July 29-30, 2008
Jul 29 06:36 Open The Spigot Now Jul 29 08:04 The AP's "Cutting Through the Clutter" Jul 29 09:42 Pelosi: "I'm Trying To Save the Planet" Jul 30 10:00 What Was The Trip's Purpose Again? Jul 30 11:58 Hunker Down & Ride It Out???
Prior Months: Jan Feb Mar Apr May Jun
Open The Spigot Now
Kevin Haslett has written a logical, compelling article on the drill vs. not drill battle. Here's how he lays things out:
The economics of extracting resources is quite simple and intuitive. If you own property that has oil in the ground, then you have to decide how rapidly you wish to deplete your resource. If prices are low today, and you expect them to be much higher in the future, then you will hold off pumping a lot.Later in the article, Mr. Haslett opens both barrels on the D's:
Open Spigot Now
If prices are high today and are expected to be much lower tomorrow, then you would rather open up the spigot now when profits will be higher.
What about prices today? A vast body of academic literature finds that future prices and spot prices are intricately linked in a manner that could only occur if producers are constantly updating their plans based on expected prices.In other words, economists know that increasing oil production leads to lower prices. This isn't considered rocket science; it's considered an article of faith.
A recent study by economists Param Silvapulle and Imad Moosa of Monash University in Australia found strong evidence of what is called bidirectional causality. Future prices and spot prices are inextricably linked.
Too Obvious
How strong is the case? My American Enterprise Institute colleague, former U.S. House Speaker Newt Gingrich, has been a tireless advocate of a more rational energy policy that allows for more drilling.
In a recent post at his influential blog, Gingrich noted that the top academic energy journal, aptly named, "The Energy Journal," recently rejected a study by economists Morris Coats and Gary Pecquet of Nicholls State University in Louisiana that found that higher production in the future would reduce prices today.
The study, Gingrich reported, wasn't rejected because it lacked academic merit. It was rejected because the finding was so well known. James Smith, the impeccably credentialed editor of The Energy Journal described it this way to the unfortunate authors:
"Basically, your main result (the present impact of an anticipated future supply change) is already known to economists (although perhaps not to the Democratic Policy Committee). It is our policy to publish only original research that adds significantly to the body of received knowledge regarding energy markets and policy."
Let's take this a few steps further. My hometown paper, the St. Cloud Times, ran an editorial by Susan Gaertner , which I posted about here . I noted that Ms. Gaertner has announced her candidacy to be the DFL nominee for governor in 2010, which I included so that people could determine for themselves whether there's a political agenda involved in her LTE. Here's what Ms. Gaertner said that I want highlighted:
In March, the Bush Administration's Energy Information Administration issued a report that said even if ANWR was opened to drilling, it would be at least five years before the oil would begin flowing and 17 years before it could reach its peak flow. In addition, the EIA report said the projected amounts of oil produced from ANWR at peak would only reduce United States imports of oil by 4 percent and have little impact on the price of a barrel of oil.I've said it before and I'm sure that I'll repeat it often: I'd rather trust an economist than a lifetime bureaucrat when it comes to oil price projections. In fact, I don't consider it a choice as much as I consider it a no-brainer.
Nonetheless, Harry Reid and Nancy Pelosi refuse to allow a vote on increasing oil production unless it's in areas where leasing is already open. Sen. Citizen of the World's policy is so similar to Reid's and Pelosi's that it's impossible to tell them apart. It's almost like they're speaking from the same script .
Which leads to this question: Why do Democrats, whether they're candidates for the US House or Senate, whether they're incumbents in Pelosi's mad House, or whether they're part of the leadership or whether they've just fresh off a continent-wide coronation/campaign swing, insist that drilling can't possibly lower prices? As much as I'm convinced that Harry and Nancy are the dimmest bulbs in a cheesy chandelier, I can't bring myself to thinking that they're that dimwitted.
The truth is that I think their minds are shut. They've drank the global warming kool-aid, which causes them to entirely to refuse to budge. I think it's almost certainty that they really think that we're destroying Mother Earth that they'll do anything to prevent the plundering of 'Mother'.
I further think that they'd rather limit people's freedoms than allow them to make their own decisions based on logic and sound economic principles.
