Video: Energy Sec. Chu claims government played 'intimate role' in all U.S. tech development
No joke.
Here's what Secretary Steven Chu, a top official in the Obama administration who's in charge of the U.S. Department of Energy, claimed today at Sen. Harry Reid's National Clean Energy Summit:
So the government played an incredibly intimate role in all the technologies that led to prosperity in the United States, and we must not lose sight of that fact.And if you don't believe he said that - and given how ludicrous that statement is, I wouldn't blame you - here's video of his comment (30:50 mark):
Browse through these lists of 10 popular inventions and the top 50 inventions of the last 50 years. Notice anything missing? Oh yeah, government's "intimacy" in creating the telephone, the television, the automobile or even the TV remote.
If you have some extra time and want some laughs, go back to the 28:25 mark of Chu's speech and watch him try to explain how the government was really responsible for airplanes.
Of course, the Wright brothers invented it, Chu says, but if it weren't for military spending or allowing private companies to deliver the U.S. mail (amazing how he considers deregulation to be "intimate" government involvement, but I digress), no doubt airplanes would have faded away.
Sure, mankind has been trying to fly for thousands of years, but absent some military spending, I'm sure this technology would have been lost to history, and we'd all be traveling on a rail system that would make Dagny Taggart envious.
What garbage.
Of course, given that Chu was at a conference designed to promote government subsidies to private businesses, false claims are par for the course.
For more coverage of Reid's Clean Energy Summit (and to find out what other ridiculous things government officials are saying), check out NevadaJournal.com.
Read moreWhat you need to know about Reid's Clean Energy Summit
Tomorrow, Sen. Harry Reid will sponsor his fourth annual Clean Energy Summit. The event is called "The Future of Energy."
So does the program feature green energy's top scientists and inventors? Nope. Instead it features speakers and panelists drawn overwhelmingly from the ranks of elected or government officials.
Why? Because "green" energy isn't profitable or popular. The only future it has is dependent on government handouts.
I wish I could say I was the first to notice this, but the RJ's Glenn Cook made this point perfectly in his Sunday column.
The National Clean Energy Summit 4.0 will be held Tuesday at CityCenter's Aria resort, so one might expect the list of speakers to be a who's who of science and entrepreneurship.Also in Sunday's RJ, reporter Jennifer Robison asks the key question: Is Nevada green energy worth all the green?
Wrong. Because the clean energy industry is propped up by massive federal subsidies and political pressure, the event might as well be a fundraiser for the Democratic National Committee. ...
As with everything else associated with green power, research and economics are out the door in favor of partisan politics and crony capitalism. All to find ways to make you pay more for energy -- and everything else as a result.
Answer: No.
Robison wrote an excellent article that details just some of the money government has wasted pursuing green energy policies and includes some great stuff from NPRI's Geoffrey Lawrence.
"We've been talking about how renewable energy would be the job creator of the future since the 1970s, and the sector has consistently failed to deliver despite massive subsidies," said Geoffrey Lawrence, deputy director of policy at the Nevada Policy Research Institute, a libertarian think tank in Las Vegas. "It's time to re-evaluate those promises."Be sure to read the whole thing.
Tomorrow's conference isn't about clean or green energy. It's about government picking the winners and losers in the energy sector. Reid and his ilk want to give taxpayer money to green energy companies and mandate the use of green energy, which will lead to higher electricity prices for consumers.
Green energy isn't just more expensive. It's also costing states thousands of jobs.
Clean energy is really about cleaning out your wallets and giving your green to government-chosen winners.
Stop giving private businesses government handouts
Whether politicians call it "business development," "economic diversification" or a "venture capital fund," handing out government - excuse me - taxpayer money to favored companies is corporate welfare and the very worst of crony capitalism.
Then why are politicians, from Gov. Brian Sandoval, Speaker John Oceguera, Senate Majority Leader Steven Horsford, Henderson Mayor Andy Hafen to even Texas Gov. Rick Perry, so eager to do it?
First, it looks good - for them! Not for taxpayers, not for the vast majority of the unemployed, not for the businesses (and their employees) who have their taxes used to subsidize their competitors. Corporate welfare looks good for politicians.
