A Ship drifts Towards Australia’s Great Barrier Reef, may cause Environmental Armageddon

Posted by PITHOCRATES - May 19th, 2012

Week in Review

A ship drifts towards Australia’s Great Barrier Reef.  Adrift due to a broken engine.  And those on the Left want to use this opportunity to attack fossil fuels (see Troubled Freighter Drifts Toward Great Barrier Reef posted 5/19/2012 on Discovery News).

A broken-down cargo ship was drifting towards Australia’s Great Barrier Reef Saturday, with fears of major damage if it were to run aground at the World Heritage-listed site…

Simon Meyers from Australian Reef Pilots, a company which provides aerial surveillance of shipping channels around the reef, said it was hard to tell whether the ship would run aground.

“It is not certain at this stage whether the ship is at risk of hitting those isolated outer reefs,” he told ABC Radio.

But the ship’s owner, Hong Kong-based ID Wallem said it looked likely to pass over the reef without incident.

“On its present course, the vessel will drift over Shark Reef but is not in danger of grounding as the ship has sufficient clearance to pass over the reef,” ID Wallem said in a statement cited by Australian Associated Press…

Senator Larissa Waters from the environmentally-driven Greens party said Saturday’s breakdown was a reminder of the dangers of turning the reef into a “coal and gas superhighway” to Asia.

“While we all wait and hope that this ship can be rescued before it creates a disastrous spill, the Australian government should now take responsibility for the Great Barrier Reef and stop this headlong rush to boost fossil fuels exports at the expense of the climate and the environment,” she said.

Fossil fuels are not the only thing they put on ships.  They also ship clothing, plasma televisions, smartphones, beer, wine, liquor, medicine, espresso, etc.  They even ship food on these ships.  And people.  For many Australians today are descended from people who came to Australia by ship.  Like the U.S., Canada, etc., Australia started out as a jewel of the British Empire.  Brought into this world by the great international trade networks Britain built.  Trade that continues today.  Which is why the U.S., Canada, Australia, etc., are some of the best countries to live in today.  As least based on the flow of refugees to these countries.

There’s probably a lot she and her fellow Greens use in everyday life that found its way over on a ship.  A ship that used diesel fuel to get it there.  Does she want to get rid of all of these ships?  Or just the ones carrying fossil fuels.  Or, in this case, an empty ship?

International trade is good.  It creates economic activity.  It increases the standard of living.  It makes our children healthier.  Yes, we have accidents along the way.  But no accident yet has destroyed the world.  For it turns out the environment is very resilient.  Unlike a child wanting for food or medicine.  Or the energy of fossil fuels used to power their schools, hospitals, grocery stores, etc.



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Birth Control Requirement in Obamacare forces Catholics to stop being Catholic

Posted by PITHOCRATES - May 19th, 2012

Week in Review

Obamacare was supposed to make things better.  Not worse.  If you liked your current health insurance you were supposed to be able to keep it.  And prices were supposed to fall.  And yet the reality is not quite like this (see Catholic university drops student health insurance, cites ObamaCare posted 5/16/2012 on Fox News).

A Catholic university in Ohio said Tuesday it is being forced to end a student health insurance program over the Obama administration’s contraception mandate and costs associated with other provisions of the health care overhaul.

Franciscan University in Steubenville, Ohio, said it has so far excluded contraceptive services and products from its health insurance policy for students and will not participate in a plan that “requires us to violate the consistent teachings of the Catholic Church on the sacredness of human life.”

In its decision to drop coverage, the school cited the contraception mandate, but also a requirement that the maximum coverage amount be increased to $100,000 for policyholders — claiming that would have made premiums skyrocket. A university official told Fox News Radio the students’ basic $600 policy was going to double in cost in the fall and triple  next year and that the school’s insurance provider said the increases were the result of the federal Patient Protection and Affordable Care Act…

Students now will likely have to be covered through their parents’ policy, though the school says fewer than 200 of its students had been buying insurance from the university.

By making insures provide everything free to the insured raises the price everyone must pay for those insurance policies.  Especially when they have to cover preexisting conditions.  For if they do why would anyone buy a policy until they are diagnosed with an expensive health problem?  What incentive is there to pay for insurance when you can get the same coverage without paying years of premiums beforehand?

But this is all a moot point I guess if you’re Catholic.  Because for a Catholic to buy a policy they have to give up Catholicism.  For if all policies must include free birth control than everybody has to pay for birth control.  Something Catholics don’t do.  At least when the First Amendment was still in the Constitution.  Where it stated, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…”  Before Obamacare removed it.  For making Catholics pay for birth control in their health insurance policy clearly prohibits their free exercise to practice Catholicism.

And if these ‘fewer than 200’ students like their current policy they have a problem.  Because they can’t keep them.  So much for all the promises of Obamacare.  It won’t be cheaper.  You can’t keep what you have.  And if you’re a Catholic you have to stop being a Catholic.  Somehow that just doesn’t seem right.



