The time for Republican self congratulation is over, and the work needs to begin. It appears that the majority of the voting population recognizes that our country is in dire condition. Time is running out to fix it. Are Republicans going to work for our country, or just shift money around to different special interests?
It is not reassuring that some Republican Party strategists think they won because they purged controversial candidates who might make a campaign gaffe—and who might upset the ruling elite’s agenda if they got elected. Or that Democrats seem confident that Republicans will “work together” with them to continue the Progressive agenda—or else Obama will do it all by himself.
Republicans can no longer blame Harry Reid for their failure to repeal or defund ObamaCare. They can’t just take symbolic votes and complain (not too loudly) when bills get bottled up in the Senate. It’s on them now.
ObamaCare is deeply unpopular. Millions have already been hurt by it, and the real pain will begin now that the election is over. Millions of insurance cancellations, IRS penalties, and sticker shock for renewal premiums are about to hit.
And that’s just the financial pain. Loss of access to physicians and hospitals, and the diversion of physicians’ attention to rule compliance instead of patient needs are harder to measure. It’s also harder to blame the government instead of doctors.
Not all of these problems are from ObamaCare alone, but can be traced to previous laws such as the HITECH Act and other “incentives” for physicians to buy expensive, error-ridden computer systems and follow protocols—or else be punished.
Every mandate, and every dollar taken from taxpayers, is income to somebody: managed-care cartels, information technology vendors, government bureaucracies, etc. With every day that passes, ObamaCare thus becomes more deeply rooted, like kudzu, and harder to extirpate.
And then there’s the reckless disregard for the law that has characterized implementation: selective waivers, politically motivated delays, and blatantly rewriting the law to provide taxpayer subsidies explicitly forbidden in Exchanges not created by States.
Congress needs to start now, and not allow the lame-duck session to wreak havoc. Reid needs to be faced with well-publicized bills to mitigate damages, pending repeal. Measures should include:
- Grandfather all existing health insurance policies indefinitely.
- Suspend all federal coverage mandates for new and renewing policies.
- Provide that insurers may price policies fairly, based on actuarial risk.
- Eliminate restrictions on health savings accounts and self-insured plans, especially re-insurance
- Make the individual mandate/tax “shared responsibility” payment truly voluntary, like the contribution for elections.
- Delay the employer mandate indefinitely.
- Suspend the medical device tax and other ObamaCare taxes until and unless they are specifically re-enacted.
- Clarify that the law really means what it says about subsidies being available only through State Exchanges
- Abolish the Independent Advisory Board (IPAB) and deny any agency the power to constrain prices or spending in the private marketplace.
What these provisions have in common is six features that Republicans should demand of all legislation:
- They return control of medical spending and decisions to individual Americans, instead of forcing them to subsidize insurance companies and social engineering schemes. They stop the extortion of money from all Americans to funnel through devious pathways to people behind the curtain who do nothing to provide care
- They remove barriers to private enterprises instead of erecting new ones
- They impose no selective stealth taxes. If Congress is to tax people, it must do so through transparent, constitutional means.
- They do not expand the reach of government into areas in which it has no constitutional authority.
- They create no new agencies through which Congress can further abdicate its authority to the Executive
- They reduce the governmental footprint on the necks of Americans.
It’s a long way to constitutionally limited government, fiscal solvency, and an atmosphere of freedom in which all Americans can thrive and prosper. But we need to take these small steps to begin the journey now.
[Originally published at AAPSonline]
One-and-a-half million to 2 million men and women served in America’s defense during the Global War on Terror. According to the U.S. Department of Veterans Affairs, 250,000 service members enter civilian life each year—and that number will rise with the drawdown of soldiers from Afghanistan. As troops return home, they face a new fight: finding a job in a competitive labor market that doesn’t understand how their military experience translates into employees with discipline, organization, and motivation.
Most have served in the Middle East, risking their lives for America, and ensuring an uninterrupted energy supply. They believe in the greatness of America.
Their experiences in the military make these returning veterans ideal employees for America’s booming oil-and-gas industry. Many companies have seen the value veterans bring to their organization and are actively recruiting veterans—both enlisted and officers.
What better way to honor them for their service than to minimize the need to return to the Middle East by making America energy secure, by developing our own abundant resources?
The U.S. oil-and-gas industry has added millions of jobs in the past few years and expects to add more and more—especially with the new energy-friendly Republican-controlled Congress. Just the Keystone pipeline—which is now likely to be built—will employ thousands. Increased access to reserves on federal lands will demand more personnel. But finding potential hires that fit the needs of the energy industry in the general labor pool is difficult, as they lack discipline, the ability to work in a team and, often, can’t pass a drug test. Here the fit for the veteran becomes obvious.
“The number one bottleneck to the oil-and-gas industry,” according to Steve Yen, founder and CEO of Valor Services, a two-year-old professional services firm that specializes in energy-industry career opportunities for veterans, “is having enough quality people to execute business at today’s levels—let alone projected growth.” Yen, a former Army Captain, Ranger, and Bronze Star recipient, who served as an infantry officer in Iraq in ‘06, ‘07, and ‘08, sees veterans as a misunderstood segment of the workforce. Through Valor Services, he wants to champion his generation of veterans. With a current staff of ten, several of which are recruiters with 15-20 years of experience, Valor has a unique mission of optimizing returning veterans’ transition from the military to the oil-and-gas industry.
Veterans, as high-quality individuals, are accustomed to working in a team on the battlefield—translate well to the oilfield. They’ve focused on safety and understand the need for procedure. They respect chain of command. Both the military and the energy industry have a large number of “boots on the ground” and those individuals need to be trustworthy and responsible.
Yen has found that it is easy to teach someone how to do a job, but difficult, or impossible, to teach character and discipline.
Obvious parallels exist. Many military experiences translate well to roles in health, safety, and environmental work. Enlisted service members make excellent field personnel where technical and mechanical skills are valued and team skills and project management are required. Welders and heavy equipment operators, for example, are always needed. But other applications need skills honed in the military. Officers make high-quality professionals and management team members. Combat arms and special-operations experiences translate into strong leadership and resiliency, valuable characteristics that are hard to develop.
Because the energy industry has such immediate needs, it doesn’t generally offer apprenticeship programs. Here vocational and technical schools, such as San Juan College’s (SJC) School of Energy in Farmington, NM, and Valor’s Vo-Tech Program fill the need. Employers often co-sponsor the education and/or partnerships are can be formed with veteran-advocacy groups.
