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.
Presidential election years, more than many others, focuses our attention on politics, those running for political office, and the promises the competing candidates make to sway our allegiance and votes toward one or some of them in comparison to others. They want us to give them political power by promising to use that power to benefit some of us in ways that can only come at the expense of others in society.
This fundamental truth about the reality of modern-day politics gets blurred in the hoopla of whose ahead in the public opinion polls, which candidate has the most charm or cunning, and what forms do their attacks on each other take.
We need to step back and look at things in terms of “first principles” if the entire process and its consequences are to be put into focus and perspective. Otherwise, we get lost in all the minutia of daily media news spins, and forget what it is really all about.
Political Means vs. Economic Means to Betterment
A little over a hundred years ago, the German sociologist, Franz Oppenheimer (1864-1943), in his book, The State (1914), explained that there are fundamentally two ways to obtain the things you desire in society. What Oppenheimer called, “the political means” or the “economic means.” By the political means, he meant the use of political power and force to acquire from others what you want. By the economics means, Oppenheimer meant the use of peaceful methods of production, either through producing directly things you want and desire, or to obtain them through voluntarily and mutually agreed-upon trade and exchange.
Through history, Oppenheimer said, people had often used the political means. He suggested this has been the origin of governments. Roving bands of thieves and plunders would invade and conquer lands to seize the wealth of others. If they settled down to more permanently rule over and live off the productive efforts of those now under their coercive control, there would be born what today we call a “State.”
Oppenheimer’s analysis of the origin and nature of the State has been more recently developed by the noted economist, Mancur Olson (1932-1998). He, too, argued that the origin of the State could be seen in the replacement of roving bands of plundering thieves by stationary bandits who settle down to rule over a territory over a prolonged period.
The roving band cares nothing for what happens in the area it has looted and then moved on. But the stationary bandits who want to live off the conquered area permanently have to take into consideration the conditions and the incentives of their “subjects” if they are to keep producing and therefore creating something for the stationary bandits to plunder through taxation year-after-year.
Plundering Bandits and the Birth of the State
Thus, out of the taxes imposed, the stationary bandits must also, in their own self-interest, to some extent secure their subject’s property rights, enforce contracts, establish a judicial system to adjudicate their disputes, and even supply some “public goods,” such as roads and harbors to facilitate commerce.
Their goal is to extract the greatest amount of tax revenue for themselves at the least cost of respecting and enforcing the property rights of their subjects, but they must offer some degree of such security for their subjects. Otherwise, the incentives of their subjects to produce the wealth out of which their tax revenues come might be minimized or in the extreme fall to zero.
As Olson described in his book, Power and Prosperity (2000):
“A bandit leader with sufficient strength to control and hold a territory has an incentive to settle down, to wear a crown, and to become a public goods-providing autocrat.
“The bandit leader, if he is strong enough to hold a territory securely and monopolize theft there, has an encompassing interest in his domain. This encompassing interest leads him to limit and regularize the rate of theft and to spend some of the resources he controls on public goods that benefit his victims no less than himself.
“Since the settled bandit’s victims are for him a source of tax payments, he prohibits the murder and maiming of his subjects. Because stealing by his subjects, and the theft-averting behavior that it generates, reduces total income, the bandit does not allow theft by anyone but himself. He serves his interests by spending some of the resources he controls to deter crime among his subjects and to provide other public goods.”
The bandit leader, obviously, cannot control and rule completely on his own. Both the original conquest and the retaining of power to plunder his conquered subjects requires lieutenants and other loyal followers with whom he must share the booty to maintain his permanent position of, now, political ruler.
Lands and the conquered peoples living on them are distributed and given by the conquering chief as deserved spoils to those under his military command. These lands and the people living on them then provide sources of income for these followers to permanently live off along with their chieftain, who crowns himself “king,” often under asserted divine mandate to rule.
The Qualities of the Chieftain Ruler
The famous nineteenth century sociologist, Herbert Spencer (1820-1903), explained in his Principles of Sociology (1885) the behavioral qualities and characteristics most likely to be found in such chieftains who first ruled over roving tribes and then over political States with monopoly jurisdiction over the use of force within its territorial confines.
Spencer said that such qualities included physical strength to defeat challengers to their rule; mental and intellectual cunning to manipulate and have mastery over the other members of the tribe or group; and conquered and accumulated wealth through which loyalty and obedience may be bought and assured through the “benevolent largess” of the ruler to his supporters and selected subjects.
Often, Spencer went on, this was combined with the claim that the king and his descendants had been assigned to rule by higher supernatural authority, to which all must obey under the threat of both earthly and heavenly punishment.
With the rise of political democracy and the (classical) liberal ideal of individual liberty, the questions of who rules and how political positions of authority are filled, and for what purposes government power exists radically changed in the eighteenth, nineteenth and twentieth centuries.
Democracy’s Turn from Protecting Liberty to Plunder
At first, representative democracy was viewed as a means to limit the arbitrary power of absolute kings and princes. It was insisted that they are, in fact, accountable to those over whom they ruled, and that “the people” – through their elected representatives – had the power to limit and even repeal edicts, decrees and demands of those kings and princes to seize their wealth and lands, unjustly imprison them, or in many other ways deny each individual’s right to his life, liberty and property.
The idea that kings ruled with absolute and unchallengeable power and authority was, however, slowly but surely replaced with the new notion that “the people” as a whole were the legitimate “sovereign” with absolute power and increasingly believed unlimited authority over their own affairs.
And surely since “the people” could never tyrannize themselves, the premise has become implicitly accepted that the government may do virtually anything it deems necessary and appropriate if it can be successfully portrayed as in the “interests” of the nation or the people as a whole. Or, increasingly, as a means and method to redress grievances and injustices committed against some in the past for which others in the present must do penance through a redistribution of their wealth or restraints on their own liberties and choices to provide some form of rebalance and restitution through regulation and redistribution for the unethical actions of earlier generations.
In this new setting the idea and ideal that government is a means to secure the rights and liberty of individuals against all abusive and tyrannical power, whether from one man or a majority of others in society, has been increasingly lost. Majorities and influential interest groups in coalitions to form working majorities are now the determiners of what government does and for whose benefit at others’ cost.
The Power-Lusting Qualities of Democratic Rulers
In the modern democratic milieu, political power and control is no longer acquired through brute conquest and violent usurpation, but through the method of running for political office.
It requires the successful candidate to persuade a sufficient number of voters so a majority may be formed of those casting their ballots on Election Day. The potential democratically elected political leader must combine a variety of behavioral qualities and characteristics.
He must possess communication skills to sway large numbers of individuals and groups to support him. He must be able to assure those whose support is he is trying to win that he “feels their pain,” understands their “grievance,” opposes the “social injustices” to which they have been a victim, and promises to assure them a “happy” and carefree life.
Or more simply, he must guarantee to those who can provide the needed campaign contributions that he will see to it that governmental rules, regulations, and redistributions are used in a way that they can more easily gain the market share, or desired profits, or positions in society that they cannot as easily obtain on a more open, free and competitive market.
In all this, he must be a master of “coalition building” to successfully bring together a sufficient number of diverse and sometimes divergent groups within a set of overlapping goals and interests that assure “a win” on polling day. He must rely upon many of the same behavioral characteristics that Spencer said the tribal chieftain had to possess, only they must take on different forms in the modern democratic setting.
Like the ancient chieftains distributing booty among his victorious followers, the modern democratic politician gains support and allegiance by plundering some in society for the benefit of others: Social Security, Medicare and Medicaid, ObamaCare, food stamps, “public” (i.e., government owned and/or subsidized) housing, government-funded schooling and scholarships or loans; regulations limiting competition, subsidizing companies or industries; imposing trade and tariff barriers, government jobs programs, government licensing of professions, occupations and trades, or “public works” projects . . . The list in modern democratic society is endless.
To undertake all of these tasks in the modern plunder State, the list of government bureaus, agencies and departments at the federal, state and local levels counts in the hundreds, each one manned with employees who incomes and positions are dependent on the rationales and reasons for the existence of the branch of government in which they work.
Over 22 million (!) people are employed by government at the federal, state or local level. And government expenditures at all levels combined – federal, state and local – absorb nearly 35 percent of America’s Gross Domestic Product. That is, over one-third all the goods and services produced in the United States end up passing through the hands of those who control and direct government.
Liberty and the Economic Means to Betterment
Let us, now, briefly contrast what Franz Oppenheimer had called these “political means” to acquiring what you desire with the alternative “economic means.” As he expressed it, “I propose in the following discussion to call one’s own labor and the equivalent exchange of one’s own labor for the labor of others, the ‘economic means’ for the satisfaction of needs.”
