Tag: Energy

MLLG

Annus Horribilis at the Midway Mark

George Noga

The gates are down and the lights are flashing but there is no train coming.

Annus Horribilis at the Midway Mark

By: George Noga – July 10, 2022

I published a special posting on January 1, 2022, (read it at www.mllg.us) warning that this year would bring unprecedented geopolitical, economic, political and financial horrors. Never before in 15 years and 600 posts did I make any such forecasts. Rarely in human affairs have predictions come true so quickly, accurately and completely.

Geopolitical Horrors

I predicted that if Putin intended to invade Ukraine, it would be in 2022; Putin invaded in February. I wrote Putin and Xi would form an entente; they issued a statement stating, “their friendship has no limits“. I said Iran would race toward a nuclear weapon and threaten its neighbors; they have enriched uranium to weapons grade and threaten Saudi Arabia. I predicted North Korea would act up; they have resumed test firing ICBMs, threatening Japan and even the USA, and testing nuclear weapons. I wrote if Xi intended to invade Taiwan, it would be this year. I now assess this as less likely due to the unexpectedly robust global opposition to Putin’s Ukraine invasion.

Economic Horrors

I forecasted inflation would exceed 10%. The Producer Price Index is up 11% and other indices are up 8.6%. The real rate of inflation is 15% if computed on the same basis as the last time the US had high inflation. I predicted the Fed would surge interest rates leading to a recession. The Fed is now increasing rates three-quarters of a point at a time just as I predicted. They are doing too little too late. The economy shrank by 1.5% in the first quarter. Throughout US history when this has occurred, there is a 94% chance of a recession. The United States likely is already mired in a recession.

Per Barack Obama “elections have consequences“. Indeed they do!

On the economic front, the worst is yet to come. I expect inflation to remain stubbornly high and intractable. The Fed will be forced to raise rates much more than they now contemplate. There will be a prolonged period of stagflation, i.e. inflation combined with stagnation. Ultimately, getting control over inflation will result in a severe recession. The recession, in turn, will lead to out-of-control spending and deficits in a futile attempt by Biden and the Democrats to salvage their tattered political prospects.

Political Horrors

In January I predicted a Biden horror show. The ineptitude of his Administration has exceeded my worst fears. They have hit rock bottom (and are still digging) on every issue: inflation, immigration, energy, supply chain, pandemic, crime and foreign affairs. Identity politics has resulted in widespread incompetence. The following were selected based solely on identity: Harris, Austin, Yellen, Buttigieg, Raimondo, Becerra, Granholm, Cardona, Mayorkas and a slew of lesser lights. Sadly, the gates are down; the lights are flashing; the whistle is blowing, but there is no train coming.

Financial and Investment Horrors

I wrote that in December 2021 I moved my investments into a highly defensive posture with over 70% in cash, cash equivalents and ultra-short duration bonds. I also doubled my holdings of gold, commodities and TIPs. Thus far, the NASDAQ is down over 30% and the S&P 500 over 20%. Commodities are up 30%, but gold is up only slightly due to the strength of the dollar and higher interest rates. The markets are not likely to hit bottom until 2023 or even 2024, but the worst is yet to come. In the immortal words of Barack Hussein Obama “elections have consequences“. Indeed they do!

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Next on July 10th: Soaking the rich and fat cat corporations.
More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us
MLLG

California Screaming – Prince of Fools

George Noga

The republic can survive a Biden, but not an electorate that made him president.

California Screaming – Prince of Fools

By: George Noga – June 5, 2022

California Screaming: The Cato Institute recently published the results of its multi-year project, Poverty and Inequality in California. You may be surprised that California, despite Silicon Valley and Hollywood, has the highest poverty rate in the USA. Moreover, poverty and inequality are getting worse by the day. The study found the cause is “California laws, regulations and policies are regressive, trapping people in poverty. . . . These policies involve criminal justice, education, housing and welfare.” California has had the most progressive government of any state for decades. Instead of utopia, liberal ideas have wrought the worst poverty and inequality in America.

