Everything in Washington, D.C. established to do X – ends up doing X, Y, Z, and triplets of every letter in the alphabet. This anti-federalism is fueled by several basic precepts. Of course DC wants as much power as it can grab. The more power it wields – the more it can lord over us and the more favors it can dole out. And the more coin it can spend – and the more coin it can justify taking from us.
But the states bear a lot of the culpability too. The more the states off-load onto the Feds – the less for which they themselves are responsible. Politically and financially. The more the Feds do what states should be doing – the more coin the states have for other silliness.
And here is a vitally important component: States can’t print money and have to at least pretend to balance their budgets. The Feds are not constrained by either of those two tethers to Reality. (Hello, $4.5 trillion in phony Quantitative Easing coin and $19 trillion in debt.)
Want yet another example of the DC alphabet growing? Behold the United States Army Corps of Engineers: “A 23,000-employee federal agency that works on a wide range of infrastructure projects for military and civilian purposes. It’s an honorable history in helping build everything from the Washington Monument to the Panama Canal. But like many federal agencies it is prone to mission creep, pork-barrel projects, and outrageous cost overruns.”
Here comes the creep: “On a recent trip to Missouri, it now looks as if Corps may be expanding into the cleanup of hazardous waste sites. Since the country has hundreds of these, this is a worrisome precedent. The West Lake Landfill, near St. Louis’s Lambert International Airport, has been a local eyesore since 1974 but has posed no discernible danger to local public health and safety despite some radiological material left over the 1940s Manhattan Project being present….(A)fter 25 years, (the Feds) have completely dropped the ball and now there has been no cleanup.”
This itself is a lesson. Perhaps we should stop waiting (decades) for the Feds, get off our respective scnheids – and do things for ourselves.
But the awful Environmental Protection Agency (EPA) finally awoke from its tax-dollar-gorging-induced slumber. “(T)he EPA announced it would clean up the site and also build a physical isolation barrier preventing any subsurface fire from spreading. The plan was to involve to the West Lake site, all in 2016. Crucially, the plans involve private sector parties paying much of the cost of the cleanup.”
Wait – We the Taxpayers aren’t on the hook? How refreshing. And after all that wasted time – this privately-funded cleanup is up and running and ready to go.
But of course this federal-government-less problem solving can not be allowed to stand. Enter the Missouri politician contingent: Democrat Senator Claire McCaskill, Democrat Representative William Lacy Clay and Republican Representative Ann Wagner (because the DC insanity is absolutely bipartisan). These three are waving around our National Debt credit card – and looking for even more things for the Corps to do.
“The U.S. Senate passed a ($400+ million, zero-hearings-held) bill to give the Army Corps of Engineers the authority to clean up the radioactive waste. ‘With the passage of this legislation today, the Senate has demonstrated that voices of the community around West Lake Landfill are being heard,’ Democratic Sen. Claire McCaskill of Missouri proclaimed. Missouri Reps. William Lacy Clay and Ann Wagner have introduced companion legislation in the House (HR 4100) – and also demanded it be passed immediately with no hearings.”
Oh look – another terrible bill DC pols are jamming through with zero examination. But after a quarter century of federal lameness – why this sudden urgency? “One possible reason for the haste is that a main backer of the McCaskill bill is the Teamsters Union, a politically powerful player in the St. Louis area. The union says it is concerned the landfill represents ‘a human rights violation.’”
But for the preceding twenty-five years it did not? Wait for it… “It also worries that landfill workers at the site ‘lack a union and are left without a means to voice concerns without fear of retaliation.’ Transferring control of the project to the Corps of Engineers could mean more union involvement in the cleanup….”
There it is. Favors for some – at the exorbitant expense of the rest of us.
The West Lake, Missouri Landfill is a mess – and has been for a long time. But finally, FINALLY – it is on the verge of being solved. With private coin, no less. Washington, D.C. is a much bigger mess – and has been for a much longer time. The Feds mandating DC’s harmonic convergence with West Lake is a quintessential visual aide of all that is wrong with Washington.
Anti-federalism, overreach, zero transparency, cronyism – and redundancy via unnecessary meddling and ridiculous and unwarranted spending. Bravo, Senator and Representatives. And everyone else that voted or intends to vote for this utterly-unnecessary disaster-in-the-making.
This, like so much in DC, brings to mind the words of World War II-era theater producer Martin Gabel: “Don’t just do something – stand there.”
Despite its reputation for freedom, the U.S. has the world’s highest prison population rate, 716 inmates per 100,000 people. More than half the countries of the world have rates less than one-fifth of that. The United States’ rate is six times that of Canada and six to nine times greater than the rates of Western European nations, with whom we have the most cultural and historical ties. Why is criminality so much higher here than in those countries? The U.S. has less than 5 percent of the world’s population but 22 percent of its prison population.
For decades the U.S. prison system was a model for other countries. Then the trend reversed. From 1978 to 2014, our prison population rose 408%. Policies in those years led to stricter federal sentencing, more law enforcement—and an avalanche of new laws. The movement toward broad, punitive crime control and prison policies wasn’t based on any scientific rationale, says Craig Haney, a professor at the University of California (Santa Cruz). “Rather, it was largely the product of a series of policy decisions made for largely political reasons [that] legislators and other politicians have found politically advantageous and expedient.”
Over the past decade Congress has created, on average, 50 new crimes per year. Not 50 new laws; 50 new crimes. That number has been far exceeded by the Obama Administration, which in its first five years created 439 new crimes, an average of 88 per year, bringing the total federal crimes to 4,889. That does not include the state and local crimes for which Americans can be prosecuted.
The laws are voluminous. The Affordable Care Act ran 1,024 pages; Sarbanes-Oxley 810 pages; and the Dodd-Frank Act 2,300 pages. These were crafted by congressional staff personnel, not even read by the senators and representatives, who couldn’t possibly have the time to read them all even if they wanted to. Laws have grown so extensive and complicated that only lawyers, often working in teams, can know everything a law requires; but everyone must obey them, which they are unable to do. John Baker, a retired law professor who has studied this issue, states, “There is no one in the United States over the age of 18 who cannot be indicted for some federal crime.”
It’s not just the laws but the regulations. These are more voluminous than the laws and set forth new crimes beyond what the laws specify. Take the Obamacare regulations, for example. The bureaucracy wrote 30 words of regulations for every word in the legislation itself. The 109 final regulations pertaining to Obamacare contained more than 11 million words (11,588,500), compared to 381,517 words in the legislation. In 2013 the Code of Federal Regulations was over 175,000 pages, the print edition occupied 238 volumes, and the index alone took 1,242 pages. I am unable to find recent estimates of the number of federal regulations, but estimates back in 1991 ran as high as 300,000, and EPA regulations alone occupied more than 30 volumes of the Code of Federal Regulations. Undoubtedly those totals are much higher now.
Andrew P. Napolitano is a former New Jersey Superior Court judge and has written seven books on the U.S. Constitution. He writes that the federal government now regulates “the thickness of leather in shoes, the water pressure in home showers, the amount of sugar in ketchup, ad infinitum. It is impossible to avoid confronting federal regulation of human behavior unmentioned in the Constitution.”
Congress permits the Supreme Court to allow the regulatory agencies to create their own rules, which run roughshod over individual rights and often counter to the intent of Congress. Charles Murray, a scholar at the American Enterprise Institute, writes, “If a regulatory agency comes after you, forget about juries, proof of guilt beyond a reasonable doubt, disinterested judges and other rights that are part of due process in ordinary courts. The ‘administrative courts’ through which the regulatory agencies impose their will are run by the regulatory agencies themselves, much as if the police department could make up its own laws and then employ its own prosecutors, judges and courts of appeal.” Regulation has become a 4th branch of government, which usurps the functions of the other three branches.
The regulatory agencies create crimes by broadening the definition of their powers granted by Congress or the Constitution. EPA, for example, has extended its power under the Clean Air Acts and Clean Water Act far beyond the intent of Congress, and it has extended its Constitutional power over “navigable” waterways by claiming it includes swamps, land under water only a few week a year—or even only a few days— and potholes, ditches and culverts hundreds of miles from any actual navigable water. In 2010 just 3 of more than a dozen environmental statutes (Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act) contained 9,000 pages on illegal behavior, any one of which can result in criminal prosecution. Here are three examples from one of my previous books (The Trojan Project) of people being sent to prison because of such crimes.
In Florida, Ocie Mills and his son served 21-month prison terms for dumping clean sand on two lots they owned and on which they were trying to build a house. They already had permission from the state of Florida, and Florida officials had told them no federal permit was necessary. But federal environmental police found them guilty of dumping a “pollutant” into “navigable waters of the United States.” After serving his full term in prison, Ocie attempted to get the verdict overturned just to clear his name, but he failed. Federal district judge Roger Vinson deplored the twisting of wording “worthy of Alice in Wonderland,” to stretch the meaning of “navigable water” to include dry land, clearly not even a wetland, much less a navigable water, but said he had to apply the law as it existed.
John Pozsgai, a Hungarian immigrant with little schooling bought an old industrial dump, cleaned it up by removing 7,000 old tires—and then committed the crime of adding topsoil without a federal permit. There was no question the environment was improved by his actions. That wasn’t the point. The point was that he did so without a federal permit. Three years in federal prison.
Bill Ellen used to be the state environmental engineer who regulated wetlands. He ran a nonprofit wildlife rescue center and had been hired to convert part of an estate into a 103-acre wildlife sanctuary when he ran afoul of permit regulations. But he wasn’t draining or filling wetlands—he was building them! The sanctuary was adding 45 acres of duck ponds. Ellen wasn’t trying to evade government regulations; he had already obtained 38(!) permits and thought he was doing everything properly. But he was sentenced to six months in jail for dumping two loads of dirt on a portion of the property that the U.S. Soil Conservation Service had previously declared a non-wetland. A U.S. Corps of Engineers official using an expanded definition of “wetland” from a new government manual—so new it wasn’t even in effect yet—declared Ellen guilty. He ended up being sentenced to 6 months in jail for a regulatory standard that didn’t even exist at the time of his actions.
Historically, Anglo-American jurisprudence required a guilty act (“actus rea”) be accompanied by an awareness that the act is wrong (“mens rea” in Latin, literally meaning “guilty mind”) for there to be a crime. However, the federal government has increasingly imposed criminal penalties under what is known as “strict liability” laws. Bill Ellen’s experience cited above is an example; clearly he did not know he was doing anything wrong.
Another example of criminal conviction lacking mens rea is the case of Abner Schoenwetter. He spent six years in a U.S. federal prison for violating an obscure Honduran regulation by packaging lobsters with plastic instead of cardboard. Under the Lacey Act, it is illegal for an American citizen to violate any fish or wildlife regulation of another nation. A reform measure, recently introduced by Congressman Jim Sensenbrenner, which would provide protection from this sort of injustice by a default “mens rea” rule has been opposed by President Obama.
The federal government’s criminalization of human behavior continues to increase with no sign of it stopping, much less reversing. Our Constitution has been violated so often and so extensively that it no longer protects our rights and freedom as was intended. The growth and exercise of federal power has become so commonplace as to be viewed as acceptable or inevitable and render the Constitution irrelevant to the power structure in Washington. The Constitution mentions only three federal crimes: treason, piracy, and counterfeiting. Does anyone involved in creating the hundreds and hundreds of new federal crimes really care that they have no justification under the Constitution?
The Constitution grants the federal government only certain powers enumerated in that document. All others are reserved to the states or to the people under Article 10. The enumerated powers grant the federal government no power to print paper money, regulate the economy, establish a central bank (the Federal Reserve), provide housing, food stamps or many other things in which federal involvement is now widely accepted public policy. These abuses of federal power will never be corrected by the elected leaders in Washington who created them or their successors who continue to benefit from them politically.
There have been 27 amendments to the Constitution. These have all been accomplished by proposed amendments achieving a two-thirds vote in both house of Congress, followed by ratification in three-fourths of the legislatures of the states. But Article V of the Constitution provides an alternative route that bypasses Congress—which would never pass amendments such as I suggest. The alternative route is through approval of two-thirds of the state legislatures, which would trigger a call for a convention to consider amendments, which would then have to be ratified by three-fourths of the state legislatures.
