I am pleased to pass along to Somewhat Reasonable readers news of the launch of a new blog, Executive Branch Review. Hosted by the Federalist Society for Law and Public Policy, Executive Branch Review seeks to prompt a national debate about (a) whether Federal executive branch activity has increased in recent years and (b) if so, with what consequences.
Because the Federalist Society does not take positions – it seeks simply to stimulate discussion and debate among politically aware and concerned citizens – the blog posts themselves will be relatively neutral in tone, merely citing federal activities that some may see as overreach and teeing them up for discussion and debate. The discussion itself will take place in the comments section of the blog, and that’s where Somewhat Reasonable readers come in.
Because I believe that public policy issues are too important to leave to just professional politicians, I ask my readers to do two things:
- Please go to the blog now (http://www.executivebranchproject.com/), bookmark the page, check back regularly, and offer comments on blog posts as you see fit. Feel free to be as brief or as extended as you wish, but please respect the rules of the forum: don’t be overly strident in nature; avoid abusive, vulgar, offensive, threatening, or harassing language, personal attacks of any kind, and offensive terms that target specific individuals or groups. Please also don’t try to post any electioneering or lobbying communications within the meaning of applicable federal or state law, as this is not a political website – it’s about public policy.
- Please forward the link ( http://www.executivebranchproject.com/) to anyone you know – left, right, or center – who wants to understand more about how our American government actually works in practice today and who wants to contribute to discussing the appropriate use of executive branch power.
Thank you in advance for your help. As I said, I believe that issues such the ones this blog will highlight are too important to leave to professional politicians, so please be professional, please be reasoned, and please say something as time permits and the spirit moves you. If the American experiment in self-government is going to work much longer, it needs intelligent and thoughtful participation from people like you and the people you know.
Maybe it’s a measure of progressives’ refusal to look back, to always move “forward.” Otherwise, they should be celebrating right now. In fact, President Obama and fellow modern progressives/liberals should be ecstatic all this year, rejoicing over the centenary of something so fundamental to their ideology, to their core goals of government, to their sense of economic and social justice—to what Obama once called “redistributive change.”
And what is this celebratory thing to the progressive mind?
It is the progressive income tax. This year it turns 100. Its permanent establishment was set forth in two historic moments: 1) an amendment to the Constitution (the 16th Amendment), ratified February 3, 1913; and 2) its signing into law by the progressive’s progressive, President Woodrow Wilson, October 3, 1913. It was a major political victory for Wilson and fellow progressives then and still today. By my math, that ought to mean a long, sustained party by today’s progressives, a period of extended thanksgiving.
President Obama once charged that “tax cuts for the wealthy” are the Republicans’ “Holy Grail.” Tax cuts form “their central economic doctrine.” Well, the federal income tax is the Democrats’ Holy Grail. For progressives/liberals, it forms their central economic doctrine.
As merely one illustration among many I could give, former DNC head Howard Dean and MSNBC host Lawrence O’Donnell were recently inveighing against Republican tax cuts. Dean extolled “what an increase in the top tax rate actually does.” He insisted: “that’s what governments do—is redistribute. The argument is not whether they should redistribute or not, the question is how much we should redistribute…. The purpose of government is to make sure that capitalism works for everybody …. It’s government’s job to redistribute.”
What Dean said is, in a few lines, a cornerstone of the modern progressive manifesto. For Dean and President Obama and allies, a federal income tax based on graduated or progressive rates embodies and enables government’s primary “job” and “purpose.” They embrace a progressive tax for the chief intention of wealth redistribution, which, in turn, allows for income leveling, income “equality,” and for government to do the myriad things that progressives ever-increasingly want government to do.
And so, in 1913, progressives struck gold. The notion of taxing income wasn’t entirely new. Such taxes existed before, albeit temporarily, at very small levels, and for national emergencies like war. The idea of a permanent tax for permanent income redistribution broke new ground. The only debate was the exact percentage of the tax. In no time, progressives learned they could never get enough.
In 1913, when the progressive income tax began (and the first 1040 form, with instructions, was only four pages long), the top rate was a mere 7 percent, applied only to the fabulously wealthy (incomes above $500,000). By the time Woodrow Wilson left office in 1921, the great progressive had hiked the upper rate to 73 percent. World War I (for America, 1917-18) had given Wilson a short-term justification, but so did Wilson’s passion for a robust “administrative state.”
Disagreeing with Wilson were the Republication administrations of Warren Harding and Calvin Coolidge, his immediate successors. Along with their Treasury secretary, Andrew Mellon, they reduced the upper rate, eventually bringing it down to 25 percent by 1925. In response, the total revenue to the federal Treasury increased significantly, from $700 million to $1 billion, and the budget was repeatedly in surplus.
Unfortunately, the rate began increasing under Herbert Hoover, who jacked the top rate to 63 percent. It soon skyrocketed to 94 percent under another legendary progressive, FDR, who, amazingly, once considered a top rate of 99.5 percent on income above $100,000 (yes, you read that right).
Appalled by this was an actor named Ronald Reagan, himself a progressive Democrat—though not much longer. Reagan often noted that Karl Marx, in his “Communist Manifesto” (1848), demanded a permanent “heavy progressive or graduated income tax.” Indeed, it’s point 2 in Marx’s 10-point program, second only to his call for “abolition of property.”
The upper tax rate wasn’t reduced substantially until 1965, when it came down to 70 percent. Alas, President Ronald Reagan took it down to 28 percent. And despite claims to the contrary, federal revenues under Reagan increased (as they did in the 1920s), rising from $600 billion to nearly $1 trillion. (The Reagan deficits were caused by excessive spending and decreased revenue from the 1981-3 recession.)
The upper rate increased again (to 31 percent) under George H.W. Bush and under Bill Clinton (39.6 percent). George W. Bush cut it to 35 percent. Barack Obama has returned it to the Clinton level of 39.6 percent.
Here in 2013, 100 years henceforth, the wealthiest Americans—the top 10 percent of which already pay over 70 percent of federal tax revenue—will be paying more in taxes this year than any time in the last 30 years. For progressives, this is justice. But it is also bittersweet: As progressives know deep inside, it still isn’t enough. For them, it’s never enough.
To that end, my enduring question for progressives is one they typically avoid answering, especially those holding elected office: In your perfect world, where, exactly, would you position the top rate? I routinely hear numbers in the 50-70 percent-plus range.
Democrats like President Obama complain about Republican “intransigence” in raising tax rates but, truth be told—and as any liberal really knows—if it wasn’t for Republican resistance, progressives would rarely, if ever, cut taxes. America would remain on a one-way upward trajectory in tax rates, just like under Woodrow Wilson and FDR, and just as it has been in its unrestrained spending for nearly 50 years. Like their refusal to cut spending (other than on defense), progressives are dragged kicking and screaming into tax cuts. They need high income taxes for the government planning and redistributing they want to do; for Obama’s sense of redistributive justice.
This year, the progressive income tax turns 100. For progressives, getting it implemented was a huge triumph. Their success in making it a permanent part of the American landscape is a more stunning achievement still.
Dr. Paul Kengor is professor of political science at Grove City College, executive director of The Center for Vision & Values, and author of the book, “The Communist: Frank Marshall Davis, The Untold Story of Barack Obama’s Mentor.” His other books include “The Crusader: Ronald Reagan and the Fall of Communism” and “Dupes: How America’s Adversaries Have Manipulated Progressives for a Century.”
Recent public filings by the DOJ and the FCC spotlight their reticence for wireless competition policy and market-driven spectrum auctions. They also show a strong predilection for preemptive and interventionist wireless regulation.
Specifically, the DOJ just sent an analysis to the FCC. It urges the FCC to establish spectrum auction regulations that would effectively deny new scarce radio spectrum to wireless market leaders, Verizon and AT&T, and effectively steer it to the “smaller nationwide networks,” Sprint and T-Mobile.
Just a few weeks ago in its annual wireless competition report to Congress, the FCC could not bring itself to declare that effective wireless competition exists.
Never mind the FCC’s own analysis shows the U.S. market is the most competitive it has ever been. Never mind it’s more competitive than most any other nation. And never mind, by most every competitive measure — pricing, speed, investment, deployment, availability, innovation and consumer satisfaction, competition is vibrant.
This tortured FCC decision to deny the obvious is a not-so-subtle signal that the FCC is bent on implementing some form of preemptive spectrum cap regulations that the FCC could not justify if it found the wireless market competitive.
What’s wrong with this FCC/DOJ approach?
First, such regulations will turn a competitive-market-based auction, driven by market supply and demand, into a less-competitive, rigged “auction” where everyone knows ahead of time to which companies the government wants to steer the new available spectrum.
A free and fair auction is just like free and fair trade – the outcome is based on competition, supply, demand, and price, not government pre-selections and regulation.
Second, the DOJ is speculating that two larger players will buy spectrum that they don’t really need in order to keep it from two smaller competitors.
If the DOJ is urging an auction policy grounded on DOJ speculation, why don’t they also consider the more obvious potential anti-competitive effects of preemptively and artificially limiting auction competition from four to two bidders?
Wouldn’t their two chosen bidders have a greater incentive to collude to foreclose the opportunity for the U.S. taxpayer to reap the benefit of being paid the highest market value for the spectrum?
Third, such regulations could shortchange the American taxpayer billions of dollars in foregone auction revenues, and not reduce the Federal budget deficit and debt as much as a free and fair auction would.
That’s because specifically excluding the two bidders — with the most subscriber demand for spectrum capacity and the most financial wherewithal to bid — will substantially reduce the winning prices for spectrum.
Fourth, the FCC has an abysmal track record of picking market winners and losers.
For example, the FCC’s heavy-handed implementation of the 1996 Telecom Act overtly picked the CLECs as market winners and the Bells as market losers. The FCC imposed one-sided uneconomic price regulations and terms, which predictably fueled a CLEC market bubble and subsequent market crash. All of the FCC’s chosen-winner-CLECs went bankrupt.
Another example, the FCC tried to steer the last 700 MHz public safety auction so tightly that no one bid. The ignominious result is that twelve years after 9-11, the FCC still has not been able to implement the 9-11 recommendation to create an interoperable public safety wireless network.
