For decades, California’s housing costs have been racing ahead of incomes, as counties and local governments have imposed restrictive land-use regulations that drove up the price of land and dwellings. This has been documented by both Dartmouth economist William A Fischel and the state Legislative Analyst’s Office.
Middle income households have been forced to accept lower standards of living while less fortunate have been driven into poverty by the high cost of housing.Housing costs have risen in some markets compared to others that the federal government now publishes alternative poverty estimates (the Supplemental Poverty Measure), because the official poverty measure used for decades does not capture the resulting differentials. The latest figures, for 2013, show California’s housing cost adjusted poverty rate to be 23.4 percent, nearly half again as high as the national average of 15.9 percent.
Back in the years when the nation had a “California Dream,” it would have been inconceivable for things to have gotten so bad — particularly amidst what is widely hailed as a spectacular recovery. The 2013 data shows California to have the worst housing cost adjusted poverty rate among the 50 states and the District of Columbia. But it gets worse. California’s poverty rate is now more than 50 percent higher than Mississippi, which long has set the standard for extreme poverty in the United States (Figure 1).
The size of the geographic samples used to estimate the housing adjusted poverty rates are not sufficient for the Supplemental Poverty Measure to produce local, county level or metropolitan area estimates. However, a new similar measure makes that possible.
The California Poverty Measure
The Public Policy Institute of California and the Stanford Center on Poverty and Inequality have collaborated to establish the “California Poverty Measure,” which is similar to the Supplemental Poverty Measure adjusted for housing costs.
The press release announcing release of the first edition (for 2011) said that: “California, often thought of as the land of plenty” in the words Center on Poverty and Inequality director Professor David Grusky, is “in fact the land of poverty.”
The latest California Poverty Measure estimate, for 2012, shows a statewide poverty rate of 21.8 percent, somewhat below the Supplemental Poverty Measure and well above the Official Poverty Measure that does not adjust for housing costs (16.5 percent).
The California Poverty Measure also provides data for most of California’s 58 counties, with some smaller counties combined due to statistical limitations. This makes it possible to estimate the California Poverty Measure for metropolitan areas, using American Community Survey data.
Metropolitan Area Estimates
By far the worst metropolitan area poverty rate was in Los Angeles, at 25.3 percent. The Los Angeles County poverty rate was the highest in the state at 26.1 percent, well above that of Orange County (22.4 percent), which constitutes the balance of the Los Angeles metropolitan area. However, the Orange County rate was higher than that of any other metropolitan area or region in the state (Figure 2). San Diego’s poverty rate was 21.7 percent. Perhaps surprisingly, Riverside-San Bernardino (the Inland Empire), which is generally perceived to have greater poverty, but with lower housing costs, had a rate of 20.9 percent. The two counties, Riverside and San Bernardino had lower poverty rates than all Southern California counties except for Ventura (Oxnard) and Imperial.
The San Francisco metropolitan area had a poverty rate of 19.4 percent, more than one-fifth below that of Los Angeles. San Jose has a somewhat lower poverty rated 18.3 percent (Note 1). The metropolitan areas making constituting the exurbs of the San Francisco Bay Area had a poverty rate of 18.7 percent. This includes Santa Cruz, Santa Rosa, Stockton and Vallejo. Sacramento had the lowest poverty rate of any major metropolitan area, at 18.2 percent.
The San Joaquin Valley, stretching from Bakersfield through Fresno to Modesto (Stockton is excluded because it is now a San Francisco Bay Area exurb) had a poverty rate of 21.3 percent, slightly below the state wide average of 21.8 percent. The balance of the state, not included in the metropolitan areas and regions described above had a poverty rate of 21.2 percent.
County Poverty Rates
As was noted above, Los Angeles County had the highest 2012 poverty rate in the state (Note 2), according to the California Poverty Measure (26.1 percent). Tulare County, in the San Joaquin Valley had the second-highest rate at 25.2 percent. Somewhat surprisingly, San Francisco County with its reputation for high income had the third worst poverty rate in the state at 23.4 percent. This is driven, at least in part, by San Francisco’s extraordinarily high median house price to household income ratio (median multiple). In this grisly statistic, it trails only Hong Kong, Vancouver and Sydney in the latest Demographia International Housing Affordability Survey.Wealthy Santa Barbara County has the fourth worst poverty rate in the state, at 23.8 percent. The fifth highest poverty rate is in Stanislaus County, in the San Joaquin Valley (county seat Modesto), which is already receiving housing refugees from the San Francisco Bay Area, unable to pay the high prices (Figure 3).
The two lowest poverty rates were in suburban Sacramento counties (Note 2). Placer County’s rate was 13.2 percent and El Dorado County’s rate was 13.3 percent. Another surprise is Imperial County, which borders Mexico and has generally lower income. Nonetheless, Imperial County has the third lowest poverty rate at 13.4 percent. Shasta County (county seat Redding), located at the north end of the Sacramento Valley is ranked fourth at 14.8 percent. Two counties are tied for the fifth lowest poverty rate (16.0 percent), Marin County in suburban San Francisco and Napa County, in the exurban San Francisco Bay Area (Figure 4).
Weak Labor Market and Notoriously Expensive Housing
The original Stanford Center on Poverty and Inequality press release cited California’s dismal poverty rate as resulting from “a weak labor market and California’s notoriously expensive housing.” These are problems that can be moderated starting at the top, with the Governor and legislature. The notoriously expensive housing could be addressed by loosening regulations that allow more supply to be built at lower cost. True, the new supply would not be built in Santa Monica or Palo Alto. But additional, lower cost housing on the periphery, whether in Riverside County, the High Desert exurbs of Los Angeles and San Bernardino Counties, the San Francisco Bay Area exurbs or the San Joaquin Valley could begin to remedy the situation.
The improvement in housing affordability could help to strengthen the weak job market, by attracting both new business investment and households moving from other states.
Regrettably, Sacramento does not seem to be paying attention. Liberalizing land use regulations is not only absent from the public agenda, but restrictions are being strengthened (especially under the requirements of Senate Bill 375). In this environment, metropolitan areas like Los Angeles, San Francisco, San Jose and San Diego could become even more grotesquely unaffordable, and the already high price to income ratios in the Inland Empire and San Joaquin Valley could worsen. All of this could lead to slower economic growth and to even greater poverty, as more lower-middle-income households fall into poverty.
Note 1: San Benito County is excluded from the San Jose metropolitan area data. The California Poverty Measure does not report a separate poverty rate for San Benito County.
Note 2: Among the counties for which specific poverty rates are provided.
Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.
He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.
In today’s edition of The Heartland Daily Podcast, we listen in as Research Fellow Heather Kays appears on the “Freedom Works Show” on Tantalk1340 in Florida with host Paul Molloy. Kays was on to talk about Heartland’s move as well as where the presidential candidates stand on education issues.
