Showing posts with label Wyoming's boom and bust economy. Show all posts
Showing posts with label Wyoming's boom and bust economy. Show all posts

Sunday, March 17, 2024

Subsidiarity Economics 2024. The times more or less locally, Part I. And then the day arrived (part two).

Our lifestyle, our wildlife, our land and our water remain critical to our definition of Wyoming and to our economic future.

Dave Freudenthal, former Governor of Wyoming/

 

January 2, 2024

The Energy Information Administration’s Short Term Energy Outlook Report states that combined generation from wind and solar will overtake generation from coal by more than 90 billion kilowatt-hours this year.

US coal production will drop to its lowest amount since the 1960s, with it taking more miners per ton to produce in the 60s than it does now.

Pennsylvania's Flying Fish Brewing Co. filed for Chapter 11 bankruptcy protection.

January 11, 2024

January 17, 2024

From the Trib:

According to a report put out by the Wyoming State Geological Survey this month, the state’s oil production has not yet surpassed its 2019 high, while nationwide oil production has surpassed pre-pandemic levels.

More than 95 million barrels of oil are expected to be produced in Wyoming in 2023, which is about 3 million more barrels than in 2022. The drilling of new oil wells has helped greatly.

In the first half of 2023, a total of 110 newly drilled oil wells were completed, most of them in the Powder River Basin. This is in line with the first half of 2022, when 118 oil wells were completed.

January 22, 2024

Flying Fish Brewing has declared bankruptcy.

January 23, 2024

U.S. oil production has been holding at or near record highs since October, topping the previous peak from 2020, even though the number of active domestic oil drilling rigs is down by nearly 30% from four years ago.

New technology is the reason why there is higher production with fewer rigs.

And also:

The U.S. set a new annual oil production record on December 15, based on data from the Energy Information Administration. Although the official monthly numbers from the EIA won’t be released for a couple of months, we can calculate that a new record has been set based on the following analysis.

Prices at the pump have been declining.

January 25, 2024

In spite of repeated Republican declarations about how bad the economy is doing, the economy grew 4.9% in the third quarter of 2023, for which the latest figures are out.  This grossly exceeds expectations.

This is interesting for a lot of reasons, one of which the "bad economy" is a consistent theme of Republicans in the current election cycle, when in fact this is a classic "good economy".  It's frankly bizarre.

Some of that might reflect, however, an ongoing retention of a return to the 1945-1975 economy by Rust Belt voters, and anxiety over an inevitable decline in the fossil fuel economy in the West.  The post-war economy is of course never returning, and the change in the direction in the energy economy cannot be arrested, although it too is doing well right now.

January 28, 2024

The Administration plans on providing billions for microchip subsidies for US producers to assure production can be made in the US.

It's worth noting that with war looming with China, there's more than one reason to do this.

The Biden Administration has paused all pending export licenses for liquified national gas (LNG) to consider the climate impacts.

February 8, 2024

Getting Wall Street out of our houses

February 10, 2024

US Credit Card debt is at an all-time high.

World's Foremost Authority On Solar Sheep Advising Wyoming $500 Million Solar Farm

Jobs, Jobs, Jobs


February 11, 2024


It is estimated that over 10% of Canadian craft brewers will close this year.

February 13, 2024

The city of Gillette and BWXT have agreed to work together to look at the possibility of having nuclear facilities and operations in Gillette 

February 15, 2024

While this should be no surprise, given what we earlier reported here:


Remington, in its new form, will close its facilities in Ilion, New York, in March.

Colorado has filed suit to stop the Kroger Albertson's merger.

February 21, 2024

Japan's Nikkei stock index soared to an all-time high.

Rivian, the electric truck maker, is laying off 10% of its salaried staff.

This will cause piles of cackling from those who are convinced electric vehicles, which have taken off, will never take off.  Rivian was an automotive start-up, something that's really tough to do.  Basically, their business model depended on getting into the saturated truck market before other maker went to electric, a real gamble.

Wyoming Gets a Big Win in Court for Coal 

 

CHEYENNE, Wyo. –Wyoming’s coal industry’s earned a long-awaited legal win today, as three Ninth Circuit judges unanimously sided with Wyoming’s arguments in support of the continuation of the federal coal-leasing program. The decision vacated a lower court order that reinstated Obama-era coal-leasing restrictions and required federal officials to perform duplicative National Environmental Policy Act (NEPA) analysis. 

“This ruling is an unequivocal win for our coal industry and a reminder that the Biden Administration has to follow the law,” Governor Mark Gordon said. “The Department of Interior now has one less excuse to thwart its federal coal leasing responsibilities. I appreciate the Attorney General and her staff for their excellent work on this case.” 

