The Shale Boom

[Gaspar]

We are living on the cusp of the largest economic expansion in decades, all fueled by . . .fuel.  The term "Shale Boom" has become the new active term, and one that may grow to carry the same infamy as the "Gold Rush" and "Industrial Revolution."

The great part for Oklahoma is that much of it started right here with Continental and Chesapeake Energy Corp., both Oklahoma companies, who have put forth the majority of the investment necessary to put the fracking technologies to work in the fields.   

Oil dipped below $50/bbl today.  The retail cost of diesel has now begun to drop drastically, and with that follows the cost for all retail goods, services, and manufacturing.

Things are about to get really good, really fast. The dominos are falling in the right direction for a change.

[DolfanBob]

Ah not so fast Gassy. The big rich oil tycoons are trying to spin how this is so disastrous. And we should feel awful for this low fuel price at the pump. It's a Y2K type event all over again. Kingdoms will fall. Chaos in the streets. We'll all go back to driving 8 cylinder monster fuel drinking cars. How will we survive?
Anything slightly good for the middle or lower income people has got to spell catastrophe for this nation.

I'm just shocked that it's happened so early before we elect another golf playing, vacationing, jet setting rich guy to the White House. Or half a Lesbian. It's kind of a toss up. 

[heironymouspasparagus]

Rig counts have been dropping for several weeks - both US and Canada.  International is up slightly this last week.

The price is too low to maintain their huge profits for an extended period of time - it merely supports very strong profits at these levels, so expect further shutdowns and furloughs of workers in the near future.  Have a friends kid working on rigs in Anadarko basin who survived the first layoffs a couple weeks ago so he could work on shutting down rigs.


Oh, and we have also already been living in the longest economic expansion in history of our country, and it also seems to be growing into the largest.  So shale oil really had nothing to do with it - just another incidental factor that seems to be dragging down the good news everywhere else, at least for the last few weeks.

[Gaspar]

Write the mythology however you please, but inexpensive resources, primarily energy are the prime mover for economic expansion.  I love how the longest economic recovery in US history has not become the "longest economic expansion."  Gridlock must be a good thing (hint: it is!).

Lay praise where you will, but lower energy prices produce the most holistic and natural economic stimulus possible, and it's foundational, meaning that it effects people at all socioeconomic levels.  On a micro scale our current household gasoline budget has decreased by $86 this month, and that's with vacation travel!  $80-$90/mo may not mean all that much to us, but for folks living on a smaller budget, that's a huge amount of money that is now available to save or invest in other goods and services.

As for the golfer in chief, his reign of bullhorn politics is dead. He has been reduced to making threats that he cannot carry out.  Obama did not prove to be the progressive cancer that many feared he would be.  He was simply an open sore that the people and their representatives have been successful in scabbing over.  He can no longer do much harm or retard policy domestically because any order he may issue will die without funding.  He has been confined to engaging in foreign misadventure, a realm where he has already burnt most of the tinder.  Much like Cuba, I think his eye will turn to the obscure and uncomplicated, to deliver his message of change.  As par, we will see him speak loudly, and execute poorly, however, most of the world will no longer be paying any attention.

[Townsend]

Everyone stand back.

Gaspar's throwing his economic theories into the pit again.

Please avert your eyes from his brain hole.  It leaks the fluid of the inaccurate.

[RecycleMichael]

I am getting the feeling that gaspar doesn't like President Obama.

Maybe it is just my perception.

[heironymouspasparagus]

Write the mythology however you please, but inexpensive resources, primarily energy are the prime mover for economic expansion.  I love how the longest economic recovery in US history has not become the "longest economic expansion."  Gridlock must be a good thing (hint: it is!).

Lay praise where you will, but lower energy prices produce the most holistic and natural economic stimulus possible, and it's foundational, meaning that it effects people at all socioeconomic levels.  On a micro scale our current household gasoline budget has decreased by $86 this month, and that's with vacation travel!  $80-$90/mo may not mean all that much to us, but for folks living on a smaller budget, that's a huge amount of money that is now available to save or invest in other goods and services.

As for the golfer in chief, his reign of bullhorn politics is dead. He has been reduced to making threats that he cannot carry out.  Obama did not prove to be the progressive cancer that many feared he would be.  He was simply an open sore that the people and their representatives have been successful in scabbing over.  He can no longer do much harm or retard policy domestically because any order he may issue will die without funding.  He has been confined to engaging in foreign misadventure, a realm where he has already burnt most of the tinder.  Much like Cuba, I think his eye will turn to the obscure and uncomplicated, to deliver his message of change.  As par, we will see him speak loudly, and execute poorly, however, most of the world will no longer be paying any attention.

