Heartland Institute Experts Comment on Resolution to Overturn ‘Citizens United’ with a Constitutional Amendment
The Illinois Legislature passed a resolution this week calling for an amendment to the U.S. Constitution to overturn the Supreme Court’s 2010 Citizens United v. Federal Election Commission decision. That ruling, which has been criticized by President Barack Obama, reaffirmed the First Amendment right of corporations, unions, and associations to engage in political speech before an election.
The following statements from public policy and legal experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below.
“The Citizens United decision recognized that the First Amendment is not reserved for favored individuals and groups. The arguments made against Citizens United all boil down to a conviction that speech from some quarters is not worth hearing, and that the public cannot be trusted with the vote if they are influenced by certain disfavored speakers. These convictions are wholly contrary to our system of government, which trusts the people with the power to listen to, evaluate, and ultimately accept or reject what they hear.”
“It is almost impossible to draft a constitutional amendment overturning Citizens United that doesn’t trample on fundamental First Amendment rights that almost all citizens hold dear. The dangers of stripping First Amendment rights from corporations include putting government censors in corporate-owned newspapers or prohibiting nonprofit corporations like the National Rifle Association or Sierra Club from lobbying Congress on behalf of their members.”
“While there is little danger that more political speech from a greater variety of sources will damage our Republic, there is great danger that attempts to reverse it will undermine core freedoms at the heart of America’s form of government.”
Sean Parnell was president of the Center for Competitive Politics when Citizens United was released and spent the next year defending the decision in a variety of forums.
“Yes, we know. Corporations are not people and money is not speech. Both statements are true. Both are beside the point. Corporations are, of course, associations of people and money makes speech possible. The freedom of speech would be empty if it was limited to the right to stand on the street corner and shout at cars. Our constitutional freedom of association would be a pale shadow if it did not include the right of people to band together to speak on matters of common concern.
“Newspapers and television networks are corporations. They spend money to speak. There is no principled basis upon which they can be distinguished from other associations of citizens who wish to be heard on candidates for office and questions of public policy. There is an unfortunately long list of persons and organizations who have been willing to trample on our First Amendment freedoms when defending them became ‘inexpedient.’ The Illinois legislature has joined those ignoble ranks.”
“If the First Amendment means anything, it means that the government may not silence, inhibit, or even ‘chill’ political speech, which – unlike, say, ‘nude dancing’ – is at the core of the First Amendment. Like gun control, national health insurance, and politically motivated investigations by the IRS, this proposed constitutional amendment is all about control of the citizenry and not about providing essential government services that are the only legitimate object of government spending. In a forest of bad ideas that seem to take root in Illinois, this is among the all-time worst.”
“Let’s leave aside for a moment the questionable moral and constitutional basis of one group in society (elitist liberals in ‘blue states’ and in academia, the media, and in government) trying to shut up their partisan adversaries. The simple fact is that liberals have deluded themselves in thinking that Republicans have some sort of big advantage in raising money, post Citizens United.
“An analysis by the liberal group OpenSecrets.org, for example, shows that, of the 16 largest donor groups to U.S. elections, 13 lean heavily Democratic, and the other three are balanced in their contributions. In the 2012 presidential election, Obama actually raised more money than did Mitt Romney. In 2008, Obama raised and spent vastly more money than John McCain.
“So this entire little crusade against free speech is in the service of a myth of the liberal/left: that they somehow represent the ‘little guy’ and Republicans represent ‘money.’ In reality, liberals represent extremely affluent elites.”
“At a time when pessimism over the nation’s direction is extremely high but economic growth is very low, to expend political effort to try to repeal part of our Bill of Rights suggests that our nation’s political leadership is approaching a historic low. This is an effort by those on the political left to weaken opposing views in a constitutional, permanent way that is more harmful than the IRS’s effort to intimidate those views short term through administrative actions.”
“Governments at all levels are using our information against us. And abusing the processes set up to acquire it. The examples are far too numerous to list here, but we can start with the IRS and Justice Department scandals currently roiling in Washington.
“National and provincial leftists now want even more of our First Amendment-protected campaign contribution data. So that too can be used against us. Don’t believe me? Ask the Republican-donating car dealers who lost their lots after the Obama auto (union) bailout.
“We need transparency from government – not transparency to government. In a constitutional republic, they should be reporting to us – not the other way round.”
“Corporations are companies of people, all of whom have basic human rights that the Constitution is supposed to protect. Ergo, Citizens United was a just ruling.”
Tibor R. Machan
Professor Emeritus of Philosophy
R.C. Hoiles Endowed Chair in Business Ethics and Free Enterprise
Argyros School of Business & Economics
“James Madison famously argued that just as we have a right in our property, we have a property in our rights. He was very sensitive to the importance of our rights as free persons to freedom of religion, and of speech, in our right to self-defense, to be secure in our persons, papers and effects, and to be secure in our life, liberty and property, as well as our rights when we stand accused of crimes. These, Madison argued, were very precious and enjoyed universally by free persons and, so, warrant that all persons have the right to vote so as to be able to protect these rights.
“Madison argued that those who enjoyed wealth could protect their property and property in general, by using a portion of their wealth to convince their fellow citizens of the goodness of a private property-based, market-oriented economy. He was also in favor of administering elections in certain ways that would tend to result in the protection both of individual rights and of property. In particular, he favored larger districts and longer terms for the upper houses of our legislatures, which, he thought, would make them more inclined to protect property.
“While most states initially featured a property qualification for voting, eventually (and for some curious reasons that I will not go into in this comment) we wound up with universal suffrage. Therefore, the position argued by Madison is more relevant for us nowadays than it was at the Founding, and it is very important for the protection both of our precious individual rights and of our private property-based, market-oriented economy.”
Fr. Andrew Greeley died Wednesday at his home in the Hancock Building in Chicago. He was 85.
He was my professor of sociology when I was an undergraduate at The University of Chicago. We were friends from the first, which was his way, and remained so to the last.
He once accelerated a course for me, exams and all, so that I could complete it well before the normal end of the quarter so that I could head off early to Egypt and Israel on a traveling seminar where I was employed by Indiana University. He said, “Far be it from me to stand in the way of peace — or, more likely in your case, trouble — in the Middle East!”
He had a house right on Lake Michigan at Grand Beach, Michigan — my recollection is that it had a big sign in front reading “Ballindrehid”, which Andy said meant “House of the Priest” in Gaelic. He wrote there, sitting in a window from which, on clear days and nights, one could see the towers and lights of Chicago across the water.
He was at the beach many weekends year-round, but especially in summer, and he would often invite students and other friends to join his family and him for cook-outs and fun. He had a power boat and loved to water ski. He tried on several occasions to teach me to ski, but I couldn’t stay up out of the water for more than a few seconds at a time. It may have been his only failure as a teacher of anything. (His evaluation of me: “Well, you float!”)
Nearly every day he would say Mass and ask his whole beach crowd to attend. Weather permitting, Mass was at a picnic table right on the beach (Andy in full vestments; the rest of us in swimsuits). In bad weather Mass was in the big room in the house. There was always a homily, and it was always informative, funny, and memorable.
He was a predictable contrarian. He’d go to meetings at the Archdiocese of Chicago wearing a suit and tie; he’d teach his classes at the University wearing a Roman collar.
Once, years later, when I was the Chief of Staff and General Counsel at USIA under President Reagan, I called him from Washington to ask advice on public opinion surveying overseas and to offer him a consulting contract. He was then one of the leaders of the National Opinion Research Center at the U of C, and survey research was always one of his academic specialties. USIA conducted a huge amount of polling and surveying of foreign populations, in sometimes very difficult circumstances in communist countries and other tyrannies and in countries with highly undeveloped infrastructures; we prided ourselves that we often understood public opinion in a country better than the local dictator did.
He turned me down on the contract but was always generous with advice over the phone.
He told me that he “loved” me “because” I was a Jew (“like my Boss”) and “despite the fact” that I was a “benighted Republican”. He liked to refer to himself as “an unrepentant Daley Democrat”. The “Daley” in question was the first Mayor Daley. “Why do you spend so much time with me, then?” I would ask. “Sinners are my business,” he would answer.
I once asked Fr. Greeley how I should describe him in a memorandum, in which I was quoting him, that I was writing for the President, the Secretary of State, and the Director of USIA. I meant, of course, which academic credentials and institutional affiliations I should set forth. His answer: “Just put down, ‘Andrew Greeley is a loud-mouthed Irish priest.’ That says it all.”
Amazingly, before his death Andy posted on his website the texts of sermons for every Sunday in June. For example, his sermon for Sunday, June 9, 2013.
Each of his on-line sermons typically tells, in addition to the Gospel passage of the week, a little story that he made up. A recurring character in his stories, as in the sermon for June 9th, is a twinkly-eyed, mischievous priest. These tales leave little doubt as to how he saw himself.
He was a fabulous teacher and a dear friend. He will be deeply missed.
Earlier this month, a New York Times article by Andy Revkin voiced concern over a gap between “the consensus” of climate scientists and public acceptance of the theory of human-caused global warming. Revkin pointed to a study published in April by Dr. John Cook and other researchers, which claimed that 97 percent of scientific papers over the last decade “endorsed the consensus” of man-made warming. But is it a failure to communicate the science to the public, or a case of bad science?
A 2010 paper from the Center for Climate Change Communication at George Mason University recommended that advocates for activist climate policies emphasize the dangers to the health of citizens: “Successfully reframing the climate debate in the United States from one based on environmental values to one based on health values…holds great promise to help American society better understand and appreciate the risks of climate change…” So, if Americans fear for their health, then they’ll more readily accept that humans are causing dangerous climate change.
Climate science has smelled for some time. The 2001 Third Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) announced “new evidence” claiming that “the increase in temperature in the 20th century was likely to have been the largest of any century during the past 1,000 years.” This was the famous “Hockey Stick Curve” of Dr. Michael Mann, which became an icon for Climatism, trumpeted to the world and taught in schools across the globe.
But the tree-ring data used by Mann and his research team did not show a temperature rise at the end of the 20th century, so they pasted the thermometer record for the last 50 years onto the 1,000-year curve to provide the alarming hockey stick temperature rise. Later analysis by Stephen McIntyre and Dr. Ross McKitrick found that the Mann algorithm would also produce a hockey stick from input of random noise. The IPCC dropped the Mann Curve from their 2007 Fourth Assessment Report without any explanation.
