Has the paradigm shift begun?
Posted on 18. Jul, 2013 by Stephan Helgesen in Economy
When any armchair economist, amateur psychologist or novice market-watcher looks at the last five years of America’s recession and the 30 years leading up to it and then takes the trouble to lay out all the facts and stats on the kitchen table, it’s not difficult to conclude that maybe the great American economic model has finally entered its otium cum dignitate.
Granted, the rest of the world lives in the same neighborhood of rising social demands, shrinking tax bases, eroding economies of scale, ultra-competitive markets, balance of payments pressures and burgeoning debt, but they are not the USA. We are. We do things differently, or do we?
There are two economic belief systems at work in Washington DC and around the country. Both are attached at the hip to the two political parties. The Republicans believe we should cut government spending, get lean and mean and save our way out of the recession and preserve the current wealth distribution levels. On the other side of the aisle, Democrats are convinced that if we will only spend more taxpayer dollars, create more government jobs, conjure up more ‘stimulus packages,’ redistribute more of America’s wealth by taxing the rich and have the Treasury pump billions more into our economy that everything will be hunky dory.
Both are missing the point.
Prosperity is hiding, but it’s not in some out of the way alcove in America’s boardrooms or in a secret memo in a Wall Street hedge fund office. It’s certainly not sequestered in the halls of Congress or in the White House, either. No, it is hiding in all of us, masquerading as the fear of change and cloaked in the mantle of intractable tradition.
Let me explain. Millions of Americans have been brought up to believe that our country rests on a solid, impenetrable foundation that never moves, never changes and never should change. Some would say that that foundation is the Constitution. Others will tell you it’s our values, and a third group would point to the heavens and say that it’s God’s will, as “He has ordained the democratic capitalist system for us to follow.”
The truth is, America, like every other country, grows up and grows older and changes along the way. In its youth, America was rebellious. In adolescence, it swam upstream a bit, and now that it’s approaching middle age it’s gotten a little soft, a little tired, a little nostalgic and more than a tad unwilling to change. I can’t fault all Americans, maybe just those who, like myself, grew up without a Depression a World War or a massive natural disaster to contend with.
This article is not about assigning blame. It’s about getting real, waking up and manning up to the reality that in order for us to move forward we may have to move backward a few steps so that we can review our attitudes, realign our economy and expectations and re-think what America is really meant to be.
If we are religious, we believe that God meant for our country to be an example of compassion, openness and inclusion for the rest of the world to emulate. If we’re non-believers, the Divine Providence argument can be easily replaced with one based on the preservation of individual rights and freedom.
The status quo has been kind to many in our society, that is until the bubbles of Wall Street, housing, and Dot com burst, leaving millions with emaciated portfolios and then, later, when the great downsizing of American business began, eliminating millions of jobs leaving middle-aged, near retirement-age workers to fend for themselves.
There’s no shortage of villains in today’s America. Take your pick. There’s government, business outsourcers, China, Congress, the Administration, right-to-work states, but there’s one über villain that controls all of them…intransigence and intractability.
Times have indeed changed, but many of us are unwilling to acknowledge that simple fact. There are more Americans to be fed, housed, clothed, educated and employed than we care to think about. “Ten pounds of potatoes won’t go into a five-pound sack,” my grandmother always used to say, and she was right.
An immigrant from a country that experienced enormous poverty in the last few decades of the 19th century, her measurement of success was having enough to eat and a place to stay dry…and that attitude stuck with her until she died.
Her generation was accustomed to change and viewed it as natural (if not uncomfortable and frustrating). They adapted to circumstances and made the best of what they had. Some today would say that their expectations were okay for them but not for us.
They are simply too LOW! “Our jumping off point is higher, therefore our expectations should be higher,” say the young among us, “why should we tighten our belts when you did nothing but loosen yours for decades!”
That remark reflects one of our biggest problems, perception. Our planet is not expanding to accommodate the millions of people added to its surface every year. Our resources are not increasing, commensurately. Our construction sprawl is threatening our natural world and disturbing the natural balance.
On a business level, the markets for new goods and services are expanding, thereby creating the prospect of potential prosperity, until you realize that many former markets for our exports have now become domestic producers of the same goods and are exporting them back to us!
The world economic order is held together by international trade agreements and a complex body of regulations AND by the market forces of supply, demand and the profit motive. Traditional thinking has kept them all going in the same direction in the 20th century until Communism came along.
Tested in practice, the experiment failed and ‘free marketeers’ shifted into higher gear and traveled the predictable path of strengthening their own hands while championing free trade for all.
The aggregation principal – of capital or other resources – creates larger wholes, but it also creates greater vulnerabilities. We saw this in the banking crisis in 2008/9 when a new, more dangerous principle took over – too big to fail (TBTF). TBTF was never meant for the private sector; it was always reserved as a last resort solution for cash-strapped countries. America’s mistake was allowing it to be used, privately.
Today, fear (of the unknown) and distrust (of institutions) rank high as considerations in corporate decision-making and may just be precipitating the death roll for America’s great economic paradigm. Ironically, this could be a positive thing for our country.
In fact, some of the changes are already occurring, perhaps in no small part to the lack of adequate financing and massive corporate downsizing. Take crowdfunding or co-working. Each is built on the concept of smaller groups coming together with a collective (but open) mindset to accomplish common tasks, unencumbered by an oppressive bureaucratic hierarchy.
Knowing when to change is every bit as important as knowing how to change. America needs to create a new business structure that’s built on our innovativeness, creativity, productivity, flexibility and pluck. It needn’t be rooted in manufacturing, but it must have a strong manufacturing component to it.
We must be able to control the manufacturing apparatus instead of being at the mercy of foreign production lines. It can’t be solely rooted in services, either, because we cannot develop a diverse economy simply by providing services to one another.
While my generation has been pretty good at recognizing opportunities, it’s time to join up with the young entrepreneurs of today and build a new foundation that can grow and prosper using new methods and by setting realistic short, medium and long term goals that fit within a nationally-beneficial framework designed to empower the American people to think and do for themselves.
