Ethanol and The Dust Bowl

Lisa and I recently watched the Ken Burns' documentary "The Dust Bowl". It was very interesting, very informative and very moving. The stories featured told of the causes of that environmental catastrophe, the impact of the event on the people in the area and the fragility of the land. It featured a lot from Timothy Eagan's wonderfully written book on the subject "The Worst Hard Time" - I highly recommend reading it.


Today I read this article "The Secret, Dirty Cost of Obama's Green Power Push" which details how the EPA, Department of Agriculture and the White House have pursued pushing ethanol as a sustainable biofuel, when the evidence is more and more to the contrary.

There are several things stated in the article that brought to mind the Dust Bowl, but this one really stood out to me:

Investors from as far away as Maryland and Pennsylvania have bought thousands of acres in Wayne County, sending prices skyrocketing from $350 per acre a decade ago to $5,000 today.

One in every four acres of in the county is now owned by an out-of-towner.
Those who still own land often rent it to farming companies offering $300 or more per acre. Perkins could make perhaps $27,000 a year if he let somebody plant corn on his land. That's nothing to dismiss in a county where typical household income is $36,000.
But he knows what that means. He sees the black streaks in his neighbor's cornfields, knowing the topsoil washes away with every rain. He doesn't want that for his family's land.

This is similar to what happened in the 1920s when the cost of grain skyrocketed and the government expanded homestead settlement programs. Investors from the big city or even out of state would purchase acreage or pay to farm someone's previously untouched existing acreage. The land hadn't previously been planted with crops because it was unsuitable for that type of farming. The huge increase in demand and price led to a boom of converting prairie land to farm land. Yet the fact remained, the newly converted land was historically known as not being suitable for crops. When the unusually wet years turned back to the normal dry years, the ground dried out and the soil began to erode and blow. When the drought of the 30s hit the former prairie lands, there was nothing to hold the soil down and it literally took off with the wind.

It would behoove us to learn from past mistakes and not farm land that is not meant to be farmed. It would be wise for our government to eliminate subsidies for programs that produce little benefit, encourage a misuse of the land and place us in a position that could lead to another environmental disaster.

In short, it would be beneficial for us as a country to learn from our own not-too-distant history.

On the Fiscal Cliff

Thomas Sowell expresses his thoughts about the Fiscal Cliff, and these portions echo exactly what I think and feel:

First of all, despite all the melodrama about raising taxes on "the rich," even if that is done it will scarcely make a dent in the government's financial problems. Raising the tax rates on everybody in the top two percent will not get enough additional tax revenue to run the government for ten days.

No previous administration in the entire history of the nation ever finished the year with a trillion dollar deficit. The Obama administration has done so every single year.

Referring to the Federal Reserve System's creation of hundreds of billions of new dollars out of thin air as "quantitative easing" makes it seem as if this is some soothing and esoteric process, rather than amounting essentially to nothing more than printing more money.
Debasing the value of money by creating more of it is nothing new or esoteric. Irresponsible governments have done this, not just for centuries, but for thousands of years.
It is a way to take people's wealth from them without having to openly raise taxes. Inflation is the most universal tax of all.

But it is not the same politically, so long as gullible people don't look beyond words to the reality that inflation taxes everybody, the poorest as well as the richest.

And there are these nuggets from Part 2:

A key lie that has been repeated over and over, largely unanswered, is that President Bush's "tax cuts for the rich" cost the government so much lost tax revenue that this added to the budget deficit-- so that the government cannot afford to allow the cost of letting the Bush tax rates continue for "the rich."

What is remarkable is how easy it is to show how completely false Obama's argument is.

What both the statistical tables in the "Economic Report of the President" and the graphs in Investor's Business Daily show is that (1) tax revenues went up-- not down-- after tax rates were cut during the Bush administration, and (2) the budget deficit declined, year after year, after the cut in tax rates that have been blamed by Obama for increasing the deficit.  

And here are the table and images referred to above:

The Importance of Knowing Where We Are

As I read this quote, I wondered if most Americans truly know where we are as a nation, where they are as individuals and the impact they can have in the culture and economy at large.

