Wednesday, April 30, 2008

More On The Evils of Ethanol

Food Riots
Water Shortages
More Greenhouse Gases
Lower Fuel Economies
Fires

And this is the short list.....

See this great article by Deroy Murdock.

Global Food Riots

Irresponsible State Governments

Great Article. Unfortunately Kansas is one of these states.

Self-Inflicted Pain Hobbles States

Bad Energy Policy?

Thomas Friedman of the NY Times writes a pretty good opinion piece today. While I normally do not completely agree with Mr. Friedman, he does make some good points. I tend to agree with this part:


Hillary Clinton has decided to line up with John McCain in pushing to
suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this
summer’s travel season. This is not an energy policy. This is money laundering:
we borrow money from China and ship it to Saudi Arabia and take a little cut for
ourselves as it goes through our gas tanks. What a way to build our country.

When the summer is over, we will have increased our debt to China,
increased our transfer of wealth to Saudi Arabia and increased our contribution
to global warming for our kids to inherit.

The McCain-Clinton gas holiday proposal is a perfect example of what energy
expert Peter Schwartz of Global Business Network describes as the true American
energy policy today: “Maximize demand, minimize supply and buy the rest from the
people who hate us the most.”


While I do not mind borrowing from the Chinese (we give them paper) or paying the Saudi's (we give them paper), it does seem the government has set up some strange incentives. The reason for this conundrum is politicians will not get re-elected (or elected) with high gas prices. Americans believe it is a birthright to have cheap gasoline.

The temporary relief of the 18.4 CPG Federal Gasoline Tax will do nothing to curb demand. If anything it will cause demand to rise and contribute even more to the problem of weening our country off the gasoline addiction.

I am also not in favor of subsidies for wind and solar. If these technologies are worthwhile, they should stand on their own. Why should tax payers foot the bill for companies to develop new products. This is the risk that entrepreneurs should take. Plus, it would appear that we can live off the subsidies the Japanese and Germans make to the industry.

I also laugh at the prospect of dependency on wind energy. Mother nature is more volatile and unpredictable than Middle East dictators. While it is nice to harness some "free" energy now and then, depending on this method of generation for a significant piece of our power need is insane.

The cold hard truth is we need traditional as well as new forms of energy. Conservation is a good practice with anything in short supply and $4 gas is a great incentive to conserve. Let prices work their magic in the market place. It is working for my family (as we go to get a new 32 MPG car today) and it is really the only solution that will solve the energy "crisis." Unfortunately politicians, and the people that vote for them, feel something has to be done.

Tuesday, April 29, 2008

A Must Read, Why B Hussein Is Dangerous

I seem to be referring a lot of Thomas Sowell lately, but I could not agree more with his positions. This one on B Hussein is spot on.

An Old Newness

B Hussien's methods have been tried and they have failed. Do we really need to re-live history? Taxing the most productive citizens and subsidizing the least productive is no way to build a nation. It sounds good, but it does not work.

Monday, April 28, 2008

Political Rhetoric vs Reality

This is a great editorial on CO2 emissions. All the candidates have no idea what they are proposing. In short, a standard living that puts us back to 1910... if not before.

The Real Cost of Tackling Climate Change

Sunday, April 27, 2008

When Government Gets Big, This Crap Happens.

When government gets too big, this happens....






Bureaucrats look for things to do to justify what they do. It usually means trampling on individual liberties. Do we really want these people in charge of our health care?

Sometimes Politicians Fail to Look at History

If the two remaining Democrats happen to get elected and push their economic policies on the Citizens of America, here is what will happen:

1. More taxes. Everyone will pay more, but the top 10% of income tax payers will pay an even greater portion of the total.
2. More protectionism. This means more tariffs and subsidies for industries that are not as competitive as they need to be.
3. Bigger Government. Government, the same function that makes for long lines at the airport and spends $600 for a hammer, will now be in charge of your health care and almost all other parts of your life.
4. Control of gas prices. Most people are too young to remember the early 1970's, but get ready for long lines at the gas pump.

Now this all sounds good on the surface. However, it has been tried before and it failed. The time was 1929-1936. Hoover passed to Smoot-Hawley tariffs that made imports more expensive (can you say inflation), and then other countries retaliated so we did not export anything either. This just hurt everyone and brought economies around the world to a halt.

FDR increased the size of government dramatically. Spending went from 3% of GDP to 13% before the war. The Federal Government has been growing ever since and is now over 40% of GDP. Bigger government results in a less productive economy where consumers get to decide how to spend.

