Friday, November 14, 2014
Usual Crime/Usual Suspects: JPMorgan and co-conspirators have been caught again, this time rigging the foreign exchange markets for a decade or two. Having cheated the public out of tens if not hundreds of billions, they collectively have to ante up a bit less than $4 billion and play another of their endless get-out-of-jail fee cards.
Net Neutrality from the Southern Point of View: Opponents of net neutrality oppose net neutrality. Such critters can be identified by their dark suits, big cigars, buckets of cash and an army of lobbyists. And an unshakable belief in their divine right to milk the public.
Keystone: As though it matters in any but the most symbolic way, the Democrats are giving up their pretense of caring about the future and will go along with the Republicans in approving the completion of the Keystone pipeline. It has become obvious that the tar sands will be mined and shipped to market somehow – trains, pipelines across Canada or north to the Pacific -, so the US might as well make some money along the way. It'll be dressed up as a great jobs program, which it is. For politicians who want to keep theirs.
How Long Can You Hold Your Breath? The IEA reminds us that a surplus of oil will lead to a shortage of oil. With moderate pauses to accommodate business cycle blips, global demand will continue to climb and is expected to be about 110 mbd in 2040, up from 90 mbd today. Production will not only have to meet that increase, it will have to replace about half of today's production. Wells run dry, y'know, even those in Saudi Arabia. Fracked wells have about a 3-year useful lifespan and the main producing shale fields are expected to be memories by early 2020's. If peace breaks out today in Iraq and someone wants to risk $300 billion or more in a ten-year development program, Iraq might one day contribute 4 or 5 mbd more that it does today. If rational behavior dropped in on Libya, there's another couple mbd. And one day soon we'll have to invite Iran back to the table along with its 3 or 4 mbd. And so on. It does not add up. Even to gracefully fail will require about a trillion dollars a year in adventurous investment by 2030 to produce a product which we need and which will, when burned in our cars, eventually cure us of needing it.
Woodshedding: The Democrats, smarting from the spanking the voters just gave them and vaguely nodding to reality, have created a “strategic policy leadership position” for Sen. Elizabeth Warren within the Senate Democratic caucus. Probably window dressing, for there are few if any career Democrats who want anything to do with the strategic policy advice she is likely to give them.
Frequent Failure Program: Kansas, the demonstration project for wingnut economics, is discovering that lowering taxes results in less income from taxes. Gov. Brownback, who has just been reelected on the strength of faith over reality, is facing the choice of raising taxes – which he cannot do – or cutting services – which he's done too much of already. By June the state needs to cut $279 million because personal income tax revenue is about $239 million less than the true believers believed it would be (and real world data suggests the actual shortfall will be nearly twice that at $546 million) – because the miracle of lower corporate taxes did not, by golly, end up as wage increases for anyone.
Political Math: The Republicans are rushing to approve construction of the Keystone XL pipeline as a step toward North American energy independence. Too bad it's not true. North America produces about 15.6 mbd and consumes 20.8 mbd and even with new math that leaves a 5 mbd shortfall.
Posted by Charles Kingsley Michaelson, III at 7:21 AM