A recent article in the New York Times, “Once Stigmatized, Food Stamps Find Acceptance,” talks about how Food Stamps are now, thankfully, accepted and people can get the help they deserve. 

I remember the first time I encounteed food stamps.  I was in line at the grocery store behind a woman with a cart piled high and among its contents were soda, potato chips, and other tasty luxuries.  When the bill was tallied, she took out her book of food stamps and handed them to the cashier.  I related this story to a friend who told me that you can’t use food stamps on junk food so it must have been applied against the other items in the cart.  Even so, I thought back to when I grew up.  We weren’t poor but we were no where near rich.  Things like soda and potato chips were a rarity reserved only for those times when relatives were coming from a distance for a visit.  Otherwise it was home brewed ice tea and supermarket generic cookies.  But even those treats weren’t purchased through a subsidy of our food staples.

New York is now actively reecruiting new food stamp recipients in all languages imaginable.  It seems that it is not enough to provide the service but you have to make sure that everyone who can get food stamps is taking advantage of them.  Let’s see, government employees paid by taxpayers going all out to make sure that a taxpayer funded program is using as much taxpayer money as possible including a program on Rikers Island (the city jail) to enroll inmates as the leave.  The article describes one woman who was actively recruited to join the program:

A big woman with a broad smile, Ms. Bostick-Thomas swept into the group’s office a few days later, talking up her daughters’ college degrees and bemoaning the cost of oxtail meat.

“I’m not saying I go hungry,” Ms. Bostick-Thomas said. “But I can’t always eat what I want.”

Okay, I’m going to go out on a limb here.  By a “big woman” can we take that observation to mean she is not lacking in caloric intake?  She says she doesn’t go hungry.  She talks about her daughter’s college degrees.  So why are taxpayers tasked with helping her eat what she wants?  And what is that anyway?  Steak? Lobster?  Twinkies?  Ice cream?  Why aren’t the daughters with their college degrees helping their mother?  Maybe they could invite her over once a week and feed her the foods she favors?  And if they are not local, why not ship her a box of Omaha Steaks?  Why does some other taxpayer have to pick up the tab for her after they worked hard to feed their own family?

The Other Side of the Coin

On the other side of the coin, from the budget of the same Department of Agriculture, we pay farmers not to grow food in the form of farm subsidies.  Why?  Well, if we didn’t, the prices of farm products, aka food, would become too cheap for the farmers to make a decent living.  In my simple economic model of supply and demand that would seem to indicate that maybe we have more farmers than we need.  But you see farming is a way of life as much as it is an occupation, and taxpayers must be sensitive to preserving that way of life whether or not it is economically justified.  I am sure there are several million unemployed people in this country who would like to have their jobs subsidized.  Unemployment compensation is when the government gives you a check (actually its funded by your employer) when you lose your job.  Farm subsidies are when the government (no employer funding here) pays farmers to keep working at their job.

Add to that another government program to pay farmers to produce corn to make ethanol, another uneconomic subsidy.  Ethanol is pitched as a substitute for gasoline, but it takes a lot of energy to make it, it cannot be transported via pipeline like petroleum products, and when the corn is diverted to produce ethanol, the cost of almost all food goes up.  Corn is used for feed for cattle, as seed to produce corn, for corn syrup as a sweeter.  So on top of regular farm subsidies, we have ethanol subsidies to further drive up food prices.  In the case of corn syrup, sugar could be a substitute, but our government places a very high tariff on imported sugar, to protect our domestic sugar producers.

Coming Full Circle

So, on the one hand we have several government programs, funded by taxpayers, that drive up the price of food.  Then we have another program, taxpayer funded, to help people buy food because food is too expensive.  And then we have government workers and programs, taxpayer funded, that are actively marketing the food stamp program to overweight people, who never go hungry, have college educated children who could help them but don’t seem to, so that the recipient can eat the things she wants to.  But if you see a problem with this, don’t worry.  Michele Obama is about to use more taxpayer dollars to launch a program to fight childhood obesity.  Can we get off this Merry-Go-Round?

How about we shut down the Department of Agriculture?  It’s function is not in the Constitution and so it should not exist at the federal level.  End farm subsidies.  If that means we have a few less farmers, so be it.  The American people do not owe anyone other than themselves a way of life.  To the farmer who can make it, you have my complete admiration.  End ethanol subsidies.  If ethannol is a viable fuel, it should be able succed on its own, not because Archer Daniels Midland spends millions on agricultural lobbyists. Negotiate free trade agreements so that our successful farmers, instead of being paid not to produce, produce and sell their goods around the world.  Likewise end high tariffs that protect our farm products.  These steps should lower the cost of food.

With lower food costs we shouldn’t need a food stamp program.  End it at the federal level along with the Department of Agriculture. If there continues to be a need it will probably be a much smaller one and let each state decide if it wants to start its own program.  Also, with everyone saving on food there is a greater liklihood for people to contribute to food banks to help the truly needy.  But to have one government program create a problem and another government program to try to solve it is lunacy.

With our economy hurtling toward a cliff with out of control spending, we don’t need to be on both sides of a problem.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.  – Tenth Amendment of the Constitution of the United States of America

 The Tenth Amendment

The Tenth Amendment of the Constitution is an interesting piece of work.  The way the Constitution is written is to explicitly state what the national government could do, and thereby exclude it from doing everything else.  When some of the Founding Fathers advocated a Bill of Rights the federalists strongly objected.  Why?  First, they thought it was redundant.  If, for example, the Constitution did not say the national government could regulate speech then having a First Amendment guaranteeing the Freedom of Speech made no sense.  The national government was only permitted to do precisely what the Constitution said it could do. 

 The second objection concerned having the opposite intent of the original writing of the Constitution.  You see, if the constitution has a provision that says what the national government cannot do (First Amendment barring free speech for example) it implies that the national government can do anything else that is not prohibited, which is exactly what the federalists did not want the Constitution to say.  It wanted to specifically enumerate the powers granted to the national government and no more.  So they compromised by adding the Tenth Amendment, which spelled out that distinction.  To quote Hamilton in Federalist 84:

 “Why, for instance should it be said that the liberty of the press should not be restrained, when no power is given by which restrictions may be imposed?”

The Federal Government’s Runaway Growth 

The federal government has expanded enormously particularly with FDR and the New Deal.  The Supreme Court has paid scant attention to the Tenth Amendment in curbing that expansion.  Perhaps it is time they gave it a closer look and more weight in their decisions.

