In Case You Thought The Chinese Know What They're Doing -- Part II

Thomas Friedman of the New York Times has famously heaped praise on the autocratic leaders of China as that "reasonably enlightened group of people" who have sagely dispensed with the messiness of democracy so that they "can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century."  

The leaders seemed to be just so brilliant even as recently as a few months ago, as China's economy just kept growing at record pace quarter after quarter (at least, if you believed the official numbers).  Oh, a few naysayers had started to quibble around the edges, as by impolitely asking how the growing swarm of ghost cities was getting counted in GDP.  But that was then.  Now suddenly there is no denying that China has hit some major bumps in the road.  Its stock markets are down around 40% since June.  There are obvious gluts of steel, building materials, and many other products coming from China's factories.

The real test of a government's economic policy comes in how it acts during market downturns and corrections.  So now we're getting a chance to look at how the supposedly enlightened Chinese leaders perform under these conditions.  Although it's still early, they've already done plenty to make it possible to render a verdict.  And the verdict is, they don't have a clue what they are doing and are committing one huge blunder after another.  The errors are all of essentially the same sort, exactly the sort you would expect from a group of self-absorbed autocrats like these, namely that everything is geared to preserving and enhancing the power and image of those in power no matter what the cost in damage to the economy and  impoverishment of the people.  And all, of course, without any of the (however minimal) accountability that might come from a little democracy.

Several weeks ago (July 18), in the first part of this new series, I took note of the first inklings of the gross incompetence, when it came to light that the Chinese government had committed the equivalent of some hundreds of billions of dollars to propping up the stock market in an effort to stem the rout.  My comment at the time:

So, to protect their political image and narrative, the great leaders of China are in the process of transferring some 5% of GDP from their taxpayers and citizens into the pockets of stock market speculators, in a completely futile effort to prop up stock prices that with a high likelihood are destined to fall no matter what.

So, how has it gone?  The Financial Times (hey, I'm in London!) this morning reports the latest, in its lead article, "China ditches mass share buys after $200bn two-month spree."   According to the FT, it seems that after pouring a couple of hundred billion into stock purchases and seeing the markets barely stabilize, the government then eased off on the purchases early last week, only to see the markets immediately resume their rout.  Then the government got back into purchases on Thursday and Friday.  Why?

Traders and officials said the latest intervention was aimed at providing a "positive market environment" ahead of a military parade on Thursday to celebrate the 70th anniversary of the "victory of the Chinese people's war of resistance against Japanese aggression."

Two hundred billion from the taxpayers straight to the hands of savvy stock speculators and the only positive they were even trying to achieve was some image-burnishment for the leaders.  I mean, at least when the U.S. Congress and President decide to essentially waste $1 trillion on a "stimulus," we get a few new sidewalks and repaved roads to show for it.

And as more news comes out about Chinese economic policy in a downturn, the stock market purchases are only the beginning of the incompetence.  From the New York Times of August 29, we have "Zombie Factories Stalk the Sputtering Chinese Economy."   Excerpt:

Like many industrial cities across China, Changzhi, which expanded aggressively during the country's long investment boom, has too many factories and too little demand.  That excess capacity, many economists indicate, will have to be eliminated for the Chinese economy to return to healthy growth.  But rather than shut down, Lucheng Zhuoyue and other Changzhi companies are limping along in a kind of march of the undead. . . .   [T]he government and its state-owned banks sometimes keep money-losing businesses on life support by rolling over or restructuring loans, providing fresh credit, or offering other aid.

And there's more.  The government geniuses have also decided that they know the lines of business that the economy should get into now, and will direct investment to their cronies to get it done.  From today's Wall Street Journal Europe, "China's Xi Faces Mounting Crises": 

Over the past week, state media have touted a theory attributed to Mr. Xi that calls for an accelerated shift to higher-level manufacturing and away from steel and other industries with excess capacity.    

Something tells me that if the very-enlightened Mr. Xi had been running the U.S. economy in the 80s and 90s, he would not have come up with the internet, the smart phone, or the search engine.  He's doing exactly what will inevitably condemn his economy to long-term second-class status.  I guess we should thank him.  Up until now, there had been reason to think that China could be challenging the U.S. for world leadership at some point in the near future.

