Friday, December 23, 2011

Shocker! Stabenow and Levin Wrong Again

Could it be that sound economic principles are now driving our energy policy? How about our policy on agriculture? Well, either would be a stretch, but every little bit helps.

The United States has ended a 30-year tax subsidy for corn-based ethanol that cost taxpayers $6 billion annually, and ended a tariff on imported Brazilian ethanol.

Congress adjourned for the year on Friday, failing to extend the tax break that's drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.

The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks.

Environmental group Friends of the Earth praised the move.

"The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables," biofuels policy campaigner Michal Rosenoer said Friday. "Given corn ethanol's downsides, it's outrageous that taxpayers have been subsidizing the industry to the tune of $6 billion a year. The industry's inability to get this tax credit extended signals that it no longer has carte blanche in Washington: Corn ethanol is no longer a sacred cow."
Clearly ethanol had no business being considered a vital portion of America's energy solution to begin with. Its harms were legion and its benefits dubious.

The corn ethanol industry was largely the brainchild of environmental activists and benevolent politicians who joined forces to not only save the planet from the evils of pollution and to save America from the evils of foreign oil, but it also served as a grand vehicle for politicians to bring home the bacon to voter districts rich in corn production--an act not considered nearly so evil.

They could save the family farm, could save the environment and, as an added bonus, could also tell the Middle East to stick it where the sun don't shine. Of course, that was before those pesky unintended consequences started popping up as thick as corn in a flat southern Michigan field. Buoyed with redirected tax dollars, the ethanol industry boomed.

Corn was diverted from food production into an inefficient energy source whose manufacture and distribution actually consumed as much energy as it produced. Millions of acres of arable land were diverted from other grains and vegetable production to that of producing corn; corn that was to be burned in my sleek '95 Buick.

Prices rose for corn as demand rose. Prices also skyrocketed for those products that had their production acreage slashed in favor of corn. Beef and poultry prices also rose as feed grains hit the roof. Meanwhile, the UN and NGOs began issuing warnings of impending starvation in the third world as food supplies waned and costs rose.

But, there was even more trouble. Many ethanol producers declared bankruptcy outright or managed to stay afloat merely through the taxpayer funded leverage supplied to them by vote seeking bureaucrats.

Ethanol producers in turn lamented that they had entered the industry at the behest of government but that the government had not done enough to actuate demand. So, a gullible congress bowed again and again to lobbying pressure by continuing to subsidize corn and ethanol production and also by changing fuel mix standards to heighten demand. Billions more dollars (and meals) went down the drain annually.

There were other ethanol alternatives, of course, the most viable being cane ethanol from Brazil. However, stodgy bureaucrats could not allow efficient ethanol to enter this country when they had activist voting constituencies that needed their inefficient products protected. So, tariffs levied upon imported ethanol made what would be a sensible alternative a no-go.

Farmers were given taxpayer money to grow corn. Ethanol manufacturers were given taxpayer money to start up and continue operations. The industry was guaranteed increasing demand for its products through manipulation of fuel blends. The industry was granted protection from truly efficient foreign ethanol.

Despite the billions poured annually into the industry and stacking the deck heavily in its favor, it simply could not support itself on its own merits regardless of the motives behind its launching. Economics is funny that way.

In recent years even many former ethanol supporters have jumped ship, among them most notably the Nobel Prize recipient Albert Gore who admitted he was merely taken in by the hype and that he is a hopeless moron. Other groups are now off the ethanol bandwagon too, apparently feeling some guilt over the millions their favored regulations helped starve over the past few decades.

However, despite Al Gore's two brain cells hesitantly sparking to life, some enlightened politicians still exist that favor the disaster that is corn ethanol, with Michigan's two brainy senators sharing top billing. Senators Stabenow and Levin voted against suspending the subsidy, apparently still is support of the idea that a bankrupt nation should be able to force its recessed citizens to pay billions in tax dollars for the simple pleasures of being able to pay billions more on food, to use less efficient fuels, and as an added bonus, to severely restrict the caloric intake of millions of people in the third world.

In Michigan we call that representation. In Ethiopia they simply call it hunger.