The economic means and methods of obtaining the goods and services one desires starts with the fundamental principle that individuals have a moral right not to be plundered, that they have a right to their life, liberty and honestly acquired property. Neither private nor politically organized bandits and chieftains have the moral right to deny the individual the fruits of his labor.
The farmer who settles on a previously unclaimed and unowned piece of land meets his needs and desires for survival by clearing the field, planting the seeds, and tending the crop until he brings it to harvest. He harms no one and serves his own consumption desires through his own production with the resources at his disposal.
If he finds that he has grown more of some crops than he needs or wants for his own use, he may approach a neighbor who finds himself in a similar situation after growing and harvesting other types of foods. They may find that each of them can be better off by trading some of what they have, respectively, produced on their own farm for some of the output of the other.
Each will, now, be better off; neither will have harmed or violated the rights of the other; and their mutual well-being will have been increased through peaceful production and trade instead of force and plunder.
This simple and elementary example, seemingly so far from how many of us personally go about earning a living, in fact, captures the essence and reality of the “economic means” of human improvement.
In our modern complex system of division of labor, in which we participate in a now global network of trade and mutual interdependency may make this elementary truth sometimes difficult to see and remember, but that remains its essence to the extent that production, trade and competition in the marketplace is left at least fairly free of the plundering hands of governments.
The political debates and disputes among the candidates offering themselves this year for the presidency of the United States are mostly, and in some cases seemingly exclusively, offers of grab bags of political plunder to those whose support they need so they can make it to 1600 Pennsylvania Avenue as their “public housing” residence for the next four years in Washington, D.C.
What Liberty Means and Requires of Each of Us
Virtually no candidate is consistently and persistently offering the vision of a free America in which the political-plunder means of wealth acquisition is to be repealed and the individual liberty-based economic means to betterment is offered as an achievable and desirable ideal.
Of course, this requires, most of all, reminding people what a system and society of liberty means and requires:
Liberty means the right of the individual to live his life as he chooses, guided by his own values and beliefs about what will give him happiness and meaning to his life.
Liberty means respect for the equal rights of others to live their lives as they choose and desire.
Liberty means that human relationships should be based on peaceful and voluntary consent.
Liberty means that each individual’s honestly acquired property and income is respected as rightfully his, and may not be plundered and taxed away by others, even when majorities think some minority has not paid some supposed “fair share.”
Liberty means the free, competitive interaction of people in the marketplace of goods and ideas, out of which comes the creative and innovative energies of mind and effort that bring about rising standards of living for all.
Liberty means a limited government, a government whose purpose is to protect each individual in his freedom and peaceful market and social affairs, and is not to be an agency for political oppression or economic favoritism through special privileges and benefits that are given to some at the expense of others in society.
These are not easy rules and ideals to live by, but they are what America was founded on, and which made America great – a land with both freedom and prosperity.
In today’s edition of The Heartland Daily Podcast, Tom Harris, Executive Director of the International Climate Science Coalition, joins H. Sterling Burnett to talk about his fear that America is committing economic suicide in response to the threat of global warming.
Harris also talks about President Obama’s war on coal, how climate science doesn’t support the need to suppress fossil fuel use and how now is the time to change course through the courts or in the next election by getting red of the Clean Power Plan and other policies like it.
Last week the Federal Bureau of Investigation (FBI) (i.e. the government) received a court order (i.e. from the government) that would force private computer giant Apple to write a program (a “backdoor”) to break the privacy-protecting encryption of their iPhone.
The court order stems from the FBI’s investigation into the awful murder by two Islamists of fourteen people in San Bernardino, California. Investigators recovered the locked iPhone of one of the gunmen – and they want in.
No one more than me wants to figure out as much as possible about and from these horrible people. But that doesn’t mean I want the government to have a perma-backdoor to every iPhone ever.
Unfortunately, the Feds are using this heinousness as an emotional ploy to get that skeleton key – manufactured for them by Apple at metaphorical gunpoint. Yet again reviving the Big Government maxim – never let a crisis go to waste.
FBI Director James Comey asserts this is about “the victims and justice.” But is demanding Apple do an injustice to and make victims of millions of iPhone owners. Who bought the product in part because of the protections it provides.
18th Century British jurist and politician William Blackstone said “It is better that ten guilty escape than one innocent suffer.” Subjecting millions to surreptitious government snooping – to learn more about two heinous people who are already dead and thus beyond prosecution – turns Blackstone’s maxim on its head. And then blows it up.
Never mind that government its own self (the San Bernardino County Department of Public Health, who owned the shooter’s phone) screwed up the possibility of recovering the data. Apple should not be forced to screw their customers – and their good name – to bail out government.
Government’s anger with the authoritarian-prevention encryption provides WAY predates this one phone.
Apple and Others Encrypt Phones, Fueling Government Standoff: “The new encryption will make it much harder for the police, even with a court order, to look into a phone for messages, photos, appointments or contact lists, they say. Even Apple itself, if served with a court order, won’t have the key to decipher information encrypted on its iPhones.”
And here we are. But encryption is a tool – like guns and shovels are tools. It can be used for good or ill. And can be used to protect the good from the ill. And as with guns and shovels, encryption is used for good WAY more often than it is used for ill.
We should not allow the government access to millions of phones – encrypted to protect millions of good people – to get at one bad person’s data. The damage would be omni-directional – and cataclysmic.
Issue Brief: A “Backdoor” to Encryption for Government Surveillance: “Encrypting smartphones and other tech products will help protect against malicious hacking, identity theft, phone theft, and other crimes. However, a government mandate requiring companies to build a “backdoor” through encryption to facilitate surveillance would put consumers at grave risk and impose heavy costs on US businesses.”
So we have the government continuing its endless campaign to gain backdoor access to every smart phone on the planet. And you have private sector Apple standing up – against the Leviathan, and for We the Consumers.
Who do you trust more going forward? Private companies looking out for us – or government looking in on us?
It isn’t a tough call.
Military triumphs and catastrophes have often hinged on how well (or luckily) armies and navies employed, avoided or benefited from weather and other natural events.
Severe storms helped the British navy defeat Spain’s Armada in 1588. George Washington knew horrid weather meant the Hessians would not expect an attack across the Delaware River on Christmas 1776.
Napoleon captured Moscow before leading his Grande Armée’s exhausted, starving, freezing remnants back to France through a bitter 1812 Russian winter. Hitler’s army never even reached Moscow; it was decimated by disease, starvation, bullets and frigid cold at Stalingrad 140 years later.
Eisenhower’s Normandy invasion plans anticipated a full moon that would illuminate bomber targets and bring low tides to expose German mines and obstacles along the beaches. Instead, overcast skies limited Allied air support – but persuaded the Nazi high command that no invasion would occur for several days. So senior officers stayed in Germany, leaving their army unprepared for D-Day, June 6, 1944.
Throughout history, commanders discovered that trying to predict the weather – or their enemies’ resolve – was fraught with peril. Even today, accurate weather forecasting is a highly uncertain science, even a few days in advance, especially for hurricanes or winter blizzards in Mid-Atlantic states where winds, storm tracks, temperatures and moisture are affected by the Atlantic Ocean, Gulf of Mexico and Arctic.
But now President Obama wants to compound his social experimentation with the military, by ordering the Pentagon brass to focus not on imminent weather events surrounding battle plans – not on threats from China, Russia, Iran, North Korea, ISIL, Hamas and other real hot spots – but on climate change years or decades in the future. He wants to replace Remember the Alamo with Remember the Climate!
Mr. Obama has issued an executive order directing the Department of Defense (and all other federal government agencies) to make preparing for global warming impacts a top priority, and treat climate change as our most serious national security threat. He even warned 2015 Coast Guard Academy graduates that “denying” climate change is a “dereliction of duty.” You can’t make this stuff up.
The EO directs the Pentagon to order all military commanders, down to battle planning levels, to include climate change analyses in combat planning, training exercises, intelligence gathering, weapons testing and procurement, fuel types and use, and practically every other aspect of military operations. This could include restrictions on the type and duration of training flights, amphibious landings and tank maneuvers.
It is sheer lunacy. It means bureaucrats and new layers of armed forces bureaucracies will waste time and money, and ignore real weapons and training issues. It means soldiers and sailors must now focus less on real natural and humanitarian disasters, and more on “climate refugee crises” that exist only in computer models, ivory tower studies and White House press releases. It could affect combat readiness and morale, make our warriors less prepared for warfare, and put them at greater risk of injury and death.
Other Obama orders forced the Air Force to spend $59 a gallon for “renewable” jet fuel and $67 per gallon for camelina-based F-22 Raptor fuel – and the Navy to spend $27 per gallon for biofuels from algae, waste grease and animal fat, and $424 a gallon for 20,000 gallons of “sustainable” diesel fuel. All that when conventional gasoline, diesel and jet fuel sell for $2.00-$3.50 per gallon (thanks to fracking)!
