Some interesting articles to read:

George Will says that the best way to save Detroit is to let it go bankrupt. Here here!

The big news of the week: The Obama girls will have to wait until after they move into the White House to get a dog.

Bush is going to leave half of the $700 billion bailout for Obama to decide what to do with it. Meanwhile, Bernie Sanders wants to make sure Bush sticks with that plan.

John McCain and Barack Obama sat down to talk yesterday. They say that they are going to work together in the coming years. Work together for what? Did anyone bother to ask that question?

Here’s the latest on our Georgia Senate run off. You knew this one was coming - Jim Martin admits that he will be Barack Obama’s dog washer. Add those duties to being Harry Reid’s sock puppet and Martin will be a very busy man indeed …. Unless, that is, you actually show up at the polls.

Howard Kurtz explores the current pop-culture fascination with Barack Obama. Come January 20th, expectations become reality.

Rupert Murdoch says that the media has dug itself into a hole because it has failed to maintain the readers’ trust.

Mayors across the country are looking for Barack Obama to implement FDR-style public work projects to help their cities get back on their feet.

Sen. Tom Carper of Delaware says that there should be significant consequences for Joe Lieberman, who supported John McCain for president.

This statistic should astound you (then again … maybe not): Since 2000, government spending has increased by more than55%.

A sign of the times from the San Francisco Chronicle: “Are you an idiot to keep paying your mortgage?”

There is an Irish film out there challenging the current global warming hysteria.

Apparently it is “Green Week” on the Today Show so you can see first-hand the affects of climate change. I’m sure this is must-see television.

A church in Kansas refuses to remove a sign saying “America we have a Muslim president. This is sin against the Lord.” Sigh.  If you goto church, you need to stop doing that.  Religion is for weak minded people.

Nancy Pelosi came up with a plan that she believes will be enticing enough to get enough Republican support. This plan includes adding certain strings to the auto bailout: new fuel-efficiency standards, development of new technology “to compete in the domestic and global market” and restructuring company finances.

The Democrats also want to include limiting executive pay. In other words, the Democrats feel that they, rather than the consumers, are the ones who know just what kind of cars the manufacturers build. All this is going to do is force the automakers to build cars that the American people have already shown that they just do not want to buy.  Sounds more like communism to me.

The Democrats also want to limit executive pay, but what about the over-inflated pay of the workers at these auto companies, thanks to union contracts.  Did you know that $1,600 of every GM car you buy goes toward the healthcare costs of union workers?  For companies like Toyota that aren’t unionized - that cost is only $200 per car. GM also spends another $1,000 per vehicle on holiday pay, work rules, plant-shutdown-pay and line-relief to UAW workers. Those are costs that auto makers such as Toyota don’t have to worry about. The average Ford, GM or Chrysler union worker makes about $71.00 or more per hour. For Toyota, Nissan and the rest … about $48.00 per hour.  Do you detect a small problem here?

A great article by John Stossel:

When so many politicians speak with one voice in support of the biggest act of government intervention in the economy in generations, I cringe.

Everybody talked about the “freeze” in the credit markets, but why, I wonder, were the cable news programs that repeated the credit-freeze mantra, pausing for commercials from companies trying to lend me money? Ditech and LendingTree still hawk mortgages at under 6 percent. Some credit freeze.

Economist Robert Higgs of the Independent Institute looked at the credit numbers kept by the Federal Reserve. He writes: “Although certain financial institutions are undeniably in deep trouble — difficulties of their own making … — credit markets in general have not ceased to operate. Moreover, lenders are extending credit in historically great amounts.”

Maybe this is why CNN business reporter Ali Velshi broke ranks when reporting on “dried up” credit and said, “When I say ‘dried up,’ I don’t mean there’s no money. But you’d better have good collateral and good credit.”

What’s wrong with that?

To those who say that, without banks, nobody can borrow, economist Steven Landsburg offers this response: “Banks don’t lend their own money; they lend other people’s (their depositors’ and their stockholders’). Just because the banks disappear doesn’t mean the lenders will. Borrowers will still want to borrow, and lenders will still want to lend.

Read the full story.

