Katrina Aftermath

[Thomas Linton]

Please tell us how to "solve" the problem of rising energy prices.

The solution is better appreciated if you think of it as a sinking dollar rather then rising oil.

Why? The dollar has not lost significant value in months against the Euro or Yen. In fact, IIRC, the Euro has fallen against the Dollar this year. Oil has risen in cost as measured in all peg currencies. Hard to think that way, but it could certainly be me.

Part of the solution involves the reindustrialization of our nation, a reorientation of laws and regulations so as to once again weigh in favor of safe development over blind environmental conservatism.

I thought your theme is how Bush was somehow to be blamed for rising energy costs -- "Let them eat cake" and all that? I reailize that Presidents receive credit AND blame irrationally for developments/events over which they have little control, but it seems unfair to blame Bush for regulations described as "blind environmentalism," whatever one means by that expression. He's the "Green's" boogyman.

And, BTW, he said not to drive this holiday to prevent temporary shortages, not as a solution to rising prices. I'm driving as little as possible so as to minimize paying #@@!! prices.

Part involves a change in our own social structure: perhaps a retrun to single income families (less driving - more stable - hence more productive/efficent), perhaps a series of protections, infrastructure, or acceptance for things like telecommuting (why would you need to drive to an office building - what can you do there that you couldn't do from home) - build new housing to include Class I (TBD) workspaces, as they do bathrooms, kitchens, etc., and get industry to buy into using them.

Single-income families, while I regret their passing, would be a heck of a goal for a President. Good luck. As for "work at home to cut energy use, does that mean cottage industries? Every mother with a hand loom? We were discussing "reindustrialization," Yes? Works for white collar, and that's good, but seems questionable for "reindustrialization." The "Boss" sang TWENTY YEARS AGO, "Those jobs are gone boys; ain't ever comin' back." (Wait, Bush wasn't President then! D's controlled Congress. Oh well.)

There is no scarcity of fuels, we just have do a better job of harvesting what is available to produce what we need.

Few -- in either party -- would agree that supply of gasoline is not an issue. But rejoice; gasoline is now at price levels that make development of alternatives practical. A "Green" pal of mine is sooooo happy. "Finally!"

Energy companies haven't invested squat in this country in decades, they have been sitting on the fat A$$ milking the cow, and it is time to encourage them to upgrade.

Government regulation have made it unprofitable to build more refineries. Investment flows to profit as water to low ground. (Damn! That's a good reason not to rebuild NOLA in is last location.) That is the nature of capitalism. (My Green pal approves of the failure to build refineries because he hates refieneries almost as much as he hates coal-buring power plants and nuke power plants But, then, he sees people as a disease to be cured.)

This is tough stuff. My kid is set in a service industry (LEO) that can't be shipped oveerseas, but what about his kids? How do we compete with folks paid $.60/hr.? Mexico can't.

(And unemployment in Europe, where they are free of the "curse" of Bush and the horrendous GOP, was over twice that in the U.S. before Katrina.)

Trouble, trouble, trouble, and gas prices are a small part of it.

 

[munk]

Yeah, but this doesn't mean WalMart will close, does it?





munk

 

[not2sharp]

but it seems unfair to blame Bush for regulations described as "blind environmentalism,"

I am not blaming Bush for what he has done, I am calling him on the deck for what he has failed to do.

As you have noted:

"Government regulation have made it unprofitable to build more refineries. Investment flows to profit as water to low ground."

So why hasn't our President made the reform of those regulations the solution set for the current energy crisis. That would be much more meaningful then "pretty please conserve gas for the holidays"

As for profits, business is conducted under rules of policy. Change the policy to restrict foreign competition (as in tariffs, imports limits, import bands, etc.) and business will invest to earn those profits right here in the good old USA.

n2s

 

[munk]

"Government regulation have made it unprofitable to build more refineries. Investment flows to profit as water to low ground." Linton

So why hasn't our President made the reform of those regulations the solution set for the current energy crisis. That would be much more meaningful then "pretty please conserve gas for the holidays" N2Sharp

N2Sharp, you know Bush and the Republicans have tried for years to ease the environmental restrictions that make building a new refinery non cost productive for the Oil Industry. He couldn't get his energy bill signed for 3 years, and I don't know what became of this particular item of contention between the parties. A loosening of enviromental protections regarding the standards for new refineries would never pass the Democrats in the Senate.


munk

 

[not2sharp]

He couldn't get his energy bill signed for 3 years

Now is the time to put it back on the table.

n2s

 

[munk]

He couldn't get his energy bill signed for 3 years- munk

Now is the time to put it back on the table. >>> N2Sharp

To my mind, the Republicans have a hard time historically of saying the right thing at the right time. This would be the right time. They'll blow it.
For some reason, even when they have good ideas, the Republican Party has a hard time getting them across.


munk

 

[fixer27]

He couldn't get his energy bill signed for 3 years- munk

Now is the time to put it back on the table. >>> N2Sharp

To my mind, the Republicans have a hard time historically of saying the right thing at the right time. This would be the right time. They'll blow it.
For some reason, even when they have good ideas, the Republican Party has a hard time getting them across.


munk

Because Republicans don't have the media megaphone the Dems have.
Remember Social Security reform? Before there even was a plan the media
was climbing all over it.

