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2008 is not 1992
If you’ve heard anything from Hillary Clinton; then you’ve heard that Bill Clinton didn’t wrap up the nomination until June of 1992. Unfortunately for Hillary, this isn’t 1992.
Entering 1992, we had an incumbent President with high approval ratings seeking re-election. That played a strong part in keeping the field clear of strong candidates - so we had an unheard-of Governor of Arkansas, an unheard-of Senator of Iowa, an unknown Senator from Nebraska, an unknown Senator from Massachusetts (also known as “No, the other one.”), the known-but-not-loved Governor of California who were “in it to win it” and the Governor of New York who couldn’t decide if he wanted to be President or not (meaning he wasn’t sure if he could win).
Entering 2008, we had a former first lady whose name recognition approached 100% who was also the sitting Senator from New York. Barack Obama is the Senator from Illinois that has been on the national stage since he addressed the National Convention in 2004. John Edwards was the immediate past VP candidate that had spent a considerable amount of time and money building a national following. Then there were other unimportant candidates, as well. Oh yeah, we also have one of the most unpopular Presidents in history who cannot seek another term. Very different.
|Veepstakes
Now that the media seems to have gotten the memo that nothing Hillary Clinton can do will give her the nomination, it’s time to move on to speculating as to who Barack Obama will pick as his Vice-President. Given the specific rhetoric of the primary, I don’t think we’ll see a Obama-Clinton ticket. That would be about the only way Obama could manage to lose my vote.
I believe it was Walter Mondale who claimed that being VP was the least important job in America (I may be wrong about that), but that doesn’t mean that the decision on who to pick as running mate isn’t important. Historically, Presidential candidates have looked to their VP candidate to add something to the ticket. Cheney added gravitas to George W. Bush’s campaign - somehow. Al Gore added national and international experience to Bill Clinton’s ticket. Dan Quayle added comic relief and showed how horrible GHW Bush was at making decisions. GHW Bush helped set up Reagan to take Texas and let him buy-off some establishment credentials. Mondale added…hmmm. Dead weight?
Anyway, Barack Obama needs to get down to business by chosing a running mate - or at least raising the visibility of speculation. Hillary Clinton is on the ropes and will have a difficult time fighting her way off of them if she has to first remind everyone that she is relevant.
John Edwards is an attractive VP candidate, though he is said to have opted out of such a run. Ditto for Al Gore. Then there are the other white men of the early primaries - Joe Biden, Chris Dodd, Mike Gravel, and Dennis Kucinich. Okay, the inclusion of the last two is a big joke. But Biden and Dodd would add the experience that could be seen as Obama’s weakness against John McCain. But I don’t see Obama, who has promised change, as bringing along two old white dudes from the east coast. Neither Delaware nor Connecticutt is vitally important in an electoral sense (though they are better to have than not). So I think Obama will look elsewhere.
Technorati Tags: Barack Obama, Vice-President
|Bad News for the GOP
I know everyone is hanging on Hillary v. Barack - but I’m just sick of it. The only way Clinton can win is if 100% of the vote in Florida and Michigan is counted and if that happens, then you better hold onto your hat because the next Presidential primary is going to be starting on November 6th of this year. Why follow the rules if there is no consequence? Of course, all of the super-delegates could gang-up on Obama and throw Hillary over the top - which is starting to sound like a good idea (in a totally difference sense of the phrase). But this would truly risk enfuriating a lot of Democrats because it is seen as entirely anti-democratic (in every sense). Many wonder if black voters would trust a Democratic Party that suddenly decided they didn’t want to have their nominee be the black man who has gathered more primary votes for President than most recent nominees.
It’s interesting that very little speculation has been about what would happen to Hillary’s supporters if she doesn’t get the nomination. If black voters are faithfully Democratic, then they are no more so than the aging feminists that have formed Clinton’s hard core of supporters. As important are the soft core of blue collar voters that just don’t seem to be willing to vote for the black guy in the race. If you don’t want to call it racism; then you have to point out how much Hillary Clinton has in common with John McCain (which is the point of my latest cartoon).
But there is still reason for the GOP to shake in their boots. Mississippi isn’t supposed to elect Democrats, but 409 votes are all that stands between Travis Childers changing that (and then OpenLeft will have another BushDog to whip). Then there is the case of Louisianna to go along with Bill Foster in Illinois. It’s getting to be that no Republican seat can be said to be safe (and we’ll add Mike Ferguson’s CD-7 and Jim Saxton’s CD-3 in New Jersey as both open seats now appear likely to go to Democrats).
