American Elephants

Did Rush say he wanted the economy to fail? by The Elephant's Child

Rush Limbaugh’s speech to CPAC has been widely discussed today, particularly in light of Michael Steele’s odd remark when he referred to Limbaugh as an ‘entertainer” whose show can be “incendiary.” Steele has since apologized.  But the discussion, such as it is, from both sides of the political divide, has widely missed the point.

Rush did as fine a job as I can remember ever hearing,  of articulating basic conservative principles and belief in America.    He tweaked liberals, of course, but as a matter of disagreeing with their basic principles and the results of their policies.

Let me tell you who we conservatives are: We love people.  When we look out over the United States of America, when we are anywhere, when we see a group of people, such as this or anywhere, we see Americans.  We see human beings.  We don’t see groups.  We don’t see victims.  We don’t see people we want to exploit.  What we see — what we see is potential. We do not look out across the country and see the average American, the person that makes this country work.  We do not see that person with contempt.  We don’t think that person doesn’t have what it takes.  We believe that person can be the best he or she wants to be if certain things are just removed from their path like onerous taxes, regulations, and too much government. …

We don’t want to tell anybody how to live.  That’s up to you.  If you want to make the best of yourself, feel free.  If you want to ruin your life, we’ll try to stop it, but it’s a waste.  We look over the country as it is today, we see so much waste, human potential that’s been destroyed by 50 years of a welfare state.

Rush said that “more people than you know live their lives as conservatives in one degree or another.  And he said:

Spending  a nation into generational debt is not an act of compassion.  All politicians are temporary stewards of our country.  It is not their task to tear it down and rebuild it in their image.

The differences come in definitions of what is policy and what is principle. Principle involves inalienable rights to life, liberty and the pursuit of happiness; adherence to the Constitution;  the rule of law and respect for the history of America.  Principle says all men are created equal and you can make of yourself what you will, that we’ll help you if you’re down, but we expect you to stand on your own two feet if you can.  Policy says that people who are more successful need to support those who made poor choices,because it is not fair for some people to be more successful than others.

Rush reminded us that Barack Obama is spending wealth that has not yet been created.  If it was about paying for it, he wouldn’t do it because we can’t afford it.  It isn’t about paying for it, it is about control.

You might keep that in mind.

Daniel Mitchell is Back, Explaining Economic Growth. by The Elephant's Child
February 19, 2009, 2:34 am
Filed under: Economy, Freedom, The Constitution | Tags: , ,

Daniel Mitchell, economist with the CATO Institute, has done a fine job of explaining the current economic crisis and what should be done about it.  He is always worth your time.  Scroll down for his previous videos.  (They can be seen here, and here.)

(h/t Hot Air)

“New, New Deal” meet the “Old New Deal.” by The Elephant's Child
February 7, 2009, 7:30 pm
Filed under: Domestic Policy, Economy, History, Liberalism, Military, Taxes | Tags: , , ,

President Obama, irritated by Republican lack of cooperation in passing his porkulus bill, hopped on Air Force One on Thursday for the less than 150 mile trip down to Williamsburg to speak to the Democrat caucus about the urgency of rescuing the economy.  A pilot estimated the cost of the gas for Air Force One at $30,000 for this short trip.

Obama discarded his prepared speech, we are told, to say the same old things about crumbling roads and bridges and levees , factories closing, tens of thousands laid off, and warned of catastrophe if his bill is not passed instantly.  He whined about the debt left for him — “wrapped in a big bow waiting for me as I stepped into the oval office” — by the Bush administration, and reminded everyone, once again, that he won the election.

So then you get the argument, well, this is not a stimulus bill, this is a spending bill.  What do you think a stimulus is? That’s the whole point.  No, seriously.  That’s the point.

There, as they say, is the rub. President Obama’s “stimulus” has aptly been called “The New, New Deal.”

When Franklin Delano Roosevelt took office in 1933, he had an economy in bad shape left to him by the Hoover administration.  FDR was inaugurated on March 4, and proclaimed a bank holiday the next week.  Five days later he began his first One Hundred Days. March 29, Congress passed a bill creating the CCC (Civilian Conservation Corps) making jobs for approximately 250,000 young men.  April 19, he announced that the U.S. would abandon the gold standard, devaluing the dollar internationally.  May 19 Congress passed a bill creating the TVA (Tennessee Valley Authority).

