T00:18:00.000-07:00

No posting till August 2nd.

Leading economic indicators swoon

2010-07-22T09:18:00.000-07:00

Evidence that the economy may be slowing. Do you think that all the new and untested regulatory hurdles, higher taxes, and ObamaCare will make matters better? Don't bet on it.

Housing skips a beat

2010-07-21T21:30:00.000-07:00

So now that the $8K tax credit to buy a home ended in April, it seems that housing prices are still facing a deflationary environment. All the tax credit did was put off the inevitable to a later date. Housing inventory continues to climb and housing starts are falling again. This is clearly bad news but not surprising for those of us that advocate the Austrian economic perspective. Attempting to prop up housing prices with short-term government aggregate demand is a losing battle. My opinion is that housing has a long way to go before it hits bottom; it may take years before it all washes out and prices stabilize. The federal government has tried everything to prop up prices--tax credits, mortgage refinance programs, and even having Fannie Mae soaking up billions of underwater loans to no avail. Unfortunately, it seems that we are going to learn the hard way that artificially propping up prices solves nothing in the long run.

A post racial President?

2010-07-20T21:28:00.000-07:00

Best post that I have read regarding the ouster of Tea Party Express spokesman Mark Williams from the greater Tea Party movement:

While I understand that Mark Williams is trying to make a point of how backwards the logic of the NAACP has become, the execution of that point is a complete failure. This “letter” is the kind of thing that simply strengthens the left’s argument about racism in the Tea Parties. So much of it reads like the stereotypical accusations that have been leveled at blacks for eons. Without full background behind the debate between Williams and the NAACP, it is too easy to read this letter and assume the charges are being leveled against all black people. It’s an Epic Fail in execution.

Another reason why this letter is a failure is because it doesn’t directly address the true problem with the NAACP. The NAACP’s problem is that they are using the good they did in the past like a mask. The mask is designed to look like they are defending or advancing the black race, when what they really are doing is launching racial attacks in order to defend the liberal agenda. Getting into a battle over the term “colored people” does little to remove the mask and expose the true goals of the NAACP.

It is high time we all started challenging those who play the race card for political gain. However, race is still a flashpoint for controversy and thus requires a very thoughtful and tactful approach. Sloppy ill-conceived approaches like this one can only backfire and end up doing way more harm than good.

The ObamaCare beta is happening right now in MA

2010-07-19T23:37:00.000-07:00

So, how is RomneyCare doing these days?

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.

Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees.

In Sandwich, business consultant Bill Fields said he has been hired by small businesses to enroll about 400 workers in state-subsidized care since April, because the company owners said they could no longer afford to provide coverage. Fields said that is by far the largest number he has handled in such a short time.

“They are giving up out of frustration,’’ Fields said of the employers. “Most of them are very compassionate but they simply can’t afford health insurance any more.’’

Precisely how many small businesses have recently given up offering insurance is hard to pinpoint. The Office of Labor and Workforce Development said the most recent quarterly insurance data collected from small companies has not been compiled.

Oh, snap! It seems that companies are kicking their employees off of their insurance rolls and hoisting them on the taxpayer! What a shock! You think that this might happen with ObamaCare? Nah, come on now.

Companies are sitting on their cash

2010-07-19T22:47:00.000-07:00

According to this report, non-financial firms have $1.6 trillion dollars in cash. My guess is that they are sitting on all this money due to all of the uncertainty that is expected when taxes rise in 2011.

Lost hope

2010-07-18T09:31:00.000-07:00

Do you need to remove that Obama sticker from your car?

HT: Capital Commentary

Politicians on a dragonslaying mission

2010-07-17T14:31:00.000-07:00

Harrison Price adroitly summed up the Dodd-Frank financial reform bill yesterday. This bill is a victory for Fannie Mae cheerleaders, Chris Dodd and Barney Frank. They will sell it to the public as a great accomplishment by liberal government to make the financial sector "safe." Yet, Fannie Mae and Freddie Mac are allowed to run their treasury busting business without nary a slap on the wrist---they continue to lose billions of taxpayer dollars each quarter. Liberals are going to claim that this bill is a great achievement. That is, of course, until another collapse rears its ugly head and then they will look to blame someone or something else.

Rainbows and Unicorns

2010-07-15T10:04:00.000-07:00

The porkulus bill created three million jobs? BWAHAHAHAHAHAHA!!

It's time for another sales job!

