A few brief thoughts
Published Tue, Jun 10 2008 12:11 AM
Barack Obama is going to make the economy one of the central issues of the campaign from what I've heard. You know the old mantra "It's the economy stupid!"
… The national unemployment rate "jumped" to 5.5% last month. That's quite a jump. It's still a smaller rate than most European countries, but it's a fairly large rate compared to recent years. This is sure to be one of those "failed Bush policies" that Obama is going to harp on John McCain about perpetuating. Never mind that the jobless rate has been generally quite low after an initial post 9/11 surge in 2001, it's got to be "Bush's fault".
Personally, I think it's more likely the combination of a sudden influx of new job seekers into the summer job market after having schools release their students and the ill-advised jump in the minimum wage by close to 30%. Think about it. What part of the labor force actually earns minimum wage? Wouldn't that typically be the entry-level worker and the summer job seeker? Somehow I don't think it's the person that's been trying to earn a living for the past several years.
Now, suppose you own a small business. Your sales will be affected by a lot of things, primarily by the quality and availability of your product and the disposable income of your customers. Your costs will be affected by a lot of things too, such as the cost of materials and the cost of labor. Even assuming that the cost of materials stays fixed (and that's a big assumption with all the talk about inflation and higher fuel costs), if it now costs you a third more per entry level worker, you're probably only going to be able to hire three-quarters of the people you used to be able to hire for summer work. It's simple mathematics.
With 25% fewer job openings, is it any wonder that unemployment might take a summertime jump after a 30% increase in the minimum wage? Whose idea was that anyway? Is that really a "Bush" policy? Or can we thank our Democrat controlled congress for that one?
It's a fair bet that Senator Obama voted to
raise the unemployment rate raise the minimum wage. After all, it was the humane thing to do. It was certainly the liberal thing to do.
High fuel prices? I wonder where those came from. Congress is all over the oil companies for being profiteers. It's my understanding from statistics I've heard on the radio that the oil companies make a 4% profit on a gallon of gasoline, and that the government (federal, state, and local together) pulls in a 15% tax on a gallon of gasoline. I've heard other numbers bandied about, with the oil companies making as much as 8% profit. The government still takes a significant cut, and they also tax the profit the oil companies make in the form of corporate income taxes.
Whether those numbers are accurate isn't the real question though. John McCain suggested a summertime moratorium on the federal gasoline tax. That's a nice idea, but of course once summertime is over the tax would be back. It's a very short-term thing, and not very meaningful either. I paid $4.29 per gallon for regular unleaded gasoline (87 octane and 10% ethanol) today for gas. I put over 11 gallons in my tank, for a total bill of just under $50.00. Getting rid of the federal gasoline tax would have saved me a whopping $2.00.
The price of a barrel of crude oil topped $130.00 within the last couple of days. And that's before refining it into heating oil, motor oil, tar, gasoline, kerosene and a host of other products. Most of our oil comes from countries that allegedly hate us. Congress — on both sides of the aisle — is upset about the cost of gasoline, and also wants to end our dependence on foreign oil.
Of course, the Democrats want to end our dependence on foreign oil, by forcing us to consume less of it. But they don't want to give us any viable replacements for it, like nuclear power. They want to force us to stop using hydro-electric power because fish can't swim over dams very easily. They don't want us to use wind power — well, actually they do, as long as the wind farms aren't in their neighborhoods. They want us to stop using coal. They want us to stop using natural gas. A lot has been said about "renewable" sources of energy, particularly biofuels. The thing is, it seems as if the Democrats don't want us to develop any domestic energy sources using technology that already exists, they don't want us to develop our own supply of oil using domestic sources. Instead we have to develop new energy sources using new technology.
We're told that it could be ten years before domestic oil supplies come online (assuming we start drilling today), and that's an argument for not bothering to develop domestic supplies, increasing our dependence on the largesse of "nations that hate us". But fusion power (touted as a clean alternative to nuclear energy?) is decades away, a hydrogen economy still has to have an infusion of energy from other sources, and other technologies are also decades away — so we must start developing them now.
Why not do both? Why not develop our domestic supplies AND encourage alternative energy technologies? Chances are pretty good that the oil will be ready before the pie-in-the-sky technologies that haven't even become glimmers in the engineer's eyes yet. It's estimated that there's over a 200 year supply of oil under our own red-white-and-blue clad feet. That would give us plenty of time to develop the technologies to become totally independent of oil, both foreign and domestic.
And if we had our own oil supply, the notion of a "war for oil" would be laughable. Hugo Chavez would be a lot less arrogant if we weren't buying his product. The oil in the middle East would be a lot less valuable as a strategic weapon too. Maybe, just maybe, world oil prices would actually go down if the supply went up?
