To kick off the IWEA conference at HyVee Hall, both the Governor and the Lieutenant Governor took turns at the podium to celebrate Iowaâ€™s commitment to wind power. I was there to take notes and to take a look around.
The Governorâ€™s comments were short, citing Iowaâ€™s adoption of wind energy standards, the lease royalty income for landowners, the jobs associated with the wind energy sector, Iowaâ€™s exporting of wind-generated power, and used a comment on the importance of the STEM curriculum (science, technology, engineering, and math) to introduce Lieutenant Governor Kim Reynolds, for whom STEM is something of a pet project.
The Lieutenant Governorâ€™s comments centered around education; preparing the young for the jobs of the â€œknowledge-based economy,â€ which I put in quotes because she said that exactly, and this happens to be one of the phrases that triggers irritation in your favorite derelict lawyer – turned political dissident.
The idea behind the knowledge-based economy comes from the plan for the post-Cold War America. As the Soviet Union wound down, the plans for a global, integrated economy that were shelved shortly after the Second World War were revisited.
America, which up until then had relied on its overwhelming industrial output for its wealth, decided that the new comparative advantage would be in the â€œknowledge economy.â€ Governments, businesses, and foundations associated with education began planning academic curricula for the new economy which they imagined would take effect.
Because Americans would be far too rich from tech stocks and mortgaged houses to bother with the dirty fingernails of manufacturing, those who needed income would have to cater to the needs of the newly wealthy and the best jobs for the new service economy would only be open to the educated.
Thus, we were saddled with an educational model designed for an economy that was to be designed in accordance with political speculations and not real human needs, and the entire thing blew up. NAFTA turned factory workers into store clerks and Mexican subsistence farmers into illegal immigrants, college turned young Americans into Helots, and the jobs of the â€œknowledge-based economyâ€ have not materialized except inside the government and government-supported industries. (See â€œThink College is Critical? Bureau of Labor Statistics Projections Suggest Otherwiseâ€)
Public-Private Partnership. Read: State Corporatist Socialism
The final comment by the Lieutenant Governor was a pitch for the public-private project called the Skilled Iowa Initiative. I checked out their website and apparently the entire initiative is to promote the National Career Readiness Certificate.
Brought to you by the people from ACT, it allows you to prove that you can read and add, which you used to be able to prove by graduating from the second grade. Then again, you canâ€™t get â€œPlatinum Certificationâ€ from the second grade.
As I walked through the main hall and examined the exhibitor booths, the thing that jumped out at me was just how much of the wind energy industry that really isnâ€™t the wind energy industry.
Construction companies, community colleges, environmental consultants, computer services, and even law firms are in on the act. The IWEA appears to have close relationships with the Nyemaster firm – who had a booth there – as well as the Brown Winick firm – the IWEA website indicates that a couple of their directors are partners at Brown Winick – both of Des Moines.
Hippies often like to cite Dwight Eisenhower in regard to defense spending, particularly his comment that â€œIn the Councils of Government we must guard against the acquisition of unwarranted influence – whether sought or unsought – by the Military-Industrial Complex.â€
If you watch his entire Farewell Address – which is about 15 minutes and available on You tube – you will see that Ike was warning about the situation we have right now; an economy too heavily dominated by the public sector, where government subsidy is substituted for private sector growth, and when private interests grow dependent on certain government programs and thus become vociferous lobbyists for continuing their own line items.
â€œWeighed in the light of a broader considerationâ€
What have we done, besides building another state-sponsored pressure group? Turning off the tax credits would provoke hostility from the entire structure of energy consultants, lawyers, and lobbyists.
But, then again, who would want to upset the apple cart; these are â€œindustrial jobsâ€ after all, and landowners are earning royalties, and we now export wind-generated electricity (the United States is also the largest exporter of military hardware), so when electric bills go up to cover the installation costs of these turbines ( as reported by the Cedar Rapids Gazette, â€œAlliant Energy seeks 13.8 percent rate increase,â€) well, that is just progress.
In my senior year of high school I took advanced physics with Mrs. Osborne; one of my favorite classes with one of my favorite teachers. Being an advanced-level course, only kids who wanted to be there had signed up for it. The teacher knew that we wanted to be there, and actually wanted us to be there as well. The class was very instructional and free of behavioral problems. Amazingly, the teacher treated us like full human beings – which is not always the case in public school.
