Mish's Global Economic Trend Analysis

Team Obama Targets Oil Traders and Speculators; Scapegoating 101

Posted: 21 Apr 2011 12:45 PM PDT

Instead of investigating fraud and corruption at banks, and instead of questioning the Fed's policy of US dollar debasement, and instead of pondering the role his administration's budget deficits have on the price of commodities, Team Obama Targets Oil Traders and Speculators.

President Barack Obama said on Thursday the U.S. attorney general was assembling a team to root out any fraud and manipulation in the oil markets that might be contributing to higher U.S. gasoline prices.

"The truth is, there's no silver bullet that can bring down gas prices right away," Obama said in prepared remarks for his opening statement at a townhall-style meeting in Nevada.

"The Attorney General's putting together a team whose job it will be to root out any cases of fraud or manipulation in the oil markets that might affect gas prices - and that includes the role of traders and speculators. We are going to make sure that no one is taking advantage of the American people for their own short-term gain," Obama said.

Scapegoating 101

The first rule in scapegoating, of which president Obama is a renown grand-master, is to quickly point the finger at someone else before everyone figures out where the finger should be pointed.

Bear in mind that traders and speculators probably are pushing the price of oil higher. I cannot quantify "how much" but open interest in commodity futures by speculators is at or near peak levels. Moreover, hedge funds and pension plans have plowed into commodity ETFs. These actions have an upward, yet unquantifiable effect on price.

The root cause of this mess however, is massive, perpetual, and ever-increasing budget deficits in conjunction with the Fed's explicit policy of US dollar debasement.

As a result of those forces, it is perfectly natural for traders and speculators to bet against the dollar and on hard assets like gold, silver, and oil, even though the trade may become overly one-sided, as it is right now.

Thus if Obama wants to point a finger, he should point a finger at himself, at Congress, and at the Fed, not at traders and speculators.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

The City that Outsourced Everything

Posted: 21 Apr 2011 09:33 AM PDT

Hello public unions. Meet Sandy Springs, Georgia: The City that Outsourced Everything

Numerous people asked me to comment on that video. Here goes ..

Sandy Springs proves without a doubt that cities can get along perfectly fine without collective bargaining, without public pensions, and without public unions.
The Sandy Springs model delivers more services for the money an any public union model ever can.
Sandy Springs is run the way cities ought to be run.

Please play the video and tell me why Sandy Springs should not be the model for every city in the country.

Hopelessly Misguided Comments

It was interesting to read a bunch of hopelessly misguided comments to that YouTube video

For example Hariz1 writes ...

All I see is a group of rich-republicans ignoring the problems of everyone outside their affluent community.

Warblingtransistor writes ...

This video is such nonsense. Sandy Springs is very affluent, with very high property values and a huge property tax base. White folks didn't want their tax dollars going to benefit the kids of black people (or poor whites) in South Fulton, and so they decided to split off and go their own way.

Prophetmargin writes ...

People in Sandy Springs commute into Atlanta to work.

And now, they avoid paying taxes to Atlanta. The "public-private partnership" has little to do with Sandy Springs' financial success. This is just rich people hoarding their money.

And when Atlanta crumbles, they'll all lose their jobs and have to move somewhere else.

Staggering Attacks on a Model that Works

It would normally be shocking to see such misguided, racially-biased attacks on a model that clearly works except for one thing: This is what we have come to expect from union supporters who will stop at nothing to maintain their unsustainable model of inefficiency, coercion, and corruption.

Outsourcing services saves money. It would save money regardless of how rich or poor a city was. The same applies to elimination of pension plans for police and fire workers.

Thus, it is preposterous to think this plan would not deliver more services for less money anywhere, regardless of race, creed, or income.

However, that's not what public unions want. They would rather bankrupt cites and taxpayers for their own self-serving goals than implement a model that is fair to everyone.

One of the reasons Atlanta, Detroit, Oakland and other cities are in trouble is precisely because they do not operate on the model of Sandy Springs. Most cities that are doing OK (or appear to be doing OK), do so in spite of not operating like Sandy Springs.

It is time to get behind Rand Paul's national right-to-work proposal. Such a law at the national level would force states like Illinois to consider a different model.

Currently cities in Illinois have no chance because of forced collective bargaining arrangements, prevailing wage laws and other numerous public union driven inefficiencies sponsored by Governor Pat Quinn and those before him, State Speaker Michael Madigan, and other corrupt politicians willing to buy votes at enormous taxpayer cost.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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Thursday, April 21, 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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