Here’s the important thing to remember, though - don’t look for these districts to provide the badly needed swing votes in Congress. While Foster appears to be firmly on the progressive side of the scales, neither Cayazoux or Childers can be described that way. They’re Democrats, but they aren’t to be taken for granted. I consider this a good thing. It’s always good for the majority to represent an ideological plurality. One of the reasons the Republican majority became so hated is that they tolerated no dissent. Democrats have to be careful not to follow that line of hubris.
Unless and until one of the Democratic Presidential candidates picks a running-mate, everything is pretty much window-dressing. Obama can’t knock-out Clinton because she is still holding those illegally won delegates in her pocket. Clinton isn’t going to quit unless she is stricken dead by God Himself. It’s going to the convention - so it will be a fun show in Denver. But nothing else matters. So it is lather, rinse, repeat. Yawn.
Who says watching paint dry isn’t fun?
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Oil is Expensive - Forever
I was glad to hear Barack Obama oppose the “gasoline tax holiday”. That is truly one of the dumbest ideas I’ve heard in some time. It isn’t that I wouldn’t appreciate paying eighteen cents less per gallon - it’s just that eighteen cents per gallon isn’t enough to do anything for anyone.
Think of it this way: New Jersey has the lowest gasoline prices in the country. Last week, when I bought gas, I got eleven gallons for about thirty-four dollars. If the federal gas tax were waived; then I would have saved one dollar and ninety-one cents. I could have bought a soda and ten pieces of Double Bubble!
How’s that going to stimulate the economy? More to the point, how is it going to make a dent in my fuel bill? Listen, it wasn’t the last two dollars that hurt me - it was the first thirty-two dollars
It’s pretty easy to draw a direct correlation between $120 oil and $4 gasoline and record profits throughout the oil industry. The talk of a “windfall profit” tax is good to have - but I don’t think we should be targeting a specific industry with it. Taxation is an effective tool to curb the excesses of unrestrained greed. The goal is not to set rates so high on incomes so low that it discourages wealth (though I’ve yet to meet someone who wouldn’t want to make more money even if it cost them more tax). The goal is to create a means of earning a reasonable return but discouraging price gouging - and that is exactly what is happening now.
It costs no more to produce a barrel of oil today - with oil around $110-120 a barrel - than it did a few years ago when it was $65-70 a barrel. The difference between the price then and now is turned into pure profit. Imposing caps only ensures that doing business in the United States risks losing money - which risks actual shortages as suppliers decide it isn’t worth losing money to gain access to the US economy. A general tax on corporate profits, however, will provide an incentive to keep prices lower than they would otherwise be because extra profit just means extra tax. This is why marginal tax rates in the United States used to reach as high as ninety percent.
Yeah, there are loopholes. They would have to be closed to keep companies from avoiding the tax by offshoring profits. So do it already. They shouldn’t be able to do that anyway, should they?
And I have to disagree with this author that extra taxes “allows” the government to do things. It only allows the government to pay for things it is doing. As George W. Bush has proven, the government is going to do what the government is going to do. We can tax and pay for it today or we can pawn it off on future generations. Bush has chosen the latter. I view that as irresponsible.
There is another reason that such a tax would be a good thing. Taking money out of the economy would help boost the value of the dollar - particularly if it cuts the budget deficit.
That won’t “solve the problem” though because the real problem is that Americans feel they are entitled to have absurdly cheap fuel. They aren’t. The only way to bring fuel prices down is to break our addiction to oil. I wouldn’t look for either John McCain or Hillary Clinton to do that - the fact that they want to give a “tax holiday” would indicate that they haven’t through through the implications of their policy, but they are impressed with its ability to get votes.
Technorati Tags: Barack Obama, gasoline tax holiday
|The Recession-Proof Economy - Not!
The good news is that the economy is not in a recession - it is just growing at a rate so slow as to be almost invisible. A recession is an economic downturn marked by two consecutive quarters of negative (GDP) growth. For the last two quarters, the growth rate has been only 0.6 percent - which is NOT negative. Yay for us.
But - the eight-month recession of 2001 didn’t have two consecutive quarters of economic growth at all. Here is a chart showing the growth rate of GDP in 2000 and 2001 (source data (Excel file):
| Quarter | Growth Rate |
|---|---|
| 2000q1 | 1.0 |
| 2000q2 | 6.4 |
| 2000q3 | -0.5 |
| 2000q4 | 2.1 |
| 2001q1 | -0.5 |
| 2001q2 | 1.2 |
| 2001q3 | -1.4 |
| 2001q4 | 1.6 |
No two consecutive quarters of negatives. But if there was a recession that stretched from March to November, then it must have been marked by a “negative-positive-negative” growth rate - in which case it should have been measured to have started in the third quarter (July) of 2000. Which is it? Did we have no recession, or did it start back in July of 2000 and last all the way through at least September of 2001?
