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Friday, December 30, 2011

Item No. 91 from Sen. Tom Coburn's Wastebook 2011

91) Feces -Throwing Reveals Communication Skills in Chimps – (GA) $592,527

Chimpanzees will often throw food or feces at passersby. Taxpayers have funded a study to figure out the origins of this odd behavior.

William Hopkins, at Agnes Scott College, and researchers at the Yerkes National Primate Research Center (associated with Emory University) used a portion of the $600,000 from the National Institutes of Health in 2011 to assist their study of throwing behavior in chimpanzees and its neurological origins. Chimpanzees are one of very few organisms that can throw objects, which zoo visitors can often observe. For example, one of the investigators‘ research papers says, "Some of the chimpanzees will pile faeces or wet chow in their cage and wait for visitors to pass by before throwing this at them."

Their studies have found that chimps in the wild seldom use throwing to obtain food. Rather, chimpanzees learned to throw objects in order to "control or manipulate behavior" of other apes or even humans. That‘s not to say that throwing helps chimps in captivity get what they want. The researchers observe that chimpanzee caretakers rarely "reward a chimpanzee with food immediately after they had just been soiled with faeces by the very same ape."

Hopkins and his team wanted ultimately to understand what throwing feces and food has to do with the neurological origins of communications in chimps. To that end, they took MRIs of chimpanzee brains, and then put those chimps through other cognitive tests. They found that chimps that excelled at throwing feces and other objects had better communication skills than chimps with less-refined skills.

William Hopkins has received NIH grants in the past to study other ape issues, including righthandedness
versus left-handedness and whether that predicts reproductive success.

Item No. 87 from Sen. Tom Coburn's Wastebook 2011

87) Economic Development Program is Duplicative and Has Unclear Benefits – (Appalachian Regional Commission) $68 Million

Economic development is one of the most poorly-coordinated mission areas of the federal government. In 2011, the Government Accountability Office (GAO) found that there are currently over 80 programs, spread across four agencies, which are intended to promote economic growth.

One such duplicative entity is the Appalachian Regional Commission (ARC), which received approximately $68 million in FY 2011. ARC was created by Congress in 1965 "to bring the 13 Appalachian states into the mainstream of the American economy." The 13 states are Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

Several groups have identified the commission as a candidate for elimination, including the National Commission on Fiscal Responsibility and Reform,  the Congressional Budget Office (CBO), and a report by Citizens against Government Waste.

As the CBO points out, it is unclear whether the commission is having any benefit. ARC, and two other entities, are all "intended, among other things, to create jobs, improve rural education and health care, develop utilities and other infrastructure, and provide job training. However, it is difficult to assess whether such outcomes can be attributed to those programs rather than to the work of other governmental and nongovernmental organizations or to market forces and the effects of general economic conditions." One recent ARC grant whose economic benefit was certainly questionable was $108,211 for the "Adventure to Space" program at the U.S. Space and Rocket Center for teacher field trips.

Item No. 83 from Sen. Tom Coburn's Wastebook 2011

83) Duplicative Rail Line Relocation Program Continues to Receive Taxpayer Money – (Department of Transportation) $10.5 Million

In FY 2011, the Rail Line Relocation Program received $10.5 million in federal funding even though President Obama recommended terminating the program multiple times. The program provides financial assistance for local rail line relocation and improvement projects. President Obama proposed eliminating the initiative because it duplicates several programs, including the Railway-Highway Crossings program, which focuses on safety improvements of rail lines and accomplishes many of the same goals. The Obama administration also noted,
"To the extent that the rail line relocation program is aimed at other goals such as community development, more appropriate programs such as Community Development Block Grant are available to States."

Item No. 78 from Sen. Tom Coburn's Wastebook 2011

78) Duplicative Grant Programs Available For Retrofitting Or Replacing Diesel Engines Despite Declining Need For the Modifications – (Environmental Protection Agency) $49.9 Million

President Obama‘s FY 2012 budget recommended eliminating the Diesel Emissions Reduction Act (DERA) grant program, which received nearly $50 million in federal funding in FY 2011. The grants are "designed to help States and localities reduce emissions from diesel engines by retrofitting or replacing older, more polluting diesel engines." According to the President, the marginal benefit of these individual retrofits is small at this point. Additionally, since 2007 new diesel engines have had to comply with much higher emission standards, so there is a decreasing need for retrofits in the first place. Indeed, the administration makes clear that "[h]aving achieved its short term objective to remove or retrofit the oldest and dirtiest engines, in the longer term any additional emissions reductions will occur even without DERA funding, as the inventory of existing engines turns over and new cleaner engines become the norm."

President Obama‘s budget also highlights how there is other funding available for such retrofits through the Department of Transportation‘s Congestion Mitigation and Air Quality Improvement program (about $45 million for diesel retrofits annually) and EPA's Supplemental Environmental Project enforcement agreements ($7.1 million in diesel emission reduction projects).

Item No. 72 from Sen. Tom Coburn's Wastebook 2011

72) Energy Program Repeatedly Slated for Termination Continues to get Funding (U.S. Department of Agriculture) $11.976 Million

Nearly $12 million was spent in 2011 on an energy assistance program that both the current and former administrations agree should not even exist.

The USDA High Energy Cost Grant program provides grants for low cost electricity to rural areas. However, only Alaska, Hawaii, and a small number of additional remote regions in the continental United States qualify for them, leaving other states out in the cold.