The complicated case spanned seven years and involved conflicting orders issued by former Interior Secretaries, in which Secretary Jewel issued an order to cease federal coal leasing and conduct a Programmatic Environmental Statement on the entire coal leasing program. Before that review was complete, Secretary Zinke rescinded the Jewel Order so coal leasing could resume; lastly Secretary Haaland rescinded the Zinke order. The district court ruled that the Department of the Interior needed to conduct additional NEPA analysis before resuming coal leasing under its existing authorities.  Wyoming argued that the case was moot, because the Zinke order was rescinded by Secretary Haaland.

Litigation costs for Wyoming were covered by the Federal Natural Resource Policy Account as directed by Governor Gordon.   

-END-

March 15, 2024

Nippon Steel proposes to take over U.S. Steel.

March 17, 2024

Tyson, the giant chicken corporation, announced that it's closing a plant in Iowa in June which will result in 1200 people, 15% of the entire town, losing their jobs. Simultaneously, the company is working with an asylum advocate group to hire 2,500 asylum seekers who are cleared to work elsewhere.

Um. . . we've been running a series on our companion blog entitled An Agrarian Manifesto. . . might be worth reading, perhaps particularly these:

A sort of Agrarian Manifesto. What's wrong with the world (and how to fix it). Part 2. Distributism


A sort of Agrarian Manifesto. What's wrong with the world (and how to fix it). Part 5. What would that look like, and why would it fix anything, other than limiting my choices and lightening my wallet? The Distributist Impact

Last Prior Edition:

Subsidiarity Economics. The times more or less locally, Part XVI. And then the day arrived.


Recent Related Threads:



Wednesday, January 17, 2024

What's the matter with Wyoming (and Iowa)?


The other day Robert Reich, whose writing I have a love/hate relationship with, wrote this article:

What’s the matter with Iowa?

I'll admit that I was prepared to dismiss it when I started reading it, but I can't. It's a well reasoned article.

I don't think it sums up everything that's "wrong" with Iowa, but it gets some things right.  This could just as easily be said, about Wyoming, however:

I saw it happen. When I was helping Fritz Mondale in 1984, I noticed Iowa beginning to shift from family farms to corporate agriculture, and from industrialized manufacturing to knowledge-intensive jobs.

The challenge was to create a new economy for Iowa and for much of the Midwest.

I didn’t have any good ideas for creating that new economy, though — and neither did Mondale, who won Iowa’s Democratic caucuses that year but lost the general election to Ronald Reagan in Iowa and every other state, except his own Minnesota.

Yet not until George W. Bush’s reelection campaign in 2004 did a Republican presidential candidate win Iowa again.

When Tom Vilsack was governor of Iowa in the early 2000s and flirting with the idea of a presidential run, he told me he worried that Iowa’s high school valedictorians used to want to attend the University of Iowa or Iowa State, but now wanted the Ivy League or Stanford or NYU. Even Iowa’s own college graduates were leaving for Chicago, Minneapolis-St. Paul, and New York.

Vilsack wanted to know how to keep Iowa’s talent in Iowa — a variant of the question I couldn’t answer for Mondale. By this time I had a few ideas — setting up high-tech hubs around major universities, blanketing parts of the state with free wi-fi, having community colleges supply the talent local industries needed — but they all cost money that Iowa didn’t have.

As The New York Times’s Jonathan Weisman noted recently, Iowa continues to lose more than 34 percent of its college graduates each year. Illinois, by contrast, gains 20 percent more college graduates than it produces. Minnesota has about 8 percent more college grads than it produces.

This talent migration has hastened America’s split into two cultures, not just in Iowa and the Midwest but across the nation.

But not entirely.

The thing people like Reich don't get is that much of the country doesn't want to become an upper middle class urban cesspool.  Places that people like Reich worship are largely abhorrent in living terms.  There's a reason that people look to rural areas and an idealized past.

But people also lash themselves to a dead economy as if it'll come back, even if it means losing track of reality at some point, or even if it means becoming something they claim to detest, welfare recipients. This has happened all over the US.

Something needs to be done to revitalize the main street economy, and people like Reich don't have the answers because at the end of the day, all American economists see things the same way.  Everything is corporate, the only question is how much, if any, restraint you put on corporations.

Distributism would cure a lot of this.

If we had a more Distributist economy, we'd have a more local one.  For rural areas, that'd mean much more local processing of locally produced goods.  There's no reason for the concentration of the meat packing industry, for example. Beef could be packed locally.  At one time, my family did just that. And that's only one example.

If the economy was reoriented in that fashion, local industry would expand a great deal.  The thing is, of course, not all of those jobs would be the glass and steel mind-numbing cubicle jobs that all economists love.

