Monday, April 19, 2010
Two Views in Conflict
Two Views in Conflict
Monday, April 19, 2010
The exercise now underway in Washington to reform our financial services sector revisits what we just went through in health care. Take a problem caused by government going where it doesn’t belong and then propose to solve it by doing even more of the same.
Only politicians could conclude that our lives will be more financially secure if we create things with names like the Financial Stability Oversight Council, the Office of Financial Research, and the Research and Analysis Center.
These new entities, under the reforms being pushed, would comprise a great command center in which a whole army of newly installed bureaucrats will survey the financial horizon and do pre-emptive strikes on institutions they identify as wobbly.
Might we consider that anyone that could reliably predict and identify banks that were going to fail could become filthy rich working on their own buying and selling stocks of these institutions?
So the bureaucrats that would assume these responsibilities will either be so public spirited that they choose to forego wealth in order to protect us, or they will take these jobs pretending to do something they cannot do – that is impossible to do - and get a safe, well paying government job, paid of course by we taxpayers whom they are allegedly protecting, as part of the bargain.
Folks, the Congressional Budget Office now shows that our projected accumulated deficits for the next ten years – almost $13 trillion – totals up to almost our whole annual national output, our GDP. Now this same political class that has us, our children, and our grandchildren swimming in red ink proposes to reform our financial system to make us more safe, stable and secure.
How about the proposed Consumer Financial Protection Agency which will be part of all this reform? Another army of bureaucrats in place to make sure nasty bankers do not abuse us consumers.
But consumers are also citizens and if our politicians are so concerned about protecting us, why are Fannie Mae and Freddie Mac not even part of this reform package?
It is these government created entities that bought and insured the lion’s share of our mortgages over these years and have done so with we consumers, aka citizens, aka taxpayers, guaranteeing them. Now we taxpayers sit on the hook for trillions of dollars in debt as result of their follies.
The same politicians who spend our money, who use us to guarantee their trillion dollar social engineering schemes, claim they are going to protect us?
Give me a break.
Lurking behind all this is the myth recently described by British historian Paul Johnson that “government treasuries can be run in a fundamentally different way from the finances of private families.”
The secret weapon of the politician is to seduce citizens into abandoning their common sense. In the famous words of Groucho Marx, “who are you going to believe – me or your own eyes?”
The way to protect citizens and consumers is simple and basic. Have law that protects life and property, understand it to be sacred and inviolable, and enforce it.
For those that read the Bible, it’s the eight commandment. Thou shalt not steal.
Our great country is deeply divided today between two irreconcilable world views.
According to one, we live in a nation with God-given law – rights in the language of our Declaration of Independence - and the role of government is to enforce this law.
In the other view, we elect politicians and give them authority to make it all up as they go along.
We’ve been living a lot of years trying to do both. Now things are just too out of hand.
We’re going to have to decide which it is and who we are. This will determine our future.
A Tea Party Diary
Harry R. Jackson, Jr.
Monday, April 19, 2010
Last Wednesday on “tax day,” I had the privilege of attending my first Tea Party event. Standing on the steps of the Colorado State Capitol building in Denver, I addressed several thousand people concerning the impact of wrong-headed energy policies on all Americans – especially the minority community. Before I began the substance of my brief remarks, I led the group in an old Civil Rights cheer – “Let Freedom Ring!” You may recall that Martin Luther King, Jr. eloquently articulated the need to let freedom ring in every corner of America. Freedom needs to ring in our environmental policies as well as on Wall Street, Main Street, and your street.
What an encouraging moment it was for Niger Innis, national spokesperson for the Congress on Racial Equality (CORE) - a 68-year old civil rights organization - and myself to be so well received by a group that has strongly been labeled as “racist.” Nothing could be further from the truth. Scores of people thanked Mr. Innis and I for both the information we shared and our presence at the rally.
They recognized that the findings of a new report on the economic and employment impact of current CO2 restrictions endorsed by the EPA will be detrimental to all Americans. The study I am referencing estimates that the US GDP will be reduced by at least $500 billion over the next two decades by this one factor alone. This translates into the loss millions of jobs over the next 10 years. Third, there will also be a significant reduction in the average household income but it will regressively affect poor and lower middle class families the most.
It is important to remind you that we are calculating are the effects of what would only be the first steps of the current EPA energy policies. Additional programs would most likely create even more dramatic effects. What I am not saying is that there should be no work done in this arena. I am simply saying that the nation must evaluate the results of such policies as CO2 emissions and the impact on the economy. This is especially important because of the economic decline we find the nation in at this moment.
Returning to the study, Management Information Systems expects the impact of basic energy costs to be as follows over the next 15 years:
1. Gasoline prices would go from $2.80 per gallon to $4.20 – a 50 percent increase.
2. Residential electricity prices would also increase by 50 percent from 11.4 cents per kWh to 17.1 cents per kWh.
3. There will be a 75 percent increase in industrial electricity prices.
4. Natural gas prices would increase 75 percent.
5. There would be a 100 percent increase in industrial natural gas prices.
6. Jet fuel prices would increase 40 percent. Because fuel costs currently represents 1/3 of airline costs, the energy factor alone could increase airline ticket prices by 15 percent.
The study I just outlined is a first analysis of the likely economic, employment, and energy market impact of the EPA “endangerment findings” which was released on December 7, 2009. This finding will be used as a prerequisite to finalizing the EPA’s proposed greenhouse gas emission standards. Therefore, concerned Americans need to be aware of the real-life impact that the EPA direction will have on their lives.
Let me articulate more specifically how these policies will affect our minority communities over the next 15 years. First, let’s look at the impact on minority poverty rates. These modest energy increases will produce an increase in the Hispanic poverty of nearly 22 percent, moving the poverty level from 23 percent to 28 percent of the Hispanic population. For blacks, the poverty rate will be increased by only 20 percent. But we should not minimize the fact the black poverty rate will move from 24 percent to 30 percent over the next 15 years.
Next, the study tackles the impact on income. Both blacks and Hispanics will lose thousands of dollars of household income over the next decade. Third, there will be an impact on jobs - 1.7 million jobs will be lost by African Americans over the next 10 years. Hispanics are positioned to lose 2.4 million jobs during the same period of time.
Finally, the study states that there will be a disproportionate impact on minority, small businesses. This is because black and Hispanic-owned businesses tend to be smaller and less capitalized than white businesses. Therefore, they are more susceptible to losses induced by the EPA CO2 restrictions. Thus researchers believe that the impact on minority businesses will be significant. For more information about the study itself – its methodologies, its findings, and its implications – go to www.affordablepoweralliance.com.
It was great to present a summary of this information at the Denver Tea Party rally last Wednesday. The crowd was fired up and concerned about the economy and our tax burden. Fortunately, they quickly grasped that our energy policies can create a hidden, regressive tax that disproportionately penalizes the poor. My reception at the Denver rally confirms what recent studies have shown that the Tea Party participants are well educated and concerned about government spending and the fact that the government is not addressing the true needs of the people.
Let me end this article by repeating the chant that was shouted in Denver, “Let Freedom Ring!”
Posted by Brett at 11:30 AM