Mostly Monday Reads: The Chaos Picayune

"That’s nice, but the cost of gas is still rising, electric bills weren’t cut in half as promised, groceries continue to cost more, Epstein Files haven’t been released…" John Buss, @repeat1968Good Day, Sky Dancers!

Well, it’s deja vu all over again. So, we have another candidate for our 21st state. Given how bluntly bothered the other so-called candidates were, I can’t see Venezuela being any more eager. Oil prices continue to rise as Cadet Bonespurs’ war on Iran runs amok. American Hero, former Astronaut, and current Senator Mark Kelly still faces a second bogus investigation, with stern words from the ever-drunk and stupid Pete Hegseth. Just another day in the democratically backsliding USA.

I guess we will take those headlines in the order they appear, however disorderly.

I guess blowing up fishing boats and regime change weren’t enough for Cadet Bonespurs. This is the headline this morning from the Washington Examiner. “Trump says he’s ‘seriously considering’ making Venezuela the 51st state.”  This story is reported by Christian Datoc. Has someone told him that they speak Spanish there?  Oh, and there are lots and lots of indigenous tribes there. The best part is that we can pay tribute to the birthplace of Simón Bolívar with a great new National Holiday! That ought to knot a lot of panties in the US Southern States.

President Donald Trump said Monday that he’s considering making Venezuela the 51st American state, months after removing former dictator Nicolas Maduro from power.

Trump spoke to Fox News on Monday, stating that he was “seriously considering” the proposition. The president has previously floated annexing Canada and Greenland.

The foreign policy of Trump’s second term, influenced by Secretary of State Marco Rubio, has placed a new emphasis on the United States’ role in stabilizing the Americas.

According to Fox, Trump cited Venezuela’s $40 trillion worth of oil reserves as driving the decision.

“Venezuela loves Trump,” the president added on Monday.

That’s one of those pronouncements that makes you shake your head, laugh, and cry all at the same time.  So, do you wonder exactly how he might try to do that and win a Nobel Peace Prize at the same time? This is from CNN. “US intelligence-gathering flights are surging off Cuba.”

US military intelligence-gathering flights are surging off the coast of Cuba, a CNN analysis of publicly available aviation data shows.

Since February 4, the US Navy and Air Force have conducted at least 25 such flights using manned aircraft and drones, most of them near the country’s two biggest cities, Havana and Santiago de Cuba, and some coming within 40 miles of the coast, according to FlightRadar24.

Most of the flights were by P-8A Poseidon maritime patrol aircraft, which are designed for surveillance and reconnaissance, while some were by an RC-135V Rivet Joint, which specializes in signals intelligence gathering. Several MQ-4C Triton high-altitude reconnaissance drones have also been used.

The flights are notable not only for their proximity to the coast, which puts them well within range of gathering intelligence, but for the suddenness of their appearance – prior to February, such publicly visible flights were exceedingly rare in this area – and for their timing.

There’s more on that link about what’s going on with Trump and Venezuela. There’s also an update on the Cuban situation. Still makes me wonder what all those new citizens and voters would do if that situation actually comes to fruition, which, of course, it won’t.

All a country’s leader has to do is increase the level of unpredictability of something and the price will rise.  I don’t know how many times I’ve taught this little bit of demand-and-supply theory over my career, but the headlines show it’s still a solid theory, proven by evidence. This headline is from the New York Times. “Oil Prices Rise as Prospects for U.S.-Iran Peace Deal Fizzle.”

Oil prices rose and stocks wavered a bit on Monday as investors reacted to the failure of the United States and Iran to reach a peace deal.

President Trump said on social media Sunday that Iran’s latest proposal was “TOTALLY UNACCEPTABLE!” He did not share details about what Iran had offered. Tehran has said that the two countries were working on a short-term agreement that would pause fighting for another 30 days and end Iran’s blockade of the Strait of Hormuz, a key oil and gas shipping route in the Persian Gulf.

  • The price of Brent crude, the global benchmark for oil, rose roughly 2 percent on Monday, trading at around $103 a barrel.

  • West Texas Intermediate crude, the U.S. benchmark, moved 1.5 percent higher, trading at around $97 a barrel.

