Tag Archives: regulation

Renewable Energy

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Has German Chancellor Angela Merkel figured out something Barack Obama hasn’t?  As recently as last June, her government had set a goal that by 2020, renewable energy (vis., wind and solar) would comprise 35% of Germany’s electricity production.  In the first half of 2012 (ending that June), Germany already was generating 25% of its electricity from wind and solar, among other renewables.

Then some other things became apparent.  Germany’s Renewable Power Act requires power companies to buy wind- and solar-originated electricity in significant quantities.  Their largest industrial electricity users consume 18% of the electricity produced,  However, they pay only 0.3% of the extra costs generated by those required buys—German taxpayers pay the difference.

The power grid hasn’t kept up with the growth in alternative energy sources—like the offshore windparks in the Baltic and North Seas off the country’s north coast.  Many of those projects are at a standstill, with no way to deliver the power they generate to the mainland.

That Renewable Energy Act provides incentives to build wind turbines, but it doesn’t provide incentives to build the natural gas-fired power plants the country needs for when the sun isn’t shining and the wind isn’t blowing (see the figure).

Withal, German consumers are faced with skyrocketing electricity bills.

Now Merkel is changing her mind.  She; her Environment Minister, Peter Altmaier; and her Economy Minister, Philipp Rösler are meeting with industry and union representatives “to discuss the rising costs for consumers.  In the run up to that meeting, Altmaier has indicated that he hopes to…put the brakes on the current rush toward renewables.”

In the US, we have these: green energy subsidies (guaranteed loans, tax credits) and a Federal requirement that power companies buy power from renewable energy producers.

Off the New England coast, special interests found the views from their beach front manses would be offended by wind farms, and the potential farms themselves were declared a “hazard” to aircraft, so they are not even being built.  In central California, environmentalists won’t allow some solar farms to be built and won’t allow the power cables that would deliver solar electricity to cities to be built.

The EPA still requires ethanol to be blended into our gasoline, even though not enough of that is being produced to meet EPA requirements, much that is produced is exported, and the whole charade is driving up the cost of food.

Maybe we should, in  this case, try Obama’s meme of being more like Europe, or at least more like Germany.

A Modest Proposal for Financial Law

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Standard Chartered PLC agreed to pay a $340 million “fine” for improper financial transactions amounting to $250 billion, a fine of just a tad over 1% of that total.  Judge Jed Rakoff, of the United States Federal District, refused to sanction a proposed settlement between the SEC and Citigroup Global Markets of a $160 million “fine” for an improperly handled billion dollar CDO fund, arguing in part that there was no basis for a punitive settlement when there was no allegation or admission of a wrongdoing.

It is, in fact, routine for supposedly misbehaving financial entities and their Federal regulators to negotiate such chump change fines, whether or not actual wrongdoing is conceded or alleged.  This disconnect between the sanction and the (phantom) misbehavior generally is not the result of cronyism; all the players are, say I, fundamentally honest.  No, such settlements are driven by the complexity of our financial laws, of which Dodd-Frank is only the latest addition.  The defendant financial institution usually finds it cheaper to pay the government’s vig than to defend itself, even when innocent, and the government usually finds it cheaper to charge only a taste and make no demand for admission of wrongdoing than to prosecute a case.

As a result of this unnecessary complexity, the government simply continues to hector the financial institutions and the financials simply continue to misbehave (my remark about honesty not withstanding) with the settlements just part of the cost of doing business.

Accordingly, a modest proposal.  Get rid of the financial laws and the regulations.  Replace them with a few simple laws (which, in their simplicity will need no implementing regulations) to the effect of honoring freely signed contracts, the products sold having to be openly and clearly described, all parties to the contracts, and their roles, having to be clearly and openly described.  There might be one or two others, but you get the idea.

Then get serious about cases.  If these laws are violated, hale the miscreants into court and go for serious penalties.  No more “negotiating” pocket money payments.  That’s like negotiating with Willie Sutton over his “community service.”  $250 billion in illegal trades ought to get that much as the floor of a fine.  If that puts the misbehaving company out of business, I suggest that a criminal organization won’t be missed.

