Conference call with API

Yesterday, I participated in a blogger conference call with the American Petroleum Institute. The conference was very informative. One of the issues that stood out in my mind was the issue of ethanol subsidies and the cost incurred by taxpayers particularly now since gasoline prices have plummeted quite a bit over the last several months. Right now the cost of producing ethanol and bringing it to market is simply not cost effective but because of congressional mandates, the American taxpayer basically props up an industry that can't compete with gasoline. The question that always sticks in my mind about ethanol is how long before this bad idea of subsidizing ethanol gets undone by our government? Once a government mandate starts, no matter how bad it is, it takes years to undo it--at a substantial cost to the taxpayer.

Moderator:
Jane Van Ryan, Senior Communications Manager, API

Speakers:
Lou Pugliaresi, President, Energy Policy Research Foundation
Rayola Dougher, Senior Economic Advisor, API
Ron Planting, Manager of Statistics, API

Listen to the conference call below:

Cartoon of the day

Markets in everything

Beautiful sidewalk artwork that simply boggles the mind. Some of the work is obviously advertising for a movie or some other product but the work is wonderful.

Judge rules Ohio homeless voters may list park benches as addresses

No, this is not a joke.

The power of big government

Milton Friedman on lobbyists, regulators, concentrated power, and special interests chasing our tax dollars to the detriment of our freedom.

HT: Liberty Pen

At the McCain Rally

Chef over at the Economist's Cookbook attended a McCain/Palin rally; interesting comments.

Where does the foreign oil come from, daddy?

Seems like our Canadian brethren supply us with quite a bit of black gold. When presidential candidates mouth off the usual populist cant against foreign oil, most people think of the middle east. I wonder if the Japanese, Chinese, or Germans put as much effort to demonizing foreign oil as much as we do?

Crude oil prices slammed by supply and demand

Oil continues to fall in global markets despite machinations by OPEC; The free-market works when it is allowed to. Since Democrats were howling several months ago that speculators and Big Oil were driving up costs at our expense, what about now? I'm sure they have a neat conspiracy theory to explain lower prices though. Lower gas prices will renew the call from the left for higher taxes to offset carbon emissions or for a government monstrosity like a carbon trading scheme. Stay tuned.

Hmm...even rednecks love this guy

It looks like Alaska's largest newspaper has endorsed Obama. The quote that gets me is this one: "Of the two candidates, Sen. Obama better understands the mortgage meltdown's root causes and has the judgment and intelligence to shape a solution, as well as the leadership to rally the country behind it." All I have heard Obama say is that it all has to do with deregulation. Um, what about all the other causes?

Oh, you just wait till they control everything--SCARY!

Please, take all of our money and bailout big business

Hey, guess what? There's a line forming for bailout cash! Wow! What a surprise! We can thank our political elite for driving this whole scam. But hey, it had to be done or else the global economy and our economy would have crashed to smithereens. Right?

Here's one of my favorite quotes from AP News:

The bailout is now the hottest lobbying game in town.

Insurers, automakers and American subsidiaries of foreign banks all want the Treasury Department to cut them a piece of the largest government rescue in U.S. history.

The betting is that many with their hands out will be successful, especially with financial markets in a stomach-churning dive and predictions the economy is about to tumble into a deep recession.

These groups argue that the credit squeeze is so severe and the risks to the economy so dire that their industries need financial support as well.

The Treasury is considering requests from a variety of industries, but has not decided whether to expand the program, officials said Saturday.

Lobbying efforts are intensifying.

Our economy in the hands of politicians does not bode well

A great post from Jim Cardoza at Liberty Pen:

The inmates are definitely running the asylum these days. It seems if any business succeeds wildly, like Exxon, government quickly moves to punish them, using weapons like the windfall profit tax. Politicians cite fairness as their motive.

However, when a business fails miserably, like AIG, government is willing to give them boatloads of money---the former property of individual Americans. Politicians cite our best interest as the motive, arguing that they have brilliantly averted an even worse scenario.

Such an economic policy should be recognized as absurd on its face. The idea that the free market doesn't work, and that the better way to run the economy is to have a handful of all-knowing central planners at the helm, has been proven by history to be a surefire recipe for the destruction of liberty.

