Edifice Rex

John Fund examines the unseemly rush to use taxpayer money to pay for monuments to living legislators. Charlie Rangel is just the latest example of a politician soliciting funds from businesses with interests before his committee. This has been going on for years. Pols are paying for their self-named edifices with taxpayer money.

Charles Rangel, chairman of the tax-writing Ways and Means Committee, is intent on raising $30 million for a new academic center in his New York district — a center with his name on it. After securing an earmark and two other federal grants totaling some $2.6 million for the project, the Democratic congressman wrote letters on his congressional stationery to businesses with interests before his committee. They sought meetings to help him fulfill his “personal dream” of seeing the Charles B. Rangel Center for Public Service completed.

The House Ethics Committee will examine the legality of Mr. Rangel’s requests, but the bigger question is why Congress hands out money to name buildings, bridges — everything under the sun — after its own living members. Until roughly the 1960s, people had to die before a grateful nation memorialized them in granite. The Lincoln Memorial wasn’t dedicated until a full half century after the Great Emancipator’s death. Ditto for Franklin Roosevelt. George Washington had to wait 89 years for his memorial.

Now it seems almost every committee chairman gets some “Monument to Me” named after himself with the tab going to the taxpayer. There’s a navigation lock in Pennsylvania named after Rep. C.W. “Bill” Young, the former GOP chair of the House Appropriations Committee. He represents St. Petersburg, Fla. — his only connection to Pennsylvania is that he happened to be born there. Nor is that Mr. Young’s only monument. The C.W. Young Center for Bio-Defense and Emerging Infectious Disease was dedicated at the National Institutes of Health in Bethesda, Md., last year.

The real champ at this is Edifice Rex himself, Robert “Porky” Byrd of West Virginia. He has at least three dozen edifices named for him - or for his late wife. Some states are trying to crack down on this, but with only varying degrees of success. Actually, they are mostly unsuccessful.

That’s our money they are glad handing away. If they want a building named for them, they should be paying for it out of their own pockets.

Who’s Paying For All This?

Why, you and I are, of course. The Wall Street Journal takes a look at the way the Federal government subsidizes energy production in the United States. It's appalling.

Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan guarantees and the like. That's double in real dollars from eight years earlier, as you'd expect given all the money Congress is throwing at "renewables." Even more subsidies are set to pass this year.

An even better way to tell the story is by how much taxpayer money is dispensed per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

This is our tax money being glad handed away by Washington. The numbers for biofuels are equally bad:

The same study also looked at federal subsidies for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.

If the subsidies for all sources of energy were taken away, which technologies would survive? That should be obvious. This isn't even taking into account the fact that fossil plants have to back up wind and solar power and be ready to take up the load when those sources drop offline suddenly. This was illustrated last February in Texas.

Suffering Farmers

Crop prices are skyrocketing, globally and for American farmers. So what's the big debate in Washington today? How much Federal money needs to go to subsidize multi-million dollar earning farmers.

WASHINGTON - House and Senate negotiators late Tuesday scrambled to meet President Bush's demands on a multibillion-dollar farm bill, considering cutting subsidies for wealthy farmers.
 
Earlier in the day, Bush had renewed his call to reduce such subsidies, saying the "massive, bloated" bill would do little to stem rising food costs. Negotiators met with Agriculture Secretary Ed Schafer soon afterward.

That meeting was "sobering," said Sen. Kent Conrad, D-N.D. He said the Bush administration had a laundry list of demands for the legislation, which lawmakers were hurrying to finish before current farm law expires Friday. The law has been extended several times, and lawmakers have said another one-week extension may be necessary.

Emerging from several hours of meetings, Conrad and Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said negotiators would further limit subsidies and cut other spending in response to the administration's demands.

"We moved considerably," said Harkin, though he declined to share specifics and said all of the bill's negotiators had not yet agreed on the cuts.