Fifth, the DOJ’s central market analysis and assumption here are incorrect. In a zealous attempt to lend support for FCC regulatory intervention, the DOJ (on page 12) contrived a flawed market analysis conclusion that Verizon and AT&T are “the dominant firms” in wireless.
The DOJ unnecessarily has created a credibility problem for itself here.
Legally, the word “dominant” is singular not plural. Dominant means first and foremost, not the top two. Verizon and AT&T logically can’t both be “dominant” at the same time; either one is dominant, or none is dominant.
Under the DOJ’s own guidelines, a firm is “dominant” with 50+% share — meaning every other competitor by definition is non-dominant. Neither Verizon nor AT&T have anywhere near 50+% share of the relevant market.
Language matters. If the DOJ meant to just imply the existence of market power, they should stick to that legal term, not employ the pejorative term “dominant,” for two wireless providers, when they know they can’t prove that factually based on their antitrust expertise.
This assertion of two “dominant” wireless providers imagines incorrectly that Verizon and AT&T somehow don’t compete against each other when they obviously do.
Lastly and most importantly, if the DOJ and FCC truly believe that the supply of spectrum is so important to wireless competition, why have they done so little publicly to rectify the federal government’s hoarding, waste and mismanagement of spectrum?
This huge and artificial governmental constriction of overall spectrum supply is the overriding reason for scarcity of commercial spectrum — not Verizon or AT&T speculated potential actions.
The federal government claims that it can’t spare any more of its spectrum for auction when it controls ~85% of the nation’s radio spectrum suitable for wireless broadband, but only uses 1% of the nation’s energy; provides 8% of the nation’s employment; produces 12% of the nation’s GDP; and gets by with 30% of the nation’s land?
The facts expose an enormous public-private imbalance between the Government’s unjustifiable and wasteful hoard of spectrum supply and the private sector’s huge unmet demand for more spectrum supply over time.
Tellingly, the private sector has a wireless spectrum utilization rate as much as ~80 times greater than the Government’s.
This spectrum hoarding and waste is only able to continue because spectrum is the only federal asset that has no modern management system, no inventory or utilization measurement, and no budget or accountability system.
It is the single biggest “good government” management scandal facing the federal government today.
In sum, there is no long-term, private-sector, spectrum-competition problem requiring FCC preemptive regulation. However, there is a deeply dysfunctional federal spectrum management pipeline problem in dire need of attention that the FCC, DOJ and the rest of the Government appear to be ignoring.
The longer the FCC and DOJ keep their head in the sand about the obvious state of federal spectrum mismanagement, the more clear it becomes that they are less interested in promoting wireless competition, and more interested in promoting regulation of the wireless industry.
[First Published at The Daily Caller]
Progressive Keynesian Myths Debunked: The Coming Redistribution of Political and Economic Power Among the States
Ongoing effective economic experiments among the 50 states are sharpening, and definitive results will pour out in the real world, editorial and opinion fallacies to the contrary notwithstanding. That sharpening is the result of the increasing political segregation among the states, with 25 now in complete control of Republicans in the Governor’s office and in majorities in the state legislatures, and 15 in the same complete control by the Democrats.
That sharpening is further exacerbated by the overconfidence of so-called “progressives” in reaction to the election of 2012, which they are certain heralds the greening of America – the abandonment by rising American majorities of the foundations of traditional American prosperity and success, in favor of European concepts of social justice and neo-Marxism. That overconfidence is leading the Democrat controlled states to embrace more radical left nostrums.
Hence we see accelerating tax rate increases in California, New York and Illinois, combined with overregulation driving out dramatic, emerging, real world opportunities in resource development and other market prospects.
The likely outcome of these economic experiments is carefully presented in the recent publication by the American Legislative Exchange Council (ALEC) of Tax Myths Debunked, authored by economists Eric Fruits and Randall Pozdena. That publication wields both meticulous logic and authoritative empirical support to definitively grind to dust economic myths advocated by “progressives” with religious fervor.
One such myth is the hopelessly outdated Keynesian notion that increased government spending stimulates the economy during recession. As the authors note, “The Obama Administration and its liberal allies in Congress forgot the dismal performance of Keynesian-type deficit spending as a stimulus of growth in the 1960s and 1970s and embarked on an aggressive deficit spending policy anyway.”
That was the nearly $1 trillion dollar so-called “stimulus” that Obama and the Democrats waived through Congress as the first major act of the Obama Administration in February, 2009. Keynesian policies failed so thoroughly in the 1970s, leading to both double digit inflation and double digit unemployment, that it is puzzling as to why Obama returned to them, as if he is ignorant not only of what happened then, but of everything that happened after then, from 1980 on. Ronald Reagan explicitly scraped Keynesian nostrums, embracing instead the new, modern supply side economics, which focuses on incentives for increased production to restore economic growth and prosperity, rather than increased demand. Inflation was quickly subdued, shocking the Washington Establishment, and the economy took off on a generation long, 25 year, economic boom from 1982 to 2007, which Art Laffer and Steve Moore called “the greatest period of wealth creation in the history of the planet,” in their 2008 book, The End of Prosperity.
That is why I have called Obama’s economic policies Rip Van Winkle economics, because Obama seems to have slept through that 25 year economic boom, and to be totally unaware of everything that happened then, in his own country.
The myth of Keynesian economics is based on a failure to take into account basic double entry bookkeeping. If the government spends more, where does the money for that increased spending come from? Either from increased borrowing, or increased taxes, which both take an equal amount of resources and spending out of the private economy as they finance in increased government spending. So not only can there not be a net increase in aggregate, or total, demand from these policies, the spending is in truth a net drag on growth, as the private economy spends money more productively and efficiently than the government. That is why this Keynesian nostrum never worked in the 1930s, as the recession of 1929 extended into the decade long Great Depression, and it hasn’t worked anywhere else since.
But most fundamentally, economic growth is not driven by increasing demand, which is insatiable, but by increased production or output (supply), which is driven by incentives for productive activity. In other words, just as an individual cannot spend himself rich, neither can a nation. Prosperity is determined by production, just as an individual increases his or her income by becoming more productive.
Demand can never be inadequate in a market economy. If the demand for any product or service is not strong enough, the price of the good or service will fall, until demand equals supply. The people can never spend more than they produce, and so increase “aggregate demand.” And they will never spend less than they produce, leaving demand inadequate, for they will either consume or save every dime that they earn or produce. The consumption goes into consumer spending, and the savings goes into capital spending (which is actually what makes us richer and more prosperous over the long run, as discussed further below).
Fruits and Pozdena recount the consequently all too predictable, dismal results, from Obama’s Rip Van Winkle, 2009 “stimulus,”
“The president’s economists predicted that by the fourth quarter of 2010 the stimulus would have led to employment of 137.5 million. Instead, actual employment was 7.3 million lower than the administration’s projections, and unemployment rates reached 10 percent. They projected that 2012 unemployment would be only 5.75 percent. Instead, unemployment is hovering around 8 percent, with much of that ‘improvement’ coming from individuals leaving the labor force unable to find employment.”
The only reason that Keynesian economics has survived for so long in western thinking is not because it works, or even makes any sense, but because it justifies what liberal politicians already want to do – spend with reckless abandon, run bigger and bigger deficits so they don’t have to explicitly pay for it with higher taxes today, and run up the national debt, which will be someone else’s problem later. The truth is, as Fruits and Pozdena explain, “A large and long-standing body of literature finds that increased or higher government spending tends to reduce economic growth rather than increase it.”
They cite Baumol, W. J. (1967), “Macroeconomics of unbalanced growth: The anatomy of urban crisis.” American Economic Review, 57(3): 415–426 as showing 45 years ago that shifting resources from high productivity growth sectors to low productivity growth sectors, such as government services, will cause the growth rate of overall productivity to decline. They cite Barro, R. J. (1991), “Economic growth in a cross section of countries.” Quarterly Journal of Economics, 106(2): 407–443 as showing that government consumption has no effect in increasing private productivity, or in other words in restoring economic growth. Instead, Barro found that increased government consumption lowers saving and growth through the distorting effects of taxation or government expenditure programs.
A review of data from the G-7 countries by E. Hseih and K. Lai (1994) found no evidence that increased government spending increases the rate of growth of per capita GDP. Barro, R. J. (1996), “Determinants of Economic Growth: A Cross-Country Empirical Study.” Working Paper No. 5698, National Bureau of Economic Research found that most government spending does not increase productivity, and that increased government spending relative to the economy reduces investment and growth.
Harvard Professor Alesina, A., along with Perotti, R. in “Fiscal Expansions and Adjustments in OECD Countries.” Economic Policy, n.21, 207-247 (1995) found based on a cross-country analysis of OECD studies that reducing the share of public spending in the economy would increase economic growth by increasing investment. Alesina A., Ardagna, S., Perotti, R., and Schiantarelli, F. (2002), “Fiscal Policy, Profits, and Investment,” American Economic Review, Vol. 92, no. 3, June 2002, 571-589 argue that government spending cuts are the most stimulative policy for economic growth in a recession.
The bottom line is that Keynesian economics has long been refuted by experience, empirical evidence, and logic, and the failed doctrine now needs to be put to bed, in American colleges and universities, and throughout the councils of government. Moreover, Obama should have known better, given that Keynesian economics has failed so badly every time it has been tried, from the 1930s to the 1970s, and all around the world since then. He had a responsibility to the American people to know better.
Another “progressive” myth debunked by Fruits and Pozdena is that raising tax rates will not harm the economy. Often cited is that tax rates were very high in the 1950s, yet the economy still grew. Perhaps if we bombed to smithereens all our economic competitors, as had recently been done in the 1950s, high tax rates would not be as harmful. But Kennedy did not think those high 1950s tax rates were harmless. He campaigned in 1960 against what he saw as the weak Eisenhower economy, and advocated an across the board 30% cut in tax rates. After that was mostly enacted after his death, the economy boomed, and revenues actually soared.
More recently, Fruits and Pozdena note that ironically, Professor Christina Romer, Obama’s own [former] head of his Council of Economic Advisors, has provided (along with her husband David Romer), some of the strongest evidence that higher tax rates depress economic growth, with their work concluding that each 1% increase in taxation lowers real GDP by 2 to 3 percent. That works primarily through the effect of tax rates on incentives. Lower rates increase the incentives for productive activity, such as savings, investment, business start ups, business expansion, job creation, entrepreneurship and work, resulting in more of each, which adds up to increased economic growth. Higher rates do the opposite.
