It’s good to have him in our group.

So why in this time of sky high deficits and unsustainable debt burdens we are laying on our grandchildren, do so-called Republican candidates support the ethanol fraud? Votes in corn producing states! It’s that simple.

Newt Gingrich, if he’s still a viable candidate, is an ethanol whore. He supports it. Mitt Romney, that smooth talking flip-flopper who developed the fore runner of Obamacare, is an ethanol whore. He supports it.

In fact, Mitt supported it publicly in Iowa as a follow-up to Tim Pawlenty’s gutsy Iowa statement that we can’t afford ethanol subsidies. So not only is Mitt a ethanol whore, but he’s a cheap one at that.

I expect Obama to win in 2012, if Mitt Romney, father of ObamneyCare, is leading the Republican field. When you think of it, Mitt should be running as a Democratt!

It’s heartening to see that the Senate today voted to end ethanol subsidies. That means it’s probably time for another Mitt Romney flip-flop. Get ready!

Tony Senik’s Daily Caller post, The Obama Gas Tax, makes the case pretty well: Fact, gas prices are up 67% since he took office. Fact, he said that we can’t drill our way out of our energy problems. Fact, he has blocked domestic energy exploration at every turn. Fact, he exported Gulf drilling rigs and JOBS out of this country to Brazil!

What’s interesting is that he wants to subsidize so-called green technologies with your tax money. So really you’ll be paying twice: once for the gas tax then again for the green technology. Strange but these uneconomic mirrors in the desert are being blocked by the environmentalists that he supports. The same is true of the idle windmills that his favorite corporate welfare dependent GE has overstocked. But then GE who pays no income tax on its billions in profit, has agreed to buy half the production of the unmarketable little green Chevy Volts! Hell of a deal!

So, Tony Senik has really understated the problem. Gas tax plus wasted green tax subsidy plus stagflation at best or depression at worst. That’s Obama’s energy policy!  As Senik said, saying you can’t drill you way out of your energy problems is like saying “you can’t medicate your way out of an illness!”

Doesn’t President Obama see the contradiction in his positions? And, why on earth would he want to be another Jimmy Carter?

Now let’s shift to Richard Weltz’s American Thinker post, Anyone Want to Connect the Petro-Dots? quote:

• George Soros and his various money-distribution organizations such as MoveOn.org spend heavily on behalf of Obama’s run for the presidency.
  
• Soros invests over $800 million for a large stake in Petrobras, the Brazilian oil company.
• The U.S. arranges for the Ex-Im Bank to guarantee loans of $2 billion to Brazil for exploration of offshore oil finds. end quote.

Victor Davis Hanson highlights President Obama victory lap in Brazil: “Last week, President Obama went to Brazil and declared of that country’s new offshore finds: “With the new oil finds off Brazil, President (Dilma) Rousseff has said that Brazil wants to be a major supplier of new stable sources of energy, and I’ve told her that the United States wants to be a major customer, which would be a win-win for both our countries.”

The administration has run record deficits, generated record unsustainable debt, and generated 9% unemployment in the process, so what does it do? Shuts down virtually all oil exploration and promoted bullet trains and the already failed Chevy Volt which runs on gas.

Who wins, the American workers? No. The American consumers? No. George Soros? Why yes! The value of George’s Petrobras investment has multiplied dramatically. The profits generated with the Brazilian offshore production will be tremendous. Oh, and those profits will be enhanced with the subsidized financing provided by Eximbank!

One more thing, who do you think Soros will support in the 2012 presidential race?

Daimia argues that “clean” equals” cool” by virtue of the EPA’s mission to limit greenhouse gasses. Those, in addition to the air you exhale are mainly caused by hydrocarbon energy, coal, oil, gas. So what does our president propose in this year of a $1.6 Trillion deficit and $14 Trillion in debt? He proposes to increase the budget for the Department of Energy by 12%, $8 Billion in addition to the $30 Billion in the 2010 “stimulated” budget!

So our president doesn’t think seriously about the morality of stealing from our future generations. He neglects to treat the budget seriously. He won’t look at the unsustainable entitlements which he has just added to with Obamacare. No, he wants more votes, greater deficits, and more debt for our grandchildren to pay! SICK!

