Government’s Economic Misinformation Campaign Peaks
Americans are pretty used to getting bogus economic information from their government and the barons of Wall Street. But today, May 14, 2008, this misinformation campaign may well have peaked. We were informed that inflation during April was “modest,” and only increased a piddling .02 percent.
How is this possible, you might ask? Or at least, you might ask that if you lived in the real world rather than Economist Land. Here’s the answer. A truly incredible one.
Food prices went up more than at any time in the last 18 years during April. Housing, medical care and clothing costs were also all up substantially. Natural gas prices shot up, too. But gasoline, according to the number crunchers charged with feeding us economic data, gasoline prices dropped by a hefty 2 percent during April and that was the prime cause of the overall modest inflation increase for the month.
Gas dropped 2 percent, you exclaim? Are they nuts. It was way up. Anyone who bought gas during April knows that.
Well, yes. The average price of gas did, in fact, increase by a whopping 5.6 percent during April. But, according to the Commerce Department, which is charged with fudging numbers in this realm, on a seasonal basis it really dropped 2 percent. Got that?
Far be it from me to gainsay the wisdom in this statistical approach. Personally, I don’t know anyone who buys gas on a seasonal basis, only on a daily basis. It might be worth noting, however, that this kind of thing makes the people playing so very, very cute with official numbers look like con artists. And generally speaking, this is not a good way for supposedly professional economists to look.
Or Americans will begin taking them even less seriously than is already the case.
‘Retribution, swift vengeance, eternal malice were in her whole aspect, and spite of all mortal men could do - the said solid white buttress of her forehead smite the ship’s starboard bow.’
(apologies to Moby Dick)
It seems that a global consensus against Senator Hillary Clinton is forming, after her razor-thin victory in Indiana and significant defeat in North Carolina.
This editorial from Lebanon’s Daily Star not only lambastes Hillary for pandering - pointedly in regard to her threat to ‘obliterate’ Iran - but it uses her bad example as a way of pointing out a glaring deficiency in Democratic government as it is presently conducted.
“Whatever she does in the future, nothing will erase her demonstration of the worst aspects of American politics - particularly her recent statement that she would ‘obliterate’ Iran if it ever threatened Israel with nuclear weapons … The context of her threatening statement is telling, in that it exposes the weak link in America’s democratic system - or any democratic system: the inclination of candidates running for public office to pander to the basest prejudices, sentiments and fears of the voting public.”
“The United States and Iran may disagree about many things; but for one to use threats of obliteration as a policy toward the other strikes us as a rather crude and offensive strategy, especially for a world power.”
One interesting question to ponder is whether Hezbullah’s takeover on Friday of much of Beirut, will also put an end the the independence of the pro-West Daily Star.
EDITORIAL
May 8, 2008
Lebanon - The Daily Star - Original Article (English)
In the coming days or weeks, Hillary Clinton’s fate as a presidential hopeful will be decided. But whatever she does in the future, nothing will erase her demonstration of the worst aspects of American politics - particularly her recent statement that she would “obliterate” Iran if it ever threatened Israel with nuclear weapons. The substance of the New York senator’s words are hard to evaluate due to the hypothetical nature of the damage she threatens to impose. Were she ever to become president and order such an attack, many other Americans would have to agree with the decision in order for it to be implemented, particularly the top military brass.
The context of her threatening statement is telling, in that it exposes the weak link in America’s democratic system - or any democratic system: the inclination of candidates running for public office to pander to the basest prejudices, sentiments and fears of the voting public. Clinton has been a particularly dynamic panderer this year, jumping on every opportunity to make her appear to be a woman of the people, whether drinking shots of whisky or calling for gas-tax holidays. In this case, she chose to play on widespread American opposition to Iran, which is in turn a function of several factors. In American politics these days, Iran is the bad guy par excellence, whether for its role in Iraq, its strategic ambitions in the Middle East, its nuclear policy, its rhetorical threats against Israel, or to its a general assertion of Islamist identity and politics. Americans also remain angry at Iranians for overthrowing the Shah in 1979 and then taking and holding Americans hostages for many months.
