Tag Archives: Koch Industries

Powerline on Bloomberg, Koch Industries

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.”

Greenpeace and allies again attack Koch Industries

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.

Contrary to Buffet, government spending is not good

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?

In a statement on the KochFacts website, Charles Koch disagrees with Buffet:

As part of the public discourse on government overspending and fiscal irresponsibility, Charles Koch offered the following public response to media queries on the topic: “Much of what the government spends money on does more harm than good; this is particularly true over the past several years with the massive uncontrolled increase in government spending. I believe my business and non-profit investments are much more beneficial to societal well-being than sending more money to Washington.”

We have to wonder if Buffet is really sincere about the wisdom of sending money to government. As I noted a few years ago, Buffet is giving most of his fortune to charity. In this way, he avoids the estate, or inheritance, tax. If Buffet really thinks inheritance taxes are good, he should keep his wealth and let the government tax it when he dies, like others have to.

Or, as many have noted, Buffet is free to give as much as he wants — right now — to the federal government.

But as it turns out, even the super wealthy don’t have much money when compared to the needs of government. Buffet’s fortune, the third largest in the world, would pay for just 12 days of federal government borrowing. Not total spending — just the new debt the U.S. government accumulates in less than two weeks.

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

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.

Pickens appeared on the program to gain support for legislation he is seeking to pass through Congress. His bill is H.R. 1380: New Alternative Transportation to Give Americans Solutions Act of 2011, commonly referred to as the NAT GAS act. The bill would provide payments in the form of tax credits to encourage the use of natural gas as a transportation fuel.

Host Scarborough said “It makes so much sense.” At the end of the segment, Brzezinski pleaded “Do us a favor. Please don’t give up.”

Never once did either host bring up the facts that Daniel Indiviglio cites in his coverage for The Atlantic. Mike Barnicle was on the show but wasn’t helpful in this regard, either.

The problem is this, according to Indiviglio: “At no point during the nine-minute interview on MSNBC did Pickens mention that he stands to make a significant financial gain if the bill he’s promoting succeeds and natural gas usage expands.”

Pickens knows how to present his case in the best possible light, picking and choosing which fact to present, and which to stretch or ignore. He criticizes Koch Industries for its opposition to the bill. Koch has explained its opposition to subsidies for natural gas as a transportation fuel, just as it opposes all subsidies. In a statement on its Viewpoint website, Dr. Richard Fink, Executive Vice President of Koch Industries, explained the harm of government intervention, writing “Koch has consistently opposed subsidies that distort markets. We maintain that the marketplace, while not perfect, is the best mechanism for allocating resources to consumers. People deciding what fuels to purchase, instead of the government, is best for consumers and our country. Likewise, if natural gas vehicles are truly advantageous and economically efficient, then consumers will demand that they be developed without political mandates that exhaust more taxpayer dollars.”

Pickens went on to criticize Koch for accepting subsides for ethanol production. Koch Industries, as a refiner of oil, blends ethanol with gasoline it produces in order to meet federal mandates on ethanol usage. Even though Koch opposes subsidies for ethanol, Koch accepts the subsidies. A company newsletter explains: “Once a law is enacted, we are not going to place our company and our employees at a competitive disadvantage by not participating in programs that are available to our competitors.”

So the criticism of Koch by Pickens is unfounded. Now I wouldn’t really expect the program hosts to be aware of this, but they must have been aware that Pickens will profit, probably handsomely, if the NAT GAS act passes.

In his coverage Indiviglio writes: “Essentially, Pickens criticizes Koch for preferring government subsidies to benefit Koch Industries. But is Pickens’ motivation for natural gas subsidies really any different?”

It is different in an important way. Koch, as explained above, participates in a subsidy program that is available to all similarly situated companies. At the same time the company calls for its end for reasons of principle that the company and its owners have supported for many years. Pickens, on the other hand, wants to create a new program with new subsidies and new expansion of government intervention into free markets.

Besides this, when you listen to Pickens, you realize it’s all about him and what he wants. “We have 250 million vehicles in America. So I’m going to take eight million heavy duty trucks — that’s it — and that will do it.” And then “I want a billion dollars a year for five years.”

Large decisions about our country’s energy future shouldn’t be made by one person, or even by Congress and the president. We need to let the dynamic discovery process of markets harness and organize the tremendous diverse power of the human mind and reveal to us the best energy solutions.

Kansas and Wichita quick takes: Friday July 1, 2011

This Week in Kansas. On this week’s edition of the KAKE Television public affairs program This Week in Kansas, Ken Ciboski (Associate Professor of Political Science at Wichita State University), John D’Angelo (Arts & Cultural Services Manager for the City of Wichita), and myself join host Tim Brown for a discussion of arts and government funding in Kansas. This Week in Kansas airs in Wichita and western Kansas at 9:00 am Sundays on KAKE channel 10.

Kansas taxes. A short report produced by Americans for Prosperity, Kansas shows some of the reasons why economic growth in Kansas has been sluggish: “Kansas’ state and local tax burden continues to be amongst the highest in the region.” Kansas has fewer private sector jobs than it did ten years ago. And in what should be a grave cause for alarm, Kansas was the only state to have a net loss of private sector jobs over the last year. … A table of figures illustrates that although Oklahoma kept its sales tax rate low and constant while Kansas increased its rate, tax revenue increased much more in Oklahoma. Download the report at AFP-Kansas Income Tax Policy Primer.

Wichita sales tax. Speaking of sales tax and its harmful effect, Wichita seems to want to raise its rate. Proposals have been floated for a sales tax for economic development in general, for increased transit (bus) service, for drainage projects, and for downtown projects. Boosters cite the Intrust Bank Arena as an example of a successful project paid for by a sales tax that disappeared as promised. That’s despite the dreams of Sedgwick County Commissioner Tim Norton: “Then, as that tax was nearing its end, Norton ‘wondered … whether a 1 percent sales tax could help the county raise revenue.’ (‘Norton floats idea of 1 percent county sales tax,’ Wichita Eagle, April 4, 2007)” … Boosters of the arena promote it as a financial success, and there was the presentation to the county of a check for $1,116,442 as its share of the arena’s earnings. This figure, however, does not represent any sort of “profit” or “earnings” in the usual sense. In fact, the introductory letter that accompanies these calculations warns readers that these are “special-purpose financial statements” and “are not intended to be a presentation in conformity with accounting principles generally accepted in the United States of America.” In particular, Commissioner Karl Peterjohn has warned that these figures — and the monthly “profit” figures presented to commissioners — do not include depreciation expense. That expense is a method of recognizing and accounting for the large capital cost of the arena. In April the County released that number, and I believe it has not been reported by any news media. That may be because the number is pretty big — $4.4 million, some four times the purported “earnings” of the arena. … Without honest discussion of numbers like these, we make decisions based on incomplete and false information. Don’t look for many local government leaders and officials to talk about this number, and certainly not the Wichita Eagle editorial page.

Koch criticism backfires — again. For those who follow the issue, it’s no surprise that Lee Fang, a reporter for the liberal think tank Canter for American Progress has come out with another attack on Charles and David Koch. Mark Hemingway of the Weekly Standard reports on this effort: “Think Progress reporter Lee Fang has a long history of being spectacularly wrong. However, there’s a seemingly unending thirst for his breathless demonization of the Koch brothers and other rants about corporate greed among the low IQ end of the liberal spectrum.” Fang disagrees with a recent U.S. Supreme Court decision, and he lambasts the litigators who brought the suit as “heavily financed by right-wing corporate money, particularly from Koch Industries and Walmart.” He also criticizes organizations for not dislosing their donors. Hemingway notes this: “In the case of the Koch brothers, they have been outspoken philosophical libertarians for decades. Their support of free speech over onerous campaign laws is entirely consistent and should not be surprising. However, in the case of Wal-Mart Fang is also astoundingly hypocritical. Because you know who else is a ‘Walton-Funded Group’? Lee Fang’s employer.” And the secret donations that Fang rails against so passionately? Hemingway again: “You know who else accepts ‘secret donations from individuals and corporations’? That’s right — the Center for American Progress.” … For another example of Fang’s reporting, see ThinkProgress and Lee Fang: wrong again.