“Those who serve in our nation’s military find many challenges when they return to civilian life. One of those challenges is often finding the work they need to provide for the families they love,” Randy Pacheco, Dean of SJC’s School of Energy, told me. “We provide programs, degrees, and certifications that can help those soldiers learn skills that will help them obtain a career in the energy industry. These men and women have served not just a nation, but every member of our great nation. Their service and commitment can never be overstated and we, as an industry, should do all we can to do for them. It is the least we can do.”
Ray Long, a Vietnam-era Navy Seabee, became a trailblazer with the vision to match returning Marines with jobs in the energy industry. As HR Director for Integrated Production Services, Inc. (IPS), a subsidiary of Superior Energy Services, Inc., Long, had difficulty in finding quality applicants for the company’s various operations. He pitched senior management on hiring Marines, who were completing their tours of duty and transitioning to civilian life. Initially, due to concerns that potential hires lacked direct oilfield experience, Long’s proposal met with resistance from both senior management and district/area managers, who’d been used to hiring locally. With the argument that these were clearly quality guys who knew how to work on a team, had proven they were imminently trainable and, by definition, would not quit when the work got tough, he convinced them to hire a few Marines.
Long told me: “Similarly aged local hires tend to be high school dropouts—job hoppers who are difficult to motivate. Marines come with a need to be part of a team and succeed.” Long added: “Employee turnover is the singular problem in the oil patch and often exceeds 50 percent. Marine turnover was less than half that of local civilian hires.” Soon, he started getting calls from the district managers, asking: “You got any more of those guys?”
Prior to retirement, Long hired more than 400 Marines before their release from active duty. He recalls that while one may have failed a drug test, many are now, not surprisingly, on their way up to leadership roles in the company.
Apache Corporation actively targets veterans to fill HR needs. In 2014, military veterans made up 12 percent of Apache’s new hires in the U.S. Its career page highlights the veterans and boasts: “When it comes to core values, Apache and the military fit like a well-pressed uniform.” Apache often participates in career days held at military bases near their operations. As result, appropriate personnel have jobs waiting for them when they return to civilian life.
Apache’s Executive VP of Human Resources, Margie Harris, reiterated the military fit: “Apache’s culture is one that respects and admires military service. We find that those we hire with former military experience tend to make very good employees.”
Unfortunately, many returning veterans face a tough headwind in seeking employment: the highly publicized, tragic cases where post-traumatic stress disorder (PTSD) causes questionable behaviors. These, however, are a small segment of the returning forces as only about 20 percent of those deployed in the Global War on Terror actually engage in direct combat and, Yen reports: “Even amongst combat troops, most don’t have PTSD. They have Post-Traumatic Growth; that is, their experiences evolve them into stronger, more capable people.”
Yen believes that, as more companies see the correlation between a military background and energy industry needs, career opportunities for those who have served honorably and successfully will grow. Valor has an extremely high success rate with its placements—a retention rate of nearly 100 percent.
What a powerful way to thank our veterans for their sacrifice that, in part, kept the necessary fuel flowing. Hire them to make America energy-secure.
[A version of this content was originally published on Breitbart.com]
Policy analysts and pundits alike seem to enjoy downplaying the U.S. economy’s recovery since the recession of 2008/9. It is time for them to wake up and smell the roses: The U.S. economy clearly is the dominant economy of the world. The European Union’s death rattle continues, while China is encountering a litany of unforeseen problems.
By contrast, the U.S. economy is holding up well. Industrial production is at its highest point since 2008. While our manufacturing firms aren’t producing 100 percent of what they’re capable of producing, many are at 60 to 80 percent of capacity, and moving in the right direction. Jobless claims are at their lowest since 2000; as a share of the U.S. labor force, unemployment claims are at their lowest point since record-keeping began in the 1970s. Manufacturing payrolls are increasing steadily and new job creation has been over 200,000 a month for some time. Declining gas prices should be a boon to consumers and retailers, though oil stocks will take a hit. The oil and gas industry can withstand lower prices for its products; according to the Energy Information Administration, due to advancing technology, the amount of oil and gas produced from every modern well has increased by 300 percent over the past four years. In the second quarter of 2014, gross domestic product (GDP) increased by more than 4 percent.
Discretionary spending by consumers appears to be on the rise. Large western ranches are being sold at record prices, and Harley Davidson reports big increases in the sale of its motorcycles, not generally purchased out of need but rather for fun. The company reports 71 percent of its sales are now in the U.S.
The 18 Euro area countries are showing no growth, with output in 2014 below that of 2011 as reported by the European Commission. They still blame it on the recession of 2008. In fact, with few exceptions, these countries are spending more as a share of GDP than before. Brian Wesbury reported in an October 15 article in The Wall Street Journal, “Euro area government spending was 49.8 % of GDP in 2013 versus 46.7 in 2006.” At a time when they should be on an austerity kick, they are on anything but.
In October of this year I had the opportunity to be in Austria, Belgium, France, Germany, Holland, and Luxembourg talking to folks about their economy. They appear to be oblivious to their long-term problems. Germany, once the economic guiding light of Europe, has seen its growth grind to a halt as renewable energy investment is making many manufacturers uncompetitive. We are likely to see many new European manufacturing plants built in the United States in the near future to take advantage of energy costs, often 70 percent lower here than in their native countries.
Italy, with the most convoluted labor laws, has seen efforts to reform met with huge protests in the streets. Older workers have unbeatable protections against being fired, laid off, or disciplined, regardless of poor performance. Firms in France cannot close a factory without finding new jobs for all its workers.
While a poor European economy does create a drag on the U.S. economy, that drag is small. Josh Zumbrun, writing in The Wall Street Journal on October 22, says, “Among major economies the U.S. is less reliant on export demand from overseas. Exports account for only about 14% of U.S. gross domestic product.” He goes on to compare this to 51 percent for Germany and 26 percent for China, according to the World Bank. Perhaps more important, trade with Europe represents only 15 percent of our foreign trade.
