Friday, April 05, 2013

Stockton Was Murdered

Were a rational person given the assignment to search this planet to find the best place for human beings to live and build wealth, he might well settle on San Joaquin County, Calif.

That is where Americans built a city called Stockton -- the municipality a federal bankruptcy judge just declared dead.

How did Stockton die? It was cold-blood murder.

San Joaquin County truly enjoys as many natural advantages as any place on Earth. It sits in the broad valley that lies between California's Coast Range and the Sierra Nevada. Two massive navigable river systems -- the Sacramento and the San Joaquin -- descend from the Sierras and converge in an inland delta upon whose eastern edge the city of Stockton stands.

Anciently, these rivers deposited rich soils in the valley. More recently, they have provided the world with access to the agricultural wealth the valley produces. Oceangoing cargo ships can sail the San Joaquin right into the heart of Stockton itself.

Yet, despite being surrounded by fresh water, Stockton basks beneath warm and sunny skies from early in spring until well into fall.

"San Joaquin County has a dry climate, marked by very little rain," says a county planning document. "Its summers are long and dry (with a growing season averaging 292 days around Stockton), and colder, rainy weather is typical between November and April. Average annual rainfall ranges from 8 inches a year in the southern part of the county to 18 inches in the northern part."

The pioneers who arrived there in the 19th century looked at the abundant water, the dark soil and the sunny skies and did the obvious thing: They built incredible farms, planting things that would not grow in other parts of the country or would not grow as well.

Driving down a secondary highway in 20th century San Joaquin County meant driving for miles and miles along unbroken avenues of grape vines and cherry, peach and walnut trees.

Culturally, in the age of the automobile, San Joaquin County had the privilege of being about two hours east of San Francisco and two hours west of the high mountains. It was neither snowbound in winter like the mountains, nor fogbound in summer like the city -- but was within easy driving distance of some of the most desolate places in the country and some of the most cosmopolitan.

So what happened to this place so favored by geology, geography and climate?

On Monday, U.S. Bankruptcy Judge Christopher Klein allowed Stockton to move forward into Chapter 9 bankruptcy.

The city's biggest bill is for the pensions of government employees -- which are run by a state agency called the California Public Employee Retirement System (CalPERS).

"Stockton's biggest creditors insured $165 million in bonds the city issued in 2007 to keep up with CalPERS payments as property taxes plummeted during the recession," The Associated Press reports. "Stockton now owes CalPERS about $900 million to cover pension promises, by far the city's largest financial obligation."

In Stockton, as in many other American cities, government became the dominant industry.

Data developed by the Census Bureau on the economic characteristics of Stockton in the years from 2007 to 2011 show that the city had an adult population (16 or older) of 212,365. Among these, there were only 84,204 private-sector wage and salary workers and another 6,927 people who were self-employed in their own unincorporated businesses.

That added up to 91,131 people in Stockton working in the private sector for a wage or salary or for their own business.

Another 18,778 in the city worked for government, and 11,426 collected food stamps.

Assuming (for the sake of argument) that none of the government workers were also collecting food stamps, there was a combined 30,204 government workers and food stamp collectors in Stockton. Those 30,204 people living off the taxpayers in the city equaled one for every three private-sector workers and self-employed business owners.

For every family in Stockton where both the mom and dad work and a teenage child also toils at, say, the local fast-food place, there is one person working for the government or collecting food stamps.

To the degree that government does not redistribute wealth from other parts of California or the nation to Stockton, that local mom, dad and teenager must carry on their shoulders the 30,204 local government workers and food stamp collectors.

Then there is that $900 million Stockton owes to the state's government worker pension system. That, too, must rest on the shoulders of the local mom, dad and working teenager -- unless the state or federal government taxes money away from people elsewhere to pay for the pensions of retired Stockton government workers.

A little more than two years ago in this column, I wrote that government had killed the state of California. That crime has now been repeated on a municipal scale. Nature gave America something with unparalleled potential in Stockton and its environs. Government murdered it.



How the US oil, gas boom could shake up global order

Without fanfare, China passed the United States in December to become the world's leading importer of oil – the first time in nearly 40 years that the U.S. didn’t own that dubious distinction. That same month, North Dakota, Ohio and Pennsylvania together produced 1.5 million barrels of oil a day -- more than Iran exported.