What’s he want to do with that largess? Something smart like nuclear power? No, sorry. He wants things your tax dollars and the tax dollars of your great grandchildren must go to subsidize. Things like, solar with a budget increase of 88% and wind with a budget increase of 61%. Something my grandchildren recognize in their youth is that the sun doesn’t always shine and the wind doesn’t always blow. Apparently Obama hasn’t gotten that message. He hasn’t driven through the Coachella Valley to Palm Desert to see the thousands of acres of still, silent wind mills bilking the US taxpayers. He hasn’t been to Victorville on an overcast day to see all those wonderful mirrors tilted toward the grey sky, reflecting only a testimony to taxpayer ignorance.

Here’s an idea. Let’s abolish the Department of Energy. What does it do that isn’t already being done by or could be done by the myriad of other real departments? It employs 1600 bureaucrats who could contribute the economy significantly better in the private sector, if for no other reason than that taxpayers would not be paying for them. It is not exactly what one thinks of as one of the essential functions of government. And, look who created it, Jimmy Carter, Obama’s alter ego! What better argument to undue it, than that Carter did it?

If we abolish the DOE, Obama will no longer have a code with which to appease the global warming alarmists! Then he must choose, make a decision! What a frightening thought!

Alaska is able to export almost
80 percent of its tax collections to
residents of other states… While
taxpayers in 43 states are busy
filing income tax returns in April,
Alaskans are instead receiving checks
from a multi-billion-dollar reserve
fund built up from years of large
severance taxes on oil extraction.

Nuclear power is to Nevada what oil  is to Alaska. The Alaska Permanent Fund provides an ongoing annual dividend to Alaskans. A Nevada Permanent Fund could likewise provide and annual check to Nevada families approximating $2,500.

Nevada has a resource that no other state has, a federally designated nuclear storage facility which can be expanded to fuel rod reprocessing, energy research and development and nuclear power generation. The Nevada Energy Park would generate new diverse  industry, a new academic center of excellence in energy research and development, significant revenue for the state treasury, and an annual dividend check for each family in the state.

The best part is that utility rate payers in 43 other states are already paying for the development of the Nevada Energy Park. That’s correct over $30 Billion is available and growing each year in the Nuclear Waste Trust Fund. Pretty good potential source to start the NEP development, the Nevada Permanent Fund, and solve the state’s budget problems.

This idea is just getting started. Check out NV4CFE.org. Let me know what you think.

]]> http://renohayek.com/2011/02/how-about-a-nevada-permanent-fund/feed/ 0 http://renohayek.com/2011/02/the-folly-of-government-investments/ http://renohayek.com/2011/02/the-folly-of-government-investments/#comments Fri, 11 Feb 2011 02:22:18 +0000 Tom http://renohayek.com/?p=2440 Friedrich Hayek exposed socialism’s hubris of central planning, the notion that the ruling class has more knowledge that the ruled, or one head is better than two or two hundred million. The so-called progressives, a euphemism for leftist liberals, nonetheless continue to believe that they know what’s best. Thus we see the President spouting nonsense about bullet trains and the CEO of Government Motors wanting to triple the production of Chevy Volts costing $40+ thousand; of course there is no independent market demand for either.

Today’s WSJ editorial, The Range Fuels Fiasco, gives a beautiful example of government “investments.” George Bush kicked off the opening act of the comedy in 2006 praising the benefits of “cellulosic ethanol from wood chips” as a way to break our addiction to oil. Range Fuels got a $76 million grant to build a plant to initially produce 20 million gallons and eventually 100 million gallons of this miracle fuel. The media applauded and the environmentalists gushed. Congress got in on the act in 2007 by mandating 100 million gallons by 2010 and 250 million by 2011. Range Fuels with all this hype raised $130 million from the private venture markets, funded in part by CALPERS. In 2008 without a drop of production the Department of Agriculture provided Range with an $80 million loan.