May 6th, 2008 by MICHAEL STICKINGS, Assistant Editor
In case you missed it, here’s what Hillary had to say about her idiotic gas-tax holiday proposal on ABC’s This Week:
STEPHANOPOULOS: Economists say that’s not going to happen. They say this is going to go straight into the profits of the oil companies. They’re not going to actually lower their prices. And the two top leaders in the House are against it. Nearly every editorial board and economist in the country has come out against it. Even a supporter of yours, Paul Krugman of The New York Times, calls it pointless and disappointing.
Can you name one economist, a credible economist who supports the suspension?
CLINTON: Well, you know, George, I think we’ve been for the last seven years seeing a tremendous amount of government power and elite opinion basically behind policies that haven’t worked well for the middle class and hard-working Americans. From the moment I started this campaign, I’ve said that I am absolutely determined that we’re going to reverse the trends that have been going on in our government and in our political system, because what I have seen is that the rich have gotten richer. A vast majority — I think something like 90 percent — of the wealth gains over the last seven years have gone to the top 10 percent of wage earners in America.
STEPHANOPOULOS: But can you name an economist who thinks this makes sense?
CLINTON: Well, I’ll tell you what, I’m not going to put my lot in with economists, because I know if we get it right, if we actually did it right, if we had a president who used all the tools of the presidency, we would design it in such a way that it would be implemented effectively.
So, everyone who knows anything about it, and isn’t just in it for the votes, opposes it, including Krugman, one of her leading supporters in the punditocracy. And Hillary doesn’t give a damn. She’s fightin’ for “hard-working Americans,” while everyone who criticizes her is part of some out-of-touch elite. And the economists? Damn them, too (unless they agree with her on, oh, say, health care or something, in which case she’s more than happy to have them on her side).
It’s bad enough that she’s running like a Republican. Now it seems she’s given up on reality altogether — or at least that’s the way her pandering comes across. She may not have embraced faith-based “reality” in reality — it’s just politics, you know, and she’s a faux populist — but the fact (in our fact-based reality) that she’s using this issue to distinguish herself from Obama (who refuses to sign on to such dangerous nonsense), as well as to attack him, says a lot about her candidacy, not to mention what she has become as a politician.
The gas tax holiday which many experts and politicians say is an ineffective idea and could make things worse is now forefront in the battle between Senators Hillary Clinton and Barack Obama for votes in the Indiana and North Carolina primaries.
Hillary Clinton and John McCain, each of whom has a hundred times the family money of Barack Obama, are out there claiming he is out of touch with the poor.
After drinking boilermakers with the boys a while back, Sen. Clinton is now telling Indiana’s blue-collar voters that “politics has become too abstract, too generalized” in Obama’s elitist world.
“Most people get a lot of meaning in their life from the work that they do,” Clinton says. “People want to be seen, they want to be appreciated, they want to be acknowledged.” And she is out there acknowledging the hell out of them with girlhood tales of helping out in her father’s fabric-printing plant and, according to the New York Times, “sounding less like a Wellesley alumna than Roseanne Barr’s old sitcom character, the den mother of her factory floor.”
Meanwhile, McCain is calling Obama insensitive to poor people by not endorsing his proposal to suspend the federal tax on gasoline this summer, a refusal “to giving low-income Americans a tax break, a little bit of relief so they can travel a little further and a little longer, and maybe have a little bit of money left over to enjoy some other things in their lives.”
McCain, who is still fielding questions about using his wife’s company jet during the primary season, and Clinton, who lent her campaign $5 million from her pin money, seem determined to educate Obama on what he failed to learn as an organizer in poverty-stricken communities.
Ah yes… the lovely sounds of spring. There are birds a-chirpin’, bees a-buzzin’, blossoms a-burstin’, and the biannual bonus display: Big Oil a-squirmin’.
Executives from San Ramon’s Chevron Corp. and four other major oil companies defended their record profits Tuesday before a hostile Congress, led by Democrats who criticized the oil giants for doing little to cut gas prices or invest in renewable energy.
It would be funny, if it were… well… funny. (Though it is slightly amusing that the Democrats weren’t chirping this song while campaigning in Texas).
