Tag Archives: graft

Doubts about Climate Change

Old timers like Jeremiah recall that winters used to be longer and colder.  Old photos in ski lodges invariably show more snowpack and a bigger glacier.  There can be little doubt about climate change.  One can, however, doubt the policy response.

Do you agree with President Obama, that climate change is the greatest threat facing humanity?  Jeremiah can find, without exerting himself, at least a billion people who feel more imminently threatened by hunger.


Among resource crises, the shortage of fresh water is easily more urgent.  With oil at $40 a barrel, the world’s desalination plants should be running flat out.  Alas, water is universally mispriced and so squandered.

A global outreach to discourage meat would go a long way.  Raising animals for food is an egregious waste of resources, especially fresh water.  Plus, livestock produce methane, a much worse greenhouse gas than carbon dioxide.

The root cause of our resource problems is overpopulation.  So, why not a global program to promote birth control?  Better yet, a global program (backed by sanctions and incentives) to mandate equal rights for women.  You can’t go wrong emancipating half the world, plus – fertility drops off sharply once women stop being chattel.

 “Population policy has been abandoned in recent decades. It is barely mentioned in discussions on sustainability or development” – Simon Ross

Why are the world’s policy makers focused on climate change, a distant and secondary effect, instead of root causes and immediate returns?  There is no logic to it, unless we apply our imagination and think like a criminal.

State control over energy is the mother lode of political rent seeking.  Politicians wielding this power can make or break any company they choose.  Those who donate generously can be rewarded with “green energy” grants.  Those who don’t can be sanctioned, without much evidence.

You can’t do that with birth control.


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Filed under Economy

American Oligarchy

Former president Jimmy Carter is now the most prominent figure to warn of America becoming an oligarchy. This term, “oligarchy,” is generally applied to post-Soviet Russia, where it took on a special meaning beyond the dictionary definition.


When the Russians tried to liberate their economy, all of the important assets – oil fields, power plants, and so forth – ended up in the hands of people with political connections. The oligarchs now control the economy, the government, and the state security apparatus.

It is painful to watch a formerly free economy, like ours, degenerate into the same condition. Russia simply failed to privatize properly her state-owned enterprises. Our shame is much greater. We are standing idly by, as an emerging oligarchy takes control of our government and our economy.

The so-called left and right have made common cause. The left loves government meddling in private enterprise – while the right thinks it is protecting same, when in fact they are only protecting entrenched corporate interests. We have written before about this mote in their eye.

The bailout of General Motors nicely illustrates this convergence. The left was able to claim they were “saving jobs,” which, as we explain here, is a chimera. Capitalism, as Detroiter Seth Godin explains, means letting incompetent companies go bust. Keeping zombie companies alive, with taxpayer money, prevents the creation of new jobs in vibrant new companies.

Not only should Congress facilitate the organized bankruptcy of the Big Three, but it should also make it easy for them to be replaced by 500 new car companies.

Our auto industry is a ward of the state, as is Boeing. Banking depends on the Federal Reserve’s largesse. Mortgage lending, and thus the housing industry, depends on the Fed and the FHFA. High tech avionics and robotics, obviously, are funded by the military. Including the Pentagon, as much as 20% of America’s labor force may depend ultimately on tax dollars.

Competition is what once made our economy stronger than the command economies of Russia and China. Even as their leaders are trying to wean China off state owned enterprise, we are allowing our economy to be nationalized by stealth. Businesses are capitalist when they start up but, once they are in a position to buy favors from the government, they become statist.

It is easy to see this unholy alliance of government and big business (and big unions) as a statist conspiracy. Jeremiah does not see conspiracy, however. He simply sees moneyed interests buying influence – to make more money – and government officials selling it, with a revolving door between the two.

Here is a long article in the New York Times explaining how the Clinton family raked in a little over $35 million during a mining rights transaction involving a Russian company and uranium in Wyoming. We write “during,” of course, because we don’t want to imply anything so crass as an outright sale of the State Department’s approval. Oh, and they paid Bill Clinton $500,000 to make a speech.

As the Russians gradually assumed control of Uranium One in three separate transactions from 2009 to 2013, Canadian records show, a flow of cash made its way to the Clinton Foundation.

America is being looted, and all of our assets will soon be in the hands of an oligarchy no different from Russia’s. We will be renting tiny homes from Blackstone, on a tiny stipend from HUD. Jeremiah has been watching this for a long time, and he can tell you that the pace is picking up. There has always been corruption, of course, but nothing so big and brazen as what we’ve seen lately.

Unfortunately, we don’t have any policy recommendation much better than those naïve calls to “clean up government.” One possibility might be to dismantle the regulatory agencies, the tax preferences, and corporate welfare. At this point, a return to laissez faire would be just as painful for the (faux) right as for the left.