Why? Because they can put out press releases saying "they," your elected representatives, have created jobs, and "they" are fixing the biggest problem facing you and your community. Now, don't you want to vote for them again?
Second, when the jobs never materialize, politicians often aren't held responsible. And businesses receiving government largesse go belly up or produce significantly fewer jobs than advertised with astonishing regularity.
How about the $1.5 million lost when a company subsidized by Texas - authorized by Perry - went belly up? Gone.
ThromboVision, Inc., a medical imaging company, was also the recipient of an award from the Emerging Technology Fund: It received $1.5 million in 2007. Charles Tate, a major Perry contributor, served as the chairman of a state committee that reviewed ThromboVision's application for state funding, and Mr. Tate voted to give ThromboVision the public money. ...How about the $58 million Massachusetts gave Evergreen Solar, which recently declared bankruptcy? Gone.
According to a Texas state auditor's report, ThromboVision failed to submit required annual reports to the fund from 2008 through 2010, when the company went bankrupt. The report noted the tech fund's managers were "unaware of ThromboVision, Inc.'s bankruptcy until after the bankruptcy had been reported in a newspaper."
How about when Nevada spent $12 million to "create" five green jobs? Wasted.
Third, there's a significant misunderstanding in this country (among politicians and the public) about what or, more appropriately, who creates jobs.
Sure, politicians can create short-term jobs and bubble expansions by taking wealth away from citizens and manipulating interest rates, but neither those jobs nor the economic bubbles are sustainable. Exhibit A is the epic failure of the stimulus. Exhibit B is the high number of failed government interventions during the Great Depression.
Long-term economic growth, the kind that made America the richest country in the history of the world, where even 97.7 percent of "poor" Americas have televisions, comes from entrepreneurs - individuals acting in their self interest.
How does a system, rooted in individuals acting in their own best interests, benefit society in general and not just those individuals? Simple. In a free-market system, you earn money by making others better off.
Want to be rich? No problem. Just invent something to make other people's lives better off. Want to run a successful company? Meet your customers' needs at a competitive price. Want to put Wal-Mart out of business? Build a better store - "better" being determined by individuals making decisions about what's best for them.
The beauty of the free market is that individuals are incentivized to meet the needs of others. These free exchanges of money for goods or services leave both sides better off and are the basis for wealth creation.
A simple example: Imagine going into a McDonald's and ordering a Big Mac. You value the Big Mac more than the money it cost and McDonald's values your money more than the Big Mac. That type of win-win transaction - freely agreed to by both parties - is how wealth (not money, but wealth) is created.
Contrast that with government-directed "growth." Instead of spending money on satisfying customers' needs, businesses that want government handouts spend money lobbying and contributing to elected officials. This shifts the power from the consumer to the government. (There's a host of other reasons this negatively impacts the economy, the biggest being that government officials suffer from both an incentive and information problem, but that's a whole other issue.)
Indeed, the great success Texas had creating jobs while Perry was governor isn't about what Perry did. As noted above, the times Perry "did" things to grow the economy, he often failed.
Perry's great success in Texas is what he didn't do. In general, he didn't raise taxes, he didn't grow government, he didn't increase job-killing regulations, he didn't pass ObamaCare. Perry's success is that he got out of the way of entrepreneurs, and they built businesses while pursuing their own individual self interests.
Entrepreneurs are ultimately responsible for job growth in Texas or in any other state. The great achievement of a politician, then, is simply to create a low and uniform tax and regulatory burden and get out of the way.
And giving money to favored companies is the very definition of getting in the way. Those who care about long-term job growth, as opposed to short-term photo-ops, should oppose government giving tax-dollar subsidies to private businesses every chance they get.
Somehow, news about Nevada's poor graduation rate gets worse
At 44.3 percent, Nevada's graduation rate is a disaster.
Next year's graduating class in the Clark County School District is headed for similar numbers, with nearly 10,000 of the 20,600 incoming seniors not projected to graduate, because they either don't have enough credits or haven't passed the High School Proficiency Exam, which is required.
