Monthly Archives: July 2009

Ninety Years Of Progress – 3 mpg

New Scientist reports a pretty amazing set of statistics in “US vehicle efficiency hardly changed since Model T “:

“The average fuel efficiency of the US vehicle fleet has risen by just 3 miles per gallon since the days of the Ford Model T, and has barely shifted at all since 1991.”

“Those are the conclusions reached by Michael Sivak and Omer Tsimhoni at the University of Michigan Transportation Research Institute in Ann Arbor. They analyzed the fuel efficiency of the entire US vehicle fleet of cars, motorcycles, trucks and buses from 1923 to 2006.”

“They found that from 1923 to 1935 fuel efficiency hovered around 14 mpg (5.95 km/l), but then fell gradually to a nadir of only 11.9 mpg (5.08 km/l) in 1973. By 1991, however, the efficiency of the total fleet had risen by 42 per cent on 1973 levels to 16.9 mpg (7.18 km/l), a compound annual rate of 2 per cent.”

“Progress has stalled since then, though, despite growing environmental concerns. From 1991 to 2006 the average efficiency improved by only 1.8 per cent to 17.2 mpg (7.31 km/l).”

After all the good intentions of politicians and environmentalists, all the legislation, all the regulation, for all those years – one has to wonder if a simpler solution might have made more of an impact on fuel economy. If instead of micromanaging the auto industry with mandates, congress had instead tried taxing petroleum to account for the “economic externalities” of our fossil fuel addiction, consumers might have placed some value on efficiency and we wouldn’t have squandered a precious resource while despoiling our environment. And we perhaps wouldn’t have lost the American auto industry to competitors who recognized the value of both efficiency and competitive enterprise.

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Latest Bank Bailout Outrage

Bloomberg reports that bank bailouts may reach $23.7 Trillion:

“U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.”

“The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.”

” ‘TARP has evolved into a program of unprecedented scope, scale and complexity,’ Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.”

With the most up to date estimate of US population at about 306,899,000, this news means every citizen of the United States is on the hook for $77,224 to bail out Bank of America, Citibank, Goldman Sachs and other giant banks that are robbing us blind but deemed by our government  to be “too big to fail”. Really they are far too big to exist and should have been broken up years ago under the antitrust laws that both political parties have refused to enforce.

Its clear that we need far more serious oversight and government reform. Its well past time to stop this insanity.

The first step is to audit the Federal Reserve. Currently 271 members of Congress co-sponsor  and support  Ron Paul’s H.R. 1207: Federal Reserve Transparency Act of 2009, which calls of the government to audit the Federal Reserve. But the Congressional leadership refuses to bring it to the floor, or even hold hearings, which makes one start to wonder who really runs our country.

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Skip Copenhagen And Impliment Carbon Taxes

In  “The Summit of Green Futility“, Anne Applebaum outlines the failure of the recent G-8 summit to come to anything even remotely resembling a meaningful agreement on carbon emissions, the failure of Kyoto, the inevitable futility of the upcoming Copenhagen summit and the impending failure of congress to come up with any real or meaningful solutions to anything based on Waxman Markey.

Instead she clearly calls for governments to do the only thing governments have proven uniformly excellent at doing throughout history – collecting taxes.  Like all rational economists, she calls for using the tax system to put a price on the economic externalities of our fossil fuel dependence, suggesting “the price of fossil fuels has never reflected their true cost, either environmental or political. It doesn’t reflect the cost of the U.S. military presence in the Middle East. It doesn’t reflect the cost of treating asthma. And it certainly doesn’t reflect the cost of rescuing bits of the coast of Florida that will be submerged by rising sea levels. Raise the taxes on fossil fuels to reflect those costs”.

And  she encourages the government to use that taxing power in such a way that will enable entrepreneurs  to solve the various problems associated with our fossil fuel addiction rather than pretending those issues can be effectively addressed by bureaucrats, politicians and lobbyists. This is again the solution favored by all the rational practitioners of economics.

Its good to see main stream media like the Washington Post getting a bit more realistic about these issues and particularly starting to clarify the externalities that should be included in the cost of paying for our fossil fuel addiction.

The Ameican public isn’t stupid. Given the option of paying higher taxes on fossil fuels or continuing to pay regressive taxes on our personal earnings, the vast majority of Americans would prefer to reduce payroll and income taxes and instead tax our wasteful use of energy. It is time for politicians to listen to common sense rather than just doing the bidding of the lobbyists and special interests.

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US Constitution Banned In Rhode Island

The Providence Journal reports that Rhode Island Tea Party was permanently banned from participating in the oldest Independence Day parade in the nation for the heinous crime of handing out free copies of the US Constitution.

A quick check of the parade rules doesn’t make it evident that handing out free copies of the US Constitution would be grounds for permanent barring from the parade. (at least they didn’t when this was posted). Perhaps those rules will be quickly changed when the press gets a hold of this story.

I wonder what it is those folks on the parade committee think they are celebrating with all their flag waving. Someone on the Bristol parade committee should perhaps read one of those copies of the Constitution that upset them so much. I’d suggest they pay particular attention to the First Amendment.

At least this story is getting coverage in the popular press, unlike the trampling of the Constitution that seems to be an increasingly preferred means of expediting politicians favored outcomes in Washington these days.

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Shultz & O’Reilly On Energy Policy

Interesting video here: Ex-Secretary of State George Shultz and Chevron CEO and Chairman David O’Reilly speaking on energy policy at the International Association for Energy Economics.

