It’s a Gas

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The massive growth in the production of natural gas, the result of using unconventional sources and methods (mainly the fracking of shale deposits) continues to demonstrate how free markets can transform the world, even in the face of statist oppression.

Two recent Wall Street Journal pieces illustrate this anew. The first reports that another industry is now converting its vehicles from diesel to natural gas — an industry you might not think of offhand. Ferryboat fleets, both here and in Canada, are making the switch because of the continuing (shale-)rock-bottom prices of natural gas.

From Staten Island to Washington State and British Columbia, ferry fleets are following the lead of Norway, which a decade ago started fueling ferries with liquefied natural gas (LNG).

One attraction of natural gas is, again, its pricing. Natural gas at the Henry Hub distribution center (a standard benchmark for natural gas pricing) hit a low of $1.95 per million BTUs this year, the lowest price in 13 years. This, while diesel skyrocketed by 140% from 2004 to 2011.

A second attraction is that, if spilled, LNG doesn’t form a toxic slick that requires costly cleanup, even as it should be so unfortunate as to kill off wildlife, or tourists, or both.

Third, LNG is actually less likely to be unfortunate, because it is less inflammable than diesel.

Of course, the switch will take time and upfront investment — as for instance, to build plants to chill and compress the gas, and new holding tanks for the ships. But the cost savings make the decision obvious, even if the timing isn’t.

The second WSJ piece is of more — shall I say — global importance. It reports that more and more US utility plants are switching from dirty coal to clean natural gas, not because of EPA coercion, but because of the coercion of free-market pricing.

Coal consumption by American power companies dropped by 18.8% in the fourth quarter of last year, compared to the previous quarter, and 9.4% compared to the fourth quarter of the year before. Again, the switch was driven by the drop in natural gas prices.

Peabody Energy, one of the biggest coal producers in the world, now estimates that American coal demand will drop by 10% this year, or 100 million tons.

The free market is helping to reduce air pollution. Obama, are you paying attention?




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Neo-Socialism: The Results Are In

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Despite his campaign promise to govern as a moderate, President Obama has aggressively pursued what can only be described as neosocialist economics. This is a system of governance within which the government essentially runs business, but not in its own name — so that when failures occur, it can disown responsibility and blame business instead. It is a new and “improved” socialism, so to say.

The program has included outright government takeovers of most of the auto industry and the student loan industry, massive new control of the financial industry, near total control of the health industry, near total dominance of the energy industry, stimulus spending bills (often favoring campaign donors), housing bailouts, cash for clunkers, cash for weatherproofing, and so on. All of this is Obama’s doing. So is the $5 trillion he has added to the national debt — pushing us past France in debt as a percentage of GDP.

The result has been a long, lingering malaise — the Obamalaise — posing as a “recovery.”

The latest jobs report starkly illustrates the failure of Obamanomics. It shows that last month the economy — in the third year of an economic recovery — created a ludicrous 80,000 jobs. Considering that the economy needs to create about 125,000 new jobs each month just to keep up with population growth, this was a profoundly pathetic report card. The unemployment rate stayed at 8.2%, only because — again — more people dropped out of the work force.

Worse, of the 80,000 jobs created, 25,000 of them — nearly a third — were temp jobs.

Even worse, in June, while a net 80,000 jobs were created, 85,000 people went on federal disability! Yes, more people got on the SSDI disability rolls than got productive jobs. Indeed, since June 2009, while Obamanomics has created 2.6 million jobs, it has put nearly 3.1 million new people on SSDI disability. Moreover, a whopping 275,000 additional people have applied for disability. Obama is truly the Disability King.

Add to this the fact that yet more people went on food stamps, cementing Obama’s rightful title as the Food Stamp King. In fact, from June 2009 to April of this year, the number of food stamp recipients exploded upwards by 11.3 million, or nearly a third.

Amazingly, while Obama has his highest support among blacks, followed by Hispanics, and his lowest support among whites, it turns out that white unemployment stands at 7.4%, Hispanic unemployment at 11%, and black unemployment at a gut-wrenching 14.4%.