The Heartland Institute recently relocated its office to Arlington Heights, a north-west suburb of Chicago. Kays calls in from the grand opening to talk to Molloy. Kays discusses some of the reasons for the move as well as some of the current education issues. Specifically, Kays breaks down candidate Jeb Bush’s stances and tells where he is right and where he is wrong.
In today’s edition of The Heartland Daily Podcast, H. Sterling Burnett, managing editor of Environment & Climate News spoke with Rob Natelson. Natelson is a senior fellow at the Independence Institute and a former Constitutional Law professor at three different universities. He and Burnett spoke about the history and the practicality of an Article V Constitutional convention.
Natelson is one of the foremost scholars concerning the Constitutional amendment process in general and Article V conventions of the States in particular. In their discussion, Natelson provides a historical analysis of what an Article V convention is, why it was put into the Constitution, how it functions, and how they have been used or not used, so far.
The word “sustainability” is now being overused throughout our public education system. The claim is that teaching sustainable development to students will help them solve problems, such as climate change and poverty reduction, by teaching students how to change their behavior and thus help combat issues deemed as problems.
There is value in teaching our youth to respect our environment and explaining the importance of not polluting the Earth. However, teaching only one viewpoint about controversial issues, and claiming that only one viewpoint represents established science, certainly silences any further discussion on the issue. That is not education, it is indoctrination (brain washing) and thus becomes a form of political pollution in the classroom.
Sustainable development is a “catch phrase” that students in most every American classroom are hearing way too often. The biased education material presents students with a viewpoint claiming that the Earth is in dire peril due to mans’ irresponsible behavior, and that without an enforced program of sustainability, the Earth is doomed. Parts of that curriculum are highly debatable, but students are rarely given opposing facts or viewpoints, even though they exist. Students are rarely taught that a growing number of credible scientists have studied the issue and arrived at different statistics and conclusions than the doomsday apologists.
If the goal of schools and teachers is to encourage students to be critical thinkers, why aren’t students being given opposing facts, documented by reputable scientists, and complete with credible arguments For instance, shouldn’t students know that credible scientists strongly disagree with the premise man can control the climate and that there are logical reasons for their skepticism? Students deserve to see evidence that indicates there has not been global warming for 18 years and six months. Important and credible facts contradict all the doom laden climate models cited in the IPCC’s (United Nations Intergovernmental Panel on Climate Change) various reports.
To put this into perspective, children in grade school through high school today, who are presently studying the climate change propaganda, ironically have not lived during a time of global warming.
How many students, parents, or teachers are even aware today that the leading proponents of Climate Change were caught falsifying facts. It had to be embarrassing that facts provided by the United Nation’s scientists did not align with their own global warming theory, and in fact proved the Earth had not been warming for at least two decades. That most likely was the reason for their name change from “Global Warming” to “Climate Change”. They might have thought people would not consider that climate change happens naturally and has done so since the Earth’s existence. Obviously, those early documented changes could not have had anything to do with man made causes, since man wasn’t even on the Earth yet, but who bothers to check such details.
It was discreetly decided to stop using the term “Global Warming” and switch to a name that covered any changes, hot or cold. The new name allowed all changes or patterns of weather to serve as proof of climate change. No need for those promoting dire warnings to worry about whether the Earth warms or cools, as both can be used to put forth their agenda.
The obvious question is: What is the reason for blaming that people are damaging our Earth and changing our climate? We submit it is the ageless attempt for people seeking more power and control over government and the people. Power is seductive, and leads to a desire for even more more ways to dictate how we all shall function and live, based on a proposed scenario that is at least partially fictional. Obviously, a reason for such control must include a dire threat if people are to comply. Climate Change is a great excuse.
It is also curious, but not unexpected given its biased agenda, that the media provides so little attention to facts that would place doubt about man-made climate change, even when international scientists were caught falsifying and/or not accurately reporting those nasty inconvenient facts. It is time for the public to demand the media and government allow all sides of this argument to be published and readily available for students and the general public.
Sustainability in studying poverty
Schools choose to teach controversial issues dealing with other areas of sustainability, and poverty is a particularly important social issue to study. It is highly optimistic to think a student studying poverty can add anything significant to help solve a problem that has existed for many centuries, especially when this is another subject in which specific facts are withheld. How many students are told, and in many cases even their parents are left uninformed, about the billions of tax dollars that have been spent to relieve poverty in America?
Intensive studies and expensive government programs have continually been initiated to resolve the growing problem of poverty, but all have proven faulty, with the result being more and more Americans end up on some type of welfare program and eventual total dependency on government assistant programs. Advocates of welfare reform in California point out that the state has one-eighth of the nation’s population but one-third of all welfare recipients. Why? California is one of the more attractive “nanny states” with a variety of numerous programs that provide cradle to grave assistance.
The most recent experiment by our government, referred to as “the war on poverty”, was established under the administration of President Lyndon Johnson fifty years ago. The program has failed in spite of the length of time, large amount of invested money, numerous agencies set up to administer the program, and new laws that have been written and implemented expanding it. Those who study the issue wonder why we continue with this expensive, failed program when evidence shows more people are added to the welfare rolls than those who escape it. Why are we so unwilling to admit the truth and move on to something that might actually work?
Star Parker was once a black single mother on welfare, until she realized the only real solution was for her to take charge of her own life. She succeeded in breaking her addiction to welfare and thus the system that had her bonded to eternal poverty. Parker began a ministry to educate others of the dangerous trap of a lifetime: government welfare. Today Star Parker is a syndicated columnist, Republican politician, author, and conservative political activist. Star warns all who will listen, that: “The war on poverty is an unending cruel experiment on the black community that all Americans can regard as a mirror into the future of everyone, as we allow government to grow and control our destiny.”
As to the mainstream media, it has lost its appetite for hiring investigative reporters who at one time worked diligently to find facts that tell the whole story and thus the truth. Then too, elected officials quietly change our laws, habits, and society to accommodate a specific, unproven viewpoint, and there is no significant opposition to these powerful game changing socialists.
By attaching the word “sustainability” to whatever the subject might be, the public, having been trained to accept that term as the motivation for blind acceptance, never questions the possibility that we are being deceived by those whom we should trust the most. Therefore, whether the subject is banning fossil fuels, initiating a federal education program for all our children, or paying higher taxes to subsidize liberal ideas concocted by the elites among us, the American people rarely question the changes or new laws.