Fruits and Pozdena explain that this works “because low marginal tax rates, in effect, raise the after-tax returns to labor and capital,” which “increase[s] the supply of labor, entrepreneurship and capital,” which directly increases production and economic growth. Most important for growth and prosperity directly for working people and labor is capital investment. That produces the tools for workers to be more productive (e.g., digging with computerized, mechanized steam shovels as compared to hand shovels as compared to bare hands). Increased worker productivity provides the increased earnings to pay workers higher wages. The increased investment also means the increased demand for labor that bids wages up to reflect the increased productivity. That reveals the fundamental truth about capitalism that labor and capital are complements, not antagonists, which so-called “progressives” fail to understand. Capital increases the productivity of labor, and labor increases the productivity of capital, which increases the production, and hence growth, of the entire economy.
This is why higher tax rates on investment (which in populist parlance is naturally held by “the rich,” who have the funds to make such investments) are so particularly harmful. This is further confirmed by the work of Romer and Romer, which found a strong negative effect of higher tax rates because “investment falls sharply in response to tax increases. It is very likely that this strong retreat of investment is part of the reason the declines in output are so large and persistent.”
That does not mean that “the rich,” or capital investors, should not pay their “fair share” of taxes. But as explained in this column already ad nauseum, “the rich” already pay far more than their fair share under current tax law, which leaves President Obama’s repeated calls ad nauseum for further tax increases on “the rich” to pay their fair share explicable only on Marxist grounds (“the rich” being unjustifiable per se, regardless of effects on economic growth, and ultimately working people and the poor).
Copious data and research from the increasingly divergent policies at the state level further explode the myth that higher tax rates are not harmful to the economy. As Fruits and Pozdena explain, “The evidence that lowering marginal tax rates grows the economy is voluminous and, because individual states vary so much in the level and type of taxes levied against the backdrop of federal policy, it is relatively easy to demonstrate a causal relationship between lower marginal tax rates and greater employment overall and migration to those states with preferable, low income tax rates.” Besides Tax Myths Debunked, that data and research are thoroughly provided in the annual volumes of Rich States, Poor States also published by ALEC.
The response from “progressives” too often just involves Alinsky style ad hominem attacks, which seems to reflect inadequate public schooling, failing to teach Aristotelian logic, which instructs that ad hominem arguments are logical fallacies.
This data and research are already increasingly affecting tax policy among the states. Nine states prosper perfectly well with no state income tax at all, including Texas, Florida and Tennessee. That policy is starting to spread across the South, from Louisiana to Virginia, and up the Plains states. In contrast, the “progressive” states, from California to Illinois to New York, along with Oregon, Hawaii, and some others, persist in raising state tax rates to record levels.
Political activist organizations posing as media institutions can effectively shield the populations of the “progressive” states from knowledge of the above discussed data, research and analysis. But they can’t shield them from the real world effects of “progressive” tax and economic policies. These redistributionist policies are only redistributing economic and political power among the states, as the American population is migrating from the increasingly stagnant “progressive” states to the increasingly booming growth oriented states.
Political power follows that migration, as the states with growing populations receive more Congressional representatives and electoral votes from the economically stagnant, “progressive” states. Arizona now has as many electoral votes, and Congressional representatives, as Massachusetts, with South Carolina not far behind. Florida now matches formerly dominant New York as well. Georgia now has as many as Michigan. Texas as many as Illinois and Ohio combined. For the first time since the 1849 Gold Rush, California received no additional electoral votes in the 2010 Census.
On our current course, these trends will only accelerate. As the saying goes, “the South will rise again.”
It’s often Crony Socialism – President Obama giving governmental benefit and/or our money to his donors and friends. Or it’s his having no idea what works and what doesn’t. Or both. Regardless, his Administration – any Administration – is perpetually pathetic when it tries to decide what should happen in the private sector.
So of course President Obama’s at it again.
On Friday the Obama Justice Department strongly suggested the Federal Communications Commission (FCC) make sure everyone get their “fair share” of wireless spectrum in the upcoming spectrum auction.
“The Department concludes that rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum could improve the competitive dynamic among nationwide carriers and benefit consumers.”
I know what you’re thinking – it’s an auction. Everyone that wants spectrum attends the auction – thus everyone has “an opportunity to acquire…spectrum.” But you’re thinking like a rational human being – not like an Obama Leftist bureaucrat.
“The Department believes it is important that the Commission devise policies that address the allocation of low-frequency spectrum in particular so that acquisitions of such spectrum do not hamper the ability of carriers in markets where that spectrum is important.”
The Obama Justice Department wants the Obama FCC to rig the spectrum auction. So that it’s not actually an auction – it’s a quota set-aside program. Affirmative Action for wireless companies.
Where people who don’t make the highest bids – win the bids anyway. Or where the FCC forbids some willing participants from participating.
It’s not picking winners and losers – it’s picking losers at the expense of winners.
Because the Justice Department’s demands only became public late Friday, there have thus far been very few reactions. But the Media Marxists that have weighed in – are thrilled with this inter-governmental ideological interloping.
“All of these recommendations are in line with what Public Knowledge and many others have been advocating for years, and it is gratifying to see the DoJ take such a strong stand in favor of competition and against the wireless status quo. We urge the FCC to take the DoJ’s recommendations very seriously and to make reforming its spectrum aggregation policies its top wireless priority.”
The “wireless status quo” which these folks are “against” – is the amazing, hurtling-ever-forward smart phone Xanadu we are all currently enjoying. Let us look at but one facet of this alleged horrendous-ness.
Less than six years ago, an “app” was what you submitted to a college admissions office. Then came the iPhone (which begat a whole host of other devices with app-lications). In November 2008, there were 10,000 iPhone apps. In January 2011, there were 306,000. This January, there were 775,000.
This unbelievable, exponential progress – is the “status quo” the Left opposes. And – in the interest of “fairness” – wants the government to proactively diminish.
How about we let an auction be an auction – and not yet another government-mandated redistribution program?
[First Published at Red State]
When perks including pensions, health insurance, paid vacations, disability insurance, and other forms of compensation are included, many municipal workers in California are receiving triple the compensation typically reported in newspapers and even by the State Controller.
Listen in the player above for a podcast in which Heartland’s Steve Stanek talks to to Ed Ring of the California Public Policy Center. Ring and Stanek talk about the shocking amounts taxpayers are spending on municipal workers at the Heartland Daily Podcast. See this related story here.[Subscribe to the FREE Heartland Daily Podcast at this link.]
President Obama’s Environmental Protection Agency has already promulgated a tsunami of 1,920 regulations, many of which will bring few health or environmental benefits, but will impose high economic and unemployment costs, often to advance the Administration’s decidedly anti-hydrocarbon agenda. The Heritage Foundation has calculated that his EPA’s twenty “major” rulemaking decisions (costing $100 million or more annually) alone could cost the United States over $36 billion per year.
The latest example involves a third layer (or tier) of rules that the agency says will clean the nation’s air and save lives, by forcing refineries to remove more sulfur and other impurities from gasoline. EPA and refiners call the proposal Tier 3 rulemaking. Tier 3 tyranny is more accurate – as the rules would cost billions of dollars but bring infinitesimal benefits, and will likely be imposed regardless.
Since 1970, America’s cars have eliminated some 99% of pollutants that once came out of tailpipes. “Today’s cars are essentially zero-emission vehicles, compared to 1970 models,” says air pollution expert Joel Schwartz, co-author of Air Quality in America.
In addition, he notes, more recent models start out cleaner and stay cleaner throughout their lives. “As a result, fleet turnover has been reducing on-road emissions by an average of about 8 to10 percent per year.” Over time, that has brought tremendously improved air quality, and continues to do so.
Moreover, since 2004, under Tier 1 and 2 rules, refiners have reduced sulfur in gasoline from an average of 300 ppm to 30 ppm – a 90% drop, on top of previous reductions. Those benefits are likewise ongoing. Using EPA’s own computer models and standards, a recent ENVIRON International study concluded that “large benefits in ground-level ozone concentrations will have accrued by 2022 as a direct result” of Tier 1 and Tier 2 emission standards and lower gasoline sulfur levels” that are already required by regulation.
By 2022, those existing emission reduction requirements will slash volatile organic pollutants by a further 62%, carbon monoxide by another 51% and nitrous oxides 80% more – beyond reductions achieved between 1970 and 2004.
But even this is not enough for EPA, which now wants sulfur levels slashed to 10 ppm – even though the agency’s models demonstrate that Tier 3 rules, on top of these earlier and ongoing reductions, would bring essentially zero air quality or health benefits.
Viewed another way, further Tier 3 improvements would amount to reduced monthly ozone levels of only 1.2 parts per billion (peak levels) to 0.5 ppb (average levels). These minuscule improvements (equivalent to 5-12 cents out of $100 million) could not even have been measured by equipment existing a couple decades ago. Their contribution to improved human health would be essentially zero
To achieve those zero benefits, the new Tier 3 standards would cost $10 billion in upfront capital expenditures and an additional $2.4 billion in annual compliance expenses, the American Petroleum Institute says. The sulfur rules will raise the price of gasoline by 6-9 cents a gallon, on top of new fuel tax hikes and gasoline prices that have rocketed from $1.79 to $3.68 per gallon of regular unleaded over the past four years. These and other hikes will ripple throughout the economy, affecting commuting and shipping, the cost of goods and services, the price of travel and vacations. (White House and EPA officials claim the Tier 3 rules would only add only a penny per gallon to gasoline costs, but that is highly dubious.)
EPA believes the additional sulfur reductions are technologically possible. Its attitude seems to be, if it can be done, we will require it, no matter how high the cost, or how minimal the benefits.
At some point citizens need to say, “Current improvements are enough for now. We have other crucial health, environmental, employment and economic problems to solve – which also affect human health and welfare. We don’t have the financial, human or technological resources to do it all – especially to waste billions on something where the payback is minimal, or even zero.”
