The Climate Change Activist's Nightmare: Falling Oil Prices

In mid-2008, the price of oil plummeted from over $140/barrel to just under $40/barrel by the end of the year (noted by the shaded area in the graph below).

Then, prices started to rebound and eventually topped out at $107 in mid-2013.  Interestingly, this fall and then a rise in oil prices greatly affected the daily U.S. consumption of oil.

In 2008, when oil prices bottomed out, Americans consumed 55,108.1 gallons of gasoline per day.  Eventually, as oil prices rose, consumption fell to just 24,722.5 gallons per day in 2013.  Thus proving a direct correlation between oil prices and consumption.

Now, since mid-2014, oil prices have fallen like a rock once again.

In fact, oil is falling so fast the Federal Reserve Economic Data database is unable to keep up with the changes.  This chart shows oil at around $55/barrel.  As, of this writing, it is actually trading below $49. But, putting this aside.  If oil is keeps falling, gasoline consumption is sure to rise once again.  Maybe even a doubling of the 24,000 gallons/day that was seen in 2013.  And, this is what keeps global warming activists up all night.  That's because, simply, if you double consumption, you double the carbon foot print.  And remember, gasoline prices aren't just falling in the U.S. but also, world wide. So, the world's carbon footprint is also sure to rise.

References:

U.S. Energy Information Administration: Refiner Motor Gasoline Sales Volumes: http://www.eia.gov/dnav/pet/pet_cons_refmg_d_nus_VTR_mgalpd_a.htm

Federal Reserve Economic Data (FRED):  Interactive Graph: Crude Oil Prices: West Texas Intermediate (WTI) - Cushing, Oklahoma: http://research.stlouisfed.org/fred2/graph/?id=ACOILWTICO,


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Thomas Piketty's Failed High Tax On Millionaires In France

Earlier this year, those on the political left were all agog over French economist Thomas Piketty's latest book "Capital in the Twenty-First Century".  In the book, this socialist economist -- that which, in itself, is an oxymoron -- argued that wealth should be stamped out with excessively high taxation.  Taxes as high as 80% on the richest.  This was a belief that had been expressed for years, and a devotee who shares it is the Socialist Party's current President of France, Francois Hollande.

In 2012, Hollande campaigned on the fact that he wanted to institute a 75% tax on those making a million Eurodollars or more as a means of reversing France's growing debt.  In December of 2013, Hollande successfully achieved passage of that tax through the French legislature.  It became retroactively applicable to all of 2013, but it was conditionally term-limited to just two years.  Thus, as of December 31, 2014, the tax died on its own without renewal.  In essence, it was a failure.

Before the tax was implemented, opponents said it would cause a mass exodus of the wealthy.  They also said it would cause the economy to falter.  While there really wasn't a "mass exodus" out of the country, wealthy investors and investments avoided coming to France to establish new businesses.  France also earned an anti-business title.  Also, the promised debt reversing tax revenues never significantly materialized.  And, the economy?  After seeing a spike in the country's GDP in early 2013, it continued to struggle throughout the rest of that year and, again, in 2014:

Then, too, unemployment, after falling in 2013, started rising again last year:

All in all, France's two-year experiment was nothing but a failure and Thomas Piketty's high taxes on the rich was exposed as simply a hate-the-wealthy economic fraud.  And, Hollande? His approval rating has tanked to just 12%.

The bottom line is that a country that punishes its rich with high taxation only limits economic growth and raises unemployment.  This was a lesson well learned in the U.S. when, in 1990 under a Democrat Congress, a luxury tax on expensive boats, planes, cars, jewels and furs was enacted to, basically, backdoor-punish the wealthy. This, under the guise that revenues would increase and the debt would be reduced.  We then slipped into a mini-recession, and over the two next years, the rich flourished while many of the people that made, or sold, or maintained those luxury items lost their jobs. 