We have gotten used to hearing China may one day over take the U.S. economy, but this is not likely anytime soon. They are presently going in the wrong direction. Economic growth has slowed significantly and they can no longer rely on low labor costs, which are rising rapidly. China’s slowdown is due in some part to enforcement of environmental regulations that had been ignored in the past. They have run into banking problems, with an uptick in non-performing loans, while corporate and domestic debt has risen from 120 percent of GDP to 170 percent. The country’s domestic consumption is only 36 percent of GDP, while ours is 70 percent.
Due to a low birth rate, China’s labor force is expected to decline by 67 million people in the next 15 years, likely pushing manufacturing to other countries. While government officials there are beginning to loosen the one-child-per-family policy, the country’s actual birthrate is well below one child per family. Many families choose to have no children, so it will take at least two generations to create an adequate stream of workers.
Once the United States wakes up to the fact that it remains in the world’s driver’s seat, we will see more companies hire more people, with unemployment continuing to fall. If we have one economic problem it is that today’s jobs require more skills than are being taught in our public schools. Further growth is going to require an improvement in our K–12 education system. More and more companies are participating in local school training and creating apprentice programs, so this is a problem we can and will solve. We have a great economic future for years if not decades to come.
First, in a column entitled “The Obama Opposition,” Charles M. Blow crudely accused President Obama’s detractors of racism. Despite having declared defiantly to Eric Cantor in 2009 that “I won” and to John McCain in 2010 that “The election is over,” the President shouldn’t be considered arrogant or intransigent, Blow suggests, but simply – what? Dictator by fiat?
For as Blow then recounts, Obama’s 2013 response to Republicans was: “You don’t like a particular policy or a particular president? Then argue for your position. Go out there and win an election.” Which Republicans, of course, promptly did, in both 2010 and 2014.
Republican’s 2010 gains in the House directly repudiated the Democrats having crammed an unpopular health insurance law down voters’ throats by a single lame-duck vote in the Senate. And just last week, after Obama had foolishly (but correctly) reminded voters that his policies were on the ballot, pro-Republican voters not only shellacked the President’s party but added a few extra coats of varnish for good measure, taking over state legislatures and governorships in addition to the U. S. Senate and increasing their hold on the House of Representatives.
So where Blow sees racism, a clearer head sees a still-majority white national electorate that put a black man the White House on the promise of hope and change but expected to his promises fulfilled. Having considered the President’s poorly-executed domestic policies and his lack of leadership abroad, the electorate held the President’s party responsible: they went out there and won (lots of) elections even as they narrowly let Obama keep the White House. Race had nothing to do with it.
Paul Krugman, in his “Death by Typo,” was even more outrageous, pre-emptively characterizing a Supreme Court that has not yet even ruled on an Obamacare-related issue as “corrupt.” Krugman’s reasoning – if his poisonous screed even rises to that level – is that the Supreme Court just might construe a law that Congress passed to mean what it actually says. Or, as Nancy Pelosi might say, you actually have to read the bill to find out what’s in it.
Readers may recall that Chief Justice Roberts ruled that Congress has no power under the commerce clause to order “we the People” of the United States to buy health insurance, but saved the Act for Obama on the grounds that Congress may tax people who decline to buy insurance. Taxes and tax subsidies are in fact central to its scheme.
Part of Obamacare’s tax-based scheme was also to encourage states to set up health insurance “exchanges” by giving federal income tax credits to the residents of states that did, and to withhold them from the states that didn’t. That part of the law, at least, could not be clearer. Yet when 36 states declined to set up exchanges, the President’s (or is it Lois Lerner’s?) IRS decided to subsidize people in all the states anyway. But the law simply doesn’t read that way, as any Nobel Prize-winning economist ought to know. So Krugman is reduced to calling “established by the states” – which appears throughout the statute – merely a “typo” and pre-emptively asking stupidly “How corrupt is the Supreme Court, anyway?”
Krugman should actually read the Affordable Care Act, look up the meaning of “state” in the dictionary, and then go read the Constitution until it sinks in: it’s the duty of Congress to pass the laws, of the President to enforce them faithfully, and of the courts to correct the President when he misreads or misapplies them. Anything else is unconstitutional.
But this is, after all, the New York Times. Some folks say it’s not fit to wrap the fish in.
I say that it is.
Most served in the Middle East, risking their lives for America, and ensuring an uninterrupted energy supply. They believe in the greatness of America.
Their experiences in the military them ideal employees for America’s oil-and-gas industry. Many companies have seen the value veterans bring to their organization and are actively recruiting veterans.
The U.S. oil-and-gas industry has added millions of jobs in the past few years and expects to add more and more—especially with the new energy-friendly Republican-controlled Congress. Just the Keystone pipeline—which is now likely to be built—will employ thousands. Increased access to reserves on federal lands will demand more personnel. But finding potential hires that fit the needs of the energy industry in the general labor pool is difficult as they lack discipline, the ability to work in a team and, often, can’t pass a drug test. Here the fit for the veteran becomes obvious.
“The number one bottleneck to the oil-and-gas industry,” according to Steve Yen, founder and CEO of Valor Services, a two-year-old professional services firm that specializes in energy-industry career opportunities for veterans, “is having enough quality people to execute business at today’s levels—let alone projected growth.” Yen, a former Army Captain, Ranger, and Bronze Star recipient, who served as an infantry officer in Iraq in ‘06, ‘07, and ‘08, sees veterans as a misunderstood segment of the workforce. Through Valor Services, he wants to champion his generation of veterans with the unique mission of optimizing returning veterans’ transition from the military to the oil-and-gas industry.
Veterans are accustomed to working in a team on the battlefield—which translates well to the oilfield. They’ve focused on safety and understand the need for procedure. They respect chain of command. Both the military and the energy industry have a large number of “boots on the ground” and those individuals need to be trustworthy and responsible.
Obvious parallels exist. Many military experiences translate well to roles in safety and environmental work. Enlisted service members make excellent field personnel where technical and mechanical skills are valued and team skills and project management are required. Welders and heavy equipment operators, for example, are always needed. But other applications need skills honed in the military. Officers make high-quality professionals and management team members. Combat arms and special-operations experiences translate into strong leadership and resiliency, valuable characteristics that are hard to develop.
Because the energy industry has such immediate needs, it doesn’t generally offer apprenticeship programs. Here vocational and technical schools, such as San Juan College’s (SJC) School of Energy in Farmington, NM, fill the need. Employers often co-sponsor the education and/or partnerships are can be formed with veteran-advocacy groups.
