Free Markets, Free People

Daily Archives: August 17, 2011

The truth about government energy subsidies

The truth, unlike the common wisdom or at least the Democrat narrative, is that far and away the bulk of the $37 billion in government energy subsidies goes to “renewable” energy sources, not evil oil and gas corporations. The $37 billion is $19 billion more than was spent in 2007 in government subsidies, a 50% increase in spending.

It was a feature of the Obama administration’s recent narrative that government was subsidizing rich oil and gas companies and that should stop.  Never mentioned, of course, were where other subsidies were going.  For example:

Of that $19 billion increase, additional subsidies for renewables amounted to more than $9 billion, a 186 percent increase. Subsidies for renewables now total $14.7 billion.

Wind power was the biggest recipient of federal energy dollars. Last year, this sector took in almost $5 billion in subsidies – a more-than-tenfold increase from 2007. Meanwhile, solar energy subsidies increased six times over the same period, from $179 million to $1.13 billion. And biofuels (think ethanol) saw a jump from $4 billion to $6.6 billion.

Any idea what we’ve bought for that money?

Take wind power. Today, it represents a paltry 1.2 percent of total domestic energy production. Yes, that’s up from 0.5 percent in 2007. But only after spending billions in taxpayer resources.

What’s more, wind power is expected to fall well short of some key growth goals set by the Obama administration. The Department of Energy has officially declared it wants 20 percent of the energy market comprised of wind by 2030.

Currently, there are about 40,000 wind megawatts online in America. Meeting the Department’s target on time would require creating 13,000 new megawatts of wind energy every year — twice the growth notched by the industry last year, which was an all-time high. And warnings of a major contraction ahead have already been sounded by the American Wind Energy Association.

A classic example of government trying to pick winners and losers, or, in more succinct terms distorting the market.  Instead of letting the market decide what is viable, government hopes to force it.  And, predictably, the results are not good.

As for the evil oil and gas companies.  Well the Democrats try to sell them as the ones sucking down all the subsidy dollars and not paying their “fair share”.  The truth, of course, is almost the opposite:

Plenty of politicians, mostly Democrats, have advertised that eradicating federal dollars for oil and natural gas as a budget panacea.

The EIA [Energy Information Administration – part of DOE] study shows that these critics have fingered the wrong energies. Researchers report that last year, oil, natural gas, and coal received a total of 11 percent of all federal energy subsidies. And most of those oil and natural gas “subsidies” are typical deductions, deferrals, and credits that all businesses take.

In fact, as a share of net income, the oil and gas industry paid 41.1 percent in federal income taxes last year, compared to 26.5 percent for all non-oil and gas S&P 500 manufacturing companies. Meanwhile, oil and gas account for 78 percent of domestic energy production and are responsible for more than 9.2 million American jobs.

The myths, however, continue to persist.  On sector promises jobs and a new source of energy and is essentially a subsidy sink hole.  The other accounts for over 9 million jobs and actually provides the vast bulk of energy the country uses.  Guess which one is constantly under fire from the left?

~McQ

Twitter: @McQandO

Whining in Iowa–Obama complains about criticism

The first thing I have to wonder is where Obama was during the George W. Bush era if he thinks the criticism he’s getting now is bad.  In Iowa yesterday, Obama complained that he took more criticism than Abe Lincoln.  A presidential scholar says that is laughingly absurd.  Actually Alvin Felzenberg  said it “is hysterical … that is really laughable in many respects.”

Why?  Because what was said about Lincoln by the opposition is still unprintable today. 

But as mentioned, the tone and rhetoric deployed against Obama doesn’t begin to reach the vitriolic level that was leveled at Bush 43.  And certainly not Lincoln. 

The exchange in which the comment came out was during a little town hall pity party:

“The Congress doesn’t seem to be a good partner. You said so yourself, they’re more interested in seeing you lose than [seeing] the country win,” the questioner lamented.

“Democracy is always a messy business in a big country like this,” Obama responded. “When you listen to what the federalists said about the anti-federalists … those guys were tough. Lincoln, they used to talk about him almost as bad as they talk about me.”

Obama’s always been sensitive to criticism.  To the point of assuming the Presidency, he’d heard little of it, having essentially spent his life teaching, doing community organization and running for office.  Suddenly, he’s in charge and under fire.   And, given his record – something until this point he’s never had – the criticism is both warranted and mostly on-target. 