Reid's and Pelosi's rigidity is about to get them in trouble. It isn't difficult to picture Ms. Pelosi's rigidity costing her a bunch of House seats, though I can't picture her losing her Speaker's office...yet. I can see this issue costing Sen. Citizen of the World, aka Sen. Obama, the presidency.
That's because I can picture factory workers in Bethlehem, PA and Youngstown, OH worrying far more about the cost of driving their car or heating their homes than they care if Europe likes us. What Sen. Obama offered is a stopgap measure at best. What Sen. McCain proposed in this interview is true relief:
Hannity: Senator, I know because everywhere I go, people talk to me about the high price of gasoline and the impact that it's having on their lives, the economy. Most Americans are angry when they find out that we have more resources here in the United States that we're not tapping into. I've even argued that we have a clear and present danger facing the United States, the possibility of an energy war. Am I overstating the case?This isn't a onetime thing with Sen. McCain either. Hannity interviewed Sen. McCain Monday to open his "Final Hour Free For All." Sen. McCain was just as emphatic Monday as he was during last Wednesday's TV interview. Sen. McCain also said that, though he didn't like the option of drilling in ANWR, he'd keep that on the table during the debate. I'd prefer he simply declare that it was part of the solution but I like the fact that he isn't rigid about this like Obama, Reid and Pelosi.
McCain: No. We're sending $700 billion a year overseas to countries that don't like us very much. Some of that money ends up in the hands of terrorist organizations. It's one of the greatest transfers in wealth in history and I think you are exactly right on the mark when you say that Americans are starting to figure things out. Of course we have to drill offshore. Of course we have to exploit every means we have of bridging this gap while we make the transition to energy independence. I viewed a new automobile the other day, the Volt. I pray it succeeds. It could revolutionize the auto industry and I also want to mention that we all love wind, tide, solar, all of that, nuclear power...nuclear power. The French can build a nuclear power plant in five years. We should build 45 nuclear power plants by 2030 and that will create 700,000 new jobs and it's clean.
Sen. Obama opposes offshore drilling. He opposes nuclear. He opposes a gas tax holiday. He opposes giving an award for a real battery-driven car. So he, uh...
Hannity: And coal.
McCain: And coal. And we've got to invest $2 billion a year in peer research and development, in clean coal technology. We are sitting on the world's largest supply of energy in the form of coal reserves. We've got to have clean coal technology.
During Wednesday's TV interview, Sen. McCain said that we must start challenging the notion that it'll take a decade for us to get oil from new drilling. He said that oil executives have told him that it's possible to see results within 2-3 years from shallow water wells.
It's amazing to me that politicians are perfectly willing to ignore what economists take for granted. Those that take that errant position should be made to pay. These politicians should pay by getting retired this November.
Posted Tuesday, July 29, 2008 6:49 AM
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The AP's "Cutting Through the Clutter"
The AP's Beth Fouhy has written a particularly offensive hit piece against Sen. McCain. This shocks me not even a little, though it's more than a little disappointing. Consider these paragraphs as why I think it's a hit piece against Sen. McCain:
Just last month, McCain reversed himself after years of opposition and called for lifting the federal ban on oil drilling off the U.S. coast. The Arizona senator promotes energy development as a way to boost the economy, and a recent poll found many voters are open to offshore drilling as a way to ease gasoline prices.It isn't a stretch to think that Fouhy's intent was to label McCain a flip-flopper without calling him that directly. It's also not a stretch to think that mentioning girlie-man Gov. Schwarzenegger's desire to be Obama's energy czar is meant to imply that Republicans are split on drilling.
But McCain's views could be troublesome in California, which has seen its share of catastrophic offshore oil spills. Republican Gov. Arnold Schwarzenegger, a McCain ally, opposes such drilling and in a television interview indicated he would be open one day to serving as the "energy czar" in an Obama administration.
Then there's this:
McCain also insisted the technology exists to quickly bring oil produced offshore to market, even as the federal government has estimated it would take years for new offshore oil exploration to yield results.As I said here , Sen. McCain has talked with oil industry experts. They've told him that it's possible to extract oil from rigs in shallow water within 2-3 years. Ms. Fouhy's mention of the EIA's 'study' is introduced to argue against Sen. McCain's position, which is informed by industry experts.