This will take leadership, commitment and cooperation. That’s why we need to encourage our political, business and cultural leaders to engage in a national dialogue on what we want America to be in the 22nd century. Maybe a good starting point would be a motto like: “Size matters: bigger is just bigger, but smaller is smarter.”
- Editor
The sounds of our lives
Posted on 17. Jul, 2013 by Stephan Helgesen in Social/Cultural
Thanks to the marvel of electronics, our ears are now exposed to a multitude of tones that regulate our daily lives. Our Big Ben alarm clock bell used to wake us up. Now it’s an electronic tone (or buzzer) that sends us out of bed like a SAC bomber crew running for their plane!
Old A.G. Bell’s invention had a pretty distinctive ring on the customer’s end while the switchboard operator’s side had another (I know because I played at the feet of the Chief Operator for the Bell Telephone Company office in Evansville, Wisconsin). This was in the early fifties before the company went automated. The switching room below the two-story building was a magical place to a young boy, and the friendly switchman, Ed Erpenbach, was only too glad to show this lad how the switches went clickety-clack, on and off. I was mesmerized, transfixed, waiting for the second act.
Sitting upstairs on high swivel chairs, the telephone operators would answer, “Number please, thank you,” and a cord was plugged in to a hole in the mammoth panel, bearing the number of the customer. In larger cities, exchanges had identifiers. When I lived in Milwaukee, our number was Humboldt 35592 (my mother drummed it into my pea brain in case I got lost). Those were the days when a fellow could walk a mile or two to school without fear of being kidnapped.
An auto horn had a fuller, richer sound than the irritating higher pitched ones of most cars today, and each model could be easily identified even if you couldn’t see the car: one for Caddies, one for Packards and another for Studebakers.
At home, our Hoover ‘talked’ to us, commanding our full attention as the huge bag filled with air and the giant metal body clacked over floorboards to get to the rugs. Mixmasters of old didn’t sound like they would careen off the kitchen counter like the fancy ones of today with their high-speed motors that whine at high rpms like race cars at Le Mans. In our parlor (living room), our grandfather clock chime sounded like an operatic baritone doing his scales, unlike the silent stealth digital clocks of today.
There were special washday sounds, too, like rugs being beaten or of sheets being squeezed through the ringer of our modern Kelvinator washer. Our Singer sewing machine’s treadle made a special sound that shared space with other sounds from the non-electronic world. On coal delivery day, I remember the sound of that sooty black fuel sliding down the chute, clunking to its resting place in the coal bin next to our furnace in the basement.
Tones or sounds alert us when something is ready like coffee makers or microwaves, but back then coffee percolated and the brew could be heard and seen through a glass top on the pot. One sound that I will never forget, though, is the air raid siren, whose singular purpose in life was to tell us to head for cover. Living in the Midwest, that usually meant tornadoes, but during WWII (and the Cold War years) it also meant enemy planes…or worse an atomic bomb.
Back then, every child played “Blind Man’s Bluff,” but when I was alone I would sometimes close my eyes and pretend to be sightless as I walked through the house and out the back door onto the grassy lawn, processing each individual sound as I inched my way forward. Life has gotten considerably more demanding, and our sounds reflect it. I fantasize about disconnecting the seat belt and ‘door ajar’ bell, doing away with the irritating chirp of the smoke alarm’s low-battery reminder and all the inane customized cellphone rings.
I wonder how today’s children would fair if they were blindfolded, transported back in time and exposed to the sounds of my youth. Would they be struck with fear without all the familiar beeps that inhabit their world? Anyway, it’s good to know that some things never change, like the sounds of birds enjoying a dip in our birdbath and the yelping of coyotes at a full moon. Think I’ll go out and check the sundial to see if it’s time for my nap.
- Editor
Borders without Boarders?
Posted on 17. Jul, 2013 by Stephan Helgesen in Economy, Politics, Social/Cultural
In the Albuquerque Journal Outlook of July 8, 2013, Jerry Pacheco proved his own thesis that “Immigration reform (is) a sensitive minefield” by giving us a mere reporting of the political machinations of the issue rather than an in-depth local look at what immigration reform might mean for our state and business community. I don’t blame him for being cautious about giving his own opinion on the issue as I assume he has many interests on both sides of the border to keep happy, but I do think that his ‘ink’ could have been put to better use.
He could have examined the Senate bill and future House bills to see if they address what immigration truly is. It’s a privilege to come and work and live in our country. Those who see it as a right are mistaken, and that’s what divides us more than our physical border. Second, amnesty (or forgiveness) for breaking the law starkly separates the legal absolutists who believe in the consistent and fair application of law from the legal relativists who believe in the selective application of law.
Third, it’s a political issue for special interest groups who have an agenda like the reconquistas, businesses benefiting from cheap labor or politicians who want to ‘be on the right side of history’ by cozying up to what they think are monolithic-thinking ethnic groups who will vote for them simply because they favor absolution rather than resolution.
The parties seem to have chosen their teams and their jerseys. The Republicans portray themselves as the home team seeking to build strong fences and then deal with the illegal/ undocumented with penalties like paying fines, taxes, going to the back of the line after the legal applicants, learning English and registering themselves. The Democrats are more like the visitors team choosing to forgive and forget, willing to let bygones be bygones and accepting a little law-breaking as the price for moving the country forward.
Pacheco’s argument that both teams are jumping on the immigration bandwagon because of an impending spike in the Hispanic-American demographic may very well be true, but it is a low blow to all of us who believe in principled lawmaking. If I read him right he is saying that we must get ready to kowtow now, “Republicans will have to step lightly around this issue so as not to offend a growing voting bloc.” Boy, howdy as they say in Texas! If this is new age politics where we must avoid good lawmaking for fear of offending some group, any group, then we might as well turn in our gavels and govern by popularity poll.