"As for blame, who can be blamed for inheriting a culture that existed before they were born?  But, while nothing can be done about the past, much can be done in the present to prepare for the future. Whatever we wish to achieve in the future, it must begin by knowing where we are in the present- not where we wish we were, or where we wish others to think we are, but where we are in fact." - Thomas Sowell in Economic Facts and Fallacies, p186

Our Current Position Visualized

This was the front page on CNN this morning and I couldn't resist capturing it and posting it here.

To me, this is a perfect example of what is wrong with our economy and country right now.
Warning: Generalized statements are about to be made which may not be true for all parties involved.

Standing for Nothing
There is a group of people who feel entitled to something without doing anything, or whatever it is they want. (see Occupy Something)

Speaking for Nothing
There is a group of wealthy people who feel that government should place even more of the burden on the rich. The fact that this call is now also coming from a couple dozen wealthier people does not change the fact that it is just another call to redistribute wealth. The fact that Warren Buffet is being used to champion this idea is simply ludicrous. (Buffet has sheltered his wealth from Federal Taxes and has admitted that he thinks the government would not handle the money as effectively and efficiently as a private organization.)

If the wealthy are so concerned with how much they have, they should stop making so much profit (money) or start giving a lot more of it away. This is their personal problem and not the government's problem. If they truly were struggling to sleep at night because they honestly believed that they had too much money and that it could be used to aid other people who desperately need it, they would have already set into motion the actions required to reconcile that conviction on their own. There is no role for the government required here. Thus, it is a cheap political stunt.


Neither of these groups represent a majority opinion. Far from it.

How did we end up here?
Our government has adopted the strategy of the one offered by the company to the right of the page. Spend what you do not have now, pay off less than the interest later and at some point down the line you will realize you are in way over your head and you will desperately need to change your behavior. However, like most Americans, our government refuses to change its spending behaviors, even after after the cost of continuing down the same road become patently clear and the outcome unavoidable.

How do I think we get out of this mess?
- We stop catering to the minority of the population  who screams the loudest. We stop handling them with soft gloves. If you want to protest anything, you need to do it within the bounds of the law. If you go beyond the law, then you should have the entirety of that law brought to bear against you and the organization you claim to represent.

- We need to stop listening to people who claim to offer solutions that appear selfless, when the reality is that their "solution" will not solve the problem. In fact, their path only leads to people other than themselves having more money taken away from them, thus increasing the gap between the ultra-rich and the wealthy.
- We stop spending money we do not have. We force our government to work for us, as it was intended. I do not work in order to pay for a government program. I work in order to have the ability to provide for my family's current and future needs. I am planning for my own future, as best as I can. It would be a lot easier for me if the government that is charged with protecting me woudl stop attacking me financially.
- We stop putting people in positions of power that cannot balance a budget. If you cannot run a household or business without going into debt, we do not need you attempting to guide the country. If you cannot run an election campaign without bungling your finances, we don't need you "helping" solve the crisis we have placed ourselves in as a nation.
- We stop electing people because they seem nice or energetic or young or whatever. We need to elect good, strong people to lead this country in a new direction. We need politicians who see it as being allowed to offer their services to their country and fellow citizens for a season, instead of having politicians who see it as the ultimate SWAG party and ridiculous retirement plan.
- We need to stop electing non-representatives. You work for me as well as the guy who disagrees with me. I am a fellow citizen of yours, just like he is - we are not just your constituents. You answer to me, even when you don't want to. If you make a choice that I find different from my desire, I have the right to express that opinion, regardless of how it might make you feel. If you do not want to hear the opinions of those that you claim to represent, then you have no right to claim to be their representative.
- We need to throw political correctness and sensitivity in the trash can. At the moment, there is very little room in political discourse for us to skirt around certain issues on our tippy toes because you or one of your lobbyist friends might take offense. Please be offended. Be offended that it took so long for you to feel or recognize how poorly you have done your job. Be offended at the fact that many of your actions have led us to this place. If you are too sensitive to deal with these very real, very large issues without getting your feathers ruffled through a lively, boisterous and heated debate, then there is no place for you in politics. Go home and cry in your bed for a while - the country will be better off with you there. This isn't to say that we should be hateful or disrespectful, but we should get fired up about what you are and are not doing with and to our country. That is patriotic. If you cannot handle grown up conversation in a real world that isn't filled with fairies and color-blindness, then you should go write children's stories and not attempt to tell us what stories we can and should read to our children.
- See Why I Think America is in Deep Trouble

Sorry about the length of this post. I got a bit carried away here. It started out as a quick picture and ended with me getting all riled up. I do not apologize for my convictions nor my vocalization of those beliefs, merely for the length of the content.

