Last month, Earth Day came and went. Perhaps you missed hearing about it. For 2013, the theme was “The Face of Climate Change.” Other than a change in the Post Office cancellation mark on your letters from the usual wavy lines, to the four stick-like wind turbines and a sun symbol, there was little note of what was once an event celebrated by 20 million Americans. Tim Wagner, Utah representative for the Sierra Club’s Our Wild America Campaign, groused: “Media coverage of global warming has virtually disappeared.”
According to EarthDayCentral.com, one of the goals of Earth Day is to help you “Discover what you can do to save the environment.”
Perhaps, people no longer see the need for planetary salvation.
The Christian Science Monitor offered an Earth Day 2013 report card on global warming. The author starts with: “When Earth Day observances first began in 1970, Cleveland had recently doused a pollutant-fueled fire on a section of the Cuyahoga River. Cities were often shrouded in thick blankets of smog. And large portions of Lake Erie were so fouled by industrial, farm, and sewage runoff that sections of the 241-mile-long lake were pronounced dead.” And later, he reports: “Since that first Earth Day, the air over major cities is cleaner. Lake Erie is healthier. So is the Cuyahoga River, which groups in Cleveland would like to turn into a centerpiece of urban life. The improvements have come with ‘yes, but…’ as other environmental challenges have elbowed their way to the fore. But for the most part, tools are in place to deal with them.”
As Patrick Moore, a co-founder of Greenpeace, explains, the ‘80s ushered in the age of environmental extremism. The basic issues, for which he and Greenpeace fought, had largely been accomplished, and the general public was in agreement with the primary message. In order for the environmentalists to remain employed, they had to adopt ever more extreme positions. Moore says: “What happened is environmental extremism. They’ve abandoned science and logic altogether.” Their message today is “anti:” anti-human, anti-science, anti-technology, anti-trade and globalization, anti-business and capitalism, and ultimately, anti-civilization.
Moore’s view helps understand how the environmental movement has gone from trying to save the planet to killing the US economy.
The American economy has some basic problems. We need more well-paid jobs, increased revenue, and our trade balance is out of whack. Each of these issues could be easily addressed, but environmentalists are doing everything they can to kill potential solutions. Three such examples are coal mining and exporting; natural gas extraction and conversion to liquefied natural gas (LNG) that can then be exported; and the Keystone pipeline—all of which face extreme opposition from environmentalists.
The US has the world’s largest economically recoverable coal resources—with more than one-fourth of the world’s reserves. Unfortunately, our policies have stymied growth in the mining industry. Bill Bissett, President of Kentucky Coal Association, told me: “Our industry is accustomed to market fluctuations and competition with other fuel sources, but having a federal government place additional regulations on one geographic region (Eastern KY and WV) and one industry (coal mining) is absolutely unfair.”
Last month, environmental groups (including the Sierra Club and Greenpeace) sent a letter to newly-confirmed Interior Secretary Sally Jewell calling for a moratorium on the leasing of federal lands for coal mining in the Powder River Basin (PRB) of Montana and Wyoming—which accounts for about forty percent of US coal reserves. The results of a recent lease sale in Wyoming, offers insight regarding the economic importance of leasing these federal lands for coal mining. Peabody Coal paid nearly $800 million to the US Government for the rights to expand an existing coal mine and maintain their current workforce. The $800 million was a “bonus payment” and gives them the right to lease the coal and pay 12.5% of the sales price as a royalty. According to data from the Bureau of Land Management, 13 active coal mines in the Wyoming portion of the PRB alone, employ more than 6800 workers.
While, as Bissett addressed, policy under this administration has harshly singled out coal and the coal miners for punishment, coal’s low cost and abundance continues to make it a highly preferential fuel for power generation in developing countries like China and India. And, as I’ve previously written, even Europe is increasing its use of coal for electricity generation, as they’ve discovered the prohibitively high cost of renewables. In 2011, exports to European and Asian markets represented 76% of total US coal exports—up 31% compared to 2010.
Currently, US coal is easily shipped to Europe from ports on the east coast, but the US is missing out on the important Asian market—now being met by more expensive Australian competitors—due to infrastructure opposition from environmental groups. In the Los Angeles Times (LAT), Bill McKibben, founder of 350.org and a legend in the world of climate activism, wrote: “Those exports can’t really take off, however, unless West Coast ports dramatically expand their deepwater loading capacity. … Environmentalists are trying desperately to block the port expansion.” Addressing the situation, the Wall Street Journal states: “there are now no major coal exporting facilities on the US West Coast. Washington State, with its proximity to coal-rich Wyoming and Montana, is seen as the best place to start.” PRB coal is being shipped to China and India through Vancouver. Additionally, the countries’ needs are being filled by Australian and Indonesian coal—so environmentalists’ fears that shipping US coal will undermine “everything we’ve accomplished,” as Sierra Club spokesman David Graham-Caso says, are wrong. The coal is being shipped and used—but the US is losing out on the jobs (which would be mostly union jobs), the revenue, and the benefit to the trade deficit. The LAT/McKibben piece cites KC Golden, policy director of Seattle’s Climate Solutions group: “Can you imagine standing at the mouth of the Columbia River, watching ships sail in from Asia carrying solar panels and electric car batteries and plasma TVs, passing ships from America carrying coal?” Worse, can you imagine all those goods coming in—manufactured using Australian coal-fueled electricity, and nothing going out? That’s what we have now.
A report from the Energy Policy Research Foundation states: “US production will merely replace higher cost production. … Neither net world coal combustion nor GHG emissions will change as a result of an expansion of US coal exports.” The report concludes: “The higher net value received is in effect a wealth transfer from foreign consumers to US producers and the national economy. This net gain to the national economy shows up in higher returns to invested capital, greater employment opportunities from expanded investment, higher revenues to state, local and federal governments, and higher lease values on coal reserves from federal and state lands.”
But environmental groups don’t want this “net economic gain to the national economy.” Apparently, they’d prefer that we continue to borrow from China’s Australian coal-fueled economy.
LNG faces a similar problem. Natural gas was once the favored choice of environmentalists—until privately funded hydraulic fracturing (or high pressure drilling) advancements made it plentiful and, consequently cheap. The low-cost fuel snatched away the fossil fuel-free dream that seemed to be almost within reach. Now environmentalists oppose natural gas as well. The Sierra Club’s Beyond Natural Gas site claims: “Increasing reliance on natural gas displaces the market for clean energy.”
Many countries want US natural gas. Unlike coal, natural gas cannot just be put on a ship and sent to the awaiting customer. It must first be liquefied—hence the term LNG. The liquefaction process requires costly facilities, which, for economic reasons, need a large customer base—many with which the US does not have free trade agreements (though the Energy Department can permit them, provided it determines that such ventures are consistent with the public interest). The International Business Times, on March 1, 2013, reports that: “As of this date, 17 applications for multibillion-dollar facilities to turn the commodity into liquefied natural gas, or LNG, for export are under review by the Energy Department.” Let’s hope they don’t take as many years and as many reviews as the Keystone pipeline.
LNG exports could have a tremendous positive impact on the US economy. A recent IHS global insight report concluded that LNG exports would “result in the creation of over 100,000 direct, indirect, and economy wide jobs and have an immediate economic impact resulting in $3.6 to $5.2 billion in potential annual revenues.”
And, LNG exporting would not only create jobs and increase revenue, it would also reduce trade deficits. A just-released report from the Rio Grande Foundation states: “The United States currently runs a $6 billion trade deficit with Japan. That nation is particularly eager to import LNG from the US due to the nuclear accident at Fukushima.”
Once again, environmentalists oppose jobs, revenue, and trade-deficit reduction. Earlier this year, more than 40 groups and individuals took out a half page ad in the New York Times that said: “Exporting Liquefied Natural Gas (LNG) to overseas markets will mean more drilling and fracking on US land, which are dirty and dangerous practices.”
Like coal mining and export, natural gas extraction, liquefaction, and export, the Keystone pipeline would create thousands of union jobs and increased service employment in supporting communities; benefit local and state economies, and provide additional revenues to the federal coffers; and help balance the trade deficit, as some of the refined product would be exported. But once again, environmental opposition has targeted the pipeline—causing delay after delay that has now postponed the economic benefit of the pipeline.
Last week, Russ Girling, TransCanada, CEO, said: “I believe that those that are fundamentally opposed to our pipeline are getting louder and more shrill as we move towards a decision.” He announced that the potential start date must be moved from the previously planned late 2014 or early 2015 to late 2015.
The Keystone pipeline saga is the same song, another verse.
These are just three current examples of how the influence of environmental organizations is driving policy in the name of planetary salvation that is, in reality, resulting in economic devastation that could lead to humanity’s ultimate starvation. Environmental motivations are less about saving the planet and more about killing the global economy—while enriching themselves taxpayers’ expense.
[First Published at TownHall.com]
I want to make just one observation based on Avik Roy’s outstanding write-up of the Oregon Medicaid project.
Most of the commentary has been shocked that there was no statistically significant improvement in health measures between people who were enrolled in Medicaid and those who were not.
I want to focus on a different issue, one that I have been hammering on in these pages ― that ObamaCare is unlikely to increase the number of people with insurance.
Before we even get to the outcomes question is the issue of whether very many people want to have insurance coverage, even when it is totally free.
Oregon had a limited amount of money with which to expand Medicaid, so it held a “lottery” for those who were potentially eligible. Roy writes −
Of the 35,169 Oregonians who “won” the lottery to gain enrollment in Medicaid, only about 30 percent actually enrolled. Indeed, only 60 percent of those who were selected bothered to fill out the forms necessary to sign up for the benefits — which tells you a bit about how uninsured Oregonians perceive the Medicaid program.
Yet the Oregon Medicaid program is far better than most –
In Oregon, Medicaid pays primary care physicians approximately 62 percent of what private insurers pay. That compares to the national average of 52 percent; a number of large blue states pay less than 40 percent. Because Oregon’s Medicaid program pays more, the state’s Medicaid beneficiaries have relatively better access to doctors. While 21 percent of Oregon physicians won’t take new Medicaid patients ― an unacceptably high number — the national average is even worse: 31 percent.
Importantly, Philip Klein reports that those who did enroll did not reduce their use of hospital emergency rooms –
Another interesting finding was that though medical spending increased among Medicaid enrollees due to more prescription drug usage and doctors’ visits, the study “did not find significant changes in visits to the emergency department or hospital admissions.” This undercuts another favorite talking point of liberals, which is that expanding insurance actually saves money by reducing costly emergency room visits.
So, first, people had to express some interest to be enrolled in the lottery. Then, if they made it through the lottery, they had to fill out enrollment forms. Then, they had to actually enroll. Yet only 30% of the lottery winners bothered to complete the process. And some of these numbers were undoubtedly people who had been getting coverage from their employers but decided that free coverage with no cost-sharing was a better deal than what they got on the job.
So, once again, even if ObamaCare is perfectly implemented on time and within budget, it is unlikely to have any positive effect on the numbers of uninsured ― the entire reason it was enacted.
Why is this? Because policy makers never actually listened to the uninsured to find out why they rejected what was available. Policy makers never treated them as an untapped market that did not care for the existing products. Policy makers decided that they should enroll whether they liked it or not. But these dogs just don’t like the dog food.
[First Posted on John Goodman's Health Policy Blog]
After recovering from my swelling of pride about our government’s concern for public welfare, I thought this was written by Dr. Joseph Goebbels–but he is dead.