References:

Capital in the Twenty-First Century: http://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century


Francois Hollande: http://en.wikipedia.org/wiki/Fran%C3%A7ois_Hollande

Hollande's 75% Super-Tax Ends As A Failure: http://www.businessinsider.com/r-france-waves-discreet-goodbye-to-75-percent-super-tax-2014-12

France GDP Growth Rate: http://www.tradingeconomics.com/france/gdp-growth

Hollande popularity plumbs new low in mid-term French poll: http://www.reuters.com/article/2014/11/06/us-france-hollande-idUSKBN0IQ14R20141106

List of socialist states - Wikipedia, the free encyclopedia:  http://en.wikipedia.org/wiki/List_of_socialist_states

Luxury Tax Repeal A Long Time Coming: http://articles.sun-sentinel.com/1992-07-07/business/9202180334_1_luxury-tax-tax-repeal-tax-didn-t

The Great American Experiment: 19 States Raising Their Minimum Wage January 1

As of January 1st, 19 states increased their minimum wage.  Three other states and Washington D.C. will do so later this year.  The new wages vary; ranging from $8.75/hour to a high of $10.50/hour in Washington D.C.  The current federal minimum is $7.25/hour and was established in 2009.  Prior to this January's hike, some states like Michigan had already raised their minimums.

First let me say that it is a good thing that the states are making individual decisions on increases.

I would rather have the states do it on their own than the Federal government step in with their typical one-size-fits-all bullying.  We don't have one economy in this country.  Each state has its own with its own average salary and its own cost of living.  For example, the average per capita income in Mississippi is just $20,618 or about $9.91/hour.  In New York, it is $32,382 or $15.57/hour.  In addition, within each state, the average per capita income varies widely between rural and urban areas.  For example, in the state of California, the county-based incomes range from $54,605 ($26.25/hour) in Marin Country to just $16,593 ($7.98/hour) in Imperial County.

However, average salaries aren't the only problem with trying to federalize the minimum wage.  The costs of living also varies widely.  The cost of living index in Manhattan is 216.7 or almost 117% higher than what an average American would pay for things with an index of 100.  Then, in a city like McClellan, Texas, it is 85; meaning that it is 15% cheaper to live in that city compared to what the average American needs to spend to live.

Now, I said this will be a Great American Experiment because, for the first time since 2009, when every state got a raise in the minimum wage, we will be able to look at the impact on those 19 states in isolation and without the added confusion of a recession. First of all, the vast majority of Americans will only get poorer when the minimum wage is increased because the cost of hotel, fast food, groceries, etc. will all go up while most American's salaries have stagnated; this despite raising the minimum three consecutive years from 2007 to 2009.  If it is too costly for Americans to travel and dine out, there may be higher unemployment and, obviously, we will see if this is the case in the states with raises.  The only fly in the ointment is the fact that gasoline prices have been falling; meaning that any increases in other costs of living will be offset by lower prices at the pump.

The old theory, too, that raising the minimum wage will lift millions out of poverty will also be tested.  In 2006, before it was set to be increased, there were 36 million Americans in poverty.  By 2010, that number rose to 46 million. One could easily argue that the raising of the minimum wage might have negatively effected the problem of poverty.  But, a little thing like the late 2007 to mid-2009 recession may have had a lot to do with that.  With 19 states raising the minimum wage in a somewhat healthy economy, we will finally see the real answer to the poverty question.

So, in essence, those 19 states will be our petri dish.  If overall, America benefits from those raises and there are no downsides, then I would say that raising the minimum wage would be a good thing on a national basis.  But, instead of a one-size-fits-all solution of $10.10 across the board, I would offer that a wage based on some percent of the average per capita salary would be more appropriate.  For example, if we wanted the minimum wage to always be 70% of whatever the state's average wage equals, New York would be at $10.89.  In the poorer state of Mississippi, it would be $6.94.  But, since the national amount is already at $7.25, Mississippi would remain at that rate until such time that the average per capita wage is high enough to trigger an increase.

Also, by setting the minimum wage at 70% of average incomes, the increase becomes indexed or, in other words, raised automatically each year to account for higher salaries.  For states that see their per capita incomes drop in any given year, it would remain the same as in the previous year.  All in all, a system like this would be fairer to the workers in each state and would take the issue out of the hands of the politicians.  Also, a good thing.


