Not Even All the Land In Saudi Arabia Produces Oil

Is it any wonder that oil companies have not drilled on every acre of lease they hold from the government? Not even the Saudis and the giant Ghawar Oil Field (the world's largest) has oil in every acre. Maybe B Hussein should look at a few maps of the Gulf and the American West.

Oil and gas are located in pockets. Not every square foot of a region hold recoverable reserves so oil companies have to be selective on where they drill.

Louisville and Las Vegas

Onions and Oil

Mark Perry does some very interesting comparisons to explain economics issues and this might be the best. This is very intriguing information and further proof that speculators are not responsible for the rise in oil prices.

What can onions teach us about oil prices?


Keep in mind that it is illegal to trade onion futures.

All That Land And So Little Oil

We have all heard, usually from B Hussein, that the big oil companies have claim to many acres of untapped government land and sea leases and are refusing to use them. This claim has always sounded bizarre to me since oil companies want to find low-cost fields to develop.

Today the WSJ has a piece on why B Hussein is again up to his rhetorical tricks and normal hot air (maybe the real cause of global warming). The oil companies are not drilling on these leases because there is no oil there. Instead, Congress is restricting where oil companies can drill and actually find oil.

Kansas is bad, Ohio is worse.

Governor Sebelius has done about every thing possible to destroy the Kansas economy, but Ohio is even worse. While Gov. Sebelius has seen employment in the private sector drop, she can still claim employment gains since she has increased the size of government. Same thing happened in Ohio. If we are not careful, Kansas will be following in Ohio's footsteps.

The Self-Inflicted Economic Death of Ohio

Once known as the Mother of Presidents, Ohio is now getting poorer, older and dumber – and making all the wrong moves to reverse the situation.

And that may actually be a plus for Barack Obama. His party is finding that lofty, vague promises of change combined with high-spending, high-tax, welfare state-ish policies are a political winner in the state. How else to explain why Gov. Ted Strickland's approval ratings are in the mid-50s or why Democrats may even win control of the state House for the first time in 14 years?

Phil Gramm. The Best Reason to Vote McCain.

I have always liked Phil Gramm. Since leaving Congress in 2002, the Republicans have been lost on economic policy. Fortunately, McCain is sensible enough to take advice from a politician who is also an economist.

There is a very good interview in the WSJ today getting Dr. NO's opinion on several critical issues.

"Why is America the richest country in the world?" he asks. "It's not because our people are more brilliant; it's because we have a better free-market system. Why has Texas created 1.6 million jobs in the last 10 years whereas Michigan has lost 300,000 jobs and Ohio has lost 100,000 jobs? Because governance matters, taxes matter, regulation matters. Our opponents in this campaign are so dogmatic in their goal of having more government because they love the power it brings to them that they're willing to let it impose costs on the working people that they say they want to help. I am not."

He adds that arresting the dollar's slide has to do with restoring confidence in the U.S. economy, which means "doing things like balancing the budget, making the tax cuts permanent, and cutting the corporate tax rate, which encourages foreign investment. Trying to manipulate the dollar to cover up for bad policy is like taking a bunch of drugs to try to deal with bad health that is caused by a bad lifestyle."

Another Reason Why The Government Should Stay Out Of Ag

The latest Farm Bill opened up the Federal Government to pay more black
farmers settlements because they were denied farm loans. This might be
the most ridiculous thing I have ever seen the Feds do. Tax payers are
now looking at a $3 Billion liability.

What truly makes this ridiculous is the that fact the PAYGO
Democrats only claimed at $100 Million liability to give the false
impression they are paying for legislation they are passing. The
chances of this legislation only cost $100M is zero. So why would they
do it? My opinion is this is the kind of integrity you can expect from
today's politicians and the Democrats in particular.

Yahoo News

Tweedle-Dee and Tweedle-Dumb (Maybe Tweedle-Dumber)

I really related to the column from Burt Prelutsky today.

Frankly, what I find even scarier than Iran’s getting its dirty little hands on a nuclear bomb is the fact that tens of millions of my fellow Americans are eager to elect this numbskull in November. As someone or other once observed, success doesn’t change people, it reveals them.

But, lest you think I’m just another right-wing partisan hack, let me assure you that I’m not too enamored of most Republican politicians, either. From 2000-2006, while the GOP controlled Congress, I watched those wimps waste six years trying to curry favor with the Democrats. What they needed was Newt Gingrich with a whip, what they had was Dennis Hastert with a very wet noodle.