And so it went, commissions and authorities and boards and corps — the WPA, the ERA, SCS, REA, NLRB, and so on and so on. [Read Amity Schlaes excellent The Forgotten Man]  All these programs put people to work, working for the government.  Nothing worked to improve the economy or lessen the impact of the Depression. Democrats are generally sure that the first hundred days fixed everything, but the facts show otherwise.

Most acknowledge that World War II ended the Depression,  but  ignore the circumstances.  The Draft began in October of 1940.  By the summer of 1941 President Roosevelt asked that the term of service be extended beyond 12 months, and many reluctant soldiers threatened to desert.  The December 7 attack on Pearl Harbor brought thousands of Americans volunteering for service.

Able bodied young men were swept up in the draft, and women and draft rejects turned to new or re-tooled factories for employment.  Military pay wasn’t much, and although thousands of new jobs were created at home, wage and price controls were instituted.

Many products were rationed to allow for a flow of goods for the military.  Rationed products included tires, cars, bicycles, gasoline, fuel oil and kerosene,  solid fuels, stoves, rubber footwear, shoes, sugar, coffee, processed foods, meats, canned fish, cheese, canned milk, fats and typewriters.  Other things were just unobtainable.  If a store got in a case of Hershey bars, long lines developed instantly.  People at home remember the bags of shortening which contained a gelatin pill of yellow food coloring and butter flavor so you could create margarine.  Soldiers remember Spam and Chipped Beef which they came to loathe.

More people were at work, but wage and price controls kept the economy stable.  There was nothing on which to spend money.  Factories which once made consumer products were making war materials.  Gasoline and car rationing meant that you couldn’t go much of anywhere, and there was nothing to buy.  In every Five & Dime store, a woman sat at a table in the front of the store darning silk stockings.

What people could do was save money.  There were War Bond drives everywhere.  Kids brought their money to school to buy Savings Stamps to fill up Savings Books, and when the book was full, you got a $25 War Bond.  Celebrities conducted War Bond drives in every venue including spontaneous appearances on the back of flag- festooned trucks on the street.

For all of Roosevelt’s good intentions, all of his spending did not act as stimulus.  The make-work, government-paid jobs that he created put groceries on the table, but did not help the economy to recover.

The government action that did help the economy to recover was the government’s  massive purchase of goods.  The government bought tanks, trucks, aircraft carriers, destroyers, rifles, cannon, canteens, Higgins boats,boots, backpacks, walkie-talkies, rubber boats — an unimaginable stream of military supplies from the “Arsenal of Democracy” not only for our army, but also for the armies of our allies.

The government was not taking money out of one pocket and putting it back in another, as was the case with make-work government jobs and government-paid projects.  The government ordered products to be built, created, invented by private enterprise, which in turn hired workers and designers and engineers to create new products. It put certainty into the economy.  Companies could be created, workers hired, products invented because there was a market that would pay for them.  Accepting risk was once again worthwhile.

Tax cuts work because they present the same certainty.  If your taxes are cut, you know that you will have  X number of dollars more income, for sure.  When the government spends, it operates on the assumption that the money will enter the economy and create a “multiplier effect” (the source of many economist arguments) as it moves around the economy.  The history of spending seems to suggest that most of the “multiplier effect” is bunkum.

People’s savings from the war created a pent-up market ready to buy consumer goods they were deprived of during the war.  New cars, new appliances, meat, butter, shoes — there was a hunger for long-unavailable products and plenty of  jobs in industries re-tooled to produce them.

So in answer to President Obama’s sneering assertion that “spending is stimulus”— Nice try, but that simply does not seem to be the case.  And we arrive back at the Democrats’ lack of interest in consequences and enthusiasm for good intentions.

Taxing Matters! by The Elephant's Child

Nobody likes paying taxes.  Many, who have their taxes withheld at work, are more or less unaware of paying taxes and appreciative of the size of their refund, thinking of it as a sort of gift rather than an overpayment of the amount actually due.   Folks who are their own bosses suffer through paying quarterly taxes, and are very conscious of how much they pay.  “Withholding” was designed to make paying taxes less noticeable and therefore more pleasant.  It apparently works, for the taxes most resented in all cases are those taxes of which one is most aware.