Sustainability tinkers with impressionable minds
Should we really expect our children, with their impressionable minds, to behave or believe any differently than adults, when not provided with important information or facts needed to make informed decisions? In other words, are we to believe our children will question what they are being taught, when adults are derelict in doing so? Few students are equipped or courageous enough to refute what they are being taught. Most will parrot back the rhetoric offered by their teachers and textbooks, and few parents are aware of what that might be, or actually even know the truth themselves.
The challenge of parents is knowing exactly what information or material their children actually receive daily, whether at school, on their computers or cell phones, and/or watching television. Without due diligence we could be raising a generation that is being indoctrinated in unknown ways by educators and media sources that are in direct disagreement with our principles and values.
Do you know what your children or grandchildren will be taught or exposed to when they start back to school after the summer break? If not, get involved! Be assured that sustainability is a term most students in every classroom have heard and are been taught to fully respect, without question. The topic of sustainability will be taught from K through 12. None of us any longer have the luxury or comfort of believing those in charge of our country or our education system have our traditional, time-honored beliefs or values in mind. We must realize others are making decisions for our families and thus our country’s future.
Common Core offers one-sided views
What has caused our education system to change in such a short period of time? We know elections have consequences, right? We know presidents have differing viewpoint and political agendas and they are given the privilege of making changes. Education was never meant to be under the control of the federal government, but instead it was designed to be a state initiated and run program. However, President Obama may have forgotten or failed to respect that time-honored ideal. Instead Common Core was initiated and sold to all the states with various incentives. Following the Common Core standards came the controversial Common Core material which is now being taught to the vast majority of children in America today. It has a very different look than what you might have experienced at the same age.
Common Core was designed by a select, small group of liberals, and the end product is one every parent and patriot should investigate, and be highly suspicious of the process that allowed a national education program to be accepted by states even before it was written, and obviously without any previous testing proving if it was superior to what it replaced. For instance, Illinois agreed to accept Common Core, sight unseen, back in 2010. It is now being implemented throughout most states.
Consider that Common Core science curriculum from K-12, offers a one-sided view of Global Warming. As noted in this article, “Scared Green: Sustainability Lies We Teach”, children are being taught material that has them terrified of what their future might be if society does not adapt to a specific behavior. The author, Wood, further writes: “While the sustainability pitch to children often involves extolling the little green steps they can take for themselves, it is almost always mixed with apocalyptic warnings of what will happen if they fail.”
It is not comforting to know that American schools, like many throughout the world, scare our children, using controversial material as fact, and without offering opposition information from other leading scientists After all, how can we expect children to become critical thinkers, if we don’t give them opposing arguments? Instead they are inundated with the importance of taking “little green steps”, and if they do not take those steps, they are led to believe the world could ultimately end up as a “temple of green doom.”
Many public-school children have sat through multiple screenings of “The Story of Stuff,” the 20-minute animated “documentary” that propagandizes young children on the environmentally ruinous nature of consumer goods, which has its roots in the all-encompassing United Nations Agenda 21, which emphasizes sustainability. The purpose, of course, is tactics which scare children into behaving in a specific way.
How is this issue affecting our college age children? Do you know what professors are teaching in university classes today? Part 3 will address these questions. Be prepared to wonder if the high costs paid for a college education today is worth the indoctrination they are receiving from liberal professors, many of whom have an agenda with which you might wholeheartedly disagree.
If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you every Friday with a highlight show. Subscribe to the email today, and read this week’s edition below.Will EPA Benefit from Its Own Mistake? H. Sterling Burnett, American Spectator The environmental disaster caused by the Environmental Protection Agency at Gold King Mine in Colorado may actually benefit the agency. While a private company that spilled three million gallons of toxic sludge into a major waterway would be gearing up for criminal investigations, EPA is more likely to use the disaster to push for building a treatment plant that would cost taxpayers hundreds of millions of dollars. READ MORE Walker, Rubio Endorse Patient Power Gene Koprowski, Somewhat Reasonable The Heartland Institute and other free-market groups have been calling for a set of health care policy reforms that economist and policy pioneer John Goodman once called “Patient Power.” These policies include a refundable tax credit to purchase health insurance, allowing consumers to purchase insurance across state lines, and expanding health savings accounts (HSAs). Now, some 30 years after the plan was first presented, leading candidates for the Republican nomination for president are embracing key parts of that plan. Time for a victory lap! READ MORE Puerto Rico’s Bankruptcy Is a Preview of Things to Come Stateside Jesse Hathaway, Townhall “It may be too late for Puerto Rico, the ‘Island of Enchantment,’ but similar high-tax, high-regulation states still have time to avert disaster if they stop treating taxpayers like ATMs and start enacting pro-taxpayer, pro-growth reforms. If they don’t change their ways soon, the result will not be enchantment, but fiscal ruin.” READ MORE Heartland Sends Truth Squad to Las Vegas to Confront Obama on Affordable Energy The Heartland Institute is sending a “truth squad” of elected officials, energy policy experts, and members of minority communities to Las Vegas to steal some thunder from President Barack Obama, U.S. Sen. Harry Reid, and their taxpayer-subsidized alternative energy cronies. Clean Energy Summit 8.0 – a political event organized by U.S. Sen. Harry Reid featuring a presentation by President Barack Obama – will be closely monitored, critiqued, and protested by Heartland and its allies. READ MORE Featured Podcast: Mischa Popoff: Leaving the Organic Food Movement Mischa Popoff, author and Heartland policy advisor, joins Environment & Climate NewsManaging Editor H. Sterling Burnett to talk about his history as an organic farmer and his time as a government organic food inspector. Popoff explains why he abandoned the organic movement and why organic farmers should embrace GMO foods rather than fight against them. LISTEN TO MORE Watch the Tenth International Conference on Climate Change! The Heartland Institute’s Tenth International Conference on Climate Change (#ICCC10) was another huge success. You can watch the entire conference online at climateconference.heartland.org. Watch the full panels composed of some of the leading climate scientists and energy policy experts as well as keynote addresses by Sen. Jim Inhofe, Rep. Lamar Smith, and author Mark Steyn. SEE WHAT YOU MISSED! How Obama’s Clean Power Plan Would End the Era of Cheap Natural Gas Isaac Orr, Townhall U.S. households are saving hundreds of dollars a year because natural gas prices are low, but that’s about to change. A study by NERA Economic Consulting has found new regulations on power plants mandated by the Environmental Protection Agency’s Clean Power Plan (CPP) will increase natural gas prices to 2007 levels, virtually guaranteeing these savings will soon be wiped out. READ MORE Cuba Deal Could Have Unexpected Silver Lining: Medical Tourism Kenneth Artz, Times and Democrat Many people question the wisdom of President Barack Obama’s decision to normalize relations with Cuba, but even misguided policies sometimes produce positive unintended consequences. Low-priced Cuban medical treatment has spurred medical tourism from Canada and Western Europe, and now Americans may follow suit. While there are significant shortcomings and risks involved, the increased competition and choice should benefit some patients and perhaps taxpayers, too. READ MORE
