Quash the Ethanol Beast in Honor of Iowa Caucuses

We still have work to do in ridding ourselves of the ethanol juggernaut

As the clock struck 12 am January 1, one of the most anti free market government interventions expired without renewal and without fanfare.  In honor of the Iowa Caucuses, we can now declare that the ethanol subsidies and tariffs are finally dead.  However, before we celebrate this rare piece of good news, we must remember that in order to deracinate the ethanol beast from our midst, we must destroy its third leg; the 10% blenders mandate.


Over the past decade, ethanol has been the poster child for the worst aspects of big-government crony capitalism.  The ethanol industry has used the fist of government to mandate that fuel blenders use their product, to subsidize their production with refundable tax credits, and to impose tariffs on more efficient sugar-based ethanol from Brazil.

This onerous mega-intervention on the part of government has had a devastating effect on the price of food and gas and it has forced consumers to purchase inefficient and often damaging fuel.  Yet worst of all, it has enriched an industry that would have otherwise faltered in the natural order of the free-market.  Ethanol production has increased 719% during the past decade, as almost half of all corn grown in the country is diverted for this unnatural and odious use of a product that was traditionally grown for livestock feed.  Government-backed venture socialism is indeed a powerful force.

Ethanol blenders have benefited from the 45-cent per gallon Volumetric Ethanol Excise Tax Credit (VEETC), which may be refundable for those companies that lack any excise tax liability.  The ethanol industry has pocketed over $45 billion in subsidies since 1980, with a $6 billion annual price tag in recent years.  Additionally, all foreign ethanol imports incurred a 54-cent-per-gallon import tariff, which coupled with a mandatory 2.5% ad valorem tax, adds up to an increased cost of about $0.60 per gallon.

These two policies are unlikely to be renewed; however, the most egregious part of the three-legged ethanol beast –the mandate – is still intact.  Industry leaders are employing a rope-a-dope strategy vis-à-vis the subsidies, while launching a counterattack to double down on the mandates.  They must be stopped.

End All Green Corporate Handouts in 'Tax Extenders' Bill

Here's our opportunity to end corporate cronyism, eco-socialism, and market distortions in the energy sector

It's that time of year again.  The clock is ticking toward December 31, and green energy special interests are discreetly lobbying for the extension of their choice handouts, credits, and grants.  We must remain vigilant against these powerful interests.

At the end of every calendar year, Congress passes a 'tax extenders' bill to temporarily reauthorize specific tax breaks that have not been permanently written into law.  These bills have traditionally dealt with issues like the AMT patch, the R&D business credits, and universal deductions for depreciation, as well as state and local taxes.

In recent years, tax extenders have been magnets for non-universal carve-outs for green energy.  The 2010 tax extenders bill also included extension of the Bush tax cuts, the annual Medicare 'doc fix,' a payroll tax cut, and an unprecedented extension of unemployment benefits.  Most of these provisions are set to expire next month, and will consume the lion's share of the debate and media coverage.  This will give the green industry the opportunity to surreptitiously slip in their handouts as part of a grand bargain revolving around the bigger issues and legitimate, universal tax deductions.  They must be stopped.

Hold the Line Against Venture Eco-Socialism in the CR

No wonder Democrats casually disregard our budget crisis.  They have a penchant to drop zeros from government expenditures!  Last month, Democrat congressional candidate Dave Weprin thought that the national debt stood at $4.0 trillion.  Now Harry Reid has filed cloture on his version of the FY 2012 CR that has a missing zero from some of the disaster aid expenditures.  According to CQ Politics, Reid’s bill, which contains $3.65 billion in emergency disaster aid – with no offsetting spending – misallocated funding for the Disaster Relief Fund at “$774,000,00,” and “$226,000,00” for the Army Corps of Engineers for flood control and coastal emergencies.  These guys have a serious problem with arithmetic.

Senate Republicans must use this error as an opportunity to defeat Reid’s bill, while the House must stand firm on their version of the CR, which contains $1.5 billion in offsets.  House leaders have already compromised on the overall discretionary budget authority in this bill; a $24 billion increase from the universally venerated Ryan budget.  The only saving grace of this bill from a conservative perspective is that it eliminates a $1.5 billion DOE loan program for manufacturers of $100,000 electric cars and the $100 million solar energy loan grant that was responsible for Solar-gate.

On Friday, Harry Reid tabled the House-passed CR, and filed cloture on his own version, setting up a cloture vote for Monday night.  Although Democrats only have 53 votes, several Republicans have already supported an even higher level of disaster spending without offsets.  This is where Harry Reid’s math error will play a vital role.  Under Senate rules, once a senator has forced a roll call, that senator proposing the amendment cannot change the text without unanimous consent.  Harry Reid will need that consent in order to fix his mistake, in the hopes that he can get this done by Monday night and pressure House Republicans to cave, so they can all enjoy their scheduled recess.  Senate Republicans must deny that consent.

