Vladimir Putin is running roughshod over International Law and the EU is addressing Coffee Makers

Posted by PITHOCRATES - April 19th, 2014

Week in Review

Vladimir Putin is running roughshod over international law.  He took Crimea.  And is threatening further parts of Ukraine.  Some think he will take Moldova next.  Or possibly one of the Baltic States.  And what is the European Union (EU) doing to protect democracy?  This (see EU lays down the law on coffee making by Edward Malnick posted 4/19/2014 on The Telegraph).

Filter coffee machines will have to turn off automatically to help save energy, under new European Union rules.

All of the devices on sale for domestic use from next year will be required to go into “standby mode” after brewing the drink, the Sun reported.

The European Commission said the changes would save money on electricity bills and were “supported by consumer and industry organisations” as well as member states including the UK.

However campaigners claimed the rules would leave many people with “cold coffee”…

Those machines with non-insulated jugs will have to go on standby after no more than 40 minutes.

Really?  Coffee makers?  That’s the threat to Europe?  Not Vladimir Putin running roughshod over international law.  I guess the EU has a different set of priorities.

All right, let’s look at the cost savings for the average EU consumer.  In America we typically brew a pot of coffee and let it sit on the warmer for maybe 2 hours.  After that it gets a little strong.  So let’s look at two hours.  Assuming a typical 600 watt heating element and an electrical cost of $0.15/kilowatt-hour the cost savings comes to $0.12.  If we brew a pot every morning that comes to a cost savings of $43.80 per year.  Of course, people will have to warm up their tepid coffee after the coffee maker automatically shuts down.  And the most likely way will be in a microwave oven for about 30 seconds.  You do this for three cups of coffee and you’re not going to consume much electric power.  But you’re going to put a lot of wear and tear on your microwave oven.  Which cost more than the $43.80 savings in electric power.  Not to mention the inconvenience of having to run your microwave when you want another cup of coffee.

You know what can keep that coffee warm without stressing your microwave oven?  The coffee maker.  For only $0.12 a day.  There are people that won’t stoop to pick up a coin if it’s less than a quarter.  So do you really think the people are going to appreciate paying more for a coffee maker (that now must include a timed shutoff mechanism) so they can go through microwave ovens quicker just to save $0.12 a day?  Probably not.

This is the problem with a nanny state.  Which the EU is.  The worst part is that these people are paid by taxes to come up with these brilliant ideas no one needs.  Something taxpayers may be more in need of is a way to stop the law-breaking ways of Vladimir Putin.  For Vladimir Putin probably poses a greater risk to Europe than coffee makers.

www.PITHOCRATES.com

Share

Tags: , , , , , ,

Businesses and Jobs tend to move from Countries with High Regulatory Costs to ones with Low Regulatory Costs

Posted by PITHOCRATES - February 23rd, 2014

Week in Review

A business is an investment.  Business owners invest capital and labor to make money.  Just like people buy government bonds to make money.  Of course, investing in government bonds is safe but it doesn’t create any jobs.  So we prefer when investors invest in a business.  Because a business will create jobs.

So where would investors prefer to risk their money?   That depends on the expected return on investment.  Historically there was always more money to be made in a business.  But higher regulatory costs have reduced that return on investment.  Leading a lot of investors to turn to government bonds.  Or to move their businesses to another country.  One with a less costly regulatory environment (see The rich world needs to cut red tape to encourage business posted 2/22/2014 on The Economist).

Singapore has come out on top as the least burdensome for the past eight years (see chart 3), whereas many EU countries are bumping along near the bottom. Of the 148 countries surveyed in 2013, Spain was ranked 125th, France 130th, Portugal 132nd, Greece 144th and Italy 146th.

Americans who complain about the Obama administration’s unhelpfulness towards business will also note ruefully that over the past seven years their country has slipped from 23rd to 80th place…

Broadly speaking, in recent years emerging markets seem to have been cutting their red tape whereas the rich world has been strengthening its regulatory regime…

But not all labour laws are equally useful. In much of Europe the problem is that regulations designed to protect existing workers from unfair dismissal often make employers reluctant to take on new ones. One international executive recounts the tale of a French worker who had been with his employer for just three years but was entitled to five years’ compensation for dismissal. “We wouldn’t put anyone in France if we can possibly avoid it,” the executive said…

The danger is that, once European companies come to expand capacity again, they may do so outside the euro zone, where employment contracts are more flexible and wages and social costs are lower…

The EU not only has inflexible labour markets and high costs; it has slower growth prospects than most emerging markets. That will tempt many businesses to move elsewhere. “Western Europe is at a severe disadvantage because of the costs when you have to restructure your operations,” says Martin Sorrell, the boss of WPP. By contrast, Singapore has a low tax rate, a light regulatory regime and an enviable location at the heart of Asia. Sir Martin thinks some multinationals will eventually move their headquarters to the city-state.

