Rebane's Ruminations

Ethanol – Insanity Ensconced

George Rebane

A perennial wet dream of the liberals is a world of internal combustion engines, all running on renewable and sustainable ethanol.  This unsanitary and polluting notion was unmasked years ago, but as with global warming, science had nor has anything to do with government mandated ethanol in our lives.  An early piece that describes this rank idiocy is ‘Ethanol Faces Facts’, and since then the evidence against converting food crops into fuel has become a torrent.

A reader sent me this report from Europe detailing how those environment loving Germans have come to reject ethanol – ‘German Ethanol Requirement Turns Into a Debacle’.  There we learn that -

Never mind that burning ethanol is an environmental debacle that leads to the destruction of forests and food shortages that lead to higher prices and more hunger worldwide, but it also burns less efficiently and causes damage to many cars. It is yet another well-intentioned program that is making things only worse. Nobody in Germany wants the stuff – neither the drivers nor the environmentalists.

This is one more topic that progressives would rather not talk about.  But there is a snowball’s chance in hell that Congress will remove federal ethanol subsidies.  Before popping a cork to celebrate, we recall that the government’s mandate to include an increasing percentage of ‘renewable‘ fuel in our gasoline is still firmly in place – Damn the torpedoes and all that!!

Ruminations – 18jun2011

George Rebane

- Wynton and the boys come to town
- Nevada City Soapbox Derby premiers

Last night Jo Ann and I joined friends George and Christine for a delicious and well-served dinner on Holbrook Hotel patio, and then drove to the Grass Valley Veterans Memorial Auditorium for a world class event.  We and an SRO audience were delighted beyond words to attend a concert of contemporary jazz performed by Wynton Marsalis and the Jazz at Lincoln Center Orchestra of which he is the Music Director.  The compositions were breath-taking and their performance exquisite.  Every member of the orchestra, starting with Mr Marsalis, is a virtuoso on his instrument(s) and the program allowed ample demonstration of this.

At the end of the scheduled concert, we would not let them go and kept up a rhythmic applause until Marsalis along with piano, base, percussion, and sax returned to perform an extended improvisation of a piece that allowed every musician to demonstrate his considerable prowess.  It was an evening to remember, right here in Nevada County, and with no need to fly to New York, or even drive to the Mondavi Center in Davis where they are performing tonight.

 

This weekend is the 51st annual Father’s Day classic bicycle race in Nevada City.  As an integral part of the professional racing tour, the Nevada City race circuit is the shortest but also the most difficult of the whole tour.  The town fills with visitors and tourists for the yearly event that heralds the real start of our county’s summer doings – Marsalis, annual Bluegrass Festival, and other sundry delights.  To put a fine ribbon on it, this year Nevada City added an important and exciting event to the weekend’s entertainment – the inaugural running of the Nevada City Soapbox Derby (more in The Union).

This ‘race’ featured over forty entries competing in the ‘speed’ and ‘artistic’ categories.  The cars were built by various enterprises – businesses, clubs, individuals, … .  All the cars were custom built using lots of love, laughs, and at most $400.  Of course we had to be there, so with our puppy in tow, there we were with more friends bellying up to the hay bales to see them come down Nimrod Street next to Pioneer Park on a well laid out downhill course.

Seeing as how it was the first time and all, a lot of the rules governing the goings on were, shall we say, in flux.  One of the problems to be fixed for next year is to run the heats in a tighter interval – lots of folks were getting a bit antsy waiting for the next batch of great looking speedsters and funsters come rolling down the hill.  We and the neighbors thoroughly enjoyed ourselves, and we see this event becoming another summer draw for visitors to our mountains.  (Now if we could only figure out a way to start a pari-mutuel betting scheme that would benefit local charities and not run afoul of the state’s gaming laws.)

Higher Tax Rates = Lower Revenues (updated 22jun2011)

George Rebane

[This piece is the second of a four part series on taxes, jobs, and income that includes, in order of posting, 'The Administration Discovers Shortage of Engineers', 'Higher Tax Rates = Lower Revenues',  'More Green Companies Heading for Greener Pastures', 'Employment and Income Inequality'.]

The progressives’ calcified mindset does not admit to the truth of the title, no matter the data that supports it.  This reconfirms to many conservatives and those of libertarian bent that there is a larger agenda at work here which involves the economic castration of America – they can’t all be that stupid.

