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The Policy and Commentary Blog of The Heartland Institute
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Supreme Court and European Union Expose Google’s Massive Privacy Liabilities

August 05, 2014, 8:43 AM

Google has privacy clay feet.

The NSA and Big Data may also, since they are relying on many of the same outdated legal assumptions as Google.

In the last few months, both the U.S. Supreme Court and European authorities have made new baseline privacy decisions that have greatly strengthened individuals’ right to privacy. As a result, they’ve also exposed and heightened Google’s massive privacy liabilities.

Contrary to tech-driven conventional wisdom, privacy is not dead. It’s being resurrected by SCOTUS in the U.S. and by various European authorities in the EU.

This post-Snowden change is real and profound. The next twenty years will be different than the last when it comes to privacy.

Some may have heard of some of these individual privacy decisions, but most have missed the new big trend — that people actually do have a legal right to privacy.

Google is the focus of this privacy discussion because of its pervasive, invasive collection of private data, and its uniquely defiant legal and operational assumption that people have “no expectation of privacy” when Google acquires their private data.

Let’s start in the U.S.

Last month SCOTUS refused to hear Google’s appeal in “Google v. Joffe,” which declared Google Street View’s mass-collection of millions of homes’ unencrypted WiFi signals as illegal interceptions, or wiretaps, of private communications — not legal collection of public communications, as Google tried to argue.

This is a big decision — the court effectively rejected Google’s longstanding data-collection presumption that if communications are not encrypted and Google can technically, easily, or cheaply intercept them, then Google can deem them public instead of private.

Google’s routine records interception of communications from Google and non-Google users involving Gmail, Glass, YouTube, Android, etc. represents the company’s broad legal presumption of “implied consent.”

The seriousness here for Google is two-fold. The first discovery  was in the Gmail class action case “Fread v. Google,” which exposed Google’s secret install of a “Content One Box” to intercept, read and analyze all emails prior to reception from 2010 to 2013, according to Bloomberg.

In the case Federal District Court Judge Lucy Koh ruled Google was not exempt from wiretap law, and that creating personal advertising profiles by reading people’s email is not an “ordinary course of business.” Koh went to say that “accepting Google’s theory of implied consent… would eviscerate the [wiretap] rule against interception.”

That means Google secretly, and without reasonable consent from users, intercepted three years of email communications from more than one hundred million Americans and just as many Europeans for commercial purposes.

It is very likely the largest illegal commercial wiretap in history.

In the court’s “Riley v. California” decision last month, the court ruled unanimously that a person has a right to privacy over the content of their smartphone, and that police must get a warrant to search it.

According to the court, “modern cell phones are not just another technological convenience. With all they contain and all that they reveal, they hold for many Americans the privacies of life.”

The decision marks a revolutionary and transformative privacy precedent.

Google and the NSA have justified their omni-interception and collection of people’s data on the pre-digital 1979 SCOTUS precedent “Smith v. Maryland.”

At the time the court ruled that checking a third party’s phone logs was not a search, and thus people had “no expectation of privacy” if a third party gained possession of someone’s private information.

Anyone who reads the unanimous “Riley v. California” decision can’t help but realize that the court, for the first time since 1979, has effectively updated and changed its fundamental legal take on the constitutional right to privacy, and what a digital search constitutes today.

Apparently technology may change, but one’s constitutional right to privacy under the Fourth Amendment does not.

Google and Big Data undoubtedly have taken note concern, because if the circumstances require the government to get a warrant, third parties will be expected to get reasonable consent from users to obtain their private data for commercial purposes.

According to the court “more substantial privacy interests are at stake when digital is involved,” and “cell phones differ in both quantitative and qualitative sense from other objects.”

The court was unanimous in recognizing four big privacy changes: the breadth of “many distinct types” of private information that reveal much more in combination,” the vast “capacity” of data involved, that information can “date back for years,” and that “the data viewed… may be stored on a remote server.”

Now consider that Google combines orders of magnitude more information about more people than any cellphone, stores an unimaginable amount of data about people, stores it largely indefinitely and does it all on remote servers.

If the court applies this new Internet-age logic and digital data reality to future privacy cases involving Google, the NSA or Big Data, they’re logically going to come to a different conclusion than SCOTUS did in 1979.

Big change is afoot for privacy in the U.S., and even bigger in Europe.

In March the European Parliament overwhelmingly voted 621-10 for stronger data protection laws in its first update to European privacy law since the advent of the Internet in 1995.

That same month, the European Parliament overwhelmingly backed a resolution calling for the suspension of the US-EU data protection Safe Harbor that lets U.S. firms self-certify as being in compliance with EU privacy law in a 644-78 vote.

The EU is asserting sovereignty over the European Internet, so European data will be subject to EU law and stored in the EU. The law also grants EU citizens the right to demand erasure of their online data for the first time.

In May a high-profile court decision by The Court of Justice of the European Union quickly enforced Europeans’ “right to be forgotten” by requiring search engines like Google to remove links to irrelevant or outdated information on regular citizens based on their right to privacy.

“The ruling confirms the need to bring today’s data protection rules from the ‘digital stone age’ into today’s modern computing world,” EC Justice Commissioner Viviane Reding said.

The ruling eviscerates Google’s claim that it has an absolute right to free speech in organizing search results, and that no outsider can legitimately request a change in the Google search algorithm. The legitimization of the right to be forgotten will lead to more exemptions for privacy, copyright, etc.

The development that may signal the biggest privacy liability for Google may be a recent decision by the Italian data protection authority, which could be the first of such national decisions to come from France, Spain, Germany, The Netherlands and the U.K. — countries that previously have banded together to enforce privacy law against Google.

“Google would not be allowed to use the data to profile users without their prior consent and would have to tell them explicitly that the profiling was being done for commercial purposes,” the Italian ruling said, according to Reuters. “It also demanded that requests from users with a Google account to delete their personal data be met in up to two months.”

To the extent that European privacy authorities enforce European data protection law, Google will have to revolutionize the way it treats Europeans’ privacy and data.

Europe is essentially calling Google’s bluff.

Now the company that has long boasted of its innovation and superiority in targeted advertising and personalized services on a global basis will be expected by European privacy authorities to, in turn, personalize European users’ real control over what information Google collects on them and how it monetizes it.

The more the privacy authorities learn, the more they will realize that Google has broken users’ private data eggs and scrambled them for their own convenience and profit maximization.

Undoing this mess of Google’s own making is going to be very costly for Google. It will take many years and constant regulatory vigilance by the EC and EU member nations to accomplish.

Other Big Data companies have privacy liabilities, but none on the scale, scope and seriousness facing Google going forward.

Justice Roberts poignantly wrote that “privacy has a cost” in the recent “Riley v. California“ decision.

“Privacy has a cost” because privacy is valuable.

It appears the tech assault on privacy rights of the last twenty years may have bottomed out, and the legal obligation of respecting individual’s right to privacy is beginning a long climb back.

Google is on a collision course with SCOTUS and the EU — Google will either be forced to respect people’s privacy, or the two will surrender their sovereignty to Google’s exceptional market power over private information.

[Originally published at the Daily Caller]

Categories: On the Blog

Cloward and Piven’s Marxist-Based Radicalism Alive Today

August 05, 2014, 8:28 AM

[This article was co-authored by Elizabeth Clarke]

An an Education Reporter article published July 2007, William A. Borst wrote:

The public schools have become the new Marxist laboratories for social engineering. The average public schools is mired in a sociological swamp of pornographic sex education, declining test score, violence and speech codes. . . They have created what David Kupelian calls [in his book, "The Marketing of Evil"] an “Alice in Wonderland environment.” where small boys are dosed with Ritalin to contain their natural restlessness while others are suspended for playing Cowboys and Indians. . . One of the greatest casualties of progressive education has been literacy. The progressives abandoned traditional phonics, the sounding out of words, which necessitates the memorization of each individual word.

Phyllis Schlafly in her Eagle Forum article of November 15, 2006, Public Schools Define American Culture, relates the significance of Sidney Simon’s 1972 book “Values Clarification.” Simon’s book sold nearly a million copies and was widely used to teach students to “clarify” their values, such as casting off their parents’ values and making their own choices based on situation ethics. This was followed by the public schools welcoming Kinsey-trained sexperts that espoused diversity to sex-in-marriage.

Few will dispute that public schools guide the morals, attitude, knowledge and decision-making of most American children. The countless billions spent every year, which are forcibly taken from us in taxes, are spent by the public school establishment under what amount to a thin veneer of accountability to school board members elected in government-run elections.

Those who attended public schools prior to the 1960′s did quite well. Teachers accepted their role in defining the culture of the children under their supervision. Some of you might remember using a McGuffey-Reader-style curriculum through which children learned not only the basics but also values such as honesty and patriotism, while immigrant children assimilated into the American culture by learning our language and culture.