The best way to protect workers is with a robust economy.  Not regulations.  If you lower the tax burden and regulatory costs the return on investment on businesses will soar past the return on investment from government bonds.  And investors would put their money into businesses to make more money.  This is how you help workers get better pay and benefits.  You create such economic activity that there are more jobs than people to fill them.  Forcing employers to offer higher wages and better benefits.  The way it was when the United States became the number one economy in the world.  Not the way it is currently in the EU.  Or the United States.  Where the Great Recession lingers on.  Thanks to an anti-business economic climate.  And the mother of all costly regulatory policies.  Obamacare.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , ,

The EU will have to find another way to Confiscate Private Sector Wealth because the ETS is Kaput

Posted by PITHOCRATES - April 20th, 2013

Week in Review

The Emissions Trading Scheme (ETS) was the European Union’s (EU’s) way of combating global warming.  By making carbon emitters pay for their carbon emissions.  But Europe is mired in recession.  And the Eurozone is suffering a sovereign debt crisis.  Which hasn’t helped to pull Europe out of recession.  And it appears that the economic reality in Europe is dooming the ETS (see If Carbon Markets Can’t Work in Europe, Can They Work Anywhere? by Bryan Walsh posted 4/17/2013 on Time).

But the ETS—and carbon trading more generally—is not doing well, and its problems are taking some of the green shine off of Europe. Since its launch the ETS has struggled, with the price of carbon falling as the 2008 recession and overly generous carbon allowances undercut the market. In the ETS business are given free allowances to emit carbon—too many free allowances mean they don’t need to reduce their carbon emissions much, which erodes the demand for additional carbon allowances on the market and causes the price to drop. Prices fell from 25 euros a ton in 2008 to just 5 euros a ton in February. There was a way to fix this—take 900 million tons of carbon allowances off the market now and reintroduce them in five years time, when policymakers hoped the economy would be stronger and demand would be greater. As anyone who’s taken Econ 101 would know, artificially reducing the supply of carbon allowances in such a drastic way—something called “backloading”— should force the price back up.

But on April 16, the European Parliament surprised observers by voting down the backloading plan. In turn, the European carbon market collapsed, with the price of a carbon allowance falling by more than 40% over the day. “We have reached the stage where the EU ETS has ceased to be an effective environmental policy,” Anthony Hobley, the head of climate change practice at the London law firm Norton Rose, told the New York Times. The ETS is a mess.

Backloading failed because even in very green Europe, economic concerns seemed to trump environmental ones. European Parliamentary members worried that any action that would cause the price of carbon to rise would add to European industry’s already high energy costs.

This should make China happy.  For there was no way no how they were going to pay for the carbon emissions from their airplanes entering European airspace.  In fact they warned they would cancel their Airbus orders and give them to Boeing if the Europeans tried to force them to help bail out the Eurozone in their sovereign debt crisis.  For this was what the ETS would ultimately do.  Transfer great amounts of wealth from the private sector to the public sector.  Which would have gone a long way in helping the Eurozone to continue to spend money they don’t have.

The ETS was nothing but a new tax on business.  Cloaked in the guise of making the world a better—and greener—place.  But the EU is suffering economically.  A large part of the sovereign debt crisis is due to having less economic activity to tax.  So the EU needs to improve the economy.  So they can generate more tax revenue from the current tax rates.  But increasing taxes on the carbon emitters will not help businesses.  It will only increase the cost of business.  Increasing their prices.  Making them less competitive in the market place.  Reducing their sales.  And killing jobs.  Which will generate even less tax revenue from the current tax rates.