An example of the right/left debate that highlights this is found on these pages in the comment stream of ‘The Liberal Mind – Tax Rates Don’t Affect Earnings’.  There we find the tired and well-worn liberal arguments citing Eisenhower era rates and the belief that more taxes on the rich increase government revenues.  Some liberals actually do believe that such higher revenues could then be applied to their conceptions of ‘social justice’.  But I’m afraid that the globalists among them know better, and pursue higher taxes in America under that façade as an effective avenue to their one-world objective.

 

In the 16jun11 WSJ Alan Reynolds of Cato again presents US government data, and argues ‘Why 70% Tax Rates Won’t Work’ with a note to Robert Reich (the ‘70% man’) that says – “The income tax brought in less revenue when the highest rate was 70% to 91% than it did when the highest rate was 28%.”  (see nearby table from the article)

Reynolds goes on to detail the history of revenue production from tax rates reaching back to 1951.  He concludes with –

… the Joint Committee on Taxation recently reported that 51% of Americans no longer pay federal income tax.
 
Since the era of 70% tax rates, the U.S. income tax system has become far more "progressive." Congressional Budget Office estimates show that from 1979 to 2007 average income tax rates fell by 110% to minus 0.4% from 4.1% for the second-poorest quintile of taxpayers. Average tax rates fell by 56% for the middle quintile and 39% for the fourth, but only 8% at the top. Despite these massive tax cuts for the bottom 80%, overall federal revenues were the same 18.5% share of GDP in 2007 as they were in 1979 and individual tax revenues were nearly the same—8.7% of GDP in 1979 versus 8.4% in 2007.
 
In short, reductions in top tax rates under Presidents Kennedy and Reagan, and reductions in capital gains tax rates under Presidents Clinton and George W. Bush, not only "paid for themselves" but also provided enough extra revenue to finance negative income taxes for the bottom 40% and record-low income taxes at middle incomes.

Of course, none of this will make a dent in the progressive chorus, because they are singing to voters already embracing the Peter/Paul Principle, and those for whom such information is not accessible.

[22jun2011 update - the following letter in the 22jun11 WSJ rebuts Robert Reich's criticique of Reynold's analysis, and extends the argument presented.]

The Administration Discovers Shortage of Engineers

George Rebane

[This piece is the first of a four part series on taxes, jobs, and income that includes, in order of posting, 'The Administration Discovers Shortage of Engineers', 'Higher Tax Rates = Lower Revenues',  'More Green Companies Heading for Greener Pastures', 'Employment and Income Inequality'.]

The shortage of native technical talent in America has been known to those who read for at least twenty years.  The shortage became apparent during the Reagan administration, but the hullaballoo created by the personal computer and interactive multimedia technologies overshadowed the acknowledgement that it was the engineers and other techies who created that new wealth engine – it was not the MBAs and the lawyers.

But institutional venture capitalists helped promulgate the myth that propeller heads did only, you know, propeller head stuff, whatever that was before they finally showed up with a marketable product.  The real wealth was created by business suits and legal beagles.  Besides, it is much easier to get an MBA or a law degree.  So native enrollments in tech schools started dropping, but not to worry, kids from overseas flocked to our excellent university programs in technology.

As the years passed and young people graduated from high schools with advanced placement programs in self-esteem, they began to discover that it was even easier to get degrees in black studies, environment management, comparative social justice, and God knows what else.  And what the hell, with one of those sheepskins in your shorts you could always BS your way into a government job.

Well, the world changed in the interval.  The Great Doubling came and no one noticed - they still don’t because it’s not visible from where they stuck their heads (RR keyword 'Great Doubling').  The foreign graduates began more and more to go back to their own countries instead of Silicon Valley to start their businesses.  With the US headed for European socialism and their own lands heading toward capitalism, the decision on where to start a business was easy.

Now we have the situation where no one gives that big rat’s asset if you’re a lawyer or have an MBA.  You need an MBA today to be seriously considered to run a Jiffy-Lube, and lawyers are making as little as $35/hr in New York just to get some part time work.  Most certainly, nobody overseas wants to hire such Americans for a ‘fair day’s wages’.  And forget it if you have a degree in Latino Perspectives.

So now President Obama sagely informs the nation that we need at least 10,000 new engineers every year - I am sure that is a brown number.  But it finally acknowledges a desperate national need, and a need that cannot be filled with the crap they teach kids in our public K-12 grades.  Other nations are graduating many times that number of engineers and technical workers annually, and it is they who now build the fastest computers, best cars, smartest robots, and merrily hack their way into our nation’s most sensitive financial, industrial, and defense networks.  (That last one is perhaps the scariest story of all for another time.)

