China’s impressive modernization since the death of Mao Zedong in 1976 and the end to the destructive madness of the Cultural Revolution has been epitomized by the dramatic growth of the industrial and port city of Shanghai, with its majestic skyline of impressive futuristic skyscrapers. It is forgotten that Shanghai already was a commercial and industrial center before the Second World War, built on the principles of laissez-faire capitalism.
Following the Chinese-British War of 1842, several ports along the China coast were opened to Western merchants. In these “treaty ports,” portions of the cities were recognized to be under European jurisdiction. Known as “concession” areas, the European powers administered these areas according to Western principles of the “rule of law,” with recognition and protection of property rights, personal freedom and civil liberties.
By the end of the 19th century, Shanghai had become the most important of the treaty ports. Indeed, it was the industrial, commercial and cultural center of modem China until the Japanese occupation of the city in December 1941, following the attack on Pearl Harbor.
Shanghai an Almost Free City-State
The Western-administered portions of Shanghai were divided into two districts: the French Concession and the International Settlement. A Consul-General appointed by Paris administered the French Concession.
But the much larger International Settlement was administered by a Municipal Council composed of fourteen members elected by the permanent foreign residents of the city, with the franchise based on being a “ratepayer,” i.e., a tax-paying property owner within the boundaries of the International Settlement. By the 1930s, around 90,000 Europeans and Americans lived in Shanghai.
Hence, Shanghai’s International Settlement was almost an independent “city-state” based on the nearly unhampered principles of free trade and free enterprise under the protection of the Western Powers (which ended up meaning mostly a British and American military presence).
In general, the economic policies of Shanghai’s International Settlement followed the ideas of Adam Smith’s system of natural liberty and laissez faire. The Municipal Council limited itself primarily to three functions: administration of justice; police protection of individual liberty and property; and the undertaking of a limited number of “public works,” such as construction of roads, traffic control (administered by Sikh policemen brought by the British from India), harbor patrol, and the dredging of the Whangpoo River that connects Shanghai with the mouth of the Yangtze.
Treaty agreements between China and the major Western nations established that legal disputes in which a Chinese citizen sued a Western resident were adjudicated before a court of the country of which the Westerner was a citizen. This system was known as “extra-territoriality.” While viewed as an insult to Chinese territorial integrity, and while not always free of abuse and bias, this meant that on the whole, an impartial and efficient system of Western-style justice was guaranteed for everyone in Shanghai’s International Settlement.
A Prosperous Metropolis of Asia
Under a regime of limited government, low taxes, and economic laissez faire, Shanghai became the most prosperous metropolis in all of Asia. The standard of living, including that of Chinese residents in the International Settlement and in surrounding Chinese-administered areas, was the highest in East Asia. It was this free market environment that created that Western-style skyline that in the 1930s was considered the Asian rival of New York.
The city also became the focal point for the Chinese intellectual community as well as a Chinese cultural center — and one in which freedom of speech and press were protected for all, Westerner and Chinese alike. While tempests of civil war engulfed China in the period between the two World Wars, Shanghai was a haven of economic and civil liberty.
Through a system of private colleges and universities that served both Westerner and Chinese, Shanghai developed into China’s center for higher learning. Indeed, through scholarships and philanthropic endowments — many being supported by Christian missionaries — many of those who later became China’s leaders in politics, literature and the arts acquired their advanced schooling in Shanghai.
A Refuge from Taxes and Tyranny
The city was a refuge for many searching for fortune or freedom, and often both. For Western businessmen Shanghai was a haven for those “escaping” from heavy taxation in other parts of the world. For example, along the Bund, the commercial waterfront, stands an impressive hotel with a pyramid roof. This was the Cathay Hotel, also known as Sassoon House, built by Sir Victor Sassoon, who left Britain with a good part of his fortune in 1927, to get away from the high business and income taxes in Great Britain.
The port bustled with the coming and going of merchant ships from all over the world. Shanghai’s manufacturing enterprises supplied inexpensive but quality goods to serve the consumers of China, and competitively exported many products on the global market.
Shanghai also was a haven for many people escaping real tyranny — not just tax “oppression.” Following the Bolshevik Revolution, thousands of (anti-communist) “White Russians” found refuge in Shanghai. They became famous in the city, not only among the city’s “sing-song” girls, but as doormen at nightclubs and bodyguards for Chinese gangsters who usually preferred the nightlife in the French Concession; and, of course, for the city’s many fine Russian cuisine restaurants. (Russian noblemen, or their sons, were seen playing the balalaika in those restaurants, or even in the streets pulling rickshaws, to earn enough to live, having lost their family wealth to communist confiscation in Russia.)
In the 1930s, thousands of German Jews who fled Nazi Germany found refuge in Shanghai, because the city had neither passport nor visa requirements. Many of them settled in the Hongkew district of Shanghai, which had been badly damaged during the fighting between Chinese Nationalist and Imperial Japanese army forces, first, in 1932, and then, again, in 1937.
But under the diligent work ethic and industry of these refugee German Jews, much of the Hongkew district was rebuilt and again became a thriving part of the city. And, then, in an irony of fate, when the Japanese occupied the International Settlement following the attack on Pearl Harbor they did not intern these Jews (unlike the systematic roundup and imprisonment and cruel treatment of all French, British and American citizens), because these Jews carried German exit passports. And though these passports were stamped with the infamous “J,” the Japanese viewed them as citizens of their wartime ally.
A Safe Haven from Chinese Tyrants and Warlords
Shanghai was also the headquarters for numerous religious and secular charities and philanthropies that ministered to the needs and improvements of the Chinese population both in the city and throughout other parts of China. There were voluntarily funded orphanages, soup kitchens, shelters, schools, and vocational training colleges to give a “helping hand” to the Chinese.
Finally, throughout the second half of the 19th century and up until the 1941, Shanghai’s International Settlement and French Concession were a refuge for many Chinese when revolutions, civil wars, or the general cruelty of Chinese government governors or warlords made life “nasty, brutish, and short.”
There in Shanghai, financial savings were safe in Western banks, and property rights were respected and protected from both illegal plunder and the “legal” plunder of Chinese officials and warlords.
But, in addition, Shanghai’s International Settlement was a cultural oasis for Chinese artists and intellectuals. Here was born the Chinese motion picture industry; non-traditional music and art; and a haven for freedom of speech and the press, which were not allowed in surrounding Chinese administered areas. Here civil liberties were respected and secure, under the rule of law.
It was also a property rights-safe place for the development of Chinese-owned manufacturing and industry — not only Western businesses. In Shanghai, these Chinese entrepreneurs were free from the “squeeze,” the Chinese term for bribes and corrupt protection rackets and government official shakedowns.
Imperfect People, But Still a Free and Prosperous City
It was also a city that operated on the basis of commercial trust and integrity. Many of the foreign residents, for instance, never paid for anything with cash or check. A person simply signed his name to a “chit” for any purchase, and just settled up at the end of the month, and rarely did these everyday debts go unpaid.
Shanghai was, of course, a many-sided city. In the French Concession were the homes of many of the most notorious Chinese gangsters. Opium dens abounded and houses of ill repute existed in the hundreds — and catered to every imaginable racial and socio-economic group. And the city attracted its fair share of adventurers, conmen and hucksters from all around the world.
Like everywhere, in an imperfect world with imperfect people, Shanghai was no “utopia.” But its instituting and general protecting of Western civil and economic liberty made the International Settlement a place of practical, everyday personal and economic freedom.
Of course, most Chinese — from intellectuals down to the ordinary (and usually) illiterate Chinese “coolies” — resented the power and presence of the European and American “foreign devils.” And this resentment and anger against the power and too-often arrogance of the Westerner, took many forms, including boycotts and strikes, and sometimes violent demonstrations, especially in the 1920s and 1930s.
But, de facto, Shanghai’s International Settlement gave many Chinese the personal safety and economic and cultural opportunities they could never have under their corrupt and power-lusting Chinese rulers in the rest of the country.
The End to Shanghai’s Era of Laissez-Faire
This all came to an end in 1941, with the Japanese occupation of the city. Then, at the 1943 Cairo Conference between Franklin D. Roosevelt, Winston Churchill and Chiang Kai-Shek (the head of the Nationalist Chinese government), the Western powers relinquished their rights to “extra-territoriality,” which was the basis for those foreign concessions in China, of which Shanghai’s International Settlement was the most important and famous.
After the war, from 1945 to 1949, when Shanghai was under the control of Chiang’s Nationalist government, the city suffered through political corruption and abuse, and as well as a hyperinflation caused by the Nationalist government’s massive printing of paper money to finance its war against Mao’s communists.
Then from 1949 until the 1980s, the communist regime left the city in a state of a “frozen moment in time,” with its skyline virtually unchanged from what it was in the 1930s.
Yet, Shanghai’s “frozen” capitalist-built commercial skyline symbolized all that was possible when men and their creative, entrepreneurial minds are left free, and people are at liberty to peacefully and profitably produce, trade and prosper to the mutual benefit of all individuals concerned.
[First published at Epic Times.]
Chicago was blasted this week by the coldest weather in 18 years. Below zero temperatures and wind gusts of up to 35 miles per hour produced wind chills of minus 40 F. The deep freeze followed a winter storm that blanketed the area with 6 to 10 inches of snow on Sunday. The extreme cold and snow was a natural retort to Chicago’s policies to fight global warming.
On Sunday and into Monday, Chicago was mostly shut down. More than 1,000 flights were cancelled at O’Hare Airport. Chicago public schools and most suburban schools were closed. Northwest Indiana was hit by over 10 inches of lake-effect snow, where officials of Lake County declared a state of emergency, banning all vehicles from snow-covered roads except emergency vehicles.
Temperatures at O’Hare Airport dropped to -15 F, breaking the old daily record of -14 F set in 1894 and 1988. The brutal temperatures were the coldest since the thermometer reached -19 F in 1996, but well short of the all-time cold record of -27 F set January 20, 1985.
The cold weather stands in sharp contrast to Chicago’s policies to slow global warming. In his Sustainable Chicago 2015 plan, Mayor Rahm Emanual lauds efforts to “. . . reduce pollution, and protect homes and communities from the effects of flooding and climate change.” In 2013, the mayor and city council passed an ordinance requiring businesses to audit and disclose energy usage in buildings of over 50,000 square feet. The city’s sustainability plan calls for citizens to install solar panels, consume renewable energy, and use bicycles, mass transit, and electric cars, rather than gasoline-powered automobiles.
University of Chicago professor David Archer is a strong proponent the theory of man-made warming. In his 2010 book The Climate Crisis, Archer notes that the 2007 Fourth Assessment Report of the Intergovernmental Panel on Climate Change predicted reduced snowfall:
One of the robust findings of the report is that snow cover in most continental areas will dramatically decrease unless warming is stopped. . . . Large areas are expected to become snow free.
But there is no evidence of a snowfall shortage in Chicago. O’Hare Airport has already received 34.7 inches of snow this winter through January 5. This exceeds the average annual snowfall of 30.8 inches, with two months of winter yet to go.
Leading Chicago corporations tout their efforts to fight climate change. Steel company ArcelorMittal and financial firm Northern Trust boast of big reductions in carbon dioxide emissions. Utility Exelon claims emission savings from costly new solar and wind projects, while winning a 2014 rate hike to pass higher costs on to electricity users. Baxter International purchases renewable energy certificates to “offset” greenhouse gas emissions. These efforts may be great for corporate public relations, but are meaningless when it comes to the climate.
The greenhouse effect is a natural effect, and man-made influences are small. Somewhere between 75 and 90 percent of Earth’s greenhouse effect is caused by water vapor and clouds. Ninety-six percent of the remaining portion of the greenhouse effect is due to natural emissions of carbon dioxide and methane from the oceans and biosphere. Human emissions are responsible for only about one percent of Earth’s greenhouse effect. If humankind completely eliminated CO2 emissions, the difference in global temperatures probably could not be detected.
Nevertheless, Chicago organizations continue a futile fight to control the climate. Grove Avenue Elementary School in Barrington, a Chicago suburb, has established an innovative “Green Tuesdays” program. School lights are off each Tuesday to raise student awareness about climate change and the environment.
Keep up the good work, Chicago. With the ample snow and bitter cold, your efforts to fight global warming appear to be working!
Editor’s note: Get the scientific and Inconvenient Truth (to some) about what’s happening to our climate at The Heartland Institute’s Climate Change Reconsidered site. And buy Steve Goreham’s book, The Mad Mad World of Climatism at Heartland’s store.
[First posted at The Washington Times.]
Net neutrality activists’ criticism of AT&T’s new freebie for consumers called Sponsored Data is nonsensical. AT&T’s pricing innovation creates a new freebie for consumers and a new freedom for web providers of Internet content, apps and devices that is fully in keeping with any reasonable notion of a free and open Internet.
AT&T’s Sponsored Data offering is no different from other business freebies offered to consumers to market and competitively differentiate their businesses like: Amazon’s free shipping and free Kindle wireless service; Apple’s free messaging and video conferencing; Google’s free Search, Fiber, Maps, Mobile Operating System, and video conferencing offerings; or Yahoo’s free email. A full list of all free and open Internet consumer freebies would be endless.
