With gas prices currently hovering around $4 a gallon across the country, everybody is looking for someone to blame. If your an economist, you will probably blame the growing oil appetite of emerging middle classes in India and China, along with supply constraints in oil-producing nations and a weak dollar. If your looking for a domestic cause, you may blame the Strategic Petroleum Reserve or investor speculation in commodities markets. But one thing is for certain: if your a Democrat, you will blame oil companies, regardless of the fact that they have little to do with the painful prices at the pump.
Now, there is no dispute over the fact that oil companies are hauling in record profits. But just because oil companies are making more does not necessarily mean that they are the reason you are paying more for fuel. I think I would "put my lot in with economists" on this one, and I have yet to come across a legitimate economist who cites oil companies as the culprit behind higher prices. Actually, "culprit" is the wrong word to use, as the higher prices are a result of the natural forces of supply and demand, over which policy makers in Washington have little control.
Yet for some reason, despite the economic reality behind higher gas prices, Democrats have not ceased from placing the blame squarely on the shoulders on "Big Oil". It hasn't stopped Barack Obama from arguing for a windfall profits tax on the profits of oil companies, and it has failed to halt Congressional Democrats in their attempt at grandstanding by calling oil company executives before committee. The reason that it has not stopped them is because it is politically unpopular to tell the American people truth: there is not much that can be done.
As a result of their unwillingness to make this known, Sen. Obama and his colleagues in Congress have sought to make it seem as though they are doing something by punishing those who are supposedly benefiting most from the rising prices. Parading oil executives before a bloodthirsty committee must seem to be a win-win strategy : not only does it appeal to the Democrats image as a crusader for the little guy, but it also puts the Democrats in good standing among environmentalists.
This strategy of making villains out of profitable oil companies may very well help Democrats in an election year when economic issues are at the top of the list for most voters, but in reality the issue of oil profits is much more complex. Despite what many grandstanding Congressional Democrats, Barack Obama, and frustrated voters seem to believe, oil executives are not the only ones benefiting from the higher profits so frequently derided. These companies are all publicly-traded, with pension funds and 401k's heavily invested in them. As a result, when profits are soaring for a company like Exxon, it is not just those at the top who benefit. This is the dilemma for Democrats.
All individuals with pension funds invested in oil companies benefit from these rising profits, including many of the labor unions and "working class voters" that lie at the heart of the Democratic coalition. For instance, the National Fraternal Order of Police and its 342,000 members have pension funds heavily tied into oil companies such as Exxon and have seen the value of officers' pension funds soar in recent years. Now I don't know about you, but providing police officers with a comfortable retirement isn't a bad thing.
So when Congressional leaders call oil executives before committee to read them the riot act, they may want to consider the diverse group of shareholders gaining from higher profits by oil companies. They may also want to consider there own hypocrisy. After all, these same Democrats deriding the profitability of Big Oil and threatening incentive-killing taxes on profits, just passed a farm bill that provides direct taxpayer subsidies to farmers who are rolling in cash. Unlike the profits of oil companies, the subsidies and record profits of wealthy farmers aren't shared with anyone. To me, lambasting profitable oil executives on one day and providing direct taxpayer handouts to similarly profitable farmers on the next day is nonsensical, given the Democrats supposed commitment to the average taxpayer. But hey, it is an election year. Nothing makes sense.
Showing posts with label Farm Bill. Show all posts
Showing posts with label Farm Bill. Show all posts
Thursday, May 22, 2008
Monday, May 19, 2008
The Real Barack Obama
One of the biggest appeals of Barack Obama's candidacy to young and independent voters is his stated commitment to "post-partisanship" and his promise of a presidency run by the people rather than by special interests. After all, how else can you explain how a first-term senator with little experience in getting things done and with no major legislative accomplishments to speak of, has catapulted to become the leading contender for President . When Barack Obama states that he is the one to lead us into a new era of politics, it appeals to a desire than many of us have for a fundamental shift in the way Washington represents the people. My only concern is can we believe Sen. Obama when he says this?
The answer is a resounding no. Barack Obama's brief time in the Senate and several positions that he has staked out on his way to the nomination reveal that he is much more partisan and entrenched with special interests than his stump speech would have us believe.
