Obama’s fake “fossil fuel infatuation tour”

Posted on 26. Mar, 2012 by Stephan Helgesen in Energy/Environment, Politics

President Obama must really be feeling the heat of high gas prices. He is on the defense.

For the past three years, America’s oil industry has endured public denigration, access denials, and permitting delays—all while the President touts the virtues of energy sources not equipped to power America: wind, solar, and, most recently, algae.

As gas prices have been spiking up, President Obama has been speaking out against the evil oil companies and accusing them of obscene profits. Apparently, Americans haven’t been buying into the rhetoric. Polls show increasing numbers of people believe the President’s policies have contributed to the high prices.

Late last week, the American public was offered more evidence that President Obama’s energy policy is really more electoral posturing. Friday afternoon, March 16, an energy tour was announced that would “highlight his Administration’s all of the above energy strategy, including his focus on continuing to expand responsible oil and gas development…” Visiting only swing states, his fossil fuel infatuation tour included a trip to the oil fields of Southeastern New Mexico—where the pending decision regarding listing the sand dune lizard as an endangered species could kill the entire economy in that corner of the state.

With little notice, locals scrambled to put together a rally to greet the President when he touched down. Oil companies, ranchers, local businesses, and politicians sent out alerts—plans were underway. The original press release said: “The President will then travel to oil and gas production fields located on federal lands outside of Carlsbad, New Mexico, an area home to more than seventy active drilling rigs. While in Carlsbad, …”

Something didn’t sound right. The Carlsbad, NM airport cannot accommodate Air Force One. Assumptions were made. He must be flying into Roswell and then being helicoptered to Carlsbad, and driven to a well site. “We’ll have folks line the streets along the exit of the Carlsbad airport with signs…”

On Tuesday, a new press release came out. Nix Carlsbad. The President is landing in Roswell and then “will travel to oil and gas production fields located on federal lands outside of Maljamar, New Mexico.” Maljamar (population 38) is a wide sport in the road surrounded by tumbleweeds and pump jacks. Regroup.

An email alert offered “an important update on the President’s visit on Wednesday. The Secret Service requested that there be NO RALLY at the airport on Wednesday. They were promptly told that this was going to happen whether they wanted us there or not. The Secret Service is CLOSING Earl Cummings Parkway during his visit.”

The update continued, “We will most probably not see the President and our goal is to have enough people show up to draw media attention to what our President is doing to our home area, Lizard, Prairie Chicken etc. He is using this visit to show ‘support’ for our energy industry, while selling our livelihoods down the drain behind our backs.  PLEASE MAKE A SIGN TO BRING WITH YOU!!!!!!!!!”

President Obama’s total visit time was scheduled to be 2 hours and 15 minutes—with no public interaction. Off in the distance, he might have seen the crowd gathered at the rally—even if only in the news reports.

He was greeted at the Roswell International Air Center by Governor Susana Martinez and Roswell’s Mayor Del Jurney. The mayor of nearby Artesia declined to meet the President. Mayor Jurney says that he spoke to the President about the sand dune lizard: “When you have an opportunity to have boots on ground and to meet the people that it affects, I think the decision making process changes a bit and I am hoping that he’ll continue to consider the ill effects of things like the sand dune lizard and other EPA issues that harm oil and gas production.”

From the Roswell International Air Center, President Obama was flown to Maljamar for a nine-minute speech with a backdrop of pump jacks. The speech contained the usual talk of increased permitting and production. Even in front of the small, select audience, he received only sparse applause. Using his professorial tone, he lectured people who earn their living from oil production on how oil is priced in the global market.

In the last few minutes, President Obama launched into the now-well-known tirade about subsidies to oil and gas companies. I am sure the section made sense to the speech writers in the White House, but Obama clearly faltered while delivering the lines in front of his policy’s victims: “The oil companies who are drilling here in New Mexico, and all over the country, are making record profits. … I want American oil companies to do well.

I have said, though, it doesn’t make sense to be providing a $4 billion subsidy when oil and gas are doing plenty well on their own. Oil companies are making record profits and that’s good, but we don’t need to subsidize them. $4 billion is a lot of money and we’ve been subsidizing them for 100 years. So my attitude is let’s make sure we use that money in smarter ways to develop a whole range of new energy sources since the oil industry is mature and has already taken off. Instead of investing tax dollars in profitable companies, let’s invest in our future.

Let’s tell Congress to get their act together. Let’s allocate these subsidies in a smart kind of way. If we’re going to end our dependence on foreign oil and bring gas prices down once and for all, we’ve got to develop new technologies.”

Apparently, he came to my state to scold the successful while promising support for the start-ups.

If President Obama’s visit was about more than a photo op, he’d stop and look into the eyes of the men and women of New Mexico’s Permian Basin—which accounts for about 20% of the domestic oil production in the contiguous states.

He would have seen good, hard-working people. If he took the time, he would have seen fear; fear not just for personal livelihoods, but also for the future of their communities. The people of Southeastern New Mexico are brave, not usually afraid. But they have watched as policy after policy put into place by the Administration directly impacts the economic stability of Southeastern New Mexico.

Greg Nibert, Chaves County Commissioner, District 5, in Roswell, New Mexico said, “I hope the President boards Air Force One committed to putting the citizens of Chaves County ahead of reptiles, birds, and whatever critters they might think of next.

I further hope he will focus on policies that will get government out of the way so our farmers, ranchers, oil and gas companies, and local businesses can produce the economic prosperity needed by our community, state, and nation.”

Will President Obama return to Washington committed to unwinding the policies he previously promoted? Or, was his stop merely a photo op to create the image that he is a friend of fossil fuels and the American West? Sadly, history tells us his fossil fuel infatuation is fake. The people of New Mexico have been used.

This article was submitted by the author of Energy Freedom, Marita Noon who serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.


 

 

 

 

 

 

Partitioning the USA’s Healthcare: A Patient’s View

Posted on 26. Mar, 2012 by Stephan Helgesen in Economy, Healthcare, Politics, Social/Cultural

In a few short days the Supreme Court will take up the case brought by 26 states against the Patient Protection and Affordable Healthcare Act aka Obamacare. You remember it don’t you? massive 2,700 page piece of legislation passed in the dark of night by the slimmest of Senate majorities with no Republican votes that’s supposed to cure the healthcare ills of all Americans? The one that Representative Nancy Pelosi said “We’d have to pass before we can know what’s in it?” The one that over 60% of all Americans oppose and that’s now projected to cost $1.76 Trillion, double its original estimate?

Yes, that’s the one.

As a patient and a taxpayer I find the whole thing incredible! It has caused a major riff in the entire country and served to drive us farther apart instead of bringing us closer together. We need to strike down this law and start afresh, using some good old fashioned commonsense, innovative thinking and a heaping helping of nationwide conversation.

We could start by looking at other countries’ systems.

