Showing posts with label corn. Show all posts
Showing posts with label corn. Show all posts

Thursday, September 24, 2015

Retro 4 - George Orwell, Doublethink and Today's Politicians

Given family engagements in town this week, we will be rerunning some of our most popular posts, posts that have garnered the most attention and which showed that we are currently enduring the worst set of politicians America has ever had.


MONDAY, NOVEMBER 8, 2010


George Orwell, Doublethink and Today's Politicians

I am a big fan of George Orwell's classic Novel, "1984." I think he was a great writer and a better prognosticator since many of the predictions he made on "1984" of how democracies would die are actually unfolding today, throughout the world and throughout America. One of the concepts he talks about is "doublethink" which he defines as the ability "to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them." If a leader can establish doublethink in the minds of his followers, then the credibility of that leader will never be questioned since whatever he says is right, doublethink suppresses free thought and free will.

I was thinking of how proud Orwell would be of our current day political class. Many examples abound of how our politicians and the government they run can implement two contradictory programs and never once stop to consider the incongruity and disconnect between the two programs. Consider:

- One of the leading drivers of escalating health care costs in this country is the poor eating habits and exercise habits of many Americans, leaving them overweight and susceptible to many diseases. In fact, one of the main activities of Michele Obama since coming to Washington has been to work hard to reduce the obesity problem plaguing many, many kids in this country. One of the efforts that both Ms. Obama is pushing, along with other parts of the government, including the Agriculture Department, is to reduce the amount of saturated fat that Americans eat, encouraging us to move towards low fat milk and other low fat dairy products.

This all sounds good. However, consider an organization called Dairy Management, as described in a November 8, 2010 New York Times article. Dairy Management is financed by a government mandated fee on the dairy industry and receives millions of dollars a year directly from the budget of the Agricultural Department. The Agriculture Department sits on Dairy Management's board, approves its marketing campaigns, and interfaces with Congress on its work. But Dairy Management recently worked with Domino's Pizza to develop a new line of pizza offerings. These new pies had 40% more cheese and Dairy Management helped develop and pay for the associated $12 million marketing campaign.

But wait. Each slice of these new pizzas contains as much as two thirds of a person's daily recommended amount of saturated fat, which has been linked to heart disease and other diseases. Thus, our government is telling people to eat better and reduce the amount of unsaturated fat in their diets while they are funding support for private companies to put more saturated fat back into Americans' diets. The particularly ironic part of this Domino's example is that I would assume that kids are high pizza eaters, the same type of Americans that Michele Obama is trying to get healthy. Doublethink in the Agriculture Department - eat healthier but don't eat healthier.

- There has been a lot of hype lately regarding all electric cars, some of which will be available shortly for consumer use, e.g. General Motors' Volt. The hope behind electric cars is that they will not spew out pollutants like the gasoline internal combustion engine, improving the environment, and will help wean us from dependency on foreign energy sources. Our political class is so excited about the future of electric cares that, according to an electric car article that was in the October 9, 2010 issue of The Economist magazine, you can get up to a $7,500 subsidy rebate from the U.S. government if you purchase one.

Sounds like a great deal. Get taxpayer money to buy a new car while helping the environment. But, are these vehicles really helping the environment? While the car itself is less polluting, the energy creation needed to generate the electricity to power these cars will increase. In the United States, we get a lot of our electrical power from coal electric plants, which are not the cleanest producers of electricity from an environmental perspective. Thus, we need to find a way to reduce the amount of coal created electricity if the potential of electric cars is to be fulfilled.

But, according to a Washington Post article from May 14, 2007, the government's National Rural Electric Cooperative Association, another Agriculture Department effort, plans to spend $35 billion over the next decade to help build conventional coal electricity plants. More doublethink in the Agriculture Department - the government hands out taxpayer funds for the purchase of electric cars to clean up the environment but uses other taxpayer money to dirty up the environment with coal electricity plants to power the cleaner electric cars.

- Over the past sixty years, the United States has probably spent hundreds of billions of dollars supporting the security and prosperity of South Korea. We fought on South Korea's side, defending them from North Korean and Chinese troops in the Korean war, we provided aid for the recovery, and have stationed tens of thousands of troops in the country since the end of that war. As a result, the South Korean economy has grown into one of the strongest in the world. Besides providing a security cover for their economy to blossom, we are also an important trading partner and market for their companies.

