China’s demand has faltered with the slowing economy, pushing steel prices to a three-year low and making it tough for mills and traders to keep up with payments on the $400 billion of debt they racked up during years of double-digit growth.
As defaults have risen in the world’s largest steel consumer, lenders have found that warehouse receipts for metal pledged as collateral do not always lead them to stacks of stored metal. Chinese authorities are investigating a number of cases in which steel documented in receipts was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said.
Ghost inventories are exacerbating the wider ailments of the sector in China, which produces around 45 percent of the world’s steel and has over 200 million metric tons (220.5 million tons) of excess production capacity. Steel is another drag on a financial system struggling with bad loans from the property sector and local governments.
“What we have seen so far is just the tip of the iceberg,” said a trader from a steel firm in Shanghai who declined to be identified as he was not authorized to speak to the media. “The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry.”
Four decades ago, when we were lending money to steel companies, the US produced around 130 million tons of steel and China produced 25 million tons. Today, the US produces 80 million tons or so and China apparently produces over 700 million tons. Amazing overcapacity.
Since 2009, China’s banks flooded the country with over $5 trillion in loans to pump up the economy in the face of flagging exports. Many empty cities were built. Now the lenders are finding out that the warehouses holding their collateral were empty too.
The latest public opinion poll conducted for TIME by Yankelovich, Skelly and White discloses just how close the race is once again. Carter and Reagan are deadlocked at 39% each…a surprisingly low 7% of registered voters claim to be undecided about whom they now favor…55% say they are not “personally interested or excited about” any of the candidates. Only 11% report genuine enthusiasm for Reagan; a mere 9% feel that way about Carter…43% of the voters who prefer Reagan say they do so because they are “really voting against Carter.” Similarly, 34% of Carter’s supporters say their choice is based on opposition to Reagan…
One of the most dramatic findings of the survey came from a more indirect probing of voter sentiment — and it looks potentially helpful to Carter. In the survey’s “state of the nation” indicator, which measures how people feel about the way things are going in the country in general and how much confidence they have in the future, voters are becoming increasingly optimistic. While only 11% took a positive view of the nation’s well-being in May, 21% are upbeat now.
Strangely enough, with gas at $4 a gallon, the economy in tatters, $5 trillion in wasted new debt for the kids to pay, and foreign affairs in a mess, 3 out of 8 voters think the country is on the right track. So what this election will display is whether or not America has lost its mind.
• Iran’s continued development of nuclear weapons capability, as detailed recently by the International Atomic Energy Agency, as we do nothing.
• Continued funding of Egypt to the tune of $1.5 billion in aid a year, along with generous support given to the terrorist-supporting Palestinian government on the West Bank and the terrorist group Hamas in Gaza.
• The retreats from still-unstable Afghanistan, pulling 23,000 troops out of the country even as its political situation deteriorates and despite saying in 2008 that Afghanistan “has to be … the central front on our battle against terrorism.”
• The open hostility of former ally Pakistan, where we can’t even get a supposedly “friendly” regime to release the doctor who helped us locate and take out Osama bin Laden.
• The sudden abandonment of Iraq, after all we’ve done there to stabilize it, leaving that country to the tender mercies of its menacing neighbor, Iran. But the list doesn’t stop with U.S. failure in the Mideast. Americans can’t be blamed for also wondering why the president has:
• Pledged to “reset” relations with Russia, enabling Vladimir Putin to turn into a tyrant, jail his political foes, bully neighboring countries, aid Iran in getting a nuclear weapon, and provide support to Syrian bad guy Bashar Assad — at our expense.
• Stiffed both the Poles and the Czechs by backing out of a planned regional missile-defense system, putting these staunch allies once again at the mercy of a predatory Russia. This was done, supposedly, to enlist Russia’s help with Iran — help that never came.
• Assured Russian Prime Minister Dmitry Medvedev that he’ll have more “flexibility” in foreign affairs once the November election is out of the way.
• Proposed an 80% cut in nuclear weapons that would leave the U.S. vulnerable to less-scrupulous superpowers such as Russia and China while encouraging rogue nations like Iran and North Korea to go nuclear.
