Farm Bill veto would be richly deserved
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Right after House-Senate conferees announced that they had reached agreement on a new farm bill yesterday, the U.S. Secretary of Agriculture said that President Bush would veto it because it didn’t reform wasteful farm programs, continued to provide subsidies to rich farmers, and still used some budget machinations to hide the costs.
Indeed, the boondoggle bill deserves a White House rejection for its almost $300 billion of farm programs that will be paid for by taxpayers and consumers. Farm bills, however, no matter how wasteful, have a way of surviving, and this legislation may be no exception, since it’s a case study of bipartisanship gone bad.
Besides the sugar provisions we’ve written about here and here, the biofuels programs’ grants and loan guarantees, plus moneys for R&D and “energy efficiency” projects, together with the extension of the tariff on imported ethanol, will continue to exacerbate the food vs. fuel program.
CEI Encounter With Sopranos “Tony” in DC
In today’s fluff news, CEI Warren Brookes journalism fellow Lene Johansen got a nice mention in the Washington Post (Amy Argetsinger’s Reliable Source) and DC Examiner (Patrick Gavin’s Yeas and Nays). The dynamic writer from Norway met the chief Sopranos mobster at Washington’s famous Hay-Adams Hotel on Wednesday night, when a small group of free market warriors gathered to imbibe a few posh cocktails. Anyhow, check out the write up + picture of Lene that appears in both papers.
How ethanol producers see the world
From The Onion. (Yes, it’s ironic. )
Why I Empathize with Hillary Clinton (and Think Tim Russert Is Full of It)
The media is supposed to watch the government, but who monitors the media?
That’s what I was asking myself this morning, after I had fully digested Tim Russert’s shocking midnight announcement on Tuesday that the Democratic Party’s primary was over. Russert is the host of the most prestigious Sunday morning news talkie, Meet the Press, so he is a big player in the world of political coverage, and his word is paramount.
The establishment took its cue. Twenty-four hours later, every commentator of note had declared the race over. Today, Time Magazine is releasing a cover story titled “And the Winner Is…” accompanied by a glamour shot of the anointed nominee, Senator Barack Obama.
But there’s a problem: the race isn’t over! Senator Obama doesn’t have the requisite number of delegates to win the nomination outright. In fact, he doesn’t even have a majority. What is more, he hasn’t been all that effective in the states that the Dems need to win if they are to beat Senator John McCain, the presumed Republican nominee.
The Wednesday morning headlines should have read: “Candidates Split; Race Goes On.” Instead, Senator Clinton was buried by the media. Who would support her campaign now that every new political story touches upon the fact that a “deluded” Clinton is doomed? And without money, the lifeblood of politics, there can be no campaign.
Yogi Berra could probably say it best, but I’ll give it a try: This one’s over, not because it’s over, but because they say it’s over.
To be sure, I am no fan of Senator Clinton. Her style of politics repulses me. But I am even more disgusted by a media establishment that thinks it knows best.
You see, I am a global warming “denier” because energy poverty frightens me more than rising temperatures. So I empathize with Hillary, because all too often, the media decides to take the ball out of my hands, too.
Take Arianna Huffington, whose hugely popular website, the Huffington Post, dominates the policy blogosphere. While promoting her new book, she has been telling reporters that the media should not report both sides of the global warming debate. Her rationale? According to Huffington, it doesn’t serve the public’s interest. In effect, she is admitting that she thinks she knows what’s best for the public.
Huffington and Russert both labor under the misapprehension that what they believe is what we should believe. Unfortunately, they are indicative of their peers. The media’s inability to separate reporting from preaching has cost the Democratic Party a fair primary, and it is robbing American voters of honest debate on global warming.
Slow pace of corn planting — more pressures on prices
This year’s corn crop is being planted much later than normal because of cool, wet weather in the Corn Belt and other production areas, according to a Reuter’s story today. The slow planting has caused a jump in corn futures:
Corn futures at the Chicago Board of Trade surged as much as 4 percent on Tuesday, with an all-time high of $6.60-3/4 a bushel set by the July 2009 contract.
According to the U.S. Department of Agriculture’s weekly agriculture summary, the pace of planting is significantly slower this year:
Corn: Twenty-seven percent of the Nation’s corn crop was planted by week’s end, 18 and 32 points behind last year and the 5-year average, respectively. In the central Corn Belt, Ohio Valley, Tennessee Valley, and central Great Plains, producers gained momentum and were able to plant 20 percent or more of their crop between rain showers, but remained well behind normal in most areas. Elsewhere, farmers planted at a slower pace, awaiting warm, dry conditions to resume fieldwork. Progress was the farthest behind normal from Missouri and Illinois northward.
