Another Recession Keyed By High Oil Prices?

Another Recession Keyed By High Oil Prices?
America Afloat On An Ocean Of Domestic Oil!
A Commentary by J. D. Longstreet


If you are old enough, and wise enough, to remember the Jimmy Carter years then you remember the fiasco that was his administration. But mostly, you will remember the so-called gas shortage or oil crisis with vehicles lined up for blocks waiting to buy gas. Remember the days when you could buy gas and the days you could not buy gas?

Back in those days, I was a credentialed broadcast news reporter. And something did not “smell” right. After a few weeks of snooping, nobody was able to convince me the gas shortage was real.

I spoke to a propane gas dealer who told me, off the record, (when I asked about the shortage) that all his storage tanks were filled to capacity and he had rail cars sitting on the local tracks filled with propane and he had just been notified that more was on the way.

Around 5 AM, one morning, I, personally, pumped gasoline from a gas pump with a hand-lettered sign on it stating the station was “out of gas.” I knew the owner and had obtained the keys the evening before.

I heard of oil dealers renting storage space from farmers, in the tanks that would normally store the farmer’s fuel for his farm equipment. I was not able to verify that story, but I knew a number of dealers and I did not doubt it then -- and I do not doubt it today.

I also heard, and saw, tankers pumping gasoline into abandoned underground tanks at old, rural, (closed) filling stations in order to store their overflow of gasoline.

An area TV station filmed tanker ships lying low in the water and anchored just over the horizon from the near-by port. It was reported they were ordered to do so while the companies waited for gasoline prices to increase… then they would sail into port and off-load their precious cargo.

I was convinced then, and I am convinced today, that THAT gas shortage – THAT oil crisis – was manufactured. We were drowning in oil and gasoline. I saw too much, I heard too much, and I experienced too much to believe otherwise.

I have come to believe it was the first attempt, by the government, to force Americans to cut back on oil consumption -- to learn to do with less. See, America’s President was the DEMOCRAT, Jimmy Carter -- you know, another one who believes we must all learn to suffer equally, just like the current democrat in the White House, Obama.

The price of gasoline and other oil products is skyrocketing -- even as I write. The American consumer is being taken to the cleaners.

I don’t blame the oil companies for our current oil crisis.

Look. America is awash in oil. We’ve got more oil than the Arabs! But – our government won’t let us get to it -- and use it -- and flip the bird to the Middle Eastern Oil princes.

Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. To our knowledge -- none has been extracted. With this mother load of oil why are we still fighting over offshore drilling?

Now. Consider this: The U. S. Geological Service issued a revised report in April of 2008 (It hadn't been updated since 1995) on how much oil was in the area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana. Take a look for yourself. http://bakkenshale.net/bakkenshalemap.html

“The Bakken,” as it is referred to, is the largest domestic oil discovery since Alaska 's Prudhoe Bay, and it has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates the Bakken deposit at 503 billion barrels. This is light, sweet, oil that would be far, far, less costly to Americans than the oil we are importing today.

We have more oil inside our borders, than all the other proven reserves on earth. We are talking more than 2 TRILLION barrels of untapped oil. Here are the official estimates: - 8-times as much oil as Saudi Arabia - 18-times as much oil as Iraq - 21-times as much oil as Kuwait - 22-times as much oil as Iran - 500-times as much oil as Yemen - and it's all right here in America -- in the Western United States.

Estimates tell us that that oil could satisfy America’s need for fuel for up to for 2,041 years!

You can read about this, yourself, at the US Geological Survey website HERE.

So what the deuce is going on? I mean, why the heck are we Americans sitting on our hands and not DEMANDING that our government “cut the cr*p” and allow the oil companies to dig, and drill, for all this oil? WHY is the US continuing to ship our treasure and our blood to the Middle East -- and to our unfriendly southern neighbors -- for oil?

We are on the cusp of back-to-back recessions with the second dip looming today. The cost to Americans for oil is threatening to push us over that brink and into a recession that will, most likely, become a depression even worse than the one or parents and grandparents experienced in the 1930’s.

Who’s to blame? First we blame the environmentalists and others (including the US government) who have blocked all efforts to aid America in becoming independent of foreign oil! And second: If we are truthful, we must blame ourselves, as well, for allowing those people so much power and influence in the first place!

I must ask: Why are we allowing a small group of people to dictate our lives and our economy, indeed, our future as a viable nation?

It is past time to fight back America. Demand that the US Congress defund the Environmental protection Agency right off the bat. Get rid of it.

Just as important is the necessity to elect a President with the cajones to override the environmentalist and open up America to drilling and digging for our own vast reserves of oil sloshing beneath our feet and just offshore and under the tundra.

