Koch Industries

The following article by U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, including the Wichita metropolitan area, explains — yet again — how ridiculous it is for President Barack Obama and others to attack Wichita-based Koch Industries on the Keystone XL pipeline issue. Pompeo explains that Koch has no financial interest in the pipeline, what “intervenor” status means, and who really stands to benefit if the pipeline is not built. Pompeo hints at who it is, but I’ll be more direct: Warren Buffet. A news article that explains how Warren will personally benefit from blocking the Keystone XL pipeline is Buffett’s Burlington Northern Among Pipeline Winners.

The Democrats continue unjustified attacks on taxpayers and job creators

By U.S. Representative Mike Pompeo

The President and his allies, including those in Congress, have shown what a nasty, personal, and abusive re-election campaign we are about to experience. A recent sideshow in my committee in Congress provides yet another clear and shocking example.

A recent letter from Representatives Henry Waxman and Bobby Rush, both Democrats, demanded a live witness and testimony from “a representative of Koch Industries” at a hearing on the Keystone XL pipeline, scheduled to be held just two days later. The frivolous nature of the request is proven by that plainly unreasonable deadline. But the partisan tactics go far beyond that.

Even if Koch Industries had a financial interest in the Keystone XL pipeline, what possibly could be wrong with that? Perhaps more importantly, under what circumstances would such an interest be worthy of a congressional inquisition? Charles Koch and David Koch, co-owners of Koch Industries, are citizens, taxpayers, entrepreneurs, and employers. Their companies employ nearly 50,000 people in the U.S. alone. The company maintains its headquarters in the district I represent, employing 2,600 great Kansans. The company and its employees are among the most hard-working and generous in our community. The company has never been bailed out by the American taxpayers. And given that Americans are desperate for jobs, we should be begging entrepreneurs to look for new opportunities, not attacking them simply because their companies might make a profit.

The facts are clear: Koch Industries does not have a financial stake in the pipeline — why, therefore, should its officials become part of the all-too-familiar congressional committee circus? The facts are straightforward and a matter of public record. Koch Industries has repeatedly stated that it does not have a financial stake in the pipeline: It does not own the pipeline, it has no role in the pipeline’s design, it is not one of the shippers who have signed contracts to use the pipeline, and it will not build the pipeline.

Democrats dug deep for some excuse to attempt to haul Koch officials in for a public flogging. What did they find? A 2009 attempt by a Koch subsidiary to obtain “intervenor” status in a Canadian legal proceeding, in order to track the approval process for the pipeline. Wishing to know the fate of the pipeline, and having an interest in whether or not the pipeline is built — as thousands of frustrated American workers and consumers do — obviously does not amount to a financial interest in the pipeline’s construction. Indeed, the Sierra Club of Canada applied to “intervene” in the same proceeding. Notably, no one has alleged that Congress should investigate the Sierra Club’s interest in the pipeline project. So the “intervenor” ploy is a patent sham, and provides no basis for harassing Koch Industries.

It is also difficult to believe that Members of Congress really think that a particular company’s asserted financial interest in a project is, or should be, relevant to the merits of that project. It becomes still harder to believe, given the decision to target only Koch Industries and the Kochs — and no other company or individual. Doubtless many companies and individuals stand to benefit, or to be harmed, depending on whether President Obama’s decision to delay the pipeline is allowed to stand. News accounts have mentioned a number of those who might reap financial windfalls from the pipeline’s demise, including at least one of President Obama’s most prominent supporters and donors. (Hint: His secretary was the President’s highly visible prop at the State of the Union address.) But two congressmen directed their attention exclusively toward the Kochs, who — as successful businessmen and outspoken critics of the President’s job-killing, statist programs — have been targets for the Administration and its allies for many months.

Indeed, the very first line of President Obama’s very first campaign advertisement for the 2012 election attacks the Koch brothers. And liberal blogs and publications have published countless slanted pieces on Koch Industries, heavy on innuendo and light on facts. The Obama Administration has long been criticized for maintaining a de facto “enemies list” of its perceived political opponents, whether they are respected Supreme Court Justices, disfavored reporters, or private citizens who just want to keep their own doctors. The Democrats’ obsession with the Kochs as a political target is, indeed, additional evidence of a truly Nixonian approach to politics. That the Obama Administration and its allies use private citizens as symbols to be attacked and vilified is both unfair and deeply threatening to our civic life and the rule of law.

America deserves better from its elected officials. To be sure, the serious challenges facing the country often generate heated discussion and disagreement. But there is no justification for Democrats who want to haul American citizens before Congress for the exclusive purpose of political abuse. Congressional hearings should not be hijacked by naked political opportunism; legitimate business creators should not be vilified; and Congress should focus on the many policy questions before it, rather than wasting time in an illegitimate pursuit of the Administration’s perceived “enemies.”

Mr. Pompeo represents the Fourth Congressional District of Kansas. He serves on the House Committee on Energy and Commerce, as well as the Subcommittee on Energy and Power. A version of this article appeared at Politico.

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On Koch brothers, Obama channels Nixon

by Bob Weeks on February 1, 2012

“Richard Nixon maintained an ‘enemies list’ that singled out private citizens for investigation and abuse by agencies of government, including the Internal Revenue Service. When that was revealed, the press and public were outraged. That conduct will forever remain one of the indelible stains on Nixon’s presidency and legacy.”

Now President Barack Obama is running the same type of campaign against Charles G. Koch and David H. Koch, who are principals of Wichita-based Koch Industries.

This is the conclusion of Theodore B. Olson, former solicitor general of the United States. He presently represents Koch Industries. His op-ed in today’s Wall Street Journal (Obama’s Enemies List) lays out the harmful effects of the president’s campaign against the Koch brothers.

Olson calls for all Americans to respond and oppose the president’s actions, writing “Whoever may be the victim of such abuse of governmental authority, the press and public almost invariably unify with indignation against it. If a journalist, labor-union leader or community organizer on the left can be targeted today, an academic or business person on the right can be the target tomorrow. If we fail to stand up against oppression from one direction, we abdicate the moral authority to challenge it when it comes from another.”