2010-07-14T22:42:00.000-07:00

The stimulus has not made much of a dent to private sector job creation, so Mr. Obama is on a propaganda tour to sell it to likely voters in the upcoming November elections. Isn't it interesting that a good chunk of the porkulus will get spent before mid-term elections?

Enjoy the decline!

I'm sorry, but this is still a waste...

2010-07-09T09:32:00.000-07:00

According to this story on CNN, this one stimulus program is popular with Republicans because it puts people back to work:

There's at least one stimulus program that's creating jobs and winning praise from both sides of the political aisle.
A little-known Recovery Act initiative is expected to put more than 200,000 unemployed people back to work in 32 states and the District of Columbia. It's called the Temporary Assistance for Needy Families Emergency Fund, and it subsidizes jobs with private companies, nonprofits and government agencies.
But the $5 billion it receives runs out on Sept. 30, even though employers and state officials administering the money say there's lots more demand out there...
The "program will provide much-needed aid during this recession by enabling businesses to hire new workers, thus enhancing the economic engines of our local communities," Barbour said when the initiative launched last year.

While this program sounds promising at first, it essentially subsidizes hiring until taxpayer funds run out. Does that sound like an efficient way to run an economy? This is a perfect example of how people are fooled by short-term results while the long term ramifications are not even explored. CNN thinks this program is putting people back to work but this program is taking funds out of the private economy and having it redistributed by federal bureaucracy. How efficient is that?

Small businesses not hiring

2010-07-08T23:55:00.000-07:00

More evidence that the "stimulus" has done nothing for small businesses and that matters will only get worse:

A payroll services firm says employers with no more than 19 workers made fewer hires in July than in any month since October. Those companies usually drive the unemployment rate down.

For the recovery to gain steam, most economists believe small businesses need to be strong enough to hire new workers. But according to one measure, the employment picture in this sector is weakening.

Intuit Inc., which provides payroll services for small employers, says the nation's tiniest companies had fewer new hires last month than any time since October.

The data are further evidence of a trend that has had many economists worried for months and intensifies concerns that smaller firms may not be robust enough to help lead the country out of its financial slump. The slowdown in hiring is particularly troublesome, experts say, because small businesses typically hire first during a recovery. A reluctance by little companies to add positions could mean that the big firms, which typically lag behind, will add jobs even more gradually.

"It's a bad sign," said Susan Woodward, an economist who tracks small business employment for Intuit. "Small businesses hire first — and they're losing their steam."

Does anybody believe that tax hikes next year will help small businesses?

Accounting gimmicks and Social Security

2010-07-08T23:45:00.000-07:00

Despite what Paul Krugman and Dean Baker have been telling you, the Social Security trust fund is in bad shape. Robert P. Murphy at LVMI explains.

Prescient words from Uncle Milton Friedman

2010-07-07T15:00:00.000-07:00

From chapter five of Milton Friedman’s “Capitalism and Freedom” which was originally published in 1962:

Each recession, however minor, sends a shudder through politically sensitive legislators and administrators with their ever present fear that perhaps it is the harbinger of another 1929-33. They hasten to enact federal spending programs of one kind or another. Many of the programs do not in fact come into effect until after the recession has passed…The haste with which spending programs are approved is not matched by an equal haste to repeal them or to eliminate others when the recession is passed and expansion is under way. On the contrary, it is then argued that a “healthy” expansion must not be “jeopardized” by cuts in governmental expenditures. The chief harm done…is therefore not that it has failed to offset recessions, which it has, and not that it has introduced an inflationary bias into governmental policy, which it has done too, but that it has continuously fostered an expansion in the range of governmental activities at the federal level and prevented a reduction in the burden of federal taxes.

Does any of the above sound familiar? All I read from liberal blogs and Paul Krugman these days is how it would be a bad idea to stop “priming the pump,” cutting government stimulus and spending. To be sure, we can see from the above quote from Mr. Friedman, that this is not a new strategy and it most certainly is not one that has favorable long term results. Anybody want to bet that it will all turn out differently this time?

Soldiers as historical art

2010-07-06T00:43:00.000-07:00

These are some great photo's of soldiers posing as symbols of American history.

You're going to need one

2010-07-06T00:18:00.001-07:00

Introducing the Obama Tax Hike Exemption Card!

Happy July Fourth!

2010-07-04T14:36:00.000-07:00

Here's a little ditty by some guy named Jimi Hendrix.

Interview with a Zombie!