Tension on debt ceiling issue. In The Wall Street Journal Kimberly Strassel writes that the current debt and spending crisis may lead to an end to farm subsidies, something she described as a “sacred federal spending cow:” “For decades, the House and Senate agriculture committees have been the last redoubts of congressional bipartisanship, liberals and conservatives united in beating back any outside attempts to cut off tens of billions annually for price supports, crop insurance, weather assistance, conservation handouts and nutrition programs. The last real stab at reform was the mid-1990s Freedom to Farm bill. Most of the changes were obliterated by subsequent bailouts and new spending.” … She describes how Arizona Congressman Jeff Flake got a limit of farm subsidies through the Appropriations Committee, but House Agriculture Committee Chairman Frank Lucas used a maneuver to block Flake’s proposal. So much for that effort at reform, blocked by a Republican. Lucas’ website promotes a conservative message, with one post criticizing bailouts. But not for farmers, it seems. … Wichita’s Mike Pompeo is mentioned: “Mr. Pompeo is waiting to see what debt package emerges and says his vote will depend on whether it contains real ‘structural’ reform. But he also tells me he doesn’t intend to let parochial interests cloud his decision. ‘I came here to be a small-government guy every day, and not just when it is spending cuts in somebody else’s district,’ he says.” … Although not mentioned in this article, Tim Huelskamp, who represents the Kansas first district, has been upfront in discussing the need to reduce or eliminate farm subsides, and so far, many farmers seem to be accepting of that. Huelskamp’s district, which covers all of western Kansas (and more), is usually second on the list of congressional districts in terms of total farm subsidies received. For 2009, that figure was $369 million.

Stossel: The Money Hole. A recent episode of John Stossel’s television program is now available on the free hulu service by clicking on The Money Hole. Writes Stossel in his introduction to the show: “We will soon spend ourselves into oblivion. But finally … movement! Budget slashing proposals from Paul Ryan, the Republican Study Committee, Ron Paul, Rand Paul and even Tim Pawlenty! But politicians and real people across the spectrum still resist change. What should government do? What’s its role? What have other countries done? The Money Hole tackles that.”

Greenwald and Sanders try to defend Social Security, slam Charles and David Koch

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?

According to a short video by Robert Greenwald, it’s the first choice. But examination of the claims made will lead us to the opposite conclusion, and you’ll wonder why Greenwald has any credibility.

The video features U.S. Senator from Vermont Bernie Sanders, who describes himself as a democratic socialist. He describes Social Security as a federal program that has been “enormously successful,” so right away we need to take issue with Sanders. Social Security a success? If creating a system where millions of people are dependent on government for their retirement income is a successful program, the government has done just that. What has been the result? As George Reisman recently wrote: “Not surprisingly, in the conviction that the government was now providing for people’s old age, the rate of saving in the United States has declined precipitously over the years, falling all the way to zero in some years.”

We’ve transitioned from savers to government dependents. For a socialist like Sanders, that may very well have been his goal. He certainly can’t be unhappy with the results.

Right after this, the video shows images and names of think tank organizations that are funded in part by Charles Koch and/or David Koch, with Sanders claiming these organizations spread “disinformation” about Social Security. The information generated by these think tanks is truthful, however, and an important antidote to a huge whopper of a lie Sanders will spread later on.

(At this point one might be tempted to ask: What is the interest of the Charles and David Koch in reforming Social Security? John Hinderaker in his Powerline article A Less Than Magnificent Obsession answers this question when he writes: “… does it make any difference to the Kochs’ company, Koch Industries, whether the retirement age is 65 or 68? I can’t imagine why it would. Likewise, the brothers themselves are both billionaires. Whether Social Security is or is not reformed makes zero difference to them personally.” I would say, however, that Charles and David Koch have long advocated for liberty and economic freedom for everyone, and since Social Security is contrary to that, this could explain their interest.)

A huge focus of the video is raising the retirement age. It’s repeated over and over — so as to scare viewers. As John Hinderaker notes at Powerline, it’s been done before: “proposals to raise the age of Social Security eligibility have been a bipartisan staple of reform proposals for decades. … The bipartisan Bowles-Simpson Commission, which was appointed by President Obama, recommended increasing the age of eligibility.”

It’s important to note that the Social Security retirement age is simply the age at which one can begin receiving benefits. Contrary to the claims of Sanders in this video, it doesn’t mean that everyone has to keep working until that age. Over the course of a working career, isn’t it possible for someone to save enough to cover the several years between when they decide to quit working and when they’re eligible for Social Security? Or will we let the government — people like Sanders — tell us how long we must work?

Sanders also says that older people need to retire and get out of the workforce to make way for younger workers to take their jobs. This is an example of the fallacy — followed by nearly all on the political Left, it seems — of believing that the economy is a fixed size, and that one person can have income only if someone else gives up theirs.

Perhaps the most dangerous lie of Sanders is his claim that Social Security has a $2.6 trillion surplus available to pay future benefits. He’s referring to the Social Security trust fund. Here, Sanders is correct one on level: The system has collected that much more than it has needed to pay benefits, forming the balance referred to in the trust fund. That money has been lent to other federal government agencies, and they spent it all. So while Federal Agency X may owe the trust fund $50 billion, the only way that agency can repay the trust fund is by borrowing or increasing taxes. (Less spending might be another way, but that’s a difficult goal, and we’d be taxed the same for a lower level of services — a tax increase by another name.) See Social Security trust fund: a problem in disguise.

Sanders dismisses private retirement accounts as risky and dangerous: “You may lose all your retirement savings when you get old.” While true, any reasonable investment strategy designed for the long term has little chance of that happening. Unless, of course, one gets greedy and invests everything in a company like Enron — greed of that type being something Sanders rails against.

Saving on one’s own, however, isn’t what leftists like Bernie Sanders have in mind. Far better for him, Democrats, and big-government Republicans that people remain dependent on government for their retirement security. Once people save and gain some wealth of their own, they find that they can thrive very nicely without a nanny state government. They find themselves wishing they could have saved more throughout their working lives, rather than making forced contributions to a government retirement plan that’s now broke. Even if not broke, most people would be in a much better position if they could have kept their own and their employers’ payroll tax contributions for their own investment.

Finally, Sanders makes a major point of “huge campaign contributions” made to advance the interests of Charles and David Koch. Hinderaker chases down some of the actual numbers, and finds that contributions from Koch Industries PAC are sometimes less than what a single labor union has contributed.

In the end, I’m sure that Sanders said something that’s true in this video. But I can’t bear to watch it again to try and spot it.

Here’s my video response:

Kansas and Wichita quick takes: Wednesday May 25, 2011

The failure of American schools. The Atlantic: “Who better to lead an educational revolution than Joel Klein, the prosecutor who took on the software giant Microsoft? But in his eight years as chancellor of New York City’s school system, the nation’s largest, Klein learned a few painful lessons of his own — about feckless politicians, recalcitrant unions, mediocre teachers, and other enduring obstacles to school reform.” Key takeway idea: “As a result, even when making a lifetime tenure commitment, under New York law you could not consider a teacher’s impact on student learning. That Kafkaesque outcome demonstrates precisely the way the system is run: for the adults. The school system doesn’t want to change, because it serves the needs of the adult stakeholders quite well, both politically and financially.” … Also: “Accountability, in most industries or professions, usually takes two forms. First and foremost, markets impose accountability: if people don’t choose the goods or services you’re offering, you go out of business. Second, high-performing companies develop internal accountability requirements keyed to market-based demands. Public education lacks both kinds of accountability. It is essentially a government-run monopoly. Whether a school does well or poorly, it will get the students it needs to stay in business, because most kids have no other choice. And that, in turn, creates no incentive for better performance, greater efficiency, or more innovation — all things as necessary in public education as they are in any other field.” … Overall, an eye-opening indictment of American public schools.

Professors to Koch Brothers: Take your green back. In The Wall Street Journal Donald Luskin takes a look at what should be a non-controversy: A gift by the Charles G. Koch Charitable Foundation to Florida State University to endow a program to study the foundations of prosperity, social progress, and human well-being — at the Stavros Center for the Advancement of Free Enterprise and Economic Education. (Sounds like a good match.) Writes Luskin: “Then there’s the donors. One of the donors, according to the two professors, is known for his ‘efforts to influence public policy, elections, taxes, environmental issues, unions, regulations, etc.’ Whom might they be referring to? Certainly not George Soros — there’s never an objection to that billionaire’s donations, which always tend toward the political left. No, it’s Charles and David Koch, owners of Koch Industries.” … Critics say the gift is an assault on academic freedom. Luskin counters: “The issue at FSU isn’t that the university has bargained away its academic freedom. The problem is that FSU has exercised its academic freedom in a way that the political left disapproves of. As [FSU College of Social Sciences] Mr. Rasmussen put it to the St. Petersburg Times: ‘If somebody says, ‘We’re willing to help support your students and faculty by giving you money, but we’d like you to read this book,’ that doesn’t strike me as a big sin. What is a big sin is saying that certain ideas cannot be discussed.”