I have experienced, firsthand, the healthcare systems of three European countries: Denmark, Germany and The Netherlands and one Asian country, Singapore. The Scandinavian countries are often trotted out as a superb example of how a healthcare system should be constructed and the  Danish system works fairly well for a country of only 5 million plus people. Studies done by my office in the early nineties showed that the Danes pay about 20% of their gross earned income for healthcare.

They have both private and public hospitals. The private ones appeared in the 1990s because the Danes got tired of waiting for months, sometimes years, for elective (read: non life-threatening) surgery. The Mermaid Clinic was one of the first. It did a land office business handling the overflow from the government healthcare system.

Many wealthier Danes also elected to come to the U.S. for diagnostic and specialized care.  As a matter of fact, thousands of foreigners routinely seek out U.S. healthcare services, bringing in millions for the M.D. Anderson Clinic in Houston and the Mayo Clinic in Rochester, Minnesota.

Upsides downsides

One of the first casualties in any government system is the ‘bedside manner’ as doctors have little time for chit chat with individual patients because of huge patient loads. In Denmark, doctors see private patients who reside outside the doctors’ geographically-mandated area of coverage and they see those assigned to them.  Their offices, clinics and hospitals were oversubscribed when I lived there due to a insufficient number of healthcare providers to handle the volume and a general patient entitlement mentality (“I paid for these services with my taxes, and by gosh I’m going to use them!”).

I am willing to bet that hypochondriacs accounted for a fair number of visits to GPs though I have no proof of it. While I can’t comment on the quality of the care others received, I can only say that the week I was hospitalized, I received efficient and professional treatment.

One of the principal areas where the Danish healthcare system fell short was in pharmaceuticals. The drugstores (apoteks) were required to buy drugs from a government-owned and operated central pharmaceutical purchasing organization. This organization determined which drugs would be purchased, in which quantity and at what price. It negotiated with the pharmaceutical companies who were not enamored with the process as many of them had new drugs they were trying to get to market.

The government purchasing office refused to stock many of them despite the fact that they had gone through extensive FDA trials in the U.S. and thereby kept them out of doctors’ and patients’ hands. One of the real benefits of the Danish system, however, was the elimination of anxiety. Danes didn’t worry about being able to afford their care as the costs were rolled into their income tax bill.

In Germany, the system relies on private insurance companies to back up its system. Since the Germans are true believers in insurance, and are home to an impressive number of insurance companies, it took no leap of faith to build a system that relied on them. The quality of healthcare and ease of delivery correspond to that of their Scandinavian neighbors’, but the major difference is the size of the populations: Germany has 80 million people, Denmark 5.5 million.  In my four years in southern Germany, I observed that their operation runs smoothly.

In Singapore, medical care was excellent with many top-notch practitioners and great hospitals to serve a relatively small population of a little over 4 million. In fact, Singapore, a tiny nation-state that’s only 21 miles by 19 miles, also benefitted from foreign patients, principally from Malaysia which was a short drive across the causeway that connected the two countries. The Singaporeans are big on technology and had the latest and best diagnostic equipment, and they used it, liberally. Our embassy assessment was that the healthcare was uniform and good.

There were at least four things these countries had in common: 1.) a belief that healthcare is a right and not a privilege, 2.) a national health ID card, 3.) a national patient database and 4.) very high healthcare costs.

That brings me to a CNN reportage done by Fareed Zakaria who is beating the drum for a single-payer system for the U.S. Unfortunately, Mr. Zakaria used the tiny, wealthy nation of Switzerland to make his case for exporting the single-payer system to the USA. Last time I checked the State Department’s statistics, Switzerland’s population was only 8 million and the average income of the  Swiss citizen was $67,000 compared to the U.S. population of 320 million with $31,000 per capita income. While it was interesting to see Switzerland’s system and hear their rationale for it, it was hardly a fair comparison to make with the U.S. demographics, infrastructure, history and geography.

A two-tiered system for the U.S.?

Given the importance of this issue and the turmoil that has ensued since passage of Obamacare, we ought to be engaged in a Manhattan Project-like dialogue to bring all affected groups to the table and consider everybody’s ideas. There are plenty of them out there, like a possible two-tiered or partitioned system: one government-run and administered system for those who dearly want it (or can’t afford anything else) and one that’s private for the rest of Americans.

Those who believe in the government system can pay the costs for running it out of their taxes for their coverage and the rest of us can continue buying our insurance to pay ours. Admittedly, this is what Medicare and Medicaid was set up to do, but the math just doesn’t work anymore which is why there must be a radical transformation in the way states are able to care for their own populations. Even the Europeans understand the principle of ‘subsidiarity’ (applying solutions locally), and they have enshrined that principle in their European Union laws.

More individual state freedom with less federal intervention is necessary to make healthcare work, locally, taking advantage of user-based budgeting and a reordering of healthcare delivery that includes a number of new solutions like health exchanges.

Risk-pool healthcare?

The new government system should not be, to borrow a transportation term, an FOB (free on board) system. Users should be means/income-tested and their fair share of the costs (or premium size) should be based on their ability to pay. Risk pools offering low monthly basic premiums could be set up alongside the full plan, financed with private and public funding. These would be offered to economically disadvantaged persons or those with debilitating illnesses in order to get them the care they need while shielding them from total financial ruin.

Similar pools could be created for those with better overall health. The pool principle is the same, however. The healthier the participants in the individual pools are, the fewer services they require. This would create the potential for profitability, and that profit would accrue the investors in the pools which would include government and the insured participants themselves.  Being able to lower your premiums is also a powerful incentive for adopting healthier lifestyles.

This idea simply exempts those citizens who choose the private insurance solution from having to participate in the government system or paying for its operation, though I believe there should be an option for them to join the government system should their health or financial situations change, dramatically. That way nobody falls through the cracks.

Participants in the government system would be required to have their medical records reside in a secure (hopefully) fire-walled government database. They would be subject to government-mandated norms for all procedures and care and have to accept the rationing that would certainly accompany it. Private plan participants would not. That may sound grossly unfair to those wanting universal, one-size-fits-all healthcare, but there is a tradeoff to be made with participation in any government program.

There’s no one, single, perfect solution to America’s healthcare system, but one thing is for certain… it must be reformed. We must bring our costs down, provide better preventative care and eliminate unnecessary procedures, many of which are now ordered out of fear of lawsuits. We need tort reform, healthcare exchanges, insurance portability across state lines and more patient involvement in their own health.

While many suggestions like those I’ve presented above may be wishful thinking and not be  financially viable, they need to be vetted in an open forum in the states where much of the responsibility to administer any government system we create must reside. We need flexibility and subsidiarity not rigidity to make it all work.

If that dialogue is to take place, we will need the Supreme Court to strike down the Act so that we can start from scratch, going about the business of reforming our healthcare system so that it is built on a public consensus around the kind of basic care Americans want, need and deserve and not on a single vote in the Senate at midnight.

