A Dreary Monday Followed By Yet Another Super Tuesday

Pretty much everyone we encountered on Monday asked how we’re doing, as the friendly folks here in Wichita tend to do, and we were able to cheekily answer that we’re faring better than the stock markets. Most of the people we met got the dark humor in our reply, as they’d heard the news that Monday was an historically bad day on Wall Street.

All three of the major American exchanges suffered at least a 7 percent drop, which comes after a few weeks of alarming declines, and all the smart money on the rest of the world’s markets seems similarly panicked, with no apparent good news on the horizon to turn things around in the near future. The main reason for the dive is the steadily spreading coronavirus pandemic, which has thus far killed only a tiny fraction of the world’s population but already cancelled big events and shut down schools and disrupted global supply chains and currently has most of Italy in quarantine. The markets are also worried that oil prices are plummeting on falling demand and a dispute between Organization of Petroleum Exporting Countries Russia and Saudi Arabia, which can’t agree on an ideal price to fix.

Neither of these developments can be credibly blamed on President Donald Trump, but so far the smart money isn’t betting that he has any solutions. Trump has thus far argued the coronavirus threat is overblown, based on his hunches and natural ability to grasp the science of epidemiology because he had a “super-genius” uncle who taught physics at the Massachussets Institute of Technology, but by Monday he was proposing a slew of government programs and “stimulus” measures redolent of President Barack Obama to prop up the economy just in case. The Federal Reserve Board is on the brink of offering zero interest loans and already printing more money to make up for the trillion dollars of deficit spending by the government, the bond markets are offering pretty much zero return on long or short-term yields, Trump is “tweeting” demands they go even further, and we can well understand why the smart money isn’t reassured.

The worries about the plummeting oil markets are harder to understand. We’re old enough to remember when the OPEC cartel’s price-gouging was the global economy’s biggest worry, and won’t mind a bit if the local gasoline prices fall below $2 a gallon as expected, but it does seem to be a troubling sign for the rest of the global economy. Trump will surely be conflicted about it, as he’s good friends with both the Russian and Saudi dictators and would love to take credit for cheap gasoline, but nothing he might say or do about it is likely to stabilize any of the markets.

Today is another big Tuesday in the Democratic presidential primary races, and the smart money is betting that former Obama-era Vice President Joe Biden will knock self-described socialist and Vermont Sen. Bernie Sanders out of the race, but that won’t help much. The stock markets had a rare good day when Biden took the lead over Sanders after last week’s “Super Tuesday,” but no one’s betting that Biden has all the answers.

It’s all quite desultory, but for now we can tell anyone who asks that we have no symptoms of the coronavirus and are feeling somewhat healthier than the stock markets. Here’s hoping that all of our dear readers are faring at least as well, and that we all make it through.

— Bud Norman

Checks, Balances, and other Trump Woes

President Donald Trump seems cocksure he could singlehandedly make America great again if only certain pesky people would get out of his way, but he’s finding that’s not the way things work in America or the rest of the world. The courts and the Congress and various other institutions have their own ideas about what to do, and are increasingly willing to assert themselves without fear of Trump’s “tweets.”

One of the peskiest institutions is the Federal Reserve Board, a stubbornly independent quasi-governmental body that plays an outsized role in the American economy by setting interesting rates and therefor determining monetary policy. Fed chairman Jerome Powell is Trump’s handpicked appointee, but like many another handpicked Trump appointee he’s greatly disappointed the president, in this case by very gradually raising the historically low interest rates and slightly easing the unprecedentedly voluminous money supply. Given the low-unemployment and chugging-along-well-enough economy that Trump routinely boasts about that’s what the Fed is supposed to do, according to the prevailing and usually reliable economy theory, but Trump would prefer the easy money that keeps the economy and stock market setting records he can brag about until the hyperinflation comes along during a future Democratic administration.

Trump has tried to solve this problem by packing the Fed’s board of governors with more compliant appointees, but the latest two have failed been forced to drop out..

One was Herman Cain, the former Godfather’s Pizza chain boss who ran for the Republican presidential bar in ’12 on a catchy “Nine Nine Nine” economic plan that somehow concluded that nine was the perfect number for the national income tax and business tax and sales tax, and even before a couple of extramarital sex scandals chased him out of the race most Republicans had concluded that despite his business success and master’s degree in business and knack for catchy slogans Cain didn’t much know about economics. Once it became clear he wasn’t going to get affirmed by Congress, Cain withdrew his name for consideration for the Fed Board.