How then did schools become, as described by William Borst, “new Marxist laboratories for social engineering?”  The origin can be traced back to Karl Marx  and his theories developed in association with philosopher Friedrich Engels, which include:

  • All historical change was caused by a series of class struggles between the bourgeoisie “haves” and the proletariat “have nots.”
  • Capitalism was the “dictatorship of the bourgeoisie.”  Like previous socioeconomic systems, capitalism produced internal tensions which would lead to its self-destruction and replacement by a new system:socialism.

John Dewey’s role at Columbia University

Marx’s philosophy was embraced by Humanist John Dewey.  Dewey, born in Vermont (1859 – 1952), was a confirmed socialist.  He is viewed today as the “Father of Progressive Education.”  Dewey put into practice what he saw happening in Russia during the 1920′s when a professor of philosophy at Columbia University while working at the Columbia Teachers College on the side.  Dewey was mesmerized by the Soviet ideal of a world without capitalists, traditional families, or religion.

John Dewey taught at Columbia for 25 years from 1904 to 1930.  But it was while John Dewey was a teacher and researcher at the Columbia Teachers College that his influence in American education was unparalleled.  W.F. Ward (George Novack) relates in his article, “John Dewey’s Theories of Education”:

Dewey’s theories blended attention to the child as an individual with rights and claims of his own with a recognition of the gulf between an outdated and class-distorted educational setup inherited from the past and the urgent requirements of the new era.

By the early 1950′s Columbia was producing a third of the nation’s largest school system’s principals and superintendents.  As such Dewey’s education philosophy set in motion a progressive education movement (learning by living) which spawned many experimental educational programs.

It was not until the 1960′s, however, when the turning point for education occurred, resulting from Dewey’s past influence and his Columbia Teachers College acolytes who argued against objective truth, authoritative notions of good and evil, and religion and tradition. During the same 1960′s era Columbia likewise earned its reputation as a hotbed of academic progressive radicalism, which exists to the present day by means of a network of Open Society Foundation (OSF) funding.  Founded in 1993, known as the Open Society Institute until 2011, the OSF is a grant making operation of George Soros, well-known as a supporter of progressive-liberal political causes.

Cloward/Piven as 1960 acolytes of Dewey at Columbia

Richard A Cloward, born in 1926 as the son of a radical Baptist minister, is defined as a sociologist and social activist who was an architect of the welfare rights movement. Cloward earned both his master’s and doctoral degrees at the Columbia University School of Social Work before joining the Columbia faculty in 1954. He served as a faculty member at the Columbia University from 1954 until his death in 2001 at age 74.  While at Columbia, Cloward won numerous awards for his teaching and academic work

Frances Fox Piven was born in Calgary, Alberta, Canada in 1932.  A daughter of Russian Jewish immigrant parents, Piven was married to Richard Coward.  Having outlived her husband who died in 2001, Piven, at 82, remains a member of the Democratic Socialists of America (Communist Party), as was her late husband, and serves as one of the eight honorary chairs of that organization.

Piven remains active as a Socialist agitator.  During an interview early in 2000, Fox Piven praised socialism as a movement founded on “the values of equality and fraternity and democracy.” She further added: “That tradition has a future.  It’s the only future that’s possible.”  By Piven’s reckoning socialism would be instituted in the U.S. by means of an incremental rather than a revolutionary process (and its happening!).

In 2011 Fox Piven rang in the New Year with renewed calls for a revolution. In an editorial published in The Nation, “Mobilizing the Jobless,” Piven called on ‘”the jobless to rise up in a violent show of solidarity and force with language that was dripping of class struggle,” the same language she and her late husband Richard Cloward had made popular in the 60′s.  In October of the same year, Piven gave a speech of protest at an Occupy Wall Street rally. Listen here.

The 1966 Cloward-Piven strategy

During the 60′s while husband and wife Richard Cloward and Frances Fox Pivenwere both political activists and professors of sociology at the Columbia University School of Social Work, they produced a political strategy for which they are most remembered.  It called for the overloading of the U.S. public welfare system in order to precipitate a crisis that would lead to a replacement of the welfare system with a national system of “a guaranteed annual incomeand thus an end to poverty”. The strategy, known as the Cloward-Piven strategy, was formulated in a May 1966 article in the liberal magazine, The Nation, titled “The Weight of the Poor:  A Strategy to End Poverty.” The article helped to foster the emergence of a more militant welfare rights movement, including the occupation of welfare offices in many cities and other acts of civil disobedience.

Cloward and Piven believed that many Americans who were eligible for welfare were not receiving benefits, and that a welfare enrollment drive would strain local budgets, precipitating a crisis at the state and local levels that would be a wake-up call for the federal government, specifically the Democratic Party, to take federal action to help the poor (In 1966 Democrats controlled both the presidency and both houses of the United States Congress.).

Cloward and Piven were likewise the impetus for the Motor Voter law of 1993. In 1983 Piven and Cloward co-founded HUMAN SERVE, an organization that sought to register voters at social-service agencies and Departments of Motor Vehicles. This organization foreshadowed the so-called “motor voter” law of 1993, which would prove to be a breeding ground for election fraud.  Bill Clinton invited Cloward and Preven to the White House at the bill signing ceremony.

Cloward-Piven strategy as applied today

Richard Cloward and Frances Fox Piven, both lifelong members of the Democratic Socialists of America, drew many of the ideas outlined in their Cloward-Piven strategy from Saul Alinksy, who we know as Chicago’s notorious revolutionary community organizer.

It is not an overstatement to say that President Obama, instead of trying to lead America to recovery, prosperity, and strength, is doing just the opposite. His strategy, sometimes called the Strategy of Manufactured Crisis, is  akin to the Cloward-Piven methodology which David Horowitz described as such

The ‘Cloward-Piven Strategy’ seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.

Crowning achievements of the Cloward-Piven Strategy prior to the election of Obama, as noted by James Simpson in his American Thinker article, “Cloward-Piven Government,” was the creation of the radical reform organization ACORN which exploited our electoral system and the passing of the already mentioned Motor Voter law of 1993. Motor Voter opened up registration to a vast number of illegal immigrants who then reliably vote Democrat.

With the election of President Obama in 2008, the Cloward-Piven Strategy was ramped up on a scale never seen before.  Since then this nation has been flooded with a tidal wave of poisonous initiatives, orders, regulations, laws, and executive orders.  It was Rahm Emmanuel who famously said as Obama’s Chief Advisor during Obama’s first term, “A crisis is a terrible thing to waste.”

Upon reflection, the ultimate goal of the health care legislation, of attempts to enact cap-and-trade, and of the massive stimulus package, was to rip the guts out of our private economy and transfer wide swaths of it over to government control.  Through the deliberate enactment of a flood of legislation that seems never ending, many Americans are becoming so discouraged, demoralized and exhausted that they are have given up or have become too distracted to fight.

Postlude

Might it be because of the brazen way in which Piven has been making her intentions known since 2000 with no fear of retaliation, that the current administration has been given a license to brazenly undermine the “Constitution” to initiate polices that are in opposition to the basic concepts of freedom and liberty?  Despite the Obama administration’s violation of countless laws that do quality for action under the provisions of our Constitution, too many Americans remain oblivious to what is happening around them, while the mainstream media harbors the same socialist philosophy held by Leftists.  The Left, feeling comfortable given the political climate, are not hesitant to express their views openly, freely, and unabashedly without fear.

Every citizen who cares about this country should be spending every minute of their spare time lobbying, organizing, writing and planning.  This is not too much to ask to save our Republic and our democratic way of life.  Destructive initiatives must be fought, as is now happening as countless Americans are rising up against the massive surge of illegal immigrants from Central American countries.

We are up against an evil force.  It is critical that we root out evil in November by electing competent and principled leaders who are willing to defend our “Constitution.”  If not what has been set in motion will be too entrenched to change, and this once proud and strong nation will cease to exist.

 

[Originally published in Illinois Review]

Categories: On the Blog

Mr. President: Please Mind Your Own Business

August 04, 2014, 10:35 AM

Dear President Obama,

For nearly six years, now, you have declared your intention and desire of being my Nanny-in-Chief. Your original campaign slogan of “Hope and Change” was really a promise of “Control and Command.” Well, Mr. President, I have a request: Mind your own business.

Let me start out with some simple questions. How do you know what is right and good for me? Have we ever met? Do you know anything about me as a real, living distinct individual? Have you the slightest idea about the goals and purposes, and hopes and dreams I’ve had about my life? What do you know about the experiences I’ve had or the knowledge I’ve accumulated over the years as the guides and tools for deciding what I consider best for my family and me?

The answers to these questions and countless others like them are: You don’t know a damn thing.  Yet you have proposed, implemented and enforced legislation and regulations that imply that you possess the knowledge, wisdom and, most importantly, the right to tell me how I should live, work, and act.

Your attitude and statements suggest a hubris and arrogance concerning your own superiority, along with those who work for you, that borders on a serious and dangerous elitist complex.