While potentially having 10,000 high school seniors fail to graduate is horrible, there's another fact that should scare Nevadans even more.
Of the 20,600 incoming seniors, the School District has identified nearly 10,000 students who don't have enough class credits and haven't passed the standardized High School Proficiency Exam needed to graduate. The exam is first administered in 10th grade and tests students on mostly 9th grade material. [Emphasis added]Umm ... what? The High School Proficiency Exam is a test on ninth-grade material? And we have up to 10,000 seniors who can't pass a test on freshman-level material? So our high school dropouts have only reached the learning level of a junior-high student? Is anyone else outraged?
Why are those seniors - who can't pass a ninth-grade test - entering the 12th grade? Why weren't they held back - several times if necessary - and allowed to develop the basic skills necessary to perform at grade level?
This out an outrage and is exactly why substantive school reforms, as opposed to the minor changes passed in the last legislative session, are so necessary. These children are graduating or dropping out of high school with a junior high education!
Liberals and their union allies have run Nevada's school system for decades, and the results of their policies, focused more on spending money and protecting bad teachers than student achievement, have long been apparent. And for at least 10,000 students next year in CCSD, that means either not graduating, or even if they graduate, only having a ninth-grade education.
That is shameful.
It's way past time for substantial and proven education reforms.
And no, spending money is not a proven reform. We've tried that in Nevada and nationally - it doesn't work.
Private school for $1/week
Private schools flourish nowhere like they do in sub-Saharan Africa, home to the poorest people on Earth. There, thousands of parents take their children out of free public schools to enroll them in low-cost private schools so they can enjoy a greater chance at success in life. John Stossel reports:
Government to keep "big role" in setting mortgage rates?
The Washington Post reports today that President Obama is asking for proposals on how the federal government can try to re-create the housing bubble. Or...at least that's what I got out of it.
Reportedly, President Obama wants to ensure the continuance of Washington's favorite taxpayer-subsidized arms of political patronage - Fannie Mae and Freddie Mac. He also wants to make sure the federal government stays in the mortgage insurance business, guaranteeing loans for risky borrowers - you know, like those of the subprime variety.
Members of Congress are almost assured to go along with any scheme to keep Fannie and Freddie alive, which really says a lot about the political class.
Einstein defined insanity as "doing the same thing over and over again and expecting different results." Truly, by Einstein's definition, Washington policymakers are completely insane.
I really can't put my frustration into words more eloquent than those of Cato's Mark Calabria:
Perhaps most offensive is that the Post reports that Obama "officials don't want to punish the thousands of Fannie and Freddie employees who have specialized knowledge about the mortgage market." Seriously? What about the many blameless employees of AIG, Lehman Brothers, or Bear Stearns? Or New Century for that matter. Did the janitors and receptionists at those firms really cause the crisis? The truth is that the employees of Fannie and Freddie have been lining their pockets at the expense of the taxpayer for years. What the Administration is really saying is that they wouldn't want all the political operatives at these favored firms to lose their perks. After all, Obama officials will need somewhere to land after 2012 and Goldman Sachs has only so many slots.
What's most depressing is that you can't say Obama hasn't been given the facts. As the Post makes clear, his economic advisers spelled out the case against massive subsidies for the mortgage market. Austan Goolsbee, chair of Obama's Council of Economic Advisers, points out: by subsidizing mortgage investments, the government drives capital away from other types of investments. If Obama truly wants to help the middle and working class, then he'd want capital to flow into investments that increase labor productivity, which is the ultimate source of wage growth. Running up asset prices, like houses, does not make us wealthier in the long run.
Indeed, sir.
Are entitlements and transfer payments responsible for US fiscal crisis?
While perusing the Economic Research division of the St. Louis Fed, I just came across an interesting article that asks, "What's the source of the increase in [federal] spending?" While policymakers in Washington - loathe to enact meaningful fiscal reform - have blown a lot of hot air over earmarks and other "non-defense discretionary spending," entitlement spending has long been the true driver of federal deficits.