As detailed in the first two installments of Power Shift, an NBC News/CNBC special report, the United States is reaping the benefits of an energy boom created by new drilling technologies that have unlocked vast domestic oil and natural gas reserves. Coupled with decreasing demand due to energy efficiency and continued cultivation of alternative energy sources, an increasing number of experts believe the U.S. could achieve energy independence by the end of the decade – realizing a dream born during the gas crisis of 1973.

But who would be the global winners and losers in such a scenario?

Most U.S. policy makers and experts agree that the U.S. and its allies – particularly its North American neighbors -- would be the biggest beneficiaries.

In fact, they say, the West already has realized one major benefit: the success of international sanctions against Iran over its nuclear program.

Carlos Pascual, the State Department’s coordinator for international energy affairs, noted last month at the CERAWEEK energy conference in Houston that increased U.S. oil production, coupled with a boost in exports from Iraq and Libya, has kept oil prices stable despite the loss, because of sanctions, of up to 1.5 million barrels a day in Iranian exports.

“What this has taught us, and helped underscore, is that within the world we live in today, hard security issues and energy policy issues have become fundamentally intertwined,” he said.

Hossein Moussavian, a former Iranian ambassador to Germany and nuclear negotiator who's now a fellow at the Woodrow Wilson School at Princeton University, said "the radicals" in Tehran failed to foresee the changing energy picture, believing that sanctions wouldn't be imposed and that, if they were, they wouldn't work because oil prices would surge.

"The Iranian mistake was to believe …  the threats of referring Iran to the United Nations Security Council, imposing sanctions, was just a bluff," he said.

In the longer term, observers say that the Organization of Petroleum Exporting Countries (OPEC) and many of its member nations are likely to be the biggest losers if the U.S. continues to cut oil imports, likely decreasing oil prices in the process.

"A dramatic expansion of U.S. production could … push global spare capacity to exceed 8 million barrels per day, at which point OPEC could lose price control and crude oil prices would drop, possibly sharply," the U.S. intelligence community's internal think tank, the National Intelligence Council, said in its “Global Trends 2030” report in December. "Such a drop would take a heavy toll on many energy producers who are increasingly dependent on relatively high energy prices to balance their budgets."

With some analysts predicting that oil prices could drop as low as $70 to $90 a barrel – down from the current price of nearly $110 per barrel of Brent crude oil – a “scramble” among OPEC members for market share could ensue, said Edward Morse, an energy analyst with Citigroup and co-author of a recent report on titled “Energy 2020: Independence Day.”

An International Monetary Fund analysis indicates that many major oil-producing states need more than that lowest price level to meet their budgets and would be forced to increase output or reduce spending, which could trigger unrest. Among them, according to the report: Iran, Libya and Russia, at $117 a barrel; Iraq, $112; Yemen, $237; and the UAE, $84.

Iraq, which has had production from its rich oil fields curtailed by war or sanctions for half of the 53 years of OPEC’s existence, poses another challenge to the organization.

Now that it’s finally free of such interference, its production is increasing by between 500,000 and 900,000 barrels a year, making it the second fastest growing oil-producing country in the world after the U.S.

“And, by God, no one’s going to impose any quota limitations on them,” said Morse, referring to Iraq’s OPEC partners. “So part of the challenge to OPEC is internal as well as external.”

For its part, OPEC professes to be not unduly alarmed by the U.S. oil and natural gas boom. It highlights the "considerable uncertainties" surrounding wells drilled using hydraulic fracturing, or “fracking,” and associated technologies.

Yergin said he believes that the Saudis will be able to withstand the turbulence, and that they will provide a buffer for the organization’s lesser producers.

“It's too quick to write the obit for OPEC,” he said. “… The Saudis will figure it out. They are re-orientated to Asian markets, turning left instead of right.”

But some members of the oil cartel -- particularly Nigeria and Angola -- already are feeling the impact of the U.S. production surge, according to the Citigroup report. U.S. imports from the two countries dropped to 700,000 barrels a day at the end of 2012, down from 1.6 million barrels in 2007. That’s because U.S. production of light, sweet crude -- the kind of oil the West African nations produce -- has burgeoned in recent years. Citigroup forecasts that by the end of 2013, the market for Nigerian oil at Gulf Coast refineries could entirely dry up.