  • After opening a tad lower on Monday, the S&P 500 rose about 0.3 percent by midday. On Friday, the index had notched its sixth straight week of gains.

  • Stocks in Asia, where countries import vast quantities of oil and gas, were mixed. South Korea’s benchmark KOSPI Index rose more than 4 percent, while Japan’s Nikkei 225 fell less than 1 percent.

  • In Europe, stocks were little changed. The Stoxx 600, a broad index that tracks the region’s largest companies, and the DAX in Germany were flat.

So, of course, Orange Caligula comes up with a hare-brained policy. Nancy Cordes reports this for CBS NEWS. “Trump says he aims to suspend gas tax for a period of time”. Oh, great!  Let’s create a much worse Federal Debt Crisis than we have now!

President Trump said in a phone interview with CBS News Monday morning that he aims to suspend the federal gas tax “for a period of time.”

“I think it’s a great idea,” the president said. “Yup, we’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in.”

Gas prices have soared over 50% since the start of the Iran war on Feb. 28, hitting a high of over $4.52 on Sunday, according to AAA. Analysts say the prices are likely to remain high with Iran blocking access to the Strait of Hormuz.

But suspending the excise taxes — 18.4 cents per gallon on gas and 24.4 cents a gallon on diesel — requires an act of Congress, and pausing it would cost the federal government about a half billion dollars a week.

Following the president’s comments, Reublican Sen. Josh Hawley said Monday that he would introduce legislation to suspend the federal gas tax. And GOP Rep. Anna Paulina Luna of Florida also said she plans to introduce a bill in the House this week to suspend the federal gas tax “in light of Trump’s recent remarks.” Several Democratic lawmakers had already introduced legislation to either pause or lower it.

Revenue raised by the federal gas tax goes toward the Highway Trust Fund to construct and repair roadways, and it also pays for other transit projects.

In the interview, Mr. Trump rejected the idea of a bailout for U.S. air carriers as they contend with jet fuel costs that have more than doubled since the start of the war with Iran.

For all the defect hawking these MAGA Republicans do, they sure love themselves some senseless U.S. Pork. When policy fails, all good Trump minions go on opportunistic political attacks using the courts as a theatre. This is also from CNN. Aleena Fayez has the report. “Hegseth calls for Sen. Mark Kelly to be investigated by Pentagon for second time.” Once is never enough. Right?

Defense Secretary Pete Hegseth on Sunday called for Sen. Mark Kelly to be investigated over comments he made about US weapon stockpiles, marking the second time the Pentagon chief has opened a review into the Democratic senator.

Hegseth slammed the retired Navy captain and former astronaut for expressing concern on CBS’ “Face the Nation” over US weapons stockpiles amid the Iran war, saying Kelly was “blabbing on TV” about a classified Pentagon briefing.

“Did he violate his oath…again? @DeptofWar legal counsel will review,” Hegseth posted on social media Sunday evening.

Kelly said earlier Sunday that following briefings by the Pentagon on munitions, including Tomahawks, ATACMS and Patriot rounds, he found it “shocking how deep we have gone into these magazines.”

“We’ve expended a lot of munitions. And that means the American people are less safe. Whether it’s a conflict in the western Pacific with China or somewhere else in the world, the munitions are depleted,” Kelly, who sits on the Senate Armed Services and Intelligence committees, told CBS News’ Margaret Brennan.

Kelly responded to Hegseth’s post with a video of the pair at a recent Senate hearing. “We had this conversation in a public hearing a week ago and you said it would take ‘years’ to replenish some of these stockpiles. That’s not classified, it’s a quote from you,” Kelly posted, adding that the “war is coming at a serious cost.”

Ryan Burke at Just Security has some interesting legal analysis. “Lessons from the Pentagon’s Empty Case Against Mark Kelly.”