The article points out that transfer payments and entitlement spending combined to account for 70 percent of federal expenditures in 2010 and that these categories are the fastest-growing budget items. Whereas defense spending dwarfed all other categories of federal spending until 1975, it has fallen, as a percentage of GDP, from 15 percent in 1953 to about five percent today. By contrast, spending on Social Security and Medicare has risen, over the same time period, from less than one percent of GDP to about 8 percent today. Combined with transfer payments, these programs cost 16 percent of GDP in 2010. Defense plus non-defense discretionary spending accounted for only 7 percent of GDP in 2010.
These figures leave Fed researchers to conclude thusly:
This analysis suggests that the increase in the debt over the period 1975-2007 was not only a consequence of increased government spending without increased revenues, but also that the government increased payments to individuals through Social Security, Medicare, and other payments without sufficiently reducing spending elsewhere in the budget. In short, these trends, as the CBO's recent Long-Term Budget Outlook makes clear, will continue to strain federal, state, and local budgets as they consume an ever larger percentage of federal spending dollars.
The article sparked my curiousity and so I visited the authors' source data - housed within the Office of Management and Budget - and constructed my own chart. This pretty much tells the story:
How will the U.S. credit downgrade impact you?
The Cato Institute has the answer.
And note what's causing rating agencies to lower our credit score. It wasn't the fight over the debt limit. It's the unsustainable spending.
Exposing the baseline-budgeting myth
At the federal level, the greatest challenge facing believers in limited government is a practice called baseline budgeting. (For a short and humorous example of baseline budgeting, watch this video.)
In zero-based budgeting (aka real-life budgeting), you compare how much you spent last year to how much you plan to spend in the next year. For example, if you spent $50,000 last year and planned on spending $55,000 in the next year, you'd have a $5,000, or 10 percent, spending increase.
Not so with baseline budgeting. In baseline budgeting, you compare how much you spent last year plus your desired amount of spending increases to how much you plan to spend in the next year. For example, if you spent $50,000 last year and wanted to increase spending to $60,000, but decided to "reduce" spending and only spend $55,000 next year, that would be a $5,000, or 8.3 percent, spending decrease.
Do you see the trick there? In the two examples, you spent the same amount last year and are spending the same amount next year, but because of the baseline-budgeting assumptions, you can claim a $5,000 cut in spending.
This, of course, is garbage and gives advocates of big government an incredible PR advantage. Since most people would rather have a colonoscopy than try to understand federal budget numbers, this system allows tax consumers and leftists to publicly bemoan "cuts" - even if what's being proposed are actually spending increases that are merely below the numbers that the "baseline" approach would entail.
Exhibit A is the recent debate over raising the debt ceiling and the $2 trillion in spending "cuts." These aren't cuts in the real sense - they are simply reductions in future spending. Even if Congress reduces future spending increases by $2 trillion, the deficit will rise to over $20 trillion in less than 10 years.
This is exactly the same trick that leftists used to claim that Nevada faced a $3 billion budget deficit before the 2011 legislative session. Fortunately, many elected officials and members of the media in Nevada understood that the common narrative was inaccurate and began noting that Nevada's deficit was only about $1 billion.
Fixing the problem in the national press isn't going to be so easy, but the Las Vegas Review-Journal editorial board has an excellent suggestion.
As Mr. [Peter] Ferrara suggests, the top tea party priority right now should be to replace baseline budgeting with "zero-based or family-style budgeting," under which the word "cut" could be used only if the government really spent less than it did last year.If the debate isn't defined accurately, it's no use having a debate on the merits of an issue. If your opponent can make you accept inaccurate assumptions, you've already lost.
The same is true in the debate over the national debt. First, believers in limited government need to expose and correct the baseline-budgeting myth. Once the terms of the deficit debate are defined accurately, it will be easy for conservatives and libertarians to show the country that America's broke and that the growth in government spending needs to be slowed or, better yet, actually reduced.
If you'd like to read more on this issue, NPRI's Geoffrey Lawrence has written a great commentary on the problems with baseline budgeting.
Video: How to save money by spending more
Only in the government can you claim to "save" money by increasing total spending. But, as Mary Katherine Ham demonstrates in this funny and short video, that's exactly what the government does.
The culprit here is something called baseline budgeting, which I will explore in my next post.