The problem in the EU is not global warming.  Or insufficient tax revenue.  They have a spending problem.  This is what caused their deficits.  That gave them their soaring debt.  Just like every other nation that ever suffered a debt crisis.  Including the U.S.  Trying to fix a spending problem with more taxes just doesn’t work.  Only a cut in spending can fix a spending problem.  It’s not like the old chicken and egg question.  Excessive and unsustainable spending always comes before a debt crisis.  Always.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , ,

The EU is begging Britain to Stay in the EU so they can get their £30 Billion over the Next 5 Years

Posted by PITHOCRATES - January 12th, 2013

Week in Review

People used to hate Great Britain.  And their imperialist British Empire.  Despite that very same British Empire giving us great countries like Australia, Canada and the United States.  And other great British Empire spinoffs that are some of the best places to live today.  All they see is a country that exploited others for their own interests.  But some of that hate appears to be turning into love.  For as Britain is preparing to hold a referendum on whether to remain in the EU some of these very same people are begging Britain not to leave the EU.  Leaving the EU, they say, could hurt Britain.  And being so concerned for the well being of Great Britain they beg that Britain remains in the EU.  For Britain’s sake.  How selfless and loving these people are (see German MPs warn UK EU exit would be ‘economic disaster’ by Bridget Kendall posted 1/10/2013 on BBC News UK Politics).

A new, strongly worded warning against Britain leaving the EU has come from a delegation of visiting German MPs…

Briefing reporters at the German Embassy in London, Gunther Krichbaum, a member of Chancellor Angela Merkel’s ruling CDU party, said: “Losing the single market for the UK would be an economic disaster.”

He added that more business leaders in Britain needed to make the case for continued membership.

Mr Krichbaum also argued that Britain would suffer a significant loss of global prestige if it left the EU club.

“Britain leaving [the EU] would weaken the European idea, but it would weaken Britain’s position in the world more,” he said…

Mr Krichbaum added that from his point of view, any attempt by Britain to renegotiate its position to reach a “new settlement” for continued membership would be resisted by its European partners.

Negotiate a new settlement?  Sounds like there is money involved.  Could this be the real reason why they don’t want Britain to leave?  Perhaps (see Banks fear ‘risk to City’ of EU exit by Kamal Ahmed posted 12/29/2012 on The Telegraph).

“The best way to strengthen our economy would be for Britain to leave the EU,” UKIP’s economics spokesman, Tim Congdon, said at the time of the Chancellor’s Autumn Statement.

“We would quickly save the money now being sent by the Government to the EU, which will total almost £30bn over the next five years.

“That figure of £30bn is bad enough. But it does not include the far more serious damage done by the loathsome acquis communautaire [the body of EU legislation which candidate countries must first adopt], with its hundreds of rules and regulations that cause larger businesses to invest outside Europe altogether, bankrupt small businesses and destroy jobs.”

£30bn?  That comes to about $48.4 billion US.  That’s a lot of money.  To put that in perspective in Britain the NHS spent about £106 billion in 2012.  And is trying to save £20 billion over 4 years ending in 2014.  So do you think Britain could use an additional £30 billion over the next 5 years?  Yes.  I believe they could.  It would help Britain take care of Britons.  Instead of sending that money to Brussels.  To help Europeans.  And in doing so they could also make their businesses more competitive by getting rid of hundreds of rules and regulations.  Which is another reason they don’t want Britain to leave the EU.  For if they do not only will the EU lose £30 billion over the next five years they will become less competitive than Britain.  Making a bad situation worse.

It would appear they love Britain when Britain can’t be Britain.  They want Britain’s money.  And they want to keep Britain as uncompetitive as they are.  That’s when they love Britain.  Not when they want to do what is best for the British taxpayer.

www.PITHOCRATES.com

Share

Tags: , , , , , ,

Excessive Sin Taxes on Alcohol in Britain does not create Higher Tax Revenue

Posted by PITHOCRATES - December 23rd, 2012

Week in Review

Potheads want to decriminalize marijuana because they like getting high.  Especially high school kids and college kids.  Who aren’t known for making responsible decisions.  Binge drinking, drunk driving, smoking cigarettes, stealing prescription drugs from their parents, unplanned pregnancies, sexually transmitted diseases, etc.  Things that just don’t happen much to married men and women raising a family in the suburbs.  Who actually grew up and became responsible adults.