References:

19 States With Higher Minimum Wage on January 1, 2015: http://dailysignal.com/2015/01/01/state-raise-minimum-wage-today/

Michigan Minimum Wage: https://www.google.com/search?q=michigan+minimum+wage&ie=utf-8&oe=utf-8

For most workers, real wages have barely budged for decades: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

Mississippi - State and County QuickFacts: http://quickfacts.census.gov/qfd/states/28000.html

New York QuickFacts from the US Census Bureau: http://quickfacts.census.gov/qfd/states/36000.html

California locations by income: http://en.wikipedia.org/wiki/California_locations_by_income

Cost of Living Index—Selected Urban Areas, Annual Average: http://www.census.gov/compendia/statab/2012/tables/12s0728.pdf

 Fact Tank - Our Lives in Numbers October 9, 2014 For most workers, real wages have barely budged for decades: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

Persons Below the Poverty Level 1975-2010: http://www.infoplease.com/ipa/A0104525.html

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Black Lives Matter and the N-Word

Every time I hear the newest mantra that "Black Lives Matter", I am reminded of the use of the N-Word.  Among blacks, the N-Word can be freely used as both a noun and an adjective.  But, have one white person use that word, and it's racism. On the other hand, its apparently alright, that of the 10,000 to 12,000 murders each year, half are black and, of that half, 93% (roughly 5100) are committed by other blacks.  But, have one white cop kill an unarmed black person -- even for a justifiable reason -- and it, too, is racism. 

The simple fact is that the killing of unarmed blacks is quite rare when compared to the daily killing that takes place between blacks themselves in this nation. The website Gawker and their page titled "Unarmed People of Color Killed by Police, 1999-2014" shows the faces of a total of 70 unarmed blacks who have been killed by police in the last 15 years:

In that same Gawker site, it mentions that the NAACP tweeted that a total of 76 unarmed blacks had been killed by cops since 1999.   Whether it is 70 or 76, it's an insignificant number when compared to the number of blacks killing each other; every year.

So, in my opinion, the "Black Lives Matter" mantra is nothing but a political buzz phrase that does a complete disservice to the police in this country. If black lives really do matter then, people like Hillary Clinton and the Al Sharpton should be focusing on the main cause of all black murders.  Simply focusing on a the approximately 5 unarmed blacks dying at the hands of cops each year, cheapens the deaths of so many others that are being killed -- many of which are drive-by executions -- by persons of their own race.

References:

Black Lives Matter | Not a Moment, a Movement: http://blacklivesmatter.com/

Protesters mark New Year with 'Black Lives Matter' marches across US: http://rt.com/usa/219191-new-year-black-lives-protest/

Hillary Clinton denounces torture and says 'black lives matter': http://www.nydailynews.com/news/politics/hillary-clinton-denounces-torture-black-lives-matter-article-1.2048047

Thousands join Al Sharpton in 'Justice for All' march in D.C.:Thousands of demonstrators streamed down Pennsylvania Avenue on Saturday, shouting “Black lives matter": http://www.washingtonpost.com/national/health-science/sharpton-to-lead-justice-for-all-march-in-dc/2014/12/13/36ce8a68-824f-11e4-9f38-95a187e4c1f7_story.html

 Unarmed People of Color Killed by Police, 1999-2014: http://gawker.com/unarmed-people-of-color-killed-by-police-1999-2014-1666672349

Race and crime in the United States: http://en.wikipedia.org/wiki/Race_and_crime_in_the_United_States

Obama's Dangerous Game Of Trying To Close Gitmo

It's no deep secret that the President has wanted to close the terrorist interment facility at Gitmo (Guantanamo Bay, Cuba) since 2009.

Now, 6 years after taking office, he is still saddled with 127 prisoners; having just released 5 more on New Year's Eve at a time when no one was really paying attention.  Those 5 just released were supposedly determined to be of a medium threat.  But, if so, why has it taken more than a decade to find a home for them and the remaining 127?

The truth is, that all the easy-to-transfer inmates had all been moved before Obama took office.  Even so, about 19% of those who left that facility under Bush rejoined the battlefields against the U.S., Iraq, and Afghanistan.