Overview
For over 70 years American taxpayers have been doling out billions of dollars every year to underwrite the agriculture sectors’ cost of doing business. Established as “temporary” emergency measures during the Great Depression, these antiquated policies have since devolved into a gravy train supporting corporate agribusiness at the expense of the public purse. Only a handful of crops receive subsidies at all, and the majority of these subsidies flow only to corporate farms. And five types of crops, corn, wheat, rice, and soybeans receive the majority of all payments. Instead of supporting a struggling sector or promoting rural development these subsidies are only icing on the cake for the wealthiest and largest farmers.

Commodity Prices and Farm Income
2007 saw record crop prices and record farm income, according to USDA. Those records are expected to be surpassed in 2008, with crop value projected to be more than $201 billion – a 17 % increase over 2007. Net farm income is also projected to reach a new high in 2008 of $92.3 billion, 51 % above the 10-year average. The average farm household’s income is estimated to be $89,434 in 2008, according to USDA.

Many factors are contributing to the price increases being experienced by the commodity sector. These include the pressure for planting more corn generated by the ethanol mandates, which reduces the amount of land available for other crops, increased food demand from other countries, and crop losses due to flooding and drought here and abroad. But while record crop prices means that the amount of government handouts will be lower than in recent years, USDA still anticipates padding farmers’ pocket with an additional $13.4 billion in taxpayer funded payments in 2008.

Concentrating the Wealth
According to an a analysis of U.S. Department of Agriculture data on subsidy payments, for farm program years 2003 to 2005, almost $39 billion in farm subsidy payments have been paid out. Just 10 % of recipients receive 66% of the payments, according to the data.  Overall, the analysis finds that the top 1% (measured by income) of recipients received 17 % of the subsidy benefits over the period.  Payments are also concentrated among large producers. The top 1% of producers receives 17% of the subsidies. Their average benefit was $377,484 per person for the three program years. Meanwhile, 80% of producers get just 16% of all subsidies.

While high crop prices are expected to keep some subsidy payments from being necessary in the near future, direct payments will continue to go out regardless of crop price, production, or whether a crop is even harvested. These payments are estimated to cost more than $5 billion per year. And under the new 2008 farm bill, households making up to $1.5 million in farm income and up to $1 million in non-farm income are still eligible to receive subsidies.

Conclusion
The farm economy is prospering. With record crop prices, farm incomes are also setting records. Meanwhile, direct payments that have no relationship to production levels or crop prices will continue to go out at a rate of over $5 billion per year. Under such circumstances the farm subsidy system deserves much greater reform than occurred in the new 2008 farm bill.

Information was obtained from Taxpayers for Common Sense.

Hedge fund manager plead their case on Capitol Hill this past week:

The five hedge fund managers who testified Thursday before the House Oversight and Government Reform Committee are more likely to find friends among Democrats, who have received 65 percent of the total $14.2 million the unregulated industry has given this election cycle to federal candidates, committees and parties. But the managers didn’t appear to be asking members of Congress for protection from regulation–instead they seemed resigned to the fact that it will happen and wanted to have a hand in shaping it, according to the Washington Post.

The managers who testified–George Soros, Philip Falcone, John Paulson, James Simons and Kenneth Griffin–have themselves contributed $179,200 to Congress this election cycle, favoring Democrats with 74 percent of their money. Soros, however, is the only one of them to have given money to president-elect Barack Obama, who received a total of $2.6 million from the hedge fund and private equity industry this election cycle. (John McCain received about $1.6 million.) Employees from the five companies represented by these men (Soros Fund Management, Harbinger Capital, Paulson & Co., Renaissance Technologies Corp and Citadel Investment Group) gave $269,550 to Obama. Citadel employees were responsible for nearly $200,000 of that. Collectively, employees of the companies represented at Thursday’s hearing have given all candidates and committees $915,900 this cycle.

Read the full story.

As was the case for much of the last decade, profits for major oil and gas companies continue to skyrocket. Exxon brought in over $14 billion in profits in the third quarter of 2008, increasing 58% over third quarter 2007 and setting a new record for quarterly earnings. Similarly, Shell’s third quarter profits increased more than 70% over third quarter 2007 and Chevron’s profits increased  to $7.89 billion, more than double the $3.72 billion reported a year ago.