If lower crop production occurs, higher prices could add to rising food costs.
And, of course, the increased use of corn for biofuels has exacerbated the rise. As the USDA noted in a May 2008 report:
The data suggest that while U.S. corn used for ethanol production had only a small effect on global markets in the 1980s and 1990s, the increase in U.S. ethanol production over the past 5 years and the related significant changes in the structure of the U.S. corn market have had a more pronounced impact on the world’s supply and demand balance for total coarse grains recently. Importantly, since the United States is the world’s largest corn exporter, some of the higher prices resulting from increased U.S. demand has spilled over onto world markets.
President Threatens to Veto Bloated Housing Bill
President Bush has threatened to veto the bloated federal housing bill pushed by House leaders, saying it would reward special interests As John Berlau has noted, the bill could cost middle-class investors billions (such as people whose retirement accounts or mutual funds contain mortgage-backed securities). (The companies that issued risky mortgages typically don’t still possess them). That’s above and beyond the billions of dollars that its bailout of subprime borrowers will likely cost taxpayers.
The architect of the bill, Congressman Barney Frank, calls his own bill the payment of an economic ”ransom,” admitting that it rewards irresponsible people by bailing them out. His excuses for paying this ransom are decidedly lame. Moreover, his bill contains political pork for left-wing special interest groups like La Raza and the National Urban League.
Why the GINA “Genetic Discrimination” Law Is Bad
At Slate, Eric Posner explains why the Genetic Information Non-Discrimination Act is a bad idea as a basic concept. The law nevertheless recently passed the Senate 95-to-0 and the House 414-to-1 because politicians’ thinking is controlled by labels, not logic or substance, and no one (especially not sanctimonious people) wants to be labeled as being in favor of “discrimination,” as Richard Ford notes.
Prior to its passage, I criticized GINA’s ban on employment discrimination in the National Law Journal for lacking a “direct threat” exception for public safety. The Economist’s blog suggested its ban on insurance discrimination could fundamentally undermine insurance markets and the availability of private health insurance in the long run.
The whims of Capitol Hill have real effects on real people
The Scientist has research grants as a theme this month, and the cover story tries to figure out what happens when NIH grants are denied because of budget cuts. The agency has gone from a 19.7 percent approval rating on Type 1 grants in 1999 to 9.1 percent approval rating in 2005. For Type 2 grants the approval rating has gone from more than 55 percent in 1999 to about 33 percent in 2005.
I am not pointing this out because I lament the loss of research funding, I think this type of funding belong in the private arena and should be funneled through 503(c)’s. I am pointing this out because this is a great story about the end results of the horse-trading that goes on in Congress.
This man’s laboratory might be the $100,000 spent by Congress on the High Falls Film Festival in Rochester, NY or the $200,000 spent on the American Cotton Museum in Greenville, TX. Not that I mind buying rich congress people tickets to museum openings and film festivals, but do they have to be so expensive?
The upcoming CEI dinner is a great alternative. It is amuch cheaper for taxpayers and we can offer speaking presidents, authors, great food, and great company.
Abrogating Peter’s Contract to Pay Paul — Mortgage Bailout’s Billion-Dollar Hit to Retirement Savings (Revised)
Many commentators, such as CEI’s Hans Bader, have done a diligent job tracking the costs to taxpayers of the mortgage bailout scheduled to be voted on this week. The Congressional Budget Office just came out with an estimate of $2.7 billion for H.R. 5830, the so-called FHA Housing Stabilization and Homeownership Retention Act of 2008, which may be rolled into larger housing bills on the House floor.
But there could be an even greater cost from the bill to millions of middle-class investors saving for their retirement or the education of their children. The bill has the Federal Housing Administration guarantee the refinancing of a mortgage in return from a “haircut” from the owners of the loan. The bill requires loans to be guaranteed at no more than 85 percent of the value, meaning a 15 percent loss for investors. But this haircut will “shave” billions of dollars off from funds saved for retirement or education.
This bill not only “robs Peter to Pay Paul,” through taxpayers’ bailout of bad loans by banks and borrowers. It can also be said to “abrogate Paul’s contract to Peter.” This is because many of the mortgages often aren’t owned by the banks that service them, but instead frequently by millions of middle class investors through their interests in entities that have mortgage-backed securities (MBS).
Many middle-class folks who have 401(k) accounts, mutual funds, money market funds or defined-benefit pensions are indirect holders of MBS. In fact, according to investment bank Credit Suisse, 14 percent of MBS are owned by pensions and mutual funds that serve middle-class savers.
