Posted tagged ‘Fracking’

Must reads For The Week 6/3/17

June 3, 2017

WE BID ‘ADIEU’ TO THE PARIS CLIMATE AGREEMENT

President Trump Announces US Withdrawal From The Paris Climate Accord, at zerohedge.com. Jerry Brown, Bill DeBlasio, Al Gore, Bernie Sanders, and Barack Obama respond to Trump pulling out of the Paris Climate Accord. If these five are for the Paris climate agreement, it must be nothing more than a socialist scheme for redistributing US tax payer money to the rest of the world. This agreement fits the world view of these gentlemen. Getting out doesn’t.

Obama Responds To Trump’s Withdrawal From Paris Climate Agreement, at zerohedge.com. First let me say this. President Obama. Since you didn’t send this treaty to the Senate for ratification, you had to know that the next President could get us out of this ‘agreement’  just as easily as you got us in to it.

Now here is what the former President said in his statement: “….the private sector already chose a low-carbon future. And for Nations that committed themselves to that future, the Paris Agreement opened the floodgates for businesses, scientists, and engineers to unleash high-tech, low-carbon investment and innovation on an unprecedented scale.”

Mr. President. The private sector didn’t choose “a low-carbon future”. Government ‘invested’ in green energy because the private sector wasn’t. The private sector doesn’t invest in technology that isn’t productive. Government ‘investment’ is nothing more than Politicians using taxpayer money to subsidize a non productive activity they think is a good idea (which means it fits their socialist world view). Once government money was available for the taking, crony capitalists, like Elon Musk and Jeffry Immelt, got in line for their share of tax payer dollars. Crony capitalist companies chose unproductive activities that were “made profitable” by tax payer dollars (Read-The Hidden High Cost Of Green Energy). So of course they’re against the US getting out of the Paris Agreement.

More from the former President: “…But even in the absence of American leadership……I’m confident that our states, cities, and businesses will step up and do even more to lead the way, and help protect for future generations the one planet we’ve got.”

First. It is OK if states, cities, and businesses want to freely choose this course of action. As long as they aren’t forced by the Federal Government or subsidized by the Federal Government.

Second. Getting out of the Paris Agreement is not the absence of American leadership. Getting out is American leadership. Leadership in America doesn’t come from political decrees. It comes from individuals coming up with new and better ways of producing output. A perfect example of American leadership is fracking. Fracking has broken the OPEC cartel because of the increased supply of oil. It has also helped lower US CO2 emissions because it has made natural gas so inexpensive that power plants are using natural gas instead of coal to produce electricity (If the purpose of the Paris Agreement was to lower carbon emissions they should be celebrating what fracking has accomplished). Here is an excerpt from an article I wrote titled; “Free Market Fracking Trumps Government Solutions When It Comes To Producing Energy.”

Market forces are more powerful than the hoped for results of central planners. The most recent example of this is the boom in oil and natural gas production, created by hydraulic fracturing [ fracking], which is taking place on private land in spite of Government policies. Our politicians shut down some Government lands to oil exploration, and made the process of getting permits for exploration on remaining lands more time-consuming [costlier]. They used their power, and our tax dollars, to promote and invest in, “green energy”. Green energy was going to create new jobs and lead our economy into the future; do you remember Van Jones the Green Jobs Tzar. As always, the plans by our best and brightest politicians, must be obedient to economic forces. Green energy has, and is, going bankrupt, in spite of being propped up by Government. Government tried to make carbon based fuels more expensive through regulation, and green energy more affordable through tax payer subsidies; And with all this Government intervention, the economic reality that green energy produces less energy at a higher cost, and carbon based fuel produces more energy at a lower cost, can’t be overcome.”

