It’s been interesting watching the commentary about the British electorate’s choice to Leave the European Union. In many ways it reflects the pre-Brexit arguments of the Remain camp, which was essentially that all right-thinking people should vote remain and that those who didn’t were just racists and nationalists. That sort of analysis has even leaked into supposedly non-political outlets like Jalopnik, one of whose stories about Boris Johnson’s checkered career as an automotive journalist began with this:
Boris Johnson, the flop-haired ex-mayor of London, has been an outspoken supporter of Brexit, or however you call the thing where old scared racist people in the UK want to keep brown people out of their country and think that ditching the shitshow that is the EU is going to help them with that.
Well, there you go. A perfectly condescending dismissal of any idea that leaving the European Union had any intellectual support at all.
Less blunt was the New York Times, who began an article about the residents of Sunderland, a strongly Labour constituency in northern England that voted overwhelmingly for Leave, thusly:
Sunderland stunned the country when voters overwhelmingly opted to leave Europe in Thursday’s referendum, by 61 percent to 39 percent. It was a far higher vote for Britain’s exit than pollsters had predicted, and it was the first sign that Prime Minister David Cameron’s gamble on staying in the bloc had lost.
Sunderland’s citizens seem to have voted against their own interests. Not only has the city been a big recipient of European money, it is also the home of a Nissan car factory, Britain’s largest, and automobiles produced there are exported, duty free, to Europe.
The citizens of Sunderland seemed not to have been impressed by this or other advantages, such as:
They can swim at the Sunderland Aquatic Center, a £20 million project with an Olympic-size pool that the European Union helped finance. They can send their children to the sleek, modern Sunderland University campus, which also received union financing.
European Union money also helped establish Sunderland Software City, a business center that offers support and advice to aspiring software entrepreneurs.
Sounds great, except…
However splashy these projects may be, they remain largely inaccessible to Sunderland’s working class. Many cannot afford the £30 monthly fees at the Aquatic Center, and people in the nearby Washington neighborhood said they had never set foot inside.
As for Sunderland University, the tuition, which the government recently raised, is too much for many young people.
The article goes on to note that Sunderland has one of the highest unemployment rates in the UK.
So, how is voting Leave a vote against their interests? Well, let’s hand wave our way past that question, which, really, no right-thinking person would ask.
No, on second thought, let’s not, though to properly unpack this, we have to consider many things.
There’s a growing sense, not only in Great Britain, but in the US as well, that the elites, or the political class, or whatever you’d like to call them, are incompetent and have been leading us astray. And the response from elites is to call those criticisms illegitimate. Those doing the carping are assumed to be racists or nationalists, both of which, of course, are unpleasant, dirty types of people. Both the UK’s Leavers and the US’s Trumpers share some commonalities. Among them are skepticism over free trade and free immigration; concerns that elites dismiss as foolish and uneducated. And, of course racist.
But perhaps the Leavers weren’t so concerned with brown people because they were brown, but because they were concerned at seeing buses being blown up in London, British soldiers being beheaded in broad daylight in the High Street, and dozens of children being raped for years in Rotherham. Perhaps, the British people have come to wonder about immigration because many immigrants seem less interested in becoming British than they are in making Britain more like the Middle East. And, maybe, just maybe, the Leavers prefer to live in Britain, in the free and modern culture that has developed over the last 1,500 years, rather than go back to live in the year 692. Maybe they wouldn’t be any more interested in living in the 13th-century culture of Richard the Lion-Hearted any more than they are in living in the Dark Age culture of Middle Eastern immigrants.
When people come into your country from elsewhere, they don’t do so simply as fungible economic units, but as real people, who bring along cultural and political ideas that may conflict those that are traditional in your country. It is almost at the point where elites cannot even conceive of an argument that implies the superiority of one culture over another, so they dismiss this argument as nationalism and nativism. But, the thing is, a free society that continually imports immigrants who have no interest in individual liberty, religious freedom, and political pluralism, will eventually have none of those things. The problem isn’t race. It’s culture.
National sovereignty means something. At the very least, it means that the people of a country have the absolute right to restrict immigration to the sort of people that will, in their judgement, benefit the country, and, once the immigrants arrive, to force them to assimilate to the country’s national culture more than the country accommodates the culture of the immigrant. No obligation exists, in any sense whatsoever, that requires the people of a country to allow entry to immigrants who desire to transform the country into something different. It is entirely legitimate to reject calls for sharia in the UK, just as it’s entirely legitimate to be upset by seeing political protestors in the US waving Mexican flags or wearing “Make America Mexico Again” hats, explicitly letting us know where their primary political allegiance lies. Nor is it illegitimate to wonder why such people are in this country, and not in the corrupt shithole of a country that they so obviously prefer, yet so oddly fled.