Apache Corporation actively targets veterans to fill HR needs. In 2014, military veterans made up 12 percent of Apache’s new hires in the U.S. Its career page highlights the veterans and boasts: “When it comes to core values, Apache and the military fit like a well-pressed uniform.” Apache often participates in career days held at military bases near their operations. As result, appropriate personnel have jobs waiting for them when they return to civilian life.
Yen believes, that as more companies see the correlation between a military background and energy industry needs, career opportunities for those who’ve served will grow.
What a powerful way to thank our veterans for their sacrifice that, in part, kept the necessary fuel flowing. Hire them to make America energy-secure.
(A version of this content was originally published on Breitbart.com)
The midterm elections underscore how much Americans value energy, job and economic revival – and how much they want less Washington control of their lives, livelihoods, and dreams for their children and grandchildren. They also reflect the waning influence of radical Obama and Steyer climate change and anti-energy environmentalist elites. If ever there was a time to end the ban on oil exports, it’s now. With U.S. demand for oil products falling, production rising, and myriad studies making a strong case for selling American crude abroad, the president and Congress should terminate the ban as soon as possible. The nation’s demand for crude oil fell by 3.5% in September versus the same month a year ago. Gasoline demand fell by 3.0% because of efficiency gains in cars and trucks, coupled with a still weak economy, abominable 62.8% labor force participation rate, and too many people forced to work part-time, for lower wages and fewer benefits. Meanwhile, U.S. crude oil production soared in September, climbing to its highest level in 29 years – and demolishing claims that we are rapidly exhausting Earth’s petroleum. During September, the United States produced 8.8 million barrels of oil per day – an increase of nearly 14% over the previous year and 58% since 2005. In fact, the United States has now replaced Saudi Arabia as the world’s #1 oil producer. The International Energy Agency predicts that U.S. oil production will likely exceed 9 million barrels per day by the end of the year, with imported energy liquids reaching a remarkable low of 21% of our consumption in 2015, compared to 60% in 2006. Hydraulic fracturing played the key role in this. That brings us to the price component of Economics 101. Declining demand and rising supplies tend to drive prices down, and indeed crude prices plunged 28% – from $105 per barrel in January to $76 in November 2014. Prices for gasoline, heating oil and other petroleum-related commodities also dropped significantly. That’s a huge boon to consumers, from families to refiners to petrochemical makers. The AAA motorists club estimates that every one-cent decline in the pump price of gasoline feeds an extra $1 billion into the USA economy. The 71-cent drop per gallon has injected $71 billion in actual stimulus money, adding much-needed disposable income to households whose budgets have been pinched by higher taxes and rising costs for food, clothing and healthcare. Interestingly, the lower crude oil prices have occurred during a time of political unrest. In the past, crude prices have tended to climb rapidly when armies were on the march. Today, however, oil production in the United States and Canada appears to have ended the connection between military clashes and prices. Despite ISIS butchery in Syria and Iraq, Israel-Palestinian dissension, disputes over the South China Sea, Russia’s incursions into Ukraine, Islamist murders and kidnappings in Nigeria, and saber-rattling in North Korea, the global price of crude oil has declined steadily all year. Increased U.S. oil and natural gas production have also nearly single-handedly lifted America’s economy out of its recessionary doldrums. A U.S. Department of Energy report found that the number of oil and natural gas jobs grew 40 times faster than jobs in the rest of the economy from 2007 to 2012. Imagine how bad the Obama economy would be if it weren’t for the oil and gas industry that the President, his radical voter base and most of his cabinet secretaries still despise. Since 2012, the good news has continued. In the booming Marcellus Shale region of Pennsylvania, Ohio and West Virginia, the number of labor hours worked rose by 40% from 2012 to 2013, marking a new all-time high. (New York could also share in this job and revenue bonanza, but its political elites continue to block any and all fracking, severely hurting blue collar and farm families in western NY State.) Numbers like these make it easy to see the benefits of U.S. oil and natural gas production for the economy. Adding crude oil exports into the mix would multiply the benefits. A recent study by the economic analysis firm IHS Global concludes that allowing crude oil exports would lower gasoline prices by an additional 8 cents per gallon and support an additional 964,000 jobs in 2018. Moreover, it said, repealing the ban on exports would benefit all 50 states, not just those that actively produce oil and natural gas. The National Economic Research Associates (NERA) says eliminating the oil export ban would create high-paying jobs for almost 400,000 unemployed American workers, while the Brookings Institution calculates that ending the ban would boost America’s GDP by some $1.8 trillion! A U.S. Government Accountability Office echoed these analyses. The GAO’s federal auditors found that oil exports would lower energy prices for U.S. consumers, incentivize more domestic oil production, boost the economy, and lower the U.S. trade deficit by further reducing the need for foreign oil imports. The GAO also advised federal agencies to reexamine the size of the Strategic Petroleum Reserve “in view of changing market conditions,” including America’s new position as a global energy superpower. Though the GAO didn’t mention it, opening federally controlled onshore and offshore lands to leasing, drilling and fracking would also work wonders. Being energy-rich also gives America more leverage internationally. Consider the impact that crude oil and natural gas exports could have on Russia’s territorial ambitions. Up to half of Mr. Putin’s budget was fueled by energy exports in 2012. If U.S. energy supplies could be exported to our allies in Eastern Europe, until they can launch their own fracking revolutions, Russia’s ability to use energy exports as a political weapon would be constrained, and Putin’s financial strength diminished. Japan, South Korea and other Asian economies are also hungering to import American crude. Some major oil and gas users worry that even limited exports of U.S. crude would reduce supplies and send prices back up. Petrochemical and other manufacturers have created jobs and profited mightily from hydraulic fracturing, soaring domestic production, and sharply lower energy and feedstock prices, so one can understand their fears. However, lifting the ban on crude oil exports will create new markets and convince more voters and politicians to support opening more areas to environmentally sound drilling and fracking, and thereby fostering further exploration and production that will help keep prices low. Biofuel producers might also oppose ending the ban. The surge in oil and gas production makes it even harder to defend spending billions of taxpayer and consumer dollars on fuels that require some 40 million acres of farmland, plus vast amounts of water, fertilizer, pesticides and fossil fuel energy to produce. Their claims that biofuels help prevent climate change have become just as tedious and untenable. Global temperatures haven’t budged in 18 years, it’s more than nine years since a Category 3-5 hurricane made U.S. landfall, and any actual human influences on the global climate are not even detectable amid natural climate blips and fluctuations. It’s time to end biofuel mandates and subsidies, and focus on fossil fuels. The U.S. prohibition on crude oil exports is a relic of the 1970s. It was enacted in response to the Arab Oil Embargo and gasoline lines that snaked through the streets of major U.S. cities. Those days are gone. Today’s technologies are increasing the nation’s global strength and standing. Just imagine the jobs, security and prosperity we would enjoy if more states permitted fracking, and federal overseers issued Keystone pipeline permits and started allowing real energy production on lands they now keep off limits. If oil and natural gas exports were allowed, the could exert its new energy influence throughout the world without firing a shot. This is a superb opportunity for a newly Republican and bipartisan Congress – and for a President who up to now has been more ideological and defiant than most American citizens can accept. Congress and President Obama should speed oil leasing and exports now.