Back in Manhattan (where I will be returning shortly) it's not hard to see that the keys to today's success have been (1) letting the businesses of the past die, and (2) allowing private individuals to create new businesses that no government bureaucrat could ever have come up with.  We had the greatest and most active waterfront for shipping in the world; now it's entirely closed down.  We had hundreds of thousands of manufacturing jobs, now almost all gone.  We had the premier clothing manufacturing center of the world, now shrunken to near invisibility.  We had the corporate headquarters of a big plurality of the Fortune 500; most of them moved away.  (Who would possibly have thought that corporate headquarters would prove to be a low-value use?)  And most of the jobs worth having today are things nobody had even heard of thirty years ago.  Hedge funds?  Apps?  Search engines?  Digital advertising?  We would have had no place to put any of these things if we had used government power to preserve the low-value businesses of the past.

Good luck, Mr. Xi, if you think you and your little group of cronies are such geniuses that you can come up with the next thousand or so currently-unknown high-value businesses to put your billion plus people to productive work.

Maybe Those Rich People Actually Serve A Purpose

The cause of the moment on the Left is income inequality.  The rich must be vilified, and their wealth redistributed!  Different countries follow different prescriptions to achieve the goal.  In Venezuela they have mostly just driven the rich out of the country.  In France they have the tax on the "great fortunes" (a "grande fortune" being defined as 1.3 million euros, equivalent to approximately 3 CSUs or Clinton Speech Units).  In the UK, prospective new Labor Party leader Jeremy Corbyn has proposed bringing back the clause in the party's platform that calls for public ownership of "industry."   That one could have prevented even Warren Buffet from getting rich if only we'd had it in the U.S. at the right time.  After all, it's letting people own businesses that enables some of them to get rich.  Public ownership would be so much more fair.  Or as the next best alternative we could make it so that businesses can only offer such products, and at such prices, as the government allows (e.g., Obamacare).

And then along comes one of those great market downdrafts.  The price of oil has declined by more than half over the course of the past year, and may be staying at this new lower level for a long time.  The Chinese stock markets have fallen by some 40% since peaking in June 2015.  Other world stock markets have had steep but less severe drops, including a drop in the major U.S. market indices of over 10% over just a few days (although some of that has now been recovered).

So how do these events play out in countries following different economic approaches?    

In the U.S., it's simple:  lots of rich people have lost lots of money.  On Saturday August 22 Bloomberg News, using data from the Bloomberg Billionaires Index, reported that the world's 400 richest people had lost some $182 billion of wealth in the market downturn just that week.  Then on Monday August 24 they reported that the same people had just lost another $142 billion.   Well, nobody feels too sorry for them, nor should anybody feel sorry for them.  That was the deal.  We let them keep the upside, but in return they had to take the downside (or find somebody to sell to who would take the downside).  In the oil patch things are even worse for the J.R. Ewings of the world.  There's talk of many bankruptcies coming among recently-high-flying drillers and producers of crude.  Lots of people who were multi-millionaires a few months ago are getting wiped out.  Again, nobody should feel sorry for them.  

And how about the poor?  By definition, they don't own any meaningful amount of these assets that just declined in value.  They won't even notice that the downturn has occurred.  And the U.S. government?  Somewhere it will take a small hit in capital gains and oil taxes, but those are a very small part of its revenue.  Basically, it won't even notice either.

China?  Some of their billionaires are in that Bloomberg 400, and they have borne a portion of the declines.  But lots more has been borne by the state -- which means by everybody, even the poor.  There's the $483 billion that the Chinese state put up just in mid-July to prop up the stock market, over 5% of a year's GDP.  That's money that came from everybody, not just the rich.  Guess that didn't work out too well.  And then there's the immense overcapacity and overbuilding that has gone on in China, in industries from steel to consumer goods to real estate.  Ghost cities, anyone?  These things are the result of the state allocating and subsidizing credit to cronies to keep doing what has seemed so successful in the past, even after it is not any more.  Again, the whole of society is on the hook for the disaster, not just the rich.