Then in November 2009 came Climategate, the release of e-mails from the Climate Research Unit (CRU) at East Anglia University. An unidentified hacker or whistle-blower downloaded more than 1,000 documents and e-mails and posted them on a server in Russia. The CRU is the recognized leading keeper of global temperature data, and CRU scientists wrote and edited the core of the IPCC reports.
The Climategate emails showed CRU practices that were seriously at odds with accepted scientific procedure. Evidence of bias, data manipulation, deliberate deletion of emails to avoid sharing of information, evasion of freedom of information requests, and attempts to subvert the peer-review literature process were all used to further the cause of human-made global warming.
Based on model projections, the IPCC First Assessment Report of 1990 told the world to expect a “best estimate” rise of 0.3oC per decade in global temperatures, leading to 2025 temperatures that would be 1oC higher than 1990 temperatures. The IPCC also projected a “high estimate” and a “low estimate” rise. Today, global temperatures remain well below the IPCC’s low estimate. Contrary to model projections, temperatures have been flat for the last 15 years.
It doesn’t matter if 97 percent or even 100 percent of published papers endorse the consensus of man-made warming. One hundred percent of the world’s top climate models, 44 models in all, projected a rise in global surface temperatures over the last 15 years. And 100 percent of the climate models were wrong. The empirical data does not support the theory of dangerous man-made climate change.
Since global temperatures are not rising, proponents of man-made climate change are now reduced to weather scaremongering. In the best tradition of ambulance chasing, the recent severe tornado in Oklahoma, Hurricane Sandy, and other weather events are blamed on mankind’s relatively small contribution to atmospheric carbon dioxide, a trace gas.
But any citizen who can read can learn that today’s weather is not abnormal. Hurricane Sandy was a Category 1 hurricane that made a direct hit on New York City. But according to the National Climatic Data Center, 170 hurricanes made US landfall during the 20th century. Fifty-nine of these were Category 3 or better, with wind speeds much stronger than those of Sandy. So how is a single Category 1 hurricane “evidence” of dangerous climate change? Historical data also shows that the US experienced more strong tornados in the 1960s and 1970s than today.
The reason for lukewarm public acceptance of the theory of man-made warming is not a failure to communicate, but that the science is rotten.
[Originally published in The Washington Times]
From the growing annals of school-led privacy invasions of minors comes this story from a Chicago suburb:[John] Dryden, who has taught for 20 years at the Kane County school, ran into trouble in April after he told students that the Fifth Amendment’s protection against self-incrimination applied to a school survey he was handing out. The one-page questionnaire had students’ names printed on top, followed by 34 personal questions.
The survey on students’ “emotional well-being” had students identify themselves and answer questions about their drug and alcohol use. Parents were only given a two-paragraph summary of the survey and not told it would contain student names.
“I looked at the questions and went, ‘Oh my gosh,’” he said. “This is a state institution collecting data. … What will they do with that? How long is it on the record? Is it going to be on the file?”
In response to Dryden’s warning to students, the school suspended him for one day without pay. On Tuesday, when the Batavia Public School District 101 board voted to reprimand Dryden, students, parents and other teachers showed up at the meeting to support him…
“The issue before the board tonight was whether one employee has the right to mischaracterize the efforts of our teachers, counselors, social workers and others, and tell our students, in effect, that the adults are not here to help but that they are trying to get you to ‘incriminate’ yourselves,” Superintendent Jack Barshinger stated.
Surveys like this are common in public schools. I’ve recently seen copies of a similar survey that has been used in Wisconsin schools for decades. It asks students lots of personal questions, all things that would be fair game for private counseling: How do you feel about your parents? Are you sexually active? What are your moods like?, etc. Yesterday, Michelle Malkin publicized three Florida schools that scanned kids’ eyes without telling parents.
Two comments about this. First: Schools are collecting personal, emotional information about students because their role has grown beyond basic knowledge impartation to society’s social workers and proxy parents. They can’t get kids to read, but maybe their luck with drug prevention will be better. Second: Not many people know, but federal privacy protections for student data have been virtually erased. Last year, the U.S. Department of Education rewrote federal privacy law to say it or any agency such as a school or the Department of Labor may share whatever is in kids’ files without parental knowledge or consent. Oh, and states are creating interoperable student databases that directly channel student files to the feds. So while the Batavia school board may feel they can be benevolently trusted to protect kids who incriminate themselves, the rules encircling them do not.
[First published at Ricochet]
The Heartland Institute has recently signed a coalition letter led by the Independent Women’s Forum urging retailers to both be aware of and reject a dubious campaign spreading incomplete information on chemicals.
According to IWF, the Safer Chemicals, Healthy Families organization is “capitalizing on the natural anxieties of parents” by leading the campaign to pressure the nation’s top 10 retailers into removing certain products that contain so-called “hazardous” chemicals.
From the letter:
Removing these products from the market will be a huge cost to shoppers and could even put consumers at risk. Among the chemicals the campaign wants removed from are phthalates, bisphenol-A, formaldehyde, and certain flame retardants. The campaign is quick to suggest these chemicals are hazardous at the level consumers are exposed, despite the significant body of scientific evidence to the contrary. Yet, the campaign fails to inform consumers that these chemicals often make products safer.
For example, flame retardants, which are now common in furniture and building materials, are largely responsible for the sharp decline in household fires since the 1970s. Formaldehyde, which is used in personal care products, helps prevent bacterial growth. Phthalates are added to plastics to make toys less breakable. And bisphenol-A, a chemical used in food packaging, safeguards against deadly botulism in canned food.
As the letter goes in to state, impeding consumer choice will distort market mechanisms in ways that actually make products less safe, harder to find, and more expensive.
Ken Cuccinelli, the GOP candidate for Governor of Virginia in this year’s election, proposed last week the most advanced, sweeping, state tax reform plan in the nation. Indeed, it is so advanced that it was beyond the capability of the Washington Post to even describe it accurately for its readers. As explained below, the plan is a model for other states all across America.
The Cuccinelli plan starts by stating its two goals explicitly, up front:
- Reform the tax code to “transition from tax policies that stunt economic growth to those that promote economic growth.”
- Reform “the size and growth of the scope of state government to [make it] more accountable, transparent, and efficient” (in other words so it grows smaller relative to the economy). That applies to both taxes and spending, a crucial point that the Washington Post completely missed in its analysis of the plan, as discussed further below.
The plan further notes that the Tax Foundation’s State Business Climate Index ranks Virginia’s individual income tax rates 38th in the country in terms of competitiveness. Cuccinelli’s “Economic Growth and Virginia Jobs Plan” adds,
“Next year, Virginians face a tax hike of approximately $60 million because inflation, even at a low rate, pushes taxpayers into high[er] brackets and makes deductions and exemptions worth less. This is wrong as a matter of principle. Taxes should change only with a vote of the legislature, not because of inflation. In the 1980’s, under President Reagan’s leadership, Congress indexed most of the federal income tax code to prevent this type of tax raise. Virginia is long overdue in reviewing the income tax brackets. The top [state income] tax bracket was intended years ago for wealthier Virginians, but inflation creep has led to current taxation of a single person who has a full time job making $10.30 per hour at the highest rate of 5.75 percent.”
Cuccinelli’s plan proposes to cut that state income tax rate by 13% during his term as Governor, from 5.75% to 5%. He proposes as well to index personal exemptions and deductions for inflation. He also proposes to cut the state corporate income tax rate by one third, from 6% to 4%. Cuccinelli’s tax reform plan states, “At 4.0%, Virginia would have the lowest maximum corporate tax rate among all 43 states that have a corporate income tax.” Of course, 7 states do not even have a corporate income tax. More on that below.
Note that with the federal corporate income tax rate of 35% (highest in the world now except for the socialist, one party state of Cameroon), the total corporate income tax rate prevailing in Virginia is 41%. That is higher than in Communist China, where the corporate income tax rate is 25%. In the European Union, the average is even lower than that. In Canada, the corporate income tax rate has been cut to 15%.
Note also that where capital is mobile, as in our free society, corporate income taxes are born mostly by domestic labor in the form of lower wages. That is why even the Washington Establishment CBO assumes three fourths of the corporate income tax burden is borne by labor. A European Union study concluded that 92% of corporate income taxes are borne by labor in reduced wages. That is why over the past decade the EU has cut their corporate income tax burden by close to half.
The plan further includes establishing a Small Business Tax Relief Commission that will propose additional legislation to be introduced in 2014 to reduce or eliminate three more taxes, the Business, Professional and Occupational Licensure (BPOL) Tax, the Machine and Tool (M&T) Tax, and the Merchant Capital (MC) Tax. These taxes together approach as big a burden on business and job creation in Virginia as the corporate income tax. Moreover, unlike the corporate income tax, these taxes are assessed regardless of whether the business earns a profit, which means they can eat up any net income out of a business at all. That can be particularly burdensome to small, start up businesses, which often must go several years before turning a net profit that could even be used to pay these taxes. These taxes are consequently often a barrier to starting up a business at all, which means lost jobs. The Commission is also tasked with proposing a means for maintaining local government revenues while reducing or phasing out these taxes, which primarily support local government spending and services.
Cuccinelli’s tax reform plan specifically states, “The Thomas Jefferson Institute has studied tax restructuring for Virginia…. It proposes to eliminate the BPOL, Machine and Tools Tax, and Merchant’s Capital Tax and considers replacing the lost revenue by eliminating sales tax exemptions and sharing the revenue with local governments. This study is currently under discussion by stakeholders across the Commonwealth as well as key leaders in the General Assembly.” (emphasis added). This more than hints where Cuccinelli wants to go with these taxes.
What is even more significant, as explained further below, is that Cuccinelli also assigned to the Commission developing legislation to further reduce personal income tax and corporate income tax rates.
Cuccinelli’s Economic Growth and Virginia Jobs tax reform plan includes two components to finance the rate reductions he has proposed while maintaining sufficient revenues to continue to finance, indeed continue to increase funding for, essential state services and programs. One is to “[e]liminate outdated exemptions and loopholes that promote crony capitalism;” as well as eliminating credits and other preferences in the corporate income tax code in particular.
This reflects true strategic brilliance in Cuccinelli’s tax reform plan. Because he is proposing to eliminate as economically objectionable the provisions of current law that involve what his opponent, Democratic Virginia gubernatorial candidate Terry McAuliffe, is proposing as the heart of his economic growth plan for the state. McAuliffe’s economic program for the state is precisely “crony capitalism,” which is special preferences and taxpayer bailouts for specific, targeted, favored businesses (generally the friends of, and contributors to, Terry McAuliffe). Why not, McAuliffe must reason: that is how he made his millions, through special, federal government, preferences and connections in Washington, DC (as a pal of the Clintons, and a participant in their shady operations).