That's a time-tested tactic with liberals: reflexively agree government bureaucrats; reflexively argue with industry experts.
It seems to me that that's a surefire recipe for getting things wrong.
Notice how things get conflated in this paragraph:
Last week, McCain's campaign scrapped a visit to an oil rig in the Gulf of Mexico as Hurricane Dolly bore down on Louisiana. The campaign cited weather for the cancellation, which also came after a Liberian tanker spilled 419,000 gallons of oil into the Mississippi River outside New Orleans.It isn't accidental that Ms. Fouhy talks about an oil spill in the same paragraph as she talks about oil rigs in the Gulf of Mexico. What does one have to do with the other? The Liberian tanker was hit by a barge.
What isn't mentioned is whether there was any oil spilled in the Gulf as a result of Dolly. I don't think Ms. Fouhy much cares about that, which should be a central issue of this article. Let's remember that being unbiased isn't part of the AP's new style under Ron Fournier :
There's more to her vinegary remark than just the aftertaste of a sour parting. Fournier is a main engine in a high-stakes experiment at the 162-year old wire to move from its signature neutral and detached tone to an aggressive, plain-spoken style of writing that Fournier often describes as "cutting through the clutter."I said then what I'll repeat now: The AP will no longer pretend to be unbiased. The good news is that the New Media is there to expose hit pieces like the one Ms. Fouhy wrote.
Posted Tuesday, July 29, 2008 8:05 AM
Comment 1 by Walter hanson at 29-Jul-08 09:48 PM
You know I find it ironic how this reporter is talking about how it's hurting us in California.
Um I don't think we were winning California this year. This might help us win California and make the margin smaller.
Furthermore even if it's hurting us in California the rest of the nation we seem to benefiting. Maybe this reporter hasn't seen the polls that say over 50% want drilling in ANWR and over 70% off the coasts.
Walter Hanson
Minneapolis, MN
Comment 2 by Gary Gross at 29-Jul-08 09:52 PM
Walter, Don't worry about what Ms. Fouhy says. She's just another typical liberal activist posing as a journalist. (And doing a damn poor job of it at that.)
Pelosi: "I'm Trying To Save the Planet"
Believe it or not, Nancy Pelosi doesn't just see herself as a history-making person by becoming the first female Speaker of the House. She's also given to the belief that it's her role to save the entire planet :
With fewer than 20 legislative days before the new fiscal year begins Oct. 1, the entire appropriations process has largely ground to a halt because of the ham-handed fighting that followed Republican attempts to lift the moratorium on offshore oil and gas exploration. And after promising fairness and open debate, Pelosi has resorted to hard-nosed parliamentary devices that effectively bar any chance for Republicans to offer policy alternatives.What Ms. Pelosi is saying when she says that she won't give the gavel away to anyone, what she's really saying is that she won't let the representatives vote on drilling in ANWR and on the OCS, something that the vast majority of the people of the United States of America want. In other words, Nancy Pelosi is telling America's voters that she'll stand with K Street environmental lobbyists instead of with those that make Main Street work.
"I'm trying to save the planet; I'm trying to save the planet," she says impatiently when questioned. "I will not have this debate trivialized by their excuse for their failed policy."
"I respect the office that I hold," she says. "And when you win the election, you win the majority, and what is the power of the speaker? To set the agenda, the power of recognition, and I am not giving the gavel away to anyone."
That isn't the only message she's sending. As usual, Captain Ed captures it perfectly here :
If they can't even go as far as Reid went in reaching a compromise, the Republicans will have a field day in November.Though she doesn't know it, Ms. Pelosi is doing to vulnerable freshmen in swing districts what the DFL did this spring in forcing freshmen legislators from rural district to vote for tax increases that won't sell in their districts. That message is simple:
We're throwing you under the bus because ideology (and our lunatic donors) demands it.
If Ms. Pelosi persists in staying the course with this policy position on energy, she'll either force a revolt amongst rank-and-file House members or she'll doom them to certain defeat this fall. I said before that I didn't think that she was "in danger of losing her speakership...yet." If Ms. Pelosi persists with her obstructionist ways, I don't think it'll take long for the people to turn on her and the Democrats either running for re-election or who are challenging GOP incumbents.