That would be me for linking to this article in the Daily Mail concerning contemporary textbooks in the modern Kingdom of Saudi Arabia.

'They show students how to cut (the) hand and the feet of a thief,' he said.

The textbooks were printed for the 2010-2011 academic year and translated from Arabic by the institute.

In one, for ninth-graders, students are taught the annihilation of the Jewish people is imperative.

One text reads in part: 'The hour (of judgment) will not come until the Muslims fight the Jews and kill them. There is a Jew behind me come and kill him.'

According to the translations, women are described as weak and irresponsible.

Mr Al-Ahmed said the textbooks also call for homosexuals to be put to death 'because they pose a danger at society, as the Saudi school books teaches'.
Incidentally, Saudi Arabia was the home of 11 of the 19 airline hijackers on 9-11-2001.

Wednesday, December 21, 2011

And Then There Were Three (Less)

The green energy industry, in particular the solar energy component of that industry, now has three fewer participants than it did just a month ago as BP Plc. has bid it a long, last goodbye. It did so voluntarily citing 'continuing global economic challenges'; this unlike two German competitors who were recently forced into liquidation by the realities of the free market and the global economy.

Solon SE and Solar Millennium, the latter of who received a $2.1 billion grant of free US taxpayer money, are no longer producing solar cells due to oversupply in the market (too little demand for an overprice product) and price pressures (falling retail prices the result of too little demand.)

It must be understood that the solar energy industry itself has recognized that it is woefully inefficient. But, in the convoluted thinking of a government driven benevolent economy, this is a feature and not a bug. It brags that it requires the most workers per megawatt of power produced than any other energy source. See how long Denny's stays in business using a "more cooks in the kitchen than anyone else" business model. Of course, that is only part of the problem. Not only is the production and installation of solar energy components more expensive than its green and not-so-green energy sisters, once the solar components are built and installed at an industry high labor cost, the energy produced is both intermittent and dependent upon even further subsidized transmission lines to bring the energy to market.

There simply is no way for these companies to make a free market profit pursuing a highly inefficient energy solution and selling it to the world for multiple times the cost of fossil powered energy. The only way a solar energy company can stay in business is by having its solar cell division carried along by other divisions that are hugely profitable (a course of action BP is no longer willing to pursue,) by perpetually preying off of taxpayers through the benevolence of planet saving politician pimps (which was the preferred route of German owned Solar Millennium,) or by choosing the path of the Chinese--compensating workers with poverty inducing wages and coupling that with a willingness to market dump products at a loss in order to dominate the industry.

We can complain all we want about China's emerging dominance in the solar panel market, but why? Economics has dictated that solar energy will not for many decades be anything more than a small niche market within the energy industry as a whole--and it will only reach profitability if its products are severely overpriced. (A price, incidentally, that only benevolent US and EU governments have been willing to pay.) Large scale profitability can be reached only if American families are forced to endure poverty inflicting prices for such heinous acts as warming up cans of soup (a food we should all get used to eating at least twice a day should solar energy ever be forced on us) or huddling around the dim family light bulb in order to read Al Gore's latest work of fiction. Americans will not voluntarily make such sacrifices--a development that the Obama administration has duly noted.

What we have here is a trade off in living standards. On one side is the American consumer who must endure a lower living standard to pay the exorbitant price of a failed energy policy, while on the other is the Chinese worker who must work for poverty sustaining wages in order to deliver a communist-blessed product to market against all economic common sense.

We must have one or the other for an existent solar energy industry. Me, I'll take the side of the energy loving American consumer and the over-stretched American taxpayer and hope that the Chinese people don't suffer overmuch for my greed.

Tuesday, December 20, 2011

A Salute to Troy

By Troy, I'm referring to Troy, Michigan, a city that lies in the shadows of a crumbling Detroit and a city, it would seem, with at least a little bit of common sense and a sense of responsibility.

Troy has figured something out. It has determined that the most destitute country in the history of the solar system does not have the money to spend on a project whose benefits were over-hyped, was not needed, and despite the fact that the $8 million necessary to construct the albatross was coming from the feds, was not free.