History and legacy of Kansas populism. Recently Friends University Associate Professor of Political Science Russell Arben Fox delivered a lecture to the Wichita Pachyderm Club that was well-received by members. Now Fox has made his presentation available on his blog In Media Res. It’s titled The History and Legacy of Kansas Populism. Thank you to Professor Fox for this effort, and also to Pachyderm Club Vice President John Todd, who arranges the many excellent programs like this that are characteristic of the club.

Federal grants seen to raise future local spending. “Nothing is so permanent as a temporary government program.” — Nobel Laureate Milton Friedman (The Yale Book of Quotations, 2006) Is this true? Do federal grants cause state and/or local tax increases in the future after the government grant ends? Economists Russell S. Sobel and George R. Crowley examine the evidence and find the answer is yes. The conclusion to their research paper Do Intergovernmental Grants Create Ratchets in State and Local Taxes? Testing the Friedman-Sanford Hypothesis states: “Our results clearly demonstrate that grant funding to state and local governments results in higher own source revenue and taxes in the future to support the programs initiated with the federal grant monies. Our results are consistent with Friedman’s quote regarding the permanence of temporary government programs started through grant funding, as well as South Carolina Governor Mark Sanford’s reasoning for trying to deny some federal stimulus monies for his state due to the future tax implications. Most importantly, our results suggest that the recent large increase in federal grants to state and local governments that has occurred as part of the American Recovery and Reinvestment Act (ARRA) will have significant future tax implications at the state and local level as these governments raise revenue to continue these newly funded programs into the future. Federal grants to state and local governments have risen from $461 billion in 2008 to $654 billion in 2010. Based on our estimates, future state taxes will rise by between 33 and 42 cents for every dollar in federal grants states received today, while local revenues will rise by between 23 and 46 cents for every dollar in federal (or state) grants received today. Using our estimates, this increase of $200 billion in federal grants will eventually result in roughly $80 billion in future state and local tax and own source revenue increases. This suggests the true cost of fiscal stimulus is underestimated when the costs of future state and local tax increases are overlooked.” … An introduction to the paper is here.

Debt observed as sold. New U.S. Representative Tim Huelskamp, who represents the Kansas first district, recently observed the Bureau of Public Debt electronically sell debt obligations of the United States of America. In a press release, the Congressman said: “In a matter of minutes, I observed the United States sell $30.4 billion more in debt. The ease with which this transaction was done reminded me that it is just too simple for Washington to acquire, buy, sell and trade debt.” As to the upcoming decision as to whether to raise the ability of the U.S. to borrow: “As Congress considers yet another increase in the debt limit, the only responsible option that exists is to put America on a path to fiscal responsibility with clear limits on spending. Democrats say they want a debt limit increase that is ‘clean’ without any of the budget cuts we have proposed. Yet, they have offered no plan to eliminate annual trillion-dollar deficits. There is nothing ‘clean’ about increasing the limit without tackling the massive deficits and ever-increasing debt. … With nearly one-half of the nation’s debt held by foreign countries, including more than $1.1 trillion by China, our national security is threatened as well. Too many of our freedoms and liberties are threatened when Americans owe trillions of dollars to nations who put their interests before ours.”

Pickens criticism illustrates divide between free markets and intervention

Last week’s criticism by energy investor T. Boone Pickens of U.S. Representative Mike Pompeo, a Wichita Republican serving his first term, 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.

Pickens is pushing H.R. 1380: New Alternative Transportation to Give Americans Solutions Act of 2011, or NAT GAS 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.

In his op-ed in the Wichita Eagle, Pickens was critical of Pompeo for his stance in favor of free markets and in opposition to subsidies. His criticism, however, was inconsistent and contradictory. Further, Pompeo’s position on this issue is clear, as part of a resolution he introduced reads: eliminate existing energy subsidies.

There was another target of Pickens’ criticism. He didn’t mention the company by name, but there were several thinly-veiled references to Wichita-based Koch Industries. Charles Koch and his brother David Koch have emerged as prominent defenders of economic freedom and the freedom and prosperity it generates. Charles Koch, in particular, has been outspoken in his criticism of the type of subsidies that Pickens seeks. Koch’s op-ed, also in the Wichita Eagle and on Koch Industries website at Advancing economic freedom, was pointed in its criticism of corporate welfare: “Our government made a point of reforming its welfare policies for individuals but not for corporations. … Unfair programs that favor certain companies — such as the current well-intentioned but misguided suggestion that the natural-gas industry should receive enormous new subsidies — don’t just happen. They are promoted, in large part, by those seeking to profit politically, rather than by competing in a market where consumers vote with their wallets.”

In a statement on the company’s Viewpoint website, Dr. Richard Fink, Executive Vice President of Koch Industries, continued to explain the harm of government intervention, saying “Koch has consistently opposed subsidies that distort markets. We maintain that the marketplace, while not perfect, is the best mechanism for allocating resources to consumers. People deciding what fuels to purchase, instead of the government, is best for consumers and our country. Likewise, if natural gas vehicles are truly advantageous and economically efficient, then consumers will demand that they be developed without political mandates that exhaust more taxpayer dollars.”

Fink continues, “We do not question T. Boone Pickens’ intentions or integrity in this debate. We recognize his experience in the energy markets and take him at his word that he thinks this is a good idea. However, we believe history has demonstrated over and over that these subsidies end up undermining the long term prosperity of the country. For these principled reasons, we oppose this bill to give tax incentives to buyers and makers of natural gas-powered vehicles and related infrastructure. We also consistently oppose subsidies for all other fuels whether or not we benefit from them.”

Pickens would probably object to the use of the term “subsidy,” as the legislation he pushes grants “credits,” a term that sounds fairly benign. Timothy P. Carney, writing in the Washington Examiner, provides an explanation of the difference: “Pickens draws two dividing lines in the piece: tax credit vs. grant, and permanent versus temporary. A temporary subsidy is certainly better than an indefinite or permanent one. The tax credit question is trickier. Many free-market champions support every tax break ever proposed (Ron Paul, for instance). Other free market types (like me, probably) think that tax credits act as subsidies which distort the market, and ultimately lead to tax hikes on others. One of the bad things about tax credits is that they reward businesses for following political signals rather than market signals, but they do it in a way that allow the beneficiaries, like Pickens, to act as if they’re not on the public dole. Sure, a tax credit (most of the time) isn’t a handout, but the favored product (like ethanol or natural gas) only succeeds because its competition is taxed at high rates. So tax credits are the socially acceptable form of corporate welfare.” (emphasis added)

While Carney usually gets things just right, I’ll disagree with him that the question of tax credits is tricky: They have the same economic effect as a grant or subsidy. They engineer the behavior the government wants. But Carney is right about the confusing appearance of tax credits, allowing them to be “the socially acceptable form of corporate welfare.” Unless we really think about it, that is.

In any discussion of Pickens and natural gas, we must recognize that he is an investor in gas and another energy technology related to gas: wind power. In 2008 Pickens ordered 667 wind turbines worth $2 billion from General Electric with plans to build a large wind power plant in Texas. Wind power is highly dependent on government subsidy, with supporters claiming the industry will be devastated unless Congress continues to renew the subsidies.

At one time Pickens wanted to use wind power to generate electricity, and the natural gas saved would be used to power transportation. But there’s another relationship between wind power and gas, and it stems from the unreliability and variability of wind power. It’s difficult to quickly adjust the output of most power plants. But natural gas turbine plants are an exception. Kansas recently saw one of its major electric utilities complete a new natural gas power plant. The need for the plant was at least partly created by its investment in wind: A document produced by Westar titled The Greenhouse Gas Challenge noted the “Construction of the 665 MW natural gas-fired Emporia Energy Center, providing the ability to efficiently follow the variability of wind generation.” In another document announcing a request for a rate increase it stated “Our Emporia Energy Center is excellent for following the variability of wind production.”

At the time of these investments by Pickens and Westar, the price of natural gas was high. Now it is low — so low, and the prospects for future low prices certain enough that Pickens has abandoned his wind farm projects. Even with all the subsidy granted to wind power, it’s cheaper to generate electricity with gas.

(Pickens has been left with many wind turbines he can’t use. According to the Wall Street Journal: “He’s hoping to foist them on ratepayers in Canada, because that country has mandates that require consumers to buy more expensive renewable electricity.” In other words, relying on some other country’s government intervention to relieve him of his mistake.)