I realize that we’re Mexico-centric here and it’s understandable as the culturalization of our state owes much to its Hispanic influence, heritage and history, but any comprehensive immigration bill must address ALL the illegal aliens from ALL countries residing in the rest of the USA as well as the illegal Mexicans living in southern border states.
Make no mistake, there are hundreds of thousands of ‘undocumenteds’ from exotic countries as well as from the more well-known respectable ones (it’s estimated that upwards of 40% of our illegal population are visa over-stayers). If we end up with a bill that doesn’t address those shadow figures as well it will be like the little Dutch Boy who plugged the hole in the dyke with his fingers until he had no more fingers left for the new holes.
It’s generally a tough decision to leave the country of one’s birth. I know because I talked with many immigration applicants at U.S. embassies around the world. To a man (and a woman) they were respectful of our laws, appreciative of the opportunity America offered them to come here and saw immigration as a pathway to citizenship and a brighter future.
Mr. Pacheco could have touched on the impact our illegal immigrant population has had on New Mexico’s education and healthcare services, on our criminal justice system or most importantly what impact legalization or regularization of New Mexico’s undocumented workers will have on our border economy and our trade with Mexico.
He could also have commented on what will happen to the billion dollar plus cash repatriations made by illegal workers back to their families in Mexico once legalization takes place (and their paychecks are reduced because of the new fines, penalties and taxes). I’d like to hear a few quotes from Mexican businessmen, Maquiladorans and from Mexican officials, too. Maybe Mr. Pacheco could report some of these next time the subject comes up. I’d also enjoy hearing his opinion on how immigration reform would affect small business development in our state. I’ll be on the look-out for the next Outlook.
- Editor
High Noon on Energy – Three new articles
Posted on 17. Jul, 2013 by Stephan Helgesen in Energy/Environment
Article I – Green energy’s exorbitant financial cost to the public: cut or “invest?”
On Wednesday, July 10, the House passed H.R. 2609—which Bloomberg News called a “$30.4 Billion Energy-Water Spending Measure.” The 2014 Energy-Water Development appropriations bill will cut spending on renewables and other green energy programs in half and was passed mostly along party lines—with 4 Republicans voting against and 7 Democrats for it.
Democrats offered amendments to the bill aimed at restoring funding to renewable energy programs, which failed. Republicans’ amendments focused on cuts: Rep. Tim Walberg of Michigan sponsored an amendment that would eliminate spending for a national media campaign promoting alternative energy, and Rep. John Fleming, M.D. of Louisiana sponsored an amendment to stop a $3.25 billion green energy loan program—both were approved.
While several of the different taxpayer funded green energy programs—which have produced more than 50 bankrupt, or near bankrupt, projects—have now expired, the Fleming amendment draws attention to a pot of money that is, currently, largely unspent.
Fleming describes this remaining boondoggle: “The Obama 2009 stimulus bill cost taxpayers about $830 billion, and much of it was wasted on growing government and administration giveaways, like a $3.25 billion loan program that put taxpayers on the hook for failed green energy projects. A company could take a government loan and walk away from a project without paying taxpayers back, even if the company remained in business. In a free market economy companies may turn to banks and investors to borrow money, but the government should not force taxpayers to be lenders, even as it gives borrowers a pass on paying back their loans.”
While Republicans realize the embarrassing failure of the green energy programs, Democrats want to keep spending—often in the face of opposition from their usual supporters. One of the most controversial commercial green energy projects, Cape Wind, provides a case in point.
Proposed in 2001 for Massachusetts’ Nantucket Sound, the Cape Wind project will span a highly-congested 25-mile area known for frequent fog and storms that is surrounded by shipping routes used by shipping operators, ferry lines, commercial fishermen, and recreational mariners. The Cape Wind industrial offshore wind energy project consists of 130 440-foot high, wind turbines (made in Germany) and nearly 100 miles of cable.
In 2010, the National Park Service deemed Nantucket Sound to be eligible for listing on the National Register of Historic Places as a Traditional Cultural Property (TCP) because of its cultural significance to the local Wampanoag tribes. (Note: a TCP designation successfully blocked uranium mining in New Mexico.) The Mashpee Wampanoag Tribe on Cape Cod and the Wampanoag Tribe of Gayhead/Aquinnah on Martha’s Vineyard believe that Cape Wind would not only desecrate sacred land, but also harm their traditional religious and cultural practices. In opposition to Cape Wind, the Wampanoag Tribe of Gayhead/Aquinnah currently has a lawsuit pending in U.S. District Court in DC.
Nantucket Sound is home to several species of endangered and protected birds and marine mammals and has been designated an Essential Fish Habitat. Cape Wind’s construction and operations would threaten this rich and fragile environment. Numerous environmental organizations, led by Public Employees for Environmental Responsibility, have a lawsuit pending for violations of the Endangered Species Act and the Migratory Bird Treaty Act.
Opposition to Cape Wind also comes from groups who side with jobs and economic development.
Commercial fishermen, who earn the majority of their income in the area of the proposed site, believe this project would displace commercial fishing and permanently threaten their livelihoods. They vehemently oppose Cape Wind.
A decline in tourism, according to the Beacon Hill Institute at Suffolk University, would lead to the loss of up to 2,500 jobs and property values would decline by $1.35 billion. Located in an area with more than 200 days of fog per year and quickly changing weather, Cape Wind would create significant navigational hazards for thousands of commercial and recreational vessels and pose an unacceptable risk to aviation safety. The local ferry lines, which transport more than three million passengers every year, have called the project “an accident waiting to happen.” All three local airports strongly oppose the project and have expressed safety concerns for the millions of passengers flying over the Sound each year.
The project would impose billions of dollars in additional electricity costs for businesses, households, and municipalities throughout Massachusetts. Dr. Jonathan Lesser, President of Continental Economics, calls Cape Wind a “poster child for green energy excess.” In a 2010 peer-reviewed paper, he stated: “the billions of dollars Massachusetts ratepayers will be forced to pay for the electricity it generates will not provide economic salvation but will simply hasten the exodus of business, industry, and jobs from the state.”