Anyway, a contribution from NOAA to this Newsletter follows. They state Spring of 2013 will have above-average temperatures for most of the United States. I am sitting in Atlanta, Georgia May 4, still waiting the arrival of Spring. Most temperatures since March 21 have been temperature we would expect early March. Predictions for the next half-dozen days are more of the same.
How has your 2013 Spring been behaving? Lots of sun and warm temperatures? Billions are being spent annually by activities proudly described in this newsletter. It appears sequestration is none-existent when it comes to climate change advocacy propaganda pursued by the Thirteen agencies.
Maybe in times of a government approaching bankruptcy, we should eliminate climate change advocacy and concentrate on what really needs to be done like protecting our borders, stop terrorists from harassing our citizens, building and repairing roads, fix Social Security and Medicare, etc.
The spectacle of San Jose State climate science professors wanting to burn a book that questions their alarmist dogma is getting some traction. Steve Goreham, author of the “offending” book The Mad, Mad, Mad World of Climatism, was on the Sean Hannity Radio Show Thursday to talk about this book.
Steve, a policy advisor to The Heartland Institute, was also interviewed by Dennis Miller for a spot that will air soon.
Listen to the interview with Hannity in the player above.
Last May, when the Competition authorities announced they had a preliminary Statement of Objections for four monopoly abuses against Google, the EU competition authority trumpeted their preference for a settlement over enforcement action in this case, i.e. ruling Google a search monopoly guilty of monopoly abuse that warranted a material fine. In extending their public deadlines for Google three times, and then tentatively accepting the immaterial search concessions Google proposed, it is obvious the EU bent over backwards to avoid politically confronting Google.
The EU economy is still reeling from the financial crisis and the resultant austerity measures. The EU needs economic growth. And the proposed U.S.-EU Free Trade Agreement offers the potential for more economic growth. Apparently the EU’s continuing economic weakness, has the EU competition authorities wary of facing Google’s potential political charges of EU protectionism and hostility to innovation, if the EU were to rule Google a monopoly guilty of monopoly abuses. Apparently the EU is also wary of getting the U.S.-EU Free Trade Agreement off on the wrong foot by angering one of the Administration’s closest corporate allies.
And evidently, Google has been throwing its exceptional political weight around behind-the-scenes to secure special treatment and exceptions from the EU.
Importantly, Google’s growing sovereign-like political power has serious implications for the EU decision-making well beyond competition policy.
So what are the problems with politically enabling Google?
Google is the world’s #1 antitrust offender. Google has been found to violate antitrust law in ten different ways in the last five years; and Google is, or has been, under antitrust investigation in nine different countries, in addition to the EU’s investigations of Google’s abuse of search/search advertising dominance, abuse of standards essential patents, and Google-Android’s anti-competitive practices.
Google is Europe’s #1 tax evader. Google is the most aggressive multi-national tax evader in the EU, paying only a 2.4% tax rate.
Google is Europe’s #1 corporate IP infringer. Germany and France formally opposed the Google Book Settlement as mass copyright infringement and anti-competitive. Google settled a Google News infringement suit against Belgian newspapers and another with French newspapers. Other EU nations continue to call for payment for Google News use of their newspaper content. Even one of the EU-Google antitrust remedies is for Google to stop scraping others content and monetizing it as their own, but it requires no restitution for this anti-competitive infringement.
Google Android is #1 in security vulnerability for malware. With a dominant share of the mobile operating system market Google has put gaining rapid share of Android above basic security protection for EU and other consumers. This obvious consumer harm should prompt the EU to formally open a Google-Android antitrust investigation.
Second, the EU decision leaves European consumers and businesses largely at the mercy of the most powerful and economically-pervasive predatory monopoly in EU history.
All other EU antitrust investigations involved primarily one industry or sector, usually technology. The Google case is unique in that the discriminatory problem of monopoly search/search-advertising self-dealing cuts across the consumer economy from shopping to news, maps, travel, restaurants, content, social, finance, video, mobile – most of the consumer online economy.
Remarkably Google, with its ingeniously-narrowing and self-serving remedy settlement, has tricked the EU into tacitly accepting and legitimizing a consumer-wide monopoly that abuses its dominance in contravention to EU law. Simply, the EU decision benefits Google greatly by locking in the Google monopoly status quo with no admission of any wrongdoing despite the EU’s findings.
By signaling its hostility to any changes from market testing in order to protect its political settlement with Google, the EU competition authorities do not appreciate the loud signals they are sending to consumers, competitors and Google: that Google’s ill-gotten monopoly is OK; that the EU views the Google dominated market as superior to a more competitive one; and that the EU has little interest in further investigating Google monopoly search abuse.
More remarkably, the Google proposed remedies that would end the EU’s ongoing investigation of this market would leave oversight of 90+% of the consumer online economy in the hands of one Google-recommended, Google-paid monitor.
It is especially ironic that a company accused of abusing its vertical-monopoly, conflicted-roles of online ad cop, prosecutor, judge and jury, is being allowed to pick the potential pool of Google monitor-cops that the EU will choose from.
Even more remarkably, the EU competition authorities have de facto delegated to the Google monopoly to: 1) fairly organize Europe’s culture(s), commerce, news, and political information going forward, and 2) to not pick online winners and losers by being an “honest” monopoly broker for Europe’s online economy.
This is a lot of blind trust to give a digital information monopoly, with a long antitrust rap sheet and that famously bragged “Google is the biggest kingmaker on this earth.” It is an especially great amount of special trust, given that EU competition law considers monopolies and abuse of dominance to be illegal.
Third, the EU will be proactively enabling Google’s well-known “culture of unaccountability,” by proactively preferring to allow Google to avoid admitting any wrongdoing or taking any public responsibility for breaking EU law.
Apparently, the EU politically decided to mimic the FTC’s no-fault, no-deterrent enforcement approach that allows Google to settle charges of law-breaking with no admission or acceptance of corporate responsibility for illegal behavior. For a brand-dependent firm like Google, the opportunity to skirt any real brand-accountability with the public for breaking the law is a huge gift to Google.
Making matters worse, the EU politically chose to accept Google’s “labeling” remedy so it would not suffer any political criticism for regulating Google’s ever-changing search ranking algorithm or stifling Google’s innovation. As a result, the EU is only entrenching Google’s monopoly not creating the opportunity for more competition.
The bad joke here that the EU competition authorities apparently don’t get is that Google does not consider its offered remedy of adjusting its presentation of search results to be “labeling” — they see the other side of the coin, that the adjustments are Google branding and marketing opportunities.
Google knows that its dominant brand, coupled with the natural propensity of ~a third of users to always click on the top result (usually taken by a Google-owned product) will mean that many users will view Google’s new “labels” as appealing Google branding. Google knows down to the micro-shade of blue and the exact positioning/font/display/framing of every result what presentation changes result in what change in consumer behavior.
Given the EU’s reluctance to require the Google search monopoly to treat competitors as they treat themselves, by requiring a normal monopoly non-discrimination obligation, it is hard to see how the Google’s proposed “labeling” ruse will have any material impact on Google’s dominant revenue model.
If the EU competition authorities accept the Google-proposed remedies to address narrow aspects of Google’s monopoly and abuses of dominance, and shut down the EU’s investigation, the settlement will de facto legalize and legitimize Google’s remaining untouched monopoly power, with only one Google-recommended/paid EU-outsourced policeman on the beat.
Is Google too powerful to prosecute? Apparently that is the current political conclusion of the EU competition authorities. Google is increasingly the de facto Internet sovereign by controlling: 87% of global search advertising; almost half of all global online advertising; nearly half of the Internet’s video viewers; and two-thirds of the world’s smart phone users.
Given Google’s 90+% market share in Europe, and given tough EU competition law, EU competition authorities could have issued a Statement of Objections, declared Google a monopoly that abused its dominance in four ways, fined Google up to 10% of revenues for monopoly abuses, and mandated much more effective sanctions to mitigate the anti-competitive effects of Google’s monopoly abuses.
The fact is that the EU made a political decision to work with Google and do what Google could accept and would not publicly criticize. Obviously EU competition authorities were much more worried about what Google would say than what anyone else would say.
Sadly, this expedient EU political decision to protect Google from EU law and the consequences of its own actions has ominous implications for future EU-Google enforcement decisions concerning: competition, data protection, property rights and consumer protection laws.
[First published at The Precursor Blog, as part of the Google Unaccountability Series]
The same is true of Oregon, except for Portland. Pennsylvania has been described as Philadelphia and Pittsburgh, with Alabama in between. But Philadelphia sometimes delivers more votes for the Democrats than the city’s population, and the entire state’s electoral votes for leftism as well. And where would California be politically without San Francisco and Los Angeles?
In fact, the result of the 2012 presidential election was changed by allowing urban areas with a 90% liberal/left vote to determine the electoral vote outcome for entire states, rather than just for their areas. But that can and should be changed.
Article II, Section 1 of the U.S. Constitution, which establishes the Electoral College for selecting Presidents, provides that the electors shall be chosen by each state “in such manner as the legislature thereof may direct …” The legislatures of Maine and Nebraska have used that clause to provide that the electors in their states shall be determined by majority vote in each congressional district, rather than by the majority vote statewide.
So if a state has three congressional districts, and the Democrat candidate for president wins the majority in two of them, and the Republican candidate wins the majority in one of them, then the state’s electoral votes go two for the Democrat and one for the Republican, rather than all for the Democrat as under the current statewide majority system. California has 53 congressional districts, 38 of them held by Democrats and 15 held by Republicans. Under congressional district majority voting for presidential electors, the Republican candidate for president would likely gain at least 15 electoral votes from California. Under the current statewide majority system, all of the state’s electoral votes would go to the Democrat. .
If congressional district majority voting were adopted in Washington state, the people of Seattle would determine the presidential electoral vote from Seattle, not from the entire state. In Oregon, the people of Portland would determine the presidential electoral vote only for Portland, not for the rest of the state as well. In Pennsylvania, the people of Philadelphia and Pittsburgh would choose the presidential electoral from Philadelphia and Pittsburgh, not from Alabama as well.
That would be true democracy. People should be able to vote for the presidential electors from their areas, not elsewhere throughout a state. Under the current system, millions and millions of Americans are disenfranchised by the current winner-take-all statewide electoral vote determination. For example, those in Maryland outside of Baltimore have no say at all in the presidential election, because the voters in Baltimore that almost uniformly vote Democrat and liberal/left will always determine the state majority. Under a congressional district selection method, by contrast, Maryland residents outside of Baltimore would be empowered to effectively vote for president too. The same is true for people in Illinois outside of Chicago. Or New York outside of New York City. Or California outside of San Francisco and Los Angeles. And elsewhere across the country.
Why should people in these politically and ideologically intolerant urban areas determine who the presidential electors are for people outside their urban areas? There is no good reason.
Each state currently has a number of electoral votes equal to the number of congressional districts in the state plus two more for the senators. All go today to the candidate who wins the majority vote in the state. But under congressional district majority elector selection, those two additional electoral votes for each state should go to whoever wins the majority of congressional districts in the state. Every citizen of every state would then have an equal say of who wins the state’s electoral votes.
If just the six states of Florida, Ohio, Virginia, Pennsylvania, Michigan and Wisconsin, which now have Republican legislatures and governors, had switched for 2012 to choosing presidential electors by congressional district majorities, rather than by statewide majorities, Mitt Romney rather than Barack Obama would be president today. In California, the change can be made by public vote through the Initiative process. That would have produced more electoral votes for the Republican ticket in 2012 as well.
