Category: US business

Surprisingly to me, the Free Enterprise blog was only able to find four things wrong with Barack Obama’s anti-energy speech yesterday:

1. Higher electricity prices

The Washington Post reports that regulating carbon emissions for existing power plants “will raise consumers’ electricity prices in the short term as utilities are forced to shutter aging coal plants to comply with stricter pollution limits.” This happens to be exactly what President Obama predicted when he was running for President in 2008. Higher electricity rates aren’t good when many Americans have a dangerously-low level of emergency savings and aren’t in the position to afford rate increases.

2. A less reliable electricity grid

The proposed greenhouse gas rules would shut down power plants that produce consistent amounts of electricity at a time when demand is projected to increase as the economy grows. EIA projects electricity demand to grow by as much as 24% by 2040. …

3. Picks energy winners and losers

The President’s proposals make American coal a loser which is the administration’s intention. White House science adviser Daniel Schrag told the New York Times, “A war on coal is exactly what’s needed,” and with Utility MACT and other rules, power plants have closed and jobs have been lost across the country.

If these greenhouse gas rules go into effect the big winner initially will be natural gas. I am a fan of natural gas, but it’s not wise to rely too much on one fuel source when the U.S. has other plentiful options. Using a variety of energy sources makes the electricity grid more resilient and the country more energy secure. …

4. Avoids accountability by ignoring Congress

The Hill points out that the President wants to avoid having other democratically-elected officials debating the efficacy of the his proposals …

Going back to jobs, look at this chart Jim Pethokoukis posted showing the leap in long-term unemployment in the last few years. New attacks on fossil fuels as the President proposes will not help to reverse this trend. In his State of the Union address, the President said, “It is our generation’s task, then, to reignite the true engine of America’s economic growth.” With this attack on reliable energy, the American economy will stall.

(I would have used an energy-based metaphor in that last sentence, but that’s just me.)

The Heritage Foundation notes which things would cost more by eliminating coal:

What President Obama’s climate change plan would do: increase the price of just about everything.

Whether it’s regulating appliances or eliminating coal from the nation’s energy diet, Obama’s plan has the same effect: hiking the cost of living.

Think through your day. Everything you buy, everything you eat, everything you wear… it was all produced using energy. Just a few of the things that will be more expensive under Obama’s plan:

• Heating and cooling your home
• Buying a car and driving—from your work commute to soccer practice and everywhere in between
• Turning on the lights
• Washing and drying clothes

But that’s not all. Think even bigger. What will it mean for President Obama’s war on coal to hike natural gas prices by 42 percent? …

From food processing to waste treatment—the entire cycle of life will cost more!

Of course, it doesn’t help that you will also have less income. Forthcoming research from these Heritage experts shows that Obama’s anti-coal policies will cause a family of four to lose more than $1,000 in annual income.

Apparently Obama’s mouthpiece, MSNBC, was less than enthralled with the speech, according to Breitbart:

After 15 years of no increase in global temperatures — which decimates a huge majority of Climate Change models — our anti-science president took to the stump today for what was promised as a major speech on what he was going to do by executive fiat to save the world. Of all three cable news networks, though, it was his own peanut gallery at MSNBC who bailed first, broadcasting only 41 seconds of the speech.

Fox News gave the president nearly five minutes. CNN covered the event for about eight minutes.

The Weather Channel was there for the full 49 minutes.

So the Weather Channel decided to cover Obama’s ignorant blatherings instead of, you know, weather. (Severe weather was forecast for the Midwest yesterday. Severe weather is forecast for the Midwest today. The EF5 tornado that nearly wiped out Parkersburg, Iowa, in 2008 was not covered by the “Weather” Channel because they were running a marathon of their global warming propaganda show, “Forecast Earth.”) Good reason to not watch The Weather Channel.

The Wall Street Journal begins with Obama’s warped priorities:

President Obama’s climate speech on Tuesday was grandiose even for him, but its surreal nature was its particular hallmark. Some 12 million Americans still can’t find work, real wages have fallen for five years, three-fourths of Americans now live paycheck to check, and the economy continues to plod along four years into a quasi-recovery. But there was the President in tony Georgetown, threatening more energy taxes and mandates that will ensure fewer jobs, still lower incomes and slower growth.

Mr. Obama’s “climate action plan” adds up to one of the most extensive reorganizations of the U.S. economy since the 1930s, imposed through administrative fiat and raw executive power. He wants to reduce greenhouse gas emissions by 17% by 2020, but over his 6,500-word address he articulated no such goal for the unemployment rate or GDP.

Investors Business Daily adds:

Arguably the centerpiece of Obama’s renewed push to mitigate the climate change that exists only in the minds of believers is a government assault on existing power plants.

His intent is to establish by executive order, rather than duly passed law, the first federal regulations on carbon dioxide emissions. And which part of the government is going to enforce these emissions limits? The ever-abusive Environmental Protection Agency, of course.

A president does not have the authority to unilaterally establish law as a monarch would. In our constitutional republic, laws are intended to be an agreement between the White House and Congress. One stands in the way of the other becoming a lone force of government without restraint.