2010-07-01T21:30:00.000-07:00

This video is a riot! Thomas Woods is interviewed by a zombie regarding his latest book. Since most talking heads and talk show hosts are brainless boobs, this zombie does a swell job.

Electric Sheep

2010-06-30T17:11:00.000-07:00

Hey taxpayer, did you know that your government has decided that some of your hard earned money needs to be funneled to boutique electric car makers? That's right, it's for your own good too. You see, these electric cars are being hailed by everyone within earshot as the next big thing that will save us from the evils of fossil fuels. Oh, electric cars have been around for about a hundred years you say and will never really catch on because of their limited range and long recharge time? Well, too bad because there's nothing you can do about it. And if you complain be sure to know that you'll be attacked as insensitive to the environment, disdainful of technology, and uncaring about our dependence on foreign oil. What's the matter with you? Why these electric sports cars boast an impressive roster of celebrity customers that have shelled out $109,000 each for their eco-bling. Oh, did I forget to mention that they get a nifty federal and state tax credit for their selfless purchase? Yes, yes, our government knows winners when they see them. Especially if you're one of the owners of this company or someone holding one of their IPO's.

It must be fun to have access to other people's money and also be able to decide how to spend it.

It must be nice.

Daily Kos polling is bunk! What a shock!

2010-06-29T17:58:00.000-07:00

Why am I not surprised by this? The Daily Kos posted a very disturbing poll about Republicans not long ago and the Left circled around it like sharks around chum. Well, it turns out that the whole poll was bunk. I've said it before and I'll say it again---the Daily Kos is not a reputable and reliable news source; it is essentially a blog that spews progressive propaganda with no regard to the verity of what it posts. It is the modern internet version of Pravda.

Addendum: It seems as the progressive site that I linked to above as proof of "sharks rounding chum" deleted its post hailing the Daily Kos poll. I guess the blogger found it too psychologically painful to handle the reality of it all.

Beck on Hayek

2010-06-28T22:00:00.000-07:00

Mr. Beck hits a homerun in my estimation by hailing F.A. Hayek and "The Road to Serfdom."

Enjoy the decline!

2010-06-28T21:56:00.000-07:00

This is a sobering projection but it is right on target with what I have been saying so far about the "stimulus" package:

Deep cutbacks by state governments such as California have all but obliterated the effect of the nearly $800 billion federal stimulus enacted last year, she said at a luncheon sponsored by the center-left New America Foundation.

Tyson said the current "jobs gap" between the number of jobs the economy is producing and full employment is about 11 million. Even if job growth surged to 350,000 a month, it would take four years to get the unemployment rate to where it was before the recession began in December 2007, she said.

If job growth is at a more modest 200,000 a month, it would take 11 years.

"When you look at the forecasts, you've got to go to 2015 before unemployment falls back to the 5 percent to 6 percent range" where it was before the recession began, Tyson said. The slowdown in Europe, a key destination for U.S. exports, makes things worse, she added.

Administration officials have indicated that Tyson is under close consideration to replace Office of Management and Budget Director Peter Orsag, who announced his departure Monday.

With the current economic policy that this administration is advocating, I simply don't see matters getting better any time soon. More federal spending, more short-term tax credits aimed at some industry to boost demand, and more threats of regulation and higher taxes will not spur the economy to a strong expansion.

Great Blog Award

2010-06-25T14:43:00.000-07:00

I want to thank Rich and Cher over at Askcherlock for this wonderful award. Please take some time and visit their blog. I find that even though we do have different political views, they maintain a lively blog and they also have a very tolerant core group of visitors which is very rare on the blogosphere. Thanks again, guys!

Don't let the door hit your ass on the way out!

2010-06-22T10:45:00.000-07:00

White House budget director Peter Orszag to step down:

The most visible members of President Barack Obama's economic team, will be leaving his post in July—the most senior official to leave the Obama administration, according to two knowledgeable administration officials.

Officials close to Mr. Orszag noted that he had served nearly four stressful years in similar posts, first as director of the Congressional Budget Office, then as Mr. Obama's first director of the Office of Management and Budget. Mr. Orszag helped steer through Congress a $797 billion economic-stimulus bill in his first weeks at the White House job before becoming one of the driving forces in shaping the health-care law.

One of the things about politics that drives me nuts is how hacks like Orszag can have such a negative impact on people that never voted for him. Orszag was one of the authors and advocates for the second "stimulus" package--a virtual porkfest--and he pushed ObamaCare like no other. Many generations of Americans will have their economic livelihoods diminished for many years while this guy will get a back slap and applause on his last day at his post.

