Heartland Institute Policy Advisor Merrill Matthews, who is resident scholar with the Institute for Policy Innovation, posted a PolicyByte the other day titled “Mandate Revolt: Health Insurers Offering Coverage for Those Who Refuse Obamacare.”
Some health insurers are offering health plans that do not meet Obamacare standards, apparently because they believe there is an opportunity to provide at least some coverage to millions of Americans who refuse to buy an Obamacare plan.
Some pundits and the media have stated or implied that it is illegal for health insurers to sell coverage that does not meet the Affordable Care Act’s “essential benefits” (i.e., things it must cover).
It’s not illegal; insurers are free to sell non-qualified coverage, subject to state insurance department approval.
However, a person buying non-qualified coverage would still have to pay the penalty (or tax) for not having the kind of coverage President Obama approves of—what he likes to call “substandard coverage,” but which many others call affordable.
Assurant is one of the largest insurers for the individual (i.e., non-group) market. It has long offered limited policies, and still does, even with Obamacare’s mandate to have qualified coverage breathing down its neck. It’s Health Access fixed-indemnity product—which means it pays a fixed amount of money rather than a percentage of the medical bill—costs $94, $159 or $249 a month for a 50-year-old male, depending on the coverage options a person chooses.
But Assurant isn’t the only one. I am told that United Healthcare has developed a limited-benefit plan and is now working to get it approved in several states. As is Texas-based American National.
A Heartland friend who got word of this emailed to say he is not all that encouraged by this development. Assurant is a small player that only offers insurance to individuals, and Big Insurance is fully captured by the Obama administration and won’t get out of line lest it risk retaliation. Assurant may get away with this for a while, my correspondent wrote, “but they are just one ‘interum final regulation’ from extinction.”
Aren’t we all “just one interim final regulation” from extinction in the Age of Obama, where the law is what he says it is at any given day? John Podesta, Clinton’s newest White House “fixer,” will certainly be encouraging even more “law” by decree.
I’m sure my correspondent is right that too much of the health insurance industry is captured and won’t dare defy its new master. But when governments get this deep into the business of dictating arbirtary “new economic realities,” genuine free-market activity has a way of emerging to meet the needs and desires of the people. Maybe if more Assurants pop up, the “captured” health insurers will gain the courage to wriggle free.
Consierge medicine, and full-on black-market health services, will be all the buzz in 2014 and beyond. We should all applaud this emerging “gray market” — a quasi-legal way to opt-out of this mess. (And at least Assurant is complying with the law, which is more than can be said for Obama and Sebelius.)
I’d certainly pay the fine plus the premiums of a health plan that met my needs if it was cheaper, and it undoubtedly would be. Hell, I’d find a doctor who would take chickens and rhubarb pie as payment before I’ll submit to the Obamacare Disaster.
John Beale was once the top climate expert at the Environmental Protection Agency, and the EPA’s highest-paid employee. Now he’s going to jail, sentenced today to 32 months in prison for bilking taxpayers out of over $1 million in salary by not showing up for work because he claimed to be doing undercover work for the CIA.
A story in the Financial Times by Brianna Ehley gives more details about John Beale’s work at the EPA. He worked in the Office of Radiation and Safety — the group that is proposing rules declaring carbon dioxide from burning fossil fuels is a dangerous air pollutant. Present Administer of the EPA Gina McCarthy was John Beale’s supervisor as head of the Office of Radiation and Safety until his retirement April 2013.
Keep this background information about Beale in mind to help judge the credibility of EPA’s absurd rules stating life-supporting carbon dioxide (called carbon pollution) is a dangerous air pollutant.
The full implementation of the incandescent light bulb ban takes effect in two weeks, which in the U.S. government’s anti-liberty wisdom will effectively eliminate the competition to companies like Cree, Inc., who one industry analyst has said is trying to do a “land grab” of the alternative lighting market.
Besides the illegalization of the Thomas Edison’s filamentous light, Cree last week received a $30 million tax credit from the Department of Energy to expand its manufacturing in Racine, Wisc. and Durham, N.C., where it is also headquartered. That was the second installment for Cree from the Advanced Energy Manufacturing Tax Credit Program, which was funded by $2.3 billion from the Recovery Act. The first windfall for Cree from the stimulus was a $39-million tax credit, as well as $1.8 million for research and development. This is in addition to millions of dollars in federal grants and contracts, plus deals for much more with state and local governments to essentially smash perfectly good incandescents to replace them with Cree’s light-emitting diodes (LEDs).
“With this project,” an announcement of the latest DOE giveaway explained, “Cree is taking the next step toward its goal of making traditional lighting products obsolete through the use of advanced LED technology with significant estimated annual energy savings.”
It always helps when your government mandates your competitor’s destruction while at the same time pours other peoples’ money into your company’s development – presumably a recipe for victory. Unfortunately those darn consumers keep getting in the way, and some retailers are trying to find a way to accommodate them as long as possible. According to FoxNews.com, Home Depot is urging customers to buy up the last of the incandescent bulbs before they are criminalized.
“Get them while you still can,” the nation’s largest bulb retailer urges on its Web site. “Stock up on incandescent light bulbs before they are completely discontinued.”
FoxNews.com reported that Home Depot has stockpiled enough of the old-fashioned version to last six months into 2014, at which time they expect to be out of 40-watt and 60-watt bulbs. Seventy-five watt and 100-watt bulbs are already outlawed. Then the only legal choices that will likely be widely available are compact fluorescents (a mercury-filled toxic hazard when broken) and the LEDs made by Cree and a few others.
The fact that retailers have built up a huge inventory of the incandescent bulbs shows there has been no diminished demand for them. Yet Congress and President Bush in 2007 passed the law that treated incandescents as though they were the endangerment to public health.
The choice left for consumers will be far less disposable income because of what they are forced to spend on light bulbs. Last month NLPC found a six-pack of General Electric, “Double Life” 40-watt soft whites online at Home Depot for $3.97. That works out to 66 cents per bulb. Cree’s LED competitor to that bulb, while it consumes only six watts of energy, costs $9.97 at Home Depot – per bulb. That means 15 of the GE soft white incandescent bulbs could be bought for the same price as the single Cree LED. Or put another way, Cree wants you to believe its LED will last longer than if you replaced a bulb in the same fixture 15 times, and/or that the energy savings will make up the difference.
Maybe it will, or maybe it won’t, but shouldn’t it be the customers’ choice to decide whether they want the cheaper bulb that uses more electricity and delivers a light quality that many people prefer?
As Americans’ preferred lighting delivery method vanishes, Cree looks to fill the void. With the multi-millions of DOE dollars to get a leg up and the ban to make the competition “obsolete,” the company is trying to capitalize.
“Remember, Cree is still in expansion mode where they’re trying to do a land-grab, effectively, of the LED and alternative lighting space,” said Peter Wahlstrom, a senior analyst with the investment research firm Morningstar, to the Durham Herald-Sun. “I would just reiterate that it’s still an under-penetrated market, particularly on the residential side.”
Two years ago a Rasmussen poll found that 67 percent of respondents disapproved of the incandescent ban. Seventy-two percent said light-bulb choices are none of the government’s business. And whether new bulb technologies would have a positive or negative impact on the environment – which is the justification for the incandescent ban in the first place – was split down the middle in the poll.
In order to get customers to adopt the different lighting technology, Cree and its LED competitors like Philips are seeking the help (again) of – you guessed it – even more government-funded or -mandated programs to subsidize the costs of the higher-priced bulbs they sell.
“They’re all trying to take advantage of rebates and Energy Star qualifications, and things like that,” Wahlstrom said.
The stimulus grants ($69 million plus), of course, are also intended to help the “land grab.” While DOE publicized the current $30 million award last week, so also did Cree earlier this month announced a new 75-watt incandescent equivalent LED bulb. The only way that product becomes remotely appealing to consumers is if it receives millions of dollars more in government subsidies, because right now it retails for $23.97 per unit. The $30 million is intended to help cover the costs of new manufacturing machinery at Cree’s two plants, so maybe that will bring the 75-watt bulb price down a few cents.
“Our initial reaction was sticker shock given that the 75 watt equivalent is 85 percent more expensive than the 60 watt equivalent, yet produces only 38 percent more light,” said analyst Andrew Huang of Birmingham, Ala.-based investment firm Sterne Agee, to the Triangle Business Journal.
In other words, no one is going to buy it – no one, that is, except for the same people who can afford to buy taxpayer-subsidized $100,000 electric cars. Even Cree has admitted in its filings with the Securities and Exchange Commission that its business model depends on government mandates and subsidies.
“If governments, their agencies or utilities reduce their demand for our products or discontinue or curtail their funding,” Cree reported, “our business may suffer.
“Changes in governmental budget priorities could adversely affect our business and results of operations. U.S. and foreign government agencies have purchased products directly from us, and products from our customers, and U.S. government agencies have historically funded a portion of our research and development activities. . . . If government or utility funding is discontinued or significantly reduced, our business and results of operations could be adversely affected.”
Thus the “sustainability” that the alternative energy industry, environmental groups and the Obama administration emphasize so often has nothing to do with support from the free market, and everything to do with endless government subsidies.
“We do whatever it takes to try to drive adoption and right now,” said Mike Watson, Cree’s vice president of corporate marketing, to theTriangle Business Journal.
Yes, that 137 percent increase in Cree’s lobbying expenditures as the stimulus bill was pieced together in 2009 is still paying off – “whatever it takes.”
[First published at the National Legal and Policy Center.]
The deal amounts to saving two days of federal spending over the next decade. A sliver of a sliver of savings. And that’s assuming future Congresses follow through on today’s promises, something that almost never happens because no Congress can force a future Congress to do anything.
Federal spending totaled $3.5 trillion in fiscal 2013 and would go to $3.6 trillion in 2014 (President Obama wants nearly $3.8 trillion of spending), up more than 40 percent since 2002 even after adjusting for inflation. Just for fun, I’m going to pick up the link for this statistic from the Heritage Foundation, one of the big targets of Republican establishment wrath.
