American Elephants

Gasp! Rick Perry Called Social Security a “Ponzi Scheme” by The Elephant's Child

                      (click to enlarge)  Venn Diagram by The Examiner’s Tim Carney*

Goodness!  Rick Perry called Social Security a “Ponzi Scheme” and a “monstrous lie” and the Left simply quivered with excitement. He touched the “third rail” of politics. Democrats can tell all the old folks that Perry wants to take away their Social Security.  Democrats can win.

Are there really people out there that don’t know that Social Security has always been a Ponzi Scheme? “A fraud that involves the payment of purported returns to existing investors from funds contributed by new investors?” (Milton Friedman once called it “the Biggest Ponzi scheme on Earth”)

That is the problem that faces the social welfare states of Europe and the United States.  When programs to provide for the aged and infirm were instituted, it was assumed that populations would always increase.  If a couple had three or four children, as was common, and each of those children had three or four children, all paying in their taxes, there would be plenty of money to ensure retirement and cover whatever inflation there was as well..

Well, it worked for a while, but in the glow of peace and prosperity that followed the end of World War II, people had more babies.  Lots more.  Big families were not uncommon among those who grew up in the deprivation of the Great Depression. They called it the Baby Boom.

In 1930, Americans over 65 numbered less than 7 million, about 5.4% of the population.  The 2010 census found over 35 million Americans age 65 and over, another number is 40.3 million over 65 today. The first cohort of Baby Boomers are reaching age 65 this year, and by 2030 will reach 72 million, more than double the number in 2000.

These increasing numbers are a tribute not just to the parents of the Baby Boom generation, but to the success of American healthcare.  Mortality rates for eight of the 15 leading causes of death have declined significantly: influenza and pneumonia -8.4%; homicide -6.5%; accidents -5%; heart disease -4.7 percent; stroke -4.6%; diabetes -3.9%; hypertension -2.7%; and cancer -1.8%.  More Baby Boomers are exercise conscious and go to the gym regularly, and are far more conscious of what they eat.

I don’t know to what extent the exercise bit is true.  The media has trumpeted the intelligence, health, and general superiority of the Baby Boom generation since they were born. (Don’t forget, this is also the Vietnam Generation, the Flower Children, the Hippies)  It didn’t take long after the Baby Boom was recognized for marketers to realize that they had a huge new market.  Advertising has been directed at Baby Boomers ever since.  Did you think it was an accident that Depends now come in colors and patterns?

But the “trust fund”, the “lockbox?” Isn’t all the money you paid in— there, waiting for you? Congress changed the law in 1983 so that in any given year if current tax payers pay more in taxes than is needed to pay the benefits the excess will be invested in treasury bonds in a trust fund. What has Treasury done with the money? The government has spent it in exchange for IOUs. By 2015 the Trust Funds will run out of cash and the program will begin redeeming the IOUs and use them to pay seniors’ benefits until it runs out of IOUs.

We simply can not continue with Social Security and Medicare as they are currently structured. No one of either party suggests changing Social Security and Medicare for current recipients or for those 55 and over. But demographics forces us to reform the programs. Recognizing the demographics allows us the time to fix the programs in a way that doesn’t hurt anyone., but we cannot put it off for long.

Social Security and Medicare are programs created by Democrats to give people benefits that will make them dependent on Democrats for their continuation. In England, in Europe, these welfare-state programs have been disastrous. They have created a permanent underclass on the dole, dependent on government, and economies that are spiraling down. Any suggestion that benefits might be cut back is met with riots and cities in flames. That is not a future that Americans should accept.

* (h/t: economist Veronique du Rugy)

Important News About Those 18 Wheelers! by The Elephant's Child
August 30, 2011, 6:26 pm
Filed under: Economy, Law, News | Tags: , , ,

The Obama Administration’s Equal Employment Opportunity Commission (EEOC) has sued a major trucking company for its firing of a driver with an admitted alcohol abuse problem. Heritage notes that:

Alcoholism is classified as a disability under the Americans with Disabilities Act, the suit maintains, and therefore employees cannot be prohibited even from driving 18 wheelers due to their histories of abuse.