Stephan Helgesen is a former U.S. diplomat. He has lived and worked in over 24 countries and has worked with the local healthcare industries in several of those countries. He can be reached at: stephanhelgesen@cs.com

 

Stimulus funds use “smart” technology for surveillance of American citizens!

Posted on 26. Mar, 2012 by Stephan Helgesen in Economy, Energy/Environment

With gas prices climbing, so is the popularity of fuel-efficient cars. AltTransport.com, a site “dedicated to giving you the latest news and the smartest analysis of the shift towards smarter and more efficient modes of transportation,” reports that “with gas prices rising, car manufacturers are starting to see some of their most fuel-efficient cars fly off the shelves.”

A call to the Smart Car Center in my area reveals that their sales are currently about double the usual; seven sales by mid-month rather than the usual three to five.

While the Smart Car may get good gas mileage and fit into tight parking places, how “smart” is it really? The April 2012 issue of Consumer Reports is now out and features the best and worst cars of 2012. The Smart Car didn’t make the list, nor did it receive a “recommended” rating in the “Hatchback: fuel-efficient class”—where its overall road test rating is 28 of a possible 100.

The April issue’s “Safety” section states: “Even a small car with a good crash-test rating will bear the brunt of a crash with a larger sedan, SUV or pick up.” The issue also states that “motor-vehicle crashes are the leading cause of death for people 5-34 years old and that they amount to more than $99 billion a year in medical and lost-work costs because of injuries.”

Crash tests show the Smart Car is “jarringly stupid.” Video from the Insurance Institute for Highway Safety shows that in a crash with a mid-size Mercedes C-Class sedan, “the Smart ForTwo is not only pulverized, with the passenger compartment getting squashed, but it goes airborne like a beach ball.” Just how “smart” is that? Is gas mileage more important that safety? I’d call it “stupid.”

Like burgundy is 2012’s “new black” for fall—serving as a “new neutral hue” that “will soon become the new backbone of your fall wardrobe”—and sixty is the new forty because “people are living longer today, they’re healthier, and they’re enjoying life more,” “smart” is the new “stupid.”

Labeling something “smart” has the automatic implication that it is right and better—when in fact, like the Smart Car, it may be “stupid” (or, at least, have foolish elements). The April 2012 issue of Consumer Reports has a section titled: “Stopping car crashes with smarter cars,” which focuses on how “talking cars can protect you.” The systems are several steps up from electronic toll collection or the use of drive-by weigh stations favored by truckers.

These V2X systems allow cars in the same area to communicate with each other over a wireless network, exchange data about each vehicle’s speed, location, and direction of travel. Consumer Reports admits that “to some this might seem like a Big Brother approach to monitoring driver behavior,” but says: “such a system has the potential to help drivers avoid” crashes.

Sounds “smart.” But, Justin Brookman, director of the Consumer Privacy Project at the Center for Democracy & Technology, points out: “The concern is that once you set up a mechanism to collect data for one admittedly beneficial use, there are no intrinsic limitations on that data being collected retained, transferred, and used for other purposes.”

We’ve recently seen the collection of data being done without consumer approval as in the case against Google and Apple. On January 23, the US Supreme Court ruled that use of a wireless GPS device attached by law enforcement to monitor a vehicle, without a court order as required for wire taps and other types of monitoring the citizenry is unlawful, a violation of the 4th Amendment. Yet, unauthorized data collection is one of the primary concerns facing consumers in states with mandated “smart” meters.

If you live in a state that is not requiring smart meters, you may not know what they are. Smart meters replace your standard analog electric meter with a digital one that can be read from a central office rather than a meter reader visiting your home—thus eliminating hundreds of jobs. President Obama says they are “devices that will have a direct benefit for consumers who want to save money on their electric bills.”

They will “Allow you to actually monitor how much energy your family is using”—“even by the hour.” But these smart meters allow others to “monitor” your electricity use as well. Additionally, the next generation of smart meters will probably have controls that let the electric company turn off your electricity at peak times—or, perhaps, if you use too much. Only then, will they actually save any electricity.

Addressing smart meters, Mark Levin, talk show host and author of Liberty and Tyranny and Ameritopia, says: “I don’t need some smart meter telling me when to increase or reduce the heat. We also know when the peak periods are—when we are home!

That’s when the peak periods are. Think we are that stupid?” He captures the concern so many feel when he says: “It is there to monitor you and dictate to you.” He concludes, “The less information they have about real American citizens the better.”

Mandatory smart meters have constitutional and statute violations, in that they include unreasonable, invasive networking elements to detect, record, report and exploit private customer energy consumption and other personal information, without receiving prior customer agreement.

In response to increasing customer objections to the smart meters, many states are now proposing opt-out programs—often with high fees for the customers who do not cooperate with the plan. Without fully understanding the implications, paid for with taxpayer dollars doled out through the American Reinvestment and Recovery Act of 2009 (stimulus funds), thousands of Americans have given up freedoms.

Like the Smart Car, smart meters sound good. The Smart Car does get good gas mileage, but it is dangerous. Smart meters can help manage how energy is used and keep power reliable, therefore keeping customers happy.

But smart meters need to be something that people ask for, not something that is forced upon them; something that rewards ratepayers with lower rates for allowing their appliances to be turned off at peak times, not something that charges penalties to opt out.

And we haven’t even touched on the smart grid.

When you hear something being touted as “smart,” beware. Chances are that it is a marketing technique designed to make you think you should have something that is really “stupid.”

Burgundy is the new black. Sixty is the new forty. Smart is the new stupid.

This article was submitted by Marita Noon, the author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

 

China Trade: A ‘Target Rich Environment’. Now, It’s American Auto Parts!

Posted on 26. Mar, 2012 by Stephan Helgesen in Economy

The post-Crash intervention by the Obama administration in mid-2009 in righting the General Motors and Chrysler ships was an extraordinary example of ideal cooperation between industry and government.

And anyone who argues against it ignores the realities of the surrounding financial marketplace which at the time offered absolutely no luxury of time and no market-available means of restructuring these two companies so integral to the American economy.

A cascade into bankruptcy or liquidation by GM and Chrysler – with Ford following in their wake – would have led to the immediate loss of hundreds of thousand jobs, with disastrous effect throughout the nation, but especially in Michigan, Ohio and Indiana where employees directly and (with the multiplier effect) indirectly associated with motor vehicle manufacturing (autos, parts and tires) account for around 8% of total non-farm employment (of 11.9 mm).

For a decade, many of us have been calling on the White House – first, Mr. Bush’s, and now, Mr. Obama’s – to demand that the U.S. have a formal national all-of-government Manufacturing Policy to rival the Policies of our major trading partners. If such a Policy had been in place in mid-2009, the appropriateness of and the mechanisms for restructuring the auto manufacturing industry would have been more obvious to all and the “prove-it-to-me” naysayers would not still be arguing, even today, over either the clear imperative or the now very obvious positive outcomes of the ultimate effort.