The Washington Post thinks it has a good angle on Cuccinelli’s tax reform plan, because it overconfidently thinks it worked in the 2012 election. ThePost editorialized,
“Like Mitt Romney, Virginia Attorney General Ken Cuccinelli wants to cut taxes – by a lot. Like Mr. Romney. Mr. Cuccinelli, the Republican candidate for governor, promises this would not reduce government revenues by a dime, since he would also eliminate significant tax loopholes and deductions. And like Mr. Romney, Mr. Cuccinelli adamantly refuses to identify these loopholes and deductions.”
Where did the Post get this information on the Cuccinelli tax reform plan? The same place Aesop got his fables. Because the Post does not employ anyone who understands free market tax reform, it does not know that cutting tax rates is not the same thing as cutting tax revenues. And where does Cuccinelli adamantly refuse to identify those loopholes and deductions? That is where the Post affirmatively lies to its readers. Four Pinocchios!
The Post thinks this ploy of demanding the full details of legislation for any tax reform proposal made during a campaign worked during 2012. But it had something in the Presidential election it won’t have in the Virginia’s Governor’s race this fall – a candidate in Mr. Romney so uninspiring to conservatives that millions did not even bother to vote, resulting in the “Progressive” victories in 2012 that have so badly misled so many about the American public. In Virginia’s Governor’s race, Mr. Cuccinelli will be just the opposite.
The Post offered the same dopey ploy in response to Paul Ryan’s budget tax reform proposal, reflecting the complete ignorance of the Post editorialists over what a budget proposal involves. It will get the full answer this year through the proper channel, Chairman Dave Camp’s Ways and Means Committee. They will explain in legislative language what the Post failed to understand about Mr. Romney’s tax reform proposals. Apologies will be adamantly and not politely demanded when the Committee produces the revenue neutral tax reform plan the Post propagandists joined the Obama propagandists in saying was impossible.
I don’t remember the Post in 2008 demanding that Mr. Obama detail exactly where he would get the money to pay for his “universal coverage” health insurance plan (which turned out to not involve universal coverage). Maybe if Obama told us it would involve cutting trillions from Medicare, he would not have been elected. But I don’t read the Post (because I don’t enjoy reading Democrat Party publications). So I may have missed something.
Let me offer some free help to the poor editorialists of the Washington Post. For business taxes, free market tax reform involves eliminating every deduction, credit, loophole, preference, and exemption that does not serve the function of defining net income, which is to be taxed, as opposed to gross income, which is not the subject of an income tax. And there are more than enough deductions, credits, loopholes, preferences, and exemptions that can be eliminated in the individual income tax code too for revenue neutral tax reform.
Plus (something else the Post does not know, even though institutionally it was supposedly up and running during the Reagan years), cutting tax rates increases economic growth, through incentives for increased production resulting from the lower rates. That increased growth means more revenue that offsets at least some of the revenue lost due to the rate cuts. Sometimes the higher economic growth resulting from rate cuts means higher revenue overall (see, e.g. every capital gains rate cut over the last 45 years, or the doubling of federal revenues during the 1980s, when Reagan led the cutting of all federal income tax rates, including the top rate from 70% to 28%).
The second factor financing the rate cuts in Cuccinelli’s tax reform plan, which the Post completely overlooked (to the detriment of any readers still benighted enough to depend on the Post to report the real world), is that the Cuccinelli plan also includes a cap on state spending growth. Under Cuccinelli’s plan, state spending would be limited to grow no faster than the rate of growth of population plus inflation. Over the past decade that has been 3.3%.
So under the Cuccinelli plan, state spending would grow every year by 3.3% on average. But the Washington Post editorialized that it wouldn’t be pro-growth because “it would starve the state of the resources it needs to fund public schools, state colleges and universities, public safety, mental health programs and state parks” and “what businesses, and which employees, would be content in a state that starves its schools, infrastructure and social services of resources?” What can you say about such commentary, except that it is uninformed, ignorant, unreasoned, and for the reasons just explained, quite honestly just stupid?
What the Post is saying here is that state spending must grow faster than the rate of population growth plus inflation, or else in its Socialist Party opinion, the state would be abandoned as dysfunctional. What it has never said is the real socialist goal driving its editorial commentary is 100% of GDP and income going to the government, which is where its editorial commentaries would take us.
The Post adds, “For the sake of fairness, the wealthiest Virginians should be asked to do more. By cutting personal income taxes, Mr. Cuccinelli would ask them to do less.” But Cuccinelli’s tax plan would cut taxes for every working person in Virginia, by an equal percentage (just like the historic, landmark, triumphantly successful, Kemp-Roth plan, which the Post also bitterly opposed) for everyone making over $10 an hour, given that the top 5.75% state income tax rate starts applying there. What you can say about such commentary is that publication of the Post every morning is an abuse of the First Amendment.
For each of the last two fiscal years, total general fund state revenues in Virginia have grown by 5.8%. As Cuccinelli’s tax plan states, “In the three non-recessionary periods since 1984, average growth in the [General Fund] budget (excluding transfers) ranged from 7.4% to 9.2%.”
What makes Cuccinelli’s tax reform plan truly revolutionary is that it finances it’s wildly pro-growth rate cuts by modestly and reasonably restraining the growth of state spending (not spending cuts), and not by increasing other taxes. And here is what makes Cuccinelli’s plan truly explosive – if that modest and reasonable state spending restraint holding spending only to the rate of population growth plus inflation (which only keeps spending per person in the state equal to what it is today in real terms), the entire state income tax, personal and corporate, including capital gains, can be phased out completely within 10 years.
That is my own rough estimate. A thorough economic study is needed to document that, plus the powerful, enormous impacts that would have on economic growth, jobs, wage growth, and income growth in the state.
What we do already know is that 9 states survive perfectly well with no state income taxes. These include large states such as Texas and Florida, medium size states such as Tennessee and Washington, and smaller states, in terms of population, such as New Hampshire, Nevada, South Dakota, Wyoming, and Alaska.
Income taxes are the most economically destructive of all taxes. That is because income levies tax directly the reward for work, savings, investment, and entrepreneurship. With the reward reduced, the incentive for pursuing these economically productive activities is reduced. The result is less work, less saving, less investment, fewer new businesses, less business growth, less job creation, lower wages and income, and lower overall economic growth. Higher marginal tax rates reduce these incentives more. Lower marginal tax rates reduce these incentives less. A marginal tax rate of zero, as with no income tax, maximizes these incentives, at least as far the burden of income taxes is concerned.
Experience and economic studies bear this out. Probably the best work was produced by Art Laffer, Steve Moore, and Jonathon Williams, published in the 2010 volume of Rich States, Poor States by the American Legislative Exchange Council. Economic growth in the 9 states without income taxes raced ahead from 1998 to 2008 almost 50% faster than in the 9 states with the highest top personal income tax rates. Job growth rocketed ahead more than twice as fast in the 9 no income tax states as compared to the 9 top income tax rate states. Yet, total state tax receipts in the 9 no income tax states still grew 30% faster in the no income tax states compared to the top tax rate states.
The authors then went on to look at the economic performance of the 11 states that have adopted a state income tax in the last 50 years. In each case, they compared the performance of the state in the 5 years before the state adopted an income tax with performance 5 years after. All 11 states grew more slowly than the rest of the country after adoption of the income tax. Michigan adopted a state income tax in 1967. By 2008, its Gross State Product as a percent of total U.S. GDP had fallen by 47%. Ohio adopted its state income tax in 1971. By 2008, its GSP had fallen by 38% as a percent of total U.S. GDP. For Illinois, which adopted an income tax in 1969, the decline by 2008 was 31%. For Pennsylvania, adopting its state income tax in 1971, the decline by 2008 was 31% as well.
Moreover, after Michigan adopted its income tax, it personal income per capita fell from 129.97% of the U.S. average to 88.8% by 2009, a decline of 41 percentage points. Indiana personal income per capita declined from 113.84% of the U.S. average to 85.79% by 2008, a decline of 28 points. Ohio declined from 114.57% of the national average to 89.33% by 2008, a decline of 25 points. These states consequently all declined after adoption of a state income tax from personal income per capita well above the national average to well below by 2008. But per capita income relative to the U.S. average declined substantially after adoption of state income taxes in all 11 states. As the authors state, “Personal income per capita is the closest measure to be found that represents the state’s standard of living; gross state product is the truest measure of a state’s output.” What the results show, as the author’s explain is that in each state that has adopted a state income tax in the last 50 years, “the state’s economy has become a smaller portion of the overall U.S. economy, and the state’s citizens have had their standard of living dramatically reduced.”
Yet, in 9 of the 11 states, after adoption of the state income tax, total state and local tax revenues in the state as a percent of total state and local revenues in the U.S. declined as well, in some cases sharply. Michigan’s share of taxes, for example, declined by 34%. In West Virginia, the decline was 33%, in Indiana, 28%, in Pennsylvania, 23%, in Illinois, 21%. What this means is that in these states all they got for paying state income taxes was a lower standard of living.
Cuccinelli’s tax plan would restore a booming economy in Virginia, with ultimately higher tax revenues, higher state spending, and much higher economic growth, jobs, wages, and incomes. Given his consistent conservatism across the board, from free market economics to social issues, Ken Cuccinelli is emerging as the Ronald Reagan of Virginia. Here’s the bottom line. For reasons of public morality and responsibility, the Washington Post should not publish again until it opens with a front page banner headline – “Cuccinelli’s Tax Reform Plan Would Increase State Spending Every Year by 3.3%.”
[First published by Forbes.com]
Until recently, most energy analysts focused on challenges to expansion and new builds when discussing the future of America’s nuclear power sector. Today, more and more observers are focused on the likelihood of an early shutdown of existing reactors due to a combination of market forces and distortions created by government intervention. According to market observers, 5 or 6 of the nation’s 103 operating reactors could be at risk of early retirement over the next several years. Indeed, as many as a quarter of civil nuclear power facilities are currently cash-flow negative or at risk of becoming so.
Most related commentary emphasizes the impact of abundant, cheap shale gas on the economic viability of reactors—particularly smaller units located in competitive state electricity markets. A growing number of analytical reports, however, also point to the negative impact of renewable energy mandates and subsidies (direct and indirect) on the competitiveness of nuclear power. Today, 30 states and the District of Columbia have renewable portfolio standards (RPS) or other mandated renewable capacity policies, according to the Energy Information Agency. Most of these policies were enacted before the shale gas revolution and the Environmental Protection Agency’s increased regulation of coal-fired power generation. As renewable targets ramp up in the coming years, we believe that reactors located within RPS states will come under increasing pressure, causing a number of them to shut down.