(Black’s Law Dictionary defines “constitutional convention” as: “A duly constituted assembly of delegates or representatives of the people of a state or nation for the purpose of framing, revising, or amending its constitution.” [emphasis added] The enemies of amending the constitution claim that such a convention could result in throwing out the existing Constitution and framing a new one. However, those supporting such a convention have made it clear their purpose is to amend the constitution, not write a new one. It is clear from the Black’s definition employing the word “or” that such a convention can be simply for amending the Constitution. Nevertheless, to avoid confusion and deprive the enemies of such a convention of a lie with which to scare people, it is perhaps best to describe the reform effort as an Article V Amendments Convention, which is what is meant by the term Article V Convention. The further scare tactic that a “runaway” convention could result is absurd because ratification of any amendments would require approval by three-fourths of the state legislatures. )
In just the past month, the governor of Texas has called for an Article V convention to amend the Constitution, and Florida, West Virginia and North Dakota have passed resolutions to this effect in either their senate or house. Several other states seemed poised to add to the total. The campaign for government reform is gaining momentum!
Heartland Daily Podcast – Introducing Michael Hamilton: Heartland’s New Research Fellow for Health Care
In today’s edition of The Heartland Daily Podcast, host Donald Kendal introduces Heartland’s new Managing Editor of Health Care News (HCN) Michael Hamilton. Hamilton talks a bit about his background as well as several topics that will be featured in the upcoming issue of HCN.
Hamilton brings Kendal up to date on the latest regarding Medicaid expansion, Right to Try legislation, Certificate of Need laws, and the advancement of direct primary care. They also talk about the novel idea of price transparency – or allowing potential clients to compare prices of services between medical centers.
Sometimes there are men of principle who live their values and not merely speak or write about them. People who stand up to political evil at their own risk, and then go on to say and do things that help to remake their country in the aftermath of war and destruction. One such individual was the German, free-market economist, Wilhelm Röpke.
Born on October 10, 1899, Wilhelm Röpke died half a century ago on February 12, 1966. It seems appropriate to mark the fifty-year passing of one of the great European economists and advocates of freedom during the last one hundreds years.
In the dark days immediately following the rise to power of Adolf Hitler and his Nazi movement in Germany in January 1933, Röpke refused to remain silent. He proceeded to deliver a public address in which warned his audience that Germany was in the grip of a “revolt against reason, freedom and humanity.”
Nazism as the Destruction of Decent Society
Nazism was the culmination of Germany’s sinking into ”illiberal barbarism, Röpke said, the elements of which were based on: (l) “servilism,” a “longing for state slavery,” with the state becoming the “subject of unparalleled idolatry”; (2) “irrationalism,” in which ”voices” in the air called for the German people to be guided by “blood,” “soil,” and a “storm of destructive and unruly emotions”; and (3) “brutalism,” in which “The beast of prey in man is extolled with unexampled cynicism, and with equal cynicism every immoral and brutal act is justified by the sanctity of the political end.” Röpke warned that, “a nation that yields to brutalism thereby excludes itself from the community of Western civilization.” He hoped Germany would step back from this abyss before its people had to learn their mistake in the fire of war.
Röpke also spoke out against the Nazi dismissal of Jewish professors and students from German universities, which began in April 1933. The Nazis denounced him as an “enemy of the people” and removed him from his professorship at the University of Marburg. After an angry exchange with two SS men sent to “reason” with him, Röpke decided to leave Germany with his family, and accept exile rather than live under National Socialism.
A Man of Courage and Principle
Wilhelm Röpke was a leading intellectual figure of twentieth-century Europe. He combined conservatism with classical liberalism to develop a political philosophy he called a market-oriented “middle way” between nineteenth-century capitalism and twentieth-century totalitarian collectivism. He also became a spiritual guide and political-economic architect of Germany’s “social market economy” in the post-World War II era. As the famous Austrian economist, Ludwig von Mises, wrote when Röpke died in 1966 at the age of 66,
“For most of what is reasonable and beneficial in present-day Germany’s monetary and commercial policy credit is to be attributed to Röpke’s influence. He [is] rightly thought of as [one] the intellectual authors of Germany’s economic resurrection . . . The future historians of our age will have to say that he was not only a great scholar, a successful teacher and a faithful friend, but first of all a fearless man who was never afraid to profess what he considered to be true and right. In the midst of moral and intellectual decay, he was an inflexible harbinger of the return to reason, honesty and sound political practice.”
Röpke grew up in a rural community of independent farmers and cottage industry craftsmen. His father was a country doctor. That upbringing can be seen in his later belief that a healthy, balanced, small community is most fit for human life.
The event, however, that shaped his chosen purpose in life was his experience in the German army in the First World War. War was “the expression of a brutal and stupid national pride that fostered the craving for domination and set its approval on collective immorality,” Röpke explained. The experience of war made him decide to become an economist and a sociologist when the cannons fell silent. He entered the University of Marburg, from which he earned his doctoral degree in 1921. In 1929 he was appointed professor of economics at the University of Marburg, a position he held until his expulsion by the Nazi regime in 1933.
After leaving Germany in 1933 he accepted a position at the University of Istanbul, Turkey, In 1937 he was invited to become a professor of international economic relations at the Graduate Institute of International Studies in Geneva, Switzerland, a position he retained until his untimely death on February 12, 1966.
After the German occupation of France, Röpke was three times offered a teaching position at the New School for Social Research in New York (in 1940, 1941, and 1943) as a means of escape from Nazi-occupied Europe. But each time he turned down the invitation to leave neutral Switzerland, having decided to continue to be a voice for freedom and reason in a totalitarian-dominated Europe.
In the 1950s, after the war, he was an economic adviser to the government of West Germany. He also was one of the leading figures of a group of market-oriented German economists who in the postwar period became known as the Ordo-liberals; their purpose and goal was the construction of a “social market economy” that assured both an open, competitive order and minimal social guarantees.
Monetary Mismanagement and the Great Depression
In the 1920s and for part of the 1930s, a primary focus of Röpke’s writings was business-cycle theory and policy. His most significant work in this field was his 1936 volume Crises and Cycles. Röpke argued that a complex division of labor with a developed structure of roundabout methods of production, held together by the delicate network of market prices for finished goods and the factors of production, had the potential to occasionally suffer from the cyclical waves of booms and depressions.
The cause of such cycles was periodic imbalances between savings and investment in the economy. While not completely following the “Austrian” theory of the business cycle, Röpke’s approach moved along similar lines, arguing that a monetary expansion that kept the market rate of interest below the level that could maintain a balance between savings and investment would feed investment projects and cause misdirections of labor and resources into production processes in excess of the savings available to sustain them in the long run.
Röpke’s particular contribution to the analysis of the business cycle was his theory of what he called the “secondary depression.” When the boom ended, an economic downturn was inevitable, with the investment excesses of the upturn having to contract and be readjusted to the realities of available savings and the market-based patterns of supply and demand. But while serving on the German National Commission on Unemployment in 1930–1931, he came to the conclusion that there were negative forces at work at that time far beyond any normal type of post-boom adjustment.
The failure of cost prices to promptly adjust downward with the decline of finished-goods prices was causing a dramatic collapse of production and employment. Rising unemployment resulted in declining incomes that then created a new round of falling demands for goods in the economy, which in turn brought about another decrease in production and employment. At the same time, growing unprofitability of industry made businessmen reluctant to undertake new investments, resulting in the accumulation of idle savings in the financial markets. Such a sequence of events generated a cumulative contraction in the economy that kept feeding on itself.
Röpke concluded that this secondary depression served no healthy purpose, and the downward spiral of a cumulative contraction in production and employment could only be broken by government-induced credit expansion and public works projects. Once the government introduced a spending floor below which the economy would no longer go, the market would naturally begin a normal and healthy upturn that would bring the economy back toward a proper balance.
In 1933, when Röpke published in English an article explaining the findings of the German Commission on Unemployment, John Maynard Keynes expressed to Röpke his “great satisfaction” that German economists were reaching the same conclusions as he had, namely, that government needed to take an active role in steering the economy.
But Röpke had no sympathy for Keynes’s belief that the market was inherently unstable and permanently in need of government management of “aggregate demand.” In Röpke’s view the Great Depression represented a “rare occurrence” of an “exceptional combination of circumstances” that required “a deliberate policy of additional ‘effective demand’ into the economic system.”
But, Röpke continued, Keynes’s construction of a “general theory of employment” based on the exceptional circumstances of the early 1930s was a “counsel of despair” and an extremely dangerous one, because it created a rationale for continuous government tinkering and a strong inflationary bias harmful to the stability of the market economy in the long run. Indeed, Röpke became a leading critic of Keynesian economics after World War II.The Crisis of Western Civilization
But the central issue that absorbed almost all of Röpke’s intellectual and literary efforts in the 1930s and 1940s was what he considered the crisis of Western civilization, the most stark and terrible symptom of which was the rise of totalitarian collectivism as represented by Soviet communism, Italian fascism, and German National Socialism.
But the heart of Röpke’s critique of the decay of Western civilization and the path for its renewal was in a trilogy published during the war: The Social Crisis of Our Time 1942), Civitas Humana (1944), and International Order (1945). This was followed at the end of the war by The Solution of the German Problem (1945). And a further reformulation of his conception of a properly ordered and balanced society was offered in A Humane Economy: The Social Framework of the Free Market (1958).
The achievements of the eighteenth century, in Röpke’s view, were the use of reason for a balanced understanding of both the natural and social world; the awakening of an insight into the possibilities of a free, spontaneous order of market relationships; a conception of man that looked at him in proportionate human terms; and a sense of humanity in appreciating and wanting to improve the human condition. One of these insights was that a free-market order that both liberated man from the status and caste society of the past and dramatically improved his standard of living; and the liberal, democratic ideal in which the individual possessed rights to life, liberty, and property, and in which peace and tolerant political pluralism replaced imperial violence and political absolutism.
But as Röpke saw it, many of these achievements and successes had been twisted in the nineteenth century. The use of reason had become “unreasonable,” as there emerged a hyper-rationalism that claimed to have the power to discover the secrets for social engineering. The triumphs of the natural sciences in mastering the physical world had fostered a “cult of the colossal,” in which there was a worship of the things of the material world and the desire for the creation of objects bigger than human life. This cut man loose from all the societal moorings of family, community, and the harmonies of local life, And the ideal of democratic pluralism had been undermined and reduced, increasingly, into an arena of special-interest political plunder.Collectivism and the Termite State
The loss of traditional human connections, the dehumanization of man in mass society, and the corruption of the political and economic marketplaces, Röpke argued, had created the sociological and psychological conditions for the emergence of and receptivity to the collectivist idea and its promise of a new community of man, a transformation of the human condition, and a better society designed according to a central plan. All these were false promises and hopes. Collectivism, whether of the fascist or communist sort, meant the end of a rational economic order, threatened the loss of freedom and the end to human dignity, and required the reduction of man to the status of an insect in what Röpke often referred to as the socialist “termite state.”
Röpke was uncompromising in his insistence that only the market economy was consistent with both freedom and prosperity. Only the market, with its system of private property rights, provided the framework to harness individual incentives and creativeness for the benefit of society. Only the market could generate the competitive process necessary for the formation of prices that could successfully coordinate supply and demand. Only the market gave each individual the freedom to be an end in himself while also serving as a voluntary means to the ends of others through the mechanism of exchange.
Yet in Röpke’s view the market by itself was not enough. The humane society required going “beyond supply and demand,” to the construction of an institutional order that incorporated the market in a wider social setting. The market economy needed strong ethical moorings to give a sound moral foundation to market order. Röpke held views concerning the role of government in a free society that were wider than many free market advocates today might consider necessary and appropriate.
But beginning in the 1950s, Röpke argued that the growing politicization of economic and social life through an expanding interventionist-welfare state undermined the possibility for a successful international order based on peace, mutual prosperity, and a rational allocation and use of the resources of the world. International order required countries to practice sound policies at home: respect for private property, enforcement of contracts, protection for foreign investments, limited government intervention, and non-inflationary monetary policies.
Networks of international trade and investment would then naturally and spontaneously connect the world through private market relationships. For this reason, Röpke was doubtful that European economic and monetary integration could be successfully imposed as long as the member states were unwilling to follow the necessary domestic policies of limited government and open, competitive market capitalism. Tensions and conflicts were inevitable in an age dominated by collectivist and interventionist ideas.
A Voice of Reason in an Unreasonable World
Wilhelm Röpke was more than just an economist. During some of the darkest decades of the twentieth century, he sounded more like an Old Testament prophet warning of the dangers from a loss of our moral compass. Collectivism had few opponents in our century with as much of a sense of ethical purpose.
Precisely because he was an economist by training, Röpke understood the indivisibility of personal, political, and economic freedom in a way that many other critics of socialism in its various forms could never articulate. The appreciation of history and the historical context in his analyses only enriched the persuasiveness of his message. The rebirth of the market economy in Germany and in other parts of Europe after 1945 owes a great deal to his intellectual efforts and legacy.