The biggest question I have regarding the Republicans in Washington is deciding if their stupidity out-weighs their cowardice or whether it’s the other way around. On Monday, they seem to be worried about offending homosexuals. On Tuesday, they’re terrified of angering blacks. Wednesday, they’re scared stiff of alienating illegal aliens. By Thursday, they’ve taken to their beds, suffering from the vapors. The really nutty thing is that very few of those people are going to vote for them anyway. But of course if they dared come out against same-sex marriages, affirmative action or tax-funded social services for Hispanic scofflaws, they’d be scolded by the New York Times and the Washington Post, and that’s something they simply couldn’t bear.

The entire column is worth the time to read.

Supreme Court Finally Interprets Law, Not Make It.

The Supreme Court finally did its job of interpreting the Constitution rather than legislating from the bench. By upholding the 2nd Amendment, Americans can now own guns in many areas, particularly DC, where most firearms were banned.

While many people may not agree with the ruling, this particular ruling is more than just about guns. It is about the Supreme Court doing what the Founders meant them to do. Interpret the Constitution and apply it as America changes over time.

America no longer has a militia, unless you are in the back country of Montana or Idaho, so many people believe the 2nd Amendment is unnecessary. However, no one can really predict when a militia formation might be necessary to preserve freedom. Therefore, all citizens need to be prepared. To me, that is what the 2nd Amendment is all about.

Here is a line from a NYT Editorial this morning:

There already is a national glut of firearms: estimates run between 193 million and 250 million guns. The harm they do is constantly on heartbreaking display. Thirty-three dead last year in the shootings at Virginia Tech. Six killed this year at Northern Illinois University.

On Wednesday, as the court was getting ready to release its decision, a worker in a Kentucky plastics plant shot his supervisor, four co-workers and himself to death.

The odd thing about all three of the cases present by the above writer is people were not allowed to carry weapons to defend themselves. Guns do not kill people, people kill people. Gun control laws have done nothing to curb homicides in DC, or any other area, for the last 30 years. The blame lays not in guns, but in people. The criminal and homicidal element will murder with or without guns.

Personally, I like the idea of more people carrying weapons. After all, when seconds matter the law is usually just minutes away.

A Reason For Even Democrats Not To Vote For B Hussein

From the Washington Post earlier this week:

"I suspect that McCain will be more constrained and will have a veto power over the Democratic Congress," said Alice M. Rivlin, who served as the first director of the Congressional Budget Office, as well as one of Clinton's budget directors. "If it's Obama, the Democratic Congress is going to be pushing for spending and it's awfully hard to rein in your own folks. No Democrat is going to want to go to war with Congress."

Lost Talent

George Will, one of my favorite columnists, has written another gem this week. In the column, Will goes into detail why limiting the number of skilled immigrants in this country makes no sense whatsoever. Here are some highlights:

Instead, U.S. policy is: As soon as U.S. institutions of higher education have awarded you a PhD, equipping you to add vast value to the economy, get out. Go home. Or to Europe, which is responding to America's folly with "blue cards" to expedite acceptance of the immigrants America is spurning.

Two-thirds of doctoral candidates in science and engineering in U.S. universities are foreign-born. But only 140,000 employment-based green cards are available annually, and 1 million educated professionals are waiting -- often five or more years -- for cards. Congress could quickly add a zero to the number available, thereby boosting the U.S. economy and complicating matters for America's competitors.

Barack Obama and other Democrats are theatrically indignant about U.S. companies that locate operations outside the country. But one reason Microsoft opened a software development center in Vancouver is that Canadian immigration laws allow Microsoft to recruit skilled people it could not retain under U.S. immigration restrictions. Mr. Change We Can Believe In is not advocating the simple change -- that added zero -- and neither is Mr. Straight Talk.

One thing you can count on at this time is the populism and scare tactics of the media and politicians. Unfortunately these tactics are holding back progress and causing America to lose its edge.

Kids Can Shoot Guns, Not Vodka.

As my kids get older, my wife and I are having to adjust the topics that we discuss with children. Not too long ago, our oldest was about to watch the "Boy" film at school. In an effort to make sure my son learned what we think is appropriate, my wife decided I needed to have "the talk." My son and I did have the talk and I believe our son was appreciative of the information, but he did seem some what disgusted and wished to finish his hamburger at Red Robin.