Last year three of the top five largest oil companies saw annual profits continue on their record-setting trajectory. Exxon lead the pack, posting $40.6 billion in profits — the largest annual profit number reported by any American company ever — breaking their previous record from 2006. Chevron also had a record-setting year with net income rising 9 percent.

Overall, most companies are experiencing the highest profits in industry history, all while receiving billions in taxpayer subsidies. The combined profits of 25 major oil and gas companies reached over $175 billion in 2007, an increase of nearly 19% from 2004. And that same year, the oil and gas industry received more than $2 billion dollars in government subsidies.

Figuring the exact number of tax subsidies is slippery and hard to quantify, given the myriad of programs that can be broadly characterized as subsidies when it comes to fossil fuels. For instance, the U.S. government has generally propped the industry up with:

• Construction bonds at low interest rates or tax-free
• Research-and-development programs at low or no cost
• Assuming the legal risks of exploration and development in a company’s stead
• Below-cost loans with lenient repayment conditions
• Income tax breaks, especially featuring obscure provisions in tax laws designed to receive little congressional oversight when they expire
• Sales tax breaks - taxes on petroleum products are lower than average sales tax rates for other goods
• Giving money to international financial institutions (the U.S. has given tens of billions of dollars to the World Bank and U.S. Export-Import Bank to encourage oil production internationally, according to Friends of the Earth)
• The U.S. Strategic Petroleum Reserve
• Construction and protection of the nation’s highway system
• Allowing the industry to pollute - what would oil cost if the industry had to pay to protect its shipments, and clean up its spills? If the environmental impact of burning petroleum were considered a cost? Or if it were held responsible for the particulate matter in people’s lungs, in liability similar to that being asserted in the tobacco industry?
• Relaxing the amount of royalties to be paid (more below)

While it’s easy to get bent out of shape that the petroleum industry “probably has larger tax incentives relative to its size than any other industry in the country”, according to Donald Lubick, the U.S. Department of Treasury’s former Assistant Secretary for Tax Policy, remember that subsidies are important across all sectors of the energy industry.

For instance, nuclear power wouldn’t be viable without subsidies - most governments pay between 60 and 90 percent of the cost of construction of new plants. Solar wouldn’t be what it’s become without significant German, Californian, U.S. federal and other incentives. Ethanol and biodiesel in the U.S. enjoy large subsidies (details, if interested, here), but let’s resist getting into the rat-hole of agricultural industry subsidies.

Subsidies, per se, aren’t a bad thing.

How does the oil industry defend its substantial incentives?

Energy security - The fossil fuel industry has, rightfully, long pointed to the strategic nature of a company’s oil and gas supply. Theirs is an industry that can’t afford to go away, they argue.

Environmental compliance - Far from being big beneficiaries, some oil companies claim they are net victims. They point to gasoline taxes and environmental regulations, such as fuel-efficiency standards for new vehicles.

Bolsters domestic production - Supporters of drilling incentives say they make sense for a country that wants to reduce its dependence on foreign oil and whose biggest untapped reserves are in water just offshore, albeit thousands of feet deep.

Defense requirements - Some have suggested that the demands of defending Middle Eastern oil fields added (pre-Iraq war that is) between $10 billion and $20 billion a year in subsidies to the true cost of oil.

Which begs the question - even if America greatly reduced its imports of oil, would it necessarily reduce its military activity in the Gulf region?

It’s not really that much money - A few years ago, Ronald Sutherland, an energy economist affiliated with the Cato Institute, a think-tank in Washington, used statistics from the Department of Energy to argue that oil actually gets rather little at the end of the day. All told, after subtracting this and allowing for that, he suggested oil receives less than a billion dollars in subsidies, in all.

Critics of oil subsidies in America, however, maintain that:

Subsidies don’t increase domestic production - A few weeks ago, a U.S. Interior Department report obtained by the New York Times suggested that the billions of dollars American oil companies stand to benefit from as incentives for drilling in the Gulf of Mexico (royalties they wouldn’t otherwise have to pay the government) wouldn’t add appreciably to any increase in production. Says an analyst who worked on the report, “if they took that money, they could buy a whole lot more oil with it on the open market.”