“In early 2010, the EPA said Range would finally produce some fuel in 2010—but only four million gallons, not 100 million, and of methanol, not cellulosic ethanol. So taxpayers have committed $162 million (along with at least that much in private financing) to produce four million gallons of a biofuel that others have been making in quantity for decades.” Range still is promising cellulosic ethanol but has had to lay off all but four employees while it raises more money.

And here’s the corker: “As for current Range CEO Mr. Aldous, he’s blaming this failure on—brace yourself—Washington’s failure to impose a tax on carbon via cap and trade. “The critical issue is really that there’s no mechanism to price carbon today,” he told a Colorado newspaper. He also blamed “public apathy toward green fuels.”

Notice the common elements of this fraud: A Pool Table, as in the kind the Music Man used to sell the boys band. That is a perceived threat, here foreign oil dependency, to create demand. A fawning press of decidedly liberal bent. Environmentalists pushing the government agenda. A large pile of free government money to be taken by corporate welfare rent-seeking types. And a paternalistic government that knows what’s best for all of the rest of us!

I recently drove through California’s major wind farms on the way to Palm Desert. Of the hundreds of acres of wind mills, hundreds of thousands of expensive towers and generators, not one was turning at any speed. I’ve taken this drive many times before and viewed the same tragedy. These monuments to leftist folly are a tragic waste of taxpayer money, a misallocation of capital on a scale seldom seen. Yes, that’s right, your hard earned dollars go to fund the tax credits and mandates without which these gigantic eyesores would not exist.

There is simply no economic justification for wind or solar power. Without tax credits they would not exist. Nor is there any economic justification for bullet trains. Obama is pushing both. He knows what’s best for you…….much better than you do! “Ya got trouble, my friends, right here in River City……TROUBLE with a capital T and that rhymes with P and that stands for Pool!”

But compounding this taxpayer theft, is another regulatory usurpation by the Obama administration. This time by the Federal Energy Regulatory Commission and its imposition of a multi million dollar annual surtax on utility bills in 13 midwestern states to cover the costs of transmission lines to wind and solar projects.

This has no statutory authority. Nor is there any legal precedent for this action by these unelected leftist bureaucrats. Legally FERC’s rate schemes have been based on the principle that users pay, non-users don’t. This new tax is imposed on non-users as well as users to promote so-called “multi value projects’ that take into account broad “public policy goals.” In other words the unelected bureaucrats without congressional authority or court precedent can do just about anything they damn well please!

Thursday’s WSJ editorialized against The Midwest Wind Surtax, calling it the latest scheme to socialize the costs of renewable energy. The folly of the renewable energy proponents is getting out of hand.

“For example, a 2009 study by the California Public Utilities Commission finds that to meet the state’s “33% RPS by 2020 target, seven additional [transmission] lines at a cost of $12 billion would be required.” By some estimates, electricity from the Cape Wind project off Massachusetts will cost about two to three times more per kilowatt hour than electricity from coal or natural gas. The wind industry has essentially conceded that without the ability to socialize the cost of multibillion dollar transmission lines, its projects can’t compete with coal, natural gas and nuclear power.”

“The FERC pricing scheme is politically insidious, and arguably unconstitutional, because it enables states with renewable standards to export the costs of those policies to other states without these laws. Why should a factory in Pontiac, Michigan subsidize the wind energy costs of a plant in Elgin, Illinois? Michigan has a renewable energy standard, but it is already complying through instate renewables.”

No doubt that true renewable energy should be used where available without subsidy, hydroelectric and geothermal power are examples. Nuclear power should be promoted for base load purposes throughout the country. But the waste of taxpayer money on part-time renewable boondoggles like wind and solar compounded by the imposition of transmission taxes on non-users by FERC is truly a compound wrong against taxpayers and common sense.

Now she dismissed uncertainty over the future of the Bush tax cuts because the difference between the current 35% top rate and Obama’s 39.6% top rate is simply too small to put hiring and spending decisions on hold.  Then she throws up an uncertainty monster saying that the future tax increases to deal with the “grossly unsustainable” budget deficits could be modest or “enormous.”  OK, let’s say you’re a corporation that could build a factory and employ 1500 workers in Nevada or in South Korea; each option is close, but the prospect of enormous U.S. tax increases scares you. Uncertainty? You bet!