In today’s edition of The Heartland Daily Podcast, Randal O’Toole, economic analyst at the Cato Institute, joins Host H. Sterling Burnett to talk about how the incentive structure facing public lands managers has resulted in mismanagement and the armed conflicts we saw in Nevada and Oregon.
He also discusses how government perversely controls private property in urban areas through growth control resulting in diminished liberty.
In this episode of The Heartland Daily Podcast, managing editor Jesse Hathaway talks with Electronic Frontier Foundation staff attorney Sophia Cope about the Federal District Court for the District of Central California’s recent demand that Apple, the $700 billion tech company producing consumer products like the iPhone and iPad, assist the Federal Bureau of Investigations with their investigation into the December 2, 2015 San Bernardino terrorist attack by devising a way to unlock the deceased terrorist’s iPhone without a password.
Apple is fighting the court order, claiming FBI is seeking unconstitutional powers that could lead to massive invasions of consumers’ privacy in the future by government agencies, Cope says. By requiring a company to hack its own products, the government is seeking to set a dangerous precedent that could lead to mass surveillance.
Requiring the software and hardware company to create an operating system lacking the privacy measures installed on the iPhone is also a form of involuntary conscription, Cope says, and technology companies are right to defy the order and protect their consumers’ privacy.
In today’s edition of The Heartland Daily Podcast, Adrian Moore, vice-president of policy at the Reason Foundation, joins Host H. Sterling Burnett to talk about two issues Moore has recently researched – the Flint water crisis and the Endangered Species Act.
Burnett and Moore talk about how the crisis in Flint, Michigan was the result of multiple failures throughout the state government. Moore explains the causes and the cure. They also discuss the looming threats to Florida and the rest of the nation from the Endangered Species Act (ESA) and how Texas headed off ESA problems to prevent the federal government from getting involved.
After months of debate and public comments, President Obama’s controversial Clean Power Plan (CPP) was issued in August 2015 and published in the Federal Register on October 23, 2015. But that is hardly the end of the story. Instead the saga is just beginning—with the ending to be written sometime in 2017 and the outcome highly dependent on who resides in the White House.
The CPP is the newest set of Environmental Protection Agency (EPA) regulations that the Atlantic states: “anchors the Obama administration’s climate-change policy. It seeks to guide local utilities away from coal-fired electricity generation, and toward renewable energy and natural gas”—with a goal of reducing CO2 emissions from existing power plants by 32 percent from 2005 levels by 2030. States are required to submit implementations plans by September 6, 2016 with emission reductions scheduled to begin on January 1, 2022.
Immediately following the rule’s publication, a coalition of 24 states and a coal mining company, led by West Virginia Attorney General Patrick Morrisey (R), filed a lawsuit to challenge the CPP. Morrisey called it: “flatly illegal and one of the most aggressive executive branch power grabs we’ve seen in a long time.”
The Hill reports: “They are asking the Court of Appeals for the District of Columbia Circuit to overturn the rule. They also want the court to immediately stop its implementation while it works its way through the courts.” Differing from the Cincinnati-based Court of Appeals for the Sixth Circuit that in October issued a stay for the Waters of the U.S. rule, on January 21, 2016, the federal court refused to put a hold on the CPP while the litigation proceeds. It did, however, agree to expedite the case with oral arguments beginning on June 2.
Days later, January 26, in an unusual move, the petitioners—which now include 29 states (Nevada is the latest to oppose CPP, to protect “Nevada’s vital tourism industry.” On February 24, Attorney General Laxalt filed a brief to highlight the federal agency’s overreach and disregard for the rule of law associated with CPP.) and a large group of utility companies and energy industry trade groups—turned to the Supreme Court (SCOTUS). Morrisey acknowledged: “While we know a stay request to the Supreme Court isn’t typical at this stage of the proceedings, we must pursue this option to mitigate further damage from this rule.” Knowing that SCOTUS has never before engaged in a case before a federal court even heard the initial arguments, CPP supporters, like Sierra Club Chief Climate Counsel Joanne Spalding, apparently felt confident, calling the appeal: “another ‘Hail Mary’ challenge to the Clean Power Plan.”
Citing SCOTUS’ 2015 ruling that reversed the Mercury Air Toxics Standards (MATS) rule, petitioners argued that the damage from MATS had already been done by the time the decision came down. In a Client Alert, international law firm Milbank—which works in the energy space—said: “The EPA itself acknowledged that the ruling had virtually no impact, as states had already largely complied with the regulation by the time the Court’s order was issued.”
Despite the historic nature of the request, on February 9, in a 5 to 4 majority, SCOTUS granted an emergency stay of CPP. Milbank states: “The issuance of stay signaled that five of the Supreme Court justices had significant reservations about the EPA’s attempt to regulate emissions from power plants in the way the CPP is currently designed. To grant the stay, the Supreme Court must have found that there was a ‘fair prospect’ that a majority of the Court would vote to reverse a judgment if the D.C. Circuit were to uphold the CPP.” Morrisey agrees: “the decision reinforces confidence in the broader challenge as the Supreme Court found the coalition’s arguments strong enough to stop the EPA even before the lawsuit concludes.” The victory means the EPA is prohibited from implementing or enforcing the CPP until the D.C. Circuit issues a decision on the challenge—which is expected as early as this fall. FuelFix reports: “The conventional wisdom is the three-member court panel will rule favorably for the White House.”
As 18 states opposed the application for the stay, whatever decision the lower court reaches, most experts agree SCOTUS will eventually hear the case—likely in 2017.
CPP opponents saw the stay as a sign SCOTUS might strike down the rule. Seth Jaffe, a former president of the American College of Environmental Lawyers, according to the Atlantic, sees it as an “ominous sign for the regulations.” Jaffe said: “One has to conclude that five justices have decided that the rule must go.”
Confidence ebbed, however, with the death of Justice Antonin Scalia—just four days after the court’s unprecedented stay order. As a conservative voice on the court, Scalia had a history of limiting government regulation and was a scathing critic of EPA’s regulation of greenhouse gas emissions. Depending on who fills the empty seat, and when, the court’s decision could go one way or the other.
Regardless, the EPA is continuing to move forward and is encouraging states to take voluntary steps toward compliance and is supporting those who do.
States have reacted differently to the stay. Many states, such as Massachusetts, Arizona, and Virginia are moving ahead with their plans. Some are already well into their CPP compliance plans, with California expected to submit its plan ahead of schedule. Ohio Public Utility Commissioner Asim Haque, reports that they were “already close to completion,” but the commission has put analysis on hold for now.
Texas, whose Attorney General Ken Paxton (R) shared the lead with Morrisey on requesting the stay, is in a holding pattern. Toby Baker, a commissioner on the Texas Commission on Environmental Quality, according to FuelFix, said: “I’ve watched states get in front of their skis on federal regulations, and then the regulations come out and they don’t match. I do feel like the [clean power plan] will change from what it is right now.”
Following the SCOTUS decision, Wisconsin Governor Scott Walker (R) issued an executive order prohibiting state agencies from doing any work to prepare for the CPP until the stay expires. Citing “undue burden” on state ratepayers and manufacturers, he argued that the rule could have a “devastating impact.”
Because the SCOTUS stay halts enforcement of the CPP until the court challenge concludes, and delays the EPA’s deadlines, Morrisey and Paxton, in a February 12 letter to the National Association of Regulatory Utility Commissioners and the National Association of Clean Air Agencies, encouraged them to “put their pencils down.” They point out: states “have no legal obligation to continue with spending taxpayer funds on compliance efforts for a suspended and likely unlawful Power Plan. …Any taxpayer dollars spent during the judicial review process are unnecessary and likely to be entirely wasted.”
Pennsylvania Coal Alliance CEO John Pippy, a leading advocate for the coal industry in his state, argues that there are “serious concerns regarding the resources that will be wasted attempting to develop a compliance plan, at the expense of the taxpayers, for a rule that may be significantly altered or thrown out by the Federal Courts.”
With the court challenge coming up in a few months, last week, February 23, led by Senate Majority Leader Mitch McConnell (R-KY) and Senate EPW Committee Chairman James Inhofe (R-OK), 34 Senators and 171 Representatives filed an amicus brief urging the Circuit Court to “block the EPA’s attempts to transform the nation’s electricity sector.” As the press release states, the lawmakers believe the rule “goes well beyond the clear statutory directive.” It points out: “States will face unprecedented new regulatory burdens, electricity ratepayers will be subject to billions of dollars in compliance costs, and American workers and their families will experience the hardship of job losses due to power plant shutdowns, higher electricity prices, and overall diminishment of the nation’s global economic competitiveness.”
Congressman Kevin Cramer (R-ND) says he joined his colleagues in filing the brief because “The EPA’s actions are clearly illegal and violate the expressed intent of Congress.” He sees that his state has been singled out. The initial proposed rule required South Dakota to reduce emissions by 11 percent, but the final rule required a “detrimental 45 percent.” Cramer concludes: “North Dakota’s electricity producers provide some of the most affordable electricity and maintain some of the cleanest air, but this Admiration’s focus on implementing a radical environmental agenda threatens our economic future.”
Now, we wait for the CPP to make its way through the courts—first the D.C. Circuit Court and then, in 2017, the Supreme Court. But, since the CPP is on hold until at least 2017, its future will really be decided by the next president. Milbank states: “the next administration could seek to alter, cease or continue efforts to implement the existing CPP. Should a Republican reach the Oval Office, this could result in a permanent halt of the EPA’s implementation of the plan altogether, or a significant departure from current emission reduction targets. Yet, should a Democrat be elected, the new administration could push forward with the CPP while exploring additional provisions of the Clean Air Act.”
Of course, as things stand now, the next president will be appointing Justice Scalia’s replacement. “If a Republican wins the White House, the Atlantic observes, “their nominee would almost certainly join the Supreme Court’s conservative wing. That justice would be unlikely to vote to support the Clean Power Plan—but it wouldn’t matter, because no remaining Republican supports Obama’s climate policies, anyway, so they’d likely be reversed administratively.”
With a Republican president, there’ll be other changes that could impact the CPP. The EPA, should it not be eliminated, will have a new Administrator. Gina McCarthy will no longer be in charge and influencing policy. If the CPP were actually argued before the court, it would be under the guidance of new leadership and could be presented in a very different way.
Since the CPP will not be argued in the Supreme Court until 2017, when the next president will be in office, it really is the winner on November 8, 2016, who determines the legal battle of the CPP—which will either embrace or eradicate Obama’s climate change policies and the Paris Agreement. Considering the CPP will, as Morrisey pleads, cause “even more destruction of untold number of jobs, skyrocketing electricity bills and the weakening of the nation’s electric grid,” the stakes couldn’t be higher.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.
A distinguished group of scholars from a diverse group of organizations has produced a new report stating when considering domestic action to reduce the impacts of climate change, U.S. agencies should limit their estimates to the domestic benefits, not benefits to the world. The Obama administration does just the opposite, using global estimates of “social cost of carbon” (SCC) and the social value of reduced climate damages from regulations that reduce greenhouse gas (GHG) emissions. The scholars point out,
Use of a global SCC as the sole summary measure of the value of reducing GHG emissions through federal rulemaking lacks transparency and leaves such actions at odds with the expressed intent of authorizing statutes passed by Congress and long-standing federal regulatory policy. [F]ederal agencies – operating under laws directing them to protect national interests – are now issuing regulations with significant costs to U.S. residents and citizens based on a finding that benefits, including substantial benefits to foreigners, “justify” those costs.
The difference between global and domestic benefits is huge, with global SCC four to 14 times greater than estimated domestic SCC. By using the global SCC, federal agencies are hiding the fact climate regulations impose substantial costs on Americans to produce benefits for residents of foreign countries.
Wake up world, you’ve been disintermediated.
Google now essentially stands between you and most everyone and everything on the Internet.
Google’s dominant search engine + its dominant Android operating system (OS) + its world-leading Chrome web browser + its uniquely-comprehensive, Internet utility functionality of193 products, services and tools = a virtual Google “Inner-net” regime.
Google’s Inner-net has practically assimilated most all of what the public open-source WorldWideWeb does for Internet users and much, much, more. And it also has practically insinuated Google-controlled code into a virtual intermediary position between most everyone and most everything on the Internet.
Think of the WorldWideWeb increasingly as the public and open façade of the Web, and Google’s Inner-net as Google’s private, and more closed regime of mostly-dominant, Google-controlled operating systems, platforms, apps, protocols, and APIs that collectively govern how most of the Web operates, largely out of public view.
This makes Google your de facto global governing gatekeeper technically for most all things Internet, if you are an Internet platform, network, business, competitor, advertiser, service provider, manufacturer, content provider, app developer, stakeholder, group, or user.