AT&T’s Sponsored Data innovation is no different from sponsored ads, website sponsors, content sponsors or any other kind of Internet sponsor.
It is nonsensical for net neutrality activists to not be open to yet another free web service. On what reasonable basis is a consumer freebie from AT&T different than a consumer freebie offered by any other competitor in the Internet ecosystem?
How have net neutrality activists let themselves get so comically twisted up in their own free and open Internet rhetoric that they now find themselves opposing more Internet freedom, choices, and freebies for consumers!
Simply, AT&T’s new Sponsored Data freebie is pro-consumer, pro-competition and pro-innovation. It’s neither discriminatory nor does not block, degrade or impair a consumer’s legal access to the content, applications or devices of their choice.
Net Neutrality activists are the ones opposed here to Internet freedom, “innovation without permission,” and consumer choice — not AT&T.
He saved his worst ban for last. Former New York City Mayor Mike Bloomberg’s nanny-state policies have left a trail of damage. His defeated soda ban, the ban on food donations to homeless shelters and other antics have cost New Yorkers money, jobs, food choices, and even their freedom to give charity.
But a bill passed by the City Council in December, and signed by Bloomberg as one of his last official acts, could cost New Yorker’s their lives. The city’s wide-ranging anti-smoking law now forbids the use of relatively harmless vapor from e-cigarettes wherever cigarette smoking is banned, not only in bars and restaurants, but in parks and on beaches. For New Yorkers trying to keep their New Year’s resolution to quit smoking, the ban is a bust.
In 2014, similar laws are likely be considered in cities and states around the country. The city of Santa Fe, N.M., already has a hearing on the matter scheduled for later this month.
If the government treats smoke-free e-cigarettes with the same restrictive laws as their deadly tobacco burning predecessor, fewer people will be inclined to quit smoking by switching to e-cigarettes. Not only would e-cigs lose their advantage in terms of being more convenient alternatives, the implicit (and incorrect) message would be that they are also equally dangerous, not only to the user, but to those exposed to the vapor.
Here is a product created by profit-driven private sector innovation that is doing what many hundreds of millions of dollars of government spending, costly litigation, addictive excise taxes, warning labels and punitive regulations have been unable to do: help cigarette smokers quit happily.
It is no wonder the likes of Mayor Bloomberg have smoke coming out of their ears about e-cigarettes. They understand that in order to maintain not only their huge budgets, but their basis for authority to control personal decisions and private businesses, they must demonize, delegitimize, and defeat e-cigarettes every step of the way. Treating them equal to cigarettes would be a dangerous first step.
The stated purpose of anti-smoking laws has always been first to reduce exposure to environmental cigarette smoke and second, to reduce the number of places people can smoke, with the hope that it would cause people to quit. These e-cigarettes restrictions undermine both of these goals. It won’t reduce exposure to second-hand smoke, because there is no smoke. In fact, people will continue to smoke cigarettes, often bunched up on the sidewalk in front of a bar, exposing passers-by to the stinky smoke. And if the degree of enthusiasm former smokers have for e-cigarettes is any barometer, they are a much more popular way to help people quit smoking than forcing them to stand out in the cold.
Those who support the bans rely on the flimsy argument that vaping (since users inhale vapor, not smoke), “normalizes” smoking because people may think vaping is smoking. That’s nonsense.
Robin Vitale of the American Heart Association, in her testimony in support of the New York City ban, said, “this mimicry of traditional cigarettes, if used indoors where smoking is banned, can easily lead to confusion and confrontation by New York business owners. The potential for this dynamic to weaken the city’s decade-long ban on smoking in workplaces is quite clear and is the greatest motivating factor to support this proposal.” She must have been embarrassed when a spokesman for business owners denied there have been many such complaints.
In addition, it seems that regular citizens have the common sense to realize that the blue LED light on the tip of market leader Lorillard’s “blu” e-cigarette signifies that it isn’t actually a cigarette. And many other popular products don’t even come close to the look of cigarettes. However, many smokers prefer kicking the habit with a product that looks and feels like a cigarette.
But even those shouldn’t cause much confusion, since an e-cigarette’s vapor doesn’t produce the smelly smoke of a cigarette. And there will be even less confusion as more people become accustomed to seeing people vape.
Spike Babian, co-owner of Vape New York, a city “vape shop,” testified that “we don’t ban water because it looks like vodka.”
At the same hearing, New York City Health Commissioner Thomas A. Farley suggested that e-cigarettes could be a gateway to smoking. But initial studies, as well as empirical evidence, show that e-cigarettes are a major gateway away from, not toward, smoking.
As cities and states consider adding e-cigarettes bans this year, legislators should remember the law they all too often tend to ignore: the law of unintended consequences. As any vaping former smoker will tell you, a vote against e-cigarettes is a vote for smoking.
[Originally published on Politix]
Global warming activists claim vast amounts of untraceable special interest money fund global warming skeptics and give skeptics an unfair advantage in the global warming debate. The undeniable truth is global warming alarmists raise and spend far more money – including far more untraceable special interest “dark money” – than global warming skeptics.
Drexel University sociologist Robert Brulle published a paper last week in the journal Climatic Change identifying 91 conservative and libertarian think tanks that Brulle claims play an influential role opposing global warming programs. Brulle claims the 91 groups receive approximately $900 million in cumulative funding each year, with approximately $64 million coming from foundations that distribute “dark money” that cannot be traced to a particular donor. Brulle claims the $900 million in funding – and especially the $64 million in dark money – tilts the playing field and gives global warming skeptics undue political and public relations influence.
Global warming alarmists and their media allies present Brulle’s paper as “proof” that money drives the global warming debate and the money is heavily skewed in favor of skeptics. For example, UK Guardian environmental reporter Suzanne Goldenberg published an article last week titled “Conservative groups have spent $1bn a year on the effort to deny science and oppose action on climate change.” Scientific American published a similar article titled “’Dark Money’ Funds Climate Change Denial Effort.” Liberal pundit and former MSNBC anchor Cenk Uygur posted a 10-minute Internetvideo discussing Brulle’s paper and playing up its findings.
Brulle’s paper and the media narrative may score some temporary points with members of the general public who do not closely follow the global warming debate, but ultimately Brulle’s paper and the media narrative will backfire on global warming activists. The narrative will backfire because the general public is not stupid. Slick lies may win some converts who will not check the facts, but the greater number of people will check the facts and hold the liars accountable.
As an initial matter, despite what Suzanne Goldenberg and the UK Guardian claim, it is palpably untrue that “Conservative groups have spent $1 bn a year on the effort to deny science and oppose action on climate change.” Without even addressing the mathematical fact that $900 million is $100 million short of the $1 billion claimed by Goldenberg, Brulle’s paper merely tabulates the total money raised by the 91 conservative think tanks for their total operations regarding all issues they address and does not break down how much of each think tank’s resources are devoted to issues such as economic policy, health care policy, foreign policy, climate policy, etc. Goldenberg tells the lie that all money raised by all conservative and libertarian think tanks is devoted to global warming skepticism. Tell that to the supporters of Obamacare.
A look at some conservative think tank websites illustrates the point. While writing this article on New Year’s Day, I pulled up the website for the American Enterprise Institute (AEI), which Brulle and the media claim is the conservative think tank receiving and spending the most money on global warming skepticism. AEI has 15 articles featured on the front page of its website, and not a single one focuses on global warming.
I also pulled up the website for the Heritage Foundation, which Brulle and the media claim is the conservative think tank receiving and spending the second most amount of money on global warming skepticism. The Heritage Foundation has 10 articles featured on the front page of its website. None of the 10 focuses on global warming. Merely 2 of the 10 focus on any aspect of energy or environment policy.
Between AEI and Heritage – representing fully 30 percent of the money raised by the 91 conservative think tanks – the global warming issue comprises substantially less than 10 percent of their cumulative time, money and efforts. Even if we generously assign to the global warming issue a full 10 percent of the money raised by the 91 foremost conservative think tanks, this means the 91 conservative think tanks are devoting a mere $90 million per year – rather than the asserted $900 million per year (or Goldenberg’s exaggerated $1 billion per year) – to the global warming debate.
And it is not just AEI and Heritage that devote little attention to the global warming issue. The Hoover Institution, identified as raising and spending the third most money on global warming skepticism, also rarely addresses the global warming topic. The most recent Hoover Institution item I can find addressing the topic is a short op-ed published more than two months ago in National Review Online by a Hoover Institution fellow commenting on a global warming poll. Prior to that short op-ed, the most recent Hoover Institution item I can find is an article published nine months ago supporting a carbon tax.
This brings us to another whopper told by Brulle, Goldenberg and their media allies – the assertion that all the think tanks identified in Brulle’s paper actively fight against global warming activism. To the contrary, two of the three top-funded groups (AEI and the Hoover Institution) support a carbon tax. Other groups identified in Brulle’s paper have similarly expressed support for a carbon tax and global warming activism. At least 25 percent of the funding that Brulle claims goes to skeptical think tanks actually goes to think tanks supporting global warming restrictions.
All told, giving the global warming activists every benefit of the doubt, no more than $90 million of conservative think tank money addresses global warming, and no more than $68 million supports conservative think tank efforts opposing global warming activism. This $68 million is counterbalanced by $22 million for conservative think tank efforts supporting global warming activism. That leaves a net of merely $46 million among 91 conservative think tanks opposing global warming activism.
Even though $46 million is far short of the $1 billion claimed by Goldenberg, $46 million may still seem like a large amount of money. It is only a drop in the bucket, however, compared to the money raised and spent by groups supporting global warming activism.
Two environmental activist groups – Greenpeace and The Nature Conservancy – raise more than $1 billion cumulatively per year. These two groups raise more money than the combined funding of the 91 conservative think tanks identified in Brulle’s paper. Just as importantly, these two groups raise money solely for environmental causes and frequently advocate for global warming restrictions. Their $1 billion is not diluted addressing issues such as economic policy, health care policy, foreign policy, etc.
Five environment-specific groups alone raise more than $1.6 billion per year (Greenpeace, The Nature Conservancy, World Wildlife Fund, National Wildlife Federation, and the Sierra Club). All five focus solely on environmental issues and are frequent and prominent advocates for global warming restrictions. When global warming activists claim global warming skeptics receive the lion’s share of funding in the global warming debate, they are lying through their teeth.
Interestingly, Brulle and his media allies place special emphasis on the so-called dark money given to conservative think tanks by foundations with anonymous donors. Only $64 million of the conservative think tanks’ $900 million in total donations come from foundations. At most, only $6.4 million of the “dark money” addresses global warming topics, with a net of only $3.2 million opposing global warming activism. Nevertheless, the assertion is dark money is nefarious money and has a special impact on the debate. As Cenk Uyger claimed in his video post:
“There’s over 140 different foundations … As you’re about to find out here, they’re totally funded by the groups that have a financial interest in making sure that you don’t believe in climate change. So those 140 different foundations are shell groups – they’re set up ironically by companies like Shell – to make sure that you believe something that’s going to help their bottom line that isn’t true.”
Curiously, neither Brulle nor Uyger provides any evidence or source material backing up the assertion that most money donated to conservative foundations is donated by energy companies with an agenda to fund global warming skeptics. They simply make the assertion based on speculation without providing any factual support. However, it is difficult to believe that most conservative foundation money is donated by energy companies with an anti-global warming agenda, especially when the conservative foundations give a large portion of the money to think tanks that support carbon taxes and think tanks that devote little attention the global warming issue.
Putting this minimal conservative dark money in context, liberal foundations with anonymous donors are major funders of global warming activist groups. For example, check out the list of Defenders of Wildlife’s “Select Funders” here. Heck, Al Gore’s Climate Reality Project sent out a fundraising letter last week telling people that an “anonymous donor” would match every other donation dollar-for-dollar. Somehow, neither Brulle nor the media remembered to mention these inconvenient truths in their narrative.
The long and short of it is think tanks and activist groups supporting global warming restrictions raise and spend far more money than think tanks and activist groups opposing global warming restrictions. Global warming activists may think they are scoring short-term political points by lying and misleading the public about such funding, but their lies will certainly come back to haunt them. They always do.
[Originally published on Forbes]
Yes, the “Hitler Becomes Engraged By Something Something” video meme is an oldie. But it’s a goodie.
It’s especially fun in this version (below), in which Hitler goes ballistic because the ship sent to the Antarctic to prove man-caused global warming got … well … stuck in the ice. (NOTE: There is fake captioned profanity in the video, and the “Chris” referenced in the video is Chris Turney, an Australian climate alarmist scientist.)
BTW: With the help of Heartland Senior Fellow James M. Taylor, I reworked up our own version of this meme in February 2010, titled “Hitler Learns of Global Warming Collapse.” Let’s just say James and I were a bit ahead of the curve, and our captions very much apply today.
I’ve embedded Heartland’s vid below the newest one from our Australian friends. Enjoy both.
