FreedomTalks

The last two evenings of the Democratic National Convention have been every bit as full of light, fluff, and glittery prose one would expect at the four day pajama party.  Speakers have grinned through their spot to cover past offenses and dished out the same misty rhetoric over and over again.  It’s all been very big on self-congratulations and very light on actual policy.

One of the most glaring omissions has been social security.  It’s no secret this is a very important issue to FreedomWorks.  In fact, our president, Matt Kibbe, has weighed in on this blog twice before wondering if the presidential candidates will get serious about retirement security.

If two throw-away lines can be considered serious then yes, the social security crisis is finally being addressed.

On Tuesday night, Senator Hillary said,” Now, John McCain is my colleague and my friend.  He has served our country with honor and courage … John McCain wants to privatize Social Security,” as if that was a bad thing.

Later, on Wednesday night, Senator Biden expounded Senator Obama’s position on Social Security with stunning clarity and depth saying, “Barack Obama will … put the ’security’ back in Social Security.”

I went to Obama’s website to see what Biden meant by that and found it meant a tax hike, and no mention of stopping the current practice of Congress to use social security like a slush fund.  It would be at least a step in the right direction to say that “Barack Obama will put the ‘trust’ back in Social Security Trust Fund and stop spending your money on pork barrel projects.”

Far from “Renewing America’s Promise” - Tuesday’s theme at the convention - this is repeating the mistakes of the past to continue to ignore the problem and conversely, the very simple steps that could be taken to give people choice and security.

Very interesting article from the Wall Street Journal - “San Fancisco Ponders: Could Bike Lanes Cause Pollution?”

Mr. Anderson disagrees. Cars always will vastly outnumber bikes, he reasons, so allotting more street space to cyclists could cause more traffic jams, more idling and more pollution. Mr. Anderson says the city has been blinded by political correctness. It’s an “attempt by the anti-car fanatics to screw up our traffic on behalf of the bicycle fantasy,” he wrote in his blog this month.

While I’m not sure what the ultimate findings from the environmental impact study will bring, Mr. Anderson does raise some really interesting questions: are the bike/car trade-offs worth it?  will better bike access really mean fewer cars or more gridlock for drivers?  and finally, and perhaps most interestingly, is the biking politically motivated?   Most biking commuters I know simply ride their bikes to work because it saves so much money on gas.  At any rate, it’s a fun read.

And further down the coast, also from the WSJ Santa Barbara County Board of Supervisors voted to support offshore drilling. The article admits this doesn’t mean rigs are heading out to CA immediately since state and federal statutes still ban drilling, but it is a strong message from Santa Barbara to the governor.  Their action also illustrates how people are beginning to understand how far we’ve come technologically, making off-shore drilling safer for the environment.

Let Go of the Past and Allow Offshore Drilling - George Skelton writes in the LA Times (h/t The Foundry)

So there’s a gusher of hypocrisy here: The state that is the biggest consumer of gasoline in the nation — but produces less than 40% of what it uses — is opposed to drilling for more oil off its shores. We’re slackers not pulling our weight.

Who Often Blocks Alternative Energy Projects? Radical Greens - Las Vegas Review-Journal editorial

They represented the handful of environmental extremist groups that are all for a renewable revolution, as long as it doesn’t involve the construction of wind turbines (they might kill birds), solar power arrays (they take up too much land and displace threatened bugs and rodents) or transmissions lines (they ruin scenic views), and as long as it doesn’t allow this country’s metropolitan areas to grow larger.

Don’t believe it?  Head over to www.lightsonOregon.com to see more radical opposition to alternative energy sources.

The Foundry has a great update on the state of card check and unions.

The president of California’s largest union local, the 160,000-member Service Employees International Union (SEIU) in Los Angeles, yesterday announced he would take a leave of absence and the local would be placed in a temporary trusteeship. Tyrone Freeman’s departure comes after an in-depth series of Los Angeles Times articles detailing how Freeman fleeced union members —  who make about $9 an hour caring for the infirm and disabled — of over $1 million in 2006 and 2007 alone.

And it gets worse from there.  The LA Times articles the blog mentioned are well worth a read to get caught up on what will definitely be an important issue next year.

Readers interested in checking into union activities on their own can go to www.unionreports.gov and read up on things like the non-salaried dispersements and perks union bosses get.

Steven Malanga takes on the “free-ride for business” myth at RealClearMarkets. Check it.

Many businesses we regard as successful operate on small profit margins. After paying $5.8 billion in taxes in 2005, Wal-Mart earned $11.7 billion—a nice chunk of change. But those earnings were on revenues of $312 billion, a mere 3.4 percent net profit margin. Exxon Mobil earned $36 billion in 2005 after paying $23.3 billion in taxes on revenues of $371 billion. Looking at that result you realize that in America today, a ‘windfall’ profit is one that amounts to less than 10 percent of revenues.

With profit earning companies vilified so much in the media, and threats of increased rates always on the horizon, it’s easy to forget that we have the second highest corporate tax rate among OECD nations.

On their way out the door for August vacation, Congressional leadership threatened all kinds of windfall profit taxes aimed at oil companies - as if taking more money from a business would result in lower prices, especially ones who are already paying record taxes in keeping with their profits.

This Wall Street Journal article also sheds some light on “windfall profits,” pointing out that compared to other industries, oil has one of the lowest profit margins.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon’s profits don’t seem so large. Exxon’s profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that’s what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery — both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau’s industry rankings.

Reason is up to their usual brilliance with their latest on ethanol.

Says gentleman at a gas station in Texas in this video. Congressman Jeb Hensarling (TX) went home to collect signatures from constituents asking for a vote on energy.