In other words, one now must go through Google-controlled code somehow to virtually access most all competitive Internet information, apps, devices, software, APIs, networks, the cloud, the Internet of things, etc. — going forward.
And the Google gatekeeper’s gazillion gates tend to remain open and free for only as long as it takes for Google to become dominant in the new targeted area, and then Google tends to close those supposed ‘open’ gates with default settings that favor Google. Google’s default dominance rule-of-thumb is that ~90% of users automatically acquiesce to new Google default settings.
What an epic failure of antitrust enforcement this is.
The FTC obviously facilitated Google’s dominance in approving its acquisitions of DoubleClick and AdMob, and in suspiciously shuttering its Google search bias and Android tying investigations shortly after the 2012 Presidential election.
Remember the Clinton Administration DOJ blocked the Microsoft-Intuit acquisition in 1995 which prevented the vertical-ization of Microsoft’s OS dominance of the tech sector into other sectors, and successfully sued Microsoft in 1998 for monopolization in bundling its Internet browser into its dominant Windows operating system.
Until EU Competition Commissioner Margrethe Vestager got very serious about Google antitrust enforcement this past year, previously negligent antitrust enforcement authorities facilitated a dominant Google search and search advertising business by approving challenged acquisitions that later proved anticompetitive, and facilitating monopolization of the mobile operating system market by ignoring the anticompetitive bundling ramifications of its dominant search business being contractually tied with Android, Chrome, YouTube, Maps, Play, Gmail, etc. via Android OEM contracts.
Commissioner Vestager’s expected decision in the coming weeks that Google search is indeed dominant at >90% EU market share, and that it has abused its search dominance in preferencing its own shopping service over competitive shopping services, likely will prove to be powerful precedents for the queue of EU and private antitrust complaints lined up to build upon them.
The biggest development everyone appears to be ignoring is the huge anticompetitive implications of Google’s plans to consolidate its Chrome browser-based operating system with its Android mobile operating system this year — per WSJ reporting.
Simply, folding Chrome’s browser-based OS into Android’s App-based mobile OS would create one global, heavily-bundled, Google Inner-net operating system that could auto-default to Google’s: Search, browser, ad-tech platform, Analytics, Translate service, Gmail, YouTube video distribution, Map location services, RCS multimedia messaging services, Apps, Play store, etc.
And Google’s Inner-net operating system default search and browser could then preference or auto-suggest any or all of Google’s 193 products and services including: 23 search tools, 10 advertising services, 33 communications and publishing tools, 15 development tools, 13 map-related products, 7 operating systems, 11 desktop applications, 46 mobile applications, 27 hardware products, and 8 general services.
This pending sweeping opportunity for Google to much more broadly self-deal or preference Google platforms, apps, products, services and tools over competitors’ offerings raises the stakes on whether Commissioner Vestager’s remedy for Google’s abuse of search dominance case will require Google to abide by a firm, enforceable, and accountable, non-discrimination-principle-remedy, like the EU made Microsoft abide by for several years in its antitrust remedy for Microsoft anticompetitively favoring its Explorer browser over competitive browsers.
Ironically, Google will have an especially hard time credibly opposing a future mandate of an EU non-discrimination-principle-remedy for tying its current market-leading Chrome browser to its dominant Android mobile operating system.
That’s because in 2009, Google’s current CEO, Sundar Pichai, helped publicly lobby the EU in a Google blog post stating: “Internet Explorer is tied to Microsoft’s dominant computer operating system, giving it an unfair advantage over other browsers.Compare this to the mobile market, where Microsoft cannot tie Internet Explorer to a dominant operating system, and its browser therefore has a much lower usage.”
In sum, as critically important as the EU’s final decision is on Google search dominance and its abuse of dominance in Google shopping for online businesses dependent on search, the EU’s Android OS tying investigation is as critically important to offline businesses that Alphabet is targeting with disintermediation going forward: ISPs; automakers; manufacturers of drones, robots, wearables, and home energy/automation devices; and biotech, health care, and finance-related companies, among others.
In a nutshell, Google search and search advertising is about dominating the virtual world of the Web and online content of all kinds. One the other hand, Google’s Android operating system/browser is about also dominating the real world of all IP-enabled devices, vehicles, drones, robots, networks, sensors, cameras, microphones, wearables, implants, and the Internet of things.
Any industry in the real world targeted by Alphabet for disintermediation should ask industries in the online world what it is like to try and compete against an unaccountable, dominant, Google global-gatekeeper and biased-broker that self-deals with impunity.
Forewarned is forearmed.
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.
If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you every Friday with a highlight show. Subscribe to the email today, and read this week’s edition below.Help Us Fix Wikipedia Joseph L. Bast, Somewhat Reasonable According to The Heartland Institute’s profile at Wikipedia, we are an unreliable front group for major corporations… except that they all stopped contributing to us four years ago… and we are “best known” for our work on tobacco control, though we devote practically no resources to that subject. Left-wing activists have taken over the site recently, removing objective descriptions of our programs and publications and replacing them with lies, errors, and outright libelous claims. Can you help? READ MORE Heartland Event: Judge Brennan and Neal Schuerer Debate Article V The idea of invoking Article V of the Constitution to rein in an out-of-control federal government is gaining steam. Supporters of the idea get passionate about what approach to take, convinced their path is best. Watch a recording of Wednesday night’s live-stream as former Michigan Supreme Court Justice Thomas Brennan, now with Convention USA, and former Iowa state legislator Neal Schuerer of Campaign Constitution debate the merits of their proposals before a live audience at The Heartland Institute. READ MORE Heartland Institute Joins Coalition Telling Congress to Reject a Carbon Tax Earlier this month, President Barack Obama released a budget that included imposing a $10.25 carbon tax on every barrel of oil. “Though advocated as a way to fight global warming, it would have little effect on carbon dioxide emissions (which are already falling in the United States) and no detectable impact on climate,” said Heartland President Joseph Bast. Read why Heartland joined the American Energy Alliance and 21 other free-market and conservative groups as signatories to an open letter opposing the carbon tax. READ MORE Featured Podcast: Isaac Orr: Heartland’s Newest Frac Sand Study Research Fellow Isaac Orr, co-author of a series of Heartland Policy Studies addressing frac sand mining, joins host H. Sterling Burnett to discuss the most recently released installment in the series, addressing the impacts of mining on land use and property values. Orr addresses the fear-mongering by opponents of mining with reason and facts. LISTEN TO MORE March 9 Event: There Is No “Scientific Consensus” on Global Warming The Heartland Institute’s newest book, Why Scientists Disagree About Global Warming, demolishes the myth that “97% of scientists” believe mankind is the cause of a global warming catastrophe. Heartland President Joseph Bast, who edited the book, will discuss his findings and bid a fond farewell to one of the coauthors, Robert Carter who passed away on January 19, at a free event at Heartland’s headquarters in Arlington Heights, Illinois, onMarch 9. Go to Amazon.com or the Heartland store [store.heartland.org] now and order a copy, or become a Heartland donor and get a free copy! The Passing of Antonin Scalia: Climate Policy and the Power of a Single Vote H. Sterling Burnett, Climate Change Weekly The passing of Antonin Scalia reminds us about the importance and influence of the late Supreme Court justice. Scalia played a major role in protecting individual liberty up until his last days. Had he died just a few days earlier, a 4–4 split decision likely would have left in place the Obama administration’s Clean Power Plan – a set of regulations that would have had disastrous effects on the national economy. READ MORE Small Business CFOs Call Obamacare ‘Fastest-Growing Threat’ Justin Haskins, Consumer Power Report A majority of chief financial officers (CFOs) said in a recent survey that dealing with Obamacare’s higher premiums is now “the fastest-growing threat to their company’s bottom line.” An even larger majority say the complexity of Obamacare regulations is taking their focus away from their primary objective – running their businesses. This was a reality long-delayed but finally here because the 2015 tax year marks the first year many of the Affordable Care Act’s costly and labor-intensive small business tax rules go into effect. READ MORE
House Oversight Committee Investigates Collapses of Obamacare Exchange Leo Pusateri, The Heartlander Since their establishment in 2014, eight of the 14 Obamacare state exchange programs have imploded due to critical financial problems. Alexander Hendrie, a federal affairs manager with Americans for Tax Reform, says taxpayers are being taken advantage of by a structure that was never going to work, combined with enormous waste in spending. “Oregon spent $20 million on an advertising campaign that told people nothing about health insurance or the exchange,” Hendrie said. “At the time, people in the state knew their exchange was not going to work, but [it] went ahead anyway.” READ MORE Durham County, NC Commissioners Add E-Cigs to Smoking Ban Andrea Dillon, The Heartlander Lawmakers on the Durham County, North Carolina Board of Commissioners rang in the New Year by adding e-cigarettes to the city’s list of “tobacco” products banned from use or possession on city or county government property – including sidewalks, parks, trails, athletic fields, and public transportation stops. “The [purported] justification for Durham’s e-cigarette ban shows just how far the action strays from a true public-health purpose,” said Mitch Kokai, communications director for the John Locke Foundation, based in Raleigh, North Carolina. READ MORE Bonus Podcast: Tom Harris: America’s Response to Global Warming Is Economic Suicide The fear driven by global warming alarmism is starting to take a destructive toll on the country. Tom Harris, executive director of the International Climate Science Coalition, joins host H. Sterling Burnett to talk about how the government’s attempts to combat climate change are economic suicide. Harris also explains why Obama’s war on coal is unjustified and how climate science doesn’t support the need to suppress fossil fuel use. LISTEN TO MORE More Common Core Promises Evaporate Joy Pullmann, School Choice Weekly Despite Common Core’s promise of providing equal, nationwide benchmarks for student learning in math and reading, a new study finds proficiency levels on Common Core tests vary widely, and almost all are below what the National Assessment of Educational Progress considers “basic.” School Choice Weekly friend and researcher Richard Inness also shows how new Common Core-aligned tests appear to be inflating student proficiency, even though Common Core was supposed to help solve this problem, too. Had enough central education planning yet? READ MORE The New SAT: Common Core Sealant Robert Holland, Milwaukee Journal-Sentinel The College Board, with assistance from the Republican-led Congress, is seeing to it that its radically revised college-entrance exam, the SAT, can step right in as a replacement to the unpopular PARCC and Smarter Balanced tests to measure high school students’ Common Core-defined “college and career readiness.” If the SAT becomes established as a graduation requirement, the standardization and centralized decision-making sought by Common Core’s elitist architects will become easier to achieve than it was under consortia testing. READ MORE Invest in the Future of Freedom! Are you considering 2016 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make. Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at firstname.lastname@example.org.
“We can’t just drill our way to lower gas prices,” President Obama told an audience four years ago at the University of Miami. Like this year, it was an election year and Obama was running for re-election. Later in his speech, he added: “anybody who tells you that we can drill our way out of this problem doesn’t know what they’re talking about, or just isn’t telling you the truth.” He scoffed at the Republicans for believing that drilling would result in $2 gasoline—remember this was when prices at the pump, in many places, spiked to more than $4 a gallon: “You can bet that since it is an election year, they’re already dusting off their three-point plans for $2 gas. I’ll save you the suspense: Step one is drill, step two is drill, step three is drill.”
Well, Mr. President, you owe America, and the Republicans, an apology. Your snarky comments were wrong. The Republican’s supposed three-point plan, which you mocked, was correct.
I don’t expect our presidents to be energy experts, but they should be advised by the brightest minds in the business. Obviously, Obama surrounds himself with ideologues.
Today, on the four-year anniversary of another of Obama’s inaccurate predictions, we have drilled our way to $2 gas—despite the fact that he has supported the anti-fossil-fuel movement’s efforts to impede and block oil production. In fact, due to American ingenuity and initiative that successfully combined horizontal drilling and hydraulic fracturing, we are producing so much it has resulted in a global glut of oil and a national average gasoline price of $1.70. According to AAA, the cost per gallon has been below $2 for 25 days.
In his message in Miami, he bragged: “under my administration, America is producing more oil today than at any time in the last eight years.” Yes, that is true. But it is not because of Obama’s support. A Congressional Research Service report released last year found that since fiscal year 2010 oil production on federal lands is down by 10 percent, while it up 89 percent on state and private lands. Obama aligns himself with those who want to “keep it in the ground”—who count his “no” decision on the Keystone pipeline as their biggest victory to date.
Funny, in the 2012 speech he said: “Over the last three years, my administration has approved dozens of new pipelines, including from Canada.” That was then.