Even on an economic level, questions of culture and country aside, people know whether they are better off today than they were 20 years ago. That’s true whether you’re an unemployed shipbuilder in Sunderland, or a textile worker in North Carolina, where about 650 textile plants closed between 1997 and 2009. A carpenter in Norwalk, CA, where low wages due to nearly uncontrolled immigration from Mexico and points south have made it impossible to raise a family on a tradesman’s salary, can see it happening, just as a plumber in Lincolnshire can see his wages drop as an influx of Polish tradesmen pour in.
One of the interesting demographic results of the Brexit vote was that people over 50 years of age were overwhelmingly in favor of Leave, while people under 30 just as keenly supported Remain. The standard explanation, as Jalopnik presented it, is simply that older people are reflexively racist against “the brown people”. Conversely, I submit that the older people have a breadth of perspective that enables them to judge what the country was like prior to submitting to the EU, compare it to the country’s situation today, and determine whether the result is an improvement. They’ve seen industry leave the north of England and an influx of immigrants who either don’t seem all that interested in becoming British or whose arrival has depressed wages for working people. Apparently, they’ve decided that’s not the Britain they were promised in 1975 or the one they want to leave to their children. Perhaps their children disagree, but those children have never had the opportunity to learn that things could be different. Indeed, they’ve been constantly taught the opposite by an education system and popular culture that characterizes Euroskepticism, as well as skepticism about free trade and unrestricted immigration, as aberrant and racist.
Now, it may be true that free trade is a net benefit. But even in the best of circumstances, such as assuming that NAFTA and the WTO are actually free trade agreements—a dubious assumption1—the benefits of free trade are widespread and diffuse, while the closure of textile plants and steel mills leave highly visible victims and long-term job losses for certain communities. That’s a political problem, not an economic one, and it’s one that elites haven’t addressed well. As a result, it’s biting them in the ass, whether it’s an unexpected Leave win for Brexit or an unexpected presidential nomination for Donald Trump. Remember, the Leave vote won even in the traditionally Labour-voting constituencies of northern England. Either working people don’t understand what’s going on in their own lives, or the promises of the elites haven’t been born out by their actual experience. Which is more likely?
But let’s go even further. Even if you could prove that, on balance, free trade is an unquestionable economic benefit, people might still prefer to be measurably poorer if that’s the price that must be paid to maintain their traditional social and political cultures. (This has even more relevance in the case of the EU, because the EU actually has power. Imagine if NAFTA had an unelected Commission in Ottowa or Mexico City that could impose laws on the United States.) Perhaps people don’t regard their economic interests as important as their national or cultural interests. It doesn’t matter what elite opinion thinks the people’s most important interests are. In a democratic society, ultimately, it only matters what the people think they are. People get to determine their own priorities, and not have them dictated by elites. The people get to answer for themselves the question, “In what kind of country do I want to live?”
Of course, I would argue that we don’t have truly free trade or, increasingly, a free economy in the United States. The Progressives always look at the rising income inequality and maintain that it’s the inevitable result of capitalism. That’s hogwash, of course, and Proggies believe it because they’re dolts. But the problem in this country isn’t free trade—we have precious little of it—or unrestricted capitalism, since we have precious little of that as well. The issue behind rising income inequality isn’t capitalism, it’s cronyism. Income isn’t being redirected to the 1% because capitalism has failed, it’s happening because we abandoned capitalism in favor of the regulatory crony state and its de facto collusion between big business/banking interests and a government that directs capital to favored political clients, who become “too big to fail”. It doesn’t matter, for instance, whether the president is a Democrat or Republican, because we know the Treasury Secretary will be a former—and future—Goldman Sachs executive.
Indeed, what we call “free trade” nowadays isn’t the Theory of Comparative Advantage in action. It’s corporations being allowed to ship jobs to low wage countries overseas to offset the cost of regulatory burdens in the US that restrict competition from new entrants to the market. That works great for large corporations. Not only do they get to offset the regulatory costs by overseas production, but slower job growth in the US flattens domestic wages, too, and sends millions out of the labor force altogether. For working people, the biggest financial rewards from the current “free trade” regime seem mainly reaped by large business and banking interests. Again, people know if their own lives are better or worse than they used to be, and if the promises of elites have been born out by their own experience.