Heartland’s very-relevant “Hitler Is Enraged” meme vid from 2010:
How many times has President Obama told us that he is “fighting for the middle class”? But real median family income has been in a continuous downward spiral since he became President, actually falling more since the recession ended in the summer of 2009 according to the National Bureau of Economic Research than during the recession. That has added up by now to the middle class losing a month’s pay a year under President Obama’s economic policies.
If President Obama is “fighting for the middle class,” why doesn’t he approve the Keystone Pipeline? Building and maintaining the pipeline would provide thousands of good paying jobs. So would refining and selling the oil and gas from the Gulf Coast refineries where the pipeline would deliver the Canadian crude. Moreover, that plentiful supply of low cost energy from a long time, reliable ally would support hundreds of thousands if not millions of additional good paying jobs in the American economy.
President Obama is constantly calling for raising taxes to increase government spending to build further infrastructure, with millions of “shovel ready” jobs supposedly waiting for that government rescue. We borrowed hundreds of billions for that in Obama’s 2009 so-called Stimulus bill, but the shovel ready jobs turned out not to be so “shovel ready” he later joked, while the economic suffering continued for millions of Americans.
But with Keystone, we have private investors fully capable of financing the more than ready to go infrastructure project, with their own private investment funds rather than taxpayer dollars. That should be a “no-brainer,” for anyone who is truly “fighting for the middle class.”
Meanwhile, electricity prices are skyrocketing to all-time highs, according to the government’s own official statistics. The Electricity Price Index of the Bureau of Labor Statistics hit an all-time record in November, 20% higher than 6 years ago. That is another loss for the middle class, further reducing real incomes.
That is due to Obama’s runaway overregulation, pursuing the President’s War on Coal, and other manipulative, fairy tale delusions. New EPA regulations will take out 10% of all electricity produced by plentiful, low cost American coal, according to the Institute for Energy Research. As for the dishonest global warming fantasy, relatively soon the period of no global warming, which started 17 years ago, will be longer then the period of actual global warming, which was a natural cycle that lasted only 20 years, from the late 1970s to the late 1980s. That was preceded by about 30 years of global temperature decline, or global cooling.
Those skyrocketing electricity prices are another loss for the poor too. Under the ultraliberal Barack Obama, and his “progressive” Democrats, poverty has soared while he has been President to nearly 50 million Americans, more than at any other time in the more than 50 years that the Census Bureau has been tracking poverty. The poverty rate has also jumped by over 30% to 16.1%, about the same as when the War on Poverty started $5 trillion and almost 50 years ago. We need “progressive” liberal Democrats for this?
Obama has also been the food stamp President, with the number on food stamps increasing during his Administration to an all-time record high of 47.7 million, up 80% over the past 5 years. Contrast that with the Clinton-Gingrich 1996 reform of the old, New Deal, Aid to Families with Dependent Children (AFDC) program. Under those reforms, the number dependent on the old AFDC program declined by two-thirds. Their incomes from going to work instead were documented to increase by 25%, while saving taxpayers 50% of the cost of old AFDC, compared to prior trends. But today’s “progressive,” Obama/Che Guevara Democrats are not the Kennedy/Clinton Democrats of yore.
Most recently, we have heard President Obama giving speeches bemoaning rising inequality. On December 4, President Obama told the nation that this rising inequality was “the defining challenge of our time.”
Inequality is measured by a statistic called the “Gini Index,” named after an Italian statistician who first wrote about measuring inequality in 1912. The Gini Index for the U.S. is officially published by the Census Bureau. The Index as published by the Census shows inequality sharply accelerating under President Obama, in contrast to greater stability under President Bush.
This follows automatically from the discussion above, with real incomes of the middle class and the poor declining under Obama. In fact, real incomes of the entire bottom 80% have been declining consistently under Obama, because of his poor record of generating economic growth, and any normal recovery from the 2008-2009 recession. Only the incomes of the top 20% have been rising under Obama, as the Fed’s loose monetary policies have juiced the stock market and corporate profits.
This has to be considered a disgrace, that Obama carries on publicly about rising inequality and how that is so important, yet inequality has been precisely accelerating under his own, consistently anti-growth, economic policies, which are precisely crippling the poor and the middle class. But no more of a disgrace than his record on unemployment, which reflects that it has been precisely his own, strongest supporters, particularly blacks, Hispanics, the young, and women, who have suffered the most under Obama’s failed policies.
For President Obama’s entire time in office, 5 years now, blacks have suffered unemployment well into double digits. With “Latino unemployment close behind,” as Obama himself also lamented in his Martin Luther King 50thAnniversary speech last August. Yes, the economy was in recession when President Obama entered office. But under every other President in U.S. history, for well over a century at least, the economy was in a booming recovery within 5 years, even under Franklin Roosevelt during the Great Depression!
Indeed, in the 10 previous recessions since the Great Depression, prior to this last recession, the economy recovered all jobs lost during the recession after an average of 23 months after the prior jobs peak (when the recession began), according to records kept by the Federal Reserve Bank of Minneapolis. So the job effects of prior post Depression recessions have lasted an average of about 2 years. But under President Obama, by last month, November, 2013, 71 months after the prior jobs peak, virtually 6 years, we still have not recovered all of the recession’s job losses. In November, 2013, jobs were still down about 1%, or about 1.5 million, from when the recession started virtually 6 years ago.
That included the longest period since the Great Depression with unemployment above 8%, 43 months, from February, 2009, when Obama’s so-called stimulus costing nearly $1 trillion was passed, until August, 2012. It also included the longest period since the Great Depression with unemployment at 9.0% or above, 30 months, from April, 2009, until September, 2011. In fact, during the entire 66 years from January, 1948 to January, 2013, there were no months with unemployment over 8%, except for 26 months during the bitter 1981 – 1982 recession, which slayed the historic inflation of the 1970s. That is how inconsistent with the prior history of the American economy President Obama’s extended unemployment has been. That is some fundamental transformation of America. And this does not include the plunge in labor force participation under President Obama, with millions fleeing the work force, and so not even counted in these unemployment rates.
Reagan suffered a severe recession starting in 1981, which resulted from the monetary policy that broke the back of the roaring 1970s inflation. But all the job losses of that recession were recovered after 27 months, with the recovery fueled by traditional pro-growth policies. By this point in the Reagan recovery, 71 months after the recession started, jobs had grown 11.2% higher than when the recession began, representing an increase of about 11 million or more additional jobs.
In November, black unemployment was still 12.5%, after 5 years under President Obama. The Hispanic, or Latino, unemployment rate was still 8.7%. The teenage unemployment rate, reflecting Obama Democrat experiments with the minimum wage, was 20.8%. The black teenage unemployment rate was 35.8%.
Even though the entire 1981-1982 recession occurred during Reagan’s first term, while only the last 5 months or so of the 2008-2009 recession occurred during Obama’s first term, real median weekly incomes for females rose 32.1% in Reagan’s first term, compared to 6.6% in Obama’s first term. Employment of women rose by 4,460,000 in Reagan’s first term, while women suffered a net loss of 354,000 jobs during Obama’s first term. Conversely, the number of women not in the work force rose by 4,458,000 in Obama’s first term, compared to 345,000 in Reagan’s first term.
More than 3 times as many jobs were created for African-American women in Reagan’s first term, compared to Obama’s first term, even though the population was much larger in Obama’s first term. Jobs for African American women rose by 15.1% in Reagan’s first term, compared to 2.6% in Obama’s first term.
Teenage female African Americans employed fell by 19.1% in Obama’s first term, compared to a decline of just 1.5% in Reagan’s first term. The unemployment rate for teenage female African-Americans rose by 5.7 percentage points in Obama’s first term, compared to just 1.1 percentage points in Reagan’s first term. So who is conducting the real War on Women.
Obama apologists cannot say Obama’s unemployment record is so bad because the recession was so bad. The American historical record is the worse the recession, the stronger the recovery, even during the Great Depression. So the 2008-2009 recession really just set the foundation for what should have been a booming recovery coming out of it, in 2009-2010, which would have made Obama such a hero. Administration economists, and even Obama himself, seemed to be expecting that. Remember Obama saying on national television in 2009 that if the recovery doesn’t take hold by 2012, he would be a one term President? This is what gave him the confidence to say that.
But Obama’s own, consistently anti-growth policies of increasing tax rates, exploding overregulation, runaway government spending in the beginning (before the Republican House was elected in 2010 to get in the way of that), and wild-eyed, destabilizing monetary policy, short-circuited the recovery, which still has not really happened. President Obama promised America in 2009 that if his nearly $1 trillion “stimulus” spending was enacted, it would bring down unemployment to 5%. Of course, we are still nowhere near that. He should have known that such wild-eyed Keynesian economics was thoroughly discredited, and rightly abandoned, more than 30 years ago. And it never held any sound logic in the first place. But Obama was so arrogant and self-satisfied about that outdated Keynesian doctrine from the get go.
What Obama needed to achieve his own stated goals to advance the middle class, the poor, and equality was economic growth, as President Kennedy’s policies so ably achieved, not to mention Reagan. Only booming economic growth can create good jobs and rising wages for the poor and the middle class. The foundation of the booming growth for both Kennedy and Reagan was reducing, not increasing, marginal tax rates. Reagan added sharply reducing regulatory costs, burdens and barriers, which began so stirringly under President Carter. Obama has repeatedly told us, as in his December 4 inequality speech, that he is for “streamlining regulations that are outdated or unnecessary or too costly.” But that is just another Obama failure, by his own words, as he has not remotely done anything like that, but so decisively just the opposite.
Reagan further stimulated the economy by cutting rather than increasing federal spending starting in his first year, and holding domestic discretionary spending flat for the rest of his two terms. And perhaps the most important was the strong dollar monetary policy which Reagan’s Administration consistently supported, giving the Volcker Fed the political cover to get the historic anti-inflation policy implemented.
This growth formula would do the job again, even more spectacularly than ever before, given all the long pent up growth in the economy. But Obama is so ideologically opposed to every component of this true growth formula, wrongly, even perversely, deriding it as the same policies that created the recession mess in the first place. He, in fact, has only done just the opposite in each case. Hence his perverse results.
And speaking about Obama failures, we haven’t even begun to talk about Obamacare yet. That was sold to the public as creating universal coverage. But not only has CBO scored it as leaving 30 million Americans uninsured 10 years after full implementation. The real world effect of Obamacare so far has been to increase rather than reduce the uninsured, by millions of Americans with Obamacare’s cancelled policies.
Also directly contrary to Obama’s often repeated promise, on which he sold Obamacare to a gullible public, that “if you like your health insurance plan you can keep your health insurance plan,” that has now been formally recognized even by the Democrat media as the Lie of the Year. But which year? It now turns out that what Obama really meant was that if he likes your health plan, you can keep it. Obama’s promise that if you like your doctor, you can keep your doctor, has fared no better. Even the policies on the Obamacare Exchanges offer sharply restricted doctor and hospital networks, to millions of Americans seeking to replace their cancelled coverage.
Obama also promised us that Obamacare would reduce health insurance costs by $2,500 a year per family. But Obamacare’s “free” benefit mandates, and overregulation, has only resulted in sharply increasing health insurance costs, more than doubling premiums in many cases, another President Obama failure by his own words and standards.
But the worst President Obama failure can still be yet to come. Obama told us that nuclear weapons in the hands of Iran’s terrorist government would be “unacceptable” and he would stop it by any means necessary, with all options now on the table. But the flower child Obama/Kerry nuclear negotiations now actually seem resigned to only trying to contain what Reagan defense expert Frank Gaffney now is calling the Iranian “Obamabomb,” to echo the Obamacare failure. But this is the one failure that can prove far more deadly to millions of Americans than even Obamacare.
[Originally published on Forbes]
Pundits are expected to make predictions for the year ahead and far be it for me to avoid what, generally speaking, depends on who is making them. Major trends are already in place and easy to predict as they proceed, but it is always unknown events that upend predictions. Mother Nature and perpetrators of evil can always be counted upon to provide them.
Since the Earth has been in a seventeen-year cooling cycle, I can safely predict there will be no “global warming” in 2014 and, given the other science-based factors, the likelihood is that 2014 will experience more colder weather and may even be an earlier predictor of a mini-ice age much the same as the one that occurred from 1300 to 1850.
As mentioned, it is the unpredictable events that will affect 2014. The good news is that the U.S. has seen far fewer hurricanes, tornadoes, and forest fires in recent years. The global cooling trend, however, is likely to cause more and larger blizzards.
“Climate change”? This is now the basis of all the lies we shall hear from the President to justify his five-year delay of the Keystone oil pipeline, his continued war on coal—affordable electricity—and other Environmental Protection Agency efforts to control our lives while denying the creation of the thousands of jobs the pipeline and other energy-related development would provide. Environmentalism is the enemy of the technologies that have transformed and enhanced our lives.
The November mid-term elections hold the promise of ridding Congress of some of the Democrats who unanimously voted for Obamacare in 2009. It will also replace those Republicans-in-name-only, RINOs, who have joined Democrats in voting for legislation that advanced the socialism that is strangling the nation by expanding the federal government. I predict the ranks of “independent” voters will increase in 2014.
