According to the Projo, both the National Republican Senatorial Committee and the Chafee campaign disapprove of Steve Laffey’s fiscal policies as Mayor of Cranston. The Projo article, however, leaves a couple of questions unanswered…
To the National Republican Senate Committee and to the Chafee campaign: Does your disapproval of Steve Laffey’s fiscal policies lead you to conclude that the people of Cranston would have been better off with Aram Garabedian, Gary Reilly, or John Mancini as their Mayor?
Also to the Chafee campaign: If you believe that Steve Laffey made poor fiscal decisions as Mayor of Cranston, why did you encourage him to run for statewide office?
I wrote the words in this posting in response to Steve Laffey’s criticisms last week of the oil industry. It was originally part of an extended entry, which did not give the policy issues sufficient visibility. As a result, I am re-posting the portion on energy issues below, with some minor modifications, and deleting them from the original posting:
I have been away from the oil industry for a long time now. My specific work experience in the industry included working in the Energy Department of The Morgan Bank in the summer of 1980, working for Aramco in Saudi Arabia during the summer of 1981, and working for ARCO during 1981-83 where, among other things, I had the privilege of playing a meaningful role in a $100 million joint venture financing of the Kuparuk pipeline on the North Slope of Alaska.
When I was at ARCO, we were one of the leading companies at the time in exploring alternative energy, including solar. If there was a chance to make profits in alternative energy, ARCO and the other oil companies would have been all over the opportunities. But it never happened – and oil was priced around $40/barrel back then in the early 1980’s.
If there were new technologies that could really create new profitable sources of energy, then the investment community or the oil companies would have funded them. Ask someone how many billions of dollars Union Oil invested – and lost – in oil shale technology years ago. At $60-70/barrel, that funding may now open up and that would be a positive benefit of the higher oil prices. It certainly would be a more efficient way to develop new resources than having a bunch of Senators pass legislation that they then hand off to nameless bureaucrats to regulate from Washington, D.C. Consider this example of what they have already done to us in the past.
My point is that we do need to deal with energy issues but simply blaming the oil companies is a shallow and tired argument. I list a series of questions throughout the rest of this posting on energy issues. I don’t agree with pursuing all of the answers to those questions but politicians will only be taken seriously when they show the courage to tackle many of the questions. Citizens also cannot complain about $3/gallon gas and then be stridently opposed to pursuing changes to the status quo. (And this posting is not about excusing unreasonable Big Government or Big Business actions such as this latest Tom DeLay story.)
An earlier posting entitled The Geopoliticization of World’s Oil & Gas Industry points out that there are geopolitical trends in energy that are beyond the power of the oil companies to control and adversely affect oil prices:
…it can’t be said that the free play of supply and demand ever set prices in the oil market. But we are now seeing an even more profound uncoupling of the oil industry from anything resembling the model characteristics of market economies. Governments rather than traditional commercial enterprises are increasingly taking control. And those governments often have interests quite hostile to ours…
Russia and China are using state-owned companies that are not bound to profit-maximize to achieve their long-term goal of weaving a web of relationships that will stand them in good stead in any diplomatic confrontation with the United States. Whether America can continue to rely on its private sector to provide us with comparable clout is no longer certain. After all, when companies that have to maximize profits compete with companies that seek to maximize national influence and power, the latter will engage in projects that the former simply cannot…
Note in that article how Saudi Arabia, Iran, Venezuela, China, and Russia are all using oil as a de-facto weapon in international relations.
Also beyond the control of the oil companies is the increasing demand for energy products by booming economies in China and India and how their increased demand has tightened the supply of oil available for the rest of the world – and further raise oil prices.
If oil supplies are so tight, is anyone willing to expand domestic oil exploration efforts or build new nuclear power plants?