I hate politics as they are and dream of how I think they could be.
There are so many people on both sides of the aisle that do not deserve to be called representatives or leaders of our country. I am hoping that real world Americans begin to be better represented in the Washington DC.
That starts with you in the voting booth.
Get informed.
Get fired up.
Get represented.
Get America back on track.

Occupying Something

I've resisted posting anything about the Occupy Wall Street protests to this point, but I wanted to say something about it today.

Here in St. Louis, we have our version of it currently operating on downtown St. Louis. Even the local newspaper can't figure out what the fuss is about. With that being said, it seems that one of the common themes of these activities is to make the wealthy pay their "fair share", which apparently translates into simply meaning they need to "pay more". If the some of the people doing the protesting are, in fact, currently unemployed, then they are essentially working against themselves.

Let's say that the politicians adopt the strategy of taxing the wealthier even higher rates. Inevitably, this will lead to the wealthy moving their financial assets from the American economy to another economy with less exorbitant taxes. In doing so, the American government will take a massive hit on tax income. The result of that income loss will lead to program cuts. Undoubtedly, some of those program reductions/eliminations could be in the welfare programs that currently support the unemployed, although knowing that politicians recognize this program as a way to maintain/buy voter support for re-election, I doubt many drastic measures would be taken. In the above scenario, if cuts do happen in these programs, the unemployed will be the ones paying the price, not the wealthy. And if they didn't happen, the politicians would be scrambling to find other areas to reduce their expenditures. Given Washington's track record of late, I think it is more likely that they would borrow against the future even more and drive the country towards a place where unemployed protestors in a park are the least of our worries as a nation.

In the meantime, the lack of a clear agenda and recognized leader of the movement provide little reason to listen to them at all.

Get organized (beyond union lines), figure out what your issue is that you want changed, offer several viable solutions and work towards influencing people in a positive direction. At the moment, it would seem that this is a bunch of unhappy people ready to protest anything. And that is fine, because they have that right. And they have that right, because other people are working hard and paying their taxes. But that doesn't mean they should be given the power to dramatically impact the lives of others or the future of our nation.

We'll see how the protest hold up when the weather turns much colder.

- Oh, and with the St. Louis Cardinals going to the World Series, I'd like to see the fans of the game reclaim the public property that has been used as a rally area for years and, prior to Wednesday's game 1, take back Kiener Plaza from the "99%" that are currently monopolizing it.

Why I Think America Is In Deep Trouble

Last week I was thinking about all of the hype surrounding the debt-ceiling when it occurred to me that I haven't check the status of the Federal Reserve's Monetary Base lately. What follows is a lengthy post where I try to recapture all of my thoughts on this and various topics that I have written about over the course of the past few years.

I started tracking the Monetary Base prior to attending the April 15, 2009 Tea Party in downtown St. Louis, after which I posted my reasons for attending the tea party event. Included in that post was a graph showing the National Debt Per Capita and the Adjusted Monetary Base.

Tyrannosaurus Debt

From Schoolhouse Rocks:

Federal Government Intervention

Here's another snippet from another great article from Thomas Sowell:

The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States.

During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down.

No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.

The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then-- and now.

I wish the federal government would just step away from this area.
It seems that doing nothing to "help" is the greatest aid in the recovery process.

The State of the Union 2011

As is my annual ritual, I read through the President's State of the Union Address this morning. I haven't read or listened to any political commentary at this point, so my perspective is untainted and solely my own.

There are several portions of the speech that I could draw attention to, but I will choose only two.
Here's the first:

And if we truly care about our deficit, we simply can’t afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans. (Applause.) Before we take money away from our schools or scholarships away from our students, we should ask millionaires to give up their tax break. It’s not a matter of punishing their success. It’s about promoting America’s success. (Applause.)
In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. (Applause.) This will be a tough job, but members of both parties have expressed an interest in doing this, and I am prepared to join them. (Applause.)