But the continuing absence of such a Policy has left stranded, so to speak, many thousands of the 1.6 million combined direct and indirect jobs in the auto industry related to parts and tire manufacturing. The overall motor vehicle manufacturing sector is the second-largest employer among all U.S. manufacturing industries, and parts and tire manufacturing contribute the most direct jobs (two-thirds or more), of which many are now at grave risk of being offshored, especially to China.

Despite the Obama administration’s highly successful reorganization of the end-of-the-line manufacturing companies (GM, Chrysler and, indirectly, Ford) – which has eliminated, at least for Chrysler and GM, the roughly $2,000-a-car cost disadvantage that these companies previously had due to high legacy costs, specifically wages and retiree benefits – a large number of employees, in the tens and tens of thousands, are still jeopardized by often unfair trade policies.

In laymen’s terms, the vital link between the growth of automobile production jobs and automobile parts jobs has been broken: the direct manufacturers are recovering, but the parts companies are still shrinking, with significant continued threat to our ongoing economic recovery. The Obama administration now needs to use its authority and capabilities, within the limits of global trade and trade-related agreements, to protect these jobs as well.

The realities associated with this unfair and often illegal overseas competition need to be fully understood before solutions can be crafted and applied.

Right now, China, in accordance with its “Twelfth 5-Year Plan” and the Plan’s stated commitment to promote all aspects of its domestic auto industry, indisputably favors its own domestic auto parts industry in ways that are in direct violation of commitments it made when it officially joined the WTO in December 2001. Evidence of this includes: The Chinese government’s subsidy of auto parts for export into the U.S. market – according to EPI, to the tune of a staggering 27.5 billion just since 2001 – while using its draconian “Indigenous Innovation Act” to effectively limit imports from America parts manufacturers into its markets. In those few instances when an American supplier is allowed access to Chinese purchasers, the American company has to set up shop in China and transfer its proprietary technology, i.e., its “intellectual property”.

China’s imposition of restraints on the export of key raw materials – especially the so-called ‘rare earth’ minerals – needed for high-end parts production. The industry and the nation can take a lot of comfort from President Obama’s resolve just last week to attack these restraints head on by bringing, along with Japan and certain of our European allies, a trade case solely directed at China’s rare earth minerals trade practices, which today have China controlling more than 95% of the globe’s overall trading in these vital commodities.

The results of these aggressive actions – which can’t be any surprise to anyone – are that imports of Chinese auto parts into the U.S. have increased by 25% in only the last two years and, even more sobering because it confirms a now seemingly irreversible trend, the U.S. trade deficit with China in auto parts has increased an almost unbelievable 900% since 2000.

Thankfully, there are solutions to this trade imbalance-cum-nightmare, and if everyone would simply acknowledge that it is indeed a “nightmare”, they are solutions which are eminently achievable.

To start, the Obama administration needs to take action, under WTO, against China’s unfair auto parts export practices, exactly as he has just proposed doing related to rare earth metals.

President Obama needs to insist that the American auto parts industry be a priority consideration of the recently announced Interagency Trade Enforcement Center that he established to police trade compliance.

As In the same way that President Obama, with great leadership, recently signed into law the legislation (SB 2135/HR 4105) that allows for countervailing duties on subsidized goods imported into the U.S. from China and Vietnam, he needs to ignore the thinly veiled threats of the Chinese government regarding auto parts..

Congress needs to enact the Reciprocal Market Access Act, the bipartisan legislation sponsored in the House by Representatives Louise Slaughter (D-NY) and Walter Jones (R-NC) as HR 1749 and in the Senate by Senators Sherrod Brown (D-OH) and Kay R. Hagan (D-NC) as SB 1766. The Reciprocal Market Access Act would immediately break down the ‘barrier’ which exists between traditional tariff barriers and the increasingly much larger non-tariff barriers (NTBs) (such as China’s oppressive and illegal ‘buy Chinese’ purchasing requirements) that prevent fair market access by American suppliers, and it would give our government – triggered by either a private sector or Congressional request – the automatic negotiated right to revoke concessions made to a trading partner if it doesn’t implement the commitments it made to us.

Finally, in order to put a stop to the theft of American intellectual property, Congress also needs to adopt former U.S. Senator Slade Gorton’s (R-WA) recommendation last year to the U.S. China Economic and Security Review Commission that the U.S. impose tariffs equivalent to 150% of the estimated annual IP losses suffered by American companies.
Some would say that we are making appropriate progress in trade reform, and that it’s time to slow down a bit. Yes we are progressing, but I, for one, am not satisfied that it is yet the degree of progress we need – and the Sword of Damocles hanging over the American auto parts manufacturing industry proves the point.

My mantra continues to be that we still need to take a much more pro-active stance in trade in order to better balance the nationalistic economic policies and mercantilist practices of our trading partners with our own trading rights as a nation. And this stance will pretty obviously not come from either of the two remaining major Republican candidates for President. Governor Romney, after first stating that America’s Big Three car manufacturers could go bankrupt for all he cared, further showed his true colors by opposing relief for tire workers in the U.S. when that industry faced a verifiably unfair increase in Chinese imports. And Senator Santorum believes tax cuts alone are sufficient to keep the entirety of the overall automobile industry prospering here at home, no matter what unfair behaviors our overseas trading partners adopt.

American-made products can compete globally just fine, thank you – their manufacturers only need to be in fair fights in order for these products to do so.

This article was submitted by Leo Hindery Jr. who is chair of the US Economy/Smart Globalization Initiative at the New America Foundation, co-chair (with USW President Leo Gerard) of The Task Force on Jobs Creation, founder of Jobs First 2012, and a member of the Council on Foreign Relations. He is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. and Liberty Media, and is currently an investor in media companies.



New Mexico 2012 Home Sales Up Over 8% from 2011

Posted on 25. Mar, 2012 by Stephan Helgesen in Economy

1,758 sales were reported to the REALTORS® Association of New Mexico during January and February 2012.  This number is 8.1% higher than the number reported for the first two months of 2011 and 10.9% higher than the sales reported for same period in 2010.

February’s median price was $159,500.  This compares to the January 2012 median of $163,250, and a February 2011 median of $165,000.  The 2012 Year-to-date median is $160,000.  Median price means half the houses sold for more and half for less.

“Lower prices (which are influenced by foreclosures and short sales) mean great news for buyers and the increase in number of sales reflects the decision to ‘buy now’ of many of those folks who were on the fence about buying,” said Debbie Rogers of Silver City, 2012 RANM President.  “Many of our members are reporting increased activity in their market.”

“Real estate markets vary widely across the state,” according to RANM Executive Vice President Steve Anaya.  “As always, there are reporting markets with increases in sale numbers and markets with decreases in sales.”

The spring market is nearly here and there is evidence that it will be stronger than recent history.  Fannie Mae’s February National Housing survey found with low mortgage rates and falling home prices, 70 percent of those surveyed say now is a good time to purchase a home.  Also, more Americans surveyed say now is a good time to sell, rising to 13 percent in February, which is the highest level in more than a year but still low by historic standards.