The Equal Employment Opportunity Commission, which filed the suit against the Old Dominion Freight Line trucking company on August 16, noted that while “an employer’s concern regarding safety on our highways is a legitimate issue, an employer can both ensure safety and comply with the ADA.”

I’m sure that makes you ever so comfortable out on the nation’s freeways. It was only in recent years that it was reported that training for truck drivers had been sharply curtailed. The EEOC has detailed the case on its website.

According to the EEOC’s suit (Civil  Action No. 2:11-CV-02153-PKH in U.S. District Court for the Western District of  Arkansas), the driver at the Fort    Smith location had worked for the company for five  years without incident. In late June  2009, the employee reported to the company that he believed he had an alcohol  problem. Under U.S. Department of Transportation  regulations, the employer suspended the employee from his driving position and  referred him for substance abuse counseling.  However, the employer also informed the driver that the employer would  never return him to a driving position, even upon the successful completion of  a counseling program. During the  investigation, the EEOC discovered drivers at other service centers whom the  employer had allegedly subjected to similar treatment.

“The ADA mandates that persons with disabilities have an equal opportunity to achieve in the workplace.  Old Dominion’s policy and practice of never returning an employee who self-reports an alcohol problem to a driving position violates that law,” said Katharine Kores, director of the EEOC’s Memphis District Office, whose jurisdiction includes Arkansas. “While the EEOC agrees that an employer’s concern regarding safety on our highways is a legitimate issue, an employer can both ensure safety and comply with the ADA.”

If the EEOC prevails in this case, Old Dominion would still be liable for any damage caused by a relapse of one of its recovering drivers. That signals to investors an increased risk involved in investing in the company,  and raises the cost of everything the truck line transports. And as well, it tells drivers that they don’t have to worry about their alcohol consumption.

Consequences. A law attempting to protect people with disabilities from persecution, well-meaning to be sure, ends up endangering every driver on the nations’ highways.  There are always unintended consequences.  Can we find a way to ensure that our legislators seriously consider that fact before they enact a good intention into law?

Sunny on Environmentalism. by The Elephant's Child
August 30, 2011, 5:52 pm
Filed under: Environment, Global Warming, Junk Science | Tags: , ,

The Sun Might Have Something to Do With It? by The Elephant's Child

Convincing new evidence indicates that global warming is caused by cosmic rays and the sun, not human activity. The research was published last week in Nature, and comes from CERN, the European Organization for Nuclear Research, involving 60 countries and 8,000 scientists at more than 600 universities and national laboratories.  CERN is one of the largest centers for scientific research, and is the organization that invented the World Wide Web, and that built the Large Hadron Collider. They have now built a pristinely clean stainless steel chamber that precisely recreates the Earth’s atmosphere.

Conventional wisdom has noted that in pre-industrial times the atmosphere of Earth contained approximately 270 parts per million (ppm) of carbon dioxide (CO2) and it has now grown to 390 ppm at the present time.  The Earth has warmed by around a degree over the past century so obviously the warming has been caused by industrialization and man’s use of hated fossil fuels. But it has been much warmer in the past when CO2 was not particularly high, and much cooler when it was.  The amount of CO2 is merely a trace element, and has been shown to increase after increases in temperature, and cannot therefore be causative.

By far the largest element in the atmosphere is water vapor, or clouds. We know that a cloudy day is apt to be much cooler, yet the hypothesis that clouds are a major influence on temperature has met with complete disinterest on the part of the blame-it-on-man bunch. The Global Warming Policy Foundation explains:

One can look for correlations in nature and appeal to climate models to prove or disprove the effect. Model based refutations are not impressive given the assumptions built into them. The observational evidence has been argued about for years. Experiments are however a different thing entirely.

Using a chamber to simulate the atmosphere Kirkby et al investigate aerosol nucleation as a function of increasing concentrations of sulphates, ammonia and ionisation. The ionisation source and the stand-in for Cosmic Rays is CERN’s proton synchrotron – the one that feeds its particles into the Large Hadron Collider. Atmospheric air could not be used – it has too many impurities – so the researchers use gas mixtures to recreate it. The chamber, 26 cubic metres of it, its controlled environment and ionisation conditions along with its state-of-the-art instrumentation are clearly the most rigorous test of the Cosmic Ray hypothesis yet devised. However, it must be stressed that the chamber is not the atmosphere.