Keep Your Hands Off My Beer! How Regulations Are Slowing the Growth of the Craft Brewing Industry Matthew Glans, Research & Commentary The impressive growth of the craft brewing industry has occurred despite myriad local, state, and national laws that create barriers to new entry and expansion. Many of these regulations are decades-old and ill-suited for modern markets. Many of the restrictions serve to protect from competition the larger brewers who have the resources to manage the bureaucracy more effectively than craft brewers can. READ MORE Bonus Podcast: Peter Ferrara on The Larry Kudlow Show: Is 4% Growth Possible? Liberal commentators often excuse the Obama administration’s poor economic growth record by claiming the days of more rapid economic growth are behind us. Really? Heartland Senior Fellow Peter Ferrara, author of a new book on entitlement reform titled Power to the People, joined The Larry Kudlow Show to discuss the factors and policies that stunt the growth of the American economy and how they can be changed. Economic growth, Ferrara says, is the key to solving many of the nation’s problems, including the pending entitlement crisis. LISTEN TO MORE California Judge Rules in Favor of Families in Parent Trigger Case Heather Kays, The Heartlander “The defenders of the traditional public school system often claim that it is superior to choice-based systems for delivering education, because the public school system is more responsive to citizens,” said Patrick Wolf, a professor of education policy at the University of Arkansas. “Isn’t it strange that when citizens actually try to influence the public school system, through the parent trigger process, the supposedly democratic traditional public school system decries and seeks to undermine their efforts?” READ MORE Number of Uninsured Declines, But Access to Care Worsens Kenneth Artz, The Heartlander Less than two years after Obamacare went into effect, the number of uninsured people has declined by 16.3 percent. The decline started before Obamacare could have been responsible for it, and much of the rest is due to the Obama administration’s expansion of Medicaid. “That would seem to be a good thing, except Medicaid is lousy coverage,” said Heartland Senior Fellow Greg Scandlen. “Most doctors don’t accept Medicaid patients, because the government’s rate of payment is so low.” READ MORE Remember Rome! Heartland Staff The Pontifical Academy of Sciences of the Roman Catholic Church held a workshop on global warming on April 28, 2015 at the Vatican. The Heartland Institute sent a delegation of climate scientists and other experts to tell Pope Francis: Global warming is not a crisis! The result was astonishing: global press coverage of our presence in Rome, a robust debate within the Church about the roles of science, ideology, and concern for the poor. We created a website with dozens of links to videos, news releases, and articles generated by our trip to Rome. READ MORE Invest in the Future of Freedom! Are you considering 2015 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make. Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at email@example.com.
The U.S. territory of Puerto Rico owes more than $70 billion—about $19,729.43 per resident—in debt to creditors and investors. First to note the territory’s fiscal problems were the credit rating agencies, which downgraded the territory’s bond status to “speculative,” the first of three steps along the junk-bond path to loan default.
Over the summer, about a year and a half after insiders warned of the territory’s looming problems, Gov. García Padilla (PPD) announced, “[T]he debt is not payable.”
“My administration is doing everything not to default,” Garcia Padilla said in an interview with The New York Times. “But we have to make the economy grow. If not, we will be in a death spiral.”
Some territory agencies, such as the Puerto Rico Electric Power Authority, are negotiating forbearance agreements with bondholders, but the future of most of the territory’s municipal debt continues to be up in the air.
Without major reforms, the crisis playing out in Puerto Rico will come home to roost in the mainland United States as well, as state governments continue to walk down the same financial path as Puerto Rico and Greece.
One of the root causes of Puerto Rico’s inability to pay its bills is the high cost of doing business in the territory. The litany of mandatory fringe benefits for employees—treated as bonuses elsewhere in the United States—discourages businesses from investing in the territory because the labor costs exceed employee productivity.
Stateside, the cumulative impact of countless business-unfriendly laws in California and New York has caused numerous businesses and the people employed by them to leave those states. Between 2013 and 2014, New York’s net population declined by 153,921, and the number of people leaving California exceeded new arrivals by 32,090. Like Puerto Rico, both California and New York are known for complex tax codes that distort the economy and discourage business investment.
The inevitable result of this incessant business-harassment is fiscal insolvency. Just like Puerto Rico before the fiscal tsunami hit, California carries a jaw-dropping amount of public debt. Adding in the cost of postponed payments to public schools and universities, deferred Medicaid entitlement payments, and other gimmicks, California taxpayers are on the hook for $443 billion in liabilities, or about $11,417.53 per resident.
The situation confronting New York taxpayers is only slightly less bleak than that of a Puerto Rican taxpayer. Each and every New York resident is on the hook for $18,222.78 in public debt. In response to such crushing amounts of public debt, politicians raise taxes even higher, which suppresses economic activity and resultant tax revenues even further, creating the “death spiral” predicted by Padilla.
Tax hikes chase away new business investment and encourage businesses to move. People then move to other states because of the lack of available jobs, and tax revenue falls short of expectations as employment rates and economic activity decline. The bills pile ever-higher as a result. The symptoms of the economic disease crippling Puerto Rico are already present in some states around the nation.
It may be too late for Puerto Rico, the “Island of Enchantment,” but similar high-tax, high-regulation states still have time to avert disaster if they stop treating taxpayers like ATMs and start enacting pro-taxpayer, pro-growth reforms. If they don’t change their ways soon, the result will not be enchantment, but fiscal ruin.
Anti-GMO radicals are harassing scientists who work at state universities — including the University of Illinois at Urbana-Champaign — with an onslaught of speculative Freedom of Information (FOI) requests, according to a report in the 13 August edition of Nature magazine, one of the world’s leading weekly science journals.
Led by the leftist group, US Right to Know, the activists, who oppose the use of genetically modified organisms (GMOs) in food and medicine, are requesting confidential documents that demonstrate the correspondence between academic research activity and industry.
Industry commonly funds research in academia. So does the government. Researchers who are employed at state universities, like Washington State University and the University of Florida, both of which receive state, and federal, funds, are subject to the FOI laws. Radicals at US Right to Know, ironically, are not covered by FOI, and have not disclosed their funding sources.
Radicals asked a total of 40 researchers to hand over documents, though some, like the University of Nebraska, have refused to produce the documents. Others, like Washington State, have agreed to turn over documents, including e-mail, Nature reported.
The liberals are distraught that some scientists have posted remarks on a web site called, GMO Answers, which is produced by the PR firm, Ketchum, in New York City, as the food fear assault mounted by these activists seeks to silence opposition to its un-scientific scare campaign.