The tightness on the supply side is further explained in this Washington Times editorial which notes the ongoing and increasing shortfall in refining capacity, with the resulting impact on prices:
The fact that gasoline prices have soared while crude oil prices have stabilized strongly suggests that today’s bottleneck in the evolving energy crisis has less to do with the total supply of crude oil and much more to do with current refining capacity. The petroleum reserve could be emptied; but if refinery capacity is not available to process the crude into gasoline, diesel, jet fuel, heating oil and other petroleum products, then the extra crude emptied onto the market will have little impact on the ultimate price of gasoline and other fuels…
U.S. refineries have become increasingly temperamental because they have been around for a very long time. In fact, we haven’t built a new refinery in more than 25 years. Yes, existing refineries have undergone significant expansion over the years as others have been shuttered, but many of them are more than 30 years old…
Beyond more frequent breakdowns and fires, America’s pre-Katrina refinery problem was further apparent from the rising level of refined petroleum products that have been imported in recent years. Since 1995, imported petroleum products have nearly doubled, rising from 1.6 million barrels per day to more than 3.1 million for the first half of 2005…
As long as America continues to consume 25 percent of the world’s oil, the least we can do is become self-sufficient in refining it.
Is anyone willing to build new refineries here in America?
Another article says:
We all know that the last new refinery in the US was built in 1976, and that many small refiners are forced to shutdown because capital improvements are not economic given RFG requirements.
This is partly due to NIMBY in the US, and is exacerbated by the patchwork RFG requirements and boutique gasolines: if there was a standard blend, we could simply buy more gas from refineries in places like the Virgin Islands, Dominican Republic, Jamaica and (in the near future) Cuba. We wouldn’t necessarily need new refineries on mainland US soil – but the boutique fuels make such projects more risky than they otherwise would be.
Reducing the number of blends required would ease short-term local spikes caused by localized refinery and pipeline outages (which will happen, random as they might be), and would encourage more refinery construction in the Caribbean, which would add some excess capacity (which is currently zero in the summer), thus dampening non-localized (nationwide) summer supply crunches.
Is anyone willing to build new refineries in their home state? Is anyone willing to eliminate boutique gasolines, which were often done in pursuit of lessening environmental emissions?
Yet another article states:
…major factors that determine pump prices, such as the cost of crude oil, are not under the direct control of Congress. Oil industry lobbyists have been pressing Congress to take action on one issue they claim Congress could have some influence over: the capacity of the United States to refine crude oil. Even if the cost of crude oil falls and other factors affecting gas prices improve, the U.S. cannot increase its ability to refine crude oil into gas that can fuel the nation’s cars, trucks, jets, and heaters, unless new refineries are built or existing ones are expanded. Industry representatives have been asking Congress to help increase the economic viability of the refining industry by changing and simplifying environmental regulations. Industry critics, however, argue that energy companies actually benefit from tight refinery capacity and that environmental regulations are not a major cause of current energy problems.
The United States currently has 149 refineries producing 16.9 billion barrels-84 percent of U.S. consumption- per day. No new refineries have been built since 1976, and over 170 have stopped operating since then. Many refineries are operating at over 95 percent capacity, which can be harmful to facilities and reduce the flexibility of the industry.The geography of refining facilities and transportation routes also poses challenges to energy supplies…
EIA has reported that tight refinery capacity contributes to price volatility, while its effects on actual prices are negligible. However, EIA does contend that U.S. refining capacity will need to be expanded in order to keep pace with growing gasoline demand. Refining industry representatives often argue that complicated, stringent environmental regulations and an inefficient permitting process imposed on refineries are largely responsible for the high cost of doing business, leading to tight refinery capacity.
Industry officials argue that the cost of refining could be lowered, and that increased refining capacity is necessary for the long-term energy independence of the U.S. They claim that simplifying environmental regulations will lead to an increase in the number of refineries that are built because of decrease in the cost of refining, which will ultimately lead to lower gas prices for consumers. If oil consumption continues to rise in the U.S., the nation will have to import increased amounts of expensive refined oil rather than refine it at home.