Obama doesn’t see it that way. Our government’s chief executive, who has many times lamented that our system has made Congress an obstacle to presidents who desire to rule, would rather not be encumbered by constitutional protection of the people. …

We grant that coal is a significant contributor to man-made carbon dioxide emissions. Its share is estimated to range from 28% to 40% of the total, depending on which group is making the analysis.

But carbon dioxide is not a pollutant, no matter what political labels might be affixed to it.

As anyone who has finished grade school knows, CO2 is exhaled by humans and is necessary to support plant life. It is not dirty, nor is it a contaminant. Without carbon, there is none of the greenery on Earth that the environmental groups claim to be defending.

Carbon is, however, a convenient target for the environmentalist lobby that perpetually needs a bogeyman to stir up public confusion and sow seeds of alarm.

Meanwhile, White House spokesman Jay Carney has become involved, excusing Obama’s presidential excesses and arguing that his climate change executive orders and avoidance of Congress “reflect reality.”

Carney merely proves that this administration lives in a fantasyland. The reality is that the global warming scare has been fabricated for politics not related to the environment.

A blogger I read asked if Obama was going to announce he was shutting off the White House air conditioning to do his part to combat “global warming.” Of course not. Sacrifice is for the proletariat.

Late morning update: I wonder what Wisconsin Democrats think about this comment from Kurt Bauer of Wisconsin Manufacturers & Commerce:

“Nearly 65 percent of Wisconsin’s energy is generated by coal fired plants. The president’s plan will significantly increase electricity costs for every Wisconsin household and business. Wisconsin’s manufacturing sector — the state’s economic driver and biggest energy user — will be disproportionately harmed. As a result of this plan employers will eventually pay more for electricity, Wisconsin will be less competitive with other states and countries, and jobs will be lost.”

James Pethokoukis sees an economic Recovery In Name Only too:

America makes a grievous error if it dismisses the weak economic expansion — this month marks the fourth anniversary of the end of the Great Recession – as nothing more than the expected aftermath of a deep downturn and financial crisis. Sluggish GDP growth and yet another “jobless” recovery point to a secular problem rather than merely cyclical forces at work.

The US entrepreneurial spirit may be faltering. Check out these data points from The Wall Street Journal: a) In 1982, new companies made up roughly half of all US businesses, according to census data. By 2011, they accounted for just over a third; b) from 1982 through 2011, the share of the labor force working at new companies fell to 11% from more than 20%; c) Total venture capital invested in the US fell nearly 10% last year and is still below its prerecession peak, according to PricewaterhouseCoopers.

New companies are best at creating what business guru Clayton Christensen has termed “empowering innovation” (creating new consumer goods and services) as opposed to process innovation (creating cheaper, more efficient ways to make existing consumer goods and services). Empowering innovation produces new jobs, while efficiency innovation eliminates them, often through automation. …

Not only do we need a vibrant entrepreneurial ecosystem so startups can flourish and generate disruptive innovation, these new entrants raise the competitive intensity for established players to become more innovative. In other words, explains banker and entrepreneur Ashwin Parameswaran, “unless incumbent firms face the threat of failure due to the entry of new firms, product innovation is unlikely to be robust. The role of failure in fostering product innovation has sometimes been called the ‘invisible foot’ of capitalism.” Big business must be subject to maximum competitive intensity. …

US workers need America to be as entrepreneurial and innovative as possible. So does the global economy. But right now we are taxing capital, educating kids, regulating banks, and managing cities in ways that are crippling America’s greatest economic asset.

Walter E. Williams:

Individually, Americans do not deserve to be subservient to such a fear-mongering, intimidating and powerful agency as the Internal Revenue Service; but collectively, we do. Let’s look at it.

Since the 1791 ratification of our Constitution, until well into the 1920s, federal spending as a percentage of gross domestic product never exceeded 5 percent, except during war. Today federal spending is 25 percent of our GDP. State and local government spending is about 15 percent of the GDP. That means government spends more than 40 cents of each dollar we earn. If we add government’s regulatory burden, which is simply a disguised form of taxation, the government take is more than 50 percent of what we produce.

In order to squeeze out of us half of what we produce, a government tax collection agency must be ruthless and able to put the fear of God into its citizens. The IRS has mastered that task. Congress has given it powers that would be deemed criminal if used by others. For example, the Constitution’s Fifth Amendment protects Americans against self-incrimination and being forced to bear witness against oneself. That’s precisely what one does when he is compelled to sign his income tax form. However, a Fifth Amendment argument can’t be used as a defense in a court of law. The IRS will counter that you voluntarily provided the information on your tax return. …

Our Founding Fathers feared the emergence of an agency such as the IRS and its potential for abuse. That’s why they gave us Article 1, Section 9 of the Constitution, which reads: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.”