At issue: Bush wants payments limited for those who make more than $200,000 a year. The House bill limits payments to those suffering farmers who have to struggle by on a paltry $1,000,000 a year. The Senate version caps it at a miserly $750,000. That is your tax money - and mine - that Congress is trying to glad hand away to people who have no need for it.

I rather wish that Bush had come to fiscal responsibility a bit sooner than this. But this obscenity of a farm bill needs to be stopped, even at this late date.

Bonus question: Who really thinks Congress and Washington could come up with the right answer for fixing health care, given this example? If you raised your hand, slap some sense into yourself.

Autopilot To Ruin

The Washington Post today points out the awkward fact that politicians are refusing to address: entitlement spending is out of control and on autopilot, heading rapidly toward ruin. There is a proposal on the table to make politicians actually have to face up to the facts. While the Post is unsure whether the idea would work, they think it is at least worth a look - because just continuing along the same path we are on is not at all a good idea.

Last week an impressive and ideologically diverse collection of economists and budget experts proposed an intriguing mechanism for forcing lawmakers — and the next president — to focus on the problem. The group, whose members come from think tanks ranging from the Brookings Institution and the Urban Institute to the Heritage Foundation and the American Enterprise Institute, would take Social Security, Medicare and Medicaid off autopilot growth and require lawmakers to set 30-year budgets. These would be reviewed every five years to determine whether the costs are set to remain within the allotted limits. If not, there would be automatic adjustments — the experts' paper doesn't specify what those would be — unless lawmakers acted to override this trigger.

This is not, and was not intended to be, a solution to the problem of runaway entitlement spending. The group, not surprisingly given its ideological scope, does not offer answers to the toughest questions: What should the spending levels be? What benefits should be cut, taxes raised or provider payments reduced? Rather, the paper offers a mechanism to force Congress and the president to face up to these difficult policy choices. There are legitimate worries about whether this mechanism would function as intended. Tax breaks, too, are on an automatic course; why not require that they be revisited as well? Would the trigger mechanism really work — or would lawmakers just vote to waive the limits ?

If nothing is done, the retirement of the baby boomers is set to raise entitlement spending to more than the entire current Federal budget. The entire paper can be downloaded from the Brookings website. As always with any proposal of this kind, the devil will be in the details. But it certainly is a starting point on a long overdue dialog on entitlement spending.

Buddy Can You Spare A Dime?

You might want to ask that question, should you ever need to, in a red state, not a blue one. George Will notes something that I have posted about before: left-leaning people tend to be parsimonious when it comes to charity.

Sixteen months ago, Arthur C. Brooks, a professor at Syracuse University, published "Who Really Cares: The Surprising Truth About Compassionate Conservatism." The surprise is that liberals are markedly less charitable than conservatives.

If many conservatives are liberals who have been mugged by reality, Brooks, a registered independent, is, as a reviewer of his book said, a social scientist who has been mugged by data. They include these findings:

Although liberal families' incomes average 6 percent higher than those of conservative families, conservative-headed households give, on average, 30 percent more to charity than the average liberal-headed household ($1,600 per year vs. $1,227).

Conservatives also donate more time and give more blood.

Residents of the states that voted for John Kerry in 2004 gave smaller percentages of their incomes to charity than did residents of states that voted for George Bush.

Bush carried 24 of the 25 states where charitable giving was above average.

In the 10 reddest states, in which Bush got more than 60 percent majorities, the average percentage of personal income donated to charity was 3.5. Residents of the bluest states, which gave Bush less than 40 percent, donated just 1.9 percent.

People who reject the idea that "government has a responsibility to reduce income inequality" give an average of four times more than people who accept that proposition.

That last point is the real driver of course. If the left thinks government must take care of those less well off, they feel no obligation to help out themselves. Never mind that if the government is involved, huge amount of money will be wasted and bureaucratic bloat will set in, using more and more of the money to pay for people to administer the programs - cutting the amount really available for the various programs.

Obama’s Tax Impact

Well, this post from Above the Law should get people's attention.

