Relevant and even prescient commentary on news, politics and the economy.

The Strike On Saudi Oil Facilities

The Strike On Saudi Oil Facilities

This is going to be a tentative post because there is much that remains unclear. What I am going to do is to make it clear that stories that are being told by US authorities and largely repeated by the MSM with little critical commentary is highly questionable.

As it is, it looks like the economic impact of the knocking out of about 60 percent of Saudi oil processing capacity by an attack by 20 drones will not amount to too much. The Saudis have now announced that they should have 70 percent of their damaged production capacity back in operation within a week or two. While crude oil prices initially surged 20 percent up, they have largely fallen back toward where they were before the attack. This is a massive contrast with how all this used to be back in the 1970s when, for example, crude prices would triple or even quadruple with a supply disruption from the Persian Gulf, with dramatic stagflationary effects on all the oil importing national economies. This does not look remotely likely to happen.

The matter that remains very much in the air, with a threat of war breaking out worse than it is already happening, involves the source of the attack on the facilities in Khurais and Abqaiq. SecState Pompeo outright said the attack came from Iran. Supposedly US intelligence agencies are supporting this, although there seem to be doubts. Buried deep in the press reports are caveats suggesting that maybe not quite all the attacks came from there. Of course, it is essentially impossible to evaluate these claims as we know these agencies have their secret methods and sources they are not leaking. But then we see both the Saudis and President Trump holding back from fully going along with this report.

So why might this be wrong? Well, at least one alternative version appears to have been decisively repudiated. That is that the attack came from Shia militias in Iraq. This theory was put forth by Bibi Netanyahu of Israel, perhaps as a desperate part of his reelection campaign, with it looking like he has not done well in that election, although the full outcome is still not known. But this apparently blatantly ridiculous report may be the beginning of the end of people taking publicly announced Israeli intelligence reports as things to be taken seriously.

However, the more serious alternative to Iran as a source is the Yemeni Houthis. Almost certainly the drones were from Iran, although even that is not definitely certain. In any case several statements have come supposedly from US intel agencies that the Yemeni Houthis could not have done this, even though they themselves have been loudly claiming that they did it, while the Iranians are loudly denying that they did it. Supposedly this all distraction from the role of the Iranians. But Juan Cole has pointed out things that the media are simply not reporting things that suggest that indeed the Yemeni Houthis appear to have the capability. In particular in May the Houthis launched a drone attack on an oil pumping station at al-Duadimi, well over 800 miles from Sana’a. The sites struck in this attack are only another 100 miles further, and the Shehad 129 Iranian drone supposedly can travel a full 1100 miles. Why are we seeing no reports of this in the media?

As it is, it may be that both the Saudis and even Trump may be aware of this matter that has not been well publicized. If so, no wonder they are not fully signing on to saying it was Iran, quite aside from a reluctance to get into a new war there. Whatever has really gone down, let us hope at least there will be no new war.

Barkley Rosser

Comments (1) | |

“Great Drug Companies Out There”

About the time I finished up my post on Biden, I get this article from Dan discussing how Biden is kissing the butts of drug companies to more-than-likely get campaign donations. Everyone else has been concentrating on individual (you know people of lesser means) donations and many candidates have refused to take corporate donations. Biden is not ashamed to take money from corporations. Gee, whata surprise!

Candidate Joe Biden: “By the way, great drug companies out there — except a couple of opioid outfits,” the former vice president told donors at the Dallas home of David Genecov, a craniofacial surgeon.

Biden’s comment came during a discussion of medical research and the cancer “moonshot” initiative he launched during the Obama administration following the death of his son, Beau Biden, in 2015. That effort included his push for companies to collaborate more on research.

While praising the research of pharmaceutical companies, Biden also complained, complained about the high drug prices being experienced by people. Such issues had not stopped him before in supporting Republican candidates for Congress in the last election.