That change has a chance to win by public vote in California, and be adopted in other less Republican areas elsewhere as well, because the people there, and all across America, are tired of the presidential campaigns only being held in a handful of “battleground” states. If the presidential electors are chosen by congressional district majorities instead of statewide majorities, presidential campaigns would again be conducted nationwide, reopening our democracy to everyone.
There is no opportunity for Democrat-controlled states to retaliate by switching to congressional district majority voting as well. Democrat-controlled states would likely produce a Democrat statewide majority in presidential elections. But the electoral vote from any Republican congressional district in such states would probably go for the Republican presidential candidate under congressional district majority voting. That would produce some electoral votes for the Republican candidate in such Democrat-controlled states, while the Republican candidate would receive no electoral votes from those states under the current statewide majority voting system. The switch to determining presidential electoral votes by congressional district would always on net favor Republicans because it would take away the power of the more uniform Democrat vote concentrated in urban areas to determine the presidential vote for their entire states, rather than just for their own urban areas.
Another benefit of the change is that it would also mean the end of voter fraud, or at least a much more limited impact from such fraud. No point in pumping up the vote in Philadelphia if it can only affect the presidential electoral vote from Philadelphia, which is never in doubt any way. Chicago could no longer pull out the election for Kennedy over Nixon, by producing whatever votes are required for that at the last second. This too would greatly improve our democracy, with a truer vote.
Legislation providing for such reform more broadly has already begun to be introduced. Two years ago in Pennsylvania, the Republican state senate president, Robert Pileggi, introduced such a bill with the governor’s support. Progress stalled because Republicans were overconfident that they would take all of the state’s electoral votes from Obama in 2012.
Virginia state senator Charles W. Carrico, Sr., from southwest Virginia, has introduced similar legislation more recently, saying voters in his district were discouraged they had no say in presidential elections because of Northern Virginia’s growing dominance. Such grassroots reform efforts have also popped up in Florida and Michigan.
For all of the above reasons, switching to determination of presidential electoral votes by congressional district majorities rather than the current statewide majorities would be a good government reform that should be promoted by the grassroots across the entire country.
[First published at the American Spectator]
On April 24 while introducing John Lott at our latest Authors Series event, I mentioned to the audience that The Heartland Institute had distributed 100,000 copies of Steve Goreham’s book The Mad, Mad, Mad World of Climatism. Some of the global warming alarmists who received the book did not appreciate the gift, and told me so in nasty emails.
I was just joking. I didn’t know I was psychic.
I’d like to say that the picture for this post says it all — and it certainly proves in one image the thesis of Goreham’s book — but let’s break it down.
The man holding the book is Craig Clements, associate professor at the Department of Meteorology and Climate Science at San Jose State University. The woman holding the match is Alison Bridger, the chair of the department. Surely, these two educators — who are paid by the poor taxpayers of California — posted this picture on the department’s website a copule of days ago to get a laugh.
No doubt bellies were jiggling aplenty among the faculty … until the pic got shared around. The post and photo were taken down Thursday, but the Internet is forever. Heartland friend Anthony Watts has thwarted this Soviet-style attempt at “disappearing” an inconvenient photo, saving a classic from “the Fahrenheit 451 department” for posterity.
For crying out loud, I thought Al Gore was a PR nightmare for the climate alarmist side with his crazy rants. But two public university climate scientists think it’s a good idea to post a picture of themselves getting ready to burn a book filled with what they consider to be apostasy? How open-minded. How liberal. How disgusting. But the joke — as sick as it is — turns out to be on those who pose as the intellectual betters of you and me.
The Heartland Institute has produced and promoted a immense amount of research that questions the dogma of man-caused catastrophic climate change — which is why The Economist magazine calls Heartland “the world’s most prominent think tank promoting skepticism about man-made climate change.”
Heartland has hosted eight international conferences on climate change attended by thousands — and always open to a public examination of the science with folks who think like Bridger and Clements, with (sadly) too few takers. In 2009, we published the 800-plus page Climate Change Reconsidered, which is filled with scientific research that questions alarmist dogma. In 2011, we published the 400-plus page Climate Change Reconsidered: 2011 Interim Report, filled with more of the same. A new edition of Climate Change Reconsidered is scheduled for publication this fall, with another on the way in 2014. And that is just scratching the surface of what is out there in the scientific community to rebut the hypothesis — which is looking shakier by the month — that man is causing an out-of-control warming of the planet.
Heartland must be having an impact if the leftist reflex to seeing our latest project — the wide distribution of a book that boils down a lot of this research for a layman audience — is to pull out the book of matches. Thanks for making Goreham’s point, professors! The enviro-left in academia has “progressed” from ignoring all this non-alarmist evidence, to trying to dismiss it, to failing at that, to refusing to debate, to fudging data and blackballing contrarian evidence, to committing crimes against The Heartland Institute, to now showing the world that putting a match to evidence from the “other side” is a reasonable reaction. Pathetic. We are witnessing the death throes of a cult in real time, and it ain’t pretty.
Yeah, the pic was a gag. But it matters that such a gag was an instinctual, casual reaction to Goreham’s book — and one that had to be (unsuccessfully) thrown into the memory hole. The upshot: Goreham was interviewed by Sean Hannity and Dennis Miller this week about his book and the affliction known as “climatism” that appears to be entering its desperate phase. Those interviews, to an audience of millions, will be shared in this space soon.
UPDATE: Read more about this at Watts Up With That, Tom Nelson, SPPI, PJ Media, Armchair General, Religious Atrocities, The College Fix, FreedomWorks, and FreeRepublic. The comments at Watts Up With That are 200-plus and counting … and a lot of them are quite witty.
UPDATE: A commenter over at Watts Up With That, Bob Shapiro, emailed Dorothy Poole, chief of staff to the president of San Jose State University. and he got a reply:
“Thank you for sharing your concerns. The Department of Meteorology and Climate Science has removed the material in question from its website, and regrets what was clearly an ill-conceived attempt at satire. Please be assured the university does not condone book burning for any reason.”
Well, that clears things up. Book burning at SJSU: Bad. Satire: Not taught at SJSU. Ill-conceived smugness: Encouraged until embarrassing Glad that’s clear now.
My mother always told me to get good grades and become a doctor or a lawyer, but she never mentioned teaching. Perhaps teaching should belong in that upper echelon of high-paying jobs as well. If we want the best and brightest teaching our children, we have to compensate them. If we don’t, they’ll find another profession.
Nevada’s education system is on a downward spiral, says former state Superintendent James Guthrie. He recommends one dramatic change: Paying top teachers $200,000 per year. Dr. Guthrie joins the podcast to discuss his proposal, which he published recently in a Nevada Policy Research Institute paper. We talk about why Nevada has so many rotten teachers, how to pay the best a lot more without increasing the budget, and how anti-elitism is a barrier to getting kids a good education.[Subscribe to the Heartland Daily Podcast free at this link.]
James Taylor, Senior Fellow at The Heartland Institute, wrote a response to the National Climate Assessment and Development Advisory Committee’s (NCADAC) 2013 Draft National Climate Assessment, which tackles many important climate-related questions but consistently reaches overly pessimistic conclusions.
The Draft National Climate Assessment presents many asserted climatic change impacts – some real, some contradicted by the weight of scientific evidence – and paints a picture of a nation and world severely and negatively affected by human-induced climate change. By contrast, the weight of scientific evidence suggests only modest recent climate change by historical standards.
Importantly, the weight of scientific evidence suggests the Draft Assessment overstates asserted recent harms and overlooks the fact that recent climatic changes are creating net benefits to plants, animals, and human welfare rather than net harm.
The full commentary cites more than 400 pages of scientific evidence, and can be downloaded here.
General Electric Co.’s decision to cut off financing for a few dozen gun retailers will impose “an insignificant and immaterial” effect on GE’s balance sheet, but the gun gambit provides this most politically attuned corporation in America an opportunity to thump its breast in another display of corporate sanctimony.
GE told the Wall Street Journal last week that fewer than 75 retailers nationwide — small shops selling primarily guns and ammunition — will have to find other capital sources to finance customers’ gun purchases. Meanwhile, GE will continue to provide credit to gun buyers at Wal-Mart Stores — the nation’s biggest retailer of guns and ammunition — Dick’s Sporting Goods and other retailers with extensive lines of firearms and related equipment.
It’s just this kind of ploy that inflames passions of gun-rights advocates who see GE’s maneuver as another example of corporate elites pre-empting citizens’ decisions on what is best for them and their families.
To be sure, GE has legitimate emotional reasons for its decision. GE Capital is based close to Newtown, Conn., the site of the shooting that took the lives of 26 children and educators in December, and GE exec Peter Lanza is the father of Adam Lanza, the shooter who killed those people.
But we’ve seen GE clothed in civic virtue before, motivated by nothing more than crony capitalism. In 2010, GE Chief Executive Jeffrey Immelt was front-and-center among CEOs recruited by President Barack Obama to proclaim that the chafing between big business and big government had been soothed. Soon after, amid much fanfare, Mr. Immelt was named head of the President’s Council of Jobs & Competitiveness, which never met with the president and evaporated after four meetings and a boilerplate report.
GE was out beating the drum in 2011 for another Obama agenda item, cap-and-trade, a system to limit man-made emissions of greenhouse gases. And what better example of civic probity to save the world from the effects of global warming than to provide federal subsidies for GE’s wind turbines and solar panels?
By May 2011, even Mr. Immelt realized he over-hyped the dangers of climate change and over-promised the benefits of green technology. He told an audience at the Massachusetts Institute of Technology, “If I had one thing to do over again, I would not have talked so much about green. Even though I believe in global warming and I believe in the science . . . it just took on a connotation that was too elitist. It was too precious, and it let opponents think that if you had a green initiative, you didn’t care about jobs.”
But sometimes GE just can’t help itself when it comes to deciding what’s best for consumers, as when it pushed effectively for a federal ban on its own GE-brand incandescent light bulbs and to substitute more-efficient compact fluorescent light bulbs (100-watt incandescents were restricted in 2011, 75-watt bulbs were phased out in January and restrictions on 60-watt bulbs take effect next year). Not to worry. GE-brand CFL bulbs are in production — in China.
GE’s decision to cut off financing for gun shops will do nothing to keep guns out of the hands of criminals, the mentally ill and others who would do harm in this country — few of whom buy weaponry on credit in the first place. Given GE’s history of playing the finger puppet for liberal causes, its determination to hinder gun ownership at some retailers but not at others is suspect at best. At worst, it’s another display of corporate elitism.
[First published by Crain's Chicago Business]
Opponents frequently claim that school choice does not benefit participants, it hurts public schools, costs taxpayers, facilitates segregation and even undermines democracy. What does the research say? Greg Forster, a senior fellow with the Friedman Foundation for Educational Choice joins the School Reform News Podcast to discuss the research on school vouchers.[Subscribe to the Heartland Daily Podcast free at this link.]
Trofim Lysenko became the Director of the Soviet Lenin All-Union Academy of Agricultural Sciences in the 1930s under Josef Stalin. He was an advocate of the theory that characteristics acquired by plants during their lives could be inherited by later generations stemming from the changed plants, which sharply contradicted Mendelian genetics. As a result, Lysenko became a fierce critic of theories of the then rising modern genetics.