Freedom Index: Cato also just released its Index of Personal and Economic Freedom for 2021. The five highest ranking (most freedom) states are, in order, New Hampshire, Florida, Nevada, Tennessee and South Dakota. The lowest ranking (least freedom) are New York, Hawaii, California, New Jersey and Oregon. The states with the most freedom all are red or purple; the bottom dwellers all are deep blue. Americans are voting en masse with their feet for more liberty and less government.

Prince of Fools: Following (edited for length) is from a major European newspaper. “The danger to America is not Joe Biden, but a citizenry capable of entrusting a man like him to the presidency. It will be far easier to undo the follies of a Biden presidency than to restore the necessary common sense and good judgment to those who elected him. The problem is much deeper and more serious than Mr. Biden, who is but a symptom of what ails America. The republic can survive a prince of fools like Biden, but is less likely to survive a multitude of fools, such as those who elected him.”

If Biden is the prince of fools, Kamala Harris is the queen of fools. Although the Trump presidency, or at least its policies, turned out much better than expected, he never should have been nominated or elected. He won the nomination only because 15 professional politicians all misread the electorate. He was elected only because Hillary Clinton was radioactive. Biden won, despite obvious signs of cognitive decline, because suburban women were triggered by mean tweets. In 2024 it could very well be a Trump- Clinton rematch – see my post of 5/22/22 on our website: www.mllg.us. How much longer can our beloved republic survive an electorate like this?

Permanent State of Emergency: Governments at all levels have learned their powers are vastly increased during an emergency – even if they created the emergency. It is no wonder we are in a permanent state of emergency: pandemic emergency, voting rights emergency, climate emergency and now an energy emergency. Nothing encapsulates the fecklessness of the Biden Administration more than energy. Immediately upon taking office, Biden declared war on the US energy sector in every way possible.

Biden feigns shock energy production plummeted and prices skyrocketed. He declared an ersatz state of emergency to tap the Strategic Petroleum Reserve, after first begging Venezuela (dirty oil) and Iran (fund terrorism) to produce more. Biden has reverted to the progressive playbook and is blaming greedy speculators and energy companies. Funny – these same groups were not greedy when prices were falling under Trump.

Achieving Perfect Equality: Since men first trod this earth, many have dreamt of a world with perfect equality; thanks to scientific advances, that now may be possible. The best minds on the planet could create a master algorithm incorporating all known markers of success. The algorithm would include DNA and would account for, inter alia, race, gender, sexual orientation, height, weight, IQ and life expectancy.

Key exogenous factors also would be included in the master algorithm: place of birth, social class, family income and education level, et seq. The result is a polygenic score assigned to everyone at birth. Those with positive scores would pay a polygenic tax while those with negative scores would receive a benefit – in direct proportion to how much the scores were positive or negative. If done correctly, this would make everyone equal. It is only a matter of time until progressives adopt this idea and run with it.

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Next: My lifetime of experience with government schools.

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More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us
MLLG

