Friday, August 2, 2013

My View

Random ruminations from your resident curmudgeon...

To lower the unemployment rate, the United States needs to create approximately 185,000 new jobs per month. The July employment report was released this morning and it showed that our net new job creation for the previous month was 163,000 jobs, and nominal unemployment continues to hover at 7.4% (real unemployment, the Bureau of Labor Statistics U-6 measure, remains over 14%). So far, in 2013, the U.S. economy has created 953,000 jobs through the end of July, a monthly average of 136,143. Here is the interesting aspect of that total jobs number: 77%, or 731,000 of these new jobs are part-time. This does not bode well for a long term economic recovery led by companies hiring full time workers and providing competitive salaries and benefits. The quality of jobs being created in 2013 is lower, i.e., more entry level and temp positions. Another aspect of this dismal picture that cannot be ignored is that many companies are moving some of their work force to "part time" status to avoid paying benefits or having to cover them under the provisions of Obamacare. Regardless of the motivations of employers, the fact remains that part time jobs provide no benefits and pay less. Until this troubling trend is reversed in the type of jobs our economy is creating, our country will continue to struggle to lower the unemployment rate and get the economy moving forward.

A friend of mine was on vacation out west when he ran into a bear with his car. Witnesses said it was a grizzly accident.

Speaking of Obamacare... If you do not have "affordable" employer sponsored insurance and your household income is between $31,800 and $94,200 for a family of four, then you qualify for an insurance subsidy to purchase coverage on an exchange under Obamacare. And when you apply for that subsidy, you have to declare your income on your application form. And we all know that  the Gestapo IRS has enforcement powers for the provisions of Obamacare. But guess what? The IRS will not be verifying the stated income level on the applications. You can immediately see how this would make the subsidy provision of the socialized healthcare program rife for fraud. Say you have a family of four and their household income is $90,000. Under the program, this family would be eligible for an insurance subsidy of $2,997. But say that family puts down their income as $35,000. Then their subsidy from the taxpayers (read: you and me) is $10,175. Think this will not be exploited? Especially since the IRS is not going to verify income levels. Oh yeah... in my hypothetical example, even if that family is caught, due to the wording of this section of Obamacare, their maximum penalty is only $2,500. Friends, all any honest person can say about this healthcare debacle is that it was a blatant power grab by the federal government that has been ill conceived and will be riddled with fraud.

When I was in college, I thought I wanted to sell computers, but I lost my drive.

Prince Alwaleed bin Talal of Saudi Arabia issued a dire warning to his countrymen and fellow oil producers in the mid-East on Wednesday. He said that Saudi Arabia is under "threat". From a foreign invader? Marauding pestilence? No, but instead from the U.S. and oil and natural gas discoveries inside of our own borders. The Prince wrote to the Saudi Oil Minister and warned that the demand for oil from OPEC, of which Saudi Arabia is the largest producer, is in serious decline and that his country must diversify their economy. More than 90% of all of Saudi Arabia's revenues come from oil sales. Why is he so worried? According to the latest World Energy Outlook report prepared by the International Energy Authority, the United States is predicted to pass Saudi Arabia as the largest oil producing nation in the world, eventually becoming a net exporter by 2030. How has this amazing event transpired? The innovation of new extraction technologies- in particular, fracking- have unlocked major finds of oil and clean burning natural gas inside our borders. The Bakkan Shale in North Dakota alone is projected to provide enough recoverable oil to meet U.S. needs for the next 200 years. And there are other larger finds that have been made in this country. Additionally, there has been an amazing amount of natural gas that has been discovered, and it is becoming so plentiful that many large trucking companies and corporate owned fleets are converting their semi trucks to run on natural gas. Wal-Mart is just the latest to announce they were doing this. Now environmentalists will continue to have their knickers in a knot about fracking, but the reality is that this technology has opened the door to energy independence for our country. And that is a game changer, both economically and politically.

When people with big egos fight, it is an I for an I.

And that, my friends, is my view.

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