Like the other social experiments, this is being imposed by political operatives with little or no military service, few kids in the military, and minimal concern about how these policies, multiple deployments and stretched-to-the-breaking-point budgets might affect military readiness, morale, safety and families.
Even more absurd, the orders are based on pseudo-science and indefensible assumptions that carbon dioxide now drives climate change, and we have the knowledge and ability to predict climate shifts, extreme weather and related disasters years or decades in advance. Basing defense policies on these notions is ridiculous and dangerous. It’s like Eisenhower using tarot cards to predict Normandy weather.
The IPCC, EPA and White House continue to rely on still “murky” science, climatologist John Christy recently told the Senate Space and Science Subcommittee, “with large uncertainties on many crucial components, such as cloud distributions and surface heat exchanges.” This and other deficiencies cause predictions to be notoriously disconnected from Real World temperatures and weather events.
Contrary to those predictions, instead of rising a degree or more, average global temperatures have flat-lined for 19 years. Instead of more hurricanes, not a single category 3-5 hurricane has struck the U.S. mainland since November 2005 (a record ten-plus years). “Moisture conditions have not shown a tendency to have decreased (more drought) or increased (more large-scale wetness),” Dr. Christy noted.
Climate models still focus on manmade carbon dioxide and ignore most of the powerful, interconnected natural forces that have always driven climate and weather. In fact, “the theory of how climate changes, and the associated impact of extra greenhouse gases, is not understood well enough [for models] to even reproduce the past climate,” Dr. Christy explained to the House Science, Space and Technology Committee. There is no way they can forecast future climates, and they have failed to do so.
Climate models pay minimal attention to significant effects of land use changes and major high-impact fluctuations like the Pacific Decadal Oscillation (El Niño and La Niña) and North Atlantic Oscillation, University of Delaware climatology professor David Legates observes.
Adds Weatherbell forecaster Joe D’Aleo: they also disregard variations in the sun’s energy output; the important effects of the sun’s ultraviolet output, geomagnetic activity and cloud-enhancing cosmic rays; and the cyclical interplay of cold and warm water pools in our oceans, which significantly influence the severity of winters in Eurasia and North America (as just one example). All these factors affect weather and climate. They assume any warming is dangerous, rather than beneficial for people and agriculture.
Additional reasons for grossly deficient climate models are their “overly simplified and inadequate numerical techniques,” and the fact that decadal and century-scale circulation changes in the deep oceans “are very difficult to measure and are not yet well enough understood to be realistically included in the climate models,” says Colorado State University weather and hurricane analyst Bill Gray.
Reliable predictive capabilities require that we end our obsession with carbon dioxide as the primary driver of climate change – and devote far more attention to studying all the powerful forces that have always driven climate change, the roles they play, and the complex interactions among them.
And yet, Christy noted ruefully, “demonstrably deficient models are being used to make policy.” That has been disastrous for domestic sectors, like coal and manufacturing. It could be lethal for military forces.
One can easily imagine how Gilbert and Sullivan would treat this insanity in an updated HMS Pinafore:
Now landsmen all, whoever you may be,
If you want to be admirals at the DOD,
If your soul isn’t fettered to the White House fools,
Be careful to be guided by this golden rule:
Heed the climate models and never go to sea,
And you all may be rulers of Obama’s Navee!
The revised D’Oyly Carte lyrics notwithstanding, Mr. Obama continues to use climate change to justify his drive to fundamentally transform our economy, society, military, and energy, legal and constitutional systems. Equally ominous, Hillary Clinton and Bernie Sanders share his obsession and objectives.
The Joint Chiefs of Staff, Pentagon brass and line officers must battle these climate directives as forcefully as they would any of the real dangers that face our nation and world. So must we all.
On February 10, 2016, the House of Representatives passed the bipartisan Scientific Research in the National Interest Act (H.R. 3293). Its purpose: to ensure that the National Science Foundation (NSF) is open and accountable to the taxpayers about how their hard-earned dollars are spent.
The bill was introduced by Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) and requires that each NSF grant award be accompanied by a non-technical explanation of how the project serves the national interest. This written justification is intended to affirm NSF’s determination that a project is worthy of taxpayer support. The bill passed the House by a vote of 236 – 178. It now goes to the Senate. As the NSF is a poster child for the sometimes frivolous nature of government-funded science in the U.S., shining a light on NSF’s grant-making is a valuable and necessary thing to do.
Following are the original cosponsors of the bipartian members of the Science Committee: Reps. Daniel Lipinski (D-Ill.); Frank Lucas (R-Okla.); Alan Grayson (D-Fla.); Barbara Comstock (R-Va.); John Moolenaar (R-Mich.) Randy Weber (R-Texas); Stephen Knight (R-Calif.); Jim Bridenstine (R-Okla); Bruce Westerman (R-Ark.); Brian Babin (R-Texas); Mo Brooks (R-Ala.); Barry Loudermilk (R-Ga.); Bill Johnson (R-Utah); Dana Rohrabacher (R-Calif.); Randy Neugebauer (R-Texas); Bill Posey (R-Fla.); Gary Palmer (R-Ala.); and Ralph Abraham (R-La.)
“Rethinking Science Funding” in 2013
Three plus years ago, September 30, 2013, Lamar Smith and Eric Cantor began to rethink science funding through their collaborative op-ed article published inUSA Today titled “Rethinking Science Funding.” At the time Rep. Lamar Smith of Texas was chair of the House Science, Space and Technology Committee, a position he holds today, while Rep. Eric Cantor, before his re-election defeat in June of 2004 to newcomer David Brat, was the majority leader of the U.S. House of Representatives.
Although the U.S. government was spending more on research and development than any other country, the Chinese were nevertheless perceived to have the fastest supercomputer, high-energy physicists were looking to research conducted in Europe more than in America, and NASA astronauts were hitching rides to the Space Station on board Russian spacecraft. As such Smith and Cantor had cause to wonder whether China and India would soon surpass the U.S.
Smith and Cantor rightly concluded that for this nation to remain globally competitive, we needed to make sure that priorities are funded and money is being used wisely. In 2013 the National Science Foundation (NSF) was spending $7 billion of taxpayers’ money every year. While Smith and Cantor did find that the NSF spent most of its funds well, they were seeing far too many questionable grants, especially in the social, behavioral and economic sciences. One questionable grant involved $220,000 to the National Geographic for the research of animal photos in the magazine. Other questionable grants cited in Smith and Cantor’s USA Today op-ed are listed below:
- Rangeland management in Mongolia $1,499,718;
- History of Chiapas, Mexico (350 BC-1350 AD) $280,558;
- Mayan architecture and the salt industry $233,141;
- Bronze Age in Cyprus $197,127.
Additional Smith and Cantor op-ed reflections: 1) government employees and their agency heads must remember it’s not the government’s money; it’s the people’s money, and 2) asking questions about grants to obtain more information is reasonable to provide meaningful justification for why some grants are chosen over thousands of others. Likewise expressed was a desire to work with the NSF to address concerns so a better process could be established for evaluating research proposals.
Question about science funding elicits strong criticism
As might be expected, the September 30 op-ed of Smith and Cantor was subject to criticism. One target of questionable funding was “Bronze Age in Cyprus”, which elicited a marked response from Sturt Manning because of his research interest on the topic as Classics Department Chair at Cornell University. Manning’s anger was expressed in this article written in response to the Smith and Cantor opinion piece. Manning further cites other article that express similar reactions and argument from his colleagues. One such reaction and argument came from Rosemary Joyce, professor of anthropology at Berkley, with her article entitled, “Why fund studies of Maya architecture instead of saving lives?”
What ensued was tension between the NSF and the House of Representatives Science Committee over congressional oversight of its grant award process. This on-going feud was settled when in December of 2014, NSF director France Cordova formally adopted new rules for increased transparency and accountability that required non-technical explanations and justifications for new grants. At the time Chairman Lamar Smith remarked: “It appears the new NSF policy parallels a significant provision of the FIRST Act approved by this Committee last fall, with its requirement that NSF publish a justification for each funded grant that sets forth the project’s scientific merit and national interest.”
With France Córdova’s commitment to work for the same legislative effort, Rep. Lamar Smith succeeded in sponsoring and then introducing H.R. 3293 to the U.S. House on July 29, 2015. Recognition of how the federal government awards many grants that few Americans would consider to be in the national interest, led up to the formulation and introduction of H.R. 3293 on the floor of House.
The bill requires that each NSF public announcement of a grant award be accompanied by a non-technical explanation of the project’s scientific merits and how it serves the national interest. This written justification affirms NSF’s determination that a project is worthy of taxpayer support, based on scientific merit and national interest.