So while the rhetoric might sound great on the surface, these ideas have all been tried before and resulted in prolonging the greatest economic disaster in the history of modern man. We need smaller government that spend less, a lot less.

Friday, April 25, 2008

All Sides Will Have to Give and Take

Here is a great blog entry from Arnold Kling. Unfortunately it looks like Republicans will have to tax more, Democrats spend less, and Boomers get fewer retirement benefits. Otherwise, the US Government will be bankrupt. The comparison between the 2000 Budget and the 2009 Budget blows the mind.

Fiscal Reality

Wednesday, April 23, 2008

The Trampling of Rights

The events in Texas the last few weeks with the Fundamentalist Church of Jesus Christ of Latter Day Saints has made me think a lot about the rights of our citizens and the function of our government. While there is absolutely no conceivable reason to force a 12 year old girl to marry a 50 year old man (or any man for that reason), is it the right of people to do so?

Many of these women and children had never been outside the walls of their compound. Do they know what rights they have? In many ways, these women and children were really indentured servants. Why did these mothers not object to forced marriages of their young daughters? Personally, I do not see how a father could let this happen to his daughter unless there was some serious wiring problems between his ears.

But given our penchant for freedom, particularly religious freedom, was it right for the government to storm this compound and take these children away from their mothers? I have a hard time believing the foster care administered by the State is any better for these sheltered children. Government should not be directing the affairs as it relates to the welfare of these kids, their mothers should.

"No man has a natural right to commit aggression on the equal rights of another, and this is all from which the laws ought to restrain him." --Thomas Jefferson


So the actions taken by the local authorities and the FBI seem to be wrong to me. Why were the men not taken into custody for breaking the law? There are laws against marrying girls under the age of 16. Certainly sexual relations with a girl under 16 is a crime. Instead, the women and children seem to be the ones getting punished in this case. They are the victims of the crime.

It is hard for me to understand what should be done here though. We should respect the difference people have in their religious practices, even when it contradicts our own beliefs. Our country was founded on that principle and in this case the law may have crossed the line.

I do not in any way support the action of the FCJCLDS church, but as an American I have to believe these people have a right to to practice the religion of their choice. This right is guranteed in the First Amendment of the Bill of Rights.
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Why China is not a threat...

US snow removal....



China snow removal....







The Sky Is Clearly Not Falling

Mr. Stossel comments on the drama of the media and why things are not as bad as they are being patrayed in the media.

The Sky Is Not Falling

Laffer and Taxation

Here is a great video series from Cato on the Laffer Curve. It is a good explanation of the effect of tax rates on tax revenues. Below is part III, but all three are worth the time to watch.

Tuesday, April 22, 2008

Remembering Earth Day

I really prefer Don Boudreux's take on Earth Day from Cafe Hayek....

Capitalism Day
Don Boudreaux

On this Earth Day, I celebrate capitalism -- the institution that, far more than any other, has made human lives clean, safe, dignified, and culturally rich. Capitalism is also responsible for giving people the wealth and leisure to permit them to mis-perceive nature as loving and bountiful, and to enjoy nature in a way that few of our pre-industrial ancestors could ever have enjoyed it.

So, on this Earth Day, I offer you here my essay, inspired by the work of Julian Simon, entitled "Cleaned by Capitalism." Here are the central paragraphs:

Before refrigeration, people ran enormous risks of ingesting deadly bacteria
whenever they ate meat or dairy products. Refrigeration has dramatically reduced
the bacteria pollution that constantly haunted our pre-twentieth-century
forebears.
We wear clean clothes; our ancestors wore foul clothes.
Pre-industrial humans had no washers, dryers, or sanitary laundry detergent.
Clothes were worn day after day without being washed. And when they were washed,
the detergent was often made of urine.
Our bodies today are much cleaner.
Sanitary soap is dirt cheap (so to speak), as is clean water from household
taps. The result is that, unlike our ancestors, we moderns bathe frequently. Not
only was soap a luxury until just a few generations ago, but because nearly all
of our pre-industrial ancestors could afford nothing larger than minuscule
cottages, there were no bathrooms (and certainly no running water). Baths, when
taken, were taken in nearby streams, rivers, or ponds, often the same bodies of
water used by the farm animals. Forget about shampoo, clean towels, toothpaste,
mouthwash, and toilet tissue.
The interiors of our homes are immaculate
compared to the squalid interiors of almost all pre-industrial dwellings. These
dwellings’ floors were typically just dirt, which made the farm animals feel
right at home when they wintered in the house with humans. Of course, there was
no indoor plumbing. Nor were there household disinfectants, save sunlight.
Unfortunately, because pre-industrial window panes were too expensive for
ordinary families and because screens are an invention of the industrial age,
sunlight and fresh air could be let into these cottages only by letting in
insects too. Also, bizarre as it sounds to us today, the roofs of these
dwellings were polluted with all manner of filthy or dangerous things. Here’s
the description by historians Frances and Joseph Gies, in Life
in a Medieval Village
, of the roofs of pre-industrial cottages:

