Heritage Foundation Breakdown of Alternative Energy Costs
Heritage Foundation breaks down alternative energy costs. Heritage points out that,
The inconvenient truth is this: nearly half of America’s electricity is generated from coal. Natural gas and nuclear energy add about 20 percent each. Most of the rest is provided by renewable sources, primarily hydroelectric energy at 6 percent. Non-hydro renewables like wind, solar energy and biomass total only 3 percent. And this is after decades of existing generous renewable subsidies. If electricity created by wind and other renewables were cost competitive, consumers would use more of it without a federal law to force consumption. But renewable energy is not cost competitive, hence the need for government coercion to force the American people to buy it.
You can find the relevant research paper here.
-nick
A Bad Idea for Financial Reform
[Editor's Note: The following piece is contributed by David Weinberger. David is a prominent blogger and works for a leading think tank in Washington, D.C.]
In 1933, Congress passed the Glass-Steagall Act to separate investment and commercial banking, the combination of which was one of the culprits behind the 1929 stock market crash. However, included in the act was a provision to forbid banks from certain financial activities, which increased, rather than decreased, financial risk. Finally repealed in 1999, its reincarnation is creeping back through Senator Chris Dodd’s (D-CT) Financial Reform Bill: the Volcker rule.
The Volcker rule, named after former Reagan Administration Fed Chairman Paul Volcker, has damaging unintended consequences. If passed, it will leave many of the problems from the most recent financial crisis unaddressed.
The Volcker rule would effectively forbid any bank or other institution with FDIC-insured deposits from undertaking any proprietary trading. In other words, it would prohibit banks from trading strictly for their self interest; instead it would attempt to allow only trading that directly involves customers.
The question is how does a regulatory commission determine whether banks are trading specifically for their own self-interest or trading on behalf of a customer? To do so would require exceedingly stringent regulation that would hamper economic growth. For example, banks invest to provide supplemental liquidity, which enables them to provide more loans to customers. In order to determine whether or not a bank is directly involving a customer when investing this liquidity would require regulation on virtually every transaction. Regulating every transaction not only slows the number of loans given to customers – impeding overall investment and spending in the economy – but it also diminishes banks’ ability to grow. If it becomes harder for a bank to grow it becomes harder for a consumer to obtain a loan.
Further, banks fund large investments, both for themselves and for consumers, which grow the economy. If the Volcker rule were to become law, it would constrict their ability to do so, and would make it harder for them to compete with major foreign banks that have no such restrictions.
Consequently, over-enforcement will cause banks to earn less, depressing the amount of money available for consumers to borrow. Likewise, under-enforcement will prove meaningless, resulting in more bureaucratic waste at taxpayers’ expense. So given the difficulty of appropriate enforcement, why is the Volcker rule being considered?
The answer is because Congress has misdiagnosed the problem. Congress, in an attempt to implement the Volcker rule, has misconstrued the financial crisis by blaming “greedy banks.” However, just as in 1933, legislation that misdiagnoses the problem will not help prevent another crisis.
The Volcker rule ignores one critically important fact: The 2008 financial crisis did not have to do with banks engaging in risky proprietary trading. Instead, it had to do in large part with non-bank financial institutions that bought mortgages and re-packaged them as securities. These mortgages were then sold off to investors, while rating agencies were paid to rate them AAA even though they weren’t.
As David John of The Heritage Foundation notes, “Both Bear Stearns and Lehman Brothers, the failures of which signaled the 2008 crisis, were significantly smaller than many other financial institutions, and neither they nor AIG was a bank”
Rather, the mortgage-backed securities those institutions dealt were so interconnected in the financial sector that they threatened the entire system, including commercial banks. Default by financial institutions would have caused other institutions to collapse, whose losses would have severely jeopardized the banking industry. Even if the Volcker rule were already in place it would not have prevented the collapse of these institutions nor would it have prevented the crisis altogether. It fails to address the interconnectedness of our financial industry and doesn’t adequately address liquidity standards.
Congress should be addressing new rules in bankruptcy law as well as increasing capital and liquidity standards to help prevent this crisis from happening again. The proposed legislation addresses neither. At the expense of economic prosperity it encourages future taxpayer bailouts. Smart regulation is a good idea, but the wrong regulation will lead to unintended results.