The early retirement of those reactors would have a substantial impact on the local economy. A job at a U.S. nuclear facility pays nearly 40 percent more than the average local salary, and the average plant generates close to $500 million a year in total output for the community in which it is located.
Moreover, a shutdown of a number of reactors would cumulatively affect university physics and engineering programs, material science laboratories, manufacturers, and the defense establishment—including the U.S. Navy’s ability to recruit personnel to help operate its nuclear carriers and submarines. Certainly, with fewer employment opportunities available on separation from military life, recruits would be discouraged from seeking military work in a nuclear-related function.
We recognize the benefits of lower cost energy to manufacturers and consumers. From an economic and national security perspective, there is no question, for example, that shale gas has greatly benefited the nation.
However, the Nuclear Energy Program at CSIS plans to work with interested stakeholders to help educate the public and the policymaking community on the unintended consequences of subsidized generation on America’s civil nuclear fleet—effects that are not generally well understood or appreciated. In particular, we wish to examine the impacts of renewable tax credits at the federal level and renewable portfolio and efficiency mandates, as well as subsidized gas plants at the state level. Given the indispensable role civil nuclear power plays in promoting U.S. national security interests and achieving air quality standards, we believe that there is a critical need for a more comprehensive, integrated discussion on stationary power issues, particularly as federal and state governments look to increase the share of renewable sources in the electricity mix.
The Wind Production Tax Credit: An Example of Unintended Consequences
Recent studies examining the impact of renewable energy policies point to their disruptive impact on competitive electricity markets, including the operation of nuclear plants located in those areas. The wind production tax credit (PTC) of $23 per MWh has been the focus of much of this research because of its link to negative pricing for electricity (i.e., when power providers must pay “congestion” charges to the grid to take their electricity).
Over the past decade, wind facilities have increased 10-fold to over 60 GW—thanks mostly to state renewable requirements and the wind PTC, which incents wind farms to produce electricity regardless of market demand, oftentimes during the late night and early morning when demand for electricity is at its lowest. Because wind generators are rewarded the tax credit, they are willing to pay “congestion” charges to the grid as long as those charges do not exceed the credit, thus guaranteeing them a profit. Negative pricing has grown from a very low occurrence before the introduction of renewable mandates to much higher levels, accounting for up to 13 percent of all hourly prices in some U.S. regions. Those numbers increase drastically in hours in which the wind blows more often.
Non-wind generators do not receive the tax credit. Consequently, other power sources, including nuclear facilities, must pay the congestion charge without the corresponding tax benefit. Nuclear reactors, which attempt to run at a set level of output for technical, safety, and cost recovery reasons, are hit hard by the increased cost of operation. Industry forecasts suggest that nuclear facilities will be forced to pay hundreds of millions of dollars in extra costs over the coming years because of negative pricing resulting from renewable policies. These costs will clearly increase as renewable energy targets ramp up in many states between now and 2025.
We are already seeing these impacts play out in several regions. The shutdown of the Kewaunee nuclear plant in Wisconsin, for example, was blamed on low natural gas prices and large volumes of new wind generation. And in Texas, Public Utility Commission chairman Donna Nelson testified at a state Senate Natural Resources hearing last September that “the market distortions caused by renewable energy incentives are one of the primary causes I believe of our current resource adequacy issue…[T]his distortion makes it difficult for other generation types to recover their cost and discourages investment in new generation.” Exelon chief Christopher Crane went even further, warning the press earlier this year that “there is a very high probability that existing safe, reliable nuclear plants will no longer be competitive and will have to be retired early” if the PTC remains in place.
In a recent report by the Organization for Economic Cooperation and Development (OECD), analysts cautioned that high-fixed-cost technologies, such as nuclear, will leave the market due to their load and profitability loss resulting from increased penetration of wind power. Because of the departure of these despatchable sources from the grid, the volatility of electricity prices will increase substantially. OECD thus suggests that policymakers “swiftly” work to address this growing challenge by educating the public on the need to protect electricity supply security. We agree with this assessment.
Given the fact that roughly half of the nation’s nuclear fleet is located in competitive electricity markets that also have renewable portfolio standards and other energy mandates and subsidies, we are clearly concerned about the future competitiveness of our nuclear units, which already face rising maintenance and fuel costs. Moreover, we anticipate greater deployment of wind installations because of the extension of the PTC, which was a component of January’s deficit deal. In addition, President Obama has suggested making the wind PTC permanent starting in 2014. Although most observers doubt the political viability of such a proposal, it remains unclear how long the production tax credit will remain in place.
As part of our examination of such policies, the Nuclear Energy Program at CSIS will explore with interested stakeholders policy options that could alleviate this pressure on the nation’s existing fleet of reactors. Understanding the longer-term impact of energy mandates and subsidies (direct and indirect) on our ability to maintain the current number of reactors and our options for expanding the fleet is clearly important to the national interest.
[First published by the Center for Strategic and International Studies (CSIS)]
Mark it down: the report this month about the shutdown of Vehicle Production Group – beneficiary of a $50-million stimulus loan from the Department of Energy – means the Advanced Technology Vehicles Manufacturing initiative within the Loan Program Office has been a thorough failure.
All five ATVM recipients, awarded a total of $8.4 billion of taxpayer-backed financing under the Recovery Act, have earned derision to some degree. Most fit into the already much-ridiculed electric vehicles program. VPG was funded to produce wheelchair-accessible passenger vehicles that ran on compressed natural gas.
The recipients range from the start-ups (Fisker Automotive, Tesla and VPG) to the established (Ford Motor Company and Nissan). The highest-profile flop, by far, has been Fisker, with its single $102,000-plus electric model built for wealthy California elites that couldn’t muster a stronger review from Consumer Reports than “the fourth-worst luxury sedan” on the market, among many other problems. The taxpayer beneficiary of $192 million now teeters on the edge of bankruptcy, and now non-electric VPG has blamed its own downfall on the Fisker fiasco fallout.
According to Business Insider Australia, VPG CEO John Walsh said fear caused by bad publicity and Congressional scrutiny of Fisker led DOE to impose greater restrictions on his company. The news site said VPG raised $400 million in private equity in addition to the DOE loan, and like other recipients was required to keep a certain level of cash in reserve. Walsh said when VPG dropped below that amount, DOE froze its assets, which forced it to stop operations and lay off its employees. Still, he insisted the business was healthy, with a few thousand vans sold and thousands more ordered from customers.
“I think the DOE has made a major error with this company because of the pressures of the Fisker situation, and that is unfortunate,” Walsh said. “It has everything to do with Fisker.”
So the electric vehicle businesses – and those that supply it, such as battery makers – were not the only ones who have struggled. They also caused collateral damage by virtue of the fact they shared the same tainted DOE loan program. At a House hearing last month, Republican members of the Oversight and Government Reform Committee slammed the judgment of ATVM loan officials who decided to finance Fisker.
“They had a triple C rating, they’re under collateralized, they can’t meet payroll, and now we’re surprised?” said Rep. Jim Jordan of Ohio. “All the evidence points to that they should never have gotten the loan in the first place.”
Ironically Walsh echoed much of the Congressmen’s sentiments, despite VPG’s own questionable qualifications for an ATVM loan.
“Fisker is an electric sports car,” he said. “Who needs an electric sports car, other than Justin Bieber?”
“There is a need for what we build,” he added, “and not a need for an electric sports car.”
Walsh’s point is understandable in relative terms, but the claim that there is a “need” for vans for handicapped people that run on CNG is also absurd. Yet a conjured-up “need” for vehicles that run on non-fossil fuels (although where do they think most electricity comes from?) was the Obama administration’s justification for aggressively developing the ATVM program through the stimulus.
Again, each loan recipient has either failed, or did not need taxpayer support, or both. And the established automakers (Ford and Nissan) that accepted the loans showed little evidence that they used the funds for its intended purpose. The others besides VPG:
1. Fisker Automotive. It’s been written to death. Besides the Consumer Reports review (which included the test car breaking down at CR’s facility), there have been fires, recalls, layoffs, frequent CEO changes, unethical behavior by its venture capital firm, an investor lawsuit, and suspected cronyism.
2. Tesla Motors. President/CEO Elon Musk Tweeted earlier this weekthe company would fully repay its $465 million loan from DOE, likely this week, which some in the media are trumpeting as an Obama “green win.” If the measurement for the administration’s success is that a company didn’t go belly-up like Solyndra, Abound Solar, A123 Systems, etc., then congratulations – here’s your trophy.
In reality, especially in light of the struggles experienced by Fisker and the bankrupt companies, it’s obvious that Tesla never needed the money in the first place. The wildly successful billionaire mogul Musk, with entrepreneurial roots in PayPal and as CEO of SpaceX, undoubtedly could have shifted some of his personal fortune around and easily taken care of the debt. But reports have said that Tesla sold more stock to raise capital – a reported $1 billion.
On the performance front, Tesla has avoided the many pitfalls that Fisker experienced. But it’s still too early to call the EV company and its costly Model S a success. The recent widely publicized announcement that the company was finally profitable was attributable to the fact that Tesla could take advantage of selling California emissions credits to other auto companies whose fleets don’t comply with the state’s stringent emissions standards.
Meanwhile Musk and friends, like everyone else in the industry, have not conquered the obstacles of expense, driving range and recharging times to a level where they are on par with gas-powered vehicles. The broader success of the EV industry also is dependent on the deployment of charging infrastructure and battery technology improvement, both of which are still heavily subsidized by taxpayers.
And the disastrous review of the Model S delivered by the New York Times’s John Broder, in which he suffered much range anxiety and a towed-away car, set off a firestorm of exchanges in the media from which Musk is still trying to recover. All these factors mean the ultimate fate of Tesla is still undetermined, but even if Tesla thrives long-term, it won’t be because of the ATVM program.
3. Ford Motor Company. The automaker that has been proud to claim that it didn’t take bailout money like its fellow U.S.-based competitors, General Motors and Chrysler, instead accepted a $5.9 billion loan guarantee from the ATVM program. Ford and its partners at DOE claimed the financing made possible the conversion of “nearly 33,000 employees to green manufacturing jobs,” with an alleged 509,000 (presumably gas-powered) cars “off the road” and 2.38 million tons of carbon dioxide avoided. This miraculously occurred with Ford’s refurbishment of a few manufacturing plants.