Our relationship with the collectors of taxes is therefore complicated.  Some live in terror of the IRS, possibly because of the extra charitable donation they claimed.  But the collectors only collect.  Our argument should be with those who raise our taxes so casually.  That’s those folks in the House of Representatives whose ideas of “fairness” are so very, very strange.

Which brings us to the Chairman of the House Ways and Means Committee, Charles Rangel, who is in trouble with the Ethics committee for, among other things, not paying his taxes.

And we have the case of Timothy Geithner.  Timothy Geithner is Obama’s Treasury Secretary-designate.  He was most recently President of the New York Federal Reserve, and before that he was at the International Monetary Fund.

The IMF does not withhold state and federal income taxes or self-employment taxes — Social Security and Medicare — from its employees’ paychecks.  Because this might be confusing, the IMF goes to great lengths to explain to their employees just what their tax liabilities are.  Each employee receives a IMF Employee Tax Manual.  For the purpose of calculating their quarterly tax returns, each employee receives a quarterly wage statement.  Then, there are year-end wage statements.  Each employee is required to file for an Annual Tax Allowance Request.

Although employees are expected to pay their taxes out of their own money, they receive an allowance to cover those tax payments.  The employee fills out a form with their basic information — marital status, dependent children and so forth, and the IMF estimates the taxes due and gives the employee a corresponding allowance.   At the end of the form are the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.”

Geithner signed the form.  He received all the paperwork and the allowance.  He just did not pay the social security and medicare taxes from 2001,2002,2003 and 2004.  In a 2006 audit the IRS discovered that he had not paid in 2003 and 2004.  He was assessed $17,230 including interest. which he paid.  The Obama transition team uncovered the fact that he had failed to pay in 2001  and 2003, at which point he dredged up another $25,970.  There was also an additional $4,334 plus interest for some other infractions.  Mr. Geithner did his own taxes.

The Obama administration said that it was “a common mistake.”

Charlie Rangel neglected to pay taxes on the rental income from some houses he owns in the Dominican Republic.

Does this matter?  Mr. Geithner is an important economist who, as Secretary of the Treasury, would be in charge of the IRS, as well as the complications of the economic recovery.  Mr. Rangel is the most influential person in Congress related to taxing and spending.

Is this a big deal?  Or just a common error like most people make at one time or another?    Ordinary hypocrisy?  Something embarrassing to be overlooked?  Cause for dismissal?  It does matter, doesn’t it?

“Spreading the wealth,” continued. by The Elephant's Child
November 16, 2008, 10:13 pm
Filed under: Economy, Liberalism, Politics | Tags: , ,

During the presidential election campaign, some voters were startled to hear for the first time that at least a third of Americans pay no income taxes whatsoever.

The Tax Foundation notes that in 2006, 45,600,000 tax filers paid no income tax at all.  Under today’s law, in 2009 47.000,000  (representing probably 96 million individuals)  will pay no income tax.

The Foundation maintains that under Obama’s plan 63,000,000 filers will pay no taxes or 44% of all returns.  So pretty close to 1/2 of Americans will pay the taxes for the other half as well as themselves.

Obama said repeatedly that 95% of Americans would get a tax cut under his plan.  Economist Alan Reynolds, when asked where they got that figure, said simply “They made it up.”

In 2006, IRS figures show that the top 10% of all filers ($109,000 and over) paid 71% of all taxes.

I’m inclined to think that everyone should pay some taxes, and participate in our society. No matter how compassionate you feel towards those who make less in our society, it is not healthy for only a handful of people to pay the taxes for the rest of us.

Now a new report from the OECD that our taxes are the most progressive in the world — we already collect the most from the wealthiest 10% and extract the most compared to their share of the country’s income.

Will Obama continue with his plans to tax the top earners still more?  Most economists are suggesting that the current crisis is not a time to raise taxes — any taxes.  Yet he seems to be determined to go after those he categorizes as “the rich.”

