Real Government
By David Glenn Cox
It just makes you scratch your head and wonder, what the hell is wrong with us? It seems that our three branches of government have become Moe, Larry and Curly and if you include the Tea Party - Shemp. We have lost the ability to solve our problems as every issue becomes convoluted. Every issue becomes a wrangling, partisan, bickering festival.
The political parties seem to have forgotten that their purpose is to protect us.To protect us from all enemies foreign and domestic. To protect us not just from bombs and bullets but to protect our livelihood's and our industries as well. Their motto is, government which serves least serves best. The wealthy and the powerful will always have easy access to government its the other three hundred million of us that have a hard time being heard.
In 1945 Germany was crushed flat. Schools, rail lines, power plants and sewer systems all destroyed. In less than thirty years the West German economy was the envy of Europe. After the fall of the Eastern Block, Germany was reunified with her East German brethren. It cost the West German nation over a hundred billion dollars just to begin yet, no one questioned if it was the correct thing to do.
Germany began a program a decade ago to encourage the use of alternative energy and the number of wind turbines have multiplied so quickly that infrastructure is having difficult time keeping up. Germany reports that solar energy will be cheaper than fossil fuel generated electricity by 2013. Once alternative energy is below the cost of fossil fuel the subsidies can be withdrawn. Germany will not have to burn coal or import natural gas and for the first time since the industrial revolution Germany will become practically energy independent.
In this country however nothing is quite that easy. Legislation to extend grants to encourage renewable energy projects have been curiously tied to the renewal of the Bush tax cuts. Solar, wind, geothermal and biomass power companies fear with the Republicans in control of the house that these grants are history. Here's the lump in the pudding, the grants might have all ready been passed had it not been for objections raised by Democrat Nancy Pelosi and and Senate Energy Committee Chairman New Mexico Democrat Jeff Bingaman.
It is all about their pound of flesh, and so the President not only has to fight with Republicans, he has to fight with his own party members as to who gets to wet their beak. This seems to be standard operating procedure, the TSA (Transportation Safety Administration) has contracted with Rapiscan Systems to purchase 150 full body scanners. Rapiscan Systems is a firm represented by the Chertoff Group. The Chertoff Group is headed by the same Michael Chertoff, who was formally George W. Bush's Secretary of Homeland Security.
One hundred and fifty machines but that's just the beginning and do you know where they got the money to purchase these intrusive machines? From the stimulus of course, so lets review, grants for alternative energy - maybe, full body scanners purchased from a former cabinet secretary- sure!
The largest single hole in our foreign accounts deficit is made by the purchase of petroleum. In 2009 it was 9,667,000 barrels of oil per DAY! People make a lot of money by importing that oil and it gives them a lot of leverage in Washington. So much in fact, that they whisper to our congressional leaders "maybe grants to encourage alternative energy isn't necessarily a good thing. Maybe what you want to encourage is more drilling in the Gulf of Mexico."
Let Germany develop its solar and wind potential. Let Great Britain develop enough wind energy to power every home in the country by 2020. So what if American companies are moving to Europe. Partizan interests with lots of money think that drilling and spilling is better than blowing and going.
I've beat this drum so long you could call me Ringo but buying machines to look under people's clothes isn't a stimulus. Giving people tax credits to buy cars or homes isn't a stimulus, it's trickle down economics. I give you a tax cut to buy a new home and the benefits will trickle down to the rest of the economy. The President has proposed a one hundred percent instant depreciation on business purchases. That means if the boss buys a hundred new computers for the office he can deduct the full $40,000 from his taxes. The boss picks up the phone and orders the computers with American name plates but the computers were actually built in Asia.
The company that sells the computers must pay the bulk of the sale to it's Asian supplier. The computer company makes an $8,000 profit on the sale and sends $32,000 back to Asia. So we just gave a $40,000 tax break for $8,000 in profits added to the economy. The boss is so pleased with himself that he buys an $80,000 Mercedes Benz The dealership earns a $12,000 profit and Mercedes Benz in Germany gets $68,000 added to the German economy. Its not a stimulus its Christmas, and it all depends on whether the boss has any business.