BigLaw lawyers love Obama. If one searches by law firm various databases on-line for campaign contributions, one sees an overwhelming sea of blue, and most of it to Obama.

But how will Obama affect BigLaw wallets? On Above the Law, we regularly see commenters threaten to abandon law firms for falling $5,000/year short of market. I therefore thought it worthwhile to examine the effects of Obama’s tax and spending plans on take-home pay.

We all know that Obama wants to end the Bush tax cuts. That is a 3% bump across the board to the bad old days when associates faced a marginal federal tax rate of 36%.

But the real hidden tax is that Obama plans to end the social-security tax cap. Right now, you may notice, sometime during the summer or early fall, your take-home pay suddenly goes up because they stop deducting FICA. Current law caps social security taxes: in 2008, the cap is at $102,000. Obama proposes to abolish this. That mid-summer bump will be no more: add about several thousand dollars to your annual tax bill.

But social-security taxes are not only on employees. The government also charges 6.2% to employers that you never see on your W-2s. But rest assured the partners see this, and will notice that the expense of keeping an associate has risen several thousand dollars a year when FICA taxes double and triple. Will they swallow that additional expense, or take it out of your bonus?

They do a spreadsheet and look at a "typical" law firm associate. The result is grim.

The effect is enormous. Betsy’s marginal tax rate goes up from an already ridiculous 42.5% to 51.4%—not including the new 6.2% marginal tax on your employer. Subject to how she structures her withholding, Betsy’s take home pay drops an average of $515 a paycheck—less in the early months of the year, but much more in the later months of the year. Add in the effects on her bonus, and Betsy loses nearly $20,000/year in take-home pay.

I added a third column: how big a pay cut would you have to take to receive the same take-home income? The answer is that Obama’s tax increases have a bigger effect on your income than a law firm cutting New York salaries by $34,000. 

The calculations apply to anyone making that much. The impact of that one, concrete proposal that Obama has offered for raising revenue for his ambitious spending plans will have a disastrous impact on a lot of people. Do read the comments. Readers over there are saying they plan to switch to McCain. There is much amusement to be had over there.

Better yet, this is only the beginning of the tax increases Obama will have to get passed to pay for the insane spending levels he is promising. Things are looking up for McCain already.

I simply must email this link to my sister, the attorney. She'll pitch a fit, I can assure you.  

Consequences We’ll All Pay For

Longtime readers here will find nothing new in this article from Bloomberg. I have written many times about the wasteful fraud of ethanol. It diverts much needed food, causing food prices to skyrocket. It is a grossly inefficient fuel that is actually worse for the planet than the alternative. And it is making big agriculture interests gobs of unneeded cash. 

Feb. 21 (Bloomberg) — U.S. plans to replace 15 percent of gasoline consumption with crop-based fuels including ethanol are already leading to some unintended consequences as food prices and fertilizer costs increase.

About 33 percent of U.S. corn will be used for fuel during the next decade, up from 11 percent in 2002, the Agriculture Department estimates. Corn rose 20 percent to a record on the Chicago Board of Trade since Dec. 19, the day President George W. Bush signed a law requiring a fivefold jump in renewable fuels by 2022.

Increased demand for the grain helped boost food prices by 4.9 percent last year, the most since 1990, and will reduce global inventories of corn to the lowest in 24 years, government data show. While advocates say ethanol is cleaner than gasoline, a Princeton University study this month said it causes more environmental harm than fossil fuels.

“We are mandating and subsidizing something that is distorting the marketplace,'' said Cal Dooley, a former U.S. congressman from California, who represents companies including Kraft Foods Inc. and General Mills Inc. as president of the Grocery Manufacturers Association in Washington. “There are no excess commodities, and prices are rising.''

The energy bill requires the U.S. to use 36 billion gallons of renewable fuels by 2022, of which about 15 billion gallons may come from corn-based ethanol. The nation's current production capacity is about 8.06 billion gallons. 