For someone who often refers to the dignity of the ordinary American against presumed powerful special interests, your own outlook and behavior manifests a disbelief in and contempt for the individual person as a free, responsible human being.

 

A Life of Hopeless Dependency on Government

In your world, Mr. President, everyone is a dependent child needing a paternalist government to take care of him or her from cradle-to-grave. Remember your “Life of Julia” story that you hailed as a model for the future world of triumphant “hope and change.” From her entry into kindergarten to her time in college, through her work life to final retirement, not one aspect of “Julia’s” life was considered possible without the “helping hand” of government to provide education, job security, financial support, and a guaranteed old age pension.

Years ago, singer Helen Reddy may have sang of independent women who could say, “Hear me roar.” But in the world you envisage every woman is presumed not able to stand on her own two feet, and to compete and succeed in a society of equal individual rights for all men and women.

No, she is clearly a “weaker sex” that cannot make it on her own without lifelong and unending safety nets and financial and regulatory supports from a government that is viewed as the “adult” who always has supervision over the eternal female adolescent.

Is this how you view your own daughters’ future, Mr. President, never free of a political Daddy that takes care of his “little girls,” because the governmental Daddy cannot imagine them growing up and being on their own?

 

Hubris of Presuming How I Should Live and Choose

Let’s talk about your signature legislation, ObamaCare. Set aside the embarrassing disaster that followed the initial opening of the website or the shock and the anger among millions of people who discovered the loss of their health insurance and the higher premiums they were now faced with under your “affordable” health care act.

The underlying premise behind ObamaCare is that you and those manning the bureaucracies in government know what every American needs and should have in terms of health insurance and medical care.

How do you and your “experts” know this, Mr. President? What makes you think you know enough about every one of the nearly 320 million Americans in terms of what would serve their health care needs and requirements?

The collectivist mindset that clearly guides your view of people and society reduces the entire population of the United States to a homogeneous and interchangeable mass that if not confined exactly to one size fits all, then to a rather narrow range of options from which the citizens of the nation are to be allowed and commanded to select.

Each of us, Mr. President, has our own circumstances, our own family needs and preferences, our own judgments about trades-offs between coverage, premiums and deductibles. Plus, our personal situations and evaluations about these and many other related matters change over time.

Do you sit at our dinner tables after the plates have been cleared when husbands and wives decide what they can afford, what is the best alternatives based on their estimates about what will serve their and their children’s health care requirements?

Do you not think that your attitude demonstrates a degree of hubris that you would find presumptuous if I or any other individual American were to mandate what you and your family should be allowed and coerced to have for your possible medical needs?

 

The Mentality of the Meddler

I don’t know your daughters or your wife or you, Mr. President. For that very reason I would not presume to tell you how to plan your family’s health care and insurance, or how to raise your children, or where to vacation, or how to spend your money, or how to manage the domestic “ups” and “downs” of any marriage between two unique individual human beings over the course of their lives together.

I would be considered a busy body, a meddler, a know-it-all, or an arrogant and irritating pest if I were to put my nose into the business of your personal and intimate affairs of everyday life. So why, Mr. President, do you presume to do just that through the rules, regulations, controls and commands that you say you are willing to us your pen and phone to impose on me?

I only ask that you show me the same respect as a free and self-responsible human being that you would expect from me if we were simply neighbors living next door to each other in any city, town or small hamlet across the United States.

 

The Arrogance of Presuming What I’m Worth

Finally, Mr. President, how do you know what my skills and abilities are worth to me or anyone else in terms of the salary I may earn in the marketplace? To be honest if someone had asked me whether I thought a person who had never worked in the business world, had never held any truly senior management and administrative responsibilities, and only had a few years of elected governmental office should be President of the United States and be paid $400,000 a year, I would have said, “I don’t think so,” and quiet separate from that person’s political views.

But there you are, Mr. President, sitting in the White House, holding your finger on the nuclear button, while having that pen and phone in your other hand. And with plenty of time to go golfing and flying off on Air Force One for Hawaiian vacations and fund-raising trips around the nation. Only in America! What a country!

So how do you know that the minimum wage that I should be paid is not less than $10.10 an hour? Why not $9.99 or $11.11? While we are at it, why not $20.20? The last one, after all, might match my eye vision. That seems pleasantly symmetrical.

The fact is that what anyone is worth in terms of services they might render to others in the market is dependent upon a whole variety of combined circumstances about which you and others in the government know absolutely nothing.

Each person’s background, education, personal and workplace experience and skills have certain distinct qualities and characteristics different from many others in the type of complex and diverse modern society in which we all live.

At the same time, what particular skills, knowledge and abilities possible employers are looking for from employees in the context of the products or services they offer and sell to consumers, given the potentially every-changing demands those buyers demonstrate in an on-going competitive market, should make it very clear that it is absurd for you or anyone else to sit in your governmental offices in Washington, D.C. and dictate what people may be worth in terms of an hourly wage.

Have you ever given any thought to the fact that your minimum wage policy might price some low or unskilled workers out of the market, because you’ve legally priced them above what many possible employers may think that are actually worth? Have you taken the time to reflect that you might be preventing someone from ever getting that entry-level job that may pay little at first, but over time provides them with the on-the-job experience that can make them more valuable to that or some other employer in the future?

 

Only Paying What You Think Something is Worth

Before you had government employees to serve you hand-and-foot in the White House, there was a time, Mr. President, when you, no doubt, went food shopping, or bought a car, or purchased a pair of shoes, or spent money on an anniversary gift for your wife.

You had a certain income that constrained what you could buy and how much of the various things you would have liked to have. In other words, there was a time when you were closer to being, well, like the rest of us.

Did you ever pay more for anything than you thought it was worth? Did you not sometimes hesitate or decide not to buy something or not of the quality or in quantity you might have desired, because to do so would have left you with too little money left over out of your limited budget to purchase something you considered to be more important to you or your family?

If you think back and remember such a time, then why do you think it is any different for the rest of us now? Say that a person may not be paid less than $10.10 per hour, and anyone that a prospective employer or customer does not consider to be worth this amount will not be hired.

 

Plundering for Political Power

Sitting in the White House, such a minimum wage may make you feel good, that you’ve imposed a salary floor that you consider “fair,” “socially just,” or every person’s entitlement “right.” But that will not help the poor individual left without a job, prevented from getting his foot on the bottom rung of the ladder of lifetime employment opportunity, and now dependent on the redistributive largess of paternalistic government.

But perhaps that is what you want. If others in society will not give people what you think they should pay them, then you’ll just tax the rest of us to pay for this unfortunate person’s welfare safety-net programs. And, besides, the government-supported unemployed and unemployable will feel so grateful to those who care for and feed them at other’s expense that they will show their appreciation by keeping those who think and act like you in political office.

Plunder some so you can pander to others to maintain the political power you cannot imagine your life without.

 

Individual Freedom Instead of Collectivist Control

Mr. President, this is not the America that the Founding Fathers of our country wanted for themselves, for their children, or the future generations for which they signed a Declaration of Independence or constructed a Constitution that was meant to restrain government and leave each individual free to be a self-governing human being responsible for his own life, and respectful of the equal freedom and rights of every other unique person in society.

I have a simple but profoundly important request, Mr. President: Mind your own business and leave me and everyone else alone. I don’t want you managing and controlling my life.

Do I always make the right choices and decisions? No, I do not. Just ask my wife!

But I do not want to be controlled by a political collective possessing coercive power to tell me what I may do or not do, or with whom I may associate and on what terms. I am not your slave, I am not your government ward, I am not some helpless or hopeless “Julia” who needs you to serve as my lifelong Nanny.

I declare that I am a thinking, reasoning human being. I am a free person with inalienable rights to my life, liberty and honestly acquired property. I insist upon my right to live for myself, guided by my own purposes and goals, and free to interact and exchange peacefully and voluntarily with all others, with the only essential moral principle behind my conduct toward them being that I respect their life and liberty just as I insist that they recognize and respect mine.

You, of all modern presidents, should be most sensitive to the dangers and immorality of making some men masters over others who are to be coerced and commanded as slaves.

The master-slave relationship is equally unethical and perverse whether the master is a private person owning other human beings on a plantation, or a “democratically elected” set of masters who use the power and force of the government to make some others obey their commands under the threat or use of political violence.

Mr. President, I ask you to mind your own business, and I promise not to put my nose into your life, in turn. If not, at least admit the truth that you arrogantly believe that you should be the head master on the political plantation that your vision of “hope and change” has really always been about.

[Originally published at Epic Times]

 

Categories: On the Blog

The Power to Tax (Progressively) is the Power to Destroy

August 04, 2014, 8:00 AM

It seems that when Chief Justice John Marshall was preparing the opinion for McCulloch v. Maryland he tapped into an eternal truth. “The power to tax is the power to destroy,” he wrote on behalf of a unanimous Supreme Court. Those words are no less true in 2014 than they were in 1819. Taxation appropriates money from one person or group of people in order to give it to others. There is no way to escape taxes. But there is a way to make taxes somewhat fairer. One way is to make taxes flatter and expand the tax base.