Under Lysenko’s view, for example, grafting branches of one plant species onto another could create new plant hybrids that would be perpetuated by the descendants of the grafted plant. Or modifications made to seeds would be inherited by later generations stemming from that seed. Or that plucking all the leaves off of a plant would cause descendants of the plant to be leafless.
Lysenkoism was “politically correct” (a term invented by Lenin) because it was consistent with certain broader Marxist doctrines. Marxists wanted to believe that heredity had a limited role even among humans, and that human characteristics changed by living under socialism would be inherited by subsequent generations of humans. Thus would be created the selfless new Soviet man.
Also Lysenko himself arose from a peasant background and developed his theories from practical applications rather than controlled scientific experiments. This fit the Marxist propaganda of the time holding that brilliant industrial innovations would arise from the working classes through practical applications. Lysenko’s theories also seemed to address in a quick and timely manner the widespread Soviet famines of the time arising from the forced collectivization of agriculture, rather than the much slower changes from scientific experimentation and genetic heredity.
Lysenko was consequently embraced and lionized by the Soviet media propaganda machine. Scientists who promoted Lysenkoism with faked data and destroyed counterevidence were favored with government funding and official recognition and award. Lysenko and his followers and media acolytes responded to critics by impugning their motives, and denouncing them as bourgeois fascists resisting the advance of the new modern Marxism.
The V.I. Lenin Academy of Agricultural Sciences announced on August 7, 1948 that thenceforth Lysenkoism would be taught as the only correct theory. All Soviet scientists were required to denounce any work that contradicted Lysenkoism. Ultimately, Soviet geneticists resisting Lysenkoism were imprisoned and even executed. Lysenkoism was abandoned for the correct modern science of Mendelian genetics only as late as 1964.
The Theory of Man Caused Catastrophic Global Warming
This same practice of Lysenkoism has long been under way in western science in regard to the politically correct theory of man caused, catastrophic, global warming. That theory serves the political fashions of the day in promoting vastly increased government powers and control over the private economy. Advocates of the theory are lionized in the dominant Democrat party controlled media in the U.S., and in leftist controlled media in other countries. Critics of the theory are denounced as “deniers,” and even still bourgeois fascists, with their motives impugned.
Those who promote the theory are favored with billions from government grants and neo-Marxist environmentalist largesse, and official recognition and award. Faked and tampered data and evidence has arisen in favor of the politically correct theory. Is not man-caused, catastrophic global warming now the only theory allowed to be taught in schools in the West?
Those in positions of scientific authority in the West who have collaborated with this new Lysenkoism because they felt they must be politically correct, and/or because of the money, publicity, and recognition to be gained, have disgraced themselves and the integrity of their institutions, organizations and publications.
The United States Global Change Research Program (USGCRP) is supposed to represent the best science of the U.S. government on the issue of global warming. In January, the USGCRP released the draft of its Third National Climate Assessment Report. The first duty of the government scientists at the USGCRP is to produce a complete picture of the science of the issue of global warming, which is what the taxpayers are paying them for. But it didn’t take long for the Cato Institute to do the job of the USGCRP with a devastating line by line rebuttal, The Missing Science from the Draft National Assessment on Climate Change, Center for the Study of Science, Cato Institute, Washington, DC, 2012, by Patrick J. Michaels, Paul C. Knappenberger, Robert C. Balling, Mary J. Hutzler & Craig D. Idso.
Check it out for yourself if you dare. Both publications are written to be accessible by intelligent laymen. See which one involves climate science and which one involves political science.
All the climate alarmist organizations simply rubber stamp the irregular Assessment Reports of the United Nations Intergovernmental Panel on Climate Change (IPCC). None of them do any original science on the theory of anthropogenic catastrophic global warming. But the United Nations is a proven, corrupt, power grabbing institution. The science of their Assessment Reports has been thoroughly rebutted by the hundreds of pages of science in Climate Change Reconsidered, and Climate Change Reconsidered: 2011 Interim Report, both written by dozens of scientists with the Nongovernmental International Panel on Climate Change, and published by the Heartland Institute, the international headquarters of the skeptics of the theory of anthropogenic catastrophic global warming.
Again, check it out for yourself. You don’t have to read every one of the well over a thousand pages of careful science in both volumes to see at least that there is a real scientific debate.
The editors of the once respected journals of Science and Nature have abandoned science for Lysenkoism on this issue as well. They have become as political as the editorial pages of the New York Times. They claim their published papers are peer reviewed, but those reviews are conducted on the friends and family plan when it comes to the subject of anthropogenic catastrophic global warming. There can be no peer review at all when authors refuse to release their data and computer codes for public inspection and attempted reconstruction of reported results by other scientists. They have been forced to backtrack on recent publications relying on novel, dubious, statistical methodologies not in accordance with established methodologies of complex statistical analysis.
Formerly respected scientific bodies in the U.S. and other western countries have been commandeered by political activist Lysenkoists seizing leadership positions. They then proceed with politically correct pronouncements on the issue of anthropogenic catastrophic global warming heedless of the views of the membership of actual scientists. Most of what you see and hear from alarmists regarding global warming can be most accurately described as play acting on the meme of settled science. The above noted publications demonstrate beyond the point where reasonable people can differ that no actual scientist can claim that the science of anthropogenic catastrophic global warming has been settled or that there is a settled “consensus” that rules out reasonable dissent.
Indeed, 31,487 U.S. scientists (including 9,000 Ph.Ds) with degrees in atmospheric Earth sciences, physics, chemistry, biology and computer science have signed a statement that reads: “There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing, or will in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate.” See here. Some consensus.
Real science, of course, is not a matter of “consensus,” but of reason, with skepticism at its core.
The Decline and Fall of the Theory of Anthropogenic Catastrophic Global Warming
The alarmist claims of the UN’s IPCC are ultimately based not on scientific observations, but on unvalidated climate models and their projections of future global temperatures on assumptions of continued increases in carbon dioxide emissions resulting from the burning and use of fossil fuels. The alarmists are increasingly in panic because the past projections of the models are increasingly divergent from the accumulating actual temperature records. Those models are not real science, but made up science. And no way we are abandoning the industrial revolution as the Sierra Club is hoping based on model fantasies and fairy tales.
The Economist magazine, formerly in lockstep with the Lysenkoists, shocked them with a skeptical article in March that began with this lede:
“OVER the past 15 years air temperatures at the Earth’s surface have been flat while greenhouse-gas emissions have continued to soar. The world added roughly 100 billion tonnes of carbon to the atmosphere between 2000 and 2010. That is about a quarter of all the CO2 put there by humanity since 1750. And yet, as James Hansen, the head of NASA’s Goddard Institute for Space Studies, observes, ‘the five-year mean global temperature has been flat for a decade. . . .’”
Reality is not complying with the alarmism of the UN’s global warming models, just as it refused to do for Trofim Lysenko. Remember all that hysteria about melting polar ice caps and the disappearing ice floes for the cute polar bears? As of the end of March, the Antarctic ice cap was nearly one fourth larger than the average for the last 30 years. The Arctic ice cap had grown back to within 3% of its 30 year average. (The formerly declining Arctic ice was due to cyclically warm ocean currents). Global sea ice was greater than in March, 1980, more than 30 years ago, and also above the average since then.
Remember the alarm about the rising sea level? Yeah, that has been rising, as it has been since the end of the last ice age more than 10,000 years ago. Just exactly as it has been, at the same rate. And anyone you know that has been scared by this alarmist propaganda has been successfully played by whatever media the fool has been relying on.
Murderous recent winters in Europe are killing as well belief in alarmist global warming on the continent. University of Oklahoma Professor and geophysicist David Deming reported in a recent column,
“The United Kingdom had the coldest March weather in 50 years, and there were more than a thousand record low temperatures in the United States. The Irish meteorological office reported that March “temperatures were the lowest on record nearly everywhere.” Spring snowfall in Europe was also high. In Moscow, the snow depth was the highest in 134 years of observation. In Kiev, authorities had to bring in military vehicles to clear snow from the streets.”
In the Northern Hemisphere, Deming adds, “Snow cover last December was the greatest since satellite monitoring began in 1966.” That reflects similarly bitter cold winters in North America as well. Despite claims by global warming Lysenkoists that soon children “won’t know what snow is,” on February 6, 2010, a blizzard covered the northeastern U.S. with 20 to 35 inches of snow. Three days later another 10 to 20 inches were added.
These developments should have been expected from known indisputable facts. Carbon dioxide is a natural substance essential to the survival of all life on the planet. It is effectively oxygen for plants, and without plants there would be no food for animals to survive. Because of the increased atmospheric CO2 agricultural output is already increasing.
CO2 is also a trace gas in the atmosphere, representing only 0.038% of the total atmosphere, up only 0.008% since 1945. That tiny proportion of the atmosphere is supposed to produce catastrophic global warming that will end all life on the planet? The historical proxy record shows CO2 concentrations in the distant history of the earth much, much greater than today. Yet life survived, and flourished. Moreover, the basic science of global warming is that the temperature increasing effect of increased CO2 concentrations declines as those concentrations increase. So stop worrying and enjoy the agricultural abundance in your grocery store.
A tip off regarding reality should have been apparent from the dodgy propaganda involved in changing the labeling of the problem from “global warming” to “climate change.” Of course, Earth has been experiencing climate change since the first sunrise on the planet. We are not going to abandon the workers’ paradise of capitalism because climate change will continue.
Another tip off should have been the effective admission by global warming alarmists that they cannot defend their position in public debate. The day the theory of anthropogenic catastrophic global warming died can be dated from the time that one leading alarmist was foolish enough to debate James Taylor of the Heartland Institute, a video of which can be found on the Heartland website at Heartland.org.
Still another tip off should have been the practice of the alarmist new Lysenkoists to respond to dissenting science with ad hominem attacks. That apparently reflects poor public schooling that never taught that an ad hominem attack is a logical fallacy, as Aristotle taught more than 2,000 years ago. My how western science has fallen.
The basic science shows that global temperatures are just not very sensitive to CO2 itself. Even alarmists will concede that. Where they get their alarm is with the modeling assumption that the CO2 induced temperature increases will produce positive feedbacks that will sharply increase the overall resulting warming. The better recent science indicates, however, that instead of positive feedbacks, the naturally stable Earth would enjoy negative feedbacks restoring long term equilibrium and stability to global temperatures.
Then there is the man caused, global warming, fingerprint that the U.N.’s models all showed would result in a hot spot of particularly large temperature increases in the upper troposphere above the tropics. But the incorruptible, satellite monitored, atmospheric temperature record shows no hot spot. That is further confirmed by modern weather balloons measuring atmospheric temperatures above the tropics. No hotspot. No fingerprint. No catastrophic, man caused global warming. QED.
The revival of western science requires that the new Lysenkoism be discredited. That is going to require quite some work, given the extent of the infestation.
[First published at Forbes]
Every private sector company spends every waking second (and many sleeping ones) trying to get new customers. It’s a relentless pursuit of improvement. Of their goods and services, customer service, marketing – whatever angles they can find to gain a better market share.
Then there’s the government – which stinks on ice at just about everything it tries to do. And perhaps nothing better demonstrates this all-encompassing incompetence than the instances when the Feds complain about getting more customers. What the private sector tirelessly seeks – the government looks to avoid like the plague. For whom the private sector seeks always to do more – the government always angles to do less.
The examples of this government-customer-aversion are myriad. We’ll look at just two – Social Security and Medicare.