He then launched into his requisite rhetoric on renewables: “The United States consumes more than a fifth of the world’s oil. But we only have 2% of the world’s oil reserves. That means we can’t just rely on fossil fuels from the last century. … Because of investments we’ve made, the use of clean renewable energy in this country has nearly doubled. … As long as I’m President, I will not walk away from the promise of clean energy. I will not cede the wind or solar or battery industry to China.”
Wait! Wind and solar do not reduce our need for foreign oil. Wind turbines and solar panels do produce electricity—albeit ineffectively, inefficiently and uneconomically. But we do not have an electricity shortage. We do not import electricity. We do not make electricity from oil. Automobiles run on gasoline made from oil—for which the president’s new budget includes a $10 a barrel tax that translates to about 24 cents per gallon.
Four years ago, in Miami, he said: “…high gas prices are like a tax” straight out everyone’s paycheck. Yet today, he wants to increase the nearly $.45 a gallon we currently pay in taxes to $.69.
Obama’s false “We can’t just drill our way to lower gas prices” prediction was made during an election year. During this election year, is a good time to be reminded that, without government “investment,” we did drill our way to lower gas prices. At the same time, taxpayer-supported renewable projects continue to go bankrupt and be shuttered—taking with them our money and the jobs they promised to create.
Yes, Mr. President, you owe America an apology.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.
By Nancy Thorner and Ed Ingold –
The passing of Justice Scalia on Saturday, February 13, while a guest at the Cibolo Creek Ranch luxury resort in the Big Bend region south of Marfa, is a tragedy for the entire nation.
This commentary, “What Scalia Taught Us”, by Paul J. Larkin Jr., director of The Heritage Foundation’s project to counter abuse of the criminal law was published on the day Scalia’s death was announced and expresses the esteem and high regard held by many upon hearing of his death:
For some, it is the painful loss of a husband or father. For those who knew him, it is the loss of a good friend. For law students, it is the loss of a justice who wrote opinions with rigorous analysis, clarity of expression, and at times an acerbic wit.
For conservatives, it is the loss of a standard-bearer and icon. For liberals, it is the loss of an opponent who always fought hard but fair.
For those who never had the opportunity to know him, it is the loss of one of our greatest legal minds, of a judge and justice who had made, and will continue to make, legal history. And to those who were privileged to know him, it is the loss of a wonderful human being.
Larkin goes on to note that 100 men and women have been justices of the Supreme Court. While Joseph Story, Oliver Wendell Holmes, Hugo Black, Earl Warren, William Brennan, and William Rehnquist will be remembered for moving the Supreme Court in one direction, thereby establishing the Supreme Court as one of the most powerful institutions in our nation, fewer justices have changed the course of the law. Antonin Scalia, along with John Marshall, were cited in the latter category of judges.
Scalia voiced disapproval of a Constitutional Convention
In a speech to the Federalist Society in Morristown, N.J., Scalia presented the following reason why America’s basic freedom has endured for more than 200 years: “It is the Constitution, not bill of rights, makes us free.” Why? Because it is the Constitution that imposes structure upon our government. Scalia considered the 7th Amendment — passed on April 8th, 1913, when Woodrow Wilson was President of the U.S., and which provided for the direct popular election of U.S. senators — the most profound and significant departure from our nation’s constitutional structure, contending that it removed a key plank of the constitutional structure the framers put in place to protect federalism and state interests. Furthermore, at a time when conservative leaders and groups are calling for a constitutional convention (Con-Con), during the question-and-answer session Scalia had this to say about whether such a convention would be in the nation’s interests: “A constitutional convention is a horrible idea. This is not a good century to write a constitution.”
If you look at issues which have divided the Supreme Court on a 5/4 basis, it is clear that all parties are not reading from the same page, to wit, the United States Constitution. This is why the death of Antonin Scalia constitutes a grave threat to our liberty. Scalia was the bastion of “originalism,” which interprets the Constitution according to the founding father’s original intent.
Cases presently on the docket could alter American life on many issues, especially in closely divided cases where Justice Scalia was expected to serve as a lynch pin of a conservative majority. With 8 justices a majority decisionwould be 5-3 rather than 5-4, and if and when there’s a 4-4 split, the lower court’s decision is upheld. But there’s an important caveat to that latter point: that decision isn’t automatically considered legal precedent.
The potential replacement of Justice Scalia by a liberal judge would shift the balance of power away from individual rights to collective rights in general, but the right to keep and bear arms in particular. Loss of these freedoms would be very difficult to recover, if ever. A liberal court would serve to keep liberals in power throughout the government by denying rights to those who oppose them. Among them, the right to support candidates by word and deed under the First Amendment.
Cases remaining on Supreme Court docket with questionable outcomes without Scalia’s voice
Following are eight important cases that remain on the Supreme Court docket and their possible outcomes without the voice of Justice Scalia.
In what is considered the most significant abortion case since 1992, this term’s abortion case centers on restrictions placed on providers and clinics by Texas and will again test how far states can go to limit abortion. The Court was expected to be divided along party lines, with Kennedy as the possible swing vote.
Religious nonprofits, including charities, schools, colleges and hospitals, may have to live with the decisions of seven appeals courts, which ruled against their challenge to the Affordable Care Act’s contraceptive mandate in Zubik v. Burwell. How will religious freedom stack up when pitted against a woman’s right to choose?
Public sector-unions may get a reprieve. What appeared to be an all but certain 5-4 ruling against unions in Friedrichs v. California Teachers Association in regard to “fair share” fees that unions charge nonmembers to cover costs associated with collective bargaining, could end up with a 4-4 decision without Scalia. Labor unions want to hold elections by acclamation in open meetings. They are supported in this by President Obama and the Board of Labor Relations packed with his sycophants. Currently, elections are conducted with private ballots where everybody in the company has a right to participate. Election “meeting,” on the other hand, are limited by the size of the hall and subject dissenters to public humiliation or worse.
The use of affirmative action in college admissions could now survive a challenge. If so, a lower court decision will remain in place that favors the University of Texas in using race as a factor in admissions.
Separation of church and state
Religious schools could continue to be denied publicly funded grants. Scalia, along with Justices Clarence Thomas, Samuel Alito, John Roberts and Anthony Kennedy had indicated a willingness to accept the argument that banning state lawmakers from funding religious schools, if a democratic majority wants to, would impede the free exercise of religion.
Obama’s Clean Power Plan could return back to the hands of the D.C. Circuit Court. One of Scalia’s last official acts as a justice was to deliver a large dent in Obama’s climate legacy by providing one of five votes to stay the Clean Power Plan, which regulates carbon emissions from power plants. A 4-4 ideological split on the Supreme Court raises the stakes for the more liberal D.C. Circuit’s eventual decision on the Clean Power Plan.
Scalia’s death may not have a big impact on one of the most significant cases the court has agreed to take up: a challenge to Obama’s latest round of executive actions on immigration to be argued in April, unless the administration can win the vote of Justice Anthony Kennedy or Chief Justice John Roberts.
The Second Amendment
Last but not least, Justice Scalia was the foremost supporter of our rights to keep and bear arms. The Heller decision established that the Second Amendment gave individuals these rights, rather than a collective right. The MacDonald decision applied these rights to supercede state and local law, subjecting these laws to strict scrutiny in most cases. The New York Times expresses this threat in a near joyful manner. “Instead of overruling precedents outright, he said, a liberal majority might hollow some of them out, notably in the area of gun rights. “The five would narrow Heller to the point of irrelevancy,” he said, speaking of the law that said Americans had a constitutional right to keep handguns at home – Eric Segall, Georgia State”
American people must decide Scalia’s replacement, via our next president
The Founders faced nearly medieval tyranny in the form of George III, who taxed the colonists heavily in order to pay for his foreign wars, and collected these taxes under force of arms. To make matters worse, colonists were required to feed and house those troops at their own expense. The King and Parliament forbade colonists to do for themselves, rather purchase basic materials like cloth, paper and other items from England, because it suited the King to favor monopolies which he created. In order to silence opposition, it became a crime to publicly disagree with his orders (restrictions which still exist in England and most of Europe). In order to forestall resistance to these draconian orders, he ordered arms and gunpowder seized. Fortunately he wasn’t entirely successful.
We face a different tyranny today, not from a king but from self-serving “liberals,” whose title inappropriately stems from “liberty.” As such liberals (Liberalism) look to government for basic needs, largely as enumerated in Roosevelt’s “Second Bill of Rights. These items include housing, jobs, medical care and wages. If this sounds somewhat familiar, look at the UN’s version of human rights, and before that august body, the Marx/Engles “Communist Manifesto.”
President Obama was entitled to two terms of office, won in free elections. He is not entitled to encumber the nation with 30 years of an unbalanced Supreme Court which disregards the Constitution and rights under God in favor of a worldly fabrication of “rights” which in fact stand in direct opposition to the rights our fathers fought and died for. We are better off living with a dead tie in the Supreme Court until Obama is out of office than subject ourselves to judicial tyranny from the Left.
It would be a tragedy for our Constitution if the Senate simply confirmed an anti-Constitution judge to replace Justice Scalia’s seat. Confirming a new judge the year of a Presidential election is unheard of, especially with rampant judicial activism. Democrats would never go along with nominating a Conservative judge if the roles were reversed. It’s likewise folly to expect that Obama would nominate a judge other than a liberal one to fill the vacancy created by Scalia’s death.
The Constitution does grant a president the right to recommend a Supreme Court appointee; however, the Constitution likewise gives the Senate power through the confirmation process to stop the process, and there is nothing the President and Senate Democrats can do about it to get the president’s nomination confirmed.
It must be left up to the American people to decide who the next Judge will be, via our next President. If Republicans in the Senate don’t hold the line against an Obama nominee as a betrayal of Conservatism, the Republican spirit and the Constitution, it will likely signal the end of the Republican Party as a viable political party. If there is anger now over the way Republican legislators repeatedly cave in to Democrats, the anger will turn to pure rage and disassociation with the Party if the majority Republican Senate confirms what is sure to be a liberal Obama Supreme Court nominee.
In The Tank Podcast (ep27): James Madison Institute, Regressive Regulations, and the Apple Decryption Debate
Hosts Donny Kendal and John Nothdurft continue to explore the world of think tanks in episode #27 of the In The Tank Podcast. This weekly podcast features (as always) interviews, debates, roundtable discussions, stories, and light-hearted segments on a variety of topics on the latest news. The show is available for download as part of the Heartland Daily Podcast every Friday. Today’s podcast features work from the James Madison Institute, the Mercatus Center, the John Locke Foundation, the American Energy Alliance, and Reason.
Better Know a Think Tank
In this “Better Know a Think Tank” segment, Donny and John talk to Dr. Bob McClure, President and CEO of the James Madison Institute – a Florida-based think tank. McClure talks about the background of the think tank, what they cover, and what they are currently working on.
Featured Work of the Week
Featured this week is a report by the Mercatus Center titled “How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation.” The report explains how government regulations impact lower-income families and communities far more than higher-income families.
In the World of Think Tankery
Today Donny and John talk about a report from the John Locke Foundation titled “Certified ‘Green’ Schools: Savings & Benefits Fail To Materialize in North Carolina” The report explains the failure of “green” schools to live up to the promises of energy conservation. They explain what “green” schools are and what the impacts have been so far.
They also talk about coalition of free-market and conservative groups who have joined the American Energy Alliance in signing a letter in support of Majority Whip Steve Scalise’s resolution opposing a carbon tax. Donny and John discuss the the American Energy Alliance’s “10 Reasons to Oppose a Carbon Tax.”
In the last portion of this segment, Donny and John talk about the ongoing situation between Apple and the federal government on the potential decryption of the Iphone belonging to the San Bernardino terrorist.
Linked here is the interview with Edward Snowden that John refers to in the podcast.
Here are a handful of upcoming events that you may be interested in attending.
Civitas Institute – 2016 Conservative Leadership Conference (Fri/Sat, March 4-5) @ the Civitas Institute in Cary, North Carolina
Heartland Institute – Why Scientists Disagree About Global Warming: Featuring Heartland President Joseph Bast (Wednesday, March 9) @ The Heartland Institute in Arlington Heights, Illinois
CPAC – Conservative Political Action Conference (March 2-5) @ the Gaylord National Resort and Convention Center in National Harbor, Maryland.
Last Monday was Presidents Day. But that holiday is relatively new – an amalgamation of the birthdays of George Washington (President #1, February 22) and Abraham Lincoln (President #16, February 12). It is now a day set aside to celebrate all American Commanders-in-Chief.
Since yesterday was Washington’s actual day of birth (and he is thus far my favorite president) I think we should look at another, lesser known contribution he and several of his successors made to our nation. They were inventors.