Soak the Rich Taxes

If the power to tax is power to destroy, then the power to tax progressively is the power to destroy some and buy off others. A state with power over a progressive taxation system can put the middle class and the wealthy in effective thrall, and use them to benefit its own ends. This is exacerbated by exploitation of the tyranny of the majority which can lead the majority of less wealthy and have-nots to demand more and more services and paying for them by inflicting ever more onerous taxes on the wealthy while diminishing their own burdens.

Furthermore, so long as the tax burden is disproportionately leveled on the few, no one can see the growing size of the state. When a citizen outside the tax base, or on a low rung of a progressive tax system, experiences an increased income through expanded redistribution from wealthier citizens, they only experience the net benefit and not the cost. That creates the perverse incentive to support further redistributions. On the other hand, with a flatter and broader tax, everyone feels the growth of government spending. They can also better understand the costs associated with it, driving them to have more realistic preferences and to make more rational demands of the state rather than treating the rich as a perpetual piggy bank.

Improving Taxation

Taxation should not be about trying to engineer a more equal society. The purpose of taxes is to furnish necessary services people need to become competitive free agents in the economy. Overly progressive taxes take unduly from some to give to others in the hope of fostering greater social equality. Yet such efforts can only be harmful, as they breed resentment from rich toward the poor for taking undue amounts of their wealth for their consumption, and feelings of entitlement from the less well-off who feel the wealthy owe them the money they pay (and thus feel happy to levy ever more odious taxes from them).

Society is best served by promoting a system of taxation that fosters equality of opportunity, by providing essential services to which everyone contributes in accordance with their ability to pay. This is better serviced through a system of flatter taxes (even if they are still a bit progressive). That would promote a system of proportionality in taxation, rather than progressive taxes that focus unduly upon the contributions of the few to the many.

 

 

Categories: On the Blog

The War on Smoking (Except Maybe Pot)

August 03, 2014, 11:04 AM

How obscene is it for a Florida jury to award $23.6 billion to the widow of a man who died of lung cancer in 1996? She sued R.J. Reynolds Tobacco Company by asserting that her husband had been “fooled” into starting the smoke at age 13. Apparently he had never heard cigarettes referred to as “coffin nails”, a slang term that has been around since the last century. And how come all those patches, chewing gum, and other means to stop smoking had no effect, if used by her late husband?

This isn’t justice at work. There are more than 40 million smokers in the U.S. today. Smokers, let alone cigarette manufacturers, however, haven’t had the benefit of equal or fair-minded justice since 1984 whenU.S. Surgeon General C. Everett Koop called for “a smoke-free society” by the year 2000.

There was a time when it was perfectly okay to smoke cigarettes. As a youth in the mid-1950’s I began to smoke them to look sophisticated. Producers advertised that as part of their appeal. Hollywood film actors like Ronald Reagan, as well as characters in films often smoked. And, yes, actors John Wayne and Humphrey Bogart both died from lung cancer. Others did too. It wasn’t a secret, so if you smoked, you knew the risk.

That’s where personal responsibility collides with nanny-government, forcing people to forego something they enjoy in the name of what the government deems inappropriate behavior.

As reported by Holman W. Jenkins, Jr., in “Who’s the Real Cigarette Monopolist?” the so-called Master Settlement Agreement in 1998 on cigarette manufacturers was arrived at “when Florida and other states sued them for Medicaid costs of people supposedly fooled by cigarette advertising.” The operative word here is “supposedly” because few smokers are unaware of the risk factor.

“A cigarette pack today fetches roughly $2.50 at the factory gate,” wrote Jenkins, “on which the government collects $3.80 on average in state and federal taxes” as well as the payments due from the Medicaid rip-off scheme. Twenty years ago, the average pack of cigarette would have cost about $1.75. Today it is in excess of $5.00.

With prices more than twice as high than in the past and smoking bans everywhere, there are less cigarette smokers. As reported in The Wall Street Journal, “The U.S. adult smoking rate has plunged to below 20% from more than 40% half a century ago.”

A survey by the Centers for Disease Control found that 18% of U.S. adults or about 42 million are cigarette smokers. For those who want to stop, only about one in twenty in any given year actually succeed according to various surveys.

E-Cigarettes

And the government is not done yet interfering with the right of people to smoke. Steve Stanek, a research fellow at The Heartland Institute and managing editor of its monthly Budget & Tax News, recently reported that “E-cigarettes have no tobacco smoke but that hasn’t stopped the Food and Drug Administration (FDA) from proposing rules to treat e-cigarettes much like tobacco-based cigarettes. The draft regulations also cover cigars, pipe tobacco and other tobacco products that have not been regulated like cigarettes.”

Greg Conley, a Heartland Institute research fellow with a specialty in tobacco policy, points out that “By requiring the manufacturer of every single electronic cigarette product on the market to file a ‘new tobacco product’ application, the FDA has all but guaranteed the closure of tens or hundreds of small and medium-sized businesses with no connection to Big Tobacco.”

Giving the Okay to Pot

Significantly, producers of “medical marijuana” are not subject to the rules affecting cigarettes and, as it dawns on federal regulators that there could be a lot of tax revenue from this market, I wonder how long it will take for the legalization of all marijuana use to fatten government coffers?

Probably not long at all. On July 26, a New York Times editorial opined that marijuana should be legalized, removing the federal laws prohibiting its sale and use. “After a great deal of discussion, the balance falls squarely on the side of national legalization.” But it’s stillsmoking!

Playing it safe, the Times’ Editorial Page Editor, Andrew Rosenthal, told ABC’s “This Week” that “We’re not urging people to smoke pot any more than we are for them to drink alcohol or smoke cigarettes. It’s just that making it illegal was creating a social cost for the country that was absolutely unacceptable.” Yeah, sure.

Sen. Marco Rubio (R-FL) is blasting the FDA for its “job-killing” regulations on the premium cigar industry, citing the J.C. Newman Cigar Company, a 119-year-old family-owned cigar business based in Tampa, as the primary loser if the FDA institutes new regulations regarding the nicotine content of the wrappers used.

“We have gone through two World Wars, the Great Depression, the Cuban trade embargo, smoking bans, excessive taxation and competition from low-wage countries,” co-owner Eric Newman told The New York Times, but the FDA may put it out of business. That, like the $23.6 billion award cited above is an obscenity too.

The excessive taxation is clearly discriminatory, along with all the other regulations and bans affecting smokers. A study published by the National Bureau of Economic Research found that “It will take sizable tax increases, on the order of 100%, to decrease adult smoking by as much as 5%,”

One is reminded of the failure of Prohibition, an earlier “public health” measure embraced by the U.S. government. People wanted to drink alcoholic beverages then just as now. And some people drink too much and die from alcoholism. Just as some people smoke too much. It is private, personal behavior that should not be regulated beyond the need for public safety, i.e., drinking and driving, nor discriminated against.

More and more, “progressive” government is taking the joy out of life. By its very nature, it must control everyone and everything they eat, drink, or enjoy.

 

[Originally published at Warning Signs]

Categories: On the Blog

Should the Government Tell You What to Eat?

August 03, 2014, 10:35 AM

Given the successive scandals and monster laws like Obamacare that have been imposed on Americans, the federal government’s efforts to control and determine what you eat doesn’t receive the attention that it should. The ultimate question is whether the government should tell you what to eat and then seek to enforce their views about it? The answer is no.

The Dietary Guidelines Advisory Committee is one of those federal entities that should have no role in determining what is on your plate, but among its recommendations is the promotion of “a plant-based diet, reduced meat consumption, and only eating fish after reading up on which are good for you.” Meanwhile the food police have been warning against the natural element of mercury in fish even though it is so small as to constitute no health threat.

Hanns Kuttner, a senior research fellow at the Hudson Institute, a Washington, D.C.  domestic and foreign policy think tank, says that the working premise of the committee is that a “good diet would increase consumer’s costs and imply the end of entire sectors of American agriculture—all in an effort to regulate behavior that has nothing to do with nutrition.” The committee, since 2010, “has not included a member who has any knowledge of food production and food regulation.”

The committee reflects the United Nations global campaign to encourage the consumption of insects. If you love dining on bugs, the UN wants this to be a part of everyone’s diet. According to Eva Muller, the director of Food and Agricultural Organizations Forest Economics, Policy and Products Division, bugs “are nutritious, they have a lot of protein and are considered a delicacy in many countries.”

It should come as no surprise that Michelle Obama is leading the food police at this point. A program of the U.S. Agriculture Department announced new rules in 2013 to remove high caloric food and drink items from cafeterias and campuses of schools around the country. As of this year, sodas, sports drinks, and candy bars are banned. Only diet drinks, granola bars, and fruit are acceptable.