Trump appointee Stephen Moore has also withdrawn his name from consideration, although for different reasons. The damned Democrats who control a majority in the House and are only slightly behind in the Senate didn’t like Moore’s long history of undeniably sexist public statements about uppity women playing basketball, nor his habit of making arguably racist jokes while on microphone, and a sufficient number of the slight majority of Republicans in the Senate were so put off by his utter lack of any discernible qualifications for the job that they risked the wrath of Trump’s “tweets” Moore has said on camera and written in print that he favors a return to the gold standard, which economists on both the left and right sides of the sensible mainstream consider crazy talk, and when confronted with that in his confirmation hearings Moore took the Trump-ian way out and insisted that he’d never said or written any such thing, so that didn’t go well

Meanwhile Trump’s Attorney General didn’t show up for his scheduled testimony before the House Judiciary Committee on Thursday, the White House and its various executive agencies are similarly resisting Congress’ very extensive efforts to exercise its constitutional oversight powers about a wide range of Trump’s ongoing businesses, which will all be eventually settled in those pesky courts that don’t always rule in Trump’s favor, despite Trump’s serendipitous efforts to pack the Supreme Court.

Gasoline prices are also rising, despite all the “fracking” that’s going on and Trump’s chummy relationship with the unctuous king of Saudi Arabia. Trump’s greatest trade deal ever with Canada and Mexico to replace the worst-ever North American Free Trade Agreement is also facing a bipartisan tough fight in Congress despite the slight Republican majority in the Senate. There still seems to be a worry about North Korea’s nuclear weapons program, despite Trump’s love affair with Kim Jong Un and his assurances we can all sleep soundly at night. The damned Democrats have some pretty fair questions to ask Barr about his rose-colored-glasses handling of the pretty darned damning Mueller report, and the Democrats are calling on Mueller himself to sort it out in public testimony, and we expect that to take up much of the coming news cycles.

Which is mostly fine by us. We don’t think any of these damned Democrats know any better, but we’ve seen enough of Trump to root for any established institutions that might restrain him. So far as we can tell, the hated establishment and its usual way of doing things is more reliably right than Trump.

— Bud Norman

The Second Term Around

A second term agenda has been conspicuously absent from Barack Obama’s re-election campaign. There’s been plenty of sneering criticism for some things that Mitt Romney has said he wants to do, far more sneering about some things that Obama falsely claims Romney wants to do, and a few small proposals such as the ever-popular soak-the-rich tax hikes, but nothing in the way of a grand scheme to fix the nation’s many lingering problems.

The oversight is so glaring that even the president’s most stalwart supporters have noticed, and some have gone so far as to suggest that he offer such a plan in order to bolster his recently declining electoral prospects. This seems reasonable enough, given the apparent difficulty of selling more of the same, but it’s hard to imagine what he might come up with that will woo back any lost voters.

Any plan released at this late date will naturally raise questions about why Obama has waited so very long to unveil it. Some will suspect that it was intended to avoid the critical scrutiny of the media, as if that would ever happen, while the most realistic skeptics will assume it a ploy to prevent Romney from having a go at it during the debates. Those still enamored of Obama will be thrilled with whatever he might come up with, but the rest of the country will immediately be wondering why he hadn’t attempted such a brilliant agenda to begin with. The plan would have to be rolled out in yet another Big Speech, as well, and there have been so many of those over the past four years that many Americans would pay it no mind.

Obama likely has a number of big ideas that he is eager to impose on the nation if given the opportunity, but probably has been keeping them to himself because he believes that they won’t be very popular. All of Obama’s ideas involve spending great gobs of money, a point that won’t be lost on a public that finally seems to be properly worried about the country’s mounting debt, and they always require an almost religious faith in governmental power that has lately become harder to sustain. Although Obama will occasionally hint at how very far left he would go when off the teleprompter, as in his infamous “you didn’t build that” oration, he has mostly tried to sustain an image of moderation.

Such reluctance to be frank has severely hindered Obama’s efforts to even tout the ideas he has proposed. When Obama was hammered about energy prices during the first debate he seemed itching to shout out that of course he had sought increases, that he had told people he would during the first campaign, and that everyone will someday be thanking him when we’re all driving on $20-a-gallon biofuels because he’s pumped the cost of Gaia-killing gasoline to $21 per gallon, and that if anyone out there didn’t like it they could just buy a Chevy Volt or leave the suburbs and live in the city like a real person. He restrained himself, of course, and offered an obviously bogus explanation of how much he truly loves gas and coal and all the fossil fuels, confident that his friends at the Sierra Club would know he was fibbing but hopeful that no one else would figure it out.