Obama Wants to Bankrupt the Coal Industry and Cause Energy Prices to Skyrocket… For Your Own Good! by American Elephant
November 3, 2008, 5:07 am
Filed under: Economy, Election 2008, Energy | Tags: , , ,

More desperately important reasons to vote for McCain/Palin and do everything in your power in these last two days to make sure as many other McCain/Palin voters get to the polls as possible:

From an interview in San Francisco (naturally) last January:

And, in the same interview, he admits freely that his plans will necessarily cause electricity prices to skyrocket:

Obama wants to drive prices up. He thinks Americans must change their evil energy consuming behavior, and that it is governments’ place to force them to do so. He believes the American free market, where we use electricity when we want it, turn on lightbulbs at our leisure, buy things we want and use them when and how we want — you know, the economic model that has lifted billions of people around the world out of poverty — must be fundamentally changed:

But we will have to subsidize energy for the poor! So not only are your personal energy costs going to skyrocket, you’ll be paying more taxes to subsidize energy for the poor.

And to what end?

As the video says, so that one day in the very distant future, the government will wave its magic wand and create a way to power the economy without oil, without natural gas, without coal, without nuclear — without any of the carbon producing, “dirty” energy sources that currently account for 90.4% of America’s electricity needs. That’s just electricity, it doesn’t even include America’s transportation energy needs.

And until the day when government can somehow make the solar and wind that currently supply 2.4% of our electricity needs, supply all the energy we need for electricity and transportation, you and your family, and your children, and their children, and their children’s children ad infinitum will have to suffer far higher energy prices, higher taxation, higher regulation of your personal behaviors and consumer choices….

THIS is what Obama means when he says he wants to bring about “fundamental change.” A level of Statism that has never, ever been known in this country. The government will tell you what, where and when you can travel. They will dictate through taxation and regulation how much energy you can use, what products you can buy, what temperature you can keep your house, what you can eat!

It is all implicit in his self-described vision. And it is contrary to almost every principle America is founded upon. Is Statism the change Americans are looking for? It’s the change they’re about to get!

Tell me where I’m wrong.

UPDATE: Sarah Palin responds to Obama’s vision for the coal industry:

(h/t Hot Air)

Why Hasn’t McCain Been Running Ads Like These? by American Elephant
October 25, 2008, 4:22 am
Filed under: Economy, Election 2008, Politics | Tags: , , , , ,

Two great new ads about the real Barack Obama from NeverFindOut.Org. Pretty devastating if you ask me. Just wish the McCain campaign were running more like them.

Donate here to help them out if you can.

Joe Biden says taxes are a matter of “patriotism”. by The Elephant's Child

“Your new tax plan is going to tax me more, isn’t it?” a plumber in Toledo asked Barack Obama  on Sunday in Ohio, where the candidate was canvassing neighborhoods and encouraging residents to vote early.  The plumber complained that he was being taxed “more and more for fulfilling the American dream.”

It’s not that I want to punish your success.  I just want to make sure that everybody who is behind you, that they’ve got a chance for success too,” Obama responded.  “My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody…I think when you spread the wealth around, it’s good for everybody.

Obama frequently rails against what he calls a Republican concept that tax breaks for the wealthy will somehow “trickle down” to middle-class Americans.  We last heard that claim during the Reagan administration.  There’s not much of anything new in Obama’s economic program.  It’s the old hate the rich and redistribute their income which has never improved an economy yet.

An IBD/TIPP poll found that most people haven’t much of an idea how much the top 5% of taxpayers (those making more than $153,542) pay in taxes. 36% of the people thought that the rich contribute 10% or less of all federal income taxes.  An additional 15% thought that the rich pay between 10% and 20% of all taxes, and another 10% thought that they probably pay between 20% and 30% of federal taxes.  In other words, most people thought that the rich pay far less than they actually do.  Only 12% of the people thought that the rich pay more than 40%.

A U.S. News & World Report blogger went to the Democratic National Convention in Denver and conducted an informal poll of about 24 delegates.  He asked them “What should the rich pay in income taxes?” The average person thought that the rich should pay 25.6% of all taxes.

So how much do the top 5% of earners actually pay?  The group whose taxes Obama wants to really raise?  They already pay 60% of all taxes. I wonder how much he’s going to soak them for, after he lets the Bush tax cuts expire?