This is Big Government at work, but no one expects that kids will go along, nor are shoppers likely to embrace a U.S. Department of Agriculture report that wants to steer them toward more fruits and vegetables and away from sugar and fat-laden items. The new guide was written for the 47 million Americans who participate in the food stamp program. Yes, 47 million!

Michelle Obama also favors costly–$30,000 each—grocery carts that are color-coded to “help” consumers selected approved food items. This kind of intrusiveness is obnoxious.

Victor Skinner of the Education Action Group noted in early July that “The federal government’s attempt to force public school students to eat ‘healthier’ lunches is falling apart at the seams.” The New York Times News Service reported that the School Nutrition Association (SNA) which initially welcomed the bans is now lobbying Congress to dial back on the “overly prescriptive” and expensive changes.

“Congress is listening,” reported the Times, “and is considering legislation to delay the nutrition regulations for a year, some of which have already gone into effect.” The SNA is pointing out that many students are throwing away the additional fruits and vegetables included in their lunches, amounting to $684 million in food waste every year—or roughly “enough to serve complete reimbursable school lunches to more than 228 million students.” Moreover, the “nutritious” federal lunch menu is also proving costly for many school districts that are now forced to purchase more expensive foods to comply with the regulations.

We have reached the point where some schools are banning birthday cakes or cupcakes in classrooms where such celebrations have gone on for decades. Meanwhile many parents have noticed that their children just skip lunch at school and wait to come home to eat instead.

For as long as I can remember Americans have been told that something they eat or drink is dangerous to their health, even though Americans now enjoy the highest life expectancy since such data has been studied. Almost everything we have been warned against has turned out to have some beneficial aspect to it.

In March, the journal, Annals of Internal Medicine published a study that concluded that “Saturated fat does not cause heart disease.” Nina Teicholz, writing in the Wall Street Journal in May noted that “One consequence is that in cutting back on fats, we are now eating a lot more carbohydrates—at least 25% more since the early 1970s…instead of meat, eggs and cheese, we’re eating more pasta, grains, fruit and starchy vegetables such as potatoes.”

“The problem is that carbohydrates break down into glucose, which causes the body to release insulin, a hormone that is fantastically efficient at storing fat…excessive carbohydrates lead not only to obesity, but also, over time, to Type 2 diabetes and, very likely, heart disease.” Thanks to Big Government dietary guidelines and regulations, “the U.S. population (is) growing sicker and fatter while adhering to official dietary guidelines has put nutrition authorities in an awkward position.”

The latest group to join the Food Police are those opposed to food grown with genetically modified organisms (GMO), calling for the labeling of them. This is intended to boost the sales of “organically” grown crops that allegedly do not use pesticides or herbicides. It is pure propaganda because, as Mischa Popoff, a former organic farmer and USDA-contract organic inspector, and the author of “Is It Organic?” recently noted in a Daily Caller article that “A whopping 43% of all certified-organic food sold in America now test positive for prohibited pesticides.” And, of course, “organic” food items cost more.

Simply put, crops need to be protected against insects and weeds. Always have and always will. There is no evidence that the proper use of insecticides and herbicides pose a health hazard. As one farmer told me, “My family eats what I grow. Do you think I would do anything to harm them?” Popoff notes that “The GMO industry is now well-established, with 35 years of science and over 20 years of commercial success behind it.”

The government has no business telling Americans what they should eat. It too frequently offers bad science and almost always propaganda. In the home of the brave and land of the free this is yet another intrusion in the lives of Americans. What you eat and even how much is an individual freedom and choice.

© Alan Caruba, 2014

[Originally published at Warning Signs]

Categories: On the Blog

The Political Attraction of Severance Taxes

August 03, 2014, 9:15 AM

As the topic of severance taxes heats up in Pennsylvania and Ohio, it’s worth investigating exactly what severances taxes are and why they are implemented.

When legislators debate severance taxes, it is seldom about making sure localities have enough resources to deal with the increased traffic, and consequent wear and tear on the roads and other public infrastructure, or greater environmental protection enforcement designed to protect the people closest to the impacted area.

More often, the taxes are an estimate of how much money government officials can take from one group, typically job-creators that harvest natural resources, without completely removing their incentives to do business in the state. That makes it possible for politicians to fund their pet projects or popular measures in election years with general-fund monies at the expense of local communities and business owners.

Pennsylvania provides an interesting case because instead of a severance tax, it has an impact fee, which is assessed on every well drilled in the Marcellus Shale formation. The fee is based on natural gas prices and the Consumer Price Index; companies drilling natural-gas wells in 2013 paid the state government $50,000 for each new well.

This fee has brought in $630 million since 2011, with 60 percent of the impact fee revenues staying at the local level, used by counties and towns hosting wells, and the other 40 percent going to fund government agencies involved in regulating well-drilling and to a fund set up to improve infrastructure around the state.

Even though the impact fee has contributed more than half a billion dollars in revenue for local governments, Democrats in the Pennsylvania legislature are now pressing for a severance tax, arguing Pennsylvania is the only major natural gas-producing state in the nation that does not have one. Although this is technically true, this statement makes it seem as if gas companies are not paying their “fair share,” a claim that could not be further from the truth because in addition to the impact fee, the natural gas industry must pay all the normal taxes that other businesses pay.

This includes Pennsylvania’s already second-highest-in-the-nation corporate income tax, royalty payments to state and local governments for drilling on public lands, and income taxes landowners pay on their royalties.

A similar series of events is unfolding in Ohio, where Gov. John Kasich is advocating a 2.75 percent severance tax on oil and gas producers in the state, with 15 percent of the revenue going to local governments and the remainder getting sucked into the state’s general fund. Although these new taxes are supposed to fund a statewide income tax cut, it’s easy to foresee politicians raising the latter again in a couple of years while keeping the new tax on the books. Pennsylvania’s severance tax advocates provide a perfect example of such convenient amnesia.

Hitting up the fossil fuel industry for more money makes for great election-year politics with some constituencies, but it is bad tax policy. Some Ohio legislators are claiming the severance tax would “bring certainty” to oil and gas producers in the state: The one thing those producers can be sure of is that they’ll get rolled again the next time there is a statewide election and politicians are on the lookout for someone to “pay their fair share” to finance out-of-control government spending.

The projected revenue for Ohio, which is estimated at between $34 million and $220 million a year, will create higher costs for job producers that will ultimately be passed along to their consumers, hurting most those who are living paycheck-to-paycheck.

Instead of enforcing a severance tax to pay for projects outside the drilling area, Ohio should adopt a narrowly targeted Pennsylvania-style impact fee that would ensure local governments have enough resources to handle the increased use of local services while allowing businesses to continue to create high-paying, family-supporting jobs.

Isaac Orr (iorr@heartland.org) is a research fellow for energy and environmental policy at The Heartland Institute.

Categories: On the Blog

The Case Against Isolationism

August 03, 2014, 8:00 AM

There is a strain of thought in the American pro-liberty movement that argues for what is essentially a return to a policy of isolationism. That is the attitude typified by former Representative Ron Paul and his adherents, who have spent years calling for the withdrawal of the United States from many of its foreign treaty and institutional obligations, including the United Nations. There is a certain attractiveness to this position, especially in light of the recent exhausting and expensive wars in Iraq and Afghanistan. The claim that the War on Terror and other interventions in various countries’ affairs have created more enemies than they vanquished holds no small amount of truth.

It is true that America has pursued an overbearing and damaging foreign policy in the past two decades. But it is also true that a policy of isolation would be even more damaging.

Pax Americana

The United States occupies a unique position in the history of the world; it is a superpower with the ability to project military power to all corners of the globe and economic capacity dwarfing all other states. Never has a state been so dominant and without rivals for global preeminence. In terms of security, its great power has given the United States the ability to serve as an ersatz world police, allowing it to guarantee the security and stability of the international system, as well as the security of its own citizens, which has resulted in an unprecedented era of peace reigning in the world.

Wars in this era of American preeminence have been intermittent and localized, nothing akin to the vast conflicts of empire that marked the 18th and 19th centuries, or the cataclysmic world wars of the first half of the 20th century. This has largely been thanks to the United States’ presence as a leader on the world stage. Were it to withdraw from its international activities, the security of the world would be in doubt. With no dominant power helping to maintain order, the whole system could break down, precipitating wars, as has occurred in previous centuries when the international landscape was marked by the power dynamics of multi-polarity.

In terms of economics, the United States is deeply coupled into the system. The United States withdrawal as guarantor of the system would be disastrous not only in terms of upsetting the international financial system, but also in terms of its position as provider of the world’ reserve currency. Without the dollar, the entire international financial system would be in jeopardy, and could even collapse. Without the United States actively involved on the international stage the world will become a more dangerous and economically volatile place.

The Indispensable Nation

Much of the world looks to the United States for leadership. Its moniker “leader of the free world” is not merely grandstanding on America’s part, but actually how many nations view it. In terms of maintenance of the present international order, of which America was the chief architect and guarantor, the United States remains the “indispensable nation.”