Not only does Sen. Obama lack a legislative history of bipartisanship that may have provided some credence to his post-partisan claims, he is in reality one of the most reliably partisan voters in the Senate. Since being elected in 2004, the junior senator from Illinois has voted with his party 96.7% of the time, according to the Washington Post's Congressional database. Tellingly, he voted against the nomination of Chief Justice John Roberts -- going against the 3/4 of senators who voted for Roberts' confirmation, a majority that included 22 Democrats. Not quite as "post-partisan" as he makes himself out to be, is he?
Moreover, not only has Obama the legislator not lived up to the bipartisan hype sparked on the campaign trail, but his other trademark issue -- an end to the reign of special interests --is similarly hard to discern from his actions. Indeed, he has built a successful run at the Democratic nomination around support for the very polices and pieces of legislation that appeal directly to these groups.
In pursuit of votes in Iowa, he became a large proponent of the ethanol subsidies that have led directly to higher food prices. More recently, Sen. Obama has voiced support for the farm bill currently sitting on President Bush's desk which gives direct taxpayer handouts to undeserving farmers who have seen their incomes skyrocket due to such rising food prices. While appeasing the farmers groups that have supported this legislation may provide Senator Obama with votes in key Midwestern states that he hopes to win in the general, it does little to reflect his supposed concern for an American public facing higher food prices. Similar pandering to entrenched special interests can also be seen with labor unions, where Sen. Obama has pledged to appoint federal judges who would end much of the oversight of labor that has been used to root out corruption and illegal practices.
The support that Obama has gained from both labor unions and farmers groups have proved instrumental to his success in many of the primary states where these groups hold substantial sway. At the same time, he has been getting the votes of independents and young people who believe him when he says that he is committed to ending the reign of special interests in Washington and working on behalf of the American people. This is truly remarkable. Sen. Obama is receiving the support of both those who have thrived off of the old-style Washington politics dominated by special interests AND those who wish to see an immediate end to such politics. The only thing that can explain Obama's ability to draw together such a diametrically opposed coalition of support is a fundamental divergence between his words and actions.
While some may try to explain his appeal to traditional special interests as a mere function of the primary process (where a candidate is forced to the extreme in order to gain the nomination), such pandering is exactly the type of Washington-as-usual politics that he has pledged to leave behind. On the two traits that have come to define him as an appealing candidate -- bipartisanship and an end to politics as usual -- Barack Obama is not what he appears to be. When faced with the facts, it is hard to believe that he is committed to reforming a broken Washington when he is courting the same interests, voicing support for the same polices, and engaging in the same type of partisanship than led to it breaking in the first place.
The answer is a resounding no. Barack Obama's brief time in the Senate and several positions that he has staked out on his way to the nomination reveal that he is much more partisan and entrenched with special interests than his stump speech would have us believe.
Not only does Sen. Obama lack a legislative history of bipartisanship that may have provided some credence to his post-partisan claims, he is in reality one of the most reliably partisan voters in the Senate. Since being elected in 2004, the junior senator from Illinois has voted with his party 96.7% of the time, according to the Washington Post's Congressional database. Tellingly, he voted against the nomination of Chief Justice John Roberts -- going against the 3/4 of senators who voted for Roberts' confirmation, a majority that included 22 Democrats. Not quite as "post-partisan" as he makes himself out to be, is he?
Moreover, not only has Obama the legislator not lived up to the bipartisan hype sparked on the campaign trail, but his other trademark issue -- an end to the reign of special interests --is similarly hard to discern from his actions. Indeed, he has built a successful run at the Democratic nomination around support for the very polices and pieces of legislation that appeal directly to these groups.
In pursuit of votes in Iowa, he became a large proponent of the ethanol subsidies that have led directly to higher food prices. More recently, Sen. Obama has voiced support for the farm bill currently sitting on President Bush's desk which gives direct taxpayer handouts to undeserving farmers who have seen their incomes skyrocket due to such rising food prices. While appeasing the farmers groups that have supported this legislation may provide Senator Obama with votes in key Midwestern states that he hopes to win in the general, it does little to reflect his supposed concern for an American public facing higher food prices. Similar pandering to entrenched special interests can also be seen with labor unions, where Sen. Obama has pledged to appoint federal judges who would end much of the oversight of labor that has been used to root out corruption and illegal practices.
The support that Obama has gained from both labor unions and farmers groups have proved instrumental to his success in many of the primary states where these groups hold substantial sway. At the same time, he has been getting the votes of independents and young people who believe him when he says that he is committed to ending the reign of special interests in Washington and working on behalf of the American people. This is truly remarkable. Sen. Obama is receiving the support of both those who have thrived off of the old-style Washington politics dominated by special interests AND those who wish to see an immediate end to such politics. The only thing that can explain Obama's ability to draw together such a diametrically opposed coalition of support is a fundamental divergence between his words and actions.