 Below is what the Constitution says Congress has the Power to do.

 Article I. Section 8. The Congress shall have Power To:

• Lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States;
• To Borrow Money on the credit of the United States;
• To regulate Commerce with foreign Nations, and among the several states, and with the Indian tribes;
• To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
• To coin Money, regulate the value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
• To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
• To establish Post Offices and post Roads;
• To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
• To constitute Tribunals inferior to the supreme Court;
• To define and punish Piracies and Felonies committed on the high seas, and Offenses against the Law of Nations;
• To declare War, grant Letters of Marque and reprisal, and make Rules concerning Captures on Land and Water;
• To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two years;
• To provide and maintain a Navy;
• To make Rules for the Government and Regulation of the land and naval Forces;
• To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrection and repel Invasions;
• To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Apportionment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
• To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenels, dock-Yards and other needful Buildings; — And
• To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

 Does anybody see anything there about minimum wages?  miles per gallon?  housing subsidies?  urban development? education? energy?  James Madison summed it up thus in Federalist 45:

“The powers delegated by the proposed Constitution to the Federal Government are few and defined.  Those which are to remain in the State Governments are numerous and indefinite.  The former will be exercised principally on external objects, as war, peace negotiations, and foreign commerce;….The powers reserved to the several states will extend to all objects, which, in the ordinary course of affairs, concern the lives, liberties and properties of the people, and the internal order, improvement, and prosperity of the state.”

To see how far we have come from Madison’s and the other Founding Fathers views can be seen in the New Deal era court case Wickard v. Filburn(1942).  Roscoe Filburn was a farmer during the Great Depression who was growing wheat to feed his chickens.  The Federal Government had imposed limits on how much wheat a farmer could grow based on acreage in order to prop up wheat prices.  The amount of wheat that Filburn was growing exceeded this number, however, Filburn intended to use the wheat entirely on his own farm.  Not only was the wheat not going to leave his home state, it was not going to leave his farm!  But the Supreme Court ruled that by growing more wheat than allowed, Filburn would not have to buy additional feed in the open market and by not doing so the lack of his consumption of wheat on the market would adversely affect the price of wheat, therefore he was violating the Federally imposed limits.  Now if that doesn’t set off Tenth Amendment alarm bells, I don’t know what could.

Federal Government Sprawl

Here are the cabinet level departments of the Federal Government.  Those in bold seem, in my opinion, to be consistent with the enumerated powers above.  Those in italics seem, again in my opinion, to be a national government overstepping its Constitutional bounds.  It is not that each and any of these things should not be done at all, but according to the Tenth Amendment should be at the discretion of the states or local government.

•  Department of Agriculture
• Department of Commerce
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services
• Department of Homeland Security (Incorporate in Department of Defense) 
• Department of Housing and Urban Development
• Department of Justice
• Department of Labor
• Department of State
• Department of the Interior
• Department of the Treasury
• Department of Transportation
• Department of Veteran Affairs (Incorporate into Department of Defense)

 Federalism

 One of the brilliant ideas of federalism is the ability to vote in two ways.  One, is at the ballot box and the other is with your feet.  If my state puts forth a bad idea and the majority of the citizens of my state agree with the bad idea, I have the freedom to move to another state.  However, if we keep moving all these bad ideas up to the national level, my right to vote with my feet is taken away.  If states like California and New York choose to follow polices that lead to their bankruptcy, so be it, but let’s not force those policies on Texas and Florida or forced the citizens of those states to pay for the mistakes of Californians and New Yorkers.

Since George Washington, who had four cabinet positions, we have added thirteen new cabinet departments and eliminated two and the ones eliminated did not go away, they simply became part of other government entities (e.g., Navy into Defense; Post Office into Postal Service).  In other words our government is telling us that they have not solved a single problem for which one of these agencies were created since 1789, otherwise why wouldn’t that cabinet department be shut down, after ceremoniously giving all the key players well deserved gold watches?  But Government encroachment marches on with the Obama Administration poised to devour one-sixth of the U.S. Economy into the Department of Health and Human Services.  They tell us they know how to solve that problem.  With their track record do you believe them?  Perhaps it’s time to dust off the Tenth Amendment, and start putting a scalpel to the federal government rather than tying a bib around its bloated neck.

Let’s look to 2010 as the year we start taking back our government.  Polls show how far out of tourch our elected leaders are from the views of their constituents.  It’s time to retire them from office.  Let’s keep up the hard work and countdown to November 2010.

In an op-ed piece in the New York Times, entitled, “What You Might Not Know About the Recovery,” that might more appropriately be entitled, “What I Don’t Know About the Recovery,” Joe Biden educates us on the stimulus.  It’s typical after the fact political obfuscation to try to convince people that they are not really seeing what they see with their own two eyes.

He begins in typical fashion going back to when he and Barack Obama took office, but avoids mentioning President Bush by name:

We still have a long way to go, but clearly we are closer to recovery today than we were in January.

This is a true statement, but I would argue that this is in spite of the $787 billion of our money squandered on the stimulus plan, while Mr. Biden says it is because of it.  It is instructive to see how someone begins their defense of an issue and Mr. Biden begins by saying that not all of our $787 billion is being spend on pork barrel projects.

Notwithstanding this progress, the nature of the Recovery Act remains misunderstood by many, and misconstrued by others: critics have suggested that the entire $787 billion is being spent on pet programs. As the person leading the administration’s efforts to put the Recovery Act into effect, I want to set the record straight.

He takes up the position that the statists typically do, that we are too stupid to understand.  This is complex stuff, America, way over your head.  You need us in the political class to take care of this for you.  Notice he didn’t say there was no pork barrel spending.  He says that not the entire $787 billion is being spent on pet projects. (Don’t forget the $30 million for Nancy Pelosi’s salt marsh harvest mouse).  Feel better?

Tax Cuts?

He says the single largest part of the recovery act is tax cuts, more than one third.  Huh?  Does he mean the $8 per week in lower payroll taxes?  That’s going to stimulate the economy?  At the same time they are finding trillions, TRILLIONS, in new taxes and spending through Cap and Trade, Heath Care reform, allowing the Bush tax cuts to expire, that will dwarf the paltry $8 per week that people are probably saving, rather than spending, if they even notice it at all.

Transfer Payments

The second larget chunk, Mr. Biden tells us, is for transfer payments.  In other words, money from the federal government given to state and local governments. Where do all governments get their money from?  Us.  So taking our money in federal taxes and giving it to state and local governments helps us exactly how?  Don’t forget the portion of each dollar that gets lost along the way as each bureaucracy handles it.