Recently, our State Department has been working to generate support for economic sanctions against the Iranian government in retaliation for the Iranians supposedly developing a nuclear weapon technology. The State Department strategy is to make life so uncomfortable for the Iranian people and government that they will become less likely to develop a nuclear bomb capability.

So what do the South Korean do relative to Iran? According to an article in the October 9, 2010 issue of The Economist magazine, South Korea still wants to protect its annual $10 billion trade volumes with Iran so it recently signed a deal with Iran so that Korean and Iranian business partners could settle trade accounts via a special facility established in two Korean banks and in Korean currencies. State Department doublethink: South Korea is our ally even though they go out of their way to bypass the very sanctions the State Department wants to impose on Iran.

- For years now, the Federal government has subsidized American corn farmers, recently to the tune of $7 billion a year, enticing them to grow more corn, which is eventually turned into ethanol. The ethanol is then added to our national gasoline supply to theoretically extend our gasoline supplies, reduce our dependency on foreign oil and clean up the environment by burning more ethanol and less gasoline.

But the inconvenient truth is that none of the benefits never really materialized and additional problems were created. Since ethanol contains significantly less energy potential than gasoline, more gasoline has to be burned to make up for the energy loss when burning ethanol. According to Robert Bryce of the National Review Online, studies have shown that ethanol use as a motor vehicle fuel increases nitrogen oxides and other key pollutants by 7% over gasoline and also corrodes the fuel lines of older cars and other engines.

According to Cornell Professor David Pimentel, as covered in the energy policy section of "Love My Country, Loathe My Government," corn ethanol is a terrible fuel. It diverts corn crops from the food chain to the energy chain, increasing food costs, it takes a terrible toll on the soil environment, and it is a net user of energy, i.e. it uses more energy to produce than it creates.

Sounds horrible: bad fuel economy, air pollution, soil pollution, bad economics, etc. So what is the political class about to do? According to Mr. Bryce, President Obama recently announced that his administration was going to allow the blend of gasoline to ethanol, currently 90/10, to rise to 85/15. He did this as a favor to the corn industry which has more ethanol distillery capacity than it needs. Energy Department doublethink: using ethanol in a 90/10 mixture is a bad thing to do but moving to an 85/25 mixture is a good thing.

- According to a November 8, 2010 Associated Press report, our war effort in Afghanistan faces a dire shortage of 900 trainers and not enough Afghan officers in the race to build up a viable native Afghan fighting force, which would allow NATO and the United States to get its troops out of the country as soon as possible. According to the recent report, the head of the training operation in the country said that if these trainers are not brought on board soon, the July, 2011 pulldown date of American forces is not going to happen.

Training challenges include a high illiteracy rate among Army and police forces (over 90%), high corruption among the officer ranks, and high levels of attrition (which I think is the code word for desertion.) Nine years after we entered Afghanistan, these elementary problems have not been addressed.

Since this situation is critical to successfully ending our occupation and expense of Afghanistan, one would have hoped that every effort and resource would be used to fill this training need. However, a November 4, 2010 article in the St. Petersburg Times reported that the U.S. government will spend over a half a billion taxpayer dollars to expand its embassy in the Afghanistan capital of Kabul. How many trainers do you think $511 million could buy? How many Afghanistan police officers and soldiers could be made semi-literate, enough so that they became good soldiers?

Thus, we have some Obama administration doublethink going on: we want to get out of Afghanistan as quickly as possible, our number one priority, we need a 50% increase in military trainers, 900 additional trainers, to make that happen, but we will lavishly spend resources to expand a single building complex in the capital. This is a major disconnect in logic: if we cannot produce a viable native fighting force via training, who cares how big or how nice the U.S. embassy is? It will eventually be occupied by the Taliban. Fix the root cause of the problem, the Afghan military, don't try to convince yourselves that both the military readiness and a single building are equally important. A non-doublethink approach would devote some of that $511 million to the training issue since that would recognize the vastly different priorities and importance at play here.