-david
The Heritage Foundation Keeps Growing
The Heritage Foundation, one of the most influential think tanks in America, had just under 350,000 donors in the fall of 2008. They currently have 633,000. Around the same time, The Foundry had just been launched. Currently, it gets about 500,000 unique views per month. Lastly, its Facebook page has just under 145,000 fans; last year it published 1,200 papers, the seventh-most of any such organization in D.C; and only a few months ago it opened a new “community committee” in San Francisco. In a time of economic and political difficulties in America, the latter especially for conservatives, this growth and influence are of great import and optimism for the future.
Now, according to The Washington Post, Heritage has created a lobbying arm. According to the Heritage press release, Heritage Action For America plans to have ten employees by year’s end, and will be independent of the think tank itself. Its CEO and COO will be Michael Needham and Timothy Chapman, respectively. According to Needham,
the new group will focus exclusively on “policy politics,” not electoral politics. “We will not endorse candidates; we will not contribute to political campaigns or PACs,” he said.
“We are all about policy,” Needham added. “To paraphrase Ronald Reagan: While The Heritage Foundation continues to shine the “light” of effective policy recommendations, Heritage Action will provide the political „heat? to help lawmakers warm to those policies.”
I think this is a great move by Heritage. I have long wondered if this would be a step the organization would take, especially with its outreach into almost every other conceivable area of politics, including but not limited to blogging; event organizing; speeches; books; its traditional “think tank” role; its Job Bank; internships; promotion of the D.C. Opportunity Scholarship; visits by many of its scholars to varied areas of the world; testimony on Capitol Hill; and its many issue-focused sister websites.
I wrote a few weeks ago that I was very despondent over the state of this country- that has not changed, nor has my doomsaying about what our debt will do to the many generations of Americans that will come after us. However, to paraphrase Feulner when he spoke to my class of interns in 2008, “There is no such thing as a permanent victory in Washington, but there are no such things as permanent defeats, either.” He also said that Heritage is fighting the longer battle, the one that will exist when the current batch of big government liberals and moderates are long retired. This new organization is just one more weapon in Heritage’s already-full arsenal. Here’s hoping they keep fighting, and winning, the good fight, both on Capitol Hill and across America.
The new organization’s website can be viewed here.
Congressional Favors Keep On Coming
The Heritage Foundation cites two professors at?the University of Michigan who showed that Troubled Asset Relief Program (TARP) funds were allocated in amounts related, at least in part, to lobbying efforts and political contributions. However, the strongest?evidence regarding political?favors was?that the study found?”banks with headquarters located in the district of a member of the House Financial Services Committee were 26 percent more likely to receive TARP funds than those not so geographically favored.”
As taxpayers, we should be outraged by this. Yes, lobbying and political contributions are designed to gain favors, and of course Members of Congress are always concerned about re-election, particularly in the House. Furthermore, this is all legal. However, one would have hoped- obviously in vain- that in order to pull the economy back from the so-called precipice that we were at last year our elected officials would act in the public interest instead of their own.
To clarify: I don’t think we should have negative feelings toward the constituent banks; after all, they probably figured the money was going out and they deserve it as much as the next bank. However, this should be yet another sign that more transparency is needed in government programs.
Overlooked Information?
(H/T to The Heritage Foundation blog)
According to the LA Times, there is a legal battle over owned and carried guns on college campuses in Colorado. Personally, I am uncertain where I stand on allowing standard gun laws to apply to college campuses- I think they could have stopped VA Tech-style shootings easily, but I also am aware that most college students tend to be irresponsible on the weekends, and that may increase the odds of gun deaths on campuses and in college towns.
The International Association of Campus Law Enforcement Administrators, Inc. (IACLEA) has supported the weapons ban side of the argument in Colorado. They cite many studies to back up their viewpoint. While admitting a lack of in-depth knowledge on the studies they cite, I would like to point out two fallacies with their argument:
1. According to the Brady Campaign, well over half of gun deaths in America were from suicides. IACLEA states this towards the end of their analysis, but neglects to inform the reader that if a gun was not present knives, tall buildings, cars, waterways and other readily-available resources would suffice for those who are willing to take their own lives.
2. They claim that gun owners are more likely to engage in reckless behavior. While guns would give gun owners- assuming they are more reckless than average- another way to be reckless, I’d like to let a former Marine take the case: “At the meeting where the board voted on the ban, Brady Allen, a former Marine and history major at Colorado State, said safety concerns were misplaced.