The general unemployment rate has now been over 8% for 41 months in a row, which sets another new record — one that beats all previous administrations over the last six decades. And the length of time the average person has been unemployed under Obama’s “recovery” has been 20.6 weeks, completely eclipsing the earlier record of 10.5 weeks.

If the labor force participation rate were now what it was when this neosocialist administration took power, the unemployment rate would be 10.9%. It is only as “low” as it is because many people have stopped “participating” (i.e., looking for jobs).

Three years of Obamanomics recovery has created job growth of 75,000 a month on average, or 2.6 million in total. By contrast, Reaganomics (neoliberalism) over the same length of time averaged 273,000 a month, or 9.8 million in total.

Of course, the nation was smaller then. If we correct for population size, the Reagan neoliberal recovery produced the equivalent of 360,000 jobs a month over the same period, or a total of 13 million.

The “recovery” brought by Obamanomics created a total expansion of real GDP of only 6.7% over eleven months. Again, by comparison, Reaganomics brought a total expansion of real GDP of 17.6% in the same period — or well over two and a half times as great a growth rate.

So what shall we call the president: The Disability King? The Food Stamp King? The Long Term Unemployment King? The Slow Growth King?

Perhaps “the clown-prince of neosocialism” will do.




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Up in Smoke

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With the recent release of yet another dismal jobs report, commentators in the MSM have begun to ask, “Why aren’t jobs being created?” They should have been asking themselves this question for the last 40 months, but, hey, better late than never.

Yet the possibility that the explosive growth in regulation might play a role in deterring job growth is not something they spend much time discussing.

It should be.

A recent story gives us a fresh illustration of the role that regulation plays in destroying jobs. (By “regulation,” I mean all increases in statutory law, rulings by regulatory agencies, and expansions of common law aimed at controlling business activity.) It concerns a business that I, a nonsmoker, never heard of, one that has never been destroyed by regulation.

It turns out that in the face of huge taxes on cigarettes produced by the major tobacco companies, many cigarette smokers started frequenting small stores that owned “roll-your-own” (RYO) cigarette machines. The RYO machines allowed customers to buy loose tobacco, especially pipe tobacco (taxed at a far lower rate than manufactured cigarettes) and paper tubes in the shop, and use the RYO machine to churn out a carton of cigarettes in just a few minutes.

For a devoted smoker, the attraction of RYO shops is clear. They save about half the price of regular cigarettes. And they allow smokers to blend different and more flavorful tobaccos together, and use both tobacco and paper that are free from many of the chemical additives.

But naturally, the attractiveness of the shops angered two powerful groups. First, it pissed off puritan “progressives” who just cannot stand people smoking, and are always conducting an anti-smoking jihad. Not content with insane taxes on people who choose to consume a lawful product, they want to stop it altogether.

Second, it pissed off the major cigarette makers — aka Big Tobacco — who hate seeing customers choosing to buy cheaper in little shops around the country.

So in a classic case of rentseeking (businesses manipulating the regulatory system to hurt their competition, rather than producing a better or cheaper product) Big Tobacco found a politician — the truly execrable Sen. Max Baucus (D-MT) — to insert a small amendment to a massive transportation bill that redefines RYO shops so that they fall under the same category as Big Tobacco cigarette manufacturers, thus imposing a massive tax increase on them — one that is intended to destroy them, and probably will.

Baucus of course was happy to do this for the campaign cash Altria and other Big Tobacco companies shoveled at him. And those Big Tobacco companies are happy to stomp out of existence a group of little competitors. And Obama — who never met a regulation he didn’t like — was happy to sign the bill.

But the small businesses that bought the RYO machines have been screwed. Over a thousand of these machines (they cost over $36,000 each) were purchased, but are now virtually useless.

So, for example, Robert Weissen and his partners, who own a chain of six RYO shops in Las Vegas (cheekily named “Sin City Cigarette Factory”), says he will have to shut down the machines and lay off 40 people.

There are eight million regulations in our “progressive” (i.e., neosocialist) economy. This has been the story of just one of them.




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Eight Million Regulations

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There is a classic film noir called The Naked City (1948). The film’s plot is the investigation of a murder, and the story takes place in New York City. At the end of the flick, a narrator intones a famous line: “There are eight million stories in the naked city. This has been one of them.”