Roofs were thatched, as from ancient times, with straw, broom or heather, or in
marsh country reeds or rushes. . . . Thatched roofs had formidable
drawbacks; they rotted from alternations of wet and dry, and harbored a
menagerie of mice, rats, hornets, wasps, spiders, and birds; and above all they
caught fire. Yet even in London they prevailed.


Peace and free trade.


So when you read about people (aka environmental whackos) that want to move us back to times of prosperity and happiness, remember what those times were really like.

The Cost of College

Thomas Sowell does a great job of explaining the issues of college costs in a new three part column. Of course the very entity that claims to help is actually most of the problem, the Federal Government.

Part I
Part II
Part III

The Government is getting in the way of market signals and distorting prices. Everything that Sowell explains in Basic Economics is essentially in chaos when it comes to college education. Even college education is about choices. There are choices that need to be made when it comes to education and the resources to proved that education are still scarce. However, the government tries to eliminate the effects of scarcity by subsidizing college education. This just costs all of us more tax dollars and creates tremendous waste.

Monday, April 21, 2008

The Kansas Governor Fails Again

Governor Sebelius is dead wrong again.  She claims the inexpensive power will cost Kansas Farmers and Ranchers later.  Really.  How is that, rising sea levels?  Inexpensive power is great for Kansas.  As for fossil fuels being the largest contributor to CO2 levels is not factually correct either.  Natural source like decay, volcanic gases, and a whole host of other mechanisms that Mother Nature provides are a much larger source.

There will not be another $3.6 Billion development in this state, ever.  This is truly a once in a lifetime opportunity to add industrial infrastructure, real jobs, and a huge tax base for Western Kansas.  

Coal is the only realistic way to gain more energy independence.  Our Governor is thinking only about pleasing a small minority of people that want to move this country back into the dark ages.  Meaning a time before we actually had electricity.  Personally I like our standard of living and would like my children to enjoy the same.  

Write your State Legislators and let them know you support the Holcomb project.  The veto failed to be overridden in the House by one vote.  The Senate is on board with economic development.

Thursday, April 17, 2008

Angry Renters Unite

The truly great thing about the internet is it allows people to come together and unite for a common cause. Take angryrenters.com for instance. These people have every right to be upset. Why should responsible people pay to bailout irresponsible banks and borrowers? I signed their petition.

Proving Minimum Wages Laws Make People Worse Off

This article from AP shows why Congress should have listened to economists when they said that a higher minimum wage will destroy jobs. Those hit the hardest will be teens and people with little to no skill.

Sure enough, there is now a teen employment issue.

Teen hiring has slumped by 5 percent since March 2007, with many
mom-and-pop stores, which typically hire younger workers, laying off employees.
Hiring in the overall job market fell by just 0.1 percent during the same
period.

That's still not as bad as the 13 percent drop in teen hiring in the
early 1990s. That means that if the larger job market mirrors the last teen
hiring slump, "we're not out of the woods," said Michael P. Niemira, chief
economist at the International Council of Shopping Centers.


Congress cannot overpower the market forces that drive wages. It is productivity that drives wages higher, not government mandates. While the higher minimum wage is great for those fortunate teens that have jobs, it is difficult situation for those teens that cannot find employment.

Someday maybe Congress will wise up and realize they need to let the market handle these issues.

The Real Reason for the High Price of Oil

The US dollar is now worth about 1/2 what it was 6 years ago when compared to the Euro. In 2002, it took about $0.85 to buy one Euro. Today it takes over $1.60 to buy one Euro. So what does this mean exactly. For one, it means crude oil (which is priced in dollars) is much more expensive. If we were to buy crude in Euros, the real price of crude would be about $65/bbl instead of $113.





Because of poor monetary policy and the growing money supply, Americans have become victims of economic inflation. The Government is not curbing inflation or the money supply right now so expect crude to rise even higher. The sad fact is the Europeans are seeing only a modest increase in their price for crude due to a strong currency.