While some may try to explain his appeal to traditional special interests as a mere function of the primary process (where a candidate is forced to the extreme in order to gain the nomination), such pandering is exactly the type of Washington-as-usual politics that he has pledged to leave behind. On the two traits that have come to define him as an appealing candidate -- bipartisanship and an end to politics as usual -- Barack Obama is not what he appears to be. When faced with the facts, it is hard to believe that he is committed to reforming a broken Washington when he is courting the same interests, voicing support for the same polices, and engaging in the same type of partisanship than led to it breaking in the first place.
Thursday, May 15, 2008
The Latest Bailout: An Update
Well, it seems as though Harry Reid and Nancy Pelosi are not the only ones tuning out the American public (see previous post). In response to Sen. John McCain's outspoken opposition to the new farm bill -- which he rightly derides for being a product of this Congress' continual wasteful spending -- Democratic presidential not-so-hopeful Sen. Hillary Clinton responded with this gem, courtesy of the AP:
"Need help", huh? Yea, it's a real shame that farm income has risen only 56% over the past two years. Sure, what's $300 billion dollars to American taxpayers. It's not like they are facing higher food prices or anything...oh wait.
To compare Bear Stearns to the farm bill is just ludicrous. In Bear's case, the Fed was faced with an imminent systematic crisis to the financial markets that threatened to shut down Wall Street overnight. While it was certainly unprecedented, the $30 billion move to rescue Bear was worth it, given the ramifications of a collapse and the immediacy of the threat.
As for the farm bill, their is neither an immediate threat to American agriculture nor any extensive ramifications for withholding subsidies. A permanent disaster-relief fund that is added to annually can provide the means to meet any systematic threat to agricultural when and if it arises. The money should be there for when farmers need it, and only when they need it. Throwing unwarranted subsidies at thriving commodities for another five years is just plain wasteful. About as wasteful, in fact, as all that money continuing to be spent by Hillary Clinton's dying, debt-laden campaign.
"When Bear Stearns needed assistance, we stepped in with a $30 billion package. But when our farmers need help, all they get from Senator McCain and President Bush is a veto threat"
"Need help", huh? Yea, it's a real shame that farm income has risen only 56% over the past two years. Sure, what's $300 billion dollars to American taxpayers. It's not like they are facing higher food prices or anything...oh wait.
To compare Bear Stearns to the farm bill is just ludicrous. In Bear's case, the Fed was faced with an imminent systematic crisis to the financial markets that threatened to shut down Wall Street overnight. While it was certainly unprecedented, the $30 billion move to rescue Bear was worth it, given the ramifications of a collapse and the immediacy of the threat.
As for the farm bill, their is neither an immediate threat to American agriculture nor any extensive ramifications for withholding subsidies. A permanent disaster-relief fund that is added to annually can provide the means to meet any systematic threat to agricultural when and if it arises. The money should be there for when farmers need it, and only when they need it. Throwing unwarranted subsidies at thriving commodities for another five years is just plain wasteful. About as wasteful, in fact, as all that money continuing to be spent by Hillary Clinton's dying, debt-laden campaign.
The Latest Bailout
First it was Bear Stearns. Then it was America's "underwater" homeowners. Now there is a new and even more costly bailout being considered in Washington, one which, while being completely unnecessary and counterproductive, has faced little opposition in Congress despite having a price tag of $300 billion.
What struggling group of Americans is Congress seeking to support with our tax dollars in its time of need? What group is struggling so mightily that its bailout legislation has received veto-proof support? The answer may surprise you -- America's farmers. Yes, that's right, the same farmers who have seen their income explode by 56% over the past two years due to rising demand for corn, soybeans, and other food staples that has pushed prices through the roof. The same farmers who are already rolling around in the dollars of American consumers who are faced with skyrocketing prices at the grocery store. The same...well, you get the picture. The new farm bill, which passed the House with a bipartisan veto-proof majority and is well on its way to a similar fate in the Senate, will grant renewed subsidies to the one group of Americans benefiting from the state of the economy.