Both the Bush and Obama Administrations have targeted the USDA High Energy Cost Grant program for elimination "because it is duplicative of, and less effective than, the Rural Utilities Service‘s (RUS) Electric Loan Program."

In 2011, one of the program‘s largest recipients was Sacred Power Corporation, which was awarded $2.8 million for work in South Dakota, Arizona, New Mexico and Utah. Sacred Power is a small $8.6 million company, but is involved in telecommunications, the production of solar cells, livestock watering and solar energy training. The company‘s owner, Dave Melton, a major NASCAR fan, recently founded Sacred Power Motorsports to advertise the company, which sponsored a car in 2010 and a truck in 2011 driven by A.J. Russell. Melton calls the foray into NASCAR "extreme marketing," which is true considering such sponsorships can run in the millions of dollars. Because the team is Native American-owned, the team‘s manager believes it has "a lot of opportunities to get sponsorships with companies connected to the casinos."

Another large grant award was given to Gwitchyaa Zhee Utility Company, which received $3.5 million to help construct a new heat and power facility to run on wood biomass. The facility will be built in Fort Yukon, Alaska, which currently has a population of 583 and is heated by a facility that uses more expensive oil. If the money were instead divided evenly among the town‘s 243 households, it would provide each with more than $14,400. In Fort Yukon, where the average monthly cost of rent and utilities for the majority of households is $390,415 this would cover everyone‘s expenses for 37 years.

For those concerned about the environmental impact of the program, additional concerns have surfaced. President Obama‘s budget notes, "the way the program is currently designed, the bulk of the funding directly supports fossil fuel activities," which the administration does not relish subsidizing. In FY 2011, the program received nearly $12 million in federal funding.

Item No. 69 from Sen. Tom Coburn's Wastebook 2011

69) Duplicative Subsidy Program for High-Risk Research – (Technology Innovation Program) $44.9 Million

When a wasteful program changes its name, you know it is in trouble. In 2007, the Advanced Technology Program (ATP) was replaced by the Technology Innovation Program (TIP), a grant program "designed to support, promote, and accelerate innovation in the United States through high-risk, high-reward research in areas of critical national need."  TIP received nearly $45 million in federal funding in fiscal year 2011.

Prior to the name change, ATP provided assistance to dozens of Fortune 500 companies, including hundreds of millions in funding to IBM, General Electric, General Motors, 3M, Motorola, and others. Although the replacement program has been restructured so only small and medium businesses are eligible, both programs are targeted at subsidizing high-risk research.

At the same time, critics argue that basic economics dictates against government funding of this type of research. If these projects were truly as profitable as promised, the private sector would use its own funding to support the research and development of these programs. Not surprisingly, only about one-third of the projects financed by the ATP program made it to market.

The president‘s 2009 budget recommended terminating the program, noting that despite the reorganization, "it will still provide subsidies for activities that private industry has the means and incentive to support."

TIP also duplicates other federal programs that fund research and development including the Small Business Innovative Program (SBIR), the Research and Technology Development grant program, and the Office of Experimental Program to Stimulate Competitive Research within the National Science Foundation.

Taxpayers are taking enough of a risk giving their money to Congress every year to spend—they do not need a program that intentionally spends their money on risky investments.

Item No. 67 from Sen. Tom Coburn's Wastebook 2011

67) US Taxpayer Funds Survey of Well-Being in 120 Countries – (CA) $610,908

Different countries have different opinions about what constitutes being well-off and feeling happy. The National Institute on Aging provided over $600,000 to the researchers at the Rand Corporation in 2011 to conduct a worldwide survey of well-being.  They will use a "vignette methodology that allows identification of response scale differences within and between countries." The survey will present participants with hypothetical situations concerning income, family relations, job, and health.  The grant will continue for five years.

Researchers justify this use of taxpayer dollars by saying, "It is important to know the determinants of life satisfaction and well-being across nations of the world."

Given that other organizations like Gallup already conduct worldwide polls of people's wellbeing, the added-value created by this survey may be minimal. Perhaps Congress should instead poll taxpayers to see if they are happy with their tax dollars being used to study how happy people in other countries are.

Item No. 10 from Sen. Tom Coburn's Wastebook 2011

10) Millions In Foreign Aid to… China? – (Department of State & U.S.
Agency for International Development) $17.80 Million

America‘s national debt recently surpassed $15 trillion, much of which it borrowed from a variety of foreign countries. China, whose U.S. debt holdings exceed $1.1 trillion, is at the top of that list.

So taxpayers might be shocked to learn that each year the United States provides millions in aid to China.  In 2011, the U.S. government spent nearly $18 million on foreign aid programs to its biggest sovereign lender. This included $2.5 million for social services and about $4.4 million for programs to improve China‘s environment.

In fact, China can better afford to fund these programs than the United States at this point.  While the U.S. public debt exceeds 100 percent of its Gross Domestic Product, China‘s debt-to-GDP ratio is only 26 percent.

Item No. 9 from Sen. Tom Coburn's Wastebook 2011

9) Video Game Preservation – (NY) $113,277

The International Center for the History of Electronic Games (ICHEG) received over $100,000 in federal funds for video game preservation.  According to the organization‘s website, it "collects, studies, and interprets video games, other electronic games, and related materials and the ways in which electronic games are changing how people play, learn, and connect with each other, including across boundaries of culture and geography."

The center‘s collection includes over 35,000 video games and a wide variety of items related to the history of electronic games. Examples of arcade video games in the collection include Space Invaders, Pac-Man, and Donkey Kong. The video game compilation also includes Super Mario Bros., Sonic the Hedgehog, and Doom.