"longest economic expansion" is the same as " longest economic recovery".  It is not necessarily the largest....and isn't yet - that still belongs to Bill Clinton's era.  Read more closely!

Everything else stands.  Baker Hughes is the definitive source of information about what's happening at the rig level... in...the...world!   No mythology there.  Well, except for maybe your interpretation of reality...?

Cheap energy, along with other resources is always a good thing for economic activity - nice, but absolutely NOT necessary!  The REAL driver behind it is cheap labor!  That's why "slave wages" are pushed so hard - $7.25 an hour - in this country, and why there is such elation amongst corporate America when contemplating "expansion" into low cost labor markets... see "China" for recent years.

I am amazed that $90 a month doesn't really mean that much to you!  That's a huge amount of money to the majority of the people I know - I AM the exception in my circle of family and friends - I would miss the $90, but would not be hugely inconvenienced like missing a meal over it.  An extra $90 for many of them literally means the difference between the selection of necessities of life!  Food versus heat in the winter.  Food versus medicine.  Food versus rent so they keep a roof over their head.

Did someone 'hack' your account...??  This is even less rational than you normally seem to be...


RM,  I think you got it.

[Gaspar]

Cheap energy, along with other resources is always a good thing for economic activity - nice, but absolutely NOT necessary!  The REAL driver behind it is cheap labor!  That's why "slave wages" are pushed so hard - $7.25 an hour - in this country, and why there is such elation amongst corporate America when contemplating "expansion" into low cost labor markets... see "China" for recent years.

But that is inaccurate, if only by omission. The "RAISE THE WAGE" crap is simply another example of bullhorn politics. It's designed to rally the uninformed. According to the Bureau of Labor Statistics, last year only 1.532 million hourly workers earned the federal minimum of $7.25 an hour; nearly 1.8 million more earned less than that because they fell under one of several exemptions (tipped employees, students, etc.) for a total of about 3.3 million.  That's only about 2% of the total labor force. 

Most of that tiny fraction of the workforce is comprised of part-time and transient labor.  Only a fraction of a percent represents manufacturing and other sectors that find foreign labor markets attractive.  The majority are the burger-flippers and mop-jockeys who we should never condemn to these jobs as careers.

I worked minimum wage jobs, and I think everyone should at some point in their development path.  Low wages are the best incentive towards self improvement.

As for companies outsourcing unskilled labor to China and the like, I think that's great! We have better things to do in this country than to commit our children to screwing LEDs into laptops. The REAL driver is not cheap labor, because cheap labor does not produce innovation, invention, or increase intellectual exchange. We are very different than China, and should be thankful of that.  Our economy is based on ideas, while theirs is based on sweat.

We will never be a country of cheap labor (at least not any more), and thank God!

An extra $90 for many of them literally means the difference between the selection of necessities of life!  Food versus heat in the winter.  Food versus medicine.  Food versus rent so they keep a roof over their head.

That was my point!  Beyond any stimulus check, or any other government gimmick, this will have a larger, more permanent impact on the average consumer.

[Red Arrow]

Most of that tiny fraction of the workforce is comprised of part-time and transient labor.  Only a fraction of a percent represents manufacturing and other sectors that find foreign labor markets attractive.  The majority are the burger-flippers and mop-jockeys who we should never condemn to these jobs as careers.

I worked minimum wage jobs, and I think everyone should at some point in their development path.  Low wages are the best incentive towards self improvement.

What kind of country is this if you can't afford a brand new Lexus every 3 years by flipping burgers? 

[Red Arrow]

But that is inaccurate, if only by omission.

Hey, whatever it takes to make a point.   

[Gaspar]

Hey, if we had a "living wage" we would have more people just living. 

Unfortunately, the one dollar menu would be a five dollar menu, and ketchup would be extra.

[Gaspar]

Back on topic. . .
We've had other dips and spikes in the bbl prices recently. Most were caused by foreign turmoil.  This time we are finally positively influenceing the market through domestic means, something that people urged the president to provide policy aid for 6 years ago to stop the recession, but he chose policies to purposefully increase prices as his advisors admit, in an effort to artificially encourage his green agenda.

[heironymouspasparagus]

But that is inaccurate, if only by omission. The "RAISE THE WAGE" crap is simply another example of bullhorn politics. It's designed to rally the uninformed. According to the Bureau of Labor Statistics, last year only 1.532 million hourly workers earned the federal minimum of $7.25 an hour; nearly 1.8 million more earned less than that because they fell under one of several exemptions (tipped employees, students, etc.) for a total of about 3.3 million.  That's only about 2% of the total labor force. 

We will never be a country of cheap labor (at least not any more), and thank God!