The moral sentiment at work was that of voluntarism – not to be confused with volunteerism, which is when career politicians or community leaders want you to work for free. Voluntarism is the manifest free will; when you do something because you want to do it.
In my opinion, only voluntarism can save the academic future of most youth, and thus education reform is largely a waste of time.
Compulsory state education does not have the tools needed to enact this lesson on a societal scale. How can you introduce voluntarism into state-run, compulsory education? You can add a handful of electives for a handful of students, but how can an institution that depends on force adopt the benefits of free will?
The philosophy behind education has also changed; many Americans still equate education with Laura Ingalls Wilder and prairie schools, and a time when education was geared towards teaching specific skills designed to help the students understand the world and be more self-reliant in it.
Teaching to increase self-reliance is not the same thing as preparing for the jobs of tomorrow. In times past, the philosophy of education acknowledged – as the pediatric human resource gulags of today no longer do – that children are actually people.
A Dutch Masterâ€™s Take
Any person who is concerned about the state of education in this country would do well to consider â€œThe Geographerâ€ by Johannes Vermeer. (You can see a representation of it from Wikipedia here) Â A man is stooped over a map on a table and holding a compass. His other hand is resting on a book – he is propped up by knowledge in a sense. He is peering out the window, and the cabinet behind him is casting a rather long shadow. Perhaps the man was so carried away by his study that he lost track of time, and is now noticing the sun moving lower in the sky. Such was his delight with his work.
The late art critic Robert Hughes said that the job of art was to â€œ make the world whole and comprehensible â€¦. Not through argument but through feeling, and then to close the gap between you and everything which is not you, and in this way pass from feeling to meaning.â€
Now, this is far too much existentialism for anything run by the government to digest, let alone copy. There is nothing for government to gain by having self-reliant people in a whole and comprehensible world.
Besides, the students donâ€™t need to understand, they merely need to be trainable for wage-serfdom masquerading as opportunity. Understanding the world and having the tools to be self-reliant in it appear to be severe disadvantages today, much to our eventual detriment.
National Career Readiness Certificate
Brought to you by the same people who produce the ACTâ€™s, the NCRC is a test designed to measure applied mathematics, reading for information, and searching for information.
It will also test â€œsoft skills,â€ like teamwork and tolerance, to make sure that the propaganda was absorbed properly and to weed out the self-reliant, self-confident, potential whistleblowers of tomorrow.
According to an Iowa Workforce Development presenter, the NCRC will soon be widespread – if not mandatory – for Iowa high school students. According to someone in the Governorâ€™s Office, it isnâ€™t. He also implied that I was falling for a conspiracy theory for thinking so, which annoyed me.
What is wrong with testing kids for employable skills?
Well, here is what is wrong with it; a fortune in taxes has gone to build schools, staff them with teachers, and bus children to the schools for 13 years at the end of which they receive a diploma, which is apparently so utterly disconnected from any intellectual capacity that the diploma-laden youth must take a standardized test to prove that they can read. Will no one throw the flag on this?
Even teachers who hate everything I have to say will tell you that when a student is interested in something – and it doesnâ€™t really matter what – performance increases across the board.
The excitement dripping from Vermeerâ€™s work captures the essence of learning and curiosity conducted in solitude and peace, by someone who in doing so was quite transported. Government education policy cannot copy this; they can only make room for it.
What Vermeer celebrated in paint, America can suppress with psychoactive drugs. So, children will be sent to school, set to work on things which donâ€™t interest them, and if they donâ€™t sit down and shut up for their boring lessons, then their compliance will be compelled through pharmacology.
So much for manifest free will.
Back in 2001, Iowa decided to securitize its portion of the multi-state tobacco lawsuit settlement. â€œSecuritizeâ€ means to borrow against it. They issued almost $700 million in bonds through the Iowa Tobacco Settlement Authority, with the settlement money itself as the asset backing the bonds. Most of them are even tax-exempt.
Such is the nature of public finance; the settlement was a windfall of revenue that didnâ€™t have to be taxed from the citizens, but instead of just riding the wave, the government used it as collateral to borrow money. Never put off spending that can be done today.