Now we have already had the drug talk with both our kids and try to reinforce that message when we can, so the next difficult topic will undoubtedly be alcohol. This is the one I feel I will have the most trouble with because this one actually involves the law more so than the other hard topics. Yes it is illegal to buy and consume illegal drugs, but there any many where abuse is not illegal. With alcohol, all products (minus cold medicine) are illegal to buy for anyone under age 21.

I am no different than 9 out of 10 Americans in that I did consume alcohol before it was legal for me to do so (hopefully there is some sort of statute of limitations). So what do I expect of my children? Is it reasonable to think they will wait until they are 21? I doubt it. Kids explore all kinds of things and alcohol is one of those.

Time is usually not my kind of magazine, but they do have a sensible article on teen drinking. I believe parents should be able to make a choice for their kids and teach responsible habits. I know 12 year-olds that are responsible enough to use alcohol appropriately and 40 year-olds that are not. The government's age 21 threshold is non-sense. Even more non-sense are the social-host laws that are sweeping the country. These laws are putting responsible parents (and kids) in jail.

Why are these parents responsible? Because they are keeping kids in an environment where they can be supervised and kept safe while learning about the effects of alcohol. What happens as a result of social-host laws is they push teen drinking to backwoods locations where they cannot be supervised and even worse, teens have to drive.

It is time to drop the age restrictions on teenage drinking and the social-host laws. Leave it up to parents to teach responsible alcohol habits in their children, especially in their own home. It is okay for a 17 year-old to sign up for duty, but they cannot drink a beer? We will hand them a machine that can shoot 300 rounds per minute, but we won't let them drink wine with their parents at dinner? Congress needs to get smart about teenage drinking and stop parenting from DC. Currently Congress is criminalizing good parenting and responsible behavior.

The Benefits of Prosperity

Don Boudreaux over at Cafe Hayek had a very interesting post that I have been thinking about this week. Long story short is that prosperity allows us to complain about the most ridiculous things. Since we do not have to worry much about food and shelter, as our ancestors did, we can now worry about shooting pigeons that poop on our park tables.

Megan McArdle adds to this line of thinking on her blog:

Prosperity allows us to have things that we all now regard as moral requirements. It permits us liberal democracy, a form of social organization that doesn't much work in hunter-gatherer tribes. It enables us to forgo infanticide, a necessary form of population control when Mom has to carry the babies everywhere and an extra unnecessary mouth might doom the whole tribe. It lets us reserve the death penalty for the most heinous violent crimes, because stealing a loaf of bread no longer threatens its owners own nutritional health. We don't have to stone adulterers, because we have enough breathing room that such behavior no longer poses an existential threat to the tribe. Wealth enables charity in the deeper, older sense of the word.

That this is true in no way undermines the decision to be charitable. Morality lies in doing the best you can with what you have. Given that I do have the luxury of finding delicious vegan food and non-leather shoes, I believe I have an obligation to do so. If that should change, I will go back to eating and wearing animal products without moral regret--though with a fair amount of digestive distress.

It's nice to be free.

Why Lou Dobbs Is An Idiot

Worth the watch....

A Great Read

I am nearly finished with a great book by Jonah Goldberg entitled Liberal Fascism. In this book, Goldberg chronicles the history of the fascist movement from Italy, the Wilson Administration and Russia then into the Nazis and the New Deal (continued through the Great Society of LBJ). While I have a massive gap in my knowledge of history of the early 20th century, this book did a fabulous job of helping me fill in some of those holes.

The book is really written from a conservative point of view, not libertarian. This is really my only complaint of the book as it addresses some social issues that I find interesting, but do not necessarily agree with.

The detail on the Wilson administration is quite chilling. The fact that Wilson was admiring the work of Lenin in what would become the Soviet Union shows just how fragile democracy really is. Unfortunately, FDR picked up where Wilson left off and continued the growth and intrusion of government in the lives of people. The War Industries Board and the Blue Eagle initiatives were straight out of the Nazi and Italian fascist play book.

Liberal Fascism is not really an easy read. I found myself hitting Wiki to get more information on people mentioned in the text as a result of my general lack of knowledge of this period. Take the time and read this very interesting history of the Liberal Fascist movement. It will make an impact on how you see today's political movement and how the left has manipulated and coerced people into sacrificing their own liberties.