Reading a recent report on the latest regulations laid down by the Justice Department for compliance with the Americans with Disabilities Act, I thought of a new take on that line: “There are eight million regulations in the Obama state. This is just another flock of them.”

In an effort to ensure perfect “fairness” for all the “disabled,” the feds now dictate the following.

  • Amusement parks must provide at least one seat for the wheelchair-bound on any new or altered ride.
  • Miniature golf courses must make at least half of the holes “accessible,” defined as having a surrounding ground space that is “48 inches minimum by 60 inches minimum with slopes not steeper than 1:48 at the start of play.”
  • Regular golf courses must now have “an accessible route to connect all accessible elements within the boundary,” and must also “connect golf cart rental areas, bag drop areas, teeing grounds, putting greens, and weather shelters.”
  • Gyms must now position at least one of each type of exercise machine so that it is accessible to the wheelchair-bound.
  • Saunas must now provide accessible turning spaces and an accessible bench.
  • Shooting ranges must now provide accessible turning spaces “for each different type of firing position.”

My favorite is this one: all public accommodations must allow miniature horses as guide animals, because some handicapped people have moral or religious problems with dogs.

The good news is that the feds rule out full-size horses. Why, I don’t know — couldn’t some handicapped people have moral or religious problems with both dogs and miniature horses?

The miniature horse rule brings to mind another line I remember from the past: Frank Zappa’s song about Montana — “Just me and the pygmy pony, over the dental floss bush.”




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The Metaphor to Nowhere

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Recently I was invited to attend a national educational conference for college teachers and administrators. I was also invited to send a proposal for a presentation at the conference. I was slightly doubtful about the value of the conference when my proposal was accepted without any vetting — I wasn’t asked to supply my credentials, my background, my experience in the field, or the literature (if any) that I would be using for my presentation. As a matter of fact, I have no specific training in the subject. I have been working in an administrative position for less than a year, and it is not in the field for which I earned my degrees. In short, although I’m a pretty good speaker and I think I have gained some valuable insights from my experiences this year, I have absolutely no qualifications to make a presentation.

I was even more troubled when the conference schedule was sent to me. It offers ten sessions per hour for three days. Just for kicks, I asked the conference coordinator how many people are expected to attend. “Between 200 and 300,” she responded. You do the math: just about every attendee is a presenter! Who knows whether any of them have anything valuable or cogent to say to me? How should I choose which of the ten sessions per hour to attend?

Titles might be helpful, right? So here are some of the offerings during the first couple of hours:

A Self Sustaining Village. A Village of Volunteers. Bringing Online Students into the Village. It Takes a Village to Raise a Budget. It Takes a Village to S-T-R-E-T-C-H a Budget. Developing a Drop In Village. Let the Editorial Village Help you Decide. It Takes a Village: REACH . . . Building a Village to Market Learning Services. Our Students are a Village. And here’s a little twist: Build it and They Will Come. Stream it and They Will Come.

Sheesh!

These faceless “colleagues “of mine seem not to have a creative thought in their brains. This tired old metaphor they’ve trotted out harks back to the wife of a president from three administrations ago! It’s nearly 20 years old! And these folks are supposed to direct me into the future of education?

Sigh. What a waste of time and travel money. I’ll bet most of it is funded by Title V grants. Don’t even get me started on that.

I sent my regrets.




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Vast New Possibilities for Government Control of Our Lives

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Now that we know that the key for politicians to make unconstitutional demands on us is simply to levy a tax on those of us who are recalcitrant, vast new possibilities open up for people who are certain they know better than we do how to run our lives.

For instance, Michelle Obama can begin promoting a Healthy Eating Act, whereby we will all be forced to buy a requisite amount of veggies each week, including my unfavorite, broccoli. I suppose if the fine, er, tax, is not too onerous, I will find that paying the tax is still preferable to filling my garbage bin with things I can't tolerate.