• Used across-the-board budget cuts to hollow out the military, diminishing our naval presence to levels not seen since the end of World War I.
• Stood by as China expands its military at double-digit rates, builds a blue-water navy and turns the Eastern Pacific into its own little lake.
• Started treating old friends such as Britain, Canada and Japan as unwanted in-laws and old adversaries such as Russia and China as friends.
• Allowed American guns to flow to cartels in Mexico without Mexico’s knowledge, at a high cost of human life.
It’s really hard to believe that it’s gotten this bad in just four years. Where’s the free press? Oh yeah: “Elderly Soviet propagandists must be wondering why they wasted their time jamming radio transmitters and smashing printing presses when they could just have sent everyone to Columbia Journalism School.”
The Diplomat says that China’s lending spree was much greater than the $1.7 trillion previously reported and that bad debts could dwarf the existing capital in the banking system:
From the beginning of 2009 to the end of June this year, Chinese banks have issued roughly 35 trillion yuan ($5.4 trillion) in new loans, equal to 73 percent of China’s GDP in 2011. About two-thirds of these loans were made in 2009 and 2010…China’s colossal stimulus package of 2009 was funded mainly by bank credit (at least 60 percent, to be exact), not government borrowing….
local governments had taken advantage of loose credit to amass a mountain of debt, most of it squandered…local government debt totaled 10.7 trillion yuan (U.S. $1.7 trillion) at the end of 2010…the real amount of local government debt was between 15.4 and 20.1 trillion yuan, or between 40 and 50% of China’s GDP…local government financing vehicles (LGFVs), which are financial entities established by local governments to invest in infrastructure and other projects, owed between 9.7 and 14.4 trillion yuan at the end of 2010…
Chinese LGFVs are known mainly for their unique ability to sink perfectly good money into bottomless holes in the ground…If 10 percent of these loans turn bad, a very conservative estimate, we are talking about total bad loans in the range of 1 to 1.4 trillion yuan. If the share of dud loans should reach 20 percent, a far more likely scenario, Chinese banks would have to write down 2 to 2.8 trillion yuan, a move sure to destroy their balance sheets…
the potential risk for a financial tsunami is greatest in China’s shadow banking system…a complex, unregulated shadow banking system has emerged and grown significantly in China in the last few years. Typically, the shadow banking system pushes something called “wealth management products,” which are short-term financial products yielding a much higher rate than bank deposits for investors. To evade regulatory oversight, these products do not appear on a bank’s balance sheet…China had about 10.4 trillion yuan in wealth management products, about 11.5 percent of the total bank deposits…Although it is impossible to estimate the percentage of non-performing loans extended through wealth management products, using a conservative 10 percent baseline would mean another 1 trillion yuan in potential bank losses.
The shadow banking system has another function: channeling funds to borrowers or activities explicitly banned by government regulation. In the last two years, the Chinese State Council has tried to deflate the real estate bubble by limiting bank loans to real estate developers. But banks can skirt such restrictions by ostensibly lending to each other, with the funds ultimately going to financially stretched real estate developers. Chinese banks do this out of their own survival instinct. If they do not lend to effectively delinquent real estate developers who have borrowed large amounts, they would have to declare these loans non-performing and suffer losses. On the balance sheets of Chinese banks, such loans are technically classified as claims on other financial institutions. According to a recent report in the Wall Street Journal, inter-bank loans today account for 43 percent of total outstanding loans, 70 percent higher than at the end of 2009.
Disturbingly, none of these huge risks are reflected in the financial statements of Chinese banks. The largest state-owned banks have all recently reported solid earnings, high capital ratios, and negligible non-performing loans.
If bad loans are 20% of total loans, “Chinese banks would have to write down 2 to 2.8 trillion yuan, a move sure to destroy their balance sheets.” Total loan loss reserves at Chinese banks are 1.2 trillion RMB, so the balance shhets would be decimated. Half a decade ago, China had some of the same problems, but robust growth made things easier to deal with. That’s unlikely to be the case this time.