The erosion of the Democratic Party base will continue as Obamacare afflicts millions of Americans who will lose their healthcare insurance plans, be deprived of using their personal physician, and see their costs increase. It is the essence of communism, providing the government with control over one’s life and, in too many cases, causing many to die for the lack of plans they previously had or the costs of those they are required to purchase. Those leaving the party will include women and the younger generation leaving college to discover there aren’t any jobs to help them cope with the debt they incurred to attend. Hispanics, too, show signs of leaving.
It is hard to predict what will occur within the Republican Party whose leadership has engaged in denunciations of the Tea Party movement. However, when the Tea Party movement elects more committed conservative GOP candidates, it will save the nation and the party. Suffice to say that Obamacare will be the gift that keeps on giving in 2014. It will, in time, be repealed.
Obama’s failed foreign policy will ensure that former allies will cease to trust the U.S. to support their need to deal with the rising threat of Islamic jihad in the Middle East and Africa. Obama has lost Egypt and Saudi Arabia as long-time allies. Israel is in a particularly perilous situation and the outcome of the Syrian civil war does not bode well for it or its neighbor Jordan.
Iran will be the greatest threat of war since the 1930s. And, yes, the U.S.-led “deal” will fail.
Polls reveal a growing unhappiness with the U.S. Congress. The President’s performance ratings have been falling and will continue to do so in 2014. The problem is the growth of socialism that began during and in the wake of the Great Depression of the 1930s. The pension debt and other benefits resulting from government worker unions has forced Detroit into bankruptcy and other American cities will follow.
By executive order the President just raised government salaries by 1%. Can he do that? Not really. Only the House can authorize such expenditures. Can he change Obamacare without consulting Congress? Not really.
The mainstream media will continue to lose its credibility as the Internet affords Americans alternative means of finding out what is really occurring as opposed to the deceptive and manipulative efforts of the Obama administration. Having raised voter’s expectations of Obama, his fall will be dramatic in 2014. The mainstream media is largely composed of liberals who are the result of the transformation of education into socialist indoctrination that began in the 1960s. By contrast, conservative print and broadcast media will thrive. Fox News has more viewers than the networks and CNN, combined.
Events such as the current attack on Southern Sudan, and the on-going slaughter in Syria will continue. Christians throughout the Middle East and Africa will find themselves under continued attack. Muslim-on-Muslim violence will continue. Islamists are devoted to its “holy” war, including its own schism.
In America, privacy, an essential element of the Constitution, will continue to be diminished if Congress does not address the vast collection of information of all of our communications. Read the Fourth Amendment. It says in part that “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated…”
We may see more states enact laws to defy Obamacare. South Carolina is currently the only one. The Tenth Amendment says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
Read the Constitution, you will not find the words “health” in it, nor “education”, nor ‘environment.” The federal government should get out of these aspects of our lives.
My most positive prediction is that historians will look back at 2014 as the year in which Americans woke to the threat of socialism-communism and, like the Tea Party movement, began to fight back.
With all the talk of America’s forgotten middle class, it’s worth taking time as we begin a new year to consider that the country’s seeming obsession with wealth and inequality may instead be turning the U. S. into a country with only two classes: the governed and the governing.
The aim of the 100-year old Progressive movement in America has purportedly been a more just and humane society in which everyone’s needs are taken care of by government, no one goes hungry or without health care because the state provides for everyone, and everyone is equal in almost every way – except, of course, for the ruling class of expert elites, who will always be more equal than the rest of us.
The goal of conservatives and libertarians, on the other hand, is a more just society in which individuals make their own decisions about what is best for themselves and their families, resources are allocated more efficiently because most people actually pay for what they consume, and everyone has an equal opportunity to succeed or to fail based upon his or her own talents, ambition, and work ethic.
A pragmatist will concede that a certain amount of inequality will always exist under both worldviews, as talent, ambition, work ethic, political connections – and just plain luck – are not distributed evenly or equally among the general population.
For every Michael Jordan, for example, are a thousand or a million kids who never make it off the playground; for every Steve Jobs, Bill Gates, or Steve Balmer are a bunch of programmers writing code in anonymity; for every Oprah Winfrey are a host of local television news readers and late-night radio disc jockeys; and for every Steven King or J. K. Rowling are a million bloggers seeking a following.
A market-based system that attempts to maximize individual liberty and opportunity accepts inequality of results as inevitable and recognizes that, for all its perceived unfairness, maximizing individual liberty also maximizes human happiness. Michael Jordan, Oprah Winfrey, Steven King, and J. K. Rowling have brought joy to millions – if not billions – of people worldwide while generating ancillary jobs and revenue in the sports, television, publishing, movie, and toy industries, among everyone from ticket-takers to executive suites, as well as inspiring others to attempt to achieve some comparable degree of success.
Progressivism sees this as unfair and seeks redistribution of wealth by taxing those who’ve succeeded financially and subsidizing those who haven’t. But as one hundred years of a “progressive” income tax, over eighty years of alphabet administrative agencies, and fifty years of an unsuccessful “war” on poverty have demonstrated, the unfortunate result is not equality in any meaningful sense but instead an increasingly polarized population. More people have civilian government jobs and more people receive public assistance than ever, yet the nation is not demonstrably better off either economically or spiritually.
The sad truth is that no amount of wealth redistribution is likely to create the next Bill Gates, Oprah Winfrey, J. K. Rowling, or Michael Jordan, no matter how much we wish it were so. If that were true, then every lottery winner would go on to fame and creative success instead of disappearing into obscurity or winding up in bankruptcy.
In one important sense, however, progressivism has indeed reshaped society. Primarily through actuarially unsound defined-benefit pension systems with health care benefits and compounded cost of living adjustments, it has created a new privileged class of government employees and former employees who have lifelong claims on the resources of the rest of the population. Part of the population must work longer and harder so that others may retire from working sooner.
Most people would likely not begrudge such a system for citizen-soldiers – particularly those who have been seriously injured while serving their country – but it is difficult to understand why those who hold essentially civilian jobs with little or no distinction should be so privileged.
Real-life examples include the public school teachers whose graduates can neither read nor write but who were promoted into administrative positions their last three years so that their pensions would exceed the salaries they received during most of their careers; the cops who checked in at the station in the morning, then spent the rest of the day snoozing in the local movie theater; the third guy on the garbage truck who rode shotgun and read the paper while another drove the truck and the third guy picked up the garbage before the whole crew drove under a viaduct for an afternoon nap before returning the truck to the depot. That’s not service; it’s taking unfair advantage.
A society in which growth may be a thing of the past can no longer tolerate such excesses, waste, and abuse. But the threat is not merely financial; it is moral and structural as well. For privileged treatment for a fortunate few first undermines initiative and promotes apathy, then lethargy; in the end it generates envy, then resentment, then anger, which has ways of boiling over.
As Abraham Lincoln famously observed in his Gettysburg address, a society cannot exist half slave and half free. Nor can it exist half productive and half parasitic. As the nation begins a new calendar year, it is worth taking the time to ponder how Lincoln’s words may still ring true today.
While the American public is justifiably outraged about a high-ranking EPA official collecting large paychecks while messing around, skipping work and falsely claiming to be doing CIA work, it is the work that John Beale actually performed – rather than the work he didn’t – that should cause the most outrage and alarm. The incompetent, bumbling imposter served as the right-hand man to EPA’s top official and personally oversaw the development of EPA’s climate policy and international climate negotiations. Sound science and the American economy are currently paying the steep price for Beale’s “Spies Like Us” asininity.
In one of the funniest slapstick scenes from the 1985 comedy classic, bungling wannabe spies Chevy Chase and Dan Aykroyd are caught blatantly cheating on their foreign service exam. Presented with video evidence of their cheating, Aykroyd asks his government overseers, “So what are we going to get, dismissal, suspension, censure, departmental prosecution – what?”
Chase and Aykroyd then bungle their assignment so badly that they launch a nuclear missile against their own country.
Put Chase and Aykroyd at the top of EPA rather than the top of CIA field operations, and you have an idea of how Beale monumentally screwed up EPA climate policy and international climate negotiations.
Inexplicably believing Beale’s story that he was actually a CIA spy and that was why he was missing so much work, EPA Administrator Gina McCarthy took Chase and Aykroyd’s slapstick asininity to a new, real-world level. In a memo sent out to EPA staffers, McCarthy attempted to provide cover for Beale to continue skipping work under fictitious CIA pretenses. Beale “is supposed to be sitting in 5426B of Ariel Rios North, but good luck finding him. We are keeping him well hidden so he won’t get scooped away from [his EPA position] anytime soon,” McCarthy wrote.
McCarthy then affirmed Beale would continue overseeing EPA’s climate policy and international climate negotiations.
Putting Beale in charge of crafting our nation’s climate policy was the equivalent of putting Bernie Madoff in charge of crafting our nation’s fiscal policy. Or, in this scene from Spies Like Us, entrusting Chase and Aykroyd to impersonate medical doctors and treat live patients.
While Chase and Aykroyd’s antics make for good comedic cinema, Beale’s antics had much more serious real-world impact. When EPA disregarded mountains of sound science demonstrating carbon dioxide emissions are being scapegoated for a mythical global warming crisis, Chase and Aykroyd – er, I mean Beale – was calling the shots on behalf of EPA’s “scientific” findings to the contrary. As a result, coal miners are being sent to unemployment lines in droves, Americans are being deprived of their most affordable widely available electricity source, jobs and wealth are being shipped overseas and bogus EPA findings are driving the Obama administration’s war on affordable energy.
The Beale fiasco is just the latest in a long line of appalling scandals perpetrated by global warming alarmists. The Climategate and Climategate II scandals should have sunk the fictitious man-made global warming crisis once and for all, but alarmists and their media allies worked to ignore and hide the truth. The Fakegate scandal of 2012 further demonstrated the agenda-driven dishonesty motivating prominent global warming alarmists.
Now we learn that Beale, one of the highest ranking figures in the Environmental Protection Agency, was not only a bumbling fool, but also a criminal, recently sentenced to 32 months in federal prison. His own attorney says his client was motivated “to manipulate those around him through the fabrication of grandiose narratives.”
You have to search long and hard to find a better representation of the individuals at the top of the global warming movement. Again and again we have seen these are men and women who lie to the public, manufacture false data, conceal evidence and use the power of their offices to attack those who expose their fictitious narratives.
Maybe the best that can be said of these latest revelations is they provide more evidence, in case any more was needed, that the mythical global warming crisis was a canard from start to finish, that the Obama administration and EPA in particular need to be reined in before they destroy even more of America’s economic strength, and that 2014 must be a breakthrough year for the voices of truth.
[Originally published on Forbes]
The article focused on a study by Drexel University sociologist Robert Brulle that had been published in the journal Climate Change asserting that “The anti-climate effort has been largely underwritten by conservative billionaires, often working through secretive funding networks. They have displaced corporations as the prime supporters of 91 think tanks, advocacy groups and industry associations which have worked to block action on climate change.”
What action these organizations or even entire governments could take to have any affect whatever on “climate change” defies common sense. Nothing they could do, for example, would have any effect on the action of the Sun, the primary determinant of climate. For the past seventeen years the Sun has been in a natural cycle of reduced radiation, less warmth for the Earth. The result has been a cooling cycle on Earth that has crushed decades of lies about “global warming.”
It’s not that the Earth hasn’t had previous cycles of warmer climate, but they had nothing to do with anything humans do. There was warming before the Industrial Revolution introduced the use of coal, oil and natural gas to provide the energy that has marked the development and use of technologies that have improved human life in countless ways. “Global warming” is blamed on the emissions of carbon dioxide (CO2) and other so-called greenhouse gases. The most prominent of these gases in the Earth’s atmosphere is nothing more than water vapor.
Apparently, if Brulle and The Guardian are to be believed, anyone or any organization that donates to any group that doubts the claims of Big Green are the enemies of “global warming”, but this conveniently ignored estimates that the U.S. government, according to an October article in The New American “will spend more money on fighting global warming than it will on tightening border security.” The spending is estimated to cost approximately $22.2 billion this year, twice as much as the $12 billion estimated for customs and border enforcement.”
There are, according to the White House, “currently 18 federal agencies engaged in activities related to global warming. These agencies fund programs that include scientific research, international climate assistance, renewable energy technology, and subsidies for renewable energy producers.”
The Guardian article caught my eye because, among the organizations that have been active in debunking the “global warming” theory has been The Heartland Institute. I have been an advisor to the Institute which, since 2008, has organized eight international conferences on global warming that have featured some of the world’s leading skeptics.
If you want to know how the Institute is funded, you can go to their website where you will find, for example, that it does not solicit or accept grants from any of those government agencies using billions of taxpayer dollars to convince Americans that “global warming” is real or that anything the government does about “climate change” can have any effect on it. In 2012, Heartland received 50% of its income from foundations, 28% from individuals, and 18% from corporations. No corporate donor contributes more than 5% of its annual budget.
In contrast, a recent article by Ron Arnold, a Washington Examiner columnist and executive vice president of the Center for the Defense of Free Enterprise, noted that over the past decade environmental organizations received 345,052 foundation grants totaling $20,826,664,000—over twenty billion dollars—largely from a 200-plus member Environmental Grantmakers Association and the smaller, farther-left National Network of Grantmakers. Arnold said that “Today, foundations are the backbone of Big Green.”