So we see Pickens moving from one government-subsidized industry — wind power — to another: the subsidized market for natural gas-powered vehicles he hopes to create. The distinction between political entrepreneurs and market entrepreneurs couldn’t be clearer.

Charles Koch: Advancing economic freedom

In recent years Charles Koch and his brother David Koch have emerged as prominent defenders of economic freedom and the freedom and prosperity it promises. In today’s Wichita Eagle, Charles Koch explains the importance of economic freedom and warns of the threats to freedom and prosperity that our country faces.

A key component of economic freedom is property rights. In his 2007 book The Science of Success: How Market-Based Management Built the World’s Largest Private Company, Mr. Koch explained the importance of property rights: “Countries that clearly define and protect individual private property rights stimulate investment and grow. Those that threaten and confiscate private property lose capital and decline. They also lose the capability and efforts of the individuals who would be the greatest contributors to economic growth.”

In the Economic Freedom of the World report, there are five broad areas that are measured to determine the relative economic freedom of countries:

  • Size of Government: Expenditures, Taxes, and Enterprises;
  • Legal Structure and Security of Property Rights;
  • Access to Sound Money;
  • Freedom to Trade Internationally; and
  • Regulation of Credit, Labor, and Business.

We can see the importance of property rights to economic freedom. When government taxes, it takes our property and gives it to someone else — often to business firms in the form of corporate welfare. Without a developed legal system, property rights are not secure. Without sound money, government takes our property by devaluing our savings through inflationary monetary policies.

It is the advancement of policies that promote economic freedom that, as Koch writes, “help societies prosper.” We see this in the rankings of countries on the economic freedom index. Countries with high levels of economic freedom, like Hong Kong, are prosperous even through they often have little in the way of natural resources. And countries that are rich in resources but not in economic freedom: Their people suffer, although corrupt leaders usually live richly.

Economic freedom is not just for rich people. Everyone — especially those on the lowest rungs of the economic ladder — benefits.

Charles Koch: Economic freedom key to improving society

By Charles G. Koch

My brother David and I have long supported the principles that help societies prosper. I have actively done so for nearly 50 years, as has my brother for more than 40.

In recent years, we have stepped up our efforts to deal with the enormous threats to the future well-being of the people of this country. This has prompted some extreme criticism. From the White House to fringe bloggers, we are now being vilified, mischaracterized and threatened.

In a perverse way, these attacks indicate that we are having a positive effect on public awareness and policymaking. That is why we are working even harder to advance economic freedom and prosperity.

We do so because we believe economic freedom is essential for improving the well-being of society as a whole, especially those who work hard to provide for their families, as well as our most vulnerable. History and sound theory are clear on this point. If we allow our government to waste scarce resources and become the ultimate decision maker, almost everyone will suffer a lower standard of living.

Continue reading at The Wichita Eagle. A slightly different version of Mr. Koch’s editorial is available on the Koch Industries website at Advancing economic freedom.

Study looks at spending, strategy in cap and trade debate

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

According to American University Professor Matthew Nisbet, in 2009 environmental groups spent $394 million on climate change and energy policy efforts such as promoting cap and trade. Opposition groups spent $259 million. Information like this helps place the reports of conservative spending, including that of Charles and David Koch, in perspective. Without this, we’re left with the one-sided reports from Greenpeace and the New Yorker magazine, in which numbers are mentioned without — or with little — context.

Nesbit’s report is Climate Shift: Clear Vision for the Next Decade of Public Debate.

The report also looks at expenditures on lobbying. In this area, it’s less clear how much was spent lobbying for or against cap and trade legislation, as companies and organizations report their total spending on all lobbying activity, not the amount spent on specific bills. In this light, Nisbet reports that “environmental groups were able to forge a network of organizations that spent a combined $229 million on lobbying across all issues. In comparison, the network of prominent opponents of cap and trade legislation spent $272 million lobbying across all issues.”

Spending on elections is mixed. Considering contributions to members of Congress, proponents of cap and trade legislation outspent opponents. But in independent expenditures, the situation is reversed. But on Proposition 23 in California, environmental groups spent the most.

In conclusion to its chapter on spending, the report states: “… propelled by a wealthy donor base and key alliances with corporations and other organizations, the environmental movement appears to have closed the financial gap with its opponents among conservative groups and industry associations. Indeed, the effort to pass cap and trade legislation may have been the best-financed political cause in American history. The effort also demonstrates not only the vast revenue base and organizational capacity of the environmental movement, but also the movement’s enhanced ability to coordinate activities among its constituent members and to build partnerships.”

Climate Change Advocacy: Revenues, Spending, and Activities

By Matthew Nisbit

After the failure of the Senate cap and trade bill in August 2010, many commentators blamed the bill’s demise on the massive spending by fossil fuel companies, industry associations and their conservative allies. Others, however, noted that environmental groups—joined by dozens of leading companies and organizations—had devoted record amounts of financial resources in an effort to pass the bill. As an unnamed Obama administration official said about environmental groups, “They spent like $100 million and they weren’t able to get a single Republican convert on the bill.”

To better understand the influence of spending in the cap and trade debate, in this chapter I review the nature, composition and funding sources of the U.S. environmental movement and compare these factors to the opposing coalition of conservative think tanks and industry associations. Then, analyzing data compiled from tax returns, annual reports, and other sources, I systematically compare the revenue and forms of spending by both sides in the debate.

Though most environmental groups are limited in how much money they can devote to direct lobbying, in the debate over cap and trade, they were able to spend heavily on efforts to educate the public and policymakers on the need for a mandatory emissions cap, hiring the country’s top political consultants. They also invested in partnerships with corporations and other organizations in a strategy aimed at counter-balancing the amount spent on lobbying by opposing industry associations and companies.

As the analysis indicates, the environmental movement has made sizable gains in closing the spending gap with their conservative and industry opponents. Indeed, the effort to pass cap and trade legislation may have been the best-financed political cause in American history. The effort also demonstrates not only the vast revenue base and organizational capacity of the environmental movement, but also the movement’s enhanced ability to coordinate activities among its constituent members and to build alliances.

Continue reading from Chapter 1 of Climate Shift: Clear Vision for the Next Decade of Public Debate

Kansas and Wichita quick takes: Thursday April 21, 2011

Can anything Think Progress says about the Kochs be believed? Mark Tapscott, Washington Examiner Beltway Confidential: “Almost certainly not, to answer the question posed by the headline above. Here’s the latest example of why. Think Progress is all atwitter about a Nation magazine report concerning the Koch Industries 2010 Election Packet. This dastardly document, according to Think Progress, was “mailed to 50,000 employees instructing them on who to vote for in the 2010 midterm elections.” Curious, I clicked over to the Nation and read the cover letter in the packet. Here’s what it said about how Koch employees should decide for whom to vote: “For most of you, we’ve also enclosed a listing of candidates supported by Koch companies and KOCHPAC, the political action committee for Koch companies. Of course, deciding who to vote for is a decision that is yours and yours alone, based on factors important to you. (emphasis added)” … At RedState, Erick Erickson contrasts the behavior of unions: “Think Progress and Lee Fang love them some unions. And what do unions do? Unions send out fliers encouraging union members to vote for union backed candidates. Hell, unions even get union members to go door to door for candidates and give union dues to candidates — something KOCHPAC cannot do with all employees, just executives. Additionally, unions will often bus employees to the polls and have a poll monitor watch to make sure the union members have voted. Koch Industries does not do that. But here’s where the real intellectual dishonesty or stupidity come in. Lee Fang and Think Progress support card check. They want unions to be able to stand over a business’s employees and find out whether or not the employee has signed a card to unionize and, if not, intimidate and cajole the employee until he does (not that Think Progress or Lee Fang are on record supporting that last bit).” … Lee Fang is apparently assigned full time to digging up dirt on Charles and David Koch, and Fang’s reporting has been found to be unreliable and misinformed.

Kansas governor on first 100 days. In a press release, Kansas Governor Sam Brownback listed some accomplishments of the first 100 days of his administration. Highlights mentioned were: “First Month Commitments” in the Governor’s Road Map for Kansas accomplished, including releasing a Strategic Economic Development Plan and establishing the Office of the Repealer. … Six Executive Reorganization Orders designed to restructure state government to become law on July 1, 2011 to increase efficiency, restructure government, and cut overhead costs. … Numerous Road Map for Kansas goals achieved through bi-partisan-supported legislation signed into law including the “Rural Opportunity Zones” bill, several deregulation bills, two pro-life bills, a voter ID bill, and a workers compensation reform bill. … On challenges ahead, the Governor said: “I am pleased with what we have accomplished in our first 100 days but our state continues to face a multitude of fiscal challenges that need to be addressed. More than 100,000 Kansans are still out of work. This administration will continue to focus on building a pro-growth environment that includes allowing businesses of all sizes to expense their investments and abolishing burdensome regulations to protect Kansans and encourage job creation.”