Rail volumes fell 8.2pc in July from a year before. The Japanese group Komatsu said its exports of hydraulic excavators to China – a proxy gauge for Chinese construction – fell 48pc in August from a year before…Local governments have $1.7 trillion (£1.07 trillion) in debts through 6,000 arms-length vehicles, described by Cheng Siwei from Beijing’s International Finance Forum as China’s “sub-prime” crisis. The state-run banks can clearly crank up lending if told to do so, but…the law of diminishing returns has already set in, with each extra yuan of debt generating less than half a yuan in extra growth. Overdue loans at major banks jumped 27pc in the first half of the year. The steel industry alone has $400bn of debts.
Five years ago the Shanghai Composite hit 6000 and we compared China’s ride to the Roaring Twenties. Now the index is back to 2000. It sure looks like a recession.
Matt Lewis has five policy problems of the Clinton and Bush eras that incrementally created the crisis of the last decade. Fannie Mae, the repeal of Glass-Steagall, artifically low interest rates and all the rest culminated in a near-perfect storm. Real problems that caused a crisis — but did they cause the panic?
No. The panic was caused by the decision by Paulson, Geithner, Bernanke and the Bush administration to let Lehman Brothers fail in September 2008. Christine Lagarde, the French finance minister, understood how calamitous that was. It was a particularly appalling moment for Ben Bernanke, since he is a student of the Great Depression, and letting Lehman go was roughly the equivalent of the NY Fed’s 1930 catastrophic decision to let the Bank of the US fail — a decision that went a long way towards turning the recession of 1929 into the Great Depression.
Final point: Almost nowhere discussed is the large cultural shift that occurred with the creation of securitization. We suppose that securitization lowered borrowing and transactions costs and made markets more efficient. But securitization did one colossally horrible thing. When applied to bank loans, securitization distorted a critical element of banking. The essence of banking is that the banker is a lender, not a salesman. Traditionally, there is an ongoing and important relationship between borrower and lender, because times and circumstances change, and nothing necessarily goes as planned in a long-term loan. Securitization with government guarantees and the like destroy this. Loans traditionally were based on creditworthiness, of course, but also on the “three C’s” (Character). “If a man comes in on a Friday afternoon for a loan, the answer is no,” and so forth. Old chestnuts of course, but banking is an old business. Making bankers salesmen packaging stuff for computer-generated portfolios is an invitation to disaster — so guess what: disaster! (This is not to say that you can’t have terrible results in direct borrower-lender loans; corrupt China stands for that proposition — see the $1.7 trillion boondoggle or Lioaning province for example.) Moral of the securitization story: “new wisdom” may be new, but almost always it is not wisdom.
The other day we noted that China’s exports had either stalled or declined. Coal inventories are still piling up and so forth. Now long-term expats are leaving to go back to the UK or to the USA, because they see very bad things just around the corner. Question: what comes after a $1.7 trillion real estate spree and a declaration that every province is Greece? Answer: nothing good.
China’s sales to European Union countries fell 16.2 percent last month and growth in U.S. exports slowed to 0.6 percent from 10.6 percent in June, customs data showed.
It was just a week ago that Secretary of State Hillary Rodham Clinton cheerfully reported that Russia was ready to “lean” on the Syrian regime of Bashar al-Assad as part of a new United Nations plan for a transitional government. “They have told me that,” she assured one interviewer following a June 30 conference in Geneva. “They’ve decided to get on one horse, and it’s the horse that would back a transition plan that Kofi Annan would be empowered to implement,” she told another.
Oops. It immediately became clear that Moscow had no such intention. In the past week, the official Ms. Clinton cited as her source — Foreign Minister Sergei Lavrov — has said repeatedly that his government will not pressure Mr. Assad to leave power. “This is either an unscrupulous attempt to mislead serious people who shape foreign policy or simply a misunderstanding of what is going on,” Mr. Lavrov said Thursday. Western policy, he added, “is most likely to exacerbate the situation, lead to further violence and ultimately a very big war.”