The rollout of its first plug-in, the Focus Electric, was done so less-than-enthusiastically. Rather than a robust campaign to promote the new vehicle and its technology (like GM did with the Chevy Volt), instead Fordemployed the ho-hum approach.
“The marketing of the Focus Electric is to people who buy electric vehicles, not to you and me,” said Jim Farley, Ford head of global marketing, to USA Today a year ago. “We’re focused on the people who buy them.”
The Wall Street Journal reported in August that Ford is expanding its hybrid offerings to compete with the Toyota Prius and others, but how is it these other automakers can develop these vehicles without putting taxpayer resources at risk, yet Ford can’t?
So 33,000 employees were not added to employment, but suddenly converted to “green” workers, all to build cars that relatively few will buy.According to Bloomberg News, Ford owes $5.5 billion on the loan, is making quarterly payments of $148 million, and its payback terms extend through June 2022. More good news: Ford didn’t take bailout money and didn’t go bankrupt – another “win” for the Obama administration!
Nissan. CEO Carlos Ghosn said in October 2011 that he would manufacture the all-electric Leaf wherever governments put up subsidies and incentives, and so he joyfully raked in a $1.44 billion ATVM loan to refurbish a plant in Tennessee to build the EV and its batteries. The project’s promoters said the alterations would lead to 1,300 new jobs, enabling Nissan to produce up to 150,000 Leafs and 200,000 battery packs per year, which will lead to the all-important avoidance of 204,000 tons of carbon dioxide emissions annually. Last year Ghosn predicted sales of 1.5 million EVs by 2016, and said EVs will account for 10 percent of new car sales by 2020.
It’s not happening, and now Nissan has admitted as much.
“We were a little bit arrogant as a manufacturer when we went to the 50-state rollout,” said Al Castignetti, Nissan’s vice president for sales, to Automotive News in late November. “We had assumed that there were people just waiting for the vehicle who would raise their hand and say, ‘Give me a Leaf, give me a Leaf, give me a Leaf.’”
The expectations were diminished to such a degree that Nissan canceled the grand opening for the new plant that was scheduled for late November, despite much earlier fanfare and anticipation. And beyond the poor sales, the Leaf has also suffered complaints about battery power loss in hot climates and extremely limited range, which of course leads todriver anxiety.
The follies surrounding each of the ATVM recipients is reflected in areport published in March by the Government Accountability Office, which reviewed DOE’s loan programs for a briefing to both the House and Senate’s Appropriations subcommittees on Energy. Investigator Frank Rusco found the ATVM program was getting the cold shoulder from other electric vehicle entrepreneurs and major automakers. Of the $25 billion that was made available, DOE only issued $8.4 billion in guarantees to the above-mentioned five companies – the remainder has been mostly left unused.
“…the negative publicity makes DOE more risk-averse, or makes companies wary of being associated with government support,” Rusco wrote.
And besides the ATVM loan program, there are troubled vehicle and battery companies that received DOE grants from the stimulus, including bankrupt A123 Systems and Ener1, and troubled Smith Electric Vehicles and LG Chem.
Evaluations of the Obama administration’s electric transportation sector “investment” extend beyond whether companies simply go bankrupt or not. They need to be measured also against whether they are reaching goals that were sold to the public, whether the money is actually being used for its intended purpose, and indeed whether they are achieving the environmental milestones they set.
Remember, all these initiatives were supposed to save us from global warming, right? Since there has been no warming in the last 17 years, I guess that could be called a success.
[First published by the National Legal and Policy Center]
There is a healthy acceptance on the part of a significant number of influential intellectual and policy elites that the state of conservatism is not strong, and that it requires reform. But do they understand why that reform is necessary? It is because the Republican Party has failed to connect with people, has failed to meet the test of competency, and has failed to live up to its promises.
Justice Scalia once wrote, “Campaign promises are—by long democratic tradition—the least binding form of human commitment.” One could explain much about what the Republican Party has done over the past fifteen years, and even earlier, as an effort to prove Scalia thoroughly correct. The goals of limited government, fiscal responsibility, traditional values, and strong defense have been an ever-present litany of bullet points from Republican politicians – but talking about limited government and actually delivering on it are two very different things. As the representatives of conservatism in the political square, the Republican Party has proved to be an abject failure at delivering to the people what they promised.
There are numerous reasons for this. Under President Bush, it was largely because the core of his policy team never believed in limited government anyway, and the challenge of an unexpected terrorist attack and their subsequent push into security buildout and two wars pushed any limited government efforts beyond the initial tax reform to the side. The failure of the Bush administration to meet its core conservative promise led to dissatisfaction in the limited government ranks, and the failure of Republican competency – not just in war, but in disaster relief, and in character – led to the 2006 rebuff. The response to the financial crisis made this frustration explode in an organic outpouring of disgust and distrust toward government institutions which led directly to the rise of the Tea Party.
As Sean Trende has pointed out on numerous occasions, the Republican Party has won not so much when it was conservative as when it was populist, the Contract With America being the most prominent modern example of a government reform agenda packaged for a dissatisfied electorate. The Tea Party kept this trend alive: this movement dramatically altered the makeup of the Republican Party on Capitol Hill: today, the overwhelming majority of House Republicans arrived after the 2006 election, and half the caucus came from 2010 on. It had an enormous impact on the governorships of major states as well. These are politicians who have fewer establishment credentials – some of them not even a college degree – and tend to be far more libertarian-leaning than preceding classes. But they are also far more populist, and more averse to negotiation on matters of principle, which they view as a betrayal of the base which put them in power. That’s why things like sequestration, a nightmare for the Washington elites, have actually happened: this crew wants, more than anything, to live up to their promises.
The choice for the Republican Party is whether to invest more in the 2010 strategy of this populist strain, to refine it and connect more policy proposals to it … or to embark on an effort to restore the party’s standing as the adult in the room – the competent, clean cut, good-government technocracy that sees the chief appeal of Republican politicians as combining agencies and seeking out efficiencies rather than rolling back government power and draining bureaucratic swamps. The GOP swung back to this technocratic approach on a national scale in 2012, and let’s just say the electoral results left much to be desired.
Within this context, consider this from Jim Pethokoukis, who has a thoughtful and good natured response to my critique of his concept of reforming conservatism – particularly, of his case for ditching talk of flat taxes and a balanced budget. “[J]ust because people support an idea doesn’t mean it’s a priority. Balancing the budget polls well, but debt and deficits are not nearly as important as jobs and take-home pay. And I’m not so sure the flat tax or slashing top marginal income tax rates would be big winners in a 2016 general election.”
As I noted in my critique, this is about the healing power of “and”. The whole point of starting with the argument for a flat tax is to end up with a tax structure that looks more like Simpson-Bowles and less like the mess we have today. The implication that Republicans can’t be pro-jobs/economy if they are pro-balanced budget strikes me as wrongheaded. And I hardly think Republican tax proposals beyond a flat tax consist only of “slashing top marginal rates” – it is certainly not one of my own priorities, nor has it been part of the GOP platform since 2003, with more energy focused on preventing rates from going up or on wholesale tax reform.
Of course Republicans need to become more sophisticated in how they connect tax reform policy to the challenges Americans face in their daily lives. Better analytics is not a strategy. But this does not demand that they ditch the populist goal. You make the case for a flat tax not as a purist aim, but because it makes logical sense to the people, even if you just end up getting to a flatter tax because of it.
Pethokoukis again: “The fiscal math has to work, more or less. It doesn’t for a flat tax. Nor does it for a balanced budget amendment that assumes an unrealistically low level of spending for an aging society that also wants a lethal, power-projecting military. At some point, simplicity edges over into falsehood or fantasy. And I am not sure what problem a balanced budget solves since you can put the debt on a downward trajectory without one.”
You can lower debt relative to GDP if the economy grows faster than the rate at which you accumulate debt, but as Jim knows, it is impossible to reduce the actual amount of debt while running deficits (note: debt-to-GDP has increased from 57 percent of GDP in 2000 to 103% in 2012). He criticizes balanced budgeteers as promoting “an unrealistically low level of spending” as Baby Boomers age – but minus magical economic growth brought to us by unicorns, if spending cuts are off the table, how exactly do you cut debt relative to GDP without allowing taxes to rise to what most of us, not just conservatives, would consider an historically unacceptable level?
As for the fiscal math: If you take the White House’s average annual gross debt growth assumptions for 2013-2018 (only 5.16% growth per year) and extrapolate that out until 2030, we would need GDP growth to average about 7.5% per year to get back down to the 2008 debt-to-GDP ratio of 70% by 2030. That is simply absurd. And that also anticipates ludicrously low White House debt growth assumptions for 2013-2018. Between 2000 and 2012, gross federal debt rose at an average annual rate of 8.5%. If those conditions repeat, we’d need annual GDP growth of 9.8% each year to get down to 2008 levels of debt-to-GDP. In the out years (2019-2030), the average annual GDP growth rate would need to exceed 12%. Just to stay below 100% debt-to-GDP throughout that period would require 5.3% average annual GDP growth under the rosy assumptions and 7.6% under the 2000-2012 assumptions. That’s quite a fiscal math test.
Back to Pethokoukis: “If someone is worried about paying for their kids’ college, the quality of K-12 education, rising healthcare costs, retirement savings, stagnant wages, and whether their job is going to be outsourced to either Asia or RobotLand, what is the GOP offering, exactly? To keep inflation low and balance the budget — even if the latter means slashing basic research or unrealistically deep entitlement cuts? To cut top taxes rates with a promise that rapid economic growth will more than make up for the lost the revenue? Doesn’t seem appealing to me.”
There are all sorts of concrete ways for the Republican Party to do this while not selling out their larger case on taxes or spending. As I noted in my initial response, there are all sorts of ways to achieve other conservative aims and appeal to the middle class by doing the opposite of cutting entitlements (“We need to gut the IRS by reforming our tax code, fire anyone and everyone involved in spying on American taxpayers, and use the savings to shore up Medicare and Social Security” is about as populist as it gets). What’s more troubling about Pethokoukis’s case for me is that if I understand him correctly, he’s officially discounted tax cuts, tax reform, and spending cuts as viable or realistic policy options. This seems a little like saying we’re going to attack your cancer, but we’re not going to use chemotherapy, radiation, or surgery.
The Republican Party needs to understand that shrinking its policy aims to more modest solutions is not going to be rewarded by the electorate. Yes, they need to tailor their message better and find policy wedges which peel off chunks of the Democratic base (winning political strategy is built on an understanding that every drama needs a hero, a martyr, and a villain). But what’s truly essential is that the party leadership rid themselves of the notion that politeness, great hair, and reform for efficiency’s sake is a ballot box winner, and understand instead that politicians who can connect with the people and deliver on their limited government promises – not ones who back away from them under pressure – represent the path forward.