According to the grant notification, the $113,277 in federal funds will be used to "conduct a detailed conservation survey of approximately 6,900 of the 17,000 e-games in [the museum‘s] collection to determine the current condition of both the physical artifacts and their virtual content." The study is designed to "better position the museum to make its International Center for the History of Electronic Games collection available to visitors, researchers, and a broad public audience by providing images, videos of e-game play, and interpretation of the collection via exhibits and the Online Collections feature of its Web site."  Admission to the museum costs an adult $13.

Over $113,000 is being gobbled up by Pac-Man and other video games as part of a survey of games at the International Center for the History of Electronic Games.

Item No. 7 from Sen. Tom Coburn's Wastebook 2011

7) Dead Federal Employees Continue to Get Benefits Checks – (U.S. Office of Personnel Management) $120 Million

The federal government sent an average of $120 million in retirement and disability payments to deceased former federal employees every year for at least the past five years.

In a September 2011 report, the Inspector General (IG) for the U.S. Office of Personnel Management found that "the amount of post-death improper payments is consistently $100-$150 million annually, totaling over $601 million in the last five years."

In one example the IG found, an annuitant‘s son cashed his dead father‘s checks for 37 years.  The son‘s scheme, which cost taxpayers more than $500,000, was discovered in 2008, when he  himself died. "The improper payment was not recovered," the IG reported.

Item No. 6 from Sen. Tom Coburn's Wastebook 2011

6) The Super-Bridge to Nowhere – (AK) $15.3 Million

The bridges to nowhere in Alaska may be the most infamous symbols of government excess and
waste. Both bridges are stilling going nowhere and may never go anywhere. However, the
bigger of the two bridge projects cost taxpayers more than $15 million in 2011, even though it
may never be constructed.

The proposed 2.7-mile bridge would connect a small Alaskan community with the Anchorage
area, at a cost supporters say will run between $650 million and $700 million.  (Others
estimate that it could cost more than $4 billion.)

The Knik Arm Bridge and Toll Authority (KABATA), an organization created by the state of
Alaska, is planning on paying for the expensive project with a $5 toll on each one-way trip – the
same toll as the San Francisco Bay Bridge, which is one-third the span of the proposed bridge.

At least $15.3 million was spent on the project this year alone.  In total, more than $65 million
in federal taxpayer money has been directed to various aspects of the project, 38 including
$57,39039 for a 14-minute video, "The Knik Arm Crossing, Bridge to Our Future."

Thursday, December 29, 2011

Item No. 5 from Sen. Tom Coburn's Wastebook 2011

5) Paying for Pancakes – (D.C) $765,828

Almost $800,000 of federal taxpayer funds went to subsidize "pancakes for yuppies" in the
nation‘s capital.

An International House of Pancakes (IHOP) franchise was built with financial assistance
courtesy of Uncle Sam.  It was intended to help an "underserved community."  The federal
funding went to the Anacostia Economic Development Corporation. According to the
Congressional Research Service (CRS), "$500,000 of the $765,000 grant was used as an equity
injection in DC Pancakes LLC for a 19% ownership interest."  The remaining funds went to
training costs for new employees, and other consultants.

The new IHOP is not located in an "underserved community" but a popular Washington D.C.
neighborhood.  The neighborhood is Columbia Heights, which has become a local shopping
hot spot for some and "one of Washington‘s more desirable neighborhoods."  Other businesses
in the area include Target, Bed Bath and Beyond, Best Buy, and Starbucks.

The restaurant chain is best known for its "world famous" buttermilk pancake flavors. Options
on the menu include chocolate chip, CINN-A-STACK, and New York Cheesecake pancakes.

Observers noticed that "in this day of anti-obesity crusades, the secretary of Health and Human
Services used her own discretionary grant money to subsidize a restaurant that serves two of
Men's Health magazine‘s 20 most unhealthy restaurant dishes."

Wednesday, December 28, 2011

Iran Threatens to Block Oil in Reply to Sanctions

It would appear that playing nice with the Iranian regime has not worked out very well.

The following was gleaned from an article in the December 28 New York Times.


Iran Threatens to Block Oil in Reply to Sanctions

By DAVID E. SANGER and ANNIE LOWREY

WASHINGTON — A senior Iranian official on Tuesday delivered a sharp threat in response to economic sanctions being readied by the United States, saying his country would retaliate against any crackdown by blocking all oil shipments through the Strait of Hormuz, a vital artery for transporting about one-fifth of the world’s oil supply.

The declaration by Iran’s first vice president, Mohammad-Reza Rahimi, came as President Obama prepares to sign legislation that, if fully implemented, could substantially reduce Iran’s oil revenue in a bid to deter it from pursuing a nuclear weapons program.

Prior to the latest move, the administration had been laying the groundwork to attempt to cut off Iran from global energy markets without raising the price of gasoline or alienating some of Washington’s closest allies.

But the energy sanctions carry the risk of confrontation, as well as economic disruption.

Merely uttering the threat appeared to be part of an Iranian effort to demonstrate its ability to cause a spike in oil prices, thus slowing the United States economy, and to warn American trading partners that joining the new sanctions would come at a high cost.

The new punitive measures, would significantly escalate American sanctions against Iran. They come just a month and a half after the International Atomic Energy Agency published a report that for the first time laid out its evidence that Iran may be secretly working to design a nuclear warhead, despite the country’s repeated denials.