My Problem with McCain.

John Stossel makes the point that I have been trying to come to grips with for several months. While I want to support McCain, as opposed to the utopian dream spewing B Hussein, it is very difficult with his anti-capitalist mentality.

Language like this is just plain scary (and ignorant):

"I am very angry, frankly, at the oil companies not only because of the obscene profits they've made but at their failure to invest in alternate energy to help us eliminate our dependence on foreign oil. They're making huge profits and that happens, but not to say, 'We're in this so we can over time eliminate America's dependence on foreign oil,' I think is an abrogation of their responsibilities as citizens."

Obscene profits and responsible citizens? Maybe McCain should look at the return the Anheuser-Busch Companies make on beer. This is the same beer that created the estimated $100 Million wealth of his much younger bride. As for responsibility, does he think the Big Oil companies are charities?

Maybe this is just pandering, but language like this makes me think twice before giving him my vote.

I thought FDR was bad. Obamanomics is even worse.

We are looking that the highest marginal tax rates in decades if B Hussein gets his way. We should all be very afraid.

Obama Turns FDR Upside Down

The fundamental principle of linking taxes and benefits was established when Roosevelt designed Social Security. He wanted to make sure that it was not a welfare system, calling Social Security "a base upon which each one of our citizens may build his individual security through his own individual efforts." His instincts have generally proved sound. Had Social Security been considered "welfare" rather than a return on taxes earned, it probably would never have had the popularity or the staying power that it has enjoyed for the last seven decades.

Social security was suppose to help people in retirement, not fund it completely. It was also not meant to be a tax or a welfare program. It is endanger of becoming both if B Hussein wins.

Good Intentions, Poor Results

While I understand the intention Congress has for raising minimum wage, those good intentions do not translate into good policy in this case (as most cases in Congress).

The increased minimum wage is really hurting those that can least afford it. Those people with little in the way of skills and young people trying to develop skills or save money for life changeing expenses like college.

Mark Perry has a great post over at Carpe Diem.

Krugman is Right? I Mean Correct.

I rarely agree with Paul Krugman, but I think he is 100% correct on this issue.

Home Not-So-Sweet Home

Home ownership is not written into the Bill of Rights. While ownership of a home is the right choice for some, it is not for others. There is downside. I like the comparison to buying stock on margin. It's great to have a home mortgage as long as prices rise. It really stinks when the price drops and its now valued at less than the mortgage. This is like margin call I suppose in some ways, especially if you want to move.

The Picture is Clear

Simple economics shows that demand is higher than supply. My 11 year old knows what happens in this case. So why doesn't Congress?

The Blame for High Oil Price... Congress and Demand.

There is a great article written by Alan Reynolds of the Cato Institute the correctly blames Congress and increased demand as the culprits in high oil prices. He also goes into detail why speculators are not to blame. In the speculative market there are two sides to every trade. Half bet the price will rise, half bet the price will fall.

Here are some excerpts:

But, much as politicians would like to blame speculators, it's just not so.

For starters, there's nothing about futures or options that makes it any more attractive to bet that commodity prices will go up than to bet they'll go down. Guess wrong on the direction, and you lose money.

And speculation that oil prices will rise rather than fall has dropped drastically since we crossed $100 mark. The "net long" position on the New York Mercantile Exchange fell from 113,307 contracts on March 11 to 25,246 by June 10 -so nearly as many traders are now shorting oil as are going long.

Speculators, in other words, are increasingly leaning toward betting the price of oil will go down, not up. So they're unlikely villains if prices do keep rising.

From November 2000 to November 2001, the volume of crude oil futures contracts in New York rose from 2.8 million to 3.2 million - even as the price of crude fell from $34 to $20.

There is no mystery behind the rise in oil prices. They rose too high too fast because of booming demand for oil for petrochemical products, electric power and shipping from many emerging economies (particularly China, India and the Middle East). Meanwhile, the supply of oil slipped in the US, Mexico, Venezuela, Nigeria and Russia.

But now JPMorgan analysts estimate that oil will drop to $85 a barrel from 2009 to 2011. Even Goldman Sachs analyst Arjun Murti, who recently guessed oil might reach $200, later told Barron's that oil will likely drop to $75 or less in the long run.

The urge to blame speculators is as big a waste of time as blaming oil companies. Americans want more oil and gas - not more hot air from politicians.