In 2018, Joe Biden came to Michigan’s 6th Congressional District to give a speech to the Economic Club of Southwestern Michigan and pivoted to the topic of Republican Fred Upton at the expense of the Democrat candidate Matt Longjohn. Matt came the closest to beating Upton and Biden gave Fred the boost he needed. Upton had won the district by 20% in previous elections and won it this time by less than 5%.

Biden was paid $200,000 to give a speech to a Republican business crowd supported by Fred Upton in Benton Harbor, Michigan during which he praised GOP Congressman Fred Upton even as Democrats were close to winning Upton’s seat in the gerrymandered Michigan 6th District during the midterms.

It was said Biden came to the 6th District to campaign for Fred Upton because Fred helped to push the 21st Century Cures Act through Congress in support of Biden’s moonshot plan. There is no confirmation of this. The Economic Club of Southwestern Michigan is heavily sponsored by Republican interests and also in one form or another by the Uptons. You would think with Repubs owning the House and the Senate back then, there would be a few issues of making this happen?

Comments (2) | |

Would Trump Try to Manipulate Economic Data Before the Election?

Dean Baker considers whether Trump’s group of supporters would be able to manipulate the bureacracies of the federal government to alter the economic outlook of the nation in a more expansive way than Larry Kudlow and others, but the data itself ( if that is even needed?)  He says not likely, but how creative would one need to be?

Dean Baker wonders out loud…

Would Trump Try to Manipulate Economic Data Before the Election?

I talked to a reporter last week who wanted to know if Donald Trump could manipulate economic data for political advantage. For example, could Trump make the Bureau of Labor Statistics (BLS) show a lower rate of unemployment or the Bureau of Economic Analysis show a higher rate of GDP growth, just before the election next fall?

…First, the people at these and other statistical agencies are dedicated professionals.

…Furthermore, since so much of the data are publicly available, it would be very hard to do this without being detected.

…Theoretically, someone could do something like this, but it would have to be a person who was very knowledgeable about the data. And, they would almost certainly need the cooperation of at least 20 or 30 people at the BLS.

 

Comments (11) | |

Affordable Housing

The other night, ten Democratic presidential, hopeful, nominees took stage and debated their plans for America’s future. There never was a mention beyond a few garbled words hastily thrown together about an issue which is plaguing many young voters ing to raise families and one which has surfaced in my community, the shortage of affordable homes. Senator Elizabeth Warren knows of the issue as she has discussed it in one of her talks, “The Two Income Family.”

Moderators have bypassed the issue and not asked the question of a candidate’s plan for Affordable Housing which is a growing problem for many people in the US especially young people. In lieu of their not asking, here is a site 2020 Because Housing is Built with Ballots from which you can read each of the candidate’s plans.

The housing crisis has hit urban, suburban, and rural areas with some states being worst(see chart above) than others with regard to supply. Nationally, there is a shortage of 7 million homes affordable and available to the lowest-income renters. Rents have risen faster than renters’ incomes over the last two decades, more people are renting than ever, and the supply of apartments they can afford has lagged. Fewer than four affordable and available rental homes exist for every 10 of the lowest-income renter households nationwide. People of color are disproportionately impacted. Racial segregation persists and concentrated poverty is growing.

Meanwhile, policy makers have disinvested in the nation’s public housing infrastructure, leaving families living in unsafe, unhealthy, and unacceptable conditions. After almost a decade of decline, homelessness is back on the rise, and is in the news in an adversarial manner. The same as with immigrants, people do not want to provide solutions and they want the homeless to disappear. Where they should go has not been determined.

Jumping on this bandwagon pre – election, the one man who has a history of discrimination as learned from a father who was depicted by in song by Woodie Guthrie, President Donald Trump has signaled his intentions to address California’s homeless crisis in a harmful, unjust, and unlawful manner. Involving criminalization, sweeps of unsheltered people living on the streets, they will (potentially?) be moved to federal homeless camps.

Affordable housing and homelessness has been in the news across the country and debate moderators have yet to ask the question of what can be done or what are your solutions to the crisis.

While providing good and affordable healthcare is important; housing, besides a cardboard box, is one of the prerequisites to having good health. One way or another, we will be paying for it.

