House Speaker Nancy Pelosi, D-Calif., said that in opposing drilling in the Arctic National Wildlife Refuge and offshore, she was “trying to save the planet.” But columnist Charles Krauthammer contends that “the net environmental effect of Pelosi’s no-drilling willfulness is negative.” He wrote: “Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world — thereby increasing net planetary damage.”
The Eagle editorial board met Wednesday with oil man T. Boone Pickens (there’s a video excerpt on kansas.com). He went over his plan for reducing the $700 billion the U.S. spends importing oil. He wants to use wind turbines to replace much of the electricity being produced by natural gas. He then wants to use natural gas to fuel trucks, thereby reducing our need for imported oil.
Pickens said that there is no personal business motive behind his effort. Rather, he believes that America has a huge energy problem that will only get worse unless we take bold action.
Many people are still mad at Pickens for helping finance the Swift Boat ads against John Kerry. And there are plenty of doubts about his plan, particularly using natural gas for trucks. But give him credit for drawing attention to the need for a national energy strategy and to drastically reduce our dependency on foreign oil.
The federal budget deficit is projected to be nearly $490 billion this fiscal year, a new record. The deficit will add to the national debt, which already is more than $9 trillion and requires annual interest payments of about $235 billion.
This means that the next president will face a huge financial hole. But that hasn’t caused John McCain and Barack Obama to stop digging - both are proposing more tax cuts.
Is the gasoline tank half full or half empty? For a more optimistic take on the energy crunch, see Time magazine’s “10 Good Things About $4 Gas.”
Among the positive trends in higher gas prices:
Globalized jobs return home. “In more industries, such as steel, lawn-mower batteries and upscale furniture, doing business in the U.S. is starting to look slightly more feasible.”
Home buyers are moving closer to cities, putting a brake on urban sprawl.
Cleaner air. As fuel use drops, so does air pollution.
Rep. Todd Tiahrt, R-Goddard, said at a press event Monday that gas prices could drop dramatically if America increased its domestic oil drilling and expanded oil refineries. But most experts say it could be a couple of decades before offshore drilling came on line, and once it did, it would only reduce the price of gas by a few pennies.
The Bush Energy Department reported last year that “access to the Pacific, Atlantic and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.”
What’s more, four-fifths of all known offshore deposits are already available to industry exploration efforts, columnist Carl Hiaasen noted, yet oil companies aren’t drilling. Instead, the vast majority of their record profits is going to stock dividends and buybacks, Associated Press reported.
Politicians pander to various voting groups. But what if they pandered to economists? What is it that economists would want to hear? N. Gregory Mankiw, a Harvard University professor of economics who has advised President Bush and Mitt Romney, came up an eight-point platform based on his discussions with colleagues and polls of his profession. The eight policies: Support free trade, oppose farm subsidies, leave oil companies and speculators alone, tax the use of energy, raise the retirement age, invite more skilled immigrants, liberalize drug policy, raise funds for economic research.
Consumers are mostly to blame for their debt problems. But the big increase in debt in recent years also reflects a shift in the way lenders do business, the New York Times reported. Because many major lenders sell their loans to investors, they are not as concerned about the ability of borrowers to repay the loans. Their focus is on the origination fees and charges on the loans. As a result, “junk fees” on mortgage loans have risen 50 percent in recent years, said Michael Kratzer, president of FeeDisclosure.com.
While President Bush and oil companies call for expanded offshore drilling to address America’s energy crisis, Democrats in Congress are pointing out that oil companies aren’t drilling in millions of acres of federal lands already open to oil exploration.
“As I write this, there are 68 million acres of publicly leased lands available for drilling that are not being drilled,” Rep. Nancy Boyda, D-Topeka, wrote in an e-mail letter. “80 percent of the oil available on the Outer Continental Shelf is already open for drilling. Today, these leases are in place; the environmental hurdles have been cleared, but no drilling is happening. The American people want to know why. So do I.”
Boyda calls it “Big Oil’s dirty little secret”: Companies don’t have the equipment necessary to do more drilling, she says, and new rigs for offshore exploration won’t be available for years.