The game is increasingly stacked against small business. We’ve made it harder and harder for working people to start or stay in business, restricted their access to finance and capital, and forced them to knuckle under to onerous regulatory burdens. Even with flat middle class wages keeping labor costs in check, the regulatory burden restricts small business formation. As a result, working people have begun begin to feel trapped. They see no way to improve their lives and they can see their own incomes stagnating—as middle class incomes have, in fact, been stagnating for at least 20 years.
Add to that the additional downward wage pressure that everyone agrees is the inevitable result of increasing the supply of labor through large-scale immigration. Then top it off with immigrants refusing to assimilate to culture of the host country in seemingly greater numbers. Now you have all of the necessary elements for a political revolt by the people the elite see as the rubes and hayseeds in flyover country. Rather than foreseeing and trying to ameliorate the results of these trends, the elite have chosen to ignore them at very least, or dismiss them with contempt at worst.
Most people, most of the time, are perfectly happy to let elites run the country. After all, it seems to make the elites happy to run run things, and as long as they’re reasonably competent at it, and do it reasonably unobtrusively, no one much seems to care. But when elite competence is compromised by faulty ideology and cronyism, people become unhappy. And when the elite response to complaints is dismissal or insult, political problems begin to bloom. People begin to think about politics. They begin to do things. It is no coincidence, as our Soviet friends used to say, that the last decade has seen the rise of the TEA Party, the Occupy Movement, and the Trump phenomenon. People of all political stripes are becoming unhappy.
I think we’re about to watch the elites start paying a price for their incompetence, inattention and contempt. Euroskepticism is on the rise elsewhere in Europe. If EU membership were put to a popular vote in the Netherlands, Spain, or Sweden, there is a good chance that Leave would win there, too. Indeed, it’s possible that a vote to leave the EU might even win in France, the nation for whom creating and strengthening the EU has been the primary policy goal for 60 years.
Perhaps the “Vote Remain, you virulent racist!” PR campaign for staying in the EU needs a bit more thought.
So, too, does the idea that Donald Trump supporters are all rubes and hayseeds. However much we might dislike the messenger, and Trump is certainly dislikable, and however slim his personal characteristics make his chance of winning the current election, the fact is that his message has gained much more ground than most thought possible a year ago. The key elements of that message are the same ones that resulted in a Leave vote in the UK. In the hands of a more astute politician, how much more effective would that message be?
I leave it to you to ponder the answer to that question.
1 By the way, free trade doesn’t require agreements and treaties. It just requires that government not interfere with trade. If there’s a treaty involved, you can be virtually certain that some industry is being protected.
The “this”? Keystone XL pipeline. Why is the president at all involved in this decision? Why is he threatening a veto if the Republican Congress passes a bill authorizing it?
The nation’s pipelines are a transportation system. Pipelines enable the safe movement of extraordinary quantities of energy products to industry and consumers, literally fueling our economy and way of life. The arteries of the Nation’s energy infrastructure, as well as one of the safest and least costly ways to transport energy products, our oil and gas pipelines provide the resources needed for national defense, heat and cool our homes, generate power for business and fuel an unparalleled transportation system.
The nation’s more than 2.6 million miles of pipelines safely deliver trillions of cubic feet of natural gas and hundreds of billions of ton/miles of liquid petroleum products each year. They are essential: the volumes of energy products they move are well beyond the capacity of other forms of transportation. It would take a constant line of tanker trucks, about 750 per day, loading up and moving out every two minutes, 24 hours a day, seven days a week, to move the volume of even a modest pipeline. The railroad-equivalent of this single pipeline would be a train of 75 2,000-barrel tank rail cars everyday.
Pipeline systems are the safest means to move these products.
The source? The Pipeline and Hazardous Materials Safety Administration of the Department of Transportation. Yes, that’s right, the US government. Executive branch.
Note the facts – 2.6 million miles of pipeline safely moving petroleum products 24/7. Look at would be required without them.
Oh, wait, look what’s required without Keystone – trucking and railcars, of course. And who has a major stake in those operations continuing? You know how this works … follow the money.
Can you say “cronyism”?
Sure you can.
The most “transparent administration”, ever!