Or take the far more extreme case of Venezuela.  When oil prices were over $100 a barrel, it seemed like such a good idea to have the state own the entire oil industry to collect the free money for the good of all of society.  Now the state itself is getting wiped out, and the people, down to the poorest, are losing everything they have saved in the country.  The government has stopped putting out GDP or inflation statistics, but a fair estimate is that GDP will decline by 30% or so this year.  They've taken to printing currency to pay the government's bills, and we all know where that ends.  Recently the largest bill they have has gotten to be worth only 14 cents at the black market (real) exchange rate, so it takes baskets of bills to buy anything.  But they have a solution:  they'll start printing bills in larger denominations!  That'll work for maybe a couple of months.

Meanwhile, as tough as things are in the oil business these days, somehow the sharpest entrepreneurs keep innovating at a breakneck pace to keep making money at lower and lower prices.  From Donald Luskin and Michael Warren in the Wall Street Journal on May 15, "The Shale Boom Shifts Into Higher Gear":

The nimblest and smartest competitors have worked relentlessly to increase their productivity. Leading-edge operators report that they can produce more profitably today at a price of $65 a barrel than they could at $95 a barrel three years ago. Where can they be profitable three years hence—$40 a barrel? $30? The oil patch today is afire with the same technological imperative and competitive mission that has powered the U.S. electronics revolution—think Moore’s Law—to dash headlong down the learning curve, crushing costs and prices and making up for it in volume.

Or then there's the oil business in the state ownership model in Venezuela.  From Mery Mogollon in Platt's, July 1:

Although officially the Venezuelan government says its production is around 3 million b/d, secondary sources and publications estimate a volume of 2.3 million b/d, compared to 3.5 million/b in 2008, one year after Chavez expropriated the oil fields owned by international companies and ushered in reforms. This was also the time when an exodus of engineers and other white collar workers began from PDVSA.  In addition to oil production, the human resources problem has impacted refineries at a time when Venezuela, formerly a net exporter, now needs to import oil products to meet domestic demand.

Somehow in socialism there is no longer an upside, only a downside, and the poor and middle class own it.         

UPDATE August 30:  I spotted this August 10 article in the Mail Online, pointing out that the richest person left in Venezuela is currently thought to be -- Maria Gabriela Chavez, daughter of deceased former strongman Hugo Chavez.  The Mail gives her wealth as $4.2 billion, held in banks in the United States and Andorra.  For its source, the Mail cites Miami-based El Diaro, which in turn cites "Venezuelan media sources."  I guess such rich as they still have in Venezuela are sufficiently well-connected to be insulated from the downside risk of the economy's collapse.  Then there's this quote from Chavez: "Being rich is bad."  For everyone but himself and his family and cronies. 

The Greatest Scientific Fraud Of All Time -- Part VII

With every passing month this just gets more and more bizarre.

So we're now deep into August, and the question on all of your lips has to be, where did July 2015 stack up in the world temperature history record books?

Checking first with the satellite records (that go back to 1979) we find that July 2015 was roughly a middling month.  Recall that these satellite measurements are worldwide, taken in the lower troposphere, with each equal volume of air counted equally.  Joe D'Aleo of the ICECAP website helpfully provided me this chart compiled from the UAH satellite data ranking the Julys of the last 20 years from warmest to coldest; July 2015 ranks ninth out of just these twenty, rather far behind number one, which is July 1998:

Checking next with US HCN (Historical Climate Network) data (going back to 1895 and covering just the U.S.) we find that July 2015 was again roughly a middling month.  This data comes from a network of ground-based thermometers in the U.S. only.  Tony Heller of the Real Climate Science website has compiled the data into this chart in which 2015 ranks 51st out of 120 years:

OK, dare we now check in with the guys at NOAA (National Oceanic and Atmospheric Administration)?  Here is their release of July 2015 temperatures.  These data are worldwide, again from a network of ground-based thermometers, although the density of coverage varies greatly from one area to the next.  The data here have been "adjusted" by so-called "homogenization" algorithms, which the bureaucrats in charge refuse to disclose the details of.  Key quote:

July 2015 was warmest month ever recorded for the globe.  Global oceans record warm for July; January-July 2015 also record warm.  