The government has for both programs dedicated, conscripted revenue streams. Every American with a job has grafted from every paycheck 12.4% for Social Security and 2.9% for Medicare. But (for the most part) only Americans age 65 and over can collect on either program. Which should mean they both will be flush with cash in perpetuity. Instead:
The Baby Boomers – from whom the government has been collecting money for decades – are retiring. The Feds are woefully unequipped to handle it – because they have all along been woefully unequipped to handle it.
The government has had more than sixty years to build equity in Social Security, and forty-plus to do so in Medicare – and they are both instead on the verge of cataclysmic insolvency. So the government is looking to:
Cut payments to their customers – us:
Make it harder for us to get our money:
And say that if you actually made some real money (and thus paid more into Social Security and Medicare) – the government won’t give you back the coin it took:
Social Security and Medicare are (really pathetic) retirement programs. How does the private sector do with retirement programs?
There are, of course, a wide array of companies offering a wide array of retirement plans – versus the government monopoly model. These companies aren’t each hundreds of trillions of dollars in debt – almost all are instead doing extraordinarily well.
They aren’t looking for ways to shirk and shed customers – they are looking to add them. By offering better plans, rates and services. (And running great ads – who doesn’t love the E*Trade baby?)
All so that when you retire, these private companies can return to you much, much more – not less. And let you choose when you hang it up – not have the government decide for you, then keep moving the finish line further and further away. And let you have your money – plus decades of dividends and compound interest – no matter how much other money you’ve made.
In almost all things, the government “business” model is a Social Security-Medicare-esque unmitigated disaster. So of course the Feds are now expanding into the Internet.
And how’s that going?
Has the government learned its lesson? What do you think?
In 2010, the Universal Service Fund (USF) provided communities with close to $8 billion in telecommunications funding. Since 1999, the fund has distributed $71.7 billion dollars.
The government utterly imploded with $7 billion in Internet coin – and rather than bowing out gracefully, is looking to spend tens of billions more in the same failed fashion.
And when the money dries up – we’re $17 trillion is debt, after all – you and your Internet access will get the Social Security-Medicare treatment.
Your service will drastically and inexorably diminish – and the government will look for any way possible to be rid of you.
When it comes to the Web – let’s not become yet another ridiculously underserved forced-government-customer class.
[First published at Red State]
With nearly a year’s worth of exclusive reporting on Obama’s green-energy crony-corruption scandal, you might think we’ve covered them all—but the hits just keep on coming. This week Fisker is in the news due to its failure to meet a Monday payment on their Department of Energy (DOE) loan, with $10 million due, and Wednesday’s House Committee on Oversight and Government Reform hearing: “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive.”
Along with researcher Christine Lakatos, who writes The Green Corruption Files, I’ve addressed Fisker before. In last week’s column, I harkened back to an October 2012 report we did on 2009 stimulus-funded projects that were in trouble. We highlighted two companies on that list: Suntech and SoloPower. Suntech was recently put into bankruptcy and, about SoloPower, we said: “SoloPower’s power is waning.” On April 22, the Oregonian’s headline read: “SoloPower moves to power down Portland factory, gut remaining workforce.”
Fisker, the stimulus-funded company making $100,000+ electric cars in Finland, was also on that October 2012 list. At the time, I wrote: “Though the company has balked at Solyndra comparisons, Fisker may well be on ‘death’s door.’”
Despite defaulting “on loans or investment conditions at least four separate times” and squandering more than $1.3 billion in investment capital and government loan money, the company’s founder and former CEO, Henrik Fisker (Fisker left the company in March over “disagreements with management”), in testimony before the House Oversight Committee hearing on Wednesday, argued that the company was still viable. In both the opening and closing of his testimony, Fisker used the following statement regarding the company that bears his name: “Fisker still has the potential to build on these achievements if the company can secure financial and strategic resources.”
While Fisker’s testimony indicates that he is proud of the company’s “many notable achievements,” Subcommittee Chairman Jim Jordan (R-OH), declared in his opening statements: “Fisker should have never received taxpayer money; it was rated CCC+…it was a junk grade investment.” So why did Fisker get the loan in the first place and continue to receive funding even after it “missed a crucial production target?”
While Wednesday’s hearing didn’t reveal any smoking gun, and Fisker claimed: “I am not aware and do not believe that any improper political influence was used in connection with the company’s loan application or subsequent negotiations with the Department of Energy,” experience in reporting on the various stimulus-funded loan guarantee programs, grants and tax credits indicates otherwise.
True, unlike many of the other stories, no one from the Fisker organization itself served on Obama’s (now-disbanded) Jobs Council, nor is there an obvious connection such as a former DOE staffer sitting on the board. But, surprise, there are political connections nonetheless.
In the case of Fisker, the cronyism comes first in the form of the venture capital firm with private investments that needed government funds to make their 2008 investment good. The company in question? Kliener Perkins Caufield & Byers (KPCB)—which, according to New York magazine, “has both former Vice President Al Gore and John Doerr, a very big-ticket Obama donor, on its board of directors.” Doerr has had roles inside the Obama White House since early 2009, from jobs, to economics, to crafting the energy sector of the 2009-Recovery Act, from which his firm—KPCB—has been rewarded handsomely. The Wall Street Journal (WSJ), in 2008, reported that the Fisker deal was “one of the first deals in which former Vice President Al Gore provided advice for Kleiner.” KPCB’s Managing Partner, Ray Lane, told the WSJ that their investment was more than $10 million and was “one of our bigger investments.”
In an earlier report, I said: “Doerr jumped on the Climate Change bandwagon in 2005 and credits Al Gore for his ‘environmental awakening’—though his conversion may have been more financial than spiritual, as he saw green-energy as the ‘mother of all markets’ and ‘the largest economic opportunity of the 21st century.’”
Despite a green-energy push from the White House, these funds haven’t “delivered the returns expected on the timeline expected for most venture capitalists.” In fact, Doerr admitted in a November 2009 speech that the government funding saved them: “If we’d been able to foresee the crash of the market, we wouldn’t probably have launched a green initiative, because these ventures really need capital. The only way in which we were lucky, I think, is that the government stepped in, particularly the Department of Energy. Led by this great administration that put in place these loan guarantees.”
Clearly the Fisker “investment” wasn’t going as well as KCBP expected. In Wednesday’s hearing, a 2009 email from Bernhard Koehler, Fisker cofounder and COO was addressed. In it, he pressured someone inside the DOE, regarding the need for the taxpayer-funded loan, because they couldn’t meet payroll.
The Fisker loan had three specific strikes against it: it had a dismal credit rating—a “junk bond” CCC+; it was initially rejected by the credit review board; and the loan was twice the value of the collateral. While the Advanced Technology Vehicle Manufacturing (ATVM) program received 150 applications, only 5 were awarded loans—and all had some political connections or ramifications: Fisker—$529 million; Ford—$5.907 billion, Nissan—$1.448 billion; Tesla—$465 million; and The Vehicle Production Group, LLC—$50 million.
Companies without connections didn’t get approved. In November, I reported on XP Technologies, one of those companies whose loan application was rejected. Alleging that “criminal activities did take place by DOE staff and affiliates,” XP Technologies has filed a lawsuit concerning the DOE’s denial. Following the publication of my column on XP Technologies, another applicant, who also didn’t have any political connections, contacted me. This applicant acknowledged that he really didn’t know the system and, therefore, looking back, wasn’t surprised that his application was denied. However, he told me that he received no help or encouragement from the DOE; they did nothing to make it easier for him. It was like they weren’t really interested in anyone but the favored few. Accepting applications was, perhaps, just for cover.
Fisker’s $529 million loan was approved in September 2009, and the first tranche was funded May 2010. But it took a lot of finagling to get there.
Vice President Biden stepped in to move the loan along—we don’t know why, but we know he did. (We also know more about other green-energy projects in which Biden was involved.) In August 2009, Fisker visited in Delaware a GM factory, which was scheduled to be shut down. According to a 2009 WSJ report, once politicians in the state got wind of Fisker’s possible interest, they ratcheted up the pressure. Saving the plant, according to officials involved in the decision, “gave fresh urgency to the DOE’s quest for Fisker.” However, by August, the December 2008 application still wasn’t approved. “Delaware’s governor and congressional delegation began peppering U.S. Energy Secretary Steven Chu with calls on Fisker’s behalf. They also had repeated discussions with Vice President Biden and his staff.” Five days after Governor Merkell had a September meeting with Secretary of Energy, Steven Chu, “Chu announced the government had signed a provisional agreement” for Fisker’s loan. Part of the deal included, not just the $529 million DOE loan, but also $21 million in grants and loans from the State of Delaware.
On October 27, 2009, Biden toured Fisker’s Delaware plant to tout the DOE’s Loan Program. ABC News reported: “Standing in a shuttered General Motors plant in Wilmington, DE, Vice President Biden proclaimed that a half-billion-dollar Department of Energy loan would transform the idled site into a production line for electric cars. Biden heralded the Energy Department’s $529 million loan to the start-up electric car company, called Fisker, as a bright, new path to thousands of American manufacturing jobs,” and stated: “This is seed money that will return back to the American consumer in billions and billions and billions of dollars in good, new jobs.”
Referencing Delaware’s involvement, the state’s chief of economic development, Alan Levin said: “We had in the vice president a secret weapon.”
In addition to Doerr and Gore championing the Fisker Project, and the Biden “secret weapon,” Fisker had a few other friends in high places. The National Legal and Policy Center reports that Fisker was receiving advice regarding their loan application from Debevoise & Plimpton LLC, a law firm with a history of donating to President Obama and other Democrats—which taxpayers also funded. Too bad XP technologies, and other applicants without connections, didn’t know to hire Debevoise & Plimpton.
Now, we all know that Fisker never made one car in Delaware—or anywhere in the US. The Delaware plant is “absolutely empty.” We know that Fisker lost $557,000 on each flashy sports car it sold and has laid off most of its employees. And we know that Fisker will likely be the next taxpayer-funded green-energy project to go bankrupt.
While we do not know all the political connections that got Fisker a free ride to make flashy cars in Finland, we do know there is crony-corruption. As the WSJ reports: “The Obama Energy Department is keeping tight rein on documents, so we don’t know.” We just don’t know.
[First published at TownHall]
Economics professor and author Randall Holcombe explains how big government begets big increases in the amount of cronyism that rewards and protects politically connected businesses, individuals and interest groups at the expense of everyone else.[Subscribe to the Heartland Daily Podcast free at this link.]
The interminable war on drilling, fracking and the Keystone XL pipeline has taken some bizarre turns. Now it’s getting worse, as opponents grow more desperate, and the moon again grows full.
Deepwater drilling, 3-dimension and 4-D seismic (the ability to visualize 3-D over many years), deep horizon horizontal drilling and hydraulic fracturing, and other technological marvels have obliterated environmentalist claims that the United States and world are running out of oil and gas – and therefore we need to switch to subsidized, land-hungry, job-killing wind turbines, solar panels and biofuels.
Thanks to free enterprise innovation on state and public lands – and no thanks to President Obama, who has made nearly the entire federal onshore and offshore estate off limits to leasing and drilling – US oil and natural gas production has set an all-time record. The world is on the verge of doing so, as well.
Long-running geopolitics have been turned upside down, as OPEC, Russia and other oil superpowers wonder what hit them. Plastic and chemical manufacturers, steel makers, bus and fleet vehicle operators, and now long-haul truckers are already cashing in on the natural gas bonanza. So are electric utilities, especially with EPA continuing its war on coal, with more unnecessary heavy-handed air and water rules.