Freeloaders come in all types. Recently John Stossel had an hour-long special show that focused on freeloaders. The show is now available on the free hulu service by clicking on Stossel: Freeloaders. The freeloaders Stossel profiles are not just panhandlers, although Stossel did work in disguise as a panhandler and discovered he could make over $90 a day — tax free, he added. One segment of the show uncovered farmers who received $50,000 because they were discriminated against by lenders. But — some of these farmers merely grew potted plants or fertilized their lawn to qualify as a farmer. Another reported on homeowners who stopped paying their mortgages on advice of a website. The homeowners and the website operator said there is no moral obligation to pay their mortgage loans. Corporate freeloaders didn’t escape, as General Electric was mentioned as a large recipient of government handouts. And, they won’t pay taxes: “Despite billions in profit, they’ll pay no taxes this year,” reported Stossel. … The severe poverty of American Indian tribes that live on government-managed reservations and living on government handouts is contrasted with a tribe that accepts no handouts and has no casinos. … Stossel covered his own beach house, which was covered by low-cost subsidized federal fund insurance. It suffered losses twice. … Standing in front of the U.S. Capitol, Stossel said “We rich people freeload off you taxpayers all the time, because the over-promisers in there keep churning out special deals for politically-favored groups. And they tend to be rich people, because the rich can afford lobbyists. … Think about how much money we could save if these guys just didn’t pass so many laws that encourage freeloading. But they do, year after year. They micromanage life with subsidies. And the winners are not so much the needy, but people like Bon Jovi, Ted Turner, Maurice Wilder, and — me. So let’s hope for an end to all this freeloading.”

Are taxes the solution? From Bankrupting America: “It’s Tax Day 2011! And while it isn’t the most pleasant thing to think about, it doesn’t sting as bad as when you consider we’re $14 trillion in debt and face a $1.6 trillion deficit. So what got us into this mess? We’ve had an unfortunate habit of spending far more than we can afford — and have been doing it for years. The logical solution is to … well … stop doing that. But some have suggested we should tax our way out of the hole. Beyond the question of whether we should, there’s a more important question: can we?” … The site has an interesting infographic relating to taxes.

The spontaneous society — centralized planning not required. In the following excerpt from Austrian Economics — A Primer Eamonn Butler explains that we don’t need centralized government planning in order to have great human accomplishment. Also, markets process far more information than any central planner could: Many people find it hard to believe that a society or an economy could survive — much less create and distribute wealth in any organised and rational way — without central planning and authority. Hayek has provided the explanation, however: the liberal human society and economy is, he says, an example of a spontaneous order. Just because something is not planned from the centre does not mean that it is wild, unkempt, random and disorderly, he points out. Societies of bees and termites are very orderly, but they are hardly planned. Human language, similarly, was never “invented”, but evolved, and grew and survived because it is useful. … The market and the price system, similarly, was never planned, but evolved as people exchanged different goods. Nor do they need any central command structure to maintain them: they have survived and expanded because they deliver such enormous benefit to us. In other words, there is a great deal of wisdom in these institutions, despite the fact that they have never been consciously designed and planned. The price system, for example, quickly and efficiently steers resources to their highest value uses, without anyone ever having deliberately invented it. The fact that there is no central planning does not mean that it is “unplanned” and irrational. We are all planners, says Hayek, in that we consciously act in order to satisfy our ambitions with the materials and information that are available to us. In the market order there is in fact far more planning taking place, and far more information being used and acted upon, than could ever be achieved by the single mind of any central authority. … In the case of the liberal market order, the rules are principles like the respect for private property and the right to hold or dispose of it, the rejection of violence and coercion, the freedom of people to enter into voluntary contracts, and the honouring of such contractual promises. Astonishingly, a few simple liberal rules such as these are sufficient to create what Rothbard calls an “awe-inspiring” harmony and co-ordination between individuals, and a precise, swift arrangement to guide resources to the greatest possible satisfaction of consumers’ desires.

New York Times correction, finally

Almost two weeks ago I spotted an error in a New York Times op-ed piece. In my post, I wrote: “Perhaps it’s a small matter. But maybe not, as a New York Times op-ed chose to mention it in the limited space these things have.”

The error was the article’s claim that Charles and David Koch have contributed to FreedomWorks, a group that advocates for limited government.

As reported on its corrections page for April 13: “An Op-Ed article on April 4, about disclosure rules for nonprofit groups that engage in political advocacy, imprecisely described contributions by the billionaire brothers Charles and David Koch to such groups. While they contributed to a predecessor of the conservative group FreedomWorks, they say they have not contributed to FreedomWorks itself.”

I suppose this qualifies as a correction. The Times can’t quite bring itself to use the word incorrectly, using the vague and less harsh term imprecisely instead.

Powerline has more on this matter here, and on an earlier error by the Times here.

ThinkProgress and Lee Fang: wrong again

Earlier this week we noted that Center for American Progress Action Fund (an arm of the Center for American Progress, a think tank closely associated with President Barack Obama’s administration and left-wing financier George Soros) was launching an “ideologically driven news organization.” Its implementation would be through the ThinkProgress blog, which has been active for some time, including a role as a vocal — and often highly misinformed — critic of Charles and David Koch.

This bit of background is important because ThinkProgress has shown to be an unreliable source of information. Case in point: Yesterday John H. Hinderaker of Powerline examined a recent post on ThinkProgress that is critical of Koch Industries and found it and its author Lee Fang to be highly lacking in a number of areas, such as facts, knowledge, and understanding of economics. One comment left to the article included: “Based on 25 years of scholarly research and market experience, I can say that Fang the Farcical knows not the first thing about either manipulation or commodities pricing. You would think that Soros could have found a junior assistant trader to teach Fang the basics. But then there wouldn’t have been a story, would there?”

Here’s just a small example: One of the most telling parts of Fang’s article is this: “Big banks and companies like Koch employ a contango strategy by buying up oil and storing it in massive containers both on land and offshore to lock in the oil for sale later at a set price.”

Here Fang is criticizing Koch Industries for speculation in oil markets. Hinderaker notes that unlike banks — which aren’t in the oil business — Koch Industries is actually in the oil business: “Koch certainly does buy oil and store it; it is in the oil business. However, I would be curious to know what ‘big banks’ ‘buy[] up oil and stor[e] it in massive containers both on land and offshore.'”

Buying something when the price is low and storing it for later use seems a rather innocent act. I wonder if Fang has ever done like I have: When I notice the grocery store has Diet Pepsi on sale, I buy extra and store it for later use when I expect the price will be higher.

Contango Confusion

By John H. Hinderaker

The Think Progress web site is a Soros-funded mouthpiece for the Obama administration. Someone at Think Progress or its parent, the Center for American Progress, has instructed cub reporter Lee Fang to devote full time to attacking Charles and David Koch and their company, Koch Industries. (It would be interesting to know who gave that instruction, and why.) We have deconstructed several of Mr. Fang’s attacks, all of which have been juvenile. But his latest effort is perhaps his most pitiful yet.

In “The Contango Game,” Fang tries to show that Koch Industries “manipulates the oil market for profit.” Unfortunately, young Mr. Fang has neither the business experience nor the intelligence to understand the issues about which he writes. The result is that nearly every sentence is a howler. Among other things, while a contango market is the main subject of Fang’s post, he doesn’t know what the phrase means.

Fang begins with the claim that oil prices are high these days because of speculation. Whether it is even possible for “speculators” — some call them investors — to have a material impact on the price of oil over time is dubious. While partisans like to blame speculators for rising oil prices–never, however, for falling prices–objective studies, like this one by the Commodity Futures Trading Commission in 2008, have failed to document any such influence.

Continue reading at Powerline.

Center for American Progress starts ideologically driven news organization

A common criticism of anyone taking a conservative political position is that they should stop getting all their information from Fox News. Criticism like that works both ways, however, especially now that the Center for American Progress Action Fund, according to Politico, is “ramping up an in-house full-fledged, ideologically driven news organization aimed in part at tripping up Republican candidates on the ground in the early presidential contests.” In the coming weeks the ThinkProgress blog will be relaunched as this news organization.