The trends and numbers reported are only a snapshot of market activity.  If you are interested in buying or selling, consult a REALTOR familiar with your market area; he/she can provide information on specific trends in your neighborhood.

Statistical information and trends are based on information furnished by New Mexico Member Boards and MLSs to U. S. House Stats. Current reporting participants are: Greater Albuquerque Association of REALTORS, Las Cruces Association of REALTORS MLIS, New Mexico Multi-Board MLS (Artesia, Carlsbad, Clovis/Portales, Deming, Gallup, Grants, Hobbs, Las Vegas, Sierra County areas), Otero County Board of REALTORS, Roswell Association of REALTORS, Ruidoso/Lincoln County Association of REALTORS, Santa Fe Association of REALTORS, San Juan County Board of REALTORS, Silver City Regional Association of REALTORS, and the Taos County Association of REALTORS. Reports represent single family residential data only.  Information does not necessarily represent all activity in any market/county.  Figures based on reports run 3/16/12.  Visit www.nmrealtor.com (housing trends) for county and board statistics.

This article was submitted by The REALTORS Association of New Mexico, one of the state’s largest trade associations, representing over 5,300 members involved in all aspects of the residential and commercial real estate market.

 

The Hidden Costs of Campaigning

Posted on 17. Mar, 2012 by Stephan Helgesen in Politics

There are four Republican candidates for President, and it’s pretty easy to figure out what they spend on campaigning as they must regularly identify and report those expenditures along with their campaign contributions.

It’s a very different kettle of greenbacks when it comes to figuring out what the real costs are when a President campaigns.

Here’s something to think about. The Hatch Act (passed in 1939) says that an incumbent/candidate like a sitting President must not campaign from federally-owned facilities and must keep his campaign costs separate from his official costs.

That should mean having two of most things like Blackberries, email accounts, cars, etc. For example, you can’t make campaign calls from U.S. Government offices and you can’t travel to campaign speeches/dinners in a Government vehicle.

There are plenty of ways to get around that, however. Meetings, speeches and dinners can be dual-purpose events – events where the President’s presence is desirable to advocate for, or speak on, national policy issues or give interviews to the media.

And while he’s at the venue already, he might as well hold a rubber chicken fund-raising dinner at $35,800/plate (the maximum allowable contribution an individual may give to a political party in a given year – see Federal Election Commission regulations at www.fec.gov).

Later, the party can openly support his campaign with all that money raised.

At this point in their respective campaigns, President Obama has held 100 fund-raisers compared with former President George W. Bush’s 56. To me, that says that George Bush was either not motivated, too confident or was too busy focusing on the country’s business. It could be said that Barack Obama is either a more active campaigner, is worried that he won’t have enough money to beat the Republican nominee, or just likes the limelight.

While firewalls must be set up between the campaign and the office staff, it’s really hard to identify which of the hidden costs associated with campaigning are paid by the taxpayers.

Let’s pretend you are the Pres for a moment. You wake up in the morning, review your secret CIA and DOD briefings, have your breakfast, read the papers and speak with your Chief-of-Staff and Press Secretary to see ‘what’s shaking’ out there in America.

Your mind is not firewalled, however, and during the conversations, you spot a few events that present opportunities for making a campaign pitch.

You spend a fair amount of time discussing the venue, the speech, the possible pre- and post interviews, the local and national spin, the travel and how this event might benefit the country and in the back of your mind…how it will help your campaign.

At this point, it’s a Presidential Event and not a Campaign Event.

You call your campaign liaison to speak with him about the event. He suggests that you hold a fund-raising luncheon and dinner built into the Presidential Event (after all, the President has to eat, doesn’t he?). You agree and go over the potential donors list, making sure that you haven’t overlooked any high-rollers.

The event goes on the official schedule and is communicated to the Secret Service which sets a massive operation into motion involving visits to the site, liaison with local security and law enforcement, venue managers, interviews and more, all costing the taxpayers a considerable chunk of change.

It’s a few days from the actual event, and you decide it would be nice to bring your family along, so a few more seats on Air Force One are booked for your children and the First Lady (and her Chief-of Staff and Protocol Assistant which are added to the passenger manifest that already includes your top staffers, speech-writers, personal physician, Secret Service contingent, selected media from the White House Press Pool, the White House Photographer and that nice military man who holds the launch codes to our missiles).

In case you’re wondering, you won’t have to take the mid-town bus to the event. Your limousine and 4-6 other official vehicles depart WASHDC ahead of you in a C-130 transport so that they’re all gassed up and ready for you when you land at your destination.

It’s ‘wheels up’ time. So far, the cost of your trip is way up in the six-figure range. And since this is mostly a Presidential Event, your re-election campaign won’t be writing a big check to the Treasury for the costs.

Instead, they’ll be depositing a thick wad of $35,800 checks from eager supporters, proving once again that Americans are world leaders when it comes to multi-tasking… and using other people’s money.

- Editor

Electric Cars, Algae and President Obama

Posted on 15. Mar, 2012 by Stephan Helgesen in Energy/Environment, Social/Cultural

I’ll be honest. I want an electric car (preferably one that goes 150 miles without re-charging so that I can make a trip to Santa Fe and back without breaking out a couple hundred ‘C-size’ batteries). I also want solar panels on my roof (preferably ones that don’t cost upwards of $25,000 and have a ten-year amortization).

Why? Because I want to stop the rapid depletion of our fossil fuel, reduce carbon emissions and eliminate our dependence on countries that despise us. I did buy a Hybrid Ford Escape back in 2008 and feel that I did something to make up for the excesses of my fellow citizens, though I still love the comfort of my Ford F-150 that gulps a gallon every 15 miles. What a contradiction!

The other day I listened to President Obama speak about algae as a possible new source for fuel, and promptly heard radio and TV commentators ridicule him for it. I guess they thought the word, algae (some called it, ‘Pond Slime’), was funny or they were too lazy to do any research on it.

This is one time I must stick up for the Chemist-in-Chief. Here in New Mexico (along our southeastern border with Texas) are millions of gallons of briny water in underground aquifers. There are also hundreds of thousands of acres of flat unused land AND ample sunshine on top of all that water.

If you decided to build hundreds of shallow beds and cover them with a translucent roof and then add the right strain of algae (with the shortest growing cycle and the highest yield of oil), our state could produce enough oil from algae which, when mixed with diesel fuel, could power the entire fleet of the Federal Government’s vehicles every single year!

That’s what the experts told me when I was Director of the State’s Office of Science and Technology back in 2008 when several pilot projects were started down in the Carlsbad area, but if you don’t believe me, just ‘Google’ fuel from algae new mexico if you want to know more.

I’m a committed recycler, and every week I make my regular pilgrimage to the massive recycling bins at the East Mountains Transfer Station on old 66 (where a great bunch of guys manage this spotless facility seven days a week).

