This article appeared online at TheNewAmerican.com on Thursday, December 22, 2016:
President-elect Donald Trump has named a longtime close friend as his “special advisor” on deregulation: multi-billionaire activist Carl Icahn. In acknowledging the honor, Icahn stated, “It’s time to break free of excessive regulation (see above) and let our entrepreneurs do what they do best: create jobs and support communities.”
Icahn started as a stock trader and then moved into a position where he could
This article appeared online at TheNewAmerican.com on Friday, October 28, 2016:
When the Energy Independence and Security Act of 2007 was signed into law by then-President George W. Bush, it was well-intended: It would increase America’s oil independence and reduce dependence on foreign oil, it would produce cleaner air, and it would help farmers.
The Act required refiners to add ethanol to every gallon of gasoline they produced. If a refiner decided it couldn’t (too costly) or wouldn’t (internal decision) do so, it would be required to
This article appeared online at TheNewAmerican.com on Wednesday, February 3, 2016:
Texas Senator Ted Cruz’s surprise upset victory over Donald Trump on Monday night just might have set in place a movement to cut and eventually end ethanol subsidies within the next few years. Not only did Cruz push against Trump’s support of those subsidies (Trump played to the enormous vested interests in Iowa favoring continuing them), Cruz also pushed against Iowa’s Governor Terry Branstad. In January Branstad spoke at the Iowa Renewable Fuels Summit:
Dual-fuel gas station at Sao Paulo, Brazil. Alcohol (ethanol) and G gasoline (Photo credit: Wikipedia)
Last week the British newspaper Telegraph leaked a portion of the report by the UN’s Intergovernmental Panel on Climate Change (IPCC) due to be released today, in which Robert Mendick, the paper’s chief reporter, said the UN now officially warns that growing food for fuel rather than for people hurts the environment and starves people. Said Mendick:
With his determination and the ability to ignore naysayers, George Mitchell, the owner of a Fortune 500 company, Mitchell Energy & Development Company, poured himself and $6 million of his company’s money into the task of finding ways to access the natural gas he knew was underground of his property north of Houston, Texas. It took him more than 10 years to find those ways. Since 2000, his discoveries have changed the world and are responsible for
Mark Perry is another common-sense economist with whom I often agree. He raises, and then answers, questions about the intelligence involved in mandating ethanol to be added to gasoline. He’s an economics professor at the University of Michigan and wrote this for the mlive.com blog:
Among all the problems that have surfaced as a result of using ethanol as an alternative to gasoline, one is especially troubling.
John Stossel (Photo credit: C o l i n)
John Stossel is about as pessimistic as I’ve seen him. Freedom lost last Tuesday. Totalitarianism got stronger:
Some people with records of supporting liberty were elected: Sen. Jeff Flake in Arizona and U.S. Reps. Justin Amash and Kerry Bentivolio in Michigan and Thomas Massie in Kentucky…
Also, Washington and Colorado voted to allow any adult to use marijuana…
But overall, the results were bad for freedom.
He says we should “fix” government the way we “fix” our cats and dogs: spay them, neuter them.
How does he propose to do that? Term limits! That’ll work, you bet:
Term limits would be good. When we give politicians power, they should know they don’t get to keep it forever. They have to bring that power right back to us and drop it at our feet. “Good boy. Now go back outside!”
But don’t we already have term limits: two years for members of the House, six years for members of the Senate, four years for the President? How is that working?
Stossel thinks that, for the moment, gridlock will
A statement for the Koch Brothers at the Occupy Wall Street protests. (Photo credit: Caroline Schiff Photography)
In Jane Mayer’s expose of Charles Koch, the billionaire conservative running Koch Industries in Wichita, Kansas, she made it sound as if she were shedding the light on Koch’s political activities for the very first time. Titled “Covert Operations,” Mayer noted that the growth of Koch Industries since Charles and his brother David took over its operations after the death of their father, Fred Koch, in 1967, has made each of them multi-billionaires—somewhere in the neighborhood of $25 billion each. Koch Industries operates oil refineries in Alaska, Texas, and Minnesota, 4,000 miles of pipeline, along with Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpets, the spandex product Lycra and generates an estimated $100 billion a year in revenues.