But here's the other thing.  As long as the economy is oriented the way it is, rural states are going to be colonies of urban areas, just as much as, let's say, French Indochina was a colony of France, or Kenya a colony of the United Kingdom.  Exploitative, in another word.  It's not intentionally so, it is an economic reality.

The problem there is that in those sorts of economies everything is produced for export alone, and everything is precarious.  That gets back to my Distributist argument above.

But it also gets to a certain cultural thing in which those deeply aligned with the economy, which includes most people, can't see anything thing else. As long as the economy keeps working, that's okay. But when changes come, that can be a disaster.

Wyoming's very first economy was the fur trade, if we discount the native economy (which is a real economy, and accordingly should not be discounted).  Contrary to the popular belief, the fur trade was not displaced, it just was never really very large, and therefore it diminished in importance when other things came in.

The other things were 1) agriculture, which came first, followed by the 2) extractive industries.  Both are still with us.  Agriculture has suffered to a degree as the naturally distributist industries that support it have been sacrificed on the altar of corporate economics and consolidation.  The state, for its part, did nothing to arrest that trend and simply let it happen.  In part, that's because the state has always deeply worshiped the thought that the extractive industries will make us all rich and nothing is to be interfered with, including losing local production of the raw resources that are first produced here.  I.e., we don't refine the oil as much as we used to, we don't pack the meat, we don't process the wool. . . . 

And the extractive industries certainly have made a lot of people and entire communities rich, there's no question of it.

But the handwriting is on the wall.  Coal is declining and will continue to do so.  And a massive shift in petroleum use is occurring, which Wyoming cannot stop.  Petroleum will still be produced far into the future, but its use as a fuel is disappearing.  Petrochemicals, on the other hand, are not.

We seemingly like to think we can stop those things from changing in any form.  We've tried to through lawsuits and legislation.  And yet it turns out that people buying EV's don't listen to our litigation or legislation, any more than they do to Nebraska's Senator Deb Fischer's whining about recharging station funding.  Like some who can't face death due to illness, we'll grasp at what we can, rather than adjust.

Part of that is listening to people who tell us what we want to hear.  A lot of politicians have tried to gently tell us the truth of what we're facing.  Governor Gordon did just recently. When they do that, they're castigated for it.

In 1962's The Days of Wine and Roses the plot follows a man who is a social drinker and introduces alcohol to his girlfriend. They marry, and over time they become heavy drinkers.  He finally stops drinking, his wife having left him, and finds her in an apartment, where she is now a hardcore alcoholic.  He resumes drinking then and there, in order to be with her.

In the end, however, he reforms and quits. She doesn't. We know how that will end.

That's a lot like Wyomingites in general.  We've received the hard knocks and blows.  Some of us are going to put the bottle down and face the day, some are not going to under any circumstances.

For some, it's easier to believe that a "dictator for a day" can order the old economy restored and reverse fifty years of demographic change, while reversing supply, demand, and technology to sort of 1970s status.  In other words, go ahead and have another drink, it won't hurt you.

But in reality, it might, and probably will.

Wednesday, January 10, 2024

Thursday, January 10, 1924. Soaring oil prices.


The sort of headlines that Wyomingites love to read, at least until they go to buy gasoline at the pump.

Wyoming, as we've explored here before, crossed over from being primarily an agricultural economy to an oil one due to World War One, with 1917 really being the demarcation point.  From that point forward the state drank so deeply of petroleum that it has never been able to see itself as anything but a petro state, even while keeping Steamboat as its symbol.  A century later, to suggest that the evolution of technology and other factors mean that this industry will decline is nearly regarded as treasonous.  Perhaps as a result, the state has neglected its other industries.

The Cohn-Brandt-Cohn film company (CBC) changed its name to Columbia Pictures.

France imposed a curfew on the Rhineland and closed its borders, save for railroads and food transportation.  The move was due to the murder of Franz Josef Heinz the prior day.  The French were so strict on the matter that they refused to let British officials in to investigate separatist movements connected with the incident.

Related Threads:

1917 The Year that made Casper what it is. Or maybe it didn't. Or maybe it did.

Wednesday, December 27, 2023

Subsidiarity Economics. The times more or less locally, Part XVI. And then the day arrived.

Our lifestyle, our wildlife, our land and our water remain critical to our definition of Wyoming and to our economic future.

Dave Freudenthal, former Governor of Wyoming/

 

December 3, 2023


Oil field, Grass Creek, Wyo, April 9, 1916

Snippets of news articles from this morning:
DUBAI, United Arab Emirates — Fifty oil companies representing nearly half of global production pledged to reach near-zero methane emissions and end routine flaring in their operations by 2030, the president of this year’s United Nations climate talks said Saturday, a move environmental groups called a “smokescreen.”