The U.S. gives far too much away - Industry analysts who compare oil policies around the world say the United States is much more generous to oil companies than most other countries, demanding a smaller share of revenues than others that let private companies drill on public lands and in public waters.

In the U.S., the government’s take - royalties as well as corporate taxes - works out to be about 40 percent of revenue from oil and gas produced on federal property, according to Van Meurs Associates, an industry consulting firm that compares the taxes of all oil-producing countries. By contrast, according to Van Meurs, the worldwide average government take is about 60 to 65 percent.

The United States has even increased some of its incentives in recent years, while dozens of other countries demanded a bigger share of their oil producers’ revenue. This is the low hanging fruit Democratic lawmakers are eying.

In 2004, the then-Republican Congress passed a manufacturing tax cut that critics said gave unnecessary incentives to the oil industry. Democratic leaders this week said they want this rolled back, and want to capture lost royalties from companies drilling in the gulf coast. They’re also considering rolling back the Energy Policy Act of 2005, according to the Washington Post, an act supported by many Democrats.

While the Democratic U.S. Congress says it wants to change the historic ratio of the flow of subsidies for fossil fuels vs. that of renewables, don’t expect government floodgates to open immediately for greentech/cleantech companies.

There’s no clear consensus even among Democrats as to how the new funds should be used. Some lawmakers want public hearings to figure out how the money should be divided. It will likely be set aside in the short term while the government determines how to put it to use.

Recent annual profits in billions of dollars:

This industry, which includes multinational and independent oil and gas producers and refiners, natural gas pipeline companies, gasoline service stations and fuel oil dealers, has long enjoyed a history of strong influence in Washington, thanks to the more than $182 million it has contributed to candidates and parties since the 1990 election cycle, 75 percent of which has gone to Republicans. With former oilmen George Bush and Dick Cheney in the White House and Republican majorities in Congress, the industry has enjoyed good times indeed.

One of Bush’s central agenda items has been to reverse Clinton-era restrictions on commercial uses of federal lands – including nature preserves, national forests, and national monuments. To the oil and gas industry’s delight, he got one step closer in March 2005 when Senate Republicans passed a budget resolution containing a filibuster-proof provision to allow for drilling in the Arctic National Wildlife Refuge. Which I have no problem with drilling in these areas.  If we got the resources, lets use them.  Don’t get me wrong though, I’m all for alternative energy too and my thinking is if we open up all these areas for oil and we put a full court press on alternative energy, do you have any idea the number of jobs that would be created?  Anyways, the industry also supports a White House energy bill that is aimed at reducing the country’s dependence on foreign oil by a million barrels per day. The proposal has drawn the ire of environmental groups and some Democrats who say the plan does not go far enough and contains large tax breaks for energy companies. Other items on the industry’s agenda include repealing (or reducing, at least) the 4.3 cent federal gasoline tax, doing away with bans on offshore oil drilling and making current programs to curb industrial pollution voluntary rather than compulsory.

The veto — Latin for “I forbid” — was not always such an expansive tool of presidential power. Early presidents used it sparingly, only when they believed Congress had violated the Constitution.  Violated the Constitution?  Hmmm…I wonder how many times our recent government has violated the Constitution? Or maybe, the Democrats and Republicans don’t even know that the Constitution even exists

Bill Clinton would be the first president to use the line item veto. But in 1998, the Supreme Court decided that the line-item veto was unconstitutional.  It ruled that Congress did not have the the authority to hand that power to the president. In the 1970s and 1980s many opponents of the line item veto accused fiscal conservatives of supporting the measure only as a partisan power grab because Republicans had generally controlled the White House, and Democrats had long controlled Congress. The 104th Congress proved these allegations to be wrong.  We will get back to the line item veto later.

George Washington issued two vetoes; John Adams and Thomas Jefferson, none. When James Monroe exercised his first and only veto, rejecting a bill imposing tolls on the Cumberland Road because he believed a constitutional amendment was required, he issued a 25,000-word explanation along with it.