Today, Gitmo houses the worst-of-the-worst, and this is why Obama has had so much difficulty finding countries that will take them. Consider, as an example, the Bergdahl deal.  Those 5 prisoners, who were traded for a possible U.S.deserter, were all extremely high level Taliban commanders and, my guess, is that their return-to-battle rate will be a lot higher than any of those released in the past.  This is the problem with trying to close Gitmo.  We are now faced with freeing some of the worst terrorist bad guys that we had captured.  It would be similar to our prison system dumping every "FBI's Most Wanted" inmates onto the street and expecting them not to return to their former lives of crime.

The statistics prove this out.  Of the 532 detainees released by Bush, the recidivism rate was only 19%.  Today, with Obama having released 88 prisoners since 2009, the rate has gone up to 29% and climbing higher by the day.  In effect, President Obama is hell-bent on freeing the kind of people that could do this country the greatest harm, and that's a very dangerous game to play merely to make good on a 2008 campaign promise. 

References:

US releases 5 more Guantanamo Bay prisoners, sends them to Kazakhstan: http://www.foxnews.com/politics/2014/12/31/us-releases-5-more-guantanamo-bay-prisoners-sends-them-to-kazakhstan/

Sgt. Bowe Bergdahl exchanged for top 5 Taliban commanders: http://www.longwarjournal.org/archives/2014/05/sgt_bowe_bergdahl_ex.php

Under President George W. Bush's tenure, 532 detainees were released from the detention facility.  88 Guantanamo detainees were released by Obama. "The recidivism rate is nearly 29 percent and has been climbing steadily...": https://news.vice.com/article/new-us-intelligence-report-a-former-gitmo-detainee-recently-returned-to-the-fight

Some Distrubing Facts About The ObamaCare 2014-2015 Enrollment

First, if you didn't enroll in any ObamaCare exchange by December 15th of 2014, you're out of luck if you want coverage starting January 1, 2015; even though you can continue to enroll through February 15th.  The continuance through February is only to avoid having to pay an IRS tax penalty.  The ObamaCare enrollment rules are very clear and simple.

If you were currently enrolled in a plan in 2014, your coverage ends December 31, 2014.  Your existing 2014 plan will be automatically renewed unless you cancel or change that plan by December 15, 2014.  If you enroll from the 1st to the 15th of any month, your coverage will begin on the 1st day of the next month.  Enroll past the 15th of a month and coverage will begin on the 1st day of the second month going forward.

With the December 15th deadline date in mind, Health and Human Services recently announced that a total of 6.4 million people had enrolled/re-enrolled by December 15th.  Of that, 1.9 million were new enrollees; meaning that only 4.5 million from last year's insurance automatically renewed (60%) or changed (40%) their insurance for 2015.

To put these numbers in perspective you need to understand what happened last year.  Originally, the President proudly proclaimed 8 million enrollees.  Then, later this year, the number was down to 7.3 million because some 600,000 never paid for the insurance they signed up for.  In November, we found out that another 400,000 were double counted.  Thus, the actual 2014 enrollment was only 6.9 million. 

So, what is wrong with this picture?

To start with, only 4.5 million of last year's 6.9 million renewed their insurance coverage for 2015; meaning that 2.4 million took a positive action to cancel in order to avoid automatic renewal. That hardly bodes well for an insurance system that the Democrats said Americans would "grow" to like.  Also, the new number of 1.9 million is very close, but still less than, last year's 2.1 million enrollees by the end of 2013.  Hardly, any improvement over last year's belief that more people would have signed up if the ObamaCare website had been working properly.  All indications are that the website worked fine this year.  Of course, if the current 6.4 number doesn't grow past last year's 6.9 million signups, we might actually see a system that is in retreat and not expanding.  Also, 6.4 million barely scratches the surface of the 42 million Americans without health insurance that, supposedly, ObamaCare was meant to help.  In fact, some government figures show that the number of uninsured actually increased in the first year of ObamaCare.

Then, there's the "freebee" problem.  According to data released by Health and Human Services, 10 million more people went on Medicaid (free health insurance) in the last year due to ObamaCare's Medicaid expansion.  Also, another study found that 87% of people who signed up received government subsidies.  Thus, only 13% of 4.5 million or 600,000 paid full fare for their insurance.  Why more people aren't signing up for exchange insurance plans is simple.  The costs are too high when you look at the monthly premiums, the high deductibles, and the annual out-of-pocket-caps.