They have found that Cosmic Rays significantly enhance the formation of aerosol particles.

These new results from CLOUD are important because they demonstrate some important atmospheric processes.  They are not the final word, but a first step in understanding a basic process.  Climate models will need revising.  Climate models are built with vast numbers of assumptions, yet assumed to be definitive. Observation and experiments trump the guesswork in the models every time. Yet the alarmist case for climate change exists only in the climate models. Clouds are very complex and poorly understood.    Here is the press release from CERN.  This article from the National Post covers more of the politics involved and how they play out. And here is the post from the Global Warming Policy Foundation.

The fascinating and troubling thing to me is the extent to which the policies of governments across the world — especially ours — under the direction of the Obama administration are focused on spending vast amounts of money to alleviate a problem that exists only in the assumptions of some computer models, not in the real world. Al Gore has profited mightily from alarmism, yet most of his claims are demonstrably false.  We don’t understand clouds and cloud formation. We don’t understand the Pacific Decadal and Atlantic Multidecadal Oscillations of currents.

The one thing that is becoming increasingly clear is that carbon dioxide levels are not the driver of global temperatures, and policies to change our economy based on that fallacious assumption are pure folly.

Correction, Mr.Obama, Here’s the Real State of American Energy. by The Elephant's Child

(h/t: Maggie’s Farm)

The Big Jobs Speech: No Change, Not Much Hope. by The Elephant's Child

Vacation is over, and next week, President Obama will give his big speech on jobs, or maybe the week after. He has announced his nomination of  Princeton University’s labor economist Alan Krueger to be chairman of the White House Council of Economic Advisers.

Mr. Krueger returned to Princeton a year ago after serving as assistant Treasury secretary for economic policy during the first two years of the Obama administration. He will replace Austan Goolsbee who has returned to the University of Chicago.

Krueger testified before the Senate Banking, Housing and Urban Affair Committee in support of government infrastructure spending, and Obama’s pet “Infrastructure Bank.” At least, Krueger  has co-authored a paper that shows that extending unemployment benefits will likely make unemployment worse, so that is a tiny step in the right direction — if he can convince the president. Krueger points out that it may be good safety-net policy, but will lengthen unemployment spells. The president has already signaled his intention to extend unemployment benefits and his belief that they will stimulate the economy.

Obama’s big jobs speech will offer more of the things that have not worked. The “shovel-ready” infrastructure jobs that turned out not to be shovel-ready, will return in the form of more infrastructure spending, and the bank as well. Unemployment will be extended, green jobs will be promised, the payroll tax reduction will be extended, and more food stamps.  It will not be a jobs speech, but a campaign speech in disguise. The government will once again be there to help you.

There is no way that Obama can support a real jobs program. A real jobs program would attack  the core beliefs of his political party, such as the idea that raising the minimum wage helps the poor and raising taxes on the rich will boost the economy.

The left believes in welfare, a strong government that will care for the people, that corporations have too much power, and that business needs much closer regulation.  The left believes that the fossil-fuel pollution emitted by industry and SUVs must be stopped to save the planet.  They believe that people must be instructed — and if necessary, forced — to move to a “clean green economy,” where they will use the lightbulbs, cars and appliances chosen by the government, and use energy and water economically, aided by smart meters that will ensure that they do.

What would a real jobs program look like? It is not as if nobody has described what is needed. As one small business owner said:

I’m not only sitting on my hands in terms of expansion and hiring, I’m paring back expenses wherever possible, getting lean as I can.  To say Ive lost confidence in Obamanomics is like saying the liberal media has lost confidence in Sarah Palin’s ability to govern if elected.  True enough, but it goes a bit beyond loss of confidence.

…The assault on folks like me comes on many fronts—business taxes, personal taxes, regulations, inflation, energy prices, Obamacare, etc. I have no way to reasonably outline any business plan(s) for the short or the long term.  All the variables are up in the air.

