Monthly Archives: September 2013

Global Warming – Pause

Global Warming Polar Bear

Remember this?

Scientists in the US have presented one of the most dramatic forecasts yet for the disappearance of Arctic sea ice.

Their latest modelling studies indicate northern polar waters could be ice-free in summers within just 5-6 years.

Professor Wieslaw Maslowski told an American Geophysical Union meeting that previous projections had underestimated the processes now driving ice loss.

Summer melting this year reduced the ice cover to 4.13 million sq km, the smallest ever extent in modern times.

Remarkably, this stunning low point was not even incorporated into the model runs of Professor Maslowski and his team, which used data sets from 1979 to 2004 to constrain their future projections.

“Our projection of 2013 for the removal of ice in summer is not accounting for the last two minima, in 2005 and 2007,” the researcher from the Naval Postgraduate School, Monterey, California, explained to the BBC.

“So given that fact, you can argue that may be our projection of 2013 is already too conservative.”

Truly amazing.  Yet listen to this bullshit:

“My claim is that the global climate models underestimate the amount of heat delivered to the sea ice by oceanic advection,” Professor Maslowski said.

“The reason is that their low spatial resolution actually limits them from seeing important detailed factors.

“We use a high-resolution regional model for the Arctic Ocean and sea ice forced with realistic atmospheric data. This way, we get much more realistic forcing, from above by the atmosphere and from the bottom by the ocean.”

And survey says!

A chilly Arctic summer has left nearly a million more square miles of ocean covered with ice than at the same time last year – an increase of 60 per cent.

The rebound from 2012’s record low comes six years after the BBC reported that global warming would leave the Arctic ice-free in summer by 2013.

Instead, days before the annual autumn re-freeze is due to begin, an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia’s northern shores.

Oh my!

Now, just to be clear, we here don’t think that the addition of CO2, a known greenhouse gas, won’t lead to a warmer planet.  We just don’t buy into the alarmist’s doomsday.

Household Income

I just finished a post that explained, in part, the rise of income levels of the 1%:

…the primary source of income of the wealthy is the market and not salary.

It’s important to point this out as our current administration continues to rail against income disparity all the while pushing for policies that help contribute to the “problem” all the while.

But check out a recent post from AEI:

During his economic speech yesterday, President Obama again suggested that the typical US middle-class family has seen no economic progress over the past 30 years:

Because even though our businesses are creating new jobs and have broken record profits, the top 1 percent of Americans took home 20 percent of the nation’s income last year, while the average worker isn’t seeing a raise at all. In fact, that understates the problem. Most of the gains have gone to the top one-tenth of 1 percent. So in many ways, the trends that have taken hold over the past few decades of a winner-take-all economy, where a few do better and better and better, while everybody else just treads water or loses ground, those trends have been made worse by the recession.

Now I have debunked this claim several times. And now so has the US Census Bureau. The above chart, from the agency’s new income and poverty report, clearly shows real median household income indeed rose over the Long Boom of 1983 through 2007. And remember, the Census Bureau is just tracking pre-tax, pre-transfer, non-fringe benefit market income. As agency itself concedes: “The money income measure does not completely capture the economic well-being of individuals and families.”

091713census1-600x198Leading up to the recession, real median income was rising.  It’s only been since Obama’s time in the White House that such incomes are dropping.

Income Disparity

Monopoly Free Market

Interesting move by the Fed this afternoon.  By announcing that they would continue the quantitative easing, the stock market responded with record highs:

NEW YORK — The stock market hit a record high Wednesday after the Federal Reserve’s surprise decision to keep its economic stimulus in place.

Bond yields fell sharply — their biggest move in nearly two years. Meanwhile, the price of gold jumped as some traders anticipated that the Fed’s decision might cause inflation.

In a statement, Fed policymakers voted to maintain the central bank’s $85 billion-a-month bond-buying program, which has been in place in one form or another since late 2008. It is designed to keep interest rates low to spur economic growth.

What this decision does is pump more money into the economy.  And whenever you do that, the cost of stuff goes up.

Consider an “economy” made up of 100 gold pieces and 20 loaves of bread.  In this case, bread costs 5 gold pieces per loaf.  Now, if we double the number of gold pieces floating, does anyone not believe the cost of bread will also not double?