There are 365 days in a year. With spending of approximately $3.6 trillion, the government spends approximately $10 billion a day. The Ryan-Murray deal says to let discretionary spending rise $63 billion over the next couple of years. Over the next 10 years they’d cut it to generate a net savings of $22.5 billion. That totals approximately two days of federal spending.
Ten years times 365 days in a year equals 3,650 days. Divide by two days and we arrive at 1,825. So Ryan-Murray would save 1/1,825th of federal spending over a decade at current rates of spending.
The deal overwhelmingly passed the House of Representatives a few days ago and could soon be okayed in the Senate. House Speaker John Boehner and other Republican Party establishment leaders are lashing out at conservatives and Tea Party types who oppose the deal. (“They are not fighting for conservative policy. They are fighting to expand their lists, raise more money and grow their organizations, and they are using you to do it. It’s ridiculous,” Boehner told The New York Times, which, as we all know, has long been a conservative and Tea Party tool.)
For most of the years since 2002, when federal spending went on its 40 percent inflation-adjusted increase, a self-described compassionate conservative Republican named George W. Bush occupied the White House, and in some of those Bush years Republicans controlled both the House and the Senate. Spending under this compassionately “conservative” regime climbed much faster than it has under the “progressive” regime of Democrat Barack H. Obama. In fact, spending under Bush climbed more than under any president since Lyndon Baines Johnson, who bequeathed the nation a huge escalation in the Vietnam War (we lost), Medicare (it’s insolvent), and the War on Poverty (we’re losing).
Paul Ryan, the supposed “fiscal hawk” Republican budget negotiator, voted for the $700 billion Troubled Asset Relief Program that Bush foisted on the nation shortly before he left office – a program that polls showed Americans overwhelmingly opposed. Ryan supported Bush’s huge Medicare expansion for prescription drugs – the largest entitlement increase since Medicare was created in the 1960s, and the first to be done without one penny of revenue designated to pay for it. He supported Bush’s failed economic stimulus spending. Ryan supported virtually all the Bush-era spending increases.
Cutting 1/1,825th of federal spending over a decade doesn’t sound like much of a cut. Combine this paltry promise with the recent history of federal spending under a Republican president who, for a time, also enjoyed Republicans in charge of the House and the Senate and who enjoyed Republicans in charge of the House for most of his term. Now Republican leaders are telling us a promise to cut two days of federal spending over a decade — a promise future lawmakers do not have to follow — is a breakthrough.
Some people actually believe in limiting the size and power of government. Republican leaders say they believe in it. When is the last time they acted like it? The Republican base is angry that Republican establishment leaders don’t act like it. The leaders are angry that the Republican base wants them to act like it.
Who’s more honorable? Those who expect people to act on their professed beliefs? Or those who profess beliefs but do not act on them?
Although not happening in all school districts throughout Illinois at the same time or to the same degree, several similar practices have being reported in school districts across the nation. Some might already be the norm, or might soon be the norm, in your Illinois school district where teachers are in the initial stages of employing Common Core standards to guide what skills students learn, not only when, but how.Many great literary works won’t be read or taught at all. The move is away from classics and toward informational texts such as government documents. When reading a classic speech such as Lincoln’s Gettysburg Address, students will be told to mediate on how they feel about the text and then asked to relate it to social justice. Ignored will be the virtues of honor, moral truths, right and wrong, etc., so prevalent in classic literature as revealed in their contents. In other words, students will be encouraged to think like a socialist with texts that foster extreme leftist ideology.
- Changing emphasis on historical events. Why Pearl Harbor should be remembered seems obvious to most of us. Consider the opening page of the slim chapter in one approved Common Core textbook devoted to World War II called “War Shock”, which features a photograph of a woman inspecting a large stockpile of thousand-pound bomb castings. As stated: The entire section is littered with questions and plenty of photos that show the destruction of Hiroshima. Just in case students would be inclined to take the American side in this conflict, the editors see to it that teachers will remind the students repeatedly that there are two sides in every war.
- A new interest in religion — just everything else but Christianity or Judaism. In California, a Common Core book used in middle school (“History Alive”) has an entire 65-page chapter devoted to the History of Islam which glorifies Islam and Muhammad where before there was only one page devoted to Islam, while the text about the history of Christianity and the church has been decreased.
- Math concepts taught at different age levels. In Math, multiplication is being moved from second grade to third and algebra is being pushed into the high school. Calculus is no longer a requirement, even though calculus is required at the college level. http://pioneerinstitute.org/news/lowering-the-bar-how-common-core-math-fails-to-prepare-students-for-stern-
- Student and family privacy tossed out. In the privacy realm: It has been revealed that non-academic, personal information is beingcollected through the Common Core testing consortia about students and their parents, including family income, parents’ political affiliation, their religion, and students’ disciplinary records — all without parental consent.
- Exhorbitant costs to school budgets. Regarding cost to Illinois: Official estimates indicate that for every $1 in federal funding states will receive from adopting Common Core, they’ll have to spend $4 to implement it. It’s much higher here in Illinois. Implementation of Common Core will cost $799 million, with federal awards totaling $66 million. This means Illinois will lose $733 million. As a federal incentive to sign on to Common Core in 2010, Illinois is the big loser financially, as are young people education-wise.
- Cost passed on to taxpayers. The cost to school districts is projected to reach $166 million nationwide over the next five years. This year state lawmakers experienced a sticker shock when PARC and SBAC rolled out its new tests which were twice as expensive on the average -as were previous tests — $22 to $27 per test. With 67% of the Illinois’ local districts operating at a deficit, one study shows Common Core implementation could cost local school districts $773 million over the next seven years.
Do your own homework on Common Core in your school district(s). Don’t allow advocates to peg you as crazy. Show up at local school board meetings and let your opinions be heard, also at PTA meetings. It is imperative that you take the time to find out how far along your school system is in adopting Common Core standards.
FOIAs are a good way to request information if a school district prefers to be secretive by being vague or in giving you the run around. Also, most districts have a curriculum director for direct interaction about Common Core. And by all means if you have children attending public schools (and even private schools) keep tabs on what and how they are being taught. Text books must be examined for bias and propaganda.
No where in our Constitution is education spelled out as to its structure and scope, for the Founders wanted nearly all aspects of our lives to be governed by those who were closest to us at the local or state level. Education does relates to the 10th Amendment as state’s rights issue. We cannot allow government to grab children early on, entering them first into a government program called Kindergarten, then continuing the molding until about age 20 when they are called to serve the State.
Opposition is growing against Common Core from the left, the right, and the middle in many states over concern about Common Core and its implementation, especially over the high-stakes standardized tests aligned to the Common Core State Standards.There is Common Core unrest in 17 states, Illinois is not among them, as noted in this post by Mercedes Schneider, a public school teacher, education activist, PhD.
Even two Democrat-led states, New York and Massachusetts — Blue States like Illinois — are showing signs of distancing themselves from the curriculum that the Obama administration is supporting in a big way. Will Illinois be next to turn on Common Core? It is past time to take action that is really for the sake of our children, unlike school districts who use the phrase “for the children” when appealing to taxpayers for additional funding.
Russian communist Vladimir Lenin knew the power of controlling the future by taking control of the school. He once said: ”Give me four years to teach the children and the seed I have sown will never by uprooted.”
The EU’s apparent preference for settling, rather than prosecuting Google for antitrust violations, turns a blind eye to Google’s proliferating abuse of its dominance.
Last week Canada’s Competition Bureau announced its investigation has found three new ways that Google maybe abusing its dominance. Those three are above and beyond the four abuses of dominance that the EU already has found. In turn, those four were more abuses of dominance than the U.S. Federal Trade Commission found in its earlier investigation.
Canadian authorities allege Google is abusing its dominance by raising advertiser prices via forcing participation in Enhanced Campaigns, by foreclosing competition via exclusive Android deals, and by abusing YouTube’s dominance to foreclose other mobile platforms.
Google’s dominance is also not going away; it is proliferating at an accelerating rate. Google reached a billion users via searches in 13 years, Google Maps in 9 years, YouTube in 8 years, and Android in 5 years. Google+ will likely reach a billion users in an estimated 4 years.
Google’s rapidly spreading dominance and allegations of dominance abuse make it by far the largest, broadest, fastest-spreading, and potentially most harmful dominant firm in EU history. Never before has one company had more power to dictate what people find online, the value of Internet content, and which online businesses prosper or fail.
Google’s EU privacy and data protection abuses are also growing.
Concerning abuses of other EU laws, EU nations have found Google to be among the most aggressive companies in the world at evading EU taxes. And Google has earned more copyright and patent property infringement charges than any company in the world.
Simply put, there is no other company that the EU has more law enforcement problems with than Google.
In that well-known context, it is astounding that the EU is even entertaining a Google-proposed absolution settlement that would require the EU to “confirm there are no grounds for further action.”
If approved, the settlement would make many extraordinary unwarranted concessions to Google.
The EU would allow Google to continue illegally diverting traffic and preferring Google content.
The EU would absolve Google of any wrongdoing for abusing its dominance in four ways.
The EU would not conclude Google’s greater-than 90 percent share is dominance even though the EU’s standard dominance threshold for other companies is 39.7 percent.
The EU would exempt Google from any fine and the standard EU legal obligations of dominant firms, i.e., “A special responsibility not to allow its conduct to impair competition on the common market.”
The EU would even permit Google to continue to extend its dominance into other markets without limit.
In sum, the EU’s continued interest in settling with Google generates many more questions than it answers.
Why would the EU lean towards the most lenient process and treatment for the most dominant, and potentially the most abusive dominant, company the EU has ever investigated?
Why would the EU consider minimizing and not maximizing its law enforcement authority and deterrence when it knows the Google dominance abuse problem is not going away, but actually is spreading and getting much worse?
How would Google have much incentive to fully comply with the proposed settlement if the EU agrees to shut down its current investigations before, and not after, Google has fully complied with the proposed settlement?
How would a settlement deter future Google abuses of dominance when the proposed settlement does not conclude Google’s 90 percent share is dominant; include an admission of, or responsibility for, wrongdoing, or preclude future illegal abuses?