There I recycle my plastic, tin cans, aluminum, cardboard, newspaper, magazines and glass. So you can count me in as a card-carrying member of the new world order, the one where people think about the consequences of their actions and manufacturers experiment with environmentally-friendly products and packaging materials.

I also want to stop the needless felling of trees to make the millions of books that stay on Barnes and Noble’s shelves for months on end until they’re reduced to 20% of their original price. That’s why I bought a Kindle for my wife and myself (we can even read the same book at the same time with this device).

I feel a whole lot better about downloading thousands of pages of the world’s knowledge, mirth and tragedy into a 4½” x 6½” half-pound electronic marvel that only costs about eighty bucks.

This green revolution isn’t new. Our ancestors made full use of everything they had, often re-inventing new ways to re-use things that most of us would have given up for dead. Fortunately, there’s still some of that attitude left in my generation.

Actually, we were saved from total egotistical consumption by the intervention of the hippies, Ralph “Unsafe at any speed” Nader, Paul “The population bomb” Ehrlich and others who reminded us that we were just caretakers of the Earth. They kept us from falling into the black hole of self-centeredness, and for that we should be grateful.

Today, the most important things for me to recycle are my imagination and my optimism. The thing I can throw away for good is the notion that things must always remain the same to be considered valuable.

- Editor

Energy cost misdirection

Posted on 15. Mar, 2012 by Stephan Helgesen in Energy/Environment, Politics

We are all squawking about high gasoline prices, but there is an energy misdirection going on.

Sabre rattling by Iran has security specialists sitting on the edge of their seats and speculators seeing the resulting reduced-fuel future. Short of a quick military strike that would squelch Iran’s threats, there is little that America can do to stem the rise of the global commodity costs—though history tells us an announcement of increased drilling in the US would have a positive impact.

While we are all looking at gas prices, there is another dramatic energy price increase going on that is totally optional; one that is within the President’s power to completely reverse.

Coal-fueled electricity generation is the lowest cost. Yet, due to cost-increasing regulations, coal-fueled power plants are being shut down at an alarming rate—killing jobs, raising rates, and putting the reliability of the electrical grid at risk.

Environmental groups are cheering, while local governments are left to grapple with the lost tax revenue. On February 29, Michael Brune, executive director of the Sierra Club, penned a post celebrating the 100th closure of a coal-fueled power plant: Chicago’s Crawford plant. He also boasts that the group’s efforts have prevented 166 new coal-fueled power plants.

The closure of two units at the Salem Harbor Station in Massachusetts could halve the plant’s workforce. Salem Harbor Station is also the city’s biggest taxpayer. Mayor Kim Driscoll addressed the problem of the loss of the $4.75 million tax bill: “It’s a big chunk of change when you’re looking at we still have the same number of kids in school, we still have the same number of calls for police and fire, we have the same number of parks and resources that need to be maintained and kept up.”

In Chamois, Mo., jobs at the power plant are “the best thing going.” Mayor Jim Wright doesn’t want to see the Central Electric Power Plant shut down. He says: “Coal’s coal. If you are going to dig it up and ship it to China, you might as well burn it right here.”

Power plants throughout the country are being closed because of onerous regulations being mandated by the EPA. The North American Electric Reliability Corporation and power plant operators are pressing the Obama administration to give companies more time to comply with the rules to avoid shutting down too many power plants at one time. The regulations and the timeline to meet them make it uneconomic to upgrade the older units.

In response to EPA regulations proposed in October, Arizona Public Service Company announced in November that it would close three of the five units at the Four Corners Power Plant in Farmington, NM. Mark Schiavoni, senior vice president of Fossil Generation, said: “These rules would present a major economic challenge for continued operation.”

Across the highway is the San Juan Generating Station where the EPA’s plans to reduce emissions and increase visibility are threatening more closures. Not only are the EPA regulations aggressive, they are also invasive. The New Mexico Environment Department has a plan that will meet the EPA requirements of the Clean Air Act at a cost of $77 million. But the EPA wants a specific technology that will cost the ratepayers ten times more! The EPA’s plan will likely force the closure of the two older units at the San Juan Generating Station.

The Public Service Company of New Mexico (PNM) is part owner of the San Juan plant. PNM and the State of New Mexico are appealing the EPA’s decision. They contend that the EPA did not properly consider the state plan proposing the alternative technology that would cost less but achieve similar improvements.

They’ve asked the EPA to put a hold on the decision, and they’ve filed a stay that would delay implementation of the regulations while the court considers the appeals. PNM could have to spend millions on planning and design when the more-costly regulation could be ruled against in favor of the lower-cost option.

On March 2, the 10th Circuit Court of Appeals in Denver denied the request to put the new regulations on hold while the appeal is being considered. The EPA could have granted the stay, but they are not interested in cooperation. The San Juan plant will likely go the way of the Four Corners plant across the highway.

Unit closures at both plants will severely cut the current generation and hundreds of jobs. The rate payers will shoulder the costs. Environmental groups are pleased with the court’s decision.

The units that could be retired early, due to the regulations, have not yet been fully depreciated. I picture negotiations taking place between the key players—the Public Regulatory Commission, the environmentalists, and PNM—in a smoke-filled room (note: the ratepayers will not have a seat at the table).

PNM could agree to bulldoze the units—which the environmentalist want—but it will cost. PNM will need to offset the cost of early retirement through rate increases.

Environmental groups say that cost claims are “hype”—though they admit that the retrofits required by the EPA will result in rate increases. They believe the consumers have been “getting a free ride because the cost of electricity from these plants is artificially low.” Additionally they believe that costs will be less than predicted. Not likely. How often do government projects come in under budget?

As the President did with the ozone rules in September, he could instruct EPA Administrator Lisa Jackson to allow more time or to approve the state’s plan. He could delay the implementation of all of the aggressive regulations for a few years—at least until the economy improves. Many of the coal-fueled units in question are fifty-plus years old.  They’ve already had scrubbers and other pollution reduction retrofits. They are running far cleaner than the original designs.

Allowing them to operate for another few years—or for the rest of their useful lives—will not greatly impact long-term emission reductions, but it could provide significant benefits to the economy.

With the Administration’s permission, the environmentalists have a stranglehold on American energy policy. They are not apt to delay implementation. The EPA is pushing these regulations now because if President Obama does not get reelected, the Republican president will delay indefinitely or repeal the regulations altogether. This is their moment.

Unlike oil, electricity is not a global commodity. It is used close to the generation source. Electricity is as essential to a robust American economy as is oil/gasoline. Yet, while we are in the midst of the worst economic crisis of our lifetime, the Administration has made choices that will have an immediate impact on electricity prices.

The one, two punch of high gas prices and increasing electricity costs are likely to knock out the struggling economy.

This article was submitted by the author of Energy Freedom, Marita Noon who serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.


