Have you heard the news? The U.S. unemployment rate increased 0.5% between April and May 2008, going from 5.0% to 5.5%. The immediate result of this report is a flurry of news stories bemoaning unemployment and reaching for their thesauruses to come up with good scare words: jumped, soared, leaps. Here’s a snippet of an MSNBC story:

The nation’s unemployment rate jumped to 5.5 percent in May — the biggest monthly rise since 1986 — as nervous employers cut 49,000 jobs.

The latest snapshot of business conditions showed a deeply troubled economy, with dwindling job opportunities in a time of continuing hardship in the housing, credit and financial sectors.

“Jumped” appeared in the title and first paragraph. “Soared” appears in the fourth paragraph, and “leaps” appears in the RSS feed title for this story. All of this reminds me of something Red Planet Cartoons published in April:

It's a matter of perspective

Stocks have taken a dive because of this hand-wringing report, but what does this news story identify as the cause of the “continuing hardship”? “Housing, credit, and financial troubles” all turn out to be the same thing.

Earlier in the decade, the government essentially forced lending companies to offer loans to people who were poor credit risks, or they’d be branded and punished as horrible racists and discriminating goons. Now — surprise, surprise — a number of people who were poor credit risks due to their unstable financial behavior are defaulting on these risky loans. Government stuck its foot in front of the housing, credit, and financial sector, and now government is reporting that this sector has taken a tumble. Well, duh! What do ya expect?

Certain politicians are always talking about government as though it could singlehandedly fix the economy. In truth, there are a few ways our government could have an immediate effect on our economy: namely, if it released the restrictions on ANWR oil drilling, oil refinery building, off-shore oil drilling, and nuclear power plant construction. Those four endeavors would open up thousands of jobs in construction and maintenance alone, not to mention the number of jobs created to support them. As an added bonus, we would be increasing our domestic energy supply at a time when there is an ever-increasing demand. Increasing the supply would mean a decrease in the cost of energy, and that would benefit our economy, and the world’s economy as well. And the increase in supply would most likely lead to decreased prices at the gas pump.

Or you could try electing liberals to government whose only promise is for “change” — what kind, exactly? — and whose actions show they prefer to restrict our energy supply so you have to pay more at the pump. So how, exactly, are liberals for the little guy?

UPDATE (6/9/2008 10:25:27 PM): Jerry Bowyer at TownHall.com posted a reason for the spike in unemployment in May — the minimum wage increase Congress passed last year:

Congress is to blame. Last year Congressional Democrats (along with some Stockholm-Syndromed Republicans) passed the Fair Minimum Wage Act of 2007, which started a phased hike of the minimum wage from $5.15 an hour to $7.25. Free market economists warned them that this would increase unemployment – that rapid increases in unemployment compensation hit teens and minorities the hardest. But the class-warriors are running the people’s house now, and they would hear none of that, so they took to the floor, let loose the dogs of demagoguery, and saddled America’s pizza parlors, municipal swimming pools, house painting businesses and lawn mowing services with a huge cost increase.

Now, we see the perfectly logical outcome of wage controls – rising unemployment among the most economically vulnerable. The chart above tells the story: Friday’s unemployment spike occurred overwhelmingly among teenagers, and secondarily among African Americans. Just like we said it would. A kid who is at entry level of job skills may be a good deal at 5 bucks an hour, but not at 7. Our anointed leaders gets to glory in their generosity (with other people’s money) and just so long as very few people in the media know that a demand curve slopes downward (a good bet, there), no one calls them on it.

Which makes yet another way the government has caused this problem.

I filled up the car again this week. As much as I would like to avoid the gas bill, driving to work is better than the alternatives of walking, biking, or riding the bus, so I will continue to pony up the bucks at the pump.

But the cost of gas has been a political tool for John F@#$%ing Kerry’s campaign. He has been hammering President Bush over the cost of gas pretty relentlessly. “George Bush has no plan, doesn’t address it, doesn’t seem to care that every American family is paying more to go to work, for the products that they get, to be able to get to school, to be able to do all the things Americans do in the course of a summer.” Yawn. OK, let’s do the math. My car holds 11 gallons of gas, and I fill it up about twice a month. Let’s round up the increase and call it an extra 50 cents per gallon. That means I would be paying 11 gallons times 50 cents times two fill-ups per month for a monthly increase of $11. This is less than the cost of two movie tickets, and much less than the price of dinner at a sit-down restaurant. Even with my current meager wages, I can’t weep too much over these prices.

However, the increased cost of gas does indirectly raise prices for me, since every good that needs to be moved from one site to another will see a cost increase thanks to gas prices. This can have a serious ripple effect on prices in the U.S., and nobody really wants to see inflation kick in.