Moreover, there are better ways to reduce traffic-related urban air pollution. Improve traffic light sequencing, to speed traffic flow, save fuel, and reduce idling, emissions, driver stress and accidents, for example. That’s where our efforts should be concentrated.
Another basic problem is that EPA always assumes there is no safe threshold level for pollutants – and pollution must always and constantly be ratcheted downward, eventually to zero, regardless of cost.
This flies in the face of what any competent epidemiologist knows: the dose makes the poison. There is a point below which a chemical is not harmful. There are even chemicals which at low or trace quantities are essential to proper operation of our muscular, brain and other bodily functions – but at higher doses can be poisonous. There are also low-level chemical, radiation and pathogen exposures that actually safeguard our bodies from cancer, illness and other damage, in a process known as hormesis.
Even worse, this Tier 3 tyranny is on top of other highly suspect EPA actions. The agency has conducted illegal experiments on humans, used secret email accounts to hide collaborations with radical environmentalist groups, and implemented 54.5 mpg vehicle mileage standards that will maim and kill thousands more people every year, by forcing them into smaller, lighter, less safe cars.
EPA also expanded the ethanol mandate to promote corn-based E15 fuels (15% ethanol in gasoline). That means we must turn even more food into fuel, to replace hydrocarbons that we again have in abundance (thanks to fracking and other new technologies) but our government won’t allow us to develop, and to substitute for cellulosic ethanol that doesn’t exist (but EPA tells refiners they must use anyway). So corn farmers get rich, while consumers pay more for gasoline, meat, fish, eggs, poultry and other products.
The agency is also waging war on coal, automobiles and the Keystone XL pipeline – based on assertions that carbon dioxide emissions are causing “dangerous manmade global warming.” Even the UN’s Intergovernmental Panel on Climate Change, NASA, British Meteorological Office, and many once alarmist scientists now acknowledge that average planetary temperatures have not budged in 16 years, and hurricanes, tornadoes, floods, droughts and sea level rise have shown no statistically significant variation from century-long averages – even as CO2 levels have “soared” to 395 ppm (0.0395% of Earth’s atmosphere). True scientists increasingly recognize solar and other complex, interconnected natural forces as the primary drivers of Earth’s ever changing and unpredictable weather and climate.
These inconvenient truths have apparently had no effect on Administration thinking. Perhaps rising indoor CO2 emissions from larger EPA and White House staffs have “weirded” their thinking. The EPA’s yellow brick road to Eco-Utopia is not one our nation should travel. It will not take us to an economic recovery, more jobs, a cleaner environment, or improved human safety, health and welfare.
Nothing in the Clean Air Act says EPA needs to promulgate any of these rules. But nothing says it can’t do so. It’s largely discretionary, and this Administration is determined to “interpret” the science and use its executive authority to restrict and penalize hydrocarbon use – and “fundamentally transform” America.
EPA administrator nominee Gina McCarthy says EPA will “consider” industry and other suggestions that it revise greenhouse gas and other proposed rules. However, neither she nor the President has said they will modify or moderate any policies or proposals, or retreat from their climate change agenda.
We clearly need some science-based legislative standards, commonsense regulatory actions, and adult supervision by Congress and the courts. Unfortunately, that is not likely to be forthcoming anytime soon, and neither Republican Senators nor the House of Representatives seem to have the power or attention span to do what is necessary. Where this all will end is therefore anyone’s guess.
[First Published at TownHall.com]
In honor of Margaret Thatcher’s memory, favorite quotes from the Iron Lady have popped up everywhere. This one came across my Facebook newsfeed: “Global warming ‘provides a marvelous excuse for worldwide, supra-national socialism.’”
The hundreds of comments the quote received covered a variety of sentiments from hostility to adoration. A couple accused Thatcher of launching the entire global warming hoax to end a coal-miners’ strike.
Another cited an earlier Thatcher quote: “The danger of global warming is as yet unseen, but real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations. Our ability to come together to stop or limit damage to the world’s environment will be perhaps the greatest test of how far we can act as a world community. No one should under-estimate the imagination that will be required, nor the scientific effort, nor the unprecedented co-operation we shall have to show. We shall need statesmanship of a rare order. It’s because we know that, that we are here today. But the need for more research should not be an excuse for delaying much needed action now.” CFACT, the poster of the comment, responded: “Thatcher evolved. Millions have joined her.”
I do not know if Thatcher started the whole hoax. I do not know the facts behind her “evolution” on the topic. What I do know is the damaging impacts climate change mitigation attempts have had on the economy—a viewpoint the American government still clings to while the Brits (as evidenced by Thatcher’s comments) have “evolved.”
Perhaps, Thatcher did perpetuate the idea that CO2 emissions were warming the planet, but the theory was readily embraced in Europe. Natural-resource rich, the US has historically had lower energy costs than our European allies—which gave us a competitive advantage. Pushing the global warming narrative—which promotes wind and solar power as a curative—attempted to level the playing field by moving all of us to higher-priced energy. Regarding the 2011 UN climate change talks in Durban, the Financial Times said the European Union (EU) “is pushing hardest among developed countries for a new global deal” and is “the greenest voice among wealthy countries at the talks.” In a column I wrote in December 2011, I posit that the EU supported the climate change narrative specifically to raise energy prices in the US.
Richard Courtney, a consultant on matters concerning energy and the environment who has served as an expert peer reviewer for the UN’s Intergovernmental Panel on Climate Change, calls the global warming issue “political.” He says: “Each government has its own special interests in global warming but, in all cases, the motives relate to economic policies. In general, the USA fears loss of economic power to other nations while this is desired by those other nations. Universal adoption of ‘carbon taxes,’ or other universal proportionate reductions in industrial activity, would provide relative benefit to the other nations.”
Whatever the motive, the EU has led the way on renewable energy—especially wind and solar. Germany, home of the Energiewende (energy transformation) has garnered a reputation as the country to follow when it comes to green energy. Having passed the Erneuerbare Energien Gesetz (renewable energy law) in 1991, Germany has poured huge subsidies into wind and solar power. Twenty-two percent of Germany’s power is now generated with renewables (“solar provides close to a quarter of that”)—which are “guaranteed more-than competitive rates”—despite the fact that “producing electricity from sunlight costs 10 times more than generating power using coal or nuclear energy.” Power companies are passing the costs on to consumers in the form of higher rates.
I frequently hear Germany’s record being held up as a shining example. After all, if Germany can get nearly a quarter of its electricity from renewables, why can’t the US do the same? I’ve had listeners of a radio show where I am a guest call in and tout Germany’s record. If one doesn’t know the whole story, it does sound admirable. I ask: “Have you been following Germany recently?” Silence.
Post-Fukushima, Germany announced the closure of eight of its 17 nuclear power plants, with the remaining 9 to be closed within the next decade. To replace the 17 power plants, it was announced that Germany would build or revamp 84 power plants—more than half would be fossil-fuel-powered, including 17 coal-fueled. This winter, it was reported that energy costs in Germany were so high that its residents were literally cutting down trees in city parks and stripping the forests in order to heat their homes.
The tree thefts are just one of the bizarre consequences of the EU’s adoption of the climate change narrative. One of the newest revelations, reported by The Economist, is: “By far the largest so-called renewable fuel used in Europe is wood”—which it calls “the fuel of the future.”
The Economist reports that nearly half of Europe’s renewable energy comes from “biomass,” while in some countries—like Poland and Finland—“wood meets more than 80% of renewable energy demand.”
Apparently, wood was included as a renewable that would help cut CO2 emissions—the supposed driver of climate change—because if the wood came from “properly managed forests, then the carbon that billows out of the chimney can be offset by the carbon that is captured and stored in newly planted trees. Wood can be carbon-neutral.” As a result of the decision to allow wood to qualify for the “renewable” mandate, its usage has “soared.” In fact, wood has saved coal-fueled power plants that would have been shut down—making it popular with power companies. Unlike expensive forests of wind turbines that require brand new, expensive, transmission lines, the coal-fueled power plants are already connected to the grid. They can also be “adapted to burn a mixture of 90% coal and 10% wood (called co-firing) with little new investment.” Additionally, wood-fueled electricity generation doesn’t require back-up (redundant) power.
While the EU’s goal of getting twenty percent of its energy from renewables by 2020 is hurting the European economy and individual ratepayers, it is helping Canada.
Europe’s energy policy ends up helping the economies of both Canada and the US—both of which didn’t jump into “renewables,” as the EU did. The US never signed on to the Kyoto Protocol and Canada abandoned it in 2011.
Europe doesn’t have enough wood to meet demand, so a substantial chunk of it will come from imports—which has created a booming new business in Canada and the southeastern US. Gordon Murray, executive director of the Wood Pellet Association of Canada, calls it “an industry invented from nothing.” Who would have thought that not only is the US now a net exporter of gasoline, but now we are fueling Europe with “biomass?”
The EU is seeing the error of their ways. “The European Environment Agency said, in 2011, the assumption “that biomass combustion would be inherently carbon neutral…is not correct…as it ignores the fact that using land to produce plants for energy typically means that this land is not producing plants for other purposes, including carbon otherwise sequestered.” In fact, using trees for energy production actually, increases “carbon emissions compared with coal” and scientists have now concluded that the idea of using wood as a renewable fuel was an “oversimplification.”
Unlike Margaret Thatcher, the EU is unlikely to “evolve”—giving the US a competitive energy advantage Europe’s global warming encouragement was intended to erase.
While the US didn’t sign on to a binding commitment to CO2 reductions, our energy policies have, like Europe, pushed the more expensive energies and punished the cost-effective. Data from the Energy Information Agency reveals that the average all-in cost for electrical energy to the customer has risen at twice the rate of inflation—with no real identifiable and quantifiable fiscal benefit.
Thatcher was correct. Global warming has provided “a marvelous excuse.” The question is, will the US “evolve” and correct its course like others, or will we allow the climate change hoax to steer us toward full-on socialism.
[First Published at Townhall.com]
The New Jersey chapter of the Sierra Club emailed to invite me to attend a “conversation on climate change in a post-Sandy New Jersey” intended to focus on the “impacts of fossil fuel pollution” later this month. “We need to take action to address and prevent the future impacts of climate change. Hurricane Sandy was the latest storm in an increasing trend of more extreme and severe weather.”