Understand this: The fantasy of wind turbines and solar panels is just that – a fantasy. The hard truth is – America needs OIL, and lots of it, to sustain our economy -- and us.

The time is exceedingly short. America is facing ruin in a depression, which lies just over the horizon. We have to act now just to insure our survival as a viable nation. Even now, we may have waited too long.

J. D. Longstreet

Feels Like a Depression to Me ... Alan Caruba

Feels Like a Depression to Me
By Alan Caruba

Between the time that George Washington took the first oath of office as president and when Barack Obama did—1789 to 2009, the United States had borrowed nine trillion dollars. Since Obama took office, it has borrowed or imposed nearly three trillion more debt. Tell me he is not deliberately seeking to bankrupt the nation.

In an August 28 Wall Street Journal editorial it noted that “To no one’s surprise except Vice President Joe Biden’s, second quarter economic growth was revised down yesterday to 1.6% from the prior estimate of growth of 2.4% which was down from first quarter growth of 3.7%, which was down from the 2009 fourth quarter’s 5%. Economic recoveries are supposed to go in the other direction.”

I was born during the Great Depression of the 1930s and have lived long enough now to find myself in a new one. There are similarities between the two, but the first one led to the creation of a variety of government regulatory entities and programs that should have avoided or at least were expected put the brakes on the current one.

At the heart of the current Depression is the government’s intrusion into the nation’s housing market via Fannie Mae and Freddie Mac, government “entities” that functioned to purchase the mortgages provided by banks and lending companies that, by law, were required to make “sub-prime” bad loans. They have since been seized and billions remain at risk until such time as they are removed from distorting the housing market.

The mortgages were then bundled and resold to banking and investment firms. When the housing “bubble” failed, it threatened the financial structure of the nation. It was a classic asset bubble as people used their homes as piggy banks, taking second mortgages to pay for lifestyles that often did not include saving money for a rainy day. If this sounds like infantile behavior, it is.

Despite the multi-billion dollar bank bailouts initiated in 2008 at the end of the second Bush term and “stimulus” bailouts continued by the Obama administration, the recession has grown longer and there is talk of a “second recession.” This is like saying the family drunk or druggie has a “consumption problem.”

Despite zero interest rates for banks borrowing from the Federal Reserve justifiable fears have slowed lending. Consumers have held off spending. Home sales reached a 15-year low in June.

If the Obama administration and Congress allow the Bush tax cuts to expire, it will deepen the current crisis. In 1932 President Hoover persuaded Congress to raise taxes and we know this led to a decade of a severe economic Depression.

Poor monetary policy drove the Great Depression and is being repeated in this one. Government does not create jobs. Its highest priority is to protect the U.S. dollar so that investment and growth can be maintained.

E. Ralph Hostetter, publisher of American Farm Publications, recently noted that “The federal government has been in control of the U.S. dollar since 1913 when the Federal Reserve Banking System was established.”

“The 130 years prior to 1913, going back to 1783, was the longest period of currency stability in U.S. history. Since the dollar came under control of the Federal Reserve Bank in 1913, it has lost 90 percent of its original value. Eighty percent of that loss has occurred since President Richard Nixon took the United States off the gold standard in 1971.”

As Gerald P. O’Driscall Jr. recently wrote in a Wall Street Journal essay, “The solution lies in restoring balance sheets. For financial firms that means raising capital. For consumers and businesses alike, that means saving more of their reduced incomes.” He warned that “Low interest rates slow the process…by keeping asset prices artificially inflated.” The current Federal Reserve interest rate is zero.

The entire governmental and economic system depends on trust and the Obama administration has squandered that by constantly telling Americans that things were getting better when it was obvious to everyone they were not.

Claims that “shovel ready” projects would turn around the economy were false. Only 3.3% of the $814 billion stimulus was allocated to the Federal Highway Administration for highway and bridge projects. The bulk of the funds expended were directed at retaining civil service jobs of teachers and funds for police and firefighters. Union contracts, fat with pension and health benefits, have bankrupted many States.

In early August first-time claims for unemployment hit a nine-month high. Since the stimulus passed, 2.6 million Americans have lost their jobs and 1.2 million have given up trying to find a new one. Despite the 9.6% figure the government cites, the actual levels of unemployment are far closer to 20%.

During the Great Depression, unemployment was 25% and wages fell 42%.

The nation has reached a point where well-respected economists are now openly using the “Depression” word. David Rosenberg, writing in his daily briefing to investors, warned against interpreting the occasional blips of Gross Domestic Product and stock market gains as signs of recovery. Other economists from major investment and banking institutions are reducing their GDP predictions for 2010 to an anemic range of 1.5% to 2%.