In the wake of the I.A.E.A. report and a November attack on the British Embassy in Tehran, the European Union is also contemplating strict new sanctions, such as an embargo on Iranian oil.

The sanction would effectively make it difficult for those who do business with Iran’s central bank to also conduct financial transactions with the United States.

 The administration raced to put some loopholes in the final legislation so that it could reduce the impact on close allies who have signed on to pressuring Iran.

The legislation allows President Obama to waive sanctions if they cause the price of oil to rise or threaten national security.

Still, the new sanctions raise crucial economic, diplomatic, and security questions. Mr. Obama, his aides acknowledge, has no interest in seeing energy prices rise significantly at a moment of national economic weakness or as he intensifies his bid for re-election — a vulnerability the Iranians fully understand.
==========

Good (or Less Bad) News for Housing

No doubt the major theme for the 2012 election will be the state of the economy.  The current sorry state of the economy was precipitated by the collapse of the housing market in 2008.

Now, someone in a position to know says that the housing market is levelling off.  That is good news.  Before the economy can ever recover, housing prices have to stop falling.

The full interview can be viewed at the link below:

http://video.cnbc.com/gallery/?video=3000064256

Tuesday, December 27, 2011

Item No. 4 from Sen. Tom Coburn's Wastebook 2011

4) Subsidy Program for Small Airports Fails to Help Most Recipients
Achieve Sustainable Air Service – (Federal Aviation Administration)
$6 Million

A federal airport assistance program spent $6 million to assist small airports in 2011,19 but has
little to show for its efforts in over a decade of assistance.

The Small Community Air Service Development Program (SCASDP) was created in 2000 to help
underserviced small community airports enhance their commercial air service with temporary help.
SCASDP grants go to communities seeking more air carrier service or lower air fares and are used mainly
as revenue guarantees to attract new commercial routes that would otherwise be unsustainable,
marketing enhancement for existing airlines, or a combination of both.

The goal of this program is for airports to use the grants to establish long-term sustainable air service.
Most of the grants, however, have not been successful in helping airports attain sustainability,
as evidenced by a series of audits and evaluations. A 2005 review by the Government Accountability Office found the program to "have achieved mixed results" and that only about half of its projects helped achieve sustainability.  Results were worse in 2008 when an FAA Inspector General (IG) study found that "70 percent of the grants in our review failed to fully achieve their objectives." Moreover, 62.5 percent of projects failed to attain even a single project goal.

SCASDP grants have also been used in past years for projects of questionable merit. Tunica
Municipal Airport, located approximately 29 miles from Memphis metropolitan area, home to
Memphis International Airport, received funds to re-establish scheduled commercial service
route to Atlanta, which was cancelled years earlier.  Tunica, Mississippi, a small gaming
community, received the grant based on a cost-sharing arrangement with local casinos,
partnering tax payer dollars with gambling revenue to subsidize potential gamblers‘ travels that
did not want to make the short drive from the major airport in Memphis. The SCASDP funds
have since expired and the scheduled service to and from Atlanta is no longer available from
Tunica.

Neither President Obama nor President Bush requested funding for this program.

Thursday, December 22, 2011

Item No. 2 from Sen. Tom Coburn's Wastebook 2011

2) Mangled Mango Effort Could Hurt Farmers It Meant to Help – (Pakistan) $30 Million

In 2009, the U.S. Agency for International Development (USAID) undertook a four-year, $90 million effort to spur hiring and sales among Pakistani businesses. Two years later, the USAID Inspector General (USAID OIG) found ―no measurable increases in sales and employment.

In four of five product areas USAID targeted – leather, livestock, textiles and dates – the agency abandoned its efforts roughly a year after it began them, with virtually nothing to show. For the remainder of the project, it focused its effort (and funding) on the fifth product area: mangoes.

USAID‘s goal for mango farmers, to boost their sales by 20 percent, 9 was as ill-fated as its grand plans for Pakistan‘s date farmers, ranchers, and leather and textile manufacturers. Nearly $30 million into the project, the USAID OIG audited the effort and concluded it ―was not on track to achieve its main goal.

The mango effort, which consisted of providing 13 mango farmers with equipment to clean, freeze and store mangoes, was "stalled."

What brought the mango effort to a standstill? Although the contractor executing the project, Chemonics, stated it had implemented "several enhancements to mango production," the USAID OIG found only one farmer had received the promised equipment, but could not operate it because of a design flaw.

To make matters worse, the bungled effort could actually hurt the participating farmers by forcing them into default on loans they had taken out against expected sales that now may not happen, the IG found.

What If?

If we had had a Balanced Budget Amendment in place in 2003, would we have not invaded Iraq?

Wastebook 2011

Journalists discuss a few of the items in Senator Tom Coburn's Wastebook 2011.

One of the panelists says that this proves that we need a Balanced Budget Amendment.  But such an amendment would not guarantee that Congress would not earmark money for foolish things.  We have just GOT to pay closer attention to what our elected officials are doing!



Wednesday, December 21, 2011

Wasteful Spending

ABC World News Tonight aired a report about wasteful Government spending that was almost unbelievable!

The report began with a discussion of the deadlock in Congress about passing the extension of the tax cut.  But the report went on to discuss some of the stupid projects that the Government is funding with taxpayer money.  The Bridge to Nowhere is in there.  So is a study about why chimpanzees throw their feces.  Another project has to do with improving living conditions in China.  We are giving money to China to improve their living conditions.  How are we paying for it?  With money we are borrowing from China!