 

Follow the Money Trail in U.S. Politics

Posted on 15. Mar, 2012 by Stephan Helgesen in Politics

(Corrects details on formation of and disclosure by Super- PACs)

http://www.bloomberg.com/news/2012-03-14/unveil-corporate-money-trail-in-u-s-politics-gomory-hindery.html

America today is very different from the country that fought the Revolutionary War and framed the Constitution. Then, it was a nation of farmers; today, it’s a nation of corporations. Most Americans now work for corporations, the largest of which command resources and money on a scale beyond that of many nations.

Yet when it comes to public issues like jobs, the distribution of wealth or even plain old politics, we still talk as we did 200 years ago. Remarkably, too few citizens discuss the effects of corporate behavior on jobs, health care and the economy, even though corporations affect all of these through their influence on elections and the actions of government.

As President Theodore Roosevelt noted in his first annual message to Congress: “Great corporations exist only because they are created and safeguarded by our institutions; and it is therefore our right and our duty to see that they work in harmony with those institutions.”

The key to doing this is to hold corporations accountable by ensuring that their activities are made visible. From the end of World War II until about 1980 — even through the economic travail of the ’70s, as the U.S. faced the Arab oil embargo, rampant inflation, significant growth in foreign competition and the aftermath of the Vietnam War — it was generally considered normal for large corporations to acknowledge all of their constituencies.

Maximizing Equity

Still, the public debate about the role of corporations began during these years. One view came from Milton Friedman, who in 1971 wrote in the New York Times Sunday Magazine that corporations’ only responsibility was to maximize the value of their shareholders’ equity.

On the other side, notably, were Edmund Littlefield of Utah International and Reginald Jones of General Electric Co., who argued that they and their fellow chief executive officers were equally responsible to their employees, customers, communities and the nation.

In 1981, at their urging, the Business Roundtable, made up of the nation’s most prominent CEOs, formally embraced this view. Real-life interests tend to ignore such intellectual pronouncements, however. Large shareholders came to realize that if they gave top management unprecedented quantities of options on company stock, the executives would single-mindedly focus on raising the stock price.

By 1997, the Business Roundtable reversed itself, saying in effect that corporate responsibility extends only to shareholder value. Of course, one way to boost profits and stock prices was to hold wages down. And so management and shareholders each came to stand against the interests of employees.

In the 1980s, management compensation rose sharply, while wage earners were left out of the benefits of growth. The average CEO of a public company, who had for a century earned about 15 to 20 times what his average employee earned, began taking a bigger and bigger piece of the pie. Today, that earnings ratio is about 400-to-1.

In trying to understand the consequences of corporations focusing only on shareholder value, it’s important to know who the shareholders are. If they are mainly ordinary people with invested pensions, then the idea of working to give them as much value as possible, even if there is an adverse effect on wages, doesn’t seem so bad. But if corporate shares are concentrated in only a few hands, then the stock price is a less-appealing goal.

Wealthy Stockholders

While many people do have small stakes in corporations through their pension funds and 401(k) plans, the bulk of equities are held by the wealthiest individuals. In 2007, the richest 5% of Americans held more than two-thirds of the value of all corporate shares, and more than half those shares belonged to the top 1%. In their pursuit of shareholder value only, corporations are now in fact dedicated to making the nation’s wealthy wealthier.

The effects are visible. From 1980 until the onset of the recession in December 2007, almost all economic growth benefited the upper 10% of Americans. The lot of the remaining 90% barely changed at all. Maximizing profits excuses the off-shoring of millions of U.S. jobs and of American technology. It also explains many of the perverse financial industry practices that contributed to the crash.

Making matters worse, it has led many large companies to spend more and more money on lobbying. Congress has tried to counteract the influence of money on politics — for example, by passing the Bipartisan Campaign Reform Act of 2002, widely known as McCain-Feingold.

However, in 2010, with its decision in Citizens United v. Federal Election Commission, the Supreme Court (1000L) struck down the provisions of the act that had barred corporations and unions from running advertisements mentioning candidates within 60 days of a general election or 30 days of a primary. This ruling handed a small group of CEOs and billionaires (unions don’t have as much money) near-unlimited powers of persuasion in the democratic process.

At the same time, the Court paved the way for the formation of super-PACs –“independent-expenditure only committees” — to raise unlimited amounts of money from corporations, unions and wealthy individuals for specific candidates or causes.

Super-PACs are required to identify their contributors, but too often the individual givers are masked through the use of shell corporations.  We can hope that the Supreme Court, seeing the effect of its rulings, will find a way to reverse or limit the decision. But while we are waiting, efforts should be made to make corporate political activity transparent.

The Securities and Exchange Commission should use its existing authority to protect investors by requiring that corporations disclose their political contributions. To be effective, this requirement would also need to apply to donations to intermediaries, such as the U.S. Chamber of Commerce.

Labels for Corporations

Corporations should also voluntarily disclose their political dealings to consumers. When any of us chooses a bank or buys a car, we should be able to tell if our money will go to push a political agenda that we might oppose.

Common Cause and other civic organizations committed to transparency could rate corporations on their political activities, and post the ratings on their websites. One such scale already exists, the Zeitlin & Schroder CPA Index, and has been used to assess the political activities of 32 major corporations.

This is only the beginning, however. Corporations also affect our lives through their influence on jobs, offshoring, health care and wages. These actions, too, should be disclosed and rated. As this effort gathers momentum, it will be important for the rating organizations to be clear about the source of their own funding.

We would not want to find that ratings were effectively for sale (as were once, apparently, the financial gradings of Moody’s Investors Service and Standard & Poor’s).

As a nation, we have reached a turning point where we must decide how much power we will allow large corporations and the extremely wealthy to have over our lives and our political system. Making their activities visible and transparent is a first step toward ensuring that we don’t become a nation for the rich but rather one that works to provide a good life for all.

(Ralph Gomory, a research professor at New York University’s Stern School of Business, was formerly senior vice president for research and technology at IBM. Leo Hindery Jr. is chairman of the New America Foundation’s U.S. Economy/Smart Globalization Initiative and former chief executive of AT&T Broadband. The opinions expressed are their own.)

Editor – To contact the writers of this article: Ralph Gomory at gomory@sloan.org or Leo Hindery Jr. at leohindery@msn.com


China targets solar industry in trade war against American manufacturing

Posted on 06. Mar, 2012 by Stephan Helgesen in Economy, Energy/Environment

On March 27 in D.C., I will be part of a panel at the Second Annual Conference on the Renaissance of American Manufacturing, along with Leo Gerard (International President of the United Steelworkers) and Mike Mandel (Chief Economic Strategist of the Progressive Policy Institute).