Okay, where to start. If you truly care about the deficit, you will stop spending more than you have. Period. This isn't rocket science. Don't spend what you don't have. That means that you can't create new government institutions, agencies, positions and programs until you have funded existing programs. Since the existing programs were running a deficit when the President took office, he should have reigned in spending and reduced the size of the Federal government. But he didn't. He increased its size and scope and buried the nation under a crushing amount of debt that will cripple us in the coming years if the tough decisions aren't made.

The idea of sacrificing for the good if the nation is noble and all, but when the government doesn't choose to adopt the same strategy, one has to question the motivation behind this course of action. America's success isn't going to be determined by whether or not the wealthiest Americans are taxed higher. Her success will be determined by how well the Federal government allows the American people to innovate, create and prosper - including financially. When you tax the wealthiest people at an ever-increasing rate, what do you suppose the final outcome of that will be? Inevitably, the wealthy people find the loopholes, reinvest their finances in other places, or they simply move to a place that will not tax them so heavily.

I'm all for simplifying the tax code. What currently exists is so convoluted and complex that even the government institution chartered to enforce those regulations (the IRS) is having trouble keeping up.Contrary to what the President and members of the government believe, this is a fairly simple goal to accomplish. It's called a flat tax. The amount of paperwork and hassle that such a system would remove from businesses is huge. The reduction in size of the Federal government, by way of drastically reducing the size of the IRS, would be sizable. While I am open to the idea of reducing and removing large portions of the existing to tax code as a preliminary step, I cannot see how this type of effort would prove worthwhile over the course of time. Every year there are additions to the tax code. I am of the opinion that a flat tax would work and would allow the citizens and companies of this great land to prosper. The only way this would work is if the government is held accountable and sticks to a non-deficit increasing budget. (That's sounds a lot like common sense, doesn't it. Some might even say it's Constitutional.)

[Feel free to insert a rant about the Federal Reserve's ability to print an unlimited amount of currency here.]

Here's the second portion that I want to draw attention to:

And because the American people deserve to know that special interests aren’t larding up legislation with pet projects, both parties in Congress should know this:  If a bill comes to my desk with earmarks inside, I will veto it.  I will veto it.  (Applause.)

Let's see how long it takes to break this promise. I cannot imagine the President being able to stick to this. Now perhaps the senators and Congressman will find another way to tack on their pet projects, or call them by a different name, but I just don't see this being a line in the sand that the President is unwilling to withdraw from.

Overall, the speech read like most of the State of the Union speeches. Obviously, I cannot speak to the effectiveness of the President's delivery of these words, nor to the receptiveness of the blended-party crowd. I am sure there is plenty being said about all that extraneous stuff anyway. If I find anything worth linking to or pointing out as I read more and hear more today, I will add it to the bottom of this post.

US States Compared to Foreign Countries

The Economist released the following map showing the size of each state's GDP as it relates to another country. For example, Missouri's GPD is roughly the same size as Finland's with a population that is equivalent to Paraguay's.

(HT: 22 Words)

Economic Recovery Hinges on One Word

"One of the biggest obstacles to economic recovery is that politicians and the media are both focused on how government can MAKE the economy recover, rather than on how it can LET the economy recover. One of the biggest deterrents to investments, and the jobs they could create, is uncertainty as to what new bright idea will come out of Washington to change the rules in midstream." - Thomas Sowell

A Big Mess Disappears?

Guess what?

All that oil that has been spewing out into the Gulf of Mexico for the past several months has suddenly gone missing...

From this ABC News article:

The numbers don't lie: two weeks ago, skimmers picked up about 25,000 barrels of oily water. Last Thursday, they gathered just 200 barrels.


Still, it doesn't mean that all the oil that gushed for weeks is gone. Thousands of small oil patches remain below the surface, but experts say an astonishing amount has disappeared, reabsorbed into the environment.

Possible reasons for this?

The light crude began to deteriorate the moment it escaped at high pressure, and then it was zapped with dispersants to speed the process along. The oil that did make it to the ocean's surface was broken up by 88-degree water, baked by 100-degree sun, eaten by microbes, and whipped apart by wind and waves.