What are these transfer payments going to be used for?  Uncle Joe tells us:

The money is allowing state governments to avoid laying off teachers (14,000 in New York City alone), firefighters and police officers and preventing states’ budget gaps from growing wider.

The dictionary defines recovery as returning to health, consciousness, etc.  This part of the stimulus does nothing to stimulate the economy.  It’s another one of the Obama administration’s wonderful fictions about saving jobs.  As the economy continues to shed jobs even above the level that the Obama administration told us it would go without the stimulus Biden boasts that they saved the jobs of government workers; union workers; Democratic voters.  Also it helps bloated state governments that have mismanaged their finances from having to make fiscally responsible decisions but keeping them fat, dumb, and happy.  By the way, which states seems to be in the most financial trouble?  California, New York, New Jersey, Michagan?  Aren’t those all “blue” states?  So is the Obama adminsitration helping America or helping themselves?

On Track?

Mr. Biden says that we are on track and that 25% of the funds have been committed.  What exactly does that mean, committed?  If you go to Recovery.gov, you will see that as of this week, only 8.5% of the money has actually been spent.  Give Mr. Biden a calculator, please.  With the three chunks that the Vice President says comprise the stimulus: tax cuts, transfer payments, and infrastructure projects, and that signs of recovery are due to the stimulus, how can the stimulus have that kind of affect when only 8.5% of the money has been spent?

The Resiliency of the American Economy

The American economy is the envy of the world.  It is resilient beyond description.  It is recovering on its own, despite government interference, and the government meddling that caused this recession.  The American people are no longer being fooled by the smooth talking Barack and Joe Show.  A Rasmussen poll shows that only 25% of the American people believe that the stimulus has helped the economy.  If that’s not bad enough 31% say that the stimulus has actually hurt the economy.  On top of that 45% say the rest of the stimulus should be cancelled.

The Stupid American People

With 92% of the stimulus yet to be spent 9% more Americans say cancel the rest than say to keep going.  So Mr. Biden grabs the op-ed page of the New York Times to, sigh, lecture the American people once again on how they misunderstand, and misconstrue what your benevolant, socialist leaning government is trying to do for you.  How ungrateful can you be?  If you people don’t get it, then the president and vice president will just have to take over the rest of the economy and set you all straight.  They will tell you how much you can earn, what cars to buy, what food to eat, what kind of light bulbs to put in your house, control how much energy you can use in your house through the smart grid, what medical treatment you can have, and when you have to die.

The Sleeping Giant Awakes

The American people have been charmed by Barack Obama as he is a very charming man.  He is an historic president.  But they are starting to notice the tea parties, the abdication of the main stream media to do their job, the warnings about what is happening to their country and they are starting to pay attention.  The more they see and hear the more Obama’s approval ratings drop.  So he pushes harder and faster.  It will be a close race to see if President Obama, Nancy Pelosi and Harry Reid can ram through their agenda and slam the door behind them, or if we can wrestle back control of our liberties and send these people packing.

It’s time to brush off the Constitution, read the 10th amendment, and start stripping the federal government back down to the size the founders envisioned.  That will give more power to the states and the people and make government more accountable.  Face it, when your Congressman represents several hundred thousand constituents and their voice is only one of 435 in the House of Representatives, is it any wonder that the founders gave them only the powers spelled out in the Constitution.  They believed that effective government has to be responsive to the people.  That is impossible in Washington.  It is too big.  It is run by too many unelected career bureaucrats.  It has too much power to tax us, regulate us, spend our tax dollars on things to which we are morally opposed, and interfere with our liberties.

This is a critical time in our history and time to roll back the unrelenting growth of government and shrink it down to size.

WE SAVED THE ECONOMY!

President Barack Obama announced last night at his press conference that his policies have brought the economy back from the brink of collapse. ( Obama Talks About the Economy).  So I guess it’s Mission Accomplished!  Despite unemployment climbing toward 10% when he promised he could hold it at 8% if we implemented his stimulus package and that it would be 9% if we didn’t.  With only 3/4 of the fiscal year over, we already have a deficit in excess of $1 trillion dollars for the first time in our history.  The House passed a Cap and Trade bill that will, if implemented, add to the cost of everything that uses energy, just don’t call it a tax because only Bill Gates and Warren Buffet will be taxed under the Obama Administration.  On top of that, we absolutely must nationalize health care to cut the cost of health care and increase coverage.  The only problem is that the CBO says it will increase costs and reduce the amount of care.

What’s the Mission

If you are foolish enough to think that Obama’s policies are failing, then you don’t know what the mission is.  The mission is not to fix the economy.  It is not to curb global warming.  It is not to make health care more affordable.  It is to increase the size and scope of government to a point where it can never be rolled back.  Our liberties will be crushed and we will be ruled by a cadre of bureaucrats who will tell us what we can do and when we can do it.  He will form a block of voters that can get him and his fellow Democrats elected in perpetuity, by showering them with government handouts and place punishing taxes on a minority of productive people.  Why do you think he is smiling in the picture?  His mission is proceeding just as planned, thank you very much.  He only hopes that it is too late before you realize what happend to you and your rights.

Obama's Sales Pitch for the Stimulus Bill

The latest unemployment numbers are in and you can forgive the fervent Obama supporters for having buyer’s remorse. The main stream media, that he holds in the palm of his hand, is playing down the darkening employment picture, focusing instead on the silver lining that it’s getting worse at a slower rate.  The jobless rate hit the highest level it has been since February 1983, hitting 9.4%.  The good news is that we only lost 345,000 jobs last month.  Here is how the spin-master puts lipstick on this pig, or should I say, pork?

“In these last few months, the American Recovery and Reinvestment Act has saved or created nearly 150,000 jobs,” Obama said, touting spending on alternative energy, keeping teachers and police officers in work and small businesses. — Las Vegas, May 27, 2009

There is one small problem with this statement as pointed out by Karl Rove in the Wall Street Journal

As my former White House deputy press secretary Tony Fratto points out on his blog, the Labor Department does not and cannot collect data on “jobs saved.” So the Obama administration is asking that we accept its “clairvoyant ability to estimate,” and the White House press corps has let Mr. Obama’s ludicrous claim go virtually unchallenged.

So if the Labor Department, the keeper of the unemployment statistics, cannot collect data on jobs saved, where does President Obama get his figure that he saved 150,000 jobs?  We can only assume it is an outright fabrication, unless he can tell us otherwise.  Will we start hearing a chant “Obama lied, our future died”? Not likely from the obsequious press.

