At a town hall meeting in Berea , Ohio, today, Senator Obama (D-iva), called John McCain and his campaign ignorant for mocking Obama’s tire inflation plan.

You know the other day I was in a town hall meeting and I laid out my plans for investing $15 billion a year in energy efficient cars and a new electricity grid and somebody said, ‘well, what can I do? what can individuals do’

So I told them something simple, I said, ‘You know what? You can inflate your tires to the proper levels and that if everybody in America inflated their tires to the proper level, we would actually probably save more oil than all the oil we’d get from John McCain drilling right below his feet there, or wherever he was going to drill.’

So now the Republicans are going around - this is the kind of thing they do. I don’t understand it! They’re going around, they’re sending like little tire gauges, making fun of this idea as if this is ‘Barack Obama’s energy plan.’

Now two points, one, they know they’re lying about what my energy plan is, but the other thing is they’re making fun of a step that every expert says would absolutely reduce our oil consumption by 3 to 4 percent. It’s like these guys take pride in being ignorant.

You know, they think it is funny that they are making fun of something that is actually true. They need to do their homework. Because this is serious business. Instead of running ads about Paris Hilton and Britney Spears they should go talk to some energy experts and actually make a difference.

First, as Jake Tapper points out, this is not exactly what Obama said “the other day.”  In fact, he said, “we could save all the oil that they’re talking about getting off drilling if everybody was just inflating their tires.” (Note the background laughter in the audience after he says this.  Perhaps someone at the pep rally was also proud to be ignorant.)

There’s something more devious, however, than Obama’s merely recasting what it is he said to make him look less of an idiot.  By slight of hand, he also converts a 3-4% increase in fuel economy to a 3-4% decrease in demand, and puts words in the mouths of experts who never said any such thing.

So what would this air inflation savings really mean?

1. Only about 1/3 to 1/4 of drivers have underinflated tires.  That means that the average fuel economy increase would only average out to 1-1.33%. (taking the pro-Obama number of 1/3).
2. Fuel economy is inversely proportional to fuel demand.  Put another way, a 4% increase in fuel economy is not a 4% decrease in demand.  For example, let’s say your car has under-inflated tires and gets 20 mpg as is.   If you drive 1000 miles a month, you use 50 gallons.  You then inflate your tires to get a whopping additional .8 mpg (a 4% increase).   It now takes 48.08 gallons (a savings of 3.8%).  This effect is even high as your percent increase increases.  (For example a 10% increase is only a 9.1% reduction in fuel demand.  A ).  It may seem like a small difference, but .2% of total fuel consumed in the US is 14.6 million barrels per year.  In any event, this 3.8% reduction in demand only applies to 1 out of every 3 drivers (at most), meaning it’s really a 1.27% decrease in overall demand for gasoline.
3. Finally, gasoline is not the only product made from crude oil.  Jet fuel, plastics, lubricants, waxes, asphalt and other products are made from crude oil.  Gasoline is only about 50% of a barrel of crude oil, so a 1.27% decrease in our gasoline demand may not, necessarily, result in a 1.27% decrease in overall demand for crude oil.  That would depend on what is driving demand for crude.  My guess is that gasoline and deisel are the drivers, but that may not be true year-round.

The point here is that no expert has ever said anything of the kind.  Just like Clinton’s ridiculous claim that “Russian missles are no longer pointed at our children,” this comment is made of thin air.

The media have been screaming bloody murder over Exxon’s recent quarterly results. Even the Anointed One has decreed that these profits are “excessive” and has announced a blatantly socialist plan to further tax Exxon so that he can buy votes with $1000 stimulus checks.

While it’s true that Exxon’s net profits of $11.7 billion is a record quarterly profit for any company, the numbers are far more interesting.  Mark Perry at iStockAnalyst points out that Exxon paid 3 times that amount in taxes already!

As I noted briefly in his comment section, if you simplify Exxon to be solely a gasoline vendor, here is how the average $4 per gallon price breaks down:

That means, all tolled, the government (federal, state and local) receives $1.23 per gallon and Exxon receives $0.31 per gallon.

So, who’s making the windfall profit?

By the way, the $2.46?  That mostly goes to foreign governments who own the only lands our Congress will allow us to drill.  I’m sure that will end well.

UPDATE: By the way, if Obama’s $50 billion stimulus plan were enacted, the taxes would (as they are now) merely be passed on to the consumer.  Meaning that, assuming for simplicity sake, everything else remained constant, Obama’s $50 billion would add $1.32 to the price of gasoline.  Even if you assume Exxon’s profits went to zero, the price of gas would instantly go up to about $5.00 per gallon.

$5/gallon gas in January?  Yes We Can!