The United States is not in “a summer of recovery” and is not likely to see any recovery if taxes increase. Massive “reform” of Medicare will drive up insurance and healthcare costs. Massive infusions of taxpayer money to keep states afloat to pay for Medicaid and other mandated costs are temporary at best.

Social Security, insolvent because successive Congresses have raped its so-called trust fund, will require a major overhaul to protect those who have paid into it and free new generations from its requirements.

Tax “holidays” are needed to allow businesses and consumers to keep their money instead of handing it over to a profligate federal government and to States that have failed to exercise fiscal sanity.

Get used to the word “Depression.” That’s what we’re in and the first step to get out of it will be to send people to Congress who will address these problems.

Alan Caruba writes a daily post at http://factsnotfantasy.blogspot.com/. An author, business and science writer, he is the founder of The National Anxiety Center.

© Alan Caruba, 2010

Will Raising Taxes On The Rich Threaten Your Job?

Will Raising Taxes On The Rich Threaten Your Job?
Poor People Don’t Provide Jobs!
A Commentary by J. D. Longstreet

*****************

Rich people provided every job I have had in my life. I expect the same is true of your work history.

One of the truisms in life is this: “If You Bought Something, Someone Worked to Make It; If You Have Something that Requires Service, Someone Is Servicing It; If You Have A Lot of Money, It Is Working Somewhere.” (SOURCE)

Today in America unemployment is hovering near the ten percent mark. Well, that is the figure supplied the public by the government. Honestly, I am not comfortable with the unemployment figures provided us by the government. I have heard reports from private organizations that the REAL national unemployment figures are closer to 22% than 10%.

How can that be? Because the government plays all sorts of “tricks” with the numbers to get a, shall we say-- more favorable figure for the administration in power at the time. A true accounting would very likely result in a figure closer to 22% than that ten percent we have been offered for sometime now.

Let’s say we split the difference and agree that the real unemployment rate in America today is around 16% to 17%. That is still a whopping chunk of the American workforce out of work.

Why are there no jobs, then? Well, that takes us back to the point I made at the beginning of this piece. Wealthy people provide the jobs in America.

Yes, the wealthy still have money. Maybe not as much as they had before the recession hit us so hard, but they still have an ample supply. But they are not spending it on plant expansions, new operations, purchasing new equipment, building up their inventory, etc, etc. When that money they are sitting on is static, when it is not working, then it is not creating jobs. As a result, Americans can’t find jobs.

For the most part, rich people are not fools. They did not get rich by doing stupid things. Risking their fortunes on an American economy on the threshold of being regulated into oblivion by a President and a government on the cusp of completely embracing socialism and fascism would, indeed, be stupid.

Wealthy Americans are nervous. They are sitting on their money waiting, and hoping, for better times, when they can again put their fortunes to work creating jobs for the American work force and making lots more money for themselves. That’s the way business works.

I don’t know where the idea that -- business is in business to do you and I a favor -- originated. But I tell you as strongly as I can, that it is untrue. Business is in business to make money, to make a profit, for the owners and the stockholders of that business.

Bludgeoning the wealthy with even more taxes is certainly not going to make them take what’s left of their fortunes and blow it on “make work” jobs creating “stuff” the public doesn’t have the money to buy because they don’t have the jobs with which to earn the money it takes to purchase that “stuff.”

If anything, increased taxes will result in the wealthy holding even tighter to their fortunes and spending even less of it. It will also result in corporations looking for countries around the globe that have a ready workforce, willing to work for much lower wages, and a government that is willing to provide a tax friendly environment within which that corporation can operate at a substantial profit. The latter is happening even as America is beginning the long road back from the recession.

Corporations have seen where the American government is going with their regulations and taxes and they are not stupid enough to sit here on American soil and allow the new American socialism to take over their corporate investments. They are getting out – sooner, or later -- and they are taking their companies offshore to countries that welcome the jobs they bring to that country’s people with open arms.

So, the answer to the question I posed above is – yes. Higher taxes, on the rich, do threaten your job. There is no question about it.

We haven’t even touched on the whether, or not, the government’s taking over half of what a wage earner makes to redistribute to those who make less, is even moral. I didn’t bother to spend much ink on that topic because the answer is so obvious. NO, it is NOT MORAL. It is, in fact, thievery. When a government does it -- it is called taxing. When an individual does it, it is called robbery.