There isn’t “an increasing trend of more extreme weather” unless you include the current cooling cycle that has been in effect for the last 17 years, causing longer, more intense winters around the world. I doubt that the Greens can do anything about the Sun which has been in a natural cycle of reduced radiation.
As for hurricanes like Sandy, meteorologists will confirm that on average the U.S. can expect two major storm systems, categories 3 to 5, every three years. In all categories, the average is about five hurricanes that make landfall every three years. So, there is no increasing trend of more extreme weather. There is just the weather.
As far as the Sierra Club and comparable multi-million dollar environmental organizations are concerned, when they say that want to “prevent future impacts of climate change” they are either delusional, thinking that anything can be done to prevent hurricanes, blizzards, and other aspects of the weather or they are talking about imposing a carbon tax on the emissions of carbon dioxide and other so-called greenhouse gases. Congress has already rejected that.
And it’s not just the Sierra Club. The same day their invitation arrived, Friends of the Earth emailed to say “The Pacific Northwest is currently engulfed in a struggle over the dirty future of coal and coal exports in the U.S. If the biggest coal companies in the world have their way, we could have 140 million tons of coal barreling through Montana, Idaho, Washington and Oregon each year. That’s up to 60 trains per day in some of our neighborhoods and more than 1,000 ships a year through our sensitive waterways!” Can you say fear-mongering? Lies about coal? And a total ignorance of the value to the economy of its use and export?
The Greens regard anything that would provide energy for any reason to anyone as the enemy.
That is why “a panel of experts will discuss fossil fuel projects in our state, their impacts, and ways to reduce that pollution.” Fuel is not pollution. Fuel is what we use to heat or cool our homes, drive our vehicles, provide electricity, and conduct the business of the nation. The air and water in New Jersey is so clean we actually invite people to live here, start businesses here, and to visit as tourists to enjoy it.
“Cutting greenhouse gas emissions from dirty fuel sources is critical to protecting New Jersey” said the invitation. Carbon dioxide levels have actually been rising. More lies. As James Taylor, the Managing Editor of Environmental & Climate News, noted in March, “New data from the National Oceanic and Atmospheric Administration show atmospheric carbon dioxide levels continue to rise but global temperatures are not following suit. The new data undercut assertions that atmospheric carbon dioxide is causing a global warming crisis.”
Since carbon dioxide is vital to the growth of all vegetation, from your flower garden to the abundance of crops that feed us and all livestock, reducing it is a very bad idea.
Need it be said that the local chapter is also gearing up to oppose a new natural gas pipeline for the state? Think jobs. Think lower energy costs. Now extrapolate that to the Keystone XL pipeline and to other expanded sources of energy and the benefit to the nation’s economy.
The old guard of the environmental movement is passing from the scene and the entire edifice of the global warming hoax is crumbling. Jim Hansen, the head of NASA’s Goddard Institute of Space Studies (GISS) since 1981 has announced his retirement. It was Hansen who told a congressional committee in 1988 that the Earth was heating up. That was the same year that the Intergovernmental Panel on Climate Change (IPCC) was established by two United Nations organizations, the World Meteorological Organization and the United Nation Environmental Program.
Larry Bell, a columnist for Forbes magazine, recently urged the U.S. to cease funding the IPCC along with the UN Framework Convention on Climate Change. “While the amount we give to the UNFCC and IPCC may seem like a tiny pittance in the realm of government spending largess, it’s important to realize that (the) true costs of that folly amount to countless billions in disastrous policy and regulatory impact.” Together they have received a total average of $10.25 million annually, set to increase in the FY 13 budget request to $13 million. They are a total waste of money, representing the greatest hoax of the modern era and the redistribution of our wealth.
Environmental organizations are all about controlling our lives. In March, a peer-reviewed paper by the American Institute of Biological Sciences titled “Social Norms and Global Environmental Challenges” was published in their annual journal BioScience. “Substantial numbers of people will have to alter their existing behaviors to address this new class of global environmental problems.”
Too many governments around the world, our own and particularly those in Europe, have passed all manner of laws and invested billions in “green energy” projects, only to discover they are a huge waste and that ordinary people have other ideas regarding the technologies that actually do enhance and improve their lives.
Greens are relentless liars and their lies appear daily in our print and broadcast media. Reality, though, is impacting their efforts. Facts are stubborn things.
Greens are far less interested in the environment than they are in imposing restrictions on the use of energy and the general welfare of humanity. It is pure fascism and always was.
[First Published at Warning Signs]
If the states are laboratories of democracy, then what does that make our cities? Showcases of the experiments’ results? If so, then we are in for a terrible time.
One need not be an alarmist to note the increasing acceptance of uncontrolled violence in our cities. Yes, it’s true that for forty-five years we have not witnessed widespread civil insurrection on the scale of the summer and fall of 1968, when Robert F. Kennedy and the Rev. Martin Luther King, Jr. were shot and killed, radical students occupied office of deans of college campuses, rioters and looters burned down the west side of Chicago, and the Chicago police beat heads in front of what was then the Conrad Hilton Hotel, home to the 1968 National Democratic Convention that nominated Hubert Humphrey for president.
It has been forty-three years since the Ohio State National Guard shot and killed four protesting students and wounded nine others at Kent State University in northeast Ohio in 1970, and over thirty years since anyone took a potshot at a president, namely Ronald Reagan in 1981. But such violence shocked the nation and made the nightly news.
Today we seem to face a more systemic, low-grade, but pervasive cult of violence that has become the norm. Certain parts of Manhattan – to the rest of the nation just “New York City” – had become so crime-ridden and violent in the 1970’s that New Yorkers elected “tough cop” Rudy Giuliani to clean it up and Manhattan today is safe, clean, and fun for visitors around the world. But in places like Cleveland, Philadelphia, and especially in Chicago – where street gang members outnumber policemen over ten to one – the trend has gone the other way.
On North Michigan Avenue, the heart of Chicago’s tourism and shipping industry known as “The Magnificent Mile,” wilding youths from the south and west sides of town have for several years been preying en masse on tourists and businesses, looting stores, shoving pedestrians, and stealing their iPhones and jewelry.
For a fare of two and a quarter or a jump of the turnstile, the nearby CTA “red line” stop at State Street and Chicago Avenue is easily accessible and provides a direct route from the South Side to a local McDonald’s restaurant that has become a haven for drug dealing and a gathering point for hoodlums. From there the miscreants soon spill over to the Mag Mile and the nearby “Gold Coast” neighborhood, where they terrorize tourists and engage en masse in shoplifting. An unusually cold and wet Chicago spring has so far dampened the violence, but everyone from the neighbors to the Mayor knows that warmer spring and summer evenings will bring another onslaught.
”Apple-picking,” as the theft of iPhones has become known, is popular up and down the Red Line and in surrounding stations. That includes two that also serve the Brown Line, on which many of Chicago’s young urban professionals commute: the Belmont and Fullerton Avenue stations. One miscreant, 19-year old Prince Watson, was convicted of murder and on April 12 was sentenced to 32 years in prison for shoving down the stairs of the Fullerton Avenue stop a 68-year old mother of three who died the next day after suffering broken bones, brain contusions, and bleeding in the fall.
At the age of 17 Watson had determined, as he claimed at his sentencing hearing, that “snatching iPhones was the safest and quickest way to make money and support myself without hurting anyone.” But in his haste to escape the person whose iPhone he had picked at Fullerton, Watson happened to shove one Sally Kitona-King, a church deacon who had survived an alcoholic father, rape in an alleyway at the age of 8, polio, divorce, and the shooting death of her second husband, and Watson discovered that life was not so simple. “Now I understand,” the Chicago Tribune quoted his one-page typed statement as saying, “what I did was wrong and it hurted [sic] a lot of people deep down inside.”
Like Kitona-King, Watson also had a troubled childhood. According to the Tribune, Watson’s mother was an alcoholic who’d had gin for breakfast the day of his birth, delivered him while carrying a near-lethal blood alcohol content of 0.28%, and died of a drug overdose when Watson was a toddler. By age 13, Watson had turned to drugs and crime, dropping out of high school his freshman year and quickly building a juvenile arrest record for disorderly conduct, battery, and retail theft. His siblings fared little better: Just eight months before he shoved Mrs. Kitona-King down the stairs to her death Watson lost his sister to a shooting – allegedly by her husband – and a month after that lost his twin brother, a convicted armed robber, to an eighteen-year prison sentence.
Two tragic childhoods with intertwined lives ending in tragedy, but the lives in between were night and day different. Kitona-King became a church deacon, a self-taught baker, and a mother of three now-adult children who cooked meals for disadvantaged families; Watson became a druggie, a petty thief, and now a murderer.
Hillary Clinton famously claimed that “it takes a village to raise a child,” but in contrast to current government schemes to fund group education at earlier and earlier ages, parenting of one’s own children remains the best option. Responsible child-rearing requires grounding children in education, morality, and cultural literacy.
The U.S. Supreme Court may insist on separation of church and state, but surely it is not too much to ask that – echoing the image of Moses receiving the Ten Commandments in the very frieze that stands above the portico of the Court itself in Washington – our schools both public and private teach the fundamental code incorporated in one way or another in every civilized society in history: thou shalt not steal, thou shalt not covet thy neighbor’s goods, and thou shalt not kill.
At the age of 19, Prince Martin says he now understands that what he did was wrong and that “deep down inside” it hurt a lot of people.
Why didn’t he understand that at the age of four or five?
David Stockman, who served as President Ronald Reagan’s first budget director, has written something either very right or very wrong, based on the scorn he has been receiving from people on both the political Left and Right.
Either way, it’s great listening as he joins Fox Business Network host Neil Cavuto to discuss his newest book, “The Great Deformation,” which chews up and spits out nearly every economic sacred cow that believers in welfare and warfare statism continue to feed. Among other things, he declares if the Federal Reserve were to “go fishing” for six weeks and stop its bond buying during that time, “there would be calamity in the markets.” It was his way of arguing government fiscal and monetary policies have manipulated and distorted the economy in ways that can end only badly.