Mind you, the industry lobbyists are very, very bullish on ethanol - so much so that they are touting "and then a miracle happens" as the next solution. Despite the environmental damage already being done:

 Researchers led by Timothy Searchinger at Princeton University said their study showed greenhouse-gas emissions will rise with ethanol demand. U.S. farmers will use more land for fuel, forcing poorer countries to cut down rainforests and use other undeveloped land for farms, the study said.

Searchinger's team determined that corn-based ethanol almost doubles greenhouse-gas output over 30 years when considering land-use changes. Bob Dinneen, president of the Renewable Fuels Association in Washington, said the study used a flawed model and overestimated how much land will be needed.

Ethanol is important in reducing emissions, ending energy dependence on the Middle East and creating jobs in rural areas, Dinneen said today at the USDA conference.

“There are still some who want us to choose between food and fuel,'' said Dinneen, whose organization represents ethanol producers including Archer Daniels Midland Co. “I don't think we have to choose.'' Research shows cellulosic ethanol made from grasses and crop waste may contribute 21 billion gallons by 2022, and farmers will be able to boost yields, he said.

Pigs may get wings and fly about fanning us with gentle breezes, too. It is not exactly a great idea to base policy on what may happen. What we already know is that ethanol is a bad bargain that is having real, immediate  consequences that we will all pay for. 

Where The Jobs Are - Or Will Be Soon

While the Democrats are playing populist demagogue politics, promising protectionist policies and confiscatory corporate taxes, other countries have laid the groundwork to get all the jobs that will disappear in the US if those populist policies become law. Iceland and Taiwan are cutting corporate taxes.

Iceland is known as the Nordic Tiger because of rapid economic growth. Much of the nation’s prosperity is the result of free-market policies, including a 36 percent flat tax on labor income, a 10 percent flat tax on capital income, and a corporate tax rate of just 18 percent (down from 50 percent at the end of the 1980s). But Iceland is not resting on its laurels. The government has just announced a reduction in the corporate tax rate:

The corporate income tax will be cut from 18 per cent to 15 per cent, effective for the 2008 income year and come into force in the 2009 assessment year.

Meanwhile, even though the 25 percent corporate tax rate in Taiwan is already substantially lower than the 39 percent-plus rate in the United States, Taiwanese politicians apparently recognize that globalization and tax competition are powerful arguments for even lower rates. Tax-news.com is reporting that the government therefore plans to slash the corporate rate to 17.5 percent - and also make unspecified reductions to personal income tax rates:  

Global trade will go on even if the United States decides not to play any longer. The jobs will merely migrate to new, friendlier places. Corporations looking to make new investments will have a choice between countries that promise to take little of their returns in taxes or an enormous chunk of them.

If you were making the decision, which would you choose? Prosperity or beggaring yourself? 

The Protection(ism) Racket

The New York Sun publishes an editorial that pounds Barack Obama and Hillary Clinton for their increasingly protectionist stances. Both candidates are taking shots at the North American Free Trade Agreement, abandoning the defense of the treaty to John McCain. The sun points out the absurdity of that.

The Wall Street Journal reported yesterday that Mr. Obama has distributed fliers in Ohio showing "a locked factory gate with a large 'closed' sign on it" and language blaming Senator Clinton for having backed Nafta. In his speech Tuesday night in Houston after winning the Wisconsin primary, Mr. Obama said, "We're here because there are workers in Youngstown, Ohio, who've watched job after job after job disappear because of bad trade deals like Nafta, who've worked in factories — who've worked in factories for 20 years, and then one day they come in and literally see the equipment unbolted from the floor and sent to China."