She posits “climate change” and dependence on foreign oil as problems that will not go away by “tabling plans to deal with them” which makes it harder for companies to plan and invest. Yeah, right! How about banning offshore drilling, or regulating the CO2 we exhale from both ends! Or what about the FCC discussing expropriation of investments in bandwidth all for so-called “net-neutrality?” Uncertainty that you didn’t mention Christina!

In a real knee-slapper she pans the uncertainty caused by the volatility of the economic forecasts. Let’s see, if you’re an economist forecasting the future of this or that, don’t you have the same access to the follies of leftist Washington as the businessman does?

Solutions, you bet, she has ‘em: “How do we resolve uncertainty about future growth? The Federal Reserve, Congress and the president need to reaffirm that they will do whatever it takes to restore the economy to full health. They could take a lesson from President Franklin D. Roosevelt, who declared in his 1933 inaugural address that he would treat the task of putting people back to work “as we would treat the emergency of a war.”

“They should follow up with powerful fiscal and monetary actions to create jobs — coupled with a concrete plan for tackling our long-run budget problems. We are at a critical moment. With many in Congress opposed to further jobs measures and tax increases of any kind, the chances of prolonged gridlock are high.”

Christiana Romer is typical of the political and academic hacks our leftist president has surrounded himself with, all puff with no concrete proposals to cut the big, behemoth intrusive, overreaching government. Uncertainty is indeed the problem, taxes, Obamacare, financial regulation, EPA, FCC, Fannie/Freddie,  you name it. What it gets down to is that these academic “elites” think that they know what’s best for us, for the economy. They think they know more than Adam Smith’s invisible hand or Friedrich Hayek’s animal spirits! That hubris is their fatal flaw!

Christiana Romer is in a safer place now happily ensconced in academia. Safer, that is, for the nation. There she will only poison young liberal minds pretending to educate them in economics.

“It is not a good policy to have these massive subsidies for first-generation ethanol,” Al Gore told a gathering of clean energy financiers in Greece this week. The benefits of ethanol are “trivial,” he added, but “It’s hard once such a program is put in place to deal with the lobbies that keep it going.” This from Al Gore’s Ethanol Epiphany in the WSJ. Guess what, Al has taken his profits in the “first-generation” stuff and has now invested in some “next-generation” stuff! Watch your wallets!

Dennis Byrne in today’s Chicago Trib wonders, Can Congress Stand Up to Ethanol? The farm lobby, the ethanol bobby, believe it or not are much bigger than fat-cat, over-weight, rent-seeking Al Gore. Once set in motion sucking off the dumb, productive taxpayers, they are unstoppable!

Ethanol consumes 41 percent of the corn crop. The EPA mandates that 10 percent of gasoline sold be ethanol and allows up to 15 percent, eventhough it will damage millions of catalytic converters and thus will damage the environment. The ethanol industry receives a tax credit of 45 cents per gallon; its supported by a tariff on sugar cane ethanol of 54 cents a gallon. And it’s a beneficiary of a federal mandate for renewable fuels going from 10.5 billion gallons in 2009 to 36 billion by 2022! On top of that the Obama administration today again shut down offshore drilling on the East and Gulf coasts!

“This is extraordinary. And insane. Here, the government creates a fake market for ethanol, then subsidizes the market, and then protects the market against foreign competition.This has to stop. But don’t count on it.”

The blood sucking, rent seeking Agribusiness is big and powerful. It won’t compete on market terms, it can’t. It exemplifies corporate welfare at its best. It owns Congress. It is not only ethanol subsidies but subsidies in general that must go. Why should we pay for the fat cats?

Ethanol is just one example of big government gone wrong, catering to big business and big environmentalists. Ethanol costs more than gasoline to make, raises food prices, and harms tailpipe pollution. Are we in the twilight zone!

Congress should eliminate all farm subsidies. There is no economic or environmental justification for any of them. Congress should stop the losses it has mandated upon the American taxpayers. We all should stop listening to fat-cat, rent-seekers like Al Gore.