Before Obama we never politicized bin Laden...

I guarantee no campaign ad by President Obama could be as over-the-top inappropriate as this one, regardless how much whining the GOP does over the next 6 months.


(h/t ThinkProgress)

US Economy Right Where It's Supposed To Be

Ritholtz video:

Phil Humber: Il Perfetto!!

Only the 21st perfect game in baseball history was pitched this afternoon as the White Sox blanked the Mariners in Seattle.

The Ace: Phil Humber admires the scoreboard on Puget Sound.

Best headlines: "The Humber Games" and "Flawless in Seattle"

QOTD- Human Resources

Quote of the Day:


As for the others, well, I cover politics for a living, and I don’t know what the silver spoon thing is. I found out about “Cookiegate” this morning. I was about eight hours late on the dog stuff and, when I asked someone who tweeted about it to explain what they were talking about, they literally didn’t believe that I could possibly be ignorant of such a consequential topic. After I learned the story, I felt a little worse about myself for being in any way involved in the tornado of idiocy that is American politics.   -- Ezra Klein, Washington Post, April 20th, 2012


MY COMMENT: Nothing amazes me more than the sheer number of quite intelligent people in our society who follow this election stuff full-time and make a living at it.  I'm not picking on Ezra Klein because he tends to have substantive columns most of the time, but the silliness of silly season seems to be getting more pronounced with every election cycle. Maybe it's a testament to the huge productivity gains in modern western civilization that we can afford such human resources expended to cover a candidate's latest Malaprop or perhaps another candidate's eating habits from 4 decades ago.


Most of political coverage is concerned not with meaningful dissection of the issues but rather of the personal peccadilloes of those running for office. We develop a cult of personality for every election.  Is this because our system of government is so finely tuned that any candidate can function within the office thus rendering careful study of the different office-seekers unnecessary? Or has modern civilization become too comfortable with the manufactured "pop culture" of politics, with elections becoming more like a reality show than a civic duty?  It's unlikely both of these scenarios can exist together.


Which leads us to another quote:  "The best argument against democracy is a five-minute talk with the average voter."?  - Winston Churchill  (h/t GH)


 ...or a five-minute perusal of modern political coverage. 


  

Governor Brewer Practices (Bad) Medicine

We have Big Invasive Government here in the wild west. Arizona Governor Jan Brewer took time from wagging her finger at black men to sign the nation's most restrictive anti-abortion legislation last week. The bill contains the boilerplate provisions present in other states' recent legislation, such as 24-hour required ultrasounds, counseling, showing pictures of developing embryos, etc, but the Arizona bill goes further. 


1. The most remarkable thing is that Arizona's bill prohibits all abortion after 20 weeks gestation even in cases of lethal fetal anomalies, unless the mother's health is imperiled by a "medical emergency". The woman is required by law to carry the pregnancy until...when? Presumably until natural labor starts or in utero death occurs.  Brewer's rationale is that:


“Knowing that abortions become riskier the later they are performed in pregnancy, it only makes sense to prohibit these procedures past twenty weeks."


She's practicing medicine, plain and simple... and it's substandard medicine at that.  The question is not whether abortion is safer at 11 weeks versus 20 weeks gestation-- there is no question that earlier terminations are safer and more cost-effective-- rather, the question is whether carrying a lethally anomalous fetus to term or until fetal death is safer than termination at 20 or 22 weeks: the answer is almost universally that early termination is safer.  


Lethal fetal anomalies are rarely diagnosed before 18 weeks and sometimes much later; this bill will certainly increase the use of 16-17 week ultrasound to look for gross anomalies (anencephaly and renal agenesis) in order to plan possible termination before the 20 week legal deadline. And since such early fetal anatomy is not adequately developed to see more subtle structures such as heart valves, etc, a subsequent ultrasound will be likely recommended in most pregnancies. Brewer's bill will cost more money for everyone since the current practice is to get one screening ultrasound around 20 weeks which can visualize major and minor anomalies.

There will be further increase in the cost for health care and maternal risk when anomalies are found after 20 weeks since the pregnancy will need to be carried to fetal death or natural onset of labor, with greater occurrence of morbidity, pain, c-section, gestational diabetes, pre-eclampsia, etc, etc, as the gestational age increases.


These patient-doctor decisions are always gut-wrenching; the presence of the Arizona legislature and Governor Brewer in this discussion is unnecessary and intrusive and will not decrease the number of abortions.