But the real lowdown, according to Mayer, is how they are investing their wealth:
The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry—especially environmental regulation.
And they are doing it with a flourish. Mayer quotes Charles Lewis, the founder of the Center for Public Integrity—calling it a “non-partisan watchdog group” which in fact is funded by internationalist socialist George Soros’ Open Society Foundation and the Ford Foundation, among others, to “reveal abuses of power, corruption and dereliction of duty by powerful public and private institutions…”—as saying:
The Kochs are on a whole different level. There’s no one else who has spent this much money. The sheer dimension of it is what sets them apart…
Charles Koch’s efforts are based on both the short-run—determined to keep President Obama a one-term president and turn control of the Senate back to the Republicans, as well as the long-run—by
The EPA was directed to set standards for radioactive materials under Reorganization Plan No. 3 (Photo credit: Wikipedia)
Last Friday’s biannual report from the Agriculture Department has re-ignited debate on the wisdom of using ethanol in gasoline to reduce emissions. Because of the drought, corn yield per acre this year will be the lowest since 1995, while the actual production of corn will be the lowest since 2006. A congressional mandate to turn corn into ethanol in order to reduce emissions requires converting nearly 40 percent of that harvest into 13.2 billion gallons of ethanol. That leaves precious little to feed cattle and people, driving up the price.
Since January the price of corn has jumped 22 percent, most of the increase since June. Marie Brill, senior policy official with ActionAid USA, explained:
If the U.S. only produces 10.8 billion bushels of corn and 5 billion bushels still goes to make ethanol, a shrinking percentage of corn is left for food and feed. It is time to rethink ethanol mandates that ensure that cars eat before people.
Pressure has been building on the Environmental Protection Agency (EPA) to back off on the mandate, at least until the drought is over. This would increase the supply of corn available for feed, and theoretically at least, reduce its price. In a free market, that’s exactly what would happen.
But the current production of corn and other foodstuffs is so regulated and politicized that such outcomes are far from predictable. Democratic governors Jack Markell of Delaware and Martin O’Malley of Maryland filed petitions with the EPA to waive the
The ethanol lobby strikes again. It can’t succeed without a mandate that forces consumers to buy its product every time they fill up the tank, and if the resulting corn shortages drive food prices up in a way that punishes consumers around the world, so be it.
Ethanol (Photo credit: swanksalot)
I consider the Wall Street Journal as the mouthpiece for the Republican establishment—faux conservative, in other words—so one has to be wary of their editorial policy. They are often like Bill O’Reilly, close to the mark, but just missing it nevertheless.
However, this editorial is spot on. Government mandates—this time to placate those who think man is responsible for global warming (a dubious proposition at best)—to force us to burn corn in our cars are, in light of the drought in the Midwest, pushing corn prices higher. Since corn and its byproducts are staples in poorer countries, people on the edge of starvation are being pushed over it, thanks to the ethanol lobby. Says the Journal:
On Friday the USDA’s World Agricultural Outlook Board estimated that global corn consumption will be off by 38.9 million tons, with the U.S. problems responsible for three-fourths of the shortage. The gap is likely to presage climbing basic-food commodity prices. Corn futures are up nearly 50% over the last six weeks. The U.S. market is so important because the U.S. accounts for 60% of global exports, and corn feeds cows, pigs and chickens and is also a key ingredient in all kinds of foods.