Let's also examine the role money will play in those congressional elections. We've heard that the DCCC's fundraising prowess is widening the playing field and giving them opportunities for additional pickups. I'm not buying that. I recall two elections in Oklahoma in 1992 and 1994 where the Democrat outspent his GOP opponent by a wide margin, something in the neighborhood of 7:1 or 8:1. While the Democrat incumbent won in 1992, it was only by a 52-48 like margin. The Democrat lost in 1994 even though he outspent his GOP challenger in a remath by an even wider margin.
In other words, there are exceptions to the rule that the one with more money wins. It's my belief that this year's elections will be decided by who's on the right side of the energy issue, not who has the bigger bankroll.
In fact, I don't think it'll help this fall being linked to someone who's "trying to save the planet."
Posted Tuesday, July 29, 2008 10:32 AM
Comment 1 by Walter hanson at 29-Jul-08 09:43 PM
Gary:
One thing to keep in mind we have a historic election this year in that a major party nominee will raise funds for the general election. It probably won't be until 2009 to see the damage that Obama is doing sucking money that would've gone to these congressional and senate races. One side benefit to the Repbulican race for months donors like me have been focusing more on state and the congressional races helping put our candidates in better shape then they might have been otherwise for this critical race.
Walter Hanson
Minneapolis, MN
Comment 2 by Chuck Hyde at 29-Jul-08 09:52 PM
This arrogance is becoming a pattern. This whole group, Pelosi, Reid, Obama, etc are convinced they know what is best for us and we are too stupid to see their wisdom. I'm tired of it.
As far as her not giving up the gavel, I wouldn't bet a lot on it if I were her. It is true the Dems may make gains but it is equally true they could have loses. Two reasons. One, a lot of the freshmen may be vulnerable due to gas prices, not having the Iraq war to run on, etc. Two, if they don't get the Hillary voters to the polls, they won't be voting in Congressional and state elections either.
Comment 3 by Gary Gross at 29-Jul-08 10:01 PM
Chuck, unless something seismic happens, Democrats will lose House seats this election.
Comment 4 by J. Ewing at 30-Jul-08 09:22 AM
I sure hope you're right that the Dems lose seats. But right now the Republicans are sniveling in the corner trying to get us excited about not losing "too many." Sounds to me like they need a jolt of testosterone.
Comment 5 by Gary Gross at 30-Jul-08 09:38 AM
Jerry, What they're saying in the blogger conference calls doesn't sound like sniveling to me. The so-called strategists are whining because the polls haven't flipped yet but they will. This energy issue is changing the political landscape. It's just that simple.
Comment 6 by J. Ewing at 31-Jul-08 01:27 AM
OK, whining rather than sniveling. I'll check my dictionary, but I'm pretty certain that, whatever you call it, it's not a Positive Mental Attitude. Why there isn't a new "contract with America" I don't know.
Comment 7 by Gary Gross at 31-Jul-08 02:43 AM
Why there isn't a new "contract with America" I don't know.
The young Turks don't have enough authority yet. There's a new crop of future leaders already in the House. Give them time to establish themselves. It won't take that long.
Comment 8 by Walter hanson at 31-Jul-08 09:54 PM
I hope they announce one in September. The Democrats in part won the house in 2006 because they ran on a contract and with basically the exception of the minimum wage lied about everything they were going to do.
I didn't remember them announcing the contract until October. Of course Newt at least had an idea how to try to win elections. The drilling is Newt's idea being exploited brilliantly. We need that with our House and Senate leadership.
Walter Hanson
Minneapolis, MN
What Was The Trip's Purpose Again?
The NY Post's Amir Taheri questions the purpose of Sen. Obama's trip in his latest column . Consider it today's must reading. Let Mr. Taheri's excoriation begin:
TERMED a "learning" trip, Sen. Barack Obama's eight- day tour of eight nations in the Middle East and Europe turned out to be little more than a series of photo ops to enhance his international credentials.Why am I not surprised to find out that Sen. Obama didn't bother listening to the Iraqis? In fact, the better question might be this:
"He looked like a man in a hurry," a source close to Iraqi Prime Minister Nouri al-Maliki said last week. "He was not interested in what we had to say."