Why is Obama so opposed to Charles and David Koch? For one thing, they run a successful business that provides over 50,000 private-sector jobs. For some reason, that goes against the president’s grain. He’d rather have 50,000 government jobs, or at least jobs in corporations that cower in response to his bullying tactics. The Koch brothers, thankfully, don’t.

Another reason must be the unwavering support for the causes of economic freedom, free markets, and limited government that Charles and David Koch have advocated for over four decades. See Charles G. Koch: Why Koch Industries is speaking out.

Obama’s Enemies List

David and Charles Koch have been the targets of a campaign of vituperation and assault, choreographed from the very top.
By Theodore B. Olson

How would you feel if aides to the president of the United States singled you out by name for attack, and if you were featured prominently in the president’s re-election campaign as an enemy of the people?

What would you do if the White House engaged in derogatory speculative innuendo about the integrity of your tax returns? Suppose also that the president’s surrogates and allies in the media regularly attacked you, sullied your reputation and questioned your integrity. On top of all of that, what if a leading member of the president’s party in Congress demanded your appearance before a congressional committee this week so that you could be interrogated about the Keystone XL oil pipeline project in which you have repeatedly — and accurately — stated that you have no involvement?

Consider that all this is happening because you have been selected as an attractive political punching bag by the president’s re-election team. This is precisely what has happened to Charles and David Koch, even though they are private citizens, and neither is a candidate for the president’s or anyone else’s office.

Continue reading at The Wall Street Journal (subscription not required).

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For those who pay attention, it is astonishing to witness the non-stop, over-the-top efforts of liberal mainstream media like the New York Times to discredit Wichita-based Koch Industries and its principals Charles G. Koch and David H. Koch. The Koch brothers have been non-stop advocates for limited government, free markets, and economic freedom for many years, and this is something the political left just can’t stand. Following is a letter from Melissa Cohlmia of Koch Companies Public Sector, LLC to Arthur S. Brisbane, the Times’ public editor, or readers’ representative. The letter was originally published at KochFacts.com.

Mr. Arthur Brisbane
Public Editor
New York Times

Dear Mr. Brisbane:

We have been observing coverage about us in the Times over the last year that appears in many cases driven by a political agenda and in others so gratuitous that it stretches the bounds of newsworthiness to absurd lengths. You will recall that we brought a number of these specifics to your attention last April and May. Since that time, there have been more than 50 articles in the paper critical of Koch (zero that are positive) written by some 41 different Times authors. You were gracious to offer a continued dialogue on the matter and two such pieces that appeared over the weekend prompt us to reach out again.

The first, by art critic Anthony Tommasini, complained about our support for the arts, compared us to the deposed King Ludwig of 19th-Century Bavaria and the Renaissance Medicis and therefore urged that the situation “would seem to make the performing arts a natural focus for the Occupy activists.”

The second piece, appearing in the “Ethicist” column by Ariel Kaminer, applauded a reader for keeping her granddaughter away from a performance of “The Nutcracker” because we donated to the production. “Tolerance has its limits” Ms. Kaminer explained, and “Tchaikovsky makes strange bedfellows.”

In other words, Times writers apparently must perform contortions so bent-over-backward that it involves medieval references and politicizing children’s Christmas ballets, all to squeeze a disparagement about Koch into their copy. My question to you is: if the paper is going to be indulging a hostile approach that is this far-fetched, then don’t we deserve some explanation from editors for the sheer frequency and the underlying purpose?

Readers themselves might wonder if they’ll soon read moral circumspection about the many performing arts or left-leaning institutions supported by the Sulzberger family, which owns the paper. Doubtful, it would seem. (And never mind at all the Sulzberger family’s role in building the New York Stock Exchange, stifling the Times’ unions, giving golden parachutes to underperforming executives, and other such activity the paper lately characterizes as “the one percent”).

When we last interacted, you explained that we could “expect the Times to continue to cover Kochs’ activities rather closely, as your organizations’ activities have acquired quite a high profile.” I’m troubled that this is a kind of circular logic — the Times is covering Koch because Koch is being covered — and tells readers little about the thinking and motives of the Times’ apparent fixation with us.

Let me reiterate that these are far from the only such examples. In October, a Times dining critic commenting about what protestors prefer to eat wrote, “Unlike the Tea Party, funded as it is by wealthy reactionaries like the Koch Brothers, ‘Occupy’ is sustained by energy, frustration … pizza and apples paid for by supporters or donated by farmers.” In November, one of your columnists denounced where we choose to live, saying, “even when oligarchs clearly get their income from heartland, red-state sources, where do they live? OK, one of the Koch brothers still lives in Wichita; but the other lives in New York.” And though the group Americans for Prosperity has tens of thousands of members, supporters, and co-founders, it is routinely described specifically as a project of ours.

As one of your predecessors once pointed out, the Times is a liberal newspaper. We understand that and have been documenting the often irrational and cynical ways in which left-wing groups have targeted us. But if the Times is going to take part in that bandwagon and go to lengths so far afield from legitimate news coverage, then it ought to have the integrity to acknowledge it.

We would be grateful if you could look into the examples we’ve cited and the larger point. We look forward to hearing your thoughts.

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Ethanol subsidy. According to Wichita Eagle reporting, the head of an ethanol trade group says the subsidy for ethanol will likely disappear after January 1, but the change might be good for the industry. It has to do with image, said the speaker. The subsidy the speaker mentioned is in the form of a tax credit, and is one of the programs that would be eliminated by proposed legislation introduced by U.S. Rep. Mike Pompeo of Wichita. His bill would end tax credits for all forms of energy. … The production tax credit is just one of three government interventions that benefit ethanol. Besides the tax credit, we should also ask for the end of mandates for ethanol use, and an end to the tariff on imported ethanol. We also need to ask for the end of interventions aimed at benefiting the cellulosic ethanol industry, like the $132.4 million loan guarantee for such a plant in Kansas.