 Smokescreen it doesn't seem to be. That's a major commitment.  But not as big as this one:

DUBAI, United Arab Emirates -- The United States committed Saturday to the idea of phasing out coal power plants, joining 56 other nations in kicking the coal habit that's a huge factor in global warming.

U.S. Special Envoy John Kerry announced that America was joining the Powering Past Coal Alliance, which means the Biden Administration commits to building no new coal plants and phasing out existing plants. No date was given for when the existing plants would have to go, but other Biden regulatory actions and international commitments already in the works had meant no coal by 2035.

None of this should be a surprise.  This is where we've been heading for some time, and it's inevitable.  Indeed, I touched on this back in 2017 here:

Coal: Understanding the time line of an industry

And I cautiously dipped my toe in the water, wondering if Wyoming should ponder a fossil fuel free future here:

Lex Anteinternet: Issues In the Wyoming Election. A Series. Issue No. 1 (a). The Economy again. . . the extractive industries


And here:


Well, now it's coming.

Not that we'll accept it. We'll do anything but.  Our senior Senator in Washington will claim its part of Joe Biden's "radical green agenda", a radical agenda now sought after by the majority of people in the United States, and in the World.  He doesn't believe that, but it sells back home.  With a Republican Party in the state that was ready to boil Governor Gordon in WD40 for daring to say that Wyoming needed to look at a carbon-neutral future, he doesn't dare say anything else as it would imperil his position.  Our junior Senator will likely say nothing at all.

Well, the voices are getting too loud to ignore, and they include people in the oil industry and now even entire nations that depend on petroleum.  From the President, to the Pope, to the Governor of the state, the message is getting pretty clear.  We're going to have to figure out a post fossil fuel economy here.

Quickly.

But, we'll choose not to.  We'll pretend that somehow we can force others to consume the product that we wish to produce, as we've produced it for over a century and a half, and it's our economy.

That, however, isn't the way economies work.
Dear future generations: Please accept our apologies. We were rolling drunk on petroleum.
Kurt Vonnegut


On another topic, the current owners of Remington are closing the doors this week to its Ilion, New York factor.  The company had been headquartered there since 1816.

It'd gone through hard times in the past.  It nearly went bankrupt after World War One when the United States Government cancelled contracts for M1917 Enfield rifles overnight, leaving them with a large stock of unfinished and partially finished rifles.  The Wilson Administration proved to be quite bad at demobilizing.  

Remington, while profitable, had the very bad fortune to be bought by the aptly named Cerebus which focused on AR15 production and drove the company under. Our prior thread on it is here:


Cerebus is virtually a symbol of all that is wrong with corporate capitalism.  Named for the three-headed dog that mythologically guards the gates of Hades to contain the dead therein, it might well be recalled, at least since Dante included it, that the creature is in Hell and of it.

Remington's history was mostly associated, over its long existence, with hunting rifles.  That's what the company was founded on in 1816.  It did manufacture military arms on occasion, however.  For example, it was a large scale supplier of contract rifles for the Union during the Civil War.  It's widely admired by riflemen rolling block rifle had a military variant that was purchased by some states in preference to the Trapdoor Springfield series of rifles, and it was in fact better than the Trapdoor.  The rolling block was widely sold overseas as a military rifle.

By and large, however, it never invested heavily in military sales until the Great War, when the British first contracted with it to produce the rifle that had been intended to replace the SMLE, but adapted to .303 British.  The P14 was a major British rifle of the war, but its production ceased in 1917 when the US entered the war, and the same rifle was adopted to the .30-06 and used by the U.S. as the M1917 Enfield.  Remington's production capacity was so vast that somewhat over half of all U.S. troops in World War One carried that rifle, rather than the M1903, and it continued to be used into World War Two.  But the experienced badly burned Remington and nearly left it bankrupt. After that it was extremely reluctant to make military arms, and it only reluctantly took to producing, ironically, M1903s during the Second World War when the government again needed help.  No original Remington arms were invented for the war as Remington didn't try to undertake that as a project, although it did make a continual series of changes in the M1903 which resulted in the M1903A3, nearly a new rifle in some ways.

After the war and into the Cold War, Remington didn't bother with military arms.  It wasn't a contractor to the M14 like H&R was.  It didn't try to enter a rifle into light rifle contests, like Colt did with the AR15 and Winchester did with its M1 Carbine derived competitor.  That all changed when Cerebus bought the company in 2007.