Again, thank those in Washington for this problem. Too much deficit government spending and a growing money supply policy have now come home to roost.

Failed Policy

Here is this week's letter to my Senators:

Dear Senator:

This Op-Ed in today’s New York Post states very eloquently what I have been trying to communicate for over 2 years now to my representation in Washington, D.C. I believe you will be well served to read it and take action that will keep the US out of economic despair. Here it is:

Food vs Fuel

I am very concerned our environmental policy and energy policy will create the kind of economic havoc that will reduce permanently our standard of living. While I recognize the need to address climate change, there is no scientific consensus that CO2 levels are the culprit. Implementing policy that endangers our standard of living without careful consideration of the unintended consequences is very dangerous. No one is to blame but Congress should people around the world starve, riot, and upset the relative peace and prosperity we enjoy today..

Wednesday, April 16, 2008

Another Reason Not to Vote for B Hussein

Hamas endorses B Hussein.

http://www.worldnetdaily.com/?pageId=61631

Politicians Blow Another Opportunity For America

Not signing a free trade agreement with Columbia hurts Americans more than Columbians. This article in RCP explains why.

Now, the rest of the story.

We only hear the 1/2 of the story where Big Oil is the bad actor in the environment, so what is the other 1/2 of the story? Turns out the government of Ecuador is to blame.

In Defense of Chevron

This kind of environmental targeting with big trial lawyers is the force behind locking out production in ANWAR and Off-Shore fields in the US. Who would want oil production in their backyard with all the horror stories coming out of South America. Turns out it is the oil companies that were the responsible ones. It is the National Oil Companies and their associated governments that are the problem.

How are your tax dollars spent?

Check out where your taxes go. I support over $13,000 in military spending every year. With that kind of money you would think they would throw in an m-16 or an occassional tank drive around the base. At least let me use the firing range or shoot off some mortars.

http://www.nationalpriorities.org/taxchart2008/

Where Oh Where Did My Tax Dollars Go?

Some good tax data....

Tuesday, April 15, 2008

The Rich and Taxes

Another good article today in Real Clear Markets. I always wondered why pandering politicians keep their jobs. Here is the answer:

Last week, for instance, a labor union-supported policy group released a study
noting that Connecticut now has the largest gap between the rich and the poor in
the nation. The local pages of the New York Times dutifully reported on this
study and asked, what could be done as a remedy? Raise taxes, the advocates
urged, heedless of the fact that in Connecticut the top 5 percent of the state’s
taxpayers already bear the bulk of the state’s income tax burden. The situation
is much the same in neighboring New Jersey and in New York where, for instance,
the top income bracket represents just 0.4 percent of taxpayers, but they pay
one-third of the state’s income tax.
Is there a consequence to this? Well, for one thing, it’s practically compulsory when talking about the state government in each of these three places to use the adjective “dysfunctional.”
All three states have seen governors resign in disgrace within the past several
years. All three states are rife with corruption, pork barrel spending and
government inefficiencies. Hardly a day goes by that the newspapers don’t reveal
yet another outrage of waste, or mismanagement or thievery.
Yet little changes in the government of these states, much to the amazement of outsiders,who often wonder why voters continue to stand for it. The answer, I tell them, is that a very small percentage of voters are paying for this waste,
mismanagement and bloat. The rest pay so little that they don’t really care, or
they benefit from bloated government, either through jobs in the oversized
public sectors, or as users of services.
This is what you get when the few
support the many--the direction the federal government is now heading. You get
Connecticut, New York or (God help us) New Jersey.


When few support the many or costs are spread out and benefits concentrated, there can be nothing but problems yet no incentive to change.

Tax Cuts for the "Rich"

Did Dubya cut taxes for the rich? Absolutely yes because they are the ones that actually pay taxes. The top 10% of AGI taxpayers actually pay over 70% of the Federal Income Tax. That is anyone with AGI above $103,000 in 2005. I bet B Hussein and Billary fail to mention that when they talk about tax cuts for the rich. On top of that, 37% of "tax payers" pay no taxes as they are in the 0% tax bracket. Who did that? Dubya. How can you reduce taxes on tax payers that pay no taxes? Give them rebates for taxes they did not pay.

There is a great post today at Carpe Diem.

Sunday, April 13, 2008

The Entitlement Culture

Americans are moving closer and closer to a socialist society with our compulsive need for government to get involved in our lives. Government is now involved in our daily lives through entitlements and subsidies in retirement, education, health, housing, food supply and energy to name just a few.