The problems with political interference in the everyday economic behavior of people pursuing their own interests are primarily twofold. First, by themselves making the rules, politicians have unlimited opportunity to dispense favors. Why does one business get bailed out and another not?

And secondly, the considerations that weigh most heavily to politicians, when making essential economic decisions, completely lack the component of restraint. In other words, why should a politician, whose vision routinely does not extend beyond the next election season, ever curb spending? After all, government can simply print money.

The ability of politicians to manipulate the markets has brought us to the economic mess of today. And yet, this situation has worked out well for those big government advocates. At great price to the American people, ownership of our nation's financial system has been transferred to the very politicians who destroyed the last one.

Ten times out of ten, the central planners responsible will blame the "lack of regulation" for their failures. The Great Depression was no different. But, how can the free market be responsible? The Federal Reserve was established in 1913. It has been 95 years since we have had one.

Ron Paul on Greenspan

Greenspan Concedes Error on Regulation

It looks like anti free-market Democrats in congress are getting the testimony they crave; Alan Greenspan spent some time being grilled and spewed forth this little nugget: “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.” Interestingly, Greenspan didn't mention having a hand at keeping the Fed funds rate too low for too long. What is most in salient in all this is that no one has mentioned that this whole crisis has the federal governments hand prints all over it.

Health care shouldn't be linked to employment

Jeff Jacoby writes succinctly on why healthcare should not depend on being employed; He explains McCain's $5,000 refundable tax credit better than McCain has during his entire campaign--which says a lot about McCain's inability to communicate his platform effectively. In essence, much of the problems we have with our healthcare system stems from the federal government tweaking the tax code to favor one group over another. The result over the last 60 years has been a lesson in unintended consequences.

Milton Friedman on opportunity

HT: Liberty Pen

Victory of the Islamic revolution!

Besides Marxists and Democratic socialists, there are others that believe that capitalism has met its match and will crumble soon enough. Some like Ayatollah Ali Khamenei of that economic super power called Iran. It's a good thing that the world at least has an economic model to strive for when everything hits the fan. Sheesh.

Milton Friedman on the minimum wage

Safer than in a bank?

Politically Incorrect Guide to Politics

If you have missed John Stossel's excellent program "Politically Incorrect Guide to Politics," you can go over to The Economist's Cookbook and watch all six segments. Stossel does a good job of explaining "spontaneous order" and also dissecting the real causes, not just what the main media says, of the housing/financial crisis. It's worth your time.

As oil prices fall, so does a socialist lament

Under Hugo Chavez and bouyed by high crude oil prices, Venezuala has grown into a petro-welfare state with cash to spare for political patronage and regional clout. But, since oil prices have taken a nose dive as of late, Chavez and Venezuela will have a very difficult time funding massive social programs and political promises made to countries and politicians (some in the U.S.) friendly to Chavez' leftist rantings. There is a lesson to be learned from Venezuela's situation as noted by Ian Vasquez of the Cato Institute: "When you have an economic situation that depends on wealth distribution rather than wealth creation you expose yourself to being in a very precarious situation."

Where, oh where, have the speculators gone?

Remember all the ruckus a while back about how "speculators" were manipulating the crude oil market and how they had a cruel hand in driving up prices? Now that crude oil prices have dropped like a rock, does it mean that these same speculators have decided to let us have a break at their expense? Doubtful. If prices ever head up again expect the usual bromide of blaming Wall Street speculators and Oil companies.

Waiting for Godot

We have been hearing a lot about how the youth vote will make a difference in this coming election. The graph above (from pollster.com and politicalarithmetik.blogspot.com) trumps the pundits who believe that the youngsters are a voting force to be reckoned with. It's possible but not likely. As usual it's always the older folks that turn out in large numbers. Now how they will vote, Obama or McCain, remains to be seen.

John Stossel on government promises

Politicians tell us what we want to hear and like wet lemmings we make our way to voting booths and pull levers accordingly. But the reality is that more depends and is accomplished on the spontaneous order of a free society than any government or politician.

All Hail Obama!!