Mrs. Clinton, rather than defend the value of free trade to growing our economy by expanding American exports, providing cheaper goods for American consumers, and increasing overall prosperity both at home and abroad, has been scrambling away from one of her husband's greatest accomplishments. The Journal article reports that the Clinton campaign responded to the Obama flier by saying that, contrary to its claim, the candidate never said that Nafta was a "boon" to the American economy. Tuesday, Mrs. Clinton herself, campaigning in Ohio, said, "My opponent has taken to attacking me on Nafta. The fact is, neither of us were in the Senate at the time, and I've long been a critic of the shortcomings of Nafta." Mrs. Clinton may not have been in the Senate at the time, but she was in the White House at the time, and she wants credit for that as part of her 35 years of experience that is supposed to make her qualified to be president. Breathtaking.

So who is left to defend the trade agreement that President Clinton and Vice President Gore worked so hard to achieve? Well, one can just click on YouTube to bring up a video with Mr. McCain explaining, "I know Nafta was a good idea. It's created millions of jobs, and it has helped the economies of all three of these nations. All you have to do is go to Detroit and see the thousands of trucks lined up every day, or go to our Southern border. …Free trade is something I think that is vital to the future of America. As a free trader, I will open up every market in the world."

Obama has already proposed close to a trillion dollars worth of expensive new Federal programs - and is at the same time arguing against the kind of agreement that has helped the American economy thrive. A growing economy generates more tax revenue than a stagnant or contracting one. Yet both Obama and Clinton appear to be willing to walk away from that agreement. Both also preach that they will raise taxes on corporations. So what they are proposing is taking more from a smaller and smaller pie. Consider for a moment what those policies will do to jobs in this country.

Hint: there will not be more jobs. 

Ivy League Populists

Victor Davis Hanson on the weirdly deformed populism being preached by both Hillary Clinton and Barack Obama. Calling it reminiscent of John Edwards campaign rhetoric, he points out the absurdity of that rhetoric - and the completely misguided assumptions that guide that talk.

The rhetoric of Sens. Barack Obama and Hillary Clinton about the sad state of America is reminiscent of the suspect populism of John Edwards, the millionaire lawyer who recently dropped out of the Democratic presidential race.

Barack Obama may have gone to exclusive private schools. He and his wife may both be lawyers who between them have earned four expensive Ivy League degrees. They may make about a million dollars a year, live in an expensive home and send their kids to prep school. But they are still apparently first-hand witnesses to how the American dream has gone sour. Two other Ivy League lawyers, Hillary and Bill, are multimillionaires who have found America to be a land of riches beyond most people's imaginations. But Hillary also talks of the tragic lost dream of America.

In these gloom-and-doom narratives by the well off, we less fortunate Americans are doing almost everything right, but still are not living as well as we deserve to be. And the common culprit is a government that is not doing enough good for us, and corporations that do too much bad to us.

In the new pessimistic indictment, the home mortgage meltdown has not occurred because too many speculative buyers were hoping to flip houses for quick profits. It had nothing to do with misguided attempts of government and lending institutions to put first-time buyers in homes through zero-down payments, interest-only loans, and subprime but adjustable mortgage rates - as part of liberal efforts to increase home ownership rates.

And there apparently are few Americans who unwisely borrowed against their homes a second and third time to remodel or purchase big-ticket consumer items - on the belief that their equity would always be rising faster than their debts. Nor are we to look at this downturn as part of a historical boom-and-bust cycle in the housing industry - the present low prices and non-performing loans the natural counter-response to the overpriced real estate of the last five years.

There is quite a lot more. There is something a bit crazy about the extremely well-off slamming the system they were able to work quite successfully to get ahead. In a way it is climbing to a high spot then pulling the ladder up behind you. You cannot tax your way to prosperity any more than you can drink yourself into sobriety. Yet that is precisely what is being offered by the preppy populists. They are proposing bigger, more lavish government spending when we are already running a deficit. 

I'm not in favor of the already high spending levels and sure don't want even more government intervention in everyday life.  