Obama thinks that increasing taxes and giving them to the “needy” is a matter of “neighborliness”.  Joe Biden calls it a matter of “patriotism”.

According to Larry Elder,:

Liberal families earn about 6% more than conservative families, yet conservative households donate about 30% more to charity than do liberal households.  And conservatives give more than just to their own churches and other houses of worship.  Conservatives, especially religious conservatives, give far more money and donate more of their time to nonreligious charitable causes than do liberals — especially secular liberals.

Obama doesn’t seem to understand the mobility of people within our American economy, which is alive with movement between the income classes.  And we are so fortunate that this is so. In many countries you cannot aspire to move beyond your station in life.  Americans would wonder what is meant by “station in life”.

And he is going to demand that people do public service, requiring it from high school and college kids.  For his other service corps, he apparently plans to pay people for “volunteering”.  If some people volunteer for pay, why should others volunteer for free?  Sounds like a good way to end the volunteering that people have been doing all along.  But maybe Obama doesn’t know about that.  He only hangs out with liberals.

American Economic Mobility Disproves Obama’s Class Warfare by The Elephant's Child

When campaign season comes along, with it always comes “class warfare”.  Many people don’t understand what is meant by “class warfare”.  America is very much a classless society, although our politicians prefer class divisions so they can claim to do away with them.  The divisions — there are five of them — come from the Treasury Department, where you have “rich” at the upper end, “poor” at the lower end, and then lower middle, middle, and upper middle.  The government finds it helpful to keep track of how people are doing in this way.  The rest of us should not.

The problem is that Americans, stubbornly, will not stay put.

There is enormous mobility in the American population.  Young people start out poor, find jobs, get promoted or find a better job, and with hard work, get promoted again and again. Some even become the rich.  From apartment to house, kids, schooling, then folks begin to reach their peak earning years, eventually retire, and slip back down the income scale and live on a fixed income.  Yes, of course, the path is not always smooth.  Two steps forward, one step back.  Lost jobs, accidents, divorce, foolish mistakes, but the point is that neither “the poor” nor “the rich” remain the same people over time.

If you follow Obama’s speeches over time, you will find that his economic plan assumptions are based on long-discredited Marxist theories. “The top hedge-fund managers made $29 billion last year” he claimed.  He assumes that capitalism unfairly favors the rich.  And he believes that it is government’s job to step in and close the gap between the average worker and the wealthiest 1%.

But he needs to get his nose out of the Marxist playbook and look at the real data.  The “poor”, those at the very bottom, do not get poorer, the income pie continually gets bigger.

Obama vilifies the mega-rich, the top 1%; but according to IRS data only one quarter of those who belonged to the group in 1996 remained in the group by 2005.  Three-fourths of them no longer qualified.

More than half of those in the bottom income group in 1996 had moved to  a higher income group by 2005.  Over 5% had jumped to the richest quintile. Some had moved up through their own hard effort, but many rode an expanding economy. Economic growth for those in the lowest fifth was 90.5%. Hardly a permanent underclass. The top 1%, on the other hand, dropped 25% in median income in the same time period.

According to the Treasury Department, the top 10 percent received about 46 percent of the income in 2000.  In 2006, they received about 47.3 percent.  But in 2006, they paid 70.8 percent of all taxes, and 33 percent at the bottom pay no taxes at all.  Obama claims that he will cut taxes for 95% of the people, but only 67 percent of Americans pay taxes.

Obama fails to understand that many of “the rich” are actually small businesses who choose to report the income from their business as an individual, rather than incorporate.  He fails to understand that raising the capital gains tax will cost the government revenue, as taxpayers won’t sell an investment if it costs them too much.

He also plans to call for a “living wage” which will stick retailers with a $10 minimum wage indexed to inflation, and with a mandate for seven days of sick leave applied to employees. But many retailers operate on very thin margins.  He assumes that business owners will simply eat the cost. With Nancy Pelosi’s much heralded increase in the minimum wage, there was 20% unemployment among young people this summer.  Perhaps you have noticed that most retail stores have smaller staffs, and there is increasingly more self-service.