Global warming / climate change hysteria is also foundering on the rocks of reality. Average global temperatures haven’t risen in 16 years, seas aren’t rising any faster than 100 years ago, and storms, floods and droughts are no more frequent or severe than over multi-decade trends during the past century.
Evidence and reality simply are not cooperating with IPCC and Mann-made climate models. “Trust the computer models!” the alarmists plead. “If reality doesn’t comport with our predictions, reality is wrong.”
The US State Department has (yet again) said the Keystone XL pipeline poses few environmental problems and should be approved, to bring Canadian oil sands petroleum to Texas refineries – creating thousands of construction and permanent jobs, and billions in economic growth and government revenue.
Unacceptable! rants the Environmental Protection Agency. “State underestimated KXL’s potential impact on global warming and needs to do its studies all over again,” says EPA. Never mind that oil sands production would add a minuscule 0.06% to US greenhouse gas emissions and an undetectable 0.00001 degrees C per year to computer-modeled global warming, according to the Congressional Research Service. Do it over, until you get the answers we want, demand EPA and environmentalist ideologues.
Some 70% of Americans and 60% of Canadians support Keystone – and energy security (and jobs) outrank greenhouse gas reduction as a national priority by a 2-1 margin among Americans – says Canadian pollster Nik Nanos.
However, haters of hydrocarbons, modern living standards, free enterprise and personal liberty are not ready to surrender. They’ve launched a blitzkrieg flanking attack. This time they are outraged that some Keystone oil could be refined into diesel and other products and exported! to Europe or Asia – while some frack-based natural gas might be converted to LNG and likewise exported! around the globe.
Well, yes. When US refiners transform crude oil into gasoline, diesel, jet fuel, heating oil, asphalt, waxes and petrochemicals, they ship some of these products overseas. Since Americans use less diesel than refineries manufacture (some parts of each barrel of crude can be converted only into diesel), refiners also export their excess diesel to Europe, which uses more diesel than gasoline, and Europeans ship their surplus gasoline to the USA, mostly to East Coast consumers. It’s a win-win arrangement that will be buttressed and safeguarded by Keystone pipeline transport of Canadian oil.
And yes, Cheniere Energy and other companies want to ship liquefied natural gas to foreign markets. It’s hardly surprising that anti-fracking activists would seize on this as yet another excuse for opposing this game-changing technology. It is hardly remarkable that Senator Ron Wyden (D-OR), Congressman Ed Markey (D-MA) and other far-Left legislators would sponsor bills to block LNG exports.
What is shocking is that Dow and Huntsman Chemical, Alcoa Aluminum, Nucor Steel and other companies are joining the no-export campaign. They have convinced themselves that such exports will hurt their own selfish economic interests – and for PR reasons have packaged that notion into assertions that exporting any US natural gas is against America’s and the public’s economic interests. Nonsense.
America has barely begun to tap its vast shale gas and conventional natural gas deposits. It has not yet touched its methane hydrates. Together, these deposits will likely last a century or more. In addition, other countries are racing to develop their own conventional, shale and hydrate deposits – while still others will eventually recognize the folly of keeping their own deposits off limits. All this will gradually reduce demand for US natural gas exports, slow and prolong extraction, and keep gas prices low.
This interplay will also help ensure that more factories and power plants in more countries burn natural gas, thereby replacing coal and providing the economic wherewithal to enable China, India and other nations to install modern pollution abatement technologies on their now dirty power plants. That will greatly improve air quality and human health in countless cities, while reducing carbon dioxide emissions and reducing consternation among steadily dwindling numbers of climate alarmists.
American oil and gas development – and exports – will also provide an opportunity for our nation to “give back” to the world community for all the petroleum that our anti-leasing, anti-drilling policies have caused us to take from the world’s petroleum supplies for decades. All this activity will also spur further innovation in technologies to unlock still more energy. It will spur job creation, economic growth and government tax and royalty revenue collection here in the United States … and abroad.
Some 23 million Americans are still unemployed or underemployed; 128 million are dependent on various government programs, including 47 million on food stamps; and the United States is more than $16 trillion in debt. Unemployment in the construction trades is 14.7 percent. Black unemployment was 12.7% when President Bush left office; it soared to 16.7% by September 2011 under President Obama, and remains stuck at 14% today for black adults – and an astronomical 43% for black teenagers!
Drilling, fracking and exports can reverse these horrendous, intolerable, unnecessary statistics.
Misguided industrialists should stop railing against exports. They would do themselves and our nation far more good by putting their lobbyists and public relations staffs to work demanding an end to leasing, drilling and fracking bans that continue to dominate eco-liberal thinking, US energy policy (especially under the current administration).
Of 1.8 billion acres on our nation’s Outer Continental Shelf, only 36-43 million are under lease. That’s barely 2% of the OCS. Offshore territory equal to 78% of the entire US landmass (Alaska plus the Lower 48) is off limits! Even the 2010 Gulf of Mexico oil spill cannot justify that.
Onshore, it’s just as bad. As of 1994, over 410 million federally controlled acres were effectively off limits to exploration and development. That’s 62% of the nation’s public lands – an area nearly equal to Arizona, Colorado, Montana, New Mexico, Utah and Wyoming combined. The situation has gotten progressively worse, with millions more acres – and vast energy, mineral and economic bounties – locked up in wilderness, park, preserve, wildlife refuge, wilderness study, Antiquities Act and other restrictive land use designations, or simply made unavailable by bureaucratic fiat or foot-dragging.
Drilling opponents claim to be protecting the environment. In reality, they simply detest hydrocarbons, modern living standards, free enterprise and personal liberty. Commonsense policies will rejuvenate our economy, put Americans back to work, and help fund government programs that Messrs. Obama and Reid profess to care so much about – while safeguarding ecological values we all cherish.
I sent the letter below to the Wall Street Journal in response to an April 17 piece by economist Art Laffer. Though the editors did not print it, they did me one better: They used my arguments in their April 21 editorial “The Internet Sales Tax Rush.” Now to my letter:After a long series of insightful articles about how low taxes promote economic growth, Art Laffer gets the internet tax wrong. [The Wall Street Journal, April 18, 2013] The nexus requirement for imposing a state sales tax is rooted in the notion that in-state retailers receive state services, while out-of-state retailers do not. There are exceptions that justify a “use” tax. If the product, like an automobile, is purchased in one state but consumed in another state where the product receives extensive state services, then the tax is appropriate. However, that rationale is seldom if ever offered for goods bought over the internet. The internet tax is supposedly justified because “showrooming” exists. It is claimed to be unfair because it allows a potential buyer to inspect the product in a brick-and-mortar shop before purchasing it on line at a lower price. What this argument leaves out, is that the internet typically offers evaluations from other buyers. The local retailer can use these evaluations to help the purchaser make a selection right in the shop. Thus, the internet is in effect subsidizing the local purchase with relevant information. If the local shop has an inventory of several brands, then the buyer can take immediate possession of the product. By contrast, the internet buyer must wait for the product to be delivered and is charged a shipping fee that can be as much as a sales tax. Thus, the local shop has another natural advantage. To burden internet sales with a needless tax will make a large portion of the retail market less efficient and may impair economic growth. I am surprised that Art Laffer would support such a tax. And here is the WSJ editorial, my point made by them in red:
The Internet Sales Tax Rush
Harry Reid and Wal-Mart hope nobody will notice their online revenue raid.
Every time Congress has taken a serious look at proposals to boost Internet sales taxes, it has rejected them. That’s probably why pro-tax Senators are trying to rush through an online tax hike with as little consideration as possible.
As early as Monday, the Senate will vote on a bill that was introduced only last Tuesday. The text of this legislation, which would fundamentally change interstate commerce, only became available on the Library of Congress website over the weekend. And you thought ObamaCare was jammed through Nancy Pelosi’s Democratic House in a hurry.
For Senators curious about what they’re voting on, it is the same flawed proposal that Mike Enzi (R., Wyo.) introduced in February. It has been repackaged to qualify for a Senate rule that allows Majority Leader Harry Reid to bypass committee debate and bring it straight to the floor.
Mr. Enzi’s Marketplace Fairness Act discriminates against Internet-based businesses by imposing burdens that it does not apply to brick-and-mortar companies. For the first time, online merchants would be forced to collect sales taxes for all of America’s estimated 9,600 state and local taxing authorities.
New Hampshire, for example, has no sales tax, but a Granite State Web merchant would be forced to collect and remit sales taxes to all the governments that do. Small online sellers will therefore have to comply with tax laws created by distant governments in which they have no representation, and in places where they consume no local services.
Meanwhile, New Hampshire’s brick-and-mortar retailers will bear no such burden. They will not be required to collect taxes on the many customers who drive across the Maine and Massachusetts borders to shop in New Hampshire. Bill sponsors say it would be too big a hassle to force traditional retailers to ask every walk-in customer where they live, but these Senators are happy to impose new obligations online.
The Enzi plan would require a centralized tax collector for each state or for a group of states that would gather both state and local levies from the online merchants. His office concedes that could still mean 27 or more different auditors of a Web-based business—which is better than 9,600 but hardly qualifies as simplicity.
The drivers of this rush to tax are Wal-Mart and other big retailers that can more easily absorb the costs of collection than can smaller competitors. Also supporting the bill is Internet giant Amazon, which coincidentally now sells its own tax compliance service to other merchants. Adding to the lobbying muscle are state and local governments. The politicians believe they’ll collect tens of billions of dollars in taxes that are already owed by shoppers on remote sales but rarely paid.
So big business and big government are uniting to pursue their mutual interest in sticking it to the little guy. Any Internet seller with more than $1 million in annual sales would be forced to serve all of the nation’s tax collectors. It’s true that many small brick-and-mortar retailers in states with sales taxes support the Enzi bill. They say they’re at a disadvantage as customers examine products in their showrooms and then go home to buy them tax-free. On the other hand, some customers use retail websites for research before buying at a local store.
But even if the goal is to “level the playing field” in favor of Main Street, it won’t happen. Mr. Enzi cannot possibly force all the world’s Internet businesses to collect local U.S. taxes. So instead of shifting sales from online to bricks-and-mortar, he might succeed in shifting them from U.S. online merchants to foreign ones.
This rush to tax is an attempt to overturn the Supreme Court’s 1992 decision in Quill v. North Dakota that forcing businesses to collect and remit taxes to jurisdictions where they have no physical presence was too big a burden. Though that ruling applied to catalogs in the pre-Internet age, it established an important principle of cross-state tax accountability.
Congress does have the power to write new rules for interstate commerce. But for years even politicians who wanted to force remote sellers to collect taxes conceded that it would only work if states and localities dramatically simplified their tax systems. That has never happened. So now the tax collectors promise that software will figure out how every item is taxed in every town in America.
Perhaps software will flawlessly determine, for example, what is classified as candy for tax purposes and what is considered food in each jurisdiction. But the legislation itself contemplates confusion, as it spells out when a merchant is liable for errors and when a software vendor takes the blame. The way governments work, they’ll penalize both merchants and the software vendors for mistakes.
Some of our conservative friends are backing this Internet tax raid as a way to raise revenue to avoid more state income-tax increases. More likely the new revenues will merely fund larger government. Republicans who are realists about government would be wiser to join Senators Ron Wyden (D., Ore.) and Kelly Ayotte (R., N.H.), who are leading the opposition.