More than seventy percent of the money Iowa receives from the tobacco settlement goes to debt service on those bonds – these, like most government bonds, are coupon bonds, meaning that the accrued interest is paid periodically, usually every six months. The remainder goes to health-related things such as smoking cessation, but the bonds themselves financed â€œvarious capital projects.â€ Iâ€™m not sure what that entails, so far I havenâ€™t found any list of specific projects.
If the tobacco industry finally succumbs to things like smoking cessation programs, those bonds will find themselves unsupported. Not to worry though – they are state-issued securities and failure to deliver will negatively impact Iowaâ€™s credit. Because of this, the legislature would almost certainly pick up the tab with taxpayer money.
So, smoke up – there are bonds to cover.
In the meantime, you canÂ click here to track the sale of Iowaâ€™s Tobacco Settlement Authority Iowa Asset-Backed Series C bonds, my favorite resource for municipal bond information. Of course the fact that I have a favorite resource for such information suggests that I need a more fulfilling career, or perhaps a meaningful relationship.
Ash Trays and Slot Machines
Should you choose to smoke inside a casino, you will be supporting other types of bonds as well. The Iowa Events Center, for instance, was constructed with funds obtained from the sale of bonds that are supported with revenue from the casino at Prairie Meadows.
All of Iowaâ€™s casinos – how many are there now? – contribute revenue in some manner to state and local government coffers through various direct and indirect means, everything from taxes, licensing, and even leases for facilities, not to mention sales and fuel taxes from the nearby communities, although casinos run by indigenous peoples can be an excellent source of untaxed cigarettes.
Casinos have become the first, last, favorite, and perhaps only tool in the box of economic development officials, and cities across the state still want more of them.
There was a time when every person with the sniffles was given antibiotics, despite the fact that while antibiotics fight bacteria, they are useless against viral illnesses. Today, casinos are the alleged cure-all of choice: Factory closes down, build a casino; young people move away, build a casino; county supervisor dozes off during a meeting, build a casino.
Some jobs will be created, some taxes will be collected, and some concerts and shows will be held to keep people busy, but the underlying problems will remain unresolved. No goods or services are created in a casino, and no assets are being bolstered. Money is simply changing hands.
It is also hard to imagine large numbers of people coming to Iowa for the casinos. Iâ€™m sure some people do, but I would think that most of the patrons are from the areas near the casino itself, and thus the money is really just churned around the community, with government taking a healthy chunk after each rinse cycle.
Gambling has traditionally been treated as a vice, and one that was more often illegal than it was celebrated. This vice has now been legitimized as a source of revenue – the beast must have flesh to survive – and it is hard to imagine a serious push to reverse course, although there might be some resistance if the Iowa Finance Authority tries to open a cathouse.
Image Â© gavran333 – Fotolia.com
The tax credit for wind energy is back on the agenda, and Iowaâ€™s own Chuck Grassley and Terry Branstad are taking leadership roles in fighting for the extension, going so far as to appear together at a press conference about it.
Wind energy is my favorite target at the moment, because it combines socialist economics, corruption, aesthetic vandalism, junk science, and cynical political machinations – all melting together into a hideous soup of wasted money and ruined skylines.
After the last election, targeting two of Iowaâ€™s best known Republicans for criticism is perhaps a risky business, but for those who think I – with my dislike of leftists – shouldnâ€™t be doing it, I offer the following historical analogy:
In the days of the Roman legions, the centurions were legendary for their swift discipline. One centurion developed a habit of breaking his staff over the backs of soldiers who had acted disobediently. â€œGive me another,â€ he would say to his aide when it happened, and it happened so often that â€œgive me anotherâ€œ became his nickname . In this way, withering cruelty became not a malicious attempt to destroy, but deep concern for long-term wellbeing.
Well, give me another.
Political Venture Capital
Wind energy is an odious political scam. First of all, the industry cannot survive without government subsidy, namely, the tax credits. The wind industry makes profits not from the power grid, but from their tax returns.
It is also ridiculously expensive and underproductive. When Alliant Energy built the Whispering Willows wind farm in Franklin County, they petitioned utilities regulators for a rate hike to help cover the cost. The market had reached a price for electricity, generated by coal, but at that price the wind farm was not economically viable – it wouldnâ€™t produce enough electricity to cover its cost.