So, when the Fed continues a policy that is pumping money into the market, the price of the “market” doubles.

So the next time a liberal is hollering that the income of the wealthy is rising faster than the income of the poor, you can point to Obama and his Federal Reserve.  After all, the primary source of income of the wealthy is the market and not salary.

Obama is the one responsible for the income disparity that we have recently seen.

Housing Crisis – Data Point

Housing BubbleThere is no doubt that the housing crisis was caused by government policy.  Bad actors everywhere?  Sure.  But at the root of it all the was the government’s desire – by both parties – to increase home ownership in America.  And specifically for the poor and minorities.

With that in mind:

There is no doubt what really happened. Between 1997 and 2007, HUD’s affordable-housing policies under two administrations built an enormous mortgage bubble—nine times as large as any bubble in modern history—and when this bubble collapsed, it caused a 30%-40% decline in housing prices. This left homeowners who had limited financial resources and no equity in their houses unable to refinance or sell, causing an unprecedented number of mortgage defaults. Shocked by these numbers, investors fled mortgage-backed securities, making them useless for short-term financing by financial institutions like Lehman. The result was a panic and a financial crisis.


As I mentioned, there were guilty actors everywhere. Everyone from the appraiser who fudge the home value to the banker who pressured lending agents to companies that engaged in fraud – guilty all.

But it was the government, through the agencies Freddie and Fannie that drove the whole failure.


HUD was still at it in 2004, stating that “Millions of Americans with less than perfect credit or who cannot meet some of the tougher underwriting requirements of the prime market . . . rely on subprime lenders for access to mortgage financing. If the GSEs reach deeper into the subprime market, more borrowers will benefit from the advantages that greater stability and standardization create.”

That statement is all you need to understand why, in 2008, 74% of the subprime mortgages outstanding in the U.S. financial system were on the books of government agencies, particularly Fannie and Freddie.



Living On A Budget

Not quite living on $31.50, but this is a neat article describing life on $50 a week:

College, unemployment, or an unexpected change in your life situation can mean that a major cut in spending is required as you plan how to survive from week to week. We found that it’s possible to take care of the essentials, with a dollop of comfort thrown in, for less than $50 a week by shopping at the local dollar store.

Sure, the dollar store is a pit stop for cheap snacks, cooking supplies, toys, and other small items, but it’s also a source for food at one very low price. And yes, there may be a stigma attached to dollar store shopping for all your needs, but can you afford to be snobby at a time like this?

Our suggested menus and shopping list below presume you have some staples on hand, such as mayonnaise and condiments like pickles. Remember, inventory will vary at every dollar store:

Suggest Grocery List:

1 box cereal — $1
1 6-ct pack oatmeal — $1
1 bag coffee — $1
1 loaf bread — $1
1 box pancake mix — $1
1 bottle imitation maple syrup — $1
1 jar jelly — $1
1 jar peanut butter — $1
1 12-ct. carton eggs — $1
1/2 gallon shelf-stable milk/1 gallon fresh milk — $1
1 32-oz. jar apple juice — $1
1 2-ct. pack pre-made pizza crusts — $1
1 jar pizza sauce — $1
1 container grated Parmesan cheese — $1
2 boxes Hamburger Helper — $2
1 bag pasta — $1
2 cans meat sauce — $2
5 5-oz. cans tuna — $5
1 box instant oatmeal — $1
3 1-lb. cans soup — $3
4 10-oz. cans vegetables — $4
1 box crackers — $1
1 pastry crust — $1
1 box New Orleans-style rice — $1
1 can beans — $1
1 box dehydrated mashed potatoes — $1
2 packages frozen chicken — $2
1 pack Country Time Iced Tea Mix — $1
1 bag potato chips — $1
1 6-ct box granola bars — $1
1 bottle barbecue sauce — $1
Total: $43

Not bad.  Combined with my list and I’ll bet it’s even less expensive.

The Value Of Employment’s First Rung

Minimum WageMuch has been discussed with jobs, minimum wage, poverty, the income gap and unemployment.  One of my central themes is that wages are not the full story when it comes to compensation.  Another is that minimum wage jobs are NOT meant to be careers and certainly are not meant to be a means by which we raise a family.