According to the American Petroleum Institute (API), a medium size refinery may need to comply with a half a million federal environmental requirements each year in addition to local and state regulations. There are at least fifty federal air programs that apply to refineries including the New Source Review of the Clean Air Act. Regulations affect emissions of pollutants such as nitrogen oxides, sulfur dioxide, particulates, volatile organic compounds, and benzene. API reports that in 2002, refinery operators had about $5.4 billion in environmental expenditures, defined as costs that would not have been incurred if environmental issues had not been considered by the industry. Industry lobbyists say that the complicated network of regulations, coupled with an extensive permitting process, causes potential investors to choose to put their money other places, and this is why no new refineries have been built in nearly thirty years…
…as noted by Senator Jeff Bingaman (DNM), there is no “silver bullet” that will solve the problem of high gas prices. There is no doubt that refining companies spend billions to comply with environmental regulations. Whether the regulations are the cause of tight refining capacity depends on who is consulted. If the cost of refining could somehow be reduced, it is uncertain whether savings of energy companies will necessarily fall back into the pockets of consumers.
Is anyone willing to lessen environmental requirements for US-based refineries?
While America dithers on adding refining capacity, Saudi Arabia is responding to market conditions:
…Saudi Arabia is responding to calls for refinery capacity increases with a multi-billion dollar investment programme. As well as its status as the biggest oil producer in the region, Saudi Arabia also ranks as the largest refiner in the Middle East and is a growing exporter of refined products particularly liquefied petroleum gas and naphtha. Multi-billion dollar refinery expansions will make this growing capacity increasingly important to global oil markets.
Apart from rising oil prices global energy markets are also facing a shortage of refined products due to an almost total embargo on new refineries in the US and Europe because of strict environmental rules. Pressures have increased due to the year on year increase in world demands for oil especially from China and India…
Over the last two decades, Saudi Aramco has developed from principally an oil and gas producer to an integrated company with significant refining, shipping and distribution assets. The process has been led through a diversification and integration of operations via strategic joint venture alliances with leading refining and marketing companies in a variety of markets.
As a result, the company is a major participant in four refining and marketing joint ventures located outside the Kingdom…
The article also talks about how China is the world’s second largest importer and Saudi Arabia is their main foreign oil supplier.
This graph highlights the tightness of worldwide refining capacity.
For a more indepth and complete report, go here for information on the demand for petroleum products, refining capacity, effects of product specifications. The report reinforces how worldwide demand is growing, there is a shift toward lighter products, concern over environmental considerations – especially sulfur – has spread worldwide, excess refining capacity worldwide has essentially disappeared and there will be a need for significant new refineries, building new refineries takes years, reduced sulfur requirements has increased competition and price premiums for sweet crude oil as well as changes to refinery processing equipment, and how tighter product specs in the US will make it more economic to ship oil products to the Far East instead of the US.
We cannot complain about prices or our lack of energy independence unless we have first agreed to make the hard choices necessary to increase our available supply of energy resources or gain our independence as a country.
Instead of simplistically blaming the oil industry, true leaders would engage in a reasoned and substantive public debate about the various alternatives so support can begin to coalesce around choices which represent an informed consensus for our society.
According to a letter sent out by the Campaign Committee to elect Bill Harsch, Harsch’s campaign for Attorney General is motivated by some very specific complaints against current AG Patrick Lynch…
Justice is not a privilege reserved for elite politicians, high-priced lobbyists, union bosses, and corporate fat cats. Justice is a right to which all Rhode Islanders are entitled.[Open full post]
Patrick Lynch’s tenure as Attorney General is a paltry record of justice delayed and justice denied. Just consider the facts. The health and safety of Rhode Island’s children are threatened by the weakest sex offender registration laws in the country, while Patrick uses his office as a billboard to proclaim the “wisdom” of Spider-Man. Our roadway safety is compromised by the highest rate of drunk driving incidents in the country, while as our chief law enforcement officer Patrick accepts thousands of dollars in campaign contributions from liquor interests. John Celona’s prosecution and the related investigation into corporate corruption in our halls of government is quietly left to the federal government, while as our constitutional guardian of justice Patrick takes no action against his former lobbying clients, such as CVS. Need we mention how Patrick has ignominiously bumbled and fumbled his way through the Station Nightclub Fire investigation?
The people of Rhode Island do not merely deserve better. We deserve equal justice!