Obama Is Business As Usual, Not Change.

You have to be very skeptical of any political candidate that claims to embrace change. You have to be very skeptical of politician running for re-election or a new office that claims to embrace change. After all, positive change happens rarely in government.

Now B Hussein has claimed he will cut ties to special interests, won't except money of lobbyists, and will represent the will of the people. This idea sounds fabulous during some of B Hussein's oratories, but is that really possible? A politician without ties to big money, special interests? One's BS alert has to being signaling that something is amiss here.

Turns out, B Hussein is no different. While he may not take money from firms that lobby, he will gladly take money from their employees. In addition, it turns out B Hussein has ties to the Ethanol Industry. I am confident that folks like Tom Daschle (one of B Hussein's prominent campaign advisers) and the companies he represents in DC have at least some influence on B Hussein's policies. So with all the talk about change in the B Hussein camp, it is really just business as usual.

Price Controls and Rationing

In a recent Gallup Poll, Americans by a margin of 53% to 45% favor price controls on gasoline. Ironically, Americans prefer not to have rationing of gas by a margin of 79% to 20%. Now this result shows a couple things. One, the American education system is failing to educate students on some very basic economic principles, and two that people truly do not understand that prices play such a vital role in our economy.

Prices are really the mechanism used in a capitalist system to ration products that are scarce. In the capitalist system, people make choices that effect their wealth (and some actually win the genetic lottery, i.e. Paris Hilton). They then use their wealth to decide what products and services they will purchase with their wealth. So people ration themselves with their money.
No system, not even capitalism, ensures EVERYONE gets EVERYTHING they desire. A few people might, but not everyone.

So when the government decides to put price controls on any good, there will be some manufacturers that cannot produce the good for that price. As a result, that supply will not be available on the market for sale (at the controlled price) because the producer would lose money. Now if demand for a good is higher at the controlled price than the supply of a good at the controlled price there will be a shortage. This is also known as the long gas line. Some people at the front of the line will certainly benefit from cheap gas, but others farther back will either spend a lot of time waiting, or find the tanks are empty once they reach the front of the line.

Coming back to the Gallup result for a moment shows us that Americans want prices below market, but not government rationing. Quite frankly, this is impossible. Prices ration goods and if the prices are controlled, the rationing is screwed up. Some people will get more than others based solely on when they get to the gas station. I can just envision people stalking gasoline tankers to see where they are heading.

I hate paying $4 for gas just like 99.9% of the population. However, I also value being able to choose what I buy when I want to buy it and ration myself. If the government controls the price of gas, the price of gas will remain the same without a doubt. While the per gallon price may drop, other costs will not. For instance the cost you incur waiting in line, paying someone to wait in line for you, running out of gas waiting in line, running out of gas on a trip because the gas station is out too, etc. will certainly not make gas cheaper.

Change, Really?

Professor Boudreaux says it best...

Looking For Love In All The Wrong Places

I tend to agree. There is always talk of change around election time, so why do we always end up in the same messes? Politicians are a homogeneous bunch. However, I still would not gamble on B Hussein.

From Joseph Schumpeter's diary:

Politicians are like bad horsemen who are so preoccupied with keeping in the saddle that they can't bother about where they go. (i.e. Billary)

Convenient Capitalism

Of Course the fascists (see earlier post) can adopt capitalism when it involves their own meals...

Senate Votes to Privatize Restaurant Service

American Fascists

It is becoming clear that many influential members of the Democrat party (not democratic) are not really Democrats, but really fascists. Yes, fascists. The type of government bureaucrat that believes the state should govern profits and ultimately control all production. Senators Waters and Dodd are two primary examples. Sen. Waters actually threatened oil executives during the last inquisition (I mean hearing) and Sen. Dodd went on CNBC saying much the same thing.

This sounds well and good in the Utopian fascists world. However, when it comes to increasing supply and lowering price, rhetoric will do nothing to alleviate the problem. Populist pandering is a very effective tool during an election cycle, but as people soon find out (after the re-election) it does nothing to help the problem.

When prominent Senators call for nationalization and confiscating profits all citizens should be worried. Your industry will be next. If politicians get away with it in one industry, they will not stop there. These "progressives" as they are wanting to be known now are really old school fascists in the same tradition of some of history's most brutal leaders.

Victory. No Cap and Trade For Now.