But the rising price of gas is too juicy an issue to leave alone. Some Democrats have criticized President Bush for continuing to fill up the Strategic Petroleum Reserve while oil prices are higher than they have been in decades. Kerry has suggested that the Bush administration stop filling the SPR so the oil that would be going into it could be used to help reduce the cost of consumer gas. Senate Minority Leader Tom Daschle went even further. “We’re at 96 percent of capacity at the Strategic Petroleum Reserve today,” he said. “If we can’t draw it down at 96 percent, when can we?” Daschle conveniently ignores the purpose of the SPR. It is not designed to stabilize the U.S. oil/gas market, but it is for the use of the U.S. military in times of crisis.

It is interesting that Kerry, Daschle and others have been calling for the release of oil from the SPR as a way of adjusting the price of gas, but these same people screamed about drilling for oil in the Arctic National Wildlife Refuge (ANWR) in Alaska. If it would make a difference to release about 115,000 barrels of oil per day from the SPR, why was it that ANWR’s expected 400,000 to 1,400,000 barrels of oil per day (pick your study) supposedly would not have amounted to a “blip” in the price of oil and gas if developed? You can’t have it both ways, can you?

Well, you can if you are a liberal Democrat, and the press is on your side.

With the release of the doom-and-gloom propaganda film The Day After Tomorrow, which tells us human beings are despoiling the earth with their SUVs, you’d think some people would be cheering about rising gas prices. And you’d be right. Here’s a bit of what Gregg Esterbrook wrote in the New York Times on May 25th:

The federal gasoline tax is 18.4 cents per gallon, while state gasoline taxes average 24.6 cents per gallon. Had federal gas taxes gone up 50 cents a gallon 10 years ago, several things might not have happened or would have had far less impact.

The SUV and pickup-truck crazes would not have occurred, or at least these vehicles would be much less popular; highway deaths would have been fewer; and gasoline demands would be lower, as would oil imports.

To continue, the world price of oil would have been lower, since petroleum demand in the United States is the first factor in oil markets; greenhouse-gas emissions in this country would be lower; Persian Gulf oil states would have less influence on the global economy and less significance to American foreign policy; fewer dollars would have flowed to the oil sheiks; and the trade deficit balance for the United States would be smaller.

Before you nod in complete agreement with Gregg, remember that he is reflecting the thinking of the people who predicted global cooling on the first Earth Day, then switched their tune to global warming a few years later, and now are back to global cooling in The Day After Tomorrow caused by [insert ominous music here] global warming. Just once I wish they would stick with one prediction.

While I don’t plan on seeing The Day After Tomorrow any time soon, I have to admit it looks like it has some spectacular effects. One of the most riveting is the flooding and subsequent flash-freezing of New York. But let’s play a wee bit with the science of New York freezing like that. Let’s imagine a cube of water 100 meters on a side, ready to freeze at 32 degrees. How much energy needs to be pulled out of this block of water to freeze it? About 33.5 billion joules of energy. That’s a little less than exploding a ton of TNT, or the same as running a 60-watt bulb for about 20 years. And that’s just for a single block of water 100 cubic meters in size. Since I’ve not seen the movie, I cannot tell how widespread the freezing is or how much water is affected, but I can easily guess that it is many times the cube of water used in my little math problem. To freeze this much water, the energy equivalent of about a ton of TNT must be evacuated per each 100 cubic meters of water. Just where would this much energy go? To put it another way, the energy released from this block of water to freeze it is enough to raise the temperature of 70 similar-sized blocks of air from absolute zero (as cold as anything can possibly get) to 212 degrees Fahrenheit (boiling). The website for The Day After Tomorrow claims the possibility of a global Ice Age is “more truth than hype.” Yeah, right.

So what is really fueling the rise of gas prices in the U.S.? Environmentalists. We don’t have a oil supply problem as much as we have a gas refining problem. You can’t fill your car’s tank with crude oil; it needs to be refined. But while the U.S. has grown in the last three decades, not a single new oil refinery was built during this time. What’s more, thanks to the increasing burden imposed on refineries by environmentalists, the number of refineries in the U.S. has shrunk steadily. We need to do more with fewer refineries, and if something were to happen with even a few of these refineries, we’d really be in trouble. Since we can’t refine as much gas as we need, the bottleneck is creating an artificial shortage, and the shortage is driving up prices.

Another culprit in the high cost of gas is differences in gas formulations. Thanks to environmental requirements, Utah County has a different gas formulation from Salt Lake County, just 25 miles away. These different gas formulations cannot be shipped to another area. So if Utah County were to run out of gas, we couldn’t get some of Salt Lake’s excess shipped here. Imagine if you ran out of sugar in the local grocery store, but rather than calling the warehouse for another sugar shipment, you had to wait for the sugar refinery to make a new batch just for you. How stupid is that? But this is the situation we find ourselves in, thanks to wacko environmentalists who have forced the closure of refineries, prevented the creation of newer and more efficient refineries, and mandated the special formulation blends of gas for various areas.

President Bush could reduce this artificial shortage immediately by telling the EPA that all their regulations for separate gas formulations are null and void.