Btw, GOP … make his veto it or forever be held as the cowards most think you are (after all, you didn’t even have the courage to dump Boehner).
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This week, Bruce, Michael and Dale talk about Tesla, Ukraine, and the missing Malaysian airliner.
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This on-line debacle that’s so embarrassed the Democrats and the Obama administration? It is likely the result of blatant cronyism. The inept hiring the incompetent:
A tech firm linked to a campaign-donor crony of President Obama not only got the job to help build the federal health-insurance Web site — but also is getting paid to fix it.
Anthony Welters, a top campaign bundler for Obama and frequent White House guest, is the executive vice president of UnitedHealth Group, which owns the software company now at the center of the ObamaCare Web-site fiasco.
UnitedHealth Group subsidiary Quality Software Services Inc. (QSSI), which built the data hub for the ObamaCare system, has been named the new general contractor in charge of repairing the glitch-plagued HealthCare.gov.
Welters and his wife, Beatrice, have shoveled piles of cash into Obama’s campaign coffers and apparently reaped the rewards.
Beatrice Welters bundled donations totaling between $200,000 and $500,000 for Obama’s campaign during the 2008 election cycle, according to campaign- finance data compiled by Center for Responsive Politics.
Well, how sweet is that? Give a little, get a lot! And while this certainly isn’t the first administration or political party to practice cronyism, it certainly is the most open about it. One would almost think they believe that they are entitled. A spoils system of sorts.
UnitedHealth Group is one of the largest health-insurance companies in the country and spent millions lobbying for ObamaCare.
The insurance giant’s purchase of QSSI in 2012 raised eyebrows on Capitol Hill, but the tech firm nevertheless kept the job of building the data hub for the ObamaCare Web site where consumers buy the new mandatory health- insurance plans.
QSSI has been paid an estimated $150 million so far, but officials couldn’t say how much more the company might collect on the repair contract.
Whatever happened to the belief that there should be a distance between politics and business? Once, it was a point of integrity to ensure there was no shadow or hint of a possible conflict of interest?
Now? Just line up at the trough, those that gave the most get the most. As for the work? Just like every other government program (except health care), they’ll be glad to overpay for shoddy work.
And here we are.
“I’m extraordinarily frustrated,” said Sen. Jeff Merkley (D-Ore.) after top Obama-administration officials gave Senate Democrats a private briefing on the state of the Web-site repairs.
He said they were losing confidence the site could be quickly fixed.
“I don’t think there’s confidence by anyone in the room. This is more of a show-me moment,” said Merkley.
I don’t think there’s confidence by anyone in the country – except, of course, the “true believers”.
Pretty much everybody knows Obamacare is a disaster. I mean, everybody who has an ounce of sense. Obviously, that excludes a lot of rank and file Lefty Democrats who think Obamacare is actually a fix or a cure for something, but most of those people are simple dolts anyway. But, apparently there’s plenty of agreement on both sides of the Congressional aisles that Obamacare is an unworkable albatross. How do we know this? Because Democrats and Republicans are negotiating some way to exempt Congress from Obamacare.
Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.
The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides…
The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer — in this case, the federal government. If not, aides and lawmakers in both parties fear that staffers — especially low-paid junior aides — could be hit with thousands of dollars in new health care costs, prompting them to seek jobs elsewhere. Older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty.
Plus, lawmakers — especially those with long careers in public service and smaller bank accounts — are also concerned about the hit to their own wallets.
In other words, unless they can exempt themselves from Obamacare’s exchange requirements, health costs for the Congressional employees will rise so much that they won’t be able to afford it.
So, both Democrats and Republicans clearly realize that Obamacare, if implemented in Congress, will kill jobs and raise health insurance costs. Is their solution to repeal Obamacare and save the rest of the country that same burden? No. Of course not. Their solution is to see how they can exempt themselves from the law. The rest of us, who have to live with it? Tough cookies, proles. Health care costs money. Deal with it.
I guess my only question is, why are we not not dragging members of Congress—of both parties—naked and screaming from their offices for a good tar and feathering?
The Republicans may make pleasant mouth noises about repealing Obamacare, but they will never do it. Even if they passed a bill, it’d die in the Senate or get vetoed by the President. So, knowing that, their fallback position is, "Well, let’s at least see if we can get ourselves exempted from it."