2. But there's even more crappy medical reasoning in the bill.  It also limits medical abortion before 9 weeks which is noninvasive and safe and quickly becoming the standard of care for 1st trimester termination.  This is when most abortions take place...and when Doctor Governor Brewer says they are safer.  The Arizona prohibition is inexplicably limited to medical abortion (ie, not suction) prescribed more than 30 miles from a hospital with the implied intention of patient safety.  In practice, however, this rule serves as an unnecessary (and dangerous) barrier to abortion services.  Failed medical abortion occurs at a statistically low rate and these failures are easily diagnosed with office ultrasound and completed with office suction; a hospital is not necessary.


The likely consequence of both of these measures within the bill is that pregnancy care in both instances will become more expensive, with greater opportunity for mismanagement and greater health risk to women. 


My Comment 1:  I get it. Conservatives don't like abortion. Newsflash: nobody does. Arizona is ignoring evidence-based medicine, requiring reckless practices, subverting the doctor-patient relationship, increasing bureaucratic hassle and putting women at risk.  This bill only serves to increase barriers to safe and effective pregnancy care and will likely not reduce abortion rates at all. The implicit rationale in the bill is to badger women and the result will be to require medical personnel to practice substandard medicine.  Is this really where we want to go as a state?


A better approach might be to define the purpose of the legislation and then look to other locales that have succeeded in this purpose.  If the desired goal is to reduce abortion, then look to other states and other nations with low abortion rates to see how they have done it.  Western Europe and the Northeast United States have the lowest abortion rates in the world and they've achieved this without draconian invasion into the doctor-patient relationship but rather increased access to contraception and education.


If the desired purpose is to eliminate all abortion, then Governor Brewer and the Arizona legislature should run for election in Fantasyland and and preside over a mythical population.


My Comment 2: Make no mistake, the Arizona bill is invasive.  It extends authority of the state into the most intimate decisions a woman can make.  Small-government conservatives should be bothered by this authoritarianism since Governor Brewer can glibly mischaracterize 'safe medicine'  while signing a bill that severely restricts medical decision-making and eschews science.  And Republican state legislator Kimberly Yee says: 

“The state has a compelling interest to protect women from the serious health and safety risks of abortion."


If the State of Arizona is in the business of deciding the absolute and relative safety of medical and surgical interventions then why not outlaw breast augmentation, botox, Viagra, and just about every aesthetic procedure... which all surely carry more risk than non-intervention?  

This belies the real purpose of Arizona's abortion bill: to hassle women into making a decision pre-ordained by the state.  Implicit in this bill is the opinion that Governor Brewer and the Arizona legislature know better than you or your doctor the optimal management of your pregnancy.

My Comment 3: Elections matter and the passage of this bill is the result of the election of conservative lawmakers who apparently reflect the will of the people, and the trend seems to be toward even more social conservatism and intrusion into people's private lives.  The unintended consequences of this approach are legion.   Instead of decreasing abortion these measures will merely increase risk-taking and unsafe practices.

My challenge to lawmakers:  If the people of Arizona truly believe that personhood begins at conception, and you truly want to legally protect all embryos then pass a law that states as much. This is the intellectually honest approach to outlawing abortion: if the fetus is a person then make that law, otherwise shut up.  For the Governor to engage in mental masturbation about what is "safe medicine" and to pass inane requirements prohibiting the standard of medical care do nothing to reduce abortion or advance the discussion. 

Oil will follow supply/demand

...and it's going higher. Credit Suisse analyst:

[video]

"He's our Hitler", about Fidel Castro

Geez, now what did Ozzie do?

Merely calling sportswriters 'fags' may be remembered as the good ol' days for the Oz.

QOTD

Quote of the day:




"I tend I to believe that religious dogma is a consequence of evolution. Religious belief and the firm adherence to it—and the intense dislike of apostates, people who abandon it—has a very important biologic origin, probably through natural selection, namely the cohesion of the group and the persuasion of people to be more altruistic."  --- E.O. Wilson, biologist.

Revealing the Origins of Life

Watch Revealing the Origins of Life on PBS. See more from NOVA scienceNOW.