On a recent CNN television program, Marc Morano, the communications director of the Committee for a Constructive Tomorrow (CFACT) took on the Sierra Club director, noting that this major environmental organization has received $26 million from natural gas corporations to support its attacks on the coal industry. So “fossil fuels” industries are okay if they are giving the Sierra Club money.
“So record cold,” said Morano, “is now evidence of man-made global warming.”
While the Koch-affiliated foundations that provide grants to conservative groups were singled out, along with Exxon Mobil, in The Guardian article, no mention was made of multi-billionaire George Soros who is famed for funding all manner of liberal groups and who reportedly has invested heavily in “clean energy” companies—solar and wind—whose products do not produce the so-called greenhouse gas emissions.
One of the more recent articles in The Guardian was titled “Global warming will intensify drought, says new study.” The problem, of course, is that there is NO global warming.
By contrast, a July Fox News article, “Billions spent in Obama climate plan may be virtually useless, study says” was not also reported in the mainstream media. Suffice to say that those billions came from taxpayer’s pockets.
I am happy to know that the Heartland Institute, a 29 year old non-profit research organization, CFACT, and other free market research and activist groups receive foundation and other support. Without them, the lies about “climate change” from the Obama administration and the many environmental organizations would not be debunked.
[Originally published on Warning Signs]
Former Durham, NC district attorney Mike Nifong was disbarred for withholding evidence from the defense and lying to the court in the trumped-up Duke lacrosse team rape case. Ex-Boston crime lab technician Annie Dookhan was prosecuted for faking test results and contaminating drug samples, to get accused dealers convicted. In both cases, charges against their victims were dismissed or are under review.
So how should we handle federal officials who’ve become unethical researchers and prosecutors – determined to get convictions, basing their cases on esoteric circumstantial evidence, allowing tainted and fraudulent evidence, hiding exculpatory information, rewriting the law, and denying defense counsel the right to cross-examine adverse witnesses or present their case?
As the Committee For A Constructive Tomorrow explains in its amicus curiae brief to the US Supreme Court, that’s what Environmental Protection Agency regulators have been doing with global warming. They’re pulling every dirty prosecutorial trick in the book, to convict fossil fuels, carbon dioxide, and America’s economy and living standards of “endangering” the public welfare.
Since 2009, EPA regulators have shown a single-minded determination to slash hydrocarbon use, drive up the price of energy, and impose huge costs on companies, industries and an economy struggling to stay afloat and retain jobs. They want to control CO2 emissions from vehicles, electrical generating plants, and eventually the sources of nearly everything we make, grow, ship, eat and do. The damage to our livelihoods, liberties, living standards, legal system, health, welfare and life spans will be enormous.
The devious dealings have continued under new EPA Administrator Gina McCarthy, who has pronounced that there is “no more urgent threat to public health than climate change.” Now it appears the mendacious malfeasance is even worse than previously thought.
Newly released emails reveal that Ms. McCarthy was “very excited” in 2010 to “finally get the opportunity to work with” Mr. John Beale, who for several years was the senior EPA policy advisor helping Ms. McCarthy and her Office of Air and Radiation develop and implement tough air quality and climate regulations. When he wasn’t off on one of his Walter Mitty undercover CIA capers, that is.
Beale was just convicted of defrauding taxpayers out of $1 million in salaries and expenses for extended vacations that he took while claiming to be a high level intelligence operative. His attorney says he had a “dysfunctional need to engage in excessively reckless, risky behavior” and “manipulate those around him through the fabrication of grandiose narratives.”
It defies belief to suppose his dysfunctions and fabrications did not extend to his official EPA roles of devising agency air pollution and climate policies, then cherry picking reports and manipulating research to justify them. The criminal fraud for which Beale will serve 32 months in prison and repay $1.4 million is outrageous. The fraud on our economy, democracy and people’s lives is far more costly and despicable. Even worse, their regulatory fraud is a pervasive problem throughout EPA.
The Constitution specifies that the Executive Branch has no authority to engage in lawmaking, but must faithfully execute the laws as written – and not as regulators might wish the laws had been written, to advance their preferred policy agendas. EPA has violated these most fundamental rules, ignoring inconvenient statutory language, and devising and enforcing other provisions out of whole cloth.
Between 1989 and 2010, Congress considered and rejected some 692 bills addressing various aspects of greenhouse gas emissions and climate change. So President Obama’s EPA simply imposed carbon dioxide controls by executive fiat, using “prevention of significant deterioration” and “new source performance standards” to create new authority over coal-fired electrical generating plants. It then unilaterally changed precise statutory emission standards from 250 tons per year to 100,000 tpy – to avoid the public backlash that would come if it began regulating and shutting down all the natural gas generators, refineries, cement kilns, factories, paper mills, shopping malls, apartment and office buildings, hospitals, schools and even large homes that emit more than 250 tons of carbon dioxide per year. Those job-killing rules can come later, when radical environmentalists sue radical regulators, to enforce the statutory requirement.
In circumventing Congress, rewriting laws and ignoring the “separation of powers” doctrine, EPA accomplished an unprecedented power grab over the energy that fuels our economy and makes our jobs, living standards and civil rights progress possible. It also flouted clear NEPA, Clean Air Act and other statutory mandates that EPA protect the health, welfare and environmental quality of all Americans.
The agency remains fixated on the speculative impacts of sea levels, storms, droughts and other manifestations of allegedly “dangerous manmade climate change.” As CFACT’s amicus brief explains, it completely ignores the increasingly adverse effects that its boiler MACT, carbon dioxide and 1,900 other Obama-era EPA regulations are having on companies, jobs, families, entire industries and communities – and thus people’s physical, mental and emotional well-being.
As breadwinners are laid off or reduced to part-time status, families are unable to heat and cool their homes properly, pay bills, rent or mortgage, buy clothing and medicines, or take vacations. Increasing numbers of families deplete their savings and are made homeless. Being unable to find or keep a job erodes self-worth, self-confidence and psychological well-being. The stress of being unemployed, or involuntarily holding multiple lower-paying part-time jobs, means reduced nutrition, sleep deprivation, increased risk of heart attacks and strokes, higher incidences of depression and alcohol, drug, spousal and child abuse, more suicides and generally lower life expectancies.
It means the regulations are far worse than the harms they supposedly redress. For EPA to ignore this simple reality is illegal and unconscionable. For it to do so based on fraudulent science is outrageous.
The agency’s position hardly reflected genuine climate science in 2009, when EPA decreed that carbon dioxide endangers human health and welfare. Since then, Earth’s temperature and weather events have refused to cooperate with EPA’s dire predictions. But the agency’s views and decisions remain etched in stone, leaving the agency on the extreme fringe of alarmist opinion, insisting that its views are supported by IPCC predictions that are increasingly discredited by Climategate revelations, investigations into IPCC practices, the Beale scandal and even an exhaustive report by one of EPA’s own analysts.
When presented 37-year EPA veteran Alan Carlin’s analysis, his supervisor tried to suppress the paper and refused to forward it to the EPA group preparing the final report that would guide the endangerment decision. The supervisor told him: “The administrator and administration has [sic] decided to move forward on endangerment, and your comments do not help the legal or policy case for this decision.”
Finally, even full compliance with EPA’s destructive regulations would achieve zero benefits, because emissions from China, India and other rapidly developing countries will continue increasing total atmospheric GHG levels – and because climate change is driven primarily by natural forces, not CO2.
For all these reasons, EPA’s carbon dioxide “endangerment” decision must be reversed; its stationary source regulations must be scrapped; and the agency must be required to fully evaluate the consistently adverse effects of its regulatory edicts on human health, welfare and environmental quality. If the Supreme Court fails to do so, the House and Senate must reassert their Constitutional roles.
Otherwise the United States will steadily fall behind its international competitors. The health and well-being of Americans will increasingly suffer. And the Legislative and Judicial Branches will become mere bystanders to an unelected, unaccountable, agenda-driven Executive Branch.
Solar electricity is growing, promoted, and most importantly, heavily subsidized. The promoters of solar electricity claim that it is close to being competitive with conventional sources of electricity. That is a fantasy.
Solar electricity is expensive and impractical. If it weren’t for government subsidies, some explicit and some disguised, the solar industry would collapse. The many claims of competitiveness are always based on ignoring subsidies provided to politically correct renewable power, ignoring the costs associated with unreliability, and ignoring the cost of backup fossil fuel plants.
An example of a hidden subsidy is the California Renewable Portfolio Standard that mandates utilities to obtain 33% of their energy from so-called renewable sources by 2020. This mandate forces utilities to contract for expensive sources of energy, such as solar. The cost is passed on to the utility customers with the connivance of the government. Although the motivation behind the California scheme is to reduce carbon dioxide emissions, politically incorrect sources of CO2-free electricity, such as nuclear and large-scale hydroelectric, can’t be counted as renewable.
People whose knowledge of electricity production ends at their wall outlet are dictating national energy policy. Magical thinking by hopelessly ignorant political activists permeates the alternative energy universe.
How much does electricity from conventional sources cost? If I look at my ComEd (Chicago) bill, the charge for electricity is about 5 cents per kilowatt-hour (KWH). Additional charges for delivering the electricity and various taxes increase the total to about 10 cents per KWH. This is electricity mainly from coal, nuclear, and natural gas. Electricity is available at the plant gate in much of the U.S. for about 5 cents per KWH.
Figuring out how much solar electricity costs is tricky. Most of the cost is the capital cost of building the plant; in favorable situations, a solar plant costs 15 times more than a fossil fuel plant per KWH generated. How one assigns this initial capital cost to the electricity generated over the life of the plant depends on economic assumptions involving interest rates. The amount of sunshine can vary by as much as two to one, if you compare sunny Arizona locations with cloudy European ones. Photovoltaic technology, using electricity-generating panels, is the currently favored technology. An alternative technology is thermal solar or plants that use reflectors to concentrate sunlight to generate high-pressure steam, or other high-pressure gas, to operate turbines that drive generators. The estimates in this article refer to recently constructed photovoltaic plants.
The cost of solar electricity at the plant gate is about 25 cents per KWH, or about 5 times more than conventional electricity. It may be 50 cents per KWH in cloudy northern areas.
It is true that the cost of solar panels has greatly decreased in recent years. This decrease has to do with technological improvements and overbuilding of capacity in the Chinese panel manufacturing industry. However, even if the panels cost nothing, solar electricity would not be remotely competitive. The panels are only part of the cost. One also has to pay for the land, the mounting systems for the panels, and other infrastructure.
The cost of a solar electricity plant is usually quoted as so many dollars per watt. For example, many large-scale plants cost about $4 per watt to build. The watts in this case refer to the maximum amount of electricity the plant can produce when the sun shines squarely on the panels, or, more technically, the number of watts that can be generated when the panels are illuminated with sunlight with an energy content of 1,000 watts per square meter (approximately the energy flux of full sunlight). In the best locations, a solar plant with fixed panels can generate the equivalent of full power 25% of the time. That is called the utilization factor.
As an example, the Agua Caliente solar plant in Arizona, when completed in 2014, will be rated at 397 million watts and will cost $1.8 billion. This works out to $4.53 per watt of capacity. The cost of generating electricity from this plant has two components: the capital cost of building the plant spread out over the 25-year life of the plant and the annual maintenance cost for such things as periodically washing the solar panels that cover 4 square miles of land. When a utility invests in a generating plant, it needs a rate of return on its investment great enough to stay in business. It must pay dividends attract capital, maintain a good credit rating, and pay substantial taxes. Roughly an 8% return on a generating plant investment is needed to maintain the business. This means that if $1.8 billion is invested, the annual capital cost is similar to the payments on a 25-year mortgage at 8% interest. This is a higher interest rate than one might pay on a home mortgage due to taxes and the need to attract risk capital. The utility might finance half the cost at 4% or 5% and finance the other half with equity capital, for which a return of 10% or 12% is necessary. The budget for the Agua Caliente plant would look roughly like this:
This is the price at the plant gate, assuming that all the electricity generated is purchased for 25 years. The required price of 22 cents per KWH compares unfavorably with the 5 cents per KWH that is widely available in the U.S. But this is only half of the story. The price of 22 cents per KWH for a plant in sunny Arizona is actually misleadingly low.
Solar electricity is generated when the sun is up and the sky is clear. But electricity is needed during the night and on cloudy days. So a solar electricity plant must be accompanied by a backup plant. A combined-cycle natural gas plant can be purchased at a capital cost of approximately $1,000 per kilowatt of output capability. Depending on the percent utilization, electricity can be generated in the range of 4 cents to 6 cents per KWH. The natural gas fuel at current prices costs about 3 cents per KWH. Capital costs distributed over the 30-year life of the plant are in the range of 1-3 cents per KWH depending on percent utilization. The percent utilization can be has high as 90%.
The bottom line is that the only saving from a solar electricity plant is the fuel not burned when the solar is working. Most likely, the fuel is natural gas. But the maintenance of the solar plant costs about the same per KWH as the fuel for a natural gas plant. It most cases, it probably makes sense to bulldoze a solar plant and use the backup natural gas plant.