We need Bill Harsch as our next Attorney General. Bill Harsch will bring a refreshing commitment to justice for all Rhode Islanders to the Attorney General’s office. Bill will not be beholden to any special interests, family relations, or political alliances. Bill is an experienced attorney and public servant whose dedication to preserving our rights and liberties by ensuring open, honest, and efficient government, and aggressively enforcing the criminal and civil laws of our state without regard for the race, wealth or political connections of the parties concerned, is unimpeachable.
We know Rhode Island can be a better place. We know justice can, must, and will be done. We know, with your help, Bill Harsch can win this election. Join us in this endeavor. Please support Bill Harsch for Attorney General.
A new editorial entitled The JFK Question: Sens. Specter and Feinstein impose an unconstitutional religious test has these words about the confirmation hearings for John Roberts:
…we appear to be traveling in the wrong direction.
Article VI of the Constitution prohibits a religious test from being imposed on nominees to public office. The clause was motivated by the experience of Catholics in the Maryland colony and Baptists in Virginia who had been the targets of Great Britain’s two Test Acts. These infamous laws of intolerance sought to prevent anyone who did not belong to the Church of England from holding public office. The Test Acts did not say that Catholics could not hold office; the bigotry was more subtle. Officials questioned would-be public servants to determine whether they believed in particular tenets of the Catholic faith.
While questioning John Roberts on Tuesday, Judiciary Committee chairman Arlen Specter asked: “Would you say that your views are the same as those expressed by John Kennedy when he was a candidate, and he spoke to the Greater Houston Ministerial Association in September of 1960: ‘I do not speak for my church on public matters, and the church does not speak for me.’ ”
Hours later, Sen. Dianne Feinstein of California made it worse: “In 1960, there was much debate about President John F. Kennedy’s faith and what role Catholicism would play in his administration. At that time, he pledged to address the issues of conscience out of a focus on the national interests, not out of adherence to the dictates of one’s religion. . . . My question is: Do you?”
How insulting. How offensive. How invidiously ignorant to question someone like Judge Roberts with such apparent presumption and disdain for the religion he practices. The JFK question is not just the camel’s nose of religious intolerance; it is the whole smelly camel.
Outrage over this line of questioning was ecumenical. In his new blog, Jewdicious.blogspot.com, Jeff Ballabon of the Center for Jewish Values posted this from the Senate’s hallways:I mean how grotesque is it that the Left feels free to indulge openly in half-century-old religious prejudice? This is not some crazy person standing outside with a rusty hanger–it is a United States Senator in her official capacity on national television. And this is no off-the-cuff blurt–these questions are excruciatingly researched and drafted and worded and reviewed and approved and choreographed by teams of liberal lawyers and advisors both on her staff and off. She–the senator who keeps harping at this hearing that her concern is the protection of people of faith–thinks an obnoxious question born of religious bigotry is legitimate because it was posed in 1960?
Non-Catholic Christians also spoke up. Wendy Wright of Concerned Women for America issued this statement:
It is precisely this kind of anti-Christian religious litmus test that many Americans find deeply offensive. . . . Feinstein is dipping her toe into the very ugly, muddy waters of religious bigotry. America’s Founding Fathers considered religious beliefs to be an asset, even essential to public officeholders. Sadly, Sen. Feinstein apparently believes the opposite of those wise men to whom we owe gratitude for our free and strong country.
Catholic leaders were stunned…Mr. Cella drew distinctions:
Of the two Senators remarks, Senator Feinstein’s were the most disturbing because she referred to the Catholic faith as ‘dictates.’ It shows her callous insensitivity and ignorance of the teachings of the Catholic faith…
The JFK question has no place in a Senate confirmation process. The Constitution says so…
…John Roberts will be only the 11th Catholic (out of 109 justices) to serve on the Supreme Court in its 215-year history. But his confirmation may be a historic first. It marks the introduction, on the record, of a constitutionally prohibited religious test for a Supreme Court nominee. We are going in the wrong direction.
This issue was also discussed in an earlier posting.