I am sure that you can find government and political class doublethink examples all around you. Sometimes doublethink happens because we have allowed the a Federal government to get so large that one part of it does not know what the other parts of the government are doing. One part wants to reduce pollution by promoting electric cars while another part subsidizes coal burning electric plants that dirty up the air. One part of the government wants Americans kids and adults to get healthy by eating low fat foods while another part, in this case within the same Cabinet Department (Agriculture), helps Domino's Pizza get more fatty, cheesy pizza into Americans' diets.

Sometimes doublethink happens because no one in the political class prioritizes needs and importance, e.g. the wasting of millions of dollars dressing up an embassy when military trainers, vital to our military success, go wanting. Other times politicians do doublethink to please their election campaign donors, e.g. corn farmers who get favorable treatment from the political class, even though those in the political class know that the favorable treatment is not good economically or environmentally.

Whatever the reasons underlying the doublethink situation, you can bet that the American taxpayer is footing an unnecessary bill. That is why Step 1 of "Love My Country, Loathe My Government" is so important. The Step itself calls for an annual 10% reduction in the federal government budget for five years. One way to accomplish this reduction, according Step 1, is to do a bottoms up, zero based budget review. Every government program, law, department, expenditure, etc. would be on the table, stripped down to it's core function and mission in order to look for redundancies and doublethink situations, like the Dairy Management situation described above.

Only then can we rationalize what we are paying for, why we are paying for it, should we be paying for it, and not paying for it if not worthwhile. Hopefully, once our politicians had far less government to think about and to track, they could focus much more closely on a smaller set of priorities, identifying wasteful doublethink quicker and more efficiently. Think about that wonderful goal: a quicker and more efficient government run operation. A government that has retired Orwell's concept of doublethink from our world.

Friday, May 23, 2014

I Am A Global Warming Doubter And A Believer In Science Upate, Part 1: Fact Checking The Obama Administration, More Scientists Rebuttals, And The Biofuels Sham

Over the past few years or so we have been running a periodic series called, “I am a global warming doubter and a believer in science.” I started the series because I am a true believer in science and scientific principles/processes and the good they can do.

However, I resent being told, or yelled at, by people like Al Gore that I must be a science hating heathen because I do not blindly except his premise that global warming is strictly being caused by mankind and that the science is settled. In his closed mind, I must be an idiot. as are all of the other doubters in the world.

If one reviews our past postings on this subject, it is quite obvious to all but the most closed mind Al Gore supporters that the science is not settled. We have pointed out dozens of studies, research projects, realities, and other proof that the global warming science of Al Gore is not settled. Our “doubter” position has recently been fortified since the global warming mania has been “redefined,” much like a cereal rebranding marketing program, to now be called “climate change.”

Much like falling cereal sales, if you cannot fix the problem, try a redefinition of the problem. The main driver of this rebranding or redefinition is the simple fact that for the past 17 years or so global warming has stopped, contrary to Al Gore and all of the forecast models that global warming advocates tried to scare us with over the years. Their models and their theories have failed, just like the failing cereal, and rather than pull the plug on the theory they are now trying to reposition their egos and their arguments.

You can access our many posts on the “I am a global warming doubter but a believer in science” by entering that phrase in the search box above. Or, you can start with some of these posts directly:




If you are still convinced that the science on global warming is settled, even after reading such facts as the premier physics facility in the world, the CERN Institute, proving that manmade global warming was a myth, maybe the following current rebuttals to Al Gore can change your mind:

1) The Obama administration recently released a large report on climate change or global warming or whatever, still beating the same drum that we are facing a climatic disaster and the Washington political class needs to take action to avert this disaster. However, the Heritage Foundation recently took a look at the administration claims, and using valid and current scientific data and realities, pretty much debunked the whole report and its premise:

Obama Administration Report Quote: “Precipitation patterns are changing”

Heritage Foundation Reality Rebuttal: Precipitation patterns were never constant. Creating a crisis from the normal allows climate catastrophists to point to every abnormal bit of wet or dry as being “consistent with models” that predict one horrible outcome or another.

Obama Administration Report Quote: “sea level is rising”

Heritage Foundation Reality Rebuttal: Yes sea level is rising, which it has done since the end of the last ice age. But the frequent claims and predictions of accelerating sea-level rise are not borne out in the data. In fact sea-level rise has slowed recently. One main-stream climatologist says this variation “makes the 21st century of sea level rise projections seem like unjustified arm waving.”