Both parties in Congress know Obamacare is an unworkable, unaffordable disaster, and their response is to just give a big "F you" to the American people. And, as far as I can see, the American people are just…gonna take it, tug their forelocks, and say, "As you wish, m’lud." As far as I can tell, the majority of Congress is composed of people so stupid it’s a wonder that they can think clearly enough to walk erect. And yet we keep electing them, and doing what they tell us to do. That idiot from Georgia, for example, who complained in a Congressional hearing that if we send too many marines to Guam the island will tip over and capsize…he got re-elected by his idiot constituency.
We really do deserve the total crapstorm that’s headed our way.
At least temporarily. You may remember when we pointed our the story of the monks in Louisiana who were making coffins and the state was moving to stop them. Under Louisiana law, a place must be a “licensed funeral establishment” in which only “licensed funeral directors” may sell “funeral merchandise”.
Now everyone knows that around here we equate choice with freedom. And, what the state of Louisiana had done, at the behest of the The Louisiana State Board of Embalmers and Funeral Directors is place a restriction that set the bar to entry into the “funeral merchandise” business at a place where it essentially barred entry to anyone who wasn’t a licensed member of that guild. And, of course, the The Louisiana State Board of Embalmers and Funeral Directors controlled who did or didn’t get licensed.
So when the good brothers at St. Joseph Abbey began making hand crafted wooden coffins and selling them, they were in direct violation of the law the board had helped craft. More importantly, they were in competition with the carefully crafted state granted monopoly these people enjoyed.
They were told that the only choice they had was to do the following if they wanted to sell their caskets:
[They] must either give up the casket-selling business or become a licensed funeral establishment, which would require a layout parlor for 30 people, a display area for the coffins, the employment of a licensed funeral director and an embalming room.
That’s even though they only desired to make coffins.
When they refused, the board threatened.
[T]he Louisiana Board of Embalmers and Funeral Directors sent the monks a cease-and-desist letter, threatening thousands of dollars in fines and up to 180 days in prison based on a law prohibiting the sale of coffins without a funeral director’s license.
And then sued.
In July of last year, a Federal judge ruled in the Abbey’s favor, as we reported.
The monks won round one in July, when U.S. District Judge Stanwood R. Duval Jr. ruled Louisiana’s restrictions unconstitutional, saying “the sole reason for these laws is the economic protection of the funeral industry.”
So now the 5th Circuit has ruled and guess what? The monks have won again. And the 5th was not at all kind to the State Board or the state of Louisiana in its ruling:
In a sometimes harshly worded ruling, a panel of federal appellate judges Tuesday evening smacked down the Louisiana funeral board’s continued attempts to prevent the St. Joseph Abbey monks from selling their hand-crafted caskets. “The great deference due state economic regulation (does not require) courts to accept nonsensical explanations for naked transfers of wealth,” wrote Judges Patrick Higginbotham, Catharina Haynes and Stephen A. Higginson of the 5th U.S. Circuit Court of Appeals in New Orleans. “We insist that Louisiana’s rules not be irrational.”
The appellate judges sent the case to the Louisiana Supreme Court, refusing to consider the funeral board’s appeal of a previous court’s ruling that found it unconstitutional for the state to give funeral directors exclusive rights to sell caskets.
“Simply put, there is nothing in the licensing procedures that bestows any benefit to the public in the context of the retail sale of caskets,” U.S. District Court Judge Stanwood R. Duval Jr. ruled in July 2011. “The license has no bearing on the manufacturing and sale of coffins. It appears that the sole reason for these laws is the economic protection of the funeral industry,” which he wrote is not “a valid government interest.”
Of course, there’s no telling what the LA Supreme Court will do. However until then, the monks are free to sell their significantly less costly caskets in Louisiana without having to clear the high bar of entry set by the crony state.
Oh, and here’s the irony and another reason the court found for the monks:
“To be sure, Louisiana does not regulate the use of a casket, container, or other enclosure for the burial remains; has no requirements for the construction or design of caskets; and does not require that caskets be sealed,” according to the court. “Individuals may construct their own caskets for funerals in Louisiana or purchase caskets from out-of-state suppliers via the internet. Indeed, no Louisiana law even requires a person to be buried in a casket.”
As plain and transparent state enforced cronyism as one can find. There are certainly more, as we all know, and they’re practiced by all levels of government. But all of them, each and every one of them, should be identified, challenged and dismantled – root and branch. Government has no business using its force and power to protect businesses from competition because doing so limits choice and thereby limits its citizen’s freedom.
Cronyism has no place in a free society.
Note the capitalized word in the title?