Cronyist Warren Buffet. “Warren Buffett’s MidAmerican Energy Holdings company has agreed to buy a giant, 550-megawatt photovoltaic farm currently under construction in San Luis Obispo County for $2 billion, giving a huge boost to the solar industry that could spur investment by other major players.” Concludes John Hinderaker of Powerline Blog: “Meanwhile, I am warming up to the idea that Warren Buffett should pay more in taxes. I would settle for just getting his federal subsidies back.” More at Crony Capitalism, Episode #…What Are We Up To Now?

Natural gas subsidies for Pickens. While on the topic of energy and harmful subsidies, Timothy P. Carney of the Washington Examiner provides an update on H.R. 1380: New Alternative Transportation to Give Americans Solutions Act of 2011, or NATGAS act. The bill provides a variety of subsidies, implemented through tax credits, to producers and users of natural gas. The goal is to promote the use of natural gas as the fuel the nation uses for transportation. … Carney explains the personal financial of the bill’s backer, energy investor T. Boone Pickens. He holds options on 15 million shares of a company known as Clean Energy Fuels. These options expire on December 28th, and their value would skyrocket if the NATGAS bill can pass by then. … Carney notes the opposition to this bill from Wichita-based Koch Industries. As a large producer of fertilizer, the price of a key input — natural gas — would likely increase if NATGAS passes. But we all ought to worry about increases in the price of fertilizer, which would like lead to higher grocery prices. These price increases harm low income families hardest.

Planning grant to be topic of meeting. On Monday December 12th Americans for Prosperity Foundation will feature Sedgwick County Commission Member Richard Ranzau speaking on the topic “The $1.5 million dollar Regional Economic Area Partnership (REAP) HUD Sustainable Development Planning Grant: Economic Development or Economic Destruction?” Some background on this item may be found at Sedgwick County considers a planning grant. This free event is from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

Tilting at wind turbines. “Switching from conventional sources of electricity like coal and natural gas to renewables like wind and solar, our elected leaders tell us, will reduce pollution, advance renewable technology and spark a green jobs revolution. Is renewable energy really a green pathway to a brighter economic future? Or is it nothing more than a heavily subsidized impossible dream?” Reason TV takes a look at wind energy in the video Tilting at Wind Turbines: Should the Government Subsidize Renewable Energy? Locally, Wichita Mayor Carl Brewer promotes manufacturing of wind power machinery as good for Wichita’s economic development, and Kansas Governor Sam Brownback supports renewable energy standards for Kansas.

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Standing up for fundamental liberties. A particularly troubling objection that those who advocate for liberty face is that we want to deny freedom and liberty to others — as if the quantity of liberty is fixed, and I can have more only if you have less. This is the type of false accusation that leftists make against Wichita-based Koch Industries. In this excerpt from the company’s Koch Facts page, the work that Koch does to advance liberty for everyone is explained: “Throughout Koch’s long-standing record of public advocacy, we have been strong and steadfast supporters of individual liberties and freedoms. These values permeate all that we do as a company and every part of our public outreach. We help fund public and school-based educational programs across the country in an effort to increase citizens’ understanding of the relationship between economic liberty and democracy. We support voter registration efforts in the communities where we live and work, and for our tens of thousands of employees. We support civil rights programs through numerous organizations. We also help build entrepreneurial initiatives that foster the fundamental reality that economic freedom creates prosperity for everyone, especially the poor, in our society. … For many years, we have directly contributed to Urban League, Andrew Young Foundation, Martin Luther King Center, Latin American Association, 100 Black Men, Morehouse College, United Negro College Fund, and dozens of other worthy organizations pursuing similar civic missions. We founded and continue to support Youth Entrepreneurs in schools throughout Kansas, Missouri and Atlanta. This year-long course teaches high school students from all walks of life the business and entrepreneurial skills needed to help them prosper and become contributing members of society. … Many of the attacks against Koch in recent months are cynical posturing at best and deliberate falsehoods divorced from reality at worst. For proof, look no further than the false claim from groups like SEIU that we are somehow trying to suppress the right to vote. … Our freedom as individual Americans relies on the ability to hold the government accountable through the direct exercise of voting rights and the exercise of other individual liberties. We are unwavering in our commitment to these rights and we stand firmly behind our track record in defending them.”

Private property saved the Pilgrims. At Thanksgiving time, the Economic Freedom Project reminds us how an early American experiment with socialism failed miserably, and how private property rights and free enterprise saved the day. See So, Is That My Corn or Yours?

Did Grover Norquist derail the Supercommittee? To hear some analysts, you’d think that Grover Norquist of Americans for Tax Reform is responsible for no deal emerging from the United States Congress Joint Select Committee on Deficit Reduction (the “Supercommittee”). It’s ATR’s pledge to not increase taxes that is blamed, so they say. All members of the Kansas Congressional Delegation except Kevin Yoder signed the pledge. Paul Jacob is thankful for Norquist and that a tax increase was averted.

Drive-through petition signing. From Americans for Prosperity, Kansas: The Wichita area chapter of the free-market grassroots group Americans for Prosperity (AFP) and other local groups have been working to collect signatures for a petition to put the hotel guest tax ordinance to a public vote. Volunteers will be collecting signatures this weekend during a “drive-thru” petition signing Friday, Saturday and Sunday at two Wichita hotels. Wichita activists are continuing their efforts to collect signatures for a petition to put the hotel guest tax ordinance to a public vote. Registered voters simply drive up to the listed locations and volunteers will bring a petition out to them. The times are from 9:00 am to 5:00 pm Friday and Saturday (Nov. 25 and 26), and 12:00 noon to 5:00 pm Sunday (Nov. 27). The locations are Wichita Inn East (8220 E. Kellogg Dr.) and Best Western Airport Inn (6815 W. Kellogg/US-54).

