Petroblogging: Speculating on Speculation

Once again our eyes and ears are being bombarded by the 24 hour Oil News Cycle. This latest iteration of the quickly evolving narrative has turned to the effects of speculation on oil prices. We still have not spent as much time on the real culprit - demand - as I would like to see.

If you have the time and want some nuts and bolts understanding of how speculation is not the primary cause of our oily woes read this brief paper by Paul Krugman. It comes with some graphs and sexy economic terms like "contango" but it gets to the science of what's going on with spot (short term) and future oil prices. Dr. Krugman has been one of the few liberal voices urging readers to resist the overly simplistic and unproven case that speculators are the root cause of increasing (I hate the word skyrocketing, it is way overused. I once had a finance professor ban the word from all writing assignments) oil prices in lieu of other factors.

In the end the only sure way out of this mess is to use less of the cruddy black stuff not blame traders. Conservation is more than just a virtue its part of the solution. If you still want to blame speculation for the current situation in the oil markets, that's fine. Just consider yourself in the same camp as our double crossing Saudi friends who also share this view.

Drive less, pay less.

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The Big FISA Wuss Out

The House approved a compromised update to the FISA law on Friday and with that ends any speculation of there being reasonable restraints on government eavesdropping. It appears that election year pressures to be "tough" on national security have trumped the desire to provide meaningful oversight of the once warrantless program to gather endless bytes of data on any person in the U.S.

Just looking at the large number of Dems (105) that sided with GOP members of the House signals how anxious the moderate wing of the Democratic party was get this pesky issue out of the way. I'm curious was to where all the libertarian small government types have been in this one.

The tech-news sphere of reporting seems to be the only area of the online media that is condemning the passage of the law with some certitude. Some good follow up reporting can be found at Ars Technica and the EFF website. The approval of the FISA authorization includes telco immunity and allows the NSA to use general warrants to surveil large swaths of data based on loose parameters (don't take my word for it).

The joining together of Republicans and Democrats in the House demonstrates that the idea of bipartisan compromise doesn't always bring forth sound policy. If you are one of the many Americans unaware of the significance of this concentration of power or if you just don't mind America slouching towards a police state then you are probably content with the news.

Some recognition is due to local House members Betty Sutton and Tim Ryan. Both decided to stand on principle despite the overwhelming tide against it and voted nea on the FISA bill. Don't leave them hanging, call their respective offices and thank them for their principled stand if you care. They are sure to face negative campaign adds over their votes the next time they run for re-election.

Also of note are the ten Republican members that did not vote on the FISA bill for various reasons. The most noticeable of these was liberterian leaning champion of limited government Ron Paul. Even more reason to believe the darling of the latest resurgence against the current GOP is more talk than substance.

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Another Russert Reflection

What can I say about Tim Russert that hasn't already been said? I can only echo the shock everyone else seems to be expressing over his passing. He was the one guy we wanted to be there to sort out the electoral mess we may be watching on a late Tuesday night. I think the little white board that could belongs in the Smithsonian.

I was fortunate enough to attend one of his speaking engagements about four years ago at EJ Thomas Hall. A full house enjoyed the political stories and insight he had to provide that night. He also did some Q&A from the audience at the end of the night. I remember his somber assessment of what he felt was the biggest challenge facing American governance in the 21st century. In his estimation (I'm paraphrasing from memory) the entitlements of Social Security and Medicare would be a crucial test for future leaders. His point was hard policy choices would have to be made in order to balance the sustainability of these programs with the fiscal solvency of the federal budget. His words on this subject were tempered with that notorious objective journalistic edge as well as the insight he clearly had gained from working for Daniel Patrick Moynihan.

Tim knew that the real policy questions at the heart of political discourse were the lifeblood of our democracy. He brought that idea to his viewers and the American electorate on a weekly basis. We can't afford to lose sight of that during the next election.

Ding Ding, It's On

Just watched Barack blow the doors off the Xcel Energy Center in St. Paul. The speech of course was his declaration of a clinch of the nomination and much much more. It was also a clarion call to get everyone off their asses and get ready for the fight ahead.