But it’s just not the kids getting high.  There are a lot of ‘responsible’ adults who want to decriminalize marijuana, too.  Most of who spent their high school and college years stoned.  But they make a more responsible argument for the decriminalization of marijuana.  For it would end all of our budget woes if the government regulated and TAXED marijuana.  Equating getting high with responsible governing.  And if there is one thing we know whenever the government regulates and taxes something it encourages people to buy more of that something, flooding government treasuries with cash (see Alcohol duty fraud: Action needed, say off-licences by Emma Forde posted 12/22/2012 on BBC News Business).

UK tax authorities are not doing enough to tackle alcohol duty fraud, claims a leading off-licence chain.

Bargain Booze told the BBC that the number of stores telling HM Revenue and Customs that they face illegal competition is rising…

Alcohol duty fraud in the UK often involves exporting alcohol to the EU – untaxed – and then bringing it back into the UK with false paperwork.

This method exploits EU rules which state duty does not have to be paid on alcohol when it is being transferred between registered producers or wholesalers – it is only paid when it enters the marketplace.

But the BBC’s 5 live Investigates programme has learned that some lorries containing duty-unpaid alcohol meant for export never even leave the UK…

The illicit alcohol ends up in the hands of rogue wholesalers and retailers who then sell it on at prices which legitimate traders say are only possible if duty has been evaded…

Representatives from the alcohol retail industry claim the total cost to the Exchequer could be billions of pounds: “HMRC view the loss of revenue to the Exchequer at £1.2bn, but that excludes wine. Within the trade, the real cost to the Exchequer is viewed as something in excess of £4bn a year,” says Keith Webb…

The cash-and-carry owner, who did not want to be named due to fear of reprisal from criminal gangs, says it would have to pay around £19.35 for a box of six bottles of Echo Falls Chardonnay – of that, £11.40 would be duty.

The same amount and brand of lager would cost £16.56, with duty at £9.36 per case.

You just can’t add a 57-59% excise tax on something and expect the criminal element not to take advantage of that.  That’s just too juicy a profit to pass up.  And an easy and safe profit to make.  For they don’t have to traffic in an illegal substance.  They’re just doing the tax evasion part of illegal drug trafficking.  Making it a far less risky crime.  So why wouldn’t they exploit the government’s regulating and taxing of alcohol?  This is a gift handed to them on a silver platter.  And the same thing would happen with marijuana.

There is a problem with sin taxes.  The purpose of a sin tax is to dissuade people from participating in an unhealthy behavior.  Such as drinking and smoking.  So as they raise these taxes people buy less of these things.  Meeting the goal of a sin tax.  But if you use that same sin tax for revenue purposes you have a problem.  For the more you dissuade that behavior (i.e., the more you raise the tax rate) the less people will participate (i.e., the less tax revenue they collect).  The two (dissuading behavior and raising tax revenue) are mutually exclusive.  You can dissuade unhealthy behavior.  Or you can raise revenue.  But you can’t do both.  Which is why we have sin taxes and not outright prohibitions on these behaviors.

Governments are less interested in their stated purpose (dissuading unhealthy behavior) than they are in raising revenue.  For they are desperate to find new sources of revenue to pay for their irresponsible spending ways.  Which is why alcohol and tobacco products in the U.S. have very high excise taxes.  As well as laws setting minimum prices.  They say these are to protect the consumer from predatory pricing.  Something few consumers ever complain about.  Low prices are good.  The lower the better.  The only people hurt by predatory pricing are businesses that can’t compete at those lose prices.  And governments trying to collect confiscatory excise taxes on sinful behavior.  To avoid the problems they’re having in the UK with their alcohol duty fraud.

Governments don’t want criminals profiting off these high excise taxes by selling alcohol to consumers at lower prices.  They want the consumers to pay higher prices so they can give more of their income to the government.  To help pay for their irresponsible spending.  Which they never consider cutting to solve their budget problems.  They only consider new sources of revenue.   Or raising tax rates.  Which will happen with marijuana.  Opening the door for less risky profit taking for the criminal element the more they decriminalize it.  And the more they tax it.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , ,

The EU won’t sell their Lethal Drugs for Vietnamese Executions

Posted by PITHOCRATES - November 4th, 2012

Week in Review

Capital punishment is a contentious issue.  Some people enthusiastically support it.  While others vehemently oppose it.  While others do both (see Vietnam says it’s unable to execute its criminals because EU refusing to export lethal drugs by Associated Press posted 11/1/2012 on The Washington Post).