[First posted at Real Clear Politics]
Late last month, the elected officials of a small, rural New Mexico county became the first in the nation to vote for permanent poverty. Mora County’s unemployment is double that of most of the country and nearly 500% greater than that of some other parts of the state where oil and gas development is taking place, and 23.8% of Mora County’s residents live in poverty. With that in mind, you’d think that the Mora County Commissioners would welcome the jobs that are boosting the economy in the southeastern part of the state. Instead, they voted, 2-1—in a session that may violate the Open Meetings Act as the notice did not contain the date, time, and place of the meeting—to pass an ordinance that permanently bans oil and gas drilling.
Defending his vote, Chairman John Olivas, an employee of New Mexico Wilderness Alliance with no political experience, explained: “We need to create other jobs. First, sustainable agriculture; second, business development; and third, eco-tourism to keep people on the land.”
Frank Trambley, the Mora County GOP chairman, disagrees: “In our economic climate, we simply cannot afford to needlessly throw the possibility for jobs down the drain.”
Currently, Mora County has no oil and gas activity—and now it looks like it never will (though the outcome of potential lawsuits could change that). But there is reason to believe that the potential for development and jobs is there. Shell Oil has 100,000 acres leased for development—not to mention private interest—in Mora County, and there are more than 120 leases on state lands within the county.
In adjacent Colfax County, there are 950 natural gas wells. There the Commissioners don’t seem too troubled by the activity. The Colfax Country Commissioners are looking at drafting an ordinance that would “allow oil and gas drilling to continue while setting standards and regulations to give county officials control over aspects of the industry’s work that affect landowners and other citizens.”
But this story is bigger than the sparsely populated—less than 5000 and declining—northeastern New Mexico County. Following the passage of their “ban” ordinance, the two “yes” vote commissioners sent a letter to all the county commissioners in the state: “We’re sending you this letter to urge you to consider adopting a similar law. In Mora, we decided that ‘fracking,’ along with other forms of oil and gas drilling are not compatible with Mora farming, forestry, and our quality of life.” Apparently unemployment and poverty are “compatible” with the Mora “quality of life.”
How did Mora come to believe that it might become the little county that could “force” change aimed at “restoring democratic control of our communities”? They had the help of an out-of-state environmental group: the Community Environmental Legal Defense Fund (CELDF)—which helped draft Mora’s “Community Water Rights and Local Self-Government Ordinance.” Thomas Linzey, executive director of CELDF explained: “This is the fight that people have been too chicken to pick over the last 10 years.” The CELDF press release on the ban states: “Mora is joining a growing people’s movement for community and nature’s rights” and brags about CELDF’s involvement in other communities across the country.
The Mora Commissioners’ letter—on County letterhead—encourages all other New Mexico Commissioners to join them and invites participation in a gathering “hosted by a new group, the New Mexico Coalition for Community Rights (NMCCR) which was formed this past year to begin to change how our system here in New Mexico functions.” Kathleen Dudley, a “community organizer” and CELDF staffer, is the “contact person for that event.”
Wayne Johnson, a Bernalillo County Commissioner, alerted me to the Mora letter that may be in violation of state’s code of conduct—to which every elected official is subject. Johnson told me: “I believe I would at least be violating the spirit of the law if I sent out a letter on Bernalillo County letterhead that directly promotes the political activities of a specific group. Imagine the uproar that would be caused if I sent out—at taxpayers’ expense—a letter promoting an NRA conference or a Right to Life meeting. The First Amendment guarantees the right to express their political opinion. However using government resources to do so is inappropriate.”
The letter also includes this: “You may be unaffected by fracking and oil and gas drilling in your county.” Wrong. There is no county in New Mexico that is “unaffected.” In response to the letter, Greg Nibert, Chairman of the Chaves County Commission, shot back: “The oil and gas producing counties bear more than 40% of the entire state budget. We send money to Santa Fe that pays for educating the children of New Mexico. It is difficult to swallow that a county who may be blessed with such rich resources would enact such an ordinance.” Along with the other counties in the region, the Chaves County Commissioners plan to send a “strong letter in opposition to the Mora County Commission letter.” In a recent radio interview Mora’s Olivas said that he had no problem accepting state revenue from energy development in other counties, but is unwilling to allow any production and contribution from his own.
If the other counties followed Mora’s lead and banned fracking and/or oil and gas development, the state would lose 33,000 jobs—that’s 33,000 people who would be unable to put food on their families’ tables, pay their bills without worry, and even save for retirement. The states’ budget would be short a combined $5.73 billion dollars of investment. The majority of New Mexico’s 50,000+ wells use hydraulic fracturing for decades.
Nibert hopes some brave citizens of Mora County will step forward and bring a law suit against Mora County and at least its two commissioners who enacted the ordinance, as it takes the real property of its citizens without compensation, which is guaranteed by the US Constitution and the Constitution of New Mexico. To date, no one has come forward. “I know some lawyers who would love to take the case!
Nibert may get his wish. Several groups are looking at a legal challenge.
The one dissenting vote was from Commissioner Paula Garcia, who believes the ordinance goes too far. Federal and state law typically overrides local county legislation, but in regards to oil and gas extraction, the Mora ordinance puts the county above state and US government. Garcia says: “It is trying to reclaim local decision making that isn’t recognized in the law currently, and, in essence, it is challenging existing laws.” She “worries the ordinance won’t hold up in court and that Mora County can’t afford a pricey lawsuit.”
The state says its Oil Conservation Division can still issue permits to drill in Mora County, but permit holders will now likely have to go to court to fight the county ordinance. Likewise, officials at the Bureau of Land Management say that they are not bound by local ordinances. Yet, the little county’s ordinance has the gall to demand an amendment to the state Constitution “to explicitly secure a community right to local self-government that cannot be preempted by the State”—even threatening secession.
Olivas believes Mora County is prepared: “What we’re doing to prepare ourselves is signing with a legal firm to represent us. At the next County Commissioner meeting, we will sign a retainer with the firm.” It is reported that CELDF is the firm—charging $1 for representation, and that Mora County is working to establish a fund to help pay for the living and travel expenses involved in representation.
Trambley told me: “The County is split on the drilling issue, but people are afraid to speak out against the ban—afraid that if they do, they’ll lose their job. It’s maddening to see sweeping bans being made without accurate information about the economic and environmental effects of drilling.”
A recent poll from the Western Energy Alliance supports Trambley’s position. Responses showed that “prior to any presentation of the facts, almost a majority (49%) of voters support” the use of fracking. However, “if and when the public understands what industry is doing to protect their safety and the environment, their support for hydraulic fracturing increases up to 71%.”
I firmly believe that government closest to the people is the best. I’ve rallied with hundreds of people from other New Mexico counties who are fighting federal overreach that denies them their economic freedoms. But, when an out-of-state entity is driving an issue by spreading fear, uncertainty, and doubt, and when the Commission has to hide the time and location of the meeting to get the vote through—that is not the true voice of the locals.
Commissioner Olivas defends his actions by claiming that his vote followed through on a campaign promise. Sources tell me that his campaign was heavily funded by a single source that doesn’t primarily live in the county and whose money comes from the Progressive Insurance fortune.
While this is a New Mexico story, beware. CELDF has its sights set on a national movement. Emboldened by its success in Mora County, they may be coming to a community near you. You may find that your local leadership voted for permanent poverty.
A tweet from Occupy New Mexico following the Mora announcement: “After the victory in Mora, the #communityrights movement is spreading across New Mexico. Next up, #SantaFe #NM! @OccupyWallStNYC @350 #NMPOL” You can be sure they are not just “spreading across New Mexico.”
[First published at Townhall.com]
Three new Google antitrust developments in just the last few weeks warrant an update to Google’s ominously-growing Antitrust Rap Sheet; see it here.
- The EU issued a Statement of Objections signaling it has concluded that Google has anti-competitively abused its standards essential patents acquired from Motorola.
- Canada just launched a broad investigation of Google’s business practices given Google’s ~90% search/search advertising in Canada.
- The biggest surprise was the U.S. FTC reportedly has started an antitrust investigation of Google-DoubleClick over display ads.
It is telling that Google has been found to have broken antitrust laws in ten different ways. In addition, Google is under antitrust investigation in eleven countries and the EU.
Google continues to claim that it has done nothing wrong and that it is the real victim here of a grand anti-Google conspiracy.
However, the evidence speaks volumes that Google is trying to divert attention from its long track record of being a scofflaw.
- Google’s antitrust rap sheet catalogues 27 offenses over the last six years.
- Google’s privacy rap sheet has over 60 offenses over the last decade;
- Google’s list of property infringements includes over 40 offenses over the last decade;
- Google settled with the U.S. DOJ for $500m to avoid criminal prosecution for knowingly and actively marketing the import of illegal prescription drugs into the U.S over a period of several years; and
- Google is currently being investigated for tax fraud in the UK for claiming that hundreds of UK Google salespeople, who sell in the UK to UK businesses, somehow have virtually no reportable sales in the UK to be taxed, because they are reported to have occurred in Ireland where they are not taxed.
How can one company have so many serious law enforcement problems occurring repeatedly throughout the company in so many jurisdictions?
It is a logical outgrowth of Google’s leadership long fostering a Google culture of unaccountability.
[First published at The Precursor Blog, as part 24 of the Google Unaccountability Series]
“We’re from the Earth Guardians group, and we’re working on fracking and how it’s going to affect our future and our health. So we wrote this song for all the gas companies that are putting their profits ahead of our future.”
With that prelude, 12-year-old Xiuhtezcatl Martinez and his 9-year-old brother Itzcuauhtli launched into an anti-fracking rap song for Evergreen Middle School students whose teacher had invited them to travel 40 miles from their home in “the People’s Republic of Boulder,” Colorado. The song was well rehearsed, spirited, clever – and no doubt assisted by their mother, the founder and executive director of Earth Guardians, and maybe even by Boulder’s former mayor, an EG advisor.
The boys have been inculcated in Aztec and Hard Green ideology from birth. As EG members, they’re dedicated to “educating” other children about “sustainability,” “dangerous climate change” and “earth-friendly” renewable energy. In an era when too many babies are having babies, it’s not surprising that children are indoctrinating children. Not surprising, but not beneficial either.
Moreover, the teacher had failed to follow school policy, get permission to bring in outside propagandists, or present other perspectives. Unhappy parents raised a stink with Principal Kris Schuh, and the school district promised to distribute “pro-oil and gas literature” to secure some balance.