The Panacea of Economic Growth

George Noga
By: George Noga – November 1, 2014
       Throughout its 238 years, the US economy has grown by over 3.0% annually, although data for the early years are problematic. For the 60 years from 1940 to 2000, the US economy grew at a rate of 3.6%. For the following 14 years from 2001 to the present, GDP grew by 1.8%, exactly half that rate. If growth remains tepid, Americans will not recover the ground they lost and their children and grandchildren will, for the first time, be worse off than the previous generation.
        America has transmogrified into Europe which is in permanent recession due to its failed economic policies. Even stalwart Germany is beginning to stagnate. France is destroying its economy in a fit of socialistic angst. Italy has a lower GDP per capita than it had 15 years ago. Meanwhile in Brussels, Jean-Claude Junker continues to strangle EU countries with bureaucrats and regulations. In Europe a 2% growth rate is seen as optimistic, 1.5% as acceptable and no growth as possible. The average European in one generation fell 25% behind the average American due solely to differences in GDP growth. As I wrote last month, just in the past 5 years, the average American has been impoverished by 17% due to the low growth rates coming out of the recession compared to the historic growth rates in similar times. In short, we already have become like Europe although Europe continues to plumb ever new depths. We are well along in suffering a lost decade on the path to a lost generation; our progeny, like Europeans today, will lead lives of quiet desperation.
“Failure to grow America’s economy is a choice; decline is not inevitable.”
        Failure to grow our economy is a choice; decline is not inevitable. It is a choice made by our political leaders solely because they prefer to demagogue inequality, class warfare and corporate profit for perceived electoral gain. It is a choice made by the media because they are lazy, economically illiterate and prefer to flog dead camels. It also has been a choice made by ordinary Americans in the voting booth for all of the aforementioned reasons advanced by politicians and the media. There are strong signals however that ordinary Americans now are beginning to want economic growth.
Economic Growth as the Panacea

        As trumpeted by the headline of this blog post, economic growth is a panacea; indeed, it is the only solution for every problem (real and perceived) that we face today and for the coming generation. It is apropos that Panacea is the Greek Goddess of healing because strong economic growth will heal everything; to wit:

  • The crisis of spending, debt and deficits: A sustained period of strong economic growth (combined with some spending restraint) will enable the US to restore fiscal balance and to stabilize its debt thereby gradually lowering the Debt/GDP ratio to its long-term historical level of around 30%.
  • Climate change and environment: If in the distant future climate change causes some issues, the best antidote is a vibrant economy that will easily enable us to spend whatever is needed to mitigate any such problems.  Only countries with strong economies can afford to spend copiously on the environment.
  • National security: The single greatest asset (weapon) we possess for our national security is a growing, resilient economy. This enables us to spend whatever is necessary to deter any possible adversaries and to defend ourselves should that be necessary. Weakness invites aggression and fosters terrorism.
  • Jobs, poverty and inequality: It is economic growth, not government, that creates jobs. It is sustained growth that fulfills the American dream and eliminates poverty; moreover, growth is the great equalizer.
  • Unfunded mandates: The USA is facing $350 trillion (over one-third of a quadrillion) in unfunded commitments in the next 50 years for Social Security, Medicare, government pensions, Obamacare and other programs.   Absent  a high rate of growth, these promises not only cannot be kept but will require drastic reductions in programs.
Recipe for Economic Growth

      Okay, so economic growth is the panacea; what must we do to achieve it? The answer is straightforward and attainable. If we do the following  we will achieve vigorous, long-lasting economic growth.