And while the liberals among us are wetting their pants in anticipation of getting to impose those and similar rules, I will be proposing the Affordable Police Protection Act to my representative and senators. It will require every head of household to buy a personal defense handgun and maintain it in an easily accessible place in the home, thus warding off various criminals and reducing the costs of police forces and criminal courts. Or maybe it could be made even stronger and require every adult citizen to carry a handgun at all times, thus reducing crime even more.

Either way, people who absolutely refuse to do their part in the anti-crime and cost-of-policing-reduction effort will be required to pay a tax to offset the costs of dealing with criminal types who continue to operate, hoping to take their own chances with such scofflaws. Of course, the police can spend some time checking random citizens to verify that they are carrying their weapons and weapons permits at all times. Oh, I suppose that proof of purchase might be filed with our 1040s each year, but still there would have to be some way to verify continued ownership. Which should take precedence, though, the Fourth Amendment or the power of Congress to tax?




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The Second Hander

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In my last article on the legal challenge to Obamacare I expressed optimism that Obamacare would be struck down. However, in an earlier Liberty article I had said it had only a 1% chance of being overturned. As it turns out, Obamacare was upheld, in a 5–4 decision that is a devastating loss for libertarians and the death of hope for saving the US healthcare industry from a slow decline into socialized medicine.

What happened? In my last essay I said that Justice Kennedy was the swing vote, and he was expected to vote against Obamacare. And that's what he did. With his vote we should have won. But he was not, in fact, the swing vote. Chief Justice John Roberts, whom George W. Bush appointed to be a conservative bulwark, turned traitor and voted with the court’s liberals. Why?

When I was in law school the chief justice was still newly appointed, but he had already gained notoriety as a person deeply concerned with how the public viewed “the Roberts Court” (Supreme Court eras are often named after the chief justice who presides over them — the Rehnquist Court, the Warren Court). Roberts has proven himself a conservative in other opinions. He is reported to be a brilliant man, and surely knew what was at stake in the Obamacare case. But it appears he was so deeply worried that the public, influenced by both the Citizens United and the Obamacare decisions, would perceive the Roberts Court as an extremist ultra-Right court that he cared more about what other people thought of him than he did about his own ethical convictions. Judges do not face reelection, but the famous ones often care deeply about how history will view them. To simplify things, he was too embarrassed to be a principled conservative.

In that sense I liken him to Peter Keating, the “second hander” in Ayn Rand’s novel The Fountainhead. Peter Keating has no conviction or integrity, but “selflessly” lets other people create and define the goals and aspirations that he then pursues with ruthless ambition. Chief Justice Roberts has no internal principles, but simply goes with the public sentiment, or what he perceives to be other people’s perceptions of his court. The Supreme Court was designed by America’s founders to be a check on the actions of Congress in order to protect the American people from unconstitutional laws. The Court has failed, and the commerce clause has now lost all meaning. But the origin of this crisis lies with human psychology, not legal doctrines.




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Nanny Tries to Resurrect Pappy

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This recent story has gone virtually unnoticed. It is a report that the federal government — yes, our very own nanny-state — has funded anew one of its many websites: www.fatherhood.gov. The site is devoted to teaching American men and — let’s not be sexist! — American women how to be good fathers.

The site gives just tons of terrific tips about being a good dad, such as: it is the father’s job to provide healthy meals for his kids, and actually to eat meals with them. (This is a revelation: I thought that since the government is advertising to get people to apply for food stamps, the rolls for which have swollen to an all-time high of 47 million, it is in fact the government’s job to feed the kids.) And there is other vital information, available nowhere else. There is a video about how to wash your hands, with narration that instructs: “Wet hands under running water, add soap, and rub all parts of the hands and fingers for 15 seconds.”

The things you can learn from government! I never knew you had to use soap!

The site offers some even more desperately needed videos on reading, “constructive play,” and — most amazing — brushing your teeth.

There is a richly layered irony in this. Begin with the fact that the website was funded most recently by the 2005 Deficit Reduction Act. The idea that deficit reduction is advanced by funding completely superfluous government websites is self-evidently ridiculous.