Cerebus also bought the AR15 manufacturer Bushmaster, which was highly regarded in that field.  By 2012 Remington was making M4 Carbines for the Army.  It leaped wholesale into the "America's Rifle" baloney with a hunting variant of the AR15.  It reentered the pistol market, which it had not been in since a brief foray after the Civil War, with a version of the M1911 pistol.  Cerebus didn't seem to understand what it was that Remington actually made.

Indeed, it was telling that a brilliant move by Remington to introduce a fairly cheap 98 Mauser hunting rifle, the 798, came in 2006, the year before Cerebus bought the company, and it quit offering it in 2008, the year after.

In name, it still exists, but now it's headquartered in Madison, NC.  It was the oldest manufacturer in the United States at the time of its bankruptcy, and it died a victim of American capitalism.

December 13, 2023

Governments gathered in Dubai agreed to the:

transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science."
and; 
accelerating efforts towards the phase-down of unabated coal power" and for "tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030.

This is a major action, if the committing countries are able to stick to it.  Environmentalist will complain that it is too little, too late, but as economists have shown in the past once efforts are made to really commit to a goal, it tends to be reached much more rapidly than anticipated. 

In Wyoming, where the Governor has been taking flak by noting that Wyoming will have to transition away from a carbon based economy, this is going to result in howls of derision, including claims that its part of a "radical green agenda" and "impossible".  It's neither.

December 14, 2023

We can’t reverse market trends, but we can be prepared. Blaming OSMRE — or, more ridiculously, President Biden — only provides another distraction as Wyoming politicians continue to whistle past the graveyard, averting our attention from planning for our future — a new lower-carbon economy that is coming whether we like it or not.

Bob LeResche former Alaska Commissioner, former Executive Director of the Alaska Energy Authority, in the Casper Star Tribune, December 14, 2023.

I used the same phrase, "whistling past the graveyard" here recently at least twice.

But some, it would appear, are not:


This will likely spark outrage in certain quarters of Wyoming, particularly in the GOP far right.   There were howls of derision concerning Governor Gordon's statements that Wyoming needs to plan for a carbon neutral future.  But that future is coming.  Moreover, what this demonstrates is that there are quarters of Wyoming, and Wyomingites, who see things much differently.  

Fremont County does have an interesting mix of residents, people who have retired there, people who have moved there (which includes everywhere else in Wyoming now), people who work in oil and gas (and live mostly in Riverton), people involved in outdoor industries, and residents of the Reservation.  Lander is the county seat, and borders the Reservation, but it is not an oil town.  The same resolution would likely pass easily in Jackson, maybe Pinedale, and Laramie. Cheyenne?  It might.

What about Evanston?

Well, probably, maybe, not, but Evanston is mad at the Wyoming Department of Transportation's plan to put in a semi tractor/trailer parking lot that will hold over 350 trucks and trailers during emergencies.  They don't like it, even though not all that long ago, almost any Wyoming Interstate highway town would have just shrugged their shoulders and figured that some of those truckers would at least order pizzas while stranded.

December 15, 2023

Global coal demand, on the other hand, was at an all-time high last year, due to use in developing countries.

General Motors is closing two plants and laying off 1,300 workers.

Closer to home, it's clear that Governor Gordon, who will not be running for office again (too bad) feels himself free to speak what he really believes.

Gov. Gordon Agrees Climate Change is Real, Says Decarbonizing the West is Possible

On national TV and in Idaho workshop, Gordon promotes his ‘all of the above’ energy strategy

This is of course going to get him a lot of criticism, including the class "he's a RINO" by people not realizing that they're the ones who are departing from the traditional Republican mindset.

December 18, 2023

All new cars in Canada must be zero emissions starting in 2035.

December 27, 2023

10,000,000 Americans will receive raises with boosted state minimum wages on January 1. The new rates apply in 22 states.

December 28, 2023

From the AP:

MEXICO CITY — Mexico launched its army-run airline  Tuesday when the first Mexicana  airlines flight took off from Mexico City bound for the Caribbean  resort of Tulum.

Also, from the AP:

So far in 2023, Americans have bought a record 1 million-plus hybrids — up 76% from the same period last year, according to Edmunds.com. As recently as last year, purchases had fallen below 2021’s total. This year’s figures don’t even include sales of 148,000 plug-in hybrids, which drive a short distance on battery power before a gas-electric system kicks in.

Last Prior Edition:

Subsidiarity Economics. The times more or less locally, Part XV. The 2% solution?

Tuesday, November 21, 2023

Subsidiarity Economics. The times more or less locally, Part XV. The 2% solution?

 August 9, 2023

3%

That is what inflation has fallen to.

The target rate is nonsensically 2%, which still robs workers of their wages.  Given the recent inflation, a more sensical target would be at or about 0%, or better yet a slight deflationary rate of 1%.