Elon Musk Leaving Trump Advisory Councils following Paris Agreement Withdrawal, at techcrunch.com. Having crony capitalist Elon Musk on a Government advisory council is like having the fox advising the farmer on how to make the hen-house more secure. (Read Here – Gov. Subsidies Helped Musk Attain $13.3 Billion Net Worth)

Studying The Climate Doesn’t Make You An Expert On Economics And Politics, by Ryan McMaken, at mises.org. Excerpt from the article: “…the Paris Climate Agreement isn’t a scientific study. It’s a political document that lays out a specific public-policy agenda…..to people who know nothing about economics or political institutions – public policy is like a magic trick. A group of politicians get together, declare that they’re going to solve problem X, and then problem X is magically solved, so long as everyone supports the “solution”…….what if the cure is worse than the disease?

THE REST OF THE MUST READS

To Lower Healthcare Costs, Try Freedom, by Julian Adorney, at mises.org. Quote from above. “Market forces are more powerful than the hoped for results of central planners.

The ‘Logic’ Of Protectionism Leads To An Absurd Conclusion: total Economic Self-Sufficiency At the Individual Level, by Mark J. Perry, at carpediemblog. Free trade increases wealth. Mercantilist protectionism decreases wealth.

Why Do Half-Measures Work For Markets, But Not for Socialism? by Ryan McMaken, at mises.org. Even as Venezuela fails as it adopts more socialist solutions, true believers say it isn’t true socialism. When a socialist country adopts some market solutions it helps lift more of their people out of poverty.

Auto Bloodbath: Lowest Domestic Auto Sales In Three Years Despite Record Inventories and Incentives, at zerohedge.com. Is the auto bubble about to burst?

Spying On You, Spying On Me, Spying On The President, by Andrew Napolitano, at lewrockwell.com. Once you  allow government surveillance outside of our fourth amendment rights. It is almost impossible to recapture the pit bull of government you let off the chain.

Voter Fraud? 5,500 Non-Citizens Discovered On Virginia’s Voting Rolls, at zerohedge.com. Now this is how you break the law to influence the election!

CARTOONS

Mk9251R.jpg

uNsFNCC.gif

SHdNlfs.jpg

Reaction To EpiPens Increased Price, Reveals Our Economic Ignorance.

September 1, 2016

SAINT LOUIS, UNITED STATES - AUGUST 25, 2016: Two EpiPen auto-injectors used for treatment of allergic reactions.

The angst over the recent price increase of the product EpiPen, reveals our economic ignorance. This economic ignorance in and of itself wouldn’t be a problem in a free market capitalist system. Unfortunately we live in a crony capitalist economic system, where more and more economic decisions are being made through the political process. Businesses are being forced to obey interventionist laws passed by Congress, on the one hand, and cave in to political shaming by ignorant consumers and politicians on the other.

When this point is reached, companies are incentivized to put their resources toward lobbying Congress to pass laws that favor these incumbent businesses. They also donate money to politicians and political parties which is like paying protection money to the mob.

All of these resources could have been used to satisfy consumer demand. But these companies have decided that these resources can best serve their interest if they are invested in lobbying government. This is not how free market capitalism works. This is how crony capitalism works.

The EpiPen kerfuffle is an example of how our economic ignorance has allowed politicians to place the blame for the price increase on Mylan, the producer of EpiPen. The blame should be placed on the very politicians who are doing the finger-pointing. Government intervention into the healthcare market over the last 75 years, culminating in The Affordable Care Act (aka. Obamacare), is what has caused prices to skyrocket. Let’s take a look.

ECONOMICS 101

EpiPen is a product that delivers a life saving dose of epinephrine to individuals who have severe allergic reactions to food, insect stings, and medicines. Lets look at the economic reality of how EpiPen magically appears to perform its life saving task.

As much as people want to think that healthcare is a right, they are literally dead wrong. Healthcare in general and EpiPen in particular, is an economic good. This means it is subject to the first rule of economics which is scarcity.  EpiPen just doesn’t appear out of thin air as if we lived in the Garden of Eden. In the real world, someone has to produce this product, and you don’t have a right to take what a person produces.