Secretary Pete Hegseth’s Pentagon is in disarray. Adherence to the rule of law is now, apparently, a ground for termination. The latest target in Hegseth’s continued purge was former Secretary of the Navy John Phelan. Phelan’s firing reportedly frustrated some White House officials, and it apparently came after the Navy Secretary found himself square in Hegseth’s crosshairs over his refusal to punish Senator Mark Kelly (D-AZ) for his appearance in a video purported to be an alleged catalyst for mutiny. After a federal judge ruled against the Pentagon’s pursuit of disciplining Kelly, Secretary Hegseth reportedly ordered Phelan to ignore the order and issue punishment to the retired Navy captain anyway. These reported events are an alarming development in the ongoing saga of instability in the Pentagon that should concern every DOD employee who thinks the law is on their side.

Months ago, Hegseth moved to downgrade Kelly’s retirement rank and pay as punishment for the senator’s participation in the so-called “Seditious Six” video. The problem for the Secretary’s pursuit: there’s no there, there. This is a manufactured scandal built on hollow ground, and the harder the Department of Defense tries to sculpt it into something meaningful, the faster it crumbles.

The central claim for punishing Kelly rests on the idea that the Senator encouraged troops to reject legal orders. The most glaring problems for DOD are twofold. First, Kelly clearly referred to the ability to refuse illegal orders – a fact in the record that was apparent in the DC Circuit oral argument late last week. “He never did say those words,” Judge Cornelia Pillard, said in response to the government’s attempt to put words in Kelly’s mouth.

The second problem, ironically for DOD, is the government can’t point to any specific orders to which Kelly referred. In the hearing, the government tried to glom onto Judge Karen L. Henderson’s suggestion that Kelly, at a press conference nearly two weeks after the video was published, said “we were looking forward to try to head something off at the pass” (video and transcript of Kelly press conference). Looking forward. Head something off. And that something clearly not being deployment orders to U.S. cities – which had long ago occurred:

Let’s not forget there’s one more war of choice out there, causing the deaths of many at our cost. The Iran War was brought about by the same two assholes. This is from the New York Times. “Trump and Netanyahu Say Iran War Is Not Over. The Trump administration said last week that the war had run its course, but the U.S. president and Israel’s prime minister in interviews on Sunday did not rule out renewed combat.”

President Trump and Israel’s prime minister, Benjamin Netanyahu, said in separate interviews on Sunday that the war against Iran was not over, seeming to undermine messaging from the Trump administration last week that the conflict had run its course.

The interviews further compounded confusion about a military campaign marked by shifting goals and messaging since the American-Israeli attacks on Iran began in late February.

Mr. Trump, in an interview released by the syndicated news show “Full Measure,” said Iran had been defeated militarily. Yet when asked if it was accurate to say that combat operations were “over and done,” he refuted that assessment.

“No, I didn’t say that,” Mr. Trump said, adding that Iran was “defeated, but that doesn’t mean they are done.”

Mr. Trump estimated that about 70 percent of the United States’ targets in Iran had been hit. “We could go in for two more weeks and do every single target,” he added.

Mr. Netanyahu also told CBS’s “60 Minutes” in an interview that the conflict was not over, laying out a longer list of unfinished business to address.

“There is still nuclear material, enriched uranium, that has to be taken out of Iran,” Mr. Netanyahu said. “There’s still enrichment sites that have to be dismantled. There are still proxies that Iran supports. There are ballistic missiles that they still want to produce.”

Mr. Netanyahu added that an agreement with Iran to remove its enriched uranium would be the ideal method to ensure the country no longer has materials for a nuclear weapon. The fate of that nuclear material has been one of the key sticking points in U.S.-Iran peace talks, according to Iranian officials.

“I think it can be done physically, that’s not the problem,” Mr. Netanyahu said. He added, “If you have an agreement and you go in and you take it out, why not? That’s the best way.”

Who voted for this? Something needs to change for the better with the Midterms.  Oh, wait, there’s still all that gerrymandering and law-upending stuff happening to thwart that.  That means it’s really important to vote.  I may not be able to vote for my Congress Critter this primary in Louisiana, but I’m damn determined to go vote against every Constitutional Amendment that our governor and Republican twits put on the ballot this year. Please, whereever you are, VOTE!

What’s on your Reading, Action, and Blogging list today?