Some key points:

  • There are ambitious goals: “The newsroom side is absolutely competing with all the leading news organizations,” said Faiz Shakir, the editor-in-chief of ThinkProgress. “We’re not out there to peddle research — we’re out there to make news.
  • Disclosure requirements are good for my political enemies, but not for me: “ThinkProgress may quack like a duck, but it’s hardly just another media organization. For one thing, like the conservative groups that have drawn Democratic criticism, its parent 501(c)4 nonprofit doesn’t disclose its donors, which Palmieri justified on the grounds that, unlike those groups, they don’t produce political advertising.”
  • CAP Action fund is, of course, an arm of the Center for American Progress, a think tank closely associated with President Barack Obama’s administration and George Soros, who advocates many liberal and left-wing political causes: “Further, CAP Action Fund openly runs political advocacy campaigns, and plays a central role in the Democratic Party’s infrastructure, and the new reporting staff down the hall isn’t exactly walled off from that message machine.”
  • Oh, it’s a moral thing: “Rejecting a question from POLITICO about why CAP declined to reveal its donors while calling out the Kochs for not disclosing their donations, he [blogger Lee Fang, a vocal critic of Charles and David Koch] said ‘It’s fundamentally different when you have wealthy individuals that want to donate to a worthy cause, and the Koch brothers and some of their cohorts that are funding groups that are essentially just advancing their self interests and their lobbying interests.'” Fang and the others at Center for American Progress and its allied organizations are evidently not able to understand that the economic freedom that Charles and David Koch advocate is not necessarily in their own interests, if all they wanted to do is become richer. As Charles Koch recently wrote in The Wall Street Journal: “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.”

It’s the big-government, freedom-killing policies that Center for American Progress supports that are not moral. As seen in the video presented Monday by Walter E. Williams, most government programs exist to take property from one American and give it to another to whom it does not belong, thereby making us all poorer in the process. After these government programs become ensconced, we end up with a country that is not able to care for itself and make arrangements for even the most important things such as retirement and health care, as George Resiman explained.

Center for American Progress news team takes aim at GOP

By Ben Smith & Kenneth P. Vogel

The liberal Center for American Progress Action Fund is ramping up an in-house full-fledged, ideologically driven news organization aimed in part at tripping up Republican candidates on the ground in the early presidential contests.

The group, executives told POLITICO, now has 30 writers and researchers at ThinkProgress, its blog, which is being redesigned and relaunched in the coming weeks. The editorial staff, similar in size or larger than that of many political websites, marks the latest phase in the deliberate, decade-long construction of a liberal infrastructure for reporting, research, and hammering home a message that the right is scrambling to match.

“We see ourselves as a content provider,” said Jennifer Palmieri, the president of The Center for American Progress Action Fund, the group’s advocacy arm. “There actually is an echo chamber now.”

Continue reading at Politico

Soros events, catering to liberal causes, largely escape notice

This week George Soros is hosting two conferences that seek to influence and change the international financial system and the news media. In contrast to a conference recently hosted by Charles and David Koch, the Soros events have received little advance attention, and it seems likely that there will be little reporting afterward.

A search of Google news shows just a handful of stories mentioning these events. The Boston Globe has short mention of the event taking place in New Hampshire, presumably only because it is in the neighborhood. But Dan Gainor of Media Research Center, a conservative watchdog group, has the details on these two events and who is attending.

The New Hampshire event, previewed by Gainor in the Wall Street Journal piece Unreported Soros Event Aims to Remake Entire Global Economy, is intended to “‘establish new international rules’ and ‘reform the currency system.’ It’s all according to a plan laid out in a Nov. 4, 2009, Soros op-ed calling for ‘a grand bargain that rearranges the entire financial order.'” The goals of the conference are lofty — and scary. Soros has written that “The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.” As described by Gainor, this conference appears to exist to counter the threat Soros sees: “That’s what this conference is all about — changing the global economy and the United States to make them ‘acceptable’ to George Soros.”

At the same time in Boston, Gainor reports (Two Soros Events Aim to Remake Financial Order and Media — So Where’s the Reporting?) that about 350 will gather for a conference on media reform. “Everywhere you they go in Boston, they’ll be making more left turns than NASCAR. It’s an event filled with lefties dissatisfied that the news media aren’t even more liberal, and their goal will be to make that happen.”

Proposals for government funding of news media and a return to the fairness doctrine will be big topics, says Gainor.

Contrast with Koch event

The virtually non-existant news coverage of these two Soros events stands in stark contrast to the frenzy whipped up by media in anticipation of the recent Koch-sponsored conference in January. This is despite the fact that several journalists are speaking at the New Hampshire event, and the Boston event is all about news media.

The Koch event was also protested, and the protests widely covered in the news. It appears there are no plans by anyone to protest the Soros events.

Perhaps David Boaz offers insight when he wrote: “One difference between libertarianism and socialism is that a socialist society can’t tolerate groups of people practicing freedom, while a libertarian society can comfortably allow people to choose voluntary socialism.”

The message of capitalism, free markets, and economic freedom is powerful. When people realize its benefits and its ability to foster civil society and prosperity for everyone, the special interests that live off government intervention are threatened. As Boaz notes, if people choose to reject freedom and live under some other form of order, libertarians have no problem with that.

But Boaz qualifies this. Such a choice must be voluntary. That’s not what Soros and his supporters have in mind. Their intent is to expand the role of government, and since government operates by force and coercion, this expansion is not voluntary. The more Soros has his way, the more the freedom and liberty of Americans is at risk.

We ought to take note of these conferences. But with a virtual news blackout, most people won’t be aware of them and the plans being made.

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

Perhaps it’s a small matter. But maybe not, as a New York Times op-ed chose to mention it in the limited space these things have.

In today’s newspaper and yesterday’s online version, David Callahan wrote this: “One such group is FreedomWorks, which has received significant amounts of money from the Koch brothers and is a force behind both the Tea Party political movement and the conservative libertarian policy agenda it espouses.”

The problem is that the alleged financial support from the Koch brothers to FreedomWorks doesn’t exist. A page on the Koch Industries website states: “For example, neither Koch companies and foundations nor members of the Koch family have ever contributed to FreedomWorks.” This was repeated in a Washington Examiner interview with Dr. Richard Fink, who heads the Charles G. Koch Charitable Foundation and serves as an executive vice president of Koch Industries.

While this might seem like an inconsequential error, the op-ed’s topic is political contributions — those who make them, and those who receive them. So it’s not unreasonable for a prominent newspaper to get the facts used to bolster its argument correct.

Generally, this is another example of the political Left’s obsessive slamming of Charles and David Koch, to the point where things like facts don’t matter, not to mention the politics and economics. As an example, critics portray the Kochs as pursuing policies that benefit only themselves. But the reality is different. As we are learning, it is easy for a corporation to mine the halls of government for subsidy, special tax treatment, and regulations that benefit it and harm its competitors. Competing in the marketplace, where consumers are king, is more difficult. These free markets, however, are what Charles and David Koch believe in and have supported for decades, because economic freedom makes everyone more prosperous. As recently written in the Weekly Standard:

The second charge was that the Kochs’ talk about free markets was merely cover for economic self-interest. But if that were true, why doesn’t every major corporation full-throatedly support limited government? Are we really to believe that Koch Industries is the only self-interested corporation in America? The reality, of course, is that an easier way to advance corporate self-interest is the one taken by most giant companies: securing monopolies, bailouts, tariffs, subsidies — the opposite of free enterprise. “It’d be much safer economically to sit on the sidelines or curry favor with the Obama administration,” said Richard Fink.

It was impossible for the liberal activists to acknowledge that libertarians might actually operate from conviction. Charles and David believed in low taxes, less spending, and limited regulation not because those policies helped them but because they helped everybody.

Kansas and Wichita quick takes: Tuesday March 29, 2011

Follow-up to Koch profile. A few pieces have provided amplification and commentary on the Weekly Standard profile of Charles and David Koch, notably Politico and Jennifer Rubin in The Washington Post. … Has a secret conspiracy been uncovered by Politico? Groups identified as lined up against the Kochs include a non-profit group titled Brave New Films, Greenpeace, Public Citizen, Common Cause, Ruckus Society, AFSCME (an arm of AFL-CIO), Service Employees International Union, and Center for American Progress with its attack blog ThinkProgress. Asks Post’s Rubin: “[a conspiracy] not of the Kochs but of the left-leaning groups that have mounted a campaign against them. … In other words, groups that purport to be nonpartisan are actually involved in a coordinated effort to smear the Kochs.” … Rubin notes the commonality shared between many of these groups: they receive millions from “foundations controlled by or linked to Soros,” referring to left-wing cause financier and anti-capitalist George Soros. … And are the Koch donations overly generous? Writes Rubin: “Left unsaid in all of this is the degree to which the Kochs’ political giving has been exaggerated. How much do they give? Over the last 20 years, about $11 million. Not chump change for you and me, but kind of stingy actually for billionaires whom the left would have us believe are taking over the American political system. By way of comparison, Duke Energy — the third-largest nuclear power plant operator — has been a major donor to Democrats, including the president. That would be the same Duke Energy that just forked over a $10 million line of credit for a single purpose — the 2101 Democratic Convention. Just the sort of thing Common Cause would be concerned about. After the next conference call with the other members of the Soros gang, I’m sure it’ll get right on it.” … Both articles are worth reading.