Subsidy and Food

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Here are some minor facts concerning a particular subsidy, courtesy of an The Wall Street Journal op-ed.

USDA lowered its 2012 corn forecast by 13% from last year’s, to 10.8 billion bushels, the shortest harvest since 2006, even though the planted acreage is the highest since 1937 and 4% more than last year.

only 24% of the corn crop is in good or excellent condition in the 18 major corn belt states, down from 72% just since June.

USDA’s world agricultural outlook board estimated that global corn consumption will be reduced by 38.9 million tons, with US problems responsible for ¾ of the shortage.

As a result,

Corn futures are up nearly 50% over the last six weeks.  The US accounts for 60% of global exports, and corn feeds cows, pigs, chickens, and humans through its role as a key ingredient in a broad range of foods.

Those corn futures will be realized as actual, sharp price increases that consumers will pay.  The price increase wouldn’t be so bad, but for a certain Federal subsidy.

The food-to-fuel mandate, Renewable Fuels Standard, requires 13.2 billion gallons of ethanol to be blended into the gasoline supply this year, rising to 36 billion gallons by 2022.  Fully 40% of 2011’s corn production went to ethanol, and courtesy of our EPA (though the subsidy originated in an earlier administration), and now more corn is devoted to fuel than to livestock or other foods.

But not to worry.  Despite the drought, the resulting corn crop failures, and the succeeding price increases driven by the crop failure, despite all of these hardships and negative impacts on the food supply, the ethanol makers got theirs.  The Renewable Fuels Association put out a statement, without a trace of irony, that there’s no danger of an ethanol shortage:

obligated parties under the RFS will have every opportunity to demonstrate compliance this year.

Helps to have your priorities straight.

More on the Integrity of the Left

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Here are some of the more egregious examples.  The primary Obama-supporting SuperPAC, Priorities USA, is planning to run an ad—an ad that’s already on the Internet—that accuses Republican Presidential Candidate Mitt Romney of being personally responsible for an ex-steel worker’s wife’s death from cancer.  The ad itself is dishonest:

  • The man’s wife died five years after GST, the steel company for which the man worked, filed for bankruptcy.
  • Romney had long since left Bain Capital at the time of her death.
  • His wife had her own health insurance after the man had left GST.
  • The man’s wife died at a time when Bain actually was being run by a major Obama bundler.

Democratic Presidential Candidate Barack Obama has been dishonest in connection with this ad:

  • Obama denied, through his Deputy Campaign Manager, Stephanie Cutter, that he “doesn’t know the facts” about the steelworker or his story, doesn’t know when the man’s wife became ill or anything about the man’s insurance coverage.  Yet last May, Cutter hosted a conference call in which the man detailed his story, including the specifics now appearing in this ad.
  • Obama, through his campaign spokesman Ben LaBolt, insisted that “we can’t coordinate with super PACs and didn’t produce” the ad.
  • Obama has given the green light for members of his cabinet to attend fundraisers for his political action committees.
  • The existence of the conference call, followed by its information appearing in Priorities USA’s ad, together with the SuperPAC fundraising efforts, demonstrate that all of this has occurred: coordination, the Obama staff’s role in the ad’s production, and active Obama White House participation in the “independent” SuperPACs’ efforts.
  • As recently as Friday, Obama still was denying, through his press spokesman, Jay Carney, any involvement or knowledge of the sordid affair.

And there’s this.

Lauren Gray is a dancer who turned 21 last Wednesday and has lived in the US as a legal resident alien since she was 4 years old, having come here when her parents came from England on work visas.  As an adult in her own right, she now must get her own visa in order to stay.  She was on track to get her green card when her priority was dumped, without explanation, into a two-year wait—which means she would have had to return to England—a nation that’s hers by birth but not by loyalty, life, or anything that matters.