Oh that's right. Economics isn't exactly Congress' strong suit. After all, they honestly think you can end poverty by punishing industry and rewarding sloth. That's why we take more and more from those who earn and invest to give it away with no strings attached to those who haven't got a clue what to do with it in the first place, except maybe buy another "40" or toss it all into another scratch ticket.
I actually watched that happen not too long ago. A homeless man that I had become familiar with a few years ago (he's always making the rounds in the same neighborhoods) had been given a few bucks — ostensibly for food. Did he buy food? No. He spent it all on scratch tickets. And not one of them was a winner. Needless to say, he left the store hungry and muttering about how bad his luck was. It was sad. Especially when he could have gotten a meal with the money instead.
Venezuela is in the news again too. It seems that the economy there, which had a brief surge thanks to oil revenues is going back into the tank. It's horrible what socialism does to a nation's economy. Take away the fruit of a man's labor and keep it for the government, or trample it and give the dross to the poor and what do you get? Fewer people willing to labor for nothing, and more people going without.
But back to Mr. Obama…
“We did not arrive at the doorstep of our current economic crisis by some accident of history,” Mr. Obama said here to 900 invited guests, a relatively small audience for him. “This was not an inevitable part of the business cycle that was beyond our power to avoid. It was the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.”
He's right about the tired and misguided philosophy that has dominated Washington for far too long. He just hasn't figured out what the name of that philosophy is…
Hey, Senator Obama! I'll give you a hint. That tired, misguided philosophy's initials are…
That's right. The socialist philosophy of the Democratic party is the one responsible for the current economic crisis. And, no matter how they try to place the blame at President Bush's feet, or to tar John McCain with the brush of continuing the president's "failed economic policies", they can't change it. After all, the President may propose a budget, but only the Congress can enact one. It seems that Senator Obama should be indicting himself and his peers when he talks about the economy. After all, he and they made the crisis.
Senator Obama urges "change". He speaks of a tired and misguided philosophy dominating Washington for too long.
Vote for Change this November. Vote for ANYBODY BUT Barack Obama.
Trackback URI for this post: http://perrinelson.com/track.aspx?postid=1170
Permalink URI for this post: http://perrinelson.com/2008/6/10/1170.aspx
Subscribe to this entry's comment feed
M. Simon responded with: Fusion and Oil
susan responded with: unemployment stats
Unemployment is a statistic but any one person looking for a job is not a statistic. There are so many good jobs out there if you know where to look.
You see? I hope people dont let stats stop them from doing.
David responded with:
Gasoline taxes a significant portion of the price at the pump?
Well, yes. Though as the price of gas goes up ($3.80/gallon this a.m. at the station I use), the percentage of gasoline taxes goes down--9.3% state and fed, using Missouri state taxes+feds.
"The government still takes a significant cut, and they also tax the profit the oil companies make in the form of corporate income taxes."
And payroll taxes, which companies pay a portion of as well. And tax complaince costs (an indirect "tax" driving costs up) can be directly laid at government's door. All told, somewhere--depending on some wildly variable tax circumstances and how wily a company's legal staff is--just count on somewhere between 22% and 29% of the cost of oil companies' products being directly attributable to "feddle gummint" greedy paws.
Yes, we do have several avenues out of the mess our Beloved Leaders have created, and yes, we ought to take several of those ways at once, because if we do not do so NOW, a decade down the road we may not be able to.
Perri Nelson responded with:
What I find truly amazing is two things.
First, anyone who benefited from a real education was taught HOW to think rather than WHAT to think as our current education system seems to be bent, and so is able to figure out that the big part of the mess we're in is directly attributable to Congress' meddling. Despite this, people still demonize the oil companies and even some allegedly intelligent people get suckered into this trap. Bill O'Reilly comes to mind.
Second, Congress can't possibly be unaware unless they're truly idiots. I'm willing to give them the benefit of the doubt and assume that they're intelligent individuals, but that leaves me with the inescapable conclusion that the mess we're in is actually something that they WANT. The part of this that amazes me is, if they're truly intelligent they must realize that they can't continue to pull the wool over the public's eyes forever.
Perhaps this explains the need that our Congress seems to have to meddle in the public education system despite having ZERO authority to do so under the Constitution. If they can fill young minds with propaganda rather than teaching people HOW to think half of their cover-up and blame-displacement game is won.
Eventually though, there will come a time of reckoning. More than anything, that's why I even bother to write about this stuff, even though at times it feels like I'm just saying the same thing over and over again.