Thursday, April 28, 2011

The Environmental Boondoggle

When you see that trading is done, not by consent, but by compulsion -- when you see that in order to produce, you need to obtain permission from men who produce nothing -- when you see money flowing to those who deal, not in goods, but in favors -- when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you -- when you see corruption being rewarded and honesty becoming a self-sacrifice -- you may know that your society is doomed." - Ayn Rand

The Environmental  Boondoggle

The environment is always a hot issue.  After all, who doesn’t want clean air, safe drinking water, healthy foods, fuel efficient transportation and an environment free of toxins?    Yet, federal, state and local governments have done more to fund environmental disasters than anybody on the planet.   
Take our coastal, wetlands and beach areas that were once lovely, pristine and sparsely inhabited.  They are now high density urban disasters that are cramped, crowded and lined with endless rows of high-rise buildings, beach houses and shopping centers.  But how did this happen?  Just ask John Stossel, the ABC journalist and 20/20 host.  Stossel wrote a piece titled:  Confessions of a Welfare Queen, How rich bastards like me rip off the taxpayers for millions of dollars.
Stossel’s own beach house was destroyed in a storm and he writes:
If the ocean took my house, Uncle Sam would pay to replace it under the National Flood Insurance Program. Since private insurers weren’t dumb enough to sell cheap insurance to people who built on the edges of oceans or rivers, Congress decided the government should step in and do it. So if the ocean ate what I built, I could rebuild and rebuild again and again -- there was no limit to the number of claims on the same property in the same location -- up to a maximum of $250,000 per house per flood. And you taxpayers would pay for it.
I did have to pay insurance premiums, but they were dirt cheap -- mine never exceeded a few hundred dollars a year.
Why does Uncle Sam offer me cheap insurance? "It saves federal dollars," replied James Lee Witt, head of the Federal Emergency Management Agency (FEMA), when I did a 20/20 report on this boondoggle. "If this insurance wasn’t here," he said, "then people would be building in those areas anyway. Then it would cost the American taxpayers more [in relief funds] if a disaster hit."
That’s government logic: Since we always mindlessly use taxpayer money to bail out every idiot who takes an expensive risk, let’s get some money up front by selling them insurance first.
The insurance, of course, has encouraged more people to build on the edges of rivers and oceans. The National Flood Insurance Program is currently the biggest property insurance writer in the United States, putting taxpayers on the hook for more than $640 billion in property. Subsidized insurance goes to movie stars in Malibu, to rich people in Kennebunkport (where the Bush family has its vacation compound), to rich people in Hyannis (where the Kennedy family has its), and to all sorts of people like me who ought to be paying our own way. 
Even more shocking, on 4/1/10 the Washington Times reported on a bill in Congress written by Florida Democrat Ron Klein, dubbed the Homeowners Defense Act, and reported that it was “nothing more than a targeted TARP-style taxpayer-funded bailout….there are no income-level or home- or property-value restrictions on who benefits from this beach-house bailout. In fact, the Florida system provides massive subsidies to homeowners of $2-million-plus properties. The claim that this bill will help low-income families is so egregious that state Sen. Al Lawson of Tallahassee said, "You're robbing from the poor to take care of the rich ... to subsidize these million-dollar homes built on the coast."”
Such legislation is like welfare for Rush Limbaugh. 
The State of Florida itself has managed to weave a tangled mass of insurance subsidies.
When private insurance companies tried to raise premiums on at-risk properties, the state Legislature intervened and established price controls for the private insurers. However, price controls never work. Once its policy to protect its wealthiest taxpayers failed, the Florida legislature established a "public option" for property insurance - a government agency, the Florida Citizens Property Insurance Corp. (FCPIC) - to assess property.
The problem is that the FCPIC uses actuarially false data, resulting in an astoundingly low rate to undercut its private-sector competitors……Rather than charge realistic, actuarially sound rates based on comprehensive risk models and expert analysis, Florida has artificially lowered catastrophic insurance rates to provide Floridians with a fail-safe system - the FCPIC. With the state charging irresponsibly low rates, these policies are keeping the private sector from engaging in market-based competition.
The FCPIC currently has a potential liability of $28 billion but only enough assets to cover $4.5 billion, leaving it 84 percent underfunded.