Our kids still proclaim that they ‘don’t do numbers’, instead they are being taught their ‘rights’ and the ‘rights of nature’ under new systems of international social justice.  When was the last time any of us examined the qualifications of our unionized K-12 teachers, or spoke up at a board of education meeting?

 

Ruminations - 15jun2012

The experiment that said “the bigger the state, the more just the society” clearly failed. There is no point pretending that it didn’t. - Tony Blair

George Rebane

- It's the Sun, stupid!
- Dems put bad stuff on hold til 2012
- Mexican right of return

Russ Steele at NC Media Watch reports here the latest real news on climate change – ‘it’s the sun, stupid.’  The AGW true believers are having to run around in ever tightening circles as they try to paper over every piece of new data that belies their political theory of manmade global disaster.  Every day it is more apparent that the only misery man is yet able to afflict on fellow man is through bad politics.  It was ever thus.

The perversion of the progressives is nowhere more visible than in the hiatus that the Obama administration is taking from its own agenda.  All those social and stimulus programs that were designed and passed by the Democrats to get the country back on its economic track have proven to do exactly the opposite.  And the social(ist) engineers in Washington know it in spades.  With the election coming up and the economy on its butt (second cheek is hitting the ground now), these hypocritical leftwingers are pulling back the enforcement of literally every piece of damaging legislation they have passed.  The dirtbags aren’t repealing any of it, only putting it on hold until after 2012 (details here).

That there is no public outcry about any of this will hopefully again explain my ongoing use of Bryan Kaplan’s ‘sheeple’ for a large fraction of America’s electorate.  In his Myth of the Rational Voter – Why Democracies Choose Bad Policies Kaplan presented ample evidence of how the democratic process goes awry the more direct democracy we instill at the cost of removing the republican safeguards bequeathed by our Founders.  (See ‘How Elections Really Work’)

As these pages have noted for the last several years, the Great Divide (here and here) is not just an apprehension of conservatives who view as hopeless the reunion with progressives.  A major force promoting the GD is the latino Reconquista movement (here and search RR with ‘Reconquista’).  The lamestream media has successfully subverted any coverage of the progress of Reconquista.  Now it has advanced to where it is openly taught in American public schools.  As reported in the 20jun11 National Review -

“Mexican-American Studies” in Tucson schools now include “Rodolfo Acuna’s Occupied America, which proposes that the US southwest become a “Chicano nation” and quotes without disapproval Hispanic activist Jose Angel Guiterrez saying that “we have to eliminate the gringo, and what I mean by that is if the worst comes to the worst, we have got to kill him.”

Shhhh, the sheeple are sleeping.

‘Saving the American Dream’

George Rebane

That is the short title to a landmark plan that Heritage Foundation published about a month ago.  In the popular media, it has received scant attention.  I believe this is so because it presents an utterly reasonable way for us to rescue America from its current financial freefall, and its ideological bedfellows are stuck in the NIH mode.  They want to get re/elected, Heritage just wants to put good policy on the table for all to draw from.   The socialists wouldn’t touch this plan with a ten-foot pole, its implementation may delay their global goals indefinitely. But we’ll come back to ‘Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity’ in a bit.

So, has anyone read the 20jun11 Time magazine’s cover article ‘What Recoverey? – The Five Myths About the Economy’?  Time started coming to our house spontaneously about three months ago; we have no idea how that happened since we did not order it.  But since it is a prominent national rag for liberal thought, we throw it on the ottoman with the other front room reading materials, and peek at it now and then to confirm our assessment of its direction and depth – beats watching MSNBC.

Time acknowledges that, given Obama’s policies so far, recovery from the Great Recession is nowhere in sight.  And it predictably concludes that more of the same is what’s required to pull us out of this insipient depression that was all Bush2’s fault.  In the process the magazine argues that placing our false hopes on any combination of its five myths is futile.  The myths are – 1. The downturn is a temporary blip, 2. The Fed can save us, 3. The private sector will make it all better, 4. We can move where the jobs are, and 5. Entrepreneurs are our greatest strength.

The Liberal Mind – Tax Rates Don’t Affect Earnings

George Rebane

According to the progressive worldview, you will work just as hard and take just as much risk when the government takes 80% of your earnings as you will when the government takes only 30% of those same earnings.  That simple proposition is the left’s basis for funding any additional revenues they deem government to need.  Just raise tax rates until the numbers come out as required by your spending programs.

And it isn’t only the sheeple in their ranks that fervently believe this.  It is also a phalanx of credentialed economists (some Nobelists included) and behavioral sociologists.