Except for the economic reality of the last 80+ years or so of minimum wage in this country!  Faux News is designed to rally the uniformed.  According to reality, increasing minimum wages ARE the real "floating boat" in the US and western European society.  "Trickle down" voodoo economics as promoted so misguidedly by Reagan because of the people he was listening to - does not.  As has also been proven for many decades.

And we are a country of cheap wages - that's why your buddies are always raging about half the people not paying taxes!  In spite of reality that they do!

[Gaspar]

And we are a country of cheap wages - that's why your buddies are always raging about half the people not paying taxes!  In spite of reality that they do!

If you say so.

I thought your point was that countries like China were the low cost labor markets? Your posts confuse me.

Also, your claims are again inaccurate. In 1980, 15 percent of hourly workers earned the minimum wage. Today that share is down to only 4.7 percent. Further, almost two-thirds of today's minimum wage workers are in the service industry and nearly half work in food service, and this number continue to shrink.  In the US, only .08% of our total working age population (over 25) is earning minimum wage.  That's a little over 2% of the total employed workforce. http://www.bls.gov/cps/minwage2012tbls.htm

Further more, 63 percent of workers who earn less than $9.50 per hour (well over the minimum wage of $7.25) are the second or third earner in their family and 43 percent of these workers live in households that earn over $50,000 per year.  http://cdn.theatlantic.com/newsroom/img/posts/Sabia_Burkhauser_SEJ_Jan10.pdf  This means that poverty numbers attributed to minimum wage are so minute, that they would likely be in the hundredths of a percent range and basically incalculable.

I think it would be a difficult battle for you to show that "we are a country of cheap wages" as you insist. Our low wage population is minuscule and it is shrinking. However, it is only fair for me to help you with your cause, since you exhibit some difficulty mounting a compelling argument, so here is the primary research that our friend Elizabeth Warren refers to frequently: http://www.cepr.net/documents/publications/min-wage1-2012-03.pdf 

Please feel free to pull some evidence from this research so that we may continue this discourse in a logical manner.

[heironymouspasparagus]

If you say so.

I thought your point was that countries like China were the low cost labor markets? Your posts confuse me.

Also, your claims are again inaccurate. In 1980, 15 percent of hourly workers earned the minimum wage. Today that share is down to only 4.7 percent. Further, almost two-thirds of today's minimum wage workers are in the service industry and nearly half work in food service, and this number continue to shrink.  In the US, only .08% of our total working age population (over 25) is earning minimum wage.  That's a little over 2% of the total employed workforce. http://www.bls.gov/cps/minwage2012tbls.htm

Further more, 63 percent of workers who earn less than $9.50 per hour (well over the minimum wage of $7.25) are the second or third earner in their family and 43 percent of these workers live in households that earn over $50,000 per year.  http://cdn.theatlantic.com/newsroom/img/posts/Sabia_Burkhauser_SEJ_Jan10.pdf  This means that poverty numbers attributed to minimum wage are so minute, that they would likely be in the hundredths of a percent range and basically incalculable.

I think it would be a difficult battle for you to show that "we are a country of cheap wages" as you insist. Our low wage population is minuscule and it is shrinking. However, it is only fair for me to help you with your cause, since you exhibit some difficulty mounting a compelling argument, so here is the primary research that our friend Elizabeth Warren refers to frequently: http://www.cepr.net/documents/publications/min-wage1-2012-03.pdf 

Please feel free to pull some evidence from this research so that we may continue this discourse in a logical manner.

I can tell....  it's all that Faux News creating confusion. 

China is a low cost labor market.  As is the US - and getting lower all the time relative to increases in inflation and productivity.  I made no comments about percentages at minimum wage - that is your Faux News deflection methodology kicking in...when someone says something you don't wanna hear, change the subject....

MY definition of low wages is wages that are below the 1968 reference point that is very close to the highest relative point of modern times.  As is well known, has been well covered in national venues as well as here, we are about 30% below that - the minimum wage of 1968 is equivalent to about $10.50 an hour today.  So your deflection about how few people are actually making minimum wage is a typical Faux approach - it may actually be technically true that 5% of the wage earners are making what in reality is a 30% reduction in REAL minimum wage.  Wouldn't surprise me at all.

The REAL world numbers would have to show how many people are making under $10.50 an hour to show a true correlation.  And I would almost bet real money that number is over your 15%, 1980 reference.

The National Employment Law Project shows that more than 25% of the people in this country make less than $10.00 an hour.  So in very real terms, we have slid much worse than your Faux nonsense wants to show.

http://www.huffingtonpost.com/2012/07/25/private-sector-workers_n_1699103.html

As for a logical discourse with Faux News....well, we all know that can't happen.