They both favor a Carbon Tax for very clear and sensible foreign relations, national security, environmental and economic reasons. Both are concerned regarding the political failure in Washington to address the subject of climate change in a credible and serious manner. O’Reilly describes Waxman Markey as “a shell game”.  Shultz suggests that “it is going to be so obviously corrupt it is going to discredit the whole idea.”

It should be noted that when Shultz suggests that a straight carbon tax would give the US far more credibility in negotiating climate treaties, he carries the credibility of having negotiated the Montreal protocol, the most successful international environmental treaty in history.

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Waxman Markey – Legislating Guaranteed Failure

In his July 1 editorial, “Just Do It”, Tom Friedman is exactly right when he says regarding the recently passed Waxman Markey climate bill: “It is too weak in key areas and way too complicated in others. A simple, straightforward carbon tax would have made much more sense than this Rube Goldberg contraption. It is pathetic that we couldn’t do better. It is appalling that so much had to be given away to polluters. It stinks. It’s a mess.”

He goes on to describe some of the completely counterproductive compromises made to buy votes for the bill that will in aggregate absolutely guarantee that the bill fails to provide any of its climate related goals.

But he really misleads the American people in describing Republican opposition to this massive pork barrel bill in saying: “What are Republicans thinking? It is not as if they put forward a different strategy, like a carbon tax.?”

In fact, two Republicans Representatives Ingliss and Flake along with their Democratic colleague Daniel Lipinski have proposed H.R. 2380, The Raise Wages, Cut Carbon Act of 2009, which is exactly the solution that Friedman has been advocating for several years. It puts real inescapable prices on carbon emmission starting immediately, that are far greater then the EPA and Congressional Budget Office estimate Waxman Markey will provide ten years from now. And it helps the economy by reducing payroll taxes, the most regressive form of taxation in the country, rather than handing out hundreds of billions in corporate welfare the way Waxman Markey does.

Sadly, instead of providing the real leadership the nation needs and serious solutions like the Ingliss bill, Friedman caves in after years of being a true leader on these matters by calling on the Senate to push forward the wasteful and completely counterproductive corporate pork that the House just passed.

Greenpeace has chosen to take a far more practical and principled stand suggesting: “the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets. The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions. To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history.  We simply no longer have the time for legislation this weak.”

In their Philadelphia Enquirer editorial entitled “Cap-and-Trade Does More Harm Than Good”, public sector environmental attorneys Laurie Williams and Allan Zabel with experience in California’s Cap and Trade law start by stating: “We would support legislation in Congress to address climate change if it were capable of accomplishing that goal. Unfortunately, despite the best intentions of its proponents, the bill known as Waxman-Markey would disable our ability to reduce greenhouse-gas emissions for at least a decade”

After clarifying several of the fundamental reasons this legislation will completely fail to meet its purported goals, they go on to conclude: “The Waxman-Markey approach would not only guarantee a decades-long failure in the United States; it would also undermine U.S. credibility in international negotiations on climate change.”

“Those who favor Waxman-Markey as a political best-case scenario lack faith in the American people. We believe the American people can understand and support a more effective and fair approach.”

“Many observers across the political spectrum agree that carbon fees or taxes, with rebates to consumers, would be a more enforceable and effective alternative. While cap-and-trade-and-offsets will enrich special interests and delay the transition away from fossil fuels, carbon fees with monthly rebates could be the centerpiece of an affordable, equitable, rapid transition to a clean-energy future.”

White House Budget Director Peter Orszag was absolutely clear in his March testimony to Congress saying: “If you didn’t auction the permit, it would represent the largest corporate welfare program that has ever been enacted in the history of the United States”.

By giving away 85% of the credits, offering completely unverifiable offsets for all sorts of sheer nonsense, and removing the EPAs role in regulating greenhouse gasses, Waxman Markey will do more to set back any real solutions than just about any policy imaginable.

In “The Cap and Trade Giveaway” Alan Viard  suggests “under a system of free permit allocation, the stockholders of companies that receive free permits would receive windfall gains. A cap-and-trade system with freely allocated permits is equivalent to a carbon tax in which the tax revenue is given to stockholders.”

Is this corrupt pork barrel corporate welfare really the best Congress can do? Do they really think nobody is paying attention, when after giving trillions of dollars in direct and hidden subsidies to the “too big to fail” banks at the center of the global financial meltdown, they are now handing out hundreds of billions more to the companies most responsible for the environmental problems facing the planet. Do they cynically think we citizens are all just stupid or that nobody is paying attention to what they do? Is empty rhetoric really all that is needed to buy  support of most of the mainstream environmental organizations and cover up such a total failure of Congress?

Friedman is right in his conclusion that “We The People” are the only hope for a real solution with his call to “get out of Facebook and into somebody’s face. Get a million people on the Washington Mall calling for a price on carbon. That will get the Senate’s attention. Play hardball or don’t play at all.”

But he is completely wrong to suggest that we should accept and promote the corrupt politics currently masquerading as a solution to anything at all. The massive fraud being perpetrated in Waxman Markey will do exactly what Williams and Zabel suggest – it will set back any real solution by at least a decade. With its inevitable costs to the economy in the trillions of dollars and its failure to impact carbon emissions in a meaningful way, it will also essentially end all credibility that the environmental movement has to later advocate for real solutions.

Hopefully we can expect more of the Senate than the cynics in the House are apparently capable of.  Let’s hope we can expect them to treat us with the respect of at least trying to be honest and serious about this issue.

Instead of caving on this issue for political expedience, Tom Friedman, President Obama and everyone else seriously concerned about this issue need to stand up and call on the Senate to reject Waxman Markey completely and start over from scratch with a real solution like a straight forward carbon tax that puts a significant and inescapable price on carbon emissions right now.

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