What part of Google’s first two settlement proposals’ delays, deceit, and deficiencies, inspire EU confidence that Google would promptly and fully comply with its proposed settlement?
In short, why isn’t the European Commission prosecuting Google?
[First published at the Daily Caller.]
Increasingly, EPA regulations are being challenged and now reach the Supreme Court for a final judgment. This marks the failure of Congress to exercise any real oversight and control of an agency that everyone agrees is now totally out of control.
Recently the EPA ruled that New York City had to replace 1,300 fire hydrants because of their lead content. The ruling was based on the Drinking Water Act passed by Congress in 2011. As Senator Charles Schumer (D-NY) pointed out while lambasting the agency, “I don’t know a single New Yorker who goes out to their fire hydrants every morning, turns it on, and brushes their teeth using the water from these hydrants. It makes no sense whatsoever.” Reportedly, the Senate is poised to consider legislation exempting fire hydrants if the EPA does not revise its ruling.
The EPA is not about making sense. It is about over-interpreting laws passed by Congress in ways that now continually lead to cases before the Supreme Court. The Court is composed of lawyers, not scientists. In an earlier case, they ruled that carbon dioxide (CO2) is a “pollutant” when it is the one gas that all vegetation requires. Without it, nothing grows and all life on Earth dies.
A federal appeals court recently heard a case about the EPA’s interpretation of the 2012 Mercury and Air Toxics Rule, yet another effort in the “war on coal” that would shut down more coal-fired plants that provide the bulk of the electricity the nation requires.
The EPA is asserting that the rule would annually prevent 11,000 premature deaths, nearly 5,000 heart attacks, and 130,000 asthma attacks. Moreover it asserts that it would help avoid more than 540,000 missed work days, and protect babies and children. These statistics are plucked from various studies published in journals and are typical of the way the EPA operates to justify its rulings. Their accuracy is dubious.
What makes this case, brought by EarthJustice–formerly the Sierra Club Legal Defense Fund–of interest is the way the NAACP, along with 17 other organizations, came to the defense of the ruling. Are you surprised that the NAACP has a director of Environmental and Climate Justice?
Apparently civil rights for Afro-Americans now embraces the absurd claims about climate change, formerly known as global warming. “Civil rights are about equal access to protections afforded by law,” said Jacqui Patterson, the NAACP director. “These standards provide essential safeguards for communities who are now suffering from decades of toxic exposure.” If these essential safeguards are in place, on what basis does she make such a claim?
The EarthJustice attorney, Jim Pew, claims the case is about protecting “hundreds of thousands of babies each year from development disorders, and spare communities of 130,000 asthma attacks each year. If, in a lawsuit, you find yourself arguing against the lives of babies, children with asthma, and people suffering from your toxic dumping, then you are on the wrong side of both the lawsuit and history..”
Here, again, the claims about health-related harm are absurd. Who believes that asthma or development disorders are related to mercury? Who believes that communities served by coal-fired power plants are subject to major health hazards?
The claims about mercury are baseless, in a 2011 commentary published in The Wall Street Journal, Dr. Willie Soon, a geoscientist at Harvard and expert on mercury and public health issues was joined by Paul Driessen, a senior policy advisor for the Committee For a Constructive Tomorrow (CFACT), rebuts the claims about mercury that have been part of the environmental lies put forth for years:
“There is no factual basis for these assertions. To build its case against mercury, the EPA systematically ignored evidence and clinical studies that contradict its regulatory agenda, which is the punish hydrocarbon use.”
“Mercury has always existed naturally in the Earth’s environment…Mercury is found in air, water, rocks, soil and tries, which absorb it from the environment. This is why our bodies evolved with proteins and antioxidants that help protect us from this and other potential contaminants.”
Dr. Soon and Driessen do not deny that coal-burning power plants emit an estimated 41-to-48 tons of mercury per year, “but U.S. forest fires emit at least 44 tons per year; cremation of human remains discharges 26 tons, Chinese power plants eject 400 tons; and volcanoes, subsea vents, geysers, and other sources spew out 9,000-10,000 additional tons per year.”
“Since our power plants account for less than 0.5% of all the mercury in the air we breathe, eliminating every milligram of it will do nothing about the other 99.5% in our atmosphere.”
Such facts mean nothing to the EPA. The air and the water of the United States is remarkably clean, but to justify its existence and expand its power, the EPA continues to impose idiotic and unscientific rules about fire hydrants and power plants.
The threat is the EPA, not mercury.
[First published at Warning Signs.]
Fittingly, the dinner, organized by the National Center for Policy Analysis (NCPA), was held in the O’Byrne Gallery of the DAR’s Constitution Hall where President Bush signed the law on December 8, 2003.
Represented were many of the people who conceived of the idea in the 1980s, the policy staff and legislators who enacted the first Medical Savings Accounts (MSA) law in 1996, the entrepreneurs and regulators who took the concept and created Health Reimbursement Accounts in 2002, and the companies who have turned the law into the products and services that benefit tens of millions of people today.
NCPA President John Goodman, who is often referred to as “the father of HSAs,” and myself opened the commemoration with a tribute to the late J. Patrick Rooney, Chairman of Golden Rule Insurance, who did more than anyone else to popularize the idea and shepherd it through the legislative hurdles.
Brian McManus and Darryl Ritchie, who worked closely with Mr. Rooney, were on hand to discuss how hard he worked to keep the MSA proposal bipartisan, recruiting Democrat co-sponsors such as Representatives Andy Jacobs and Richard Gephardt, and Senators John Breaux and Tom Daschle.
Dr. Reyn Archer, the son of Rep. Bill Archer, former Chairman of the Ways and Means Committee, remembered how his father negotiated with Senator Ted Kennedy to include MSAs in other legislation. And former Senator Phil Gramm recalled how the bipartisan support fell apart over President Clinton’s attempt to enact sweeping health reforms.
Kyle Rolfing and Dr. Mike Parkinson, formerly of Definity Health and Lumenos respectively, spoke of taking the MSA concept a step further after the collapse of managed care in the late 1990s. They found a way to apply the idea under current tax law and sell it to large corporations. They found a receptive audience in the Bush Treasury Department, according to Bill Sweetnam, which termed the effort Health Reimbursement Arrangements.
The embrace of consumer-directed health care by larger corporations helped secure the HSA legislation in 2003, aided by regulators such as Roy Ramthun, who also read a letter of congratulations from former Secretary of the Treasury John Snow. Mr. Snow called HSAs “an example of public policy done right,” and said, “The creation and implementation of HSAs represents one of the most meaningful health policy innovations in a generation and one that I count as a great accomplishment of the Bush Administration and my tenure as Secretary of the Treasury.”
Also on hand were representatives of many of the companies who are developing and marketing the products and services that support consumers in the health care marketplace, including, Evolution1, Health Equity, ConnectYourCare, Alegeus Technologies, Acclaris, Bank of America, Golden Rule Insurance, Optum Bank, and PNC Bank.
The commemoration was topped off with a champagne toast by Dr. Goodman, honoring all those who have made the program successful and calling for restoring the patient to the center of the health care system in the future.
[First published at NCPA.]
The public eulogies marking the passing of Nelson Mandela at the age of 95 on December 5, 2013 have refocused attention on the long struggle in South Africa to bring about an end to racial discrimination and the Apartheid system.Mandela and His Marxist View of Apartheid
Forgotten or at least certainly downplayed in the international remembrance of Mandela’s nearly three decades of imprisonment and his historical role in becoming the first black president of post-Apartheid South Africa is the fact that through most of the years of his active resistance leading up to his arrest and incarceration he accepted the Marxist interpretation that racism and racial discrimination were part and parcel of the capitalist system.
Mandela was a member of a revolutionary communist cohort who were insistent and convinced that only a socialist reorganization of society could successfully do away with the cruel, humiliating, and exploitive system of racial separateness.
With the fall of communism in Eastern Europe and the Soviet Union in the late 1980s and early 1990s, the communist model of socialist transformation was too tarnished and delegitimized to serve a as a guidebook for post-Apartheid South Africa by the time that Mandela assumed office as the first black president in that country in May 1994.
Instead, Mandela’s government followed the alternative collectivist path of a highly “activist” and aggressive interventionist-welfare state, with its usual special interest politicking, group-favoritism, and its inescapable corruption and abuse of power. Its legacy is the sorry and poverty-stricken state of many of those in the black South African community in whose name the anti-Apartheid revolution was fought.The Free Market Criticisms of Apartheid
But this did not have to be the road taken by South Africa. There were other voices that also opposed the racial and Apartheid policies of the white South African government, especially in the decades after the Second World War.
These voices argued that racial policies in that country were not the result of “capitalism,” but instead were precisely the product of anti-capitalist government interventionism to benefit and protect certain whites from the potential competition of black Africans.
One of the most prominent of these voices was economist, William H. Hutt. Hutt had come to South Africa from Great Britain in 1928 and taught at the University of Cape Town until the 1970s, when he moved to the United States where he died in 1988. Born in 1899, he had attended the London School of Economics and studied under Edwin Cannan, the noted historian of economic thought and liberal free trade economist.
In the 1950s and 1960s, Hutt became most widely known in free market and classical liberal circles as an outspoken and tireless critic of Keynesian economics and an advocate of a liberal free market order.
But his notoriety in South Africa was due to his well-reasoned and biting criticisms of government economic policies to “keep blacks in their place.” Indeed, in the mid-1950s, Hutt was threatened with expulsion from the country as a result of his criticisms until the matter was brought up in the South African parliament, and his right of residence and freedom of speech were defended.South Africa’s Racist and Anti-Capitalist Policies
William Hutt’s criticisms culminated in a 1964 book, “The Economics of the Color Bar.” The thesis of the book was that South Africa’s “race problem” was due to the rejection of a liberal, open and competitive market economy. Black poverty and the income inequality between South African whites and blacks was caused by government regulation and prohibitions that bestowed privileges on segments of the white, and especially Afrikaner, population at the expense of unprivileged blacks who were prevented from competing for employment and opening businesses in restricted “white-only” parts of the economy.