I doubt the founders had this in mind when they were writing the Constitution. George Will makes some good commentary with his article today in Townhall.com.

Maybe we could take some lessons from New Zealand. Here is a great summary of what has happened in New Zealand from Maurice P. McTigue. Wouldn't it be great if we could eliminate 66% of the Federal Government and get more employment, better markets, lower taxes and better education? If we are not careful the US will far even farther in the world rankings of economic freedom. The world is getting better and learning what truly makes society more prosperous. The US on the other hand, is moving more and more toward a society of big government.

Does This Make Us All Safer?

Billary wants to make the Defense Department purchase everything from US-based sources. But you have to ask "does this really make us safer?" I doubt it.

Self sufficiency in defense makes no more sense than economic self sufficiency. I truly doubt that US companies can make every defense item as good, or as cheap, as international suppliers. If we could make everything as good, it would come at tremendous cost. What would Americans have to give up in order to make all these goods? Quick answer, a higher standard of living. We would be spending time and effort making defense items instead of pharmaceuticals, computers, and other items that contribute to our way of life.

I can think of no better way to keep America safe than to make other countries dependent on us. That dependency is economic in nature. Why would anyone want to attack a good customer?

Self-sufficiency makes civilization poorer and less safe. The only reason we should overlook a foreign supplier is if there is a better quality and cheaper American alternative. This policy would also provide the incentive for domestic defense contractors to get better and more efficient just like automakers in the 1970's.

Politicians are pandering to the electorate and using fear to collect a few extra votes. Unfortunately it will not mean a safer America.

Saturday, April 12, 2008

It's not easy being (a) green(ie)...

Here is a great letter from the WSJ:

In Europe, consumers pay up to $9 a gallon for gasoline, in part because European Union governments tax gasoline at rates of $2 to $3 a gallon and more. What most people don't realize is that gasoline taxes are implicit carbon taxes. Taxing gasoline at $1 a gallon is roughly equivalent to taxing the carbon dioxide emissions from gasoline at $100 per ton. So, European motorists are paying carbon dioxide penalties of $300 or more per ton. That's about six times higher than the maximum estimated carbon permit price under the Warner-Lieberman cap-and-trade proposal.

Yet where in Europe is the miracle fuel to replace petroleum? Where are all the zero-emission vehicles? Europe is not one mile closer than we are to achieving a "beyond petroleum" transport system. In fact, from 1990 to 2004, EU transport sector carbon dioxide emissions increased by almost 26%.

Mr. Krupp and other cap-and-trade advocates ignore the main lesson of the failed Synfuels program of the 1970s, memorably expressed by MIT's Thomas Lee, Ben Ball Jr. and Richard Tabors: "If a technology is commercially viable, then government support is not needed, and if a technology is not commercially viable, no amount of government support will make it so."

Marlo Lewis
Senior Fellow
Competitive Enterprise Institute
Washington


Carbon taxes are just another way for the government to dig into the check book of all Americans. These taxes will surely decrease the standard of living for all Americans and do nothing to reduce emissions. What may reduce emissions is a decrease in standard of living putting us all in a position where we live like people did 100 years ago. Personally, I prefer to live with a little more CO2 and avoid coastal property ownership.

Friday, April 11, 2008

Irresponsible Government

A recent story in the New York Times details how the Federal government has found fraud in over $6B in credit card transactions. My guess is none of these people have been fired or have had their cards confiscated. In the private sector people get terminated for these issues. Why? Because business has to be profitable to survive. Wasting $6B makes it very hard to be profitable. The Feds do not have to worry about this small inconvenience, they just tax the citizens more.

I have had to fire someone over credit card fraud. It is no fun firing someone, but it has to be done. It is stealing. These people that commited fraud have stolen money from all Americans.

It should not surprise anyone that a problem was found. This article from Washington Post in 2001 (Government Credit Cards Growing) gave clues to the problem years ago. Government is not made up entirely of employees that are concerned about the general welfare of all people. It is made up of people that apparently have no problem stealing from their neighbors.

This is just how much fraud was uncovered. My guess is this is just the beginning.

The Loss of Talent

There is an excellent article in the Economist about the recent debacle with the H1-b visa process that started on April 1. Many of America's greatest breakthroughs and triumphs were the result of talented immigrants coming to this country. Think scientists like Einstein and Von Braun, business people like Andy Grove and the Google founders to get an idea of the contribution these people make to our society. America needs these talented people to create jobs and discover the next big advancements in technology, medicine, and who know what else. This is how our standard of living and quality of life can get even better.