Fracking, of course, is horizontal drilling and hydraulic fracturing, a revolutionary technology that definitely will affect our future and our health – for the better.
Although fracking has been used for 60 years, in combination with deep horizontal drilling it has sent US oil and gas production sharply upward for the first time in decades, turned “imminent depletion” into another century of affordable petroleum, generated millions of jobs and billions of dollars in government revenues, kept home heating and electricity prices from skyrocketing in the face of EPA’s war on coal, brought a resurgence in US petrochemical and other industries, and helped reduce CO2 emissions (which should make Earth Guardians and other global warming true believers happy). It’s meant fewer oil imports, improved balance of trade, and more opportunities to lift more people out of poverty worldwide.
A recent IHS Global Insight report documents that, in the United States alone, fracking has already created 1.7 million new direct and indirect jobs, with the total likely to rise to 3 million jobs over the next eight years. It’s added $62 billion to federal and state treasuries, with that total expected to rise to $111 billion by 2020. And by 2035, it could inject over $5 trillion in cumulative capital expenditures into the economy, while generating over $2.5 trillion in cumulative additional government revenues.
By contrast, $26 billion taken from taxpayers and given to wind, solar and biofuel energy projects via Department of Energy subsidies and loan guarantees since 2009 created only 2,298 permanent jobs, at a cost of $11.45 million per job, the Institute for Energy Research calculates, using DOE data.
If more of this new natural gas were devoted to generating electricity – instead of just backing up 40,000 US wind turbines – millions of birds and bats would not be slaughtered every year, and vital species would not be driven to the brink of extinction in wildlife habitats that have been blanketed by turbines.
The Earth Guardians ignore all of this, and claim hydraulic fracturing is poisoning our air and water.
The facts say otherwise. As the film FrackNation and numerous articles and reports have documented, there has never been a confirmed case of groundwater contamination due to fracking, despite numerous investigations by state agencies and the US Environmental Protection Agency. There is no evidence of air or people being poisoned, and companies continue to improve their technologies, to reduce methane leakage and employ more biodegradable and “kitchen cabinet” chemicals.
But the Earth Guardians still deliver outright falsehoods about fracking, by children to children, in public schools funded by taxpayer dollars. Perhaps this goes on because teachers and school administrators fail to recognize the potential harm, or are themselves devoted to promoting extreme environmentalist ideologies. Certainly they failed to exercise their responsibility and authority as educators to provide a balanced curriculum and avoid being used by groups with political agendas, to inculcate a new generation of Americans in perverse Hard Green dogmas that are harmful to wildlife, people and the environment.
Why is it that the Earth Guardians, Sierra Club and similar groups detest fracking? Maybe because this technology demolishes their Club of Rome claims that mankind is about to run out of petroleum – or because it means fossil fuels are again on the ascendency, making wind and solar even less viable and further demonstrating that wind energy is a far less sustainable energy resource than petroleum.
How vulnerable are America’s youth to this brainwashing? With young people spending 7.5 hours a day viewing television, music and social media like Facebook, they’re almost ready-made targets for political groups that use these communications tools to promote narrow views. Without facts and data to counter the simplistic, entertaining and superficially persuasive messages – especially when they are delivered in schools – children tend to accept what authority figures put in front of them.
Even older students are vulnerable to being spoon-fed incorrect information. And student voters who are reluctant or too disinterested to seek truthful information can have a profound impact on U.S. elections and national policy.
In 2011 college professors Josipa Roksa and Richard Arum surveyed 925 college students about their transitions into the labor force, two years after graduation. In addition to discovering that only slightly more than half had found full-time jobs, Roska and Arum found that student “lack of awareness of current events … was startling.” Thirty-two percent reported “that they read a newspaper only monthly or never.” It makes you wonder how many colleges are doing their most fundamental job: teaching students to think and question, rather than merely to parrot politically correct mantras – and whether they are preparing students to become intelligent, informed, active members in a functioning democratic society.
Roska and Arum wrote, “This lack of engagement is as troubling as their financial difficulties – it can hardly be a good sign for a democratic society when many of its citizens, including highly educated ones, are not aware of or engaged with what is going on in the nation and world.”
Yet, as we learned in the 2008 election, young voters have the power to select a president. If their political choices are based on a lack of knowledge – or even worse, on propaganda – the nation is in peril.
Our schools need to end the indoctrination and ensure that students are presented with and taught to ponder and debate all sides of important and complex questions. Parents need to make sure they do so.
“You’re going to come across people in your life who will say all the right words at all the right times. But in the end, it’s always their actions you should judge them by. It’s actions, not words, that matter.” – America novelist and screenwriter Nicholas Sparks, The Rescue.
“Here is a guarantee that I’ve made. If you have insurance that you like, then you will be able to keep that insurance. If you’ve got a doctor that you like, you will be able to keep your doctor. … If you like your plan, and you like your doctor, you won’t have to do a thing, you keep your plan, you keep your doctor. If your employer is providing you good health insurance, terrific, we’re not going to mess with it.” – U.S. President Barack Obama speaking on “The Affordable Care Act,” a/k/a Obamacare, March 23, 2010.
“We have to pass this bill to find out what’s in it.” – former Democratic Speaker of the House Nancy Pelosi, speaking on “The Affordable Care Act,” March 21, 2012.
“Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past.” – New York Times reporter Reed Abelson, “High-End Health Plans Scale Back to Avoid ‘Cadillac Tax’,” May 27, 2013.
“The consumer should continue to expect that their plan is going to be more expensive, and they will have less [sic] benefits.” HighRoads benefits consultant executive Cynthia Weidner, quoted in The New York Times, May 27, 2013.
If you guessed (2), of course, you’d be correct. Spark, Abelson, Weidner – even Pelosi – are and were either correct or telling the truth as they see it. On the signature health insurance act that unofficially carries his name, only the President was not.
The sad fact is that, even with the heavy hand of administration arm-twisting that included such bribes and buy-offs as “The Cornhusker Kickback” and “The Louisiana Purchase,” the inaptly named “Patient Protection and Affordable Care Act” that even Democratic Senator Max Baucus now calls a “train wreck” was rammed through the U. S. Senate by a single vote. Those votes included Saturday Night Live comedian Al Franken of Minnesota, who won election by two or three hundred votes on a contested recount, and Roland Burris of Illinois, the man appointed to his seat by now-convicted federal inmate and former Illinois Governor Rod Blagojevich.
Now that the Congress has passed this Orwellian monstrosity and Ms. Pelosi and the rest of us have found out what’s in it, President Obama’s rhetorical “guarantees” have proved as phony as a three-dollar bill. Proof that the skeptics – which includes at least some of us here at Somewhat Reasonable – were correct comes not from some Justice Department-designated criminal enterprise suspect like Fox News, but from no less an impeachable progressive source than the venerable New York Times.
Reporting on May 27, 2013, Reed Abelson outlined some of the consequences that will hit employees who used to have the kind of “good health insurance” that the President promised he was” not going to mess with” – that is, insurance plans and doctors that they liked.
“Get ready to enroll in a program to manage your diabetes” instead, writes Abelson. “Expect to have your blood pressure checked or a prescription filled at a clinic at your office, rather than by your private doctor. Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees.”
Abelson cites the case of Abbey Bruce, a nursing assistant in Olympia, Washington. Ms. Bruce reportedly actually works for a hospital but was forced to drop out of school and to take a second job pushing a mop and a broom because the hospital that employs her full-time stopped offering the plan that she and her husband liked and that President Obama promised not to “mess with.”
Starting this year, Ms. Bruce and husband Casey, who has cystic fibrosis, will reportedly see their combined deductible nearly quintuple from $500 to $2,300 and their personal responsibility for medical expenses increase to $6,600. “My husband didn’t choose to be born this way,” The Times quoted Ms. Bruce as saying, but what is that compared to the progressive cause of national health insurance?
If you believe the Times, Ms. Bruce liked the insurance that she had but under the “Affordable Care Act” her employer isn’t allowing her to keep it, and soon, likely, neither will you. The “Cadillac plan” tax on employers that led Ms. Bruce’s hospital to change the cost and coverage of her healthcare kicks in completely in 2018, and your employer, like Ms. Bruce’s, is probably preparing for it now. According to the Times, Johns Hopkins health economist Bradley Herring estimates that up to three-quarters of all plans could be affected tax over the next decade.
So better begin planning for it now: try not to get sick – or to marry someone who is.
Durbin: Let’s Have Government Create a Journalist Guild That Exclusively Enjoys First Amendment Protections
It’s sometimes dangerous to take a snippet of a politician’s Sunday talk show bloviations and extrapolate them into a ruling philosophy. I don’t think that’s the case with Sen. Dick Durbin (D-IL) and his comments on Fox News Sunday this week. It’s clear that he really means what he said about First Amendment protections for subjects of the federal government free citizens of the United States.
While talking about a potential media shield law for “journalists,” Durbin said this [emphasis mine]:
What is a journalist today in 2013? We know it’s someone that works for Fox or AP, but does it include a blogger? Does it include someone who is tweeting? Are these people journalists and entitled to constitutional protection? We need to ask 21st century questions about a provision that was written over 200 years ago.
As a former “credentialed journalist” and now a mere “blogger,” I watched that quote live on Sunday and was shocked by the statement — as should everyone who has a computer keyboard. The First Amendment states this [emphasis mine]:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
Note that the First Amendment of the Bill of Rights explicitly protects the “freedom of speech,” with a secondary nod to “the press.” The First Amendment does not define what a “free press” means, because it doesn’t have to do so beyond the standard definition — the people publishing their coverage of the government.
In other words, “the press” is just one avenue in which the people can express their right to free speech. There is no reason to imagine what our Founders thought about “a provision that was written over 200 years ago.” It is crystal clear: They meant, chiefly, to protect the right of the people to report upon and express their news and opinion about the government. To make it easy for Durbin to understand, today’s “bloggers” are the pamphleteers of “over 200 years ago.”
There has never been an “official journalism guild” that enjoys specified protection under the Constitution, nor should there ever be one. The First Amendment right of a “free press” is merely a form of the people’s right to free speech. Dick Durbin can no more regulate my right to say he’s a tyrant-in-waiting through a bullhorn on my front porch than he can if I decide to say it on this blog. Nor does he have the right to say information leaked to James Rosen of Fox News is less-protected by the Constitution if it’s leaked to me.