Perhaps if the election comes to seem out of reach Obama will at last unleash his inner radical, and go down with his full Alinskyite furor proudly on display. The true believers will love it, but the rest of the country will likely decide that Romney isn’t so scary after all. Expect to hear more sniping about Big Bird and binders, then, and any distraction available to keep you wondering from about what he really has in mind.

— Bud Norman

Oklahoma Crude

There’s no telling what the White House’s internal polls are saying, but the travel itinerary says the president is schedule to appear today for yet another energy policy speech in Cushing, Oklahoma, and that says he’s getting very nervous about the recent rise in gasoline prices.

Obama is not popular in Oklahoma. He lost Oklahoma by the widest margin of any state in the last election, a proud distinction that rebuts every dumb Okie joke ever told, and in the most recent voting he lost 15 counties in the Democratic primary. As frequent visitors to the Sooner State, we can attest that there’s even a good deal of loathing toward the president there.

It is safe to assume that Obama feels no particular affection for Oklahomans, either. Aside from their annoying habit of not voting for him, Oklahomans tend to cling to their guns and religion, although not at all bitterly, and have a strange preference for relying on themselves rather than the government. Many of them also work in the oil fields, rather than in a non-profit advocacy group or government-subsidized solar panel factory, and one gets the impression that Obama would find that yet another example of how very gauche they are.

Which is apparently why Obama chose such a far-flung locale for his latest attempt to prove how very pro-oil he really is. After blocking construction of the Keystone XL Pipeline, which proved wildly unpopular, Obama will announce in Cushing that he’s going to expedite the review process for construction of the southern part of the project that runs through Oklahoma. The construction of that portion is already slated to start by June, Obama’s intervention won’t speed its progress at all, and it still won’t reach halfway to the source of oil due to Obama’s edicts, but the fact that he went to Cushing to announce his new policy should convince a few gullible voters that he’s serious.

A sharp political operative should be able to round up a small hall’s worth of star-struck Obama supporters even in rural Oklahoma, and the president will no doubt get a cheer when he boasts that domestic oil production has increased during his term, but few other Oklahomans will be swayed. Even ABC News is forced to admit that “energy experts say his policies have little to do with those developments,” and most Oklahomans already know that from their friends in the oil business.

Still, we hope the president enjoys his time in Oklahoma. He should try the chicken fried steak, punch the numbers for some western swing music on the juke box, take in a prairie sunset, and enjoy the simple pleasures of a fine state, because he probably won’t be back for another visit.

— Bud Norman

Alternative Alchemy

Legend has it that back in the Dark Ages there were kings who spent fortunes on an effort to turn lead into gold. Even at that point in western science it was known that lead and gold are tantalizingly close in their chemical compositions, and the kings assumed that all that was needed to make up the slight difference was a vast amount of the taxpayers’ money.

A similar assumption seems to underlie the Obama administration’s energy policy, which seeks to turn wind, sunshine, algae, and anything else at hand into something as powerful and affordable as oil and coal. All that’s needed to achieve this transmutation, apparently, is several billion dollars more of federal funding.

With oil prices recently on the rise, and the public’s discontent rising at a commensurate pace, Obama flew his petroleum-powered jet to North Carolina on Wednesday to defend this notion. After assuring the crowd at a German-owned truck factory in Mount Holly that his policies have increased oil production in America, Obama called oil a “fuel of the past” and prophesied a glorious future of alternative energies and more fuel-efficient vehicles.

The part about his administration increasing domestic oil production simply isn’t true, as disgruntled oil producers around the country will attest. There has indeed been an increase in the amount of oil being pumped here, but it’s been on private lands beyond Obama’s control or from leases issued by previous administrations. The administration’s policy has been to keep almost all federal lands untapped, enforce a moratorium on Gulf drilling, and “slow-walk” new permits.

The part about the alternative energy-powered future might happen, but there’s plenty of reason to be skeptical about it happening anytime soon. Even Obama’s Department of Energy’s can’t offer a more optimistic projection than 13 percent of America’s energy production coming from alternative sources by 2035, and history gives no reason to be hopeful that federal funding will help us get there.