We have a lot of Oil

2010-06-17T07:44:00.000-07:00

Remember Tuesday when Pres. Obama said this: "We consume more than 20% of the world's oil, but have less than 2% of the world's oil reserve. And that's part of the reason oil companies are drilling a mile beneath the surface of the ocean -- because we're running out of places to drill on land and in shallow water."

Well, it's not exactly true.

Fannie Mae and Freddie Mac get de-listed!

2010-06-16T16:47:00.000-07:00

You must understand that as taxpayers we are liable for nearly $5.5 trillion. BTW, all of Fan and Fred debt is "off the books." So, we don't see their liability reported in the yearly federal budget.

Around the horn

2010-06-16T00:12:00.000-07:00

1) Business as usual: More proof that the financial reform bill coming out of Washington is eyewash. The credit agencies get a free pass.

2) Just like Cash for Clunkers, Cash for Caulkers, Cash for Appliances, after the tax breaks end as they are now doing with the housing market, the positive numbers that some liberal economists would tout as proof of a a strong housing recovery start to fade away.

(Additionally, and on a macroeconomic scale, does anyone want to make a bet at what's going to happen when taxes go up next year when the Bush tax cuts expire? The Bush tax cuts act like a tax break for the greater economy in the same way that all these much smaller "Cash for" programs did; when the tax cuts go away, it's a sure bet that we are headed for the doldrums in the very same manner that auto sales slumped after Cash for Clunkers did.)

3) Even liberal news outlets are predicting a dire November for Democrats.

Don't give a junkie more drugs, don't give a debt junkie more debt

2010-06-16T00:05:00.000-07:00

"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said.

~Nassim Taleb, professor and author of the bestselling book "The Black Swan."

They refuse to see...

2010-06-15T15:18:00.000-07:00

This was my comment to this post:

There are three ways to increase aggregate demand:

1)”Prime the pump”–transfer wealth from the private economy to the public and then redistribute.

2) Have the central bank print more colored green paper.

3) Cut taxes.

Numbers one and two have been tried and we have little to show for it. Jan. 1, 2011 will be very interesting when taxes bump up again.

With less people working and paying taxes (the real unemployment rate is closer to 17% IMHO), those that are working will have to take up the slack with more taxes to pay for all the promises made by the political class. Somebody needs to stop shoveling before the hole gets too deep.

I have noticed on many liberal blogs of late an unmistakable air of denial on how policies by the Obama administration has essentially hurt our economic recovery. Instead, they have tried desperately to find an answer for the lack of job growth and the precipitous economic recovery. Some say that the stimulus wasn't enough, others say that this sluggish, limping growth is the "new normal" because of competition from China, Brazil and India---developing nations with economies that are half the size of the U.S. economy combined! (The total GDP of Brazil is roughly the GDP of the state of Texas!) I've even seen posts praising the Obama administration for saving us from the Great Depression (by the mastery of Tim Geithner!) that would have surely followed if a stimulus would not have been passed; this, of course, ignores the sad fact that the stimulus was essentially a giant wealth transfer scheme that pushed off the inevitable reckoning which fast approaches.

I am convinced that many of these liberal bloggers refuse to see the coming economic storm and the failure of Obama's interventions into the economy because it is simply too psychologically painful to admit that their man was wrong or that liberal fantasies of wealth distribution will not make us more prosperous. So it continues.

How minimum wage laws hurt teens

2010-06-15T14:23:00.000-07:00

Criminal negligence

2010-06-14T12:21:00.000-07:00

The following excerpt is from a letter to the WSJ regarding the Deepwater Horizon disaster:

The BP testimony to the House Committee on Energy and Commerce on May 25 says it all, but perhaps that material needs to be explained. From looking at that evidence, this is what we know:

1) When cementing the production casing the cementing crew, which was being supervised by BP, had difficulty landing the top plug into the casing shoe. This was the first "red flag" because a satisfactory cement job to the production string is fundamental to the safe operation on a go forward basis. The fact that the cement job did not go as planned should have caused the testing operation that followed to be carefully scrutinized, it clearly was not.

2) As is normal practice, the integrity of the pressure tight seal was tested by pressuring up on the casing and observing the pressure response. If pressure bleeds off there is clearly a problem with the pressure integrity of the shoe, However, industry practice dictates that a positive test, that is no pressure drop, is not diagnostic, simply because the reservoir pressure is sufficient to retain the pressure being applied. A negative test is useful because it is diagnostic of a failed cement job. In this case the test was positive.