Obama Administration Report Quote: “the frequency and intensity of some extreme weather events are increasing”

Heritage Foundation Reality Rebuttal: The latest report on the science from The Intergovernmental Panel on Climate Change and analysis provided by the administration’s own National Climatic Data Center conclude that there isn’t a case for extreme weather increases – no significant trends for floods, droughts, hurricanes or tornadoes.

Obama Administration report Quote: “In Arctic Alaska, the summer sea ice that once protected the coasts has receded”

Heritage Foundation Reality Rebuttal: Global warming is supposedly global. Global sea ice (Arctic and Antarctic) is above average and, for this time of year, it is at its highest level in 30 years, which is the third-highest on record.

Obama Administration Report Quote: “It is notable that as these data records have grown longer and climate models have become more comprehensive, earlier predictions have largely been confirmed.”

Heritage Foundation Reality Rebuttal: The past 15 years have seen the climate model predictions stray farther and farther from actual temperatures (here and here). Last year, prominent climatologist, Hans von Storch, said, “If things continue as they have been, in five years, at the latest, we will need to acknowledge that something is fundamentally wrong with our climate models.” Maybe Professor von Storch needs four more years to be sure the models are wrong, but there are no grounds on which the models can be declared “confirmed.” Instead, the predictions are getting worse and worse.

The last claim by the administration is really the most bold faced deception. As we have shown any number of times in previous blog posts on this subject, many, many credible sources have shown that the major global warming models have severely overestimated the impacts of man on the environment and global warming. 

This is easily fact checked to prove that the last point above from the report is pure fallacy. Makes one wonder what other quotes in the report are also fallacies.

2) Although this global warming doubter story is a couple of years old, I just came across it and find nothing wrong with its content and assertions, given the scientists that support it. This story appeared in the Wall Street Journal about two years ago and was written or signed of on by sixteen scientists. 

Their view is the same as ours: there has been no further global warming for many, many years, the global warning models have all been severely deficient in prediction accuracy, and the science is not settled, not close to be settled. If anything, the science is close to be settled for the exact opposite of global warming.

The entire article and associated details can be read at:


The main conclusion from these scientists can be summed up from one of their paragraphs within the article:

Speaking for many scientists and engineers who have looked carefully and independently at the science of climate, we have a message to any candidate for public office: There is no compelling scientific argument for drastic action to "decarbonize" the world's economy. Even if one accepts the inflated climate forecasts of the IPCC, aggressive greenhouse-gas control policies are not justified economically.

“There is no compelling scientific argument for drastic action…” Sounds like a lot is still unsettled according to these scientists.

The writers and scientific signers of this article work at or teach at the Institute for the Study of the Earth, the University of Paris, the Laboratory of Biochemical Genetics and Metabolism, Rockefeller University, the American Physical Society, the National Academy of Engineering and National Academy of Sciences, Princeton University, University of Cambridge, the Australian Bureau of Meteorology, MIT, Virginia Technical University, the New York Academy of Sciences, Hebrew University, Jerusalem, the Royal Dutch Meteorological Service, and the World Federation of Scientists, Geneva. 

Al Gore fails to mention these types of scientists and global warming doubters, i.e. the science is NOT settled.

3) One of the proposals to combat global warming that was cooked up by the political class and its business cronies was to develop biofuels for use as an energy source, particularly with our cars. The faulty thought process was that if we could displace at least part of the gasoline with biofuels in our gas tanks, less carbon would be released into the atmosphere and thus, less global warming.

It was more a political decision than a valid scientific reason and strategy according to a recent United Nations report where they found some severe “unintended consequences” of biofuels (why do we always seem to find out about “unintended consequences” AFTER the political class gets us way down the road to failure?)”