Buyer’s Remorse

In pressing for his pork filled stimulus package, Obama insisted that it was necessary, it was needed immediately, if not sooner, and if we didn’t do it, it would turn crisis into catastrophe.  I direct your attention to the graph above.  This graph was included in the stimulus package to point out that in the absence of the stimulus package the unemployment rate would rise to 9% by the middle of 2010.  However, get behind the stimulus plan and voila, the unemployment will top out at a mere 8% in the third quarter of 2009 and you get all of this for a mere $787 billion.

As conservatives pointed out at the time this made no sense, since the bulk of the stimulus spending, chock full of pork, would not be spent until 2011 and beyond.  As of today, less than 10% of the money has been spent, and the unemployment rate has past both the peak Obama sold to the American people, as well as what he predicted would happen without the stimulus.

Of course the statists will roll out their tired old argument that it wasn’t enough.  With every government program that fails they always tell us we didn’t spend enough…if we only spent enough…

Look back to February 1983, the last time the unemployment rate was this high, and what we see is Ronald Reagan in charge.  His solution was to cut taxes, cut spending, and reduce the size of government.  Today, President Obama’s plan is just the opposite.  It is to raise taxes on the most productive among us, spend our money like it has never been spent before, grow government without bound, and lay the burden of paying for it on generations to come.  We do know this, Reagan’s plan worked, ushering in the longest peacetime expansion in history.  Are we to believe that doing the exact opposite will also work, or work even better?

The slowing of the job losses and the advance of the stock market foretell that our economy is starting to turn of its own accord, as little of the stimulus has taken effect.  Conservatives said to get out of the way, reduce the tax burden and the economy will recover on its own.  The statists said no, now is the time to advance our agenda and our power grab.  Take advantage of the crisis.

Interest rates are starting to climb as massive government borrowing crowds out private borrowing.  The flooding of dollars into the economy is starting trigger inflation as can be seen in the increase in oil prices.  With Reagan, the best was yet to come, since Obama has chosen the exact opposite path, we can only fear for the future, when his programs take full effect.  As can be seen by the chart above, their plan is already way off course and with the massive inexperience of Obama and his team, how much confidence do you have that they can find their way back?

Do you like to breath?  I do.  Do you like trees and enjoy their beauty?  I do.  So what’s the problem?  The problem is that Obama’s EPA is considering a ruling that would declare Carbon Dioxide a “dangerous pollutant“.  So what do you do with a dangerous pollutant?  Well, you stop it, ban it, eliminate it so that it no longer harms us or the environment.  No?

Carbon Dioxide as a Pollutant

The problem is that every time you exhale, part of what you are exhaling is carbon dioxide.  So with every breath you are dangerously polluting the earth.  You must be stopped.  Your breathing must be banned.  You must be eliminated.

What about all those dangerous trees and plants?

“When the sun is shining, plants perform photosynthesis to convert carbon dioxide into carbohydrates, releasing oxygen in the process.”

Trees and plants absorb carbon dioxide and convert it into oxygen.  So if we eliminate this dangerous pollutant, wouldn’t it stand to reason that plants would die?  If plants die, they don’t produce oxygen and people and other oxygen breathing life would die. What a great idea! Let’s ban a dangerous pollutant and in doing so, kill all life on earth as we know it.  Why didn’t I think of that?

Global Warming, I mean, Global Climate Change

Since we have been seeing record cold temperatures across the country and it seems to snow everywhere Al Gore goes to speak (is GOD playing with him?), we hear less and less about global warming.  Now it’s called global climate change, which in my observation happens every day, season, year for as long as I can remember and I expect that it will continue to do so.

The problem is that those who advocate the declaration of carbon dioxide as a pollutant are the same people that say it is settled science that the increase in temperatures, or as it is now called climate change, are man made.  The truth is that there is significant evidence to the contrary that increases in carbon dioxide are not the cause of temperature increases, but the result of temperature increases caused by solar activity (see previous post).

Let Cooler Heads Prevail

I have no problem in working toward reducing the amount of anything that is a byproduct into the atmosphere.  Recycling is good.  Cutting back on energy waste is good.  Renewable energy helps us get off foreign oil from despotic dictators which is good.  But we have to avoid going around the bend and taking extreme positions that the very act of breathing results in a dangerous pollutant.  Once you give that power to the government, more of you liberty vanishes and there is no telling how far they will go with it.

Speaker Nancy Pelosi has released a draft of the proposed stimulus package that is now standing at around $825 billion.  It didn’t take too long to grow $50 over what Obama was asking for (read draft here).  Needless to say, that in order to get bi-partisanship off on the right foot, she had to make sure to give Bush a parting shot by indirectly blaming him for the current crisis (“Since 2001…” gee, who began their presidency in 2001?).  I also found this statement curious:

The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we are warned that unemployment could explode to near twelve percent. With passage of this package, we will face a large deficit for years to come. Without it, those deficits will be devastating and we face the risk of economic chaos. Tough choices have been made in this legislation and fiscal discipline will demand more tough choices in years to come.

The first interesting point concerns unemployment.  In Obama’s economic team’s analysis they said that with a stimulus plan unemployment would rise to 8% and without it, rise to 9%.  Pelosi is now saying it could explode to 12%.  Can we get on the same page, here?  Which is it?  The next point is that with the stimulus we will face large deficits for years to come, but without the stimulus the “deficits will be devastating and we face the risk of economic chaos.”  So we’re damned if we do, and damned if we don’t because Congress can’t keep themselves from spending more damn money than they take in.

But don’t worry folks, this time (really) there will be unprecedented accountability.  Do you feel better? I do.  After all, don’t we have Barney Frank to thank for making sure Fannie Mae was fically sound?  No?  Let’s recap.

In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie’s oversight. Mr. Frank dismissed the idea, saying concerns about the two were “overblown” and that there was “no federal liability there whatsoever.”

Two years later, Mr. Frank was at it again. “I do not regard Fannie Mae and Freddie Mac as problems,” he said in response to another reform push. And then: “I regard them as great assets.” Great or not, we’ll give Mr. Frank this: Their assets are now Uncle Sam’s assets, even if those come along with $5.4 trillion in debt and other liabilities.

Again in June 2003, the favorite of the Beltway press corps assured the public that “there is no federal guarantee” of Fan and Fred obligations.