National interests a qualifier for science grants
How is national interests to be defined in the legislation as having the potential to achieve? Increased economic competitiveness in the United States;
- Increased economic competitiveness in the United States;
- Advancement of the health and welfare of the American public;
- Development of an American STEM workforce that is globally competitive;
- Increased public scientific literacy and public engagement with science and technology in the United States
- Increased partnerships between academia and industry in the United States;
- Support for the national defense of the United States; or
- Promotion of the progress of science in the United States.
before H.R. 3293 was passed in the House on February 10, 2016, Rep. Lamar Smith was a featured writer in the Winter, 2016 ISSUES in Science and Technology. Click HERE to read Smith’s piece, “Fact Check: Scientific Research in the National Interest Act.” In his article Lamar speaks of a number of falsehoods that have been spread to scare scientific community into opposing the legislation by opponents of bringing accountability and transparency to taxpayer-funded scientific research that have been spread by opponents
Lamar sets the record straight by negating charges leveled against H.B. 3293.
- Bill does not change or interfere with the merit review process for approving
- Bill does not mean that research projects will be judged by the title as to whether or not they are worthy federal funding
- Bill does not mean that research projects will be judged by the title as to whether or not they are worthy of federal funding
- As to the bill attempting to solve a problem that doesn’t exist, why then did NSF director France Córdova testify before the Science Committee earlier this year (Feb.16) saying that the Research in the National Interest Act is compatible and consistent with the NSF policy set forth in December of 2014?
Rep. Lamar Smith also questions the spending of $700,000 on a climate change musical encouraging transformative research? Aditionally, “What is high-risk, high-reward about spending $340,000 to study early human-set fires in New Zealand? What is groundbreaking about spending $487,000 to study the Icelandic textile industry during the Viking era? ” Lamar does concede that there may be good answers to the questions, but his committee was not able to come up with one. When NSF funds projects that don’t meet such standards, there is less money to support scientific research that keeps our country at the forefront of innovation.
As Rep. Smith lamented, NSF is able to fund only one out of every five proposals submitted by scientists and research institutions. When NSF funds projects are funded don’t meet set standards, there is less money to support scientific research that keeps our country at the forefront of innovation.
Taxpayers deserve science projects of merit, not frivolous ones
With a national debt that exceeds $18 trillion and continues to climb by hundreds of billions of dollars each year, taxpayers cannot afford to fund every research proposal, much less frivolous ones.
We owe it to American taxpayers and the scientific community to ensure that every grant funded is worthy and in the national interest.
HR 3293 has been sent to the U.S. Senate, in particular to the Senate Health, Education, Labor, and Pensions Committee.
Contact your senators and insist they pass H.R. 3293. and that Senator Republican leader Mitch McConnell permit the bill to come to the floor for a vote.
Many energy-producing states are currently struggling in the wake of falling oil and natural gas prices. Thousands of people are losing their livelihoods in the energy sector, and lower severance tax payments are projected to produce numerous state budget shortfalls, which could end up reducing state spending on social programs.
But as bad as the situation in many states now looks, it would be far worse if Sen. Bernie Sanders (I-VT) gets his way and ends up successfully banning fracking, a plan he recently proposed as a way to reduce the carbon dioxide emissions Sanders says is causing global warming.
A ban on fracking would be disastrous for everyone. It would drive up energy prices (don’t forget gasoline cost more than $4.00 per gallon a few years ago), and it would cripple the economies of numerous states, including New Mexico and Ohio.
New Mexico has the fifth largest proven oil reserves and the seventh largest reserves of natural gas in the nation, and many of these sources are accessible only through fracking. Oil and gas production are vital to the economy in New Mexico. The average annual wage paid in the energy industry is about $63,000, more than 57 percent higher than the average wage in the state. Nearly 22 percent of New Mexico’s population is living beneath the poverty line, a figure that’s sure to decline should fracking be banned.
It’s not just about jobs; fracking policy also affects children. Educational institutions—from K–12 schools to junior colleges and research universities—are the biggest benefactors of New Mexico’s energy revenues. Severance taxes collected from oil and natural gas developers supplied more than 30 percent of the state’s general fund in 2013, and it would be much more difficult to pay for educational programs if a major source of income for schools is banned.
Ohio is less reliant on energy production for its overall economic activity than New Mexico, but fracking has breathed new life into Eastern Ohio, an area of the state that has struggled for decades and has endured high rates of unemployment and poverty.
Youngstown, Ohio, for example, has the highest poverty rate of any city in the state. More than 40 percent of the city’s population and nearly 59 percent of the city’s children live in poverty, but fracking is starting to move the economy in the right direction. An increase in oil and natural gas production from the Utica shale in Eastern Ohio is providing employment opportunities for people living in Youngstown. Thanks to low natural gas prices caused by fracking, steel plants, once a staple of Ohio’s economy, are beginning to return to the state.
Vallourec, a French manufacturer of steel pipes, recently opened a plant in the state, creating 350 jobs. A new multibillion-dollar steel plant is also now in the works, scheduled to be built in downtown Youngstown. Local pipefitter unions reported full employment in 2014, up from 40 percent unemployment just a few years before. The increase is largely the result of the growing energy industry, but that trend would suddenly stall if Sanders’ plan to stop fracking becomes a reality.
The boom-and-bust nature of the energy sector creates challenges for people during down cycles, such as the one we are currently experiencing, but it also creates tremendous employment opportunities for people when production is high. Critics of fracking have often dismissed fracking-related jobs because they say they are not high-status occupations, but these jobs provide real wages to real people and better education for children.
The best social programs aren’t welfare policies; they are high-paying jobs, and that is exactly what fracking provides to thousands of blue-collar Americans. Oil and natural gas development funds schools and helps lift children out of poverty. That’s a future worth fracking for.
In today’s edition of the Heartland Daily Podcast, Isaac Orr, Heartland Research Fellow for energy policy, joins H. Sterling Burnett to talk about his newly released study on the impact of frac sand mining – Social Impacts of Industrial Silica Sand (Frac Sand) Mining: Land Use and Value.
The study focuses on property rights, property values and other amenities. Orr’s research shows there is limited evidence frac sand mining harms adjacent or surrounding property values in general and property rights are not affected in a way that has been measured.
A new study in the journal Scientific Reports shows enhanced levels of carbon dioxide are driving global dryland greening in recent decades. Drylands – zones where mean annual precipitation is less than two-thirds of potential evaporation – make up the largest part of the global terrestrial ecosystem. After analyzing data from 45 studies covering eight countries, researchers from Indiana University-Purdue University Indianapolis concluded the most likely source of the greening of dryland areas around the world is rising levels of atmospheric carbon dioxide. Regional scale analyses using global satellites show extensive areas of drylands greening in northern China, the Mediterranean, the Middle East, Mongolia, the Sahel and South America.
The authors ruled out other potential drivers for the greening, concluding only increased carbon dioxide levels provided a global explanation for changes to dryland vegetation. Under increased carbon dioxide levels, plants use water more efficiently, reducing the amount of moisture lost during respiration and storing more water in the soil. The study found elevated carbon dioxide enhanced soil water levels in drylands by 17 percent.
A new report by British Petroleum (BP) shows, despite continuing gains in energy efficiency and forced expansions of renewable power sources, economic growth in China, India, and other developing countries is swamping carbon dioxide reductions in Western countries and is expected to do so for decades into the future. According to BP’s report, “Despite the slowdown in emissions growth, the level of carbon emissions continues to grow, increasing by 20% between 2014 and 2035.” BP projects increasing emissions from fast-growing nations will overwhelm any emissions cuts made by the United States and other developed countries.
The rate of global carbon dioxide emissions growth could be reduced substantially, if only more countries would embrace fracking.
A new study by Oren Cass, senior fellow at the Manhattan Institute, finds despite massive subsidies and state mandates, renewable energy sources remain a small part of America’s energy supply. Investment in the industry has been flat for almost five years domestically and globally. Even as GDP grew 7.3 percent since 2007, Cass notes, U.S. carbon dioxide emissions fell 9.7 percent from their 2007 peak of 6,001 megatons of carbon dioxide (MtCO2) to 5,417 MtCO2 in 2015.
Improvements in the efficiency of electricity use, the amount of electricity used per dollar of GDP, accounted for 20 percent of carbon dioxide emissions reductions. The fracking revolution, resulting in a shift in electricity production from coal to natural gas, accounted for 19 percent of the decline. By contrast, increased solar power production is responsible for just 1 percent of the decline in U.S. carbon dioxide emissions. For every ton of carbon dioxide cut by solar power’s substitution for coal, the switch to natural gas has removed 13 tons of carbon dioxide. Globally, the amount of carbon dioxide reduced by solar power’s expansion in the United States equaled less than four hours of global carbon dioxide emissions in 2013.