On April 2, I was driving from Albuquerque to Farmington, NM, where I spoke for the San Juan Country Tea Party group. During the three-hour drive, I listened to talk radio. That was the time of the Cyprus bank crisis and the middle of budget discussions in DC. By the time I got to Farmington, I felt defeated and hopeless. “Sometimes you lose.” I wondered how I’d motivate and inspire the folks in Farmington. The speech worked. There was a lot of Q & A. It ended well.
On Thursday, April 18, I made virtually the same trip—ending in Durango, Colorado, where I spoke for the Rocky Mountain Coal Mining Institute’s regional meeting. This time I had a totally different attitude. Just 2 days before, we’d had a big win. “Sometimes you win.” I could hardly wait to share the good news! Gratefully for me, not one of the guys at the regional meeting had heard the news—which was good. If they’d all heard it already, they didn’t need me (or I’d have had to come up with a new speech). It was great to be able to share the “win.”
Maybe you haven’t heard the good news. If you haven’t read my Margaret Thatcher piece—where I chronicle some of the history of the global warming/climate change agenda, please stop and read it now.
In short, I posit that Europe has embraced the ruse and pushed it on other western economies (read the USA), as it would change the energy playing field by removing America’s low-cost energy advantage. This, I believe, is why the European Union (EU) originally began espousing the narrative. They have been the leaders in so-called green energy. The EU is held up as the one to follow. It has actually implemented cap and trade—which Obama, with control of both houses, couldn’t get through.
Now, add on the victorious news.
The win? The Economist magazine, historically a supporter of manmade climate change, phrased it this way: “On April 16th the European Parliament voted to reject an attempt to bolster Europe’s flagship environmental programme, the Emissions Trading System (ETS).” The Wall Street Journal(WSJ), like this: “The European Parliament refused to save the EU’s failing program, which is the true-believer equivalent of the pope renouncing celibacy.” If the pope did renounce celibacy, it would throw the entire Catholic church into a tailspin as it would remove a basic tenant of the faith. Likewise, the April 16 vote, has removed the foundation from the religion of climate change.
In its coverage, the Financial Times (FT) affirmed my supposition: “The shale gas revolution in the US, which has lowered energy prices for the country’s manufacturers, has heightened Europe’s concerns about industrial competitiveness.”
Regarding the European Commission’s (EC) proposal to withdraw a large tranche of permits from the market to reissue later, Roger Helmer, a Member of the European Parliament, whom I met a year ago at the Heartland Institute’s International Conference on Climate Change, posted the following on his blog: “It would also (though the EC doesn’t mention this) make energy more expensive; undermine European competitiveness even further; drive even more businesses and jobs and investments offshore (known in the jargon as ‘carbon leakage’); and force more households and pensioners into fuel poverty.”
Add to this news the “climategate” email leaks that proved tampering with evidence and a repression of dissenting opinion; England’s announcement that wind turbines are a “blight,” and the Minister of State at the Department for Energy and Climate Change (now the Prime Minister’s Senior Parliamentary Advisor) John Hayes’ comment: “We can no longer have wind turbines imposed on communities. … It seems extraordinary to have allowed them to be peppered around the country without due regard for the interests of the local community and their best wishes;” BP’s near-total retreat from renewable energy; and Europe’s tree-thefts as a result of high-cost heating bills and increasing use of wood (often imported from the US and Canada) and coal for energy production—and you have the environmentalists on the ropes.
And, remember, the EU has been a leader in manmade climate change mitigation, and in demanding the same from us. The Economist states: “Over the past few years more than a dozen countries and regions have followed the EU in establishing or proposing cap-and-trade schemes.” And from the WSJ: “Aided by Al Gore, Europe tried to turn cap and trade into a global policy.” (Don’t forget, Europe bestowed a Nobel Peace Prize on Gore for his scare tactics.) The FT reports: “The repercussions of Tuesday’s vote are spreading far beyond the EU to other nations with carbon market plans, including Australia, Korea and China.” And now they’ve realized, from the Economist: “In a new world of carbon trading, the ETS will not be the scheme that others copy.”
Why the change in approach? According to the Economist, Europe’s largest companies, especially energy-intensive ones such as chemical firms, opposed the reforms. “They complain that the ETS is imposing higher costs on them and they do not want carbon prices artificially raised.” From the FT: “Complaints from business groups that the carbon market and other climate policies are contributing to higher energy prices at a time when they are already grappling with a weak economy appeared to be decisive in Tuesday’s vote.” The WSJ offers parallel comments. Regarding the collapse of carbon prices, it states: “The low price of carbon allowances is good for consumers who don’t have to absorb the extra regulatory cost in what they pay for energy.”
Bottom line? It is about low-cost energy. A cap-and-trade scheme—or a carbon tax—artificially raises the price of energy, at a time when inflation is nipping at the heels of individuals and industry.
Helmer observed: “For the first time in my recollection, the European parliament has faced up to reality, and voted for jobs and economic survival rather than climate alarmism. This is an early indication that we are starting to make progress in our campaign for rational energy policies, and for affordable energy.”
Good news, eh? It is up to me—aided by you; it is up to you—aided by me, to spread this message.
You help me by forwarding my weekly column on to your friends and family and by talking up this story with your colleagues.
I help you by doing the research and providing you with the talking points in the form of my weekly column. I give you with the facts on America’s energy issues—triggered by current news stories. I hope to motivate and inspire you to keep up the fight when you are tired of waving signs and, instead, feel like waving a flag of surrender. The EU parliament story should encourage you. It is a big win! It is a battle, not the war, but a victory for rational policy and cost-effective energy, nonetheless.
Additionally, my column from the week of March 24, is especially encouraging, as it addresses 6 specific non-energy news stories from March 11-20 and three recent energy stories where government overreach was smacked down.
Remember, the environmentalists are on the ropes; they feel cornered and are trying to strike back. Last week, the Sierra Club and 20 other environmental groups called for a moratorium on coal leasing in Montana and Wyoming’s Powder River Basin—from which 40% of America’s coal comes. Reports say: “They also want more attention given to the climate change impacts of greenhouse gasses emitted when coal is burned.” Environmental activist and fading actress, Daryl Hannah’s latest the film, Greedy Lying Bastards, is now playing. Forbes contributor Larry Bell says this about the disinfomercial: “It is premised on the notion that Big Oil is pouring lots of carbon-drenched money into pockets of climate crisis skeptics.” Bell quoted my mentor, Ron Arnold: “Greedy Lying Bastards producers spent nearly $2 million to complain about climate skeptic money, in yet another Big Green attack on anyone who disagrees with the climate fanatic industry which is, itself, a multi-billion-dollar enterprise that seeks to impose anti-energy policies in the name of preventing climate change.”
Together, I believe we can impact public opinion and prevent the USA from going down the same expensive path upon which the EU embarked. Celebrate this victory—they have been far and few between. Spread the word!
As the Department of Energy seized the last of Fisker Automotive’s reserves in lieu of an unknown amount that it was due to repay this week, what’s left of the lame electric automaker clings to the slim hope it can survive.
While CEO Tony Posawatz and his team may need an intervention, a hearing before the House Oversight and Government Reform Committee yesterday revealed that DOE and committee Democrats (as well as those in the Obama administration) are hopelessly stuck in an alternate universe, where losing millions of taxpayer dollars is considered a good record. Republicans had called officials from the company – including founder Henrik Fisker, as well as administrators of DOE’s loan program – to explain the logic that went into granting $529 million to a fledgling, unproven car company that targets an ultra-rich clientele.
Democrats attempted to dismiss the hearing as a “show trial” to embarrass the president, but the facts kept getting in the way of their trivialization efforts.
“The committee’s efforts to stoke false controversy by selectively leaking a few out-of-context documents just do not stand up to scrutiny,” said White House spokesman Jay Carney.
A Democrat committee member, Rep. Matt Cartwright of Pennsylvania, downplayed the loss of $192 million in taxpayer money (the amount Fisker received before DOE halted the loan payouts) compared to the overall $8 billion of stimulus money that backed the electric vehicle program.
“In the world outside the Beltway,” Cartwright said, “anybody who exceeds expectations 98 percent of the time gets an A-plus.”
That boast echoed one by DOE two weeks ago, when the hearing was scheduled.
“Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact,” a spokeswoman told the Wall Street Journal.
Those remarks indicate it’s probably impossible to shame the Obama administration and Congressional Democrats about the embarrassing performance of their management of the stimulus, especially when it comes to the green energy sector. Failures such as Solyndra, Abound Solar, A123 Systems, Ener1, Beacon Power, LG Chem and others already mar their record, but the spectacle of Fisker’s failure reaches new levels. While Solyndra accounted for a far greater loss in terms of dollars, the tanking of the Anaheim-based maker of one lousy electric car – the Karma – represents an amazing fusion of futility and cronyism that may never be matched again.
Fisker is one of several molted feathers fallen from Energy Secretary Steven Chu’s soon-to-be-removed cap. As NLPC has reported ad nauseum, the authorities over DOE’s Loan Guarantee Program saw fit to grant Henrik Fisker a $529 million sum just because he 1.) designed cars for Aston Martin and BMW; 2.) was backed by hundreds of millions in private support from Democrat cronies; and 3.) was going to produce a “green” car, even though he’d never headed such a company in his life and Fisker hadn’t built anything en masse to that point. Add to that the fact that he had celebrities Al Gore and Leonardo DiCaprio on board as early customers, and the powerhouse Silicon Valley investment firm Kleiner, Perkins, Caufield and Byers stroking DC egos with campaign cash and lobbying sway, and the DOE Loan Program Officers (DOELPOs?) couldn’t resist the sizzle.
Then reality set in with mishaps such as recalls, production failures, vehicle fires and bad reviews. Yet despite this stunningly bad record, Obama and the Defender-crats chalked it up to routine losses in an investment firm’s portfolio, rather than the coercively extracted resources that once belonged to taxpayers.
“Only in Washington would a $200 million loss be viewed as a success,” said Republican Rep. Jim Jordan of Ohio, who chairs the Oversight subcommittee on economic growth and regulation.
“The Obama administration owes the American taxpayer an explanation as to why this bad loan was made in the first place,” Jordan said at another point in the hearing yesterday, “and what they are going to do to minimize the loss that taxpayers face.”
But the president’s people don’t think they did anything wrong, and therefore they consider the losses to the taxpayer acceptable. According to the Associated Press, former acting director of the Loan Program Office’s electric vehicle program Nicholas Whitcombe said DOE acted “decisively” to protect taxpayer interests after Fisker Automotive failed to reach goals per its agreement.
Unfortunately the facts again prove the Obama administration wrong, as AP reported. Documents released yesterday showed that four months passed before DOE recognized that Fisker had fallen short of its milestones, which allowed the company to access an additional $32 million in taxpayer support before the loan’s June 2011 suspension.
As for Mr. Fisker, he testified that an Energy Department official in 2008 invited him to apply for the government loan (thus inspiring Democrats to bellow “Bush did it too!”), which he said he didn’t really need because he (and presumably Kleiner Perkins) had already raised millions of dollars in private investment.
“I am not aware and do not believe that any improper political influence was used in connection with the company’s loan application or subsequent negotiations with the Department of Energy,” Mr. Fisker told the committee yesterday.
So he’s saying the taxpayer money was forced on him and his company. I guess that’s why Fisker and Kleiner Perkins together spent nearly $900,000 in 2009 and 2010 to lobby Congress and the administration about the loan program and other renewable funding schemes. Once again, the facts undermine what comes out of the mouths of nearly every enthusiastic backer of President Obama’s green energy “stimulus” program.