These discriminatory laws began to be implemented in the early decades of the 20th century. Under “workplace fairness,” for example, white trade unions had pushed for legislation requiring for “equal pay for equal work.” But, in fact, such laws made it difficult for blacks to offer themselves at more attractive wages than their white competitors. This worked like a minimum wage law that prices lower skilled and less valuable workers out of the market. In the South African case, the burden of exclusion from employment fell almost completely on blacks.Afrikaner Fear of Black African Competition
In his book Hutt traced out the history of how the Afrikaners, who had originally come from Holland and had first settled in South Africa early in the 1600s, were mostly farmers who shunned manufacturing and commercial enterprise. These latter occupations and businesses were mostly formed and developed by later settlers from Great Britain.
But as circumstances changed over time in the 19th and early 20th centuries, with industrial development and the growth in mining, Afrikaners reluctantly found themselves moving into these lines of employment. However, they resented and feared the potential competition from black Africans also looking for employment, and who might be more industrious than themselves or willing to work for lower wages.
The labor market restrictions were exacerbated in the post-World War II period when the Afrikaner-led Nationalist Party came to power in 1948 and instituted the Apartheid policy of keeping the races separate by restricting entire professions and occupations or forms of employment for white workers only.
In addition to occupational segregation, Apartheid attempted to limit black residence and settlement to certain parts of South Africa, which included restrictions on the everyday movement of blacks within white areas.Government Planning to Separate the Races
Hutt called this a form of “totalitarian” control so the government could “centrally plan” the interactions, associations and movements of whites and blacks throughout the country. Contrary to the leftist propaganda of the time, many private businesses in South Africa were interested and willing to employ black workers and invest in their training and acquisition of more highly valued marketable skills.
However, the Afrikaner government used its regulatory and fiscal tools of control and intimidation to “keep in line” white employers who saw economic gain by “crossing the color line” in their businesses and enterprises.
Thus, it was political goals of the South African government and not the market motive of profit that prevented black South Africans from having the opportunities to rise more out of poverty through peaceful competition and cooperative commercial association.Free Markets as the Great Liberator
Hutt forcefully insisted that capitalism was the potential and real force for freedom and prosperity of the blacks in South Africa, if only the government would get out of the way. As Hutt expressed, it in the free market the only “color” that really matters is the color of your money:
“The liberating force is released by what is variously called ‘the free market system,’ ‘the competitive system, ‘the capitalist system’ or ‘the profit system.’ When we buy a product in the free market, we do not ask: What was the color of the person who made it? Nor do we ask about the sex, race, nationality, religion or political opinions of the producer.” “All we are interested in,” Hutt continued, “is whether it is good value for money. Hence it is in the interest of businessmen (who must try to produce at least cost in anticipation of demand) not only to seek out and employ the least privileged classes (excluded by custom and legislation from more remunerative employments) but actually to educate them for these opportunities by investing in them.
“I have tried to show [in his book], Hutt said, “that in South Africa it has been to the advantage of investors as a whole that all color bars should be broken down; and that the managements of commercial and industrial firms (when they have not been intimidated by politicians wielding the planning powers of the state) have striven to find methods of providing more productive and better remunerative opportunities for the non-Whites.”
What, then, was holding back opportunities for black South Africans? Hutt explained it was the political and restrictive power of government:Government Intervention Benefits Some and Hurts Others
“The subjugating force is universally through what we usually call, when writing dispassionately, the interventionist, collectivist, authoritarian or ‘dirisgiste’ system . . . Unchecked state power (or the private use of coercive power tolerated by the state) tends, deliberately or unintendedly, patently or deviously, to repress minorities or politically weak groups. Thus, the effective color bars which have denied economic opportunities and condemned non-Whites to be ‘hewers of wood and drawers of water’ have all been created in response to demand for state intervention by most [of South Africa’s] political parties.”
Why would businessmen, enterprisers, capitalists have any incentive or motive to overcome what might even be their own racial or ethnic prejudices and hire and train those in the discriminated group?Consumers’ Color-Blindness Open Opportunities
Hutt said that it was due to what he once called “consumers’ sovereignty.” That is, in a competitive, open and free market, there is only one way that a businessman may earn profits and gain market share: Making the better and less expensive product than his rivals who are also attempting to capture some of the consumers’ business. In the free market place, the consumer is the “master” and the producers are the “servants” who must satisfy the consumers’ desires, or end up as failed entrepreneurs.
“The virtues of the free market do not depend upon the virtues of the men at the political top but on the dispersed powers of substitution exercised by men in their role as consumers,” Hutt stated. “In that role, a truly competitive market enables them to exert the energy [through their decisions to buy or not to buy] which enforces the neutrality of business decision-making in respect of race, color, creed, sex, class, accent, school, or income group.”
“In a multi-racial society,” Hutt continued, “it tends, because of the consumers’ color-blindness, to dissolve customs and prejudices which have been restricting the ability of the under-privileged to contribute to, and hence to share in, the common pool of output and income. This is because business decision-makers – ‘entrepreneurs’ – have an immensely powerful incentive to economize for the benefit of their customers, who collectively make up the public. Their success depends upon their acumen and skills in acquiring the resources needed for production at the least cost, especially in discovering under-utilized resources.”
Here was the free market capitalist road not taken by South Africa, both in bringing an end to the racist and Apartheid policies of the past, and in terms of the policies that could have brought about a far more color-blind, free, and prosperous South African society in the nearly twenty years since 1994.
In following the anti-capitalist ideas of Nelson Mandela instead of the classical liberal free market ideas of someone like William H. Hutt, South Africa’s post-Apartheid history has been in many ways as troubled and discriminatory as the corrupt racist regime it replaced.
[Originally published on Epic Times]
Green energy, specifically solar and wind, has been sold to the American public as the answer to a host of crimes against the planet—but green has a big downside.
Hundreds of acres of photovoltaic solar panels confuse migratory water birds, such as the “once-
critically endangered brown pelican whose lifestyle involves fishing by diving into open water,” to veer miles out of their way to dive toward what they perceive are lakes or wetlands—only to die from “blunt force trauma.” At the largest solar thermal plant in the world, Ivanpah, the 170,000 reflecting mirrors—designed to “superheat liquid in boilers”—literally fries feathers. The USA Today reports that the intense radiation—called solar flux—has singed some birds, melted feathers, and denatured the protein in their wings as they fly through the intense heat. Unable to fly, the injured birds drop out of the sky and die.
The birds being lured to their death by solar power plants may get a reprieve.
USA Today references a “solar-industrial corridor” along I-10 in Riverside County, California, which was to have 80 percent of its 148,000 acres covered with solar panels or mirrors. However, it reports: “Today, that seems unlikely. Industry trends are toward smaller solar projects and the U.S. Department of Energy’s (DOE) loan-guarantee program has ended.” Additionally, Friday, December 13, was unlucky for the solar industry—but lucky for the birds. Giving official recognition of the threat solar power tower projects pose to wildlife, the California Energy Commission announced that it is “likely to deny approval to a major Riverside
County solar power project that has been criticized for posing an unacceptable risk to birds and other wildlife.”
The bald and golden eagles aren’t so lucky.
The Friday before, December 6, the Obama Administration announced an extension of the existing five-year eagle take permit. Effective immediately, the new rule issued by the Department of Interior (DOI) will grant 30-year permits allowing wind farms to “accidently kill federally protected eagles.” The “rule” is in direct violation of the Bald and Golden Eagle Protection Act passed by Congress in 1940.
Wind turbines chop up bald and golden eagles, and other endangered species—like a Cuisinart. If the DOE were to meet its 2030 goal of having 20 percent of the nation’s electricity generated from wind, the authors of a new study on bird collision mortality at wind facilities project: “a mean annual mortality estimate of roughly 1.4 million birds.”
To encourage Interior Secretary Jewell to reverse the DOI decision, the National Audubon Society has set up a direct email option with a customizable letter to Secretary Jewell that states: “The 30-year permit rule is a blank check for the wind industry and provides no comfort or confidence at all that you will be protecting America’s majestic Bald and Golden Eagles and safeguarding their populations.”
Like the expiration of the DOE loan guarantee program has increased the likelihood populations of migratory birds will survive death by renewables, the pending expiration of the Production Tax Credit (PTC) for wind energy could help the eagles and other raptors that are attracted to the towering turbines.
A December 12 Wall Street Journal (WSJ) editorial, “Powering Down the Wind Subsidy,” points out, as the subtitle states: “How Congress can achieve something by doing nothing.” The WSJ is encouraging Congress to “do nothing” and allow the PTC to expire as scheduled on December 31—which would save taxpayers $18 billion over the next five years. Expire it may, as the current budget deal takes away last minute negotiations that got it extended last year—but that doesn’t mean it is really gone. The PTC has expired several times in its twenty-year history and has been extended retroactively. The WSJ states: “The wind lobby is now trying to get the subsidy included in a January ‘tax extender’ package and made retroactive.”
Senator Ron Wyden (D-OR), Chairman of the Energy and Natural Resources Committee, on December 13, for the first time hinted, according to Politico.com, that he may push the Senate to consider a tax extenders package. Wyden said: “If you didn’t have tax reform and you didn’t have extenders, you’d do crushing damage to solar, wind and renewables.” No mention was made of the “crushing damage” to America’s migratory bird population or to the bald and golden eagles.
Wyden will likely have his way. While, Republicans generally oppose government subsidies and support the energy that actually works, and Democrats, like Wyden, tend to favor government giveaways and support the energy that they “hope” will “change” and actually work—there are plenty of Republicans who will help him push the “extenders” package and give the PTC back. Senator Chuck Grassley (R-IA) is the ranking Republican on the Senate Finance Committee, where the PTC extension originates, and he recently predicted a PTC extension. With just a handful of Republicans, such as Orin Hatch (UT), Pat Roberts (KS), John Thune (SD), and Mike Crapo (ID)—all of whom voted for the extension in 2012, the PTC could be hailed a “bipartisan victory.”