It is further exacerbated by the fact that I cannot predict what else these jackals might do to hurt me.  With most administrations and congresses, whether you agree with them or not, at least you could usually predict the limits of harm or help they might do to you.  Not with this Obama crew, and not with the Dems in Congress.

What do you suppose it says to American business when Obama’s National Labor Relations Board’s (NLRB) files a lawsuit against the Boeing Company for daring to build a manufacturing plant in a right-to-work state? No government has ever attempted to tell a private business where they must locate and who they may hire.  There is no Constitutional justification for such an attack.

The feds raided the Gibson Guitar Company last week; a swat team raided factories and offices, seizing pallets of wood, computers and guitars, and shutting the company down. The question seems to be about small amounts of ebony or rosewood used on the fingerboard of guitars. The wood is certified by the Forest Stewardship Council, and satisfies FSC standards.

The Justice Department apparently wants Gibson to not buy any wood from India, and to make their guitars in India — eliminating at least some of the company’s 2000 U.S. employees, but that isn’t clear yet. The government claims that Indian wood not finished by Indians is somehow illegal, but that is not what Indian law says.  That’s clear, isn’t it? Why would this send a tremor through American business?

Just these two cases demonstrate why business is hunkered down defensively. Add to that the enormous bundle of regulation the EPA is attempting to place on the back of the American economy. All forms of energy will become more costly. Brownouts and blackouts will be common. The cost of everything will rise because of higher energy costs. The government is trying to shut down oil pipelines, close coal-fired power plants, build unwanted and unaffordable high-speed rail, keep oil companies from drilling for oil.  Obama wants a new stimulus, and a renewed Fannie and Freddie.

There will be a new jobs program of some sort. It won’t help. No change, and not much hope.

John Stossel Defends the Indefensible by The Elephant's Child

Here’s some food for thought.  Many economic ideas are not as simple as they seem.


Choose: Economic Growth Or Turn Off America’s Light Switch? by The Elephant's Child

Representative Vicky Hartzler (R-Mo) inquired of the Environmental Protection Agency of the economic impact and employment consequences of its initiatives. Assistant EPA Administrator Gina McCarthy was very clear in her response:

Under the Clean air Act, decisions regarding the National Ambient Air Quality Standards (NAAQS) must be based solely on evaluation of the scientific evidence as it pertains to ;health and environmental effects.  Thus, the agency is prohibited from considering costs in setting the NAAQS.

Responding to a question by Representative Cory Gardner (R-Col) before the House Environment and Energy Committee regarding regulations that would govern industries that recycle coal ash and other fossil fuel byproducts for concrete, wallboard and roofing materials, EPA Administrator Mathy Stanislaus stated:

We have not directly taken a look at jobs in this proposal.

President Obama issued an Executive Order 12563 in January that specifically required that all new rules issued by federal agencies take job creation into account. Everybody has suggestions about what President Obama can do  to get the economy moving again. The EPA is currently pushing an extensive rewrite of air-pollution rules in an attempt to shut down a big chunk of America’s coal-fired power plants. I’m sure you remember Mr. Obama’s pledge to bankrupt the coal industry.

Coal-fired power plants provide 40% of U.S. baseload capacity in the United States, and almost half of net power generation.  The EPA has their agency eye on about 8% of all U.S. generating capacity.That doesn’t sound like much until you recognize that it the equivalent of wiping out all power generation for Florida and Mississippi.

In practice, this means blackouts and rolling brownouts, and rising electricity rates for consumers. As the Wall Street Journal says, if terrorists did that in  a cyber attack, it would be considered an act of war.

Later this year, the EPA will release regulations that require utilities to further limit mercury and other “hazardous pollutants.” Full compliance will be required by 2015, 36 months after the final rule is public and plants that can’t be upgraded in time will be required to shut down.  The industry says that the average lead time for retrofitting scrubbers was 52 months.