When asked how he wanted to be remembered, Washington replied “As a farmer.” And it was in all things farming that he was constantly tinkering – and inventing. And he understood the vital import of people with the capital to invest – to invest in inventing. “Washington recognized that experimentation was anathema to all but the most forward looking farmers. Instead, Washington believed that it was the responsibility of wealthy farmers to undertake experimentation, as failures would be inevitable and losses would have to be absorbed while new techniques were perfected.”
As my friend John Berlau exquisitely put it, “Washington was less a ‘gentleman farmer’ than an agricultural entrepreneur.” Washington was constantly looking to invent better ways to do things: “He tinkered ceaselessly but never aimlessly. A firm believer in experimentation, he tested tools with a view to their capacity to save labor and boost productivity. Among other cutting-edge technologies, he installed at Mount Vernon an advanced gristmill that allowed him to produce high-quality ‘G. Washington’ brand flour and even market it overseas.” Washington received a trademark for his flour – the better to protect his intellectual property with, both here and abroad.
Washington had absolute admiration for his fellow inventors, viewing them as “visionaries desperately needed for America’s economy to thrive.” And he himself certainly did way more than his fair share of contributing to said thriving.
Washington was not alone amongst our Chief Executives. His first Secretary of State – and our soon-to-be third President – Thomas Jefferson was a prolific inventor. “Among Thomas Jefferson’s inventions were such devices as a macaroni machine that he invented in 1787, the swivel chair, the spherical sundial, the moldboard plow and the cipher wheel, which was an ingenious way to allow people to code and decode messages. Jefferson’s cipher wheel was used until 1802, and then it was ‘reinvented’ just prior to World War I and used by the US army and other military services to send messages back and forth…. Several of Thomas Jefferson’s inventions are still in use today; they deal mainly with agricultural and mechanical products.”
Washington birthday-mate Lincoln too was an inventor. “In two separate boating incidents, one as a teenager on the Mississippi River and one on the Great Lakes, President Lincoln got his boats stuck in shallow waters, known as ‘shoals.’ These two experiences inspired Lincoln to invent a solution to help him navigate his boat through shallow waters. A wooden model of this invention, which Lincoln made himself, is in the Smithsonian Institution.”
And Lincoln thoroughly understood – and brilliantly summed up – the import of protecting intellectual property: “Lincoln called the introduction of patent laws one of the three most important developments ‘in the world’s history,’ along with the discovery of America and the perfection of printing.”
The discovery of America was important – but only because of what she became. She became what she is in large part because of the indemnity of patents and all other forms of intellectual property. America is an idea – built upon many, many other ideas.
Lincoln knew these ideas must be protected. Because the inventors need the protection – and, as Washington noted, investors need to know their investments in inventors are protected.
Unfortunately, there is in our current Congress – House and Senate – an effort underway to dramatically undermine our patent law protections. The bills are – like the Congress that extruded them – an abysmal mess.
Rather than revisiting these messes, Congress should adhere to this 1966 movie title: “Don’t Just Do Something, Stand There.”
And we have to decide with whom we stand: Birthday Boy Giants George Washington and Abe Lincoln, and their fellow inventors who helped build this nation – or a tiny cadre of the members of the shambles that is our current Congress.
It isn’t a tough call.
In January 2016, a fierce blizzard in Texas left snow drifts up to 4m deep and killed 35,000 dairy cows and 12,000 beef cattle. Cold kills and there is no food in snow.
There is abundant food in steamy equatorial regions but only a few hardy species survive precariously in the dry, icy climate of the frigid zones.
The great animal migrations seek to escape the hungry winters by following the warmth or chasing the new pasture from spring storms.
Reindeer follow the sun – they spend the summer grazing on the rich pastures of the treeless tundra, but when the snow starts they head south for the protection of the forests. Moose also migrate to lower land in winter – staying ahead of the descending snowline.
Snow geese are not silly – they follow the sun towards the equator as winter approaches and then fly back when the summer sun melts the snow and energises the dormant pastures.
Bears have a climate-smart winter strategy – they find a cozy cave and hibernate, conserving their body warmth and reducing their energy needs to what can be sustained by their carbon-rich fat reserves.
Most humans are also sun-worshippers (apart from the jet set who travel in air-conditioned comfort to over-heated lodges so they can cavort briefly in the snow confident that someone else has produced the food, coffee and warmth they will soon return to).
Holidaying humans tend to follow the sun towards the equator. They do not head for Archangel or Antarctica in winter – they head for the Bahamas, Bali, Cairns, sunny Spain or the Black Sea. Being “Sent to Siberia” was a punishment not a reward.
Farmers fear early frosts but welcome early spring rain.
The geological record is also very clear on the matter of global temperatures – cold is the killer. The mammoths were not killed by a heat wave – they were snap frozen in ice. About 100 species of mega-fauna also disappeared in the end-Pleistocene ice age. The great ice sheets sterilised more fertile land and forests than rising sea levels will ever do.
It is a testament to the power of propaganda and vested interests that a whole generation is having hysterics about a natural beneficial climate cycle – the modern warm, wet era.
A return to the cold, dry and carbon-starved climate of the Little Ice Age would cause world-wide famines; humans may not survive a return to Pleistocene Ice Age conditions.
Our warm globe supports life; cold kills.
National Common Core-aligned standardized tests for elementary and secondary schools are in the midst of a death spiral, despite the $360 million the Obama administration spent on the creation of the two consortia, the Partnership for Assessment of Readiness for College and Careers (PARCC) and Smarter Balanced, five years ago.
Only six states report they will administer PARCC testing in 2016; five years ago, PARCC proudly counted 23 states in its fold. Smarter Balanced also has been losing members — most recently Delaware and Montana — while receiving reviews similar to the following one made by a tech expert who was quoted in a Feb. 8 article in EdSurge, an online education-technology journal: “(Smarter Balanced is) a quagmire of poor technological design, poor interaction design, and poor mathematics that hopelessly clouds the insights the tests might give us into students’ thinking.”
Despite these significant setbacks, Common Core collaborationists in big government, business and foundations shouldn’t fret, because the College Board is now riding to the rescue.
College Board, with assistance from the Republican-led U.S. Congress, is seeing to it that its radically revised college-entrance exam, the SAT, can step right in as a replacement to the unpopular PARCC and Smarter Balanced tests to measure high school students’ Common Core-defined “college and career readiness.”
The Every Student Succeeds Act (ESSA), enacted in December 2015 as No Child Left Behind’s successor, lets states seek U.S. Department of Education permission to use the new SAT to evaluate all high school students’ Common Core competence, thereby also measuring the level of compliance schools have with the nationalized standards.
To understand how a test originally designed to help selective universities gauge applicants’ aptitude for intellectually challenging study can now be a yardstick of generic readiness, it is important to know the role former testing consultant David Coleman has in shaping the nation’s educational standards.
In 2008, Coleman and Gene Wilhoit, director of the Council of Chief State School Officers (CCSSO), visited philanthropist and Microsoft founder Bill Gates at his Seattle office to persuade him to bankroll the development of national education standards. The visit paid off; the Bill and Melinda Gates Foundation spent more than $200 million on the standards. The money was not used merely to develop Common Core under the aegis of the National Governors Association and CCSSO; it also was spent to increase public acceptance of the standards after their hasty, stealthy adoption by state boards of education, many of which were too busy lusting after federal Race to the Top grants tied to the standards to evaluate quality.
After their rollout in 2010 and the gradual rise in parents’ discontent over the standards, which occurred as parents began to discover drastic changes to their kids’ math and English classes, Coleman magically became president and CEO of the College Board.
From the get-go, Coleman said he intended to align the SAT fully with Common Core. When SAT testing begins in March, we’ll know for sure if Coleman is a man of his word, but SAT previews suggest the new SAT is likely to be another Common Core-aligned failure.
If the SAT becomes established as a graduation requirement under ESSA-mandated federal accountability, the standardization and centralized decision-making sought by Common Core’s elitist architects will become easier to achieve than it was under consortia testing.
States not fully on board with Common Core could find that their college-going students would be at a competitive disadvantage with students from states that strictly follow the Common Core curricular standards, and there’s no doubt that is the quandary the keepers of the Core want to present to dissenters in the hopes they too will fall into the common mold.
Robert Holland (email@example.com) is a senior fellow for education policy with The Heartland Institute.
In today’s edition of The Heartland Daily Podcast, Neal Schuerer, Executive Director of Campaign Constitution joins Hosts Donny Kendal and Kyle Maichle to talk about the importance and potential impact of holding a mock Article V convention of states.
Schuerer came to the Heartland Institute to participate in Heartland’s Forum on Article V Convention event. Click here to watch the event in full.
He also answers some of the most frequently heard questions. These include: Is momentum for an Article V Convention growing? and, How do you respond to the concerns about a runaway convention.
The roundtable discussion is moderated by Christopher Casey, Managing Director at WindRock Wealth Management. Participates also include Bud Conrad, Author of Profiting from the World’s Economic Crisis; Tres Knippa, Hedge Fund Manager; Brett Rentmeester, President of WindRock Wealth Management; and Gerald Celente, Publisher of the Trends Journal.
Today we have assembled a panel of independent experts with unique perspectives. We are recording this in late January, and it has already been a dramatic year. After rebounding from a brutal start, the U.S. stock market is still down 5%, while Europe, Japan and China have all declined approximately 8%.
Bud, you went on record in a recent podcast with WindRock as well as in the Casey Report stating 2016 will witness a significant recession. Do you believe recent stock market activity indicates a worldwide recession is upon us and investors should expect future declines, or is this simply a momentary correction?
Oh, of course I’m in the camp that we are already in a recession. That’s based on the way they actually define what a recession is as done by the National Association of Business Economics. One of the guys that does that is Bob Hall, a professor I know over here at Stanford. They look at things like employment and so forth, but pretty much after the fact. Sometimes they don’t declare the beginning of a recession until after it’s actually finished, and then they declare that it is finished later than that. So official recession dating is not much use to investors. The main reasons that I point to are that the world economies are slowing and the stock markets are falling, like our own. The Baltic Dry Index is at a record low indicating that nobody is demanding ships for trading. There are declines in all the important measures of our economy, starting with industrial production, retail sales, etc. Inventories have been rising, especially as compared to sales, back to a level that’s definitely a recessionary warning, which is why GDP hasn’t completely gone negative. GDP came in at 0.7% for the last quarter of 2015. This was with an inflation level that is extremely low and I don’t think reflective of reality. If the inflation that I pay at the grocery store and California housing were properly calculated, I would say we are already at a negative GDP. When things like unwinding the inventories is added to what I suspect for the projections, we are going to have negative GDP quarters coming along.
In my book I spent some time on the fact that feedback loops are very important. When you have a falling stock market, people feel less wealthy. When they feel less wealthy, they spend less. When they spend less, the economy slows. When the economy slows, guess what? Earnings of companies decline so stocks decline. It’s a feedback through the system that feeds on itself. Once you have the start of a rollover, as we now have for the stock market, it feeds back through the economy and the economy feeds back through the stock market in a vicious circle. The vicious circle we have been on with Fed printing, adding money to financial markets to drive up financial assists, namely stocks and bonds, stopped a year ago. It should be no surprise at all that stocks have not gone anywhere for a year either. In fact, earnings are down and even sales are down – only a modest 3% in the last year – but that is the sign of an economy already in recession.
Do you know why Bud’s right and we are in a recession? Because Janet Yellen just raised rates. Her record is untarnished. She is zero for however many times you want to go through this exercise. Her record at predicting a recession is zero. It is perfect. She hasn’t done it not one time. One time, she said that we were in a recession, but by then, we had already starting coming out of it. When Ben Bernanke took over, Janet Yellen gave a speech saying that no person had ever taken over as Fed chairman with the economy being in such good shape; it was like a tennis racket with a massive sweet spot. That was in 2007. We were right on the front door of the single most important financial event of our lifetimes and she completely missed it. So if Janet Yellen says red I say blue, if she says up I say down. You want an indicator that we’re going into recession: she raised rates. That is all you need.
You should take her to Vegas!
Regarding the stock markets, I wanted to really highlight this: what have American companies done, besides stock buybacks? They finance these stock buybacks. They’re doing it with debt, and if you are sitting there forced to service debt as a public company and your top line growth starts to go down, i.e. we see a recession, we see sales slow, etc. Their balance sheets look worse now than they did then and that really troubles me when we start talking about what we think stock markets can do. On the other hand, as we start talking about recession, we naturally have to say that it is possible QE comes back, so is it possible that asset prices rise? The Japanese stock market’s been rising and their economy has been dead flat now for 20 some odd years, so it is hard to believe but possible. Stock prices very well could go up.
