Dash of Calabash

Have a look at the Honolulu Advertiser[ page b1] on 11/10/05. The headline reads “HECO pleads for conservation”.

Pretend you are an entrepreneur running a small company with 12 employees in northern Michigan. Your company does business via internet thruout the world and it matters not a lot where the business is physically located. Since you love Hawaii and vacation there often and your three key executives feel likewise, you have been thinking of moving the business to Hawaii.
Now read that article. Are you going to invest in Hawaii in face of expected chronic energy shortages and outages?

HECO and the State of Hawaii have no vision or appreciation of what it takes to generate prosperity. They operate on a static agenda. They will reap what they sow, leaving abundance, wealth and prosperity to builders and risk takers somewhere else.

Thomas DiLorenzo over at the Ludwig von Mises Institute has an outstanding article on the 4000 year history of price controls. He notes that throughout history price controls have always led to economic downturns and devastation.

The case against price controls is not merely an academic exercise, restricted to economics textbooks. There is a four-thousand-year historical record of economic catastrophe after catastrophe caused by price controls. This record is partly documented in an excellent book entitled Forty Centuries of Wage and Price Controls by Robert Schuettinger and Eamon Butler, first published in 1979.

He outlines some of the history covered in the book going all the way back to Hammurabi 4000 years ago in Babylon. The Greeks, the Romans and even the struggling American colonies made the error of resorting to price controls and severely damaged the war effort as a result. As DiLorenzo points out the Continental Congress of June 4, 1778 adopted a resolution stating “Whereas it hath been found by experience that limitations upon the prices of commodities are not only ineffectual for the purpose proposed, but likewise productive of very evil consequences–resolved, that it be recommended to the several states to repeal or suspend all laws limiting, regulating or restraining the Price of any Article.”

That our present day legislators don’t know their own history and seemed determined as well as condemned to repeat it is bad enough. But we have even more recent examples to learn from.

Price controls were the cause of the “energy crisis” of the 1970s and of the California energy crisis of the 1990s (only the wholesale price of electricity was deregulated there; controls were placed on retail prices). For more than four thousand years, dictators, despots, and politicians of all stripes have viewed price controls as the ultimate “something for nothing” promise to the public.

He finally concludes:

This is what the economically ignorant among the American public is clamoring for Congress to do with regard to today’s energy industry. Let’s hope that the recent “hearings” in Congress on the topic of gasoline prices were just another public relations charade.

Let’s hope indeed. Whole article here.

The Goldwater Institute has an article about the remarks of education some union leaders admitting that the policies they advocate are not helping to educate children. For example, Morty Rosenberg, head of a local union in New York and sits on the NEA national board of directors said in part:

If the United States is to preserve our system of free public schools, teacher unions are going to have to stop accepting the status quo and making excuses for the poor performance of our students. Most of us know that contrary to all of the talk about how we are raising our standards, in most of our schools they continue to decline. The low scores on the so-called high stakes tests are testimony to the fact that large numbers of students leave school knowing next to nothing and ill equipped for any but the most menial of jobs.

That is an amazing admission for a union leader. Read the rest of his remarks.

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Seattle voters have thrown in the towel on the 14 mile monorail project that has been nearly a decade in the planning. Support for the $2.1 billion project deteriorated in the last year and costs continued to rise, the vehicle tax increase designed to fund the system failed to bring in the estimated revenues and the means to finance the balance proved untenable.

This will not take taxpayers off the hook though since the Seattle Monorail Project’s debt is $110 million and will take about 2 years to pay off with the vehicle tax increase. The story should be a wake-up call for Honolulu concerning the cost of such projects. Even a city already experienced with building rail couldn’t get it right.

Hat Tip: Malia @ HawaiiReporter

The Tax Foundation has analysis of the results the last time the government imposed a windfall profits tax on the oil industry. Tax revenues actually fell rather thin increased and the windfall tax had minimal effect on oil industry profit margins. One paragraph from the report stands out:

. . . over the past 25 years, oil companies directly paid or remitted more than $2.2 trillion in taxes, after adjusting for inflation, to federal and state governments-including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period, according to the latest numbers from the Bureau of Economic Analysis and U.S. Department of Energy.

The graph shows that taxes are far and away the greater portion of the cost oil company products. Adding an additional windfall profits tax will only damage the oil industry and have a ripple effect throughout the rest of the economy, just as it did last time.

Neal Boortz stated it about as clear as can be done. While commenting on politicians from both parties demanding to interrogate those evil oil company executives he called what they are doing “economic fascism.”

Nonsense. Corporations are in business to make money. Once earned, corporate profits are “given back” to the shareholders in the form of dividends. There is a word for the national government dictating to companies how their profits are to be spent: It’s economic fascism. How long will it be before somebody calls for the confiscation of all private oil companies by government? Then the price of oil would go down, right? (Sadly, there are probably Americans who actually think that this might be a good idea.)

Neal always has a unique view on issues but on this one he is right on.

The UN wants to wrest control of the Internet from the U.S. The EU, China and others are also interested in manuvering control and oversight away from the U.S. and private enterprise in order to manipulate and control the political content.

The low point of that planning session was the European Union’s shameful
endorsement of a plan favored by China, Iran, Saudi Arabia and Cuba that would
terminate the historic U.S. role in Internet government oversight, relegate both
private enterprise and non-governmental organizations to the sidelines, and
place a U.N.-dominated group in charge of the Internet’s operation and future.
The EU’s declaration was a “political coup,” according to London’s Guardian
newspaper, which predicted that once the world’s governments awarded themselves
control of the Internet, the U.S. would be able to do little but acquiesce.

Senator Norm Coleman states an unequivocal “No!” and has initiated a Sense of the Senate resolution in that regard. This is an issue that is crucial to everyone who uses and relies on the internet.

Also, as we expand the global digital economy, the stability
and reliability of the Internet becomes a matter of security. Technical minutiae
have profound implications for competition and trade, democratization, free
expression and access to information, privacy and intellectual-property
protection.

As the debate about UN control of the Internet advances it behooves everyone who cares about the outcome to stand up and be counted, like Senator Coleman.

Hawaii isn’t the only state playing the tax shell game, raising taxes in one arena to give breaks or reductions in another. A report by the Tax Foundation gives several examples: Texas, Indiana, Kentucky and Ohio. All are experimenting with such schemes. For some reason Hawaii didn’t make the list but with our recent increases in the conveyance and GE taxes in favor of, as yet to be passed, relief in the individual deduction, food and medical care it should have.

Here are the showtimes on Olelo Channel 54 for the Reason Foundation’s informational briefing on the Akaka Bill featuring John Fund and Dr. Ruby Johnson:

Monday November 7,05 - 7pm
Wednesday Nov. 9, 05 - 6pm
Friday Nov. 11, 05 - 9am
Monday Nov. 14,05 - 3pm