To that end, Reid would be forced to file a new cloture vote, thereby overshooting their entire recess – for a green program.  The longer this ordeal drags out the more Reid will be pressured to adopt the House bill.

Baltimore: A Case Study of Failed Government

In case anyone was wondering how such failures as Mayor Stephanie Rawlings-Blake can continue to get reelected in Baltimore, yesterday's Wall Street Journal has the answer.  In a piece titled, "How Property Taxes and the 'Curley Effect' are Killing Baltimore," two economics professors offer a trenchant explanation of the circuitous cycle of failed statism and electoral politics in cities like Baltimore.  Of course, Baltimore is the paradigm for such corrupt and odious leadership:

Away from the waterfront, this strategy's failure is apparent. The city has lost 30,000 residents and 53,000 jobs since 2000, marking the sixth consecutive decade of population and employment exodus. About 47,000 abandoned houses crumble while residents suffer a homicide rate higher than any large city except Detroit. The poverty rate is 50% above the national average.
Much of this decline is a result of the city's exorbitant property-tax rates, which are twice as high as any other jurisdiction in Maryland and Washington, D.C. The encouraging news is that all four major mayoral candidates are promising property-tax relief. [...]

In modern Baltimore, the machine has exploited class divisions, not ethnic ones. Officials raised property taxes 21 times between 1950 and 1985, channeling the proceeds to favored voting blocs and causing many homeowners and entrepreneurs—disproportionately Republicans—to flee. It was brilliant politics, as Democrats now enjoy an eight-to-one voter registration advantage and no Republican has been elected mayor in 48 years.

Be sure to read the full article here.

$500,000 of Green for Green Jobs, Red for the Rest of Us

It certainly pays to go green.  Well, at least until the greenbacks stop flowing – and bankruptcy kicks in.

Last year, the Competitive Enterprise Institute’s Chris Horner estimated that the $30 billion green handout in the stimulus bill cost taxpayers roughly $475,000 per job created.  According to the Wall Street Journal, that’s quadruple the cost of creating a job in a nonsubsidized private firm.  It turns out that Horner was right on the money, even for non-energy related “green” jobs.

Yesterday, Fox News reported on the results of a tree planting stimulus program in Nevada – and it’s not pretty:

In 2009, the U.S. Forest Service awarded $490,000 of stimulus money to Nevada’s Clark County Urban Forestry Revitalization Project, aimed at revitalizing urban neighborhoods in the county with trees, plants, and green-industry training.
According to Recovery.gov, the U.S. government’s official website related to Recovery Act spending, the project created 1.72 permanent jobs.  In addition, the Nevada state Division of Forestry reported the federal grant generated one full-time temporary job and 11 short-term project-oriented jobs.

Supporters of the program claim that there was an unspecified amount of jobs created from “Spanish-language training for Hispanics in the landscaping and tree care industry.”  After all, these are probably jobs that Americans won’t do anyway.

It's Official: You Must be an Eco-Socialist to Graduate in Maryland

Getting control of school boards before they groom the next generation of Democrats and green parasites

It's not like Maryland Democrats haven't worked assiduously to earn the distinction of 'least free state in the country' for their beloved Free State.

Maryland high school students will now be required to pass green proficiency requirements in order to graduate.  The Maryland state board of education will  require public schools within the state to weave in eco-socialist propaganda to the general science curriculum.  Sadly, due to flaccid opposition and complacency on the part of all of us, public schools across the country have already been doing this for quite some time.  Maryland is merely the first state to consummate those requirements as part of the "official curriculum."  The Baltimore Sun reports:

State officials and environmental activists called the vote "historic" and said Maryland has become the first state in the nation to require environmental literacy to graduate from high school. Under the rule, public schools will be required to work lessons about conservation, smart growth and the health of our natural world into their core subjects like science and social studies.

The requirement applies to students entering high school this fall.  Local school systems will be able to shape those lessons to be relevant to their communities, but all will have to meet standards set by the state. School systems will have to report to the state every five years on what they're doing to meet the requirements. 

Somehow I don't think the 'environmental literacy' science courses will include the best hits from Climategate.  Will they present these impressionable minds with dissenting opinions within the meteorological field?  Does anyone think the social studies courses will teach them about the trail of green corporate cronyism between the government and the likes of Jeff Immelt or Al Gore?  Or, will they teach Al Gore's science of population control instead?

Let's Nail Democrats on Their Duplicity with Energy Subsidies

Close down the DOE and eliminate all energy 'tax cuts' for the (green) rich in one great big compromise.

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."~ President Ronald Reagan

Democrats (and the Maine Republicans ladies) are agog to demonize oil companies and punish them with punitive tax increases.  Their effort was defeat yesterday 52-48, but they plan to continue wasting time on it today.  Aside for the fact that a punitive tax is unconstitutional, and a tax originating in the Senate is...also unconstitutional, the Democrats are providing Republicans with the ammo to eradicate their green empire of corporate cronyism once and for all.