[Open full post]As an experiment of our own, AnchorRising will be liveblogging responses to tonight’s installment of “A Lively Experiment”, Rhode Island public television’s public affairs roundtable (Channel 36, 7:30 pm). This is not intended as a comprehensive review of the program, but as a supplement helping to add ideas and insights to the existing dialogue.
SHOW’s ON
They just said their good-bye to Steve Kass (Kass is leaving to become Don Carcieri’s communications director).
Topic 1: According to all 4 panelists, Steve Laffey has no chance. Because he is he is too conservative for the electorate (Lila Sapinsley) and becasue the electorate is too conservative for him (Dave Layman). As has been the case so far, most of the Laffey/Chafee discussion quickly becomes a Laffey discussion. Is this a good thing for an incumbent Senator?
Topic 2: Credit to Roger Begin; he wants tougher controls against voter fraud. Most panelists agree. Maureen Moakley has some reservations.
Topic 3: Roberts confirmation. Sapinsley, a Chafee Republican is strongly behind Roberts. Will Senator Chafee’s support be as strong?
Outrages:
Begin: We need a climate in this state that does not alienate successful people. This is Begin’s second major break with Dem CW. Is he planning to run for something? Or are you free to say what you want when you’re not running for anything?
Sapinsley: Pays tribute to Kass, but adds that Don Carcieri is too conservative!
Layman: Tribute to Kass.
Moakley: State legislature shouldn’t repeal gas tax. The country needs to find energy alternatives instead.
In “Katrina and the Media’s Demand for Racial Division,” I note that Hurricane Katrina seems to have undone some of the good that came from the evil of September 11 by rejuvenating racial divisiveness as a focus of conversation. Depressing. Sickening. Discouraging. And yet there’s hope if only we can find the patience to let the unimaginative among us think matters through… ideally without further catastrophes for precipitation.
[Open full post]Tom DeLay declares there is no fat left in the federal budget:
House Majority Leader Tom DeLay said yesterday that Republicans have done so well in cutting spending that he declared an “ongoing victory,” and said there is simply no fat left to cut in the federal budget.
Mr. DeLay was defending Republicans’ choice to borrow money and add to this year’s expected $331 billion deficit to pay for Hurricane Katrina relief. Some Republicans have said Congress should make cuts in other areas, but Mr. DeLay said that doesn’t seem possible.
“My answer to those that want to offset the spending is sure, bring me the offsets, I’ll be glad to do it. But nobody has been able to come up with any yet,” the Texas Republican told reporters at his weekly briefing.
Asked if that meant the government was running at peak efficiency, Mr. DeLay said, “Yes, after 11 years of Republican majority we’ve pared it down pretty good.”
Congress has passed two hurricane relief bills totaling $62.3 billion, all of which will be added to the deficit…
Some Republicans wanted to offer an amendment, including cuts, to pay for hurricane spending but were denied the chance under procedural rules.
“This is hardly a well-oiled machine,” said Rep. Jeff Flake, Arizona Republican. “There’s a lot of fat to trim. … I wonder if we’ve been serving in the same Congress.”
American Conservative Union Chairman David A. Keene said federal spending already was “spiraling out of control” before Katrina, and conservatives are “increasingly losing faith in the president and the Republican leadership in Congress.”
“Excluding military and homeland security, American taxpayers have witnessed the largest spending increase under any preceding president and Congress since the Great Depression,” he said…
DeLay and his gang are drinking some serious Kool-Aid that only gets served up to people who spend too much time in Washington, D.C. and, thereby, lose touch with economic reality.
This posting extends the arguments made here and here.
How can these people talk and keep a straight face?
Here’s Sheldon Whitehouse’s response to the Brown University Senate preference poll…
Meanwhile, yesterday, the Whitehouse camp chose to focus on Chafee’s 3-point “downslide,” since the last Brown poll in June had him leading Democrat Whitehouse with 41 percent of the vote, and now it is 38 percent.Attention Whitehouse Campaign: The same poll shows a 10 to 11 point drop in support for your own efforts. Do you think that a 10 point drop is more or less significant than a 3 point one? (And wouldn’t that have been something worth pointing out in the Projo article?) [Open full post]
There are numerous aspects of Steve Laffey’s personal life history that many of us can relate to and all of us can respect. He is a living embodiment of the American Dream, achieving great things through the liberty found in America combined with getting a great education and then working hard.