Recessions are notoriously difficult to call, but this period has all the writing on the wall of a global recession – so the odds are quite high in our opinion. The wildcard is whether central bank actions can continue to delay the onset. We think it’s unlikely they can for much longer. The world economy is built on an increasingly unstable and interconnected tower of debt – much like the game Jenga. In Jenga, blocks supporting the tower are pulled out one by one until the whole tower tumbles. We are seeing key blocks being pulled from the global economy as we speak. We’ve had high valuations and weak global growth for several years already, but two additional blocks got pulled in 2015. It was the first year where company fundamentals turned down decisively with essentially flat sales and a contraction in earnings for S&P 500 companies. In addition, we also saw interest rates on junk bonds almost double from 4% to 8%. We believe soaring junk bond yields have often been a leading indicator that investors are becoming more fearful. This change in sentiment could be the final block that knocks the tower over. In the aftermath, central bankers will likely panic, and similar to 2008, re-inflate the system with money printing, but will investors have lost faith in the power of their actions this next time around? The Fed will come back to QE and other easing measures, but likely not before we first see some serious losses in the stock market.
Gerald, you have been spot on in predicting the last two recessions. In December 2007, you had an article entitled “The Panic of ‘08” in which you predicted failing banks, busted brokerages, etc. Where do you see the worldwide economy headed?
The stock market is disconnected from reality, and it has been since they started negative interest rate policy and quantitative easing. All that has done, and the facts prove it, is allowed companies to do massive buybacks of stock and mergers and acquisition activity and last year of course M&A activity was record breaking. So the only thing it did was to boost the stock markets and to also take that hot money and to push it into emerging markets and boost those markets as well. So, it has no reflection to reality because when you look at the real numbers, for example here in the States, what are we at? Basically a 2% GDP rate increase each year since the panic of 2008 and now you just saw the numbers come for the last quarter of 2015 and what was it: 0.7%? You call that an economy? And it stinks. So the realities are hitting home, and the reality is that there’s no recovery and we are in the beginning stages of a massive global recession and you can also see it in declining commodity prices. You look at the Bloomberg Commodity Index back at its 1991 levels and why? It’s because this is a global slowdown and there’s too much product. Whether its raw materials or finished product and not enough money to buy the stuff whether it’s by a company or individuals. So, this is real and the commodity prices don’t collapse like this for no reason at all.
I completely agree with your comment about commodity prices. Of course, we can cite a number of statistics pointing to economic weakness, but I think the dramatic fall in commodity prices may be perhaps the most significant statistic since growing economies require natural resources. From their highs over the last few years, we have iron ore down 80%, copper down 55%, and oil down 75%. These are simply some examples as virtually every commodity is down significantly. Are there any commodities that look attractive at today’s levels despite the economic deterioration?
Crude oil for one, I’m a big advocate of starting to accumulate but I want to accumulate production. The way I would look at that is through some of these royalty trusts, and that way I am not buying one well or two wells. I happen to be in Texas, so you know I’d rather own a piece of a portfolio of wells. I like it. The Saudi Arabians right now are seeing capital outflows. There’s been talk, mainly by Jim Rickards, of a potential trade where he sees Saudi Arabia unpegging the riyal to the U.S. dollar because they are having problems with their foreign currency reserves. So, the best way to do that would be to unpeg, and thus weaken the riyal. Now, there’s clearly a bigger part to the story but the point that I am trying to make is that the Saudis are suffering here, with oil at these levels and they have been doing our foreign policy bidding for us. All along as crude oil was dropping, the United States asked them to not cut production. Well that’s changing now. The Saudis are going to cut production. They are going to back off and I expect prices to start rising back up again. Let’s remember that global demand is the highest it’s ever been. So, global demand has not dropped. This has only been a supply story. So you will see the Saudis start changing policy. Now, do I expect crude to rally to $60 next week? No. I think this is going to take time, but if you’ve got a reasonable time frame of 2-to-5 years, accumulating oil right now is absolutely a commodity I want to own.
We’ve been avoiding all economically-sensitive commodities the last several years and have focused more attention on hard assets that serve as a store of value for purchasing power during difficult times – things like farmland, rental real estate and precious metals. A global recession could further contract overall industrial metal mining activity. Since nearly 70% of silver’s supply is as a byproduct of mining industrial metals such as copper and zinc, a slowdown in overall mining could create a supply shock in silver at the same time the demand spikes due to investors buying silver as an alternative currency that isn’t being printed out of thin air. We also think oil is intriguing at these levels. At $30 a barrel today, oil is priced near the generational lows seen in the 1980s, when adjusted for inflation. There could be more weakness ahead, but we’d plan to be aggressive buyers if oil approached the $20 a barrel level.
The fall in commodity prices has had a significant impact on emerging markets with their stock markets down around 15% so far in 2016 and some currencies off significantly such as the Canadian dollar, the South African rand, and the Brazilian real. These are all resource-based economies. Given how far emerging markets have fallen, is now the time to start making emerging market investments? If so, where and what type of investment?
You are looking at all of this hot money that flew into these emerging markets when they had quantitative easing and of course zero interest policy and now their commodities are declining. They’re exporting less and now they have all this debt that is in dollars. Now, if there’s the expectation of the dollar getting stronger, meaning interest rates are rising as emerging market currencies are collapsing, emerging market currencies then have to pay back this dough with more expensive dollars as they’re making less money with their commodities and the currencies are crashing.
Emerging markets have been battered and the good news is they look very cheap on paper and are already pricing in recession risks, unlike the U.S. markets; the bad news is that if a global crisis emerges, we are likely to see credit conditions get difficult for the emerging economies and we could see a default cycle around industries in the commodity space. Thus, we think it pays to wait to see what transpires before making a big bet in emerging markets. However, these are the markets that will likely be the best performers for the decade ahead once they bottom.
Emerging markets are down due to the lack of demand by China for commodities. The Chinese stock markets are down as much as 35% since last year’s highs. They have instituted draconian measures to prop up their stock market, their economic growth has slowed considerably to multi-year lows, and they have devalued their currency. Do you think they will devalue the yuan in the near term future?
From our perspective, the yuan and dollar are somewhat of a mirror image – the Chinese yuan could fall further while in the near-term we see dollar strength; but in the longer-term, it seems likely that yuan gains will come at the expense of the dollar. In the near-term, it’s conceivable that the Chinese could devalue the yuan further, if global recessionary conditions accelerate, in a move to support their export machine and competitiveness on the world stage. If this happened, it would likely trigger further devaluations in Asia to match China’s increased competitive position. The beneficiary would likely be the dollar. However, we see the dollar as having the most to lose in the longer-term and the yuan as having the most to gain for one simple reason – trade flows. China is already the second largest economy in the world and is increasingly building the plumbing to settle global trade in yuan. For the last 70 years, the dollar has been the beneficiary of being the only kid on the block, essentially serving as the sole trading currency of the world. If China bought oil from Kuwait in the past, they transacted in dollars. This is starting to change as more trades are occurring in yuan, putting the future of the petrodollar (oil traded in U.S. dollars) at risk. This doesn’t mean the dollar will be completely supplanted by the yuan, but it loses on the margin, much like the British pound sterling did when the U.S. economy was on the rise.
They’re afraid to because they’re looking at the capital outflows. The capital outflows of the emerging markets now apply well over a trillion dollars in the last year. The money’s pouring out of China. That thing is one big Ponzi scheme when you look at the real numbers. And the real numbers don’t lie. China counts as 17% of the world’s $80 trillion of GDP. In two decades, the Bank of Japan expanded its balance sheet from $40 billion to how much now? Four trillion. Go back 20 years ago. China has had about $500 billion in public in private debt outstanding. You know what it is now? It’s over $30 trillion. The money is flowing out of that country. It’s a lie that they want to devalue the currency so they can export more product. For guys like Cramer on CNBC, this is Toyota against Ford. It’s bigger than that. They are afraid to devalue.
I don’t think so. The Chinese have capital outflows right now, and how do you battle capital outflows? You devalue your currency. The citizens of China are trying to get out so they are trying to sell yuan and buy anything and everything else to convert. So how are the Chinese policy makers going to battle that? They’re going to devalue and they’re going to talk about how they were trying to spur exports and all that nonsense. They’re doing it to try to protect their foreign currency reserves. I see seven and a half to eight yuan to the dollar by the end of 2016 and eventually as high as double digits: maybe 12 or 13. They have to recapitalize their banking system. How are they going to recapitalize banks? They’re going to do it with freshly printed yuan from the People’s Bank of China. So, expect a lot more yuan coming into the market just like what happened with Japan – as Japan goes to negative rates, the yen drops. The yuan has a peg to the dollar so yuan because now Chinese products cost more to Japanese consumers. Who is Japan’s largest trading partner? China. So with one fell swoop, the Japanese have just made Chinese products cost more in Japan.
I would back you up with one other piece of data on that. We think our central bank is crazy, printing up all this money. The People’s Bank of China is crazier or was crazier, especially since they papered over the last recession with money printing of their own that exceeded ours by a significant amount. I would add a little piece of local color from here in California: a lot of houses have been brought, sight unseen for the full cash price, by people who aren’t actually living in them. What is going on here? It’s another way of money laundering and getting money out of China to buy real estate whose ownership isn’t tracked anywhere near as closely as things like stocks and bonds. So that has been happening, although it looks it is slowing right now. The point of this is I think a lot of Chinese are scared about their currency as well and are adding to this flight. It looks like another reason to add to the fact that they will have to let the yuan decline.
Around the world, policy makers face the same economic circumstances: deteriorating economies, currency wars, and high debt levels. What course of action do you believe they will take, and what does it mean for interest rates?
Remember, Janet Yellen is a believer in the wealth effect. I actually think that she will be data dependent on one single piece of data: the stock market. That is what will bring back QE. Because we already know what her record of predicting a recession is, it’s horrible. So she’ll actually start QE after the recession is over. Oddly, if QE 1 worked then why did you need QE 2? If QE 2 worked, why did we need 3 and then now 4? I find that puzzling. QE lowers the borrowing costs for the government. When you enable policy makers to keep borrowing, the politicians are going to keep borrowing.
So while U.S. treasuries may be a grossly overvalued asset, it’s going higher. It’s not going down. Because we can’t afford for rates to be higher and the Fed will make sure of it. Interest rates won’t move until currencies do. When Bud talked about feedback loops, this is how it happens in bond markets. You don’t come to a crossroads and choose a bond crisis or a currency crisis. In actuality, one causes the other and typically it happens in the currency first.
So if the currency starts sliding, a bond holder who is holding a 10-year bond says, wait a second, I’m going to get paid back in a currency that’s now dropping just as precipitously? Why in the world would I hold onto this asset? So then the bond holder starts selling because they’ve seen the currency risk of holding that bond, and then the central bank has to step in and print more money, which thus accelerates the drop in the currency and that’s when you’re off to the races. Let me give you examples from last two years: what did Brazilian rates do when the Brazilian real dropped? Rates went up. What did the rates do in Russia when the ruble cratered? Rates went up.
I agree with you that a stock market decline could be the trigger for the Fed to start a new QE. The problem though is that we started the 2008-2009 recession in relatively good shape. That is, they could drop interest rates a significant amount. The federal government stepped in with huge deficits at a time when it could be absorbed. This time around, we’ve got a problem in that the Fed is already at a zero rate. Sure, they might try to go to a negative interest rate. Sure, they could go back and expand QE, which I do expect, but if the federal government starts to ask for more borrowing to support new spending programs, you’re going to find a problem with borrowing that amount of money unless the Fed buys that amount of debt. I think it’s guaranteed that the Fed comes back dramatically to destroy the currency and it’s only when the currency looks extremely weak that the Fed is forced to stop that program and I would say that’s another, let’s pick $2 trillion more QE.
Japan and their now negative interest rate policy. I mean you can’t make the stuff up. This never happened in the history of the world part one or part two. And they’re getting away with this stuff. So the Europeans are doing the same thing with Mario Goldman Sachs Draghi. Zero or negative interest rate policies. This is a screw the people, shaft them, we don’t care about them. We’re going to pump up the equity market, we’re going to make inflation higher, make it cost more for everything that they make and by the way, they have no place to put their money in, other than the equity markets because if they put in the bank, we’re going to charge them to put it in there. There is a criminal operation. Its “bankism”. The central banks have taken over the world and people better grow up. Let’s stop calling this capitalism. This is not capitalism. In capitalism, you rise and fall on your own merits. You don’t have a bunch of shysters from the central banks rigging the game. People should be outraged at this because I am and any person with a brain between their ears could see what they’re doing to screw the people.