The new United Nation’s report and analysis comes from the U.N.'s Intergovernmental Panel on Climate Change"
  • The researchers found that that while biofuels do indeed release smaller amounts of greenhouse gases than gasoline or diesel, "for some biofuels indirect emissions — including from land use change — can lead to GREATER (my emphasis) total emissions than when using petroleum products." 
  • Additionally, the negative consequences of including corn ethanol related biofuels in the fuel supply are enormous in other areas of life including serious damage to the world’s food supply. 
  • For example, in 2000, more than 90% of the corn grown in the United States went to feed people and livestock, including many people in undeveloped countries, and less than 5% was used to produce ethanol. 
  • By 2013, according to mandates from the Federal government and Washington politicians, 40% percent of the U.S. corn crop went to produce ethanol, 45% fed livestock, and just 15% was used for foods and beverages, according to a Forbes magazine investigation. 
  • This translates into the U.S. annually using nearly 5 billion bushels of corn to produce more than 13 billion gallons of corn based ethanol biofuel. 
  • By taking 5 billion bushels of corn out of the food chain, corn harvesting would lose the ability to feed 500 million people a year compared to what corn crops were doing in 2000.
  • 500 million people is equivalent to the entire population of the Western Hemisphere outside the United States, according to Forbes writer James Conca. 
  • By 2007, the diverting of the corn crop to biofuel uses caused the global price of corn to double, leading to increases in the price of milk, cheese, eggs, meat, cereals, and corn-based sweeteners, and world grain reserves dwindled to their lowest level in over 30 years. 
  • Increased corn prices also impact a wide array of other products, including toothpaste, cosmetics, shampoo, and adhesives. 
  • "Additional unintended effects from the increase in ethanol production include the dramatic rise in land rents," as well as an increase in the use of natural gas and fertilizer chemicals, over use of water aquifers, and clear-cutting of forests to plant corn crops, Forbes reported. 
  • Other news reports, including Bloomberg, assert that vehicles' fuel systems are being damaged by the use of ethanol. 
  • The International Institute for Sustainable Development has estimated that the benefits of carbon displacement by replacing petroleum fuels with biofuels like ethanol are "basically zero."
“Basically zero.” After spending billions and billions of taxpayer dollars to support biofuel usage via subsidies, after causing unnecessary price increases in food and other consumer products, and after causing severe environmental damage from driving up corn production, we end up with “basically zero” net positive impacts on carbon emissions, according to the most recent U.N. analyses and report.

But we are used to getting “basically zero” from the Washington political class in all aspects of our lives, from failing public schools, a lost war on drugs, escalating health care costs, etc. so getting nothing from this one large global warming initiative should not be a surprise. Thus, even if you still buy into the Al Gore global warming hype, what makes anyone think that the current members of the Washington political class can resolve this potential scenario, given their track record in biofuels and every other issue they confront? They are not the solution, their typical “unintended consequences” often make the situation worse.

More “global doubter but believers in science” discussion tomorrow.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w




Thursday, November 4, 2010

And The Government's Wasteful Spending Just Keeps On Coming

One of the promises from the Republican party leadership after their big election wins this past Tuesday was the pledge to reduce the size and budget of the Federal government and to finally start cleaning up the wasteful spending of taxpayer dollars. They may want to consider the following recently reported samples of government waste as a starting point:


- An Associated Press article on October 28, 2010 investigated the widespread misuse of taxpayer dollars in the many "dysfunctional" housing authorities across the country. The result of their investigation uncovered the following:
  • The head of the Philadelphia housing authority, the fourth largest in the country, maintained a secret slush fund of $900,000 to pay off a sexual harassment problem without the oversight board of the housing authority knowing about it.
  • And Philadelphia was not even designated a problem housing authority by the department of Housing And Urban Development (HUD). The Department currently maintains a list of 146 housing authorities across the country that were in a troubled condition, a list that does not include Philadelphia.
  • Some housing authority contracts are signed and approved without bidding.
  • The New Haven housing authority in Connecticut had no written contracts at all.The Associated Press found that Federal housing money designated for one purpose is often used for a totally different purpose.
  • Some housing authority of directors do not meet on a regular basis and many times when they do meet, meeting minutes are not kept.
  • Many housing authority executives have little or no financial management or accounting experience, often resulting in deep financial problems before anyone notices, including the Federal government.
  • Two employees of the Alamosa, Colorado housing authority were able to embezzle almost $1.7 million of housing authority funds before they got caught, often by simply writing housing checks out to their relatives. It was an easy way to embezzle since often board members regularly signed blank checks and relied on these employees to spend the money wisely, using the signed blank checks.
  • In 2003, the Winter Haven, Florida housing authority was cited for not preparing monthly budgets, not adequately training its staff, and being cited for its board not having adequate monitoring and accountability procedures. In 2010, seven years later, they are still on HUD's troubled list.
  • The findings show that current audits of housing authority operations cannot be done because audits from several years ago have not yet been completed.
  • The inability of many housing authorities to manage their operations usually results in needy families not quickly finding the housing they need or never finding the housing they need.
  • In Dallas, even if as needy family found housing, two out of three times the Dallas housing authority miscalculated the monthly rental rate to be paid.
This incompetence and criminal activity is funded by a $26 billion Federal budget and many more billions from state and local governments.