Colorado Congressman Mark Udall has apparently seen the light of elections and  reversed his opposition to off shore drilling, The Denver Post has the story.

Battered on the energy issue for weeks, Democratic Senate candidate Rep. Mark Udall moved Wednesday to close the distance with his Republican opponent on the issue, calling for more domestic drilling and reversing his long-standing opposition to drilling off America’s shores.

Still no word if Udall will come around on the vast reserves of oil shale in his own state.

Here’s an interesting article from the Philadelphia Inquirer about oil off the New Jersey shore.  The article talks about the new technology we have to pinpoint oil, making it a more exact science than ever and about the billions of barrels just off our own coasts.

One of things that stood out to me most was the fact that New Jersey’s Governor and Senator Lautenberg both oppose off shore drilling  (and Rep. Zimmerman, a Republican senatorial candidate was opposed as well but tempered his stance by saying states should get to choose which is true) despite the fact that a majority of the people they supposedly represent disagree.

A 62 percent majority of likely New Jersey voters polled this month by Quinnipiac University Polling Institute said they favored drilling in protected offshore areas.

An even higher percentage of Jersey Shore voters - 70 percent - supported lifting the ban, polling spokesman Pat Smith said.

It’s pretty clear this is a national message leaders are ignoring.

FreedomWorks popped in to hear the speeches that are still going on over on the House floor today, the dogged determination to see this issue through is amazing.  Here’s what we heard:

Rep. Michael Ferguson (NJ): urged Americans to call the switchboard, (202) 224-3121. to speak to their Congressperson and demand a vote.  He said that people should “raise their voice and act, regardless of opinion.”

Rep. John Shimkus (IL): was running the show today, introducing speakers, welcoming visitors to the floor.  He spoke repeatedly about today’s theme: American energy means American jobs, saying “No to new energy is no to new production” noting all the jobs at every point in energy production.  Shimkus also read a letter from an Illinois Democrat judge who wrote in a letter to Speaker Pelosi that her refusal to allow a vote on drilling and relieving prices at the pump was “a despicable act” and that she hopes when Pelosi flies over the heartland she takes “time to reflect on all the citizens below who need real leadership in the house…this won’t make you the first woman president.”

Rep. Trent Franks (AZ): started by saying what a sacrifice it was for him to be there today - his wife just gave birth to twins only last week. However, he feels they make it all the more imperative he come to the floor and fight for their future.  It is easy to forget why you came to Congress in the first place, but it is to protect lives and the constitutional rights of those to come.  Franks went on to talk about the two major implications of high gas prices: first economical and second security.   Importing so much of our energy means a huge transfer of wealth from our nation to others that aren’t good allies.    Government needs to unleash people to do “all of the above” (drilling in OCS and ANWR, LNG, wind, solar, etc) instead of deliberately tying hands.  Government shouldn’t be “choosing winners and losers, but letting the market and American enterprise” solve the problem.  Already, Franks noted, Americans are doing a great job at conservation and efficiency.  While we burn 20% of the world’s oil and gas, we produce 1/3 of the goods because we have mastered efficiency and production and this will solve the energy problem, not government.

Rep. Geoff Davis (KY): said that we have so many resources of our own, at our very feet that we should be able to use responsibly.  We need to  pass legislation that lets us tap known resources like in the OCS and ANWR, followed by extracting fuel from oil shale, tar sands, and coal to liquids while technology continues to improve for alternative, non-fossil fuels.

Rep. Tom Davis (VA): started off by saying Congress was supposed to pass 11 appropriations bills this year to fund government, but so far only 1 has been brought to the floor because Speaker Pelosi is avoiding any amendments that could force a vote on drilling in the OCS.  And that although the Speaker had started to weaken on her stance as of late, it would probably be loaded down with pork barrel spending.  Davis said we needed a comprehensive policy and then read some of the OCS drilling myths the WaPo dispelled this morning.  Davis concluded, “Whether or not you agree on drilling in the OCS or not, we deserve a debate.”

Energy and food prices have risen at an astonishing clip. That means the U.S. economy is in inflation, right?

But the price of a key asset class, housing, is declining at 15 percent annual rate. That means deflation, right?

So what’s the word for an economic condition that contains relatively disruptive levels of both inflation and deflation simultaneously in different sectors of the economy?

Lousy public policies are a major driver of our current problems, of course. In particular, the Federal Reserve, led by Chairman Ben Bernanke, has cut interest rates far below the real cost of capital, weakening the dollar and causing a significant part of the increase in commodity prices.

Congress, not to be outdone, recklessly expanded the ethanol fuel mandate and continues to limit energy production, putting further upward pressure on both food and fuel prices.

In housing, a combination of tax breaks, conflicted ratings agencies, and government backstops for reckless (and in some cases fraudulent) lenders like Countrywide and Indymac Bank helped spur a bubble that is now correcting.

So some of the folks at FreedomWorks kicked around a few possible names for this unhappy outcome that seems different from traditional inflation or deflation (at least so far…).

Multiflation
Dumbflation (nod to bad policy)
Bailflation (nod to the bailout)
Fedflation (for our friends at the Federal Reserve)
Bearflation
Schizoflation
Scareflation
Badflation
Sadflation
WTF-flation

If you want to lay it at Bernanke’s feet, “Benflation” has a nice ring.

Biflation
Dissflation
Price Dissonance (already has microeconomic meaning though)
Greenflation (nod to former Fed Chairman Alan Greenspan’s role)
Coflation
Simulflation
Fragflation
Chipflation
Dieflation

I rather like Conflation, which captures both the conflated nature of the current economy, the role Congress plays, and the “con” involved in shifting housing market losses to the taxpayer.

What do you think? Share your own ideas in the comments below!