Eliot Spitzer Cracks Up

In a move that has stunned even some of his Democratic party allies, New York Governor Eliot Spitzer is proposing the taxation of illegal drugs. His plan calls for illegal drug dealers to purchase tax stamps to affix to the bags of drugs. No, really, he is proposing this. While a surprisingly large number of states have illegal drug taxation laws on the books, they are meant as enforcement tools since it is often easier to get a tax evasion conviction. (Think about how the Federal government got Al Capone.) Spitzer, however, is proposing this as a revenue tool only.

NEW YORK — If you can't beat it, tax it.

That seems to be the axiom in New York these days, where Gov. Eliot L. Spitzer (D), struggling to close a $4.4 billion budget gap, has proposed making drug dealers pay tax on their stashes of illegal drugs. The new tax would apply to cocaine, heroin and marijuana, and could be paid with pre-bought "tax stamps" affixed to the bags of dope.

Some critics in the legislature are asking what the governor has been smoking.

"I guess if it moves, he'll tax it," said Republican state Sen. Martin J. Golden, who dubbed the proposal "the crack tax." Some opponents said that because cocaine and weed would be subject to the new levies, it should more aptly be called "the crack-pot tax."

"How do I explain to my 16-year-old son that we're giving a certain legitimacy to marijuana, cocaine and heroin?" asked Golden, a former New York City police officer who represents a Brooklyn district. "We are taxing an illegal substance." He added, "Is prostitution next?"

On the other side of the aisle, some Democrats, too, were stunned by the plan. "My initial instinct is: I don't understand it," said Bill Perkins, a state senator from Harlem. "Most of the dealers I'm familiar with are petty crack dealers — most of them are crackheads. They are broke, to say the least. I just don't understand how you impose a tax" on broke crackheads, he said.

Taxing illegal drugs is more widespread than is generally known. At least 21 states have some form of tax for illicit drugs, although some of those laws have been challenged in courts, and others have fallen into disuse. Almost all the remaining drug-tax laws are used mainly by local law enforcement agencies as a way to seize drug money and fund counter-narcotics operations.

The controversial idea grew out of the efforts to fight bootleggers such as Al Capone during Prohibition — going after the bootleggers for unpaid taxes often required a lighter burden of proof than a criminal prosecution. Taxing illicit drugs gained popularity during the 1980s and early 1990s, when prosecutors and law enforcement authorities were pushing for mandatory sentences and other measures to signal a crackdown on drugs and drug use.  

Courts in Massachusetts and Tennessee have recently struck down their state illegal drug taxation laws as unconstitutional. While experts believe the taxation laws are relatively effect enforcement tools, no other state is attempting to use them as a revenue tool. Spitzer is claiming that the law would raise some $13 million in the first year. Yet in those states that do have similar programs, no drug dealers actually buy the stamps. 

Soaking The “Rich”

One commenter has made several comments favoring taxing the "rich" at a 90% rate. He speaks glowingly of the tax rates of 90% during the Eisenhower years. Actually, it is just a tad more complicated than the commenter explains it. Using the historical tax rate tables from this site the highest tax bracket was reached in 1952-53. The rate of 92% applied to incomes of $400,000 or more. Here's where the fun starts. Using this official inflation calculator published by the US Federal Reserve, that $400,000 income in 1953 would be $3,105,617.98 in 2007 dollars. 

But the latest tax proposal already on the table from Charlie Rangel declares that anyone with an income of $150,000 is "rich" today. That is somewhat less than $20,000 in 1953 dollars.

So that "fair" 90% tax rate would take all but of $15,000 from today's "rich" leaving them with an after tax income close to the poverty line.  Actually less than poverty level for a family of four, as mine is. You would literally be better off quitting work and going on welfare.  

Fair? Or enslavement to the state?  

Increasing Populist Rhetoric

Both the Clinton and the Obama campaigns have sharply increased their populist rhetoric in recent days. Their attacks on corporations have become increasingly strident as both of them strive to gain John Edwards' former followers - and his potential endorsement.

As the Democratic presidential contest moves to the distressed industrial Midwest, Hillary Clinton and Barack Obama have ratcheted up their antitrade, anticorporate rhetoric.