A capitation is a tax placed directly on an individual. That’s what an income tax is. The founders feared the abuse and the government power inherent in a direct tax. In Section 8 of Article 1, they added, “But all Duties, Imposts and Excises shall be uniform throughout the United States.” These protections the founders gave us were undone by the Progressive era’s 16th Amendment, which reads, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” …

The bottom line is that members of Congress need such a ruthless tax collection agency as the IRS because of the charge we Americans have given them. We want what the IRS does — namely, to take the earnings of one American so Congress can create a benefit for some other American. Don’t get angry with IRS agents. They are just following orders.

Remember former Speaker of the House Nancy Pelosi‘s claim about ObamaCare that “we have to pass the bill so that you can find out what is in it, away from the fog of the controversy”?

The more we learn about ObamaCare, the more controversial it gets, independent of the predictions by its opponents that are beginning to come true.

There are those who claim that ObamaCare is actually designed to fail so that Americans would demand a single-payer health care system, just like (supposedly) the rest of the industrialized world.

What would that be like? Look north, and despair, says Reason, which tells the story of Dr. Jacques Chaouill, who decided to fight Canada’s health care system on constitutional grounds, going so far as to get a law license:

Ultimately, after many years, his efforts bore fruit. A lower-level court had ruled that Dr. Chaouilli was correct in contending that the prohibition of private health care violated ones rights to “life, liberty, and security,” as guaranteed by the Charter of Rights and Freedom, but that the development of a two-tiered medical system was unacceptable to the Canadian vision of “equality.”

In 2005, the Supreme Court of Canada heard Dr. Chaouilli’s appeal, and ruled that the Canadian single-payer system led to situations whereby patients suffer and die on government waiting lists, in violation of their rights guaranteed by both the Canadian and the Quebec Charters of Rights and Freedoms. The Supreme Court ruled as unconstitutional the prohibition of a parallel private medical system in addition to the government mandated single-payer system.

Dr. Chaouill’s heroic eight-year effort, during which time he sacrificed priceless time with his family and with his patients, left him financially distressed, but morally vindicated.

The Court’s decision has since led to the growth of numerous private clinics, throughout the provinces, where patients can obtain private medical care for cash, in a consumer-driven market, and avoid having to travel south of the border to get off the queue. …

The Canadian experience provides an opportunity to anticipate the future of health care delivery in the United States.

Over the past 20-30 years, the practice of medicine has been slowly morphing into a government-run enterprise, often with private health insurance companies acting as the intermediaries. Medicare price controls serve as templates for private insurance reimbursement arrangements. Managed care, encouraged and nurtured by federal legislation, requires providers to obtain authorization from faceless bureaucrats in order to provide many services they deem necessary for their patients. Guidelines and protocols, drawn up by committees and panels serving federal regulators, are imposed upon providers, requiring them to practice according to one-size-fits-all to models or face financial or even legal sanctions.

While not the simple Canadian style single-payer system, the U.S. system, especially with the advent of the Affordable Care Act, gets us to the same place—only in a more Byzantine fashion. True, there are multiple payers, but the insurance companies, as a result of the ACA, have become nothing more than publicly regulated utilities. The policies they will be allowed to offer patients are all designed and predetermined by the U.S. Department of Health and Human Services. The provider payment provisions, as well as the coding system, as has been the practice for years, will be pegged to Medicare reimbursement schedules.

Pollster Scott Rasmussen:

Mitt Romney’s secretly recorded comment that 47 percent of Americans are “dependent on the government” and “believe they are victims” isn’t the only reason he lost the presidential campaign. But the candidate himself acknowledged after the election that the comments were “very harmful.”

He added, “What I said is not what I believe.”

But many Republicans still believe it, and the “makers vs. takers” theme has a deep hold on the party. In private conversations, many in the GOP are whispering that Romney was right and that his only mistake was saying it out loud.

I can’t tell you how many times I’ve heard people say something like, “Well, the half who favor government programs is the half who don’t pay any taxes.”

This is ridiculous — on many levels.

First, the overwhelming majority of those who don’t pay federal income taxes pay a whole variety of other taxes, including state and local taxes, payroll taxes, sales taxes, property taxes, sin taxes and more. They don’t feel excluded from sharing the tax burden just because they don’t pay one particular tax.

It’s also worth noting that these aren’t the people pushing for higher taxes. At Rasmussen Reports, our most recent polling shows that people who make $100,000 or more each year are more supportive of higher taxes than those who make less.

Second, the 47 percent who don’t pay federal income taxes include large chunks of the Republican base. Many senior citizens fall into this category because their primary income is from Social Security. They don’t consider themselves “takers.” They paid money into a Social Security system throughout their working lives and now simply expect the government to honor the promises it made.

Third, low-income Americans aren’t looking for a handout. Among those who are living in poverty, 81 percent agree that work is the best solution to poverty. Most would rather replace welfare programs with a guaranteed minimum-wage job. Sharing the mainstream view, 69 percent of the poor believe that too many Americans are dependent upon the government. …

If they want to seriously compete for middle-class votes, Republicans need to get over the makers vs. takers mentality. We live in a time when just 35 percent believe the economy is fair to the middle class. Only 41 percent believe it is fair to those who are willing to work hard. Those problems are not created by the poor.