Longer term, say by 2020, cheaper heavy oil from Canada, freed from the so-called oil sands by new recovery technologies, could push similar oil from Venezuela out of the U.S. Gulf Coast market,  (assuming the Obama administration approves construction of the Keystone XL pipeline to carry it), according to forecasts.

Mexico also is expected to increase production, offering the U.S. access to another convenient and friendly provider.

"The Eagle Ford formation in Texas extends into Mexico and if you look at the Gulf, you'll see thousands of black dots marking oil platforms on the U.S. side but nothing on the Mexican side,” said Yergin. “That's changing. There is a political consensus among the three major parties on energy. You will see less immigration from Mexico. Mexico could become more of a BRIC (the term used for fast-developing economies like Brazil, Russia, India and China) than Brazil."



National Science Foundation subsidizes authors of left-wing racism

Your tax dollars subsidized left-wing “consultants” who published a race-baiting op-ed in the Washington Post falsely claiming that white men commit virtually all mass shootings, and that we need to collectively ”hold them accountable” for a culture that spawns such killings. The website of consultants Charlotte and Harriet Childress boasts that they have “received close to a million dollars in grants from the National Science Foundation.” As the Wall Street Journal’s James Taranto notes, “The NSF is a federal agency, so your tax dollars have subsidized the authors of what can only be described as a racist rant.”

Many other leftists, like David Sirota, have made this argument in a less extreme form, arguing that it is noteworthy that more than 70 percent of mass murderers are white. (But that really isn’t noteworthy, in light of the fact that more than three-quarters of all Americans are white. It’s also not clear why we should focus on just mass murder, rather than all murders — slightly less than half of all murders are committed by whites, even though they are a substantial majority of the overall population. By contrast, blacks, who are only 13% of the U.S. population, commit nearly half of America's murders). The Journal’s Taranto lists a number of well-known cases in which mass murders were committed by non-whites, cases that the Childresses ignored even though they would be obvious to any competent researcher writing about this issue. The Childresses ignored even high-profile mass murders committed by non-whites that occurred in the Washington Post‘s own backyard, like the Beltway Sniper mass killings.

Earlier, another federal agency, the National Institutes of Health, used Federal cancer research money to fund a “laughable conspiracy-theory report smearing” the Tea Party as being created by the tobacco companies, which we earlier debunked. The left-wing academics that authored it had “received $7 million” from the National Cancer Institute of the National Institutes of Health. That “study” was a tissue-thin, 10-page smear, produced using federal grants that reportedly exceeded $1 million, that contained wild claims, such as the ridiculous assertion that “the Tea Party has origins in the ultra-right John Birch Society of the 1950s.”




AR: House votes to override veto of voter turnout suppression bill:  "The Republican-controlled Arkansas House of Representatives voted on Monday to override a veto by the state's Democratic governor of a bill that would require voters to show photo identification. Representatives voted 52-45 to override Governor Mike Beebe's veto, joining the state Senate, which had voted on March 27 to override the governor's veto."

CA: Judge allows Stockton to enter bankruptcy:  "The people of Stockton will feel financial fallout for years after a federal judge ruled Monday to let the city become the most populous in the nation to enter bankruptcy. But the case is also being watched closely because it could answer the significant question of who gets paid first by financially strapped cities -- retirement funds or creditors."

Liberal hypocrisy on Bloomberg’s moneyed gun control fight:  "'Bloomberg is buying another term in office! It’s an outrage!' That’s what lots of my fellow liberals said when billionaire Michael Bloomberg spent $102 million of his own cash to win re-election as New York mayor in 2009. ... So why aren’t these same critics complaining, now that Mr. Bloomberg is showering his millions on candidates who back gun control and same-sex marriage? Because liberals like these causes, of course. ... [I]f we are truly opposed to the undue influence of money in politics, we should protest that influence in all cases -- no matter who wins. If we only call for limits on campaign spending when our team is losing, then we don’t really believe in those limits at all."



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