Job creation. Governments often fall prey to the job creation trap — that the goal of economic development is to create jobs. We say this today in Wichita where several labor union leaders appeared before the Sedgwick County Commission to encourage the county to grant a subsidy to Bombardier Learjet. The labor leaders, naturally, pleaded for jobs. To them, and to most of our political and bureaucratic leaders, the more jobs created, the better. Our business leaders don’t do any better understanding the difference between capitalism and business. In his introduction to the recently-published book The Morality of Capitalism, Tom G. Palmer writes: “Capitalism is not just about building stuff , in the way that socialist dictators used to exhort their slaves to ‘Build the Future!’ Capitalism is about creating value, not merely working hard or making sacrifices or being busy. Those who fail to understand capitalism are quick to support ‘job creation’ programs to create work. They have misunderstood the point of work, much less the point of capitalism. In a much-quoted story, the economist Milton Friedman was shown the construction on a massive new canal in Asia. When he noted that it was odd that the workers were moving huge amounts of earth and rock with small shovels, rather than earth moving equipment, he was told ‘You don’t understand; this is a jobs program.’ His response: ‘Oh, I thought you were trying to build a canal. If you’re seeking to create jobs, why didn’t you issue them spoons, rather than shovels?” … After describing crony capitalism — the type practiced in Wichita, Sedgwick County, and Kansas, with deals like the complete funding by taxpayers of the Bombardier LearJet facility, Palmer explains: “Such corrupt cronyism shouldn’t be confused with ‘free-market capitalism,’ which refers to a system of production and exchange that is based on the rule of law, on equality of rights for all, on the freedom to choose, on the freedom to trade, on the freedom to innovate, on the guiding discipline of profits and losses, and on the right to enjoy the fruits of one’s labors, of one’s savings, of one’s investments, without fearing confiscation or restriction from those who have invested, not in production of wealth, but in political power.”

Experts. David Freedman and John Stossel discuss experts, our reliance on them, the political advocacy that’s often involved, and how often experts are wrong.

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Wichita City Council. The Wichita City Council this week considers two items of interest. Spirit AeroSystems will ask for $15 million in IRBs. Spirit will purchase the bonds itself. It will receive a property tax exemption for ten years and exemption from sales tax. No dollar amount is given for the value of the exemptions. … Then, Southfork Investment LLC, a group headed by Jay Maxwell, is asking for the formation of a new tax increment financing (TIF) district. This item, if the council approves, will set December 6 as the date for a public hearing. The vote to form the district would be taken then. … According to city documents, the project is near 47th Street South and I-135. It is planned for 50 acres and one million square feet of retail, hotel, restaurants and office space. For comparison, Towne East Square has slightly less than 1.2 million square feet of space. There will be a medical park on an additional 22 acres. … It appears that all the TIF financing will be pay-as-you go, which is a recent revision to the Kansas TIF law. No bonds would be sold. Instead, the increment in property tax would be refunded to the developer as it is paid. There’s also a joining of TIF and special assessments, where TIF revenue will be used to pay special assessment taxes. … Only a simply majority vote is needed to form the TIF district after the December 6 public hearing. There will have to be redevelopment plans approved after that, and those require a two-thirds majority. Sedgwick County and USD 259, the Wichita public school district each may pass ordinances objecting to the formation of the district. Sedgwick County did that regarding the Save-A-Lot TIF last year, and that project went ahead, despite the claims of the developer that TIF was necessary. USD 259 Superintendent John Allison has recently stated that the school district would not be participating in the formation of TIF districts in the future, as they lose revenue. This will be the first test of that. In 2008 John Todd and I testified that the district should not agree to the formation of a TIF district because of the lost revenue. Officials assured us that the Kansas school finance formula held them harmless, and it didn’t matter if a TIF district was formed. … There will also be a community improvement district (CID) with an additional sales tax of one cent per dollar. … As always, the agenda packet is available at Wichita city council agendas.

Crony capitalism. The Occupy Wall Street protests, as well as the group that protested against Koch Industries on Saturday, seem to be opposed to capitalism. Their efforts would be better directed against business specifically, or crony capitalism in particular. There’s a huge difference. Capitalism is a system of absolute respect for property rights and free exchange in free markets. As Tom G. Palmer wrote in his introduction to the recently-published book The Morality of Capitalism, “Indeed, capitalism rests on a rejection of the ethics of loot and grab.” … As for free markets and enterprise Milton Friedman explained that business is not always in favor: “The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses generally prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.” Even one liberal New York Times columnist realizes this, as did Nicholas D. Kristof when he recently wrote “But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us. They’re not evil at all. But when the system allows you more than your fair share, it’s human to grab. That’s what explains featherbedding by both unions and tycoons, and both are impediments to a well-functioning market economy.” Kristof goes on to explain that capitalism means the freedom to fail as well as succeed: “Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It’s the possibility of failure that creates the opportunity for triumph. Yet many of America’s major banks are too big to fail, so they can privatize profits while socializing risk.” … While most want more regulation on Wall Street and banks, I think that it’s impossible for government to write effective regulations. Instead, markets — if allowed to work — provide the most effective regulation: if you fail, you fail. It’s as simple as that. But George W. Bush gave a bailout, and Barack Obama has followed along. The Dodd-Frank banking regulations, for example, make “too big to fail” an explicit policy.

Kansas pensions. Do we know the true magnitude of Kansas’ unfunded pension problem? Do we want to know? Perhaps not, writes Paul Soutar at Kansas Watchdog: “Even though taxpayers in the rest of America eventually may find out what public pensions really cost them, Kansas school accounting practices and the way school retirement is funded may let school districts avoid reporting the true cost of district employee pensions. Some estimates show the unfunded actuarial liability of the Kansas Public Employees Retirement System will more than double from its current official $8.3 billion based on optimistic assumptions to more than $20 billion using the more realistic calculations.” The full story is School Districts May Get to Dodge Accounting Rules on Pensions . … State Budget Solutions, in a recent report (Report reveals aggregate state debt exceeds $4 trillion) made similar findings, writing that our unfunded pension liability is $21.8 billion, well over twice as high as the numbers used by most official sources. The difference: “The AEI figures estimate how large public pension liabilities would be if states used private sector market-valuation methods.” In other words, the real world.

Global economics to be discussed in Wichita. This week’s meeting (November 4th) of the Wichita Pachyderm Club features Chris Spencer, Vice President, Regional Sales Manager Oppenheimer Funds, speaking on “Goliath vs Goliath — The global battle of economic superpowers.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club Upcoming speakers: On November 11th: Sedgwick County Commission Members Richard Ranzau and Jim Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On November 18th: Delores Craig-Moreland, Ph.D., Wichita State University, speaking on “Systemic reasons why our country has one of the highest jail and prison incarceration rates in the world? Are all criminals created equal?” … On November 25th there will be no meeting.