This “ethanol lobby” that has no interest in cutting its subsidies, regardless of the imminent starvation of poor people. As the Journal explains:
If not for the politics, the ethanol mandate would have been gone years ago. Oil costs and imports are up (ethanol makes up less than 1% of world-wide transportation fuel), and even the green lobby has turned against the fuel (because of the carbon-increasing deforestation it causes)…
Natural disasters can’t be controlled. Ethanol is a man-made disaster that could be stopped if the EPA or others in Washington cared for human health as much as they do power politics.
Fat chance.
Currently, about 40 percent of the U.S. corn crop is used in the production of ethanol. Corn prices rose as a result of the government creating an artificial, additional demand. As a result of higher corn prices, many farmers grew more corn and fewer other crops, such as wheat, which, in turn, caused the prices of those other crops to rise because of lower production.
Cornheap (Photo credit: Wikipedia)
The government mandates that ethanol be added to gasoline. I don’t like that word, mandate. Better words are: demand, require, rule, dictate, impose. “It’s the government, stupid,” to paraphrase Bill Clinton. And it’s the unintended consequences of that government edict that are causing the prices not only of corn but wheat, and eventually, meat, to rise.
As Rahn explains:
The drought is resulting in a much smaller corn crop, but by law, much of the remaining corn must be used to produce ethanol, resulting in even higher prices for corn, which reached a record high last week.
Higher corn prices drive up the price for other grains that are affected by the drought, resulting in higher prices for almost all grains. Corn and other grains also are used to feed animals. This means it is more costly to produce meat, which, in turn, will cause meat prices to rise rapidly.
Other unintended consequences of ethanol mandates are the impact of our drought on poor people around the world. Since the US produces, in non-drought years, about 40 percent of the world’s corn, when prices rise here they also rise around the world. Poor people spend most of their miniscule incomes on food and when food costs go up, they are impacted enormously, forcing many of them into starvation.
And all because some greenies in Washington want cleaner air.
But even that part of the plan isn’t working. As Rahn explains:
Now the inconvenient facts: Recent studies show that the total carbon-dioxide emissions from growing, harvesting, processing and burning corn as ethanol are much greater than those from oil and gas production and use. (emphasis added)
There it is: government insanity causing pain and misery, all in the name of cleaner air. What a travesty!
Under the assumption that former Massachusetts Governor Mitt Romney will become the Republican Party’s nominee for President in Tampa in June, the Romney campaign staff is growing from 87 to more than 400 to prepare for the national election in November. A close look at Romney’s expanded staff reveals the same influence of elites that was reflected by the members of his “Foreign Policy and National Security Advisory Team” announced last October. Included in that list were:
Senator Jim DeMint (R-S.C.) introduced the Energy Freedom & Economic Prosperity Act (EFEPA) in February and then offered his bill as an amendment to the Transportation Bill last week. Had it passed it would have eliminated all energy tax credits not only for wind, solar, biomass and biofuels but for coal, oil and natural gas as well. Said DeMint:
Our tax code is riddled with loopholes for special interests and it’s time to end this corporate welfare that is hurting our economy. When Washington picks winners and losers in the energy market, those with the highest paid lobbyists win while the small businesses and taxpayers lose. We shouldn’t favor ethanol over hydrogen, nuclear over natural gas, or oil over renewables. The free market economy works when everyone competes on a level playing field and works to provide Americans with the best, lowest-cost products.
The original bill and the amendment were supported by a raft of free-market advocates including Americans for Prosperity, Club for Growth, Heritage Action and the National Taxpayers Union. In a letter to its members FreedomWorks urged them to pressure their senators to vote for the amendment, noting that “these subsidies have long distorted the market for new sources of energy by allocating funding to the technologies with the best lobbyists instead of those with the most value to consumers.”