The people who produce this product have to be compensated for the cost of production plus a profit. If they can’t make a profit, they would cut their losses and stop producing the product. This is why prices are so important in a free market economy. Prices send information through the production process. Government intervention increases the cost of production, which in turn sends false information through the pricing system.

CENTRALLY PLANNED HEALTHCARE

The Healthcare system was one of the most regulated industries before the Affordable Care Act (aka Obamacare) was passed six years ago. There is no true price discovery in our current healthcare system. This means information about which healthcare goods and services should be produced and in what quantity they should be produced doesn’t exist.

When third-party pays, whether it’s an insurance company or Government, prices are distorted. If you add the fact that insurance companies have to abide by the rules set by Government it is worse. Take a quick glance at this article, EpiPen Price: What To Know, at webmd.com, to see how much Government intervention there is in the healthcare system. Government intervention is essentially an attempt at price-fixing. Price fixing distorts the information sent through the market.

Government has created the monopoly position that Mylan holds with EpiPen. Government regulations have made it more difficult for competitors to enter the market and produce an EpiPen like product. Scan this short article, Why The EpiPen Has A Monopoly (Hint It Is Not Runaway Capitalism), at thelibertarianrepublic.com, to see how Government planners created the monopoly position for Mylan that allows the price to soar.

Supply and demand chart drawn on a blackboard.

SUPPLY AND DEMAND RULE THE DAY. EVEN IN A HAMPERED MARKET.

At a lower price more is demanded and less is produced. At a higher price more is produced and less is demanded. This is the law of supply and demand.

Government had artificially lowered the price, that people were paying for EpiPen, through Insurance mandates and Government subsidies. Because of the artificially low price, demand increased. When Auvi-Q, one of the other two producers of automatic injection devices for epinephrine, was taken off the market by regulators in October of 2015, overall supply was reduced. What happens when demand is increasing and supply is decreasing? The price has to go up to ration the scarce resource. Is this a good thing? It is neither good nor bad. It is just the reality of prices. Prices discovered through free markets not only coordinate supply and demand. Free market prices also reveal the scarcity that exists. But free market prices don’t create the scarcity.

Let’s look at the price of oil to understand what would happen if there were free markets in the healthcare system. When the price of oil was around $120 dollars a barrel, there was talk of oil going to $200 a barrel. But what happened. People started using less, demand started to decrease. At these higher prices fracking became economically viable. The supply of oil started to increase. Frackers started to find more productive methods of extracting oil from the ground. As supply increased and demand decreased the price of oil started to decrease. Because of these more productive methods, fracking wells could keep supplying oil at lower and lower prices. Because supply remains high and demand has just marginally increased, the price has remained low.

Even though Obama’s EPA took government land off-line for fracking, that didn’t keep fracking from happening on privately owned land. The free market pricing system worked to supply more oil to the market at a lower price. Bureaucrats in Government didn’t do this, free markets did. What does this have to do with the price of EpiPen?

In a free market the rise in the price of EpiPen would do two things. People would start using less. And companies would start supplying more. The price would eventually go down.

Because of Government intervention their won’t be new suppliers even at the higher price. They are being restricted from entry into the market by Government rules. Supply won’t increase like supply increased in the oil sector.

If Government and insurance companies subsidize the purchase of EpiPen, and Mylan gets bullied into lowering prices, their will be no true price discovery. False information about production and consumption will be sent through the hampered market. Their will be over consumption and under production of EpiPen. The more the planners plan the more their plans will not work.

CONCLUSION

Central planners, and people who vote for central planning, think that whatever is decreed, will happen. Unfortunately for them economic laws are more powerful than central planners mandates. Unless more companies are allowed to supply EpiPens, the artificially created shortage will continue. If the price is artificially kept below what it would be in a free market, demand will remain high. High demand and short supply means EpiPen will have to be rationed by bureaucrats in Government instead of by prices in a free market. Look at the waiting lines in Venezuela if you want to see what rationing by Government looks like.