Not many normal people support the unhinged leftists and their anti-science campaign. In remarks yesterday at the Heartland Institute’s open house, U.S. Rep. Randy Hultgren (R-Ill.) gave a speech, which, among other things, voiced support for continued federal backing of science and technology at the Fermilab, located in Batavia, Ill., which has conducted research on the ethics of genetic engineering, among other important scientific work.
In today’s edition of The Heartland Daily Podcast, we listen in as Heartland Senior Fellow Peter Ferrara joins the Ayn Rand Institute’s podcast, The Debt Dialogues. Ferrara, author of the new book – Power to the people, is on to discuss the growing entitlement crisis in America and what to do about it.
The Debt Dialogues is a weekly podcast that aims to educate young people about the welfare state and how it will affect their future. Ferrara and host Don Watkins talk about why Social Security and Medicare are not sustainable, the importance of coming up with concrete proposals for reining in entitlements, and Ferrara’s proposals for reforming Social Security and the health care system.
Clint Eastwood’s iconic Dirty Harry Callahan uttered one of the greatest movie lines of all time: “A man’s got to know his limitations.” It would appear no one in Washington, D.C. has ever heard of Harry or his weighty wisdom.
No one in our nation’s capitol seems to think they are limited in any way. Not by any personal shortcomings – it’s like everyone who enters the city limits thinks they magically transmogrify from Clark Kent into Superman. And they certainly find no limits placed upon them by anything as quaint and antiquated as the Constitution.
The Environmental Protection Agency (EPA) is a classic example of very limited men and women behaving boundlessly. To begin, it can be easily argued that the Agency shouldn’t even exist. The federal government’s powers must by the Constitution be expressly enumerated – and nowhere therein does it get anywhere near enumerating what is being done by the EPA.
I have the “1800 Rule” (the year, not the tequila). If a government agency or program was created after 1800 – it most likely shouldn’t exist. Because in 1800 the guys who created the government – were running the government. They knew what they intended it to do – and by 1800 were having it do it. The EPA was founded on December 2, 1970 – just a little past the sell-by date.
For the sake of argument, let’s move past the EPA’s unconstitutional existence – and look at it as just another Executive Branch agency. Which means it is actually a creation and creature of the Legislative Branch – Congress. The EPA can not do anything unless and until Congress first passes a law that says “Hey EPA – do this.”
Think anyone in the EPA recognizes this limitation? It would appear not. They issue power grab after power grab – again and again far exceeding the limits emplaced by Congress and its legislation. In the apparent hope that with such volume – some will slip by the Constitutional backstops. For every court decision stopping one grab – two or three (or four, or…) slam through.
But of course the EPA also rejects limits emplaced by the Judicial Branch. If they don’t like a court ruling – they’ll just make a similar, often bigger power grab all over again. And over again. To wit: The EPA’s serial overreaches beyond the bounds of the Clean Water Act – to again and again reimpose their “Waters of the United States” uber-regulatory-overreach.
The EPA has twice already tried to unilaterally over-expand its authority over the nation’s waterways. Twice the Supreme Court has pushed them back. But we don’t need no stinking limitations – the EPA has issued a third, even huger “Waters of the U.S.” power grab.
Under this sweeping seizure, if after a deluge rainwater temporarily collects in a recessed area on your land – the EPA can deem your entire property a waterway, and thus unusable by you. This is a giant pain in the keister for anyone under any circumstance. If you’re a farmer or a rancher – anyone who makes their living off their land – it’s devastating. So yet again, people who can’t afford to do so are forced to file lawsuits against the EPA.
Meanwhile, how is the EPA doing with the waterways over which they already lord? Not so well. For instance, they just spilled three million gallons of wastewater into Colorado’s Animas River. Turning it a Tang-Gatorade day glow orange – and setting up a lengthy, multi-multi-million-dollar clean up.
It would appear the men and the women of the EPA are sorely limited in what they can do – and thus what they should actually be doing. They should try to get a better handle on things – before trying to handle even more things.
Everything would be a whole lot better – and a whole lot less orange. Dirty Harry understands it – as does everyone outside the self-delusionally-mesmerizing confines of the Beltway.
Guest Column by Wisconsin Attorney General Brad D. Schimel
There is an expectation that when we plug in our smart phone or put laundry in the dryer, electricity will flow to those devices on demand. And we allot a small portion of our monthly expenses to pay the energy bill without much thought. But the EPA’s onerous Clean Power Plan (CPP) will change all of that by forcing Wisconsin utilities to shutter cheap, clean coal-fired energy plants and switch to costly and unreliable energy sources.
With strict oversight by state regulators, the current power grid provides reliable, inexpensive energy to every user as needed. States, including Wisconsin, have spent billions of dollars building a complicated, integrated grid that generates and transmits electricity to those who need it exactly when they need it, at an affordable price. Each state has a unique set of resources and needs, and no one knows the intricacies of each state’s system better than each individual state. The EPA, through the CPP, is reversing this and is taking over regulation of the power grid.
As a result of the EPA’s unlawful power grab, Wisconsin, along with 15 other states, has mounted a legal challenge against the CPP. While there are several parts to the 1560-page regulation, the current legal battle focuses on section 111(d) of the Clean Air Act, the portion of the CPP that applies to existing generators. There are two main arguments against 111(d).
The first is EPA’s inability to regulate outside of the physical location of the plant. For example, in the past the EPA has mandated that certain technology be added to the actual physical plant to reduce emissions. In this case, the EPA is going outside the “fence line” by forcing states to change the entire electric system to reduce emissions, including installing more renewable generation and shifting to natural gas. Most troubling, the EPA did not evaluate how these changes affect the reliability of the electric system, nor did it undertake a full and fair analysis of the cost to consumers. Regardless, the EPA does not have the authority to regulate the entire electric system, and must stick to control measures that can be done at the source of the emissions, i.e., at the generator’s physical location, or inside the “fence line.”
The second argument relates to the tension between regulations on those same plants under section 112 and newly enacted regulations under 111(d). That argument revolves around two different versions of a Clean Air Act amendment that were both inadvertently signed into law – one that encompassed a substantive change meant to prevent particular plants from being overly regulated by different sections of the Clean Air Act, and one that contained a clerical error.
The substantive version prevents additional 111(d) regulation of plants that have already made considerable upgrade investments to comply with regulations mercury and air toxics standards recently passed under section 112. This version clearly prohibits EPA from invoking 111(d) “for any air pollutant…emitted from a source category which is regulated under [Section 112].” 42 U.S.C. § 7411(d)(1). Though Congress’s intent to limit regulation is clear, the EPA argues that it has the discretion to rely on the version containing a clerical error to support their new regulation, which will result in closing plants in which utilities, and consumers, have invested millions of dollars to meet other EPA regulations.