Too bad nobody kept the t-shirt, because it looks as if the stars may have again aligned this year. The combination of a presidential election and cumulative record oil company profits may very well take us down the treacherous but familiar road of windfall profits taxes and pulled incentives.
We never learn… and with the ever-tighter focus on renewable energy and a green economy, there’s an added layer of complexity.
While some folks evidently understand that getting oil out of the ground requires rather more than a spoon, an unfortunate percentage of the population still seems to think crude can just be scooped from puddles. The reasons behind our untenable choices — exploration and drilling in currently protected areas vs our lethally symbiotic relationship with external providers — just aren’t well-understood.
“But Polimom, what about green energy?”
Why… Yes!! There is a third possibility, and it’s definitely the direction we need to go… but there’s a problem (my emphasis):
“Why is Exxon Mobil resisting the renewable revolution?” he asked.
Simon responded that Exxon Mobil had pledged $100 million to Stanford University for a project to study renewable energy and climate change. But he said until renewable sources become more economically competitive, the company will focus on its core oil business.
Right there is the key to understanding the entire equation.
You think $3.287 is high? Sorry, but even factoring in the difficult-to-assess geopolitical and environmental costs, it’s not high enough. Current gas prices (and everything else related) are still lower than current technology can deliver for renewable sources.
The best thing that could happen, strangely enough, is for prices to go higher yet. Until we cross above the point where the cost of renewable energy is less than non-renewable, we’re stuck… and no amount of election year grandstanding will get us out of the spring mud.
A $12 billion judgment on behalf of ExxonMobil against Venezuela’s state oil company has once again set off President Hugo Chavez, who, according to this news account from Venezuela’s leading newspaper El Universal, said, amongst many other things, ‘If you end up freezing (Venezuelan assets) and it harms us, we’re going to do harm to you. Do you know how? We aren’t going to send more oil to the United States. Take note, Mr. Bush, Mr. Danger … We cannot be a government of wimps. No! Our best weapon is to counterattack and begin shooting; we are going to counterattack, and therefore I said to my ministers, come on!’
By Mariemma Ramos Nava
Translated by Miguel Guttierez
February 10, 2008
Venezuela - El Universal - Original Article (Spanish)
Barinas: President Hugo Chavez threatened today to suspend oil exports to the United States if Exxon Mobile manages to seize the assets of Petroleum of Venezuela S.A. (PDVSA) through the courts.
[Editor’s Note: Chavez refers to a series of court orders obtained by Exxon Mobil Corp. in Britain, the Netherlands, and the Dutch Antilles, freezing up to $12 billion in assets of Venezuelan state oil firm PDVSA. The injunctions were sought by Exxon in anticipation of an arbitration ruling by the International Centre for Settlement of Investment Disputes over a compensation claim. The rulings mean that Venezuela can’t sell Read the rest of this entry »
Is the United States missing a chance to redeem its global reputation by obstructing a climate deal at a U.N. conference in Bali? Along with Al Gore, the editorial board of Saudi Arabia’s Saudi Gazette certainly thinks so.
“Of course, Bush was bought and paid for by the time he was elected President in 2000 … when it comes to the Bush Administration, the word ‘moral’ is one that doesn’t exist in its vocabulary.”
EDITORIAL
December 14, 2007
Saudi Arabia - The Saudi Gazzette - Home Page (English)
The United States has the world’s largest economy, the world’s mightiest military and the world’s largest media machine. It is also the world’s largest emitter of greenhouse gases. And now, it’s the world’s greatest impediment to reaching agreements on stemming the increasingly frightening decline of the world’s environment.
Reports coming out of the U.N. climate conference in Bali are disturbing, to say the least WATCH . Former U.S. Vice President Al Gore, fresh from his visit to Sweden to accept the Nobel Prize for his work on the environment, stated categorically in a speech delivered to delegates that, “My own country, the United States, is principally responsible for obstructing progress here in Bali WATCH .”
And the European Union is threatening to pull out of U.S.- sponsored climate change talks unless the Bush Administration agrees to specific emissions targets, something it currently refuses to do. Such targets, the Bush minions say, would necessarily limit the scope of future talks and, incidentally, wreak havoc on the U.S. economy.