The answer? Get rid of Government regulations and let free market prices work. Until people gain understanding about free markets, they will continue to get fooled by slick politicians, and we will remain in this political quagmire.

 

Related ArticleThe Economics of Healthcare vs. The Right to Healthcare, at austrianaddict.com.

Related ArticleLets Look At Government Run Healthcare, at austrianaddict.com.

Related ArticleThe Reality Of Obamacare, at austrianaddict.com.

Related ArticleGruber Tells The Truth About Obamacare, at austrianaddict.com.

Economic Forces Eventually Win: Let’s Look At Oil

March 2, 2016

Mark J. Perry’s recent post at Carpe Diem Blog titled; Some Charts And Updates On America’s Amazing Shale Revolution, It’s Not Over Yet, shows how economic forces are always in play even when we think they’re not. When the price of oil was over $100 dollars a barrel and gas was close to $4 a gallon in 2014, who thought oil would get down to $30 dollars a barrel and gas would sell for under $2 a gallon?

The law of supply and demand states that more will be produced at a higher price than a lower price. Higher oil prices made fracking economically viable. The American shale industry took off, in spite of the Obama administration making oil rich government land off limits to fracking. The shale industry started drilling on private land. Even though a portion of the investment in the shale industry may be an artificial bubble, thanks to the fed printing money, the reality is that fracking is now viable at lower and lower prices per barrel. Some marginal companies are going bankrupt because of the lower prices, but you can rest assured these evil oil companies won’t be bailed out by our green energy loving government, which is good. These marginal producers will be purchased by more viable companies and whatever malinvestment the Fed created will be purged from the shale industry. The housing bubble should have been allowed to find the bottom, instead of the Fed pumping money to keep the correction from happening. This is what should have happened to GM instead of being bailed out by Bush and Obama.

Economic forces are always in play even though government tries to keep them at bay through regulation, taxes, or money printing. Even though it may take some time, economic forces always win. Just ask the leaders of the former Soviet Union.

Here are some charts and quotes from Mark J. Perry’s article (click above).

US oil production is almost up to early 1970s levels.

oil

US natural gas production is at all time highs.

natgas

Low oil prices have had a positive economic impact, even though the Wall Street experts say the low prices are bad. In fact the Obama administration couldn’t claim any US job growth if it wasn’t for the jobs created in the fracking industry. And the Obama did everything it could to halt fracking. Excerpt from the article.

“The plunge in energy prices is driving a U.S. building boom for plants that turn crude oil and natural gas into motor fuels, chemicals and fertilizer. Energy companies proposed or received approval to build 140 petrochemical projects in the last five years as falling oil and natural gas prices made it cheaper to refine and process the raw materials…

We are becoming more energy self sufficient. The OPEC Cartel has been brought to its knees by the American shale revolution.

netoil

Excerpt from the article:

“America’s Amazing Shale Revolution is arguably one of the most remarkable energy, economic, entrepreneurial, and technological success stories in history. The charts, data and reports above help to tell part of that remarkable story.”

“And make no mistake, the shale revolution is not going away, it’s here to stay and will be part of the global energy landscape for a long time. Despite a temporary slowdown and setback in domestic oil production in response to low oil prices, America’s bonanza of shale resources won’t vanish, but will remain available and accessible when needed…. America’s petropreneurs….stand ready to start drilling shale oil again as soon as oil prices rebound back above $40 per barrel. And the shale producers will come back leaner and meaner than ever in the upcoming Shale 2.0 period, thanks to ongoing technological improvements in drilling and extraction technologies, less costly and shorter drilling times for new wells, and increases in the initial shale output flowing from new wells…

America’s shale revolution isn’t going anywhere. In fact we are probably at the end of the beginning of the revolution.