Obama’s sensitivity to criticism is bound up with his progressive ideology, which sees political disputes as best resolved by experts, said Michael Franc, vice president for government studies at the Heritage Foundation. Obama believes “he has discovered the truth and if you disagree with him, it’s not only against the country, its unpatriotic and anti-Obama,” Franc suggested.

Eric Dezenhall, a former communications aide to President Ronald Reagan, went ever further in an interview with The Daily Caller: Obama’s complaint, he said, “is more grandiose than narcissistic … It’s equating any form of push-back with some sort of giant historical crime.”

Thus the comparison with Lincoln who was president during an incredibly tough era, even compared to this one.  And while he won’t say it, it seems clear that Obama and his supporters do indeed think that criticizing him is “against the country…unpatriotic and anti-Obama.  This is a guy who walked into office having done nothing and was awarded the Nobel Peace Prize.   As was clear, he felt it was his due.  Now after almost 3 years and an obviously failing presidency, he’s beginning to whine about criticism and acting as if it is unwarranted.

One thing is for sure, given the economic, fiscal and unemployment situation in this country, the criticism isn’t going to lessen.  He signed up for the big-boy job and now he has it.  Let’s see if he can actually manage to act like a big-boy and quit whining about criticism.

~McQ

Twitter: @McQandO

Poll places Perry in “front runner” spot

Anyone surprised by this, given the pre-Perry GOP field, must have been living under a rock or just not paying attention.  While there were small segments of the right delighted with at least one of the candidates, it appears that on the whole, most of the GOP faithful weren’t at all excited about any of them.   Enter Texas governor Rick Perry and boom, we have a new front runner, according to Rasmussen:

The latest Rasmussen Reports national telephone survey of Likely Republican Primary voters, taken Monday night, finds Perry with 29% support. Romney, the former Massachusetts governor who ran unsuccessfully for the GOP presidential nomination in 2008, earns 18% of the vote, while Bachmann, the Minnesota congresswoman who won the high-profile Ames Straw Poll in Iowa on Saturday, picks up 13%.

Texas Congressman Ron Paul, who was a close second to Bachmann on Saturday, has the support of nine percent (9%) of Likely Primary Voters, followed by Georgia businessman Herman Cain at six percent (6%) and former House Speaker Newt Gingrich with five percent (5%). Rick Santorum, former U.S. senator from Pennsylvania, and ex-Utah Governor Jon Huntsman each get one percent (1%) support, while Michigan Congressman Thaddeus McCotter comes in statistically at zero.

Sixteen percent (16%) of primary voters remain undecided.

Naturally, as we’ve seen over the past day or two, all the fire from the left has lifted and shifted to Perry.  A quick perusal of memeorandum and the top stories are all about Perry.  One of the things we’ve already seen is the left is desperately sure it must refute the success of the Texas economy lest it be favorably compared to the mess Obama has made and thus put another Republican Texan in the White House.  I’m not sure the loony left could survive that.

Conn Carroll reviews the Democrats emerging arguments – perhaps claims is a better word – about Texas as penned by Matthias Shapiro of 10,000 pennies fame:

Texas Liberal Myth #1: Texas’ 8.2 percent unemployment is hardly exceptional – Texas is adding jobs at a rate faster than any state at 2.2 percent. But the state’s unemployment rate is 8.2 percent, which is higher than blue states like Massachusetts and New York. How is this possible? Easy, Texas’ population is growing much faster than any other state. They have added 739,000 residents since the recession began. If Texas had the same population at the beginning of the recession that they do know, its unemployment rate would be 2.3%.

Texas Liberal Myth #2: Texas has only created low-paying jobs – Texas median hourly wage is $15.14 which is actually slightly below the median (28th out of 51 regions). But wages in Texas have actually increased in Texas since the recession began. In fact, since the recession started hourly wages in Texas have increased at a 6th fastest pace in the nation.

Texas Liberal Myth #3: Texas wouldn’t be leading in job creation without the oil industry – Energy has been a major source of job growth in Texas. In the last year, 25 percent of all job growth has come from the energy sector (which includes all natural gas, coal, and electricity generation). But even if you remove all of Texas’ energy-job growth, it would still lead the nation in job creation.

So, new week, new front runner, same old fact free attacks.  

Aren’t you glad Obama changed politics as we know them?

~McQ

Twitter: @McQandO