The Solyndra debacle and the Chevy Volt fiasco are but two notable examples of the government’s “green” failures, and the big successes that the administration’s cheerleaders at The Hill cite are the re-organization of the bankrupt EnerDel company and that taxpayers will recover 70 percent of a loan to the Beacon Power Corporation’s bankrupt energy storage plant. The government has been at work on alternative energy sources since at least the ‘70s, when President Jimmy Carter set a goal of obtaining 20 percent of America’s energy from solar power by the year 2000, and the results have not been encouraging. To borrow a word from the alchemists’ lexicon, more federal money is not a panacea.

Which raises the question of why it has to be federal money. Anyone who does invent a power source that is less expensive and just as efficient as oil will become very, very wealthy as a result, and that should entice the smart money into the most promising avenues of research. The inevitable technological breakthrough might be discovered by government scientists who will be paid the same if they fail or succeed, or it might be found by private entities that will be rich if they succeed and broke if they don’t, but we’re inclined to bet on the latter. The people staking their own money will also be more careful in choosing which technologies to invest in, rather than governments, which always seem to wind up backing the biggest campaign contributors.

The alchemists’ failed experiments yielded some knowledge that later became useful, but they never did figure out how to turn lead into gold. Centuries later science did figure out how to do it, but not in a way that was less expensive than the price of gold. The modern day energy alchemists will probably provide some new science, too, but don’t expect that they’ll soon be able to turn wind, sunshine, algae, and whatever’s at hand into power. They might be able to provide alternative energy at a competitive price when oil gets to $600 a barrel, but the Obama administration hasn’t achieved that yet.

Then again, the price of gold is now $1,686 an ounce, while WTI crude oil is selling at a relatively cheap $106.41 a barrel, so perhaps the government would do better to invest in some old-fashioned alchemy.

 — Bud Norman

That Gassy Feeling

No one, not even the greenest environmental wacko in the world, likes paying higher prices for gasoline.

We can state this with journalistic certainty, because back in our newspaper days the editors would send us out in search of utterly predictable man-at-the-pump quotes to localize wire stories every time the prices spiked. On one such occasion we happened to spot a fellow we know to be the greenest environmental wacko in the world as he was filling up his tiny automobile. We immediately pounced on him, notebook and pen in hand, hoping to snare the first-ever quote in praise of higher gas prices, but alas, even he offered nothing but the usual grousing.

With gas prices once again on the rise, already reaching record levels for the month of February and expected to head far past the outrage-inducing $4 barrier by peak summer driving season, all that really matters is who gets the blame. Much of the anger will likely be directed towards President Barack Obama, and this seems fair enough.

Presidents always get the blame for high gas prices, after all. The last oil shock came during the waning days of the George W. Bush administration, and he was blamed by everyone, including then-candidate Obama. If only for the sake of bi-partisanship and intellectual consistency, this venerable tradition of blaming the president should continue for at least one more term.

Bush was easily blamed because he’d once been an oil man and was thus perceived to be friendly toward the oil industry, always a mother lode of material for conspiracy theorizing, but Obama’s once-vaunted hostility toward energy producers should make him an even more plausible scapegoat. This is the man whose only regret about the last round of $4-a-gallon gas was that it hadn’t happened gradually enough, after all, and the same one who appointed a Secretary of Energy who openly yearned for European-level gas prices. He’s also the same fellow who openly boasted that his cap-and-trade plan was intended to cause to electricity rates to “skyrocket.”

As president, Obama has not pursued a cheap energy policy. He acted in contempt of a court to impose a moratorium on drilling in the gulf of Mexico, blocked the construction of the Keystone XL pipeline, and has continued to keep the Alaskan National Wildlife Refuge and other oil-rich properties off the market, and subsidized a number of “green” industries whose business models rely on higher energy prices. He’s now touting increases in domestic oil and gas production, even as he continues to play the role of environmentalist hero, but most of the increase has come on private land or because of permits issued by his oil-loving predecessor.

You can also make a strong case that the oil hasn’t become more valuable, but the dollars we’re buying it with have become less so. If so, Obama’s profligacy and his choice for Federal Reserve chairman are at fault.

One can also blame the mad mullahs running Iran, whose belligerence has spooked the futures markets into bidding up the price of crude oil, but this still does not leave Obama blameless. It is impossible to say if a more confrontational policy would have deterred Iran from its recent aggressions, but it is quite possible to say that the “open hand” approach has thus far not worked out.

The White House will no doubt give it a try, but it’s going to be a hard sell to blame the higher gas prices of Mitt Romney, Rick Santorum or any other Republican challenger. They won’t dare blame it on Satan.

— Bud Norman