So, let’s do some math. The bill authorizes the FHA to guarantee up to $300 billion in mortgages. With the 15 percent haircut, the loans were originally worth $345 billion. So $45 billion represents the potential lost savings by the private sector. Now assume, per the Credit Suisse stats, that a random 14 percent of the loans in this program represent those owned by pensions and mutual funds. 14 percent of $45 billion is $6.3 billion.
The bottom line is that middle-class savers and investors could be left more than $6 billion poorer in savings for retirement and education of their children. Another compelling reason this bailout is not worth the cost.
Re: Sugar and the farm bill
Hans–
Glad you posted about the bloated farm bill and how sugar is treated. A “Sweetheart Deal” – how right the Washington Post is in its editorial today blasting farm bill proposals that would make the U.S. sugar program an even sweeter deal for producers while consumers foot the bill.
The current sugar program – which has expired but has been extended with other 2002 farm programs — is a system of price supports, domestic production restrictions, and restrictions on sugar imports. The new bill would distort the market even further. It would raise the price supports for U.S. sugar cane and sugar beets, thus guaranteeing sugar producers twice the world price; provide domestic producers with 85 percent of the U.S. market, and protect them from competition by turning imported sugar into ethanol. The Sweetener Users — a coalition of food, beverage, and confectioners pushing for reform of the sugar program — estimates that the farm bill will cost consumers about $2 billion over five years.
That sweet deal is one that the Bush Administration doesn’t like and is one of the issues that may indeed provoke a presidential veto. The Administration thinks real reform of the programs was needed, and income caps for who can receive subsidies should be lowered. But farm programs, especially sugar, get heavy support from their lobbyists and from Congress. Add to that the fact that the majority of farm bill money goes for food stamps and nutrition programs – which almost guarantees that urban, suburban, and rural representatives also want the bill to pass.
In a period where farmers are making unprecedented profits, and consumers are feeling the pinch of higher food prices, it should be a time when real reform of farm programs would have a chance. But don’t count on it.
Job-Killing Sugar Quotas Continue, Milking Consumers
Say bye bye to more American manufacturing jobs. The Washington Post editorialized today about sugar import quotas and price supports contained in the bloated federal farm bill, which have ”driven some U.S. candy producers either out of business or overseas” by increasing U.S. sugar prices. It costs consumers a bundle in higher prices to benefit a handful of subsidized American sugar producers, while antagonizing and impoverishing poor countries in the Caribbean and Latin America. The President has criticized the bloated farm bill, but may not do anything to block it, given his weak political position and other priorities. In Reason, Ronald Bailey describes the many ways that the current farm bill wastes taxpayer money and takes from the poor to give to the rich. In the National Review, Fran Smith earlier wrote about “the outrageous U.S. sugar regime,” which has cost taxpayers billions to benefit “a small number of large sugar-cane and sugar-beet producers.”
Federal obesity epidemic hits the FDA again!
Something is wrong with the FDA. They doubled their staffing at the beginning of the 1990’s, which lead to a temporary decrease in processing speed, but bureaucratic inertia soon set in and approval times slowed down again.
FDA is going to increase their staff with 1,300 people by October, which will be paid for increased industry fees. It is pretty drastic that a government agency increase their staffing with 13 percent, but industry can afford the increased fees right? It actually only means that the increased cost will be passed down to you and me, also known as Joe and Jill consumer. Grandma will have more expensive drugs at the pharmacy and your sister’s friend who is a single mom will not be able to afford that breast milk pump she needs to go back to work.
FDA also announced a blackmail plan, ehem, I mean incentive plan, to encourage industry to develop more medications against tropical diseases. If they do develop this, FDA will issue them a tradable voucher that will guarantee them a 6-month review time on other medications. That sounds like a great deal right? 6 months is the maximum review time that FDA is allowed for a drug application according to the law, the fact that they routinely disregards this means that people are suffering and dying, waiting for FDA to approve the drugs that helped them immensely when they participated in the trials. While FDA is dragging its feet on approving drugs that could save lives and alleviate suffering for regular people, the bureaucracy is bloating up like a balloon.
We have an obesity epidemic in the federal bureaucracy in my opinion.
Reality causing anti-biotech hegemony to waver
As reports of food prices going through the ceiling are trickling in, some of the countries that traditionally reject plants bred with molecular plant breeding methods (PMBs) are reconsidering.
Japan’s largest corn processor have started buying PMB corn for human consumption, although Japan have permitted PMBs for animal feed.
63,000 tons of PMB corn arrived in Seoul, South Korea on Thursday last week and officials said that they couldn’t get hold of enough non-PMB corn because the European’s are sweeping the small supply that exists off the market.