Rather, these jobs are meant to be the first rung in the employment ladder.  In addition to modest wages they teach job skills; customer service, scheduling, listening, task completion and plain old “boss respect”.

An old story that emphasizes this point:

Here’s one reason why Volkswagen likes hiring former fast-food employees for its 2.5 million-square-foot plant here in the heart of the Tennessee Valley.

“Inexperience is a key,” said Gary Booth, director of the Volkswagen Academy training operation. “Some of our best employees came from McDonald’s. They know standardized work.”

Booth, strolling the halls of Volkswagen’s 163,000-square-foot training facility connected to the plant, said he doesn’t want to hire assembly-line workers who have developed “bad habits” at previous manufacturing jobs.

I work at a highly specialized center and I continually advocate hiring local McDonald managers to fill our centers.

Just sayin’.



Just this afternoon I profiled an individual in my neighborhood.

I know most of the people on my street.  To be sure, not by name but by demographic; age, sex, race, sex and such.  I know if someone I see is a member of that street or not.  Further, I know most of their habits and activities; schools, sports, walking or biking – things that they do when I see them.

Coming into my driveway I noticed a kid – 16 to 19- sitting on one of the utilities facility boxes, you know, those green things for the phone or cable company?  No one that age lives within 15 houses either way.  No one I know of in that age isn’t in school or in some activity that time of day.  I’ve never seen a kid smoking a cigarette while walking around the neighborhood.

Or sitting on a utility box on someone else’s property.

It’s 85-90 today here in Raleigh.  The kid was overdressed in cargo pants and a sweatshirt, though no hoodie.

I walked to the end of my driveway, directly approaching him – the box is right across the street from me- and looked him straight in the eye as I approached.  He kept my gaze without blinking.

I got my mail and walked back.

From my windows I watched him finish his smoke, get up and walk away.  I then followed him until he turned the corner.

I did not call 9-1-1 or engage him.  But I followed him.  And I have zero neighborhood watch training.  And if I wanna watch a kid whom I have never seen acting in a way and manner inconsistent with kids in my neighborhood I’m gonna watch him.  And make note of him.

And any claim that I “don’t need to follow him” will be met with a gigantic FU.

By the way.  The boy was white with striking blue eyes; like a Siberian Husky.

This boy was 100% profiled.  And it had 0% to do with his race.

Wage Gap – Employment Gap

Increasing Bar GraphThe argument has long been, “The rich get richer while the poor get poorer.”

There are two problems with the statement:

  1. The people who make up the poor and who make up the rich change over time.  This is especially true when rich and poor are defined by wages only.
  2. This argument never takes into account “externalities”

For example, the argument never admits that we are looking at families and not individuals.  As such, it would be valuable to look at how families are changing over time.  But we never get that.

Additionally, it would be important to look at education and how it  has changed over time.  Again, nothing.

But today we have a new report that provides insight:

WASHINGTON — The gap in employment rates between America’s highest- and lowest-income families has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.

Rates of unemployment for the lowest-income families — those earning less than $20,000 — have topped 21 percent, nearly matching the rate for all workers during the 1930s Great Depression.

U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level traditionally defined as full employment. At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.

Amazing.  And truly heart breaking.  The very folks that need, and I mean NEED, a job are faced with unemployment levels that make it virtually impossible to find work.

A rational policy decision would be to make work as easy as possible to give away.  That is, let these people find and accept a job anywhere they can for whatever wage they can.  Ironically, the administration that most of these folks feel are helping them out are really hurting them the most.

One of the most devastating things that can happen to a worker out of work is to see the wage of the jobs he wants raised above his reasonable level of productivity.  This has the effect of discriminating against him for no reason other than he lacks the skills to obtain better work; skills that are often learned while working.

Don’t forget the history of the minimum wage:

Did you know that there was a time in our country, after the Civil War, when white unemployment was higher than black unemployment? It seems almost unfathomable now, but that was the case in the early decades of the 20th century. This was intentionally changed after Congress enacted the first federal minimum wage law: the Davis-Bacon Act of 1931.

As most of us remember from history class, the 1930s saw a plethora of public works projects introduced to combat the unemployment associated with the Great Depression. (Whether or not this worked is a topic for another day.) But during that time, many impoverished blacks left sharecropping to come north in search of such jobs. The Davis-Bacon Act was created specifically and explicitly to prevent blacks from “taking” these jobs from local white workers.