However, we have a bunch of knuckle-head Congressmen that are getting illegal immigration mixed up with the realities of a global work force. Unlike many countries, America does not have to lure people to our shores. People genuinely want to be here. So why restrict the number of H1-B visas? There is no good reason.

What Billary and B Hussein Do NOT Understand About Trade.

A trade deficit can actually be good for a country as this paper illustrates. We get goods and exchange those goods for paper. Paper that is only good in the US so foreigners have to invest those pieces of paper back into the US.

We get to consume more than we can produce. That is how our standard of living improves. China exports more than they consume and their standard of living grows only very slowly. China is still one of the poorest countries on the planet and will be for decades (same for India).

If we want to raise the standard of living around the world, free trade is the only way to make that happen. Does it mean the US might be a smaller portion of the world pie? Yes. However, the pie will be bigger and thus our piece will be bigger but just a smaller percent of the total.

B Hussein and Billary will lower the standard of living around the world if they restrict trade like the say they claim. Trade restrictions are not good for Americans or American workers.

Thursday, April 10, 2008

Loss of Manufacturing Jobs

No bother in me trying to write something as coherent as Russ Roberts, so here is the link:

The Strange World of Harold Meyerson

Again, it is important to understand the statistics, not just listen to them.

Wednesday, April 9, 2008

Ethanol is a Hoax Part 4

Even Paul Krugman at the NYT agrees ethanol is a joke that is no longer funny. People are going to starve so ADM can continue to profit at tax payer expense.

Grains Gone Wild


As long as Iowa is the first caucus, farm policy will always be to the detriment of the consumer and tax payer. This is obvious from the support all three candidates have for ethanol. Amazing that McCain changed his policy when he decided to run for President.

A Bus Load of Lawyers Flys Off a Cliff....

So it goes, this is a good start. I think Stossel would agree in this Op-Ed in the WSJ. He also follows this Op-Ed with a column today in Townhall.

Tuesday, April 8, 2008

Another Williams Classic

This column is very appropriate...

Political Loathsomeness

More on Regulation

This is a great piece from Bloomberg today.

Another Letter to My Senators

Here is one of this week's letters to Roberts and Brownback...

Dear Senator,

I am writing in regard to legislation you are voting on tomorrow that deals with a potential rescue of the housing market. From what I read, this bill is ripe with special interest and waste that is completely unnecessary. The people would be better served by letting housing prices correct on their own thus making homes more affordable for citizens who were responsible during the last 5-6 years. Instead, your legislation will reward careless and irresponsible behavior and force the responsible citizens of this country pick up the cost of these programs.

I like this piece in Slate published today by Daniel Gross:

The proposed tax break is hard to justify for several reasons. It does nothing for slow and steady companies that keep their heads and simply rack up profits year after year—and pay their taxes accordingly. Rather, it rewards the most reckless participants in the bubble. If you borrowed a ton of money to build spec houses in Miami and reported $2 billion in profits between 2002 and 2007 but gave up all those profits by notching a $2 billion loss this year, the extended carry back has a great deal of value. If you've been building affordable housing in Wichita, Kan., and booked $300 million in profits in those years, and then, through careful management of costs, managed to eke out a $5 million profit this year, it has no value. The big public home builders, whose shares rallied on the news of this potential tax break, didn't pay any windfall taxes on the bubble-era earnings. Why should they get an extraordinary post-bubble windfall?


So I ask, again, that government resist the temptation to help and simply let the market work. Congressional involvement will only make the situation worse as I am confident there will be many unforeseen consequences to your action. After all, the work of government is what started all of this mess in the first place.

Doug

My guess is government will not resist the temptation and will do something. Undoubtedly, this will make the situation worse...

Corporations Don't Pay Taxes, Consumers Do.

There is some discussion going on in the media about corporate taxes and who pays what. It turns out that ExxonMobil pays as much in US Corporate Income Tax as the bottom 60% of individual taxpayers. But is it really the corporation that pays? No, it is the consumer.

Corporations spend money and make capital outlays for new equipment based on Net Income After Tax. The higher the tax rate, they more they have to charge to earn a return on their invested money. The higher prices corporations charge make it harder to generate the revenues they need to be profitable. After all, each of us buy fewer goods when the price is high. On the other hand, lower tax rates mean it is easier for corporations to generate the revenues necessary to be profitable because their prices are (can be) lower.