Don't worry though, because our ever-responsible Congress has limited subsidies to only those farmers who really need it. After all, the Pelosi-Reid Congress was elected on a promise of reform and fiscal discipline regarding wasteful spending. To that noble end, they have set an upper income limit at which point a farmer is cut off from taxpayer funds. That limit: wait for it....$750,000. Yep, four zeroes. And that's not all. According to the Wall Street Journal, through fancy accounting, farmers can claim incomes of up to $2.5 million and still receive a nice little check from America's taxpayers.
The New Deal-era farm bill has been historically used to provide a safety net for family farms vulnerable to sudden swings in the economy and vital to America's food supply. Yet that safety net is clearly no longer needed, and family farms are not even receiving the bulk of the aid. Of course, some disaster relief money is necessary to protect farmers in truly difficult times. However, while the new farm bill does contain money specifically for the creation of such a disaster-relief fund, the majority of the $300 billion is devoted to unwarranted subsidizing of the booming industry for agricultural commodities, along with money earmarked for urban lawmakers and wary fiscal hawks in an effort to buy their votes.
Democrats in Congress, despite their hawkish rhetoric on spending, have many first-term members from farm districts to protect in the 2008 elections. The same is true of Republicans in Congress whose seats are already being threatened by legitimate challenges from conservative Democrats gearing up for November. Due to this electoral calculus, both parties have forsaken their promise of spending reform in favor of saving their collective ass by handing out taxpayer money to undeserving farmers in their districts.
Despite the bipartisan support for the farm bill, the ultimate responsibility for this monstrosity lies with Nancy Pelosi and Harry Reid, who are reneging on the promises that vaulted them to power in 2006. They are merely continuing the same type of irresponsibility with taxpayer money that turned voters off from Republicans two years ago. If this long primary season has taught us anything, its that a still-frustrated American electorate is yearning for real change. Yet while it is clear that the voters have spoken, as the farm bill weaving its way through Congress now shows, its is equally clear that our representatives in Congress continue to tune them out
What struggling group of Americans is Congress seeking to support with our tax dollars in its time of need? What group is struggling so mightily that its bailout legislation has received veto-proof support? The answer may surprise you -- America's farmers. Yes, that's right, the same farmers who have seen their income explode by 56% over the past two years due to rising demand for corn, soybeans, and other food staples that has pushed prices through the roof. The same farmers who are already rolling around in the dollars of American consumers who are faced with skyrocketing prices at the grocery store. The same...well, you get the picture. The new farm bill, which passed the House with a bipartisan veto-proof majority and is well on its way to a similar fate in the Senate, will grant renewed subsidies to the one group of Americans benefiting from the state of the economy.
Don't worry though, because our ever-responsible Congress has limited subsidies to only those farmers who really need it. After all, the Pelosi-Reid Congress was elected on a promise of reform and fiscal discipline regarding wasteful spending. To that noble end, they have set an upper income limit at which point a farmer is cut off from taxpayer funds. That limit: wait for it....$750,000. Yep, four zeroes. And that's not all. According to the Wall Street Journal, through fancy accounting, farmers can claim incomes of up to $2.5 million and still receive a nice little check from America's taxpayers.
The New Deal-era farm bill has been historically used to provide a safety net for family farms vulnerable to sudden swings in the economy and vital to America's food supply. Yet that safety net is clearly no longer needed, and family farms are not even receiving the bulk of the aid. Of course, some disaster relief money is necessary to protect farmers in truly difficult times. However, while the new farm bill does contain money specifically for the creation of such a disaster-relief fund, the majority of the $300 billion is devoted to unwarranted subsidizing of the booming industry for agricultural commodities, along with money earmarked for urban lawmakers and wary fiscal hawks in an effort to buy their votes.
Democrats in Congress, despite their hawkish rhetoric on spending, have many first-term members from farm districts to protect in the 2008 elections. The same is true of Republicans in Congress whose seats are already being threatened by legitimate challenges from conservative Democrats gearing up for November. Due to this electoral calculus, both parties have forsaken their promise of spending reform in favor of saving their collective ass by handing out taxpayer money to undeserving farmers in their districts.
Despite the bipartisan support for the farm bill, the ultimate responsibility for this monstrosity lies with Nancy Pelosi and Harry Reid, who are reneging on the promises that vaulted them to power in 2006. They are merely continuing the same type of irresponsibility with taxpayer money that turned voters off from Republicans two years ago. If this long primary season has taught us anything, its that a still-frustrated American electorate is yearning for real change. Yet while it is clear that the voters have spoken, as the farm bill weaving its way through Congress now shows, its is equally clear that our representatives in Congress continue to tune them out
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