Here is the video that aired tonight:  http://abcnews.go.com/Politics/video/payroll-tax-cut-side-caving-15209827

Tuesday, December 20, 2011

Our Underperforming Intelligence Services

A few years ago, I heard a commentator say that the CIA was not a top-notch intelligence service.  Recent events surrounding North Korea suggest that the commentator was right.

As an article (In Kim Jong-il Death, an Extensive Intelligence Failure) in today's New York Times discusses, Kim Jong-il died on a train last Saturday morning.  Yet, officials in South Korea and Washington, D.C. did not know anything about it until after North Korean state media had announced it.

Perhaps that can be forgiven.  North Korea has always been such an opaque country.  But there have been other things our intelligence services definitely should have caught.

Pyongyang built a sprawling plant to enrich uranium that went undetected for about a year and a half until North Korean officials showed it off to an American nuclear scientist in late 2010.  Why did no one detect anything suspicious on satellite imagery? Why were there no electronic intercepts of frantic North Korean telephone calls?

When North Korea was building a nuclear reactor in Syria, the United States did not know anything about it until the head of Mossad visited President George W. Bush's national security adviser and dropped photographs of the reactor on his coffee table.  Apparently, the U.S. did not have a clue, even though North Korean officials traveled regularly to the site.  Israel destroyed the site in an airstrike in 2007.

Recently, some important assets in Lebanon were exposed.

For the sake of our national security, we had better find out why our intelligence services are performing so poorly and address this situation.

Monday, December 19, 2011

Downside of Digitizing Medical Records

Even before Obamacare, the digitization of medical records was seen as a way to hold down rising health care costs.

Today’s New York Times has an article (As Patient Records Are Digitized, Data Breaches Are on the Rise) discussing a downside to medical record digitization.

As part of the 2009 stimulus bill, the federal government provides incentive payments to doctors and hospitals to adopt electronic health records.  Some 57% of office-based physicians now use electronic health records, a 12 percent jump from last year, according to the Centers for Disease Control.

An unintended consequence is that as patient records have been digitized, health data breaches have surged.  The number of reported breaches is up 32 percent this year from last year, according to the Ponemon Institute, a security research group.  Those breaches cost the industry an estimated $6.5 billion last year.  In almost half the cases, a lost or stolen phone or personal computer was responsible.

Health organizations are required by federal law to report data breaches that affect more than 500 people to the Department of Health and Human Services.  The department’s Office of Civil Rights publishes the equivalent of a data breach “Wall of Shame” on its Web site.

Sunday, December 18, 2011

U.S. Military (Finally) Out of Iraq

I am relieved to see video of the last U.S. convoy leaving Iraq.  That second Gulf War is a war that never should have happened.

The people who attacked us on September 11, 2001 were based in Afghanistan.  About a month later, we sent in our military.  In 2002, our enemies were toppled.  We had them on the run.

But in 2002, we were also preparing for an invasion of Iraq.  Why?  Saddam had nothing to do with September 11.  Saddam was not an ally of our foes in Afghanistan.  He was a Baathist (kind of like a Communist), not a jihadist.  He had a different worldview.  Saddam was a problem for us, but he was not an imminent threat.  Saddam had been a monster to his own people, but he was not much of a threat to American interests.

But in 2003, we took our eye off the ball in Afghanistan to overthrow Saddam.  We succeeded in overthrowing Saddam, but did not know what to do afterwards.

We spent $800 billion of borrowed money on Iraq.  That's the same amount as President Obama's much maligned stimulus package.  I suppose if you spend that much money, you will get something good out of it.  But whatever benefit we got from our involvement in Iraq, I would argue that we overpaid.

Even though our troops have left Iraq, the U.S. will still have a strong presence there.  I understand that the U.S. Embassy there will be the largest U.S. embassy in the world.

I would like to think that we are now free to refocus on Afghanistan, but I fear that it may be too late for that. Al Qaeda and the Taliban have regrouped in Pakistan.  The American public is growing impatient and the President is talking about having all of our troops out of Afghanistan by a certain date, whether all of the objectives have been achieved or not.

Our departure from Afghanistan may look a lot like our departure from Iraq - no celebration, just quietly packing up and leaving.

But it is good to see our troops leaving Iraq and coming home.

Friday, December 16, 2011

It's a Puzzlement

This morning I noticed that oil is trading just under $93/barrel.  That is off of recent highs of just over $100.

Now, the Obama Administration has been trying to get tougher sanctions in place against Iran because Iran is  suspected of trying to develop the Bomb, and a lot of people do not want that to happen.

Iran is the world's No. 2 supplier of oil.  If the Administration is successful in suppressing trade with Iran, the price of oil should go way up because of the diminished supply on the world markets.

So, why is oil trading for only $93/barrel?  I am sure that the weak economy in Europe and the slowing economy in China have something to do with it.  But if trade sanctions against Iran go into effect, oil should be a lot higher.

Are the oil markets not considering sanctions against Iran?  Are they considering them, but concluding that they will never happen?

I don't get it.

Thursday, December 15, 2011

Obama & Defense Cuts

I saw a strange interview on Fox News this morning.

Fox was interviewing a female senator (I forget from which state).  The senator was quite upset that the President was not more involved in the budget process.  If things stay the way they are and no budget deal is reached, there will be across the board budget cuts.  The senator seemed to think that this was quite intolerable.  We can't cut Defense spending!  We must support our men and women in uniform!  The President is Commander in Chief!  Why isn't he involved in the budget battles, fighting to keep America strong?