UPDATE #2:  One reader pointed out that Obama’s plan would spread his “windfall profits tax” over 5 years (and presumably more oil companies than just Exxon).  That would only increase the price to about $4.30 or so.

The media and John McCain are finally starting to turn against poor Barack Obama.  Even Obama admits it, warning that, what Bush and McCain “[are] going to try to do is make you scared of me,” Obama said.  “You know, `he’s not patriotic enough, he’s got a funny name,’ you know, `he doesn’t look like all those other presidents on the dollar bills.‘”

McCain and ABC’s Jake Trapper have rightly pointed out that this is Obama playing the race card.  No person speaking on behalf of Senator McCain or President Bush has even remotely mocked or referred to Obama’s appearance, skin color, the phonetics of his name or his racial history.  What they have done is criticized his woeful lack of experience.

Not one to ever stick to a statement, when questioned, the Obama campaigned feigned surprise, claiming, incredulously, that Obama was not saying anything about race:

Obama spokesman Robert Gibbs said “What Barack Obama was talking about was that he didn’t get here after spending decades in Washington,” Gibbs said. “There is nothing more to this than the fact that he was describing that he was new to the political scene. He was referring to the fact that he didn’t come into the race with the history of others. It is not about race.”

Really? There are 8 U.S. presidents on currently circulated currency.  Only two of them have more than 10 years of political experience in washington (and only then if you count Jefferson’s Ambassadorship to France as time he spent as a “Washington insider”):

Arguably, the $2 bill and the silver half dollar are not even in common circulation.  I have excluded military service, as I don’t think anyone could reasonably call Washington, Ike, Grant (or their equivalent in General Patreaus) “Washington insiders” simply because they commanded the military in war time.

Of course, the flip side of the coin is that, if Obama (God forbid), is elected president, he will have served 4 years in the Senate, making him more of a Washington insider than any president on currency (other than JFK and Thomas Jefferson).

Jim Gereghty at the Campaign Spot points out Obama’s flimsy New Math on tire pressure.  I agree with Jim in general, but I think there’s an easier way to make the point.  First, Obama’s connecting this with offshore oil drilling is ridiculous.  That’s like a doctor telling a man with a cold, if you lay down part of the day, you’d cough less and you won’t need so much cough syrup.  Okay, but why don’t I do both, would that be better?

In any event, Obama is claiming that properly inflating tires would have a significant impact on gas prices.  Let’s take Jim’s assumptions and see:

Assuming:

• The average commuter commutes 33 miles per day;
• The average car gets 24 mpg (unlikely, but okay);
• Improper tire pressure decreases efficiency by 2.5 mpg (average of 2-3 mpg);
• And 1 out of 3 commuters has improper tire pressure.

Take three random commuters: two travel 33 miles each at 24 mpg (1.375 gallons per day) and the other at 21.5 mpg (1.53 gallons).  The evil, unAmerican commuter is wasting .16 gallons per day.

To put into perspective, this means that uninflated tires increase domestic demand by .16 gallons for every 4.125 gallons.  (All three commuters with properly inflated tires would use (1.375 * 3 = ) 4.125 gallons.)   Put another way, this is an effect of less than 4% (.16 / 4.125).

Assuming you believe in the law of supply and demand, a 4% decrease in demand should correspond to at most a 4% decrease in price.  This ignores effects like stockpiling and the cost of the federal beauracracy needed to ensure compliance.  If the average price of gas is now roughly $4.00 per gallon, a 4% decrease would make it $3.84, saving $.16 per gallon.

To sum up, forcing every motorist to properly inflate their tires would save, at most, $.16 per gallon.

In contrast, the federal tax on gasoline is $.184 per gallon.  Wasn’t there a candidate who said that eliminating this tax was a “typical Washington gimmick” that wouldn’t amount to any real savings?

There are two conflicting views of reality fluttering through the Democratic Congress and both involve the effects of speculation.  On the one hand, Harry Reid and Nancy Pelosi are absolutely convinced that speculators are driving up the price of oil.  On the other, Chuck Schumer is equally convinced that his open and public speculation about the financial health of a bank had no effect on its immediate collapse and takeover by the FDIC.  The terrible truth is that, like Democrats on most issues, they are both provably wrong.

When a market participant decides to buy (or sell) a futures contract on oil, they are betting that the future price will rise (or fall).  These “evil, manipulative speculators” are people who use oil or gas and need to manage their risk.  For example, if you run an airline, a large portion of your cost is the cost of fuel.  Unfortunately, there is no market for managing the risk of refined Jet-A fuel, so you have to rely on the proxy of crude oil.  For example, let’s say the price of oil on July 1, 2008 was $140 per barrel.  You believe the price will go up in a year, so you buy several contracts that will, theoretically let you buy oil in a year at today’s price.  If, on July 1, 2009, the price of oil is $200 per barrel, you have a piece of paper that allows you to buy a barrel for $140 and the other party makes up the difference.  If, on the other hand, the price goes down to $100 per barrel, you have to pay $140 (in reality, you pay $40 to the counterparty and no oil changes hands).