Obama has claimed that the current financial crisis was caused by a lack of enough regulation.  But it was actually caused by too much regulation of the wrong kind. A Democrat congress essentially told banks that they must lend to people with questionable ability to repay the loan, under penalty of law.  This is regulation, not oversight.  And very poor regulation at that.

Few congressmen have been entrepreneurs prior to being elected to Congress.  Lacking any knowledge of how to run a business nor of what the problems involved are, congress wants to tell businessmen how to run their operation.  The proper work of congress is oversight.  They don’t seem to learn the difference.

Americans are opposed to income redistribution to fix the economy.  Only 13% of adults, nationally, believe that the government should take steps to distribute wealth more evenly among Americans.  84% of adults believe that the government should take steps to improve overall economic conditions and the job market, according to a USA Today/Gallup poll from mid-June of this year.

Taking from the rich through much higher tax rates in order to help the poor and middle class makes no sense intellectually and has seldom worked in practice.  Reducing rates increases the share of taxes paid by the highest income earning group.  Obama’s pollsters have told him that the economy is his strongest suit.  And some Americans seem to believe that Obama actually knows something about economics.  But such doesn’t seem to be the case.

When you put “tax fairness” before economic progress, you usually end up with neither.

If someone gets obscenely rich, it does not take anything away from you.  The pie just gets bigger.  Do not let anyone sell you on class warfare.  It doesn’t work.

Obama promises wonders that he cannot deliver. by The Elephant's Child

Obama embarrassed himself by claiming in a recent campaign ad that John McCain was behind the times because he didn’t use email.  Technologically inept.  And of course the former bomber pilot and chairman of the Senate Telecommunications subcommittee — who is considered the most technologically informed member of the Senate — wouldn’t know about something like email.  As Obama becomes more desperate, his attack ads are more poorly conceived.

James Taranto calls attention to a new Obama campaign ad in “Best of the Web” in the Wall Street Journal:

A new television ad released Wednesday by Sen. Barack Obama’s campaign highlights the closure of Corning Inc.’s plant in State College, Pa., and accuses Washington with Sen. John McCain’s help of selling out the workers, the Associated Press reports.

So what did Corning make at the plant? The ad does not say,… but the AP story does: “glass tubes for television sets and computer monitors.”

It’s hard to remember now, but in the olden days TV sets and computer monitors used a technology called cathode ray tubes.  A CRT consisted of an electron gun that projects an image onto a fluorescent screen.  In most cases the gun had to be some distance from the screen, with the entire assembly  enclosed in glass, which meant that TVs were bulky and boxy (hence the term “idiot box”).

In modern times, the CRT has given way to superior technologies such as plasma and liquid crystal, which take up less space and provide superior picture quality.  This is an enormous blessing to all Americans who watch TV or use computers.

Now who is behind the times?  As Mr. Taranto says: “It’s hard to imagine a more backward-looking position than mourning the decline of the picture-tube industry.”

It is hard on workers when the advance of technology makes their jobs obsolete. An industrial plant designed to manufacture an obsolete product often has little choice but to close.

There is no question that technological change has speeded up.  The average person will change their job many times in their lifetime, and they must be prepared for it.  Not even the mighty government can prepare each individual for the change that may happen in our world.

Obama has spent a lot of time on the campaign trail claiming that Government should keep plants from closing (obsolete plants?), and prevent industry from outsourcing jobs (that cannot be profitably done in this country?).  He does not explain how he is going to make this populist horse hockey work.  He’s going to have taxpayers underwrite a plant that makes obsolete products? Products that cannot be sold? He’s going to have the government take over the plant? He’s going to order some other manufacturer to take over the plant?  Sounds reminiscent of the Soviet plants that made all left shoes.  And production of goods that cannot be made profitably in the US is going to be forced to be made here by Government?  Are taxpayers going to be forced to underwrite that production or are we going to raise tariffs so high that consumers have no choice but to buy goods that are vastly more expensive than they would be otherwise?  Which is simply a different way for taxpayers to underwrite production.  Of course he doesn’t say.  He offers only “hope”.  “Yes we can.”