The Clean Air Act was revised in 1990, and the amendments added at that time contain a proviso that would allow Mr. Obama overrule EPA Administrator Lisa Jackson, exempting all power plants from compliance with any standard  or limitation for two years. None of these regulations were demanded by  Congress, but are the result of bureaucratic discretion. The big question is whether the Administration’s green campaign is more important than the country’s economic growth.

The EPA’s own estimate is a cost of $11 billion annually., but that’s a lowball estimate.  Don’t expect Mr. Obama to rein in his regulators. He has already demonstrated that his green priorities are more important to him than American jobs.

Annual federal funding for policies purportedly directed at climate change has been increasing substantially.  According to the GAO, annual climate spending has increased from $4.6 billion in 2003 to $8.8 billion in 2010 — $106.7 billion over that period. That’s for technology for reducing greenhouse gas emissions, science to understand climate change, international assistance for developing countries, and wildlife adaption to changes. That doesn’t begin to count  all the regulation costs.

The Small Business Administration estimates that compliance with such regulation costs the economy more than $1.75 trillion per year, about 12 to 14% of GDP, and half of the $3.456 trillion Washington is currently spending.  The Competitive Enterprise Institute believes the annual cost is closer to $1.8 trillion.  CEI further notes that these regulation costs exceed 2008 corporate pretax profits of $1.436 trillion. That’s alarming.

Glad You’re Alright, East Coast Folk. by The Elephant's Child

Hurricane Irene has been downgraded to a mere tropical storm. Uncomfortable or worse for many, with power outages and  fallen trees, but most of us have been there and done that.  The media, as usual, vastly overhyped the event.  Apparently every region has their version of “STORMWATCH” and they send crews out to find pictures of disaster of one sort or another to prove that it was indeed a terrible event.  Photographers found some damaged boats, docks, decks, and at least one tree through a roof, and lots of excess water.

The hype led President Obama to “take charge” at the National Response Coordination Center (NRCC) set up at the Federal Emergency Management Agency’s (FEMA) headquarters in Washington.  All spokesmen in the media and the White House emphasized how much the President was in charge and on top of things, but unfortunately the storm did not really cooperate by giving him much of anything to be in charge of.  NOAA had overestimated wind speeds by taking readings from the wrong altitude.

It could have been a lot worse.  The east coast has had hurricanes do a lot of damage on occasion in the past.  Let’s just say that everyone tried hard to be responsible and keep people from being harmed, and for the most part they did. So lets not make too much of the “optics” to use the new buzz word for the way things look. It’s always better to err on the side of caution and preparedness.

Computer Problems, Computer Problems, Sigh. by The Elephant's Child
August 28, 2011, 4:50 pm
Filed under: Blogging

I’m sorry about the absence of blogging. No hurricanes here, but ordinary computer problems.  Crashed something over six times yesterday, and froze innumerable times.  Off to the shop this week, in the hopes that I don’t have to get a new computer just yet.

I’ll be back just as soon as I can.

A “Big Idea” is Not Enough. It Has To Pencil Out! by The Elephant's Child

If you can’t get something past the societal watchdogs — because they actually investigate what is involved — well then you just rename it, figure out a slightly different path and choose new and improved words to describe it.  I am referring here to Cap-and-Trade, now so thoroughly denigrated that it is dormant if not dead.

The idea there was that everyone would get a “cap” on the amount of CO2 they could emit, but big emitters could buy rights to emit more from low emitters, and there would be lots of money involved and some selected people would make a bundle. (Al Gore?) They even established a board of exchange in Chicago where rights would be traded, but thankfully that has closed.

The Green Meanies are not going to let their big ideas die without a fight. The new name is “Clean Energy Standard” (CES).  Doesn’t that sound better? Or also “Renewable Energy Standard” (RES). Who can possibly object to clean energy?

Possibly the people who look into such mundane things as costs and benefits would object. And some may even consider whether the underlying assumptions are indeed true,  something else usually ignored by those with big ideas

Are actions by governments to select, promote or mandate particular energy technologies and sources in the national and public interest?

Governments are notoriously bad at picking winner and losers. They have forced spending  of billions of tax dollars and energy consumer dollars in ways that have failed to be commercially viable, and have instead merely driven up the cost of electricity. The president’s proposal for a Clean Energy Standard is an arbitrary one, unsupported by adequate consideration of costs, risks or evidence.