Shouldn't we expect a man of Obama's arrogance to be indifferent to listening?
Notice this exchange with Tom Brokaw on Meet the Press:
MR. BROKAW: When you get home and Michelle says to you, "Barack, what did you learn that surprised you? And did you change your mind about anything based on this entire trip?"Granted, this is only the first part of his answer but it's verification of what Mr. Taheri is saying. He learned nothing. The trip was just verification that he was right all along. Stop after stop, Obama's policies were verified in his mind. Why didn't Sen. Obama ask Gen. Petraeus his opinion on his 16-month plan? Was he afraid he might get this response?
SEN. OBAMA: Well, I, I, I didn't see a huge shift in the strategic policies that I've laid out throughout this campaign. It was clear to me that Afghanistan is the central front on terror, that the Taliban and al-Qaeda have reconstituted themselves.
Petraeus said any timetable must have "a heck of a lot more granularity than the kind of very short-hand statements that have been put out. We occasionally have commanders who have so many good weeks, (they think) it's won. We've got this thing. Well we don't. We've had so many good weeks. Right now, for example we've had two-and-a-half months of levels of violence not since March 2004," he said from his office at Camp Victory. Well that's encouraging. It's heartening. It's very welcome. But let's keep our powder dry...Let's not let our guard down."TRANSLATION: Not so fast. There's some serious questions that need answering before we start setting a timetable to leave.
It's possible that Sen. Obama worried that Gen. Petraeus might say this to him:
"We know where we are trying to go. We know how we think we need to try to get there with our Iraqi partners and increasingly with them in the lead and shouldering more of the burden as they are," Petraeus said.Hearing that firsthand might force Sen. Obama to rethink things through, something that worldly messiahs aren't comfortable with.
"But there are a lot of storm clouds out there, there are lots of these possible lightning bolts. You just don't know what it could be. You try to anticipate them and you try to react very quickly...It's all there, but it's not something you want to lay out publicly."
Considering the fact that Sen. Obama tried preventing the Surge from happening, why shouldn't we expect him to think of his Iraq visit as nothing more than a photo op? Why should we think that he was serious about learning things that might challenge his opinion?
In fact, why shouldn't we think that Sen. Obama is utterly incompetent with national security matters? Here's what Sen. Obama said in 2006:
Dreams of democracy and hopes for a perfect government are now just that ; dreams and hopes. We must instead turn our focus to those concrete objectives that are possible to attain ; namely, preventing Iraq from becoming what Afghanistan once was, maintaining our influence in the Middle East, and forging a political settlement to stop the sectarian violence so that our troops can come home.This paragraph is one that Sen. Obama doesn't want people to hear:
There is no reason to believe that more of the same will achieve these objectives in Iraq. And, while some have proposed escalating this war by adding thousands of more troops, there is little reason to believe that this will achieve these results either. It's not clear that these troop levels are sustainable for a significant period of time, and according to our commanders on the ground, adding American forces will only relieve the Iraqis from doing more on their own. Moreover, without a coherent strategy or better cooperation from the Iraqis, we would only be putting more of our soldiers in the crossfire of a civil war.
Let me underscore this point. The American soldiers I met when I traveled to Iraq this year were performing their duties with bravery, with brilliance, and without question. They are doing so today. They have battled insurgents, secured cities, and maintained some semblance of order in Iraq. But even as they have carried out their responsibilities with excellence and valor, they have also told me that there is no military solution to this war. Our troops can help suppress the violence, but they cannot solve its root causes. And all the troops in the world won't be able to force Shia, Sunni, and Kurd to sit down at a table, resolve their differences, and forge a lasting peace.
I have long said that the only solution in Iraq is a political one. To reach such a solution, we must communicate clearly and effectively to the factions in Iraq that the days of asking, urging, and waiting for them to take control of their own country are coming to an end.
Iraqis were most surprised by Obama's apparent readiness to throw away all the gains made in Iraq simply to prove that he'd been right in opposing the 2003 overthrow of Saddam Hussein. "He gave us the impression that the last thing he wanted was for Iraq to look anything like a success for the United States," a senior Iraqi official told me. "As far as he is concerned, this is Bush's war and must end in lack of success, if not actual defeat."That a "senior Iraqi official" would make such a statement is stunning. What type of man would rather have America lose a war than admit that his opposition to that war was wrong?