It's the hottest month EVAH!  And remember, these are the guys who previously loudly proclaimed that May 2015 and March 2015 were the hottest March and May on record respectively.  

So really, how could these different data sets be showing not just somewhat different, but wildly different results?

The increasing divergence between the UAH/RSS satellite records and the NOAA/GISS/HadCRUT thermometer records was the subject of a long comment posted at Watts Up With That in June by physicist Robert Brown of Duke University.  That comment deserves quoting at some length:

The two data sets should not be diverging, period, unless everything we understand about atmospheric thermal dynamics is wrong. . . .  [T]he growing difference is strong evidence of bias in the computation of the surface record. . . .  [E]very new version of HadCRUT and GISS has had the overall effect of cooling the past and/or warming the present! This is as unlikely as flipping a coin (at this point) ten or twelve times each, and having it come up heads every time for both products. . . .  If [the divergence between the data sets] grow[s] any more, I would predict that the current mutter about the anomaly between the anomalies will grow to an absolute roar, and will not go away until the anomaly anomaly is resolved.

In short, the divergence is just not plausible at this point.  My only quibble with Brown is that he is way too nice in using the word "bias" to describe what is going on with the NOAA/GISS/HadCRUT data sets.  I'm sorry, but there is no way this can be anything other than intentional reverse engineering to create an artificial warming trend.  What the divergence does is make plain to anyone who cares to inquire that the entire trend of increasing temperatures reported by NOAA/NASA has been artificially created by their "adjustments," which they resolutely refuse to explain.

So how is this subject reported in the news media?  CNN: "NOAA: July hottest month on record . . ."; no mention of satellite record or of divergence.   The Weather Network: "Earth Just Had Its Hottest Month of ANY Ever Recorded"; no mention of satellite record or of divergence.  Science Daily:  "July 2015 was warmest month ever recorded for the globe"; no mention of satellite record or of divergence.   USA Today: "July was Earth's hottest month ever recorded"; no mention of satellite record or of divergence.  Slate:  "July Was Earth's Hottest Month Ever Recorded"; no mention of satellite record or of divergence.  LA Times:  "July was warmest month on Earth in 136 years, NOAA says"; no mention of satellite record or of divergence.   UN Climate Change Newsroom (OK, you knew you couldn't trust these guys): "July 2015 Hottest Month Ever Recorded"; no mention of satellite record or of divergence.  Time: "July Was The Hottest Month Ever"; no mention of satellite record or of divergence.   CBS News: "July was Earth's hottest month in recorded history"; no mention of satellite record or of divergence.  Fortune: "July was the hottest month in the hottest year on record"; no mention of satellite record or of divergence. BBC: "July was Earth's hottest month on record, NOAA says"; no mention of satellite record or of divergence.   ABC (Australia): "Global warming: World sweats over July breaking warmest month record, 2015 hottest year so far"; no mention of satellite record or of divergence.  Washington Post: "July was the hottest month in Earth’s hottest year on record so far"; no mention of satellite record or of divergence.  AP: "Feeling the heat: Earth in July was hottest month on record"; no mention of satellite record or of divergence.  Reuters: "July was hottest month recorded worldwide: U.S. scientists"; no mention of satellite record or of divergence.   The Independent (UK): "Climate change: July was the Earth's hottest month on record – while 2015 could be the warmest year, scientists say"; no mention of satellite record or of divergence.  Bloomberg News: "July Was Earth’s Warmest Month in Records Going Back to 1880"; no mention of satellite record or of divergence.  

Really, you could go on literally as long as you want with this.  How stupid do these people think we are? 

Brown predicted that the current "mutter" about the "anomaly between the anomalies" will shortly be turning into a "roar."  It certainly should.  Actually, it should have already.  But remember that all the climate reporters at all those mainstream media outlets are perfectly aware of the satellite records and of the divergence between the satellite records on the one hand and the "adjusted" NOAA/NASA records on the other.  And to a person they are intentionally suppressing any mention of the satellite records or of the divergence.  It's remarkable, but it's how groupthink works.  Anybody who mentions the actual facts is subject to being shamed, ostracized, and run out of the profession.  See, Larry Tribe.  The whole affair is an embarrassment to the profession of journalism.