In short, if a global recession becomes acknowledged, U.S. interest rates can move down before they move up. We’ve been one of the few advisors suggesting this the last several years. Even though the 10-year U.S. treasury bond only pays 2%, that is still a tremendous premium to Switzerland (-.3%), Japan (.1%), France (.9%) and almost any other large developed nation. If investors get fearful, where will they park capital? We think in the U.S. dollar and the treasury bond, perhaps the 10-year bond yield could dip below 1.5%, maybe even approaching 1% if a recession ensues. If this happened, we may even see negative rates in the U.S. for short-term bonds, as hard as that is for many to believe today. The Fed has already discussed it as a potential tool and we just saw Japan take this action. However, bond investors, don’t get too comfortable! Falling yields would push bond values higher and make them look like a good investment in the short-term, but there is a day of reckoning on the other side of this. How attractive is a 10-year treasury bond at 1.5% after paying taxes and factoring in inflation? We are likely to see a reflexive rebound in rates to much higher levels eventually as the world resorts to expanding the money supply and devaluing currencies, setting the stage for perhaps a bond bear market for the next 30 years. Investors saw this during 1950-1980 when investors lost money in bonds (after inflation) for three decades. This will require investors to be very nimble ahead and realize that we may be nearing a generational turning point in interest rates, but we’re probably not there quite yet.
For 2016, what one investment category do you believe every investor should consider?
I don’t give financial advice. Only speaking for myself, I am bullish on gold. You look at what we just went through in January. Virtually everything went down, virtually all the commodities and all the equity markets trended down. The only thing that went up is gold. About 3.8%, so to me gold is the safe-haven commodity not only in a time of socio-economic unrest and volatility, but also in geopolitical. And when you look around the world, what happy days over there in the Middle East now that the United States is announcing they’re going back into Libya, they are in Syria, they are in Iraq and now you are hearing the rest of the countries get involved. Belgium is now sending jet fighters into Syria, I mean that’s how bad it’s gotten, and then you have Saudi Arabia destroying Yemen, there were four million Yemenis living in Saudi Arabia, so then you get more geopolitical unrest. The amount of refugees flooding into Europe is a crisis. And on top of the refugee problem and geopolitical unrest, you have declining economies. I like gold as a safe-haven asset.
We like secured private lending. Shortly after the 2008 crash, forward thinkers like John Mauldin forecast the growth of private pools of capital lending money and stepping in where banks were failing to lend. With the Too-Big-to-Fail Banks facing increased regulation, they’ve left many profitable lending niches behind. In many cases, the regulations are keeping them out, but in other cases, the opportunities are just too small given their massive size. We know one trade finance group in Asia that was offered a $100 million loan by a large global bank, but the bank wouldn’t lend anything less as it was insignificant for this bank. Investors with access to these opportunities can often find lending arrangements with low double-digit return projections. More importantly, their lending is often secured by real tangible assets or known income streams as further security beyond simply a borrower’s willingness to repay. They also tend to be “spread” lending and not sensitive to the overall level of interest rates. If we see a global recession, expect banks to pull back lending even more and these opportunities to increase. However, the devil is in the details, so investors need to understand the risks and do their homework. These are niche plays that take an entrepreneurial mindset to identify.
Short the yuan. The Chinese are going to devalue, there is no way around it.
My prediction is that the weak economy will bring a weak stock market. This six-year stock bubble could burst. So an opportunity is to find overvalued stocks, like some of the tech “unicorns” to short. The falling stock market will bring the Fed back to print rather extensively to try and reboot this weak economy that I think will get a lot worse. But I don’t think new Fed actions will be as effective this time because people will lose confidence in the dollar and treasuries. If interest rates then rise, the value of the treasury bond purchase price decreases, so then you have an implosion in bonds and stocks together, but you would have a rise in other assets: physical assets like gold, like oil, like real estate, particularly productive agriculture.
Thank you all, we look forward to seeing how 2016 plays out.
In his 1889 essay “The Decay of Lying”, Oscar Wilde wrote “Life imitates art far more than art imitates life.” In the 21st century Western energy and “climate” policy theater of the absurd, Wilde’s famous statement has been reincarnated as “Politics imitates science far more than science imitates politics.”
The latest case in point comes in the form of a new political video sponsored in part by global consumer products company Unilever. It was an attempt to drum up support for the UN climate COP-21 meeting in Paris in December 2015. It is an implicit condemnation of the scientific method and an endorsement of UN climate policies, both of which are antithetical to Unilever’s own goals as outlined in its “Sustainable Living Plan.”
The video is a professionally produced and witty hidden camera prank taking place in a first-world office setting. With young actors portraying themselves as office workers, actual new hires are brought in for what they believe is their first day. Each time, the temperature is increased and the “office workers” begin to dramatically complain about the temperature. When the temperature reaches 91 degrees, one poor “worker” pulls off his undershirt and button-down and, while standing shirtless in front of his “co-workers,” rings out the undershirt, sweat dripping on to the office floor to the “ooohs” of the other workers.
The actors talk the unsuspecting new employee into speaking to the boss. When the boss finally enters the room, the new hire politely complains about the temperature and asks for some relief. The boss – obviously representing biased, embedded fossil fuel energy interests (only the Koch brothers t-shirt is missing) – questions whether the thermometer is accurate. One of the actor “workers” then dramatically quits, but not before delivering a political missive that would make UN climate delegates cry tears of joy: “there is a problem that’s happening that effects every one of us. We have the information that it is getting hotter every day, all of us feel it getting hotter every day, and no one is doing anything about it, and that’s cuckoo.”
Unilever Seeks to Silence Climate Debate
The intent of the Unilever video is to silence debate on the complex, unsettled scientific issue of whether humanity’s CO2 emissions from burning fossil fuels are dangerous as respects earth’s climate. “You can’t deny the scientific evidence before your very eyes” or you are crazy. You get the picture.
This statement is a thinly veiled poke at skeptics of the supposed “97% consensus” mainstream climate science, an explicit endorsement of same, and yet another installment in smear-rather-than-answer-your-opponent climate politics. The politics goes like this: if you “deny” (read: so much as question) the “97% consensus”, you are either crazy or evil, and, since only fools allow crazy or evil people into the debate, the debate is over. How convenient.
This political strategy is much easier than rigorously adhering to the scientific methods, which welcomes skepticism as a central tenet, and hasn’t been particularly successful lately. On important policy decisions involving complex scientific concepts dealing with the environment, rigorous adherence to the scientific method is both critical and time consuming and potentially fatal to “progress” for the Left. Fearmongering and declaring science “settled” is more convenient, and sometimes more expeditious and effective. This is nothing new. Rachel Carson’s “Silent Spring” comes to mind as “settling” the discussion over the need to end the use of DDT despite its astounding benefits in reducing malaria where it was used. Josh Fox’s attempt to “settle” the case against fracking to produce natural gas in “Gasland” does, too.
Ayn Rand said, “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” Doing exactly this, the Soviet government “scientist” Trofim Lysenko helped kill about a million people a century ago, bringing me to the point.
Propaganda Recalls Lysenkoism
The number of degrees of separation from Lysenkoism to science-by-consensus and the “ignore the crazy/evil people” message in the Unilever-sponsored video is less than six. Unilever is a global consumer products corporation whose entire product line depends on various degrees of advanced chemistry, biology, and other sciences. Absent rigorous science, Unilever could not reliably deliver product efficacy, much less consumer safety. Without faith in unbiased, rigorous science, global society cannot hope to make smart policy decisions about climate, energy, the environment, or anything else. Calling those who demand rigor in any field of science and have legitimate scientific questions “cuckoo” is a conscious call for the intentional abrogation of one of the most basic tenets of the scientific method – skepticism. Condemning skepticism in science is known to be dangerous to humanity in every area of policy – from energy and environmental policy to consumer product safety and everywhere in between. There. Did it in 5 degrees, with one to spare.
And therein lies the irony in Unilever’s sponsorship of this propaganda video, although one cannot be certain they are smart enough to realize it. Or, maybe they are simply counting on your continued inability to recognize it. Unilever’s corporate sustainability reporting and messaging may be helpful here.
Stipulation: There is nothing inherently wrong with corporations advocating for policies benefitting them and their shareholders, per se. However, there is definitely something wrong with any corporation advocating stifling scientific debate on complex, important issues in an advanced society which depends on scientific integrity.
Doing so in a flippant, oblique fashion in a hidden-camera prank does not lessen or distract from the offense. This also comes at a time in history when “consensus” scientists and their politician friends are demanding RICO investigations of opposing scientists and corporations with whom they scientifically and politically disagree, the Salem witch hunt-like silencing of opposing scientific and political views, and the NY State Attorney General launching an investigation into Exxon’s activities with regard to misrepresenting “climate science.”
It would be fair to ask, “From where does such a corporate mindset emanate? Why would a corporation like Unilever advocate for shutting down scientific debate on a matter of such importance”?
Unilever is a company with UK roots and EU-centric leadership. The Euros understand the climate, energy and environmental politics game better than anyone. They have effectively bet their economic and energy futures on UN-favored climate policies and are the ones who fell in behind (and as result have been most impacted by) the UN FCCC’s Kyoto Protocol.
Unilever CEO Paul Polman is also Chairman of the World Business Council for Sustainable Development (WBCSD). WBCSD’s website states “Through our work to change the rules of the game and drive measurable impact, WBCSD is emerging as the leading and most compelling sustainable development business voice with multilateral institutions such as the United Nations, World Bank, UNFCCC, as well as with global platforms like the UN Climate Summit and COP negotiations.” Polman’s bio on Unilever’s website touts involvement in numerous UN economic, climate, and sustainability areas and projects. Louise Fresco, non-executive Chair of Unilever’s Corporate Responsibility Committee, is a former UN Food and Agricultural Network official.
Here is a quote from Unilever’s beautifully produced “Sustainable Living Plan” video (emphasis mine). It follows an intro reading like a list of the Left’s environmental talking points – temperatures rising fast, water shortages more frequent, food supplies increasingly scarce, populations’ growing fast: “And the changes will pose new challenges for us too, as commodity costs fluctuate, markets become unstable and raw materials harder to source.”
“There is no ‘business as usual’ anymore. The old economic systems are no longer fit for purpose.”
To be fair, there are some admirable, material environmental improvements in Unilever’s “Sustainable Living Plan”. But, is it appropriate for a global Fortune 100 consumer-products company to parrot anti-capitalist darling Naomi Klein saying “The old economic systems are no longer fit for purpose.” Should its stockholder’s be concerned? Is Unilever channeling the UN, Bernie Sanders, or both? It begs the question: exactly what kind of economic system is Unilever advocating?
Set aside for the moment the question of whether a corporation should advocate for silencing scientific debate. When one digs just a bit deeper into the broader issue of Unilever’s support for UN climate policies, there is so much hypocrisy and paradox – with respect to both Unilever’s own products, supply chain, and sustainability reporting and the UN climate policies it is advocating – you could cut the irony with a recycled knife.
For instance, Unilever’s sustainable living plan boasts the company is “among the largest purchasers of tea, palm oil, and vegetables.” And from the slide show video version of the same Plan: “With products used by millions of people, we have an enormous opportunity to create change and are developing a new sustainable business model. A model in which……people’s health and well-being are a priority, all agricultural raw materials come from sustainable sources, the environment is safeguarded for future generations.” One of Unilever’s 3 main goals by 2020 under the Plan is to “improve the health and well-being of more than a billion people.”
Fighting the deforestation of environmentally important tropical forests in Malaysia and Indonesia – among those environmentalists refer to as the “lungs of the earth,” acting as a substantial CO2 sink – is a rallying cry for the Eco-Left. Ironically, the very UN climate and energy policy Unilever is advocating in their video causes precisely that.
Palm oil is part of the EU’s version of the US “alternative fuels” energy policy, a policy which destroys vast amounts of important habitat for wildlife, only worse. There are numerous reports villagers have – literally – been burned out of their villages by some corporation’s or government’s mercenaries for palm oil plantations in the developing world. Last we checked, no Grandma has ever been chased off her Iowa farm at gun point with flaming torches to plant corn for ethanol.
People who understood this would never be brazen enough to comment “we are among the largest purchasers of palm oil” in a Sustainability report, where they also brag about “improving the health and well-being of more than a billion people,” would they? Put another way, if you find it difficult to reconcile being part of a supply chain responsible for large-scale sensitive habitat destruction and running indigenous people off of their land with “a model in which……people’s health and well-being are a priority, all agricultural raw materials come from sustainable sources, the environment is safeguarded for future generations” and improving “the health and well-being of more than a billion people,” you can be forgiven for being confused.