After last night's debate and since McCain has failed to effectively make a real dent in this election campaign, we had better start learning the lyrics to this little ditty. We are on our way folks! A new tomorrow will dawn: A new America where the government has more control over your financial and economic life in order to make it all more "fair" and to "spread the wealth." For too long we have let the free-market run roughshod over the American people like a hungry lion devouring a helpless little lamb. Finally, the our government with the right selfless leaders in place will fix our country--provide healthcare for all Americans, put a turkey in every pot and install all the proper regulations that will keep us safe and sound while we sleep like baby's at night. Oh happy day. November forth can't get here fast enough.

Big Government continues to grow...

The U.S. government is set to take an even bigger role in our economy and there is nothing we can do about it:

To kick off Tuesday's expected announcement, the government is set to buy preferred equity stakes in Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. -- including the soon-to-be acquired Merrill Lynch -- Citigroup Inc., Wells Fargo & Co., Bank of New York Mellon and State Street Corp., according to people familiar with the matter.

Some of the big banks were unhappy about the government taking equity stakes, but acquiesced under pressure from Treasury Secretary Henry Paulson in a meeting Monday. During the financial crisis, the government has steadily increased its involvement in financial markets, culminating with a move that rivals the breadth of the government's response to the Great Depression. It intertwines the banking sector with the federal government for years to come and gives taxpayers a direct stake in the future of American finance, including any possible losses.

The popular meme these days is that the free-market failed and that the events that have unfolded over the last several weeks is proof that capitalism is flawed, imperfect, and subject to the weakness of greed. And besides, socialism isn’t a bad word. Such is the trance of the general public that has been bludgeoned with high gasoline prices and higher consumer prices. There is a scramble for answers in the dark and we are getting easy answers with no real depth or foresight of unintentional consequences. The power of government grows and it will never be satisfied; More of our tax dollars to be steered by political appointees with little choice by us. Aside from the institutional bankers, is anyone happy about all of this?

Best post I've read on Warren Buffet...

Buffett is no doubt a genius at investing. No one makes $50 billion by luck and he didn't suck at the government teat to do it. But as a moral philosopher, he's an idiot. Who the hell is he to decide for others where they ought to spend their money? Worse, who is he to decide it's ok for the Feds to take it?

If Buffett feels compelled to give half his wealth to Bill Gates's wife so she can feel noble by providing diseased Africans with medicine to keep them alive three months longer, that's his right. He has no right to ask Congress to compel the rest of us to go along.

Read more at Shaving Leviathan

Best post on Paul Krugman recieving the Nobel prize for economics

By Russell Roberts at Cafe Hayek:

I've talked to a number of people who are depressed and angry at Krugman's prize.

For me, it is just another reminder that those of us who believe in liberty are in for a long time in the intellectual wilderness. Today's intellectual climate is a taste of what it must have been like to believe in liberty in 1933, or what it must have been like to be Milton Friedman in say, 1962.

When Al Gore received the Nobel Peace prize I knew that the Academy had tossed political objectivity and credibility out the window.

Some people should NOT vote

John Stossel on how some voters are simply melon heads.

Best post I've read today on a national health care plan...

From Cafe Hayek on the idea of having national health care because it will free businesses from an added expense:

Washington Post columnist E.J. Dionne, perhaps channeling Malcolm Gladwell, commits a truly bad economic mistake. Like all such mistakes, it's one that results when someone looks only at the surface, with no analytical penetration beyond what is most easily seen.

Here's Dionne:

"Few investments would help businesses more than offloading a share of their health-care costs to the government. It's social justice with an economic kick."

Rather than explain in detail the flaws that saturate this idea, I content myself now only to ask: If Dionne is correct that the efficiency of American businesses would generally be improved if government paid for all workers' health insurance - that is, if government paid part of firms' costs of employing workers - then is it also true that the efficiency of American businesses would be further improved if government paid firms' full wages bill?

Put differently, if the U.S. economy would get "an economic kick" from government paying part of firms' costs of employing workers, why would the economy not get an even bigger kick if government announces to all employers: 'From now on, government will pay all of the expenses you incur in hiring and maintaining employees. Government will pay not only one type of fringe benefit, as Mr. Dionne proposes, but all of your costs of employing workers.'

