Three quick links for you guys today! And a proposal for the coal industry. (Emphases added mine as always)
First up, a very interesting ZeroHedge article on the number of miles driven in 2017 to date. I've grown to really like ZeroHedge even though it is littered with alarmism. You sometimes have to wade through some irrational panic and emotionalism to get at the genuinely good analysis.
The basic contention of the article is that people in 2017 drove fewer miles than they historically have in Januarys and Februarys past, perhaps in response to the increased price of oil. The article concludes with the following:
The implication is that the US motorists' sensitivity to rising prices is now far higher than it was even 5 years ago, when the economy was supposedly in far worse shape. While on the surface that would suggest that something is rather wrong with the financial state of the average US consumer, the more immediate implication is that the higher oil - and gasoline - prices rise, the less miles will be driven, the weaker the end demand for gasoline, and ultimately, the greater the gasoline, and crude, inventory glut as the world continues to produce assuming recent demand trendlines, trendlines which with every passing week, we learn are no longer applicable.
This isn't surprising and isn't anything we don't already know, but I love seeing total miles driven as an economic indicator. Assessing inventory plays a key role in assessing how well the economy is doing, amongst other things. Why not miles driven? It seems a prudent indicator, given how automobile-based we are as a society.
Anyways it's not news that there's more oil being produced globally that the world can consume. That's been the case for a decade running. It's also been the case that people are skittish enough about their economic futures that they no longer resemble the classic Super Consumer of old. Until people feel truly secure in their finances, I wouldn't expect oil prices to come surging back. Can't sell the oil if people ain't gonna buy the oil! Especially since oil's not a rare commodity in the slightest.
Next up we've got Paul Krugman talking coal. If you don't want to read his short post, just know this: the coal industry makes up a tiny portion of national employment, and even a tiny portion of employment in "coal country" itself, West Virginia. There are far more health care professionals in West Virginia than there are coal workers, and there's probably no bringing coal, as an industry, back. These health care jobs are not as good as the old coal jobs, but coal is on the way out; time to find another solution for West Virginia. The crux of his post:
[Trump] is not, of course, going to bring back coal mining as an occupation. Coal employment’s plunge began decades ago, driven mainly by the switch to strip mining and mountaintop removal. A partial revival after the oil crises of the 70s was followed by a renewed downturn (under Reagan!), with fracking and cheap gas mainly delivering the final blow. Giving coal companies new freedom to pollute streams and utilities freedom to destroy the planet won’t make any noticeable dent in the trend.
So maybe illegalize fracking and natural gas and strip mining, and coal might revive? Or perhaps some of that famous infrastructure money could be spent on developing the carbon capture industry, with special consideration given to Appalachia - the former coal-producing states.
Or here's a proposal, if you don't like developing new industries: how about just paying those people who used to work in the coal industry their same wages for life to not work in the coal industry? There are only around 174,000 full-time coal industry jobs in the United States. Let's be generous and assume all these people should earn around $75,000 per year (approx. to what a mining engineer makes - take a look here). The total salaries of all these people annually comes to $13.05 billion. In the grand scheme of things, that's chump change. How about we just declare the coal industry dead/illegal and pay everyone previously employed by it this salary until they die? We save our fresh air for $13.05 billion per year, far less than the President is asking in additional Pentagon expenditures. As a taxpayer and about-to-be father of a little girl I'd like to see not suffer the effects of carbon pollution (not just foul air but a likely disruption of the food chain that brings dinner to the table each night), that sounds like a steal to me!
Finally, I leave you today with this pretty damn on-point assessment of all the Russia hysteria we've gotten of late. Though we should not lose sight of the fact that Russia is run by a dictator who routinely has his opponents imprisoned or assassinated, who is playing anschluss-style games with his neighbors, and ignores his own country's terrifying demographic problems, much of the Russia talk of late has truly been grasping at straws, and the author nails the news cycle. Please read it, with especial attention paid to point #11.
Hope you guys all have a great weekend.