Despite widespread opposition, President Obama and Governor Patrick are closely allied and working together to push Cape Wind forward for political advantage. Audra Parker, President and Chief Executive Officer of the Alliance to Protect Nantucket Sound (APNS), says Cape Wind is “a project that is controversial, extremely expensive, and one that has been propelled forward by shortcuts, bending of rules, and political favoritism.”
Freedom of Information Act (FOIA) requests and House Oversight Committee research found significant coordination between the Patrick and Obama administrations through the Department of Interior to push Cape Wind forward and gain financial assistance for Cape Wind through the loan guarantee program.
For example, a June 24, 2011, email (acquired through APNS FOIA requests) describes a request by the White House to include Cape Wind in an economic briefing for the President on the loan guarantee program: “The WH was very direct about what should be included in the slides so we don’t have much flexibility.” The email specifically stated that the White House wanted: “1 slide on status of Cape Wind (because he [the President] has heard from Gov. Patrick a few times – they are close friends).”
In the months prior and after Cape Wind was notified that its application for section 1705 assistance was put on hold, there were numerous meetings and calls between MA state officials, including Governor Patrick, with senior officials at Department of Energy (DOE)and the Loan Guarantee Program, including the usual players: Jonathan Silver and Secretary Chu.
In April, US News addressed a new Government Accountability Office (GAO) report that points to federal subsidies for wind energy that are rife with wasteful spending: “The GAO report finds substantial overlap in federal wind initiatives. This duplication allows some applicants to receive multiple sources of financial support for deployment of a single project.”
Once again, the $2.6 billion Cape Wind construction is illustrative of how the overlaps can give the developer more in taxpayer-funded benefits than the project’s actual cost. Federal incentives, including a $780 million energy investment credit, a DOE loan guarantee, and accelerated depreciation could be more than $1.3 billion—or more than 50% of the project’s cost. But, this just represents the federal package. Add in state incentives and the combined total could be $4.3 billion—exceeding the projected cost by 167%. Cape Wind claims to create only 50 permanent jobs—which would equal a staggering $86 million per job.
But, it is not just the money—though in the current constrained fiscal environment, money is a huge consideration. Government agency recommendations and/or policy—including the Advisory Council for Historic Preservation, the Federal Aviation Administration (FAA), the Bureau of Ocean Energy Management, Regulation and Enforcement, and the US Fish and Wildlife Service—had to be overridden or overlooked to prevent “undue burden on the developer” that “could possibly bankrupt them.”
For example, a May 3, 2010, FAA PowerPoint presentation to Eastern Service Area Directors includes a slide titled “Political Implications” which states: “The Secretary of the Interior has approved this project. The Administration is under pressure to promote green energy production. It would be very difficult politically to refuse approval of this project.”
While this quick overview of the Cape Wind project barely touches the surface issues, it highlights the folly of allocating billions of dollars of state and federal money for green energy projects at the expense of the taxpayers. Any stimulus funds designated for green energy, but not yet “invested,” should be withdrawn; taxpayers should be taken off the hook—which is the goal of the Fleming amendment passed on July 10.
Too bad these specifics in the 2014 Energy-Water Development appropriations bill are little more than a representation of the different approaches of the parties: one wants to fund more green energy projects and the other wants to cut—which also reflects the division throughout America. Because our government is operating on one continuing resolution after another, the appropriations bill is a mere formality. As pointed out on June 25, at Georgetown University, President Obama intends to “invest in the clean-energy companies”—despite the exorbitant financial cost of the projects and economic damages they will cause the public.
Article II - The battle for economic and energy freedom
During the Fourth of July celebrations, you probably thought about the freedoms we enjoy in the USA. Perhaps you even pondered how those freedoms are slipping away right before your eyes. But, did you think about economic freedom? Did you think about energy freedom? They are all connected and are all important to America.
Economic freedom is described as “the key to greater opportunity and an improved quality of life. It’s the freedom to choose how to produce, sell, and use your own resources … While a simple concept, economic freedom is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not.”
America’s forests and the management, or mismanagement, of them provides an important example of “economic freedom”—especially the part about using resources. And, the spotted owl saga offers a case study of such mismanagement.
“It is hard to imagine a bigger failure—or a greater success—depending on which side of the issue you stand,” is how I start the “spotted owl” chapter in my book Energy Freedom. “If you strive for open and honest government policy that is straight-forward about its goals, this twenty-year experiment has failed. If you believe the end justifies the means, regardless of the cost in life or livelihood, then the spotted owl represents a great success.”
Twenty-three years ago, nearly to the day, the spotted owl was listed as an endangered species. Since then, environmental groups have used the designation to block logging—and other economic activity on federal lands. In 1989, logging on federal lands accounted for more than half of Oregon’s timber harvest. Since 2008, it has fallen to less than ten percent. The listing has shut down a substantial part of federal timber harvest and threatens logging on private lands.
In 1994, the Clinton Administration introduced the Northwest Forest Plan that was supposed to guarantee specific amounts of logging, but according to Jim Geisinger, executive vice president of the Associated Oregon Loggers, those numbers never materialized. The federal forests were left more vulnerable to catastrophic fires—which hurt the very trees that were supposed to be protected.
Last week, in his Climate Action Plan speech, President Obama wanted the American public to believe that the extreme fires we are facing—that just killed 19 firefighters in Arizona—are as a result of climate change. He stated: “Firefighters are braving longer wildfire seasons, and states and federal governments have to figure out how to budget for that. I had to sit in on a meeting with the Department of Interior and Agriculture and some of the rest of my team just to figure out how we’re going to pay for more and more expensive fire seasons.”
In fact, as Ann Forest Burns, vice president of the American Forest Resource Council, explains: “For every dollar invested in forest management—harvesting timber to put the forest on a sustainable basis for current and future generations—we save $1.46 in firefighting.” She told me that the American people would be appalled if they understood how the forests are managed. Instead of allowing the forests to make money through timber harvests, we are taking money away from forest management to fight fires.