Why is it that government grows in size and scope, and is so difficult to stop or reverse? Political economist, Gordon Tullock, who passed away on November 3, 2014 at the age of 92, was a path-breaker is explaining how and why big government keeps getting bigger.
Gordon Tullock was one of the founders of what has become known as Public Choice theory – applying the logic of economics to understanding the nature and workings of the political process.
Born in Illinois in 1922, Tullock earned a law degree at the University of Chicago in 1947. He served in the U.S. Foreign Service and was stationed in north China in the late 1940s, witnessing the Chinese Civil War that ended with the triumph of communism and the dictatorship of Mao Zedong.
The Birth and Logic of Public Choice
In the 1950s he began a long collaboration with economist, James M. Buchanan, which was devoted to the economic analysis of democratic political decision-making that resulted in their co-authored book, The Calculus of Consent (1962). Many familiar with Tullock’s contribution to the development of Public Choice theory felt that he had unfairly not been included in the awarding of the Nobel Prize in Economics that was given to James Buchanan in 1986 for this insightful extension of economic reasoning to the workings of government.
He went on to write a series of works on this theme, including Private Wants, Public Means (1970), The Logic of the Law (1971), The Social Dilemma (1974), The Vote Motive (1976); Rent-Seeking (1993) and Government: Whose Obedient Servant? (2000).
The starting point of Public Choice theory is that the logic and rationality of the political process has the same foundation as economic theory in general: individuals, whether in the marketplace or the political arena, are guided by self-interested motives to improve their circumstances; they weigh costs and benefits, and they respond to incentives.
In the political process there is an “iron-triangle” of three interacting groups of people. There are special-interest demanders those who desire favors and privileges from the government at the expense of consumers, competitors and taxpayers; there are politician suppliers who offer government-bestowed favors and privileges in return for campaign contributions and votes; and there are the bureaucratic managers of the regulatory, interventionist, and redistributive system, who are constantly on the lookout for ways and means to expand their authority and increase their budgets as avenues to more power and opportunities for promotion and higher salaries.
It is Rational to be Ignorant about Politics
Why do voters not see through the propagandistic smokescreen that is used to rationalize this process of legalized plunder? Tullock explained that it is because voters are rationally ignorant. For any one voter, his ballot, in terms of its potential to make the difference in any election, is insignificant in relation to all the votes cast.
Everything, after all, has a cost. More time devoted to any one activity means less time remaining available to do something else during any given period of time. Individuals allocate their time to any one activity for as long as they consider the additional, or “marginal,” benefit to be greater than the additional, or “marginal,” cost of using that same time for some alternative activity, instead.
Becoming an informed or knowledgeable citizen on governmental policies has a cost, since time has to be allocated and used to become that better-informed voter. For many people, any benefit from being a politically and economically informed voter is based on the significance that person’s vote might have on influencing the outcome of an election.
In almost all elections, the individual’s vote counts for little in determining that outcome, especially since the larger the number of people participating in the voting process, the smaller becomes the “weight” or importance of any one individual’s vote.
For example, in the November 2012 presidential election, 118 million eligible voters cast their ballot. This meant that any one voter counted for only 1/118,000,000 in deciding the outcome.
If politically informed knowledge is viewed as a means to the end of “making a difference” and therefore “why it should matter” to be an informed voter, the cost will often seem greater than the benefit from gaining very much political or economic knowledge about the candidates and the details of the policy issues at stake in the election.
Thus, it is reasonable – “rational” – for many voting-age citizens not to incur much of a cost in time and effort to be able to make a more intelligent decision in the political process. For most people it is just not worth the personal cost in time and expense to become intelligently informed on all the various policy issues that are being advocated by politicians, interest groups, and bureaucrats. Therefore, the average individual has little incentive to incur the intellectual expense to penetrate the political smokescreens.
However, on the other hand, those special interest groups who hope or expect to obtain clear and large concentrated benefits from various forms of government intervention, regulation and income redistribution have a strong motive to be highly informed abut the policy issues and the politicians who can provide them with their political privileges and favors.
Rent-Seeking: Pursuing Profits through Politics
One of Gordon Tullock’s most insightful contributions was the concept of “rent-seeking.” What motivates the drive for government favors and privileges is “rent-seeking” behavior. It is the name given to the pursuit of profits through the political process. A better name, perhaps, would have been “political profit-seeking” in comparison to “market-based profit-seeking.”
In the free marketplace, the only way in which producers can earn revenues and profits is by successfully competing against their rivals in offering better and less-expensive goods to the consuming public. But, Tullock said, there is another route to profits: the use of government to obtain restrictions and protections limiting the ability of market rivals to compete in ones own market or to receive direct government subsidies or contracts from the government to gain profits.
The costs from this process of politically acquired profits, Tullock explains, are the resources and labor devoted to manipulating the political process to ones advantage, rather than to producing the goods and services potentially desired by consumers on the market.
Economic Waste from Political Favoritism
Suppose there are three competitors in a market, each of who earns $5,000 of revenue that is just equal to cost their individual costs of production, given the price they competitively charge and the amounts of the good they, respectively, sell to the buying public. Combined they earn total revenues of $15,000.
Now suppose that it might be possible for one of these three producers to successfully influence politicians controlling the passing of economic policy legislation to give one of them a monopoly position in their market. One would have the legal monopoly privilege to be the single seller of this good, and the other two, as a consequence, would be regulated out of the market.