Vietnam says it can’t execute its hundreds of death row criminals because the European Union is refusing to export the lethal drugs used in the executions…

Vice Chairman of the National Assembly Huynh Ngoc Son was quoted as saying the EU is trying to pressure Vietnam to give up capital punishment.

The EU doesn’t want Vietnam to execute people.  Presumably for humanitarian reasons.  Yet they make the drugs that states use to execute people.  Which isn’t very humane.  So they are both for and against capital punishment.  Interesting.

After Dien Bien Phu (where the Viet Minh massacred the French) you’d think the French would be all for selling lethal drugs to Vietnam.  While on the other hand, if they harbor no ill will to the current generation for what happened more than a generation ago you’d think they would respect the sovereignty of Vietnam.  Choosing not to interfere in their domestic policies.  And sell these lethal drugs to Vietnam.

They could probably buy these drugs from the United States.  For they use these drugs in capital punishment there.  But perhaps relations haven’t normalized enough yet for that to happen.  America’s involvement in Vietnam was a bitter one.  As they were winning.  Until the college protesters and Walter Cronkite defeated them from within.  Allowing the Vietnamese to turn to a Fabian strategy.  Staying in the war long enough until they made the US grow weary and quit.  Much like the Americans did to the British during the Revolutionary War.  But that was then.  More than a generation ago.  And the Vietnamese and the Americans are normalizing relations.  So they could probably buy these lethal drugs from the United States.  But if they’re talking about making their own drugs it doesn’t look like they’ve gone to the United States.  Or the US already said “no.”

Perhaps it’s just collective guilt with outside involvement in Indochina.  Who knows?  It just seems strange that a manufacturer of lethal drugs refuses to sell what they manufacture.   Which kind of defeats the purpose of making those drugs.

www.PITHOCRATES.com

Share

Tags: , , ,

China to Punish Airbus and EU Airlines if the European Union Proceeds with their Emission Trading System

Posted by PITHOCRATES - September 16th, 2012

Week in Review

Fighting global warming is one thing.  But hurting aircraft sales is another.  Which will happen if the EU goes ahead with their Emission Trading System.  So Airbus is begging the EU not to ruin the aviation industry (see Airbus ministers seek EU CO2 plan delay: Hintze by Maria Sheahan and Victoria Bryan posted 9/14/2012 on Reuters).

Aerospace officials of the European countries where Airbus (EAD.PA) makes its planes will push for a suspension of the European Union’s Emission Trading System (ETS) for airlines to avert retaliation from China, an official said on Tuesday…

Michael Fallon, new business minister in Britain, said at the ILA Berlin Air Show on Tuesday: “Airbus has left us with no doubt that the threat of retaliatory action is a clear and present danger to its order list.”

There is harsh opposition to the ETS from European air travel companies and countries outside the EU such as the United States, Australia and Brazil that have said they want a global agreement to curb carbon emissions rather than a European law that extends to non-EU companies.

Which is a nice way of saying they should scrap the whole ETS.  But if they said that the environmentalists would say they hate the planet.  That they’re global warming deniers.  And that they, of course, hate children.   So by saying we should have a global system instead of just a European one sounds like they believe in global warming.  While at the same time knowing there will never be a global system because the world can’t agree on anything.  And that China is not going to fall for any of this nonsense.  Because they play hardball.

China has threatened retaliation – including impounding European aircraft – if the European Union punishes Chinese airlines for not complying with its emissions trading scheme (ETS), intended to curb pollution.

The dispute between China and the EU froze deals worth up to $14 billion, though China signed an agreement with Germany for 50 Airbus planes worth over $4 billion during Chancellor Angela Merkel’s visit to Beijing last month.

If the dispute is not resolved, Airbus will have to cut its production target for the A330 “pretty soon”, Airbus Chief Executive Fabrice Bregier said late on Monday.

Cancel billion dollar orders AND impound European aircraft?  That’s right.  The Chinese don’t take crap from anyone.  Especially from a bunch of whiny global warming alarmists.  Airlines everywhere are thanking China (behind closed doors, of course) for playing the heavy here.  So they can act like they really want to do what is right for the planet.  Without losing billions in business.

The airline industry has said the ETS distorts competition, forcing European carriers to pay more simply because of the fact they are based in the EU.

