Five key reasons to pull plug on wind subsidies

Committee For A Constructive Tomorrow (CFACT) published an article by Larry Bell which can be viewed at this link:

Five key reasons to pull plug on wind subsidies

The five reasons are listed below, and more details for each are in the article linked above:

1. First, consider that even gargantuan wind installations covering thousands of acres generate only small amounts of unreliable power.

2. Those intermittent outputs require access to a “shadow capacity” which enables utilities to balance power grids when wind conditions aren’t optimum . . . which is most of the time. Anti-fossil energy promoters aren’t eager to mention that those “spinning reserves” (which must equal the total wind capacity) are fueled by the same sort of coal or natural gas turbines that those friendly breezes were touted to replace.

3. A major study of nearly 3,000 on-shore British wind farms found that the turbines have a very short –12- to 15-year– operating life, not the 20- to 25-year lifespans applied in politicized government and industry projections.

4. Along with high life-cycle investment and operations costs, let’s also add environmental costs to the mix. A Sierra Club official described them as giant “Cuisinarts in the sky” for bird and bat slaughters. Other local wind critics have legitimate health concerns about land-based installations. Common symptoms include headaches, nausea, sleeplessness, and ringing in ears resulting from prolonged exposure to inaudibly low “infrasound” frequencies that even penetrate walls.

5. The existence of the entire wind power industry depends upon federal subsidies.

Recall of the absent Wisconsin State Senators

You have an opportunity to show your support for Wisconsin Governor Scott Walker in his efforts to limit government employee union influence.  14 democratic state senators have boycotted the state senate chambers and are refusing to vote on the Wisconsin state budget.  Recall efforts are now underway in various districts in Wisconsin to remove the absentee state senators from office.  One of these recall committees have the following website:

http://www.recallwirch.com/

The Consequences of Government Employee Unions

Thomas J. DiLorenzo of the Ludwig von Mises Institute has written a short but comprehensive article about the effects of government employee unions.  The article can be viewed here:

http://mises.org/daily/5072/The-Political-Economy-of-Government-Employee-Unions

I recommend reading the entire article.  Listed below are a few of the highlights:

The main reason why so many state and local governments are bankrupt, or on the verge of bankruptcy, is the combination of government-run monopolies and government-employee unions. Government-employee unions have vastly more power than do private-sector unions because the entities they work for are typically monopolies.

The enormous power of government-employee unions effectively transfers the power to tax from voters to the unions. Because government-employee unions can so easily force elected officials to raise taxes to meet their "demands," it is they (the unions), not the voters, who control the rate of taxation within a political jurisdiction.

Politicians are caught in a political bind by government-employee unions: if they cave in to their wage demands and raise taxes to finance them, then they increase the chances of being kicked out of office themselves in the next election. The "solution" to this dilemma has been to offer government-employee unions moderate wage increases but spectacular pension promises. This allows politicians to pander to the unions but defer the costs to the future, long after the panderers are retired from politics.


As taxpayers in California, Wisconsin, Indiana, and many other states are realizing, the future has arrived. The Wall Street Journal reports that state and local governments in the United States currently have $3.5 trillion in unfunded pension liabilities. They must either raise taxes dramatically to fund these liabilities, as some have already done, or drastically cut back or eliminate government-employee pensions

Every government-employee union is a political machine that lobbies relentlessly for higher taxes, increased government spending, more featherbedding, and more pension promises – while demonizing hesitant taxpayers as uncaring enemies of children, the elderly, and the poor (who are purportedly "served" by the government bureaucrats the unions represent).

How to support the Wisconsin Revolution

You can lend your support to the current efforts in Wisconsin to control government spending and reduce government employee union’s control. A group of Tea Party organizations has formed “American Majority” to support the whose mission is to train and equip a national network of leaders committed to individual freedom through limited government and the free market. Their website is: http://americanmajority.org/

American Majority is organizing a national demonstration of support for Scott Walker and leaders across the country who have the courage to fight the public sector union bosses - on Wednesday, February 23rd. The website dedicated to this effort is: http://www.istandwithwalker.com/

Why the Wisconsin State Employees Unions cannot back down

The following blog news item includes the comment listed below:

http://newsbusters.org/blogs/noel-sheppard/2011/02/20/tea-partier-joins-george-will-great-debate-about-wisconsin-abcs-week#ixzz1EX5JhPae

The following comment was posted by shivas irons redux

Would someone please note that Unions make the great lion's share of their $ from negotiating "benefits", not salaries... or collection of dues.