Get that world leaders, frack for gas, reduce your carbon dioxide emissions — now that’s green energy.
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.
Puerto Rico Default Begins
Gabrielle Cintorino, The Heartlander
The slow-motion train wreck that is the economy of Puerto Rico is officially going off the rails. Lawmakers in the United States territory announced plans to partially default on $1 billion in monthly bond payments owed to investors in state-owned corporations. The potential for a large- scale bankruptcy is growing as some in Congress explore the idea of amending federal laws to allow states to declare bankruptcy. READ MORE
What’s Wrong with Wikipedia?
Joseph L. Bast, Somewhat Reasonable
In recent months, left-wing activists have hijacked The Heartland Institute’s profile at Wikipedia, removing objective descriptions of our programs and publications and replacing them with lies, errors, and outright libelous claims. Our efforts to correct the site have been rejected by the editors of the self-described “free encyclopedia.” Can you help? READ MORE
A Valentine’s Day Ode to Fracking
Isaac Orr, USA Today
Valentine’s Day is a time when we celebrate the affection and friendship we have for loved ones. Research Fellow Isaac Orr reminds us to write a special Valentine’s Day card for hydraulic fracturing. As Orr points out in USA Today, fracking has dramatically lowered the cost of gasoline and natural gas, giving people more resources to pamper their loved ones with flowers and chocolates. According to a study by the Brookings Institution, these low prices have saved people hundreds of dollars a year, depending on where they live. READ MORE
Heartland Study: The Social Impacts of Frac Sand Mining
Isaac Orr and Mark Krumenacher, Heartland Policy Study
When discussing the potential impacts of development, including frac sand mining, on land and scenic beauty, emotion and opinion tend to dominate the discussion. Heartland’s latest Policy Study brings technical facts and scientific data to the table instead. This study addresses commonly expressed concerns about frac sand mining and discusses how mining companies are already taking steps to reassure those who fear a loss in tourism and land value. READ MORE
Featured Podcast: Terry Miller: America Drops on the Economic Freedom Index
It might not surprise many that America’s economic freedom has declined in recent years. What might shock you is the fact that the United States is no longer among the top 10 freest countries in the world. Terry Miller, former U.S. ambassador and director of The Heritage Foundation’s Center for Data Analysis, joins The Heartland Daily Podcast to discuss the latest edition of the Economic Freedom Index. LISTEN TO MORE
March 9 Event: Never Lose a Debate with a Global Warming Alarmist!
The Heartland Institute’s newest book, Why Scientists Disagree About Global Warming, demolishes the most pernicious myth in the global warming debate: 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, on March 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!
Vouchers Are Everywhere. What Next?
Joy Pullmann, School Reform Weekly
The school choice movement is gaining momentum and could potentially be reaching a tipping point. Currently, a majority of states offer a school choice program that includes access to private schools. As it becomes more clear that school choice encourages innovation and quality, it will open the door for further progress on other fronts including vouchers and education savings accounts. While the progress that has been made so far is a major accomplishment, advocates of individual liberty and choice still have much work to do. READ MORE
Trend Watch: Parents Are Flocking to Homeschooling Conventions
Lennie Jarratt, The Heartlander
The popularity of homeschooling continues to grow nationwide as more parents choose to withdraw their children from government schools and take a more active role in their children’s education. There are now more than 100 homeschool conferences annually, where parents learn how to craft a tailor-made curriculum for their child and network with their peers in what has become a legitimate and influential cultural and political movement – one that puts families first. READ MORE
Medicaid Expansion: The President’s Discarded Valentine
Michael Hamilton, The Hill
President Barack Obama’s proposed budget for 2017 included a sour Valentine’s Day treat – the expansion of Medicaid, a jointly funded federal-state government program that uses taxes to provide health insurance to the poor. Using the same perverse incentives by which entitlements trap millions of Americans in poverty and government dependence, the latest Medicaid lure coaxes financially strapped states into federal assistance that is temporary and illusory. READ MORE
Ted Cruz’s Life-Saving Legislation Would Reduce FDA’s Monopoly
Justin Haskins, Consumer Power Report
Regulations related to the introduction of new drugs and medical devices cost money and, more importantly, lives. Newly proposed legislation from U.S. Sens. Mike Lee (R-Utah) and presidential candidate Ted Cruz (R-Texas) attempts to fix this problem. The Reciprocity Ensures Streamlined Use of Lifesaving Treatments Act would transform the way drugs and medical devices are approved by the federal government. READ MORE
Bonus Podcast: Ryan Yonk: The Economic Impact of Renewable Fuel Mandates
Ryan Yonk, assistant research professor at Utah State University and executive director of Strata Policy, joins The Heartland Daily Podcast to discuss an in-depth analysis of the economic impact of renewable fuel mandates. A new study found these mandates contributed to the poor economic recovery of “corn belt” counties, despite the fact that they historically supported renewable fuel subsidies. LISTEN TO MORE
Supreme Court Blocks Obama’s Climate Regulations
H. Sterling Burnett, Climate Change Weekly
Hundreds of state legislators and business, labor, consumer, and public-interest groups are rejoicing after the U.S. Supreme Court ruled to stay the Obama administration’s anti-fossil fuels Clean Power Plan. The regulation would have dramatically increased energy costs while having virtually no impact on the supposed threat of “global warming.” “We are thrilled that the Supreme Court realized the rule’s immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues,” said West Virginia Attorney General Patrick Morrisey. READ MORE
It’s the FCC-forcing-proprietary-video-to-be-free-to-Google stupid!
That’s a Jim Carville-esque paraphrase of the FCC’s AllVid commercial navigation device proposal to focus the mind.
The FCC spins its AllVid proposal as pro-competition in isolation when in reality the evidence will prove it profoundly anticompetitive overall.
That’s because the FCC’s AllVid proposal has been primarily orchestrated behind-the-scenes by Google to primarily benefit Google, which commands the world’s overwhelmingly dominant ‘navigation device’ for the entire Internet – its dominant Google Search engine, and also commands the world’s dominant mobile operating system/navigation device for the mobile Internet, Android, which already can turn any of the hundreds of millions of Android smartphones, tablets, or laptops into an Internet TV ‘remote control’ or de facto navigation device.
Given Google-YouTube, the world’s dominant Internet video distribution platform with ~1.6 billion viewers in 70 countries and 75 languages covering 95% of the world’s population, and given Google-Android is the world’s dominant mobile operating system with >80% share, the only thing Google lacks in the Internet video business is a willingness to pay a market-negotiated rate for the licenses and rights to use and profit from the world’s most valuable video content, and to be a responsible corporate steward to protect the premium content from the devaluation of piracy.
So this FCC AllVid proposal is not about “unlocking the box” for competition, it is really about unlocking the legitimate “box” protecting copyrighted content and market-negotiated licensing contracts, not with the offered and legitimate, owner’s “key” of proprietary apps, but with the destructive and illegitimate, “crowbar” of FCC force, so that Google can take for free what others in the marketplace now pay a competitive premium for, and so Google can singularly dominate the global monetization of this premium content for pennies on the dollar.
Now you see why Google wants the FCC to “unlock the box” for them. This ‘box’ protects premium content producers and distributors from theft, piracy, and abuse of their property.
Ironically and sadly, this “box” may be needed most to protect from the predatory devaluation of Google’s dominant piracy-tolerant: navigation device/search engine, advertising/monetization platform, and YouTube distribution platform.
So how can we be sure this is what Google and the FCC are doing?
Consider the evidence of Google’s history of anticompetitively devaluing premium content.
First, don’t miss this damning Google admission in the Viacom v. YouTube Statement of Undisputed Facts # 161: “On June 8, 2006, Google senior vice president Jonathan Rosenberg, Google Senior Vice President of Product Management, emailed Google CEO Eric Schmidt and Google co-founders Larry Page and Sergey Brin a Google Video presentation that stated the following: “Pressure premium content providers to change their model towards free[;] Adopt ‘or else’ stance re prosecution of copyright infringement elsewhere[;] Set up ‘play first, deal later’ around ‘hot content.’” The presentation also stated that “[w]e may be able to coax or force access to viral premium content,” noting that Google Video could “Threaten a change in copyright policy” and “use threat to get deal sign-up.””
Even in 2006, before Google bought YouTube, and when they only had ~44% of search share per ComScore, that email shows Google’s leadership was keenly aware of the market power its search engine enjoyed as the leading ‘navigation device’ for all free Internet content at that time.
Google’s leadership bought YouTube in 2006 knowing that video searches comprised roughly a quarter of all Internet searches and knowing that YouTube was the overwhelming Internet video market leader, precisely because its willful blindness to copyright infringement enabled fast piracy-driven search growth.