Further imagine that the lucky winner in the political competition to become the market monopolist would then earn total revenues of $20,000, with production costs of $10,000, resulting in a profit of $10,000.
The political pursuit of gaining this monopoly position, and the resulting extra politically based profits will act as an incentive for each of the three competitors to devote resources – expressed in sums of money – in the political lobbying process to try to become the winner at the expense of their two market rivals.
Each of them would have an incentive to possibly spend up to $15,000 to try to gain the monopoly position (equal to the current $5,000 they earn from being one of the existing competitors in this market, and which they would lose if they are driven out of this market, plus the $10,000 of extra profits that can be theirs if they gain the monopoly privilege.)
In other words, the three competitors would have a incentive to spend up to a combined total of $45,000 in the political contest to defeat the other two in pursuit of the monopoly position, so one of them can earn an extra $10,000 of profit.
Tullock insisted that this represented complete economic waste, in the sense that rather than those sums of money (and the real resources they represent) being applied through investment to make more, better and less expense goods available to the consumers of the society, they were used to influence and manipulate the political process in their direction instead of someone else’s.
Successful rent seeking results in closed-off markets and limits on competition, all of which in the longer run reduce the innovation and competitive rivalry that normally act as the stimulus for improvements in the quantities, varieties, and prices of goods available to consumers.
Bigger is Not Better – Benefits of Small, Local Government
Tullock also suggested that Public Choice theory can offer insights into the benefits from political federalism that are lost when power is centralized in one single political authority within a country. First, that very diversity of policy preferences among people suggests the reason that many issues should be decided at the local level, where the people most directly interested in and possibly affected by a particular policy may be concentrated. A smaller group may sometimes find it easier to reach a common agreement about things.
Second, if issues to be voted on are localized, the number of voters participating in an election is reduced in comparison to a national vote. As a consequence, the importance of any one person’s vote increases, and more people may be influenced to incur the personal cost of becoming better informed about the policies on which they may be expected to vote.
Third, if a jurisdiction is decentralized and its geographic size reduced, an individual who feels strongly enough that he can no longer endure the policies implemented within the area in which he lives, has a shorter way to go to move away. Some of the costs of voting with his feet, in other words, are reduced.
And, fourth, having many competing governments makes it easier for citizens to compare and contrast the costs and benefits from government programs implemented in different political jurisdictions. It may make some voters more informed about the likely consequences to be expected from a policy if they can look next door at a neighboring political jurisdiction that has already been experimenting with a policy they are being asked to vote on.
But the fact remains that in the political arena, relationships are based on force because the results are coercively imposed on people whether or not they supported the policies. This also highlights the fact that after any election, each voter is forced to live with a package deal, i.e., all the policies to be implemented by the politicians elected. No one can refuse to pay for or obey implemented government policies with which he disagrees.
Gordon Tullock’s Valuable Legacy on the Leviathan State
It must be admitted that Gordon Tullock did not offer many fruitful suggestions about how to escape from these and related dilemmas experienced in modern democratic politics. But what he did do was to clarify and explain the nature of the big government beast and what it feeds off to keep getting larger and larger.
The answer, in my view, can only be found in the wider context of moral and political philosophy about the nature of man in society, and a successful theory of individual rights to life, liberty and honestly acquired property.
But his does not distract from the important and valuable contributions that Gordon Tullock has left us with about the reality of the political process, and the problems we must confront to hold back and defeat the Leviathan State.
[Originally published at EpicTimes]
With great sorrow I advise of the death Saturday, Nov. 8, 2014 of Philip M. Crane, a long-time Congressman from Illinois and leader of the national conservative movement. He died peacefully at the home of his daughter Rebekah Crane in Jefferson, Maryland. The cause was lung cancer. He was 84.
Mr. Crane first went to Congress in a special election in 1969, held in the 13th Congressional District of Illinois when Donald Rumsfeld left Congress to go into the Executive Branch. He was redistricted into the 12th and then the 8th Districts, and served continuously until January 2005, a period of 35 years.
In the very early 1970s he established and led what became the Republican Study Committee in the House of Representatives
In 1978 he was elected Chairman of the American Conservative Union and served in that capacity for two years. His votes in the House of Representatives earned a lifetime ACU rating of 99%.
In 1994 Mr. Crane was very active and very generous in his support of my candidacy for President of the Cook County Board. My wife, Kathy, and I became particularly fond of Phil and his wife, Arlene, who, alas, preceded him in death in 2012.
Mr. Crane was born in Chicago, Illinois on November 3, 1930 to George W. Crane III, M.D., and Cora Ellen Miller Crane. He received his undergraduate degree from Hillsdale College in 1952 and went on to earn a PhD in history from Indiana University in 1963. He served in the US Army from 1954-1956 and taught history at Indiana University and Bradley University.
He gained national recognition in politics through his work on the Presidential campaign of Barry Goldwater in 1964. While working as an Assistant Professor of History at Bradley University (1963-1967), Mr. Crane proved to be a popular and charismatic public speaker on behalf of Goldwater. Through these efforts and his book, The Democrat/s Dilemma which came out in 1964, Mr. Crane became a leading national figure in the fledgling conservative movement.
While serving as headmaster of Westminster Academy in Chicago in 1969, Mr. Crane was urged to enter a special election race triggered by the appointment of then Illinois Congressman Donald Rumsfeld to the Nixon Administration. Mr. Crane won the primary and went onto win the election, serving in that seat from 1969 until his defeat (by Melissa Bean) in November 2004.
As a leader of the conservative movement in Congress, Mr. Crane was instrumental in the founding of a number of conservative organizations that flourish to this day. In 1973, he founded the Republican Study Committee which is the preeminent GOP conservative organization in the House of Representatives. In that same year, he was a leader in the effort to form the Heritage Foundation which has grown into one of the most well known and respected conservative think tanks in the world.
In Congress, Crane spent most of his career serving on the Ways and Means Committee. There he championed lower taxes, a simplified tax code, free market economics, and free trade. He was the ranking member and eventually Chairman of the Ways and Means Trade Subcommittee. There he led the effort to pass numerous free trade agreements including the North American Free Trade Agreement (NAFTA). He was the leader of efforts, ultimately successful, to repeal laws that prohibited Americans from owning gold, buying, selling, and possessing gold. He also was very active in efforts to reduce or limit government spending and authored and supported hundreds of bills and amendments to accomplish those ends.