This is why the decoupling of the Salaries and Benefits so important to Unions in Wisconsin. And why the Union's have countered the way they have. They'll give up Salary and Jobs for Teachers in a second, but they will fight to death for Benefit negotiation position. In another life as an executive in CA, I used to do administration for two Teamster's "Health and Welfare" benefit packages. Do your research, but you'll find I'm correct about motivation of Unions. I also believe that the amount of money kept by Unions will be very interesting to both your viewers, and the tax payers of the US of A. The way it works is that the Unions negotiate with the "Employer" regarding how much money per member/per month they will need to support the benefit options required in Union contract. In the case of WI, they negotiate with each of the 77 counties. Then the Unions negotiate the terms of benefits with "providers"/Ins Co's, etc. They make the lion's share of their money off of what is called the "breakage" created by Employees choosing between plan options, and the administration of the programs. Let me explain with an example: A Union begins by negotiating with the Employer/State. They'll claim their buying leverage will afford Employer significant savings. They'll end up with a 3-tiered cost structure which allows the Union a profit even with the highest benefit option available as Union already has a very good idea about what Providers will be charging. But it gets even more lucrative for Unions at this point. Let's say high-end Blue Cross PPO coverage costs $400 for the Family tier. What a Union will do is require $425 from Employer, plus a loaded in admin fee, as a charge for all Families in the employer group. So far, so fair? But, the Union will also offer a few other plans for Employees to choose from. The Union will also have developed relationships with a few cheaper HMO plans, and lesser PPO benefit structure plans that charge, as an example, $325 and $375, respectively. At an Open House Employees will choose what fits their needs and the Union is in line for the "breakage". The left over breakage is then, to my experience, placed in a fund where only the Union has the checkbook. Cars, Vacations and Condo's, oh my. The Union also makes a "commission" off of things like Pre Legal, Dental and Term Life. As another profit source, the Union also leans on the Administrator for favors I'd rather not list, but usually involving idiocy like buying thousands of dollars of "raffle tickets" and leasing cars for the Union's Business Agents, not entirely above board. Of course I am relating my experience, and what little I know of others who also did Union administration. I'd expect any simple research by an actual reporter would open up a Pandora's box of Slush in the Badger State.

This exposes the Union motivation in opposing the proposed Wisconsin legislation.  If the Unions lose control of the employee benefits they lose the majority of their discretionary funds along with the ability to extort and corrupt the benefit providers.  If you have information to add to this subject please include a comment.  I agree with the comment “I'd expect any simple research by an actual reporter would open up a Pandora's box  of Slush in the Badger State.”

Government accounting 101

The following news article describes the mounting debt crisis at the local government level:

http://www.staradvertiser.com/news/nyt/20101005_Options_dim_cities_in_debt_seek_havens.html

There are so many disturbing facts and quotations in this article that I do not know where to start commenting.  The primary focus of the article is on Harrisburg, Pennsylvania.  The recent actions by Harrisburg are symptomatic of the financial mismanagement at the local government level worldwide.  Consider the following facts from the above article:

Harrisburg, the Pennsylvania capital, dodged financial disaster last month by getting money from the state to make a payment to its bondholders.

It did so even though the state warned that the money had to be used for city workers' pensions.

Now Harrisburg is calling on the state again. On Friday, the city said it could not meet its next payroll without money from the state's distressed cities program.

In the private sector borrowing money to pay bondholders and to make payroll is the path to liquidation. But in the government sector accounting has mysterious properties:

Using the pension money to pay bondholders last month has increased the city's total debt burden, by the state's calculation. The city's audited financial statements are a year late, and the most recent one gives four-year-old pension data, showing a surplus before the recession and the financial crisis took its toll.

Officials in Harrisburg said they saw no harm in using this year's state pension money to pay their bondholders because they thought the municipal pension funds had a surplus.

But they see a surplus only because they are looking at a five-year-old number, said Bernard S. Kozlowski, deputy director of the state Public Employee Retirement Commission, which administers the state pension law. He said the state would eventually come after Harrisburg, demanding the missing money with interest. But not for at least two more years, he added, because of the lags built into the state system.

If you are considering the purchase of municipal bonds, beware; if you own municipal bonds, you have been forewarned.

