The price per barrel of oil is back up near $100 as of the end of last week and through today’s trading. According to the free-marketeers, that must mean gasoline demand has been through the roof. Oops, not so much: demand is down -4.3% YoY, at 8671 M gallons vs. 9056 M a year ago, as noted at The Bonddad Blog.
Clearly, something other than just demand is and has been at work. Oil trading is as much gambling as the stock market is. All the volatility that consumers are affected by arises primarily from large amounts of bets placed on anticipated prices.
Why is this important? As NDD notes, “This [oil's price] is back above the recession-trigger level calculated by analyst Steve Kopits. Gas at the pump declined $.03 to $3.42 a gallon. Measured this way, we probably are still about $.15 above the 2008 recession trigger level.” Those bets have real-world implications. Recessions are easier to trigger when oil and gas prices remain high.
Deregulation and conflict of interest juxtapose in very dangerous territory. News is slowly coming out that the credit raters knowingly gave their best rating to securities that didn’t deserve it. Bond and securities issuers pressured rating agencies like Standard & Poor, Moody’s and Fitch, Inc. into issuing AAA ratings that they shouldn’t have. Not surprisingly, those corporations made very large profits, in no small part because with excellent ratings, securities rose in value and more could be issued … with excellent ratings. It was but one positive, though artificial and unethical, feedback cycle that kept driving housing prices through the roof in the 1990s and 2000s. Also in the article: a severe admonishment from Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee. I had a lot of respect for Rep. Waxman coming out of the 2006 election cycle. The past two years has shown me that he’s too ready to issue his rebukes but he hasn’t really exercised the oversight for which his committee is responsible. I suppose getting beat up by the right-wing for decades will do that to you. Will Waxman push for enforcement of regulations under an Obama presidency? Time will tell.
Have people really adopted more efficient driving habits? Will the money saved on falling gas prices go instead to reducing household debt, which runs into the trillions of dollars? Here again, time will tell.
More economic stimulus is being discussed within Washington. Should taxpayers get more cash or should the money instead be spent on infrastructure projects? I vote projects. They’re not as quick to enact, but they will deliver longer-lasting and more substantial economic growth. Make a good portion of the projects related to renewable energy development and you’ll knock a whole bunch of birds down with one stone. A more sane energy policy, mitigation of human forced climate change, improved domestic security, more jobs, a stronger economy. Giving people checks that they spend once is the weaker solution. Adding to the already enormous national debt with no medium- to long-term plan just doesn’t make sense.
India launched its first mission to Earth’s moon. Chandrayaan-1 will map the moon in greater deatil than what was done by the Apollo missions in the 1960s, by the Japanese Kaguya spacecraft (launched last year), or by China’s Chang’e-1 spacecraft (also launched last year). Chandrayaan-1 cost $80 million. The U.S. is planning on sending the Lunar Reconnaissance Orbiter to the moon next year. That spacecraft will cost $500 million, but will provide even greater mapping resolution than Chandrayaan-1.
George W. Bush continues to set record after record. Five of the worst deficits? They’re Bush’s and his extremist allies in Congress. This year’s deficit will amount to around $482 billion. Bushies are of course trying to spin the number, citing two worse deficits in our history, based on percentage of GDP. There’s a lot of that going around as the economy tanks and businesses post record-setting losses themselves. It’s only the third worst yearly deficit ever! Brought to you by folks who convinced voters they were fiscally responsible. One more reason not to vote for McCain and dozens of other candidates.
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One out of five bridges in the US is 50 years old or older, according to American Association of State Highway and Transportation Officials. Why is 50 years worth mentioning? Engineers design bridges to last 50 years. And the amount of traffic using those bridges far exceeds what was estimated 50+ years ago. Last year, a bridge collapse in Minnesota killed 13 and injured 144 people. And yet the same conservatives who have run up record deficits continue to argue that we shouldn’t invest in our national infrastructure. Indeed, immoral corporations like Halliburton and Exxon are gleefully accepting corporate welfare while our infrastructure edges closer to failure.
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So someone went to a church in Tennessee with a shotgun and killed two people while injuring seven others. Who is this person? Another psychotic white male. He was pissed off at “liberals and gays” and frustrated he couldn’t find a job. He believes that all liberals should be killed. Where did he get such crazy thoughts? Unsurprisingly, his reading included Bill O’Reilly, Mike Savage and Sean Hannity. Their writings and general use of language, along with other extremist right-wingers, have been identified as infused with violence.
I recommend reading Jeffrey Feldman’s “Outright Barbarous” to get a clearer idea of this – he takes a short stroll through right-wing pundit-land and examines their rhetoric. His conclusion: that the level of violence in their rhetoric prevents any real discussion of the issues we all face today. I’m actually surprised even more outbursts like this haven’t been seen.
I’m curious if Jim David Adkisson will be charged as a terrorist. Based on the fact that he’s not brown and doesn’t have a Muslim-sounding name, I doubt it.
A barrel of oil hit an all-time high yesterday. The price continues to climb today, currently at $111.76. Airlines are failing, farmers and truckers are having trouble paying for diesel (>$4.00 per gallon) and Americans are having to choose between paying for gas and spending money in other sectors of the economy. Meanwhile, energy corporations continue to enjoy record profits, totaling billions of dollars per quarter. I’m sure glad folks voted for the regular guy they wanted to have a beer with.
Some serious inflationary pressure is being applied to the economy. Prices jumped 1.1% last month. It represented the second largest increase in prices in the past 33 years, with the largest coming last November when prices jumped 2.6%. This won’t shock anybody: economic forecasts were way off: economists were expecting a 0.4% rise. Oops. If a weather forecaster missed a high temperature by 1/3, they’d be tarred and feathered in the streets. But economists are part of the serious classes.
Inflation over the past year stands at 6.9%. I’ve asked before and I’ll continue to ask the following: did your wages increase by 6.9% last year? Unless you’re a corporate executive, and if you’re lucky enough to still have a job, they probably didn’t. With the decline the dollar has suffered, Americans can buy less and less every month. Economists talk about the core inflation rate, which doesn’t take energy and food costs into account. That makes sense: people don’t have to transport themselves or eat, after all. I’m not going to talk about the core inflation because it’s a joke measure of the economy. It’s set up to allow fat cats to convince themselves the economy is performing well.
The Republican economy is doing so well, 52,000 homes were lost to foreclosures last month. But Bear Stearns received $30 billion last month in corporate welfare. Taxpayers of course will be responsible for that money if Stearns’ investments fail. Almost 250,000 houses are entering foreclosure filings every month now. Republican economic policies prevent people from achieving the American dream. And it’s because of their worship at the false altar of the “free market”, where the only freedom is freedom from regulation. Well, we’re seeing the direct results of that lack of regulation.