“We feel we are being discriminated against,” Hintze said. “We demand a global solution from an industrial policy point of view because we could otherwise put ourselves at a disadvantage in major markets…”

Airbus sales chief John Leahy suggested at a separate news conference on Tuesday that one possible solution could be that all airlines around the world pay a tax to ICAO for carbon emissions, regardless of where they are based.

The ETS is nothing but a way to generate revenue for a cash-strapped European Union.  For what will they do with the money they raise from their ETS?  Pretty much anything they want.  And one of the things they most desperately want is to close their budget deficits.  And the EU thought they had a real winner in the ETS.  Collect money from EU members.  And collect money from non-EU members.  Effectively transferring some EU costs onto nations outside of the EU.  It was perfect.  Except for one thing.  It required other countries to voluntarily pick up the tab for some EU spending.  And some are choosing not to no matter how worthy the cause.

A global carbon tax payable to the ICAO?  The United Nations’ International Civil Aviation Organization?  And what, pray tell, will the UN do with that money?  Spend it on grants to green manufacturers to see if they can make jet fuel out of sea weed?  The aircraft manufacturers are doing everything they can to reduce jet fuel consumption because a plane that burns less fuel is a plane that sells better.  They don’t need a grant to do that.  Planes are carrying and burning less fuel per passenger mile than they ever have.  And they still have an incentive to reduce that even more.  Without any grants from the UN to improve fuel efficiency.

As countries around the world are suffering through economic problems the last thing they need is a new tax.  If anything they need a tax cut.  So the ETS should be the last thing we should be doing.  The earth will get by just fine without it.  In fact, it might even do better.  For the rise in global temperatures interestingly correspond to the time we began to fight global warming.  Back in the days when industry, trains and home furnaces belched coal smoke, soot and ash into the air we didn’t have a global warming problem.  Our cities were covered with coal smoke, soot and ash but the temperatures were just fine.  Perhaps a little more of the same would reverse this warming trend.  Say, encouraging our airplanes to burn a dirtier fuel so they put more emissions into the atmosphere that can block those warming rays from reaching the earth’s surface.  It works with volcanoes.  Perhaps it’ll work with manmade emissions, too.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , ,

Ireland needs an EU Bailout but doesn’t like the Austerity attached to it and may reject the New Spending Rules

Posted by PITHOCRATES - March 3rd, 2012

Week in Review

Just when you thought the Euro was safe again (see Future of the euro again thrown into doubt after Irish announce referendum on new EU cash rules by Jason Groves posted 2/29/2012 on the Daily Mail).

Efforts to prop up the euro were again thrown into doubt last night after Ireland announced plans for a referendum on whether to accept new European spending rules…

Public anger over austerity measures is running high in Ireland and many observers were last night predicting a ‘No’ vote. That would not prevent the strict budget controls coming into force, but would leave Ireland  unable to access future EU bailouts…

Ireland has twice rejected plans for EU reform in referendums, only for the votes to be overturned under intense pressure from Brussels.

Eurosceptics in Ireland are expected to use the latest referendum to highlight Ireland’s dire economic problems, which have required a £70 billion bailout from the EU and International Monetary Fund.

Ireland giving away control over its own destiny to others due to intense pressure from an outside power?  My, how times have changed.  Once it took an occupying army to wrest their sovereignty away.  Now all you have to do is to get a nation to spend itself into debt and they will eventually hand you the keys to the kingdom.  Will they do it again?  Time will tell.

Again, the problem with the Eurozone is the lack of a political union.  But getting a political union of countries having such long and rich histories is not easy.  For if it were they’d already have done it.  But they haven’t.  And probably never will.  Unless countries step forward and agree to surrender their culture and identity.  And give control over their destiny to a distant central power.  Something that just doesn’t happen.  At least, not so far in the history of this world.  Where the trend seems to be definitely in the other direction.  Where autonomous regions of countries yearn for their independence from the countries suffocating their culture and identity.

This is the risk of excessive government spending.  You spend too much and you either ask for help.  Or wreak havoc on your nation by destroying its financial institutions with bankruptcy.  Neither is good.  But one is less desirable than the other.  Better still would be never putting yourself in between these two choices in the first place.  And the path there is that dreaded ‘A’ word.  Austerity.  For this we know for certain.  If Ireland had no debt Brussels wouldn’t be dictating terms to them.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , ,

The European Union retains its AAA rating from S&P for now but Member EU States can Change That

Posted by PITHOCRATES - January 21st, 2012

Week in Review

Things may be bad for some individual members of the European Union (EU) but the EU as a whole is doing all right according to S&P (see S&P Affirms The European Union’s AAA Rating, Outlook Negative by Sam Ro posted 1/20/2012 on Business Insider).