The Question the Presidential Candidates Don’t Get Asked, City Lab, Diane Yentel

The GAP, A Shortage of Affordable Homes March 2018

Comments (5) | |

Joe Biden: “How Are We to Pay for Single Payer Healthcare Alias Medicare for All?”

Joe knows the answer to this question and he is baiting the other candidates. Joe has a history of supporting big business interests as witnessed by his aggressive support of the banking industry with bankruptcy laws favoring banking against the needs of citizens and with a special intended harshness when it comes to student loans. Joe has sponsored or cosponsored every bankruptcy bill since 1997. With his question and his healthcare bill, I believe Joe  is courting the healthcare industry and the healthcare insurance industry’s support. Other candidates need to call Joe out on this.

Before moving to Medicare4All or a form of it, we need to attack the costs of healthcare which are rising at a clip greater than inflation.

Much of the payment for improved healthcare will come from negotiating with pharmaceutical companies, reducing the increasing cost of hospital inpatient and outpatient care, rolling back unnecessary pricing increases, reducing costs to 120% of Medicare costs today, etc. There are enough cost targets to attack which should provide a wealth of lower costs and funding for expansion. Healthcare Cost Drivers Pharma, Doctors, and Hospitals

Kocher and Berwick gave an outstanding recital of how we will get from Medicare and Commercial Insurance to just Single Payer Medicare4All. “While Considering Medicare For All: Policies For Making Health Care In The United States Better.” It is unlikely, Congress will move on Medicare4All in the beginning. It will take time. Today’s Medicare is not free from issues.

As the Director of Medicare and Medicaid and upon departing the position, Donald Berwick made this observation of today’s Medicare:

“20 to 30 percent of health spending is ‘waste’ that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by Medicare and Medicaid.

He listed five reasons for what he described as the ‘extremely high level of waste.’ They are overtreatment of patients, the failure to coordinate care, the administrative complexity of the health care system, burdensome rules and fraud.

Much is done that does not help patients at all and many physicians know it.”

Within the PPACA, the issues with ACOs must be fixed. The initial PPACA ACO strategy has given hospitals the ability to exploit the market through consolidation, eliminating or minimizing competition in regions, leading to increased pricing, and enabling the employment of specialist doctors, making them “must haves” in insurance networks. As planned, the ACOs should have generated administrative cost synergy and quality benefits instead of enabling ACOs to consolidate and control prices.

Single payer does not use ACOs. In single payer, the government will pay hospitals, healthcare professionals, pharmaceutical and healthcare supply companies. The government will also set the budgets for hospitals and healthcare. Single Payer in Vermont was going to fail and failed due to cost because it used 3 ACOs to manage its plan. Bernie Sanders is also using ACOs in his plan. “Why the Bernie Sanders Bill Is Not Single Payer” The only fear I have of this type of arrangement is the influence of the healthcare industry on those determining pricing and accepting costs. The healthcare industry is attempting to establish a methodology using value brought to the patient clinically and in quality of life with resulting benefits to the health-care system and society also. It is an argument on the issue of the morality of higher prices. Single Payer will have to contend with this as much of the pricing argument is not justified.

The plan should be to gradually move from insurance administered healthcare (what Kocher and Berwick propose) to a single payer system similar to what Sanders proposes but minus ACOs. As I explained, there are enough cost targets to pay for much of the implementation to be derived from reducing costs in the present healthcare system.

Comments (13) | |

Whither Ukraine?

Whither Ukraine?

Or “wither Ukraine?” some might suggest?  But no, after nearly 30 years of serious economic stagnation and massive corruption, along with losing territory to neighboring Russia with whom it has on ongoing military conflict, things are looking up there.  GDP grew at 4 percent annually last quarter.  The  hryvnia currency has been the second most rapidly rising currency in the world during 2019.  There has even been a prisoner exchange with Russia.  All this comes under its new president, Volodymyr Zelensky, who until recently was playing a Ukrainian president on a TV show. That sounds like a joke, but so far he seems to be delivering the goods, including an apparent effort to combat the deeply entrenched corruption practiced by both his pro-Russian and pro-EU predecessors.