Tellingly, the Viacom v. YouTube Statement of Undisputed Facts # 162 shows us that Google co-founder Sergey Brin disagreed with co-founder Larry Page and Chairman Eric Schmidt in buying YouTube because it effectively was forcing paid video to be free on Google; Mr. Brin said in an email: “…is changing policy [to] increase traffic beforehand that we’ll profit from illegal downloads how we want to conduct business? Is this Googley?”
In the first four years of Google owning YouTube, Google’s share of search tipped to dominance in increasing ~50% from 43.7% to 65.1% per Comscore, in large part because YouTube’s piracy-fueled business model drove strong video search and search advertising growth.
Note that after Google purchased YouTube, Google sought to continue to leverage YouTube’s blind-eye to piracy to force pay TV content producers into Google-favorable revenue deals with Google.
Statement of Undisputed Facts # 216 tells us that Google Manager David Eun said on 2-15-07 that: “Audio fingerprinting system whereby the content partner can send ‘reference’ fingerprints’ to Audible Magic’s database “are now live as well and are only offered to partners who enter into a revenue deal with us.””[Underline added for emphasis] (Translation: Google would only protect a video content owners’ content from piracy, if they allowed Google to monetize and revenue share at an advertising price dramatically less than other advertisers paid for the same thing.)
How do we know that Google long understood the market power its world’s dominant search engine/navigation device commanded? Santiago de la Mora, Google Executive, said 8-23-09 in the NYT that: “Search is critical. If you are not found, the rest cannot follow.” In 2010, Google’s search ranking head, Amit Singhal, tacitly admitted Google is “the biggest kingmaker on this Earth” per the Telegraph.
In 2012, Google led, orchestrated, politically-framed and set the political tone for much of the Web’s opposition to the SOPA/PIPA anti-piracy legislation, because it threatened Google’s anti-property-rights mission, open philosophy, business model, innovation approach,competitive strategy, and culture.
From 2014 to present, Google has sued in court that Section 230 in federal law completely immunizes Google from State law enforcement authority for violating state laws concerning consumer protection and property theft among other violations. 41 State AGs currently oppose Google’s breathtaking claim of special legal immunity from all state law enforcement.
In sum, apparently Google’s gambit here is to use its political influence to get the FCC to use its dwindling legal credibility to contort an outdated 1996 navigation device provision to forcibly open-source pay TV content and grant Google a political fair use claim to take the premium pay TV content for free and profit from it.
The combination of the FCC de facto open-sourcing pay TV content by fiat, with the anticompetitive reality of Google’s dominant search engine navigation device, dominantAndroid remote control operating system, and dominant YouTube global Internet video distribution platform, and with Google’s longstanding anticompetitive tolerance of piracy, would not be a pro-competitive dynamic as the FCC claims, but would be a profoundly anticompetitive and anti-proprietary content dynamic going forward.
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.
In recent months, left-wing activists have hijacked The Heartland Institute’s profile at Wikipedia, removing objective descriptions of our programs and publications and replacing them with lies, errors, and outright libelous claims. Our efforts to correct the site have been rejected by the editors of the self-described “free encyclopedia.” Can you help?
Here’s the link to our profile: https://en.wikipedia.org/wiki/The_Heartland_Institute
Supporters of Heartland will be surprised to learn that we “worked with the tobacco company Philip Morris to question or deny the health risks of secondhand smoke and to lobby against smoking bans,” that we “support climate change denial,” or that our decision to spin off our work on finance and insurance into the R Street Institute is characterized as the “resignation of almost the entire Heartland Washington D.C. office, taking the Institute’s biggest project (on insurance) with it.”
These are simply lies, meant to damage our reputation and effectiveness in the most important public policy debates facing the nation. But the editors of Wikipedia refuse to remove these libelous claims, and over time have allowed them to proliferate.
You can help! If you have experience editing Wikipedia articles, we especially need your help to restore fairness and objectivity to this article.
If you don’t have an account at Wikipedia, click on “Create account” in the upper right corner. It will ask you to choose a username and enter a password. Putting in your email is optional, but will allow you to retrieve your password if you forgot it.
When you make a change, be incremental. And keep an eye on your changes. If it is “changed back,” go to the “talk” area and convince the editors that your change is fair, objective, independent, and properly sourced.
A detailed critique of our Wikipedia profile has been posted on PolicyBot. But first consider these basic facts:
1. The Heartland Institute is an independent nonprofit research and education organization that addresses a wide range of topics, including school reform, budget and tax issues, health care reform, environmental protection, and constitutional reform. This profile ignores about 90% of what we do.
2. Heartland is highly regarded by its peers. We are endorsed by scores of think tank leaders as well as elected officials and civic and business leaders. Like hundreds of other “think tanks” with profiles on Wikipedia, we take a conservative-libertarian perspective on issues. Nearly all the sources in our current profile are left-wing activists who object to our philosophy. How is that fair?
3. We enforce policies that limit the role donors may play in the selection of research topics, peer review, and publication plans of the organization. Heartland does not conduct contract research. These policies ensure that no Heartland researcher or spokesperson is subject to undue pressure from a donor.
4. The left hates our views on global warming, and tobacco control [https://www.heartland.org/policy-documents/january-2006-leave-those-poor-smokers-alone], but our positions are well-document, endorsed by leading scholars, and widely shared by other think tanks and advocacy groups. Why has Wikipedia allowed left-wing activists to fill our profile with their hate speech on these topics?
5. We have replied, repeatedly, to all of the false claims and accusations that appear in the profile. None of our replies and efforts to set the record straight are reported in the Wikipedia profile.
This PDF is a line-by-line critique of the Wikipedia site as it stood on February 12. If you choose to go to our profile and try to make changes, some of the facts reported there may be useful in your effort. Jim Lakely, Heartland’s communication director, has the URLs of many third-party sources you can cite to document changes you suggest. He can be reached at 312/377-4000 or email@example.com. Or just Google and find independent confirmation yourself. Heartland’s work has been reported fairly in thousands of published articles and websites. Remember that Wikipedia doesn’t want to cite anything on Heartland’s own website.
Hosts Donny Kendal and John Nothdurft continue to explore the world of think tanks in episode #26 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 Freedom Foundation, the Heritage Foundation, and the Illinois Policy Institute.
Better Know a Think Tank
In this “Better Know a Think Tank” segment, Donny and John talk to Anne Marie Gurney, Research Analyst at the Freedom Foundation. Anne Marie talks about the background, history and mission of the Washington-based think tank, and what they are currently working on.
The Freedom Foundation also hosts a podcast called Freedom Daily.
Featured Work of the Week
Featured this week is a report by the Heritage Foundation titled “Maine Food Stamp Work Requirement Cuts Non-Parent Caseload by 80 Percent.” The report explains how work requirements and reduce the amount of able-bodied adults without dependents from taking advantage of this societal safety net.
Check where your state is ranked – Heartland 2015 Welfare Report Card
In the World of Think Tankery
Today Donny and John discuss an article from the Sutherland Institute on the negative impacts of the Obama administration’s three-year freeze on all new coal leases on federal lands. The article does a great job at describing just how important coal is in these Western states.
They also talk about an article out of the Illinois Policy Institute about how the state of Illinois failed to heed the warning from Caterpillar CEO Doug Oberhelman about the decline fiscal situation. Illinois is the only state in the region that has declined in manufacturing jobs over the past four years.
In last portion of this segment, Donny and John talk about the passing of Justice Antonin Scalia. The Federalist Society, for which Scalia was a member, issued a statement mourning the loss of the Supreme Court Judge.
Linked here is the Heartland Daily Podcast on how Scalia’s passing may effect the Friedrichs vs. California Teachers Union case
Here are a handful of upcoming events that you may be interested in attending.
Mackinac Center – The Flint Water Crisis and the Challenge of City Infrastructure (Tuesday, Feb 23) @ Northwood University in Midland, Michigan
Heartland Institute – Forum on Article V Convention – (Wednesday, Feb 24) @ The Heartland Institute in Arlington Heights, Illinois
Grassroot Institute of Hawaii – Renewable Energy: How the 100% Mandate Hurts Hawaii (Friday, Feb 26)
Federalist Society – 2016 National Student Symposium: “Poverty, Inequality, and the Law” (Friday, Feb 26-27) @ the University of Virginia School of Law in Charlottesville, Virginia
With Valentine’s Day rapidly approaching, Americans naturally focus on romantic relationships. Chocolates … intimate dinners … flowers … fracking … Wait, what?
Yeah, fracking. Many factors influence the level of happiness in a relationship, but one issue that can make or break a relationship is money. This is where hydraulic fracturing, also known as “fracking,” could very well be boosting the love lives of millions.