Of course, Bush was bought and paid for by the time he was elected President in 2000, and the secret meeting his Vice President, Dick Cheney, held with U.S. energy moguls at the start of the Bush presidency was further proof that profits - not the health of the planet - are the main focus of this administration.
The Bush Administration has been clueless on virtually every issue the country and the wider world have faced over the past seven years. From Iraq to stem cell research to health care to the environment, George Bush has shown the sensitivity and insight that only a person who has lived his life in affluent isolation could. In other words, he has the capacity for neither.
The problem here is that personal wealth will do little to save anyone from what could be a true environmental disaster lurking just around the corner.
September 27th, 2007 by BRIJ KHINDARIA, International Columnist
Iraq is not the only oil war at this time. New political battles for oil and gas are emerging as tensions rise between Western oil and gas conglomerates and the governments of non-Western countries, which are major future suppliers of these vital resources.
The latest shock to the Western oil majors came from new measures begun this week in Kazakhstan to unilaterally violate international energy contracts, if its government decides that foreign companies are not obeying the rules. In Russia, a new law later this year will disallow companies owned 50% or more by foreigners from bidding in auctions for strategic deposits.
Russia has already forcefully renegotiated almost all foreign oil and gas contracts since 2003. Gazprom, its gas conglomerate, causes fear in Europe because of its bold plans to buy oil and gas distribution and other companies.
The European Union’s executive Commission views this as aggression and is opening investigation of Gazprom for misuse of market power to control segments of Europe’s oil and gas markets. But these are early days and the charges are a long shot.
The trend to contract revisions is spreading among the former Soviet republics, which are likely to be the world’s leading new sources of supply. However, no emerging supplier is likely to nationalize resources or make dramatic demands like Russia has dared with foreign energy investors.
Restrictions on the participation of Western majors in extraction are increasing with news laws in Bolivia and Venezuela, which are also trying to better redistribute oil revenues. Other key producers like Kuwait, Mexico, and Saudi Arabia do not allow foreign participation in oil and gas extraction. Some that do permit foreign investment are under embargo e.g. American companies are not allowed to invest in Iran or Sudan.
The Kazakh move was prompted in part by cost overruns and a five-year delay to late 2010 of a huge contract at Kashagan, run by the Italian major Eni, Exxon Mobil and Royal Dutch Shell. The government is threatening to impose $10 billion in fines if negotiations due to close on October 22 end in failure.
Some Europeans and American Congressmen are citing security reasons for objecting to Gazprom’s inroads since it is State-owned. In turn, Kazakhstan is citing security reasons to prevent European companies from obtaining lucrative contracts which are then not fully honoured, placing financial strains on the government. Since suppliers like Kazakhstan depend heavily on oil revenues to finance economic development and their hold over power, they do not appreciate delays in obtaining those revenues.
Chevron chief executive David O’Reilly rushed to the Kazakh capital last week to ensure that his company’s huge investments in another Kazakh project at Tengiz would not be touched for “ecological reasonsâ€. This was the argument used by Russia in a dispute with BP in December 2006 to force a cut in its stake in the $20bn Sakhalin-2 scheme in favour of Gazprom.
Russia supplies over one-third of Europe’s natural gas and is expected to become more prominent in coming years. It is already a major supplier to Germany, Central and East Europe, and Britain. Gazprom caused special heartburn earlier this year when it showed interest in buying Centrica, which owns British Gas, a family jewel.
The Russian company has been accused of playing politics by using its market power to intimidate the Ukraine and Belarusse governments and remind European politicians of their electors’ economic dependence on Moscow’s goodwill. Security of energy supply is now a key political issue between the European Union and Moscow.
Despite their political power, Western governments are unable to stall or stop their energy vulnerability. Britain could only stand by as Moscow squeezed BP. Energy economy stresses are reviving plans in Europe and the US to expand nuclear power regardless of anti-nuclear lobbies. That presages some domestic political turmoil.
Whatever happens, none can prevent a loss of bargaining power in oil and gas compared with the new producers over the next 15 years because data comparisons suggest that oil and gas resources in industrialized countries are being depleted ten times faster than in other countries. This growing dependence on imports is bad news with oil prices already well above $70 a barrel.