 The Federal Flood Insurance Program and various state insurance schemes to subsidize the wealthy is not only welfare for the wealthy but it’s also responsible for endless development in environmentally sensitive areas that would never have been developed without government subsidies.  It’s the government that taxes citizen to subsidize growth that destroys the environment.  In a free market system such development would be significantly reduced simply because these projects would not be financially feasible.  For starters, insurance costs would be incredibly high and this alone would act as a deterrent as well as a free market approach to conservation.   Furthermore, many environmentally sensitive properties would simply be uninsurable without massive government subsidies.  Few businesses or individuals would risk the massive financial losses of investing resources into uninsurable or prohibitively expensive to insure properties, especially in areas highly susceptible to floods, hurricanes and natural disasters. 
Besides government subsidies that effectively destroy the environment by promoting commercial development, government subsidies are almost always present in the kind of residential development know as suburban sprawl.  Developers buy large tracks of land and then pay a check bearing visit to City Hall where they fill campaign coffers and dazzle the politicos with glossy presentations on how their tax revenues would skyrocket if they only issued bonds to pay for gobs of development infrastructure like roads, water, sewer, utilities, parks etc.  Since politicians are literally addicted to other people’s money (OPM), they immediately become euphoric at the thought of more looting opportunities and have no moral qualms whatsoever about issuing bonds to subsidize development.  Commercial developers are considerably savvier in obtaining their subsidies because they manage to secure lengthy tax abatements (low or no property taxes) as well as concessions on sales taxes.  In Austin, TX, the “Domain” welfare subsidies of lower sales and property taxes subsidies for a huge upscale commercial project raised a stir and small businesses were furious that big anchor store competitors were give a carte blanche competitive tax advantage.  Small unsubsidized business is always the loser.   Walmart is famous for negotiating subsidies on real estate and sales taxes and much has been written about how Walmart has mastered the art and science of getting financial competitive advantages that are exclusive to Walmart and not available to Walmart’s competitors. 
When we think of welfare, we almost always narrowly focus on it in the context of the poor folks, not rich welfare queens.  But powerful special interests have virtually unlimited money to buy all the taxpayer subsidized welfare perks they can dream of; all they have do is make a campaign contribution. 
New Orleans has been an environmental disaster just waiting to happen and, sure enough, disaster struck when Katrina hit.  At below sea level, New Orleans is a virtual swampland and the cost of building and maintaining a complex network of publicly funded levies just to hold back the water is mindboggling.   CBS News reported:
For 300 years, the sea has been closing in on New Orleans. As the coastal erosion continues, it is estimated the city will be off shore in 90 years. Even in good weather, New Orleans is sinking….coastal erosion was thrown into fast forward by Katrina. He says by 2095, the coastline will pass the city and New Orleans will be what he calls a “fish bowl.”….

“Because New Orleans is going to be 15 to 18 feet below sea level, sitting off the coast of North America surrounded by a 50- to 100-foot-tall levee system to protect the city,” explains Kusky.

He says the city will be completely surrounded by the Gulf of Mexico just 90 years from now.
By the time Katrina hit New Orleans it had been downgraded from a category 5 storm to a category 3.  New Orleans wasn’t destroyed by the hurricane, it was destroyed by the failure of the levies and the tragedy was a manmade disaster and not actually a natural disaster.  Few Americans escaped watching the horror of Katrina when it hit at the end of August 2005.  Since then the fingers of blame have been raging at the City of New Orleans, the State of Louisiana and the Army Corp of Engineers who was substantially responsible for maintaining the levy system in New Orleans.  More interesting is that in a court decision in November 2009, a federal judge ruled that the Army Corp of Engineers was in fact responsible by mismanagement of maintenance of the Mississippi River-Gulf Outlet.  The judge wrote “The failure of the Corps to recognize the destruction that the MRGO had caused and the potential hazard that it created is clearly negligent on the part of the Corps," said U.S. District Judge Stanwood Duval Jr. in his ruling. "Furthermore, the Corps not only knew, but admitted by 1988, that the MRGO threatened human life….”  This decision allows the victims to sue the government although this case will be tied up in the court system for years. 
Nevertheless, there are a lot of components to the Katrina levy nightmare.  Some have argued that environmentalists were always filing lawsuits to stop and/or delay levy construction and maintenance.  The Corps itself acknowledged in 1988 that New Orleans was a disaster waiting to happen.  It’s also been reported that the Bush administration had radically cut funding to the corps' New Orleans district and by more than 80 percent.  Apparently, various media venues reported that New Orleans officials had been seeking $14 billion for levy work but only got a paltry $570 million out of Congress and Bush. 
Then there is the issue of private insurance and/or federal flood insurance and whether or not it is a Constitutional function of the federal government to spend into oblivion to keep a city afloat that is geologically destined to be under water anyway. 
But lo and behold, along comes the Katrina rains and reconstruction costs that far surpass and by a factor of at least 10:1 the cost of properly maintaining the levy system in New Orleans. 