These arguments have been presented in both the Murray Energy and West Virginia cases brought against 111(d) before its finalization, and will be further addressed in the new challenges. The importance of the nuanced arguments that support our position should not be ignored, but it’s equally important to address the big picture problem with the EPA’s unilaterally expanding authority: The EPA is ignoring the foundation of cooperative federalism upon which this country was built.
To say that the CPP is agency overreach is an understatement. The CPP would allow the federal government, through the EPA, to control energy policy in each state. It allows EPA to force a federal plan on states if they choose not ruin their economies with overly-burdensome regulations. It gives EPA the power to mandate what energy type a state must rely on regardless of resources available in that state. In short, the EPA will have full power over our power.
And for what? A very minimal reduction, if any, in global carbon emissions.
The good news is that Wisconsin is joining the state of West Virginia and other states in challenging the EPA’s regulatory overreach, and we have the law on our side.
In today’s edition of The Heartland Daily Podcast, Budget & Tax News managing editor Jesse Hathaway speaks with Rebecca Friedrichs, a California teacher who’s going all the way to the Supreme Court of the United States to fight for her (and other teachers’) protection against compelled speech and involuntary association by labor unions.
Friedrichs explains how the teachers union has failed to protect the best interests of children and educators, but only serves itself and its interests as an organization. Instead of allowing people to choose to join the union and voluntarily pay dues, teachers unions require members to be a part of the unit and pay money they earned as a condition of employment in the school system.
For more information, check out this website: www.cir-usa.org
A federal judge in the Northern District of California last week stopped the U.S. Fish and Wildlife Service (FWS) from moving forward with a thoughtless proposal that would have let the wind industry legally kill bald eagles and golden eagles for the next 30 years. The court ruling is a surprise defeat for President Obama’s Clean Power Plan, which calls for increasing domestic wind-energy capacity threefold.
U.S. District Judge Lucy H. Koh ruled in favor of the plaintiff, the American Bird Conservancy, and against the government’s “eagle take” proposal. Judge Koh, an appointee of President Obama, determined that the government violated the National Environmental Policy Act when the agency’s director decided that the agency could issue permits to wind-energy producers that permitted the wanton slaughter of the eagles for up to 30 years, without so much as an environmental-impact assessment. Eagle kills in particular, are a legal and PR nightmare for the politically correct windmill industry.
A study in Wildlife Society Bulletin found that turbines in the U.S. kill some 573,000 birds and 880,000 bats each year. The study also said there is an “urgent need to improve fatality monitoring methods” at these deadly wind facilities.
In today’s edition of The Heartland Daily Podcast, H. Sterling Burnett, managing editor of Environment & Climate News speaks with William Yeatman. Yeatman is a senior fellow specializing in environmental policy and energy markets at the Competitive Enterprise. Burnett and Yeatman discuss his analysis of Obama’s Clean Power Plan for new and existing power plants, including what Yeatman calls the plan’s dirty secret.
They also discuss the importance of the court in possibly granting a stay of the plan as well as his work on Hillary Clinton’s proposed energy plan. Yeatman also discussed two other Obama regulations, its Mercury and Toxics rule, and the regional Haze regulation, which he calls two of the top three worst environmental rules of all time.
GOP Presidential contenders Sen. Marco Rubio (R-Fla.) and Gov. Scott Walker (R-Wis.) recently introduced health care policy reform proposals that are earning kudos from at least one free market health care analyst.
“Both Walker’s and Rubio’s health care plans are a very good start,” said Dr. David Hogberg, health care policy analyst at the National Center for Public Policy Research, a free market think tank. “On balance, these are excellent plans for moving our health care system in a free market direction.”
What is more, Dr. Hogberg congratulated the candidates for releasing their reform plans early in the campaign season. Perhaps The Donald will follow suit soon? Or Jeb? Or Rand?
“Usually, Republican candidates release their health care plans late in the election cycle, if they release them at all,” he said. “By putting these plans out there more than 14 months before the election, Walker and Rubio show they are willing to make health care a central issue of the campaign.” Both Walker’s and Rubio’s plans contain components that should help the government midwife, so to speak, a free market in health care, the think tank said.
These free market terms include:
* A refundable tax credit to purchase health insurance.
* A provision allowing consumers to purchase insurance across state lines.
* Expanding health savings accounts (HSAs)
“These are all big steps that will empower Americans to become health care consumers,” said Dr. Hogberg. “These will be important drivers in reducing the cost of health care and health insurance.”
Obama Raising $800 Million for Post-Presidential Library, Planning Focus on ‘Criminal Justice Reform’
An ambitious fundraising plan – and agenda – was this week unveiled for the Barack Obama Presidential Library.
A report in The New York Times indicates that Mr. Obama is planning to raise $800 million for the project, and will focus his time, as a former president, on “criminal justice reform.”
The high-tech, digital library and worldwide foundation will be based at the University of Chicago, on the city’s south side. But Obama will have offices there, and at Columbia University, his alma mater, in New York City. Fundraising for the library may reach twice the amount raised by former President George W. Bush.
The Obama family is likely to remain in Washington until their younger daughter Sasha, 14, finishes high school at the prestigious Sidwell Friends school.
Planning an active post-presidency, like Jimmy Carter, whom many compare him to, rather unfavorably one should hasten to add, Obama is expected to continue to be a public presence.
“His focus is on finishing this job completely, thoroughly,” Obama-confidante Valerie Jarrett told The Times.
Now that’s reassuring!
Watch Bruno Behrend debate Chicago Public School Principal Troy LaRaviere on the topic, “Public or private? What should be the future of public education in Chicago?” The debate was held July 25th as part of the famous Bughouse Square Debates.
Behrend’s argument was clear: Large urban districts, the teachers unions, and the public school system itself are willing to protect themselves with lobbying in Springfield and Washington, DC at the expense of children.
LaRaviere started by explaining the difference between scientific data and the use of averages and overall data. He then espoused the alleged virtues of Chicago Public Schools (CPS), quoting statistics from CPS and claiming CPS was outperforming charter schools in Chicago.
Behrend noted the best “vote” a parent could make was not for mayor or alderman, but taking an education savings account and vote with the money following their child to the school of their choice, thus opening up a “vast new array of education opportunities.”
Bruno Behrend is a Heartland Institute senior fellow.
Troy LaRaviere is the principal of Blaine Elementary School in Chicago’s Wrigleyville.
Increasingly over the past decade both federal and state governments have given special subsidies to, provided tax advantages for and mandated the use of solar energy as a solution to environmental concerns and the need for greater domestic energy independence. A damming report from the Taxpayers Protection Alliance details the enormous cost to American’s of the government’s obsessive solar power push. A few of the tidbits are below
- A Government Accountability Office review of federal renewable energy-related initiatives for fiscal year 2010 discovered at least 345 different federal initiatives supporting solar energy. The programs are managed by nearly 20 agencies and support more than 1,500 individual projects.