- On November 3, 2010, the Associated Press reported that government owned mortgage buyer, Freddie Mac, posted a $4.1 billion loss in the third quarter of the year and has asked for another $100 million of taxpayer money to help its short term financial condition. It asked for $1.8 billion in the second quarter.


The article estimates that the combined bailouts for both Freddie Mac and Fannie Mae will eventually top out at about $260 billion. This works out to about $2,300 for every American household. Most of the problem is due to the soured mortgages and mortgage securities that both agencies got involved prior to and during the "Great Recession." Given the fragile state of the economy and the worst state of the housing market, the article quotes a housing expert who concludes that the financial condition of both is unlikely to improve dramatically any time soon. Thus, taxpayer subsidizing of these poorly performing government entities is likely to continue.


- A short article in the November 4, 2010 edition of the St. Petersburg (Florida) Times reported that the U.S. government will spend $511 million to expand, not build, its embassy in Afghanistan. The American ambassador there "described the work as a demonstration of America's commitment to Afghanistan." I do not know what it cost to build the existing embassy but if it costs more than a half a billion dollars to expand it, the original build cost out most have also been obscenely expensive. And given our government's tendency to never hit a budget, there is a good chance that the $511 million is a low ball estimate. Do we really think that building a fancy building in the middle of the capital of Afghanistan is going to reassure the local population and government that we are not going to abandon them? I doubt it.


- A National Review Online article by Robert Bryce that was included in the November 5, 2010 issue of The Week magazine, talked about the state of the ethanol energy industry in this country:
  • The Federal government pays an annual $7 billion subsidy to American corn farmers to produce a "second rate fuel" to be added to gasoline.
  • The ethanol/gasoline mixture approach has failed to reduce America's appetite for imported oil, creates more pollution than straight gasoline, and reduces gas mileage.
  • According to Mr. Bryce, environmentalists have concluded that ethanol is net negative from the environmental perspective since studies indicate that corn ethanol increases air pollutants by 7% over gasoline.
  • Ethanol is corrosive to fuel lines of older cars, boats, law mowers, and other engines.
So why do we continue to use taxpayer money to fund an inferior fuel product while increasing the environment damage? Because our political class likes those corn farmer votes. In fact, they like those votes so much that the Obama administration recently approved increasing allowable amount of ethanol that can be combined with gasoline from 10% to 15% because those corn farmers have overbuilt their ethanol distillery capacity and need the extra volume to bail them out of their poor planning.


- A chart from the October 25, 2010 issue of Businessweek magazine, showed the TARP payback status of major financial institutions. Bank of America, Wells Fargo, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Hartford Financial, and PNC Financial Services have all repaid back their TARP loans already. We know from other news sources, most of them paid back their TARP bailout funds within months after receiving them, indicating that maybe they were that needy in the first place and were just looking for a free lunch at the expense of the American taxpayer. The Businessweek chart shows that Citigroup, GMAC Financial and Sun Trust banks have not paid back all of their TARP money with Citigroup having paid back about 75% and the other have not paid back any. I am pretty sure that the financial system would not have collapsed if we had allowed these three institutions to go bankrupt due to the bad management of their leaders. The quick and total payback from the many other banks indicates they would have easily picked up the slack. Thus, the $32 billion still owed by Citigroup, GMAC, and Sun Trust is wasted taxpayer money.


- A short article in the November 5, 2010 issue of The Week magazine, reported that the Public-Private Investment Program run by the Treasury Department, which helped private money-management firms invest in devalued mortgage securities, had an investment return of 36% over the past year, far surpassing the 10% return by stocks and the 8% return by bonds.