When the Berlin Wall fell it was to the United States that the budding democratic movements looked for inspiration. Its upholding of values such as freedom of expression and of religion, as well as its adherence to democratic values and free markets have served to shape the fabric of the international order. Since the United States became a major leader in the world, after World War II, it has helped to make the soil of the international landscape become more receptive to the growth of democracy and free market capitalism, not only as a major form of government, but as the predominant one.

Should the United States abandon its place of leadership in international relations, it would pave the way to destruction of the international order it has striven to build. I have previously written about the problems of America’s failure to establish an international order that would survive its decline. A policy of isolation like some on the libertarian-right wing of American politics would only hasten that erosion of international norms. The Obama administration’s rudderless foreign policy leadership should be viewed as a chilling prelude to a world without American leadership. It is a world that should be avoided at all costs.

A Way Forward

The United States is too important to the international system to abandon it. Doing so could result in all manner of catastrophe, not just for other countries, but for the United States as well. The problems of world cannot simply be sealed off from America’s shores, especially if free trade is to still be upheld.

It is in America’s interest, and in the interest of the world, that the United States pursue a foreign policy that continues to promote the norms it has sought to inculcate in international relations. The task is not complete, and has seen setbacks in the past few years. But failure is not an option.

Categories: On the Blog

Congressional Testimony of Bernard Weinstein to Subcommittee on Energy and Power

August 02, 2014, 8:48 AM

[The following is the testimony of Prof. Herbert "Bud" Weinstein to the House Committee on Energy and Commerce, Subcommittee on Energy and Power. This hearing, held on July 24, was on the subject of "Laboratories of Democracy: The Economic Impacts of State Energy Policies."]

Mr. Chairman and Members of the Committee, my name is Bernard Weinstein and I am the Associate Director of the Maguire Energy Institute at Southern Methodist University (SMU) and  an adjunct professor of business economics at SMU’s Cox School of Business.  Thank you for this opportunity to speak to you today.

I want to address two topics today: first, the ongoing “War on Coal” and its implications for electric power costs and grid reliability; and second, the contrasting economic performance of those states that have embraced energy development with those that haven’t.

The War on Coal

President Barack Obama, in pursuit of his “Climate Action Plan,” has been using his executive power in an effort to limit carbon dioxide (CO2) emissions from both new and existing power plants, further increase fuel economy standards for motor vehicles, and provide additional incentives for the development of renewable energy sources.  Among these initiatives, the potentially most damaging to the economy are those related to power generation.

Electricity drives our economy, and nearly 40 percent of the electrons on the grid still come from coal-fired power plants, which will be most affected by mandates to reduce CO2 emissions and other greenhouse gases (GHG).  Coal’s contribution to the electricity mix has been slowly declining in recent years, mainly because of a sluggish economy and comparatively cheap natural gas prices.

According to projections by the Energy Information Administration, by 2016 we’ll see a capacity decline of 42 gigawatts, or 14 percent, in the nation’s coal-fired generating capacity since 2012.  Without question, the Environmental Protection Agency’s (EPA) proposed GHG standards for new and existing coal-fired power plants will accelerate plant closures.  Indeed, these standards are so restrictive they will likely block the construction of new coal-fired power plants in Texas and elsewhere unless they utilize novel and expensive technology to capture carbon.  The newest and most advanced coal-fired generators in Texas, and the rest of the nation for that matter, can’t meet the proposed emissions limit of 1,100 pounds of CO2 per megawatt hour for new power plants.

The consequences, in terms of higher energy costs and compromised grid reliability, could be serious.  The new standards could also derail America’s nascent industrial revival while eroding the competitiveness of U.S. manufacturers.  Hundreds of thousands of jobs are at risk—not a happy prospect in an economy that’s barely growing five years after the Great Recession with 9.5 million workers currently unemployed and millions more underemployed or discouraged from even looking for work.

Policy-makers and regulators must keep in mind that a one percent increase in economic output necessitates a 0.3 percent increase in energy use.  By extension, any combination of policies that serves to increase the price of electricity or reduce the reliability of energy sources will have a negative impact on economic growth.  Higher power costs can be especially detrimental to manufacturing industries, who consume proportionately more electricity than other sectors of the economy.  Five million manufacturing jobs were lost during the Great Recession, and relatively few have come back during the recovery.  But manufacturing still matters because of its strong linkages with other sectors of the economy.  About one in eight private sector jobs relies on America’s manufacturing base.

We can ill-afford to risk undermining the availability of power in the U.S., placing electricity reliability in jeopardy and risking catastrophic economic impacts.  Coal-fired plants cannot be replaced overnight by natural gas plants, and they certainly cannot quickly be replaced by alternative energy facilities. The time it takes to install pipeline and other infrastructure necessary even to begin the conversion of an old plant or construction of a new one is considerable.  Accordingly, if EPA regulations accelerate the closure of coal-fired power plants, that, in turn, will increase the probability of an insufficient supply of electricity at times when demand peaks, such as during hot weather, or when there are unexpected problems with electricity generation or transmission.

EPA should not be developing long-term energy policy through environmental regulation.  The improper regulation of GHG’s could drastically reduce the diversity of this country’s energy sources, particularly by minimizing coal-fired power generation, and hold the nation hostage to volatile natural gas prices and intermittent renewables like wind and solar for the next fifty years.

For example, proponents of the EPA’s proposed GHG rules contend they will incentivize renewable energy in states where such resources are a possibility.  But we know from recent experience that the fastest growing form of renewable power is so-called rooftop solar, a form of distributed generation.  The business model for this expansion is likely to be third-party leases for periods of 20 years or more, where available subsidies are transferred to third parties and where the leases are eventually securitized and sold as financial instruments on Wall Street.

There are a number of issues that must be resolved before federal rules encourage the transfer of affordable, reliable fossil-fuel base load electric power for leased rooftop solar.  Since rooftop solar depends on the use of the electric grid for backup and for sales of excess power, net metering policy must take into account a fair allocation of the costs necessary to maintain grid integrity.  Without doing so, relatively wealthy solar households or Wall Street investors will essentially be subsidized by lower income base load customers.  Further, replacing reliable power sources with intermittent ones can have profound negative impacts for overall system reliability.

These risks must be taken seriously.  As the Institute of Electrical and Electronics Engineers (IEEE) has stated, “a reliable supply of electricity is more than just a convenience, it is a necessity; the global economy and world’s very way of life depends on it.”[1]  IEEE further observes that “Even minor occurrences in the electric power grid can sometimes lead to catastrophic ‘cascading’ blackouts.  The loss of a single generator can result in an imbalance between load and generation, altering many flows in the electricity network.”  The direct costs to high-technology manufacturing in just the San Francisco Bay Area during the California blackouts alone ran as high as one million dollars a minute due to lost production.  The relatively brief Northeast blackout of 2003 cost business about $13 billion in lost productivity.[2]

The administration and Congress must also acknowledge that America, by itself, can do little to reduce global greenhouse gas emissions.  In fact, GHG emissions in the United States today are at a 20-year low, even though the economy is more than 50 percent larger.  The only effective way to significantly reduce global GHG emissions is through a coordinated strategy involving all of the planet’s major economies.  Otherwise, any marginal reductions in America as a result of shuttering coal plants will be more than offset by rising emissions in China, India, Brazil, and other fast-growing economies around the world.

Energy development and economic growth: a contrast among the states

 As is generally well known, America is in the midst of an oil and gas boom unlike anything we’ve seen since the 1920s, thanks largely to the technologies of horizontal drilling and hydraulic fracturing in the various shale plays around the country.  Domestic oil production has jumped 40 percent since 2010 and is now above its peak in the mid-1980s.  By 2016 at the latest, the U.S. will have reclaimed its crown as the world’s number one oil producing country.  Natural gas output has also climbed dramatically, up 33 percent since 2010, pushing us ahead of Russia to become the planet’s number one gas producer.

Five years ago, the oil and gas industry accounted for only 3 percent of America’s economic output.  Today, it’s more than 10 percent.  Employment in the oil and gas industry is up nearly 30 percent since 2008 while total U.S. employment has just returned to its pre-recession level. Because of higher domestic production, oil imports have dropped from 50 percent of consumption to 30 percent in just five years, helping to lower our trade deficit and improve America’s global competitiveness.

Contrary to the commonly-held belief that only a few states are in the energy business, the Energy Information Administration reports that 24 states are currently producing commercial quantities of coal, 31 are producing crude oil, and 33 are producing natural gas.  What’s more, current and prospective shale plays are found in most part of the U.S.

But the shale revolution has not been embraced by all of the states who are situated above the shale formations.  In those states that have chosen to pursue energy development, output and jobs have grown faster than in most other states while their unemployment rates are well below the U.S. average of 6.1 percent.  For example, Texas, which has aggressively developed its shale fields, has witnessed a 100 percent increase in oil production since 2010 and currently records an unemployment rate of 5.1 percent.  By contrast, New York State, whose southern tier sits atop one of the “sweet spots” of the Marcellus Shale, has imposed a ban on hydraulic fracturing with the result that oil and gas production has plummeted in recent years while the state’s unemployment rate is currently at 6.7 percent, with some upstate counties as high as 7.5 percent.