So no firm would any longer have to pay as much as a single cent to hire and maintain workers. Wages, salaries, and fringe benefits - all benefits from health-insurance premiums to office holiday parties - would be fully covered by government.

Gallup Poll still has Obama leading

Barack Obama continues to hold a lead over John McCain in Gallup Poll Daily tracking, 50% to 43%, among registered voters. Obama’s lead has narrowed slightly after being in double-digits several days last week. Two Gallup likely voter estimates show the race slightly closer. Gallup Poll

Cartoon of the day II

Cartoon of the day

HT: Carpe Diem

Funny but true...so true

HT: Liberty Pen

Acorn and the seeds that it has sown

Democrats and the Left have constantly accused Republicans of voter fraud (with little real evidence) particularly over the last two presidential elections. Well, here's a real eye opener. ACORN is a radical liberal pet agency that has recently been nabbed for voter fraud in eleven states. But wait--there is more to Acorn than meets the eye-- ACORN also has a hand in the subprime debacle. It intimidated banks to lend to borrowers that would not have qualified for loans by using the Community Reinvestment Act as a legal bludgeon--threatening litigation if it didn't get its way.



HT: Liberty Pen

Cartoon of the day

HT: Liberty Pen

Who are these people without health care insurance?

Here's another great video from Reason TV. This one focuses on the issue of health care insurance and who can really afford it.

Russell Roberts on the bailout

Say it isn't so, John

In the last presidential debate, John McCain threw out a populist bomb right out of Liberal Land--A mortgage rescue plan that calls for the government to pay full face value for troubled mortgages on properties that are now worth less than the loans. What!? When I first heard McCain utter his proposal I thought that I had misunderstood him but that is not the case. It seems that some liberal groups have actually praised McCain’s idea which has immediately raised the ire of fiscal conservatives everywhere.

I wish McCain would just stick to fiscal conservative principles and just stop worming his way towards a populist center-left which is already occupied by Obama. There should be no doubt that we are experiencing a massive systemic change in America's financial and economic paradigm. This is the moment that Progressives have been waiting for--a moment of financial weakness to pounce on with leftist propaganda and to send us into even more crony-capitalism and corporatism. McCain should be the maverick that he claims to be and rage against the machine.

Destroying Liberty

Americans demand that Congress spend trillions of dollars on farm subsidies, business bailouts, education subsidies, Social Security, Medicare and prescription drugs and other elements of a welfare state. The problem is that Congress produces nothing. Whatever Congress wishes to give, it has to first take other people's money. Thus, at the root of the welfare state is the immorality of intimidation, threats and coercion backed up with the threat of violence by the agents of the U.S. Congress. In order for Congress to do what some Americans deem as good, it must first do evil. It must do that which if done privately would mean a jail sentence; namely, take the property of one American to give to another.

According to a Washington Post article (6/22/05), there were nearly 35,000 highly paid registered lobbyists in Washington in 2004 who spent $2.1 billion lobbying the White House, Congress and various agencies on behalf of various interest groups. Political action committees, private donors and companies give billions of dollars to political campaigns. My question to you: Do you think that these people are spending billions of dollars to assist presidents and congressmen to better perform their sworn oath of office to preserve, protect and defend the U.S. Constitution? If you do, you're a fine candidate for a straitjacket. For the most part, the money is being spent to get politicians and government officials to use their coercive power to create a favor or special privilege for one American at the expense of some other American.

If we Americans didn't give Washington such enormous control over our lives, I doubt whether there would be 10 percent of the money currently spent on lobbying and campaign contributions. This enormous control that Congress has over our lives also goes a long way toward explaining much of the government corruption that we see in Washington.


Read the entire article from Walter Williams

59% Would Vote to Replace Entire Congress

Wouldn't it be great to kick some of these bums out. It is very obvious that Congress is chock full of politicians that will sell this country down the river to salvage their interests.

McCain is still behind in polls

It's not looking good for McCain right now. His failure to properly attack Democrats and Obama on the true causes
of our financial crisis has made him seem part of the problem just by having an "R" next to his name.