Franklin Delano Roosevelt rejected or failed to sign 635 bills during his 12 years in office, using his veto power to keep Congress — run by his fellow Democrats — subservient. Harry S. Truman vetoed 250 bills; Dwight D. Eisenhower, 181.   George Bush senior vetoed 44 bills and Bill Clinton used one of 37 vetoes (not including the line item veto) to reject a law banning a particular type of abortion.

Now getting back to President Clinton and the line item veto.  First, and most critical, is the question of whether the line item veto worked to reduce wasteful spending. In 1997 President Clinton used this new budget cutting tool 82 times to delete unnecessary expenditures in 11 spending bills. The total savings have come to nearly $2 billion over five years. True, in a $1.8 trillion annual budget, this is not a huge sum. But $2 billion is not an insignificant level of savings–even by Washington standards. Moreover, as Gene Sperling, the President’s chief economic adviser has noted, “You have to use the line item veto a few times before its deterrent power sinks in.”

In 1998, President Clinton used the veto to eliminate funding for a $600,000 solar aquatic wastewater treatment demonstration project in Vermont; a $2 million Chena River dredging project in Fairbanks, Alaska to benefit a single tour boat operator; a $1 million corporate welfare grant to the Carter County Montana Chamber of Commerce; $900,000 for a Veterans Admin. cemetery the VA says it doesn’t need; $1.9 million for dredging a Mississippi lake that primarily serves yachts and pleasure boats; $500,000 for the Neabsco Creek Project in Virginia for removal of creek debris; and other such absurdities.

Congress approved the line item veto and the public demanded it, precisely to purge the budget of these kinds of white elephant projects. So, yes, on balance the line item veto works as intended.

Second, did the President abuse the power of the line item veto as was feared? The answer to this question is, on balance, no. Of course, many complaints have been made about Bill Clinton’s use of the line item veto. Senate Appropriations Committee Chairman Ted Stevens, complained that Clinton’s line item vetoes have been a “raw abuse of power.”  Ted Stevens says “raw abuse of power”?  How about his abuse of power in the senate and all the pork projects he was associated with?  Anyways, Robert Livingston, the Republican House Appropriations Committee Chairman charges that Clinton is used the veto to “threaten and intimidate” members of Congress. It is also true that there was one incident reported by The Wall Street Journal where the administration reportedly offered to withdraw a threatened line item veto of a $1.5 million cemetery expansion in Rep. Sonny Callahan’s (R-AL) district in exchange for his support of IMF funding. Such political horse trading constituted an abuse of the item veto.

As their lists of unproductive federal spending demonstrates, we need the president to have the line item veto authority; but, we also need a president who is not reluctant to wield this power.

President Bush went more than five years without exercising his veto power simply because he did not have to: the Republicans who controlled Congress gave him everything he wanted.

But Mr. Bush has also found ways of exercising control over (or circumventing) Congress without using the veto. When Bush wanted to empower federal authorities to monitor the international communications of suspected terrorists, he did so by issuing a secret executive order, avoiding a possible legislative battle — and the potential veto that might go along with it.

And when Congress last year passed a legislative amendment barring cruel, inhumane and degrading treatment of detainees in American custody, Mr. Bush — who had threatened a veto but ultimately backed down — tacked a “signing statement” onto the measure, asserting that he could interpret the amendment as he deemed fit with his constitutional authority as commander in chief.

“President Bush has vetoed things without vetoing them,” said Julian Zelizer, a professor of history at Boston University. “He’s kind of found alternative ways in which he can basically say no to Congress without publicly saying no, or publicly having the confrontation.”

The Bush administration says it has issued 141 such threats since taking office. Some involved disputes over federal spending, an area where Mr. Bush has used veto threats to force compromise with fellow Republicans on Capitol Hill.

Yet some in the party, irate over the federal deficit, say they wish Mr. Bush had exercised his veto power sooner.

In 2002, the president came close to vetoing a $190 billion farm bill that expanded subsidies for growers.

“I think he should have vetoed the farm bill, because it was a lousy bill that perpetuated a really bad system,” said Nicholas E. Calio, who was then Mr. Bush’s assistant for legislative affairs. “But some people convinced him that discretion was the better part of valor.”

That is why Norman Ornstein, a scholar at the American Enterprise Institute, advises presidents not to follow Mr. Bush’s veto path.