Chapter 3: In which Kat joins the Pigou Club

na-au619_enerte_ns_20081211211615This thread is going to speak to solving several major problems we have in our Economy in a way that is not going to be highly popular with folks outside the Pigou Club.  If you slept during or avoided your microeconomics course, or blocked the bad memories the minute you finished the course, you undoubtedly are asking yourself wtf is the Pigou Club?  If you do remember who Pigou is and what he suggested, you’re asking yourself, why would any economist suggest raising taxes on anything during a major recession?  Well, get ready to discuss using a tax to shape social behavior because that’s what Pigou suggested and that’s what we now do on things like alcohol and cigarettes.

Arthur Cecil Pigou was a Brit economist who was part of the Cambridge school that also produced John Maynard Keynes.  Pigou’s major work was in an area that we call welfare economics.  You can read more about him if you’d like but this is from Wikipedia and gives you the major idea.

Pigou’s major work, Wealth and Welfare (1912, 1920), brought welfare economics into the scope of economic analysis. In particular, Pigou is responsible for the distinction between private and social marginal products and costs. He originated the idea that governments can, via a mixture of taxes and subsidies, correct such perceived market failures — or “internalize the externalities“. Pigovian taxes, taxes used to correct negative externalities, are named in his honor.

So what do the members of  Greg Mankiw’s Pigou Club want to tax?  Well, the answer is that now is the perfect time for a federal tax on gasoline and other petroleum products.  It appears that the incoming energy secretary, Steven Chu, is also a member of the Pigou Club.    Another Obama appointee, Lawrence Summers also supports the idea.  Here is a description of Chu’s idea from the WSJ.

In a sign of one major internal difference, Mr. Chu has called for gradually ramping up gasoline taxes over 15 years to coax consumers into buying more-efficient cars and living in neighborhoods closer to work.

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” Mr. Chu, who directs the Lawrence Berkeley National Laboratory in California, said in an interview with The Wall Street Journal in September.

But Mr. Obama has dismissed the idea of boosting the federal gasoline tax, a move energy experts say could be the single most effective step to promote alternative energies and temper demand.

That last sentence is the important argument is signficant.  A Pigou tax on gasoline, heating oil, and other petroleum products would, in fact, be extremely effective in promoting alternative energies, decreasing dependence on foreign sources of the products, and giving us more leverage in the world with countries we have to endure just because they have oil.   Check out today’s Market Watch and the new threat from OPEC.  Threats from OPEC are nothing new, we’ve been dealing with them since the 1970s, but ineffectively, because they can negatively impact our economyand the way we deal with certain oil exporting countries with terrorist tendencies.  We also know they loosen up the supply and let prices drop anytime we threaten energy independence which causes auto companies and stupid americans who love big vehicles to buy them. 

NEW YORK (MarketWatch) — The Organization of Petroleum Exporting Countries has decided to cut its oil output by 2.2 million barrels a day from current output, or 4.2 million barrels a day from September levels, the Wall Street Journal reported on its Web site Wednesday.

OPEC faces a world where oil prices are set by factors outside of the traditional supply and demand. Currency and interest rate moves, as well as jitters tied to the global economic crisis, have pushed oil prices down precipitously of late.
Analysts at Pritchard Capital Partners noted that the lowered production target is expected to take effect on Jan. 1, with actual cuts coming mostly from Saudi Arabia, United Arab Emirates and Kuwait

 

Now is the perfect time to do this since prices are incredibly low.  I’d like you to know that I am personally goring my own ox while suggesting that.  I currently have a weekly commute that has caused my gas consumption to go from a tank a month to about 1 1/2 tanks a week.  Believe me, I’m perfectly happy with gas prices around $1.50 a gallon but I’m willing to say that it’s about time we putting an increasing Pigou tax that will cause us, once and for all, to stop our dependence on foreign fossil fuels.  This will give automobile makers a signal that they should drop the big old fuel guzzlers because it will shut off demand for them.  This will give incentive for alternative energies, because they know that gas prices will continue to go up.  This will give us incentive to actually go green and not just wait for the next downturn in energy prices to ignore the problem. 
So how about it, do you want to join the Pigou Club and really do something for our future?  Better yet, will the two members of the incoming Obama Team convince the PE that this would be a better way to raise taxes for a national health program than a windfall profits tax on Oil Companies?

 

 

 

 

 

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