Democratic Presidential Candidate Obama’s immigration fiat, though, gives those who are in the US illegally a prompt stay—they have only to aver having themselves come here as children and having stayed out of trouble since, and they get, promptly, documents allowing them to continue staying in two-year increments.

Gray has been working with “her” Congressmen (Senator Claire McCaskill, D; Senator Roy Blunt, R; and Congressman Sam Graves, R) from Missouri, the state in which she’s been living her life, seeking assistance, and at the last minute Senator McCaskill was able to get permission for Gray to stay in the US legally until her green card request works its way through the system.  Gray will get a work visa, renewable every two years.

But why did a United States Senator have to get involved?  How many others here legally are being forced out—because they’ve outgrown their parent’s visas, or their student visas or their H-series visas have expired, or…?  This is an outcome of Obama’s immigration amnesty by fiat program—as Obama knew when he issued his “Dream Act” edict; he is, after all, a highly intelligent man and a Harvard-trained lawyer.  He knew full well what the results of his Presidential Bull would include.

Finally, there’s this:

The law breakers that were in the defunct Occupy Wall Street crowd are getting a pass from the Democratic Candidate’s White House.  Emails from the General Services Administration (remember this gang of partiers?) obtained by Fox News indicate that, on orders from the White House, the GSA instructed Federal law enforcement in Portland, OR, not to enforce curfews on protesters camped out on Federal property.  This exchange between DHS’ National Protection and Programs Directorate Chief of Staff, Caitlin Durkovich, and GSA’s Public Buildings Service Commissioner, Robert Peck, illustrates:

Durkovich: They have chained themselves to a large drum filled with concrete. GSA controls the permits and has asked [Federal Protective Services] not to enforce the curfew at park and the prohibition on overnight encampments…. Our FPS Commander in Portland says they are standing down and following GSA’s request to only intervene if there is a threat to public safety.

Peck: Caitlin: yes, that is our position; it’s been vetted with our administrator and Michael Robertson, our chief of staff, and we have communicated with the [White House], which has afforded us the discretion to fashion our approach to Occupy issues….  The arrests last week were carried out despite our request that the protesters be allowed to remain and to camp overnight….

Never mind that “the arrests last week” were these:  25 demonstrators arrested after they refused to leave Jamison Square in the Pearl District after the park was closed after “an intense standoff.”  And never mind the impact that waiving the law and letting lawbreakers, en masse, go free has on “public safety.”

Obamanomics and Life Expectancy

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Power Line quoted, earlier in the week, a Cato-conducted tongue-in-cheek study that applies Democratic Presidential Candidate Obama’s standard for attributing deaths to economic behavior, with the arithmetically driven conclusion that Obama has personally killed nearly 60,000 Americans with his own policies.  The Republican Presidential Candidate, Mitt Romney, plainly is a piker who does not kill efficiently, having done in only one, and taken far more time to do so.

Of course, the claim by the Democratic Presidential Candidate through his SuperPAC is dishonest, and the claim by Cato is ludicrous and made only to illustrate that point.  A fair question to ask, though, is what is the impact on American lives the Democratic Presidential Candidate has had with Obamanomics?  The answer is apparent.

The connection between poverty level and life expectancy has been well established, as the following graph (which takes a broad-brush view of splitting between poor and rich; however in the present context, finer gradations are not needed) illustrates:

The life expectancy delta between “rich” and “poor” over the 20 years of this study has reached +4-ish years in favor of the “rich” for the population in general, with a larger disparity among men.

On the other hand, the number of Americans living in poverty has been growing sharply during the 3+ years of Democratic Presidential Candidate Obama’s current term on the hustings.  In 2010, the number of Americans living in poverty was 15.1% of the population, while that had risen to 15.7% in 2011—an increase of 2.2 million Americans reduced to poverty in just that one year.  If we go back to 2009, we see an increase of some 5.2 million Americans living in poverty under Obamanomics.

The Democratic Presidential Candidate’s policies have shortened the lives of 5 million Americans by roughly four years—and he’s achieved this in only three years of campaigning.