Believers in global warming alarmism will probably claim that it is worth paying 5 times more for electricity in order to reduce CO2 emissions. But if they are really concerned about CO2, the obvious solution is CO2-free nuclear power, which is far cheaper and more practical than solar.
Wind power is the other renewable energy. The capital cost of building wind farms is less than solar, and the utilization factor may be higher in favorable locations. But, at best, wind energy costs 2-3 times more per KWH than conventional energy. There are doubts about the useful life of wind turbines and many population centers have no suitable wind energy sites near enough to economically transport the power.
Solar energy and wind energy are nothing but a scam promoted by ideological fanatics in environmental organizations and allied special interests. We all pay for the scam with our taxes and with our electric bills.[Originally published on the American Thinker]
Hydraulic fracturing started out as an “exploding torpedo” back in 1865. Today, nearly 150 years later, the actual process has made giant technological strides, but now, it’s the topic that’s explosive.
While the White House has been encouraging Christmas dinner table conversation to center around Obamacare, in my experience, it is fracking that came into the conversation—and when it did, the results had the potential to be as explosive as the early practice.
Over the holidays two young adults came home for Christmas. Somehow hydraulic fracturing, or “fracking,” came into the conversation. Dad, a reader of my column whose employment is also peripherally connected to the oil-and-gas industry, spoke up in support of the practice that has unleashed America’s natural resources and made us the world leader in energy production. His children, and their friends who had gathered in his home, were shocked and spouted the usual claims of water contamination, harsh chemicals, and flaming faucets. The topic became so explosive that his kids packed up and left before the festivities even began.
I was in California for Christmas. I visited a cousin in Napa Valley whose adult son is in the wine business. He was at her home when I arrived. She told him what I do and stated that he had many friends in the oil-and-gas business. I smiled and said: “I can talk oil, gas, coal, nuclear, fracking, whatever…” My cousin quickly interrupted and stated: “We probably don’t want to talk fracking.” I took the hint, and we moved on to another topic. Driving back to my brother’s house, I wondered: “When did fracking become an explosive topic.”
With the Christmas prime rib consumed, my family and friends were still gathered around the table. Once again fracking came up. I shared the previous two recent stories. One woman asserted that if her sister, who was arriving in a few days from Boulder, Colorado, was there and we talked fracking, the results would be explosive, too.
Because they are not in the industry, I found that the group gathered around our table had misconceptions about the process that they’d picked up from the media.
While I don’t have an exact date when the topic of fracking became explosive, I do know, from my speaking and writing on the topic, from radio interviews with listener call-ins, and private conversations, that the explosive reactions are due to a lack of understanding about the process—with the two biggest concerns being about water and chemicals.
As I’ve written previously, there are accusations that fracking is taking billions of gallons of water out of the hydrologic cycle. Especially in the southwest where water is scarce and drought conditions persist, this poses a problem.
The process of hydraulic fracturing has advanced from the first nitroglycerin “torpedo” that was shot down a well hole on April 25, 1865, and well acidizing that was used in the 1930s to enhance productivity, to the modern mix of high pressure, water, and chemicals—and it continues to evolve and become more economical.
In a piece addressing water used in fracking, The Economist describes the process this way: “Water injected at high pressure into rock deep underground during the process of hydraulic fracturing, or ‘fracking,’ often returns to the surface as brine, having picked up a lot of salt on its journey. It is also contaminated with chemicals from the fracking process itself.”
Today, less and less freshwater is being used—especially in the arid southwest where water for drinking and agriculture is at a premium. A typical frack job can use as much as 5 million gallons of water and lasts about 3 days. The procedure can result in decades of oil or gas production.
With the development of new technologies, the fracking process can be done with brackish water that may be as much as ten times as salty as seawater. A recentreport from Reuters, titled “Fracking without freshwater at a west Texas oil field,” documents some of the advancements. Billions of gallons of brackish water are located far below the fresh water aquifers. Producers in west Texas are fracking with the brackish water from the Santa Rosa aquifer. They are then recycling the produced water—a byproduct of oil and natural gas drilling, and the flowback water—the fluid pushed back out of the well during fracking. Both forms of wastewater have historically been trucked to underground disposal wells.
A couple of months ago, I participated in the Executive Oil Conference in Midland, Texas where a panel of water experts addressed the crowd of more than 800 attendees and discussed the new technologies.
Now, instead of trucking wastewater to a remote location, mobile systems can treat the water onsite and condition it to meet almost any specification the driller wants—resulting in a reduction of expensive truck traffic. The portable systems can treat 20,000-30,000 barrels of water per day. For bigger frack jobs, additional units can be added—making the system totally flexible.
These new water solutions can reduce the total dissolved solids in the water from as high as 200,000 to below 200. For reference, the Environmental Protection Agency’s standard for drinking water is 500. The same water can be recycled and used over and over again. Addressing the new technologies, James Welch, Global Business Development Manager, Water Solutions, with Halliburton, told the crowd: “Produced water is not a waste. It is an opportunity. It is an offset to freshwater usage.” Halliburton is able to fracture with water that’s 280,000 TDS.
The result of these new procedures is, according to The Economist: “Clean water …pure enough to be used for irrigation, or even drinking water. …Alternatively, it can be re-injected into the ground during the next frack.”
Rather than taking water out of the hydrologic cycle, the oil-and-gas industry is actually often taking formerly unusable water, using it in fracking and then cleaning it up to a level where it can be introduced into the cycle as either irrigation or drinking water.
Stan Weiner, Chairman and CEO at STW Resources, was one of the panelists. He summed up the new water solutions by saying: “Now we’ve figured out a way to clean it up economically. There’s no reason not to use it. Companies nationwide, worldwide, all want to do this. We get no resistance from them. They want to see it work. It’s a go.”
GE (as addressed in The Economist), Apache Corp. (as covered by Reuters), Halliburton, and STW Resources are just a handful of the many companies, which are developing revolutionary water treatment processes that neuter one of the biggest arguments against fracking.
In our Christmas conversation, someone asked: “Why do they need chemicals? Why don’t they just frack with water?” She’d heard stories.
I explained that the so-called chemicals are needed to provide lubrication for the tiny particles of sand that hold open microscopic cracks in the “fractured” rock that allow the oil or gas to escape. “As a woman, I am sure you’ve had your fingers swell. That makes it hard to get your rings off.” She nodded. “What do you do then?” I queried. “Soap my hands up,” she replied.
That is the role the chemicals play in the fracking process. But those chemicals are now mostly food-based and can be consumed with no ill effects—both Governor Hickenlooper (D-CO) and CNBC’s Jim Cramer have had a drink.
So, even if the chemicals did somehow defy geology and migrate several miles from the fracked well through the layers of sedimentary rock to the aquifer, they are not harmful.
To illustrate the point, I am in the process of organizing what I am calling “the great New Mexico fracktail party.” I have several state legislators lined up—and am looking for more. I need to find an operator who is willing to invite us onsite when a frack job is being done. The legislators, industry folks, and anyone else who wants to participate, will be invited to the location with cocktail glass in hand (umbrella, fruit, olive—whatever—included). With media cameras rolling we’ll pour the fracfluid from the tank to our glasses and toast to American energy freedom.
My sister-in-law asked: “What about the flaming faucets?” “Those are real,” I explained. “But they have nothing to do with fracking.” Natural gas, or methane, was found in water wells long before any fracking was done in the area. In fact, it was the gassy smell that often alerted explorers to the potential oil and gas in the region. Oil-and-gas drilling didn’t cause the flaming faucet phenomenon. Quite the contrary. The presence of gas near the surface brought about the “don’t smoke in the shower” adage. While the water is harmless to consume, a gas build up in the house could cause an explosion.
Lies about hydraulic fracturing are rampant. If fossil fuel opponents can spread fear, uncertainty, and doubt about fracking—with the goal of causing a federal fracking ban, they can virtually stop oil-and-gas development in America, as it is estimated that 90 percent of producing wells have been fracked. Without American ingenuity and increasing production, gasoline prices and utility bills will skyrocket. Economic ruin will reign. America will, once again be beholden to increasingly hostile foreign sources.
A fracking conversation shouldn’t be explosive. Today’s hydraulic fracturing is really benign, American technology that is ecologically sound and economically advantageous. Keep these facts in mind. As my stories illustrate, not everyone will listen—but if more people, such as my brother and sister-in-law, know the truth they can help de-fuse the explosive conversation.[Originally published on Townhall.com]
On October 24, 2011, President Obama said:
Without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs. . . . We can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.
Counter productive was the Obama administration’s jobs plan based on a greening of the economy. Candidate Barack Obama said in 2008 that he would create five million well-paying “green” jobs within 10 years.
Solar panel company, Solyndra, was one of many boondoggle companies that went belly up after being the recipient of government largess (taxpayer’s money) through stimulus funds intended to boost the green economy. A Johnson Controls plant in Michigan, toured by Obama to much fanfare in 2011, was able to produce 150 jobs with its $300 million in conservation grants at a cost of $1 million per position.
Despite Obama’s initial pledge to create millions of well-paying green jobs, 88% of all jobs created in 2013 were “part-time” jobs. Considered a plus was that the unemployment rate declined in November of 2013 from 7.3% to 7.0%, although millions still remain out of work, not counted because they are no longer looking for work.
How did Illinois fare in 2013 at the state level with job creation? With a ranking of 48 out of 50 states on economic outlook and 47 out of 50 in economic performance, Illinois’ performance could rightly be called dismal and unacceptable. In the Monthly Rankings of Unemployment Rates for States, Illinois was ranked 48th at 8.7% by the Bureau of Labor Statistics for November, 2013.
Some areas of Illinois even experienced double the national average of unemployment, which, according to the Bureau of Labor Statistics, dropped to 7.0% in November (This 7% figures fails to consider those who have dropped out of the work force because they are unable to find jobs.)
Three of the ten top Illinois cities with the worst unemployment in 2013 were: 1) East St. Louis, 14.8%; 2) Harvey, 14.4%; and North Chicago, 14.3%.
Illinois legislators were chided by Illinois Chamber of Commerce President, Doug Whitley, when both the Senate and House failed to follow through on bills offering tax breaks for companies to stay or move to Illinois, but instead left town after the pension vote on Tuesday, December 4. Since lawmakers aren’t due back until January, the issue was pushed ahead into 2014.
According to Brent Pollina, head of Pollina Corporate Real Estate in suburban Chicago, whose firm helps companies find new locations:
It seems like Illinois can’t get its act together. Illinois really is behind the times when it comes to the concept of economic development and helping work with business.
Not so, according to Illinois lawmakers. Their first concern was to deal with the state’s roughly $100 billion pension crisis that had diverted money from other services and had led to repeated credit downgrades. Nevertheless, House Speaker Michael Madigan did tell reporters that “It’s still under consideration” to give tax incentives to corporations when lawmakers return to Springfield in late January.
While other states are in competition to snag large businesses here in Illinois — governors from Texas and Florida have waged public campaigns trying to get Illinois companies to move out of state — it is Illinois’ own messy state finances and incomes taxes that are presenting obstacles to what remains at the heart of America’s engine of growth for economic success and job creation. It is small businesses and start-up companies established through entrepreneurship that create new jobs. In-state large corporations generally do quite well without incentives, even here in Illinois.
Talk to any small business owner in your community and you will find that many are just barely making it. It is not uncommon for a small business to go bankrupt and go out of business almost overnight. But what has Illinois does to help small businesses survive in this time of economic uncertainty?
On January 1, a new drag was imposed on small business with a large new tax, compliments of Obamacare. It is the levy on health insurance premiums that targets small business and individual markets. Although the IRS classifies the tax as a “fee”, it functions like an excise tax on premiums.
Most gold-plated public, private and labor plans are exempt from the “fee” IRS regulations imposed last November which excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.” This political selectivity means that the tax burden will fall on those who work for small businesses, the self-employed and individuals. These are the people who can least afford the large, new Obamacare tax.
According to the research arm of the National Federation of Independent Business, these higher insurance costs will shrink hiring by 146,000 to 262,000 jobs over the next decade, with 59% of the losses hitting small business. Also prevalent will be the temptation to dump insurance coverage and send workers to the mercies of Obamacare, which most likely was the preferred outcome from the start.
Editorial page editor Paul Gigot discusses the new health-care tax on premiums that starts on January 1 via a video presentation at: Opinion: “Obamacare’s Coming Assault on Small Business.”
In case you’re feeling safe and secure from the reaches of Obamacare, not so fast! Surprises will be in store for you on your insurance premiums and income tax bills. Taxes and fees will be listed as a line item titled “Affordable Care Act Fees and Taxes.”
The government thinks we should surrender without complaint even though it is trying to make us buy something many of us don’t want. To add insult upon insult, government is now forcing us to pay additional taxes for what the government is demanding we buy, taxes that are set to increase year after year.
In my mind this results in the government’s confiscation of our liberty and freedom. What about you?
[First posted at Illinois Review.]