At yet another conference on Syria, in Paris on Friday, Ms. Clinton had changed her tune. Now she is accusing Russia and China of “blockading” progress on Syria, insisting that is “no longer tolerable” and warning that they “will pay a price.” She pleaded with participating governments to lobby Vladimir Putin to change course. This raises an interesting question: Was Ms. Clinton taken in by Mr. Lavrov? Or did she know all along that the new U.N. plan she has been promoting was stillborn? Either way, the Obama administration’s Syria diplomacy is making it look foolish as well as feckless.
We noted back in February that the US looked absurd picking public diplomatic fights with Russia and China about Syria that the US was sure to lose. If the administration hadn’t bungled the economy so badly it’s inept foreign policy would have a higher profile.
China has more than 60 submarines and is projected to have around 75 in the next decade or so, slightly more than the United States. China “is outbuilding the United States in new submarines by four to one” since 2000, and by “eight to one” since 2005, even as the U. S. Navy’s Anti-Submarine Warfare forces have diminished, write James C. Bussert of the U.S. Naval Surface Warfare Center and Bruce A. Elleman of the U.S. Naval War College. Whereas most of China’s submarines are diesel-electric and all of America’s are nuclear, the latest Yuan-class diesel-electric models are reportedly equipped with air independent propulsion and increasingly difficult to detect. Because the Western Pacific constitutes China’s home waters, China’s submarines do not have to travel from half a world away merely to get to the Asian military theater as America’s must…China has increased the number of its modern, fourth-generation aircraft from 50 to 600 since 2000, even as it has reduced the size of its overall air force from 3,000 combat aircraft to 2,000.
This is a continuation of Kaplan’s ongoing coverage of China’s navy. We’re not particularly worried about China’s navy, but its rise is surely interesting. China’s problems are more on land at the moment. Internal security forces and the PLA number about 2.3 million. Now that’s a large number!
prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles. Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said…
officials in some cities and provinces are also overstating economic output, corporate revenue, corporate profits and tax receipts, the corporate executives and economists said. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist. The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of economic indicators by 1 or 2 percentage points.
China’s cement output grew 5 percent from a year earlier to 793.98 million tonnes in the first five months, the country’s top economic planner said Saturday. The growth rate, however, represented a sharp decrease of 14.3 percentage points…flat glass output dropped 1.7 percent year-on-year to 298.28 million weigh boxes in the first five months, in comparison to an increase of 19.6 percent last year. In May, flat glass output dropped 10.2 percent, compared to 21.7-percent growth last year.
It has been well known for many years that China cooks its books to show higher growth than it actually has, but apparently it didn’t matter too much, since the country was growing at a torrid pace, even if a little slower than advertised. Now the numbers matter. We don’t see easy policy options for the government at this point.
THe NYT has a piece on Zhang Weiying, the free-market oriented former head of the Peking University’s equivalent of HBS or Stanford:
“It’s not a good time to speak out for reforms, but it’s a good time to speak out against them,” said Li Shuguang, a professor at the China University of Politics and Law. “The government doesn’t encourage debate.” Few people illustrate this conundrum better than Zhang Weiying, a 53-year-old Peking University professor who is probably the closest China has to an economic dissident. A cause célèbre in Chinese economics circles, Mr. Zhang was fired a year and a half ago from his post as dean of the university’s Guanghua School of Management. Since then, he has been on an extended sabbatical, traveling widely and giving speeches on the country’s brewing economic troubles…
Zhang does not look like a radical. But his pronouncements are acerbic, reflecting his support for neoclassical economics in the mold of Milton Friedman, the Nobel Prize-winning free-market advocate…“Before 2003, the idea of reform was dominant,” Mr. Zhang said in an interview last month. “Now it’s much harder to make that case.” Challenging the system, Mr. Zhang contends, has been the key to China’s economic success. Today, he says, that would mean reducing the party’s control over important sectors of the economy. Over the past decade, state companies have maintained and expanded control over industries like automobiles, aviation, chemicals, energy, information technology, machinery, metals, steel and telecommunications…