Those not buying insurance this year are going to be shocked when the IRS tags them with a minimum penalty of $365 or the greater of two percent of their income for not being insured. Gone is last year's $95 penalty or one percent of income; whichever is higher.

Lastly, this is the year that the employer mandate kicks in and many companies (those with 50 employees or more) will have to pay a penalty for not providing health insurance.  How the mandate affects employer-provided insurance rates is yet to be seen.  Some think that, rather than incur a hefty cost for providing insurance, some number of employers may elect to pay a lower-cost penalty instead.  Or, will the current trend of replacing full time employee with part-timers continue as companies jockey to avoid paying for insurance and, at the same time, avoid any penalties?  Whatever the case may be, it is quite possible that 2015 will be another year where there is no increase in median family income as full-time, high-paying jobs are replaced with lower-paying part-time work.

References:

Affordable Care Act Open Enrollment: https://www.healthcare.gov/marketplace-deadlines/2015/

U.S. Health Chief Calls Review After Obamacare Inflation: http://www.bloomberg.com/news/2014-11-24/u-s-health-chief-calls-review-after-obamacare-inflation.html

Obamacare Enrollment Numbers As Of Dec. 31: http://www.businessinsider.com/obamacare-enrollment-numbers-dec-31-january-2-million-2013-12

 1.9 million new customers enroll in Obamacare: http://www.nbc33tv.com/news/19-million-new-customers

January 2014:  Obamacare Enrollment Surges Past 2 Million: http://www.businessinsider.com/obamacare-enrollment-numbers-dec-31-january-2-million-2013-12

A whopping 87 per cent of Obamacare customers to get taxpayer-funded subsidies: http://www.dailymail.co.uk/news/article-2891804/A-whopping-87-cent-Obamacare-subscribers-taxpayer-funded-subsidies-2015-Supreme-Court-make-65-BILLION-subsidies-illegal.html

Medicaid Rolls Surge Under Affordable Care Act: http://www.nytimes.com/2014/12/19/upshot/medicaid-rolls-surge-under-affordable-care-act.html?abt=0002&abg=1

US Census Data: Uninsured Rate…Increased in 2014?: http://townhall.com/tipsheet/guybenson/2014/09/22/us-census-bureau-number-of-uninsured-americansincreased-in-2014-n1894992

Unable to Meet the Deductible or the Doctor: http://www.nytimes.com/2014/10/18/us/unable-to-meet-the-deductible-or-the-doctor.html?src=twr 

Employer Mandate | U.S. Chamber of Commerce: https://www.uschamber.com/health-reform/employer-mandate

How Businesses Are Handling the Obamacare Employer Mandate: http://www.entrepreneur.com/article/239039

Median Incomes Fell for All But Richest in 2010-13, Fed Says: http://www.bloomberg.com/news/2014-09-04/median-incomes-fell-for-all-but-richest-in-2010-2013-fed-says.html

Wealth gap between middle class and rich widest ever: http://money.cnn.com/2014/12/17/news/economy/wealth-gap-middle-class-rich/

The Impending Health Care Disaster Being Created By ObamaCare

Right now, the flu season is quickly upon us and expected to peak in February of 2015.  If you go to an average (non-affluent) emergency room during the next 2 months, you will probably find wall-to-wall patients waiting for hours to see a physician.  Many may look as if they only have a few minor symptoms, such as sneezing or coughing. You may wonder why they don't just go see their own doctors.

However, they probably don't have "their own" doctors because they either can't afford insurance; or, can't afford to pay a large deductible; or, they have an insurance policy that leaves them with little access to doctors near their homes.  As a result, they are forced to take advantage of a law in this country called the Emergency Medical Treatment and Active Labor Act (EMTALA).  Under EMTALA, any hospital that takes Medicare patients must also take any patient regardless of their ability to pay or whether or not they are a U.S. citizen.   Because of this law, and how ObamaCare addresses healthcare,  a nightmare will be created in almost every emergency room that takes Medicare patients.  So much so, that many hospitals may stop taking Medicare altogether in order to avoid having to take the millions of non-paying patients showing up at their doorsteps.