S&P just affirmed the European Union’s AAA rating.  However, the outlook is negative.

This comes a week after S&P downgraded nine eurozone countries, including France and Austria.

And directly from the S&P press release.

The outlook is negative, in part reflecting the negative outlooks on 16 of the 27 member states of the EU…

During 2011, eurozone member states accounted for 62% of the EU’s total budgeted revenues; budgeted revenues from Germany and France were 30% of total EU revenues, at 16% and 14%, respectively. On Jan. 13, 2012, we lowered the ‘AAA’ long-term sovereign credit rating on France and Austria by one notch to ‘AA+’, and affirmed the long-term rating on Germany at ‘AAA’. As a consequence of the Jan. 13 downgrades, the pool of ‘AAA’ member states contributing to the EU’s revenues has declined to 33% of 2011 budgeted revenues, from 49%. Nevertheless, in our opinion, the supranational entity known as the EU benefits from multiple layers of debt-service protection sufficient to offset the current deterioration we see in member states’ creditworthiness. We are therefore affirming the long- and short-term issuer credit ratings on the EU at ‘AAA/A-1+’.

So everything is hunky-dory.  As long as France and Germany don’t go broke trying to bail out the Euro.  And with the Greek problem about to be resolved by screwing the private bondholders out of 70% of their investment the Eurozone should be right as rain.  As should the EU.

Of course, there are still more than half of the member EU states sucking air.  That could be a problem.  But why worry about that now when we can worry about that later?

www.PITHOCRATES.com

Share

Tags: , , , , , , , ,

Taxing Carbon to Fight Global Warming is Good as long as other Governments don’t get our Money

Posted by PITHOCRATES - July 20th, 2011

Barack Obama has Global Warming Immunity

Barack Obama was going to lower the sea levels.  By fighting global warming he was going to save the planet.  Because he believed in the righteousness of the cause.  You know, as long as it didn’t inconvenience him (see Boris fines Obama for not paying congestion charge by Nicholas Cecil posted 7/19/2011 on the London Evening Standard).

London Mayor Boris Johnson button-holed him at a State banquet in May to raise the issue of US diplomats in London not paying the congestion-busting levy. They have run up a bill of more than £5 million since 2003.

At the time, the Mayor of London also publicly made clear that he wanted the £10 congestion charge paid for Mr Obama’s security vehicle “The Beast” and other cars in the president’s motorcade.

But the US authorities defied the request and have now been hit with a £120 fine.

It seems like £10 is a small price to pay to save the planet.  Especially if you believe in this crap.  I mean ‘science’.  But no.  Not for Barack Obama.  Green Crusader.  Savoir of the planet.  A carbon tax is fine for others to pay.  But don’t you penalize him for driving his big, safe, polluting ride.  For apparently it’s okay for diplomats to pollute.  Guess they have global warming immunity.

The Fight against Global Warming is about the Money, not the Planet

Obama and the Democrats in Congress anxiously want a carbon tax.  To make our everyday life more expensive.  So we can save the planet from global warming.  Like the European Union is doing with its Emissions Trading Scheme.  Which is the exact kind of thing they want for the United States.  And yet, surprisingly, they’re challenging the EU’s plan to tax U.S. airlines that fly into or out of the EU (see U.S. Lawmakers Target Airline Inclusion in EU Emissions Trading System by Frank Jackman posted 7/19/2011 Aviation Week).

A bipartisan group of U.S. lawmakers — the rarest of birds on Capitol Hill these days — has decided to challenge the European Union’s plans to include aviation in its Emissions Trading System (ETS) come Jan. 1…

Congressional opposition to U.S. airline inclusion in the EU ETS isn’t really a surprise. The House version of the FAA Reauthorization Bill includes a Sense of Congress provision that says the EU directive extended the ETS to include international civil aviation without working through ICAO and that is inconsistent with the Chicago Convention. The Obama administration also is opposed to airline exclusion in the EU ETS.