Progress, or not. Today’s Wichita Eagle carries a letter that laments the jobs lost due to self-serve checkout lanes, online bill payment, online banking, and online reservation services. Concluding, the letter asks readers to “consider how many jobs could be saved if all of us stopped demanding immediate service or answers.” This reminded me of a recent column by Donald J. Boudreaux, commenting on similar remarks by U.S. Rep. Barbara Lee (D-CA). He wrote: “Fred Barnes reports in the Weekly Standard that you refuse to use computerized checkout lanes at supermarkets (“Boneheaded Economics,” Oct. 24). As you — who are described on your website as ‘progressive’ — explain, ‘I refuse to do that. I know that’s a job or two or three that’s gone.’ Overlooking the fact that you overlook the lower prices on groceries made possible by this labor-saving technology, I’ve some questions for you: Do you also avoid using computerized (‘automatic’) elevators, riding only in those few that still use manual elevator operators? Do you steer clear of newer automobiles equipped with technologies that enable them to go for 100,000 miles before needing a tune-up? I’m sure I can find for you, say, a 1972 Chevy Vega that will oblige you to employ countless mechanics. Do you shun tubeless steel-belted radial tires on your car — you know, the kind that go flat far less often than do old-fashioned tires? No telling how many tire-repairing jobs have been destroyed by modern technology-infused tires. Do you and your family refuse flu shots in order to increase your chances of requiring the services of nurses and M.D.s — and, if the economy gets lucky and you and yours get seriously ill, also of hospital orderlies and administrators? Someone as aware as you are of the full ramifications of your consumption choices surely takes account of the ill effects that flu shots have on the jobs of health-care providers. You must, indeed, be distressed as you observe the appalling amount of labor-saving technologies in use throughout our economy. It is, alas, a disturbing trend that has been around for quite some time — since, really, the invention of the spear which destroyed the jobs of some hunters.”

Business and politics. We often hear that government should be run like a business. But the two institutions are entirely different, explains Burton Folsom: “The differences between business and politics, however, is where our focus needs to be. In business, you hire people with your profits to make and sell your product. With those jobs, your employees earn money, spend money, and thereby create other jobs by their demand for houses, cars, iPhones, and household products. Wealth expands, new entrepreneurs get new ideas for products to make, and, if society is free, it becomes prosperous. In politics, you do hire people to run your campaigns and your administration once you’re in office; you do sometimes dole out jobs to build highways, snoop on business, or run the IRS. But almost all of those jobs require other people’s money (i.e. tax dollars) to continue. They take money out of the economy. For example, the jobs created by the Justice Department to check on the trading practices of corporations, the jobs created by the agriculture department to interact with farmers, or the thousands of jobs created to bring trillions of tax dollars each year to Washington are all jobs that take wealth out of the private sector. Looked at this way, the jobs created in business are the productive jobs, the ones that create wealth and give us the thousands of choices we enjoy in breakfast cereal, cars, clothes, and houses. By contrast, each job created in the political class subtracts a job that could be continued or created in the private sector.” … More at The Difference between Business and Politics.

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The politically-motivated attack on Koch Industries

by Bob Weeks on October 10, 2011

Investor’s Business Daily and The Atlantic have provided more context to the politically-motivated article in Bloomberg Markets criticizing Wichita-based Koch Industries. We find that the more scrutiny the Bloomberg article receives, the worse it looks.

The Investor’s op-ed makes the observation that anyone who reads the article must come to: “Indeed, throughout the entire story you find the Kochs taking steps to bring corporate behavior back in line, not only with the law but with their own stringent ethical standards.”

Later, the authors point out the politics behind the attack on Koch: “The long hit piece, as Daniel Indiviglio writes in the Atlantic, managed to find ‘eight instances of alleged misconduct by a giant multinational over the span of 63 years.’ In nearly every case, Koch itself took steps to correct the problems. Putting it in context, Indiviglio then Google-searched a comparable company, finding eight serious instances of misconduct — we’re talking fines and settlements for fraud and bribery — over 11 years. That company would be GE, whose CEO Jeffrey Immelt heads President Obama’s jobs council and seems to see regulation as opportunities for businesses to profit. We await that Bloomberg investigation.”

In his piece for The Atlantic, Indiviglio writes: “According to Bloomberg, 14 reporters around the globe worked for six months on the story. What did they turn up? Really, shockingly little. And what’s worse: from the very outset, the reporters’ bias against the Koch brothers is utterly clear.”

On the bias and lack of context, he writes: “To further attempt to sway the reader before explaining the facts, the reporters reveal the following fact that someone not familiar with politics and lobbying might find shocking: ‘Koch Industries has spent more than $50 million to lobby in Washington since 2006.’ My reaction to reading this was, ‘$50 million? That’s it?’ That might sound like a lot, but let’s compare that to, say, General Electric. Over the same period, GE has spent more than $136 million lobbying, according to the Center for Responsive Politics.”

After running through the eight issues in the Bloomberg piece, Indiviglio concludes: “Obviously, Koch Industries did make mistakes. It likely regrets those mistakes: the penalties, fines, and lawsuits that resulted cost the firm many millions of dollars. This is more a problem with big multinational corporations than a problem specific to Koch, however. When you’ve got subsidiaries around the world, strong, flawless oversight is difficult and very expensive.”

Underlying this article (and others like it) and its criticism is the advocacy of Charles Koch and David Koch for free markets and economic freedom — something the political left is opposed to.

But it’s not only the political left — liberals and progressives — that oppose the positions that Charles and David Koch advocate. Much of the business community, like General Electric, thrive on the crony capitalism the Kochs oppose, and have opposed for many years. As Charles Koch wrote earlier this year in the Wall Street Journal: “Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay. Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”

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Powerline on Bloomberg, Koch Industries

by Bob Weeks on October 7, 2011

The recent piece by Bloomberg Markets on the purported faults of Koch Industries is being revealed as another example of the politically-motivated slash-and-burn pieces that have become common at media outlets with a liberal political agenda.