How ObamaCare will be responsible for this impending emergency room disaster comes down to two key elements of the law: (1) The Expansion of Medicaid and (2) high deductibles and high annual out-of-pocket expenses for insurance bought in the Exchanges.

First, there is the expansion of Medicaid.  Medicaid was originally intended to give the poor access to healthcare at no cost; except for some token co-pays for certain services in certain states. ObamaCare changed that by allowing people who were 138% above the poverty threshold, access to Medicaid.  This is a problem.  Medicaid, as a wholly run state and federal, medical insurance program pays doctors and hospitals just a few cents on the dollar for the services they provide; and, almost every year, states have been cutting what doctors and hospitals are paid in order to balance their budgets. As a result, fewer and fewer are willing to take Medicaid patients.  In a recent Merritt Hawkins report on healthcare in America, their most recent survey found that only 45.7% of the doctors surveyed would take Medicaid.  This was down from 55.4% of doctors in 2009 and before the ObamaCare law was enacted.  And, as the New York Times is reporting, that number may fall to as low as 40%.

So, if you can't find a Medicaid-accepting doctor near you, what do you do?  Well, you go to the emergency room instead.  Proof of this comes from Oregon who, in 2008, expanded Medicaid on its own.  They surely thought that this would alleviate the overburdened emergency rooms in the state.  However, just the opposite happened. ER usage rose by 40% because people were being forced off their own private insurances -- accepted by many doctors --  and onto Medicaid -- accepted by few.

Then, there's the health insurance being sold in the state and federal exchanges, and how they too will impact ER's across the country.  All the policies being sold in the ObamaCare exchanges are primarily some form of catastrophic insurance; meaning they have high deductibles or high annual out of pocket expenses.  For example, if you buy the cheapest plan, the Bronze plan, and whether or not the premiums are subsidized by the Federal government, you will still be liable for an average of $5,181 in annual deductibles.  After paying that first, you will then pay 40% of any doctor/hospital bills (assuming the doctor/hospital treating you is even eligible for reimbursement under your exchange insurance plan's network) until you reach a maximum out-of-pocket limit of $6,373 per individual or $12,749 per family.  So, if you are poor -- but not poor enough for Medicaid -- and, even if your premiums are fully subsidized by the Federal government, do you really think someone will simply go to a doctor and pay full-price for the doctor's bill and most likely some number of expensive tests that may be needed?  No;  instead you'll go to the emergency room of your nearest hospital and claim that under EMTALA you have no ability to pay.  Of course, insurance bought in the exchanges have another problem similar to Medicaid:  Fewer doctors are willing to accept ObamaCare insurance.  This, too, will force many to go to ER's.

The bottom line is that millions of Americans getting insurance through ObamaCare, will still swamp our emergency rooms; forcing many to stop taking Medicare patients.  Americans will literally die in the process for lack of quality care.  And, the insurance premiums for those who can pay will skyrocket to make up for those who can't.

References:

As Medicaid Rolls Swell, Cuts in Payments to Doctors Threaten Access to Care: http://www.nytimes.com/2014/12/28/us/obamacare-medicaid-fee-increases-expiring.html

New Study: Expanding Medicaid Reduces Access to Health Care: http://www.forbes.com/sites/aroy/2012/03/10/new-study-expanding-medicaid-reduces-access-to-health-care/

Merritt Hawkins: Survey 2014: Physician Appointment Wait Times and Medicaid and Medicare Acceptance Rates: http://www.merritthawkins.com/uploadedFiles/MerrittHawkings/Surveys/mha2014waitsurvPDF.pdf

Medicaid Expansion Boosted Emergency Room Visits In Oregon: http://www.npr.org/blogs/health/2014/01/02/259128081/medicaid-expansion-boosted-emergency-room-visits-in-oregon

Bronze Plan Statistics: http://www.healthpocket.com/individual-health-insurance/bronze-health-plans#.VKBUYv8LAB

Doctors Begin To Refuse Obamacare Patients: http://dailycaller.com/2014/08/04/doctors-begin-to-refuse-obamacare-patients/