The candidates have made broad attacks on corporate wealth and tax cuts they say tilt toward the rich, along with more specific attacks against health insurers and oil companies, among other industries. On Friday, Mrs. Clinton began airing a TV spot in Wisconsin in which she says, "The oil companies, the drug companies, have had seven years of a president who stands up for them…. It's time we had a president who stands up for all of you."

Both candidates increasingly sound like former North Carolina Sen. John Edwards as they pursue his endorsement and the voters — particularly union members — who were drawn to the populist candidate before he dropped out last month. Illinois Sen. Obama got a boost toward that goal Friday with the backing of the Service Employees International Union, one of the most politically powerful labor organizations…..

……Besides wooing voters, both candidates are trying to win favor from Democratic leaders in these states who serve as superdelegates. Superdelegates — members of Congress and other prominent party figures — aren't bound by the results of the primaries or caucuses in their states. They could help decide who wins the nomination.

Sen. Sherrod Brown (D., Ohio), one undecided superdelegate, won election in 2006 with a populist message and said he is pleased that the presidential candidates are now following suit. "They were both a bit slow to get there, but they both have genuine beliefs about the middle class and working families and they're going exactly in the right direction," he said.

Business groups are dismissive of the Democratic attacks. "They should be talking about ways to grow the economy such as deregulation and lessening burdens on employers, rather than criticizing them with simplistic politically driven rhetoric," said Randel Johnson, a vice president at the U.S. Chamber of Commerce.

The two candidates differ very little in their anti-corporate (and ultimately anti-job) approaches. This sharp veer to the left will actually drive more jobs out of the country rather than help things. It does help John McCain in the general election, however. He is going to be able to use these rhetorical attacks against the Democratic candidate later. 

Race For A Trillion

Kimberley Strassel over at the Wall Street Journal has been trying to keep track of the spending proposals being thrown around by the two Democratic candidates. This is not an easy task since both Barack Obama and Hillary Clinton seem to come up with new, expensive mandates every day. But the fact is that both candidates appear to be clawing desperately to reach the trillion dollar mark for new programs. With no explanation of how they propse to raise that kind of money to spend, other than to promise to soak the "rich."  At the rate they're going at it here, the "rich" will have to be defined as anyone earning more than $5 per month. Or even less. This gives John McCain a major opening, no matter who the nominee is.

This is going to be an old-fashioned debate on spending, and here the divide will be of Grand Canyon proportions. Democrats have presented themselves as the party of fiscal responsibility of late, a message that contrasted well with spendthrift Republicans in the 2006 elections. The Democratic presidential candidates will struggle to make that case, given both are inching toward the $900-billion-in-proposed-new-spending mark.

Mr. Obama's wish list for just one term? Some $260 billion over four years for health care. Another $60 billion for an energy plan. A further $340 billion for his tax plan. A $14 billion national service plan. A $72 billion education package. Also, $25 billion in foreign assistance funding, $2 billion for Iraqi refugees and $1.5 billion for paid-leave systems. (I surely forgot some.) Mr. Obama says he'll pay for these treasures by stopping the Iraq war and taxing the rich. But both Democrats have already spent the tax hikes several times over, and even a Ph.D. would struggle with this math. (Ed Note: That's about $775 million.)

Making a message of fiscal responsibility harder is Mr. McCain's reputation as a fiscal tightwad, and his role as one of the fiercest critics of his own party's spending blowout. Watch him also expand this debate to earmarks, as he's already done with an ad ripping into Mrs. Clinton for her $1 million request for a Woodstock museum. Mr. McCain's earmark requests last year? $0.

Mr. Obama's and Mrs. Clinton's economic speeches this week were noteworthy for sweeping government initiatives, straight out of FDR-land. Both propose a federally backed "infrastructure bank" that would finance projects with subsidies, loan guarantees and bonds. Both are vowing to "create" five million "green-collar" jobs in the environmental sector. These are in addition to giving government a huge new health-care role.