In the wake of the celebrated shootings in Newtown, Connecticut; Aurora, Colorado; and the streets of Chicago, both parties have fallen over themselves to act “serious” about the problem of gun violence in this country. By making it harder for citizens lawfully to defend themselves with firearms, Senators assert, they can keep more arms out of the hands of criminals and thereby reduce the murder rate.
The executive branch, of course, is leading the charge. First Lady Michelle Obama dropped into Chicago on last week to “listen” to some of the children who fuel the nation’s apparent anxiety, while the president himself has gobbled gallons of jet fuel at an operating cost to the taxpayers of roughly $179,000 per hour criss-crossing the nation in Air Force One with survivors of those who died at Newtown onboard, shouting campaign-style at every stop that “now is the time” to limit the right to keep and bear arms.
With the Newtown survivors watching in the Senate gallery after having shed tears on the Senate floor, sixteen Republicans, including Utah’s Orrin Hatch and former Club for Growth Chairman Pat Toomey of Pennsylvania, joined 52 Democrats in voting 68 to 31 on Thursday to debate a proposed law that would, in part, expand background checks for gun sales and supposedly strengthen mental health and school safety programs.
Given that two Democrats and most Republicans voted against even opening debate and that skeptics like Texas Republican Ted Cruz have warned that it will lead to an undesirable national gun registry, the bill’s passage is far from certain. But even Arizona Republican and former Presidential candidate John McCain admitted that the president’s having Newtown survivors there affected the vote. As evidenced by their presence, the theme of restricting gun rights is to help save children from meeting violent deaths – but only if they aren’t aborted first.
For just up the east coast in Philadelphia, the trial of an abortionist accused of killing seven newborns and a young woman at an abortion clinic so filthy and strewn with body parts that it’s been called a “slaughterhouse” and a “house of horrors” that has been going on for four weeks (as of last Thursday) attracted not one mention on ABC, CBS, NBC, MSNBC, NPR, or PBS, and but one brief mention so far on CNN.
To its credit, The Philadelphia Enquirer has covered the story relentlessly, as have pro-life and religious websites such as LifeNews, and the Associated Press and the Washington Times have given it at least passing attention. But the silence elsewhere is deafening, leading conservative commentators such as Brent Bozell’s Media Research Center to accuse “the pro-abortion liberal media” of being “determined to hide … from the public” the “horrific excesses of the abortion industry exemplified by [Dr. Kermit] Gosnell and Planned Parenthood … ” – in other words, a cover-up.
What’s striking to us here at Somewhat Reasonable, however, is not the relative media coverage but the apparent schizophrenia of the public and of liberal elites when it comes to balancing constitutional rights against the safety of “the children.”
Regarding everything from handguns to car seats the public impulse seems to favor less freedom and fewer individual rights, promoting gun licensing, registration, and background checks in the former case and specifying in excruciating detail the precise location and orientation in which a child may sit in his or her own parents’ car based on age, height, and weight in the latter.
When it comes to abortion, however, apparently anything goes: early term, mid-term, late term, even after the baby is delivered alive so long as it hasn’t yet left the delivery room and the mother doesn’t want it. (Never mind the father, who has court-enforced responsibilities but no real rights when it comes to “choice.”)
The political explanation is that the success of the women’s movement in America has elevated the rights of women of child-bearing years over the rights of their children. The economic explanation is that the relative scarcity of children born under an open abortion regime (compared to a more restrictive one) means a higher value of each surviving child, therefore justifying greater protection at greater cost. But people are not actually so coldly calculating as political or economic theory would predict, so something else must be going on – but what?
On the political front, the question is puzzling: Why are absolutists on one issue (abortion, Second Amendment rights) so typically in favor of regulation on the other? It’s a fair guess that most “pro choice” people oppose unrestricted gun ownership rights (i.e., are not “pro choice” when it comes to guns) and that most of those who accept an unrestricted right to keep and bear arms would place at least some limits on abortion, including banning the “partial birth” and “after birth” abortions of which Philadelphia’s Dr. Gosnell is currently accused.
Rational thought and constitutional law (not always the same) both teach that no rights are absolute, so why should one right be restricted while the other is not? In particular, why is a right explicitly mentioned in the Constitution (the right to keep and bear arms) more subject to popular and media attack than a right (to elect an abortion) that only emanates from the penumbra of privacy?
Are Americans really that schizophrenic, or can we no longer distinguish right from wrong? These are questions to ponder as the American calendar approaches “Mother’s Day.”
President Obama’s FY 20414 budget will be released on Wednesday — two months later than the legal deadline. But thanks to administration leaks, too conveniently released just hours before last Friday’s horrendous employment report, we have some idea what it will contain.
Most of the Obama budget will be the same tiresome mix of higher taxes, higher spending, and budgetary gimmicks that would land any private sector CFO in jail.
Despite the larger fiscal impact of other provisions of the Obama budget, it is hard to match the audacity, paternalism, and economic idiocy of Obama’s plan to limit individual retirement accounts to a maximum of $3 million.
What we know so far offers more questions than answers; the answers we have already are bad and the questions even worse.
Let’s start with what we know. According to a White House statement reported by Politico.com,
The budget will include a new proposal that prohibits individuals from accumulating over $3 million in IRAs and other tax-preferred retirement accounts. Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving. The budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million in 2013. This proposal would raise $9 billion over 10 years.
How will the government prevent the “accumulating” of wealth in a retirement account other than by disallowing contributions to accounts that already have more than the amount Obama says a person “needs” for retirement?
In other words, what if a retirement account was, over decades of work and saving, funded with $1 million in contributions but through the power of compound interest and a few good investments reaches a value of $3 million? Will the administration propose making all further earnings taxable despite being inside a tax-free or tax-deferred account?
Whether taxing what would have been tax-free contributions to a retirement account or taxing earnings in a retirement account, money that would have gone into an investment portfolio and been made available for capital formation for businesses large and small will instead be confiscated by the government.
So 40 percent of that money (presumably someone putting this much into a retirement account is in the top tax bracket) will instead be funneled into the next Solyndra or Fiskar, more aid to the Muslim Brotherhood and the Palestinian Authority, advertisements to support Obamacare, or one of millions of other government ratholes. And that’s without even counting state taxes.
The ivory tower idiot-savants at the White House budget office also suggest that $3 million will create annual income of $205,000. In other words, they are assuming 7 percent returns while 10-year government notes are yielding 1.7 percent. It’s true that returns in the stock market can average 7 percent over the long run. But retirement accounts are rarely 100 percent in stocks — and they should not be for investors within a decade, and perhaps two decades, of retirement.
Yet this sort of asset allocation assumption is coming from an administration that, every time the subject comes up, tries to scare citizens away from private Social Security accounts by comparing the stock market to a casino, or at least a place far too risky for retirement funds.
New York City Mayor Michael Bloomberg may not understand guns or our desire for Big Gulps, but the man does know finance. In a 2012 New York Times story about New York City’s actuary taking down the assumed rate of return for five city pension funds from 8 percent to 7 percent, Bloomberg said: “The actuary is supposedly going to lower the assumed reinvestment rate from an absolutely hysterical, laughable 8 percent to a totally indefensible 7 or 7.5 percent. If I can give you one piece of financial advice: If somebody offers you a guaranteed 7 percent on your money for the rest of your life, you take it and just make sure the guy’s name is not Madoff.”
The article also notes that “companies now use an average interest rate of 4.8 percent to calculate their pension costs in today’s dollars, according to Milliman, an actuarial firm.”
So, using estimates that those who live in the real world use to calculate how well-funded a pension needs to be to provide a particular guaranteed benefit, a retirement account would require over $4.25 million rather than $3 million to generate the $205,000 that Obama says is the most a person “needs” for a “reasonable” retirement income.
It is also worth noting that withdrawals from traditional IRAs are taxable as ordinary income. So, earnings of $205,000 from a retirement account would put the retiree in at least the 33 percent tax bracket, plus state taxes, meaning that at least $70,000, and perhaps more like $85,000 of the retirement income would go to the government, leaving something on the order of $125,000 after taxes. That’s not a bad retirement income but, particularly if there is still a mortgage to pay, hardly extravagant. And if a retiree has health issues, or a grandchild’s college, or even substantial charitable donations she would like to pay for, the amount may not even be sufficient.
But this raises the most important question of all.
Who the hell is Barack Obama to tell Americans what a “reasonable” retirement income is, or how much you “need” in order to retire with a “sufficient” nest egg?
The paternalism of this proposal is astounding, even for this president.
And so is the hypocrisy: According to the Celebrity Net Worth website, President Obama’s net worth has jumped from $1.3 million when he took office to nearly $12 million now, largely through sales of his two books from 2007-2009. During that three-year period, his reported family income exceeded $12 million. The site also predicts that post-presidency “Barack should receive at least $10 million for the rights to his autobiography and between $500 thousand and $1 million per speaking engagement,” adding that if things go well during Obama’s second term and he is as popular after his presidency as Bill Clinton has been, “Barack Obama should be worth well over $100 million at some point in the future.”
And this man is going to tell us a $205,000 income in retirement is “sufficient” and all we “need”?!?
Apparently, since Obama will get fabulously rich without using a well-funded retirement account, nobody else can have one either.
President Obama will frame this as an issue of the “1 percent” versus the rest of us. He will point out that very few Americans will have the opportunity to amass $3 million in net worth, much less $3 million in their personal retirement accounts (since Americans typically have a large proportion of their wealth tied up in the value of our homes.) This is true, but irrelevant.
The class-warfare mentality that oozes through our current president and the leadership of today’s Democratic Party has never been the mindset of the majority of Americans, even while Obama was winning two presidential elections.
The obliging liberals at Bloomberg news have shown the true motivation behind the assault on retirement accounts by titling their recent article on the topic “Obama’s Budget Would Cap Romney-Sized Retirement Accounts.”
Yes, the jealous, private enterprise-hating, perpetually campaigning Obama team is still obsessed with Mitt Romney and people like him who have the gall to make enough money to ensure they will never be wards of the state, the chutzpah to be successful enough to provide, through savings and investment, capital so other entrepreneurial Americans can chase the American dream.
But envy combined with economic idiocy is no way to structure a tax code, fund a government, or encourage a thriving civil society.