President Obama is campaigning as a champion of the oil and gas boom he’s had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department’s little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.
The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the “energy needs of the nation.” Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four potential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.
Why? Because Ken Salazar in his infinite wisdom, knows more about all of this that you proles, especially the proles in Alaska. The excuse?
Interior Secretary Ken Salazar says his plan “will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives.” He added that the proposal will expand “safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that’s needed to bring supplies online.”
Got that? Restricting use of a area designated by Congress for a specific purpose, a purpose backed by the state in which the area is located, will “help industry” and expand “safe and responsible oil development”.
George Orwell, call your publisher. Time to update Newspeak. Up is now down, and restrictions now “help industry” and “expand” development.
Meanwhile in coal country:
Two coal companies in Pennsylvania blamed President Obama and his Environmental Protection Agency (EPA) for the layoffs announced last week.
“[T]he escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry,” said PBS Coals Inc. President and CEO D. Lynn Shanks in a statement on Friday, as noted by the Pittsburgh Post-Gazette. The company also cited weaker-than-normal demand for coal.
Shanks’ comment on the EPA came as he announced a 28 percent work force reduction. “PBS Coals Inc. and its affiliate company, RoxCoal Inc., laid off about 225 workers as part of an immediate idling of some deep and surface mines in Somerset County,” Post-Gazette added. “The company now employs 795 workers.”
Yes, the Obama promise to essentially put coal out of business is indeed making progress.
So wait, we have the administration restricting the oil industry in Alaska and the EPA causing layoffs in coal country, and my guess is Obama will attempt to brag about how many jobs he’s created tomorrow night. Any takers?
That said, guess who is getting “fast tracked”?
The Interior Department set aside about 285,000 acres for commercial-scale solar in Arizona, California, Colorado, Nevada, New Mexico and Utah. The federal government will offer incentives for development, help facilitate access to existing or planned electric infrastructure and ease the permitting process in the 17 zones.
“Energy from sources like wind and solar have doubled since the president took office, and with today’s milestone, we are laying a sustainable foundation to keep expanding our nation’s domestic energy resources,” Interior Secretary Ken Salazar said. …
The development program approved Friday cuts some up-front costs for developers, as the federal government already has performed National Environmental Policy Act assessments for the sites.
The administration fired the most recent volley Wednesday by affirming tariffs on Chinese imports. The Commerce Department determined Chinese solar panels were sold below fair value and that its solar businesses unfairly received direct government support.
Now for the irony:
Yes, you read that correctly — even with all of the many types of subsidies and special government treatment the solar industry receives, they still can’t compete, so the government affords the domestic industry protectionist tariffs… purportedly because China gives its own industry unfair government help.
Anyone who still thinks this isn’t the most political, inept, corrupt, ideologically driven and opaque administration in the history of this country has to have been living under a rock for a few hundred years.
This bunch makes one pine for Jimmy Carter.
From Professor Luigi Zingales:
“There is not a well-understood distinction between being pro-business and being pro-market. Businessmen like free markets until they get into a market; once they are in it they want to block entry to others. Pro-marketeers want free markets at all times. The more conservative pro-marketeers are fearful of criticising business, because they assume they will be seen as criticising the free market. But we need to stand up and criticise business when business is not helping the cause of free markets.”
We talk a lot about crony capitalism. Well what the good professor is talking about when he says that businessmen like free markets until they get in one and then they try to “block entry to others” is part of what we’re talking about.
One aspect of cronyism is where businesses attempt to use the power of government, if they can so influence it, to give their company sweetheart regulations, raise artificial barriers to entry and to otherwise impede competitors to the point that they have an advantage. I’d like to say advantage in the “market”, but the market, at that point, no longer exists as a free one. It is now a distorted market due to government cronyism.
That’s something that badly needs to stop. Whether at this point that’s even possible and if it is, how we’d actually go about it are some interesting questions to discuss.
However, the primary point is being pro-business does not necessarily being pro-market and it certainly doesn’t mean you are necessarily for free markets.
We need to change the way we discuss this. We nee to talk about free markets and roundly condemn any business that attempts to use the coercive power of government to it’s advantage in markets as well as condemning those in government who use its power for such things.
Unfortunately these stories are all too common now:
As U.S. Senate Majority Leader Harry Reid prepares to host his fifth annual National Clean Energy Summit on Aug. 7, a Nevada Journal examination of Nevada’s renewable energy sector shows that over $1.3 billion in federal funds funneled into geothermal, solar and wind projects since 2009 has yielded and is projected to yield just 288 permanent, full-time jobs.