Related ArticleFree Market Fracking Trumps Government Solutions When It Comes To Producing Energy, at austrianaddict.com.

Related ArticleWind And Solar Energy Is Diluted and Intermittent, Which Means More Costly, at austrianaddict.com.

Must Reads For The Week 10/10/15

October 10, 2015

French Workers Attack Air France Executives Rip Off Their Clothes, at economicpolicyjuornal.com. How can businesses survive the costs of the benefits mandated by government? Compensation for working more than 35 hours a week, subsidized travel, restaurant lunch vouchers, paid days off for weddings and funerals, subsidized healthcare, guaranteed maternity and paternity leave, thirteenth month bonus pay, and minimum wage are just a few. Politicians who mandated all these benefits employers have to provide are the ones who caused these layoffs. These protesters are attacking the wrong people, they should be attacking the politicians for losing their jobs. We are not far behind France. Just look at the mandated benefits listed in the article; do they sound familiar?

Politicians Keep Chasing The Green Jobs Fantasy, at freedomandprosperity.com. Green energy is nothing more than a money and power grab. Green energy is not a viable alternative to fossil fuels. It can only become an alternative if its unsubsidized cost per kilowatt-hour is lower than the cost per kilowatt-hour from fossil fuels. Fracking has pushed the green dream farther into the future.

Michigan’s Wind Energy Mandate Costs Each Family $4,000, at michigancapitalconfidential.com. Because of the higher cost 24,000 jobs went away. When will we learn that central planning doesn’t work? Markets don’t necessarily pick winners. Markets allow the winners to be revealed. And it puts pressure on them to continue to please the consumer or another winner will take its place.

Recycling Was ‘Garbage’ In 1996, It’s Still That Way Today, And The Future Looks Even Worse, by Mark J. Perry, at carpediemblog. Recycling is now seen as a moral imperative, when in reality it is a waste of resources, time and money. Quote from John Tierney: “We’re not just reusing our garbage, we’re performing a rite of atonement for the sin of excess.

Adidas 3D Printing Is A Sneaker Industry Game Changer, at esquire.com.

Swash 10-Minute Clothing Care, at swash.com. Swash is like having a dry cleaner at home.

Chile’s Private Social Security System Should Be Globally Emulated, Not Locally Emasculated, by Dan Mitchell, at freedomandprosperity.com. Chili privatized its social security system in the 80’s. Its success speaks for itself. The governments recent drift toward socialism puts the pension money in the cross hairs of the central planners.

Government Planted Questions For ’60 Minutes’ Interview With Snowden, at economicpolicyjournal.com. What about the separation of press and state. Does this surprise anyone?

Two Journalists Banned From Debate On Whether Feminism Stifles Free Speech, at tamybruce.com. The headline says it all.

Why America’s Oil Output Refuses To Collapse, at bloomberg.com. Fracking comes with new ways to extract more oil from existing wells at a lower cost. Cooperation in a market produces better results than top down decision-making from central planners. If President Obama had his way he would have shut down fracking. He is trying to do it through EPA regulations like he crippled the coal industry.

TIME TO LAUGH

Bear Reacts Logically To Mixed Signals Given By Insane Lady

Video starts with insane lady talking to a bear.

Lady: “Thank you for leaving my kayak alone.”

Bear: No response

Lady: “I’m going to pepper spray you in the face, that’s what I’m going to do to you.”

Bear: “You insane b*$@#! Now watch what I do to your kayak.”

Her voice is like finger nails on a chalk board (click here).

 

PICTORIAL ESSAY: 18 Things I Did That My Grand-Kids Can’t Do Without Someone Getting Arrested, at theburningplatform.com.

Here are a few.

Guns!

We played Cops and Robbers! People DIED! We used ketchup as blood to make it look real. We took cap pistols to school …so we could play Cops and Robbers during Recess. I believe that in rural areas kids could even take bb-guns to school. No one gave a rats ass. Ever.