Barack Obama leads John McCain among registered voters across the country by a 50% to 42% margin in Gallup Poll Daily tracking from Oct. 3-5, the tenth straight day in which Obama has held a statistically significant lead. More

Best post I've read today on our economic pickle...

From the Economist's Cookbook on Time magazines torpid reporting:

So TIME spends paragraphs talking about easy money. But they neglect to clearly state that the easy money is the fault of the Federal Reserve! It's asinine to blame all of this on the greed of wall street. Greed is a constant factor of life. It's like blaming gravity when a plane crashes.

Barney gets pounded by O'Reilly

With friends like these...

The difference between Liberals and Libertarians (like myself) is that Liberals really believe that government can be a vehicle for progress in that it can, by the dint of its scope and power, help people achieve economic prosperity, equality, and fairness. Conservatives and libertarians, on the other hand, are suspicious of concentrated power and view government as prologue to abuse of power. The latest escapade regarding the "bailout" bill is a prime example. Our government has written up a bill, now law, that would drive any fiscal conservative batty. There are so many bells and whistles in the "bailout" that temerity itself could not explain the boldness that it took to write it and then vote to pass it. Yet another example of how anything that is dealt by our government amounts to largesse, bureaucracy, and fickle solutions.

From National Review Online:

It is no coincidence that the Senate passed its economic bailout bill in a package containing unrelated legislation and special-interest tax breaks. This is an important lesson about how Washington works that is seldom mentioned in the debate over “earmarks,” if these tax provisions can be called that. For in addition to the common objections to earmarks — the wasteful nature of many of them, and the climate of disrespect for taxpayers that they create — it is also important to remember that earmarks grease the skids for bad or unpopular legislation.

“They’re trying to buy off members,” says conservative Rep. Michelle Bachmann (R., Minn.), who spoke to me on Thursday afternoon, ahead of the House’s expected Friday vote. “I think this sort of thing leads to cynicism on the part of the public. It demonstrates the crassness of Washington, the out-and-out vote-buying that happens when leadership feels a bill has to pass. It’s a bit troubling to think that someone would throw out the concept of free markets for the sake of wooden arrows.”

Congress OKs historic bailout bill by big margin

Cha-ching!! The taxpayers get hosed again. This bill looks like a Christmas tree— lit up with all sorts of pork. Both candidates for president supported this bill. Disgusting.

How Democrats protected Fannie and Freddie

Rep. Barney Frank (D., Mass.): I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .

Rep. Maxine Waters (D., Calif.), speaking to Housing and Urban Development Secretary Mel Martinez:
Secretary Martinez, if it ain't broke, why do you want to fix it? Have the GSEs [government-sponsored enterprises] ever missed their housing goals?

House Financial Services Committee hearing, Sept. 25, 2003:
Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

House Financial Services Committee hearing, Sept. 25, 2003:
Rep. Gregory Meeks, (D., N.Y.): . . . I am just pissed off at Ofheo [Office of Federal Housing Enterprise Oversight] because if it wasn't for you I don't think that we would be here in the first place. And Freddie Mac, who on its own, you know, came out front and indicated it is wrong, and now the problem that we have and that we are faced with is maybe some individuals who wanted to do away with GSEs in the first place, you have given them an excuse to try to have this forum so that we can talk about it and maybe change the direction and the mission of what the GSEs had, which they have done a tremendous job. . .

Read more wonderful quotes from those that brought us financial crisis

How government stoked the mania---more from Russell Roberts

Russell Roberts (professor of economics at George Mason University) has a great article on the housing collapse and the financial mess that has reared its ugly head in today’s Wall Street Journal . The simple-minded meme from the Left these days is that all of this has to do with deregulation and the voracity of the free market. It seems to be a popular, if not populist, argument. The issue is far more complex than we are being told.

Kling on Freddie and Fannie and the Recent History of the U.S. Housing Market

Quite possibly one of the most educational podcasts that I have listened to regarding the debacle of Fannie Mae and Freddie Mac is this one on Econ Talk with Russell Roberts and Arnold Kling. The discussion covers all the intricacies and mechanisms between government and these large congress-created behemoths. If you don’t believe that government had a hand in the collapse of these two GSE’s (government sponsored enterprises), take some time and listen in.

Cartoon of the day