He didn't hold back when counter punching McCain's earlier speech and made it clear with the numerous swipes at the flaws in the GOP's platform. I especially enjoyed the reference he made to how his campaign will not "use religion as a wedge and patriotism as a bludgeon". It's good to see he's showing some fortitude when it comes to pushing back against the flag lapel pin litmus test antics of the past few moths.

Right now Chris Matthews and Tom Brokaw are obsessing over the "tactile" nature of the Obama's post speech sweep through the arena crowd. Time to call it night boys?

The Ameritrap Chronicles

Just when you thought there were was nothing left to print about Cuyahoga County's Ameritrust Tower woes comes another piece about the flawed deal. This time a long overdue narrative in the June issue of Cleveland Magazine provides a thorough time-line of the whole plan to move County employees into the asbestos riddled tower on East 9th Street. The piece authored by Erick Trickey provides the most accurate rendition of the deal's conception and subsequent decay into a taxpayer funded real estate debacle (or fiasco) that I have seen so far.

The article does well to paint a picture of the lack of strategic thinking exhibited by Cuyahoga's commissioners on the whole Ameritrust scheme. There has been plenty of criticism from the PD and other media sources on this one but they all seemed to focus on a specific piece of the deal. An example of this being the obsession over one particular contract award to remove asbestos from a building that exudes big brother from its Brutalist visage.

Trickey carefully reconstructs the story of the doomed County plan from past to present, weaving facts about the internal debates and analysis in near perfect chronology. What is apparent is that there was plenty of reservation about the project from internal sources as well as paid advisers but the County administration didn't heed that advice until the project became inundated with potential cost overruns from mission creep.

After stumbling into a deal to sell away the building the County may be off the hook for the gigantic cost of developing the site. That is unless the deal with the developer falls through in which case two of the commissioners think the Count project would restart:

Today, a new county building is a low priority. But Hagan and Jones say the project might be revived if K&D can’t finance the purchase, or if the county locates the new convention center and Medical Mart on downtown’s Mall and expands the site to the west, where the county offices are...

Basically they won't be rid of this one until the ink has dried on the purchase agreement. Even then there's no guarantee that the developer won't have to come crawling back begging for more subsidies.

Akron METRO's Rate Hike Deception

Not more than three months have passed since voters approved a sales tax increase for Akron METRO and there is already talk of a rate increase. A story in the ABJ that was intended to spotlight commuters switching to public transit to get to their jobs in Cleveland included this bit of news as an aside.

METRO's North Coast Express to Cleveland has see an increase in ridership as hapless commuters are giving up the keys to let METRO do the driving. The increase in use for the route that leaves from Ghent Rd has seen ridership up around fifty percent according to METRO sources quoted in the article. That all makes sense considering the impact that four dollar a gallon gas has on long distance commuters. Turning to public transportation is a win for METRO even when the changes in attitude are due to economic duress.

The snippet that caught my attention though was the admission that METRO is considering a 21% rate hike for the North Coast Express weekly rate:

Gas prices have Metro considering a price increase on the North Coast Express route from $4 to $5 each way. The 10-ride ticket would increase from $33 to $40. Those increases could go into effect in August.

We all understand that Akron METRO is feeling the same pain over rising fuel prices, no surprise there. That's why a proposed quarter percent sales tax increase was put before the voters and approved in March. METRO stated in the media, at its public hearings and in it's own printed election material that a fare increase for the Cleveland lines would be required if the tax increase didn't pass. With the passage of the sales tax increase an extra $18 million a year in revenue will be pouring into the bank in 2009. How long did this change in fortune hold off rate increases? By my count that would be four months.

Seems like the administration wasn't being completely honest with county voters or the riders of the Cleveland express line. One of the key threats to service that was dangled before the public was that same rate hike that is going to be implemented anyway (considering means a done deal). It appears as if METRO will use the source of our angst, high gas prices, as a means to ratchet up fares at will regardless of the approved tax increase. They couldn't possibly have been caught off guard by rising fuel prices so that reason seems tenuous at best. Why not raise the rate by $2 with the stated intent to phase in subsequent increases over time? Wouldn't this be a fairer and more even approach to managing the tax dollars that METRO utilizes?