A propaganda department directive this year explicitly banned the term “monopoly” to describe state-owned enterprises. Journalists say they regularly have articles kept from publication if they discuss the deadening effect of state control over so many industries. This contrasts with the first two decades of China’s economic opening, when the overall trend was toward relaxing state control, and pro-market economists were household names. Mr. Zhang was a big part of this early effort to move away from communist-style state planning. Working for the influential State Commission for Reforming the Economic System, he was most famous — as a 24-year-old — for writing a paper that led to the replacement of state-designated prices with market prices…
In 1994, Mr. Zhang co-founded the influential China Center for Economic Research at Peking University. In 1997, he moved to the university’s Guanghua management school and two years later was named dean. His rise tracked a second era of economic liberalization. Mr. Deng brought in reformers like the now-retired President Jiang Zemin and Prime Minister Zhu Rongji to scale back state control, moves that eventually paid off with China joining the World Trade Organization in 2002. But when they retired, replaced by Mr. Hu and Prime Minister Wen Jiabao, the atmosphere changed. Economic modernization was seen as causing social unrest, which rose steadily during the 2000s. In response, the country put in place a “stability maintenance” apparatus…“Hu Jintao is more a follower of Mao Zedong,” said Mao Yushi, 83, a pro-reform economist…
Mr. Zhang…gave an hourlong video interview to the Web site Sina. Although the site belongs to a publicly traded company listed on Nasdaq, Sina works closely with the Chinese government. After a week on the site, the interview was deleted. A Sina spokesman, who refused to give his name, said the video was removed as part of regular site maintenance. Similar interviews from more mainstream experts, however, are still available. Mr. Zhang’s address this year to the Yabuli China Entrepreneurs Forum seemed to have encountered a similar fate. The speech, which criticized the lack of market-oriented changes, cannot be found on most major Chinese newspaper sites, a sign of government disapproval of his views. Video of the speech is available only on overseas Web sites that are blocked in China.
Last year Larry Lang, professor of Finance at the University of Hong Kong, said that “every province in China is Greece.” China has added $1.7 trillion in provincial debt over the last few years, much of it to build empty cities. You may recall that China’s president-in-waiting gave a speech a couple of months ago that was characterized in the FT as “standard Leninist rhetoric” aimed at the recently deposed Bo Xilai, the maverick strongman who wanted to turn Chongqing into the “red capital.” Trouble ahead.
Policy responses by fiscal and monetary authorities have managed to prevent substantial haircutting of the $200 trillion or so of financial assets that comprise our global monetary system, yet in the process have increased the risk and lowered the return of sovereign securities which represent its core. Soaring debt/GDP ratios in previously sacrosanct AAA countries have made low cost funding increasingly a function of central banks as opposed to private market investors. QEs and LTROs totaling trillions have been publically spawned in recent years. In the process, however, yields and future returns have plunged…
Both the lower quality and lower yields of previously sacrosanct debt therefore represent a potential breaking point in our now 40-year-old global monetary system. Neither condition was considered feasible as recently as five years ago. Now, however, with even the United States suffering a credit downgrade to AA+ and offering negative 200 basis point real policy rates for the privilege of investing in Treasury bills, the willingness of creditor whales – as opposed to debtors – to support the existing system may soon descend. Such a transition occurs because lenders either perceive too much risk or refuse to accept near zero-based returns on their investments. As they question the value of much of the $200 trillion which comprises our current system, they move marginally elsewhere – to real assets such as land, gold and tangible things…
it is usually creditors that establish the rules for transitions to new regimes. Such was the case in the late 1960s as France’s de Gaulle threatened to empty Ft. Knox unless a new standard was imposed. Now, with dollar reserves widely dispersed in Chinese, Japanese, Brazilian and other surplus nations, it is likely to assume that there will come a point where 2% negative real interest rates fail to compensate for the advantages heretofore gained in buying sovereign bonds. China, for instance, may at the margin shift incremental Treasury holdings to higher returning commodity/real assets which might usher in a gradual or somewhat sudden reconfiguration of our current dollar-based credit system. Having a reduced incentive to purchase Treasuries and curtail Yuan appreciation, the Chinese and their act-alikes may look elsewhere for returns…
This transition continues to point towards higher global inflation as a solution to overextended debt-ladened balance sheets – be they public or private. Bond investors therefore should favor quality and “clean dirty shirt” sovereigns (U.S., Mexico and Brazil), for example, as well as emphasize intermediate maturities that gradually shorten over the next few years. Equity investors should likewise favor stable cash flow global companies and ones exposed to high growth markets.