That’s an initial cost of over $4.6 million per job.
So as the Senator from Nevada tries today to justify his profligacy in his home state at your expense via this sham “National Clean Energy Summit”, you can be assured of one thing – No one in government will be held accountable for this, at least not legally.
The performance of many of these “sons of cronyism” is as dismal as the cost per job is outrageous.
Auditors for Nevada Geothermal Power, a federally subsidized green-energy firm in Nevada, are raising questions about whether that firm is going to fail.
As of last October, Nevada Geothermal Power had 22 employees in Nevada, and, according to the New York Times, had received $145 million in federal subsidies — composed of a loan guarantee of nearly $79 million for its Blue Mountain geothermal project and at least $66 million in grants to the company itself.
The Times called the company a “politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee,” and said it “… is now facing financial turmoil.”
Today, three quarters later, the latest company audit again questions the “company’s ability to continue as a going concern.”
The firm’s survival, wrote auditors on March 31, will depend “on its available cash and its ability to continue to raise funds….”
And that’s not the only example:
The most recent “clean energy” company failure in Nevada occurred three weeks ago when Amonix, a North Las Vegas solar manufacturing plant that had received more than $20 million in federal tax credits and grants, closed after only 14 months of operation.
Hailed upon its opening by Sen. Reid, U.S. Rep. Shelley Berkley and Gov. Brian Sandoval, the 214,000-square-foot Amonix facility had, at its height, employed some 700 individuals. In 2010, even President Barack Obama praised the Amonix plant, saying the “stimulus” tax credits it received had made an “extraordinary impact.”
Today, the company is bankrupt.
The result is something out of an Orwellian nightmare and the ultimate victim? The people of Nevada:
In Nevada, consumer energy rates climb higher and higher. According to the Energy Information Administration (EIA), Nevada now has the highest residential electricity rates in the Intermountain West region.
Moreover, so long as present government policies — such as the state’s Renewable Portfolio Standard — remain in place, rates will continue upward.
While Sen. Reid helped Salazar fast-track government-approved renewable projects in 2009, he also used his influence as Senate majority leader to delay and ultimately kill a coal power plant planned for White Pine County.
Coal-powered plants produce electricity at a much lower price than do renewable-powered plants, according to the EIA and NV Energy.
Currently, NV Energy pays 3 to 5 cents per kilowatt-hour for natural gas and coal-fueled power, 8 to 10 cents per kWh for geothermal energy and for wind energy and 11 to 13 cents per kWh for solar photovoltaic energy. Wind and solar photovoltaic energy also require backup power for “intermittency issues.”
The higher costs from renewable-energy production are passed on to Nevada ratepayers in the form of residential electricity rates that are 26 percent higher than those of other Intermountain West states and 7 percent higher than the national average, says the EIA.
Obviously cronyism isn’t just limited to Democrats. It’s just their turn in the barrel because their cronyism has been such a spectacular disaster here lately.
What none of our elected officials who regularly indulge in cronyism seem to understand is that they call certain things economic principles or economic laws for a reason – they aren’t something you can ignore and expect, for some reason, to be successful in ignoring them.
In this case Richard Epstein of the Hoover Institute again states why what is again being attempted, and failing, is a lesson that the government seems never to learn:
These subsidies programs have failed for mundane but compelling reasons. No government has ever succeeded in trying to shape industrial policy with state subsidies, for the simple reason that it has neither the knowledge nor the incentives to pick which fields make sense to invest in or which firms in these fields have latched onto a viable technology.
No government should, of course, ban investments in solar and wind energy, but the prudent strategy is to let these investments be made by venture capitalists and other entrepreneurs who might actually know what they are doing. And currently, the smart money seems to be steering clear of renewable energy technologies.
And yet we continue to see these sorts of attempts by government to do something it is entirely unequipped (and unneeded) to do.
You know, act like it has better information than … markets. It never has, it never will. The results are just about as predictable as sunrise.
Failure. In some cases epic failure.
In the case of Nevada, government intrusion, at the cost of $1.3 billion of your dollars, has created a whopping 288 jobs and managed to quadruple energy costs for the state’s residents.
And yes, I put that in the epic failure column – but then we’re talking Harry Reid here, so one should be used to epic failure when his name is mentioned.