The forest overgrowth exacerbates the problems of the naturally dry climate in the Southwest, which in turn adds to the fire dangers like a self-perpetuating cycle. The natural process is that rain falls on the forest. The water not used by the trees soaks into the underlying aquifer. Each tree soaks up hundreds of gallons of water a week. In arid climates, nature does not support many more than 50 trees per acre. In many parts of New Mexico, where several fires are currently burning, the forest now has up to 2,500 trees per acre—using up all the water resources. Because logging was stopped decades ago, the forest is packed with fuel, wildfires are sparked, and they quickly burn out of control.
The US Forest Service (USFS) needs to change its policy and start selectively harvesting trees—not clear cutting, but harvesting the way it’s been applied on New Mexico’s Mescalero Indian Reservation. The forest on the Mescalero land is a healthy forest. When a recent fire was raging across the Lincoln National Forest, it stopped completely and dropped down from the trees to become a very natural, and manageable, grass fire when it got to the forest the Mescalero tribe had treated.
A study from the USFS supports the Mescalero’s approach. Published in the Canadian Journal of Forest Research, the study found that thinning to 50-100 trees per acre—depending on the species, terrain and other factors—reduces the impact of catastrophic wildfires, helps protect communities, provides jobs, and promotes overall forest health. According to Burns, every million board feet harvested supports eleven direct forest industry jobs. Yet, environmentalists continue to block logging and the economic freedom it represents.
However, economic freedom was just handed a win from the courts.
On June 26, a federal district court in Washington, DC, smacked down the Bureau of Land Management (BLM) for failing to comply with timber harvest requirements. Under the BLM’s own resource management plan, the timber harvest for Oregon’s Medford and Roseburg districts should have been 57 and 45 million board feet, respectively. Instead, current harvest has been 19 million and 29 million. The court’s decision requires the BLM to increase the harvest by 38 million board feet in the Medford District and 16 million board feet for Roseburg—which equals the creation of 594 jobs.
A press release from the American Forest Resource Council says: “These harvest levels are just a small percentage of the annual growth volume of timber on these lands. The BLM lands in Western Oregon have 73 billion board feet of standing volume. These timberlands are capable of growing 1.2 billion board feet per year”—with the potential of creating more than 13,000 jobs.
These job growth numbers don’t really represent new jobs, as these are jobs that have been killed over the past 23 years as a result of forest management—presumably enacted to protect the spotted owl. Unfortunately, the court decision came too late to save the 85 jobs at Rough and Ready Lumber Company—one of the plaintiffs in the case. Rough and Ready closed its doors in May due to a lack of available timber from federal lands.
Environmental groups expect an appeal of the decision.
The USFS plan to manage for the spotted owl has threatened property rights, killed jobs, and increased the severity of wildfires—all while the spotted owl population has declined thanks to a bully: the barred owl.
Congressman Steve Pearce (NM-R) offers this summary: “Decades after hasty decisions on the Spotted Owl led to thousands of lost jobs, the Fish and Wildlife Service has admitted that they were wrong all along, and local governments and communities have slowly begun working to find ways to bring back jobs and restore devastated economies. Today, it is important to learn from this painful lesson, and not continue to make the same mistakes—decisions that affect our jobs, our communities, and the management of our land must be made carefully and with the voice of the people, not through rushed decisions handed down from bureaucrats in Washington.”
Had the freedom to choose how to produce, sell, and use resources been in play in the spotted owl story, it would have driven economic prosperity and the economic devastation wouldn’t have taken place—economic freedom.
But what about “energy freedom?”
History highlights energy’s importance in the role of freedom. In his book, The Color of Oil, international energy consultant, Michael Economides, states: “The search for natural resources and the coveting, or defending, of wealth is the clear connection that has most often precipitated war.”
Two examples of wars fought over access to energy supplies are found in World War II: Germany’s quest for Russia’s oil and gas and Japan’s for resources in Indochina. While the war is over, due to a lack of their own resources, both are still in a battle to supply their energy needs—which has also encouraged alternatives such as nuclear power and renewables.
During WWII, two days before Hitler invaded Russia in 1941, he proclaimed: “What one does not have, but needs, one must conquer.” Hitler’s prize was to be Russian oil and gas. He obviously knew what Henry Kissinger later stated: “Who controls the energy can control whole continents.”
Hitler was denied his prize and Russia still controls much of Europe’s energy: 36% of the EU’s total gas imports, 31% of the EU’s total crude oil imports, and 30% of the EU’s coal imports originate from Russia. More specifically, Germany is the EU’s second biggest natural gas consumer and Russia’s largest market—with almost 40% of its natural gas imports coming from Russia in 2011.
The Russian natural gas industry is one of the most important players in the global energy market and revenues generated by natural gas are vital to the ruling Russian elite. To date, Europe’s energy security is largely under Russian control—a situation the EU wants to change as dependence on Russian natural gas presents political risks. Russia has shown a willingness to cut off natural gas supplies as a tool to achieve its political objectives.
Remember, in January 2009, without warning, Russia cut off gas supplies to the EU and much of Eastern Europe suffered over the course of three weeks during a cold snap. European officials have become increasingly concerned about the potential for cutoffs or curtailments of Russian natural gas supplies to Europe.
Fears of Russian dominance have lead the EU to search for other options to break Putin’s grip on energy supplies: develop its own potential shale gas reserves through hydraulic fracturing, build pipelines to bypass Russia and bring in natural gas from Central Asia, and look to Liquefied Natural Gas from the US.
Unfortunately for Europe, before any drilling has taken place, public opinion has turned against hydraulic fracturing and several countries have moratoriums in place to prevent shale gas drilling. Russia has demonstrated a willingness to go to great lengths to maintain its hold on European market share of natural gas, including attempts to stymie European-backed alternatives. Many believe that Russia is funding Europe’s anti-fracking fomenting.