It’s been almost five years since the Bear Stearns conference call that heralded the beginning of the sub-prime disaster. A year after that, the US made the calamitous mistake of letting Lehman fail, and then had to create liquidity on an unprecedented scale to prevent another Depression. Soon the results of all that debt expansion will begin to be played out. We largely agree with Bill Gross’s views that inflation hedges and exposure to fast-growth economies are likely to be good places to be. We’ll see.
China’s unexpected economic difficulties are starting to unnerve investors in world markets, especially commodity markets, as China is the world’s largest consumer of most raw materials and the second-largest consumer of oil. A deepening slowdown would ripple across the world economy. Until now, China’s economy barreled ahead mostly unhindered as the main engine of global growth
Unexpected? Not here. Perhaps the Times was unaware of the $1.7 trillion in debt that was poured into the economy in the last couple of years in mostly unproductive real estate projects in order to offset the slowing of exports. Oddly enough, another Timesman reported on the problems a year ago. China’s problems are many things, but not unexpected.
Enron, BP, Goldman, Philip Morris, G.E., Merck, etc., etc. Accounting fraud, tax evasion, toxic dumping, product safety violations, bid rigging, overbilling, perjury. The Walmart bribery scandal, the News Corp. hacking scandal — just open up the business section on an average day. Shafting your workers, hurting your customers, destroying the land. Leaving the public to pick up the tab. These aren’t anomalies; this is how the system works: you get away with what you can and try to weasel out when you get caught.
I always found the notion of a business school amusing. What kinds of courses do they offer? Robbing Widows and Orphans? Grinding the Faces of the Poor? Having It Both Ways? Feeding at the Public Trough? There was a documentary several years ago called “The Corporation” that accepted the premise that corporations are persons and then asked what kind of people they are. The answer was, precisely, psychopaths: indifferent to others, incapable of guilt, exclusively devoted to their own interests.
There are ethical corporations, yes, and ethical businesspeople, but ethics in capitalism is purely optional, purely extrinsic. To expect morality in the market is to commit a category error.
Since Deng Xiaoping legitimized capitalism in China thirty years ago, per capita income has quadrupled and half a billion people have been lifted out of grinding poverty. Seems moral to us.
As many as 100 high school students walked out of a national journalism conference after an anti-bullying speaker began cursing, attacked the Bible and reportedly called those who refused to listen to his rant “pansy assed.” The speaker was Dan Savage, founder of the “It Gets Better” project, an anti-bullying campaign that has reached more than 40 million viewers with contributors ranging from President Obama to Hollywood stars. Savage also writes a sex advice column called “Savage Love.” Savage, and his husband, were also guests at the White House for President Obama’s 2011 LGBT Pride Month reception. He was also invited to a White House anti-bullying conference…
Savage was supposed to be delivering a speech about anti-bullying at the National High School Journalism Conference sponsored by the Journalism Education Association and the National Scholastic Press Association. But it turned into an episode of Christian-bashing. Rick Tuttle, the journalism advisor for Sutter Union High School in California, was among several thousand people in the audience. He said they thought the speech was one thing – but it turned into something else. “I thought this would be about anti-bullying,” Tuttle told Fox news. “It turned into a pointed attack on Christian beliefs.”
Tuttle said a number of his students were offended by Savage’s remarks – and some decided to leave the auditorium. “It became hostile,” he said. “It felt hostile as we were sitting in the audience – especially towards Christians who espouse beliefs that he was literally taking on.” Tuttle said the speech was laced with vulgarities and “sexual innuendo not appropriate for this age group.” At one point, he said Savage told the teenagers about how good his partner looked in a speedo.