The trouble with getting hold of non-PMB crops has hurt inside Europe too, a corner stone factory that processed food oils in my hometown in Norway shut down in 2005, and EU official’s thinks that the rice in food prices might sway the European political opposition against PMBs, we can only hope and see…
A tale of Wikipedia woes and highly politicized issues
As a science writer with a liberal arts/ social studies background, I frequently run into brick walls where I do not have detailed enough knowledge about the subject. Physics will be one of those subjects where I gladly admit to being more ignorant than I ought to. Messages from my friend Miranda Hvinden frequently sends me looking for definitions as well (she is a microbiologist and a smart cookie) because she sometimes delves into details beyond my scope of knowledge. I frequently turn to Wikipedia to get the scope of scientific theories and definitions of technical terms.
I used to love the online edition of Encyclopedia Britannica when I was in undergraduate school. I studied comparative religion and intellectual history, and the trusty old Britannica gave me run downs and overviews that got me into the subject matter quicker. The science journal Nature published a study where the accuracy of these two encyclopedic giants where ranked as pretty even when it came to the number of inaccuracies, to the chagrin of subscription based Encyclopedia Britannica.
I write quite a bit about politicized science issues, such as global warming and stem cells and plant biotechnology. And I can tell you that I never turn to Wikipedia on any of these issues. If it is an issue in the political arena, Wikipedia is not your friend. EVER! One of the columnists at the Financial Post has discovered this, because he actually spends some time editing articles on Wikipedia.
The columnist updated some incorrect information about one of the scientists who has involved himself in the global warming debate, but found out that his edits where immediately removed over and over again. The same person always did the removal.
Someone called Tabletop was undoing my edits, and, following what I suppose is Wikietiquette, also explained why. “Note that Peiser has retracted this critique and admits that he was wrong!” Tabletop said.
I undid Tabletop’s undoing of my edits, thinking I had an unassailable response: “Tabletop’s changes claim to represent Peiser’s views. I have checked with Peiser and he disputes Tabletop’s version.”
Tabletop undid my undid, claiming I could not speak for Peiser.
Why can Tabletop speak for Peiser but not I, who have his permission?, I thought. I redid Tabletop’s undid and protested: “Tabletop is distorting Peiser. She does not speak for him. Peiser has approved my description of events concerning him.”
Tabletop parried: “We have a reliable source to this. What Peiser has said to *you* is irrelevant.”
The columnist, whose name is Lawrence Solomon, ran into another mischaracterization of the views of a scientist that is active in the global warming debate. This time, politically correct Wikipedia entries where removing serious accounts of this person’s scientific track record and insinuating that he believes in Martians. Solomon has obviously given up contributing to Wikipedia by now, so he recounts the man’s science credentials in the Financial Post column instead of wasting his time on work that will be tossed out by less accurate writers with an angle.
By now, his columns and his edits have actually riled up some of the zealots that use Wikipedia as a political propaganda tool. Solomon posts another column where he shares the advice he has gotten from experienced Wikipedians, they all tell him not to write under his real name. This is counter intuitive for someone who writes for a living:
But how odd a thought that a writer would want anonymity. Or maybe not so odd. In the real world, those who want anonymity are either ashamed of their conduct — say, poison pen writers– or fear for their safety — say, writers inside China criticizing their government. In the world of Wicked Pedia, the same two reasons rule.
The world of online socializing can get ugly fast, because people feel anonymous behind their computers in their own homes. Anyone who has spent time on the Paleolithic bulletin board systems and UseNet can tell the tale that it always was so, and always will be so. Wikipedia is no different.
Solomon is not the only person who has run into pranksters and zealots with too much time on their hands on Wikipedia. Participants in the public debate have been declared dead, implied as participants in assignations and other criminal activities, and it is a problem that Wikipedia recognizes as a major obstacle to the quality of the Wikipedia brand. However, since Jimmy Wales proclaimed that he would operate with “stable” and audited entries in 2005, little has changed. We still have these issues.
I will continue to use Wikipedia for technical stuff, such as double checking the definitions of enzymes and ribosomes. I will also continue the rule that my professors at the Missouri School of Journalism drilled into my head, always verify the information from one source with another source. In the meantime know that Wikipedia is not a reliable source for information about political issues, or people that are involved in public debate about political issues.
Congress Messes With Insurance
Eli Lehrer has an editorial in today’s Washington Examiner about how ill-considered legislation to create federal “national catastrophe insurance” could lead to American taxpayers shelling out more than $100 billion, on par with Hurricane Katrina. Earlier, he described how the legislation could cause serious financial problems for the country as a whole.
Last month, Congress created a long-run threat to the insurance industry by passing the Genetic Information Non-Discrimination Act (GINA). GINA also regulates employers in ways that I criticized in 2005 in the National Law Journal.
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