Koch Industries itself has debunked the reporting in the piece on its KochFacts.com site. Others have too. John Hinderaker of Powerline Blog has a series of pieces that detail problems with the Bloomberg article. It’s a lot to read, as the Bloomberg article itself is lengthy. Here’s an excerpt from the first of three parts that reveals the political nature and motivation of Bloomberg:

Bloomberg’s article offers a pastiche of five or six incidents which took place over a period of decades, are completely unrelated, and were selected by Bloomberg simply because they can be used to put Koch in a bad light. Bloomberg says that “Koch’s history of flouting rules covers more than two decades,” but what that actually means is that Bloomberg had to go back a quarter century to find a handful of examples where Koch had a regulatory problem. (Actually, one of the instances cited by Bloomberg goes back to the Truman administration.) The same attack could be made against any large manufacturing company. Let’s take just one example.

General Electric is the Obama administration’s favorite U.S. company (with the possible exception of “green” energy sinkholes like Solyndra). Yet everything Bloomberg wrote about Koch Industries could just as easily have been written about G.E. G.E.’s foreign subsidiaries have done business in Iran, and G.E., like Koch, has publicly noted that its subsidiaries’ dealings with Iran were legal. Likewise, employees of one or more G.E. companies paid bribes to obtain business in Iraq, and just last year, G.E. paid a $23.4 million fine as a result. And G.E. has had environmental problems, like–to name just a few–contaminating the Hudson and Housatonic Rivers with PCBs, along with the Coosa River Basin, and releasing dimethyl sulfate, chlorine, 1, 1, 1, -trichloroethane, ammonia, and toluene from its silicone manufacturing plant in Waterford, New York. G.E. has had product liability problems, including claims of wrongful death that were, tragically, justified. And, while Bloomberg makes a laughable price-fixing claim against Koch, G.E. was in fact a party to one of the most famous price-fixing conspiracies of all time.

So, is Bloomberg’s story titled “The Secret Sins of General Electric”? Or, in the online version, “General Electric Flouts Law With Secret Iran Sales?” Of course not. G.E. is generally identified with the Democratic Party. Does anyone seriously doubt that Bloomberg wanted to do a hit piece on Koch Industries solely because that company’s owners are prominent conservatives? Of course not.

The three Powerline articles are here:

Bloomberg Whiffs, Part 1: “So the supposedly explosive charge that Bloomberg chose to headline–Koch ‘flout[ed] the law’ and acted ‘in defiance of a U.S. trade ban’ is simply false. Koch did no such thing; what is more, unlike hundreds of other American companies, it has voluntarily gone beyond the requirements of the law and has, in more recent years, prohibited all subsidiaries from doing business in Iran.”

Bloomberg Whiffs, Part 2: “The Koch subsidiary’s termination of Mrs. Egorova-Farines was held to be amply justified. But Bloomberg didn’t want you to know any of that. Bloomberg, motivated by political animus against the Koch brothers, wanted you to get the impression that she was a heroic whistle-blower who was fired for lifting the lid on another employee’s improper payments. This is the sort of dishonesty that pervades the entire hit piece.”

Bloomberg Whiffs, Part 3: “Like all too many ‘whistle-blowers,’ Ms. Barnes-Soliz was a poor employee who, anticipating termination, asserted false claims against her employer in order to set up a lawsuit. The criminal prosecution that resulted was far from the triumphant vindication that Bloomberg portrays; on the contrary, the prosecutor overreached and his case collapsed when it was tested in court, to the extent that the federal government pleaded for a settlement in which the Koch employees it had persecuted agreed not to sue it for malicious prosecution.”

In his conclusion, Hinderaker wrote: “This is a story from which one can learn a great deal. First, don’t take news accounts of noble whistle-blowers and evil corporations at face value. The truth is usually much different from what is implied by liberal reporters. Second, reporters like those at Bloomberg who write on such topics are generally ill-suited to the task. Typically, they know little about business, let alone the complex legal and environmental compliance issues that were involved here. Worse, they generally don’t know how to research effectively, and — to be blunt — aren’t very diligent. So if someone hands them a story that fits their political preconceptions, they swallow it hook, line and sinker.”

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Greenpeace and allies again attack Koch Industries

by Bob Weeks on August 29, 2011

Last week saw the release of two reports criticizing Koch Industries for its opposition to heavy-handed regulation of the chemical industry. Greenpeace released a report with highly charged words in its title: “Toxic Koch: Keeping Americans at Risk of a Poison Gas Disaster.” Other articles commenting on this were highly sensational, such as this example: “Do the Koch Brothers Want a Toxic Disaster?”

Koch Industries has responded to these articles in a response on KochFacts.com website. Among many facts, we can see that Koch companies have received 386 safety awards and 28 environmental awards just since President Obama took office.

Much of the Greenpeace report criticized Koch for its opposition to H.R. 2868, the Chemical and Water Security Act of 2009. Koch and most of the chemical industry instead favored continuation of Chemical Facility Anti-Terrorism Standards, a set of less intrusive standards that have been effective.

Greenpeace characterizes the regulatory measures in H.R. 2868 as so mild that it can’t imagine why anyone would object. At issue is a concept known as “Inherently Safer Technology” or IST. If passed into law or regulation, regulators could require manufacturers to substitute alternative processes, in the name of safety. That, however, poses many problems, as explained below.

The Greenpeace report contains an economic analysis of what H.R. 2868 might do to the economy. This bill passed the House of Representatives, but not the Senate. The report estimates that the cost of IST would be slightly less than $1 billion per year. The analysis concludes that the extra costs of IST regulation would eliminate jobs, but the extra spending on IST would add roughly the same number of jobs. The net impact is therefore zero.

But we shouldn’t infer that a net loss of zero jobs means no economic harm is done. There will be dislocation, as the people who gain jobs won’t likely be the people who lost jobs.

But most importantly, this extra cost is spent paying for something that isn’t a problem. The Greenpeace report concedes there have been no attacks on U.S. chemical plants since the terrorist attacks of 9/11. The reports says various terrorists would like to conduct such attacks. That’s hardly news. What is news is that, for whatever reason, they haven’t succeeded.