What is to be learned by this situation? There was no need for any government bailout of any industry. The free market is self correcting, whenever assets devalue, some investor, somewhere will step in and buy the assets, betting that he or she can manage the asset better and make a profit. It happened here in the mortgage industry. Once the sour mortgage securities hit a balanced market price, money professionals came in, bought up the distressed assets and made a financial killing for themselves. It's called capitalism. Same thing would have happened with the banks, investment firms, and the car companies. Eventually, the assets of these distressed companies would have become attractive enough to have been bought by willing entrepreneurs, wasting taxpayer money on the bailouts made no financial sense. However, from the political class perspective, the bailouts made political sense to step in and protect the companies from themselves and possibly generate some campaign donations and votes from those affected.


If you add up all of the waste and tax payer bailout listed above and throw in the amount of taxpayer money spent bailout General Motors and Chrysler, you find almost $400 billion of taxpayer money that has been wasted in one form or another. A lot of this money is a one time waste (e.g. the car company bailouts and the Afghan embassy) but much of it is annual recurring waste (e.g. the billions of dollars wasted subsidizing poor performing corn ethanol and the never ending subsidy of Fannie and Freddie.) In both cases, one time and recurring, serious government savings and waste is available to be reaped.


How could this reaping be done? Consider the following approaches:
  • An article in the October 25, 2020 issue of Businessweek explained how American farmers are currently in a boom period with exports making American farming quite lucrative. One quote from the article states: "It is a perfect situation for U.S. farmers, the best since the early 1970s. Thus, given it is actually a boom period for U.S. farmers, this might be the best time ever to cut the ethanol subsidy to nothing, saving wasted taxpayer dollars and reducing the incremental harm to the environment. While the farming industry might gripe about losing their government corporate bailout, they cannot cry poverty since overall, farming is in the best situation in four decades. Anyway, since much of the farming today is done by farming conglomerates and not family farms, they should not be getting any government subsides to begin with. If this total cutoff is too drastic politically, then limit the subsidies to family farms only.
  • Delay the build out of the Afghan embassy for now and maybe forever. The Obama administration has publicly stated it wants to start getting our troops out of the country by next summer. That will have a far larger impact on demonstrating our resolve to see the fight to the end then putting up a prettier and bigger embassy building. Save the money for now, until we know what we are doing in an overall strategy.
  • Make the hard and difficult analysis and decisions on how to get the Federal government out of the mortgage business. Freddie Mac and Fannie Mae executives, along with their oversight committees in Congress have proven time and again that they cannot manage their mortgage business, resulting in untold billions of wasted taxpayer dollars. Since the political class did not have the courage to address these two government atrocities in the financial reform bill legislation, rendering that legislation next to useless, the drain on taxpayer dollars by these two institutions needs to be readdressed. One alternative may be to write down and sell off their assets like the Treasury Department did with the Public-Private Investment Program. It may require the assets to be sold at a drastically reduced price but such a program would get the assets off of the government's ledger, would shut down a taxpayer drain, and would finally turn the mortgage industry back over to the private sector who cannot help but do a better job. Even if they cannot do a better job, it is their risk and not the taxpayers' risk.
  • Implement Step 34 from "Love My Country, Loathe My government," a step that removes Congressional members from their committee posts if they do not adequately perform their oversight functions for their respective committees. For example, under this step, those members sitting on the financial committees overseeing Fannie Mae and Freddie Mac would have been removed from their committee posts for not foreseeing the financial disaster that is Fannie Mae and Freddie Mac. Any Congressional committee member sitting on a HUD oversight committee would also be removed for allowing the nation's housing authorities receiving Federal money to be so corrupt and incompetent. Possible ways for executing this step are detailed in the book on pages 127-130.
  • Step 6 should also be implemented, a step that would allow only individual citizens to financially contribute to election campaigns. I am pessimistic that the political class has enough courage to shut down the wasteful ethanol subsidy since that might effect how much money a politician can get from the industry for their re-election. If you can remove that option of corporate campaign donations via something like Step 6, the political class might actually do the best thing for the country since it does not hurt them politically. This step would also support Step 46 from "Love My Country,Loathe My Government," which calls for the Federal governrment to get out of the farm subsidy market altogether. Since most farming in the U.S. is done by large farming corporations, most farming subsidies today are nothing but trading corporate welfare for campaign money.
There you go, political class. Almost $400 billion in government waste, exposed, detailed, and a plan attached on how to achieve the savings. The election is over, the rhetoric is over, time for action.


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