The people in Troy have discovered something that should make them eligible to win next year's Nobel Prize for Economics--namely that federal tax dollars still are paid by those who live in small, medium, and large towns across America; they are not created arbitrarily at the wave of some federal bureaucrat's wand.

This country is $15 trillion in debt not counting the scores of trillions of additional debt currently off the books in the form of unfunded liabilities. Not only does this country not have the money to fund wanted but unnecessary building projects, it doesn't even have the money to fund initiatives without which needy people will go hungry, without heat, and without health care.

Troy is but one declining city in one declining state in what amounts to a bankrupt country, and as it turns its nose up at this project, countless other entities across the nation are greedily peeping toward the sky hoping the shadow of Father Bird Obama will regurgitate some borrowed Chinese money down their gluttonous throats for their own versions of a pet project--easily wiping out Troy's common sense on the order of a thousand times or so.

But for this moment at least, we should salute Troy.

Monday, December 19, 2011

Joe Biden is not Sentient, per se...

Fightin' Joe Biden is at it again, this time waxing eloquent on the tangled web of geopolitical intrigue present in modern day stone age Afghanistan and, one assumes, tribal Pakistan.

One can definitely draw a line between al Qaida and the Taliban, but one cannot have one working brain cell and posit that the Taliban is no enemy of the US. While they are not al Qaida, they did offer Osama bin Laden an unfettered existence within their territories from which to attack the US. While they are not al Qaida, they have killed many Americans within Afghanistan. While they are not al Qaida, they have helped to export terror to surrounding countries including Pakistan and India. While they are not al Qaida, the Taliban is one of the most oppressive political bodies on Earth, beating women who do not cover their faces, burning schools, blowing up innocent civilians, stoning infidels, outlawing music, among other things.

The Taliban is working against every interest of the US and is willing to back that up with munitions. Yet our Vice President does not see within any of that the hint of an enemy stance.

One heartbeat from the presidency resides a man with a flat line EEG.

Sunday, December 11, 2011

Imagine My Surprise

Imagine my surprise when I read the first few sentences of a politics blog post by Libby Spencer in the Detroit News.

"As you know, the investment firm MF Global went bankrupt and somehow "lost" at least $1.2 billion of their customers' money. Former CEO...["]
Seeing that an article written by Libby Spencer might possess even the slightest hint of criticism aimed at a progressive Democrat is enough to set my heart aflutter. Might Libby be seeing the light? Might her enthusiastic approval of all things socialist at all times be finally cracking.

Might she finally criticize John Corzine, the huge Democrat supporter and former Democrat governor of New Jersey, who took huge bets on foreign states with his clients' money just before the Eurozone members began floating in obvious debt? Might she?

With a lump in my throat I decided that I had to look.

So, I clicked through to the main blog post where I was met with this headline: GOP helps Banksters Run Wild. Drat.

Libby was just teasing.

No mention of Corzine's long standing membership within the favored Wall Street Democrat support group. No mention of Corzine's party affiliation. No mention of his Democratic former governorship in the nearly insolvent state of New Jersey. No mention of Corzine's term as Democratic senator. No mention of his failed nomination to President Obama's cabinet. No mention of any of these pesky little facts in a story designed to use Corzine's actions as a way to pillory the GOP.

I did find this little bit of fun...
I didn't know this but according to the report, "Farmers, ranchers and others who make a living from agriculture rely on futures contracts to lock in commodity prices."
Imagine that, Libby admitting her ignorance on something so basic as this despite the fact she feels expert enough to comment on politics and economics with all too much frequency.

Let's hope she doesn't discover all the items of basic economics in which she is totally ignorant, at least any time soon. I don't think my heart could take it and I'm certain I couldn't toil my way through any blog post of Libby's that long.

Saturday, December 10, 2011


Protein Wisdom:

I’m tempted to talk about the irony of kids taking out student loans to enroll in a class that will “study” why irate college grads who can’t get jobs are camped out in tents complaining about the amount they owe on student loans...
That ain't no education bubble, its just an inflatable muffin. Tuition rates at NYU? $1,159 per credit hour. Carry on.