According to the U.S. Energy Information Administration’s study of subsidies to the energy industry completed last July, the federal government in 2010 gave out $37 billion of taxpayer monies, more than double the amount given away in 2007. Biofuels received $6.6 billion, wind received $5 billion, solar and biomass each received $1.1 billion, coal received $1.3 billion while oil and gas received subsidies of
The Washington Post’s editorial celebrating the ending of ethanol subsidies iterated the same free-market positions taken by Rep. Ron Paul (R-Texas) and other Austrian school economists about those subsidies. Calling the 45-cent-per-gallon tax credit supporting U.S. corn-based ethanol production and the 54-cent-per-gallon tariff on imported ethanol “two of the most wasteful subsidies ever to clutter the Internal Revenue Code,” the Post estimated that ending those subsidies will save the U.S. taxpayer approximately $6 billion this year.
In a remarkable admission of undeniable truth, the Post added: “Taxpayers will no longer have [to] shell out roughly $6 billion per year for a program that badly distorted the global grain market, artificially raised the cost of agricultural land and did almost nothing to curb greenhouse gas emissions.”
Further, the Post rejoiced over the expiration of another “lesser known but equally dubious energy tax break…the credit that gave electric car owners up to $1,000 to defray the costs of installing a 220-volt charging device in their homes,” and said
As a means of reducing carbon emissions, electric cars and plug-in hybrid electrics are no more cost-effective than ethanol. What’s more, only upper-income consumers can afford to buy an electric vehicle (EV); so the charger subsidy is a giveaway to the well-to-do.
More surprising was the Post’s disappointment that the credit for
Image by Robert Couse-Baker via Flickr
The recent attempt to terminate both the ethanol subsidies of $.45 a gallon and the $.54-per-gallon import tariff on Brazilian sugar-based ethanol by the Senate failed because it was an amendment attached to a bill that was doomed to failure anyway. Both will cease on December 31 automatically, ending 33 years of subsidizing the ethanol industry; however, food prices are likely to stay high anyway. The main reason is neither the subsidy nor the tariff, but the mandate by the government requiring
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According to internationally acclaimed author and highly regarded expert Lester Brown, writing in the January 10 issue of Foreign Policy magazine:
Tonight there will be 219,000 additional mouths to feed at the dinner table, and many of them will be greeted with empty plates.
Another 219,000 will join us tomorrow night.
Eighty-year-old Dottie Bell is a volunteer at the Community Market food bank in Opelika, Alabama, and every day she sees the impact of high food prices on people in her community.
In the last 12 months, more than 3,000 families have come to her food bank for food assistance. Michael Davis is just one of them. When Dottie asked him for his identification, he pulled out his driver’s license and Social Security card from a worn ZipLoc bag and handed them to her. When she asked when the last time was that he’d eaten anything, he said: “About two days. It’s not a good feeling. You have to
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On Thursday the United States Senate voted to end the 45 cents-per-gallon subsidy currently supporting the ethanol industry. The bill, offered by liberal Senator Dianne Feinstein (D-Calif.) and conservative Senator Tom Coburn (R-Okla.), was passed overwhelmingly, 73-27. Said Feinstein, “We’ve got to change the way we carry out business. This is going to be the first of many coming down the line. We might as well get used to it now.”
Opposition to ethanol subsidies has been building for years, but the green lobby has successfully overcome all attempts to repeal them, until now. Starting out as a
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When the UN’s Food and Agriculture Organization (FAO) announced its latest round of increases in the cost of food, analysts were nearly breathless in their recommendations for solutions that involved—what else?—more international “cooperation,” under the tender ministrations and control of the UN.
Image by smemon87 via Flickr
“I’m sure the rising cost of energy is bothering the market,” said Fred Dickson, chief investment strategist at D. A. Davidson & Company last week. “I do think the uptick in gasoline prices will have an impact on consumer spending in the next few quarters.”
One could scarcely call it an “uptick,” with gasoline prices up by $.70 a gallon since the first of the year, and approaching $4 a gallon. The American Automobile Association said at that level consumers “will have to start cutting back to pay their fuel expenses. This could adversely affect restaurants, malls, and entertainment venues that count on people driving to get there.”
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