Category Archives: Economics

Business, Economics, Political Commentary, Technology and Society, War Commentary

Putin’s Kremlin And Oil

4 Comments

He’s losing the price war:

Well before Crimea, European nations resented Russian natural gas price gouging. The Kremlin used pricing threats to bully Ukraine, Poland and even Germany into political concessions.

After the Crimean travesty, the Baltic States and Poland demanded alternative gas supplies. The Obama administration quietly agreed to permit U.S. gas exports and the development of a liquefied natural gas exporting facility.

American LNG supplies might reach Poland in three years. That’s good news. Here’s the bad news: Putin has three years to exploit E.U. divisions and politically split NATO.

Or he had three years. Enter Saudi Arabia. America’s “fracking” success challenges Saudi global oil dominance. What’s the price point where fracking becomes unprofitable? Estimates run from $55 to $70 a barrel for oil. The Saudi oil ministry intends to find out and says it will not cut production. The market will determine price.

Though Russia can strangle Ukraine by denying gas supplies, the stunted and corrupt Russian economy survives on energy sales. Without its cash crop of oil, and gas, Russia is a big cabbage farm with a second-rate armaments industry. Cabbage, tanks, ICBMS and nuclear weapons mean Russian is not quite a petro-emirate writ large, but the cruel analogy has instructive utility.

If Russian nukes mean open war with Moscow is too risky, then attacking the Kremlin’s cash generator is war by appropriate means.

The question is, how long will the Saudis be able and/or willing to try to break the US energy industry? Regardless, OPEC is dead. Which is bad news not just for Russia, but Venezuela and Iran. It’s a shame that the administration has been doing almost everything it can to hamstring us.

Business, Economics, Media Criticism, Political Commentary

Seattle’s $15 Minimum Wage Law

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…is having exactly the effect that anyone who understands economics or how a business works would predict:

In Seattle, 42 percent of surveyed employers were “very likely” to reduce the number of employees per shift or overall staffing levels as a direct consequence of the law. Similarly, 44 percent reported that they were “very likely” to scale back on employees’ hours to help offset the increased cost of the law. That’s particularly bad news for the Seattle metro area, where the unemployment rate for 16- to 19-year-olds is already more than 30 percent — due in part to Washington state’s already-high minimum wage.

Perhaps most concerning about the $15 proposal is that some businesses anticipated going beyond an increase in prices or a reduction in staffing levels. More than 43 percent of respondents said it was “very likely” they would limit future expansion in Seattle in response to the law. One in seven respondents is even “very likely” to close a current location in the city limits.

You don’t say.

Business, Economics, Media Criticism, Political Commentary, Space, Technology and Society

Orion

8 Comments

Eric Berger has the latest installment of his series on NASA’s drift (which is likely to become a book, I think):

NASA’s rank-and-file believe America wants a space program pushing outward, and upward.

“We don’t think of our jobs here as white-collar welfare,” Kramer said. “We have a real passion for what we do.”

Of course you don’t. You have to motivate yourself to go to work. But that doesn’t make it untrue.

I weep to think what that billion dollars per year could be doing if applied to something useful.

[Update a while later]

I should note that I have worked on many projects that I considered a pointless waste of money, because it was my job assignment. While I’m probably more cynical than most, I did eventually tire of helping Congress waste the taxpayers’ money, which is why I quit the mainstream industry two decades ago.

Business, Economics, Mathematics, Media Criticism, Political Commentary, Social Commentary

Gruber The Grifter

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Why you don’t want to let “intellectuals” anywhere near power:

Unfortunately, contemporary Washington is calibrated to defer to experts who defer to politicians, providing an intellectual Praetorian Guard for the constant growth of a leviathan. As Denver University professor David Ciepley noted, “Starting in the First World War, and much more so during the New Deal and World War II, American social scientists became part of the autonomous state themselves, helping staff the mushrooming government agencies.” The closer that intellectuals get to politicians, the more weaselly they usually become.

Playing off Mr. Gruber’s derision of average Americans, one wag suggested a new acronym — L.I.E. — for Low Information Experts. Mr. Gruber and many other professors have gotten rich by pretending that government is far more competent than it actually is. Economist Robert Skidelsky, writing about the history of modern socialism, observed that “the collectivist belief system existed independently of the facts of modern life.” The same is true of the academic cadre who profit by vindicating endless government interventions that breed chaos and dependency.

I’d like to think that people will take a lesson from this (particularly with regard to climate models), but history doesn’t make me hopeful.

Business, Economics, Media Criticism, Political Commentary, Space, Technology and Society

SLS Engines

9 Comments

They still have no idea what they’re going to do after thye run out of SSMEs.

As I noted on Twitter:

[Afternoon update]