Now add the bigger point. Here we are, nearly 30 years after the publication of Charles Murray’s Losing Ground, the definitive analysis of the massive destruction brought to the American family (and society) by the benighted changes to the welfare programs in the early 1960s. The new form of welfare basically paid young girls to make horribly bad life choices, mainly to have children too young and out of wedlock. The illegitimacy rate in the inner city spiraled out of sight, hitting 25% by the mid-1960s (when Daniel Patrick Moynihan wrote his famous report on the black family crisis). In the inner city, the first of the month was dubbed “Father’s Day,” in grimly humorous recognition of the fact that the only “father” in these broken welfare families was Uncle Sam.

Over the decades since, the welfare state’s iatrogenic pathology has spread from the inner city to mainstream America. Now over 70% of all black children, 50% of Hispanic children, and 25% of non-Hispanic white children are born out of wedlock. The rate of illegitimacy for all American births is currently 41%, and for American women under 30, it is a stunning 53%.

So the richest irony of all is that the nanny state that did so much to eliminate fatherhood is now trying to train men to be fathers.

In fine, now that nanny has choked pappy to death, she is trying to resurrect him.




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Taxes on Buying and Not-Buying

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In his decision on the healthcare law, Chief Justice Roberts interprets the "penalty" on not buying health insurance as a tax. He recognizes that it is meant "to affect individual conduct." But such taxes, for example import duties, are nothing new. As Roberts says (pp. 36–37 of the decision), "Today, federal and state taxes can compose more than half the retail price of cigarettes, not just to raise money, but to encourage people to quit smoking. And we have upheld such obviously regulatory measures as taxes on selling marijuana and sawed-off shotguns."

But the import, cigarette, marijuana, and shotgun examples are taxes on selling and buying something. The penalty regarding health insurance is a tax on not buying something. Does Roberts really mean to constitutionalize a tax on not buying whatever Congress may specify? What has become of constitutional limits to federal power?




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The Fast and Furious Investigation: Quick or Dead?

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On June 28 the US House of Representatives voted 255-67 to hold Attorney General Eric Holder in contempt of Congress for failing to provide documents subpoenaed by the Oversight and Government Reform Committee. Although the vote was largely along party lines, it still represented the first time in American history that a cabinet member has been found in contempt of Congress.

Partisan or not, the contempt vote was more than justified by the facts. The attorney general has stonewalled Congress’ investigation of Operation Fast and Furious, a crazy policy which amounted, in substance, to running guns into Mexico with the expectation that this would lead to prosecutions and the interdiction of weapons trafficked to Mexican drug cartels. One US border patrol agent has already died as a result of Fast and Furious, as have an untold number of Mexicans. Hundreds of the guns remain in the hands of criminals who will not hesitate to use them to kill people. While it should be noted that tactics resembling Fast and Furious were first employed by the Bush Justice Department, the stupidity was ratcheted up in a big way under Holder. In any case, the attorney general has provided Congress with about one tenth of the documents under subpoena, and contradictions have cropped up in his congressional testimony. The whole business stinks, and yet the scandal remains (except on the Fox News channel) for the most part under the radar screen.

On the day of the contempt vote I heard some talking head on a cable news program declare that the timing of the vote showed that the Republicans were not veryserious about pursuing their investigation. On the contrary, the vote was scheduled to coincide with what the Republicans thought would be an overturn of Obamacare by the Supreme Court — the second blow of a double whammy that would jumpstart the Republican effort to take the White House. This plan backfired when Chief Justice John Roberts found a way to declare Obamacare constitutional. The unexpected reversal of fortune for Obamacare washed the contempt vote right out the public consciousness.

It is a fact that the New York Times and the Washington Post have done little to get to the bottom of Fast and Furious. Nothing illustrates the mainstream media’s bias in favor of Obama more than its (non)response to this scandal. Even less surprising is the absence of a Democrat version of Howard Baker asking publicly “What did the attorney general (and possibly the president) know, and when did he know it?” Obama is no Nixon, but Holder might be another John Mitchell. We’ll never know for sure, because Holder, unlike Mitchell, will never wind up in the dock (the Justice Deptartment is not about to file criminal contempt charges against its own AG). So much in life depends on who you are, and even more on who your friends are.




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