  1. Political consensus: Probably the single most difficult hurdle for achieving growth is reaching a political consensus. Politicians and the media must agree to pursue policies that maximize growth and agree to stick with such policies for the long term. They can continue to argue over how to divide the wealth that results; that is what politics is about. Absent some consensus however, achieving sustained growth becomes problematic.
  2. Tax and fiscal policy: Taxes (personal and corporate) must be reduced, simplified and stable. People and businesses must be able to plan ahead and certainty about taxation is indispensable to investment and job creation. In the same vein, spending needs to be restrained.
  3. Eliminate uncertainty: Business hates uncertainty; it stifles planning and results in gridlock. There needs to be a broad and sustained political understanding about taxes, regulations and new initiatives.
  4. Sound money: The Fed should focus only on maintaining sound money and fighting inflation. A strong, stable and sound dollar are indispensable for a vibrant economy.
  5. Regulation: The economy is being strangled by regulation and litigation. We need to have a moratorium on new regulations while we gradually reform and roll back existing ones. Our tort system needs to be reformed.
  6. Energy: We should develop every possible energy source including ANWR, offshore and shale and natural gas on federal and state lands. We should export LNG immediately from many terminals and, of course, construct the Keystone XL Pipeline. Such a policy will create jobs, make us energy independent, stimulate the economy and, importantly, prove to be a potent weapon in keeping Putin and Russia in check.
  7. School choice: I include this because educated, trained workers are a potent economic resource. Further, school choice will bring about more equality and reduce poverty. It also is a panacea.
     The choice is ours. We can continue on our present slow growth trajectory which will condemn future generations to a downward spiraling economy and reduced living standards; they will experience untold miseries as the crisis of spending, debt and deficits culminates in a meltdown. They will inhabit a Clockwork Orange nation drowning in taxes, regulation and uncertainty. They will have part time jobs for low wages. At best they will collect 65% of the present Social Security benefits deferred until they are age 70; Medicare and Obamacare (also age 70) will be busted; health care rationed and long waits common for poor treatment. They will inherit a volatile, dangerous world where nuclear weapons proliferate, a revanchist, aggressive Putin-led Russia and all without the resources for adequate national defense.
       Or, we can make a different choice; we can choose to reject decline and to embrace high-growth policies. This would lead to a virtuous circle of better education, abundant and cheap energy, and to a far safer and more secure nation and world. It would result in fixing the debt crisis and funding all the promises we have made for the future. Most of all, it would help ordinary Americans. As year after year of high growth enriches America, the politicians can fight over how to best divide up this cornucopia – including addressing any inequality issues.
       Firstoff however, we must make the right choice. This gets us right back to the heart of Alexander Hamilton’s question: “Whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend on accident and force.” Is America today still capable of putting politics aside when self preservation is at stake? Or, do we heed the Siren song of politicians advocating failed ideologies, searching for Utopias and demagoguing political correctness, class warfare and inequality?
MLLG

MLLG State of the Union Address

George Noga
By: George Noga – October 1, 2014
      My fellow Americans: I begin with first principles. Governments are instituted among men to protect their rights which include life, liberty, property and the pursuit of happiness. Indeed, this is the only legitimate purpose for government. Experience has shown that legally sanctioned force, i.e. government is necessary to secure our rights including defense against foreign threats, protection from domestic violence and enforcement of contracts. Government therefore is a necessary, albeit evil, force that must be tightly controlled and used only for the carefully circumscribed purposes noted supra and then only to the absolute minimum extent necessary.
      All of human experience demonstrates free people, free trade and free markets result in the greatest prosperity for all. Government is inherently coercive; it is not about logic, reason or persuasion; it is about brute force including the threat of force. In contrast, civil society is always voluntary and cooperative. No company, no matter how big or powerful, can compel you to buy its product or service. A consumer armed with a free choice is the most powerful force on earth.

     The principles identified supra lead to twelve major initiatives I now announce. There is much more to be done; however, this is where we must begin to restore our Constitutional Republic.