The decline of Detroit: a lesson for Wichita? William McGurn in The Wall Street Journal: “Most Americans did not need to be told that Detroit is in a bad way, and has been for some time. Americans know all about white flight, greedy unions and arrogant auto executives. The recent census numbers, however, put an exclamation mark on a cold fact: A once-great American city today repels people of talent and ambition.” How did this happen? McGurn quotes Rev. Robert A. Sirico: “Detroit is a classic example of how a culture that was legendary for enterprise and innovation was slowly eroded by toxic politicization from the 1960s on.” … Later McGurn asks “What happened to this Detroit? In many ways the answer is liberal politics and expanding government.” … Could this happen to Wichita? Our population is not declining. But Wichita has been said to be more dependent on one industry (aircraft manufacturing) than Detroit was on automobile manufacturing. And Wichita government is becoming more liberal — notwithstanding the protests of several self-styled conservative city council members who will soon be leaving office. Increasingly business looks to city hall rather than markets for inspiration and financing. Our mayor, city council members, and bureaucrats want more “tools in the toolbox” for intervening in the economy. … Yes, the devastation seen in Detroit could happen here.

Moran to vote “no” on debt ceiling. United States Senator Jerry Moran, a newly-elected Kansas Republican, has informed President Obama that he won’t vote for an increase in the national debt ceiling. Wrote Moran: “Americans are looking for leadership in Washington to confront the problems of today, not push them off on future generations. To date, you have provided little or no leadership on what I believe to be the most important issue facing our nation — our national debt. With no indication that your willingness to lead will change, I want to inform you I will vote “no” on your request to raise the debt ceiling.” The entire letter from Moran is at I will vote “No.”

Golden geese on the move. Thomas Sowell: “The latest published data from the 2010 census show how people are moving from place to place within the United States. In general, people are voting with their feet against places where the liberal, welfare-state policies favored by the intelligentsia are most deeply entrenched.” Sowell notes that blacks, especially those young and educated, are moving to the South and suburbs. “Among blacks who moved, the proportions who were in their prime — from 20 to 40 years of age — were greater than in the black population at large, and college degrees were more common among them than in the black population at large. In short, with blacks, as with other racial or ethnic groups, those with better prospects are leaving the states that are repelling their most productive citizens in general with liberal policies.” Detroit, he writes is “the most striking example of a once-thriving city ruined by years of liberal social policies.” Finally, a lesson for all states, including Kansas: “Treating businesses and affluent people as prey, rather than assets, often pays off politically in the short run — and elections are held in the short run. Killing the goose that lays the golden egg is a viable political strategy.” (Mass Migration Of America’s Golden Geese.) The migration statistics concerning Kansas are not favorable, although some are trending in a better direction.

Legislators will have more access to SRS case files. Kansas Health Institute News Service reports” “Parents whose children have become state wards now have the option of signing a one-page form that gives state legislators unrestricted access to information in their family’s case file.” Previously legislators had access to the information, but “social workers decided what information from the file would be shared. And legislators were not given documents or copies from the files but verbal briefings.” Some are concerned that information harmful to children will be made public.

Wichita unemployment rate improving. Writes Friends University finance professor and Mammon Among Friends blogger, Malcolm Harris, as saying, “‘We’re seeing a trend, and that trend is in the right direction’…But, he cautioned, ‘we’ve got a long way to go.'” More at Wichita’s Unemployment Rate Falls Compared to Last Year.

Government planners vs. individuals. Another reading from Economics for Real People: An Introduction to the Austrian School by Gene Callahan. The topic is individuals acting in markets vs. government planning: Economics does not hold that the desires of the consumers are pure or virtuous. It does illustrate that the market process is the only way to approximately gauge those desires. All other systems must attempt to impose the rulers’ values on the ruled. Those who plan on doing the imposing have a very high regard for their own judgment, and a very low regard for that of the rest of us. To paraphrase the economist G.L.S. Shackle, the man who would plan for others is something more than human; the planned man, something less. … [Ludwig von] Mises describes those who would coercively replace the value judgments of their fellow men by their own value judgments: [They] are driven by the dictatorial complex. They want to deal with their fellow men in the way an engineer deals with the materials out of which he builds houses, bridges, and machines. They want to substitute “social engineering” for the actions of their fellow citizens and their own unique all-comprehensive plan for the plans of all other people. They see themselves in the role of the dictator — the duce, the Führer, the production tsar — in whose hands all other specimens of mankind are merely pawns. If they refer to society as an acting agent, they mean themselves. If they say that conscious action of society is to be substituted for the prevailing anarchy of individualism, they mean their own consciousness alone and not that of anybody else. (The Ultimate Foundation of Economic Science)

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

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:

The second charge was that the Kochs’ talk about free markets was merely cover for economic self-interest. But if that were true, why doesn’t every major corporation full-throatedly support limited government? Are we really to believe that Koch Industries is the only self-interested corporation in America? The reality, of course, is that an easier way to advance corporate self-interest is the one taken by most giant companies: securing monopolies, bailouts, tariffs, subsidies — the opposite of free enterprise. “It’d be much safer economically to sit on the sidelines or curry favor with the Obama administration,” said Richard Fink.

It was impossible for the liberal activists to acknowledge that libertarians might actually operate from conviction. Charles and David believed in low taxes, less spending, and limited regulation not because those policies helped them but because they helped everybody. “If I wanted to enhance my riches,” said David, “why do I give away almost all my money?”

We’ve just seen the results of how an “aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting” can succeed, as we’ve learned that General Electric has been successful in avoiding income tax liability. GE, whose chief executive is said to be close to President Obama, also invests in industries like wind power that receive government subsidy, without regard for the underlying economic benefit of these investments.

But Charles and David Koch believe that economic freedom and free markets are the best way to generate prosperity for everyone, and the Weekly Standard article shows they have worked for decades to promote this message.

What may really gall liberals is that while believing that a powerful and expansive government is good for the country, they have created a complicated machine that a politically-favored company like GE can exploit for huge profits, all without creating anything that consumers value. Charles Koch calls for an end to this, as he recently wrote 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.”

The political Left just can’t believe that anyone would write that and really mean it.

The Paranoid Style in Liberal Politics

The left’s obsession with the Koch brothers
By Matthew Continetti

… For decades David and Charles have run Koch Industries, an energy and manufacturing conglomerate that employs around 50,000 people in the United States and another 20,000 in 59 other countries. Depending on the year, Koch Industries is either the first- or second-largest privately held company in America — it alternates in the top spot with Cargill, the agricultural giant — with about $100 billion in revenues. David and Charles are worth around $22 billion each. Combine their wealth and you have the third-largest fortune in America after Bill Gates and Warren Buffett. Like most billionaires, the brothers spend a lot of time giving their money away: to medical and scientific research, to educational programs, to cultural institutions, and to public policy research and activism.

That last part has caught the attention of the left’s scouring eye. For unlike many billionaires, the Koch brothers espouse classical liberal economics: They advocate lower taxes, less government spending, fewer regulations, and limited government. “Society as a whole benefits from greater economic freedom,” Charles wrote in a recent Wall Street Journal op-ed. Judging by the results of the 2010 elections, there are millions of Americans who agree with him.

Over the years the Kochs have flown beneath the radar, not seeking publicity and receiving little. But then the crash of 2008 arrived, and the bailouts, and the election of Barack Obama, and pretty soon the whole country was engaged in one loud, colossal, rollicking, emotional argument over the size, scope, and solvency of the federal government. Without warning, folks were springing up, dressing in colonial garb, talking about the Constitution, calling for a Tea Party. Some of them even joined a group called Americans for Prosperity — which the Kochs helped found and partly fund.

Continue reading at the Weekly Standard.