Think of the millions of birds being killed by renewables. Think of the billions of taxpayer dollars that have gone down the drain in “the quest for the holy grail of cheap renewable power.” Whether you oppose death by renewables for avian or economic reasons isn’t important. But what does matter is making your opposition to continuing wind welfare heard.
Cleland is the president of Precursor, LLC, a Fortune 500 research consultancy specializing in the future of Internet competition, property rights, privacy, cyber-security and cyber-ideology; algorithmic markets; and communications competition and de-regulation. Cleland authors the widely-read PrecursorBlog and serves as Chairman of NetCompetition® a pro-competition e-forum supported by broadband interests.
Cleland’s thesis is that the Federal Communications Commission (FCC) is an outdated and outmoded federal bureaucracy. He explains in the podcast that the FCC’s common carrier laws are largely outdated because they were created in 1934 and pulled from 1880′s regulations for the railroad industry. How do you expect such an outdated law to keep up with modern technology?
The bottom line is that the FCC’s authority is obsolete and needs to recognize today’s facts.
Hear the rest by listening to the podcast in the player above!
Mayor Bloomberg’s going out with one last ban. The City Council, with the administration’s strong backing, is rushing through a law to treat the vapor from e-cigarettes like tobacco smoke under the city’s “Smoke-Free Air Act.” The use of e-cigs, aka “vaping,” would be forbidden in indoor and outdoor locations wherever smoking is banned.
The key idea is that e-cigs somehow facilitate tobacco smoking – but the best evidence suggests the reverse, that they’re mainly useful for (and used by) people trying to quit. So the ban is likely to do harm, not good.
The goal of the Smoke-Free Air Act has always been to reduce exposure to second-hand smoke, and allow people to smoke in fewer places, with the hope that it would cause them to quit. Banning e-cigs helps on neither front.
It won’t cut exposure to secondhand smoke, because there is no smoke — not even any first-hand smoke. And early evidence is that they’re a much more popular way to help people quit smoking than forcing them to stand out in the cold.
Here’s the science so far: A randomized controlled trial, published in the Lancet last month, found that e-cigs were about as effective an aid in quitting as FDA approved nicotine patches.
The study, funded by the Health Research Council of New Zealand, also found that e-cigs have only a few adverse effects — far fewer than tobacco.
The pro-ban side argues that e-cigarettes “normalize” smoking, because people may be confused and think vaping is smoking. That’s nonsense.
Robin Vitale of the American Heart Association summed up the claim at a council hearing this month: “This mimicry of traditional cigarettes, if used indoors where smoking is banned, can easily lead to confusion and confrontation by New York business owners. The potential for this dynamic to weaken the city’s decade-long ban on smoking in workplaces is quite clear and is the greatest motivating factor to support this proposal.”
Actual business owners beg to differ. Andrew Rigie of the New York City Hospitality Alliance, the trade association for restaurants and bars, testified that e-cigarettes have not become an issue of concern among his members.
It seems that regular folks can tell that the blue LED light on the tip of many e-cigs from the red burning ember at the end of real cigarettes. It helps that vapor doesn’t stink the way tobacco smoke does.
Yes, e-cigs somewhat mimic the old “coffin nails” — that’s why they help you quit. Many smokers prefer kicking the habit with a product that looks and feels like a cigarette.
Spike Babian, co-owner of Vape New York, a city “vape shop,” made the clear point, testifying, “We don’t ban water because it looks like vodka.”
City Health Commissioner Tom Farley presented another red herring at the same hearing, hauling out the “gateway” argument: He claimed, with no data to back up the charge, that e-cigarette use could lead to smoking. In fact, preliminary studies, as well as empirical evidence, show that e-cigarettes are a major gateway away from smoking.
A study presented at the American Association for Cancer Research meeting in November looked at 1,300 college students, average age 19. Only 43 of those told researchers their first nicotine product was an e-cigarette, and only one of the 43 later switched to cigarettes. The vast majority of the 43 who’d tried an e-cigarette weren’t using nicotine or tobacco when researchers followed up.
“It didn’t seem as though it really proved to be a gateway to anything,” said researcher Theodore Wagener, an assistant professor of general and community pediatrics at the University of Oklahoma Health Sciences Center, in Oklahoma City.
As an ultimate fallback, activists suggest e-cig vapor might be dangerous. But in a study this summer, Drexel University’s Dr. Igor Burstyn found “there is no evidence that vaping produces inhalable exposures . . . that would warrant health concerns by the standards that are used to ensure safety of workplaces.”
Grasping at straws, the ban fans suggest it’s just the prudent thing to do until we have more data. No, the prudent thing to do is to help smokers trying to quit.
[Originally published in the New York Post]
Politically, the president’s inequality concern trolling push is just the latest MacGuffin: the distraction of an issue that does not poll as a high priority, but is designed as a sop to the media and his now-shrinking base of support. But it also speaks to real concerns in an era of wage stagnation and squeezed paychecks. There shouldn’t be any debate about the reality of the problem that the costs of basic staples, health care, and higher education are chewing up ever-increasing portions of the median family budget which is, in inflation-adjusted terms, smaller than it’s been since 1995. According to the Bureau of Labor Statistics, over the past five years, the average prices for all goods are 7.7% higher; the average price of bread is 10.4% higher; and the average price of meat/poultry/fish/eggs is 16.2% higher. In the past decade, the average worker has paid 89 percent more toward their health care benefits, while their wages grew 31 percent. The rising costs of the government-fueled higher education bubble makes American parents concerned they can no longer afford to send their kids to college. On top of it all, Americans no longer feel confident about their ability to find a new job which can pay them enough to make up for the costs of these goods and services.
The problem is not that the cost of unskilled labor is too low. The problem is the costs of what workers can buy with the fruits of that labor are too high. And the reason for that is largely due to government and systems which socialize risk and insulate producers from reality, not the realities of a competitive marketplace. Those who favor a free market response to these inequality-related concerns ought to view the minimum wage push as an opportunity to put forward an agenda that speaks to these real concerns with a gas & groceries agenda. This is not going to be solved by more government requirements which raise the cost of labor and will absolutely lead to more low-skilled unemployment: it is with an agenda that would smash the insulated systems which have led to these higher costs.
What does that look like in practice? Well, you can start by ending the massive subsidies and mandates for big conglomerates that drive up food and gas prices; streamlining or eliminate burdensome regulations on food production; ending the government’s management Soviet-style programs of dairy and raisins; streamlining or eliminating burdensome regulations on energy which needlessly drive up prices, inhibit competition, and destabilize the market while eliminating all taxpayer-funded energy subsidies and letting the best product win; and eliminating subsidies and tax incentives for energy companies to turn food like corn into gas, such as the Renewable Fuel Standard. You can propose smashing the federal government’s accreditation cartel, which has had a dramatic and negative impact on innovation within the higher ed space, and take a simple, federalist step of empowering the states to create 50 new accreditation entities. With the ability to accredit all the way down to the level of the individual course, this approach would push market-driven course offerings designed not as hollow imitations of larger liberal arts programs, but to suit the skill demands of the new economy.
These types of approaches, packaged together or pursued separately, should address these concerns head on. But is the Republican Party at all interested in such steps? It’s an open question, given how many of them are still in bed with many of the industries who view these protectionist and subsidy programs as essential supports for their industry.
I’ve repeatedly criticized the government’s sugar program, which kills jobs here in America while driving up prices on sugar and incentivizing the use of high fructose corn syrup – some estimates have put the program at a $1.9 billion annual cost for foodmakers and consumers. But this piece in the Washington Post illustrates how much hypocrisy exists on the right around the program, bringing together Debbie Wasserman Schultz and Marco Rubio to defend a New Deal-era program of market-warping cronyism.
“As a rule, the industry meets with every incoming freshman member of a new Congress. This year the list included Rep. Ted Yoho (R-Fla.), elected in 2012 on a tea party platform. Yoho quickly gained national recognition for, among other things, pressing House Republicans to cut deeply into farm bill programs such as food stamps. But on sugar subsidies, the livestock veterinarian said he has grown to support the industry view. He is sponsoring a sugar-backed resolution that favors giving up the sugar program only when other countries end their subsidies. “I ran on limited government, fiscal responsibility and free enterprise,” Yoho said, “but when you’ve got programs that have been in place and it’s the accepted norm, to just go in there and stop it would be detrimental to our sugar growers.”
Mario Loyola does a good job of explaining how execrable Yoho’s position is here.
“Protectionism is always a reverse–Robin Hood proposition. Farm protections force the poor to pay artificially higher food prices in order to pad profits for millionaire farmers. And the poor never even realize that they’re basically being defrauded by a conspiracy of government officials and their favorite special interests. When properly understood in their true economic light, these farm supports (like the abominable Wright Amendment for American Airlines) are tantamount to government collusion in a criminal price-fixing cartel. Contrary to what is an almost biblical tenet of progressivism, government cannot sanitize a price-fixing cartel. Government power can only make the cartel’s injury to the public far worse, both by protecting the cartel from the competition that would bring it down in a truly free market, and by making the cartel permanent. It is no surprise that the New Deal’s agriculture supports were foisted on the American public as emergency measures, but are still with us today.”
Some Republicans have taken up more populist anti-corporatist and anti-cronyist arguments in recent months, because they can read the same polls we do. But will they stand up to cronyism, or are they just interested in demagoguery on the issue until they hold the reins of power again? I’m skeptical they’ll change unless political reality forces the issue and makes this route the most expedient, and make the obvious lure of Big Sugar less appealing.
[Originally published on The Federalist]
“Pray that the market for the national debt remains open so that the United States can keep borrowing to repay the money is previously borrowed and then will have to re-borrow to repay the money it just borrowed. There is no chance the market will not change its demeanor over the next 100 years.”
That’s Murray Holland’s conclusion in his book, “A Nation in the Red: The Government Debt Crisis and What We Can Do About it” ($28.00, McGraw Hill). As a longtime book reviewer, I have read a growing stack of books warning about a financial collapse, but Holland’s book is not only based in the actual debt, but is written in a manner that even a person who has no knowledge of this issue can understand.