If it seems like you’re going backward financially, it may be because you actually are. The Consumer Price Index rose 1.1 percent in June, the largest increase in 17 years. The new report follows Tuesday’s bleak analysis by Federal Reserve Chairman Ben Bernanke and the announcement that General Motors is laying off thousands of workers. “No matter how one slices and dices,” one economist said, “the bottom line is that U.S. workers are falling farther and farther behind.”
Home foreclosures spiked by 53 percent in June. Fannie Mae and Freddie Mac reportedly are on the verge of a government bailout. The stock market is plunging. Oil prices are soaring toward another record high.
But don’t worry, Americans. It’s all in your head, according to John McCain’s top economics guru, Phil Gramm, who told Americans to stop whining. Everything’s fine.
Maybe Gramm’s the one who should see a shrink.
The U.S. economy lost more than 60,000 jobs last month, mostly from manufacturing and construction companies. It was the sixth consecutive month the economy has shed jobs, for a total of about 438,000 jobs since the first of the year.
“I do not believe nation-building in Iraq is going to be the issue come November - whether things get better there or worse. I think nation-building in America is going to be the issue,” wrote columnist Thomas Friedman. “It’s the state of America now that is the most gripping source of anxiety for Americans, not al-Qaida or Iraq. Anyone who thinks they are going to win this election playing the Iraq or the terrorism card - one way or another - is, in my view, seriously deluded.”
Friedman’s advice to voters: “We need nation-building at home, and we cannot wait another year to get started. Vote for the candidate who you think will do that best. Nothing else matters.”
Gas prices are high everywhere, but their impact is being felt much harder by low-income Americans who live in rural areas. “Nationwide, Americans are now spending about 4 percent of their take-home income on gasoline. By contrast, in some counties in the Mississippi Delta, that figure has surpassed 13 percent,” the New York Times reported. Reasons for this disparity include lower incomes, lack of public transportation, fewer available jobs (which means longer commutes), and older vehicles that get lower gas mileage.
Bad news on the economic front today, as the jobless rate for May was 5.5 percent, up from 5 percent in April. That’s the largest swing in a single month since 1986, the Washington Post reported, as the number of jobs fell by 49,000.
“One of the best ways to describe the current rural atmosphere is something akin to a gold rush — I’ve never seen anything like this — especially with the oil influence,†Lane County grain grower Vance Ehmke told Associated Press. But it’s not just increased oil drilling that is raising the fortunes of rural Kansas. So are high commodity prices. As a result, AP reported, farmland values are up about 20 percent from last year; farmers are making more capital investments, which also helps the rural economy; and there are high loan repayment rates, which is freeing up more money for farm loans.
For lots of people, learning basic work skills — showing up on time, following directions, completing tasks — began with a summer job as a teenager.
But many traditional summer jobs for teens, such as lawn mowing and restaurant work, have dried up in recent years. Only about one-third of teens ages 16 to 19 are expected to find work this summer, the lowest share in half a century. And the percentages are even lower for minority African-American and Hispanic youths.
This is a trend that should concern not only parents but Wichita’s civic and business leaders. We need to make sure that our teens are being connected to job, internship and volunteer opportunities.
Consider giving a teen a chance to work, learn and earn some money. It’s an investment in our city’s future.
When it comes to energy and gas prices, writes Robert Bryce in this interesting piece in Slate, Americans are living in a fantasyland.
Even at $4 a gallon, our gas prices are dirt-cheap compared with most developed countries. In England, motorists pay more than $8 per gallon of gas. In Norway, it’s $8.73 — and they’re an oil exporter.
Supply trends suggest it’s not going to get any cheaper.
“The simple truth is that Americans are going to have to get used to more expensive gasoline,†Bryce concludes.
The trucking industry says there’s an easy way for Americans to save on gas — slow down.
Former Kansas Gov. Bill Graves, head of the American Trucking Associations, recently presented a proposal to slash fuel use by 86 billion gallons and carbon dioxide emissions by 900 million tons over the next decade — roughly the amount of CO2 emitted by the population of Chicago in one year. Among the recommendations:
Reduce the national speed limit to 65 mph for all vehicles. Install engine governors to limit new trucks to 68 mph. And reduce congestion by investing in highway improvements.
Graves called the proposals “practical, reasonable and doable,†and he called on Congress to help support the program.
Good luck on that. In 1995, Congress repealed a national speed limit, and 32 states, including Kansas, now have speed limits of 70 mph or higher on some highways.