If the boss has laid off half of the staff then there are plenty of extra computers lying around. He's not planning to buy that new car unless the company buys it for him because then its almost free. Tax cuts are a way for the federal government to say that they are do something without actually doing anything at all. Tax cuts won't stimulate an economy that isn't stimulated all ready. How about a $1,000,000 tax credit for every American that buys a Boeing 747?
NYT SAN FRANCISCO — Solyndra, a Silicon Valley solar-panel maker that won half a billion dollars in federal aid to build a state-of-the-art robotic factory, plans to announce on Wednesday that it will shut down an older plant and lay off workers.
Solandra said that it would lay off 40 workers and 150 contract workers because of increased price competition from China. Now who would buy Chinese solar panels over American solar panels?. Nellis Air Force Base would and so would Rutgers University and Rutgers used state matching funds to do it!
We have made protectionism a dirty word but stupidity is an even uglier word. If you think you are going the go to France and sell discounted wine and cheese you're out of your cotton picking mind. If you think that you're going to sell Kia's in Berlin think again. You say that you want to sell Buick's in Beijing? Sure, come on over build a factory, staff it with Chinese workers and management. Then you must take on a Chinese partner and train them and share with them all of your trade secrets.
Your Chinese partner will then be free to go into direct competition with you but you will never be free of them. The Chinese Government selects certain industries which it considers vital and it nurtures these industries and protects them. The solar industry is at the top of the list, because any fool can see that solar technology is the wave of the future and he who controls the market is going to earn an awful lot of money.
The American Congress is only interested in protecting vested interests and technologies of the past while the Chinese are looking towards the future. Instead of giving Solandra half a billion dollars to build a robotic factory the Federal Government should have given Solandra a half a billion dollar contract to supply solar cells for every federal building in the country. Then Solandra could build any factory that they wanted and the money would stay viable in the economy. Then contracts could be let all over the country to install all those solar panels. Then the benefit of that half a billion dollars spent would be ours.
Imagine if John Kennedy had said, "This nation stands prepared to give tax cuts to any corporation that can build us a moon rocket. Real government builds things and doesn't give loan guarantees or tax credit for somebody else to build it. FDR didn't give tax credits to build all those dams in the Tennessee Valley he let out contracts to build them.
Barack Obama's mortgage rescue plan is a case in point, fifty percent of all applicants drop out or aren't qualified. Of those who stay in the program only one third receive a permanent mortgage modification. The administration scratches their heads and ponders, "gee, what's wrong? We offer the banks $1,500 for every mortgage they modify. If the home goes into foreclosure all the bank will get is a tax write off and credit for the full amount of the unpaid mortgage from the Federal Reserve."
The New Deal's Homeowners Loan Corporation rescued over a million homes and farms in one year. The President's HAMP mortgage rescue program hasn't yet saved half a million mortgages in almost two years! Obama's program pays the banks to modify mortgages while in the New Deal program the federal government directly bought the mortgages from the banks and refinanced them.
It was direct aid versus indirect aid, it was government doing something instead of paying someone else to do something. Those dams built by the Tennessee Valley Authority created tens of thousands of jobs directly and millions more indirectly. Millions of kilowatts of electricity were generated making the cost of those dams insignificant.
Kennedy's space program spent $24 billion dollars and created 400,000 jobs directly and millions more indirectly. It revolutionized the modern world as whole new industries sprang up from nothing. It means that our trip to the moon was virtually free when compared with the economic benefit to our economy.
The Home Owners Loan Corporation went out of business and it returned to the treasury a small surplus. Over one million families were assisted and the banks were assisted and it didn't cost the taxpayer one thin dime.
I don't fault the Chinese for looking out for their national interest nor do I fault the Germans or the French for wanting to protect their own national industries. International trade isn't supposed to be a winner take all proposition. Monopoly is a winner take all proposition and protection from monopoly is real government's sworn duty.