His passion for history and the US Constitution was always evident in his public speeches and floor debate as he routinely cited historical events and the Constitution to make his case. Crane also wrote numerous books. In addition to his most celebrated work, The Democrat’s Dilemma, he also wrote the The Sum of Good Government in 1976, and Surrender in Panama: The Case Against the Treaty in 1978. (He also composed a work of popular music, a Christmas song, “Little Sandy Sleighfoot”, which was recorded in 1957 by James Dean and initially sold some 300,000 records.)
In addition to his efforts on behalf of Barry Goldwater, Mr. Crane was actively/directly involved in Presidential politics in the 1970s and 1980s. He was the first sitting Congressman to come out and openly support Ronald Reagan’s effort to defeat then-President Gerald Ford in the 1976 Republican presidential primary. When it appeared that Mr. Reagan was not going to run in the next presidential election, Mr. Crane threw his hat in the ring in 1978 to run for the 1980 GOP nomination, only to have Mr. Reagan enter the race later. Mr. Crane eventually withdrew from the race throwing his support to Reagan.
While Phil Crane was a fierce partisan in debate and on the campaign trail, he was very personable and well liked by members of both parties with whom he served. He was well known for his great sense of humor and was a master joke teller and prankster as anyone who spent time with him would soon discover. He took pride in hand writing hundreds of letters over the years to family, friends and constituents and was particularly quick to write a note to friends or colleagues who were facing difficult times or had lost a loved one.
A loving father and husband, Mr. Crane was preceded in death by his parents, George and Cora Crane , his wife, Arlene, his brother, George, and his daughter, Rachel. He is survived by his siblings, Judith Crane Ross, Daniel Crane, and David Crane, and his children, Catherine Hott, Susanna Crane, Rebekah Crane, Jennifer Oliver, Sarah Crane, George Crane, and Carrie Crane and by numerous grandchildren.
Services are expected to be Thursday, November 13, 2014, at Loudoun Funeral Chapels in Leesburg, Virginia, with burial near the family farm in Indiana. If and when I have further information about visitation and funeral arrangements I will pass it along.
May his memory always be a blessing.
The FCC is considering administratively bypassing Congress and unilaterally reversing longstanding U.S. Internet policy in law with an administrative maneuver that could have sweeping and unintended negative consequences for U.S. trade and foreign policy.
To implement the FCC’s most recent redefinition of net neutrality, the FCC is seriously considering its net neutrality “nuclear option.” That would reverse administratively the legal status of the Internet from a lightly regulated “information service” to a utility price-regulated “Title II telecommunications” service, per Wall Street Journal reporting.
Rather than asking Congress for Internet authority that the FCC knows that it does not have, it apparently is scheming to creatively combine existing legal authorities, in ways in which they were never intended, in order to ban a two-sided free market for the Internet from developing.
The FCC covets a legal theory that would allow it to administratively dictate a permanent, zero-price subsidy for all downstream Internet traffic from cloud servers at Internet consumers’ expense.
Essentially, the FCC would be banning a two-sided free market where senders and receivers may negotiate payments, in favor of a permanent receiving-party-pays Internet economic model.
Some background here is important in order to understand the sweeping implications of this for U.S. trade and foreign policy.
In 1994, the Clinton administration privatized the Internet backbone. Its peering-arrangements were market-negotiated. That’s because the FCC legally treated Internet traffic as unregulated “enhanced” data services under the FCC’s 1980 Computer Inquiry II precedent, and not “Title II,” common-carrier-regulated “telecommunications.”
In 1996, the bipartisan Telecommunications Act also did not treat the Internet as “telecommunications.” To the contrary, that law explicitly stated: “It is the policy of the United States… to preserve the vibrant and competitive free market that presently exists for the Internet… unfettered by Federal or State regulation.”
Since 1996, the United States government has convinced international trading partners to not treat Internet traffic as “telecommunications” in order to ensure the development of a free and open global electronic marketplace, and to promote democratic discourse.
This purposeful consensus to not saddle the Internet with “telecommunications” price regulation has been integral to creating the free and open global Internet we know today.
Thus the world’s leading trading partners ensured that the Internet would not fall under the legal jurisdiction of the United Nations’ International Telecommunications Union (ITU).
International “telecommunications” legally falls under the UN-ITU equivalent of a trade treaty. Specifically, ITU agreement: ITU-T D.50 recognizes the sovereign right of each state to regulate “telecommunications” as that state determines.
The ITU’s “telecommunications” settlements regime operates under a sending-party-pays economic model, the exact opposite of the FCC’s desired receiving-party-pays economic model.
This allows each nation to set their own tariff on incoming traffic or information imports. In the past many nations set their telecommunications tariffs on incoming calls very high to generate large net trade payments from the U.S.
Now back to the FCC.
According to news reports, the FCC is responding to Silicon Valley pressure for a formalized American industrial policy that would protect and favor Silicon Valley’s cloud-based, client-server economic model, where the selling server-side never pays for delivery of its downstream traffic to the buying client-side.
Silicon Valley’s cloud client-server model — of ad-serving, video streaming, software on demand, and cloud-computing services — involves sending vastly more downstream traffic to American and international users than those users send upstream to Silicon Valley.
Now, one can understand why the FCC formally reversing the legal status of the Internet from un-tariffed Internet trade to tariffed “telecommunications” trade, where Silicon Valley would pay for its exceptionally disproportionate net downstream traffic under a sending-party-pays model internationally, would be a profound change in U.S. trade and foreign policy.
It gets worse.
The new secretary general of the ITU is Chinese, and China, Russia, Iran and the Arab states have convinced the vast majority of UN ITU member nations, which are heavily autocratic and have Internet censorship aspirations, to support eventual ITU governance and economic regulation of the Internet.
Edward Snowden’s leaks that the NSA has been near-universally surveilling foreign use of the Internet has only catalyzed and accelerated the UN-ITU’s Internet power grab plans.
It is in this international “telecommunications” tinderbox that the FCC is playing with matches by signaling to the world its likely plan to change the legal status of the Internet to price (and tariff) regulated “telecommunications.”