In the next few weeks, we Americans are going to hear and see a lot of debate about raising taxes on Americans, and on American business. Raising taxes will prolong the recession, and make the unemployment figures continue at unacceptable highs. It will also drive many large corporations away from America and stop those considering locating in America to look elsewhere. In short, higher taxes will crush what is left of the American economy.

With Election Day approaching we ask that you observe which political party is pushing those higher taxes, and remember them when you cast your vote in November.

J. D. Longstreet

"I'd like to Propose..."

“I’d Like to Propose….”

J. D. Longstreet (and an Unknown Author)

Like you, I get tons of e-mail. Every so often I get material for a “suggested commentary” from readers. That’s how this one came to be in my inbox. As I am not mathematically inclined, I have not run the numbers so I cannot vouch for their accuracy and I will not even try.

Having said that, I must also say, the writer, whoever, he/she is, does posit some fodder for thought, especially when the country finds itself in trying financial times such as we are experiencing today in America. Our form of capitalism comes with these cycles built in.

IF we remain a capitalist country, and I have strong doubts that we will, we must go back to teaching our scholars, while they are yet in high school, that recessions, and recovery from same, and yes, even depressions, will come and go. It is the way a system based on a free market operates. It is when we forget that fundamental of capitalist economics that we get into trouble. I was taught that in high school over half a century ago. It has stuck with me and, as a result, I tend not to get rattled when the “slow downs” come. The trick, of course, is to plan for the slow downs during the cycles of plenty. America could take a lesson from Joseph’s interpretation of Pharaoh’s dream about the seven years of plenty and the seven years of famine. But, that is a commentary for another day.

The Proposal: (Author Unknown)

When a company falls on difficult times, one of the things that seems to happen is they reduce their staff and workers. The remaining workers need to find ways to continue to do a good job or risk that their job would be eliminated as well. Wall street, and the media, normally congratulate the CEO for making this type of "tough decision", and his board of directors gives him a big bonus.

Our government should not be immune from similar risks.

Therefore: Why not reduce the House of Representatives from the current 435 members to 218 members and Senate members from 100 to 50 (one per State). Also reduce the remaining staff by 25%.

Accomplish this over the next 8 years. (Two steps / two elections) and of course this would require some redistricting.

Some yearly monetary gains include:

$44,108,400 for elimination of base pay for congress.
(267 members X $165,200 pay / member / yr.)

$97,175,000 for elimination of the above people's staff. (Estimate $1.3 Mil in staff per each member of the House, and $3 Mil in staff per each member of the Senate every year).

$240,294 for the reduction in remaining staff by 25%.

$7,500,000,000 reduction in pork barrel earmarks each year. (Those members whose jobs are gone. Current estimates for total government pork earmarks are at $15 Billion / yr)

The remaining Representatives would need to work smarter and would need to improve efficiency. It might even be in their best interests to work together for the good of our country? (Ya Think???… Ed)

We may also expect that smaller committees might lead to a more efficient resolution of issues as well. It might even be easier to keep track of what your representative is doing.

Congress has more tools available to do their jobs than it had back in 1911 when the current number of representatives was established. (Telephone, computers, cell phones to name a few)

Note: Congress did not hesitate to head home when it was a holiday, when the nation needed a real fix to the economic problems. Also, we have 3 senators that have not been doing their jobs for the past 18+ months (on the campaign trail) and still they all have been accepting full pay. These facts alone support a reduction in Senators & Congresspersons.

Summary of Opportunity:

$ 44,108,400 reduction of Congress members.

$282,100,000 for elimination of the reduced house member staff.

$150,000,000 for elimination of reduced senate member staff.

$59,675,000 for 25% reduction of staff for remaining House members.

$37,500,000 for 25% reduction of staff for remaining Senate members.

$7,500,000,000 reduction in pork added to bills by the reduction of congress members.

$8,073,383,400 per year (estimated total savings.)

Big business does these types of cuts all the time.

If Congresspersons were required to serve 20, 25 or 30 years (like everyone else) in order to collect retirement benefits… there is no telling how much we would save. Now they get full retirement after serving only ONE term.

*******************

Now, I am not so naive as to believe that any of this is going to happen… at least not in my lifetime… if ever. Some of it even begs the question of feasibility. Nevertheless, it IS interesting to ponder.

The so-called “Stimulus Bill,” which is expected to be passed at any moment, in my opinion, is only going to set us back, deeper into the current recession, and our children, grandchildren, and great grandchildren will be paying for it. Where else is the money going to come from to pay for all this? It must come from you and me and the others listed above. The Stimulus Bill is not going to do one single thing to get us out of debt. It is only going to suffocate us under tons and tons of MORE DEBT.