A month later, Freddie Mac’s multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. “I do not think we are facing any kind of a crisis,” he said at the time.

Three months later he repeated the claim that Fannie and Freddie posed no “threat to the Treasury.” Even suggesting that heresy, he added, could become “a self-fulfilling prophecy.”

In April 2004, Fannie announced a multibillion-dollar financial “misstatement” of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that “I think Wall Street will get over it” if the two collapsed. Yes, they’re certainly “over it” on the Street now that Uncle Sam is guaranteeing their Fannie paper, and even Fannie’s subordinated debt.

By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. “What blocked it [reform] last year,” Mr. Frank said then, “was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don’t think there should be a Fannie Mae or a Freddie Mac.” What really blocked it was Mr. Frank’s insistence that any reform be watered down and not include any reduction in their MBS holdings.

In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, “I can ask Fannie Mae and Freddie Mac to show forbearance” in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding.

So, I for one am really glad that we will now have A Recovery Act Accountability and Transparancy Board, to keep an eye on things.  Whew, I was concerned there for a minute.

What’s Included in the Package

• Clean Efficient, American Energy
• Transform Our Economy with Science and Technology
• Modernize Roads, Bridges, Transit and Waterways
• Education for the 21st Century
• Lower Health Care Costs
• Help Worker’s Hurt by the Economy
• Save Public Sector Jobs and Protect Vital Services
• Tax Relief

Clean Efficient, American Energy

“To put people back to work today, and reduce our dependence on foreigh oil tomorrow.”  Wow, sounds like, Drill Here, Drill Now, doesn’t it?  Not a chance.  Oil drilling is no where to be seen.  After over 1 million signatures on a petition to tell Congress to stop blocking our ability to drill for our own oil, Congress agreed, until the election that is, and then nothing more.  Also, nothing about nuclear energy either.

What is included:

• Reliable electric energy grid — $11 billion
• Renewable energy loan guarantees — $8 billion
• Renovations and repairs to federal buildings, including energy energy efficiency — $6.7 billion. Why are our federal buildings in such need of repair?  Why hasn’t Congress been maintaining them?
• Local government energy efficiency block grants — $6.9 billion.  This is taking money out of the left pocket and putting it in the right pocket.  The federal government’s money comes from individuals and businesses in all fifty states.  Why do we send our money on a round trip ticket to Washington, only to have our local politicians grovel to get it back?
• Energy Efficiency Housing Retrofits for HUD sponsored housing — $2.5 billion
• Energy Efficiency Research and Development — $2 billion
• Advanced Battery Loans and Grants — $2 billion.  I’ve got a better idea.  Do you want to see innovation in battery and energy efficiency?  Eliminate the Capital Gains tax.  It will boost the stock market and bring in a lot more investment in new technologies
• Energy Efficiency Grants and Loans for Institutions — $1.5 billion
• Home Weatherizations — $6.2 billion.  That’s $20 for every man, woman, and child in America.  Does every house in America need weatherization or is this a but much?
• Smart Appliances (rebates for new appliances) — $300 million
• GSA Federal Fleet (replace older vehicles with alternative fuel vehicles) — $600 million. Are they saying that today the Federal Government buys inefficient vehicles?
• Electric Transportation (new grant money to encourage electric vehicle technology) — $200 million.  Did any of these politicians go to the Detroit Auto Show?  It was chock full of electric vehicles.  Didn’t we just give GM and Chrysler $14 billion?  Are we saying they need another $200 million for encouragement?
• Cleaning Fossil Fuel — $2.4 billion
• Department of Defense Research — $350 million
• Alternative Buses and Trucks for state and local governments — $400 million
• Industrial Energy Efficiency for demonstration projects — $500 million.  There are dozens of things we can do to improve Industrial energy efficiency.  We need demonstrations?
• Diesel Emission Reduction — $300 million

That’s just the energy piece of the package.  With regard to the renewable and efficiency spending on government buildings, there should be a reduction in energy costs going forward.  Are the operating budgets for those buildings going to be reduced in future budgets to reflect the savings or is that money just going to be diverted to other uses?

It seems to me that we could get a lot more stimulus with some immediate tax breaks and if the problem with the economy is a lack of credit, perhaps loan guarantees is a better way to go.  Having the government pick winners and losers, or set dollar amounts on each of the slop troughs, just opens the door to lobbying, corruption, and mismanagment.  Who gets the money?  How is it determined? Who gets to decide?

Tax cuts are there for everyone.  As I have said many times, to me, many of our problems have been caused by the government.  The government is not the answer.

At 06:00 this fine Saturday morning, the Obama folks released an analysis by their economic team of how their economic stimulus package is supposed to work (see full text here).  Quite frankly, I think there would be more stimulus from handing out coupons to Starbucks for a good shot of Joe, than this stimulus plan suggests.

Among the first things to catch my eye was the following statement:

“It should be understood that all of the estimates presented in this memo are subject to significant margins of error.”

There’s nothing like a good caveat to start off an explanation of how you’re going to spend nearly $1 trillion.  It brings to mind the old economic joke of how economists have successfully predicted eight out of the last five recessions.  While I understand the need to explain that these economists don’t have a crystal ball, you wish they were sitting at the table with a much smaller pile of our chips.

The thrust of the plan calls for “ substantial investments in infrastructure, education, health, and energy. “  To me that translates into bigger government than we have now.  Infrastructure is largely government owned.  There is also a significant lag effect in infrastructure projects.  Education is also government run.  After over $1 trillion in spending by the Department of Education, our education system is no better and probably worse than when it started.  Teacher employment has skyrocketed with the goal of making class sizes smaller with no demonstrable improvement in learning.  So, let’s pour more money into that arena and make sure we saddle communities with higher property taxes for years to come.  Sounds great!  Where do I sign up?  But, it does make the teacher’s unions happy.

Another chunk of the stimulus packages is to provide:

“State fiscal relief designed to alleviate cuts in healthcare, education, and prevent increases in state and local taxes.”

In other words, let’s take money from one government entity and give it to another, the reason being so that they don’t have to run a deficit at the state level.  Instead, we’ll run a deficit at the federal level.  Brilliant!