Managing nature is hugely expensive and no matter what human engineers do, nature ultimately wins.  But Congress Critters wasted no time in doling out over $100 billion for Katrina that included massive tax dollar for New Orleans and other coastal cities hit by Katrina; some of this money ended up being nothing more than subsidies for rich casino owners.  A lot of organizations were following “Katrina Waste and Fraud”.  An organization called reported:
A hotel owner in Sugar Land, Tex., has been charged with submitting $232,000 in bills for phantom victims. And roughly 1,100 prison inmates across the Gulf Coast apparently collected more than $10 million in rental and disaster-relief assistance.

There are the bureaucrats who ordered nearly half a billion dollars worth of mobile homes that are still empty, and renovations for a shelter at a former Alabama Army base that cost about $416,000 per evacuee.
Even the New York Times took notice of Katrina fraud and waste.  The NYT goes on:
The estimate of up to $2 billion in fraud and waste represents nearly 11 percent of the $19 billion spent by FEMA on Hurricanes Katrina and Rita as of mid-June, or about 6 percent of total money that has been obligated.
"This started off as a disaster-relief program, but it turned into a cash cow," said Representative Michael McCaul, Republican of Texas…
The $7.9 million spent to renovate the former Fort McClellan Army base in Anniston, Ala., included fixing up a welcome center, clinic and gymnasium, scrubbing away mold and installing a protective fence between the site and a nearby firing range. But when the doors finally opened, only about 10 people showed up each night, leading FEMA to shut down the shelter within one month.
The mobile homes, costing $34,500 each, were supposed to provide temporary housing to hurricane victims. But after Louisiana officials balked at installing them inland, FEMA had no use for them. Nearly half, or about 10,000, of the $860 million worth of units now sit at an airfield in Arkansas, where FEMA is paying $250,000 a month to store them.
The most recent audit came from the Government Accountability Office, which this month estimated that perhaps as much as 21 percent of the $6.3 billion given directly to victims might have been improperly distributed.
If $2 billion in fraud and waste is only associated with $19 billion spend by FEMA, then the total FEMA fraud must be in the vicinity of tens of billions.    The bigger question on rebuilding New Orleans and other below sea level areas is “why would any sane person want to pour precious public resources into rebuilding areas that are destined to be geographic wetlands permanently susceptible to being swallowed up by the sea?”   Ah, but politicians get high on the power to dole out contracts to their campaign contributors. 
Water is becoming a scarce resource, especially in the West.  California is notorious for draughts, wildfires and earthquakes.  The media is reporting that water taps to farmers have been cut-off in some areas that have simply run out of water or have run low on water. 
In Tom Bethell’s book The Noblest Triumph, Property and Prosperity Through the Ages, Bethell puts forth a convincing and documented position that free market capitalism is a much more efficient conservator of scarce resources than politicians and government.   Although Bethell’s book was published in 1998, it’s a timeless classic. 
Bethell talks extensively on how the State of California kept the cost of water cheap by subsidizing it and he’s point blank in his analysis:
Why don’t government agencies charge more for water?  The answer is that they have been captured by their clients.   “Without the farmers, the government agencies would never have been able to get the political support they needed to build the dams in the first place,” said the economist Gordon Tullock. ….The relevant dam-building agencies were able to expand from small beginnings by actively seeking out customers who “demanded” their services.  These agencies – the Bureau of Reclamation and the U.S. Army Corp of Engineers, primarily, then enjoyed political support from farmers and could rely on them to lobby on their behalf when budget appropriations were needed…..
With California’s population growing rapidly, and water being poured into the ground for farming, the water agencies saw shortages ahead.  As before, they weren’t concerned….as before they would build more dams…the farmers would still get cheap water….By the 1970’s, however, there was a new variable in the political equation:  Environmentalists. 
Environmentalists recognized that the cheap water that was drenching the CA farm belt areas also held the potential to dry up rivers, streams etc. and affect fish and wildlife.   These days this drama has exploded into a full-fledged hot potato political and judicial issue as farming interest line up in the courts against what they consider unreasonable and punitive environmental policies.  Obviously, the California water disaster has significantly intensified since Bethell’s 1998 book.  A recent court ruling held that the fish trump the subsidized farmers, and with the current draught, the situation is acute.  The NYT reports:
TULARE, Calif. — For the third year in a row, Mark Watte plans to rely on the aquifer beneath his family farm for three-quarters of the water he needs to keep his cotton, corn and alfalfa growing, his young pistachio trees healthy and his 900 dairy cows cool. That is 50 percent more than he used to take, because the water that once flowed to the farm from snow in the Sierra Nevada has been reduced by a long dry spell and diversions to benefit endangered fish.