I would remind you, as so many other conservative writers have, that FDR did not get America out of her last, much, much, worst, Depression. In fact, FDR made it worse by doing exactly the same things the Obama Administration and our leftist/socialist Congress is doing. Apparently, our government doesn’t know its own history, and it is repeating it.

So, buckle up America, it is all down hill for a while, at least until we bottom out. Maybe, just maybe, the American people will, by that time, have seen the error of their ways (by electing a socialist government) and toss them all out on their rear-ends and replace them with some realist conservatives. Until then, America is facing some dark, dark, days ahead.

J. D. Longstreet

********************

href="http://technorati.com/tag/ conservative+Recession+politics+socialism+Obama+Proposal " rel="tag">conservative+Recession+politics+socialism+Obama+Proposal

Hey Kids, it's a Depression ... by Alan Caruba

Hey Kids, it’s a Depression

By Alan Caruba

***************************

Here’s the difference between a recession and a depression as defined by Bloomberg Business News:A recession occurs when a nation’s living standards drop and prices increase. This downturn in economic activity is widely defined as a decline in a country’s gross domestic product for at least two quarters.

A depression is defined as an economic condition caused by a massive decrease in business activity, falling prices, reduced purchasing power, excess of supply over demand, and rising unemployment.If this isn’t the beginning of a depression, it sure feels like one. Just check the daily headlines. On Monday, the Financial Times informed readers that “Gloom deepens as 75,000 global jobs go.” Among the companies laying off people were Caterpillar, General Motors, Sprint Nextel, Home Depot, Pfizer, and Texas Instruments. My guess is the General Motors declares bankruptcy by March.

The Financial Times still called it a recession, but we know what it is, don’t we? And if we just look at the 1930s and see how every move the administration of Franklin Delano Roosevelt made only deepened and prolonged the Great Depression, we will also see what should be done, but won’t be done. Indeed, with every passing day, the Obama administration looks and sounds just like FDR’s.

As to the stimulus bill, here’s what last Monday’s Wall Street Journal had to say about it:

“The stimulus bill currently steaming through Congress looks like a legislative freight train, but given last week's analysis by the Congressional Budget Office, it is more accurate to think of it as a time machine. That may be the only way to explain how spending on public works in 2011 and beyond will help the economy today."

According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill's $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing given that Congress's justification for passing this bill so urgently is to help the economy right now, if not sooner.”

Much, if not most, of the proposed $825 billion “recovery act” will go to various government agencies. Even a cursory review of the 600-plus page document suggests that not much of its billions will create private sector jobs. Those portions devoted to infrastructure projects are not only worthy, but polls indicate are greatly favored by the public. By contrast, the bill includes nutty energy stuff about solar and wind farms, neither of which can produce enough steady, dependable energy to keep the lights on anywhere.

Contrary to the madness that has gripped most of Congress, government spending should be cut. There is enormous waste in government at almost every level except the local level that must answer to people directly.

There should be major cuts in the tax rates from the wealthy to the lowest paid job holders. Putting money back in the hands of people will shorten the duration of the depression by stimulating purchasing, investment, and the risks involved in beginning or expanding a business of any size.

There should be a marked reduction in government regulation of all manner of business and industry in order to avoid increasing the cost of production and facilitate research and innovation

NONE of these options, proven, known, effective, are being discussed by the Obama administration that, in office less than two weeks, is issuing executive orders that will increase the cost of manufacturing cars in the name of fighting “global warming” or “climate change.”Apparently word has not reached the White House that it just snowed in a Middle Eastern desert nation, the United Arab Emirates, for the first time ever! That the world outside (and including) Washington, D.C. is experiencing some serious cold weather.

It’s so cold in D.C. that Al Gore’s Wednesday testimony to the Senate Foreign Relations Committee that the Earth is warming will likely be rescheduled.

While there is talk of tax cuts, it remains just that, talk.

Meanwhile things are going to hell in a hand-basket, so maybe it would be a good idea to (1) pay attention to the history and lessons of the Great Depression, (2) avoid repeating the same mistakes, and (3) not take your eye off the ball here at home with talk of finding a Mideast peace where none has not existed since the days of Harry Truman and, for that matter, all previous presidents.

The folks in Washington, D.C., being politicians, are all delusional and guess who’s going to pay the price for that? Phone, fax, email your Senators and Representative, and tell them to put the Recovery Act back on the shelf.

Alan Caruba writes a daily blog at http://factsnotfantasy.blogspot.com. Every week, he posts a column on the website of The National Anxiety Center, www.anxietycenter.com.

**********************

Conservative+Depression+Recession