 

[Thomas Linton]

. . .
As for profits, business is conducted under rules of policy. Change the policy to restrict foreign competition (as in tariffs, imports limits, import bands, etc.) and business will invest to earn those profits right here in the good old USA.

n2s

See Hawley-Smoot Tariiff
See international tariff wars
See Great Depression

It's been tried. Doesn't work except to stop world trade leading to mass unemployment. (And that was when we were self-sufficient in oil, copper, and aluminum.)

Besides, neither party will support such measures, having learned from history. Both parties are officially for "free trade."

If this was easy to fix , Kerry would have come up with a concrete plan to improve things.

It's like our balance of trade. It went negative in the late 1950's, and it's been down hill ever since. We are now a net debtor nation. God save us if foreigners decide investing here is not a good idea because we live on the money they invest.

 

[not2sharp]

See Hawley-Smoot Tariiff
See international tariff wars
See Great Depression

See that is the problem we have when trying to have an informative exchange. We have been so preprogrammed by the powers-that-be that meaningless associations immediately pop into mind.

The seed of the great depression was planted during the peace settlement of WWI. It was a global meltdown which had little to do with Hawley-Smoot, or any other US legislation. We discovered that the issue had been compounded for us domestically by the free association of the banking and investment industries, and by inadequate reserve deposits and other safeguard. But, the real problem was the creation of unrealistic global expectations with the close of the war. The global financial system had banked on a series of agreements which in effect were impossible to carry through.

John Maynard Keynes, the father of Keynesian Economics, had participated in the drafting of that settlement as a young man in 1919 and he warned that they were setting the stage for a global disaster to no effect.

He published his thoughts in 1919 in his Economic Consequences of the Peace. It is a great read; and, if anyone is interested you can read it here:

http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/keynes/peace.htm

(back on subject)

Tariffs are a standard policy tool. Virtually all of our trading partners have them in place, and most are growing far faster then we are. The arguement that they should be taken off the table removes a useful tool, that while by no means a cure all, can be as useful as penecillian when properly used.

I wonder where all of this anti-tariff histeria originates since our nation has had tariffs in place during its most productive years. Which perhaps brings us to another interesting old read:

Link:
http://www.amazon.com/exec/obidos/t...bs_b_2_1/104-7922781-1911136?v=glance&s=books

n2s

 

[Thomas Linton]

See Hawley-Smoot Tariiff
See international tariff wars
See Great Depression

See that is the problem we have when trying to have an informative exchange. We have been so preprogrammed by the powers-that-be that meaningless associations immediately pop into mind.

The seed of the great depression was planted during the peace settlement of WWI. It was a global meltdown which had little to do with Hawley-Smoot, or any other US legislation.

[Keynes]

He published his thoughts in 1919 in his Economic Consequences of the Peace. It is a great read; and, if anyone is interested you can read it here:

http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/keynes/peace.htm

(back on subject)

Tariffs are a standard policy tool. Virtually all of our trading partners have them in place, and most are growing far faster then we are. The arguement that they should be taken off the table removes a useful tool, that while by no means a cure all, can be as useful as penecillian when properly used.

I wonder where all of this anti-tariff histeria originates since our nation has had tariffs in place during its most productive years. Which perhaps brings us to another interesting old read:

Link:
http://www.amazon.com/exec/obidos/t...bs_b_2_1/104-7922781-1911136?v=glance&s=books

n2s

I don't feel slightly hysterical. Just tired from three hours of grass-cutting.

I have read J.M. Keynes' books and articles with a few exceptions. He was an economics "god" in the 1960's. The profs taught that there would be no more great economic dislocations. The economy was a machine that we know how to run. Keynes had taught us how to do it -- they said.

I just do not agree that the Versailles Treaty created the Great Depression. Germany, for example had recovered from its post-war malaise and had a booming economy when the rounds of tariff wars, kicked off by Hawley-Smoot, began.