- Over the past five years, the federal government spent an estimated $150 billion subsidizing solar power and other renewable energy projects.
- Preferable tax treatment given to solar and other alternative electricity initiatives cost Americans nearly $9 billion annually, according to the IRS.
- State and local governments increasingly subsidize solar energy. Personal tax credits related to solar products are available in 20 states, 18 states maintain corporate tax credit and deduction programs, and 14 states and Puerto Rico offer taxpayer-funded grants to support solar electricity.
And what as all this largesse bought? Despite the subsidies and mandates solar will make up only 0.6 percent of total U.S. electricity generation in 2015, according to the Energy Information Administration. Worse still, government efforts to promote solar energy have resulted in waste and fraud and diverted public and private resources from energy resources that hold more promise. For instance, “Government-backed solar boondoggles are rampant and include such devastating examples as the Solyndra loan, which cost taxpayers $535 million and left 1,100 employees without a job, and the Ivanpah Solar Electric Generating System in California, which, despite reaping $1.6 billion in subsidies, produces electricity at a cost three times higher than traditional power and has requested $539 million in additional direct handouts from the federal government.”
The word on renewables is not much better out of Europe. One recent report showed despite generous support that dwarfs the subsidies given to the wind industry in America, Germany’s wind farms are failing to deliver much power. The country has more than 25,000 turbines with a rated capacity of nearly 40,000 megawatts. However, over the course of 2014 they delivered just 14.8 percent of their rated capacity – or less than 6,000 megawatts, the amount of power one could get from just six coal fired or nuclear power stations. And, of course, unlike the power from the coal power or nuclear power plants, the power delivered by the wind turbines was so volatile and unpredictable that it could not be counted upon to provide baseload power.
With numbers like this, it is little wonder why windpower is quickly falling out of favor in Europe. Across the EU green energy subsidy programs have been slashed causing the rate of wind farm installations to plummet. The Financial Times reports new wind installations fell precipitously in much of Europe: by 90 per cent in Denmark; 84 per cent in Spain (Europes largest wind power market) and 75 per cent in Italy. The fact that the decline in new wind farm construction comes as subsidies have been slashed is not a coincident and shows just how “not ready for prime-time” wind power still is despite 40 years of support. Wind still can’t compete on price, and may never be able to compete on reliability with the much abused and criticized electric power staples — coal, natural gas and nuclear.
When the EPA literally popped the cap holding back toxics filled water at the Gold King Mine above Silverton and Durango Colorado, it really screwed up.
Here’s what we know. The Gold King Mine had been closed and plugged since 1923. Behind that plug were several million gallons of tainted water, laced with toxins and heavy metals that existed in the rocks and naturally leached out over time even before mining started in the area, combined with toxic chemicals used in the mining process. Among the potential toxins in the mine were, lead, sulfuric acid, dissolved iron and copper, zinc, beryllium, cadmium and arsenic. Note I said potential toxins. Any of these chemicals or metals alone or combined as they were in the waters contained in the Gold King Mine, could be dangerous, but only if only if a person is exposed to them particular ways, in sufficient amounts.
Even before mining really took off, Cement Creek, the stream first hit with the sludge released by the EPA’s snafu at Gold King, had been declared undrinkable as far back as 1876. Nature was poisoning the water even before humans got involved. Mining exacerbated the problem. Tainted water had been seeping out of abandoned or closed mines near Gold King for decades. The mines that had been the prime reason this region of Colorado was settled in the first place and that had been the lifeblood of the towns in the area for more than 100 years, were also the source of ongoing water problems.
By 2015, Cement Creek contained no fish. Still, the water draining from Cement Creek and other nearby streams into the Animas river was not toxic or dangerous to humans – it took the EPA to literally poison the wells. The Animas river was a popular canoeing, kayaking location, anglers, hikers and hunters used the area, and its resources for food and recreation, farmers used the water for irrigation, adjacent and nearby homeowners used well water for drinking and bathing and cities and the Navajo Nation used the waters from the Animas and connecting streams and rivers for municipal drinking water.
Thanks to the EPA, for now until who knows how long, all this has come to an end.
We also know the EPA had been bucking to declare the entire region a Superfund site for decades. Ever since the last mine in the region closed, Sunnyside, in 1991, the EPA has been trying to force a clean up using the threat of a Superfund designation. Entire towns in the U.S. have had to be abandoned and fenced off once they are declared Superfund sites. Silverton and nearby towns and residents wished to avoid such a fate at all costs. For years, residents of Silverton fought EPA involvement out of fear a Superfund designation would destroy their tourism industry, the only source of income that could replace the vanished mines.
In what seemed a sign of progress, earlier this year, EPA agreed it would not designate the mines a Superfund site, and it would provide $1.5 billion to plug two other area mines, where polluted water was draining. This is where the Gold King problem arose. As the Washington Post reported, “But water has a habit of finding its way downhill, and plugging one mine often means it simply leaks from others, so the agency had to excavate and stabilize the Gold King mine upstream.”
Do we know for sure that water from the mines the EPA plugged was flowing into Gold King? No. Do we know for sure that Gold King’s plug would soon, or indeed ever, collapse absent EPA actions to drain the mine? No.
And here are a few things the EPA didn’t know that engineers think they should have before tackling the problem: How much water was stored behind the plug? What were the water pressures? What toxins at what percentages were in the water?
Rather than doing a little more research and testing at nearby mines containing lower volumes of water, the EPA ham-handedly blundered forward, and by breaking the seal unleashed 3 million gallons of toxic sludge and water into waterways and watersheds that provided sustenance and a living for people in Colorado, New Mexico, Utah and Arizona.
Three million gallons, sounds like a lot, and it is, about 60,000 bath tubs or 4 ½ Olympic sized pools, however, it’s a relatively small volume compared to the water flowing through the affected rivers on a daily basis, and though Lake Powell, the ultimate destination for much of the spill, is only 53 percent full at present due to an extended drought, it still contains 4,247,025,005,449. In short, the toxins that reach Lake Powell’s 4 trillion gallons of water will be so diluted as to not be a concern, and possibly not measurable.
Testing was done immediately after the spill. One of the samples of mercury was nearly 10 times higher than the EPA acceptable levels. Samples of beryllium and cadmium were 33 times higher, and one of the arsenic levels was more than 800 times higher. Having said this, much of the river system is are already back to or near normal conditions. For example, samples tested from nine locations along the San Juan river showing it is back to pre-event conditions.
The problem is, while much of the contaminated sludge will settle into the river bottoms, reducing immediate threats from the toxics, river activities, storms and other events can and will stir it up in the future, leading to episodic spikes in dangerous pollutants.