I guess saving the planet is one thing but when another government taxes their airlines that’s another.  The planet be damned.  That’s our money.  And if anyone is going to tax it away by gum it’ll be the American government.  So I guess the fight against global warming is about the money.  Not the planet.  It’s just another tax for Uncle Sam to collect.

The Cost of Fighting Global Warming is…more Global Warming

So the American government is not interested in saving the parts of the planet outside U.S. territory.  So what about the parts within U.S. territory?  Well, that’s a different story.  They want to subsidize the building of windmills.  They want to subsidize the building of solar panels.  And they want to subsidize the building of batteries and electric cars.  None of which can happen without federal subsidies because none of them can compete in the free market.  They all have problems. 

Windmills only produce electricity when the wind blows.  Solar panels only produce electricity when the sun shines.  And electric cars have a limited range and it takes forever to charge the battery.  Until now, that is (see Israel to Get Electric Car Battery Swap Stations by Kevin Bullis posted 7/6/2011 on technology review).

Next month, Better Place, a startup based in California, will begin selling electric cars in Israel that come with subscription packages that include a leased battery and the cost of recharging it. Gasoline is expensive and taxes on gas-powered cars are high in Israel, and the company says the packages could make owning an electric car 20 percent cheaper than owning a gasoline-powered car.

Better Place is trying to solve the biggest challenge to the widespread adoption of electric cars: the limitations imposed by battery chemistry. A battery big enough to give an electric car the same range as the average gas car would be far too large and expensive; and recharging battery packs takes hours at standard outlets, compared to the minutes it takes to refuel a conventional car.

Better Place will sell a new electric sedan made by Renault that has a range of just over 100 miles on a charge—enough for most daily commutes. For longer trips, Better Place provides battery swap stations, where an automated system switches out a depleted battery for a fully-charged one in less than five minutes. Instead of owning the batteries, the car owners buy subscriptions for a certain number of kilometers of driving per year.

Problem solved.  For Israel at least.  Being a Jewish island in an Arab sea kind of makes their oil supply costly to say the least.  And Israel is a narrow state.  So you won’t need a lot of battery swap stations.  But there are some drawbacks.

To ensure that batteries are available at swap stations, the company has developed a system that charges the battery in one hour (compared to roughly seven hours for charging the Nissan Leaf at a home outlet). Such rapid charging can damage the battery if it causes overheating, so the swap stations have to keep the batteries refrigerated.

The company is working with local utilities to ensure that swap stations—or large numbers of cars being charged at night—won’t overload the grid. Better Place will manage charging for a central location, prioritizing cars that are low in charge (drivers can indicate if they need charging urgently).

Refrigerating batteries?  Why, that’ll take a lot of electrical power.  In addition to the enormous electrical demand of just the batteries charging.  The loads are so great that they have to be coordinated with the electrical utility so they won’t cause blackouts.

More electricity.  Produced by fossil fuels.  And more heat dumped into a warming atmosphere from the battery refrigerators.  So the cost of fighting global warming is…more global warming.  And more electrical blackouts.

Still a good idea for the Israelis due to their circumstances.  As long as they can beef up their generating capacity to handle those crushing loads.  But a very bad idea for the United States.  Due to the vast costs resulting from the vast geographic size of America.  And an already taxed electric grid and generating capacity.

For the Planet.  And Uncle Sam’s Pockets.

If President Obama believed the battle against man-made greenhouse gasses was about saving the planet he would have paid that £10 congestion charge.  That’s about $16.17.  I think the U.S. could have afforded that.  Even Obama himself could have flipped them a twenty and said, “Keep it.  For the planet.”

But he didn’t.  That was too much for him.  But the high cost of electric cars will be okay for us.  And the average taxpayer is going to pay a lot more than that $16.17.  How generous he can be with our money.  And tight with his.

And now the U.S. is challenging the EU’s authority to tax U.S. airlines.  Now this isn’t giving the finger to the junk science that is global warming like that congestion charge flap.  This EU ETS tax is a lot of money.  And as broke as the U.S. is, if anyone is going to shake down U.S. airlines it will be the U.S. government.  Who, if you haven’t heard, is desperately trying to raise their debt ceiling.  So they can borrow more money to pay their bills.  So you know they would love to shake down the airlines for a few billion.  Which they won’t be able to do if the EU beats them to it.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , ,

« Previous Entries