Durbin’s brand of creeping tyranny is one reason this ink-stained journalist opposes any type of “journalist shield law.” Get the government in the business of regulating “the press” — for its own “protection” — and it will soon define what “the press” is. Down that road lies the short trip to negating the free speech rights of all those whom the government will define as “non-journalists,” such as bloggers and “tweeters.”
It should go without saying that the way the mainstream media performs these days, the only real examination of our federal government comes largely from bloggers — the modern-day pamphleteers Dick Durbin thinks are perhaps unworthy of First Amendment rights.
Don’t expect the MSM to fight for our rights. We’ll have to light the candle of First Amendment vigilance on our own.
It was my pleasure to interview James P. Pinkerton, co-chair of the RATE Coalition, for the Heartland Daily Podcast. As many listeners know, Jim is a regular on “Fox News Watch” and a columnist at FoxNews.com. (Follow Jim on Twitter, and also @RATEcoalition.)
The RATE Coalition advocates for lower corporate tax rates in the United States to make us more competitive with our peers in the industrialized world. Jim Pinkerton notes, for instance, how Sweden — a soft socialist country — has a lower corporate tax rate than the U.S., and is moving to lower it even further. For shame.
Of course, we also talked about the recent absurd spectacle of Apple CEO Tim Cook being hauled in front of a Senate committee to explain why he takes every legal step to avoid America’s punitive corporate tax rate — while still sending billions to the federal Treasury every year.
“Companies have a choice,” Pinkerton says. “They don’t have to put their money in America. They can put it somewhere else.”
We also discuss a metric I invented: The Depardieu Line, the rate at which a celebrity will stay in his own country. Enjoy.[Subscribe to the Heartland Daily Podcast free at this link.]
Last Thursday, the US Department of the Interior released a draft proposal that would “establish common-sense safety standards for hydraulic fracturing on public and Indian lands.” Last Friday, the US Department of Energy (DOE) approved a Liquefied Natural Gas (LNG) terminal in Freeport, Texas. Despite opposition from environmental groups, the Obama administration apparently supports the expansion of the natural gas industry and the controversial technology of hydraulic fracturing. These events are welcome common sense from an administration that is typically deep in green ideology.
Good old Yankee ingenuity has produced a new hydrocarbon revolution. Vast quantities of oil and natural gas can now be recovered from shale rock formations, thanks to enabling technologies of hydraulic fracturing (or fracking) and horizontal drilling. US crude oil production in 2012 was up 30 percent since reaching a low in 2008. Natural gas production is up 33 percent since 2005. Bob Dudley, CEO of BP, forecasts that the United States will be “nearly self-sufficient in energy” by the year 2030.
Fracking is not new, but has been perfected over the last 20 years to allow cost-effective recovery of hydrocarbon fuels from shale. Water and sand, along with a small amount of chemicals, are injected under pressure to fracture the shale and create millions of tiny fissures, releasing the trapped gas or oil. To develop a large producing field, horizontal drilling is used to bore mile-long horizontal shafts into the shale. Fracking is typically used at depths greater than 5,000 feet.
But hydraulic fracturing is under assault from environmental organizations. According to the Sierra Club, “Fracking, a violent process that dislodges gas deposits from shale rock formations, is known to contaminate drinking water, pollute the air, and cause earthquakes.” A 2011 letter from Friends of the Earth, Greenpeace USA, Climate Protection Campaign, and other groups urged President Obama to “halt hydraulic fracturing…until and unless the environmental and health impacts of this process are well understood and the public is adequately protected.”
The draft rule released Thursday from the Department of the Interior acknowledges that hydraulic fracturing can be conducted in an environmentally safe manner. It calls for disclosure of chemicals used in fracking, assurances of well-bore integrity to prevent leakage of gas and fluid into ground water supplies, and confirmation of a water management plan for disposal of water and fluids used in the fracking process. Indeed, fracking has been used more than 500,000 times over the last 50 years without incidents of water contamination when proper safeguards were employed.
The hydrofracturing revolution has created a glut of natural gas in the US market. Prior to wide-scale use of fracking, natural gas prices reached $15 per million British thermal units (Btu), and port facilities were being constructed to import LNG. By 2011, prices had fallen to $4 per million Btu and import terminals sat idle.
Unlike crude oil, which is priced and sold in a global market, natural gas is priced and sold regionally. To date, the fracking revolution has been a US phenomenon, with other nations slow to join. While US gas prices have dropped to under $4 per million Btu, Europe’s prices remain above $10, and the price of imported LNG in Japan is above $15.
US producers now see an opportunity to liquefy the gas and ship it to Europe and Japan. Twenty applications have been filed with the Department of Energy (DOE). The approval last week of the Freeport export terminal in Texas is the first since 2011. The $10 billion terminal plans to export up to 1.4 billion cubic feet of natural gas per day, or about two percent of annual US consumption.
Environmental groups have criticized the approval. “Exporting LNG will lead to more drilling―and more drilling means more fracking, more air and water pollution, and more climate fueled weather disasters like last year’s record fires, droughts, and superstorms,” according to Deb Nardone of the Sierra Club. Nevertheless, it appears that the Obama administration will support hydraulic fracturing and the growth of the natural gas industry.
Shale gas booms in Texas, Louisiana, and Pennsylvania have created tens of thousands of jobs. Low natural gas prices are attracting global chemical firms to build plants in the US. Thousands of additional jobs and tax revenues can come from LNG exports. Sound energy policy demands that fracking and export of natural gas be allowed, if environmental safeguards are met.
[Originally published in The Washington Times]
Not 24 hours passed from the time a devastating tornado ripped through Moore, Oklahoma, killing at least 24 people including eight children, until shameless global warming activists in Congress began exploiting the grief and pain of a devastated community to tell an idiotic tale of global warming causing tornadoes. Sen. Sheldon Whitehouse (D-RI) and Sen. Barbara Boxer (D-CA), shame on you for being such hard-hearted and factually ignorant vultures preying on other people’s misery.
Before we even get to the objective facts regarding global warming and tornadoes, can we at least respect the human tragedy in Oklahoma and give victims a few days to grieve before we try to politicize their pain? Literally minutes after the F5 tornado devastated Moore, Whitehouse rushed out to the cameras to blame “polluters,” “deniers” and Republicans for the Oklahoma tornado. For goodness sake, Sheldon, even if you happened to be correct about global warming and tornadoes (more on that in a minute), can you stop playing political games for just one hour and allow a hurting town, state and nation to grieve without having to listen to your callous political divisiveness? Where is your sense of decency?
Barbara Boxer, to her benefit, waited almost a day before shamelessly politicizing this human tragedy. Her lack of human decency would be unparalleled in the Senate if not for the even more remarkable lack of human decency displayed by Whitehouse.
Now let’s get to those pesky little things called “facts.” I know these things are foreign to plastic, out-of-touch career politicians like Whitehouse and Boxer, but believe it or not they are relevant to the global warming debate in some circles.
When the Oklahoma tornado touched down Monday afternoon, it occurred at the culmination of the 12-month period with the fewest tornado strikes in recorded history. Did you catch that? We are currently experiencing the fewest tornado strikes in recorded history!
I guess it was inevitable that at some point a tornado would strike again. After all, to the best of my knowledge tornadoes have occurred since long before Oklahomans began driving SUVs and living with the benefits of electricity. According to the alarmists’ logic, because a tornado occurred and because the earth has gradually warmed in the century-plus since the end of the Little Ice Age, global warming must cause tornadoes – even when we are experiencing the fewest number of tornadoes in recorded history precisely when atmospheric carbon dioxide levels are at their highest in centuries.
Nor has a gradually warming earth led to an increase in the severity of tornadoes. According to National Oceanic and Atmospheric Administration data, the past 50 years have seen a steady decline in major tornadoes – the F3-F5 tornadoes that do the most damage.
If we want to play the climate association game and claim that global warming plays a role in all extreme weather events, that role is clearly to lessen the frequency and severity of tornadoes and virtually all other extreme weather events. F3-F5 tornadoes occurred approximately 50 percent more often from 1964 through 1984 than they did from 1984 through the present.
While shameless, opportunist, dishonest career politicians claim global warming caused the Oklahoma tornado, the undeniable fact is – if we choose to connect global warming to extreme weather trends – global warming has PREVENTED approximately 20 F3-F5 tornadoes each and every year during the past three decades. That’s 600 F3-F5 tornadoes that would have additionally occurred during the past three decades if not for the beneficial impact of global warming. Thank goodness that global warming is occurring to save so many lives.
These are facts that need to be told. But today should not be the day to tell them. That day should have been sometime next week, or next month, or later in 2013. But hard-hearted politicians can’t resist politicizing every last tragedy that strikes this country, even when they are wrong on the facts.
Can you imagine how it must feel to be one of the people personally affected by this tragedy who knows these global warming facts, is struck with overwhelming grief at the loss of a loved one, and then has to endure politicians like Whitehouse and Boxer predating on his or her unimaginable grief? I suspect quite a few people in families personally affected by the Oklahoma tornado know the facts and now have to endure the additional pain and frustration of listening to Whitehouse and Boxer callously telling lies about their personal tragedy in order to make political hay off their personal loss. Shame on you hard-hearted and ignorant politicians.
Global warming clearly has either no effect on tornadoes or is making tornadoes less frequent and less severe, but this is not a fact that people like me should feel obligated to discuss on a day and a week like this. Whitehouse and Boxer need to grow some common decency.
[First published at Forbes]
Author and Heartland Institute Policy Advisor Steve Goreham recently discussed climate change and his new book, The Mad, Mad, Mad World of Climatism, on the Charlie Sykes Show on WTMJ in Milwaukee, Wisconsin. In case you didn’t know, that book is so disturbing the climate alarmist community, it’s now being burned by university departments of climate sciences.
Steve is the executive director of the Climate Science Coalition of America, and he uses easy to understand scientific facts to dispel so much of the climate change mania in our society.
Listen to Steve and Heartland friend Charlie Sykes talk about the book — and the controversy that surrounds it — in the player above.
Are schools collecting too much personal information about kids? The world has become an intensive data-tracking place, with grocery stores tracking your eating habits and Google tracking your internet history and search terms. Schools are no exception. Bluegrass Institute education analyst Richard Innes, an old hand at the inner workings of student data collection, joins Joy Pullmann on the Heartland Daily Podcast to discuss how even “anonymous” information on a child is no longer anonymous to any researcher with a decent database. He also outlines how the federal government is moving towards creating a comprehensive cradle-through-career database on each child, and what this means for privacy, government, and education.[Subscribe to the Heartland Daily Podcast free at this link.]