The conservative website CitizenLink was the first to report about the controversy. They interviewed a 17-year-old girl who was one of students who walked out of the auditorium. “The first thing he told the audience was, ‘I hope you’re all using birth control,’” she told CitizenLink. “he said there are people using the Bible as an excuse for gay bullying, because it says in Leviticus and Romans that being gay is wrong. Right after that, he said we can ignore all the (expletive deleted) in the Bible.” As the teenagers were walking out, Tuttle said that Savage heckled them and called them pansy-assed. “You can tell the Bible guys in the hall they can come back now because I’m done beating up the Bible,” Savage said as other students hollered and cheered.
We’re interested in the reaction of any attendees from Jones College Prep. Meanwhile, “students in Shanghai rank number one globally in reading, math and science, far outpacing their American peers.” And Asians in America are being discriminated against. Disgraceful.
Black Star Project, according to its website, is funded by Open Society Foundations (i.e. George Soros), Best Buy, ING and Toyota Motor Sales, among others. But Jackson apparently had no interest in allowing students to come to their own conclusions on gun ownership. Jackson’s co-presenter, Camille Williams of the Peace in the Hood movement, made several inflammatory statements about gun ownership and the National Rifle Association. She claimed the NRA is indifferent to gun violence. She also asserted she has received emails from the NRA and/or its members claiming she is “going to hell” for her advocacy and “these porch monkeys deserved to die,” referring to black children killed by guns. EAGnews.org contacted Jackson regarding these emails, wishing to make them public. We received no response.
The teachersban legos for 8 year olds. They suspend students for pointing their fingers at each other bang-bang style, which was mandatory school behavior in 1960. And they teach math by asking if math was a color, what color would it be. Frankly we don’t know that the country can survive with this kind of indoctrination and dumbing-down.
It’s not difficult to construct a plan to add a million or more jobs in the US and stop sending the better part of $4 trillion a decade overseas, while at the same time adding to domestic security by making the Straits of Hormuz largely irrelevant to vital American economic interests. Since the President has made an issue out of Keystone and goes on about solar and algae and nonsense, should Governor Romney go on the offensive by announcing a serious ten-year plan for energy independence? (He could toss in a couple of paragraphs about green-this and green-that for the folks in the suburbs.) Of course the media will hate it, and the professoriat and so forth, but maybe that’s a good thing in this particular election cycle.
We probably have 1000 trillion cubic feet of shale gas alone in the US. We consume about 25 trillion cubic feet of natural gas a year, so exploiting our own resources is a no brainer, and there’s substantial opportunity to do so with this clean fuel. And this resource will last quite a while, at least until we’re flying around in cars powered by hydrogen and good vibes.
By the way, 1000 trillion cubic feet of natural gas is the energy equivalent of around 167 billion barrels of oil (at a 6:1 ratio). Including ANWR, US oil and gas reserves total 130 billion barrels or so (though that estimate may understate US reserves by a factor of as much as 10x!). So, even granting that all of the various objections to shale gas are true (here and here, for example), shale gas appears to double US petroleum resources or at least take them much farther into the future. It is the height of foolishness not to be exploiting this domestic resource as quickly as can be accomplished profitably.
There are many reasons to move quickly. We import 70% of our oil, and that’s unhealthy when so much of the world market flows through an unstable region. It is irresponsible to ignore this issue. The cost of importing 10 million barrels a day of oil is $365 billion at $100 a barrel. That’s almost $4 trillion over the course of a decade. It’s ridiculous to send all that money overseas, especially given the unsustainable trade imbalances of the United States.
But the final issue that makes this an attractive campaign theme for 2012 is the jobs crisis in America. Why are we exporting good paying oil and gas, oil service, and support industry jobs (like some steel production) to be done by foreign workers? Question: how dumb is that as a government policy, given a 20% unemployment rate in a key demographic? Answer: about as dumb as a 7-year moratorium on offshore drilling.