It is within this context that last week’s story about the “centerpiece of the European Union’s push to limit its reliance on Russian natural gas” that “came to an unsuccessful conclusion” should be of interest to Americans. The now-defeated Nabucco pipeline would have shipped gas from Azerbaijan (the target of Hitler’s efforts) to Europe and provided much needed diversification of energy sources. Europe lives with a vulnerability to Russian energy supply manipulation.
Why is this important to those of us in the USA? Because we don’t have to live with energy fears and vulnerabilities. We have the ability to produce, sell, and use our own resources, which could drive prosperity and allow the economy to thrive—energy freedom. Even President Obama, in his book, the Audacity of Hope, says: “A nation that can’t control its energy sources can’t control its future.”
America is fortunate. We have economic freedom. We have the ability to thrive due to energy freedom. But like so many of our other freedoms, these, too, are slipping away. Anti-fracking fomenting is threatening access to our abundant resources and Middle Eastern countries have demonstrated a willingness to go to great lengths to maintain control of the world’s oil supplies.
As our brave soldiers show us every day, freedom isn’t free—it is something that must be fought for. It is something worth fighting for. The battle includes economic freedom and energy freedom.
Article III – Obama’s Climate Action Plan: emphasizing what doesn’t work while ignoring what does
For months President Obama has been in the uncomfortable position of straddling a barbed-wire fence—does he appease his ardent environmental supporters or advocate for economic growth that will help all of America? In his speech outlining his Climate Action Plan, he made his choice clear. He’s abandoning what is best for America and has bowed to the political pressure from environmental lobbyists like the Sierra Club and the Natural Resources Defense Council.
White House Climate Advisor, Daniel P. Schrag told the New York Times: “Everybody is waiting for action, the one thing the president really needs to do now is to begin the process of shutting down the conventional coal plants. Politically, the White House is hesitant to say they’re having a war on coal. On the other hand, a war on coal is exactly what’s needed.” However, the American public is not clamoring for the closure of cost-effective coal-fueled power plants. What they want is cheap energy, but Obama is, as the Washington Post states: “a president bizarrely antagonistic toward domestic energy production and low energy prices.”
In the Pew Research Center’s annual policy priorities survey, just 28% say dealing with global warming is a top priority for the president and Congress this year. In fact, the president’s own research shows that his favorability rating “plummeted” with focus groups when he vowed to attack climate change—yet, promising to use executive action, he’s pushed forward with plans he knows couldn’t get through Congress.
Addressing the executive order emphasis, U.S. Chamber of Commerce President and CEO Thomas J. Donohue says: “It is unfortunate that on a matter of such importance to all Americans that the administration has chosen to bypass our elected representatives in favor of unilateral actions and go-it-alone tactics.”
The Washington Post explains why Obama is now seeking to go around Congress to enact anti-coal regulations by fiat: “When Democrats controlled both the House and Senate, Obama could not get climate control legislation passed.”
In his hit-and-run speech, delivered hours before leaving the country, President Obama issued a directive for the EPA, instructing them to begin drafting new rules governing emissions from power plants. Current EPA regulations are already closing coal-fueled power plants at an alarming rate—which New Mexico Public Regulations Commissioner Pat Lyons calls “the real energy crisis that no one is talking about.” He told me: “The biggest issue facing utilities is the closure of 300 coal-fueled power plants.
This represents tens of thousands of jobs in the coal mining industry and billions of dollars of revenues for local, state and federal government.” There are no plans to effectively replace the comparatively cheap electricity. Progressive thought leaders Michael Shellenberger and Ted Nordhous state: “energy poverty causes more harm to the poor than global warming” and cheap energy “makes the poor vastly less vulnerable to climate impacts.”
Europe has already tried this experiment and found it to be economically devastating. In April, the European Parliament voted against saving the Emissions Trading Scheme (ETS)—Europe’s flagship environmental program. Roger Helmer, a member of the European Parliament explained that propping up the ETS would “make energy more expensive; undermine European competitiveness even further; drive even more businesses and jobs and investments offshore (known in the jargon as ‘carbon leakage’); and force more households and pensioners into fuel poverty.”
Regarding the April 16 vote, The Financial Times reported: “Complaints from business groups that the carbon market and other climate policies are contributing to higher energy prices at a time when they are already grappling with a weak economy appeared to be decisive in Tuesday’s vote.” To meet its energy needs, Europe is now importing US Coal and North American wood.
Speaking of fuel poverty, nowhere are people living in more substandard conditions than Africa— plagued by malaria and inadequate medical care, most don’t have indoor plumbing and even fewer have electricity. Shellenberger and Nordhous accuse the environmental movement of offering “the global poor not what they want—cheap electricity—but more of what they don’t want, namely intermittent and expensive power” which “offers the poor no path to the kinds of high-energy lifestyles Western environmentalists take for granted.”
In response to the president’s Climate Action Plan, Senator Lisa Murkowski (AK-R) was talking about Obama’s African tour when she quipped: “I encourage him to note what life looks like in parts of the continent where people do not have—or cannot afford—access to energy.”
While shuttering coal-fueled power plants, the Climate Action Plan calls for more “clean energy” which will “cut our dependence on foreign oil.” He’s directing the Department of Interior to “green light” wind and solar projects on public lands and wants Congress to “invest in the clean-energy companies.” We’ve got two problems here.
First, wind and solar don’t cut our dependence of foreign oil. The two have no connection to one another. The wind and the sun can be harnessed and, as a result, do produce electricity—albeit inefficient, ineffective, and uneconomical electricity. Foreign oil that we import is for our transportation fleet. It does not, with very few exceptions, produce electricity.
Second, in Obama’s 2009 Stimulus Bill, he allocated nearly $100 billion for green energy projects that have produced an embarrassing number, more than 50, of bankruptcies and near bankruptcies—while lining the pockets of his friends and donors. He is obviously a slow learner. Dr. Phil might ask, “How’s that working for ya?”
