Month: June 2010

Our Hidden Inflation

Government statistics are about the last place one should look to find inflation, as they are designed to not show much. Over the last 35 years the government has changed the way it calculates inflation several times. According to the Web site Shadow Government Statistics, using the pre-1980 method, the Consumer Price Index would be over 9 percent, compared with about 2 percent in the official statistics today.

While the truth probably lies somewhere in the middle, this doesn’t even take into account inflation we ignore by using a basket of goods that don’t match the real-world cost of living. (For example, health care costs are one-sixth of G.D.P. but only one-sixteenth of the price index, and rising income and payroll taxes do not count as inflation at all.)

Why does the government understate rising costs? Low official inflation benefits the government by reducing inflation-indexed payments, including Social Security. Lower official inflation means higher reported real G.D.P., higher reported real income and higher reported productivity.

via Op-Ed Contributor – Easy Money, Hard Truths – NYTimes.com.

Coast Guard Sank Oil Rig

Mike Miller has run Calgary-based Safety Boss — which established an international reputation after successfully fighting the Kuwait well fires after the first Gulf War — for more than 30 years.

The U.S. Coast Guard erred, Miller said, in how it dealt with the fire aboard the Deepwater Horizon after the explosion on April 20 and before the drilling rig sank two days later.

He remains convinced that two days of pouring water on the fire swamped the ship, causing it to sink and sever the connection from the ocean floor to the surface, where it would have been easier to deal with the fire and contain the flow.

Oil well firefighters would know not to do that, he said.

“If you’re not successful in an hour you’re not ever going to be successful,” he told CBC News.

The U.S. Coast Guard made a 'colossal' mistake in how it fought the fire on the Deepwater Horizon, says Mike Miller.The U.S. Coast Guard made a ‘colossal’ mistake in how it fought the fire on the Deepwater Horizon, says Mike Miller. (Associated Press/U.S. Coast Guard)

“You have to hit these fires with overwhelming force. They’re not like a forest fire where you fight them for days at a time. Why they went on with that was just beyond me.”

The resulting aerial pollution would have been far less of a threat than oil in water, especially given that booms have limitations. In the Exxon Valdez tanker spill in 1989, booms only collected four per cent of the oil, and that was in an enclosed bay
Read more: http://www.cbc.ca/money/story/2010/06/02/f-gulf-spill-canadian-oil-industry.html#ixzz0pjLHVR87

via CBC News – Money – A game changer for Canada’s oil industry.