  1. The Constitutional Box: We are a government of laws and not men. The identity of those who hold executive, legislative or judicial offices should be of little consequence to citizens provided they act within the confines of the Constitution, i.e. stay inside the Constitutional box. This means shrinking government to its core responsibility of securing our rights and, to a very limited extent, providing infrastructure. Accordingly, we will scale the federal government back to 15% of GDP, a level which empirically is demonstrated to result in the maximum rate of economic growth and hence the maximum well-being for all our citizens.
  2. Free Trade: Wealth and prosperity are created by trade among peoples. Traders take substantial risks and can accrue riches; however, their wealth ultimately depends on improving the lives of their customers. If they fail to make you better off, they do not prosper. Free and unfettered trade is universally good – always and everywhere. For that reason I announce the United States unilaterally will eliminate all tariffs and trade barriers – even if other countries do not reciprocate. We will be better off for that action and those who do not follow will be worse off.
  3. Sound Money: The Federal Reserve will have one mission only: to maintain sound money. This means purchasing power will be maintained, inflation eliminated, and increases in the money supply subject to strict constraints. The Fed will be audited regularly and we will take a hard look at reestablishing a gold standard.
  4. Taxation: As we scale government back to 15% of GDP, taxes can be slashed. I am asking for repeal of the 16th amendment to eliminate the income tax. We also will eliminate the death tax and Social Security/Medicare payroll taxes. These will be replaced by  a consumption tax at the lowest rate possible – likely in a single digit. The 60% of Americans who currently pay no income tax (net of credits) will begin to enjoy the dignity that comes with being a taxpayer. Moreover, they will have a personal stake in controlling spending and holding taxes to the absolute minimum. The crisis of spending, debt and deficits will end instantaneously.
  5. Defense and Foreign Affairs: We will follow the admonition of President John Quincy Adams that “America is a friend of freedom everywhere, but a custodian only of our own.” Simultaneously, we will observe George Washington’s advice  that “The best way to keep the peace is to be prepared for war.” We will strengthen and then consistently maintain the military for the long term at such a high level as to deter any possibly adversary.
  6. War on Drugs: The war on drugs is over. As we learned with prohibition, the drug war is unwinnable and never should have been fought. Henceforth, all drugs will be legal but regulated, taxed and discouraged just as with tobacco. Drug taxes collected will go solely for rehabilitation of those who continue to abuse them. We immediately will realize benefits including: (a) releasing non-violent drug offenders; (b) ending drug related crime; (c) putting drug cartels out of business; (d) reducing police corruption; (e) refocusing our foreign policy; (f) ensuring safety of drugs; and (g) eliminating drug dealers as role models.
  7. Regulation: All regulations will automatically sunset ratably every 10 years. Congress must enact any that need to be replaced. Any regulations promulgated by bureaucrats that have an economic impact of over $25 million must be voted on and approved by Congress before taking effect.
  8. Role of Juries: Henceforth, defendants (and their attorneys) will have the right to explain to juries that juries are sovereign and, as intended by our nation’s founders, have the final say about the legality and enforcement of all laws. The grand jury system will be reformed to stop prosecutorial abuse and to allow citizen grand juries.
  9. War on Poverty: The war on poverty is finished. The percentage of Americans who, by their own reports, lack a healthy level of food, shelter, clothing or medical care is 2%-3%. This cohort is identical to the 2% to 3% of Americans with very low mental acuity, i.e. those who struggle to fill out a simple form. We will therefore refocus our attention and also our solutions to better deal with the real problem. Even though the percentage in poverty is low, it still equates to 7-8 million of our countrymen to whom we pledge a strong safety net.
  10. Entitlements: Obamacare is to be repealed and replaced with free market solutions. Entitlements  will be placed on budget. Social Security gradually and voluntarily will be privatized. In the interim, benefits will be maintained by changing indexing and lengthening eligibility ages. Medicare benefits will be maintained by gradually lengthening eligibility ages and changing to a premium support model; also, medical costs will moderate given real prices.  Medicaid will be block granted to the states to administer as they see fit without interference.
  11. Energy/Climate: The Keystone Pipeline will be built and natural gas exported. We will drill and frack in ANWR, offshore and on federal lands – all ASAP. Our national delusion about manmade global warming  is over. Warming is a solar phenomenon to which man’s contribution is minimal. We will continue to develop alternative fuels for the future while eliminating subsidies for wind, solar and biofuels. The EPA’s mission will be refocused.
  12. Education: School choice is the civil rights issue of our time. We will move with all deliberate speed to universal school vouchers. We will bring education into the 21st century with technology and by furthering alternatives such as online and home schooling and by creating entirely new paradigms.
          Thank you and may God bless the United States of America.