That's the core inflationary rate, by the way. Real inflation is at about 4.1%.

The US is banning private equity investment in China and investment in some Chinese technology companies.

August 12, 2023

The EPA estimates that by 2055 most petroleum fueled vehicles will have attrited off the road.

August 16, 2023

From the Oil City News:
CASPER, Wyo. — Rocky Mountain Power, the state’s largest electric utility, is proposing to raise its energy rates by 29.2%.
August 24, 2023

Before more consolidation of everything is just what we needed:

Subway sandwich chain sells itself to Dunkin’ owner Roark Capital

August 27, 2023

France will spend €200 million to destroy excess wine in hopes of shoring up the struggling wine industry.  Wine consumption in Europe has been falling, while production increasing.

September 7, 2023

Chinese exports, upon which that nation depends, have decreased every month of 2023.  China's economy is dependent upon exports and there is serious discussion on the country going into a recession.

September 11, 2023

Alexandria Ocasio-Cortez faced severe criticism from her constituents, after sharing a video on Instagram from the Kiwi left-wing Aotearoa Liberation League that accredited rising prices solely to corporations and described the discussion surrounding inflation as propaganda.

When I read the headline, I actually wondered if she'd reposted something of Robert Reich's. . . 

The bloom has really been off AoC's rose in recent months.

Trump has been heard at campaign dinners indicating that if re elected he will cut taxes, which are too low to start with, and use tariffs as a trade weapon.

September 15, 2023

The United Auto Workers are out on strike.


September 20, 2023

Ford Motors in Canada reached a deal with is union to avoid a strike there.

Republican infighting kept two budget bills from advancing there.

Cont:  

A drought in Spain has caused a 50% increase in the price of olive oil, which in turn is causing a spike in olive oil theft.

September 27, 2023

The Writers Guild of America has reached an accommodation with the entertainment industry and has ended its strike.

U.S. regulators and seventeen states have sued Amazon on Tuesday over allegations it uses its position in the economy to inflate prices.

The Senate has drafted a stopgap funding bill it will likely pass, but there's no certainty the dysfunctional House of Representatives will.

September 28, 2023

Kevin McCarthy, prisoner of GOP populists, will not take up the Senate bill to fund the government, making a shutdown impossible to avoid.

The House of Representatives is, quite frankly, dysfunctional.

And given this, we will close out this edition of Subsidiarity Economics, even though its barely gone, and start one focused on that theme.

But not before noting that the U.S. economy recently grew 2.1%.

October 1, 2023.

Crisis postponed. 

The following crisis that is:

Subsidiarity Economics. The Shutdown edition.

September 28, 2023


Kevin McCarthy, prisoner of GOP populists, will not take up the Senate bill to fund the government, making a shutdown impossible to avoid.

The House of Representatives is, quite frankly, dysfunctional.

And given this, we will close out this edition of Subsidiarity Economics, even though its barely gone, and start one focused on that theme.

Kevin McCarthy should hang his head in shame.

What all will close, assuming that the House doesn't get its act together today, isn't clear. Some things will, but "vital" things apparently will not.  Some Federal employees will be asked to work without pay, which is interesting, as working without pay is involuntary servitude, and was banned by a post Civil War constitutional amendment.

Congress, oddly, will get paid. 

The mail will continue to be delivered, as the U.S. Post Office funds itself.

Arizona and Utah have voted to spend state funds to keep their National Parks open.  Senator John Barrasso asked the Secretary of the Interior to use park entry fees to do the same.

Fat Bear Week is off due to the dysfunctional House of Representatives having been taken hostage by populists.

Government contracts and modifications to contracts will not be issued.

Medicaid will continue to be paid. Medicare will continue on.

The FHA will have limited staff and loans it processes will be delayed.

The SBA will shut down.

The ATF might not process background checks, which may lead to a complete halt on the sale of firearms by licensed firearm's dealers.

The latter is the thing that Wyomingites are likely to complain about right away.  People in industries supported by tourism are likely to notice the closure of the parks rapidly.

All of this, of course, is because this will be a managed shut down, which is really a limited shutdown or a slow-down.  If things continue for some time, and this time they might, a real shutdown may creep in, which Wyomingites, in spite of apparently disdaining the Federal Government, would really feel.  A closure of the airports, for example, could be expected at some point, And a cessation of petroleum production on Federal lands due to a lack of Federal oversight.  Perhaps a cessation of grazing on the Federal domain for the same reason.  And a lack of highway funds.

None of that will happen rapidly, of course.  Or maybe at all.

September 30, 2023.

We’re likely to avert a shutdown, but the clown show continues

Let the grousing now being.