Let's remember that Sen. Obama claimed to be this great post-racial, post-partisan politician. He's nothing of the sort. If this Iraqi official is right, then he's the exact opposite of a post-partisan politician. If this quote is accurate, that means that Sen. Obama is the most bitter of partisans in American politics.
Posted Wednesday, July 30, 2008 10:01 AM
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Hunker Down & Ride It Out???
Lord knows that Freedom's Watch is doing alot of good things. Between supporting the troops to ridiculing Democrats on high gas prices, they're generally moving the ball down the field. I say generally because Carl Forti, in talking about the Democrats planning on running ads tying Republicans to Big Oil, gave this quote to the LA Times :
So what's a Republican candidate to do?Mr. Forti couldn't be more wrong. You don't hunker down. You go on the offensive. Instead of hunkering down, you highlight this quote from the Sierra Club's Carl Pope :
"You hunker down and ride it out," said Carl Forti, a former congressional GOP strategist and now executive vice president for issue advocacy at Freedom's Watch, a conservative organization.
Our own folly is cheap fuel. The United States once had large oil reserves, and they made us rich and powerful. Ergo, cheap fuel, oil, coal, nuclear, or whatever, is seen as being key to our continued prosperity and future security. This gusher mentality deforms our society and economy. It leads the United States to sabotage international efforts to combat global warming, tolerate a huge trade deficit that has destroyed millions of manufacturing jobs, and keep military bases in the Middle East, where they serve as rallying points for terrorists. And it's why the U.S. auto industry continues to promote size and performance over safety and efficiency.Excuse me? Keeping inflation low lets people keep more of their hard-earned money, which is a positive thing, right? Not according to Mr. Pope. That's because he'd rather save the world, along with Ms. Pelosi , from global warming than let people keep more of their money.
Envionutters are saying outrageous things like this but we're suppposed to "hunker down and ride it out"? I think not, Mr. Forti. Mr. Forti would be wise to heed Dick Wadhams:
Dick Wadhams, campaign manager for Colorado Senate candidate Schaffer, said that Democrats' attacks on the oil industry could backfire against growing public support for expanded domestic energy exploration.BINGO!!! That's the fact we must remind ourselves of. You can't want lower gas prices while wishing Big Oil ill. People want cheap gas. They aren't that fussy about how that happens. People will whine about Big Oil making profits. The minute that they're done with that, though, they're hoping that Big Oil increases the supply of oil.
I love this ad:
"Chris Carney voted five times against environmentally safe domestic energy production, voted against American energy independence," says a radio ad scheduled to run in the Pennsylvania Democrat's House district. "But Chris Carney stands in the way while we cut back on gas and groceries, family outings and summer vacations."That's an effective response to Democrats screaming "Big Oil, Big Oil." Like the term liberal, Big Oil just doesn't have the impact that it did a decade ago.
Posted Wednesday, July 30, 2008 11:59 AM
Comment 1 by Chuck at 30-Jul-08 11:15 PM
"You hunker down and ride it out,"
It's this exact mentality that costed us the 2006 elections. The GOP spent too much time on defense and not enough on offense. We already are swimming upstream because of the MSM's lovefest for the Dims. If the GOP lets themselves be defined this time we could be looking at Obama as President with a veto proof majority in Congress. Then we will have at leaast two years to "ride it out".
Comment 2 by Gary Gross at 31-Jul-08 12:07 AM
Chuck, I wouldn't worry about that this time. I've seen firsthand how the House GOP Caucus, both here in Minnesota & in DC, has a great fire in their belly to spread their positive, pro-growth message.
I've been privileged to participate in numerous blogger conference calls. During each of them, I've pointed out how we can go on offense. The various groups have taken note & used a couple of my suggestions.
The point I'm making is that this year's candidates, whether they're incumbents or challengers, are listening to the grassroots, which is a major step in the right direction.
Be of good cheer, Chuck. We'll run a positive campaign & beat expectations by a healthy amount.
Projections that we might face a filibuster-proof majority in the Senate are silly. Projections that we might face a veto-proof majority in the Minnesota House aren't based in fact.