No lawmaker has stepped forward to endorse the ATA proposal. How serious are we about conserving energy?
A new Energy Department report concludes that it’s feasible for the United States to get 20 percent of its electricity needs from wind power by 2030 — about the same share now provided by nuclear power — without the need for any major technological breakthroughs.
Wind power currently provides only about 1 percent of the nation’s electricity.
The report bolsters claims that wind power has arrived and is poised to move from a niche market to the mainstream.
Is Kansas poised to capture this opportunity?
The report does identify some major challenges, such as the need for more transmission lines in remote areas — that’s been a key obstacle in western Kansas. But the study says it’s doable and affordable.
It’s further confirmation that a thriving wind power industry for Kansas isn’t a pipe dream — it’s waiting to be built.
John McCain’s proposal for a three-month summer federal gas-tax holiday might be a good way to get votes, but it’s lousy transportation and energy policy. A Wired blog points out that suspending the federal 18.4-cent-per-gallon tax would save the average motorist about $28. But the plan would cost the government $9 billion in lost highway funds and put at risk an estimated 300,000 jobs tied to the funding, according to the American Association of State Highway and Transportation Officials.
This at a time when the Highway Trust Fund, which bankrolls local and state road and bridge projects, is already facing a $3.4 billion deficit.
A McCain spokesman said he would borrow from the general fund to make up the shortfall, but doing that would just add to the federal deficit.
Plus, as energy experts point out, the next president should be encouraging gasoline conservation, not more consumption and carbon emissions.
On the McClatchy news site, economist Linda Bilmes, co-author of “The Three Trillion Dollar War: The True Cost of the Iraq Conflict,” explains why the Iraq war isn’t giving the economy a “war bump”:
Unlike World War II, the Iraq war “has had a net negative effect on the economy. This is for several reasons. First, the money that we spend every month goes largely to operational costs (fuel, laundry, cooking, transportation, repairs), much of which is performed by subcontractors from the Philippines, Nepal and other countries. So in effect, the dollars spent do not have any positive return for the U.S. economy. Second, because we have borrowed all the money to fight the war, largely from abroad, we have added to the deficit and to the national debt, which means we have to pay more interest and adds a burden onto the economy. Third, the war has contributed to the increase in oil prices, which of course take money out of the hands of consumers, and lower business margins, and transfer it to the oil producers.”
A resounding majority of Americans — 81 percent — think the country is “pretty seriously†on the wrong track, according to a CBS News-New York Times poll — up from 69 percent last year and 35 percent in 2002.
Only 4 percent thought the country was better off now than five years ago. And two-thirds of respondents said they thought the economy was already in a recession.
That was before Friday’s announcement that employers slashed 80,000 jobs in March — the most in five years. And on Wednesday, Federal Reserve Chairman Ben Bernanke acknowledged for the first time that the country might be heading into a recession.
Voters wanting a change in direction, the economy sliding — it’s not a good general election scenario for incumbents.
If you feel like you’re stuck on the down escalator financially, no matter how hard you try to get ahead, it may be because you actually are. Even though workers are producing more, inflation-adjusted median family income has dropped 2.6 percent — or nearly $1,000 annually since 2000, the Washington Post reported. The main reason is that rising health care costs are causing many businesses to limit wage increases and to pass more costs on to workers.
“We’re paying the price for willful amnesia,†New York Times columnist Paul Krugman wrote about the financial crisis. “We chose to forget what happened in the 1930s — and having refused to learn from history, we’re repeating it.†Krugman argues that the banking crisis that followed the 1929 stock market crash “showed that unregulated, unsupervised financial markets can all too easily suffer catastrophic failure. As the decades passed, however, that lesson was forgotten — and now we’re relearning it, the hard way.â€
FYI: David Leonhardt of the New York Times wrote an easy-to-understand commentary explaining how subprime mortgage loans — which are a small percentage of the mortgage business — could cause so much havoc in the financial markets and threaten our entire economy.
House Speaker Nancy Pelosi, D-Calif., said that in opposing drilling in the Arctic National Wildlife Refuge and offshore, she was “trying to save the planet.” But columnist Charles Krauthammer contends that “the net environmental effect of Pelosi’s no-drilling willfulness is negative.” He wrote: “Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world — thereby increasing net planetary damage.”