So, if your company uses a lot of oil, and you’re worried the price will go up, you would buy a lot of these contracts.  If the price does, indeed go up, you have the “profits” from the future contracts to offset the increased cost.  In other words, you enter into 10,000 of those contracts, your cost of jet-A goes up by $400,000, you can offset that cost by the $400,000 you receive from the futures contract.  As you (hopefully) can tell from my description, no where in the futures market is the price of oil manipulated.  People are speculating (that’s a Harvard word for guessing) about whether the price will go up or down, but no oil changes hands.

This is very similar to betting.  I can assure you from personal experience that betting on a team to win will in no way effect their chances of winning.  If Harry Reid were right about this, the favorite would win every sporting contest.  (And his home state of Nevada would lose a ton of legal and illegal revenue).  There is no economist that I’m aware of who has ever said that speculating has an impact on price.  Indeed, as the Wall Street Journal pointed out, when the federal government banned commodity trading on onions the result was a disaster.  When market participants could not manage their risk, prices became more volatile, not less.  Learning from history, it seems, is not a part of the Democratic agenda.

Separately, Chuck Schumer (D-umbass) and senior senator from New York, decided he wanted to collapse a bank, apparently to prove he could do it, or more cynically, to advance the leftist anticorporate agenda.  His public letter questioning the solvency of Indymac led to two weeks of frantic withdrawals by depositors.  After the federal government needed to step in on Saturday and take over the bank, Schumer, surprising no one, tried to blame Bush.  after causing the bank collapse, Schumer charged that president Bush had “blamed the fire on the guy who called 911.”

This is how stupid or dishonest Chuck Schumer is.  Either he is so dumb that he doesn’t realize that openly questioning the solvency of a bank would cause its depositors to withdraw their money, or he is so dishonest, he believes that you are so stupid that he can get away with it.  When a sitting U.S. senator (frequently referred to as a failed lawyer) on the senate banking committee openly questions the solvency of a major bank, there are consequences.  People who either (1) still have faith in their goverment or (2) realize who monumentally stupid such a thing is to do; will rush to their bank and take out their money.  As Mr. Schumer appears immune to any real facts, he might want to re-watch “It’s a Wonderful Life,” as this was a major plot point.

Mr. Reid is the kind of idiot who thinks gamblers have an impact on the game.  Mr. Schumer is the kind of idiot who, when hiding with the Franks in the attic, sees nothing wrong with shouting “DO YOU THINK THE NAZIS CAN HEAR US?!?” in the middle of a ghestapho raid.

April 14, 2010

In an effort to alleviate decreasing consumer confidence and skyrocketing food and energy costs, President Obama announced a broad tax relief package today. The plan, which is modeled after President Obama’s anti-foreclosure plan, allows federal judges to reduce the tax burdens of those who cannot afford the fat, bloated government they purchased.

“Just like the economic recovery plan I proposed when running for president,” noted President Obama, “this plan allows for an ex post facto repricing. If a taxpayer is having trouble paying for the enormous bloated bureaucracy they bought when they elected me and my fellow Democrats, they can declare bankruptcy and a federal judge will be empowered to adjust their tax burden.”

Critics of the plan note that it will create what one Senator calls “a reverse ponzi scheme.” At first, the lower middle class will begin to file bankruptcy, “which will increase the burden on those left paying taxes, causing them to file for lower taxes. Eventually, you won’t have anyone left to pay taxes except George Soros, Hillary Clinton and Al Gore.”

President Obama dismissed these claims as unhopeful, saying “I find your lack of hope disturbing.” John Sweeney, the new Secretary of the Treasury, noted that the plan would be “as, if not more successful as the anti-foreclosure rule.” The Treasury department reported that exactly zero home foreclosures have occurred since last month, down from 25 the previous month.

“We have not seen the ‘dramatic’ increase in interest rates predicted by the so called ‘experts,’” noted Secretary Sweeney. The nationwide average interest rate on a 30 year mortgage remains steady at 24%.

There’s an interesting argument developing on the Left.  Having Hillary’s Attack Machine up against the Audacity of Hope Machine has been very enlightening for some Democrats. First, Hillary supporters are now seeing first hand what it’s like to be called racist, simply because you don’t vote for a candidate who is Black.  Of course, there may still be some people who won’t vote for a Black person only because they’re Black, but the syllogism falls apart when you say if you don’t vote for Obama, you must be racist. It’s also telling that Obama’s supporters cannot image why anyone would want to vote for anyone other Obama, even Hillary. There’s nothing scarier than the devout who accept a leader without questioning or comparing alternatives.