Building off of Mike’s ongoing superb economic analysis to prove the imperative of a robust manufacturing sector, I will try to make the further case, as Rick Sloan (Communications Director of the International Association of Machinists and Aerospace Workers) and I tried to do in a piece last month (http://www.huffingtonpost.com/leo-hindery-jr/do-manufacturers-need-spe_b_1274551.html) that U.S. government policies across the board – trade, taxes, investments, R&D, exports, infrastructure and procurement – need to be integrated into a manufacturing policy to rival those of our trade competitors.

A robust manufacturing sector – with no less than twenty percent of the nation’s workers engaged in it – is critical to the American economy.  Indisputably, manufacturing has the largest multiplier of all sectors of the economy (every dollar in final sales in manufacturing products supports about $1.40 in other sectors of the economy); manufacturing employees earn higher wages and receive more generous benefits than other working Americans (on average, they earn 23% more than workers in other parts of the economy); American manufacturers are responsible for the majority of all business-related R&D in the U.S.; and an increase in the production of manufactured exports and import-replacing goods in the United States is the only thing that will significantly bring down our trade deficit  and reduce our international debt burden.

Before the March 27 Conference, however, the Obama administration will have an ideal opportunity to support America’s manufacturing base when the Commerce Department considers two cases involving massive illegal subsidies and illegal dumping practices by China’s state-directed solar manufacturing industry.

These specific cases are part of the larger pattern of unfair trade practices by the Chinese that have taken a significant toll on American manufacturers and workers since China joined the WTO.

The extensive subsidies that China lavishes on its state-owned enterprises (or SOEs), from currency manipulation to low- and even no-cost loans, from free power and water to forced technology transfers and hoarding of rare earth minerals, have caused at least 18 million U.S. jobs, both direct and indirect, to be off-shored to China in the last decade.

With these massive subsidies, Chinese manufacturers – including the Chinese subsidiaries of and joint ventures with U.S. manufacturers – can deliver products to market more cheaply than U.S.-based manufacturers operating without such subsidies.

These unfair subsidies and practices have impacted numerous U.S. industries, but none more so than America’s solar manufacturing sector.  According to the U.S. Department of Energy, the Chinese government has handed Chinese solar manufacturers more than $30 billion in subsidies in just the past few years.

Not surprisingly, this largess has tipped the competitive balance in favor of the Chinese manufacturers.  So far, twelve American solar manufacturers have either been forced to close or downsize, with significant job losses.  The American companies are simply not competitive in the face of China’s tilting of the playing field.

To be clear,  I am not talking here about the much-publicized failure of the company Solyndra, which rather than making conventional solar panels made more expensive, but potentially more efficient cylindrical ones that became uncompetitive once silicon prices plummeted.  Solyndra’s collapse was as much due to a bad bet on long-term materials costs as it was to the unfair re-stacking of the economic odds by the Chinese.

That the goal of the Chinese is to dominate the global solar and renewable energy industry is clear.  A report released in February by the Senate Finance Committee’s Subcommittee on Trade titled “Losing the Environmental Goods Economy to China” provides ample evidence.

According to the Subcommittee’s report: The U.S. trade deficit in environmental goods with China reached an all-time high in 2011.  Because of the surge in imports from China, the overall U.S. deficit in environmental goods increased an astonishing 87 percent in that time. U.S. imports of solar cells and modules from China went up 135 percent in 2011.  Imports of solar cells alone from China shot up more than 300 percent. European Union and Japanese exporters of environmental goods are also unfairly losing market share to China.

As bad as the Chinese employing unfair trade practices to gain an upper hand over American solar manufacturers is the fact that the Chinese are using U.S. know-how as the backbone of their current solar manufacturing industry.

This technology was blatantly pilfered from U.S. companies in the same way that the Chinese have made the theft of other American intellectual property the mainstay of their internal manufacturing policy.

As I’ve written previously, when it comes to finding solutions to the daily theft of America’s invaluable IP, a single anecdote brings this imperative home.  Microsoft, one of the real gems of American ingenuity and also one of the most patriotic major companies headquartered in the U.S., recently sold to a large commercial customer in China one (1) unit of its advanced business software, for several hundred dollars.

However, when it sent out an upgrade to the software, the upgrade was downloaded thirty million (30,000,000!!) times.  This egregious theft of Microsoft’s IP is why Microsoft’s profits from sales in China, with its 1.3 billion population, are no greater than its profits from sales in The Netherlands, with its population of only 16.7 million.

As a result, the United States went from having a small trade surplus with China in solar equipment in 2010 (primarily thanks to sales of manufacturing equipment and polysilicon, the base ingredient in solar cells and modules) to a huge deficit today.

Imports of Chinese solar cells and panels rose from $1.2 billion in 2010 to $2.8 billion in 2011, a jump of $1.6 billion – nearly 135 percent.  U.S. exports of solar manufacturing equipment and polysilicon to China – the same products that were keys to the 2010 surplus – declined by $170 million and $194 million, respectively, in 2011, according a report by the Coalition for American Solar Manufacturing.

This issue isn’t mere hyperbole.

China every day grabs global market share in everything technology-based.  For example, in late February, according to Bloomberg, the Chinese Ministry of Industry and Technology announced targets for increasing production capacity at key polysilicon and solar cell makers, part of the Chinese government’s plan to ensure its companies survive the current global industry slump.

A Ministry official quoted in the story said that the government wanted to ensure enough domestic capacity to meet the export goals in China’s latest five-year-plan.

Moreover, in addition to supporting the export capabilities of their domestic manufacturers, the Chinese government has announced specific plans to squeeze out U.S. polysilicon manufacturers in the interim.  In the ultimate irony, the Chinese government, as an obvious stalling tactic, has started its own “dumping investigation” of the now much-beleaguered U.S. industry.

Ending China’s unfair trade practices – especially at the moment those targeting the solar energy industry in particular and the renewable energy industry in general – should be an opportunity for all who are adversely impacted by China’s behavior to come together: suppliers, manufacturers and installers of all types.

On this point, one would think that curtailing China’s unfair trade practices and strengthening our nation’s solar manufacturing base would enjoy unanimous support from the entirety of the business community and Congress.  Surprisingly, however, there are some companies and trade associations which either remain on the sidelines or directly oppose the trade case brought by U.S. solar manufacturers against China, worrying, perhaps, about how these trade cases might affect their own bottom lines.

However, given China’s clear goal of dominating all global industries, no American company is immune from unfair trade practices, which is a lesson better learned sooner than later.As I’ve written before, whether on a schoolyard or on a continent, “treading softly and using diplomacy” in dealing with a bully seldom promises a happy outcome.

It’s past time for America to stop being a spectator to global trade abuses, with our hands bound by either our diplomatic sensitivities or corporate short-sightedness in valuing short-term profits over the long-term viability of our national economy.

This article was submitted by Leo Hindery Jr. who is chair of the US Economy/Smart Globalization Initiative at the New America Foundation, co-chair (with USW President Leo Gerard) of The Task Force on Jobs Creation, founder of Jobs First 2012, and a member of the Council on Foreign Relations.  He is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. and Liberty Media, and is currently an investor in media companies.


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