Not from Reich, with whom I obviously have a love/hate relationship, but from the MAGA far right out in the hinterlands, who will be outraged, outraged I tell you, and they'll tell you on their way from the television to the refirgerator for a Coors Lite (can't touch that Bud, of course) who would, they'll say, have enjoyed the shutdown. . .right up until they didn't, and then somehow, it would have been the Democrats fault.Congress passed a 45-day stopgap spending bill yesterday.  In doing so, Speaker McCarthy noted:

We’re going to be adults in the room. And we’re going to keep government open.
Well now he has 45 days to see if he can do that.

The bill omitted funding for Ukraine.  President Biden noted that in his address regarding the stopgap bill.
Tonight, bipartisan majorities in the House and Senate voted to keep the government open, preventing an unnecessary crisis that would have inflicted needless pain on millions of hardworking Americans. This bill ensures that active-duty troops will continue to get paid, travelers will be spared airport delays, millions of women and children will continue to have access to vital nutrition assistance, and so much more. This is good news for the American people.
 
But I want to be clear: we should never have been in this position in the first place. Just a few months ago, Speaker McCarthy and I reached a budget agreement to avoid precisely this type of manufactured crisis. For weeks, extreme House Republicans tried to walk away from that deal by demanding drastic cuts that would have been devastating for millions of Americans. They failed.
 
While the Speaker and the overwhelming majority of Congress have been steadfast in their support for Ukraine, there is no new funding in this agreement to continue that support. We cannot under any circumstances allow American support for Ukraine to be interrupted. I fully expect the Speaker will keep his commitment to the people of Ukraine and secure passage of the support needed to help Ukraine at this critical moment.

McCarthy had to rely on Democrats to pass the bill, and will now surely face an effort aimed at his removal by his hard right. 

October 4, 2023

Facebook's parent company Meta is laying off 11,000 employees.

October 5, 2023

75,000 Kaiser Permanente employees went on strike Wednesday. Staffing levels are an issue.

October 8, 2023

California has put into effect a law requiring  requires public and private US businesses with revenues greater than $1 billion operating in California to report their emissions comprehensively.

October 9, 2023

Workers for Mack Truck are going out on a UAW strike.

October 11, 2023

The UAW's strike has expanded to include a Ford plant in Kentucky.

October 15, 2023

The price of oil has jumped 6% since April.

October 24, 2023

Icelandic women are on strike for wage equality.

October 27, 2023

The economy grew by 4.9% last quarter.

October 28, 2023

Governor Gordon sounded climate alarm bells in a speech at Harvard this past week, noting that Wyoming needed to decarbonize. This caused the Wyoming Freedom Caucus to freak out.

October 31, 2023
Robert Reich.

November 2, 2023

Headline:

Union sets its sights on Tesla

November 5, 2023

Voters in Maine are voting on a referendum to replace the state's two electric companies with consumer-owned Pine Tree Power Company.

The proposal goes to the polls on Tuesday.  It states:
















November 9, 2023

The Air Force wants Congress to restrict the placement of wind farms near nuclear missle silos.

November 10, 2023

Moody’s Investors Service is revising the outlook on the U.S. government’s ratings to negative from stable but affirming the long-term issuer and senior unsecured rating at AAA.

Lest anyone doubt, this is bad for the economy and reflects a years long inability to get the deficit under control.

November 21, 2023

Ontario Knife Co. was sold to Blue Ridge Knives and all 56 employees at its Frankliville, New  York plant lost their jobs as a result.  Blue Ridge owns 800 brand names.

Last prior edition:


Tuesday, October 17, 2023

Wednesday, October 17, 1973. The Arab Oil Embargo begins.

OPEC having doubled prices the day prior, Arab oil producing nations, led by Saudi Arabia, now went further and cut production overall by 5% and then placed an embargo on the United States, the Netherlands, Canada, the United Kingdom, West Germany,  Japan, Rhodesia, South Africa, and Portugal.  Western oil producers Venezuela nor Ecuador refused to join the embargo.

This causes us to recall part of what we recently posted here:

Friday, October 12, 1973. President Nixon commences a transfer of military equipment that leads to a Wyoming oil boom.

Congressman Gerald Ford was nominated to be Vice President by Richard Nixon.  

Also on that day, President Nixon authorized Operation Nickel Grass, the airlift of weapons to Israel.


 

M60 tank being loaded as part of Operation Nickel Grass

The operation revealed severe problems with the U.S. airlift capacity and would likely have not been possible without the assistance of Portugal, whose Azores facilities reduced the need for air-to-air refueling.  The transfer of equipment would also leave the United States dangerously short of some sorts of military equipment, including radios, something that was compounded by the fact that the U.S. was transferring a large volume of equipment to the Republic of Vietnam at the same time.