A curious aspect of this so far successful presidency seems to be the effort by President Trump to undermine it, or at least not help it.  $250 million in military aid has been canceled.  Is this more payoff to Vladimir Putin for a future Trump Tower in Moscow?  There have also been reported efforts led by Rudi Giuliani to get the Ukrainian government to open an investigation into alleged misdeeds by a son of Joe  Biden who worked for a Ukrainian company for awhile. There have also been efforts to get them to denny charges made against former Trump campaign manager, Paul Manafort.  Rumors are that the military aid is being held up until The Ukrainians deliver on the firrst of these items, which would be pathetic.  So far they do not seem to be going along.

I was in Kyiv (Kiev) last weekk for a nonlinear economic dynamics conference and can confirm that the optimistic feelings are shared by Ukrainian economists I met there, some of whom I have known for a long time and who have not been like this in the past.  Maybe it will not work out, but for now there definitely is optimism there. Ironically an advantage of not having had much economic growrth over the last 30 years is that there are few modern glass and steel buildings downtown, with many very beautiful per-revolutionary ones there, with sculptures on them and painted bright colors.  This goes along with various historical buildings and sites dating back nearly a 1000 years.

Barkley Rosser

Comments (1) | |

F**king Old Enough to Vote

It’s That Day again. I mostly stayed off Facebook (except for birthday greetings) and Twitter, but even LinkedIn has posts of now-yellowed newspaper articles of survivors–and probably some of those who didn’t.

In another ten years, it will be as far from 11 Sep 2001 as that date was from 11 Sep 1973.

At least now, most people know what a sh*t Rudy Giuliani was, both in setting up the firefighters for disaster and moving the NYC Office of Emergency Management Command Center from the safest location in the city–the basement of 1 Police Plaza–to the 23rd floor of a building in a complex that had already been bombed once before he did it. While he and Bernard Kerik got to Be Adulterers on taxpayer money, somewhere between one-third and one-half of the 343 firefighters they murdered outright certainly could have been saved. Though that would have been more people who, but for the grace (and anger) of Jon Stewart, would still be trying to get health care. Rudy’s tombstone should read: ““This group’s finding is that the security of the proposed O.E.M. Command Center cannot be reasonably guaranteed” — July 1998″

Yes, I’m still bitter. No, I’m not going to post anything nearly as subtle as this, which is probably my ultimate contribution to the genre of In The Shadow of The Towers. I’m going to talk about Milton Friedman. Because it’s the 18th anniversary, so it’s now old enough to vote–or, especially in the pre-26th Amendment world–be drafted.

Let’s be clear: Milton Friedman had one good idea in his life, and that was that his alma mater should not sponsor a football team. Even a broken clock, and the program whose highlights are Ray Rice and Greg Schiano (whose skills included guiding the team to a money-losing Bowl appearance) isn’t exactly something that could justify Superstar Economics Theory.

Milton Friedman, like Gary Becker, was wrong about almost every social policy recommendation he made. While it might be difficult to identify what he was most wrong about, a leading contender is The Elimination of the Draft, which he championed for years and finally shepherded through the Nixon Administration.

After all, people should be Free to Starve Choose, and conscription is certainly not a “choice.” Choice can discriminate; conscription means mandatory attendance or a demonstrable reason to be excused. Friedman’s ghost, twirling at Mach 3 in the Eighth Circle, probably rues that males still must register for Selective Service.

So we have a story published just over two years ago on America’s only remaining news source becoming evermore real. While before people who didn’t want to be subject to two years of training and possibly warfare had to at least come up with a somewhat reasonable excuse (*cough* bone spurs *cough*) or face jail time, the scions of the elite have no “skin in the game.” So the Longest War in U.S. History continues: planned as well as it was executed, executed as well as its objectives were planned. While the planners well know that their sons (and daughters) will not even have to come up with the lies they did to avoid any chance of being killed.