Harry Reid and Bob Menendez are claiming that profitable oil companies don't need subsidies, and the repeal of those tax credits, which they call subsidies, will save us $20 billion over 10 years.  Let's ignore the fact that the $4 billion annual tax credits are near universal deductions which are afforded to almost every other industry.  We'll agree to use the spurious "oil subsidies" label for the purpose of comparing similar terms.  But if they want to discuss the repeal of energy subsidies, that is a dialogue we should embrace. 

If logic dictates that we should cut subsidies to a profitable industry which delivers a product that is the lifeblood of our prosperity, shouldn't we cut the billions in subsidies to industries that produce ineffectual energy that barely registers on our energy consumption map?  If it is condign to eliminate $4 billion in tax credits for an industry that brings in hundreds of billions in taxes and royalties, shouldn't we eliminate the subsidies for wind, solar, and ethanol, which are a net loss for the treasury and consumer alike?

Instead of Senate Republicans introducing harmful amendments which accept the Democrats' premise and mandate onerous drilling regulations and liabilities, they should utilize Democrats' hypocrisy and offer real consequential amendments.  In that spirit,  I propose a quintessential Washington style compromise and call for the Bipartisan Comprehensive Energy Reform Act of 2011.  It would end all tax credits for the oil and gas industry.  But, you know what?  It would eliminate all subsidies, mandates, and (or) tariffs for wind, solar, and ethanol (incorporating the goals of Mike Pompeo's H.Res. 267).  In addition, it would completely abolish the Department of Energy (DOE), along with the ethanol programs at the USDA.  How's that for a compromise?

Time to End Fed's Dual Mandate of Destruction

Let's pin the inflation tail on the big government/big Wall Street donkey.

Recent economic reports of Obamanomics have shown dismal GDP growth, rising jobless claims, an anemic dollar, and soaring inflation; all indications of stagflation.  There are two components to stagflation; high unemployment and high inflation.  The unemployment, along with the weak economic growth, is due in large part to Obama's Keynesian fiscal policy of overtaxing, overspending, over-subsidizing, and over-regulating.  While the profligate spending and corporate welfare are also responsible in part for inflation and the devaluation of the dollar, the major culprit is Obama's Keynesian monetary policy of near-zero interest rates and printing money (QE I and II). 

Both reckless spheres of Keynesian economics are supported by corporate cronies on Wall Street who benefit from true "handouts to the rich" to the determent of the rest of us through price-hiking market distortions.  Unfortunately, there is no single silver bullet to ending the cumbersome socialist fiscal policy (although, a spending amendment would go a long way).  The pernicious monetary policy, however, can be eliminated through one act of Congress; ending the Federal Reserve's mandate to control the economy (H.R. 245-Mike Pence).

In 1977, Congress vested the Federal Reserve with a dual mandate of stimulating the economy and job growth in addition to keeping a stable currency.  This has allowed the Fed to become a fourth branch of government by initiating its own stimulus policies of printing money.  These stimulus policies exacerbate the fiscal stimuli of the other branches of government by devaluing the remaining dollars that we own (non-borrowed money).

Hence, as much as Obama's trillions in stimulus and bailouts have bankrupted the country, Ben Bernanke's $600 billion monetary stimulus has attenuated the value of our remaining savings and spiked the cost of vital commodities across the world.  Additionally, their rash intervention in the credit market was one of the big culprits of the housing crisis.  Thus, while the Fed seeks to achieve a dual mandate of low unemployment and low inflation, they are ultimately inimical to both goals.  It's time for House leadership to bring Mike Pence's H.R. 245 to a floor vote and end the Fed's overreach into our economy.

Liberal Economics: Drive up Cost of Food on Poor, While Benefiting Corporate Donors

The Democrats have thrived in public office since FDR by cementing their power through the perpetuation of government and subsidization of poverty.  Pick an industry and the name of the game is the same.  They blow up the private sector through any mix of taxation, regulation, and litigation.  Then, as jobs are cut and the cost of the good or service of that industry skyrockets, the liberals swoop in with more government solutions to solve problems incurred by the original governmental intervention.  Worse, these programs usually benefit their corporate friends who remit some of their new-found cash to Democrat reelection committees.

There is no better illustration of the fatuous cycle of government than the Democrat's food policy.  They have artificially inflated the cost of food through ethanol mandates, environmental regulations, and new FDA regulations.  In addition, their constriction of oil drilling, refinery constructing, nuclear power, and coal extraction, has had a residual effect on the cost of food transportation.  Now that these regressive policies from the progressives have come home to roost, and people cannot afford the gratuitously high cost of food, they are waiting at the door with handouts.

According to the latest data released by the USDA,  an additional 289,737 people were added to the food stamp program during October 2010, the first month of FY 2011.  That is roughly a 14% increase in enrollment and costs of the program on a year-over-year basis.  There are now a record 43,200,878 people and 20,183,148 households enrolled in the program which costs us almost $5.8 billion annually.  At this rate, the food stamp program will cost taxpayers at least $70 billion for FY 2011, and will likely increase as enrollment in the program continues to skyrocket.