Sensible Punishment

Practically the only way to get expelled was if you actually put someone’s eye out. They didn’t expel kids willy-nilly for every imaginable offense.

Baths Were For Wimps

Even today, at age 81, my mom’s house is so clean you could perform open-heart surgery in any room. After playing outside all day, the chances of me walking in the house were exactly zero. I’d strip to my underwear, and mom would hose me down. She had a big heart though. In the winter time she’d use a warm bucket of water.

CARTOONS

Political Cartoons by Nate Beeler

which-one-of-these-signs-will-prevent-an

Politicize-600-LI.jpg

Must Reads For The Week 8/22/15

August 22, 2015

The pen is mightier than the sword...

 The pen is mightier than the sword… (Photo credit: mbshane)

Barber Gives Free Haircuts To Kids Who Read To Him, at odditycentral.com. Here is an example of a person making a difference.

Cab Companies Expanding Technology To Help Level Playing Field With Uber And Lyft, by Janet Moore, at startribune.com. Uber is forcing the taxi cartel to improve their service. The taxi cartel has operated on a playing field tilted in their direction for years thanks to Government. The game is no longer being played on this tilted playing field. Uber has moved the game to a new playing field that does not need to be leveled, it already is. No one kept the taxi cartel from coming up with the Uber model. Their monopoly position sowed the seeds of their own destruction. Read; “Car Wars” Return of the Jitneys.

Californians Roll 96 Million Plastic Balls Into Reservoir To Curb Evaporation, by Craig Rucker, at cfact.org. As it says in the post: “Irony is when Californians blame a natural drought on oil, than protect their reservoir with 96 million balls made from petroleum.” It reminds me of; “Seattle “Kayaktivists” Protest Shell Oil Drilling Rig In Kayaks Made From Oil.

How Much Time ABC, NBC, and CBS Have Spent Covering the Planned Parenthood Videos, by Kate Scanlon, at dailysignal.com. A total of 1 minute and 13 seconds out of a total of 243 hours of coverage were spent on the videos that show Planned Parenthood trafficking in baby parts. If you watch the videos it’s not hard to figure out why they don’t want people to see them. It’s media censorship by omission.

Transporting Oil And Gas By Pipe Line In Canada Is 4.5 Times Safer Than Transport By Rail, by Kenneth Green, at fraserinstitute.com. How much oil will be spilled, unnecessarily in the U S, because the Obama administration shut down building the Keystone Pipeline for “environmental” reasons?

Refrack Resourceship: Why The Carbon-Based energy Era Is Still Young, by Robert Bradley Jr. at masterresource.org. Here is an excerpt from the article: “The fossil fuel era is new…..In fact compared to renewables, natural gas, coal and oil are the real ‘infant industries’. Remember, for most of the last thousand tears, and all of the time earlier, renewable energy (primitive biomass, falling water, wind, solar) held a virtual 100 percent market share: Carbon-based energies have dominated only since the onset of the Industrial Revolution.”

The Agency That Contaminated The Animas River Is About To Start Regulating Water That May Be In Your Back Yard, by Marita Noon, at cfact.org. Unelected EPA bureaucrats are making regulations that squash your freedom, by expanding their regulatory power.

Why The Federal Government Fails, by Chris Edwards, at cato.org. Top down government central planning benefit a few at the expense of the many, while free markets produce increased value for both parties involved in an exchange.

James Harrison Gives Back His Sons Participation Trophies Until They Earn A Real Trophy, at jhharrison Instagram. Pittsburgh linebacker James Harrison wants his sons to have real self esteem earned in the real world, instead of false self esteem assigned for fake achievement.

Sound Familiar? A Clinton Swears Under Penalty of Perjury That Nothing Improper Took Place, at michellemalkin.com.

Are you as sick of the Clinton’s shtick as I am?

 

News Busted. Lets laugh a little bit.