  1. Texas v. California: Two large energy states pursuing different paths

Last year, Texas led the nation in job creation for the fourth straight year, adding 323,000 workers to payrolls.  Through June of this year, another 225,000 jobs have been created and the state currently boasts the lowest unemployment rate (5.1%) of any large state.  More incredibly, Texas has accounted for almost 35 percent of the nation’s job growth since 2000.

Without question, the tremendous growth in oil and gas production resulting from the “shale revolution” has accounted for much of Texas’ superior economic performance. The state now accounts for more than 25 percent of America’s oil and gas and would rank as the 14th-largest producer in the world if we were a separate nation.

Texas’ economic fortunes can also be attributed to a positive business climate and sensible, cost-effective regulation of energy and other sectors of the state’s economy.  Contrary to assertions by some environmental activists, Texas is not a toxic wasteland.  We care greatly about the quality of our air, water and land.  But we make sure our regulatory environment is predictable and effective so that the costs of compliance aren’t burdensome to the point of discouraging new investment.

California’s economy has recovered somewhat from the Great Recession, though total payroll employment growth since 2008 has been a mere 322,100—about the same as Texas’ gains last year.  Had the state been more supportive of energy development, especially in the huge Monterey Shale, California would likely have posted much faster job gains and its unemployment rate wouldn’t be 7.4 percent, the highest among the 10 largest states with the exception of Michigan.

According to some estimates, the Monterey Shale, which runs from Los Angeles to San Francisco, contains approximately two-thirds of America’s total shale oil reserves, or 15 billion barrels.  Unfortunately, hydraulic fracturing has been roundly opposed by the state’s influential environmental community as well as many state and local government officials.  Consequently, oil production has been falling rapidly in California for more than a decade while output in Texas has skyrocketed.

If California were to adopt more accommodating energy policies and regulations, the state could realize huge economic benefits.  According to a recent study conducted by the University of Southern California and the Communications Institute, a Los Angeles think tank, development of the Monterey Shale would generate 500,000 direct and indirect jobs within three years and 2.8 million direct and indirect jobs within a decade.

  1.  David v. Goliath: North Dakota slays New York

Two years ago, North Dakota passed Alaska to become America’s number two oil producing state.  In just a few years, production has jumped from 10,000 barrels per day to more than one million barrels per day.

North Dakota is unique in that very few states sit atop formations like the Bakken Shale.  But in addition to its resource base, the state’s business-friendly policies have helped grow its energy sector.  Unlike New York, which prohibits the use of hydraulic fracturing, North Dakota offers an accommodating and supportive business and regulatory climate that encourages new investment in oil and gas production.  Since 2008, North Dakota has created jobs at a faster clip than any other state and currently records the nation’s lowest unemployment rate, 2.9 percent.

Could New York replicate the experience of North Dakota?  As mentioned earlier, the southern tier of New York is one of the “sweet spots” of the Marcellus Shale, the largest gas field in the continental United States.  But because of the fracking ban, thousands of potential jobs and millions of new tax revenues are being forfeited.  For example, the New York State Department of Environmental Conservation estimates that at least 25,000 new jobs would be created quickly if the state lifted the ban, and that figure doesn’t include the indirect and induced employment that would follow.  Another study, prepare d by Michael Orlando of the University of Colorado, estimates that drilling and producing activities could support 39,000 new jobs in New York State within three years and 69,000 jobs within ten years.  And the Manhattan Institute recently projected that with shale development, total employment in upstate New York by 2020 would be 54,000 higher than without shale development.

  1. Economic performance of other energy states

Other states that have encouraged their energy sectors have outperformed the U.S. averages for job creation and economic growth in recent years.  But it’s important to note that the economic benefits from energy development are benefiting the entire nation, not just those states producing oil and gas.  The shale boom has helped to revive America’s industrial base, boost our exports, and reduce our reliance on imported oil while creating hundreds of thousands of high-wage jobs.  At the same time, cheap and abundant natural gas is reducing electricity and heating costs for millions of American households and businesses.

Categories: On the Blog

Climate Alarmists Never Quit!

August 02, 2014, 8:10 AM

In the same way Americans are discovering that the Cold War that was waged from the end of World War Two until the collapse of the Soviet Union in 1991 is not over, Americans continue to be subjected to the endless, massive, global campaign to foist the hoax of global warming–now called climate change—on everyone.

The campaign’s purpose to convince everyone that it is humans, not the sun, oceans, and other natural phenomenon, and that requires abandoning fossil fuels in favor of “renewable” wind and solar energy.

“It is not surprising that climate alarmists, who desire above all else blind allegiance to their cause, would demand all school teachers toe the ‘official party line’ and quash any dissent on the subject of man-made global warming in their classroom,” says Craig Rucker, the Executive Director of co-founder of the Committee for a Constructive Tomorrow (CFACT). “What is absurd is that any teacher or free-thinking person for that matter would listen to them.”

These days when I am challenged regarding my views about global warming, climate change or energy I send the individual towww.climatedepot.com  and www.energydepot.us, two constantly updated websites filled with links to information on these topics. Both are maintained by CFACT.

It’s not just our classrooms where Green indoctrination goes on. It is also our news media that continue to distort every weather event to advance the hoax. Guiding and feeding them is a massive complex of organizations led by the United Nations—the International Panel on Climate Change—that maintains the hoax to frighten people worldwide in order to achieve “one world order.”

On September 23, heads of state, including President Obama, will gather in New York City for what the Sierra Club calls “a historic summit on climate change. With our future on the line, we will take a weekend and use it to bend the course of history” to save the world from “the ravages of climate change.” This is absurd. Suggesting that humans can alter the climate in any way defies centuries of proof they do not.

One of the leading Leftist organizations, the Center for American Progress, focused on the July 14 Major Economics Forum in Paris, offered four items for its agenda. Claiming that “the Arctic is warming two times faster than any other region on earth”, they wanted policy changes based on this falsehood. They blamed climate change for “global poverty” and wanted further reductions in so-called greenhouse gas emissions from energy use. The enemy, as far as they were concerned was energy use.

Mary Hutzler, a senior research fellow of the Institute for Energy Research, testified before a July 22nd meeting of the Senate Foreign Affairs Subcommittee on International Development and Foreign Assistance, that due to Europe’s green energy (wind and solar) policies, industrial electricity prices are two-to-five times higher than in the U.S. and that, by 2020, 1.4 million European households will be added to those experiencing energy poverty.

There are lessons to be learned, for example, from Spain’s investment in wind energy that caused the loss of four jobs for the electricity it produced and 13 jobs for every megawatt of solar energy. In Germany, the cost of electricity is three times higher than average U.S. residential prices. Little wonder that European nations are now slashing wind and solar programs.

Billions Wasted to Combat Global Warming

In the U.S., the Obama administration used its “stimulus” to fund Solyndra—$500 million dollars—and fifty other Green energy projects that have failed or are on their way to failure. Undeterred with this appalling record, on July 3 the Energy Department announced $4 billion for “projects that fight global warming.”

But there is no global warming. The Earth has been in a cooling cycle for seventeen years and it shows no indication of ending anytime soon. This is the same administration that has waged a war on coal, forcing the closure of many plants that produced electricity efficiently and affordably, and had throughout the last century.

The National Oceanic and Atmospheric Administration’s 2014 weather highlights showed that, from January to June, the temperature in the U.S. has risen by a miniscule 0.1 degrees Fahrenheit compared with the average temperature for the 20th century. NOAA also noted that recorded temperatures for the first half of 2014 are the coldest since 1993 when the cooling cycle began. The exception to this has been California.

Brainwashed for decades about global warming, 20% of likely voters, according to a July Rasmussen poll, still believe that global warming is not over, colder weather or not, 17% were not sure, but fully 63% disagreed!

The results of a Pew Research Center poll in June revealed that 35% of Americans say there is not enough solid evidence to suggest mankind is warming the Earth while another 18% says the world has warmed due to “natural patterns”, not human activity. Pew found that liberals remain convinced that humans are to blame, but the bottom line is that 53% disputed the President’s claims.

That means that a growing number of Americans are now skeptics.

In the months to come we will see marches and meetings intended to further the global warming lies. The good news is that fewer Americans are being influenced by such efforts.

 

[Originally published at Warning Signs]

Categories: On the Blog

A Case for a Politically Oblivious Citizen

August 01, 2014, 11:16 AM

Recently while discussing the political knowledge, or lack thereof, of the average U.S. citizen, a thought occurred to me. Ideally, this is how it should be. Government in America was designed to be small, very limited and irrelevant to the day-to-day life of the average American.