It’s true that the words “Inherently Safer Technology” don’t appear in H.R. 2868. But in an explanatory document produced by Greenpeace, we see the bill isn’t as mild as Greenpeace claims: “If a facility disagrees with the DHS’s finding they have 120 days to appeal and the DHS must consult with a wide range of experts and those expert recommendations must be included in any order to implement safer chemical processes.” (emphasis added)

That sounds like heavy-handed regulation and the implementation of IST. Or maybe it’s just wishful thinking on Greenpeace’s part. At any rate, once initiated these regulatory regimes have a way of growing, often far exceeding the intent of Congress when it passed the legislation creating the initial regulation.

But that’s the goal of the political left: Regulation. And if they can accomplish this goal while at the same time beating up on Koch Industries, the chemical industry, the oil industry, and capitalism in general, so much the better for them. Underlying the quest of Greenpeace and its allies is a hatred of capitalism, hated so much that they will do whatever it takes to discredit and defeat its proponents and practitioners.

The problems with Inherently Safer Technology regulation

A document titled Final Report: Definition for Inherently Safer Technology in Production, Transportation, Storage, and Use supplies some useful information about IST:

IST’s are relative: A technology can only be described as inherently safer when compared to a different technology, including a description of the hazard or set of hazards being considered, their location, and the potentially affected population. A technology may be inherently safer than another with respect to some hazards while being inherently less safe with respect to others, and may not be safe enough to meet societal expectations.

IST’s are based on an informed decision process: Because an option may be inherently safer with regard to some hazards and inherently less safe with regard to others, decisions about the optimum strategy for managing risks from all hazards are required. The decision process must consider the entire life cycle, the full spectrum of hazards and risks, and the potential for transfer of risk from one impacted population to another.

This hints at the difficulty in regulating complex processes such as manufacturing. There may be many tradeoffs to make. An an example, a process might use a toxic catalyst. It would seem that eliminating its use would lead to greater safety.

But: the tradeoff. Eliminating the use of the catalyst would mean the company has to increase the temperature and pressure of the process, two factors that increase risk. The end result might be a process with more risk than the original process.

At a committee hearing in 2009, Senator Susan M. Collins gave another example of how IST might force more hazardous trucks on highways:

According to one water utility located in an isolated area of the Northwest, if Congress were to force it to replace its use of gaseous chlorine with sodium hypochlorite, then the utility would have to use as much as seven times the current quantity of treatment chemicals to achieve comparable water quality results. In turn, the utility would have to arrange for many more bulk chemical deliveries, by trucks, into the watershed. The greater quantities of chemicals and increased frequency of truck deliveries would heighten the risk of an accident resulting in a chemical spill into the watershed. In fact, the accidental release of sodium hypochlorite into the watershed would likely cause greater harm to soils, vegetation and streams than a gaseous chlorine release in this remote area.

In its discussion on IST, the “Final Report: Definition for Inherently Safer Technology in Production, Transportation, Storage, and Use” report notes the tradeoffs that are commonplace:

IST options can be location and release scenario dependent, and different potentially exposed populations may not agree on the relative inherent safety characteristics of the same set of options. For example, two options for handling a toxic gas might be receiving the material in ten, 1-ton cylinders or one, 10-ton truckloads. To a population several miles from the site, the 1-ton cylinders would be inherently safer because the maximum potential release size is smaller and less likely to expose them to a hazardous concentration of the gas. However, operators, who would now have to connect and disconnect 10 cylinders for every 10 tons of material used, instead of a single truck, would consider the truck shipments to be inherently safer. Thus, evaluation of IST options can be quite complex, and dependent on the local environment. There is currently no consensus on either a quantification method for IST or a scientific assessment method for evaluation of IST options.

We need to consider also who is in the best position to judge the relative risks: government bureaucrats, or the operators of the plant. The view of government regulators is that any risk is bad, and through technology — IST in this example — we can eliminate risk.

But this ignores the tradeoffs involved, as illustrated above. It also ignore the costs of these regulations in their attempt to lessen risk, notwithstanding the economic analysis commissioned by Greenpeace.

A common response we see in the media — certainly we see it from the political left and attack groups like Greenpeace as well as government regulators — is that greedy plant owners will use whichever method is cheapest, so as to produce the greatest profit.

This ignores the fact that there are laws and regulations already in place. It ignores the fact that market forces give plant operators a huge incentive to operate safely, for their own safety, the safety of the employees they can’t operate without, and the safety of the surrounding communities. Besides the potential loss of human life, unsafe plants expose their operators to huge economic costs. Besides being liable for damage and loss of life due to accidents, unsafe workplaces have to pay employees more to work there. Insurers charge higher rates for unsafe plants they believe present a high risk of having to pay claims.

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Contrary to Buffet, government spending is not good

August 20, 2011

Recently wealthy investor Warren Buffet has been in the news for his advocacy of higher taxes. But is government — politics, in other words — the best way to allocate resources?

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Pickens: It’s all about me, and MSNBC doesn’t notice

July 14, 2011

Appearing on the MSNBC morning program Morning Joe, energy investor T. Boone Pickens let us know that despite his no-nonsense business-like approach to supporting what he believes to be in America’s best interests, it’s really all about him and what profits him. But program hosts Joe Scarborough and Mika Brzezinski didn’t catch that.

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Kansas and Wichita quick takes: Friday July 1, 2011

July 1, 2011

Today: This Week in Kansas; Kansas taxes; Wichita sales tax; Koch criticism backfires — again; Tension on debt ceiling issue; Stossel: The Money Hole.

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Greenwald and Sanders try to defend Social Security, slam Koch brothers

June 23, 2011

Are the free market critics of Social Security a shadowy “echo chamber” seeking to end the system for the benefit of the rich, or sounding a fact-based alarm that government and its supporters dispute and don’t want you to hear?

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Kansas and Wichita quick takes: Wednesday May 25, 2011

May 25, 2011

Today: The failure of American schools; Professors to Koch Brothers: Take your green back; History and legacy of Kansas populism; Federal grants seen to raise future local spending; Debt observed as sold.