Fracking has dramatically lowered the cost of gasoline and natural gas, giving single people more resources to find a potential partner and relieving financial tension for people in established relationships. Who knows how many eHarmony accounts have been funded with cash left over from cheap fill-ups and how many divorce lawyers were never hired when suddenly making ends meet became less of a struggle.
Fracking has made the United States the largest producer of natural gas in the world and has nearly doubled the amount of oil produced in the United States since 2008. A study by the Brookings Institution found low natural gas prices may be saving people somewhere between $181 to $432 per person over the coming years, depending on which part of the country they live in.
Large increases in oil production in the United States are a key reason why gas prices are the lowest they have been in many years. The Energy Information Administration estimates the average U.S. household saved more than $700 in lower gasoline costs alone in 2015, compared to 2014, and these savings may be even greater in 2016, as gas prices are lower now than at this time in 2015.
These dollars and cents have a real impact on relationships, whether they are new or well-established. Spending less money on gasoline and heating costs allows more people to spend their cash on other pursuits, such as dating. According to a survey by COUNTRY Financial, debt is an important concern for many Americans, with 78% of respondents believing someone who is single should be worried about a romantic interest’s debt status. Additionally, 38% of those respondents said they would break off a new relationship if they deemed the other person’s debt level was too high.
Money also influences happiness in established relationships. According to Fidelity Investments’ Couples Retirement Study, 47% of couples argue about money. The COUNTRY Financial survey finds that 54% of couples do. Further, a report released by the United Kingdom’s Office for National Statistics in 2015 found that more people among those surveyed said money worries were more likely to put a strain on a relationship than many other concerns, including working long hours — or even an extra-marital affair.
As much as we may like to think of love as an emotional pursuit, money plays an important role. This is hardly to say fracking is going to save a failing relationship, but it might just take the edge off the tension in a rough patch.
Far too often, people talk about the economic and monetary benefits of fracking, tax cuts or salary increases in solely financial terms without realizing that real people don’t keep score on checkbook ledger, they care about what money means to them, how it can provide psychological and emotional benefits.
Whether you spend your extra cash on that all-too-important first date, the ring in your pocket for when you finally pop “the question” or the extra financial breathing room that makes any relationship a little easier, hydraulic fracturing is helping people worry less about money, so they can focus more on finding that special someone to spend Valentine’s Day with.
President Barack Obama released his proposed budget for 2017 days before America’s sappiest holiday. Similar to many expressions of love given each year around February 14, the budget packed much potential to please—and even more to disappoint.
Unlike most snubbed suitors, the lame-duck president faces no consequences for failing to satisfy. Obama thrusts his trillion-dollar gifts at the citizens of the United States, and these attempts to buy love, like so many boxes of chocolate and flowers purchased this time of year, were made using credit.
One of Obama’s naughtiest tokens of affection is the expansion of Medicaid—a jointly funded federal-state government program that uses taxes to provide health insurance to the poor. For states that expand their program’s rolls under Obama’s plan, the federal government proposes to pay 100 percent of the cost of newly eligible enrollees from 2014 through 2016. Thereafter, the federal share would decline until it reaches 90 percent in 2020. Under non-expanded Medicaid programs, the federal government pays for just 51 percent, and the state picks up the rest of the tab.
Rather than motivating states to help individuals rise above Medicaid, Obama’s budget encourages states to add citizens to their welfare rolls and tempts states to depend on federal assistance.
Similar to budgets his administration has proposed in previous years, Obama’s latest proposal creates perverse incentives, but some states just won’t swing that way.
At present, 19 states have declined to expand Medicaid, despite the prominent role the program plays in Obama’s signature health care law and the goodies states supposedly receive as a result of expansion. The Affordable Care Act (ACA) called on states to expand their Medicaid rolls to include people up to 138 percent of the federal poverty level. Only 26 states complied outright. Six expanded Medicaid through unconventional means, such as through waiver programs. The remaining 19 know a bad date when they see one.
Some states, such as Alabama and Wyoming, have already doubled down in 2016 on their previous rejections of Medicaid expansion. Gov. Robert Bentley (R) is leading Alabama away from traditional Medicaid altogether. Bentley announced on February 9 a pilot program that uses Section 1115 federal waivers to shift Medicaid patients and dollars to a new system that will tie fees to health care outcomes. His goal is to realign incentives, increase efficiency, and improve care.
State legislators in Wyoming continue to resist Medicaid expansion, despite mounting pressure. Gov. Matt Mead (R) once sued the federal government over ACA’s overreach, but now, in his second term, Mead is pushing for expansion, which the state’s Senate killed (again) earlier in February. Similar to the Obama administration, proponents of Medicaid expansion in Wyoming and other states are learning the hard way that “no” means “no”—or at least that it should.
States that didn’t learn this lesson in time have inadvertently taught it to wiser neighbors. A new study by Nebraska’s Platte Institute for Economic Research tells a cautionary tale. Arkansas expanded Medicaid in 2014 by steering newly eligible enrollees toward qualified health plans (QHPs) sold on the insurance exchange, but as Jonathan Ingram and Nicholas Horton explain in Arkansas’ Failed Medicaid Experiment: Not a Model for Nebraska, “The cost of expanding Medicaid through QHPs,” which is about $800 million over three years, “is far higher than the cost of traditional Medicaid expansion.”
Adding to Arkansas’ costs, the program attracted 85,000 more enrollees than predicted. “As a result, more than 41 percent of all Arkansans are on Medicaid, making Arkansas one of the most Medicaid-dependent states in the nation,” write Ingram and Horton.
Nebraska Gov. Pete Ricketts (R), determined to learn from his neighboring state’s fateful night with the king, has made Arkansas’ troubles a pillar of his argument against expanding Medicaid. Nebraska lawmakers, who have already rejected Medicaid expansion three times, will decide the issue again between now and April.
States that have held the line against expanding Medicaid should stand firm through Obama’s last year in office. Those enticed by the federal government’s offer to pay 90–100 percent of new Medicaid expansion costs should recognize this as Obama’s last-gasp attempt to rescue the Affordable Care Act from the fire, by marrying it to state budgets.
Obama’s budget sends a dangerous Valentine message to states that have thus far resisted Medicaid expansion: “Be mine.” Using the same perverse incentives by which entitlements trap millions of Americans in poverty and government dependence, the latest Medicaid lure coaxes financially strapped states into federal assistance that is temporary and illusory.
By Nancy Thorner and Bonnie O’Neil –
There is a growing concern among citizens that some government officials have been and are continuing to abuse their authority. There are many examples and evidence of this starting at the very top level of our government. Will there be further conflicts, and if so will it be the catalyst for further insurgency by citizens against government?
Linking the Ferguson example in 2004 with that of rancher Clive Bundy’s Nevada dust-up within the same year (See Article 1 published at Illinois Review, Friday, February 12), and most recently the new conflict among more ranchers and government at the Malheur National Wildlife Refuge that resulted in police killing one of the ranchers, seems to point toward a developing pattern. One day after Thorner and O’Neil’s article was published at Illinois Review, news media information revealed the heavy hand of law once again struck at both the City of Ferguson and rancher Clive Bundy.
Ferguson was under pressure by the federal government (Attorney General Loretta Lynch) to submit to specific demands. Ferguson officials did not think it in their community’s best interest to comply with the new procedures demanded of them, and Attorney General Lynch’s federal boots stomped down. Ferguson has now become a political tool for a federal power grab. The city may well end up with a federalized police department.
In an unexpected twist, federal authorities not only arrested the ranchers who had occupied the Malheur National Wildlife Refuge, but they also arrested Cliven Bundy. At 69, Bundy was charged with “conspiracy, assault on a federal officer, obstruction, having a weapon, and other offenses stemming from his role as the leader of an April 2014 clash with federal officials at his ranch near Bunkerville, Nevada. The 32-page criminal complaint cites Mr. Bundy’s role “in recruiting about 200 armed supporters to face off with federal agents who had come to remove his cattle from the Bureau of Land Management property in 2014 over a grazing dispute.
The Malheur National Wildlife Refuge
As alluded to in the above paragraph, in early January of this year another explosive situation developed between ranchers and the government. This incident involved father and son ranchers, Dwight and Steven Hammond and resulted in the occupancy of the Malheur NationaI Wildlife Refuge. It all began over a “controlled burn” on Hammond’s land, initiated as a “clearing” of dry grass land to protect their family’s property from a potential wildfire. The federal government initiated charges claiming the Hammonds had burned federal land in the process. The Hammonds acknowledged the fire accidentally strayed and burned grass on federal land. The Hammonds were arrested and a trial resulted. The judge sentenced Dwight Hammond to three months in prison and his father Steven Hammond to one year in prison, even though there was no proof of deliberate arson.