To review parts I through VI of this series on "The Greatest Scientific Fraud Of All Time," go here.             

Smart People Sure Are Easy To Fool

A recurrent motif of the climate scam is that the melting of glaciers in certain regions of the world will shortly cut off the water supply of otherwise dry downstream areas that draw their water supplies from the runoff of the glaciers.  

The most famous example of this motif appeared in the IPCC's Fourth Assessment Report that came out in 2007.  Here is the section of that Report relating to the Himalayan Glaciers.  Excerpt:

Himalayan glaciers cover about three million hectares or 17% of the mountain area as compared to 2.2% in the Swiss Alps. They form the largest body of ice outside the polar caps and are the source of water for the innumerable rivers that flow across the Indo-Gangetic plains. Himalayan glacial snowfields store about 12,000 km3 of freshwater. About 15,000 Himalayan glaciers form a unique reservoir which supports perennial rivers such as the Indus, Ganga and Brahmaputra which, in turn, are the lifeline of millions of people in South Asian countries (Pakistan, Nepal, Bhutan, India and Bangladesh). . . .  Glaciers in the Himalaya are receding faster than in any other part of the world (see Table 10.9) and, if the present rate continues, the likelihood of them disappearing by the year 2035 and perhaps sooner is very high if the Earth keeps warming at the current rate.    

Got that?  The Himalayan glaciers are a "lifeline" for well over a billion people!  Without the glaciers to supply the water, the billion people are toast!

When I first read this, I thought it was completely ridiculous.  Kindly think about this for one minute.   The runoff from the glaciers in any given year is equal to whatever precipitation falls on them plus any net melting.  Suppose there is no net melting and the glaciers are perfectly stable at their current size.  Then the amount that runs off from the glaciers in a year is exactly equal to the amount added by new precipitation.  Now suppose that the glaciers have completely melted away and the temperature has gotten so warm that no snow and ice any longer accumulate; all precipitation runs off within the year.  Then the amount that runs off from the previously-glaciated area in a year is exactly equal to the amount added by new precipitation.  So stable glaciers and no glaciers lead to exactly the same result:  runoff equal to precipitation.  Then why is the melting of the glaciers a problem for water supply in downstream areas?  It never made any sense, and it still doesn't.

But it turned out that the IPCC Himalayan glacier story of 2007 fell apart for an entirely different reason.  In early 2010, various independent researchers did some checking on the IPCC claim, and found both the claim and its source to be highly dubious.  The actual melt rate of the Himalayan glaciers did not remotely support the claim that they would be gone, or even significantly diminished, by 2035.  The 2035 prediction proved to be based on a non-peer reviewed WWF pamphlet from 2005.    Here is a report from early 2010 from climateaudit blogger Steve McIntyre on how the IPCC story fell apart.   Similar reports appeared at the time on other blogs, including Watts Up With That here.    But as far as I can find, nobody questioned the underlying premise that it would make any difference to the water supply of downstream areas whether the glaciers were there or not.

The disintegration of the IPCC's 2007 melting glacier story caused the organization a good deal of embarrassment, and led to calls for the resignation of its then-head, Rajendra Pachauri.  But the way in which the glacier melting scare had imploded left it open for the IPCC to come back in its next big assessment with another claim that melting glaciers were somehow going to leave masses of people without drinking water.  The IPCC's Fifth Assessment Report came out in 2013.  Sure enough, Mr. Pachauri was still around, and still peddling ridiculous stories that melting glaciers were going to leave the masses waterless.  Here is an article from the Financial Times from September 2013, reporting on an interview with Mr. Pachauri at the time of the release of the IPCC's Fifth Assessment Report.  Excerpt:

The glaciers of the Himalayas are melting so fast they will affect the water supplies of a population twice that of the US within 22 years, the head of the world’s leading authority on climate change has warned. . . .   [T]he UN’s Intergovernmental Panel on Climate Change, . . . this week starts releasing its first extensive report in six years on how the global climate is changing. . . .  This is the panel’s first big study since it was mired in controversy four years ago over a mistaken suggestion in its last assessment in 2007 that the Himalayan glaciers could disappear as early as 2035, a date it admitted was “poorly substantiated”. . . .  While the glaciers may not vanish by 2035, [Pachauri] added, the pace at which they are melting is bound to affect vast numbers of people depending on them for water.  “Even before 2035 it’s going to start showing up in terms of changes in water flows, which affect, as we had estimated, 500m people in south Asia and 250m people in China,” he said.

Needless to say, the FT reporter nowhere questions Mr. Pachauri as to whether his premise makes any sense whatsoever.

And finally, I bring up this history today because the melting glaciers scare is back, this time in an article in Nature Geoscience published Monday August 17.  The next day the Wall Street Journal covered the story, in a piece titled "Asian Glaciers Melting Faster."   This time it's the Tien Shan mountains of Central Asia, rather than the Himalayas:

The glaciers of Central Asia’s Tien Shan mountain range have lost a quarter of their ice mass over the past five decades, largely because of increased melting linked to a rise in summer temperatures, according to new research.  

So why again is this a problem?  

Both glacial melting and snow are vital sources of water for people living in semiarid parts of Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and China. The worry is that continual glacial shrinkage could affect the water cycle and reduce the water supply in coming decades.  

Now I don't know whether the glaciers in the Tien Shan mountains -- or for that matter the Himalayas -- are actually experiencing net melting at all, let alone rapidly disappearing.  What I do know is that if these glaciers completely disappeared tomorrow, then the annual runoff going forward would be exactly the same as it would be if the glaciers were totally stable at today's size, namely that annual runoff would be equal to annual precipitation in both cases.  

Uber Shows How To Break Crony Capitalism

The taxi medallion scam is one of the worst examples of crony capitalism.  Uber (and some other app-driven services) are in the process of defeating the scam in New York and, apparently, in many other places as well.  It's about time.

The scam is simple.  A city issues a limited number of so-called "medallions," which convey exclusive rights to pick up passengers on the streets, and often at airports as well.  I have never heard anybody articulate a good rationale for why the number of medallions should be limited.  Fake rationales include preventing "destructive" competition (don't we have that in every industry?) and so-called environmental concerns (always articulated by those holding medallions whose only value lies in artificial scarcity). 

I have a long-time friend, call him R, who is head of one of those lenders that specialize in loans for the purchase of taxi medallions.  Twenty or so years ago I went for the first time to a fundraising event for a candidate for City office, and there was R.  Since then, I haven't been to many fundraising events for candidates for local offices, but at the few I have attended, somehow R was always there.  I can't say I was surprised when Bloomberg News reported last month that the medallion taxi industry had contributed over $500,000 to the campaign of Bill de Blasio for Mayor.  Probably, they contributed that amount or close to it to other candidates as well.  Other than the City employee unions and real estate interests, the taxi medallion guys have been right at the top of the political contribution heap.

Back when I first found out from R what business he was in (I think this was in the 90s), I expressed some very severe skepticism.  From there, the conversation went something like this:

R:  It's literally the best industry to lend in.  We have not had a single default in decades.

Me:  That will be true until the day that all the value suddenly disappears.  Basically, all the value comes from the artificial scarcity.  One day that will disappear, and the medallions will suddenly be worthless all at once.

R:  They've been saying that for decades.  Meanwhile we are diversifying to some degree.  

Since this was before this blog recorded all my thoughts, I don't have an official record of my prediction.  However, it is now rapidly coming true.

For the past few years, New York City taxi medallions have been trading for over $1 million each.  With over 13,000 medallions issued, this has represented a value of over $13 billion -- a good measure also of the value of the inconvenience inflicted on people in neighborhoods where taxis have been systematically unavailable for decades due to the corrupt crony system.  But with the advent of Uber, the value of the medallions has suddenly plummeted.  This article from CNN Money in July reports that the value of a medallion is off by some 40% from its peak just last year.