The “market” Holland refers to is the market for America’s treasury notes and bonds, issued to cover our on-going budget and the interest needed to pay prior borrowing. In sum, the nation is spending more and borrowing more than it can afford. It has been doing this for a long time and the warning signs are places like Greece, Italy, Spain, Portugal and other European nations that, following World War Two, embraced socialism. America did so even earlier during The Great Depression and the decades since the 1930s.
Holland calls it a Debt Trap and conservatives know instinctively that the U.S. government is too large and too based in socialism to survive. “There are over 500 agencies and departments on the list and it does not even include all the agencies and departments created in the states under grant programs from the federal government.” One can find the list here.
“The list of social programs is long,” writes Holland, “but the four major categories driving America into the Debt Trap are income security (Social Security, welfare, and other related programs), healthcare (Medicaid, Obamacare, and Medicare), education, and housing,” noting that “These programs did not exist until after the Great Depression.” They came about as the result of a Keynesian view that government spending would lift the economy out of its doldrums, but government spending does nothing to improve the economy. It sucks money out of the economy and, more specifically, out of the pockets of individual citizens and the business community.
Americans born during and after the Great Depression have had eighty years living in a nation whose economic system is capitalism, but whose governance is socialism.Despite nearly fifty years of a Cold War with the former Soviet Union (1945-1991), Americans have been blissfully ignored its intention of the communist intention to destroy capitalism and have accepted a vast matrix of social programs that now represent $70 trillion in unfunded financial liabilities. Even after the collapse of the Soviet Union, their plan “to overwhelm America with debt, welfare, and entitlements—in other words, to bankrupt America has continued unabated.
“This will cause the collapse of America and the government could then turn to pure socialism,” says Holland, noting that “Their scheme has been so well researched it has its own name: the Cloward-Piven strategy,”
It’s worth noting that, in addition to the socialist nations of the European Union, communism is still alive and well in Russia, China, North Korea, Venezuela, and Cuba to name just a few nations. And yet, even Russia and China have adopted some capitalistic measures, while ensuring strong, totalitarian central governments.The level of danger has increased exponentially with the election and reelection of President Barack Obama whose namesake legislation, Obamacare, is already having a catastrophic effect on the economy while putting all Americans at risk for the loss of healthcare from individual physicians and hospitals. The legislation was passed by a party-line vote by Democrats and opposed by every Republican in Congress. Obama spent the years since signing it lying about it. That’s what Communists do.
It is what the vast bulk of the nation’s print and broadcast media is doing are doing as well. They are little more than echo chambers for the torrent of lies that Obama administration is telling Americans about the economy.
“During the first few years of the Great Depression, almost 2,300 banks were closed, manufacturing fell 46 percent, and wholesale prices fell 32 percent. Today, the United States has a reported unemployment rate of around 8 percent. During the Great Depression, the unemployment rate hit 25 percent.” With ninety million Americans unemployed, the figures cited by the federal government are a fiction.
The only thing that can save America is an increase in our Gross Domestic Product (GDP), selling more goods and services, enabling an increase in employment, coupled with a vast reduction in the enormous governmental regulation of business. The vast taxation of Americans needs to be reduced in order to permit them to retain and spend their earnings, make investments, start new businesses. The annual GDP is now less than what the nation earns.
The “redistribution of wealth” is a totally communist concept and it is the intent of the Obama administration.
The future of the nation depends on the outcome of the 2014 midterm elections and control of Congress by as many conservative candidates and office-holders is essential. The RINOs, Republicans in name only, must be replaced.
In the meantime, I recommend you purchase and read “A Nation in the Red.”
Thirteen of Fisker Automotive executives made more than six figures in the past year, despite manufacturing zero cars.
The news was first reported Wednesday afternoon on the automotive Web site Jalopnik.com, and later in the evening by theDelaware Journal. Jalopnik often gets the scoops when electric cars catch fire. For those unaware of the ugly saga, Fisker declared bankruptcy at the end of last month after squandering more than $1.4 billion in private investment and losing $139 million of taxpayers’ money.
According to news reports, including one from the Journal a year ago, not a single Fisker Karma – the $102,000 (base price) luxury electric plug-in embraced by the likes of Leonardo DiCaprio and Al Gore – has been produced since July 2012. Hopeful workers in Wilmington, Del. –where company officials and local politicians loudly announced the revival of a former General Motors plant for the manufacture of a second model, the Atlantic – were laid off in April 2012. Most of the rest of Fisker’s employees, in California, were abruptly dismissed a year later. They promptly sued the company, citing state and federal labor laws that they said required advanced notice before layoffs – and hired the same law firm that Solyndra’s former employees used to successfully recover lost wages.
While the rank-and-file got screwed, the executives took care of themselves. Based upon information gleaned from Fisker’s bankruptcy filing, the Journal reported that nine of the officials were paid more than $100,000 during the twelve months from November 2012 to November 2014. Four of them made in excess of $200,000. Payments consisted of salary, automobile use, health benefits, vacation payouts and expense reimbursements.
The top recipient was co-founder Bernhard “Barny” Koehler, who was paid $687,691. Ironically Koehler was the one who in August 2009pleaded to Department of Energy officials, “We are oversubscribed in this equity round with the Energy Department support — and nowhere without it.” Three to four years later the situation was far worse, but that didn’t stop him from drawing a handsome salary and perks out of failing Fisker. At the same time U.S. taxpayers were out precious millions, and Delaware taxpayers were still stuck paying the utility bills for the empty plant that Fisker never used.
The next top earner during the period was the former GM executive who helped develop the Chevy Volt, Tony Posawatz, who joined Fisker as CEO in August 2012 and left in August this year. He took in $534,213, according to the Journal’s review of the bankruptcy filing. Posawatz spent much of his time with investment bank Evercore Partners, Inc. – which has a reputation of helping businesses plan their bankruptcies – denying that Fisker was contemplating bankruptcy and instead claiming Evercore was helping find a “strategic business partner” for Fisker. Posawatz was reimbursed for trips to Asia, fruitlessly trying to find such a “partner.”
Fisker CFO James Yost was the next highest earner during the lengthy dormant production period. The Journal said he took in $430,375. That’s a lot for someone who was supposed to be in the position of fiscal responsibility for the company. For example, in June this year Reuters – based upon documents it had obtained and insider sources who were willing to talk about the sinking ship – revealed several reasons whyFisker was tanking, despite $1.4 billion in investment.
“Fundamentally, say suppliers and some insiders, executives simply couldn’t orchestrate the complex dance that leads from a design sketch to the production and sale of a profitable car,” Reuters reported. “Spending was lavish; engineering blunders rife.”
Among the issues that can be pegged to financial unaccountability were last-minute design changes, engineering fixes, delayed delivery of components, over-ordering, stockpiling of parts, and vehicle flaws – all cited as contributions to cost overruns. An anonymous Reuters source knowledgeable about Fisker’s financial details “estimated that last-minute tweaks rendered between $50 million and $100 million of Fisker’s parts inventory obsolete.”
And then there were what might be called “excesses.” Several knowledgeable sources said the company’s iconic head Henrik Fisker and Koehler were paid $600,000-$700,000 annually, even after the company started reducing payroll the last couple years. And in May 2011, only weeks before the Department of Energy severed its loan, Fisker hosted a grand prix-themed party aboard a 146-foot yacht on Monte Carlo harbor. The price tag was estimated at $80,000-$100,000.
“Guests drank glasses of champagne served with flecks of gold,” Reuters reported. “Clad in a dark pinstripe suit and open-neck white shirt, Henrik Fisker navigated a crowd that included Prince Albert of Monaco, whom he described as the inspiration for the Karma.”
If the nicely compensated CFO Yost spoke up about such overindulgence, it was unheeded.
Then there’s the man himself, Henrik Fisker, who bailed out on the company named for himself after disagreements with the direction that Posawatz and others were taking. The Journal reported that he received $330,024 in salary and perks up until his departure in March 2013. A former designer for automakers like BMW and Aston Martin, Mr. Fisker had the ingenuity and know-how to actually create a vehicle, but apparently not the management chops or discipline to build one (and a company) from scratch. Illustrative of the dysfunction was the fact that in less than a single year, the Anaheim, Calif.-based company went through three CEOs, replacing Mr. Fisker with former Chrysler CEO Tom LaSorda, who after five months was replaced with Posawatz. Nevertheless Mr. Fisker still drew his six-figure salary.
According to the bankruptcy filing reported by the Journal, nine other executives collectively received more than $2.3 million during the 12-month period. The situation is similar to that of Fisker’s former battery supplier, A123 Systems, which received a $249 million Department of Energy grant (plus other government contracts and giveaways) but now also has gone bankrupt. As that company’s situation grew increasingly dire early in 2012, top officials moved suddenly to increase the compensation, stock holdings and severance terms for its corporate leadership.
Similarly, Fisker’s management apparently didn’t recognize that they were supposed to give their employees 60-days’ notice before they were cut loose. Nor did they realize, apparently, that paying themselves nicely while Delaware taxpayers paid for gas and electricity at its empty plant would look bad. Neither did they understand, evidently, that taking millions of dollars while failing to produce a single car – even one built as a toy for rich California celebrities and Silicon Valley liberals – would look even worse.
A principled presidential administration might consider seeking to recover some money on behalf of taxpayers, but that’s getting way too hypothetical.
[Originally published on the National Legal and Policy Center]
Common Core sounds innocent enough, but what it represents and how it is applied in teaching children from K – 12 can’t be ignored. If we do so at a local, state, and national level we are ourselves to blame for what looms ahead as to the final outcome of an experimental educational system that has been put in place lock, stock and barrel without any trial runs to test the credibility of the system.
This nation already ranks below other nation in math, reading and science, while we spend more money per child than any other nation but Sweden. It defies logic to expect that Common Core standards will succeed in advancing educational standards to duplicate those of other nations who spend far less but who get better results. And how long will it take teachers to get up to speed in learning how to teach the “Common Core way“?
It is our children who will suffer in a educational system where one size fits all in an agenda-driven system that is laced with political bias that advances liberalism and where so-called critical thinking is considered superior to memorization in Common Core classrooms.