3) Again, as is normal industry practice a negative pressure test was run, with pressure released from inside the casing and the pressure response was measured. In this case evidence has been bought before the committee that there was a 1,400 psi pressure response. This response is highly diagnostic and is therefore the second "red flag" and at this point the BP supervisors should have concluded that they had what the industry calls a "wet shoe." That is that the cement job had failed to form a seal at the casing around the reservoir which we know contains high pressure oil and gas.

4) At this point a decision should have been made to do a remedial cement job; this is an expensive operation, but having seen a 1,400 psi response, there was no choice.

5) The BP engineers then proceeded with the balance of the operation to temporarily abandon the well. This meant replacing the 14-pound-per-gallon mud that was in the wellbore with 8.5-pound-per-gallon sea water. The denser mud had been, up until this time, the primary pressure control and was keeping the hydrocarbons in place despite the lack of an adequate cement job at the casing shoe.

Given the two red flags that had been thrown up previously, one would have expected that as a precaution a cement plug would have been placed somewhere in the wellbore as a secondary pressure seal before this primary pressure control system (heavy mud) was evacuated from the wellbore. But at the very least the mud replacement operation should have been heavily scrutinized. Clearly it was not.

6) Evidence provided at the hearing, including the pressure data transmitted from the rig for the last two hours before the explosion, is diagnostic. At 8:20 p.m. on the day of the explosion the pressure data suggest there was a constant flow of sea water being pumped into the drill pipe that was displacing the heavier mud system which was the primary pressure control for the well. The rate going in was 900 gallons per minute, but the flow data of mud coming out was steadily increasing from 900 gallons a minute at 8:20 p.m. to a rate of 1,200 gallons per minute at 8:34 p.m. During this 14-minute period one can conclude that hydrocarbons were flowing and pushing more fluid from the wellbore than was being pumped in.

This letter which was written by the president of Samson Oil and Gas clearly illustrates that it really was sheer negligence by BP that caused the explosion which sank the rig. Every industry standard of safety and protocol was ignored. The question I ask is, how would more regulation have stopped such negligence?

More on why government fails!

2010-06-11T17:53:00.000-07:00

This post hits the mark:

Liberals feel, not unjustifiably, that people act out of their own best interests yet, somehow, when you take a collection of selfish individuals and put them together in public office they transcend their nature. If only it were true...

Liberals will always set themselves up for failure by taking the moral high ground in creating complex governmental systems which fail because people will always view this type of failure as being worse than any other. Why? Because people elected fellow citizens to rise to the challenge to make our lives better.

When these complex Liberal governmental system fail it is the fault of private industry. Liberals will say: Acme Corporation spend millions on lobbying and that influenced the decisions of several members of a vast, unknown bureaucracy to make bad decisions. Within a short amount of time, a few government employees are crucified, the CEO of Acme is on the evening news, and Liberals move on. Liberals do not want to own up to the fact that it was they who created a government so entangled in everybody’s lives that they set the stage for too big to fail...

So what are the solutions? If the oil is near the coast and we need it, allow companies to get it thus ignoring the expensive, dangerous to find oil 5,000 feet below the water. If health insurance is expensive, allow insurance companies to compete against one another nationwide and find a way to make it work. Don’t create artificial markets like those for CO2 which suck limited capital away from things which can instead go towards more productive areas. Don’t tax people and companies to death giving them a disincentive to find new products and services to fill needs people have. In short, allow people to fill holes in life with their skills, talents, and drive don’t shut them down by forcing them to act in ways contrary to human nature. And, finally, except in areas of law enforcement, security, butt out.

~Read the entire post by Harrison Price at Just Politics.

More on government failure

2010-06-11T12:54:00.000-07:00

1) The number one book on Amazon is written by an economist. Thank you, Glenn Beck!

2) The Treasury reports that U.S. debt will rise to 19.6 trillion by 2015; someone should alert congress.

3) The Congressional Budget Office has tacked on another $115 billion to ObamaCare. That brings the total cost to more than $1 trillion in the first ten years

4) Gold continues to hit new highs.

5) Strict European and federal requirements failed to spot cadmium in Shrek glasses. What else can’t they spot that could kill us?

6) A little hysteria and a vocal minority goes a long way. Federal officials now want to ban peanuts on airplanes. They might as well ban everything on board since there is bound to be at least one person or group that is allergic to something. Are you feeling safe yet?