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Has Keynesian Monetary Policy in India only created Jimmy Carter Stagflation?

Posted by PITHOCRATES - May 19th, 2012

Week in Review

Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output.”  This means only government can create inflation by ‘printing’ too much money.  And they ‘print’ money these days by keeping interest rates low to ‘stimulate’ economic activity.  But when you increase the amount of money each unit of that currency becomes worth less.  And therefore takes more if it to buy the same things as it did once before.  Which is why prices rise when you ‘print’ money.  Just like they did in India (see April CPI inflation accelerates to 10.36 pct y/y by Manoj Kumar posted 5/18/2012 on Reuters).

India’s consumer price inflation accelerated in April to 10.36 percent, making life harder for the RBI as it looks to kickstart a flagging economy, government data showed on Friday…

The Reserve Bank of India, which unlike other central banks uses mainly the wholesale price index for monitoring inflation, slashed policy rates by a steeper-than-expected 50 basis points last month to boost a sagging economy.

The Reserve Bank of India (RBI) lowered interest rates in April to stimulate the economy.  At the end of April the consumer price inflation increased to 10.36%.  Just like Milton Friedman said.  Only government can create higher prices with inflationary monetary policy.  A lesson we all need to learn.  Especially the Keynesians whose answer to everything is to lower interest rates and spend money.  So India followed this Keynesian advice.  Now they have a flagging economy and double-digit inflation.  Reminiscent of Jimmy Carter’s stagflation in the Seventies.

Will Keynesians ever learn?



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Drill Baby Drill working Great in North Dakota

Posted by PITHOCRATES - May 19th, 2012

Week in Review

President Obama keeps saying that the United States uses the vast majority of the world’s oil while having some of the smallest proven oil reserves.  This is his justification for shutting down the oil exploration industry wherever he has the power to shut it down.  Thus restricting the amount of oil the U.S. brings to market.  And increasing the price at the pump.  And he belittles anyone who suggests we should drill for more oil.  That ‘drill baby drill’ is no solution.  Even if they put an oil rig on the east lawn of the White House.  Because we just don’t have the oil reserves to make a difference.  But he’s wrong.  Very, very wrong.  For drill baby drill DOES work.  As they’re proving it in North Dakota (see ND becomes nation’s second-leading oil producer by JAMES MacPHERSON, Associated Press, posted 5/15/2012 on Yahoo! News).

North Dakota has passed Alaska to become the second-leading oil-producing state in the nation, trailing only Texas, state officials said Tuesday…

North Dakota owes its rapid rise from No. 9 in just six years to improved horizontal drilling techniques in the rich Bakken shale and Three Forks formations in the western part of the state.

“No. 2, who would have thought?” said Ron Ness, president of the North Dakota Petroleum Council, which represents several hundred companies working in the state’s oil patch. “In 1999, we had zero rigs working and people left this industry for dead in North Dakota. Technology, geology, price and the business climate changed that.”

From zero rigs in 1999 to 6,921 working wells today.  Thank God they didn’t think like President Obama in North Dakota.  Or they wouldn’t have used new technology to find new oil reserves where they thought there were none before.  Proven reserves are oil deposits that they have already found. Which can be low if you are hindering the oil exploration industry.  But no one knows how much oil we have until we start looking for it.  And there’s probably a lot more out there.  All we have to do is look for it.  Like they have in North Dakota.

So drill baby drill.  Because it does work.  All you have to do is to visit the oil fields in North Dakota to know that it does.



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Health Insurers to lose $1 Trillion in Revenue if Supreme Court Says the People can’t become $1 Trillion Poorer

Posted by PITHOCRATES - May 19th, 2012

Week in Review

Oh no.  The health insurance companies will lose money if the Supreme Court rules that Obamacare is unconstitutional.  Those poor health insurance companies.  Here the government is trying to help the people they hate more than anyone else and the Supreme Court has to rain on their parade (see Obamacare repeal would cost insurers $1 trillion by Sarah Kliff posted 5/15/2012 on The Washington Post).

Next month, America’s health insurance plans may lose $1 trillion in revenue…

The figure comes from Bloomberg Government, where number crunchers have taken a look at what happens if the Supreme Court strikes down the Affordable Care Act and its expected expansion of health care coverage to 32 million Americans. They find that, should the Affordable Care Act be found unconstititional [sic], insurance companies will lose $1 trillion in revenue between 2013 and 2020…

The majority of that loss – $880 billion – would be from the 16 million Americans expected to purchase coverage on the individual market…

The Bloomberg Government study estimates that, of the $1 trillion in revenue, health plans would keep $174 billion.

Cost insurers are NOT going to lose $1 trillion in revenue if the Supreme Court rules Obamacare unconstitutional.  This is 2012.  The $1 trillion in revenue is projected between 2013 and 2020.  This revenue doesn’t exist.  And, therefore, can’t be lost.

This projected revenue will be from the individual mandate forcing people to buy health insurance.  So the insurance companies will be $1 trillion richer.  And the American people will be $1 trillion poorer.  This is perhaps the first time someone has felt sorry for the poor health insurance companies suffering at the hands of greedy consumers who are unwilling to buy their products.  So they applaud the poor health insurance companies projected sales as the government forces the American people to enrich the insurance companies.  And feel sad when the mean old Supreme Court says the government can’t force the American people to become poorer so the insurance companies can become richer.

Of course the insurance companies aren’t going to become richer under Obamacare.  They’ll never see that $174 billion in profits.  For insurance companies will be going out of business left and right.  Because Obamacare forces them to pay for preexisting conditions.  An ingenious plan to put the health insurance companies out of business. 

Currently the fine for not buying health insurance is pretty low.  Less than the cost of an insurance policy that covers everything but the kitchen sink.  As mandated by Obamacare.  From birth control to abortion to every kind of preventative screening there is.  Making these policies very, very expensive.  So people will choose to pay the less costly fine.  Until they get very, very sick.  Then they will buy health insurance.  And the insurer will have to pay for every bill that comes in for that preexisting condition.  Because Obamacare forces them to.  Forcing them to raise their premiums.

Of course when they do others will choose to pay the less costly fine instead of the more costly insurance policy.  They will drop their coverage.  Until they become very, very sick.  Meanwhile, the insurance companies will have to raise their premiums because fewer people are paying premiums.  And on and on this vicious cycle goes.  Until the insurance companies have only sick people with policies.  So they’ll spend more on health care bills than they will ever collect in premiums.  Until they go bankrupt.  As designed.  So they can expand Obamacare into a full-blown national health care system like they wanted all along. 

Like I said, ingenious.  As well as devious.



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Airbus spends €263 Million to Keep the A380 Safe because Capitalism makes Safe Airplanes

Posted by PITHOCRATES - May 19th, 2012

Week in Review

Free market capitalism is a beautiful thing.  It’s like a dog having puppies.  You don’t have to do anything but stand back and let it happen (see Airbus Earnings Hit By A380 Wing Cracks by Robert Wall posted 5/15/2012 on Aviation Week).

Airbus is taking another €158 million charge linked to the costs associated with wing component cracking on its A380s.

 That comes on top of a €105 million charge taken in March against 2011 results because of the same problem. “This final retrofit fix is more complex than initially anticipated in March; therefore, the group updated the cost for the retrofit solution leading to an additional charge of € 158 million in the first quarter,” Airbus parent EADS says in releasing its latest results…

Qatar Airways, for instance, has said it will only take A380s once the final fix is installed on its aircraft — the first handover to the Middle East carrier is due next year.

The fix also has hit A380 delivery plans. Airbus has temporarily slowed A380 production, but the impact of that move is not expected to be seen until 2013.

Airbus has a vested interest to make sure their planes are safe.  For an unsafe airplane is very difficult to sell.  Earlier reports stated that these cracks did not affect the safety of these aircraft.  But they have still hurt sales.  And slowed their production. 

Airbus has spent to date some €263 million ($335.85 million) to fix this problem.  Which is quite a sum considering one A380 has reportedly sold for $234 million.  So their spending the money to do what’s necessary to fix this problem.  Spending more than the cost of one A380 so far.  And the reason why they’re doing this is in part to the airworthiness directive issued by the European Aviation Safety Agency grounding A380s.   For you can’t sell an airplane that’s not allowed to fly.  But a customer not taking any more deliveries until the final fix is installed on its aircraft is also a very big incentive.  Because Boeing is out there with their 747.  And Airbus will do whatever necessary to make sure their customers don’t cancel those A380 orders and replace them with 747 orders.

It’s been said before.  Competition makes everything better.  It’s what makes free market capitalism the best system in the world.  And why aircraft built in capitalistic countries are the safest aircrafts in the world.  Because safe airplanes are easier to sell than unsafe airplanes.  And selling airplanes drive profits.  So when your system is based on profits it’s also based on safety.  Because safety drivess profits.  Unlike in the old Soviet Union. 

When they suffered the loss of a state-manufactured aircraft their greatest concern was embarrassment.  Looking inferior to the West.  Their people had no choice but to get on those same airplanes.  Because their state airline had no choice but to use the state-manufactured airplanes.  And the only incentive the state-manufacturer had to spend money on fixing problems was when the costs of those fixes proved to be less than the cost of lost airplanes.  And they would never spend more than the cost of one aircraft to fix a problem that hasn’t caused the loss of a single aircraft.

Airbus has a lot riding on the A380.  It was a very expensive airplane to bring to market.  It has to be a safe airplane to cover their investment costs.  So they will choose to spend what it takes to ensure its safety.  Because that’s what corporations do under capitalism.



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