Any one of the 10 riveting facts listed below about Common Core should set alarm bells ringing with enough intensity for concerned citizens and parents to become involved by insisting on a full accountability of what is happening in their school districts. Children should not be used as guinea pigs.
This nation’s future is in the hands of those who are not willing to sit back and see the country we love become a nation that has gone far astray from the principles set forth by our Founding Fathers. Our Founding Fathers would be appalled at the way federal government is now taking control of so many aspects of our lives by dictating what is best for us. This is Socialism.
1. Common Core rests on the faulty premise that a single, centralized entity knows what education is best for all 55 million students nationwide. Although Common Core was approved in 2010 by 45 states, Common Core standards had yet to be written at the time states agreed to adopt Common Core. All of the 45 states initially signing on to Common Core took stimulus money from the Obama administration. Illinois signed on without hesitation.
(It does hurt that Arnie Duncan is U.S. Education Secretary. Duncan was confirmed by the U.S. Senate in January of 2009 following his nomination by President Barack Obama. But before becoming secretary of education, Duncan was the chief executive officer of the Chicago Public Schools until December of 2008. As a firm supporter of Common Core, Arnie Duncan recently created quite a furor when in speaking to a group of state schools superintendents he made this controversial statement: “White suburban moms” are upset that Common core shows their kids aren’t “brilliant.”)
2. Common Core State Standards are academic benchmarks that outline the skills a student should have at each grade level. For example: Third graders should know how to find the perimeter of a figure A fifth-grader should be able to compare and contrast two characters from a story.
(I obtained copies of Parents’ Guide to Student Success at a meeting devoted to explaining Common Core to parents in Lake Forest Districts 67 (K-8) and 115 (high school). The two page guides provide an overview for each grade (Kindergarten through 8th) of what your child will learn by the end of the year in mathematics and English languages arts/literary, with additional guides providing an overview of what you child will learn during high school in Mathematics and English. These guides are a must to download, especially for those whose children attend public schools. Download the guides in color here. You will be amazed, as I was, at what the guides suggest!)
3. Common Core standards K-12, as applied to the classroom, place less emphasis on memorization such as rote memorization of multiplication tables, or of dates, or of historical facts, but instead critical thinking has become the hallmark of the Common Core class. Is giving up on educating students in factual history, civics, and other social studies content a good idea, despite high school and college graduates of today knowing little about the mechanics of government or knowledge of this nation’s amazing historical narrative? Instead critical thinking (what Common Core experts are calling higher-order thinking) is to serve as the preparation for life after high school?
4. Common Core basically removes away parental and local control of education. Regarding teachers, they lose their ability to be creative in the classroom, with teaching to the test becoming more important than ever.
5. Common Core tests are being developed by the same people who worked on the Core standards and who are now writing the textbooks. This is federal control of education and also of IDEAS. (Houghton Mifflin is a huge textbook publisher. It’s company website promises to be a partner who will share the responsibilities” of the Common Core. As such Houghton Mifflin has created a wide range of content, curricula, and services to support school leaders, teachers and educators, parents, and especially students with the transition.)
6. The Gates Foundation, a supporter of liberal progressive politics, is heavily involved in promoting Common Core through its generous funding. One organization funded by Gates is the ASCD (Association for Supervision and Curriculum Development), a membership-based nonprofit organization founded in 1943. Recently signing up a an endorser of Common Core, ASCD continues to receive funding from the Gates Foundation “to provide teachers and school leaders with supports to implement the Common Core State Standards at the district, school, and classroom levels.”
7. Common Core standards in Math and Language Arts were written first and are now being integrated into the curriculum of school districts throughout Illinois to some degrees and are at various stages of development. So 3 times 4 can now equal 11 so long as a student can effectively explain how they reached that answer.
8. Common Core’s “Guidance for Enhancing the Rigor of K-12 Civics, economics, Geography, and History” was released in September. Althoughthe 110-page “C3 Framework” took three years to develop, it is confusing, overly complicated and fails to include any content whatsoever. The Framework has “written by a committee” stamped all over it.
9. Common Core videos on Scientology spew United Nations ideas that demonize the United States and its wealth and pits the rich against the poor. Videos teach students they have the right to food, housing, clothing, medicine, even a job, five of the 30 universal human rights declared by the Unite Nations in 1945.
10. Common Core Science curriculum teaches the U.N-approved man-made global warming hypothesis, which is in sync with this nation’s political agenda of promoting green energy sources as a way to curtail global warming by reducing CO2 emissions emitted by coal and oil.
For over 100 years an educational system was in place that served this nation well. Those of us who can relate back to the 1950′s and before remember a time when the curriculum was left to individual teachers, or to department personnel in larger school systems, and where textbooks were likewise selected by individual teachers or department committees from a state-approved list of school textbooks.
It was an era when if teachers weren’t doing their jobs, they were usually let go after having a chance to improve. This same accountability existed from grades K through graduate school until the 60′s when teacher unions were organized and took hold in states. The Illinois Education Association (IEA) is one of the strongest in the nation. Its influence is far reaching in setting teacher salaries and in determining rules and regulations under which teachers work in local school districts.
Young men, having been educated under an educational system that some now view as haphazard, were prepared for work and for college. They further acquitted themselves well on the battle field when serving in World War I and II. After the wars these same ordinary men and women built businesses and proved to be productive in many ways.
What happened in the interim, despite all the money this nation has plowed into education, when fast forwarding to 2010 a new education program, Common Core, was conceived and created by the National Governors Association? President Obama and his administration wasted no time in embracing the new Common Core program.
Concluded by the NGA and the SCSSO was that for children to be properly educated there must be national standards, or a national curriculum, with lock-step performance testing curriculum to enable this nation to catch up with the rest of the world in science, math, and engineering. This despite that during much of the last hundred years this nation led the world in the disciplines of science, math and engineering and produced a large number of competent and brilliant scientists, doctors, engineers, architects, etc.
According to an article published on December 4th at Breitbart.com, Barack Obama didn’t simply embrace a concept that others had developed. Rather, the very roots of Common Core are in the early ideas generated by Obama and his fellow radical community organizer, Bill Ayers. It was Obama who headed the Chicago Annenberg Challenge from 1995 to 1999, a school “reform” organization founded by Bill Ayers, which funneled more than $100 million into community organizations and radical education activists.
Regarding the National Governors Association and the Council to Chief State School Officers, who are often cited and given credit for being the originators of Common Core standards, the real architect behind Common Core was David Coleman. As such, Coleman is responsible for bringing change to the entire American education system, even in the absence of any teaching experience.
In applying for a high school teaching job Coleman was turned down, after which he worked for a consulting firm where he advised public schools and became a fixture at NYC Department of Education meetings.
Transforming the American education system to fit his lofty ideas of what “real” education is. And it has nothing to do with learning useful skills to help you say, write a cohesive and grammatically correct resume or long division.
Of great concern is that Coleman was hired this past summer to lead the College Board organization. He is now redesigning the SAT’sand AP Program. In this position Coleman has the opportunity to tie what kids are learning to what colleges are expecting.
[This is the first of a three-part series. First posted at Illinois Review.]
The EPA has put out a proposal to reduce the amount of ethanol mixed with gasoline to be reduced in 2014 by 3 billion gallons from the 2007 Energy Independence and Security Act (EISA) mandate of 18 billion gallons. The renewable fuel industry is asking their members to write to the EPA asking the original mandate be kept. This lobbying will be very intense.
Ethanol from corn reminds me of the sonnet by Elizabeth Barrett Browning: ”How do I love thee? Let me count the ways.” The re-write for ethanol from corn is: “How bad is ethanol from corn? Let me count the ways.”
One could write a book about negative features of ethanol from corn. It take more energy to produce it than contained in the product. Ethanol has two-thirds the energy content of gasoline; so you get two-thirds the mileage using ethanol as a fuel.
Ethanol absorbs water which makes it a corrosive material for storage in metal containers. For this reason ethanol or ethanol-gasoline blends are not transported in pipelines. Ethanol is transported in tankers or rail tank cars. Now there is concern about ethanol blends causing corrosion in underground storage tanks (UTS) with environmental problems from leaks. Organizations demanding EPA concerns are discussed in this paper.
Because diesel fuel is involved in all aspects of ethanol from corn production and transportation is a big reason it requires more energy to make ethanol than the product contains. The energy balance has to go from the corn field to the gas tank. Diesel fuel is involved with tilling, planting, harvesting, and transporting corn to a refinery. A lot of energy is expended in converting corn to ethanol. Pipelines are the most energy efficient means of transporting fuels; however, ethanol has to be transported by diesel-fueled tankers.
Corn is a debilitating crop that requires much water and fertilizer for its growth. A Purdue University study claimed 18 inches of rainfall is necessary for a thriving corn crop. With a corn yield of 150 bushels per acre and 2.4 gallons of ethanol per bushel of corn, this requires 1,360 gallons of water for plant growth per gallon of ethanol. Add in 200 gallons of water to process corn into ethanol yields a water requirement of 1,560 gallons of water per gallon of ethanol. The 2014 EPA proposed 13 billion gallons of ethanol from corn mandate requires 20 trillion gallons of water annually. This is more water than 320 million Americans use for all activities. The 20-40 billion gallons of water used annually by the oil and gas industry for hydraulic fracturing (fracking) pale in comparison to ethanol requirements.
Proponents of ethanol say water requirements are unimportant because most of it is rainfall. This argument is specious because the water could be used for something more important like growing food for consumption. Another factor is irrigation is widely used in corn production–especially in times of drought like the summer of 2012. Withdrawals from the Ogallala Aquifer are seriously depleting this major water resource in the Great Plains.
Due to political maneuvers in corn states, the country is saddled with an industry that produces 13 billion gallons of ethanol annually. This requires over 5 billion bushels of corn grown on more than 36 million acres. The vast land requirement led to a devastating article on environmental problems producing ethanol from corn. “The secret, dirty cost of Obama’s green power push” by AP writers Dina Capiello and Matt Apuzzo on November 12, 2013. Millions of acres of wet and grass lands were cleared for corn crops and runoff of fertilizer from corn fields has helped create 6000 square miles of a dead zone in the Gulf of Mexico at the Mississippi River mouth.