The EPA compounded its gross negligence by failing to inform city and state officials or residents and recreationists on the river for a full 24 hours after the event. That’s 24 hours farmers were irrigating with tainted water, cities were pumping tainted water for municipal uses, kayakers and anglers were literally standing or floating in the toxic brew. Some mayors of cities were outraged that they first learned of the danger from news stories, not the EPA itself. Colorado and New Mexico’s governor’s declared states of emergency and local officials and those using private wells have turned off the taps in the affected region. Numerous lawsuits are undoubtedly forthcoming, and the EPA has already established mechanisms for compensating individuals and businesses affected by the closure of the affected areas.
As the EPA itself admits, this has created a long term problem, for which it is responsible. And this all could have been avoided, the question is, did the EPA want the spill to occur. Outrageous you say! Consider this, the EPA has long wanted an excuse to declare Colorado’s mining region a Superfund site. Billions of dollars flow to the agency to remediate Superfund sites. In recent years, the EPA’s budget and staffing has been stagnant or in decline.
The EPA has already gone on record stating this spill proves the need to deal with the more than 50,000 abandoned mine in the area. That’s decades of remediation work, work which may never have gotten funding (especially since the problematic waters are a threat to no one while trapped in the mines), absent the EPA’s spill.
Less than a week before the spill a retired engineer predicted it in a letter published in the Silverton Standard and The Miner. He wrote: “Based on my 47 years of experience as a professional geologist, it appears to me that the EPA is setting your town and the area up for a possible Superfund blitzkrieg.” He warned, accurately, EPA would underestimate the water pressure build up and the clean up would fail spectacularly flooding the river with toxic waste. He warned citizens and the cities downstream of the Gold King Mine to attempt to protect their water supplies from the predicted toxic flood and said the EPA would use their failure to pushg to build $100 million to $500 million treatment plant in the area, which he believed was the EPA’s real goal all along.
If a private company had caused this disaster, federal and state officials would already be talking criminal investigations, and civil penalties would be filed claiming in billions in damage. Heads would roll, yet, while the EPA may transfer some of the people supervising the operation, its likely few if any of its employees will fired or forced to resign. Indeed if past cases of government malfeasance are any guide, those most intimately tied to the spill may receive raises or promotions, whether to reward them for surreptitiously gaining the EPA’s underlying goal of garnering millions for future mine clean ups, as suggested by Taylor, or keep them quiet concerning such a plan.
If Congress isn’t careful, it could end up rewarding the EPA’s bad behavior. When it approves, as it likely will, emergency or additional funds to , clean up the Gold King Mine spill, compensate all affected parties, and provide ongoing monitoring of water quality and residents health, rather than granting the EPA additional funds, it should use shift funds from the EPA’s existing budget, cutting or reduce funding for other EPA programs. This would send the message that the EPA will not benefit from either dunderheaded or malicious but self-interested actions it undertakes.
* This is a modified and expanded version of an article the author wrote for The American Spectator.
In today’s edition of The Heartland Daily Podcast, we listen in as Heartland Senior Fellow Peter Ferrara joins The Larry Kudlow Show. Ferrara is the author of the recently released book on entitlement reform titled Power to the People. Ferrara and Kudlow discuss the potentiality and likelihood of a 4% growth rate in America.
Kudlow seeks Ferrara’s opinion on the recent comments by Jason Furman, Chairman of the Council of Economic Advisers, that suggested four percent growth was implausible. Ferrara is more optimistic. What is stunting our growth?, asks Kudlow. Is it secular stagnation as some suggest? or is it just bad policy? Kudlow also asks about Ferrara’s views on the upcoming 2016 presidential election. Ferrara tells who his favorite candidates are what he thinks about Hillary Clinton.
U.S. households are saving hundreds of dollars a year because natural gas prices are low, but that’s about to change. A study by NERA Economic Consulting has found new regulations on power plants mandated by the Environmental Protection Agency’s Clean Power Plan (CPP) will increase natural gas prices to 2007 levels, virtually guaranteeing these savings will soon be wiped out.
A study by the Brookings Institution found natural gas prices have plummeted as horizontal hydraulic fracturing, also known as horizontal “fracking,” has caused U.S. natural gas production to skyrocket to all-time highs, making the United States the world’s top producer of natural gas.
Record-high production caused natural gas prices to fall from $8.03 per million cubic feet (mcf) in 2007 to less than three dollars today. As a result, U.S. natural gas consumers will save $181 to $432 per person, depending on which part of the country they live in. For a family of four living in Ohio, the savings add up to $1,036 of their money they get to keep. People change car insurance providers to save substantially less money than that.
Unfortunately, these savings will soon go up in smoke because of CPP.
The goal of the Obama administration’s new regulations is to reduce carbon dioxide emissions by 30 percent of 2005 levels by 2030. Because wind and solar account for less than 5 percent of U.S. electricity generation, despite receiving decades of subsidies and billions of taxpayer dollars, this goal can be accomplished only by shutting down coal-fired power plants and replacing them with natural gas-fired electricity generation.
This transition has already begun. In April of this year, natural gas accounted for more electricity generation than coal for the first time ever, with natural gas generating 31 percent, compared with 30 percent for coal. Regulating coal out of our energy portfolio will have serious negative consequences because it means abandoning a reliable, abundant, and affordable source of energy. The Obama administration’s ideological war against coal means demand for natural gas for electricity generation will continue to grow, with the goal of the CPP to increase the use of natural gas to account for an average of 70 percent of the electricity generated in each state, causing natural gas prices to climb back up to approximately $7.80 per mcf and essentially incinerating the savings U.S. consumers currently enjoy.
Those who argue the power plant rules are needed to avoid the negative effects of climate change should reconsider their position. EPA’s own climate models show the regulations will reduce the amount of projected warming by a negligible .018 C, an amount below the margin of error in the calculations. In other words, these regulations will cost billions of dollars to implement, will significantly increase the costs of natural gas and electricity, will hurt low-income families the most, and will have no positive impact on the environment whatsoever.
EPA officials argue we need the rules in order to set an example for the rest of the world. That brings to mind something our mothers told us: “If your friends all jumped off a bridge, would you jump off too?” The big carbon dioxide emitters, such as China and India, are listening to Mom and are not going to jump with us. On the contrary, they’re building new coal-powered plants every day.
Low natural gas prices made possible by horizontal fracking are a tremendous boon for families struggling to make ends meet, but even these low prices are barely compensating for the significant, long-term damage being inflicted upon our energy system by the Obama administration’s reckless war against affordable energy. By the time people realize the impact of the Clean Power Plan regulations, it may be too late to reverse the damage.