I was quite puzzled by the things that this lady senator was saying.  Yes, the President is Commander in Chief, but he is also a liberal Democrat.  Mr. Obama is NOT going to fight to keep Defense spending intact and take it all out of social programs.  He is NOT going to do that.  And she should KNOW that!

The lady senator (I wish I could remember her name or which state she represented) should be GLAD that the President is no more involved than he is.

Wednesday, December 14, 2011

Mr. O Could Aid His Reelection

Today the Interior Department plans to auction oil leases for blocks off the Texas coast.  This would be the first such auction for offshore oil leases since the Deepwater Horizon disaster last year.

The Number One issue for voters next year is likely to be Unemployment.  Those who are unemployed are having great difficulty finding new jobs and many with jobs are afraid of losing them.

When Mr. O imposed the moratorium on deep water drilling last year, he put a lot of offshore oil field workers out of work.  Now, the moratorium has been lifted, but drilling companies complain that it is very difficult to get permits.

A related issue is the XL Pipeline.  In a baffling move, Mr. O delayed approval of the pipeline until after the 2012 election.  Construction of this pipeline would have put tens of thousands of people to work.  Many of these jobs would be high-paying union jobs.  Labor unions are an important part of Mr. O's base.

The best thing Mr. O could do to insure his reelection would be to reduce unemployment, and yet, he seems to be unwilling to facilitate things in the one sector (energy) that could really help him.

If Mr. O is really interested in winning a second term (as he seems to be), he would do well to facilitate issuance of drilling permits in the Gulf of Mexico and he would do well to sign the House jobs bill with its XL Pipeline attachment.

Tuesday, December 13, 2011

Surprise, Surprise, Surprise!

I see that the Iranian government has not only said, "No" to President Obama's request that Iran return the downed spy drone, but it is mocking Mr. O for making such a request.

Who would ever have imagined ... ?

Did You Ask Nicely?

I was amused to learn that President Obama has asked the Iranian government to return our spy drone and that he is now waiting to see what they say.  I wonder if he said, "Please" or "Pretty Please."

I remembered seeing on TV that there is a device available to consumers that has propellers and a camera.  It hovers like a helicopter and is equipped with a camera that really works.  The device is controlled by an iPhone. People can really use these things to spy on their neighbors.  I can imagine what my gut reaction would be if one of my neighbors sent one of these devices over my property to spy on me, I had captured it, and he then asked me to give it back to him!

Does the President really think that the Iranian government is going to say, "Oh, sure.  No harm done.  Here you go."?

I am surprised Mr. O didn't apologize and promise not to do it again.  Or maybe he did and we just didn't hear about it.

During the 2008 campaign, Candidate Obama indicated that he would not get tough with the Iranian government.  That is one promise that he has kept.

Monday, December 12, 2011

What Are We Complaining About?

A Gallop poll for the week of Dec. 5-11 shows that the President's job approval rating was 43%.  Those who disapproved of his job performance were 50% of those polled.  The most recent (Nov. 14) job approval rating that I could find for Congress was 13%.  I believe I heard on TV recently that it was as low as 9%!  While 43% isn't very good, 13% (or even worse 9%) is dismal.

I don't get it.  We got what we voted for!

In 2010, we were pretty mad about having Obamacare shoved down our throats while other important issues remained unaddressed.  So we voted to stop Obama-Reid-Pelosi.  Republicans took control of the House and we got more of them in the Senate.  And these were not just any Republicans.  These were TEA Party Republicans!

People are complaining that Congress is dysfunctional and that the members cannot work together to find a solution to the budget deficit.  But that may be asking too much.

For my part, I am GLAD that Congress will not be able to pass anything big over the next year.  There is something to be said for gridlock.  It keeps the politicians from screwing things up worse than they already are.

Sunday, December 11, 2011

The Pipeline We Actually Need

I think we should start building the Keystone XL oil pipeline right away, not wait until after the 2012 election.  Even so, this guy makes some good points about natural gas pipelines.


The New York Times (The New York Times Company)
Added on Sunday, December 11, 2011

The Pipeline We Actually Need 
By GREGG EASTERBROOK

LISTENING to the debate over the proposed Keystone XL oil pipeline, you might think that all pipelines are bad. But thousands of miles of pipeline already crisscross the United States. Without them, there would not be gasoline at filling stations, or natural gas in restaurant kitchens. It is 100 percent certain that new pipelines must be built.

The question is: what kind of new pipelines are needed? Oil pipelines that prolong the nation’s addiction to imported petroleum, or natural gas pipelines that carry a cleaner, domestically produced fuel?

The Keystone XL project — which the Obama administration has moved to table until after the 2012 election — would move synthetic petroleum from the Canadian province of Alberta to Gulf Coast refineries for conversion into gasoline. Yet even if all were to go well with the pipeline, which would be built to high safety standards, the United States might be better off without still more imported oil.

At the same time, there is a better kind of pipeline — but it is nowhere close to construction. That pipeline would bring natural gas from Alaska to the lower 48 states. Access to Alaskan natural gas would reduce greenhouse emissions, while providing an alternative to coal in electricity production and to oil in transportation. And don’t assume it’s a bad idea just because Sarah Palin favors it.