This would directly result in the Arab Oil Embargo, which had been threatened. The embargo commenced on October 17.  

U.S. oil production had peaked in 1970.  Oil imports rose by 52% between 1969 and 1972, an era when fuel efficiency was disregarded.  By 1972 the U.S. was importing 83% of its oil from the Middle East, but the real cost of petroleum had declined from the late 1950s.

The low cost of petroleum was a major factor in American post-war affluence from the mid 1940s through the 1960s.  The embargo resulted in a major expansion of Wyoming's oil and gas industry, and in some ways fundamentally completed a shift in the state's economy that had been slowly ongoing since World War One, replacing agriculture with hydrocarbon extraction as the predominant industry.

We often hear a lot of anecdotal information about this topic today.  

In this context, it's interesting to note that petroleum consumption is not much greater today in the U.S. than it was in 1973, but domestic production is the highest, by far, it's ever been.  Importation of petroleum is falling, but it's also higher than it was in 1973, but exportation of petroleum is the highest it's ever been, exceeding the amount produced in 1973.  If experts are balanced against imports, we're at an effective all-time low for importation.  In effect, presently, all we're doing with importation is balancing sources.


People hate this thought locally, but with renewable energy sources coming online, there's a real chance that petroleum consumption will fall for the first time since the 1970s, which would have the impact of reducing imports to irrelevancy.  Any way its looked at, the U.S. is no hostage to Middle Eastern oil any more.

It turned out that Europe wasn't hostage to Russian hydrocarbons either, so all of this reflects a fundamental shift in the world's economy.

Price has certainly changed over time.


Juan and Isabel Person were sworn into office as the elected president and vice president of Argentina

Judge John Sirica ruled that the Senate Watergate Committee was not entitled to have access to President Nixon's tape recordings, but that the U.S. Department of Justice special prosecutor, Archibald Cox, could subpoena them as evidence.

Motorola Corporation's engineer's filed for a patent on the DynaTAC, the first hand-held cellular telephone.  It would be issued two years later and our long modern nightmare would accelerate.

The DynaTAC would not enter production until 1983.

The Mets took game four of the World Series against the A's.  I surely would have watched that on the television with my father.

Thursday, October 12, 2023

Friday, October 12, 1973. President Nixon commences a transfer of military equipment that leads to a Wyoming oil boom.

Congressman Gerald Ford was nominated to be Vice President by Richard Nixon.  

Also on that day, President Nixon authorized Operation Nickel Grass, the airlift of weapons to Israel.


 

M60 tank being loaded as part of Operation Nickel Grass

The operation revealed severe problems with the U.S. airlift capacity and would likely have not been possible without the assistance of Portugal, whose Azores facilities reduced the need for air-to-air refueling.  The transfer of equipment would also leave the United States dangerously short of some sorts of military equipment, including radios, something that was compounded by the fact that the U.S. was transferring a large volume of equipment to the Republic of Vietnam at the same time.

This would directly result in the Arab Oil Embargo, which had been threatened. The embargo commenced on October 17.  

U.S. oil production had peaked in 1970.  Oil imports rose by 52% between 1969 and 1972, an era when fuel efficiency was disregarded.  By 1972 the U.S. was importing 83% of its oil from the Middle East, but the real cost of petroleum had declined from the late 1950s.

The low cost of petroleum was a major factor in American post-war affluence from the mid 1940s through the 1960s.  The embargo resulted in a major expansion of Wyoming's oil and gas industry, and in some ways fundamentally completed a shift in the state's economy that had been slowly ongoing since World War One, replacing agriculture with hydrocarbon extraction as the predominant industry.

We often hear a lot of anecdotal information about this topic today.  

In this context, it's interesting to note that petroleum consumption is not much greater today in the U.S. than it was in 1973, but domestic production is the highest, by far, it's ever been.  Importation of petroleum is falling, but it's also higher than it was in 1973, but exportation of petroleum is the highest it's ever been, exceeding the amount produced in 1973.  If experts are balanced against imports, we're at an effective all-time low for importation.  In effect, presently, all we're doing with importation is balancing sources.


People hate this thought locally, but with renewable energy sources coming online, there's a real chance that petroleum consumption will fall for the first time since the 1970s, which would have the impact of reducing imports to irrelevancy.  Any way its looked at, the U.S. is no hostage to Middle Eastern oil any more.

It turned out that Europe wasn't hostage to Russian hydrocarbons either, so all of this reflects a fundamental shift in the world's economy.

Price has certainly changed over time.


Juan and Isabel Person were sworn into office as the elected president and vice president of Argentina