Comment And Commentary -- July 18, 2014; First Time In Decades, One Step Closer To Drilling Off-Shore

It appears President Obama found the "all the above energy list" hanging on the refrigerator, next to a "selfie" he took of himself and Michelle. Bloomberg is reporting that the POTUS is taking steps to drill off-shore:

The Obama administration took a step toward allowing oil and gas drilling off seven Atlantic Coast states for the first time in decades, establishing guidelines for seismic testing that would gauge offshore reserves.

The decision today doesn’t authorize the tests, done by ships towing guns that blast high intensity sound waves into the water. The Interior Department will consider applications for testing in light of safety standards to mitigate risks to ocean life, the head of the agency’s Bureau of Ocean Energy Management said.

Environmental groups criticized the action, saying tests would pose serious risks to species including sea turtles and the right whale and could lead to drilling in a region that has been off-limits to oil exploration since the early 1980s.

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I guess this is how far "we've" come. A commercial airliner carrying 298 people can be shot down with a missile and:

• it's called a tragedy by The Wall Street Journal 
• the POTUS notes the event in an opening sentence at a fund-raising event and then begins his speech with the already-written jokes
• the financial markets swoon for 8 hours, and then move to new highs
• oil hardly moves; in fact, one day later, oil declines in value
• headline over at CNN one day later: "blown out of the sky"
• headline over at FOX News one day later: "we just shot down a plane" -- Russian separatists
• headline over at NY Times: jetliner "explodes" over the Ukraine ("explodes"?)
• headline over at LA Times: Malaysia defends flight path
• headline over at WSJ: US Says missile downed Malaysia Airlines plane over Ukraine
• banner over at Drudge Report: Russia denies
• top story over at Yahoo!Finance: Malaysia Airlines faces a difficult future 
• Free Beacon: POTUS fundraises; Putin runs amok (it's actually worth reading)(the writer describes the "emperor with no clothes")(Putin is "old school"; POTUS is "no school")

A third of the Malaysian travelers were AIDS researchers.

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I missed this in all the other news yesterday: the Dow finished higher yesterday, setting yet another record. CNBC has an article on the "stealth" correction -- I won't be reading that article. Another story from Yahoo!Finance:

The Fed's Beige Book showed a pickup in economic activity overall and a stronger labor market. Manufacturing, consumer spending and tourism were the strongest sectors, while New York, Chicago, Minneapolis, Dallas and San Francisco regions were the strongest regions.

Meanwhile, Federal Reserve Chair Janet Yellen was back on Capitol Hill today for her second day of testimony to Congress. Yellen didn’t rock the boat when it came to equity valuations, like she did on Tuesday. However, she defended the central bank's independence when grilled by Republican lawmakers about legislation to make the Fed more transparent.

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Larry Kudlow On ObamaNation, The Economy, and Malaysian Airlines

From CNBC: 

When Reagan went to Reykjavik to meet with Mikhail Gorbachev, he believed the resurgent American economy would hammer the nails on the coffin of Soviet communism. And he explained to Gorbachev that if the Soviets didn't come to the negotiating table with nuclear weapons, the U.S. would out-produce them on nukes and with technological superiority. Similarly, Reagan would not give up his vision for strategic missile defense.

We know that the Malaysian plane was brought down by a ground-to-air missile fired from Russian-made SA-11 weapons run by pro-Russian Ukranian rebel terrorists. We also know that Russia is fighting a proxy war with the U.S. in Ukraine, and that Russian special forces are leading the terrorist movement in Ukraine. We can add to this the proxy war fought by Russia in the Middle East, with its main ally Iran, and the fact that Russia is engaging in state-sponsored terrorism. 

Whether President Obama understands all this, I don't know. His policies have been alternatively passive (Libya, Egypt), incoherent (Russian reset), and feckless (Syria). But the fact that the current U.S. economic recovery is the slowest in post-WWII history — spanning 70 years — is surely a key factor in Vladimir Putin's adventurism.

At 2.1 percent average real growth [in ObamaNation], the U.S. is lagging far behind the 4.1 percent average recovery pace of the post-war business cycles. The Reagan recovery averaged 5 percent annual growth at the same point as the Obama recovery. 

This brings us back to Reagan's link. Putin may recognize that Russia's economy is a thin deck of cards. But he surely doesn't fear the weak American economic position. Ditto for the broken economic dictatorships in North Korea, Iran, and Venezuela, and the rising economic dictatorship in China. They don't fear us. 

Yesterday I talked about "disconnects." This is another disconnect: US growth is anemic (as Kudlow notes above) but the stock market is setting new records (highs). Having said that, I'm actually more optimistic than a number of pundits; I think there are some "things" going on just below the surface that make me very optimistic.