Because Milton Friedman said that would not be Freedom. And people believed him, because “freedom” means you don’t have to “have skin in the game” (literally, in this case) if you don’t want to, even if your actions caused the problem.

I suspect Rudy Giuliani approves.

Comments (1) | |

MbS Consolidates Immediate Family Control Of Saudi Oil Industry

MbS Consolidates Immediate Family Control Of Saudi Oil Industry

Saudi Oil Minister al Falih, who also ran ARAMCO, has been replaced by Abdulaziz bin Salman bin Abdulaziz  al Sa’ud, half brother of Crown Prince Mohammed bin Salman bin Abdulaziz al Sa’ud, (MbS),who was Ambassodor to the US untile the Khahoggi murder got hot between USA and KSA.

The New York Times claims that this is part of an effort by MbS to modernize the Saudi economy, an ongoing line of th Saudi PR machine.  However more specifically how al Falih got in trouble with MbS is that oil prices are too low and there has not yet been an IPO for ARAMCO.  These probably are issues for MbS, although I think at this point the Saudi Oil Minister’s ability to make oil prices go up has become limited.  But the lack of an ARAMCO IPO clearly has cost variouis members of the Saudi royal family money.  But the problem has been that to issue an IPO ARAMCO will have to make public information that apparently it does not want to.  Whether MbS and his brother are really ready to do that is unclear.

Anyway, I think all this talk about modernizing is just baloney.  This is just a further move to consolidate power and also make money for the Salmans, the king and his sons.

Barkley Rossser

Comments (3) | |

I get Ruthless With David Leonard

(Dan here…lifted from Robert’s Stochastic Thoughts)

by Robert Waldmann

I get Ruthless With David Leonard

David Leonard picks cherries in a generally good op-ed. I agree entirely with his general conclusion that Democrats should run a populist campaign (no triangulation — he should have noted that Clinton ran on raising taxes on the rich and cutting taxes on the middle class in 1992 — he was a populist before he was a triangulator). He also says don’t talk about decriminalizing border crossing or eliminating private health insurance. I agree entirely. He relies on a Pew poll on issues. It is an interesting poll by a good pollster.

However, I think there should be a rule that any commentary on polls should consider all available still relevant polls. The norm of non data journalists writing about data is still to comment on one poll. This is nonsense. It is like election night coverage based on an interview with one voter. There is, I think, no excuse for looking at data other than averages of polls. I think fivethirtyeight.com can improve on the simple average, but that’s not my current assertion. I am asserting that any commentatory must justify (to an editor not the readers) every decision to not consider every poll which is not considered.

I was triggered by this passage justified by three picked cherries.

Yet Democrats are frittering away their advantage — and damaging their image. Last fall, most Americans had a favorable view of the Democratic Party, according to the Pew Research Center. That makes sense, because Democrats ran a populist campaign in the 2018 midterms, focused on pocketbook issues that dominate many people’s lives, like wages and medical costs.This year, the polling has flipped. Most Americans now have an unfavorable view of the party, no better than their view of the Republican Party. Likewise, slightly more voters say the “ideas being offered by the Democratic candidates” would hurt the country than say would help, according to the NPR poll.

 

Comments (8) | |

Decennial Census Temp & Intermittent Employment

There seems to be some confusion about the impact of Census employment of temporary and intermittent employment for the 2020 Census.

The U.S. Bureau of Labor Statistics has a table showing the monthly  employment for Special Census workers. You can find it at: BLS – Special Census Workers

The table also has the data from the 1990 and 2000 Census so you can compare what happened in those Censuses to what to expect over the next year. I took the data from Table 1 of total nonfarm employment and subtract the Census employment to create  a new series,  Total NonFarm Employment excluding Census Temp & Intermittent Employment.  The chart shows the last some 20 years of  special Census employment.  As you can see, this months 27,000 increase hardly shows in the chart compared to what happened in the 2000 and 2010 Censuses or what we can expect over the next year.

 

 

Comments (8) | |