Governmental action to promote the technologies selected by the government have resulted in transferring billions of dollars to developers and owners of high cost energy sources that produce little energy. From 1973 to 2010, DOE and its predecessor agencies have spent over $145 billion of tax dollars, according to energy expert Glenn Schleede,  not counting research and development costs.

In fact, electricity from wind is high in true cost and low in real value, particularly because of its intermittence, volatility, and unreliability.

Countries that have heavily promoted wind energy like Denmark and Germany have some of the world’s highest electricity costs. Neither wind nor solar are either reliable or dependable sources of energy. They must be supplemented by constantly available regular generating capacity from coal or natural gas.

There is, however, an even more basic assumption behind the CES.  William Happer, Cyrus Fogg Brackett Professor of Physics at Princeton describes it in a new paper:

     [There is] a contemporary moral epidemic: the notion that increasing atmospheric concentrations of greenhouse gases, notably carbon dioxide, will have disastrous consequences for mankind and for the planet. …
We need to be vigilant to keep our land, air and waters free of real pollution, particulates, heavy metals, pathogens, but carbon dioxide (CO2) is not one of these pollutants. Carbon is the stuff of life.  Our bodies are made of carbon.  Every day a normal human exhales around 1 kg of CO2 —the simplest chemical stable molecule of carbon in the earth’s atmosphere.  Before the industrial period, the concentration of CO2 in the atmosphere was about 270 parts per million (ppm). At the present time, the concentration is about 390 ppm, 0.039% of all atmospheric molecules and less than 1% of that in our breath.  About fifty million years ago, a brief moment in the long history of life on earth, geological evidence indicates, CO2 levels were several thousand ppm, much higher than now.  And life flourished abundantly. …
The argument starts something like this, CO2 levels have increased from about 270 ppm to 390 ppm over the past 150 years or so, and the earth has warmed by about 0.8 C during that time.  Therefore the warming is due to CO2.  But correlation is not causation.  …
A rare case of good correlation between CO2 levels and temperature is provided by ice-core records of the cycles of glacial and interglacial periods of the last million years or so.  But these records show that changes in temperature preceded changes in CO2 levels, so that CO2 levels were an effect of temperature changes.

This is the merest sample of Dr. Happer’s paper — “The Truth About Greenhouse Gases“, and I would urge you to read the whole thing. The amount of taxpayer money, energy costs, regulations, mandates, lost jobs, and inflation  that are due to the misguided effort to restrain CO2 can hardly be tabulated. The sheer waste is beyond belief, and the ineffectiveness of government efforts is painful to see.

With an economy in the tank, we cannot afford the luxury of paying for ever more grants and subsidies and loan guarantees for Obama’s” hope” of a clean green economy that he hopes will create lots of jobs, with no evidence that there are green jobs and a great deal of evidence that the green jobs are the stuff of rainbows and unicorns. We have to do our homework.

What About the Tea Party? Radical? Extremists? by The Elephant's Child

The Democrats are obviously terrified by the Tea Party.  We have Maxine Waters charmingly shouting that the Tea Part can go to hell, and she wants to help them get there.  Democrats have called them “terrorists,” “extortionists,’ “racists,” the real enemy,” yet the movement is one of ordinary citizens who think the federal government should stop creating massive debt, and should rein it in by cutting spending.  I guess to a big-spending liberal, that must seem extremely threatening. If you believe that you get votes by spending money on giving voters goodies, then people who believe in free market capitalism and a government of the people, not of bureaucrats must seem really scary.

Fifty-six percent of the economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced primarily or only through spending cuts.  Another 37 percent favored equal parts spending cuts and tax increases and the remaining 7 percent thought it should be done through tax increases. So it would seem that the Tea Party is fairly mainstream after all.

Tea Party people seem to know American history well, have read and studied the Constitution, and to be clear on what the government is allowed to do and what it is not allowed to do.

Here’s Sunny again.  She cracks me up!

%d bloggers like this: