What Is Wrong With Republicans???

Who didn't watch with amusement yesterday as Republicans refused to vote for Boehner's bill to make permanent the Bush era tax cuts for all Americans earning less than $1 million per year. It would seem that the Keystone Cops are alive and well in the Republican wing of Congress. As Gerard van der Luen of American Digest is wont to say, "Republicans, they thirst for death."

Republicans have precisely zero leverage on tax rates. Come January 1, all of the Bush era tax cuts expire and all the tax rates will go up automatically - and quite unfairly, Republicans will get the blame. Moreover, the centerpiece of Obama's tax plan was to raise tax rates on "the rich." It is time to give the people what they voted for. If four years of gross economic incompetency wasn't enough to convince the electorate, well, let's let them have the next four years good and hard indeed. Obviously, more lessons are needed.

In this instance, Republicans prepared to die on the hill of stopping higher taxes is much like Picket's charge - a suicidal act that did nothing beyond sealing the doom of Lee's Army of the Potomac. One of the first rules of warfare - don't reinforce failure, reinforce success - or at least where you have the greatest likelihood of success.

Where House Republicans hold absolute power is on spending. Give Obama whatever tax increase he wants, but then shut down the government over the budget ceiling. Moreover, refuse to pass anything but a life support budget until all sides agree on - and pass into law - a grand bargain that in real terms, sans the usual accounting gimmicks, will decrease the debt by 25% over the next four years.

Debt is where the real issue lies. Sure, Obama's tax increases will hurt the economy - but they won't kill it. Our continued accumulation of debt will. Between Obama's world record profligate spending and Fed Chairmen Ben Bernanke, who is keeping our printing presses spinning at a record pace, they are placing our nation in mortal peril. Obama and Bernanke are setting the stage for runaway inflation and the devaluation of the dollar. That is where Republicans need to draw the line in the sand - this far, and no further.

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The Price Of Oil - NYT Mystified By Cause & Effect

The price of oil is swinging violently and trending ever upwards. The NYT is at a loss to explain it:

The extreme volatility that has gripped oil markets for the last 18 months has shown no signs of slowing down, with oil prices more than doubling since the beginning of the year despite an exceptionally weak economy.

The instability of oil and gas prices is puzzling government officials and policy analysts, who fear it could jeopardize a global recovery. . . .

A wild run on the oil markets has occurred in the last 12 months. Last summer, prices surged to a record high above $145 a barrel, driving up gasoline prices to well over $4 a gallon. As the global economy faltered, oil tumbled to $33 a barrel in December. But oil has risen 55 percent since the beginning of the year, to $70 a barrel . . .

Read the entire article. The NYT goes on to quote speculation that the instability in Nigeria and Iran are playing a significant role in the rise in oil prices, but both of those are of recent vintage and do not account for the steady upward rise in oil prices since the beginning of the year.

Anyone who couldn't see this coming is not paying attention. I wrote a month ago, in the post "The Looming Crisis In Energy Costs," that we would soon face another energy crisis. None of the causes in demand that gave rise to $145 a barrel oil have disappeared permanently. Obama has refused to live up to his promise to allow expanded exploitation and exploration of our domestic oil resources - perhaps the only thing in the near and mid-term that could actually stabilize world oil prices. And on top of that, he has, with the cap and trade bill, declared war on our energy industry, particularly on coal which provides almost 50% of our energy. This is bound to increase demand for oil. Lastly, oil is priced in dollars. A weak dollar causes higher prices for oil - and Obama is in the process of destroying the value of the dollar.

As I wrote in the above referenced post, all of these factors are clear indicators that we can expect a real crisis in oil costs. There is no reason for the NYT to be mystified by the rise in prices over the past six months. Cause and effect are clear. The NYT just needs to start some honest reporting.

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