“I tell every president or adviser, take one of the first 10 bills that come to you, pick it at random and veto it,” Mr. Ornstein said. “You want to get it out of the way, otherwise the first veto takes on an enhanced importance, and you’ve got to explain and justify why this one and not all the others.”

Barack Obama wants Congress to approve $50 billion for the auto industry. He also wants to appoint a czar or board to “oversee the companies.” This would be the person or committee in charge of restructuring the auto industry.

Since when is it the government’s job to restructure the auto industry? The auto industry got itself into this mess, and it doesn’t need government or the tax payers to get it out of this mess.  That’s how capitalism works people.  If a company has made bad executive decisions, that means that they should file for bankruptcy and not have the taxpayers try to bail them out.  Also, there will always be another company their to either purchase it or pick up the slack.   And besides, what makes the auto makers believe that government could do a better job of restructuring their industry? Politicians aren’t in the industry … let the companies that once enjoyed such great success build on the ingenuity that made them great. The only guarantee you will have from government is mediocrity.

In the mean time, all three automakers will be hoping their lobbying efforts pay off, though none of the companies is on track to spend much more than they did last year–perhaps another indicator of their dire financial situation.

Through September, DaimlerChrysler has spent $5.3 million on federal lobbying, GM has spent $10 million and Ford has spent $5.8 million. Next week executives from the three manufacturers are set to testify before the House Financial Services Committee, whose members have received $1.5 million, collectively, from transportation sector PACs this election cycle. Ford and GM have both given slightly more money to Democrats this election cycle than to Republicans, marking the first time Ford has done so since the 1990 election cycle (and if GM has ever done so, it was before 1990, when CRP started tracking contributions by industry). Chrysler has given just a little more money to Republicans in 2008 (51 percent to 49 percent), indicating a strategic change from the last election cycle, when the company gave Republicans 63 percent of its total. So far the Bush administration seems set to reject the $25 billion in aid, and if that happens, GM, at least, might be forced to file for bankruptcy.

UAW is planning to ask the government for an additional $25 million to cover a union-run trust to take over the car companies’ retiree pensions and health benefits. UAW has reported spending about $1.2 million on lobbying efforts so far this year.

Information was obtaind from the Center for Responsive Politics.

Some interesting articles to read:

Chuck Schumer says that the Republicans are deliberating meddling in the Minnesota Senate race.

Tired of getting felt up by some TSA guy every single time you fly commercial. Well check out this new screening system.

Al Gore says that he does not want to be Barack Obama’s “Climate Czar.”

The Democrats are planning on investigating George Bush and his administration once he leaves the White House. Didn’t they do this to the Romanovs?

George Soros wants Barack Obama to regulate hedge funds and to tax hedge fund managers at higher rates.

Obama will officially resign from his Senate seat over the weekend, paving the wave for the likes of Jesse Jackson Jr.

The GOP is going to file federal lawsuits to repeal McCain-Feingold campaign finance regulations.

Want to work in the Obama administration? All of you folks who claim you have that phony ADD, there is no way in hell you could sit still long enough to fill out this application.

Sarah Palin addressed fellow GOP governors yesterday in Florida and she is not too happy about the growing list of industries lining up at the government teat for a bailout.

Vladimir Putin discusses Georgia onions with Nicolas Sarkozy.

When a bus driver hits three pedestrians, what would be your first thought? Fire the SOB. Not according to the union that thinks it is “unfair” to fire someone for killing pedestrians.

A government school student did a little experiment. She wore an Obama t-shirt to school one day and a McCain t-shirt another day … you can imagine the reaction from fellow students AND teachers.

A Marine put pumper stickers on his car with sayings like “Islam=Terrorism” and “We Died, They Rejoiced.” His car is then banned from all federal installations. So he drives his car to Arlington National Cemetery to visit his son’s grave and guess what happens

The Postal Service isn’t doing too well … what did you expect? It’s a government operation.

It seems we have less idiots wandering around these days … the number of adult smokers has dropped below 20%.

A US company is being accused of gender discrimination in Sweden because of an advertisement that says wives will get beauty treatments if their husbands buy power tools.