QOTD

Quote of the Day:


"The truth is, we know so little about life, we don't really know what the good news is and what the bad news is."    ------ Kurt Vonnegut, A Man Without a Country

Fred Upton's WTF moment

Rep Fred Upton (R-MI) is most famous for his niece, but more pertinently he is the Chairman of the House Energy and Commerce Committee.  His latest quote:

"Our wheels are beginning to turn," said Representative Fred Upton, Republican of Michigan and chairman of the House Energy and Commerce Committee, which would have a large role in developing Republican alternatives to the Obama health care law.

Let's get this straight: The Republicans have had control of the House for the better part of a decade, health care consumes 18% of our GDP and rising, we have 50 million uninsured, the dreaded Obamacare which they hope will be overturned by the Supreme Court has been law for over 2 years and only NOW is the GOP leadership beginning to evaluate their options?


WTF!!

"Whatever you say Tony"-- Gas Prices edition

In response to a previous post , Anonymous said...

Tony, gasoline prices of $1.80 in 2008-09 was the regression to the mean. Gasoline prices had heated up so much due to demand in developing nations that the prices were being driven up due to demand. When the world was ending in 2008-09 this demand slowed. The current rise in price is being driven by Obama policy. This current $4.29 gasoline is not a return to normal. You seem to be a chartist (I'm a fundamentals investor), if you apply your chartist skills to historic gasoline prices you will see that $4.29 is the aberration. We may have a somewhat strengthening US economy if you can call anemic strengthening. China is in a slowdown. The demand just isn't there to support an argument for current price levels. Some of the pricing can be pegged to Iran but overall the current US prices are on Obama's and Chu's shoulders (and according to Chu we are only about half way to his goal of "European price levels").

While I am loathe to respond to Anonymous commenters, I think I know who this is and the topic is actually interesting, so here is my surmise:
______________________________________________________________

The economics of petroleum supply and demand are far from my area of expertise, but I can find at least three major mistakes with this comment.

1. Global oil demand is higher than ever.
You say, "The demand just isn't there to support an argument for current price levels." Is this true?

Figure 1: Global oil consumption is above what is was in 2008, in fact, it is at all time highs. Period, end of story. This is the only graph (from Bloomberg Financial) you need to see:


In fact, gasoline prices are not as high as would be expected given the higher world oil consumption; they are not as high as the summer of 2008...yet. (I overlayed the gasoline prices taken from gasbuddy.com).  Global oil consumption is almost a direct proxy for global GDP, but gasoline prices are not as clean an indicator since gasoline price is also reliant on refining capacity and the futures market sentiment.

When you say "The demand just isn't there to support an argument for current price levels", what data is this statement based upon?

Furthermore, there are structural factors that favor increasing oil consumption in the decades to come: namely, continued increased demand from emerging economies. Which brings us to point #2.

2. China's GDP is growing

Trust me, China is not in a slowdown. When you say, "China is in a slowdown", what you really mean is that China's GDP projections have been decreased from 8% per year to 7.5% per year by the Chinese government. (Private analysts have been more sanguine and keep growth rates above 8%.)  This is massive growth for the second largest economy in the world and will not change anytime soon.

China GDP (Trillions)             US GDP (Trillions)
2007: $3.5                            $14.0
2008: $4.5                            $14.3
2009: $5.0                            $13.9   
2010: $5.9                            $14.5
2011: $7.3                            $15.1
2012: $8.4                            $15.7  

In fact, not one year has China stopped growing and has more than doubled its GDP since 2007-- doubled!-- which is in line with their oil consumption.  Furthermore, China's GDP is expected to grow at an increasing rate over the coming decade and will surpass the US by 2018....and by extrapolation-- barring new breakthroughs in non-fossil fuel technology-- oil demand will continue to rise. And that doesn’t even count India and Brazil, which are both huge populations with large GDP growth.

When you say, "China is in a slowdown", what data is this statement based upon?


3. US Oil production is higher than 2008.

You say that "The current rise in price is being driven by Obama policy". You don't elaborate what you mean but since Obama a) cannot control foreign GDP growth and b) he is expected to want US GDP growth to increase, barring increased gasoline taxes (which haven't happened) this can only mean that c) somehow Obama's policies have led to decreased oil production.  Is this true?