It’s useful to visit some of the planks of Karl Marx’s 1848 Communist Manifesto. They included abolition of private property — the keystone of capitalism — and the application of all rents of land to a public purpose. Marx advocated a heavy progressive or graduated income tax whereas a fair tax that treats all Americans fairly by taxing what you spend instead of what you earn. The current tax code is more than 73,000 pages! Marx wanted to eliminate all rights of inheritance and centralize credit by means of a national bank.
What Obama is talking about is socialism/communism when he claims that income inequality must be altered by more government intrusion into our lives and his claims are false. He said that “a dangerous and growing inequality and lack of upward mobility” is “the defining challenge of our time.”
His objective is to further divide Americans by promising what government cannot and should not deliver. This is now the Democratic Party theme leading up to the midterm elections in November. He is right about one thing, only economic growth can provide the opportunity for Americans to increase their personal incomes, provide a choice of investments, and save more for the future. In his first five years in office, economic growth has been historically slow.
In a Wall Street Journal opinion commentary by Robert A. Grady he cites a 2011 study by Lee Ohanian and Kip Hagopian, “The Mismeasure of Inequality”, that concluded that “inequality actually declined 1.8% during the 16-year period between 1993 and 2009.” According to studies by the U.S. Treasury, the capitalist system in America, providing mobility (up or down), found that “considerable income mobility” in the decades 1987-1996 and 1996-2005, found that approximately half of those in the bottom income quintile in 1996 had moved to a higher quintile by 2005. They were decades, the 1980s and 1990s, in which the vast majority of Americans gained higher incomes.
In the past four and a half years since the recession officially ended, poor people and the middle class were hurt the most and opportunity slowed. Under Obama millions of Americans are out of work and dependent on government programs such as food stamps and unemployment compensation. The later ended for many on December 31. The inequality that Obama cites is the direct result of the failure of his economic programs as well as a dramatic surge in federal regulations that harm economic growth.
The Affordable Care Act — Obamacare — is discouraging full-time employment. According to Gallup’s payroll-to-population ratio, the proportion of the American population working full-time, has dropped almost two percentage points in the last year to 43.8%. Wall Street Journal columnist noted that Obama spent 2013 fund-raising for the Democratic Party “making 30 separate visits to wealthy donors” at “more than twice the rate of the president’s two-term predecessors. On the day following the September 11, 2012 attack that killed an American ambassador and three others in Benghazi, Obama flew to Las Vegas on a fund-raising trip.
In the year ahead you will hear him cite figures based on 1979 income rates to justify his call for more opportunity, but in 1979 the mean (average) household income of the bottom 20% of wage earners was $4,000. By 2012, it was $11.499, an increase of 186%. For the middle class, the increase was 211%. Despite the 2008 financial crisis, it still rose.
Did the rich get richer? Yes. But the rich earn their money from inheritance, from business development (jobs) and investment. Under communism there is no inheritance; the state gets it all. And the state owns the factories and instruments of production, as well as collectivizing agriculture. It maintains a “progressive” or graduated income tax.
Does the political theme of income inequality work? Bill de Blasio, New York’s new mayor, ran on an income inequality platform and will be sworn in by former President Bill Clinton who will be accompanied by his wife, Hillary.
Income inequality will be the theme of Obama’s forthcoming State of the Union speech, but like everything else he says it will be a Big Lie.
[First published at Warning Signs.]
Happy New Year to all! Along with the Holiday Season are inspirations that good citizens need to return gifts to benefit those less fortunate. From my activities, it is easy to find areas for donations that help the poor cope with expenses of energy use.
Most don’t think simple items like paying electric bills are a hardship. For the unemployed and extremely poor these are almost life-or-death choices. Great help is available through Project Share administered by the Salvation Army. This is assistance to help the hopeless pay utility bills.
In Georgia, you can make a donation on your electric bill which is matched by Georgia Power. Donations are matched by Georgia Power Company; so if you don’t like them, make a big donation and cut into company profits. Project Share has given over $100 million to poor Georgians the past 30 years. Similar programs exist in other states. Make your donation now!!
High energy bills for electricity, heating oil, natural gas, and gasoline are far more punishing to the unfortunate than for average citizens. With government policies directed toward higher energy costs, the situation for the poor becomes even more hopeless.
The federal government, most states, and even many local municipalities have subscribed to the idea that carbon dioxide from burning fossil fuels causes uncontrollable global warming with catastrophic climate events. As a consequence, they place roadblocks for fossil fuel production and mandate use of a vast variety of “renewable energy sources” that are far more expensive than our abundant fossil fuel resources of coal, oil, and natural gas.
In many cases “renewable energy sources” are not renewable and create far more economic and environmental problems than they are alleged to solve. This global warming scare activism is a global problem that is locking developing nations (like in Africa) into perpetual poverty and reducing living standards for those in developed nations like in Europe and North America.
Without impediments to fossil fuel energy use, energy costs would decrease, millions of new jobs would be created, and, billions, if not a trillion, of annual revenue generated in the United States alone. The global benefits are extraordinary.
To slow down this anti-fossil-fuel train charging to disaster, there is a host of organizations staffed with thousands of volunteers educating the public about the nonsense of fossil-fuel caused global warming and impractical, uneconomic, and unreliable energy sources proposed as solutions. These organizations have expenses for maintaining office space, phones and computers, publication materials, mailing, hosting conferences, travel, and office salaries. Most organizations are 501(c) 3 organizations for which donations are tax deductible.
So in a sense donations to energy advocacy organizations produces the same results as giving money to the poor because their accomplishments decrease energy costs for the unfortunate. A few organizations with links for making donations follow. My apology for not listing the hundreds of other organizations toiling so hard to educate the public about efforts to make radical changes to global energy use.
1. The Heartland Institute. A Chicago-based libertarian think tank that sponsored eight international conferences on climate science, published many thousands of pages of scientific articles refuting United Nations publications promoting the global warming scare, and a vast array of other activities. Donations are made with this link.
2. Science & Environmental Policy Project (SEPP). A Washington-based group that collaborated with The Heartland Institute on thousands of pages of scientific articles refuting United Nations publications, publishes a weekly summary of pertinent articles on climate science and energy, and a host of other activities. Donations are made with this link.
3. Committee For A Constructive Tomorrow (CFACT). A Washington-based group that published numerous articles on climate science and energy policy, attends United Nations Conferences to refute global warming scare information, and a host of other activities. Donations are made with this link.
4. Cornwall Alliance. The Cornwall Alliance is a coalition of clergy, theologians, religious leaders, scientists, academics, and policy experts committed to bringing a proper and balanced view of nature and the environment. They publish numerous articles refuting the global warming scare, provided speakers for news and religious meetings, and a host of other activities. Donations are made with this link.
Support energy advocacy groups because they need funds to accomplish their mission. Organizations pushing the global warming scare have access to billions of tax dollars and donations from those who profit from their assistance.
A retrospective analysis of the year 2013 reveals one humiliating defeat after another for contemporary ecotheologians as various climatic and political events served to further undermine their case for man-made climate change.
For starters, a number of Western governments rejected United Nations climate change protocols. Australia (Tony Abbott, whose platform featured a rejection of climate change hokum, was elected prime minister), Japan (the country dramatically scaled back its 2009 carbon emissions pledges) and Poland (which fired its environmental minister just days into the COP-19/Conference of Parties climate change forum) all sent a clear message that they would not be bound to any economically destructive international agreements based on fraudulent science.
In terms of COP-19 “accomplishments,” the Obama administration pledged to have U.S. carbon reduction targets in place by the 2015 Paris conference and there was a loose agreement on a “loss and damage” (a wealth redistribution scheme compensating developing countries for damages from greenhouse gas emissions with funds from developed countries) plan. Such “commitments” are best to be taken with a grain of salt, however, given the poor record of nations keeping such promises.
One 2013 event that held out hope for man-made climate change advocates was Typhoon Haiyan, a category 4 storm that struck the Philippines in early November. Having recast their focus on “extreme weather events” (instead of rising temperatures) as the litmus test for the existence of man-made climate change, the alarmists viewed Haiyan as a godsend.
In the wake of the storm, the main stream media and climate change alarmists trumpeted their message of linkage between climate change and the storm’s intensity. Following the hyperbole emanating from these messengers of doom, however, a number of scientific analyses and historical hurricane records were published that conclusively debunked any such linkage. In fact, claims of causality between purported climate change and Haiyan’s intensity carried about as much water as similar calls linking “super storm” Sandy and climate change the year before.
The typhoon was the highlight of a normally active Pacific hurricane season, but the Atlantic Basin was quite tranquil with the region experiencing the fewest number of hurricanes in 30 years. Of thirteen named storms, only two became hurricanes and only one of these made landfall in the U.S. Mexico experienced a total of eight storms, with three making landfall as hurricanes. Of greater significance, however is the long term record that shows no trend of increase in the number or severity of U.S. hurricanes since 1990 (2013: Slowest Hurricane Season in 30 Years, Anthony Watts, November 25, 2013).
And what about those global sea ice trends? Perhaps one should ask those aboard the MV Akademik Scholkalskiy, the misfit bunch of researchers and tourists who went venturing off to the Antarctic to see how climate change was affecting sea ice. Well, to paraphrase a famous play, a funny thing happened on the way to the Douglas Mawson base camp (the researchers mission was to recreate the 1912 exploits of the Australian scientist).
The latest news was that the ship was stuck in ice 15-feet thick with attempts by several other ships to rescue the crew members rendered unsuccessful due to similarly poor seafaring conditions. In fact, the latest satellite data shows that Antarctic sea ice is at record highs while Arctic sea ice is up 35% or more from last year’s low levels. Translation: global sea ice is now well above the historical average.
Perhaps the crowning achievement of the alarmist community in 2013 was the IPCC’s release of its Fifth Assessment Report, or AR5, another IPCC publication that came up well short in the credibility column. Most laughable among the report’s conclusions was the statement claiming improved confidence in projections of rising temperatures despite the increasingly yawning disconnect between actual global temperatures and rising CO2 levels. Thus is the logic of the IPCC. Welcome to the global warming “pause,” 17 years and counting. [Editor: Catch up with the latest definitive rebuttal to IPCC alarmism, Climate Change Reconsidered II: Physical Science, from the Nongovernmental International Panel on Climate Change or NIPCC.]
In an effort to refute this widening decoupling, the “true believers” like Heidi Cullen continued to grasp for straws, claiming that the earth’s warming is taking place in the deep ocean with the effects to become more profound in the future. The problem with people like Heidi Cullen, Al Gore and NOAA’s James Hansen, is that their predicted apocalyptic events are always in the future, thus in order to avoid accountability.
It was on September 27 that the UN Intergovernmental Panel on Climate Change (IPCC) delivered to massive media coverage an unsettling message: Climate change is real, humans are the main cause of it, and unless we stop the warming of the planet, in 50 years life as we know it will be no more.
A little more than a week before, on Sept. 18, a dueling climate change report was issued (published by Chicago’s Heartland Institute) by the Nongovernmental International Panel on Climate Change (NIPCC), Climate Change Reconsidered II: Physical Science.
The NIPCC report, in keeping with past precedent, was not accorded the same fanfare as received by the UN’s IPCC report upon its release. To the contrary, media attention for Heartland’s NIPCC report was practically nonexistent as was observed at the Sept. 18 press conference held by Heartland in Chicago to announce the release of its report.
As a skeptic of global warming, a welcome mat does not exist in Chicago for The Heartland Institute as its message goes against the accepted media message of the Chicago Tribune, etc., that global warming is man-made with CO2 as the main culprit.
A slew of scathing reports followed the release of Heartland’s NIPCC report, such as this from Climate Science Watch:
The discredited Heartland Institute is attempting to present its new NIPCC report, Climate Change Reconsidered, as a legitimate alternative authority to the Intergovernmental Panel on Climate Change (IPCC). But the NIPCC report is not a credible scientific undertaking, and the Heartland Institute has no credibility, scientific or otherwise.
To protect the stellar credentials of The Heartland Institute, President Joseph Bast offered the following essay:
We urge the public to compare and contrast these two reports on what is probably the most important public policy issue of our age. The NIPCC report was produced by a team of independent scientists with no agenda other than to find the truth. . . . The IPCC study, in contrast, is produced by a government agency, part of the United Nations. That agency’s mission is to find a human impact on climate. . . .
The NIPCC report finds the human impact on climate is very small, and as a result, any warming that may be due to human greenhouse gas emissions is likely to be so small as to be invisible against a background of natural variability. The authors of the NIPCC study do not believe man-made global warming is a crisis, or that scientists know enough about how the climate works to make policy-relevant recommendations to the world’s government leaders.
Without question President Obama and his administration are in lock step with the UN’s highly flawed report that calls for action now to fight climate change before time runs out. Accordingly, it’s full steam ahead for Obama and his administration.
On November 1, Obama offered a presidential directive to “enhance climate preparedness and resilience.” The directive calls for an interagency Council on Climate Preparedness and Resilience in partnership with state, county, local and tribal governments, by which Obama aims to reduce U.S. greenhouse gas emissions by 17% by 2020 from 2005 levels. Even the approval of the Keystone XL pipeline hinges upon a determination of what will be the net effects of the pipeline’s impact on our climate.