“You might as well ban everything that has a potential risk — cars, alcohol and sports,” he said.”
Gun laws on campuses should be carefully weighed- a tiny number of gun deaths were from citizens protecting themselves, according to the IACLEA, in 2005, and colleges don’t exactly encourage responsible behavior by students. However, I think gun-related homicides on college campuses would be less common if guns were allowed, and if college students were encouraged to be accountable citizens- as my 20-year old sister, a professional singer and non-college attendee, is expected to be, by law- perhaps the culture of entitlement and irresponsibility at colleges could be changed and expected gun deaths related to carelessness would be an unexpected occurrence on gun-allowing college campuses instead of a point of great and legitimate concern.
Health Care Officially Passes Senate
It passed on a party-line vote, too. However, do not despair yet:
1. The White House is outright lying about President Obama’s campaigning on the public option. Desperation?
2. According to Politico, the White House is admitting negotiations over the bill may go past the State of the Union address in late January or very early February. Given that there have been multiple passed deadlines already, and primary season hits full stride in May, will vulnerable Democrats like Senator Blanche Lincoln (D-AR) be willing to pass this monstrosity in the final vote? Their constituents will be (and are) paying attention, and 2010 is going to be a Republican year anyway, so conservative Democrats are going to continue to be very careful.
3. Democrats in the House have felt ignored and trampled for much of the health care debate, and The Heritage Foundation has compiled a number of issues the House and Senate will have to overcome to get a final bill passed. Question: will the House be willing to cave? That verdict is uncertain.
4. Politically influential conservatives, liberals and moderates are against the Senate bill. Polls show Americans are increasingly against the so-called “ObamaCare” version of health care reform. Again, will vulnerable Democrats risk voting for the bill?
5. The designed-to-be-a-pain federal legislation process is in America’s favor.
It’s Christmas- let’s enjoy the day, thank God for sending us His son and enjoy our time with family and friends. Let’s also pray for the guidance and ability to prevent this bill from gravely harming Americans by not letting it pass.
Critical Vote On Health Care Passes Senate
Officially, the Senate has not passed health care reform. Unofficially, the fight is over for this round. Senate Democrats overcame a filibuster by a party-line vote of 60-40, including the two independent senators who caucus with the Democrats.
As I said, it’s not officially over; the above vote merely provided official “cloture.” However, it is merely window dressing to get the bill passed by Christmas Eve, which seems very likely now.
The Heritage Foundation outlines what this bill will do to America’s budget, the unborn and taxes. In short, it’s a bad bill, which we already knew. However, there is still hope. The Senate and House bills must be compromised in conference- where the two chambers make two bills into one- and then voted on again in each chamber separately. The two biggest issues, as far as I see, that could shut down this reform effort are abortion and the public option. The House bill includes the latter, the Senate one does not. The Senate bill, however, allows public funds to be used for abortion and the House one does not. I hope Representative Bart Stupak (D-MI) holds strong on his abortion language and kills the bill. A pro-life amendment would help the health care bill that finally passes (if one does) not fund the murder of the unborn.
Fox News has a very revealing analysis about where various monies went to various senators in order to bribe them votes for the cloture vote. As Fox notes in the article, uncertain votes were brought in line as a direct result of how the Senate leadership decided to use our money.
Democrats & Liberals Standing On Principles
The left is revolting over health care reform. Almost all Americans agree the country does need health care reform, but not the kind the current crop of Democratic Senators and Representatives want. The left and far left- as well as some of the middle- were leaning towards passage of the health care reform package going through the Senate. However, since Senator Lieberman (I-CT) broke the Medicare buy-in into pieces the other day, Keith Olbermann, Markos Moulitsas- the founder of Daily Kos- have come out against the bill, Senator Bernie Sanders (I-VT) has as well and former Vermont governor Howard Dean is against it. Too, an opinion piece featured on Huffington Post calls Dean “a genuine hero” for the way he is opposing the current bill, and the SEIU is calling out the President.