This is not to endorse laissez faire, mind you. That would mean big setbacks for labor and the environment. The idea would be to “drain the swamp.” The less power government has over business, the less opportunity for corruption. Unable to buy favors from the state, companies would again be forced to compete.

Admittedly, this is not a great solution. At this late stage, it’s hard to imagine the oligarchy being rolled back by any means, and certainly not by the same voters who allowed it to develop in the first place.

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Filed under Liberty

Washington Skills

model-s-signature-red-motion_960x640Here is an article in the Financial Times congratulating Apple on their newfound pull in Washington.  President Obama has just set aside a patent ruling that had gone in favor of rival Samsung.  The article is quite sincere about this “progress” under new CEO Tim Cook, in contrast to Steve Jobs, who had better luck beating Samsung in the open market.

Public companies are hiding important facts that place their investors at risk. If you somehow find out, you will have no recourse because regulators gave the offender a “get out of jail free” card.

Meanwhile, American companies’ prospects abroad are damaged by their compliance with NSA data requests.  Imagine trying to sell American VOIP gear in Europe right now.  We no longer have the moral high ground when we talk about spying, hacking, or patent infringement.

Jeremiah has previously explored the back scratching motive for keeping Canadian pipelines out of Warren Buffett’s rail network.  Then there’s the Tesla scam, wherein buyers of expensive “green” sports cars receive rebates from Uncle Sam.  Tesla stock has tripled since May.

Success in business now depends on Washington skills.  That’s bad news for commerce, and bad news for freedom.

Update: Derision for Tesla from Wolf Richter. Richter, a stock analyst and car guy, argues that Tesla’s appeal is mainly due to government subsidies.

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Filed under Business

Sugar High

WillyWonkaYou are paying twice as much as you should for sugar and sugary foods.  That’s fine, you say, sugar is dangerous and ought to be heavily taxed.

Well, no.  The fact is that your tax dollars are used to support the price of sugar.  If you are both a taxpayer and a sugar user, you were dinged twice – once when the USDA took a loss on the sugar, and again when you overpaid for it.

Last year, the price of sugar around the world averaged 26.5 cents per pound, compared with 43.4 cents in the U.S.

The high cost of American sugar is backed up by tariffs on imported sugar, ostensibly to protect 140,000 jobs in the domestic sugar industry.  This year, said protection will cost taxpayers about $80 million.  It varies from year to year.  Call it $1,000 per job.  That’s not too bad, by Washington standards, and Jeremiah is not dogmatically opposed to price supports.

On the other hand, manufacturers now have a powerful incentive to build near cheaper sources of sugar.  This means a jellybean factory in Thailand, for example.  That’s probably a net loss of jobs and revenue for America, but ­– maybe it’s not about jobs.  Maybe it’s about pork for the eighteen sugar states, and $5 million in campaign donations.

The sugar lobby and the candy lobby are engaged in a bidding war for Congressmen, over corporate welfare.  That’s democracy at work.

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Filed under Finance

Book Yours Today

PricelineIt is hard to take the budget process seriously when they close the White House for tours.  This was clearly intended to be of symbolic, not financial, value.  Then, when the symbolism went bad, the administration blamed the Secret Service.

“Using the tours to send a message seemed like a surefire winner,” said Tobe Berkovitz, a professor of communications at Boston University

Jeremiah is impartial.  Regardless of the administration, he is going to side with the Secret Service.  By the way, it’s not smart to disrespect the agents who might someday have to save your life.

Meanwhile, Organizing for Action is brazenly selling access to the president for $500,000 – although we have heard you can get it cheaper on Priceline.

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Filed under Finance

Rise Above

Jeremiah is old enough to remember President Ford’s ridiculous “whip inflation now” campaign, complete with W.I.N. buttons, so he is cynical about this.  In every exposition we have read, the subtext is – “rise above” Speaker Boehner’s resistance to raising taxes on the rich.  Not exactly a formula for compromise, nor a credible answer to the debt crisis.

Anyone with a working calculator knows that another 2% from the top 2% won’t make a dent in the deficit.  A meaningful compromise would look something like this:

  • Rep. Boehner accedes to taxing the rich (symbolic).
  • Rep. Pelosi stops selling ObamaCare waivers (graft).
  • Freeze congressional salaries and reduce government headcount.
  • Cut, cap, or means-test backdoor spending in the tax code.
  • Trim some fat from ObamaCare.  Democrat proposals here.
  • Repeal the Alternative Minimum Tax.

We could go on, cribbing ideas from Simpson-Bowles.  By the way, raising revenues without raising rates is indicated in that reportTalking Points is mocking Rep. Boehner for making this subtle distinction.  In fact, the break from a doctrinaire tax-pledge position is to be welcomed.

Since the American public is now willing to be ruled by bumper stickers and cheesy slogans, we will publish the doomsday scenario next week.


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