Since 2006 the surface of the aquifer, in the Kaweah subbasin of the San Joaquin basin, has dropped 50 feet as farmers pumped deeper, Mr. Watte says. Some of his pumps no longer reach far enough to bring any water to the surface….
Beginning in midcentury, the state enjoyed a respite with completion of the Central Valley Project, a large hydroengineering effort to redistribute surface water around the San Joaquin Valley.
But this year, the Westland water district— the state’s largest, in the San Joaquin Valley — got a taste of what the future may hold when its allocation of surface water from the Central Valley Project was cut by about 90 percent. As a result, area farmers expect to pump two and a half times the usual amount of groundwater this year.
The Central Valley Project is a project of the federal Bureau of Reclamation.  The federal government poured money into subsidizing California’s farmers.  But the State of California gave the powerful farm lobby the authority to pump all the ground water it wanted.  As the water tables in California are now vastly reduced as a direct result of prolonged drought, water in California is quickly becoming a scarce resource.  Meanwhile, California gets its congressional contingent to get more and more federal money for more water projects. 
With 1.64 million acres of farmland that supports a $30 billion agricultural industry, the economic ramifications are huge for CA and so is the burden upon taxpayers.   As water dries up, farmers in California are being paid by the federal government not to produce.
But the situation is even more critical.  California’s population has increased from 29 million folks in 1990 to astounding 38 million.  With much of the population growth being fueled by immigration, many of the immigrants are entitlement dependent.  California is broke and cannot pay its bills.  The federal government fueled a CA real estate boom born of a population explosion; the CA real estate boom has gone bust with the aid and complicity of massive government sanctioned mortgage fraud and Bankster shenanigans.   As California tax and spend lawmakers deal with chronic deficits in the $25-40 billion range, Reuters quoted a 2004 study documenting that the cost of California’s illegal immigrants was in excess of $10 billion.  (
As a nation that has grown from 150 million in 1950 to 310 million in 2009 to an anticipated 400-500 million by 2050, it’s not possible to be concerned about the resources required to support such massive population explosions so long as we advocate for unlimited population growth and open borders.  The inevitable resource conflicts that will arise from environmental protectionism and mobs of hungry folks demanding water and food cannot result in anything other than extreme misery. 
Another Environmental Boondoggle exposed by Bethell involves the Forest Service, dubbed “the world’s largest road-building company” by John Baden of the Foundation for Research on Economics and the Environment.   The Forest Service as of 1991 had constructed 360,000 miles of roads which is 8 times the length of the entire U.S. Interstate Highway System.   Bethell documents how the Forest Service went on a taxpayer funded road building extravaganza post WW II and actively engaged in the timber business. 
The cost of road-building was paid out of the U.S. Treasury, but some receipts from the timber sales could be retained in the service’s own budget.  So it didn’t matter to the Forest Service if it lost money on every sale.  According to one study, below-cost timber sales cost taxpayers $5.6 billion in the 1980’s alone.  In effect, the treasury subsidizes the Forest Service to cut down trees, and Congress permits the service to retain part of the proceeds….
….With employees in 46 states, the service keeps many private logging companies in business…..Since 1976, then, the service has logged a lot of timber…
Bethell then goes on to quote a Forest Service volunteer who said “entire mountainsides were shorn of cover, and rough roads crisscrossed their faces, creating terraces that bled topsoil into the rivers when the snow melted in spring…The Forest Service is deforesting our national timberlands….”.
The economics of government funded deforestation are insane and Bethell quotes the Washington Post who “reported that in just four national forests in North Carolina in l989, the Forest Service spent $4.8 million selling trees worth $2.9 million”.
Logging is very expensive and it is not financially feasible in many areas because of exorbitant costs and accessibility issues. But hey, with the Forest Service paving roads for loggers with taxpayer dollars, who won’t jump on the bandwagon of easy subsidized profits?  What environmentalists fail to grasp is that much of our environmental degradation was actually caused by the government subsidizing special interests that fill campaign coffers.  In DC, it’s all about money and special interests, nothing more. 
As Republicans and Democrats in Congress continue to pass legislation with very endearing names that trick the public into believing they are protecting the environment or a public asset, beware.  These schemes have little or nothing to do with protecting the environment and a whole lot more to do with allowing some special interest to cheaply exploit a resource that they couldn’t cheaply exploit in a free market.