And that's if you can sell a medallion at all.  Many reports indicate that the market has gone dead as lenders have been spooked and refuse to lend. 

When the medallion market first started to plummet, de Blasio and his friends on the City Council (all takers of industry cash) floated several proposals to put the reins on Uber, including, for example, a limit on Uber licenses.  But when the reports started to come out about the unbelievable amounts of political contributions they had received from the medallion taxi industry, suddenly they were in a tough spot.  Turns out that our "progressive" Mayor and City Council would happily sell their outer-borough constituents down the river, inflicting them with $13 billion of inconvenience, and handing the $13 billion to a handful of cronies, in return for a paltry few million of political contributions.

The latest news is that de Blasio and the Council are refusing to help out their medallion-owning friends, so the medallion owners are now pinning their hopes on a litigation contending that existing law restricting non-medallion owners to only "pre-arranged travel" effectively outlaws the Uber model.  Good luck with that.  Of course de Blasio and the Council will gladly help out their medallion-owning friends as soon as nobody is looking; but it seems that people are going to be looking at this one, at least for a while.  Now, will anybody start to pay attention to, for example, the "green energy" scam?

Government Spending Is Just A Fact Of Nature. Get Used To It, Peasants!

For a picture window view into the official Washington mindset, check out the editorial from the Washington Post from this past Friday titled "Republican presidential candidates' reckless anti-tax crusade." 

It seems that the majority of the Republican presidential candidates have signed on to the no-tax pledge of activist Grover Norquist (to "oppose and veto any and all efforts to increase taxes").  Something must be done to stop this foolishness!  So the Washington Post marshals all of its vast intellectual brain power to come up with the best argument it can for the other side.  Here goes:

[The Republican candidates are] kneeling before Mr. Norquist’s make-believe anti-tax theology.  Why do we say make-believe? Here are some facts for the truth-tellers. Federal spending averaged 20.1 percent of gross domestic product from 1965 to 2014. With the baby boomer generation retiring, the population aging and health costs rising, the Congressional Budget Office projects that government spending will grow to 25.3 percent of GDP by 2040.

That's right -- our opponents' views are "make-believe."   Nyah, nyah!  The "facts" are that government spending must grow by 5+ points of GDP.  These are the facts of nature!  The CBO has projected it!  It's what is absolutely necessary to provide the "things Americans expect from government."  And you thought that Congress and the President had to agree to that and actually vote to spend the money?  You have just proved yourself to be a peasant!

Meanwhile Post columnist George Will comes back with a column (in National Review Online) the next day identifying just a few of the ridiculous things that government pays for while nobody is looking.  The title is "How American Government Became Encrusted with Subsidies."  Will particularly focuses on subsidies for whaling museums ($9 million per year) and mohair ($6 million per year). 

You probably never knew of the federal funding of museums commemorating America’s long-gone whaling industry. The funding existed for nearly nine years, until fiscal 2011, because almost no one knew about it. A mohair subsidy continues six decades after it was deemed a military necessity in the context of the Cold War. The subsidy survives because its beneficiaries are too clever to call attention to it by proclaiming it necessary, which of course it isn’t. To understand these two matters is to understand how American government functions.

Will's column is fine so far as it goes, but really these issues are only illustrative and not even the tip of the iceberg in the big picture.  Dare we mention some of the things that should be gone from the federal government down to the last dollar before anyone even considers a tax increase?  How about: Department of Education, Department of Commerce, Department of Energy (except for nuclear weapons program), most of Department of Labor, agriculture subsidies, all crony capitalism, green energy subsidies, all kinds of insurance programs (flood, crop, pension, terrorism, most of bank deposit).  Ex-Im Bank should be a complete no-brainer.  How about NASA -- it's fun, but I've never understood why hard-working taxpayers have to pay for it.  Getting rid of Obamacare will save a bundle.  There's hundreds of billions to lop off before we get to anything that ought to be remotely controversial.

I guess I've marked myself as a peasant in the eyes of the Washington Post and all the really, really smart people down there in the capital.