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Pickens criticism illustrates divide between free markets and intervention

May 24, 2011

Criticism by energy investor T. Boone Pickens of U.S. Representative Mike Pompeo and Koch Industries continues to illustrate the difference between those who believe in economic freedom and free markets, and those — like Pickens — who invest in politicians, bureaucrats, and the hope of a government subsidy.

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Charles Koch: Advancing economic freedom

May 19, 2011

Charles and David Koch defend the principles of economic freedom that leads to prosperity for everyone, and warn against the dangers it faces.

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Study looks at spending, strategy in cap and trade debate

April 26, 2011

While those who advocate cap and trade legislation charge that conservatives, particularly Charles and David Koch, have outspent them, a study finds the opposite.

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Kansas and Wichita quick takes: Thursday April 21, 2011

April 21, 2011

Today: Can anything Think Progress says about the Kochs be believed; Kansas governor on first 100 days; freeloaders come in all types; are taxes the solution; the spontaneous society — centralized planning not required.

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New York Times correction, finally

April 17, 2011

The New York Times finally issues a correction regarding political contributions from Charles and David Koch.

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ThinkProgress and Lee Fang: wrong again

April 16, 2011

A post on the left-wing blog Thinkprogress that attacks Koch Industries is found to have many errors and distortions.

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Center for American Progress starts ideologically driven news organization

April 13, 2011

The Center for American Progress Action Fund has started an ideologically driven news organization.

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Soros events, catering to liberal causes, largely escape notice

April 8, 2011

Two conferences sponsored by liberal George Soros largely escape reporting in the news media, in contrast to the reporting on a conservative conference.

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For New York Times, facts about Kochs don’t matter

April 4, 2011

For the New York Times, getting the facts about Koch Industries correct isn’t a concern.

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Kansas and Wichita quick takes: Tuesday March 29, 2011

March 29, 2011

Today: Follow-up to Koch profile; the decline of Detroit: a lesson for Wichita?; Moran to vote “no” on debt ceiling; golden geese on the move; legislators will have more access to SRS case files; Wichita unemployment rate improving, government planners vs. individuals.

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Weekly Standard: The left’s obsession with the Koch brothers

March 28, 2011

Matthew Continetti of the Weekly Standard has written a profile of Charles and David Koch and Koch Industries, focusing on politics and the attacks by the political Left. A key passage in the story explains what those who believe in economic freedom have known all along: If Charles and David Koch really wanted to make a lot of money for themselves, they would act like most corporations: seek fortune through government intervention, not through competition in free markets.

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The Left’s ‘obsession with all things Koch’

March 23, 2011

The Center for American Progress, through ThinkProgress, “has carried on a bizarre vendetta against Charles and David Koch and their company, Koch Industries.”

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Who benefits, loses from regulation?

March 17, 2011

Who benefits and loses from increased regulation of greenhouse gases?

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Charles G. Koch: Why Koch Industries is speaking out

March 1, 2011

In today’s Wall Street Journal, Charles G. Koch, who is chairman of the board and CEO of Koch Industries, writes that economic freedom — not government spending and intervention — leads to prosperity and economic well-being for all, even for our poorest citizens.

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Koch critics examined

February 28, 2011

Critics of Charles and David Koch allege that the philanthropists have tried to hide their political involvement and contributions over the years. While false, many uncritically believe it. And at the same time, the media gives Koch critics a pass on their lack of transparency.

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Koch executives respond to fraudulent call

February 25, 2011

Koch Industries executives say Charles and David Koch will continue to support economic freedom in spite of attacks.

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Charles and David Koch v. George Soros: Free markets or not

January 31, 2011

The protests surrounding a conference of free-market advocates reveal the political left’s misunderstanding of the relationship between business and government, and between freedom and coercion.

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Koch Industries: Jobs created through market principles

January 26, 2011

Through application of market-based principles, Koch Industries Inc. has grown and created jobs at a rate 16 times that of an index of other large companies.

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Growth of Wichita’s Koch Industries profiled

December 21, 2010

Wichita-based Koch Industries has grown during the recent recession by looking for companies with long-term value that will fit in with Koch’s company culture.

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Kansas and Wichita quick takes: Tuesday November 16, 2010

November 16, 2010

Today: American Majority, Community Improvement Districts, Kansas legislature, Kansas Reporter, Sam Brownback, Tea Party, Wind power, Global warming alarmism, Government spending, Wind power.

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Kansas and Wichita quick takes: Friday October 22, 2010

October 22, 2010

Today: Free markets, Kansas Governor, Koch Industries, Mike Pompeo, Raj Goyle, Politics, Regulation, Wichita Pachyderm Club, Kansas fourth district,

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Kansas and Wichita quick takes: Thursday October 21, 2010

October 21, 2010

Today: Climate change, Facebook, George Soros, Jerry Moran, Kansas Supreme Court, Koch Industries, Regulation, Politics, Wichita Eagle opinion watch, Kansas judges, Taxation

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Free political speech, with what restrictions?

October 15, 2010

The ability to exercise free speech anonymously is important for both individuals and corporations.

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Kansas and Wichita quick takes: Wednesday October 13, 2010

October 13, 2010

Today: Kansas fourth district, Raj Goyle, Politics, Subsidy, Downtown Wichita revitalization, Kansas third district, Elections, Koch Industries, Barack Obama, Interventionism.

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Kansas and Wichita quick takes: Tuesday October 12, 2010

October 12, 2010

Today: Economic development, Elections, Eminent domain, Government spending, Kansas Reporter, Koch Industries, Mark Parkinson, Politics, Regulation, Wichita city council, Economics

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U.S. business under attack by its own government

October 11, 2010

Who would have thought that President Barack_Obama would take a page — maybe an entire chapter — from the Richard Nixon political playbook?

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Kansas and Wichita quick takes: Sunday October 10, 2010

October 10, 2010

Countryman back on air: Gene Countryman, host of a long-running radio show that went off the air earlier this year, returns to the airwaves tonight with the Gene Countryman Show. The new show airs Sunday evenings from 6:00 pm to 8:00 pm on KNSS Radio 1330 AM. Koch article criticism: Andrew Ferguson, media critic for [...]

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