Dear XXX,

Thanks to the more than 25,000 e-mails CCAGW members like you sent to Capitol Hill, Senate Majority Leader Harry Reid last Friday pulled the Climate Security Act after falling a dozen votes short of the 60 needed to end debate and bring the bill up for a vote!

Introduced by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.), the Climate Security Act was "cap-and-trade" energy legislation that attempted to limit greenhouse gas emissions, principally carbon dioxide, and establish a trading system for emissions allowances. In reality, the bill was nothing more than a hidden tax that would raise energy costs by $1.2 trillion by 2018 and would have created an army of new bureaucrats that eventually would have dictated nearly every aspect of commercial and indvidual energy use.

In rejecting the legislation, the Senate acknowledged this unacceptable expansion of government and said no to its higher costs and elite command-and-control structure that would kill prosperity.Thank you again for your help in this very important government waste battle! This truly is YOUR victory!

Sincerely,
Thomas A. Schatz
President Citizens Against Government Waste

Buy Local?

It seems there has been a lot of press on the merits (the green kind) of eating food that is grown locally. When I first heard this I thought it seemed a little suspicious. After all, what are you suppose to eat in Kansas from October through March/April? I guess Atkins is a possibility with an all pork, beef and chicken diet. Now I like meat as much as any one, but I do need a little fruit and veggie now and then. Kansas has it good I suppose, what are the Canadians suppose to do?

Turns out that the majority of greenhouse gases caused by food does NOT come from transportation of food (11%), but rather in production (83%). This is all from a report you can read here. So go ahead and enjoy your bananas, Chilean veggies, and other winter foods from down south when it is snowing outside.

Just How Much Does The Government Spend?

The "reform" oriented Congress the Democrats promised is failing to deliver on their promises. The Heritage Foundation has published a report detailing just how poorly the Democrats have lived up to the reforms they promised. Here are some highlights:

Federal spending now tops $25,000 per household annually, and the coming Social Security, Medicare, and Medicaid costs of 77 million retiring baby boomers threaten to add another $12,000 per household to the taxpayers' annual tab.

The Democratic congressional majority promised pay-as-you-go (PAYGO) budgeting that would prevent new deficit spending. During the 17 months of their majority, they have used blatant accounting gimmicks, such as fake sunsets and shifting payment dates, to:

• Pass SCHIP (State Children's Health Insurance) legislation adding $55 billion to the budget deficit;
• Enact a student loan bill with $15 billion in new deficit spending; and
• Waive their own PAYGO rules and enact a farm bill that adds approximately $20 billion to the budget deficit, despite record-high farm incomes.

In failing to offer spending reductions, congressional budget writers ignored:

• At least $55 billion in annual program over payments;
• $60 billion for corporate welfare;
• $123 billion for programs for which government auditors can find no evidence of success;
• $140 billion in potential budget savings identified in the CBO's "Budget Options" books; and
• Massive program duplication, such as the 342 economic development programs, the 130 programs serving the disabled, the 130 programs serving at-risk youth, and the 90 early childhood development programs.

Congress's budget resolution pledges to raise taxes by an average of $3,135 per household. This classic tax-and-spend budget pushes up discretionary spending and leaves the nation woefully unprepared to face the coming retirement of 77 million baby boomers.

Government Policy and Unintended Consequences

Congress was warned before they passed minimum wages legislation last year that these changes would negatively impact employment. The minimum wage went from $5.15 to $5.85 last year and is scheduled to move to $6.55 next month. Even more worrisome is the move next year to $7.25 and the impact it is sure to have on employment.

There have been many articles in the local and national papers that are documenting the tough time teenagers are having finding summer jobs. According to the latest government report on employment, kids 16-19 years old have an unemployment rate of 18.7%. Who works for minimum wage? It has traditionally been kids 16-19 years old with few job skills. The higher wages encourages employers to find ways to cut back on hiring since it cost more. When anything costs more, less is demanded at that price. Labor is not immune to the law of supply and demand. While the intent of higher minimum wages is good, the actual practice makes it harder for low-skill people to find jobs. I am sure Congress will forget they are the cause of most of the increase in unemployment....

More Government Waste for Agriculture

From Citizens Against Government Waste...

The letter from the chairman of the Sugar Cane Growers Cooperative of Florida was a painful reminder that the U.S. sugar program benefits only a handful of people ("Boost for sugar is good for city," May 23).