Congressman Robert Bacon of New York began crafting various pieces of legislation to discriminate against black workers when a black construction crew from Alabama was brought to his state to build a hospital for veterans in 1927. Because most blacks lived in the South, any laws restricting the use of migrant labor discriminated against them. Since blacks were not admitted to trade unions, any law that favored union labor automatically excluded blacks. Bacon submitted 13 such bills over the next four years, culminating in the Davis-Bacon Act.

The act mandated that federal contracts pay their workers the “prevailing wage.” As innocent as this might sound, records of the debate over the bill reveal that everyone understood the “prevailing wage” meant the union wage and that this meant there would be no blacks working on federal projects. In fact, when testifying before the Senate in favor of Davis-Bacon, American Federation of Labor union president William Green complained, “Colored labor is being brought in to demoralize wage rates.”

The federal minimum wage may no longer be racist in intent, but it is still racist in its effects. Labor is affected by supply and demand, just like anything else. If we pass a law that raises the cost of printer paper to $100 a ream, companies will find a way to use less printer paper. In the same way, when the law raises the cost of labor, companies purchase fewer hours of labor.

The history of the minimum wage was SPECIFICALLY meant to discriminate against black workers.  And the effects of that law have created the condition we see today.

Obama’s Syria – Red Line And Force

Syrian Flag

So, it’s come down to this:

WASHINGTON – The Obama administration says the U.S. is open to a United Nations resolution that does not include the threat of military force against Syria if the government fails to surrender its chemical weapons.

That is what we call Game, Set and Match.

Described here:

The threat of force was never something the Security Council, where Russia and four other countries have veto power, was going to pass. Nevertheless, the LA Times describes the development as “indication of the White House’s weak hand in the unfolding negotiations between world powers.”  John Kerry and his Russian counterpart have been negotiating a deal for Bashar Assad to surrender his chemical weapons to international control ever since the secretary of state off-handedly identified that as an unlikely diplomatic solution to the situation. The Russians seized on the perceived misstep and the UN resolution will include whatever arrangement Russia and the US manage to strike.

Why is the United States in the role of chemical weapons monitor of the world? Barack Obama insists it wasn’t him that drew the red line for war (a kind of “Who Killed Davey Moore?” moment), it was the world. The president claims international law demands he (on behalf of the world?) act. Yet, in fact, none of the existing international law on chemical weapons applies in this case. The president’s red line is his alone, his arguments to a non-applicable (or even non-existent) international legal regime notwithstanding. The UN does, under its charter, have the authority to act in some way on the human rights violations in Syria, but the Security Council has to act with at least the apathy of its five veto-wielding members, the US, Russia, China, the UK, and France. The Obama Administration’s newfound willingness to drop the non-starter that the threat of force is at the UN should mean it’s ready to meander away from a very much self-made crisis. John Kerry, it seems, has already turned his attention to the Israeli-Palestinian peace process, his other pet project.

We elected an “Occupy Wall Street” committee member as President.  It’s really not his fault, rather, it’s ours.


Peak Oil – Anyone Buying?

peak oil

Peak oil.  A fascinating concept.  Motley used to scare children into thinking that the planet will die and we’ll freeze due to lack of usable fuels.

Or starve because the economy will tank as oil prices continue to rise and all goods and services become too expensive for the common man to afford.

Technically it means, at least I think it means, the moment when new discovers of oil are fewer than the increasing demand for oil.  We begin to see supply diminish and demand increase.

However, there is a small catch.  The oil that is counted as “discovered” is only that oil that is economically feasible to obtain.  Oil on the moon?  No good, too expensive.  Oil 25 miles deep?  Same thing.

However, technology is catching up and pushing the concept of peak oil further and further into the future:

Rising U.S. shale oil production will help meet most of the world’s new oil demand in the next five years, even if the global economy picks up steam, leaving little room for OPEC to lift output without risking lower prices, the West’s energy agency said.

The prediction by the International Energy Agency (IEA) came in its closely watched semi-annual report, which analyses mid-term global oil supply and demand trends.

“North America has set off a supply shock that is sending ripples throughout the world,” IEA Executive Director Maria van der Hoeven said on Tuesday.

It might take a new President to obtain access to all the oil though.