Part of me feels badly for these guys and gals. They worked really hard to put President Obama and his Democratic majority into power and are being rejected on what has been their biggest issue all along. Despite being what many consider a far-right conservative, I greatly respect their stand on their principles, and hope they will continue to work to create real reform, as Dean referenced here in his Washington Post column today: “Any measure that expands private insurers’ monopoly over health care and transfers millions of taxpayer dollars to private corporations is not real health-care reform. Real reform would insert competition into insurance markets, force insurers to cut unnecessary administrative expenses and spend health-care dollars caring for people. Real reform would significantly lower costs, improve the delivery of health care and give all Americans a meaningful choice of coverage. The current Senate bill accomplishes none of these.”
Except for forcing companies to cut unnecessary administrative expenses, I like what Dean for health care reform results. Hopefully he, Kos and the rest of the left will join The Heritage Foundation, Senator Tom Coburn (R-OK) and other conservative organizations and individuals in bringing choice, competition and lower costs to American health care.
The Mayo Clinic Speaks
Senator Reid, when The Mayo Clinic, possibly the most respected medical establishment in the nation, dislikes your bill, you are in trouble.
President Obama and The Mayo Clinic have worked together on health care reform this year. Mayo has critiqued the health care reform efforts before, but also praised efforts on payment reform. However, consider the following regarding the current Senate bill: “Expanding this system [Medicare] to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country. A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare. As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices.? Despite these provider losses, Medicare has not curbed overall spending, especially after adjusting for benefits covered and the cost shift from Medicare to private insurance.? This is clearly an unsustainable model, and one that would be disastrous for our nation?s hospitals, doctors and eventually our patients if expanded to even more beneficiaries.”
Mayo spends a fraction what the most expensive Medicare-accepting hospitals do on patients and uses fewer resources by far. When they can’t break even on Medicare, who can? Yet Democrats want to expand Medicare? Former Vermont Governor Howard Dean was on MSNBC the other night- I was in the gym and decided to watch Keith Olbermann for a few minutes- and he fully supported the expanded Medicare concept. That alone is almost enough for me to oppose it, though when a single-payer advocate in Congress supports it as well and Stuart Butler of The Heritage Foundation is against it the opposition becomes complete.
Mayo has its critics- but many of those critics merely claim Mayo can keep costs down because it has patients that are less racially diverse, wealthier, etc. Those critics add to the case Mayo makes above, because if Mayo does have the advantages critics claim and still can’t break even on Medicare reimbursement, how can the vast majority of the rest of the nation’s hospitals even come close?
Liberals make the argument that Medicare brought millions of elderly people out of poverty- this may or may not be true, but the simple fact is that many or perhaps even most Congressional Democrats don’t have a clue about financial sustainability- granted, nor do most Congressional Republicans- and by expanding Medicare they hasten the bankruptcy of America.
Transparent Incompetence
Transparency is on at the White House- however, I expect President Obama wishes it wasn’t quite so transparent. Turns out information being sent in regarding what the stimulus has done to boost employment is somewhat inaccurate.
The Associated Press started the now-mainstream stimulus critique reports a few weeks back- doing a commendable job as watchdog- and put the White House on stimulus defense. Now, however, comes a new wrinkle in stimulus efficiency and White House competence- namely, the White House is reporting job numbers in congressional districts that don’t exist.
To be fair, I am not blaming the administration. It’s not their fault people reporting numbers don’t know what district they live in. However, it does not look good on the heels of the AP report (which was, admittedly, preliminary) and the other stories regarding stimulus measuring difficulties that have come out recently.
I first heard about this new debacle from The Heritage Foundation. However, like a good little newly-arrived blogger, I double-checked two of the claims Heritage made. Guess what? They are accurate.
Unfortunately, Democrats and liberals can defend against the claims the stimulus isn’t working. Yes, these public relations disasters makes President Obama, Democrats and the stimulus look rather dumb in the public eye. Yes, it’s great fodder for conservative blogs, newspapers, radio and TV shows and speeches. Yes, it speaks volumes about government incompetence and wasteful spending ($18 million to overhaul the site and this is the inaccuracy they get?). However, if the jobs were created- and for the moment let’s assume they were and aren’t overstated by the same people who don’t know what district in which they live- doesn’t that lend credence to President Obama’s claim that the stimulus worked?
Personally, I say no. I say it is another obvious harbinger for Democratic health care reform, the EFCA, cap-and-trade and the renewal of NCLB next year that government can run very little well, especially proven over the last decade. Maybe my libertarian college friend Jon O’Neill is right and a third-party candidate will win the 2012 presidential race. It would serve Republicans and Democrats right.