The fact is that these programs are wildly expensive and represent a permanent drain on already overburdened tax revenues. The tax increases required for all this will stop the economy dead in its tracks. And there is still the looming demographic nightmare of the boomers retirements. The word "rich" will have to be defined lower and lower. Don't believe it? Remember when Bill Clinton pushed his huge tax increases through, the rich were those earning over $200k. In the Rangel tax proposal that is already out on the table, the rich are defined as earning $150k - despite more than a decade of inflation. The rich just keep getting poorer. 

Fantasy Island

Well, at least one person in Britain has had more that enough of the wind power scams being run by folks trying to get rich off government subsidies. Edward Heathcoat Amory has a scathing column up over at the Daily Mail about what is going on.

My electricity company has just sent me a handwringing letter, explaining why, despite its best efforts to keep costs down, my bill is set to soar again this year.

The reason - apart from the usual rapacious profits enjoyed by our power suppliers - is a hidden subsidy paid towards the development of wind farms.

In the last financial year, electricity consumers were forced to pay a total of £600million in subsidy to the owners of wind turbines.

This figure is due to rise to £3billion a year by 2020 as vast areas of the most beautiful parts of the country will be pockmarked with 500fthigh windmills.

The sudden growth in this area of energy supply is because the green lobby has convinced many that this renewable power source is the answer to our looming energy crisis.

But the truth is that not only do renewables provide a mere 1.3 per cent of the country's energy needs but also that this money is being wasted.

The subsidy system works on the principle of encouraging the development of new wind farms by forcing traditional energy companies to pay producers of renewable energy. The firms then recoup the money by charging consumers higher bills.

After an initial surge in the number of new wind farms, few are currently being built. The most obvious sites, far from human habitation, have already been filled and energy firms are now facing delays in obtaining planning permission to build in more environmentally sensitive locations.

As a result, the huge subsidy is concentrated in a small number of hands. There is a rising amount of money for renewable energy and if less is produced each turbine gets more of the pot.

At current subsidy rates, anyone who constructs a wind farm, which is expected to last for a minimum of 20 years, will have paid off their investment in only five years. From then on, its profit all the way to the bank.

John Constable, director of policy at the Renewable Energy Foundation, says that the system "has encouraged underperforming onshore wind turbines in low wind areas. Though of little engineering value, such plants attract speculators because they require little capital investment".

As a result, consumers will soon be paying billions in unnecessary subsidy to a bunch of sharp-suited businessmen who have spotted an opportunity for easy money.

The number one hogs at the trough? Well, according to another article in the same newspaper, it would be the power companies in Britain themselves. It is so bad that the regulators themselves are calling for the system to be scrapped.:

Inflation-busting increases in electricity prices - which were supposed to pay for a massive expansion of wind power - have boosted the profits of power companies instead, it emerged yesterday.

Under a controversial Government scheme, British consumers pay £1billion a year in their fuel bills to subsidise the drive towards renewable energy.

The cash is supposed to act as an incentive to companies wanting to build green generators such as wind farms or hydro-electric dams.

However, because of a loophole in the system - and the vocal opposition to new turbines in the countryside - the scheme has failed to produce the expected surge in wind power. Instead, most of the money has lined the pockets of energy companies.

Energy experts yesterday warned that the "Renewable Obligation" subsidy system is "hugely flawed" and places a unfair burden on families at a time when household bills are soaring. Last year the energy watchdog Ofgem called for the

Renewables Obligation to be scrapped. "It is a very expensive way of providing support for renewables," said regulator Andrew Wright.

I've pointed out before why wind energy is a very bad idea . The best data I have seen is that the turbines are actually available and producing power about 30% of the time. Compounding that is that they can drop offline at any moment, because the wind dies or increases to too high a velocity. When they do, fossil plants have to be ready to take the load. The savings are illusory. But the profits - made up of our tax money - that are handed to those sharp-suited businessmen are quite real.