By the definition, there was no recession. That’s easy enough to answer. The question then becomes why it would be marked as starting in March 2001and not July 2000. I don’t have an answer to that one, but the stats do point out one thing I’ve said for a while now - the effect of 9/11 on our overall economy was negligible. At the worst, the effects were shaken off in the following month/quarter.
|Yes, Oil is Expensive - Get Used to It
Amazingly, with both crude oil and refined product prices at record highs, oil companies are turning record profits. Here’s a nice little fact tucked away in the story:
Shell’s Chief Financial Officer Peter Voser said oil companies are not to blame.“We don’t understand the oil price at this stage,” he said. “The fundamentals will not justify an oil price as we see it at the moment.”
Shell’s earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.
Stripping out the impact of oil inventories that have risen in value, refining profits would have fallen 20 percent, Shell said.
Hmmmm. The CFO of Shell doesn’t understand why oil prices are so high? Well, I agree with him that a six percent reduction in production should not cause a fifty-two percent rise in profit. Refining profits are down? Someone isn’t telling the whole story.
Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia’s Sakhalin Island to a state-run enterprise.
Yeah, that’ll cause problems. But it doesn’t explain why the world oil price is so expensive.
I’ve said before - and I’ll stand by it - a large part of the problem is the weakness of the US dollar. Oil contracts the world over are bought and sold in US dollars, so when our currency’s worth drops, the price of oil must rise exactly the same amount even if no market conditions change. When Chinese politicians begin to talk openly about selling dollars, that drives the value of the dollar down, and the price of oil up. It doesn’t matter if China actually sells its dollars (actually, it does - it would be even worse if they did), what matters is that marketeers think that China will. Wanting to get ahead of the dollar’s plummet, they sell their dollars and accomplish, in minature, what China could do on a grand scale.
|Truckers Strike - Who is behind it?
I got a little suspicious when I heard about this trucker’s strike in DC. What did it for me was the group’s demands:
The truckers are calling on Congress to stop subsidizing big oil companies, release oil from the Strategic Petroleum Reserves, end exports of oil from Alaska and regulate transportation brokers and fees paid to truckers.The truckers said they want Congress to issue an immediate cap on gasoline, diesel and heating oil prices. They are demanding a $2 a gallon cap on all of the fuels.
Oil is at an all-time high. I’ll be the first to say that major oil producers, like Exxon-Mobil, are making predatory profits. But $2 a gallon is stupid - and the idea that gasoline, diesel, and heating oil should be priced exactly the same is stupid, too. The refining process is just not that simple. Plus there are many different grades and blends of gasoline and diesel. Like any manufacturing process, different products have different production costs. Also like any manufacturing process, forcing the manufacturer to sell below profit levels only causes mass unemployment.
I’ll openly admit ignorance to the “transportation brokers and fees”. But I do know that the trucking industry was the primary driving force in de-regulating such things. Take a look:
Both the Teamsters Union and the American Trucking Associations strongly opposed deregulation and successfully headed off efforts to eliminate all economic controls. Supporting deregulation was a coalition of shippers, consumer advocates including Ralph Nader, and liberals such as Senator Edward Kennedy. Probably the most significant factor in forcing Congress to act was that the ICC commissioners appointed by Ford and Carter were bent on deregulating the industry anyway. Either Congress had to act or the ICC would. Congress acted in order to codify some of the commission changes and to limit others.The Motor Carrier Act (MCA) of 1980 only partially decontrolled trucking. But together with a liberal ICC, it substantially freed the industry. The MCA made it significantly easier for a trucker to secure a certificate of public convenience and necessity. The MCA also required the commission to eliminate most restrictions on commodities that could be carried, on the routes that motor carriers could use, and on the geographical region they could serve. The law authorized truckers to price freely within a “zone of reasonableness,” meaning that truckers could increase or decrease rates from current levels by 15 percent without challenge, and encouraged them to make independent rate filings with even larger price changes.
The unions fought deregulation and these same independent truckers that decry the unions finally won the right to be left at the mercy of the market. Now they’ve had more than enough of that and they want out. There’s a reason “Truckers and Citizens United” isn’t a union strike. Not that the author of the article to which I linked is a fellow at the Hoover Institution - and is pushing the conservative solution that more deregulation will save everything.
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