The proposal is also a massive betrayal of trust, rewriting the rules mid-game, which is par for the course for this administration but rarely with policy as well-established and popular as retirement accounts (though participants in Medicare Advantage programs may beg to differ).
So when pundits look at the weakest economic recovery in American history, punctuated by the March employment report coming in at less than half of the average estimate of economists, they should not see the sequester or the recent end of the payroll tax break or even the tax hike for the highest income bracket as the primary culprits, though the last two may have had a marginal impact to date.
Instead, American entrepreneurs and investors rationally fear — because they are constantly reminded, as with Obama’s mindless attack on retirement accounts — that this president and his sycophant minions are hell-bent on punishing achievement regardless of the damage they cause to our nation’s economy.
When the president sows bitterness, he cannot expect to reap sweet success.
[First Published at The American Spectator]
Brad Rodu, Endowed Chair, Tobacco Harm Reduction Research at the University of Louisville and Senior Fellow at the Heartland Institute discusses tobacco harm reduction on “The Legislature Today’ radio show in Bismark, North Dakota.
Read some of Dr. Rodu’s work, and Heartland coverage of tobacco harm reduction, at PolicyBot.[Subscribe to the Heartland Daily Podcast free at this link.]
As green energy stimulus recipients raked in billions of dollars the last few years, with President Obama declaring what a great “investment” they were for taxpayers, friends of mine would jokingly ask, “Where’s my dividend?” “Where are my stock certificates?” “Where’s my free electric car?!”
With the Anaheim non-automaker (no cars produced since last summer) firing about 160 of its 200 remaining employees on Friday, a bankruptcy law firm hired, and no buyer to pick over the $102,000 Karma model’s carcass, the Chicago Tribune reported Monday the imminent insolvency “could leave the federal government essentially owning” Fisker.
That would be quite a feat, since it’s been widely reported that Fisker drew more than $1 billion in private investment and has felt the love of celebrities such as Justin Bieber, Leonardo DiCaprio and Al Gore. Well-heeled Silicon Valley investment firm Kleiner, Perkins, Caufield and Byers also helped generate enthusiasm for the company launched by the well-known designer for BMW and Aston Martin, Henrik Fisker. For U.S. taxpayers to come away with a company that generated so much buzz, for so cheap, would be considered a steal.
Yet despite all the millions poured into the company, it has become essentially worthless.
“Expect the assets to be sold for pennies on the dollar,” said Dave Sullivan, manager of product analysis for industry consulting firm AutoPacific, to the Tribune.
That’s quite a contrast to what one of Fisker’s investors, Toby Smith, told Fox Business (with great certainty) in October 2011 about the company’s promise.
“Fisker is a company that has 3,000 of their cars pre-sold,” said Smith (video link, about 3:30 in), who was characterized by Fox host David Asman as “a savvy investor.” “They have deposits. They are going to be a company that’s going to go a billion dollars in sales in 2012 – the fastest-growth company in the history of commerce in the United States…selling at a profit every one of those cars. They have 47 dealerships. They have 700 new jobs that that DOE loan started.”
Smith won’t go down as the first or last Wall Street false prophet, but his forecast woefully missed the mark. If the 3,000 deals did close (reports are they fell well short of that), revenues would not have exceeded $325 million just from those pre-sales. Even if Fisker doubled those numbers, sales would have fallen well short of his predicted $1 billion for 2012.
The fact is he was a cheerleader for a sorry company that extracted money from taxpayers thanks to the political connections of Kleiner Perkins and six-figure lobbying efforts for the Recovery Act. The idea that Fisker – selling a single model that only extremely rich people would buy – would soar as a company was pure fantasy.
And now the reality is at least 660 workers – plus hundreds more in Delaware who were promised future employment at a former General Motors plant – have been let down. Soaring political rhetoric and delusions of grandeur by the likes of Smith and Vice President Joe Biden unjustifiably raised their expectations, and now they are looking for jobs again.
Many of them aren’t just swallowing the decision, which was delivered on Friday without forewarning or severance pay. The same day a lawsuit was filed in California by employees, alleging Fisker violated the federal Worker Adjustment and Retraining Notification Act and a similar state law by not providing 60 days advanced written notice, which the plaintiffs said is required in mass layoff situations. The complaint seeks two months of pay and benefits for the fired workers.
“It happens when a company is circling the drain,” said a lawyer with the firm that brought the lawsuit, Outten and Golden, which won a $3.5 million decision for terminated Solyndra workers in a similar situation.
After blunders and stumbles that included fires, recalls and bad reviews for the Karma, media scrutiny has intensified over Fisker in recent months. Many outlets appear to want to get the scoop on the bankruptcy announcement even before it’s official. Reporters can’t come right out and say it themselves, so they find “experts” to say it for them in their stories. Examples:
- “This is going to be another Solyndra, a poster child for perhaps a lack of due diligence on the part of the federal government when it’s investing funds.” – Jeremy Anwyl of auto research firm Edmunds.com, to Bloomberg
- “The fact that some of these companies fail is because companies make mistakes. Fisker made mistakes.” – director of the Institute of Transportation Studies at the University of California, Davis, also to Bloomberg
- “Without cash coming in they can’t pay bills, they can’t do development on the next vehicle. The race is over for them now.” – the aforementioned Sullivan to the Chicago Tribune
While the watchdog “experts” emphasized Fisker’s gurgling, the ever-optimistic Department of Energy looked on the bright side.
“Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact,” said a DOE spokeswoman to the Wall Street Journal.
Feel better? That means only $1 billion of taxpayer money has evaporated thanks to bad DOE loans. That’s how the stewards of your money, who seize it from you, see the world.
At least some in Washington are taking Fisker’s failure a little more seriously. Ohio Rep. Jim Jordan, a Republican, has called an April 24 hearing before a subcommittee of the House Oversight and Government Reform Committee to examine the Energy Department’s decision to award stimulus money to Fisker. Among those he wants to testify are founder Henrik Fisker, who resigned last month after disagreements with the executive leadership. In an interview with the Detroit News, Mr. Fisker said he would testify, even if he had to travel to Washington at his own expense – despite having received no severance or lingering benefits from the company that was named for him.
“I have nothing to hide,” he said.
The News reported that Mr. Fisker said he paid full price for a Karma after his departure from the company last month.
“I wanted to support my local dealer,” he told the newspaper.
That’s one less vehicle the taxpayer-owners will have to unload.[First Published at National Legal and Policy Center]
As I’ve noted before, there were three opportunities for those who oppose Obamacare to repeal and replace it. One path was at the ballot box, where opponents failed. The next best was the avenue of the Courts, which resulted in partial success on Medicaid, the largest portion of the coverage expansion. And finally, they’ll have an opportunity once the approach goes live based on the public’s measure of how it works. There will be a post-Obamacare health care policy shift – either to reopen the measure from the left to try and fix its numerous problems, or from the right to deconstruct it in more significant ways. This week, with the release of the president’s budget and a few other rule and regulatory updates, we’re seeing a torrent of indications that this policy approach is failing to match up with the promises of the president and the hopes of his party. The admissions from Kathleen Sebelius that this is a bigger task than they had hoped are just a prelude for what’s coming down next. Here are five different ways Obamacare is already failing.
1. Kicking the Can on Deficits. The White House is admitting that Obamacare’s Medicaid expansion won’t work as promised. Sarah Kliff: “For decades now, Medicaid has sent states billions of dollars in something called Disproportionate Share, or DSH, payments. These funds, which totaled $11.3 billion in 2011, go to the hospitals that provide a higher level of uncompensated care and are meant to help offset the bills of the uninsured. At first, the health law appeared to make DSH payments unnecessary. When the Affordable Care Act expanded Medicaid to 17 million Americans, it would significantly reduce the burden of unpaid bills on health-care providers. The Supreme Court decision, however, changed the equation. It allowed states to opt out of the Medicaid expansion. Many Republican governors now say they won’t move forward on that program, which means that a lot of the unpaid bills will still exist. And that left hospitals clamoring for these DSH cuts to be reversed so they could continue covering the uncompensated care they provide. The White House budget essentially proposes something close to that: not reversing the DSH cuts, but delaying their implementation for one year.”
This is both what everyone predicted at the time, and it’s a stunning indication of how much the deficit savings under Obamacare continue to evaporate. Essentially the White House is kicking the greater reductions into the out years, counting on future Congresses to stop DSH payments – creating a likely “DSH-fix” scenario, just as we currently have with the “Doc Fix” on Medicare payments. As for states currently deciding whether to expand Medicaid, this step means the providers can no longer use these DSH payments as a justification for demanding expansion. These cuts were never real – now, the administration has admitted as much.
2. Exchange Costs Double. Running exchanges in 33 states is an expensive and bureaucratically demanding proposition, and the Obama budget admits it. “Setting up the central piece of President Obama’s healthcare law has cost the administration more than twice as much as originally intended. The Health and Human Services Department (HHS) said in budget documents Wednesday that it expects to spend $4.4 billion by the end of this year on grants to help states set up new insurance exchanges. HHS had estimated last year that the grants would cost $2 billion. The department also is asking Congress for another $1.5 billion to help set up federally run exchanges in states that do not establish their own. The request for extra money comes at a critical time — exchanges are supposed to be up and running in every state by October. But it is also sure to meet hostility in Congress, which just last month denied HHS’s last request for additional funds.” They’re running behind schedule, they’re over budget, and HHS is still being very coy about the details of how things are going to run when things go live in October. Sebelius may blame Republicans for not giving them the money needed to make the exchange work, but that’s unlikely to resonate outside Washington.
3. Driving Premium Shock. One of the reasons to expect premium shock in huge ways in 2014 is the fact that there’s a lot more incentives in place for unhealthy people, the most expensive portion of the market, to move onto the taxpayer funded exchanges rapidly – while there’s far less incentive for the young and healthy to join. But the administration is actually making this problem worse, according to Nicole Fisher: “Recent changes made by the federal government however, now have states and insurers concerned about the program they are required to pay into and get funding from, once the health care law takes effect. The Department of Health and Human Services (HHS) has released regulation clarifying that state high-risk pools are no longer eligible for the return of funds, and that the government money will not be given for anyone with medical costs around $60,000 per year. This shifting of incentive has many health policy analysts worried that states now have no reason not to dump their high-risk pools onto the exchanges on opening day. Under the new regulations it actually makes sense for insurers to move high-risk enrollees as quickly as possible to get larger shares of the reinsurance funds.” Given how mismanaged the temporary federal program on high risk individuals has been, it wouldn’t surprise me if this is another area where the effect is the opposite of what the administration hopes.