Obama’s supporters are also finding out what it’s like to suffer violent personal attacks in response to policy arguments. Welcome to our world, folks. The funny thing is that, somewhere, Ken Starr is wondering “What the hell? All I did was ask about their finances, too.”

The real interesting development, however, is the growing “fear mongering” complaints. Obama’s supporters are complaining about Hillary’s 3 a.m. ad, which questioned Obama’s ability to deal with a crisis. Of course, the unspoken threat is terrorism.  Obama’s supporters are also, ironically, complaining about Hillary scaring people with losing their jobs.  (Look for Hillary’s camp to make similar complaints about Obama’s NAFTA rhetoric.)

The interesting thing is that Democrats are finally realizing that the “Republican tactic” of reminding people that it’s a dangerous world out there is just as “unfair” when you play to people’s fears about their jobs as when you remind them of the ever present threat of terrorism. Personally, I have never thought that this argument is unfair at all. If you’re running for President of the United States, you should be able to allay people’s fear of the unknown. You should be able to defend your policies and convince the people who elect you that you are capable of keeping them safe.

The argument is slightly less valid, however, when you play to people’s fears of losing their job. The president has direct control over the military and the national security assets that keep us safe. No one is infallible, and attacks will happen. The question is, what will you do to keep us safe? The president has no direct effect on jobs, however. (Of course, some Democrats are still hoping for a worker’s paradise where the government is the only game in town.) The president can advocate tax cuts, can suggest legal reforms and some regulations, but the president doesn’t close the factory. Claiming that electing the old so-and-so will cost you your job is more inflammatory than claiming he or she won’t keep you safe.

Of course, accepting responsibility for your actions is not one of the Left’s strong suits.

Daily Danet has teamed up with Café Press to bring you (drum roll, please)….MERCHANDISING!

Please stop by the store at it’s new address:  store.dailydanet.com.  Take a look around, buy some early holiday presents, and piss off those liberal neighbors.  Let me know if there are any posts you’d like to see made into a t-shirt, mug, small child, flamethrower, etc.

This post won’t stay at the top of the blog for ever.  Fear not, the link to the store will always be at the top of the left column.  And I’ll be sure to let you know when more items are added to the store.  (I get suchadeal on advertising!)

 We hope you’ll look to us for all your Opinionated Clothing!™

Happy shopping!

Pharmaceutical giant Pfizer (NYSE: PFE) announced a 77% decline in earnings do to the discontinuation of its inhaled-insulin product, Exubera.  In an effort to bolster the company’s stock, Pfizer’s research and development division has announced the start of product trials on several new drugs:

• Pink Slipitor: A new drug for use by Pfizer employees that makes layoffs unnecessary.  The drugs high mortality rate (98%) is seen as a drawback for employee morale, but, according to financial estimates, the savings in Pfizer’s pension and medical costs will outweigh those effects.
• Selloft: A new anti-depressant that targets the financial risk processing regions of the brain, prevent the sale of Pfizer stock.
• PFEagra(pronounced (FI-AG-RA): A new drug to combat “earnings dysfunction” or “ED” in pharmaceutical stocks.  The drug works by inflating analysts’ estimates of future performance, but comes with a warning regarding “stock elevations lasting longer than four hours.”

Gentlemen’s Quarterly has agreed not to publish an unflattering article about the Clinton campaign.  The article, scheduled to appear in the October edition of GQ, was to highlight the antagonistic and aggressive stance taken by the Clintons, as well as infighting among the staff. 

According to one source, the article was pulled after the Clinton’s threatened to deny the magazine access presumptive First Lady Killer™ Bill “I Banged ‘Er” Clinton.  Another source has claimed, however, that the Clinton’s made far more damaging threats.  “Apparently, Jay Carson, Bill’s PR guy, threatened to unleash Bill on GQ’s female interns.  That was a legal risk that [editor] Jim [Nelson] couldn’t take.”  The threat of sexual harrasment lawsuits are common in the men’s magazine world, but “sexual assault is something different. 

The magazine decided to pull the piece and will, apparently, “be doing a multi-page spread with Mrs. Clinton snuggling puppies instead.”  Bill is said to be “disappointed” that he would not get to meetthe “little honnies” who intern at GQ.  The former president and disbarred attorney remains at the Clinton homestead, drugged and caged until the 2008 election.

Editor Jim Nelson denied the recent allegations, and expressed the desire to focus on the relevant issues at hand.  “Whether or not the Clintons pressured us to pull the story is beside the point.  We have a duty as Democrat–the mainstream media, to fight against the Republicans who are constantly infringing on our civil liberties.”