Environmentalism’s Siren Song

George Noga

By: George Noga – Updated February 22, 2014

    Nothing matches the environmental movement for effrontery. Everything about it is fraudulent; yet it has captured the hearts, minds and souls of our children. Try explaining to your kids that every measure of human and environmental well-being is better today than at any time in the past 100 years and continues to improve; they will not believe you. And it just isn’t our kids; too many of us buy into environmental myths.

      Everyone supports reasonable laws for clean air, water and energy, biodiversity, saving rain forests and right on down the line. So what’s the difference between us and those who usurp the mantle of environmentalism? There are three main differences: (1) we are for capitalism, free trade and limited government; (2) our beliefs are based on empiricism and science; and (3) we make rational, economic tradeoffs when human well-being is at stake.

The Environmental Movement is Led by Marxists with Other Agendas

   Like most movements of our era, environmentalism began in response to legitimate concerns. All people of good will supported laws to address the concerns. Then things began to diverge. Moderates left the movement believing their mission accomplished. Extremists took over and pushed for more and costlier laws to eke out smaller and more dubious improvements. Then the Berlin Wall fell; communism collapsed; and the most diehard Marxists found themselves homeless. Patrick Moore, a founding member of Greenpeace, stated it well.

   “Following the collapse of world communism . . . many of its members moved into the environmental movement, bringing with them their neo-Marxist, far-left agendas. The environmental movement was hijacked by political activists using green language to cloak agendas more about anti-capitalism and anti-globalization than with science or ecology.”

      Today the environmental movement is run by former Reds and the hard left. They have morphed into Greens for maskirovka but they are like watermelons, i.e. green on the outside and red on the inside. Its acolytes today are limited to big government types, professors, teachers, movie stars, a smattering of unthinking camp followers – and many of our children.

   The ultimate irony is that for a country to improve the environment, it must be wealthy. The only way for nations to become wealthy is via capitalism and free trade. That is why America, Japan and western Europe are able to spend lavishly on the environment. The worst environmental tragedy in human history was the Soviet Union and its satellites. The same leftists who created an environmental Armageddon in the USSR and who advocate a return to its disasterous ideology are the very ones leading the environmental movement in the USA.

Science and Empiricism Versus Failed Political Dogma

     We differ from the extremists in another important respect; our views are based on science and not failed dogma. Following are but a few examples to ponder.

  1. As well documented by economists Julian Simon and Steven Moore in their book It’s getting Better All the Time, the 100 greatest human and environmental trends of the past 100 years are the best they ever have been and continue to improve.
  2. Environmentalists oppose the Keystone Pipeline, US drilling for oil in the Gulf of Mexico (new wells), ANWR and the Atlantic continental shelf. Yet Cuba, Venezuela and many South American countries, with far worse safety records, drill in the gulf and on the continental shelf. Logically, it would be more eco-friendly for the US to drill.
  3. Extremists push for ever more costly laws to achieve insignificant marginal benefits while ignoring the 800-pound gorillas in the world such as coal mine fires in China and India that create more pollution than all the fuel burned by cars in a year in the USA.
  4. Organic food in scientific taste tests cannot be distinguished from conventionally grown food; it harms the environment as it requires 40% more land for production.
  5. Extremists insist we spend trillions in the years ahead to combat alleged warming and all to lower global temperature by an imperceptible .1 degree Fahrenheit by 2100. The same amount of money could be better spent fighting TB and malaria, ad infinitum.

Conflicts Between the Environment and Human Well-Being

  When inevitable conflicts arise between environmental and human well-being, extremists totally disregard economics and human suffering. There arise situations when harm to the environment is uncertain or minimal while the cost and suffering to humans is astronomical. In such situations, like the snail darter and delta smelt, my calculus favors humans.      

    We are losing our children’s hearts and minds to eco-extremists who seduce them like the Sirens of Greek  mythology. The Sirens were seductresses who lured sailors with enchanting music to shipwreck on the rocky shoals of their island. Today’s environmental Sirens similarly are beguiling our kids with enchanting thoughts but with the same pernicious intent.