If Obamacare works, Democrats will be running on it for a generation. But if it fails, they will be fighting over it – how to fix it, whether to defend it, or what to do next – for just as long.
[First Published at Real Clear Politics]
In today’s installment of the Heartland Daily Podcast (in the player above), host Jim Lakely interviews Senior Fellow for Environment Policy James M. Taylor about how many states are rethinking their foolish commitments to mandate that a large percentage of the state’s electricity is generated from “renewable energy” sources, such as solar, wind, and biomass.
Taylor has spent this spring hopscotching across the country to testify in state legislatures about how — in his testimony in Ohio in March and Arkansas in April — “renewable power mandates raise electricity prices, kill jobs, and severely punish the economy.”
Listen to the podcast in the player above, and subscribe to the FREE Heartland Daily Podcast on iTunes for great free market commentary every day.
The London-based newsletter Oil & Energy Insider posted on their April 12 issue information about a new bill being considered in Congress to overturn some of the most damaging parts of the 2007 Energy Security and Independence Act.
These parts involve the mandate to mix ethanol from corn with gasoline in ever increasing amounts from the twelve billion gallons today to 36 billion gallons of ethanol by 2022. The newsletter portions dealing with ethanol mandates follows:
While all of this is going on, the controversial ethanol mandate is coming under increasing attack. On Wednesday, four US Congressmen — two republicans and two democrats — proposed legislation to ease the ethanol mandate in what they said was a move to protect consumers, energy producers, livestock producers, food manufacturers, retailers and the US economy at large.
The legislation, the Renewable Fuel Standard Reform Act, would reverse the biofuels mandate as of 2014 and rescind the requirements of blending up to 15 percent ethanol in the fuel supply. It would also prohibit corn-based ethanol from being used to meet renewable fuel standards.
The legislation is gaining wider support, with a coalition of 13 food groups jumping on the bandwagon over what they fear will be increases in food prices.
Advocates of the ethanol mandate accuse the oil industry is secretly being behind the new legislation in an attempt to eliminate biofuels as a competing force.You might want to notify your Congressman about this act, which would stop the terrible waste of corn crops and potential damage to older model cars and all devices that operate with two-cycle engines — lawn mowers, weed eaters, chain saws, tillers, chippers, etc.
Exports from the Pacific Northwest are an ongoing battleground in the environmental war on coal. Last week, the Sierra Club and three other groups announced that they would file suit against Burlington Northern Santa Fe Railway and six coal companies over shipments of coal in open-topped train cars. The announcement is an escalation in the three-year battle to stop new export terminals proposed for ports in Washington and Oregon. Underlying all the rhetoric is a concern that mankind is causing dangerous global warming.
In 2010, Peabody Energy, Cloud Peak Energy, and Australia-based Ambre Energy announced competing plans to build export terminals in the Pacific Northwest to ship coal to Asia, with Arch Coal joining the fray in 2011. Five new export terminals have been proposed. Coal would be shipped by rail from the Powder River Basin coal mines in Montana and Wyoming, loaded on ships at the proposed terminals, and transported across the Pacific Ocean to meet the growing demand for coal in China and Asia. Potential coal exports to Asia are estimated at between 50 and 100 million tons annually. Environmental groups and students have mounted a growing campaign to oppose construction of the terminals and the planned coal exports.
The Sierra Club and other opponents claim that rail transport of coal is responsible for “emitting coal into waterways in many locations across Washington” in the form of coal dust and that this violates the Clean Water Act. They fear that, if the export terminals are built, additional coal trains will add to the problem. “Coal is a toxic pollutant and this action today seeks to stop illegal pollution and keep our river free of dirty coal,” said Brett VandenHeuvel, Executive Director of Columbia Riverkeeper.
Shipping coal by rail and exporting coal is nothing new. In 2011, the US exported 89 million metric tons of coal, up 143 percent from 2002. Most of those exports went through the East Coast ports of Norfolk, New Orleans, and Baltimore to Europe, which is using more coal―not less. Most of this coal was delivered to ports by rail and water pollution has not been a major issue.
Neither is coal dust new. In 1900, coal provided 70 percent of US energy consumption. Factories, railroads, electrical utilities, and home furnaces were powered by coal. During the 1940s and 1950s, fallen snow in Chicago was blackened with coal dust after only a few days. Homeowners washed their walls once a year to remove accumulated coal dust. But thanks to cleaner-burning coal-fired plants and our nation’s shift to natural gas and petroleum, US emissions of coal dust today are at a 50-year low.
While environmentalists complain about coal dust, the real reason they hate coal is their acceptance of the ideology Climatism, the belief that man-made greenhouse gases are destroying Earth’s climate. In 2009 Dr. James Hansen stated, “The trains carrying coal to power plants are death trains. Coal-fired power plants are factories of death.” Environmental groups believe burning coal will cause catastrophic climate change, so “coal dust” is used as an excuse to try to halt coal exports.
But there is no empirical evidence that human greenhouse gas emissions are causing dangerous global warming. Carbon dioxide is a trace gas. Only four of every 10,000 air molecules are carbon dioxide. Ninety-nine percent of Earth’s greenhouse effect is natural, caused by water vapor and natural greenhouse gas emissions from oceans and the biosphere. Global temperatures have not increased for more than ten years, despite a continued rise in atmospheric CO2, confounding the climate models. And despite the furor over Hurricane Sandy, history shows that storms, floods, and droughts today are neither more frequent nor more severe than in past centuries.
Yet, protests against coal in the Pacific Northwest continue to escalate. It seems that “yes we can” works except in the case of export terminals and pipelines.
[First Published at The Washington Times]
Only a month ago BP – which not long ago promoted itself as “Beyond Petroleum” – released an “energy outlook” video that projected 99 percent of America’s energy will be supplied domestically by 2030, in part because it says the U.S. will grow production from renewable sources 202 percent by that time.
Just don’t expect BP to participate in the alleged alternative energy “boom.” The London-based petroleum producer announced last week it would dump its investments in U.S. wind energy projects, which were said to be worth $3.1 billion. It’s hard to believe they’re really worth that much, however, especially without government subsidies – not to mention the fact that BP is so easily discarding “assets” that are supposed to hold great value. The move follows a December 2011 announcement that the company would exit the solar business.
So where does BP think – its “outlook” notwithstanding – the future of the energy really is? Well, the same place it has been in the past: with fossil fuels.
“BP has decided to market for sale our U.S. wind energy business as part of a continuing effort to become a more focused oil and gas company and re-position the company for sustainable growth into the future,” said Mark Salt, a company spokesman. “For BP, this effort represents another example of prudent and active management of our global portfolio, consistent with our pledge to unlock more value for shareholders.”
Environmentalists’ heads must be ready to explode. For years their pressure groups had slapped oil companies like BP and ConocoPhillips into submission, waging corporate campaigns to get them to adopt their centuries-old, inefficient sources of power generation – wind and solar – to appease their feel-goodism. They even succeeded in getting the oil giants to join the U.S. Climate Action Partnership for a time, until they exited in February 2010. Now BP, the “greenest” of the fossil fuel behemoths, is saying the way forward for its own “sustainability” is in oil and gas!
Adding insult to injury for the eco-zealots, BP is just emerging financially from huge fines and a publicity disaster caused by its April 2010 explosion and oil spill in the Gulf of Mexico. Bloomberg News estimates that catastrophe may cost the company $42 billion. Yet BP officials don’t see renewables as the path to recovery, but rather a refocus on the fuels the market truly demands: fossil fuels.
- An enormous environmental accident gushed for weeks…
- Which led to disastrous economic consequences to many other industries, such as seafood and tourism
- Enviro-activists still harp about the spill to this day
- Local, state and federal governments heavily mandate and subsidize (“stimulate”) wind and solar
- The Obama administration demonizes the fossil fuel industries on a daily basis and…
- Raises the cost of their production by obstructing leases for drilling and projects like the Keystone pipeline
And despite all those financial and practical obstacles thrown in its path, BP still sees the best way forward is to reject renewables and refocus on oil and gas. There may be no greater an indictment of wind and solar energy than BP’s rejection, especially under these circumstances.
BP first showed its discontent with renewables when it bailed out on its 40-year solar business almost a year and a half ago – only four years after it had received a $7.5 million Department of Energy grant. BP Solar had just closed its only U.S. manufacturing facility, in Frederick, Md., the year before. The company had said it would outsource its production of solar photovoltaic panels to China and India, and then-CEO Tony Hayward told the Washington Post it was “moving to where we can manufacture cheaply.”
BP auctioned equipment in January 2012 from the closed solar plant, and with bankrupt Solyndra fresh in its memory, an experienced industrial auctioneer told the Frederick News-Post, “We’ve been doing more solar technology auctions lately.” One witness to the auction described a “somber scene” in which equipment was sold off in the midst of a storm that dumped nine inches of snow in northwest Maryland.
So much for the excuse that U.S. solar companies “can’t compete” because of the cheap, heavily subsidized production of panels in China and India. BP sent its manufacturing to those places, which would presumably have made solar viable, and it still shut down – even with its own U.S. grants. It was a fast and steep fall for BP Solar, which only six months earlier had produced a video (which BP has now removed from its YouTube channel) that espoused the innovative qualities of its solar panels.
Similarly now, a month after its rosy “energy outlook” video that promoted renewables growth, BP has dumped wind. The fact that such a globally known energy icon, which for a long time placed its sensitivity to environmental causes ahead of its core profit-making business, has bailed on the movement also shows how much the cause and concern for global warming has been depreciated in just a few years. As both temperature trends and public polls indicate, the climate “threat” that alarmists have tried to drum into the national conscience has fizzled away.
Clearly BP no longer fears the environmentalists’ messaging. Despite the Gulf disaster, sound economics, usable energy and scientific truth have won the day with BP’s decisions to quit solar and wind. Too bad politicians can’t see the light.
[First Published at the National Legal and Policy Center]