Industrialized countries consume more than half of global oil and gas output but possess only a quarter of production. They have less than 8% of the world’s remaining proved reserves of oil and gas. In contrast, developing or transition economies were 21 of the top 25 countries ranked in 2005 by total remaining proved reserves.
With a mess in Iraq, quarrel with Iran and the declining political clout of their governments, Western companies are finding it more difficult to access those remaining reserves in countries that have been Russia’s sphere of influence for decades if not centuries.
New polls show Americans unhappy with just about everything. “A very sour mood†is the Gallup conclusion.
Only 24 percent say they are satisfied “with the way things are going,†a figure that hasn’t been this low since 1992. At that time, Bill Clinton’s advisers saw a reason (“It’s the economy, stupidâ€) and used it to get to the White House.
According to Gallup, Americans now worry about the economy, their jobs, high gasoline prices and, since politicians started yapping about it, immigration. Yet, by most measures, the economy is doing well enough, and so is the stock market.
It’s easy to see how the war in Iraq is causing so much frustration, with voters giving the President low marks and the Congress they elected to fix things even worse approval ratings, an all-time low of 14 percent.
What’s harder to measure is the free-floating anxiety behind the numbers. How much is due to the Republican drumbeat of “If we don’t fight them there, they’ll follow us here?†How much to Democratic impotence and in-fighting over how to get us out of Iraq? How much to the noisy distrust and disgust over everything in our public life, fueled by caustic cable-news anchors and bilious bloggers competing to be heard?
Our national mood disorder isn’t helped by the endless Presidential campaign, which is getting more negative as candidates feel the pressure mounting. But somewhere in all this, there may be an opportunity for one of them to do what Ronald Reagan did in the wake of Vietnam and rampant inflation with a “Morning in America†vision.
If Gallup is right, the country could be ready for it.
If there was ever truly bad news for the White House and the Republican party, the latest Gallup poll is definitively it:
A new Gallup Poll will only reinforce those who claim that while the rich get richer most Americans don’t feel they are sharing in the growth in our economy. The stock market may be climbing and the unemployment remains relatively low, but 7 in 10 Americans believe the economy is getting worse — the most negative reading in nearly six years.
Only one in three Americans rate the economy today as either excellent or good, while the percentage saying the economy is getting better fell from 28% to 23% in one month.
You don’t want to overstate a poll and use the word “catastrophic” but this comes close to a required usage. The most fundamental axiom in politics is that people “vote their pocketbooks.” A good economy has sometimes carried a weak or beset President or party through troubled times.
But both the polling results and the trending here suggest that neither optimistic official or party statements about the future or statements about how good things are in the economy are producing desired results where results count — in the attitudes of most voters:
Gallup adds: “For the first time this year, a majority of Americans are negative about the employment market, saying it is a bad time to find a quality job.”
The 70% negative rating is up 10 points since April. Also, just in the past month, there has been a significant five-point drop, from 28% to 23%, in the percentage saying conditions are getting better.
And if you look at the specific areas of dissatisfaction, it further spells t-r-o-u-b-l-e:
“When asked about the most pressing financial problems their family faces today, Americans mention healthcare costs, lack of money or low wages, and oil and gas prices,” Gallup reports. “Healthcare costs are mentioned by 16% of Americans while 13% say low wages and 11% say oil and gas prices. These percentages are virtually unchanged from last month.”
All of this suggests (again) that unless there is some major shift for the better, Democrats will be running on George Bush’s record in 2008 and Republicans will be running away from it. And New York Mayor Michael Bloomberg may have some fun pointing to how both parties have seemingly made a mess of it.
Americans are obsessed with gas prices. If the price rises a bit, an immediate firestorm is the result. At this moment, I am told in today’s open thread, “gas prices are now at an all-time high in the US: $3.18 per gallon.”
$3.28 per gallon = $1,1312 per liter
$1,1312 = euro 0.840094
Gas prices in the Netherlands: euro 1.523
euro 1.523 = $2.05055
We pay, per liter, 1,21 euros more. That’s $1.63. Per liter.