Today, natural gas is being found in tremendous quantities in the shale formations of the East Coast (owing in part to the controversial extraction method known as hydraulic fracturing), the Bakken shale field in North Dakota (where the gas is being “flared” or burned off as a waste product, because there are no pipelines to carry it to consumers), Prudhoe Bay and Cook Inlet in Alaska, the Mackenzie River Delta in Canada and elsewhere.

An opportunity exists to replace coal and oil, the most carbon-intense fossil fuels, with natural gas, which produces 30 percent less greenhouse gas per unit of energy generated than oil, and 50 percent less than coal.

Even without access to Alaska’s abundant natural gas, domestic production has risen steadily for a decade, last year hitting its highest level since 1973, according to the federal Energy Information Administration. “Proved reserves of natural gas have grown significantly over the past several years,” the agency said recently. It estimates, moreover, that the country has about a century’s worth of technically recoverable natural gas resources at current rates of consumption. (United States oil reserves equal about a three-year supply.) Production of natural gas has risen about 20 percent over the last four years despite a low prevailing price for this commodity — an ideal situation for consumers.

Policy makers might not have noticed the boom in natural gas reserves, but the market surely has. In October, Kinder Morgan, an energy giant that owns many of the terminals used for oil and coal transportation, bid $21 billion for El Paso Corporation’s natural gas pipelines. The deal would make Kinder Morgan the country’s largest operator of natural gas facilities.

Some urban buses already run on natural gas. Honda began selling a Civic that runs on natural gas; its energy use equates to 31 miles per gallon of gasoline at $2 a gallon, with low greenhouse-gas emissions. The financier T. Boone Pickens is backing a bid to install natural gas pumps at truck stops. Cheniere Energy, a Houston company, has agreed to export liquefied natural gas to Spain. As Washington wrings its hands about dependence on imported oil, American companies will ship a superior, cleaner fuel overseas.

Yet energy policy is still premised on the notion that coal and oil must be used for most needs, while carbon-neutral green energy from the sun, wind and biofuel is the main alternative. Here, the perfect becomes the enemy of the good. On paper, green energy can eliminate greenhouse emissions, while natural gas cannot: using gas instead of coal and oil would merely reduce carbon accumulation in the atmosphere. But most practical applications of all-green energy remain years off, if not decades.

That’s where the missing pipeline comes in. Prodigious amounts of natural gas are sitting in Alaska. It is conventional gas, which can be extracted without the problems associated with hydraulic fracturing for shale gas. (Some research suggests shale gas production via hydraulic fracturing causes methane emissions that offset the clean-burning advantage of gas.) If the natural gas in Alaska could be moved to the contiguous states, substantial long-term supply would be ensured. Buyers confidently could switch to natural-gas vehicles or gas heating; utilities confidently could switch from coal-fired generation, the dirtiest form of megawatts, to gas power.

Several Alaskan natural gas pipeline routes have been proposed. All require either cutting across British Columbia or converting natural gas into a liquid for shipment by tanker. All proposals entail complex capital-intensive efforts that would take years, require government support in the form of loan or price guarantees, and almost certainly cause political brawls — since everyone wants low-cost natural gas, but no one wants the pipelines or shipping terminals nearby.

Right now, with the price of natural gas low, private capital isn’t interested in building a major pipeline to Alaska. Such a pipeline could serve the national interests of the United States for decades. That makes support of an Alaska gas pipeline an appropriate role for the federal government. Yet the Obama administration is not interested — because only the word “green” is politically correct.

Some assume that the cost and complexity of major new pipelines make them politically impossible. But Canada has overcome domestic obstacles to Keystone XL.

Because the United States and Canada have a long, admirable history of cooperation, approval of the Keystone XL project is likely. But at the least, American consent for moving Canadian oil-sand products across the Midwest should be tied to Canadian consent for an Alaskan natural gas pipeline across British Columbia. The two should be a package deal.

Beyond that, policy makers need to encourage natural gas production — and better regulations to reduce methane leaks from gas production — while embracing natural gas as a good, though not perfect, alternative for the next few decades.

Gregg Easterbrook is the author, most recently, of “Sonic Boom: A Guide to Surviving and Thriving in the New Global Economy.” 
==========

Jay Leno Monologue 12-09-11

http://www.nbc.com/the-tonight-show/video/monologue-part-1-12-9-11/1372879?__source=tnt|home|featured|recent

Saturday, December 10, 2011

More Readable Credit Card Agreements

From the White House.


The White House
 info@messages.whitehouse.gov via service.govdelivery.com 


to me

On Tuesday, President Obama traveled to Osawatomie, Kansas, to lay out his vision for America -- where everyone from Wall Street to Main Street plays by the same rules and all Americans have a fair shot at success. Check out his speech here.
The Consumer Financial Protection Bureau (CFPB) is a key part of achieving that vision. Unfortunately, some Republicans in Congress are trying to dismantle this important consumer watchdog, even before it gets fully off the ground by blocking the nomination of Richard Cordray, the President's nominee to be the director of CFPB. In his weekly address, President Obama calls on Congress to stop playing politics with important protections for American families.
Despite not having a director, the CFPB is doing everything they can to fight for consumers. In fact, this week, they kicked off a pilot program to simplify credit card agreements, and we wanted to make sure you saw it. Read their email below.
From: Marla Blow, Consumer Financial Protection Bureau
Subject: A shorter, readable credit card agreement

The Consumer Financial Protection Bureau

Millions of times every year, financial institutions issue a new credit card agreement to their customers. And every year, millions of consumers receive new agreements and do not read them.

We have an idea that we think can make things better: a simplified credit card agreement.