The current price of U.S. sugar is roughly 20 cents per pound. The price of sugar on the world market is about 10 cents per pound.

Any economist will tell you that the price of our domestic sugar is artificially inflated by strict regulation of imports, a commodity loan program that forces the government to buy up any sugar that domestic producers can't sell and production controls that make it illegal for domestic sugar processors to sell more than their government-assigned allotments, even if they have buyers standing in line.

By keeping domestic sugar prices so high, the current sugar program encourages companies that use sugar in their products to move their factories to countries such as Canada and Mexico where they can buy less-expensive sugar and then just bring the finished products back here.

If you owned a factory that made candy, wouldn't you jump at the chance to cut the cost of your key ingredient in half, especially if you could do so by simply relocating a few miles across the border?

Regrettably, Congress just passed a new farm bill that makes a sweet program for sugar growers and processors even sweeter.

And by mandating a new and costly sugar-for-ethanol program, the bill will require the U.S. Department of Agriculture to purchase surplus sugar for about 20 cents per pound and then resell it to ethanol plants for less than 10 cents per pound.

The sugar program has always been touted as one with no net cost to taxpayers. But this costly new measure requires the government to give away taxpayer dollars.

This would be laughable if it were not so outrageous.

Thomas A. Schatz
Washington
The writer is president of Citizens Against Government Waste.

Government Hypocrites and The Price of Oil

George Will writes a great article today for RealClearMarkets.com.

If anyone in NY votes for Schumer after reading this article then they certainly deserve to pay more for gasoline. These Senators who voted against ANWR drilling yet are displaying their outrage over gas prices are simply the biggest hypocrites this country has ever seen in the Senate. Maybe they should stopped pandering to every popular whim and do what is right for a change.

Why I Will Vote For McCain.

Just read a little Sowell....

We all know both candidates are not the best this country can produce, however there truly is a lesser of two evils.

Put your wealth in perspective.

While I think some of these sites are in existence to make you feel guilty then cough up a contribution, this one makes a point we all might need to consider now and then.

While I do not feel I am in the top .15% in world income, it certainly shows just how poor most people are on this planet.

How Rich Are You?

The Flat Tax Revolution

I am still trying to fully form my opinion on the Flat Tax. Many Libertarians, Boortz followers and the like are big advocates and I see many advantages. One is a less complex tax structure, another is closing loopholes that politicians can provide to help them with campaign donations.

Here is what I would need to see in order to support a flat tax.

1. A rate 17% or lower
2. No corporate income tax
3. No Federal excise taxes or estate taxes
4. NO growth of FICA tax sturctures or rates
5. Commitment by State governments to reduce taxes and the size of State government

To me the Flat Tax will only be successful if there is commitment to make government smaller and less influential in our daily lives. However, the Flat Tax is showing promise all over the world. In that respect, the US better get competitive with taxes or more business will head overseas. We have some of the highest corporate tax rates in the world and that is not good for business.

Here is a good video on the Flat Tax.

The Role of Sweatshops

Here is a great short paper from Ben Powell on the importance of so called "sweatshops" and how they benefit the third world. From the conclusion:

Not only are sweatshops better than current worker alternatives, but they are also part of the process of development that ultimately raises living standards. That process took about 150 years in Britain and the United States but closer to 30 years in the Japan, South Korea, Hong Kong, and Taiwan.

When companies open sweatshops they bring technology and physical capital with them. Better technology and more capital raise worker productivity. Over time this raises their wages. As more sweatshops open, more alternatives are available to workers raising the amount a firm must bid to hire them.

The good news for sweatshop workers today is that the world has better technology and more capital than ever before. Development in these countries can happen even faster than it did in the East Asian tigers. If activists in the United States do not undermine the process of development by eliminating these countries' ability to attract sweatshops, then third world countries that adopt market friendly institutions will grow rapidly and sweatshop pay and working conditions will improve even faster than they did in the United States or East Asia. Meanwhile, what the third world so badly needs is more "sweatshop jobs," not fewer.

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You thought Exxon was big?

Saudi Aramco is 32 times larger than ExxonMobil. So who do you think has more control over the price of gasoline? Maybe it is time the Iraqi people paid some debt for freedom? The Iraqi National Oil Company is 14 times bigger than ExxonMobil.

Windfall Profits

When are Big Ag companies going to be subject to congressional hearings over obscene profits?

See Carpe Diem today.