This is not an “administrative” call of three unelected FCC commissioners. This is a big-time congressional trade and foreign policy call that should involve the congressional leadership and the committees of jurisdiction responsible for trade and foreign policy, in addition to the FCC’s traditional congressional overseers for domestic matters.
And within the executive branch, the foundational legal status of the Internet should be a trade and foreign policy matter driven by the authorized Departments of state, treasury, defense, commerce and the USTR — not the FCC, a domestic regulatory agency with no lead trade or foreign policy authority from Congress.
Will the constitutionally empowered legislative and executive branches of government allow a mere administrative agency like the FCC to unilaterally reverse longstanding, successful, bipartisan, trade and foreign policy by acting like a self-appointed Federal Communications Congress?
Will the real Congress please stand up?
[Originally published at the Daily Caller]
Back in Dec 1941, Japan suddenly attacked the huge US Naval base at Pearl Harbour. Three days later, two “invincible” British warships, “Repulse” and “Prince of Wales” were sunk by Japanese planes off Malaya. Soon Japanese armies were rampaging through Asia towards Australia.
By Feb 1942, the British fortress of Singapore surrendered and Japanese bombs were falling on Darwin. By Sept 1942 the Japanese army had slashed their way down the Kokoda Track and could see the lights of Port Moresby. They were looking across Torres Strait to Australia. At that time, most of our trained soldiers were fighting Rommel in North Africa or in Japanese prison camps.
Suddenly Australia was on its own and needed to defend itself with what we had here. Armies need soldiers, weapons, bullets, vehicles, fuel, food (and cigarettes). Rationing was introduced for petrol, food and cigarettes. An immediate critical shortage was copper for cartridge cases – we had mines producing lead, zinc, silver, gold and iron, but there was a critical shortage of copper. Fortuitously, just before the Japanese attack on Pearl Harbour, an exploration drill hole at Mount Isa had struck rich copper ore. Mount Isa was called on to avert a calamitous shortage of copper in Australia.
With government encouragement, Mount Isa Mines made the brave decision to suspend the profitable silver/lead/zinc operations and convert all mining and treatment facilities to extracting copper. The lead concentrator could be converted to treat copper ore, but the biggest problem was how to smelt the copper concentrates. Luckily the company had skilled engineers and metallurgists in the lead smelter. In a miracle of improvisation, scrap steel and spare parts were purchased and scavenged from old mines and smelters from Cloncurry, Mt Elliot, Mt Cuthbert and Kuridala and cobbled into a workable copper smelter. In 1943 the first Mount Isa blister copper was produced.
Production continued after the war when Mount Isa returned to extracting the then more profitable silver/lead/zinc. Later new plant was built enabling both lead and copper to be produced from this fabulous mine. This story of the importance of self-reliance has lessons for today. The war on carbon energy, the carbon tax, the renewable energy targets, escalating electricity costs and the voices in Parliament calling for Emissions Trading Schemes have all unnerved our big users of carbon fuels and electricity.
Smelting and refining have become threatened industries in Australia, and closure of the Mount Isa copper smelter and the Townsville copper refinery has been foreshadowed. Already six major metal smelting/refining operations have closed in Australia this century and more are likely. The closures have affected copper, lead, zinc, steel and aluminium – the sinews of modern industry. And the car industry, with all its skills and tools, is closing Local production and refining of oil is also declining, while “lock-the-gate” vandals are trying to prevent domestic exploration and production of gas.
More and more land and offshore waters are closed to exploration and mining, and heavy industry is scorned. It was estimated recently that by next year, half of Australia’s oil refining capacity will have closed. In the event of a disruption to tanker routes, Australia has just 12 days of diesel supplies before city fuel and food supplies start to dry up. We are losing the resources, skills and machinery needed for our own security, while we fritter precious resources on green energy, direct action, carbon capture and storage and other pointless anti-carbon chimeras.
Our foolish green energy policies and the suicidal war on carbon fuels are killing real industry leaving us unskilled and defenceless – like a fat toothless walrus basking on a sunny beach. Wake up Australia.
Imagine two companies, one worth more than $31 billion and the second worth $315 billion, ask for and receive $1.6 billion in federal low interest loans to build a power plant. The power plant delivers less power than promised and destroys wilderness and wildlife in the process. Then, rather than running for cover or making excuses, the companies boldly claim that the power plant was worthwhile and requests a federal grant to pay off the federal loan.
“Impossible,” you say, after a hearty guffaw. Not so. Outrageous, yes, shameless, no doubt, but none the less true.
NRG Energy and Google have had the nerve to request the federal government give them money to pay off the loan that the government gave them to help build the Ivanpah Solar Power Plant. The same plant that has underperformed because despite being in a desert, they blame the sun for not shining up to their expected forecasts — forecasts they used to secure the loan. The same power plant that is making flight unsafe for human pilots and killing birds by the truckload.
While NRG and Google will reap millions if not billions from this subsidized boondoggle over the course of its operations, they want to take the taxpayers for $539 million more.
Congress should be holding hearings or a trial, not considering a loan.
For more see: http://www.foxnews.com/politics/2014/11/08/world-largest-solar-plant-applying-for-federal-grant-to-pay-off-its-federal/
American corporations are not the only bad actors, however. A science institute in India is claiming that the ever entertaining charlatan’s at the IPCC have tried to pull a fast on over on developing countries. The New Delhi based Center for Science and the Environment (CSI) is crying foul over a decision by the IPCC to drop a particular chart from its alarmist synthesis report.
The chart in question shows that the developed world is off-shoring its greenhouse gas emissions by shipping manufacturing overseas then importing the goods produced while taking credit for slowing or cutting emissions. Was this a bit of chicanery on the part of developed countries or a case of accurate but unflattering accounting for emissions from developing countries? I don’t know, but I am amused anytime one alarmist group attacks another one for falsifying data.
In fairness I wonder, if the companies in the developed countries offered to close their CO2 belching factories in developing countries, bringing the jobs and goods produced back home, but in doing so took the full blame for the greenhouse gas emissions caused (minus the emissions no longer resulting from transit, of course), if those egghead academics offended by the IPCC’s accounting, would then be happy? I’d lay odds the workers, their families and the governments in the developing countries affected would be very unhappy.
Just a thought.
For more see: http://timesofindia.indiatimes.com/home/environment/developmental-issues/IPCC-dropped-key-chart-inconvenient-to-developed-world-CSE/articleshow/45064308.cms