Both men completed their sentences, but after their release from prison, a federal judge stepped onto the scene claiming the punishment of the Hammonds was not enough. The Ninth Court of Appeals stated: “Given the seriousness of arson, the ranchers should have been given a five-year sentence; the reduced sentence was grossly disproportionate to the offense.” Dwight Hammond called the new ruling a “death sentence,” largely due to his advanced age. The Hammonds appealed to the Supreme Court, but it would not accept the case. Currently, Dwight and Steven Hammond are appealing to President Obama for clemency.
Ranchers support Dwight and Steven Hammond
The new sentence was deemed exceedingly unfair by fellow ranchers, who believed the Hammonds’ rights had already been violated by the first sentence. Ranchers knew an arson charge was inappropriate for what was actually a common occurrence by ranchers in the area. There is always a risk with controlled burns exceeding the intended limit, but there is a bigger risk to the land and property without the “burn.” Ranchers had reached a limit to what they would endure from officials who appeared to them as enemies just looking for ways to discourage, discredit, and harm them.
A group of ranchers joined together in a peaceful protest near the Hammonds’ home. Brothers, Ryan and Ammon Bundy, driven by their growing anger of perceived injustices, broke away from what had been a peaceful protest and led a group of armed militiamen to take over the unoccupied headquarters of the Malheur National Wildlife Refuge on January 2, 2016. It soon became obvious that the Refuge was being occupied by the renegade ranchers.
The following explanation was given by the ranchers occupying the Refuge:
“The facility has been the tool to do all the tyranny that has been placed upon the Hammonds. We’re planning on staying here for years. This is not a decision we’ve made at the last minute.”
Ryan Bundy further stated, “Many of the men at the refuge are willing to fight and die to protect the rights of states, counties, and individuals to manage local lands.” Sadly, that proved to be true in the days ahead.
FBI Challenges the Killing of a Rancher
The Malheur NationaI Wildlife Refuge occupation went viral in the media on January 26, 2016, when the mostly peaceful occupation turned violent. Law enforcement officers shot and killed rancher Robert “LaVoy” Finicum as he drove on Highway 395, about fifty miles north of the occupied Malheur site.
Not helpful was the conflict that developed in Harney County, Oregon over the nature of Finicum’s death. In an interview the day before he died, Finicum claimed that the government appeared to be ramping up for action. He voiced his concern saying: “They’re doing all the things that show that they want to take some … action against us.”
Kris Anne Hall, legal advisor for the Coalition of Western States and a defender of the armed Oregon take over, stated during an interview on The Joe Miller Show that no shots were fired by any of the protesters, but multiple shots were fired by federal agents at the protesters’ car. Additionally, Ms. Hall claims LaVoy Finicum was “summarily executed” while on his knees with his hands in the air. This claim was disputed by police, but there is no doubt Finicum was shot at least six times, while no shot originated from Finicum. Further contradicting Ms. Hall are police claims that Finicum was going for his gun when shot. But there are witnesses who claim Finicum was shot multiple times, including in the face at close range after he was likely dead.
As of February 9, 2016, the autopsy report has not been released, which could prove helpful in determining whose version is most accurate. However, the FBI did release a video of the chase and the shooting on January 28, 2016, to the “Oregonian“ that carefully examined all in slow motion. The detailed second by second account of the shooting can be viewed on this site.
In existence is another video of the police chasing Finicum’s car, taken from a helicopter overhead. After the Finicum family viewed it, they called the shooting unjustified, even going so far as to accuse the authorities of a cover-up. The new claims are bolstered by the account of Shawna Cox, who was riding in Finicum’s vehicle during the chase and shooting. Another passenger, Victoria Sharp, provided confirmation that Finicum was fired upon before he left his truck.
Conservation Plan negotiated as Beacon of Hope
What makes the Malheur National Wildlife Refuge flare-up so upsetting to stakeholders — including ranchers, environmentalists, and federal agents — was a conservation plan that had been agreed upon for the Malheur National Wildlife Refuge in the Harney Basin. The plan took three years to negotiate. An agreement was reached that considered ranchers’ livelihoods, ecological concerns, and local economic sustainability. Accordingly, the plan had become a beacon of hope in the region, as well as in other rural communities faced with similar conflicts.
“We try to sit down with people and develop a shared vision early on in the process or at least make sure our vision isn’t stepping on theirs. You do it in a way that minimizes conflict. Collaborative planning processes such as the one worked out in the Harney Basin are the essence of good land management.”
Nevertheless, conflicts do arise because the economic survival of some ranchers depend on access to water on public lands located in the high desert owned by the U.S. Bureau of Land Management (BLM), especially during the critical spring and summer months. Some ranchers even purchase grazing and water access to BLM owned high desert public land. Furthermore, some landowners are not as amenable to that kind of collaboration with the federal government, claiming officials seek what is called state sovereignty over public lands: a transfer of rule making an administrative authority over taxpayer property: from federal agencies to state and county authorities.
It might come as a shock to many that the federal government owns 650 million acres of land or 1/4 of all the land in the U.S. Most of the land is in the West.
Movement growing to seize land from Centralized Agencies
Webster is concerned over a growing movement to seize land management decisions away from centralized agencies. His concern is based on how more and more ranchers and farmers — called “radicals” by Webster — are speaking up against public lands and oppose government control of any kind. The result is a perception of injustice. As in the Hammond case, there is a shrinking gap between those like Bundy and moderates who want to work with the government. Concern also exists that the desire to wrest management authority away from public representatives at BLM and FWS could possibly become mainstream.
Webster understands why ranchers are upset, but he does not see Bundy’s’ approach as a solution. As Webster noted:
“It clearly seems unreasonable to put somebody in prison for five years for burning 139 acres of public land. There are some legitimate frustrations out there like that.” Webster then added: “But we have a system of laws put in place for reasons. You get engaged if you don’t like the laws and try to change them. You don’t hold a stand-off.” Ranchers claim they tried the legal approach without success.
Impact of Standoff Unknown
It is difficult to ascertain the kind of impact the refuge standoff will have on the freshly-healed partnerships negotiated by Webster between ranchers and federal workers in the community prior to the Malheur National Wildlife Refuge occupation.
If the November 2014 Senate campaign is an indication, in which Cory Gardner (R) defeated Mark Udall (D) for U.S. Senate, the public seems to have sided with the ranchers, The Gardner/Udall political contest was largely about the smothering effects of government regulation. There does appears to be a growing sympathy for the ranchers as they are perceived as hard-working, honest people who are land rich and dollar poor, challenged by continual harassment inflicted by government agencies. The recent shooting of Finicum can only add to the community’s concern.
The standoff at the Malheur National Wildlife Refuge finally came to an end, when on Wednesday, February 10, 2016, forty-one days after the occupation of Malheur began, the last rancher surrendered to the FBI.
There are inevitable consequences when crisis situations are not successfully managed before tempers flare and situations become harder to control. Most everyone ends up losing in the end.
Granted, the conflict that created the situation in Oregon is far from over. The ranchers involved have accomplished their primary goal of having their concerns made public, although not to the extent of those who rioted, thrashed, and burned Ferguson or those who marched on the streets of large cities chanting “No justice! No peace! No racist police!”
Unfortunately in calling attention to their plight, one rancher paid the ultimate price, his life, for doing so. Will the authorities now be more open to initiating productive discussions to hear ranchers’ concerns? The fate of the protestors arrested and taken into custody might be an indicator of what the future might hold for the Great Basin region of this nation.
As for Ferguson, many now believe much of what transpired in Ferguson was a deliberate, orchestrated effort to federalize the police, to eliminate local independence through strong armed “consent,” and to send a message to other police departments around the country that the same thing can and will happen to them if they do not submit to federalization. It appears to be a first step to initiate the Obama “civilian national security force” that he called for in July, 2008.
It seems prudent for all citizens to be alert to what is happening and realize this is not just about a few rare incidents; it is about protecting our Country, Constitution, and honest citizens from intrusive government actions.
Heartland Daily Podcast – Lennie Jarratt: Ted Cruz’s Education Bill and the Effects of Scalia’s Passing
In today’s edition of The Heartland Daily Podcast, Lennie Jarratt, project manager for education at The Heartland Institute joins host Donald Kendal to talk about a newly proposed bill that would treat homeschoolers like a private school, allowing them to receive federal money.
The bill, S. 306 – Enhancing Educational Opportunities for all Students Act, was proposed by Republican Senator Mike Lee and Co-sponsored by Senator and Presidential Candidate Ted Cruz. While the bill is generally well-received by advocates of school choice, some homeschoolers fear this access to federal money will inevitably usher in greater federal regulation.
Jarratt also talks about the passing of Justice Antonin Scalia and how it will effect the Supreme Court case of Friedrichs v. California Teachers Union.