Figure 2  shows that Annual US oil production peaked in the 1980's and steadily declined until...January 2009 when it began to increase again.  In fact US oil production has increased 15% since Obama took office (see the small blip upward 2009 to 2012). From the US Energy Information Administration:

FIGURE 2: US Annual oil production



Table 1 show Monthly US oil production. Note that US oil production declined steadily under Bush, reaching a 40 year low in Sept. 2008, and has risen to 12 year highs since Obama has taken office..  You brought up "Obama's policy", I didn't. I am the first to say that this increase in production is mostly due to improved technology and oil sands discoveries and presidents have very little to do with oil production, but it’s your argument.  Again from US EIA:

TABLE 1: US Monthly oil production (Thousands of barrels):


So your conclusion that "The current rise in price is being driven by Obama policy" is based on what data exactly?



MY COMMENT 1: The current $3.89 is hardly an aberration, it is right in line with global oil consumption and in fact may be a little low. Expect gasoline prices to rise faster than oil consumption during an economic recovery-- such as we are experiencing now--as refining capacity is maxed out. Also, expect the trajectory of oil consumption to increase parabolically as global demand outstrips supply, barring any new discoveries or new technologies.

One could argue that our recovery is not as robust as we would like, but a more robust global recovery would lead to even higher gasoline prices, and even more squealing on Fox News.  One could also argue that we should be drilling even more oil than we currently are, using new technologies to increase production, etc, but regardless, $3.89 is definitely not  an aberration given the current scenario of supply and demand. Of course, at some point higher fuel costs will begin to have a slowing effect on the US as well as global economies...in other words, supply and demand will fundamentally affect oil and gasoline prices as they always do (See MY COMMENT 3 below).

MY COMMENT 2: Energy Secretary Chu's sentiment that gasoline prices are too low and the US should move toward European levels was stated in 2008 before he was Energy Secretary and was his academic stance for a long time. As an academician, Dr. Chu was stating that that the US would be best off if we were not as reliant on foreign oil for economic growth and the only way to change demand is through pricing via taxes.  But, upon joining the Obama administration, in the throes of a crippling recession, Chu said it would be “completely unwise to want to increase the price of gasoline.”

Macroeconomically, given that emerging markets like China, India, Brazil and others will continue to grow their GDP’s at staggering rates, and given that oil prices rise proportionally with world GDP, it’s common sense that our way of life will be negatively affected by the trends that are in place as long as we rely on oil.  If we had diverted our energy use to, say, natural gas (now at generational low prices and all domestically produced) 10 years ago, our economy would be less correlated to the oil hiccups we are experiencing. In essence, Dr. Chu was correct in his sentiment that the US would be well-served changing its energy use to one that is domestically produced from one that is subject to geopolitical stressors and rising foreign demand.

MY COMMENT 3: At some point high energy prices will slow the US and world economies. Rick Santorum recently quoted certain economists who opine that the 2008 credit freeze was triggered by high gasoline prices, and this may not be too far off. Sure, we had a lot of household debt, and sure, housing prices grew too much too fast, but it was only when households faced higher energy costs that they began to fall behind in mortgage payments. Historically, oil shocks often usher in recessions.  And now we may be facing a similar situation as gasoline prices approach all-time highs. Santorum's claim is actually an argument for Dr. Chu's opinion.  If we had followed Dr. Chu’s advice and diverted our economy away from oil then we might have cars run on natural gas today, for the equivalent of $1.50 per gallon. Just sayin.

MY COMMENT 4: How can citizens get information from the media about gasoline prices, presidential policies and GDP? Answer: not Fox News and AM radio.  I watch Fox News occasionally just to see what the lowest common denominator of the national political debate is.

In 2008, Fox News was breathlessly defending Bush against the high gasoline prices: "no President has the power to increase or to lower gas [ie, gasoline] prices."





...and now, of course, high gas prices are completely dependent on presidential policy:







Finally, further Information about externalities and other costs from this quick presentation. One externality they left out was the cost of our military that largely protects the flow of oil around the globe.







References:

Oil prices: A tale of two tails, Calgary Herald, March 12, 2012.

China GDP: How it has changed since 1980, Guardian UK.

Fact Check: Does more US drilling ease gas pump pain? Washington Post, March 20, 2012

Flashback: Fox News on gas prices in 2008, Media Matters, March 5, 2012.

Rick Santorum thinks gas prices caused the recession. Is he right? Washington Post, Feb 28, 2012

Fact Check: Obama wanted higher gas prices, Factcheck*dot*org, March 23, 2012


Everything You Need to Know about Gas Prices, Treehugger Blog, April 2012