In Tuesday’s speech, Obama did point to one success: “Since 2006, no country on Earth has reduced its total carbon pollution by as much as the United States of America.” The United States is the only industrialized country to actually lower carbon emissions. We’ve done it, not through extreme policies—but through private enterprise embracing our abundant natural gas. Encouraging extraction in the US and approving Liquefied Natural Gas export terminals would reduce global carbon emissions and help our economy.
“Rather than new federal regulations, he should be encouraging more natural gas development and approving Liquefied Natural Gas (LNG) export licenses,” states Kathleen Sgamma, Vice President of Government & Public Affairs for the Western Energy Alliance. “By exporting LNG, not only would America benefit from huge job growth, but we would be providing a low-carbon solution to other nations and helping them to likewise reduce their greenhouse gas emissions.
Germany and Japan have increased their use of coal because they lack access to affordable natural gas, and their carbon emissions have risen. By stubbornly repressing exports, the President is standing in the way of a global solution to a global problem.”
The fact that natural gas is only given cursory mention, rather than being an integral part of Obama’s National Climate Action Plan, exposes his true motives—which, I believe, are not really about carbon emission reductions, but rather furthering America’s declining international status. Why else would he emphasize what has proven to not to work and eschew what we know to be effective?
These articles were submitted by Marita Noon, the author of Energy Freedom. 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.
Crisis of confidence on Fantasy Island
Posted on 02. Jun, 2013 by Stephan Helgesen in Politics
Ask any newly married couple. It’s tough to pack up the sun block and the two-piece and head back home after a dream honeymoon in Barbados.
Why? Because real life is so, well, real. There’s no concierge, no room service, no Rum Punches on the beach. It’s not playful and carefree, adventurous and provocative 100% of the time. It’s more like 10% at best. This must be how the mainstream media is feeling after their bikini-clad ox got gored at the Associated Press.
Yes, Virginia, the honeymoon is finally over. Unzip the garment bag and take out the truth. It’s time to see if it fits. After nearly five years of pushing it farther back into the closet we may have to admit that it’s probably not in fashion any more. And if it doesn’t fit, what then? What will that say about our relationship with Barack Obama? Has he been stringing us along or have we simply deluded ourselves that he loved us.
While we’re at it, we might as well take off those rose-colored glasses that our Baby Boomer parents gave us, you know, the ones they got at Woodstock and wore for nearly half a century along with the ‘Make love not war’ buttons. The glasses are beginning to leave marks on our consciousness. Maybe it’s time to trade them in for a magnifying glass and a spotlight so we can see what shenanigans our government has been up to since Vietnam and Watergate?
Oh, I forgot. We’ve done that already, and are still doing it — that weapons of mass destruction thing (Bush lied, people died). I’m confused. Have I got this right? Do you mean we’re going to have to go after one of our own just because he went after us at the Associated Press? Seems kind of unfair. Isn’t there a way we can blame all these scandals on George Bush or Karl Rove or Don Rumsfeld instead of toppling our guy?
It’s tough being conflicted like this. On the one hand, I sort of like the First Amendment and the right not to be surveilled or harassed by the Justice Department or by the IRS. On the other hand, I’d miss being tucked in at night by Kathleen Sibelius and serenaded with an Al Green tune from the Crooner-in-Chief. Government can be soooo comfy.
I mean, I know that all honeymoons eventually come to an end and that we have to get on with our daily lives, but why couldn’t this one have lasted at least until 2017 (or 2025 after Hillary is done being President)? Now we’re all going to have to listen to those low-life Republicans interrogate our heroes, reducing them to ordinary people. Can you believe that Republicans are going to be defending our rights? Bizarre!
Then there’s the BIG quandary…will we in the press have to cover all these scandals? Can’t we just let Fox News do it and then blame them afterwards for being unfair, unbalanced and highly partisan? That would be my choice. What? You don’t think that would fly, that the wells of the Senate and House would look too bare with only one cameraman and one reporter? Hmmm, could be.
Wait, I’ve got it! We’ll go on a second honeymoon and come back when all this blows over. That way we too can use the most famous DC strategy for not knowing – plausible deniability (nobody told us anything that we didn’t want to hear). It could work. It might work. After all, it’s only a scandal.
- Editor
Will Republicans Screw Up Again? Some Are Already Overreaching.
Posted on 02. Jun, 2013 by Stephan Helgesen in Politics
From The Rothenberg Political Report – Some Republicans are so excited at the thought of multiple controversies dogging the White House over the next few months (or longer) that they are already foaming at the mouth. For example, on his syndicated radio show late last week, former Arkansas Gov. Mike Huckabee compared reports of the IRS targeting conservative groups seeking tax-exempt status to what happened in Nazi Germany. And, of course, you knew that some conservatives and Republicans (such as Glenn Beck, Oklahoma Sen. James M. Inhofe and Minnesota Rep. Michele Bachmann) couldn’t resist mentioning… To read the entire article, log on to www.rothenburgpoliticalreport.com
NM lost 3,000 businesses during recession
Posted on 01. Jun, 2013 by Stephan Helgesen in Economy
According to a recent article in Albuquerque Business First, not only did the recession cost New Mexico more than 50,000 jobs, it cost the state 3,000 businesses. According to new data from the U.S. Census Bureau, New Mexico had 43,860 businesses in 2011, down from 46,869 in 2007. Sixteen out of 20 industry sectors lost establishments, with construction leading the way with 1,370 businesses lost between 2007 and 2011. To read the full article log on to: www.bizjournals.com/albuquerque/
Senate Majority Whip Tim Keller to Run for State Auditor
Posted on 01. Jun, 2013 by Stephan Helgesen in Politics
Albuquerque – Sen. Keller shared with supporters his intentions to run for the State Auditor position in 2014.
“Today I am excited to announce I’m all in for Auditor 2014! The State Auditor office is the best fit for how I can continue to serve New Mexico. Being our next Auditor offers the platform to champion government reform ideas I’ve worked on in the legislature, on a year-round, statewide basis. I plan to attack fraud, waste and abuse; and also to evaluate effectiveness and cost benefits to improve state-funded programs including: education, healthcare, water and economic development policies.”