If you read his announcement speech from last week, how can anyone not respond favorably to his working numerous jobs as a kid, earning a scholarship to a fine college like Bowdoin and becoming the first member of his family to go to college, attending a great business school at Harvard, and working his way up to be President of Morgan Keegan while still in his 30’s? All in all, it is a wonderful human interest story.
No less impressive is what he has started to accomplish in Cranston. He took a city on the verge of bankruptcy and led a meaningful change effort by publicly telling the truth about numerous independently verifiable problems, such as the crossing guard fiasco. He did step on the toes of some powerful interest groups and helped elevate those issues to statewide visibility. He was bold and many of us have admired his actions.
Now, I previously wrote why I think so little of Senator Chafee and the state Republican party. As a Republican myself, it would be a kind understatement to say I find many of the party’s leadership and their actions to be unimaginative and disappointing. I find it easy to respect a principled liberal, even if I thoroughly disagree with their policy preferences. What I don’t respect is vacillation and that is Senator Chafee’s trademark on a number of key issues.
That posting also stated that I thought it was a mistake – for different reasons than the Establishment has pushed – for Laffey to run against Chafee for the U.S. Senate seat. I thought it was a mistake for two reasons.
First, while he has started a turnaround in Cranston, the job is not complete. As a business executive myself who has led 6 successful turnarounds over the years, I believe the turnaround in Cranston will only be complete when there are significant and more permanent structural changes to Cranston’s financial future. Laffey deserves huge credit for stabilizing a wildly unstable mess and saving the town from bankruptcy. But can anyone say the turnaround is truly complete? Are the public sector union contracts across all aspects of Cranston materially different from when he first took office – so the past cannot repeat itself when some spineless politicians take his place? Are those contracts sufficiently different now so that the initial property tax increases he imposed can be rolled back? I don’t think so and that is why I thought one serious option he could have acted on was to stay and finish the turnaround. At the same time, I can also understand why his ambition might drive him to think bigger than Cranston.
Second, he could have thought bigger than Cranston by running for Treasurer. That would have played to his work experience and allowed him to focus on the brewing public pension financial disaster at both the state and national level. I lived in California when Jerry Brown became Secretary of State in the post-Watergate world of 1974 and turned what had been a sleepy position into one with national visibility. He was governor four years later in 1978 and a presidential candidate by 1980.
That being said, now that Laffey has opted for the U.S. Senate race, I read his announcement speech with great anticipation.
At first I was not disappointed. His speech hit a number of highly relevant and hot issues – such as outrageous public sector union demands, corporate welfare for the sugar industry, the excessive highway and energy bills, and a complete lack of spending restraint in general – that I have written about over the last year and are either linked together in a recent posting entitled Rancid Pork Leaves a Bad Taste in Your Mouth or contained in postings entitled Has the GOP Lost Its Soul? and Economics 101: Never Underestimate the Incentive Power of Marginal Tax Cuts.
We do need a more vigorous public debate about these issues, all of which center on the core question of what role government should play in our society – including how the size of government grows ever larger and, therefore, more subject to capture by special interests due to its fundamentally misguided structural incentives.
And I thought the Laffey campaign slogan of “The smallest state in the Union will have the strongest voice in Washington” was wonderfully clever.
But I found key portions of his speech to be troubling. Laffey’s speech contains words that no informed or business savvy person would say – unless he was pandering for votes. That possibility is most disappointing because it suggests opportunism – not principled behavior – is driving the Laffey campaign.
[Full disclosure: I have worked in the healthcare industry since 1983, spending most of my time since 1985 working in venture capital-financed startup companies. I worked briefly in the energy industry during 1981-1983, with a 1981 summer job in Saudi Arabia working for Aramco and then worked for ARCO in the USA during the subsequent two years.]