Government work is supposed to be boring. With the Constitution severely limiting the responsibilities of the government, the role of the public sector was intended to be constricted and narrow. When the branches of the federal government were being formed, our founders envisioned citizen statesman that would serve in government for a short amount of time before returning to their farms or trades. What was not expected was the rise of the career politician. Government work has since become an industry.

The growth in all facets of the government has created a leviathan out of the public sector. Politicians seek constant reelection, move from office to office and stay in politics as lobbyists. These politicians become policy experts which is now required do to the complex matters now under the umbrella of government responsibility.

The issues debated in government today are so convoluted and intricate; the layman cannot possibly stay properly informed. For example, The Patient Protection and Affordable Care Act was nearly 1,000 pages long. This bill was also filled with jargon, specific terminology and references to other statutes. How could the average person develop an opinion on this legislation without relying on third or fourth party sources? No wonder Rep. Nancy Pelosi (D-CA) said, “we have to pass the bill so that you can find out what is in it.” The length of the ACA bill was not unique. Plenty of bills reach the 1,000 page mark. Many other bills including yearly budgets, the stimulus bill and others extend well beyond 1,000 pages.

For the person who follows politics closely, reads the legislation and stays informed on all the important topics, only one thing can be going through his/her head, ‘Why am I not getting paid for this?’ It is simply impossibly for the average person to stay up to date and comprehend all of the issues and proposed legislation up for debate.

In the ideal scenario, government would be small and not of concern for the average person. The state would have little impact on the constituents’ everyday life. This would free up the citizen’s time to focus on their trade or whatever they deem necessary or important. There would be no reason why someone should not develop a niche expertise in whatever they find interesting while staying only moderately informed on the actions of the government. As of now however, we are far from this ideal. We have to stay informed on these issues that affect the entire nation and strive to reduce the size of the government to something more manageable.

Categories: On the Blog

Industry Doesn’t Undermine Tourism

August 01, 2014, 8:43 AM

In rural areas, there is often a heated debate over economic development that essentially boils down to a choice between industrial jobs and tourism jobs. Both come with advantages and disadvantages, but to pit these two sectors against each other in an either-or discussion is a false dichotomy. My hometown provides a good example of how industry and tourism can coexist.

I grew up on a dairy farm in Waupaca, Wisconsin. For those industry buffs out there, Waupaca is home to the Waupaca Foundry, the largest producer of gray, ductile, austempered ductile, and compacted granite iron in the world, melting more than 9,500 tons a day. For those of you planning your next vacation, Waupaca has the Chain O’Lakes, a beautiful series of interconnected lakes that is one of the state’s top tourism destinations.

The debate over industry versus tourism is heated in Waupaca, an economic profile of which can be described as the three Fs: farming, foundry, and FIBs (an unflattering term for tourists from Illinois). It’s a debate common to small towns, with the alternatives seen as being a focus on increasing tourism or promoting development of industrial, blue-collar jobs. The truth is, our town needs both.

I lived a stone’s throw from the Waupaca Foundry (don’t ask me how I know that), which employs more people than any other employer in Waupaca County. Some days the air smelled bad, so bad I didn’t want to be outside, especially when there was a wagon full of hay that needed to be put up in the barn. Fewer people had more exposure to the unappealing externalities of the foundry than my family and I.

Although things did not always smell like roses at my house, Waupaca is a small town surrounded by smaller towns, and the wages paid by Waupaca Foundry are a big reason we have a little movie theater, two grocery stores, and three car dealerships, which the surrounding towns don’t have. The foundry also helped some of my friends pay for college.

Starting wages at the foundry are around $12 an hour, but with piece work and incentives, people can start at $15 to $18 an hour. Jobs paying more than $37,000 a year are hard to come by in our part of the state, but that is what workers at the foundry make with only a high school diploma.

On the other side of town we have the Chain O’Lakes. Many of my friends worked there, too. These first jobs provided valuable real-world experience, and my friends who served as hostesses, servers, dish washers, and cooks at local restaurants learned interpersonal skills, the art of conversation with strangers, how to be amazing short-order cooks, and other useful skills.

Tourism provides a boost for the small businesses on Main Street that see their margins dwindle in the winter as their main customers stay home for the cold months. But tourism jobs are usually minimum-wage jobs, and they leave with the tourists after Labor Day.

Thus both these sources of income are important to the local economy, and they can coexist peacefully. In too many cases, environmental activists who advocate for a tourism-based economy frame this discussion as an economic Sophie’s Choice, when they should instead look for environmentally responsible ways to promote both manufacturing and tourism.

Unfortunately, the false dichotomy that pits industry against tourism is not confined to the little town where I grew up; it rages in areas all over the country. This debate is especially destructive now, as more than 800,000 people dropped out of the labor force in April alone, partly because so many of them became frustrated and stopped looking for work entirely. Voters and lawmakers in small towns should be looking for all ways to create more good-paying, family-supporting jobs—as should those in bigger cities. If anyone asks you whether you are for industry or tourism, remember: The correct response is “both.”

Isaac Orr (iorr@heartland.org) is a research fellow for energy and environmental policy at The Heartland Institute.

Categories: On the Blog

Che Guevara Shirts: Proof of the Triumph of Capitalism

August 01, 2014, 8:00 AM

Want to know why capitalism will always triumph over collectivism? It responds to people’s desires, even those who would consider themselves enemies of capitalism.  A case-in-point is the ubiquitous Che Guevara t-shirt.

Anyone who has spent any time walking down a city street will have come across at least one young person wearing Che’s famous likeness. Some leftists have argued that the sheer pervasiveness and popularity of the image is proof of the enduring principles of which Che has sometimes been seen as a symbol. Yet that is not the case.

The Che Guevara t-shirts actually represent the ultimate power of capitalism, the power to transform the most potent symbols in opposition to it into commodities that can be bought and sold in the marketplace. The market does not care about what the symbol “represents.” All that matters is that the symbol can be bought and sold. That is the ultimate neutering of socialism and radical leftism, when the young people who Che might in another time have tried to galvanize to violent rebellion tacitly accept the capitalist system. When Che and his ilk became fashion symbols rather than political symbols, they were finally defeated. That is the real beauty of the free market: its ability to transform an enemy into harmless kitsch.

Supporters of liberty and the free market might understandably be irritated by the nation’s youth running around with the image of a monomaniacal war criminal blazoned on their chests, but they should bite back their bile. Indeed, they should rejoice. As Che has become a popular image, the image has lost all the symbolic power it once might have claimed.

A couple of generations ago, radical socialism was a common part of the zeitgeist of the American youth, with college campuses forming the primary advocates and apologists for the totalitarian regimes of Cuba and the Soviet Union. Today, a lot of leftishness is still there, but it has been beaten down to a softer kind of socialism or social-democratic philosophy. People on the political right often rail against the liberal bastions of academia, and they are not completely wrong to do so. To be sure, the political products of the academic world, such President Obama and Senator Elizabeth Warren, serve as cautionary tales to voters thinking about giving real power to cloistered professors. But they are nowhere near as threatening as the sorts of firebrand spokespeople produced by the hallowed halls of academia only a few decades ago.

Socialism in America, and around the world, has had to respond and adapt to the overwhelming power of the free market. In the marketplace of ideas, socialism is outdated and doomed to go out of business. In response, socialist thinking has shifted, softened, and come to accept at least parts of the capitalist system as essential to maintenance of prosperity. We should call that a tentative victory for liberty, if not a total one.

The youth of today are not as susceptible to the radicalization of the 1960s and 1970s because capitalism is the only serious game in town. The aspects of it that still adhere are just empty or deflated symbols, like t-shirts featuring half-forgotten political dissidents. Young people represent a fertile marketplace for sellers of the ideas of liberty, perhaps more so than any time in the past 40 years. Before the forces of socialism mutate into yet another dangerous ideological strain, proponents of freedom and liberty ought to claim the territory.

Categories: On the Blog

Shivering in the Dark

August 01, 2014, 7:00 AM

Yesterday, the temperature here at Rosevale in Queensland rose 25 ℃ in just 8 hours – from zero at 6 am to 25 ℃ at 2 pm. It rose at the rate of 3 ℃ per hour, and every degree of warmth felt better.

And then, despite there being 400 ppm of the dreaded “global warming gas” in the atmosphere, the temperature plunged 25 ℃ to zero by the next dawn.

Yet learned people are being paid by governments to scare us into suicidal energy policies they say will save us the horror of possible man-made global warming of maybe 1-2 ℃ per century.

Do these people ever go outside? Do they ever feel the powerful life-giving warmth of the sun? Do they notice that all life celebrates spring? Have they read some climate history – of the abundance during warm eras and the bleak starvation of the ice ages? Do they know there has been no global warming for 17 years? Are they aware that the sun has gone ominously quiet and we may face global cooling, just at the time their disastrous energy policies leave us shivering in the dark?

It’s time for some common sense on energy and climate.

[Originally published in the American Thinker]

Categories: On the Blog