Tim Keller serves as the Majority Whip in the State Senate and is in his second term. During his legislative career Keller has run over 100 hundred pieces of legislation and passed 30 measures. Keller’s vision for expanding the State Auditor’s office into policy evaluation builds on his legislation accomplishments. In the legislature Keller’s primary focus has been on government reform and tax and economic development policy. Examples passed legislation include:
· Restructuring and adding qualifications to the Public Regulatory Commission
· Sweeping State Investment Council (SIC) governance restructuring
· Requiring of the transparency and effectiveness of NM’s $1B in tax incentives
· Expanding the In State Business Preference creating 5,000 local jobs annually
· Rebranding Albuquerque’s “War Zone,” the “International District”
· Enacting the state’s first Home Owners Association Act
· Establishing the net 40% solar tax credit
Tim was born and raised in New Mexico and is an Eagle Scout. Following graduation from St. Pius X High School, he attended the University of Notre Dame, where he earned a Bachelor’s degree studying in Finance. He then went on to earn an MBA with honors from the Harvard Business School.
Keller closed with personal note, “Liz and I are thrilled to be expecting our first child at the end of July!”
This information was submitted by Senator Keller’s Office. Senator Keller can be reached at:
tk@timkellerfornewmexico.com
German Ambassador to visit New Mexico
Posted on 01. Jun, 2013 by Stephan Helgesen in Politics, Social/Cultural
The German Ambassador to the United States will make his first visit to New Mexico on June 4-7. Ambassador Peter Ammon, who holds a Doctorate in Economics from Berlin’s Free University,most recently served as State Secretary at the Foreign Office. Born 1952 in Frankfurt/Main, he has close ties to the US through family relations and many long-standing friendships .
From 1999 to 2001, he served at the German Embassy in Washington,D.C. as Economic Minister. In 2007 and 2008, he was appointed German Ambassador to Paris, France. Prior to that he served as a career diplomat In London, Dakar/Senegal and New Delhi.
From 1996 to 1999, he was Head of Policy Planning and speech writer to the German President. A staunch advocate of free trade, he takes strong personal interest in what it takes to build a fair, peaceful and prosperous global order. As Director General for Economics at the German Foreign Office from 2001 to 2007, he helped prepare the G8 World Economic Summits for German Chancellors Schroeder and Merkel.
While in New Mexico, the Ambassador will meet with New Mexico’s Lt. Governor, German company CEOs and Hispanic leaders at a special “Hispanic Leaders Forum” at the Albuquerque Hispano Chamber of Commerce. He will also tour the special Karl May Exhibition as a guest of the New Mexico History Museum in Santa Fe. He will end his visit with a tour of German Air Force facilities at Holloman Air Force base before returning to Washington on June 8th. He will be accompanied on his trip by Mr. Klaus Guehlcke, Consul-General of the German Consulate in Houston.
- Editor
Horse-trading the Presidency
Posted on 01. Jun, 2013 by Stephan Helgesen in Politics
Our 2012 Presidential election distinguished itself as having had the third largest participation rate since the election of John Kennedy in 1960 and that reminds me of a phrase I heard about history. It goes something like this, “a person’s historical frame of reference begins with their own birth.”
I guess it’s only natural to focus on one’s self when looking at something as personal as history, but there’s also something very dangerous about it. Take Presidential elections, for example. Most of remember how contentious the Bush versus Gore election was, but I’ll bet we don’t remember the contentiousness of the 1876 election between Rutherford B. Hayes and Samuel Tilden, do we?
Let me refresh your memory…Rutherford B. Hayes was the Republican candidate and Samuel J. Tilden was the Democrat. After the first vote, Tilden had won 184 electoral votes to Hayes’ 165, but there were 20 electoral votes that were unresolved and in dispute in four states: Florida, Louisiana, South Carolina and Oregon. (By the way, Tilden won the popular vote with 4,284,020 votes (50.9%) to Rutherford’s 47.9%. It was the first Presidential election in 20 years that a Democrat had won the majority of the popular vote. )
The election was notable for other statistics as well, but historians look at this election for one REALLY INTERESTING twist of fate. It seemed that neither party was able to get the other to concede the outstanding 20 electoral votes, so a very unique compromise was made.
Basically, the Democrats gave the election to the Republicans in return for the end of Reconstruction (the post Civil War Northern militarization of the South)! So, Midwesterner Hayes became President and Yankee Tilden became a near hero to southerners who saw Federal troops withdraw from old Dixie.
Since no one from that time is around to give us a first-hand interview, we can only speculate as to how the electorate dealt with the trade. They may have been upset, but I doubt they were as outraged as Americans during the election of 2000 when both parties went to legal war over hanging and dimpled chads AND used Federal election law and Florida State law to decide who would inhabit the White House.
When the 2000 election was finally decided by the Supreme Court, a new political Mason-Dixon Line was drawn in the sand, effectively reinforcing a Red-Blue ideological divide akin to the Blue-Grey mentality of 1876.
I suspect that it also created a boomlet of low (or no) information voters who cared less about the policies of the opposition than they did about bringing them down and replacing them with their own team.
No or low-information voters are the worst kind of voter imaginable, and a few of the founding fathers warned against them because they had no skin in the game. They owned no property but would be allowed to decide how the property of others could be treated. They had no education but could influence the workings of the educational system. They didn’t understand how government functioned but would be able to tell it how to do its job.
Americans have always been proud of the one man, one vote form of Democracy, but many, I suspect, have secretly wished that those with no real interest in the issues nor any real understanding of them would just stay home and let the rest of us who care enough to learn about those things choose the right people to represent all of us.
It’s a thorny situation alright. It’s also not talked about openly, precisely because we steadfastly protect our right to be ignorant, out of touch or uninformed. Maybe we should start discussing how to better inform our electorate before any more no/low-information votes are cast, unless of course we want another disputable election like the one in 2000 or God forbid, the one of 1876.
- Editor