When you look at the charts, here’s where it really gets interesting.  The plan says it will take 5 years for unemployment to return to a 5% level, which is higher than pre-recession levels and it will reach this level with or without a stimulus package.  The difference is that the stimulus package will provide faster relief in the intervening period.  Their forecast is that unemployment will peak at 8% in 3Q09 with the stimulus, and at 9% in 2Q10, without the stimulus.  So we are to spend ¾ of a trillion dollars for a 1% improvement in the unemployment rate, for four years.  That’s an additional $193 billion a year for four years to get us to the same place we would be without the stimulus.  What the analysis doesn’t show is the stimulative impact on the economy of not having a $775 billion dollar deficit to pay off after the economy recovers.

The analysis then addresses the effect of tax stimulus:

“It is important to note that the jobs effects of temporary broad-based tax cuts would probably be considerably smaller. Large proportions of temporary tax cuts are saved, blunting their stimulatory impact on output and employment. The prototypical recovery package only provides for the first two years of the Making Work Pay tax cut. Our analysis assumes that households treat the tax cut as permanent in determining their short-run spending.” {emphasis added}

I would take that argument a step further.  As we saw earlier in 2008, there was a minimal stimulative effect from the $300-$600 tax credit that was issued.  Given a finite dollar amount, as the proposal states, most people are inclined to save rather than spend it.  I would argue that tax relief of any fixed dollar amount, that would be realistic as we can’t give everyone a check for $1 million, is going to have a limited stimulative effect on the economy.  However, when you cut tax rates, the stimulative effect is genuine and long lasting.  Why?  In the Obama plan, the tax relief is $500 or $1000, depending on if you file individually or jointly.  If I know that I am getting $500, regardless of how much I work, the stimulative effect of the $500 depends on what portion of my income that is. But like the $300, it is likely going to be used in these times for saving or paying down debt.  The fact that I may, and I repeat, may get another $500 next year, isn’t likely going to make me splurge on a new car.  However, if I know that my taxes will be lower on every dollar I earn, because of lower tax rates,  I am encouraged to produce more, work more, keep more, and spend more.

From an article in Reason this past Monday before Obama’s speech:

“Lets break this down. Its nice to see that the change we can believe in won’t alter the way Washington plays games with taxpayer money. We can give Obama the benefit of the doubt until we hear from him later this week, but if “officials” are really committed to “historical and empirical evidence” of how to get out of a recession, they won’t stimulus spend. Japan spent 10 years–its “lost decade”–trying to spend its way out of recession and wound up doubling unemployment and increasing the debt level above GDP. “Historically” real tax cuts for the wealthy and business world increased productivity and national growth, but they aren’t politically savvy, so we’re unlikely to see those too.”

So the search is for “popular” tax cuts, not effective tax cuts.

If you ask someone today which president is most responsible for the Great Depression, the answer will likely be Herbert Hoover.  However, Hoover was president for only three years of the Great Depression, while Roosevelt was president for eight of those years.  So while Hoover, without question, make some key errors that made the situation worse, Roosevelt couldn’t find his way out of the problem for almost three times as long, and yet the Democrats are using Roosevelt as a model but saying we have to do it bigger.  Are you getting a little concerned now?

Obama can use this to his advantage.  Just like Roosevelt and Hoover, Obama can and will blame the economic problems all on George W. Bush, for as long as Obama remains in office.  No matter what he does or fails to do, he can point to Bush and then to the Great Depression and say, hey, these things take a long time to fix.

Another point the Reason article makes is that recipients of the Obama tax cuts are very likely to be people who do not pay income taxes:

“While Americans know better what to do with their money than the federal government, many people got those checks who didn’t pay taxes in the first place, so they got other people’s money back. That redistributory system doesn’t encourage growth, it just hands out money.”

Americans do know better what to do with their money.  So here’s my prescription for the economic problem:

• Make the Bush tax cuts permanent
• Explore making the tax cuts deeper, going back to the rates that Reagan put in place starting the longest peacetime expansion in history.  Face it folks, if you want to get the economy moving, you have to give tax relief to people who actually pay taxes.  That’s were the money is, and it will be put to work to invest in businesses and create jobs, not to pay off the credit cards.
• Start dismanteling the federal government.  It is too big, it spends too much money, programs that start never end, and it is eating up too much of the economy.
  • Why is education a federal issue?  Kill the Department of Education
  • Why is the Department of Agriculture as big as it is when only 2%-3% of the population work in agriculture
  • Why are food stamps a federal program rather than being at the state or local level?
  • Why can’t we fix Social Security and Medicare.  The average return on Social Security investments is about 1%-2% per year, which is dismal
  • Why was the Grace Commission report, prompted by Reagan and finding about $400 billion in savings, largely ignored?
  • Why is our tax code, that is estimated to cost taxpayers $200 billion per year to comply with, not replaced with a flat tax?
• Kill the uncertainty overhanging the economy.  Tell businesses that the bailout window is CLOSED. Go back to running your businesses like you should, or face the consequences of your actions.  Government should clearly state what it will do and what it won’t do.  Without that, everyone will sit on the sidelines waiting for the other shoe to drop.

Once people stop waiting to hear what the government plan is, they will set about doing what they have to do for themselves.  Many of the problems that got us into this mess were caused by the government (Fannie, Freddie, Community Reinvestment Act, bailing out this company but not that one, keeping interest rates too low for too long, enormous deficit spending).  How any sane person thinks that “only the government” can get us out of it, escapes me.  This great country has enjoyed tremendous growth and prosperity through much of its history, with government playing a very small role.  But government programs and initiatives (New Deal, Great Society) have saddled us with a host of problems that we will be dealing with for many years to come.  It’s time that when the doorbell rings and we open it to hear, “I’m from the federal government, and I’m here to help you,” that we slam the door and follow the age old advice, “If you want something done right, do it yourself.”

As I continue to read the book I mentioned in my last post, I become more wary of the politics surrounding it.  Man’s contribution to global warming is “settled science”, or in other words, no more debate folks the discussion is closed.  The suggestion from a politician in Australia that any Australian that doesn’t believe in man made global warming should be stripped of their citizenship until the are re-educated.  Does that kind of talk scare you?  It scares me.  The American Meteorological Society (AMS) has issued a statement on climate change that reads:

“There is convincing evidence that since the industrial revolution, human activities, resulting in increasing concentrations of greenhouse gases and other trace constituents in the atmosphere, have become a major agent of climate change.”

Heidi Cullen, the Weather Channel’s climatologist believes that any meteorologist who carries an AMS certification should lose that certification if they do not toe the company line.  If their science and their logic are so convincing, why resort to the threats and coercion?