The most expensive school ever constructed

A friend of ours sent me the following article:

http://online.wsj.com/article/SB10001424052748703959704575454013855538920.html?mod=WSJ_Opinion_LEADTop

The following paragraphs highlight the orgy of spending involved in this Los Angeles public school project:

At $578 million—or about $140,000 per student—the 24-acre Robert F. Kennedy Community Schools complex in mid-Wilshire is the most expensive school ever constructed in U.S. history. To put the price in context, this city's Staples sports and entertainment center cost $375 million. To put it in a more important context, the school district is currently running a $640 million deficit and has had to lay off 3,000 teachers in the last two years. It also has one of the lowest graduation rates in the country and some of the worst test scores.

"It wasn't cheap, but it was saved," says Thomas Rubin, a consultant for the district's bond oversight committee, which oversees the $20 billion of bonds that taxpayers approved for school construction in recent years.  I asked Mr. Rubin whether some of the school's grandiose features—like florid murals of Robert F. Kennedy—were worth the cost. "Did we have to do that? Hell no. But there's no accounting for taste," he responded.

The Kennedy complex is Exhibit A in the district's profligate 131-school building binge. Exhibit B is the district's Visual and Performing Arts High School, which was originally budgeted at $70 million but was later upgraded into a sci-fi architectural masterpiece that cost $232 million.


Even more striking is Exhibit C, the Edward Roybal Learning Center in the Westlake area, which was budgeted at $110 million until costs skyrocketed midway through construction when contractors discovered underground methane gas and a fault line. Eventual cost: $377 million.

If you find this unaccountable spending outrageous you may ask yourself how this can occur. The answer is in this paragraph from the above article:

Expect more such over-the-top and inefficient building projects in the future. Los Angeles voters have approved over $20 billion of bonds since 1997 and state voters have chipped in another $4.4 billion of matching funds. Roughly a third of the cost of the Kennedy complex will be shouldered by state taxpayers.

This is the recipe that government has found so effective. Place a referendum on a ballot that asks voters to approve more government spending.

Giving money and power to government is like giving whiskey and car keys to teenage boys.

Just say no to government spending.

Let the buyer beware

The Securities and Exchange Commission recently settled a fraud claim against the State of New Jersey.  The details are in this Bloomberg News article:

http://www.bloomberg.com/news/2010-08-18/new-jersey-settles-sec-claims-of-misleading-bond-investors-on-pension-fund.html

Here are the highlights:

New Jersey settled claims that it misled investors in $26 billion of municipal bonds by masking underfunding of its two biggest pension plans, in the first Securities and Exchange Commission case to target a state.

Documents for 79 bond offerings from 2001 to 2007 “created the false impression” that the Teachers’ Pension and Annuity Fund and the Public Employees’ Retirement System were adequately funded, hiding that the state couldn’t make contributions without raising taxes or cutting services, the SEC said in a statement today.

The suit marks the first time the SEC has sued a state for violating federal securities laws and marks an early salvo in the agency’s plan to crack down on fraudulent practices in the $2.8 trillion municipal bond market.

State and local governments all across America have substantial unfunded pension liabilities. Can bond holders now file claims against these bond issuers due to misrepresentation of their pension liabilities? If so this could be a bonanza for trial attorneys.

Tax exemptions for any cause

New York City will soon consider tax-free financing for the Ground Zero Muslim center:

http://www.reuters.com/article/idUSTRE67Q5BW20100827?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher

The Muslim center planned near the site of the World Trade Center attack could qualify for tax-free financing, a spokesman for City Comptroller John Liu said on Friday, and Liu is willing to consider approving the public subsidy.

The mosque's backers hope to raise a total of $70 million in tax-exempt debt to build the center, according to the New York Times. Tax laws allow such funding for religiously affiliated non-profits if they can prove the facility will benefit the general public and their religious activities are funded separately.

Whether you support or oppose the building of this project the fact that it may be financed by tax exempt bonds is outrageous. This is what happens when someone else is allowed to spend your money. Just say no to government spending! (Please note that handing out tax exemptions has the same effect as increasing government spending).

Sunlight is the best disinfectant

The Sunshine Review is a new project intended to provide a clearing house of information on state and local government spending. This is the link to the website:

http://sunshinereview.org/index.php/Main_Page

The level of detailed information that is available is surprising. This website gives you the ability to see how your hard earned money is spent.