American today has some of the highest corporate tax rates in the world. In fact, according to a recent study by PriceWaterhouseCoopers the US now ranks 102nd out of 176 countries. This means it is easier (as far as taxes are concerned) for corporations to earn returns on investment in 101 other countries besides the US. So is it any wonder that corporations are moving operations overseas? The US is becoming evermore uncompetitive because of government policy, not cheap labor or other cost concerns.

In addition, consumers are the ones that pay taxes corporations pay. We consumers pay those taxes in the form of higher prices for goods and services. At a time when other countries are lowering corporate tax rates, we have Congressmen and Presidential candidates hollering for higher taxes on our corporations. This means we will become more uncompetitive in a global economy and we will experience higher prices for the items all of us buy every day. We need to immediately lower our corporate tax rates if not eliminate them altogether. This will insure our corporations, the ones that employ most of us, stay healthy.

One more case against Billary care.

Turns out things are not as rosey as President Chavez proclaims in his social utopia. Even with all that oil money, you still cannot deliver a suitable socialized health care system. Nothing eliminates corruption and waste like the threat of loss or the potential for profit. The Soviets learned that lesson the hard way after millions of their people endured a quality of life that was decades behind that of Americans.

Health Care in Venezuela Takes Turn For The Worse

Thursday, April 3, 2008

Great Podcasts

I really like these short segments...

http://www.libertyradiounderground.com/

$53T Budget Short Fall

This is scary.....just go to about the 5 minute mark.

When $17B does not matter.

Here is a recent letter I received back from Senator Roberts in response to a request to eliminate earmarks and support the McCain-DeMint Bill (which neither Kansas Senator did).

Dear Mr. XXXX:

Thank you for contacting me regarding earmark reform. I appreciate your taking the time to get in touch.

I have long supported efforts to reduce federal spending and make certain our tax dollars are used as efficiently as possible. Recently there has been a lot of negative attention surrounding the appropriations procedure known as "earmarking." Earmarking is the process by which a Member of Congress prioritizes the allocation of appropriations to their state or district. It is important to note that earmarking does not increase budget outlays. In other words, if the funds are not earmarked for a particular use, they will still be spent by the administrative department or agency according to their discretion. I have always maintained that it is more effective for an elected, accountable Member of Congress to determine spending priorities in their state or district than for an appointed bureaucrat in Washington, who may have no tie to the region, to make those decisions. In addition, it is important to note that this year, earmarks account for less than two percent of budget outlays, leaving the remaining bulk of federal spending decisions to the administrative branch.

I understand concerns over the potential for earmarking to become corrupted. That is why I have always supported transparency in the process. I disclose earmarks that I secure for the state of Kansas, and I have consistently voted in favor of bills to increase transparency in the appropriations and earmarking process. Most recently, I supported the Honest Leadership and Open Government Act (P.L. 110-81), which includes several provisions directed at increasing earmark transparency.

President Bush has also made earmark reform an executive branch priority. He recently signed an executive order directing agencies to ignore earmarks in future spending bills that are not specifically in the text of the appropriations bills. This measure provides another guarantee of transparency in the earmarking process.

Again thank you for taking the time to contact me. You may rest assured that I will continue to work for ethical appropriations procedures. If you would like more information on issues before the Senate, please visit my website at http://roberts.senate.gov. You may also sign up on my home page for a monthly electronic newsletter that will provide additional updates on my work for Kansas.

With every best wish,

Sincerely,



Pat Roberts


What really makes me angry is how insignificant $17B has become to our elected officials. To this letter, is sent the following response:

Dear Senator,

I am concerned about the response you gave me on recent letter I sent you regarding earmark reform. Here it is:

It is important to note that earmarking does not increase budget outlays. In
other words, if the funds are not earmarked for a particular use, they will
still be spent by the administrative department or agency according to their
discretion.

I have to wonder why this money has to be spent at all. If the different agencies do not need this money, which I am assuming since the Congressmen doing earmarks are spending based on what they seem to think is important, why budget these dollars in the first place? I am confident that if the spending was critical, the government agencies would make every effort to secure the funding they need.

While $17B may not be a big part of a $3T budget, it is still tax payer money and should be spent wisely. This money should not to be used to secure favor with constituents and campaign donors. $17B represents over $200 for a family of four in this country. I am 100% certain that every family can find a way to spend this money better than politicians in DC.