Obama is just practicing an old, old socialist trick.  Elect me and I will keep bad things from happening.  Elect me and I will make government (taxpayers) fix things for you.  Empty promises for folks who want to believe. There is neither hope nor change here. He is promising things that he cannot deliver without transforming our economy into a socialist “paradise”, and socialist paradises not only don’t work, but there is one hell of a lot of misery involved.

Don’t Cast Caution to the Winds! by The Elephant's Child

Denmark is usually cited as the world’s most successful wind-power pioneer.  Denmark is a small, flat, windy country with a population of around 5.5 million people.  Researchers have put a value on Danish wind energy.  They believe that wind power cut $167 million (1 billion kroner) off Danish electricity bills in 2005.  Danish consumers, on the other hand paid 1.4 billion kroner for subsidies for wind power.

The trouble with wind is that it doesn’t always blow when you need the electricity, and often blows when you don’t need it.  Wind power cannot be stored. Thus you must have electricity constantly available as backup for the times when the wind isn’t blowing.

Denmark relies on their neighbors, Norway and Sweden, and takes their excess production of electricity, and conversely sends it’s excess wind-power generated electricity back to the neighbors.  In 2003, the scale of subsidies caught the attention of the media, which claimed that the subsidies were out of control.  When subsidies were cut back, the building of wind turbines ground to a halt.

One of the big problems seems to be that where wind is, there are not transmission lines. Often, the wind is far from the grid.  Transmission lines run about a million dollars a mile.  Most of Denmark’s electricity comes from plants that burn imported coal.

There are some lessons here, which suggest that the “experts” in Congress should get out of the way and let the market find the way.  Congress doesn’t do well with making the rules for energy.

Democrats Vote to Raise Cost of Gas and Food! by American Elephant

Democrats Vote to Raise Cost of Gas and Food!

The law of supply and demand really is very simple.The price of any good or service is determined by how much people want it and how available it is. The more available it is, the less it will cost; the less available, the more it will cost.

The price of oil, for example, is skyrocketing because demand is skyrocketing. As trade is raising the standard of living in countries like China and India, more people are using more energy, so the demand increases and the price goes with it.

Republicans understand this.

That is why when Republicans were in charge they offered tax-breaks to oil companies if they would do certain things to increase the supply of oil and gasoline.

Democrats either don’t understand the law of supply and demand, or they simply don’t care. I suspect its a combination of the two.

Democrats have just passed another “energy” bill that does absolutely nothing to increase the supply of energy or bring the prices of energy down. On the contrary, they have voted to raise taxes on oil companies and take away the incentives to increase supply.

This means the price of gas will go up as oil companies pass their increased tax burden on to the consumer, and will go up even more as they scale back their efforts to increase supply.

Democrats did this despite the news that gas prices could reach $4 per gallon in some places next summer because of the increasing demand on crude oil. Lets be clear about that, the increased costs Democrats voted for would be on top of the $4/gallon price.

But the stupidity of the bill doesn’t end there.

The Democrats’ bill would also increase subsidies for ethanol and other “biofuels”. The problem with this (well, there are many problems with this), but the biggest problem is that when government creates artificial demand for ethanol, then the companies that make ethanol increase the demand for corn (which is used to make ethanol).

So, the price of corn goes up.

Not only does this raise the price of foods made from corn — i.e. cereals, tortillas, etc. But animals also eat corn. So the price goes up on chicken, eggs, milk, beef, you name it.

Virtually all the inflation you’ve noticed at the supermarket can be attributed to the increased cost of oil and the increased cost of corn because of “biofuel” subsidies. And Democrats just voted to increase the cost of both gas and groceries even more.

But the stupidity doesn’t end there!

The new taxes on oil companies only apply to domestic oil companies. Which means this bill will lower the amount of oil and gas we produce ourselves, and increase our dependence on foreign oil!

Plus, ethanol and other “biofuels” cost more to produce than oil, require far more land to produce than oil (it would take every single acre of farmland in the United States plus another 50 percent to make enough ethanol to replace oil), take far more energy to produce than oil, and deliver far less energy than oil. All of which means “biofuels” are actually worse for the planet!

Keep all this in mind when President Bush vetoes the bill. No doubt Democrats will demonize him for doing so, but they will be lying, as usual.


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