Here are the healthcare-related words from Laffey’s speech that bothered me:
The senior citizens of Rhode Island are paying twice the price for prescription drugs that seniors pay in Canada for the exact same prescriptions. And yet, our seniors are banned from buying cheaper medicine in Canada and Medicare is prohibited from negotiating for cheaper drugs through group buying. Why? Because the big drug companies have a financial strangehold on the politicians in Washington keeping prices high…while 2/3 of our seniors, like my parents, cannot afford their medicine because they depend on social security checks as their primary source of income…
In 2006, we need to set our own concrete goals for progressive ideas to come to fruition…ideas like offering Americans lower prices on prescription drugs as low as those offered to the rest of the world…
Someone needs to stand up and fight when the drug companies won’t let our seniors buy their prescriptions from Canada at a discount price…
Those words are nothing less than pure demagoguery. See this separate posting for specific counter arguments.
Here are the energy-related comments from Laffey’s speech that bothered me:
Look at what’s happening with gas prices and energy policy. The car companies have the technology today to make cars with double the gas mileage, but they won’t do it. So America stays dependent on Saudi Arabian oil, with tragic consequences when we don’t have to. We have the technology to design alternative energy solutions today. What we lack is the political will to do it…
Our lack of an energy policy today is a crisis on par with these challeges America has faced over the last seven decades…
Someone needs to stand up and fight when the oil companies get huge subsidies while we do nothing to reduce our dependence on foreign oil and we’re stuck paying more than $3.00 for a gallon of gasoline…
See this separate posting for specific comments on energy issues.
Laffey’s comments fail to address the complete set of issues that matter to working people in Rhode Island in a balanced, factual manner.
Here is my point of view:
Corporate welfare programs lobbied for by Big Business are nothing more than a hidden tax on working people that benefits only the few and powerful. Such taxes are unfair and unjust. But, as bad as they are, it would be unreasonable to focus just on the corporate welfare programs.
The ever-increasing regulatory burdens imposed by Big Government are at least as big a problem as they perpetuate the power of unelected and unaccountable bureaucrats who impose unilateral costs on companies. Such burdens then show up as some combination of higher product prices to consumers or lost jobs due to the stifling of private sector innovation – both of which represent additional hidden taxes paid for by working people. Such taxes are also unfair and unjust.
The Establishment, consisting of Big Business and Big Government, has an incentive to propagate the growth of government. Why? Because such growth leads to more assets to tap into or control for their benefit. It provides the Big Business lobby with an incentive to pursue more corporate welfare programs and the Big Government lobby with an incentive to pursue more government regulation of both our economic and personal lives. All of which leaves the working people of America with less freedom: less financial freedom due to higher taxes and higher prices plus fewer opportunities to live the American Dream due to lower economic growth.
Unfortunately, Laffey’s words have confirmed that the Laffey vs. Chafee race is not a battle between Principles and the Establishment. With little use for the philosophically unmoored Establishment and its utilitarian focus on maintaining power, my greatest wish continues to be for a leader who, driven by empirically-based principles, stands up and tells the truth. Laffey’s comments, particularly about the drug industry, don’t tell the truth and amount to nothing more than an unprincipled pandering for votes. He is a smart enough man to know better and that means his ego is not under control. His words, if implemented, would lead to nothing less than a long-term policy fiasco.
But, even more importantly, this isn’t just about Laffey and his individual candidacy. My larger concern is that the failing status quo of the Establishment will become even more entrenched should they successfully swat down his candidacy – and his words have given them further ammunition to do just that. That further entrenchment will only magnify over time the hidden costs paid for solely by the working people of Rhode Island, adversely impacting the ability of many to realize the American Dream.
So all of us are still waiting for the first U.S. Senate candidate – from either party – to show the will to stand up for the hard-working taxpayers across the state by truly challenging the status quo of the Establishment.