I think it is way too early to assume that there might be no long-term effects of this in that environment, but if what some of these scientists are saying is true, then it is truly amazing what is happening in that water.

(HT: Michael Williams)

Large Bureaucracy Leads to Democracy's Demise

"Least of all shall we preserve democracy or foster its growth if all the power and most of the important decisions rest with an organization far too big for the common man to survey or comprehend. Nowhere has democracy ever worked so well without a great measure of local self-government, providing a school of political training for the people at large as much as for their future leaders. It is only where responsibility can be learned and practiced in affairs of one's neighbor rather than some theoretical knowledge of the needs of other people which guides action, that the ordinary man can take a real part in public affairs because they concern the world he knows.Where the scope of political measures become so large that the necessary knowledge is almost exclusively possessed by the bureaucracy, the creative impulses of the private person must flag."       

- p. 257-258 The Road to Serfdom by F.A. Hayek

Large-scale Economic Planning Leads to Using Force

"To imagine that the economic life of a vast area comprising many different people can be directed or planned by democratic procedure betrays a complete lack of awareness of the problems such planning would raise...To undertake the direction of the economic life of people with widely divergent ideals and values is to assume responsibilities which commit one to the use of force; it is to assume a position where the best intentions cannot prevent one from being forced to act in a way whih to some of those affected must appear highly immoral."

- p. 244-245 The Road to Serfdom by F.A. Hayek

When Democracies Have Nothing to Offer

"If the democracies themselves abandon the supreme ideal of the freedom and happiness of the individual, if they implicitly admit that their civilization is not worth preserving, and they know nothing better than to follow the path along which the Germans have led, they have indeed nothing to offer."

- p. 238 The Road to Serfdom by F.A. Hayek

Minority Led Policy Leads to Destruction

"It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it."

- p. 218 The Road to Serfdom by F.A. Hayek

Authority Presented As "Organization"

"When authority presents itself in the guise of organization, it develops charms fascinating enough to convert communities of free people into totalitarian States."- "The Times" (London)

- p. 199 The Road to Serfdom by F.A. Hayek

Collectivists Must Be Unbound By Morals

"The principal that the end justifies the means in individual ethics is regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivitist must not be prepared to do if it serves "the good of the whole," because "the good of the whole" is to him the only criterion of what ought to be done..."

"There can be no limit to what its citizen must be prepared to do, no act which his conscience must prevent him from committing, if it is necessary for an end which the community has set iself or which his superiors order him to achieve."

- pp. 161-162 The Road to Serfdom by F.A. Hayek

One Inherent Contradition of Socialism

"But what socialists seriously contemplate the equal division of existing capital resources among the people of the world? They all regard the captial as belonging not to humanity but to the nation - though even within nation few would dare to advocate that the richer regions should be deprived of some of "their" capital equipment in order to help the poorer regions. What socialists proclaim as a duty toward the fellow-members of the existing states they are not prepared to grant to the foreigner..."

"One of the inherent contradictions of the collectivist philosophy is that, while basing itself on the humanistic morals which individualism has developed, it is practicable only within a relatively small group. That socialism so long as it remains theoretical is internationalist, while as soon as it is put into practice, whether in Russia or in Germany, it becomes violently nationalistic, is one of the reasons why "liberal socialism" as most people in the Western world imagine it is purely theoretical, while the practice of socialism everywhere if totalitarian. Collectivism has no room for the wide humanitrianism of liberalism but only for the narrow particularism of of the totalitarian."

- pp. 155-156 The Road to Serfdom by F.A. Hayek

The Creation of a Totalitarian Regime

"We must here return for a moment to the position which precedes the suppression of democratic institutions and the creation of a totalitarian regime. In this stage it is the general demand for quick and determined government action that is the dominating element of the situation, dissatisfaction with the slow and cumbersome course of democratic procedure which takes action for action's sake the goal. It is then the man or the party who seems strong or resolute enough "to get things done" who exercises the greatest appeal. "Strong" in this sense means not merely a numerical majority - it is the ineffectiveness of parliamentary majorities with which people are dissatisfied. What they will seek is somebody with such solid support as to inspire confidence that he can carry out whatever he wants. It is here that the new party, organized on military lines, comes in."

- p. 150 The Road to Serfdom by F.A. Hayek