Vehicles running on ethanol generate higher concentrations of ozone than those using gasoline, especially in the winter, Stanford researchers have found. That could create new health concerns in areas where ozone hasn’t been a significant problem before. A report by the National Academy of Sciences also confirmed ozone producing problems using ethanol as a fuel.
Ethanol is damaging to fuel lines, carburetors, and other parts of older engines. Increasing ethanol use above the 10 percent mixture of ethanol and gasoline (E-10) is expected to ruin cars older than 2001 and all two-cycle engines used in lawnmowers, chain saws, weed eaters, leaf blowers, and a host of other small motor applications. With 13 billion gallons of ethanol being used at this time, the “blend wall” is reached in which all gasoline produced in the United States is mixed with 13 billion gallons of ethanol results in E-10 mixtures.
The renewable fuel industry frequently claims ethanol from corn lowers the price of transportation fuels. This claim is patently false. The Department of Energy recently published the “2012 Renewable Energy Data Book” which gives the average 2012 ethanol price of $4.48 per gallon of gasoline equivalent and the average 2012 price of gasoline of $3.29. The 35 percent higher price for ethanol also existed for prices from 2000 to 2011.
Due to the great corn demand for producing ethanol, the price of corn has escalated from about $2 a bushel in 2005 to as high as $8 a bushel in 2012. Corn is a mainstay food crop for the world. It is not only food for humans, but a major source of feed for poultry, pigs, and cattle. Higher food prices in poor nations has produced life threatening problems for the poor living in those countries.
The Arab Spring that swept across North Africa in 2011 is reported to be partially due to higher corn prices. “U.S. biofuel expansion has cost developing countries $6.6 billion in higher food costs,” estimates Tufts University economist Timothy A. Wise in Fueling the Food Crisis, a report published by ActionAid. A 10-minute video interview with Wise about his research is available here.
This is a short list of reasons to encourage the EPA to stay with the proposed 2014 ethanol mandate of 13 billion gallons. Much pressure from the renewable fuels industry will be exerted to stay with the EISA mandate of 14.5 billion gallons. Lawsuits are being proposed.
Fortunately, Energy Citizens provides an easy way to write to the EPA and demand they follow their proposed guideline for 2014 ethanol use via the notice that follows. After making this contact, forward this notice to associates and ask them to send similar letters. The renewable fuels industry and environmental movement supporters will generate hundred of thousands of letters asking to abandon this reduction.
Thursday, the FCC considered issuing a proposal that seeks comment on the Commission’s rules regarding the use of mobile wireless services on board aircraft. In my view, the proposal to seek public comment should be adopted.
As reported in today’s Washington Post, the announcement by the FCC’s new Chairman a couple of weeks ago that the agency would issue the notice seeking comment on a rule change that might lead to in-flight cellphone use has drawn a lot of public attention, both positive and negative. This is not surprising given the strong feelings of consumers concerning the use of cellphones in flight. Some consumers reacted positively to the prospect of allowing in-flight calls and wireless services, while others criticized the idea.
Those who interpreted the FCC’s announcement as permitting passengers to make voice calls in-flight should relax. The so-called Notice of Proposed Rulemaking will not itself allow in-flight calls. The NPRM will merely seek public comment on proposed revisions to the Commission’s rules to begin the process of considering whether any changes in the on-board wireless device use policies are warranted. The NPRM likely will also announce the Commission’s tentative decision to give airlines discretion to determine whether and how to provide and manage on-board wireless services, given the FCC’s determination that “there is no technical reason” to prohibit on-board use of mobile devices.
If it is true, and I await public comment on the issue, that there is no technical reason from a spectrum management or spectrum interference point of view for the FCC to prohibit on-board wireless use, then, from my free market-oriented perspective, giving airlines discretion to determine policies governing in-flight wireless services is an appropriate way to approach the issue. The FCC has technical expertise regarding resolving concerns about spectrum interference issues, and it is appropriate for the agency to address those concerns utilizing its expertise. But, at the same time, absent any concerns that on-board wireless use poses spectrum interference issues that compromise airline safety, I don’t see it as the FCC’s role to dictate how the airlines run their operations with respect to passenger conduct.
If the FAA believes that the in-flight use of cellphones may compromise the safety of airline operations because cellphone use is likely to cause disruptions due to unruly passenger fights, the FAA may well have a role to play. Perhaps other federal agencies may have a role to play as well. And, most importantly, as I understand it, nothing in the FCC’s proposed rule would require airlines to allow in-flight cellphone use. That decision would be left to the airlines themselves based on their own perceptions concerning the demands of consumers in the air travel marketplace.
When the FCC’s new Chairman, Tom Wheeler, announced a few weeks ago that the FCC would be considering this change, he said: “I do not want the person in the seat next to me yapping…But we are not the Federal Courtesy Commission.” I agree with Mr. Wheeler on both counts.At the end of the day, I personally hope the airlines don’t allow in-flight cellphone use, or at least certainly not in an unrestricted way that is likely to cause widespread passenger irritation. But, at the same time, as someone who has argued for a very long time that the FCC over-regulates and meddles in matters that ought to be left to the judgment of those businesses it regulates, sometimes to the point of counterproductive micro-management, I am with Mr. Wheeler on this one. There will be time enough to be critical when the new Chairman proposes new regulatory measures that shouldn’t be adopted. This is a deregulatory one that at least should be considered. [Originally published on The Free State Foundation]
FCC staff just muffed an easy opportunity to advance the IP transition on the FCC’s timetable in the National Broadband Plan.
Apparently FCC staff missed the big picture here.
1. On November 25th, AT&T proposed a baby step forward in the IP Transition.
AT&T did not propose any change in special access rates. AT&T simply proposed that its special access contract term-lengths, synch up with the FCC’s own goals for when the IP transition should be complete.
Instead of promoting investment certainty — by respecting its own IP transition timetable that the private sector has come to rely on for infrastructure investment planning — FCC staff announced an unnecessary five-month investigative delay.
With the effective consumer-driven transition to IP three-quarters complete, the FCC ironically could become a drag on, and impediment to, the IP transition, if it muffs more easy IP transition decisions like this one.
2. This is about leasing 1960’s telephone technology in 2020.
Companies like Sprint, Level 3, and Cbeyond, are pleading to FCC staff that it would be anti-competitive in 2020 for them not to continue to get 1990s resale subsidies, as if somehow the world has not changed, as if somehow broadband, smart-phones, tablets, and video-conferencing were not the new normal in the broadband marketplace.
Special access is about reseller businesses that serve the business market insisting on continued subsidized access to obsolescing technology that: is no longer being built; has parts that are increasingly no longer available; and has a rapidly-declining pool of engineers available to repair it.
It’s about reselling DS1 and DS3 telephone trunks that transmit at 1.5 MBPS and 44.7 MBPS respectively — to business customers. Has the FCC forgotten how it publicly supports gigabit speeds to consumers and schools today? Why can’t FCC staff let go of subsidizing 1.5 MBPS and 44.7 MBPS copper wire technology from the 1960’s by 2020?
The FCC has long encouraged the IP transition understanding the exponentially-growing cost savings generated from repetitive Moore’s Law cycles. Since special access started with the 1996 Telecom Act, digital technology has gotten ~2,000 times more efficient than 1996 analog special access telephone technology, and by 2020 it will be ~16,000 times more efficient than that copper telephone technology!
With all of the more efficient and faster infrastructure technologies than analog copper wire technology – i.e. coax, fiber, microwave, satellite, fixed wireless, cellular wireless, cantenna wireless, WiFi, WiMax, 4G wireless, LTE, etc. — the pleading companies still must have 1960’s technology, at 1990s rates, to “compete” in the 2020 business market? Where is the FCC staff’s big picture perspective here?
3. Real competition is not one-way.
In 2020, it will be 25 years after passage of the 1996 Telecom Act and most all American consumers will have abandoned the rapidly-obsolescing PSTN. Nevertheless, these special pleaders and FCC staff apparently still contemplate that the 2020 business market somehow should still need business subsidies? How does that make big picture sense?
If competition policy is to have any meaning, all competitors eventually must be expected to compete on their own two feet. Technology advances offer equal opportunity to incumbents and competitors alike. Permanent price subsidies are not competition policy, they are more akin to a permanent corporate welfare program.
When the FCC staff is investigating this market, they should ask the pleading companies why other competitors have been able to use other technologies and other means to provide their services to the lucrative business market and they can’t. With interest rates low and with large domestic and foreign investment in the pleading companies, why are they not investing in alternatives to special access, individually or as part of a consortium?
In addition, they should ask the pleaders, if 25 years is not long enough to build a viable, sustainable business model without government subsidies, how much longer will it be before they can compete on their own like other competitors do? Simply, does the FCC staff see special access subsidies as transitional or permanent, and why?
Lastly, FCC staff should ask themselves whether or not their continuous generous subsidies have distorted the market and/or discouraged competitors from investing in competitive broadband facilities to achieve more market competition. Furthermore, they should self-examine whether the FCC’s current approach is more about preserving an FCC regulatory role than promoting sustainable market competition that could require less FCC involvement.
In sum, FCC staff appears to be missing the proverbial forest for the trees. For the reasons above, it’s particularly important to have a big picture perspective on the special access issue.
25 years is a long time. It is a veritable eternity in the age of broadband Internet and the mobile revolution. Real competitors don’t need 25 years to find a sustainable business model independent of government subsidies.
As we recently learned from a wise network historian and big picture thinker, network innovation has facilitated “the end of the tyranny of place,” and also often causes “resistance to network change.”
In the case of special access and the IP transition, the pleading companies and FCC staff appear resistant to acknowledging the network change that the Internet and wireless technology have wrought for special access. There are other opportunities for the pleading companies to gain access to the Internet than just the “special” places where access to DS1 and DS3 copper wires are subsidized by the FCC.
[Originally published on Precursor Blog]