The Left’s ‘obsession with all things Koch’

Yesterday John H. Hinderaker of Powerline wrote another article about the political Left’s obsession with Charles and David Koch and Koch Industries. It’s a lengthy piece and worth reading, but because it is long, I will try to summarize.

The Center for American Progress and its website ThinkProgress are fronts for the Obama Administration and are “lavishly funded by George Soros and several other left-wing billionaires.”

The Center for American Progress, through ThinkProgress, “has carried on a bizarre vendetta against Charles and David Koch and their company, Koch Industries.” The Kochs are active in politics on the conservative/libertarian side.

Having an “obsession with all things Koch,” ThinkProgress has attacked freshman U.S. Representative Mike Pompeo, who represents the strongly Republican Kansas fourth congressional district where Koch Industries’ Wichita headquarters is located.

Therefore, the man-bites-dog story: “Republicans support Republican candidate in Republican district!”

Other things we learn: ThinkProgress charges that Pompeo “made his fortune off of a Koch backed company.” The facts are that Koch Venture Capital invested in a company that Pompeo and some partners founded to the amount of two percent.

ThinkProgress has also made an issue of campaign contributions by Koch Industries, writing “In fact, Koch Industries even ranked at top of Pompeo’s campaign contribution list, outpacing the second top contributor by $60,000.” This is true, but when we look at data at OpenSecrets.org, we can see that of the $79,500 contributed, $10,000 came a Koch Industries political action committee (PAC). The balance of this amount came from a large number of people employed by Koch Industries.

The left-wing mob behavior is noted in the story: “One of the curious media phenomena of our time is the synergy between the fever swamp of left-wing web sites, often closely affiliated with the Democratic Party and supported by far-left billionaires, and the supposedly mainstream media. Repeatedly, ‘stories’ that begin in the fever swamp attain a sort of respectability a few days later when they are picked up by the New York Times or the Washington Post, and often are disseminated from there to liberal newspapers around the country. This is a case in point. On March 20, the Washington Post, evidently inspired by Think Progress, laundered that site’s attack on Pompeo into slightly more respectable form, and brought it into polite company.”

(The story referred to is GOP freshman Pompeo turned to Koch for money for business, then politics.)

The recent congressional campaign between Pompeo and Raj Goyle is mentioned, and it is revealed that the Center for American Progress — the parent of ThinkProgress, the site attacking Pompeo and Koch Industries — contributed $8,300 to the Goyle campaign. By the way, according to OpenSecrets, Goyle raised much more money for his campaign from out-of-state donors than from people in Kansas.

Powerline also criticizes the Post story’s usage of Kansas University political science professor Burdett A. “Bird” Loomis as a source without identifying Loomis as a “Democratic Party partisan and a virulent enemy of Republicans in general and the Kochs in particular” and having written an “anti-Koch op-ed.” (The op-ed, from the Wichita Eagle, doesn’t outright criticize Koch, but you can tell Loomis doesn’t care for the Kochs and their advocacy of economic freedom.)

Powerline also notes on Loomis’ Facebook page his affinity for left-leaning politicians like Jim Ward, Laura Kelly, and Goyle, and also for the left-wing attack blog “Dome on the Range,” which exists only to poke fun at Republicans.

Summarizing — and from my observations Hinderaker is correct:

What we see here is incest to the third degree. The disgusting morass of left-wing blogs, funded by far-left billionaires like George Soros, spew up an endless stream of slimy attacks on mainstream citizens, like Charles and David Koch, and mainstream politicians, like Mike Pompeo. Democratic Party outlets that are generally presumed to be more respectable, like the New York Times and the Washington Post, watch the dirt flow by and periodically, when they see something promising, pluck it out of the swamp and take it mainstream in order to benefit their party. The Post isn’t as bad as some — I have referred to it as the most respectable voice of the Democratic Party — but when it follows this disgusting practice, plucking out the vilest unsubstantiated smear and promoting it for purely partisan purposes, it is hard to distinguish the Post from the most disreputable far-left rags, like ThinkProgress and the New York Times.

Anatomy of a Smear

By John H. Hinderaker

The Center for American Progress is generally regarded as a front for the Obama administration. Its President and CEO is John Podesta, formerly Bill Clinton’s Chief of Staff and the chairman of Barack Obama’s transition team. CAP is lavishly funded by George Soros and several other left-wing billionaires. It runs, among other things, a web site called Think Progress, which cranks out a steady stream of slimy hit pieces for the benefit of the Obama administration and the far left.

Soros apparently believes that only left-wing billionaires should be able to participate in public discourse, so his Center for American Progress, through its web site, has carried on a bizarre vendetta against Charles and David Koch and their company, Koch Industries. The Kochs are two of the very few billionaires who are active in politics on the conservative/libertarian side, a phenomenon that apparently drives left-wing billionaires wild with rage. I’m not sure why; maybe they think the Kochs are traitors to their class. In any event,Think Progress has stalked the Koch brothers with video cameras and produced one false, over-the-top attack on the Kochs after another, some of which we have had fun dissecting here.

Continue reading at Powerline.

Who benefits, loses from regulation?

A Powerline post discusses the Upton-Imhofe bill, which would bar the EPA from regulating carbon dioxide emissions. The article quotes Ranking Democrat Henry Waxman of the House Committee on Energy and Commerce as stating this bill benefits “big polluters like Koch Industries.”

But who really benefits from the regulation of greenhouse gases? First, large companies do. They are better able to absorb the costs of regulation than their smaller competitors. This is why we often see big business promoting increased regulation. It places their smaller competitors at a disadvantage. As Koch Industries is a large company, it is in a position to benefit from the proposed regulations relative to their smaller competitors. But, the company does not support the regulations.

Who will lose from increased regulation of greenhouse gases? Ultimately consumers will, but business is harmed, too. The cost of regulation causes a loss of income, which leads to less of the product (energy) being produced, and a corresponding rise in price. As energy becomes more expensive, it is low-income people that are hurt the most.

Aside from these market effects, the Powerline piece explains an entire industry that has developed to benefit from government subsidy of green energy sources and producers:

But there are, in fact, some companies that would benefit from the imposition of CO2 regulations on power plants, refineries and so on. Those companies are the ones that peddle inefficient forms of energy that cannot compete with fossil fuels absent government subsidies. Those subsidies come in two forms. The government can give money and tax breaks to inefficient energy producers like solar and wind, and it has indeed done that. However, those subsidies are relatively transparent and controversial. The second way in which government can help producers of inefficient energy is, therefore, actually better: it can make energy produced with fossil fuels more expensive by imposing needless regulations. And that is exactly what “green” — i.e., inefficient — energy producers lobby for.

And who are the green energy subsidy-seekers that benefit from increased regulation? Powerline identifies one: Thomas Steyer, a west coast hedge fund manager with investments in green energy companies. He has a personal financial motive, as Powerline describes: “As an investor who has placed a big bet on non-fossil energy, he has an obvious personal interest in the government imposing regulations that make his competitors — producers of fossil fuel energy — more expensive. In fact, without such government action, the ‘green’ projects in which he has invested are likely worthless.”

It should not be surprising that Steyer makes large campaign contributions to Democrats and is a board member of Center for American Progress, a left-wing think tank closely associated with the Obama Administration.

A case study in liberal hypocrisy

By John H. Hinderaker

On Monday, the House Committee on Energy and Commerce began its consideration of the Upton-Imhofe bill, which would bar the EPA from regulating carbon dioxide emissions. Upton-Imhofe is critical to any effort to restore our economy, so the Democrats are against it. Ranking Democrat Henry Waxman went on a hysterical rant against the legislation:

This is dangerous legislation. Climate change is real; it is caused by pollution; and it is a serious threat to our health and welfare. We need to confront these realities, not put our head in the sand like an ostrich.

We have written about this issue many times. Climate change is “real” only in the sense that the climate is always changing. That has been true for millions of years. Climate change is not caused by pollution; history proves that the level of carbon dioxide in the atmosphere does not control worldwide temperatures. Nor is global warming a serious threat to our health and welfare. Humanity has consistently thrived during warmer periods and suffered during colder ones. The Dark Ages were dark largely because they were cold.

Waxman continued:

Yet instead of promoting a clean energy future, we are pursuing this partisan bill that benefits no one except big polluters like Koch Industries.

I suppose Waxman thought he was punching his liberal ticket by mouthing the Democratic Party talking point du jour. Evidently he didn’t get the memo, and hadn’t heard that the Left has backed off on its daily attacks on Koch because those attacks were so over-the-top and so factually deficient that they made laughingstocks of the lefties who asserted them.

Continue reading at Powerline.