Doug

The Pig Book Is Out

$17 Billion on over 11,000 projects. CAGW has now published the Pig Book for 2008. Alaska and Sen. Stevens are once again near the top. Alaska received over $500 per resident in the last fiscal year.

This is the reason that politicians cannot be trusted with our money.

Wednesday, April 2, 2008

Food Stamps

I like this piece today in IBD. Turns out, Billary actually had the highest use of food stamps in the 90's. Nothing like a government program that encourages dependency rather than independence.

Congress is Responsible for High Oil Prices...

I like this OP-ed that came out today. Just imagine that you are French and buy your oil with Euros. The price of oil has only slightly increase in real reams since the Euro has gone from about .85 to the dollar to 1.5 to the dollar. Amazing that oil has gone from about $50 to $100/bbl.

If you think about it, the entire mess we are in today is the result of way the Feds have managed monetary policy. Lawrence Lindsay wrote a great piece in the WSJ today. Even B Hussein has played a role.

Contrary to the claims last year of Sen. Barack Obama, it was never the
financial services industry (in my experience) that lobbied for easier lending
terms. Rather it was politicians who sought easier lending regulations so more
constituents could borrow. Community activists (Mr. Obama's occupation before
becoming an elected official) also put on the pressure.


Congress should stop pointing fingers and start taking some blame.

Tuesday, April 1, 2008

Big Ag vs Big Oil

In reading a little bit on the Congressional hearings today for the big oil companies I came across something very interesting. Rep. Edward Markey, D-Mass stated the following:

"These companies are defending billions of federal subsidies ... while reaping
over a hundred billion dollars in profits in just the last year alone," he said.
The companies are reaping "a windfall of revenue" while poor people have to
choose between heating and eating because of high energy prices.


I find this interesting because of a quick bit of research I did this afternoon. It turns out that US Farm income is expected to be $92.3B in 2008 according to the USDA. Now farmers are enjoying in excess of $20B in government support (subsidies, loan programs, disaster aid, etc). On the other hand, the Oil Companies are enjoying $123B in profit (2007 and less expected in 2008) and only $18B in government support. So farmers’ income to aid ratio is 21.6% while Big Oil is 14.6%. So it would seem to me that it is the farmer who is actually making people make the choice between heating their homes and eating, not the oil companies.

Maybe the right thing to do is have no subsidies for anyone and let consumers choose what the right price for energy and food is in the market place. Why do any of these for profit entities need tax payer support? If they cannot stand on their own two feet, they should be allowed to fail, even farmers. Get the land in the hands of farmers that can be more efficient and deliver food to consumers that is cheaper. That is the humane thing to do, even for the farmers.

High Oil Prices

Today, there will be yet another Congressional hearing on the high cost of gasoline and the subsequent grilling of Big Oil executives. I am sure there will be lots of blame placed on Big Oil and how they are contributing to the excessive hardship of ordinary Americans.

I am confident that one thing these Congressmen will do is fail to do any self-reflection. Have they considered that many of the actions that they have taken might actually be contributing to the high cost of gasoline?

For starters, governments (State, Local and Federal) have put so many unique limitations on gasoline that oil companies have to keep literally thousands of formulas on the market to comply with standards. Gasoline is not a commodity product like wheat any more. That drives tremendous complexity in the business. The Feds have also failed to allow new drilling in some of the most promising areas of the US like ANWAR, Coastal Florida, and Coastal California. Permitting is do difficult in this country that new refinery construction is virtually impossible. In fact, there has not been a new refinery built in the US since 1976.

There has also been no consideration given to a reduction in the gasoline taxes. The US average fuel tax is $0.47/gal (from API). At $3.15/gal, gasoline taxes represent 15% of the cost to the consumer. It is the government that benefits most from the sale of gasoline.

A very good article from the President of the Heritage Foundation details some of the challenges faced by oil companies today. It is worth the time to read it. Considering what has to be done to get gasoline to the consumer today, we should be thanking oil companies, not bashing them.

Oil companies have to go to the most dangerous and perilous places on earth to find crude oil. Then they have to extract it from as deep as 30,000 feet at tremendous risk and capital cost, then transport it via pipelines that terrorist are constantly attacking and loading it onto very expensive double-walled tankers and shipping it half way around the world to refineries. These refineries cost billions to build (when you can) and maintain just so they can then put a product into a pipeline again so it can be distributed to local terminals for delivery. All this is done so consumers can enjoy a gallon of product for less than they pay for a gallon of milk.