We set tariffs high enough to stop their stuff. They won't raise theirs? Why not?

As for "standard policy tool." You are absolutely correct. Like wars, tariffs are standard policy tools. Were then. Are now. That doesn't mean they always work.

Neither party will support traiff barriers to restore manufacturing.

(Funny you should bring up Choate's book. Fear that Japan had too much influence via former GOP officials was part of my motivation to vote anti-GOP in 1992. Little did I know that Bubba would sell out to China interests instead. )

Yours truly,

Meaningless.

 

[munk]

Thomas, is there any reason to believe this hurricane disaster will be the straw that broke the Camel's back? I don't see it. I think the economy will churn through.

Raising taxes would be a mistake.



munk

 

[not2sharp]

We set tariffs high enough to stop their stuff. They won't raise theirs? Why not?

We don't current export very much of anything, and if you actually check you will see that most of our trading partners aready have tariffs in place ranging from 40-80% of the value of USA exports. We are the ones asleep at the switch. It is hard to bargain for lower tariffs for your goods when you leave yourself with nothing to bargain with.

n2s

 

[Thomas Linton]

Thomas, is there any reason to believe this hurricane disaster will be the straw that broke the Camel's back? I don't see it. I think the economy will churn through.

Raising taxes would be a mistake.



munk

Geez, if I only knew.

It's a big economy.

In today's dollars, Northridge earthquake was almost as bad in terms of property loss but not in loss of life or displaced persons. Houses could be rebuilt at once rather than after months and months of delay. (I head six months to pump out the standing water and a year for the soil to stabilize enough to rebuild.)

The spike in energy prices is the monster. Demand for gasoline was at record levels before the storm (9.5 million gallons/day). The price rise is out of proportion to the actual diminution of supply. There seems to have been relatively little damage to the refineries and petroport facilities. Newspaper today said most of the refineries impacted by the storm will be up and running shortly. If the medja can be trusted, few drilling platforms were damaged (3 of 34?). All that should help. Locally, SUV sales just STOPPED, and if that is a national trend, it helps.

Hopefully, the political dance over national energy policy will stop and something logical get done.

The vacancy in the Chief Justice position may prove distracting.

 

[munk]

The vacancy in the Chief Justice position may prove distracting.>>>
Thomas Linton


It just doesn't seem as important as it once was, but I'll get over that.


munk

 

[Thomas Linton]

We set tariffs high enough to stop their stuff. They won't raise theirs? Why not?

We don't current export very much of anything, and if you actually check you will see that most of our trading partners aready have tariffs in place ranging from 40-80% of the value of USA exports. We are the ones asleep at the switch. It is hard to bargain for lower tariffs for your goods when you leave yourself with nothing to bargain with.

n2s

In 2004, the U.S. exported $807 billion in goods and $344 billion in services (seasonally adjusted). A trillion here, a trillion there; pretty soon you're talking real money.

 

[not2sharp]

Mostly, software, entertainment, and food....very little in manufactured consumer goods.

n2s

 

[not2sharp]

it just doesn't seem as important as it once was, but I'll get over that.

Munk,

The Chief Justice passed tonight, leaving us with two Supreme Court vacancies.

n2s

 

[fixer27]

it just doesn't seem as important as it once was, but I'll get over that.

Munk,

The Chief Justice passed tonight, leaving us with two Supreme Court vacancies.

n2s

Not to mention thousands dead from Katrina.

 

[munk]

I didn't know. I should have caught it when Thomas said Chief.

Yes, two vacancies is a distraction.



munk

 

[Thomas Linton]

We set tariffs high enough to stop their stuff. They won't raise theirs? Why not?

We don't current export very much of anything, and if you actually check you will see that most of our trading partners aready have tariffs in place ranging from 40-80% of the value of USA exports. We are the ones asleep at the switch. It is hard to bargain for lower tariffs for your goods when you leave yourself with nothing to bargain with.

n2s

I actually checked. 12% and less (except for China which was given time as a new WTO member to lower its tariffs). That's because WTO/GATT requires it, and, aside from our big trading partners Canada and Mexico (0% tariffs), we mostly trade with WTO nations.

In the process, I discovered that the 30% tariff we slapped on steel imported from certain nations increased costs of products (due to raising cost of steel) by $732,000 for every U.S. job saved. It also caused retaliation because every nation in the world except the US regards it as a violation of GATT.

Its a complex issue to figure out if tariffs, which often raise the costs of materials and therefore the cost of U.S.-produced goods, produce any net benefit besides courting voters from vocal segents of the economy.

The U.S. Government has proposed a gradual transition to 0% tariffs for all WTO members.