That the historical data does not support this conclusion is ignored by the apologists who see all fiscal problems solved by simply raising taxes.  Most people will instinctively understand the insanity of such a belief, at least when they put themselves into the earner’s shoes.  ‘Why should I work just as hard for the dollar from which the government will let me keep twenty cents, than I do for the same dollar from which I got to keep seventy cents?  I think I’ll just take some extra time off and figure out where to put my energies so I can keep more of what I earn.’

And that such thoughts are beyond rocket science to the collectivist is borne out by their constant surprise of why government revenues fall when tax rates approach confiscatory levels.  Yet, as we can see today, their tax hike solution is in stasis, trotted out every time the debt burdens and unfunded liabilities of governments are discussed.  ‘We’ll just tax the rich, they’re so stupid that they won’t notice, and we’ll get all that extra money that they will continue earning no matter what we do.’

Entrepreneurship 2011

George Rebane

[This is the submitted form of my July column that appears in the 11jun11 edition of The Union and in its online form here.  A related graphic on the impact of the stimulus is on NC Media Watch here.]

This administration has taken a bad economy and, by any measure, made it unimaginably worse.  We all know the litany of government stimulus packages, corporate bailouts and takeovers, new reams of regulations designed to drive business and finance off-shore, and, of course, Obamacare.  That nationalized healthcare monstrosity is proving to do exactly the opposite of every one of its touted benefits.  And parodying Nancy Pelosi, the more we find out about the Patient Protection and Affordable Care Act, the worse it gets.

Polls now show President Obama’s disapproval ratings well above 60% for his handling of the economy, yet enough people are being paid sufficiently that 44% of voters would still re-elect him.  With so many people ignorant about or out of today’s economy, it will take a miracle to replace him.

Meanwhile both Democrats and Republicans agree that small businesses are the nation’s job creators, and success there paves the road to recovery.  Yet the social engineers and vote buyers in Washington continue hindering the very economic activities they tout from the other side of their mouths.

Few people know what it takes to be an entrepreneur and start a job-creating business.  A successful entrepreneur comes with an over-arching dream, a practical approach, tolerance for considerable risk, and enough funds to last through the ‘cash minimum point’ when revenues start exceeding costs – whenever that may be.

Economic Summit – This time from the Left

George Rebane

[This is the transcript of the 10jun11 edition of my regular bi-weekly KVMR commentary broadcast earlier this evening.]

Nevada County has had a harder time than most during this Great Recession.  The closing of stores, shops, and businesses has hit our workforce particularly hard, causing our unemployment to hover above 11% with the nation at 9.1%.  To pile on, the county is currently in the throes of a costly lawsuit and embarrassing scandal.  But it’s easy to see that all of these misfortunes could be turned around with an improved local economy.

In the past years we have had various conferences and summits that drew together business and community leaders to see what could be done to make things better.  These were usually led by the county’s Economic Resource Council, cities, and the local chambers of commerce.  None of these conferences ever went anywhere because first and foremost, we could not agree on where we wanted to go.

The Jobs of Texas

George Rebane

Just a short update on how individual states can still affect their own fortunes as long as they have the brains and will to do so.  After all, allowing the several states to improvise and compete in how they solve their own problems of local governance is part of the genius of our Founders.  California, of course, has shoved that genius up where the sun don’t shine and we are where we are.

Today’s WSJ reports the results of a recent study by the Dallas Fed (here).

… since June 2009, when the recession ended. Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state. New York was second with 98,200, Pennsylvania added 93,000, and it falls off from there. Nine states created fewer than 10,000 jobs, while Maine, Hawaii, Delaware and Wyoming created fewer than 1,000. Eighteen states have lost jobs since the recovery began.

From the nearby graphic our California is not even lumped with ‘All other states’ because it lost a net 11,400 jobs.  Today we find that “Texas accounts for 45% of net US job creation” and “is also among the few states that are home to more jobs than when the recession began in December 2007.”

So how did they do it?  Well let’s see if we can guess which state “has no state income tax. Its regulatory conditions are contained and flexible …, is fiscally responsible and (its) government is small. Its right-to-work law doesn't impose unions on businesses or employees” and it “is open to global trade and competition”.

Only the hard left rejects that “capital—both human and investment—is highly mobile, and it migrates all the time to the places where the opportunities are larger and the burdens are lower.”  That lesson has been absent in the Golden State for over a generation now, and like insane people everywhere, we expect things to change for the better by doing even more of the same.

What can little Nevada County learn from this data and constructively do, as we contemplate developing our own economy?

And what does all this say about multi-cultural democracy unleavened by education?  But never mind, that query we’ll save for another time.