Friday, March 23, 2012
Random ruminations from your resident curmudgeon...
The Obama administration has a fixation on green energy. While there is nothing wrong with attempting to develop alternative energy sources, the efforts at developing these alternatives by this administration have amounted to little more than paying off campaign donors through massive subsidies of our tax dollars. Solyndra, Beacon Power, and EnerDel are just three of twenty companies that have received massive federal grants or guarantees that have either filed bankruptcy or are in serious financial trouble. All of these companies have a common thread: they are controlled or have deep ties to campaign donors to Obama's election bid for the presidency. The latest company to receive federal largesse- read: your tax dollars- is Solazyme, a San Francisco based company that is trying to turn algae into fuel for the Navy. Solazyme received $25 million in federal grants and contracts and is poised to receive even more dollars as part of Obama's effort to promote green energy. Interestingly, one of the board members of Solazyme is T.J. Glauthier, a former Deputy Secretary and Chief Operating Officer of the Department of Energy under Bill Clinton. Glauthier is also on the board of EnerNOC, Inc., a company that provides demand-response services to electric utility companies. EnerNOC won a $10 million contract from the DOE in 2010 despite being underbid by several competitors. Glauthier also served on the board of SunRun, a solar financing company that received a $6.7 million federal grant in 2010. By the way, Glauthier is a donor to numerous Democratic candidates and the Obama campaign for President. Does it make sense for Solazyme to supply green fuel to the Navy. Consider this: standard jet fuel costs the Navy $4 per gallon. Solazyme green fuel will cost the Navy $15 per gallon. Talk about fuel efficiency! Remember, as I have always told you, follow the money.
They say you should always keep your enemies closest to you. I guess that is why people get married.
The economy is showing some signs of life, with a projected growth rate of 2.3% in GDP for 2012. While that is nothing to brag about, at least it is growth. The real issue for the economy- and all of us as individuals- is the direction of the economy AFTER the election. What happens if President Obama is re-elected? President Obama has indicated that he intends to raise taxes. The Congressional Budget Office (CBO) reviewed the effect of the proposed tax hikes in a report titled Budget and Economic Outlook: Fiscal Years 2011-2021. The CBO stated that given likely policy outcomes (meaning the tax increases go into effect) "production and employment are likely to stay well below the economy's potential for a number of years." The CBO estimates that U.S. economy will grow at best 2.3% throughout the next decade even under the best of circumstances. Private economists are not as optimistic. Their view of raising taxes is that GDP growth will be 1%. Raising taxes by 1% lowers GDP by 3%, according to Christine Romer, Obama's former economic adviser. The Heritage Foundation has estimated that the effects of Obama's proposed tax hikes will cost the economy an average of 799,000 jobs per year and cut GDP by $1 TRILLION over the following decade. Although Obama and the Democrats want to tax "the rich", the effect of increasing taxes transfers more power to the government, crimps economic growth, and is painful to all of us. Just something to think about as we hear the rhetoric coming out of Washington.
I went to the gym and hit the treadmill for 20 minutes. Tomorrow, I am going to try to run on it.
In a March 7 news conference, President Obama declared, "We have 2 percent of the world's oil reserves, and we use 20 percent. What that means is, as much as we are doing to increase oil production, we're not going to be able to just drill our way out of the problem of high gas prices." Not exactly. According to a 2006 Department of Energy report, the U.S. has access to 400 billion barrels of crude oil that could be recovered using existing drilling technologies. A Rand Corporation study estimated there are an additional 800 billion barrels of recoverable oil in shale in Wyoming and neighboring states. Why don't oil companies just go and get this oil? Because the federal government blocks them from doing so. Much of the recoverable oil is on federal land, and obtaining permits to drill on these lands is an impossibility. The efforts to extract OUR oil is being blocked by our elected leaders and bureaucrats in Washington. While we continue to pay higher prices at the pump, Washington dithers, to our economic detriment. It is time for Washington to reverse course and work- for once- in the best interest of the citizens of this country.
I just put some clean laundry on my folding chair. So far, it's not working.
And that, my friends, is my view.