John Fund has written a powerful editorial entitled Hey, Big Spender: FDR and Truman made cuts when crises demanded it. Why won’t Bush?. Here are some highlights:
With almost no debate and with precious few provisions for oversight, Congress has passed President Bush’s mammoth $62 billion request for emergency Katrina relief. House Speaker Denny Hastert says the final total will “probably [be] under the cost of the highway bill” that Congress passed last month with a pricetag of $286.4 billion.
Despite such sums, there are few calls for offsetting cuts in other programs, apart from antiwar opportunists who see in Katrina a chance to undermine the Iraq effort. Last week Sen. Tom Coburn of Oklahoma asked White House Budget Director Josh Bolten if he planned to continue to pursue budget reductions the administration had already proposed in its January budget. Mr. Bolten said he “didn’t have time” to worry about that.
All this leaves Mr. Coburn and other budget hawks wondering what has happened to what might be called “the Republican wing of the Republican Party.” “The president could exercise leadership by insisting that we set priorities and offset the cost of Katrina relief by making changes elsewhere,” says Mr. Coburn. “Sadly, we don’t have that leadership.”…
Families hit by any disaster realize they have to reassess their situation and change their circumstances. There was a time when the nation acted the same way. After Pearl Harbor, the country sprang into action to win the war against Japan and Germany. But it realized that the old way of doing things wouldn’t do. Dramatic changes in government policy resulted.
After Pearl Harbor, it’s generally known that Franklin D. Roosevelt dramatically expanded the bite of the federal income tax so that, in the words of one tax professor, it “spread from the country club…down to the railroad tracks and then over to the other side of the tracks.”
Less well known is FDR’s decision to slash nondefense spending by over 20% between 1942 and 1944. Among the programs that were eliminated entirely were FDR’s own prized creations. By 1944, such pillars of the New Deal as the Civilian Conservation Corps, the National Youth Administration and the Work Projects Administration had been abolished. In 1939 those three programs had represented one-eighth of the federal budget. Roosevelt and the Congress of his day knew what to do in an emergency.
Indeed, FDR chose to begin the reordering of budget priorities long before Pearl Harbor. In October 1939, one month after Hitler invaded Poland, Roosevelt wrote Harold Smith, his budget director, ordering him to hold budgets for all government programs “at the present level and below, if possible.” The next month he told Smith that “the administration will not undertake any new activities, even if laudable ones.” He told reporters the next year that his policy would be to cut nonmilitary programs to the bone. He kept his word. Between 1939 and 1942, spending for nondefense programs was cut by 22%. Everyone realized that no matter how popular or politically entrenched a program, the nation’s priorities had to change.
Harry S. Truman acted with equal decisiveness after the Korean War began in 1950. In just one year, Truman and a Democratic Congress cut nonmilitary spending by 28%.
But the attitude of the nation’s political leaders changed after the beginning of the Great Society in the 1960s. Lyndon B. Johnson told advisers he could deliver “both guns and butter” and proceeded to avoid any hard choices between his favored domestic programs and the Vietnam War. Between 1965 and 1974, the fighting in Vietnam led to a 57% hike in defense spending. During the same period of time, nondefense spending also surged, nearly tripling over the same period.
Mitch Daniels, Mr. Bush’s former budget director and now the governor of Indiana, says, “We rightly remember the dismal consequences, both economic and fiscal, of the refusal to make hard choices back then.” They included inflation, which led to by foolhardy wage-and-price controls. The 1970s became a decade of economic stagnation under both Republican and Democratic presidents.
Mr. Daniels proposed the country make hard choices after the 9/11 attacks, urging spending restraint. In a speech in 2001, he noted that “to the average citizen, shifting resources when priorities change makes simple common sense. When the new priority is the survival of Americans, the cause is even more obvious, a straightforward matter of battle stations vs. business-as-usual.” But Mr. Daniels was thwarted by both a White House and Congress who paid lip service to spending restraint but never practiced it. Total federal spending is now up 20% in real terms since 2001…
…I fear that the White House and Congress have decided instead to throw money at the ravaged Gulf Coast and ignore the example of FDR and Truman…
This posting builds on an earlier posting entitled Has the GOP Lost Its Soul? with its many links to other postings.
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