Check it out, and tell us what you think.

 www.consumerfinance.gov/credit-cards/knowbeforeyouowe/
Know Before You Owe: credit cards
Credit cards are simple to use, but consumers have a lot of choice in exactly how they use them. Differences between cards provide even more choices to consumers.

Credit card agreements describe the terms and features of a particular card. They spell out the rights and obligations of both parties, and provide legal protections for the issuer.

This can result in a dense and complicated document that can be difficult for consumers to understand.

The thought-starter we’ve developed reduces this complexity. We’ve separated the key terms from the legalese, leaving a clear, readable document.

We think it makes sense to give consumers a short, understandable document with the key terms they need to know. And we think it makes sense to give issuers the option to use our definitions, freely available on our website. We think this could reduce the costs of compliance and printing.

But as credit card users and issuers, you’re the people who need these agreements to work for you, so we want to know what you think. Would consumers be more likely to read this? Could issuers use this approach for their own products?

Take a look at what we’ve come up with. Weigh in with your thoughts to help us make credit card agreements better.

www.consumerfinance.gov/credit-cards/knowbeforeyouowe/

Thank you,

Marla Blow
Acting Assistant Director, Card Markets
The Consumer Financial Protection Bureau

David Letterman Monologue Dec 9, 2011

http://www.cbs.com/late_night/late_show/video/?pid=e3mB2RiWiC9wNGGN3y6urRagJXriOcXB&vs=Default&play=true

Misconduct of Baggage Handlers

The following is gleaned from an outrageous December 10 New York Times article entitled, "Cocaine Smuggling Case Shows Airline Baggage Handlers' Misconduct."

The article is about a group of American Airlines baggage handlers at JFK airport that was smuggling cocaine.  Testimony at trial revealed that baggage handlers also steal freight and personal items from the luggage of passengers.  A line frequently heard at trial was, "Everybody did it."

Although the article suggests that misconduct was worst at American Airlines, employees from other airlines and at other airports have engaged in similar corrupt behavior.

Friday, December 9, 2011

Warnings about China

It was not my intention for my first post to be about China.  Recent news items include the Presidential candidates, the economy, the budget deficit, and Lindsay Lohan.  But I heard some comments from a hedge fund manager this morning I thought were very good and could very well affect the first three.

The guest host on CNBC's Squawk Box this morning was Jim Chanos.  He saw problems with Enron before most others did.  He even sold Enron short before it collapsed.  He has a good track record of spotting things that are amiss.

While we in the U.S. have been trying to get our economy moving, China has been trying to slow its economy down.  Mr. Chanos was asked if the Chinese government had succeeded in bringing about a soft landing.  Mr. Chanos said that it is not going to be easy for nine men in a room to control an economy comprised of 1.3 billion people.

The European Union and the United States have been dealing with debt issues for the past few years.  China has its own debt issues.  While we in the west have been focused on the debt crisis in Europe, a recent item in the Chinese news was about a developer missing a payment to another developer.  This was a large payment.  Mr. Chanos believes that there are more such news items coming.

It was surprising to learn that exports account for only about 5% of the Chinese economy.  About 70% of the Chinese economy is construction.  China has real credit problems in the largest sector of its economy.

What Mr. Chanos sees in China today reminds him of Miami in '06 and Las Vegas in '07.  And he sees problems in all China, not just Beijing.

This is not to say that China will completely melt down.  China will survive this.

Later, the question was raised as to whether China might be able to save Europe from the debt crisis that it is currently experiencing.  Mr. Chanos responded that China will only save China.

Some people seem to think that the best economic model is a mixture or hybrid of a centrally planned economy and capitalism.  But the history of such models is not good.  Like China, Japan had such a model and it did not work out so well for them.

Mr. Chanos said that a big problem is the banks in China.  If someone owns shares of a Chinese bank, he or she does not own a profit-maximizing business.  He or she owns an instrument of State policy.  Mr. Chanos gave an illustration of what that might mean (there was a suggestion that something like this actually happened.):  A local official might be connected enough to get an 80,000 seat soccer stadium built in his city.  In three years, the soccer stadium does not succeed in attracting a soccer team.  What is the solution?  Build a 100,000 seat soccer stadium!  There is no real banker to say that this is not a good idea.

One should remember that the real estate market in China is only 12 years old.  Until now, that market has only gone up.  It is now about to go down.

Mr. Chanos joked that the Chinese banking system should send Greece and Italy a Thank You note for keeping the world's attention off of it.

Below are URLs for videos of the conversations I summarized above:


http://video.cnbc.com/gallery/?video=3000061498

http://video.cnbc.com/gallery/?video=3000061500


As I see it, the world's markets are connected.  There is a worldwide deleveraging process going on and China is not immune from it.  Some people have been hoping that China, with its excess reserves, would bail out Europe and if Europe does not collapse then the U.S. can continue its sluggish growth.  I guess such a scenario is possible, but I would not count on it.  Caution is in order.  Risk is still high.

Greetings

I would like to welcome everyone to the new JBK-Current-Events blog.  I hope that this blog can be a forum for sensible, intelligent discussion of current events.  It seems that so many news outlets have become echo chambers where previously help opinions simply get reinforced.  I hope this blog can become a place where people who know the facts of a matter and have thought things through can come to express themselves.  Hopefully, others will then be able to learn something.

Please be courteous.  Those who use abusive language may find their posts removed with no apology.

Thank you for visiting!

Jon B. Kraft