Meanwhile DOE on April 11 sucked $21 million out of the already-gasping company to pay back a portion of the $192 million. According to two Reuters sources, the amount due on Monday was $10 million, and Fisker had less than $30 million (a figure that had been reported previously) on hand after it had fired three-quarters of its work force, before DOE confiscated its reserves.
“Given the obvious difficulties the company is facing,” said DOE spokeswoman Aoife McCarthy, “we are taking strong and appropriate action on behalf of taxpayers.”
Failure is success; millions in financial losses are good; heavy lobbying and campaign contributions are disinterest; and weak and late really means “strong and appropriate” action. I’m sure it all makes perfect sense in the alternate world the Obama administration and renewable energy advocates dwell in.
[First published at National Legal and Policy Center]
It is cruelly ironic, but the massive law that was enacted to solve the problem of the uninsured in America is more likely to worsen it. This would be true even if the program is perfectly implemented and all the provisions come online on time and within budget.
How could this be? It is a multistep process. Stay with me for a second.
First, the simplest and most direct form of expanding coverage — Medicaid expansion — is likely to have very little effect. I’m not talking here of the states that refuse to do it after the Supreme Court made it optional, but of the entire program.
Remember that one-third of the uninsured have always been eligible for Medicaid and/or SCHIP coverage but don’t bother to sign up. Actually, it is worse than that. A few years ago, William Sommers wrote in Health Affairs that one-third of all uninsured children had been enrolled in Medicaid or SCHIP within the previous year but their parents found so little of value that they didn’t bother to re-enroll them.
Nothing about ObamaCare’s Medicaid expansion is likely to change this dynamic. Yes, there will be more advertising, and yes a larger number of people will be eligible, but quite of a few of those newly eligible people are already getting coverage on the job, so any expansion of enrollment is likely to be a crowd-out of private insurance. One of ObamaCare’s architects, Jonathan Gruber, has done extensive research on this subject and concluded that as much as 60% of the enrollment in expanded public programs is from people who had been privately insured. No doubt this effect grows bigger the higher up the income scale you go.
By the way, a recent example of this crowd-out phenomenon is revealed in a new study by the Robert Wood Johnson-funded State Health Access Data Assistance Center (SHADAC). Much has been made of the numbers of adult “children” covered under ObamaCare’s mandate allowing people up to age 26 to stay on their parent’s policies. This study shows that the number of such people covered as dependents on employer plans rose from 30.2% of the population group in 2009 to 36.5% in 2011. Sounds like a great success until you realize that the percentage of that age group that had employer coverage in their own names dropped from 21.8% in 2009 to 16.5% in 2011. So, virtually all of the people now covered as dependents were previously covered on their own.
Less studied is the stark reality that many of the people who might be eligible for Medicaid are simply too dysfunctional to enroll. They might be functionally illiterate, drug addicted, mentally ill, outlaws, or in the underground economy and not want to bring attention to themselves. They can’t understand an insurance contract or make and keep appointments for services, but they know where the doctors are 24/7 — the hospital emergency department. When these people have a health problem they don’t need insurance coverage. They need direct care.
Here is where the Supreme Court decision made a very big difference. It said there is nothing illegal about not enrolling in coverage; it simply exposes you to a tax. This removes many of the tools state and local government might have used to compel enrollment. All manner of government services might have been denied to people who do not have proof of insurance — school admission, public housing eligibility, fishing licenses, food stamps, job training, day care — all might have been denied to lawbreakers. But the Supreme Court shut down that possibility. So for low-income people there will be as little compulsion under ObamaCare as there was before and people will continue to behave as they always have.
We can’t calculate what the net effect of all this will be. At best Medicaid expansion will have only modest impact on reducing the numbers of uninsured. But it is equally likely to have no effect at all.
Next up is the mind-boggling assumption that employers will continue to provide coverage as they have in the past. No one actually believes this.
In fact, employers have been dropping coverage for at least the past ten years. There is no reason to think this will not continue and may dramatically accelerate under ObamaCare.
The study by the State Health Access Data Assistance Center (SHADAC) cited above finds that the nonelderly population with employer-sponsored coverage decreased from 69.7% of the population in 1999/2000 to 59.2% in 2010/2011. This is because fewer employers offer coverage, and of those that do, fewer employees accept the coverage that is offered. The drop-off is particularly acute for smaller firms with fewer than 50 employees. Only 37.5% of these companies now offer coverage, down from 47.2% ten years earlier.
Once ObamaCare kicks in, many more employers will drop coverage. The only dispute is over how many.
Two years ago the well-respected McKinsey Company conducted a survey of employers and found that 30% said they will “definitely or probably” drop their coverage. The survey was criticized by Obama’s supporters because it wasn’t an economic analysis. Odd, since the same folks seem to live or die according to survey results that are far less rigorous. Avik Roy noted in Forbes that the actual results were even worse than it seemed at first blush. He wrote that the more respondents knew about the law and the more directly involved they were in decision-making, the more likely they were to want to drop their coverage −
…primary decision makers were significantly more likely to drop employee health benefits: 36.5% of primary decision makers said they “definitely or probably” would drop benefits, compared to 22.4% of those who simply had some influence over the decision.
More recently, Douglas Holtz-Eakin, former CBO Director and currently with the American Action Forum, published a study with the economic features the McKinsey critics apparently prefer. He estimated that 35 million American workers will lose their coverage. He assumes most of these will go to the exchanges for subsidized coverage (more on this below), costing the federal treasury an additional $1.4 trillion over ten years.
The Congressional Budget Office is more constrained, but even they have upped their estimate of the number of workers losing coverage from a mere 3 million a few years ago to 7 million just last month.
The CBO number is almost certainly a gross under-estimate. CBO’s ability to predict the future has long been constrained by two things:
- It is required to assume that current law will be in effect in the future. So, for example, its budget predictions always assume that the SGR cuts in physician payments will actually occur. But that never happens, so the predictions are never accurate.
- It tends to use “static scoring,” which means it assumes that current behavior will be unchanged by new incentives. In this case it issued a 30-page justification for its estimate. As an example, part of that report said −
The fact that many firms currently offer health insurance coverage to their workers despite the high cost of premiums and rapid growth in those premiums for many years shows that many firms continue to find health insurance coverage to be a worthwhile element of their compensation packages. If firms could have attracted employees more cheaply by dropping health benefits and adding wages or other benefits that cost less, then they would have done so.
Good grief! This is about as shallow as you can get. Firms have been offering coverage despite the high cost because there has been no viable alternative, and they feel an obligation to ensure their workers can get coverage. The whole point of ObamaCare is to provide an alternative! Companies will now feel free to drop coverage in the belief that workers will now be able to get good coverage through the exchanges.
On top of actually dropping coverage, no one is estimating the effects of employers who convert full-time workers to part time, reduce the size of the workforce to stay under the mandate, out-source jobs to other companies or even other countries, or enter employee-sharing arrangements with other companies. There is no data for these developments (so they are invisible to policy researchers) but local daily newspapers are awash in stories about companies doing exactly this.
Whether it is McKinsey’s 50 million or so, Holtz-Eakin’s 35 million, or CBO’s 7 million, there is no denying that some large number of workers will no longer have employer-based coverage and will be left to their own devices.
Why should this be the least bit surprising? Kaiser Family Foundation’s 2012 employer benefits survey found that on average employer coverage costs $15,745 per family, of which the employer pays $11,429 (for single coverage it is $5,615, with the employer paying $4,664.) Holtz-Eakin finds that the federal subsidy for a $15,000 plan in the exchange will range from $14,176 for people with incomes of 133% to $2,935 for people with incomes at 400% of poverty ($94,800 for a family of four). For all income groups below 250% of poverty ($59,000), the federal subsidy is far greater than the employer subsidy is.
Employers will be doing their workers a favor if they stop offering coverage, pay the $2,000 fine, and send workers into the exchanges. This is especially true if the company pays out the savings in the form of higher wages. Holtz-Eakin doesn’t even consider the enormous savings for the company if they no longer have to pay the Human Resources cost of finding and negotiating coverage, enrolling workers, explaining the coverage, answering questions, and intervening when there is a problem with a claim. Any CFO worthy of the title would take that trade in a heartbeat.
So, the Medicaid expansion will make very little difference and some 35 million (perhaps more) people will lose their employment-based coverage. What is left to pick up the pieces? The much-vaunted “health insurance exchanges” (now referred to as “marketplaces” by the federal government). How will that work out?
Never mind for now the implementation problems (which are massive). Let’s assume for the moment that they work as planned — they are up and running by October of this year, the hundreds of thousands of newly hired navigators” are competent and well-trained, plenty of insurance companies are participating, and the data-sharing arrangements between employers, state Medicaid programs, and the IRS all work flawlessly. With all of this behind us, what do we have?
Well, first we have the underlying assumption that people really want to have insurance coverage. That is the whole point of this exercise, after all — there are so many uninsured, not because they don’t want it, but because they are deprived of it for one reason or another. One might think somebody would have tested that premise before enacting this boondoggle.
Oops! Three years after enactment, CMS decided to finally ask the question: just who are these poor wretched uninsured people and what are they looking for?
Turns out 92% of them can be divided into three segments:
- The biggest cluster (47.8% of all the uninsured) are “healthy and young.” They are not much motivated to enroll and they take their health for granted.
- The next largest group (28.9%) are “sick, active and worried.” These tend to be older and are pretty good candidates for coverage.
- Finally we have the “passive and unengaged” group (15.3%). I’ve tried to bring some attention to this population (see here). These folks tend to be older and have poor literacy skills.
All of these groups say cost is the main reason they are uninsured, but I expect that is just a throw away excuse. I doubt many of them have the slightest idea what insurance costs. They aren’t interested enough to even look into it.
At best, two-thirds of these people will be hard to reach and even harder to sell (as any insurance agent could have told you years ago.) They are uninsured, not because they are deprived, but because they do not see value in it. The time to do this research would have been before passing the law, not afterwards. That way the law could have been tailored to meet their needs, instead of assuming they will comply with whatever Nancy Pelosi crams down their throats. So out of the 50 million or so currently uninsured we might get 15 million who sign up for coverage.
But what about the newly uninsured, whose employers no longer will offer coverage? Most of these people have been passive recipients of whatever coverage their employers offered. They never had to do anything to secure coverage. We have written about this population before.
For the most part they are very much like their uninsured brethren except they happened to have a job that provided coverage. Once again, one-third may be motivated enough to seek coverage on the exchange, the rest won’t bother, knowing they can always get coverage later on when they need it. Meanwhile, they can save a whole lot of money that would otherwise go the premiums. So, out of 35 million newly uninsured possibly 12 million will get coverage on the exchanges.
But what about the mandate? Won’t that persuade people to get coverage even if they don’t particularly want it? Hardly. The mandate literally has no teeth. The only enforcement mechanism available to the IRS is to confiscate income tax refunds. The vast majority of the uninsured are lower-income (so they pay no federal taxes) and the rest can easily adjust their withholding at the start of the year to avoid sending excess money to the Treasury. No refund = no penalty.
So what are we left with? Medicaid expansion that will enroll few people and most of those will be people who were previously covered (crowd-out). Of the 50 million currently uninsured, possibly 15 million will get new coverage. But these will be offset by the 23 million who lose their employer coverage and don’t bother signing up for exchange coverage. Net result — 8 million more uninsured than before ObamaCare was enacted.
[First published at John Goodman's Health Policy Blog]