Dreams from my public employee unions

Illinois Governor Pat Quinn is proposing a 33% tax increase. Some of the details can be found in this Chicago Tribune article:

http://www.chicagotribune.com/news/elections/ct-met-quinn-budget-speech-0311-20100310,0,4512692.story?

Think of the reaction you would receive if you were to ask your employer today for a 33% raise, or if you were to tell your customers that you will be raising your prices or fees by 33%. Only politicians and government employees live in a world where such fantasies could come true. This passage from the article is truly at odds with reality:


“The Illinois Federation of Teachers welcomed Quinn's call for a tax increase, but said it's not large enough to deal with the state's overall money problems.”

So there you have it, the government employees do not think that a 33% tax increase is enough to satisfy their gluttony.

The Governor is selling this outrage to the taxpayers of Illinois in the name of education for the children. It is a minor oversight for the Governor not to mention that the State of Illinois does not pay one dime for education of children in grade school or high school. The state is only responsible for some community colleges and the state university system. The primary education system grades 1 through 12 are paid for by local governments primarily by real estate taxes. The burden on local taxpayers to support primary education is overwhelming. This crushing real estate tax allows the Governor to imply that the state income tax is now low at the 3% level and that he is only proposing an additional 1% increase.

Resist this madness. Just say no to raising taxes.

California leading the Nation

California has a history of “firsts”, first to regulate auto emissions, first to ban smoking in public spaces, etc. We are now about to witness another first, the first state to be forced to rationalize the role of government due to debt market restrictions. The following article describes California’s financial condition:

http://www.reuters.com/article/topNews/idUSTRE55F5VK20090617?feedType=RSS&feedName=topNews&pageNumber=1&virtualBrandChannel=0

The White House press secretary had this to say:

• "We'll continue to monitor the challenges that they have, but this budgetary problem unfortunately is one that they're going to have to solve," Gibbs said.

This response is very interesting as up until now the Obama Administration has been ecstatic about loaning money and taking control of private enterprise. Why the sudden change of tactics? Why doesn’t the Obama Administration want to control California?

I think that some of the answers are contained in the above article, consider this quote:

• 
  Washington's view toward California is one more reason to not hold the state's debt, said Tom Tarabicos, a financial adviser at Wells Fargo Financial Advisors Network in Roswell, Georgia. "We're selling every California bond we can," Tarabicos said. "We don't like them."
  "Sometime next year you'll be able to buy California GOs somewhere around 7 percent or 8 percent," Tarabicos said, referring to general obligation bonds.”

Bond traders have had a prominent role in government policy since the founding of the nation. Consider this famous quote:

• 
  “You mean to tell me that the success of my program and my reelection hinges on the Federal Reserve and a bunch of f***ing bond traders?”
• 
  That’s how Bill Clinton responded in 1993, according to an account in Bob Woodward’s The Agenda, after his advisors told him that his ambitious economic plan had to be put on hold because of deficit jitters in the equities markets.

Two other examples: In 1896 presidential candidate William Jennings Bryan, for instance, railed against Wall Street’s “cross of gold” and decades later FDR threatened “to drive the money changers out of the temple.”

In my opinion the Obama Administration has recently realized that they have squandered their ability to borrow. There have been stern warnings from the markets but probably more importantly blunt words from primary lenders such as China.

The inability to sell more massive amounts of debt has forced the Obama Administration to talk about how it is going to pay for new programs. An example of this new “pay as you go” strategy is the current hoax being promoted about Medicare savings being used to pay for the single payer health care plan.

The inability of the Federal Government to raise the necessary capital to bail out California will now force that state to reduce government spending. This trend could sweep across the nation as other states fall deeper into budget deficits.

Will this trend materialize at the federal government level? The federal government seems to have run out of borrowing power, but they have the one capability that states do not, they can print money.

At some point the Federal Government will find itself in the same position as California. Additional borrowing will be prohibitively expensive. The options then will be to reduce government spending at the federal level or flood the world markets with US dollars.

Help Me, Uncle Sam

This Barrons article discusses the next phase of our governmental meltdown:

http://online.barrons.com/article/SB123941269948510457.html

If States and Municipalities are allowed to borrow from the US Government or have the US Government guarantee their debt there will be no fiscal accountably left at any level of government.