But what do the American people think? Might they be seeing through the story they are being fed by the mainstream media? According to the Pew Research Center’s policy priorities survey, this year the American public ranked dealing with global warming at the very bottom of 21 listed priorities. Even so 35% of Republicans, 53% of independents, and 75% of Democrats believe there is solid evidence of rising temperatures on earth.
According to Michael Bastasch, the American people should be holding their champagne glasses high this holiday season as the end of 2013 marks the 17th year without global warming. Explaining away the 17-year hiatus in global despite the setbacks noted below, can be achieved only if political ideology is permitted to trump proven scientific facts.
The following top seven global warming alarmist setbacks of 2013 were posted on December 20 by Mr. Bastasch from content compiled by The Daily Caller News Foundation:
1) Studies show that the world was warmer than it is today during the Roman Empire and when the Vikings were plundering Europe and North America. In fact, even in the 19th Century, there were discussions surrounding the fact that the Vikings could settle the northernmost reaches of Greenland and North America because there was less ice coverage.
2) During the second week in December, the U.S. saw more than 2000 record low temperatures and record snowfalls, according to the National Weather Service and HamWeather records center. There were 606 record low temperatures, 1,234 low maximum temperatures and 285 record snowfalls across the country. In the meantime there were only 98 high temperature records and 141 high minimum temperature records.
3) Satellite data shows that the polar bears have at least one reason to be happy this year – Arctic sea ice coverage was up 50 percent over last year’s record low coverage. Contrary to Al Gore’s prediction that there would be no polar ice cap by this year, sea ice coverage spanned nearly 2,100 cubic miles by the end of this year’s melting season, up from about 1,400 cubic last year.
4) Global cooling is on the way, according to an increasing number of scientists. German scientists have predicted that based on declining sunspot activity and natural climate oscillation the world will cool over the next century. Temperatures will eventually drop to levels corresponding with the “little ice age” of 1870.
5) Other scientists have also been coming around to the global cooling side of things. The BBC reported that Professor Mike Lockwood of the Reading University predicts that at the current rate of decline in solar activity, another “Little Ice Age” could envelope Northern Europe.
6) The United Nations climate bureaucracy’s latest global warming report was called “hilarious” by a leading scientist from the Massachusetts Institute of Technology. Dr. Richard Lindzen said the UN’s report “has truly sunk to level of hilarious incoherence” because they continue to proclaim with ever greater certainty that mankind is causing global warming, despite their models continually being wrong.
“Their excuse for the absence of warming over the past 17 years is that the heat is hiding in the deep ocean,” Lindzen said. “However, this is simply an admission that the models fail to simulate the exchanges of heat between the surface layers and the deeper oceans.”
7) The Senate testimony of Dr. Roger Pielke of the University of Colorado completely undercut environmentalists and Democrats trying to claim that global warming was causing “extreme weather.”
“It is misleading and just plain incorrect to claim that disasters associated with hurricanes, tornadoes, floods or droughts have increased on climate timescales either in the United States or globally,” Pielke said. “It is further incorrect to associate the increasing costs of disasters with the emission of greenhouse gases.”
The other witnesses on the panel did not refute Pielke’s data.
Will the Dec. 28 saga of a dramatic spectacle of climate researchers trapped in Antarctic ice (which has expanded massively during 2013) help free the mainstream media of the false global warming ice narrative? A Chinese ice breaker sent to rescue climate researchers who became trapped in ice on Christmas Day is now itself waiting and is hoping to push aside some of the ten foot thick ice preventing it from reaching the trapped researchers. An Australian ice-breaking ship got stuck in the ice, too.
Hardly so, because the story doesn’t fit the unflinching template held by the mainstream media, just as the same has disregarded John Coleman (founder of The Weather Channel) and various other critics who have called the theory that human use of carbon-based fossil fuels will lead to catastrophic global warming or climate change a hoax, despite an added warning that purposeful deception to mislead might be criminal.
Even if more adults do see through the hoax that is global warming, what about our youth?
The Common Core Science Curriculum teaches children that humans are dangerous to the planet, that man made global warming is an accepted incontrovertible fact even though it is not, and that government action is required to fix global warming even though the taxes the Obama administration would like to impose on carbon dioxide producers would have a negligible effect on global warming but would have a devastating effect on a crumbling economy.
Are parents in the know up to countering the false propaganda being taught their children? And what about the many parents who have no idea or little interest in what their children are being taught in the public schools by way of the new Common Core curriculum.
Only time will tell, but the situation doesn’t offer much hope.
Federal Reserve Chairman, Ben Bernanke, and his designated successor, Janet Yellen, have defended the central bank’s $4 trillion monetary expansion over the last five years as a necessity to fight recession and prevent deflation. The only problem is that booms and recessions are caused by central banks, and deflation is “bad” only when it is the result of government policy.
It was the five years of easy money policy and interest rate manipulation between 2003 and 2008 that created the unsustainable housing, investment, and consumer spending booms that finally came crashing down in 2008 and 2009. The Federal Reserve’s 50 percent increase in the supply of money and credit in the banking system between 2003 and 2008 generated the illusion that people could do more and spend more than the scarce resources of the society could actually fund and cover.
The recession was a symptom that numerous sectors of the economy had been thrown out of balance during the years of easy money, and that markets needed to rebalance to restore sustainable full employment and long-term wealth-enhancing growth.
Instead of leaving markets alone to find their own levels for that rebalancing of supply and demand, the Federal Reserve continued to pump in even more money into the financial markets – over $4 trillion more into the banking system – and the federal government went on an even larger than usual deficit spending binge – over $4.6 trillion worth between 2009 and 2013.
Rather than assisting a post-recession recovery, these policies – plus other market-harming government interventions, regulations, and manipulations including ObamaCare – have made this the most sluggish recovery, especially in terms of employment, in the entire period since the end of World War II in 1945.
At the same time, the Federal Reserve leadership has argued that its “quantitative easing” policies were necessary to prevent the economy from experiencing any significant “deflation,” defined by the monetary authorities as a sustained and continuing fall in the general level of prices.
This is what is behind the unofficial Federal Reserve policy of aiming for a “target” of two percent price inflation, that is a sustained and continuing rise in the general level of prices.
What is considered to be so “damaging” in a general decline or fall in prices throughout the economy? For many economists, including, seemingly, those at the helm at the Federal Reserve, falling prices is considered a sign of economic “bad times.” After all, how can businessmen be making profits and maintain employment if their selling prices are going down?
It is possible to distinguish at least three causal reasons behind any observed general fall in prices, or “price deflation,” and it is worth understanding the affects of each one.
A general decline in prices may accompany significant expansions in output resulting from productivity increases and cost efficiencies. One of the competitive forces in the market economy is the never-ending drive of entrepreneurs to bring better and less-expensive goods and services to market for the consuming public.
New technologies and cost-saving innovations introduced within business enterprises enable more goods to be manufactured and sold at lower per-unit costs. Sellers, in one sector of the economy after another, increase their supplies offered on the market, and competitive pressure results in a lowering of the prices of those goods to reflect their lower costs of production. The cumulative effect is that the general level of prices will decline over a period of time.
In the period between the end of the American Civil War in 1865 and 1900, the general level of prices in the United States declined by about 50 percent. While the American economy did experience short periods of economic depression during those years (mostly due to the federal government’s manipulation of the monetary standard), this nearly half-century period was the time of America’s Industrial Revolution, and it saw a dramatic rise in standards of living even though accompanied by an expanding population.
An open, free-market system tends to foster the incentives and profitable rewards for capital investment and innovation that bring forth increasing prosperity. Greater output at falling prices provides people with higher real income as each dollar they earn now buys a larger quantity of goods and services in the marketplace. Supply-side deflation, therefore, is an indication of a growing and dynamic market system that is improving the economic conditions and opportunities of the general population.
For that reason, such supply-side price deflation has often been called the “good deflation.”
Price-Wage Rigidity Deflation and Keynesian Economics
All economic change brings with it shifts in market demand-and-supply conditions. Continuous adjustment and balance within the market requires those affected by change to adapt to the new circumstances. In a world of constant change, the demands for some goods increase while other demands decline.
Innovations and technological advancements as well as changing resource availability bring with it shifts in the demand and supply of various forms of labor and capital. The information about these changes and the incentives to appropriately respond to them are provided to people in the market through changes in the structure of relative prices and wages.
Any failure of prices and wages to correctly reflect the new patterns of market supply and demand only generates distortions, imbalances, and maladjustments between the two sides of the market. Under the influence of Keynesian economics, for most of the last 75 years, the resulting unemployment and falling output due to price and wage rigidities have been called “aggregate-demand failures.”
The presumption has been that the level of total demand for goods and services in the economy in general falls short of the total supply of goods and services available for sale at prices equal to their costs of production. The problem, it is said, is not that prices and wages are “wrong” on the supply side but rather that aggregate spending is “too low” on the demand side. The policy presumption has been that government and its monetary authority must increase total demand, either through government deficit spending or the central bank’s printing money and providing it for private investment and other purposes.
Unemployment as a Supply-Side Pricing Problem
The free-market economist William H. Hutt gave a refutation to this Keynesian reasoning in his two works “A Rehabilitation of Say’s Law” (1974) and “The Keynesian Episode” (1979). Hutt argued that when the Keynesians refer to excess aggregate supply and an apparent weakness of aggregate demand to purchase that supply, they are looking through the wrong end of the telescope.
There cannot be an “aggregate” excess supply of everything unless there is a super-abundance of all resource inputs and consumer-demanded outputs, at which point there would no longer be an “economic problem” because there would no longer be scarcity. Why bother whether all are employed when the society has reached the point where it is so rich in all desired things that there is no longer any work left to be done?
What can exist is an oversupply of particular goods relative to the demand for them at the prices at which they are being offered for sale. What is preventing the buying of more of these goods is not that the aggregate demand is “too low” but rather that the particular prices for these goods are set too high, given the consumer demands for them.
In other words, the sellers of these goods or labor services are pricing themselves out of the market. It is the unwillingness of resource owners to price their products and services at levels commensurate with consumer demand that Hutt said were the cause of prolonged depressions.
When a supplier is unwilling to lower his price or wage to induce greater sales when demand for his particular good or service turns out to be less than he had, perhaps, expected, then a part of his supply remains unsold and a portion of the labor services available for hire remains unemployed.
The loss of income due to producers or workers maintaining their supply prices too high relative to actual market demand results in a decrease in their ability to purchase the goods and services of others being offered on the market.
If the suppliers of those goods and services, in turn, refuse to adjust their prices and wages downwards, given the now-lower demand for their output, then the circle of unsold products and unemployed labor starts to expand. A “cumulative contraction” of output and employment may develop in the face of such a network of relatively rigid prices and wages.
Hutt also emphasized that whenever a price or wage that is too high is lowered closer to its equilibrium or market-clearing level, suppliers of those goods and services increase their sales and potentially earn higher income. Their higher incomes from pricing their goods and services more correctly, in turn, enable them to increase their demands for other goods and services and thus start a process of expanding the circle of employment and production opportunities in the market. Market-guided pricing puts the unemployed back to work and releases the flow of demand for a growing circle of goods in the economy.
A general decline in prices can also be brought about by a monetary deflation. A contraction in the supply of money and credit reduces the amount of money in people’s hands with which they can demand the various goods and services they wish to buy in the market. With less money to spend, there invariably results a downward pressure on prices and wages in general in the economy
If there are price and wage rigidities, as just discussed, then the process of restoring balance between market supplies and demands at a required lower scale or level of prices can be dragged out and punctuated by “recessionary” unemployment and lower production.
Under central banking, monetary contractions are government-made. There have been instances when governments have intentionally contracted the money supply. The British government did so after the war with Napoleon in the early 19th century and then again after the First World War in the early 1920s.
Other times it has happened as a result of the central-bank-managed fractional-reserve system, under which outstanding bank liabilities are a multiple of the actual reserves to meet all depositor obligations. In the early 1930s, bank loans went bad, depositors withdrew their funds out of fear of bank closings, and the amount of bank credit outstanding contracted as a multiple of the reserves withdrawn by depositors.
But as we saw, for practically the entire 21st century, so far, the Federal Reserve has been greatly increasing the supply of money and credit to the banking system, both during the “boom” years between 2003 and 2008, and even more “aggressively” during the recession and recovery years between 2008 and 2013. So no monetary deflation or contraction has threatened the U.S. economy.
A Non-Inflationary Free Market Banking System
What we should want is a non-inflationary monetary framework for the United States, through severe restraints on the ability of the Federal Reserve to expand the supply of money and credit, and through an eventual shift away from central banking to a gold, or some other commodity-based, private competitive banking system.
A free, competitive market economy is always rewarding successful entrepreneurs with profits for having made new, better and less expensive goods to earn consumer business. Thus, the normal trend in a free, competitive market is a world of gently falling prices as innovative businessmen bring improved and less expensive goods to consumers.
A truly free market economy, therefore, is one that tends to have the “good deflation,” and we should look forward to it, if only government intervention and central banking would get out of the way.
[First published at Epic Times.]