Environmental degradation isn’t just a federal issue.  Many states have actually issued bonds to pay for developer infrastructure.  Florida, one of the top 4 states hit hardest by the real estate crash, created 600 creatures known as Community Development Districts (CDD).  The Florida CDD’s issued over $3 billion in development bonds to fund taxpayer paid infrastructure for out of control development.  Guess what?  Florida now leads the nation in municipal bond defaults and these defaults are directly attributable to bonds issued by Community Development Districts.  Bloomberg reported that 105 of these districts are now in default.  If these bonds carry the full faith and credit of the citizens of Florida, it’s the Florida taxpayers who will be left holding the bag as they will be forced to pay the bondholders.  
Most probably, citizens in these Florida Community Development Districts could be faced with exorbitant increases in the cost of services or their taxes will be increased to service the bond debt that fueled insane and subsidized development on steroids.    Similar nightmares are routinely unraveling across the nation as states, cities and counties massively indebt themselves to fund development that never would have occurred under a free market system. 
The free market has a built-in conservation mechanism simply because so much of what is built these days is subsidized with tax dollars and public bond proceeds, and certainly would not be financially feasible without government subsidies.
Above all, it’s the corrupt to the core system of crony capitalism that has enabled massive environmental “development” destruction and at public expense.  Crony capitalism is just another name for corporatism, fascism, public-private partnerships, statism and other “ism’s” hurled about that promote the unbridled concentration of power and money into the hands of big developers with deep pockets to fill campaign coffers in exchange for sweetheart deals.
It was recently announced that a new automobile company called Fisker Automotive is getting $529 million in tax dollars to build what is dubbed “environmentally friendly” autos.  But these are no ordinary autos for ordinary working stiff smucks – these are welfare sport cars for the rich.  Who in America will be able to afford an $89,000 sports car sitting in their driveway?  Interestingly, Fisker Automotive is backed by Al Gore, the phony baloney environmentalist who is getting rich off of one environmental scam after another.  Al Gore and his pals are just another gang of welfare queens who will reap huge publicly funded profits.    
Just what America needs….more rich welfare queens in the name of the environment. 
Except for the terrorizing by the media and government over “Global Warming”, global warming has been scientifically discredited a pure fiction.  The BBC, one of the most liberal government subsidized propaganda media outlets on the planet, even did a piece titled “So, Where’s the Global Warming?” by Paul Hudson, BBC Climate Correspondent.
Friday, 9 October 2009
This headline may come as a bit of a surprise, so too might that fact that the warmest year recorded globally was not in 2008 or 2007, but in 1998.
But it is true. For the last 11 years we have not observed any increase in global temperatures.
And our climate models did not forecast it, even though man-made carbon dioxide, the gas thought to be responsible for warming our planet, has continued to rise.
So what on Earth is going on?
Climate change sceptics, who passionately and consistently argue that man’s influence on our climate is overstated, say they saw it coming.
They argue that there are natural cycles, over which we have no control, that dictate how warm the planet is.
According to research conducted by Professor Don Easterbrook from Western Washington University last November, the oceans and global temperatures are correlated.
The oceans, he says, have a cycle in which they warm and cool cyclically. The most important one is the Pacific decadal oscillation (PDO).
For much of the 1980s and 1990s, it was in a positive cycle, that means warmer than average. And observations have revealed that global temperatures were warm too.
But in the last few years it has been losing its warmth and has recently started to cool down.
These cycles in the past have lasted for nearly 30 years.
So could global temperatures follow? The global cooling from 1945 to 1977 coincided with one of these cold Pacific cycles.
Professor Easterbrook says: "The PDO cool mode has replaced the warm mode in the Pacific Ocean, virtually assuring us of about 30 years of global cooling."….
The “Warmers” should not be deciding policy for our country or the rest of the world.
If anything, they should be in jail.
Mr. Hudson is right – the globaloney “let’s get rich quick with Cap and Trade” gang should be in jail and certainly not laughing all the way to the bank with stolen middle class money pouring out of every pocket and orifice as these crooks blast humanity back to the stone age. 
Yeah, I’d say it’s time for all Americans to starting talking about the environment and how taxpayers fund its destruction and how special interests get rich off of phony baloney environmental and development schemes. 
Without government directly funding out of control development and massive environmental degradation, free market principles would have left us with a much cleaner and more pristine environment.  Without greedy Banksters and politicos frothing at the mouth to acquire “cap and trade” riches and power, the planet and its occupants would have a much brighter, secure, cleaner and prosperous future. 
Anybody who cares about the environment should make it a priority to stop government at all levels from directly or indirectly funding its destruction.

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