There is an alternate theory that is not even addressed in the book and that is that the temperature increase that we are seeing is caused by solar activity.  In the book the author touches on the effect of the sun, but only with regard to the position of the earth relative to the sun, not solar activity and since the position hasn’t changed that much, he says it is not a factor.  But it is not the position of the sun that is the factor, it is the amount of solar activity.  There have been very high levels of solar activity between 1940 and 2000.  That activity has since decreased and has been low for several years now.  If you listen carefully you will hear news stories that global warming peaked about ten years ago.

The book states that from 1990 to 1999 global CO2 emissions increased at a rate of 1.1 percent per year.  In the years 2000 to 2006, the rate tripled to over 3 percent per year.  So with such a dramatic increase of CO2 being released into the atmosphere and it being “settled science” that CO2 causes global warming, why did the temperature peak in 1998, and begin falling while the amount of CO2 being pumped into the atmosphere accelerated?  Another study concludes, “if you shut down all the world’s power plants and factories, ‘there would not be much effect on temperatures.’”

My concern is that we have a rush to solve a problem that may no longer exist, or worse may be going in the opposite direction, and our “leaders” are clamoring for massive spending and changes to our economy.  But what about all the proof of CO2 emissions leading to increases in temperature?  The question should be what is the cause and what is the effect?  Has the increase in CO2 caused the increase in temperature or has the increase in temperature, caused by solar activity, led to an increase in CO2?

The author unintentionally makes this point when he mentions that increasing temperature in the oceans caused CO2 to bubble up and be released into the atmosphere.  He also mentions that if the arctic tundra should start to thaw then methane, which is a more potent greenhouse gas than CO2 will be released into the atmosphere.  I think he was trying to say that an acceleration effect would occur where CO2 warms the earth and thereby releases more CO2, but if this was the case we would have baked long ago.  There is a study that indicates that based on past data going back 250,000 years that CO2 concentrations actually lag temperature change, meaning the temperature increase caused the CO2 increase and not the other way around.

With this in mind, any proposal to immediately change to renewable fuels on a massive scale could actually have the opposite effect.  I believe we should convert to renewable fuels when and as they become economically viable.  We recently saw a dramatic climb in the price of a barrel of oil.  With that there came an economic incentive to switch to hybrid cars, build wind farms, install solar systems, etc.  With the housing bubble and the subsequent fall off in economic activity, the price of a barrel of oil has decreased just as dramatically.  Sales of hybrids have sharply curtailed.

So if we artificially push to change from oil to renewable energy now: 1) it will be disruptive to the economy; 2) if the Indians and Chinese do not increase their consumption as fast or faster than we would wean ourselves off, the price of a barrel of oil will continue to fall.  As the price of a barrel of oil falls, the economics of renewable energy will get worse not better, and therefore more coercion would be required through tax incentives and regulations to continue the process.

I believe we should put our energy in driving down the cost of the technolgy through manufacturing improvements and R&D, so that alternative energy can compete with fossil fuels without subsidies, and let the market determine the pace of the conversion.  We tried the massive government energy program with the Synfuels Project in the late 1970s and every one of those projects failed because they were not economically viable. An enormous amount of money was spent in that effort but it was shut down.  Command and control economies do not work, the collapse of the Soviet Union and the injection of capitalism in China have proved that.  Markets do work, if artificial constraints are not placed upon them by bureaucrats.

I just started reading a book that was recommended to me on the need for a Green Revolution.  I won’t disclose the name of the book until I have finished it and will provide a review, but there are some interesting points to be made.

The author approaches the subject from a liberal perspective.  Now, I know that many conservative pundits will read Green and see red.  They believe that the effort to go green is to subjugate us all to living back in the stone age.  I approach the subject with a different view.  I personally believe we will stop using oil long before we run out of it.  I also believe that people who carelessly pollute the environment should be stopped and punished.  This is particularly true when I am stopped at a traffic light behind a car bearing an Obama bumper sticker and they roll down the window and toss their cigarette butt on the street.  Serious hunters and fishermen tend to be conservationists as well since carelessness on that front is only going to come back and prevent them from doing what they love.  So if we start with the premise that we all want a planet we can inhabit and enjoy for a long time, both liberals and conservatives, we’ll probably come up with some pretty good solutions.

I also believe that if we can produce energy cleanly, why not?  The more we do that and learn how to do it more efficiently then the sooner we can fulfill my previous prophesy of not needing oil it long before we run out of it.  My main beef with the book so far is its belief that the solution lies in government “leadership” which I consider an oxymoron of the highest order.

I believe that many of the problems that we are now addressing are the direct result of government programs.  And as government continues to grow and take away our liberties and impose more “solutions” on us that don’t work, the deeper our problems will become.  Let me cite some examples:

• The Financial Crisis — the current financial crisis was triggered by the collapse of the housing bubble.  At the core of that collapse was Fannie Mae and Freddie Mac.  The former was created during the Great Depression, but like many government programs that might be a good idea when they start out, they are never shut down when their intended goals are achieved.  The bureaucrats, in a scramble to keep their jobs, go find another mission which eventually leads to trouble.  In the Johnson administration Fannie Mae was “privatized”, however, government backing was always assumed.  Johnson didn’t want Fannie’s debt on the federal balance sheet when he rolled out another massive government “solution” the Great Society.  Along comes the Carter Administration and the Community Reinvestment Act which compelled lenders to make riskier mortgage loans.  In the Clinton Administration, Attorney General Janet Reno got a lot more aggressive in threatening banks that didn’t step up lending of more and riskier mortgage loans.  President Bush may have called for more oversight of Fannie and Freddie, but at the same time he wanted to increase the level of home ownership.   All of this increase in demand drove home prices to unsustainable levels and once those who should have never gotten a loan in the first place couldn’t pay them back, the whole house of cards collapsed.
• Social Security — Now here’s a ponzi scheme that would make Bernard Madoff look like a piker.  It was a government program that started out with good intentions, that no one has had the political courage to fix so the government keeps kicking the can down the road for the next generation to deal with.
• Education — In the Carter Administration there was concern that we were falling behind in education.  The government’s solution?  Split off education from the Department of Health, Education and Welfare, into a stand alone Department of Education.  Since it’s inception in 1980 Congress has appropriated $1.06 trillion to the Department of Education. So how did that work out?  Now we graduate high school seniors that many colleges have to teach them high school skills so that they can succeed in college.  What about the free market?  If you mention school vouchers the liberals will scream.  School vouchers will ruin the public school system.  But almost everywhere it is tried, it is successful.  Where is Barack Obama going to send his children to school?  Not to public school.  At least Jimmy Carter sent his daughter to public school, so let’s give him points for not being so much of a hypocrite.
• Energy — After the 1973 Arab Oil Embargo, when nuclear engineer Jimmy Carter took office, the Department of Energy was created adding another huge bureaucracy to the already massive government.  Some of the arguments you hear today is that Brazil is energy independent and one reason for that is that they make ethanol out of sugar cane.  If the Brazilians can do it, why can’t we?  During the Carter Administration they used the argument that during World War II the Germans made petroleum out of coal.  If they could do it, why can’t we?  That brought about the Synfuels project.  Congress appropriated $100 billion for this boondoggle and every project under this program failed.  A proven energy technology is nuclear.  However in this country, since 1979, environmentalists and liberals killed the industry.  On Long Island a $5 billion nuclear power plant was built and all but ready to throw the switch and provide clean nuclear power to replace or cap the oil fired power that had until that point supplied Long Island’s needs.  The plant was ready, but protests that evacuation was impossible, shuttered the plant.  The cost of the plant was dumped on the taxpayers and now the hue and cry is that we are producing too much CO2.  The book mentioned the ignominy of President Bush going to Saudi Arabia to ask for a price break when oil prices were skyrocketing.  I think the true ignominy was that we were begging foreign governments to give us a break when our own government said we couldn’t expand oil exploration here.  Cuba and China could drill off of our coast but we couldn’t.  If the issue is a lack of oil refining capacity, put yourself in the position of an oil company CEO. You know that you can build a new refinery at a profit, but when you look across the bargaining table you see your government putting all kinds of obstacles in the way and at the same time pumping subsidies into ethanol providers who are your competition.  Are you going to place that bet on a refinery, or make do with what you have?  And while we’re at it, how efficient is it to stop the refinery to re-formulate a dozen or more different gasolines for different parts of the country?  That’s our government’s energy policy.  But, we’re supposed to believe that government can really tackle and solve our energy problems going forward.
• Food — While government subsidizes the ethanol producers to make a product that no one would buy if not for the heavy hand of government, they are at the same time paying farmers not to produce so that prices will remain high.  So corn is diverted from feeding cattle, producing corn syrup as a sweetener substitute for sugar (which is subsidized at twice the world price), and being used as a food by itself, driving up the price of all foods that have corn anywhere in the chain, our government is also telling farmers not to produce and pays them for it.  So call me skeptical if I don’t think that in the absence of government interference, we couldn’t feed the world.
• Automobile Bailout — We are now faced with bailing out the Big Three Auto Companies.  Why?  Well there are many reasons and I think chief among them is the government mandated CAFE standards.  When the first Arab Oil Embargo hit in 1973 people who wanted better mileage cars could buy from the Japanese and they did.  For years, you could get a high mileage car if you wanted to by buying a Volkswagon Beetle.  So why did Congress feel it was necessary to get involved?  The market provided the full gamut of choice that people had the liberty to make.  But government felt they had to intervene.  Was the motive to provide high mileage cars to help the environment or was it to appease the United Auto Workers (UAW) by limiting Japanese cars?  If you look at the history further the motive may become a little clearer.  When that didn’t work, because people still wanted to buy Japanese, the UAW figured it must be because wages are so low in Japan they couldn’t compete, so let’s make them build the cars here in the U.S.  The idea behind that was that the UAW would organize those plants and make them just as expensive as the Big Three.  With CAFE, and UAW organizing the foreign owned plants, the problem would be solved.  It turned out that the workers at the foreign owned plants didn’t want to be organized by the UAW.  So GM, Ford, and Chrysler were saddled with the costs that the union and management agreed to, and the CAFE standards were forcing them to build cars they couldn’t sell at a profit.  The Big Three could still sell cars at a profit, such as trucks, Cadillacs, Lincolns, but having to average the mileage of those vehicles with higher mileage cars, they might have to sell seven subcompacts for every Cadillac to meet the CAFE requirement.  Since Americans can buy a Toyota, Honda, Nissan or many other brands if they want a well priced, high quality, high mileage car, the Big Three have to price theirs at a loss to compete, because if they don’t sell the small ones they’re not allowed to sell the big ones.  What would happen if the market were left alone?  The foreign makers would supply the high mileage end of the market, the Big Three could make money selling trucks, SUVs, and high priced cars.  They could plow those profits back into the next generation of vehicles and as the price of gasoline climbs they would either continue to shrink to become smaller companies or they would develop a competitive product.  The problem is our government, through the CAFE standard has bled them of any profits.  They have nothing to plow back in to R&D to make a new generation of fuel efficient cars, all they can do is demand a bailout or cost the economy 3 million jobs.
• The New New Deal – This is the one that scares me most of all.  To address the current economic calamity we here that the Obama administration, nostalgic for the days of FDR, is going to create a new New Deal, only bigger and bolder.  The problem is that many people believe that FDR and the New Deal actually got us out of the Great Depression.  Folks, the Great Depression was ended by World War II, not FDR.  It dragged on for twelve years, and many of the steps intended to “fix it” made it worse and prolonged it.  From the Smoot-Hawley tariffs that killed international trade, to contracting the money supply instead of expanding it, to raising taxes instead of cutting them, to having government entities like the TVA competing with private utility companies, I shudder to think of the fixes this new administration is going to attempt.

Government just grows and grows, takes more and more of our liberties away, and screws up the economy with program after program.  It’s time we went program by program and measure its performance against its original goals and shut down any program that isn’t working, cut taxes that were needed to fund these beasts, and return the money to the people.

As far as going Green, I believe it is something that is important and that we should do for our long term benefit.  However, I believe it should be market based, not driven by some bureaucrat in Washington, that decides that this technology is better than that one.  They are not smart enough.  No one is.  If we need the government to help to fund basic research because there is no commercial application on the horizon for a private company to fund such research, fine.  If some financing help is needed to reach a tipping point for some early adopters similar to SBA backed loans, I think that would be okay as well.  But the focus should be on letting the market decide.

The idea that today the world is too crowded also makes me wonder.  If you took the population density of Manhattan island, then 3 times the current world population would fit in the state of Texas.  That leaves a lot of space remaining.

Are there problems to overcome?  Yes. Do we have the ability to overcome them?  Yes.  Is it better we start working on them sooner rather than later? Yes.  But, is it a good idea to expect our government to lead us there?  No.  Not by a long shot.  Let’s dispense with the scare tactics.  Let’s get the government out of our way rather than looking to government to come up with a solution.