They built it anyway. Even though the money in the wind industry is earned on the tax return and not the power grid, they didnâ€™t want to eat an operating loss, so rates have to increase. Consumers in central Iowa found themselves paying more money for the electricity they used – still mostly generated from coal – to pay for a wind farm erected so the utility could earn a tax credit.
The utility sells the power and claims the credits; the landowners earn fees for having these modern art sculptures on their land; the turbines produce just enough electricity to power a massive, metaphorical conveyor belt carrying money from the pockets of poor customers to the rich and the politically-connectedâ€¦ Because that is progress these days.
Grassley stated at the recent news conference that â€œWe have a 20 year investment in thisâ€¦ it would be terrible to throw a way a 20 year investment if it will mature in a short time.â€
We have been waiting for the wind energy industry to mature since the days when pioneer farmers could order a windmill from the Sears and Roebuck catalog. Most of them were dismantled after rural America was electrified. Now, the fantasy is that the same technology that was felled by electricity will be the future of electricity.
Nothing becomes outdated faster than a fantasy about the future. This is never more true than when the fantasy has its birth in the minds of politicians; a future brought to you by the same people who bring you inflation, wars, and prisons.
The general public is also rapidly becoming too poor to cover higher utility bills, but wind energy fits into the political rhetoric of our time and so they charge forward. Wind energy doesnâ€™t make power cheaper, reduce our trade deficit, strengthen the dollar, or generate tax revenue – but it can get you elected. Â It employs only a handful of people, especially when compared to the coal industry – which politicians have threatened to kill. The turbines themselves are insanely ugly, and provide a far too convenient backdrop for political photo opportunities.
I understand that this is politics. I also object to the fact that this is politics. The experience of subsidized public housing should have been enough to dispel the urge to make fantasy into reality, but it wasnâ€™t. We will all pay the price. Literally.
Well, Barack Obama will be President for a second term. It is now time to take a look around, and prepare for what is likely to happen next. Based on my observations and what Iâ€™ve learned over the years, these are my predictions:
No Housing Recovery
Commentators have been calling the bottom of the housing market â€“ and screaming with increasing urgency that it was time to buy â€“ since 2007. The Fed has cut interest rates to nearly zero, and through quantitative easing has flooded the financial system with new money. This will continue for the near future, especially since QE-infinity was announced earlier this year. There remains no recovery in the housing market, and there wonâ€™t be a recovery.
Bad monetary policy has left the productive bits of the economy in an absolute shambles, and now there simply arenâ€™t enough jobs to allow a recovery in the housing market. This will get worse, not better.
This one will happen sooner rather than later. In an economy that is as sedate as ours the likelihood of reduced unemployment is already pretty slim, and if you consider the looming Obamacare mandates, tax hikes on income, dividends, and capital gains, as well as another four years of an administration that has a penchant for change (breeding uncertainty), I predict that there will be large job losses coming in the very near future.
This one seems to fall into place as well, especially for those laid low by the layoffs which I think are coming. But, even those who keep their jobs will experience marked decreases in their standard of living. In an economy where consumption is king and production â€“ or any sort of value-added economic activity â€“ is outsourced, taxed, regulated, or outright banned, the remaining employment opportunities take on a sort of wistful irrelevance. Many will be nominally employed, but at the same time wholly unable to support themselves, let alone able to assemble savings.
Spike in Utility Rates
All forms of energy are likely to get more expensive over the next four years. Obama has explicitly stated that he intends to bankrupt the coal-generated electricity industry in favor of renewable energy kitsch which can only be financially feasible with massive increases in electricity prices. Expect some coal plants to be shut down in the next term, and expect to pay far more for electricity.
High Prices for Oil and Grain
In a past article, I pointed out that since 1990, the United States has run trade deficits in excess of $9 trillion. This despite the fact that in 1990 the supply of dollars (the M2 metric) was only $3 trillion. In an economy where we can buy foreign goods by printing money, there is no reason to manufacture much of anything. This dynamic will continue for the time-being, and we will import shiploads of consumer goods and pay for it with nothing but inflation. This will lead to even higher prices for oil and grain, which are inflation-sensitive commodities whose production cannot be outsourced.
Feeding grain to livestock is a value-added activity, however, and in an inflationary economy the price of grain will go up, and the ability of the public to buy meat will be reduced, so I am predicting a continued decrease in the number of farmers who bother to raise livestock, as well as a decline in the overall size of the livestock herds in the country.
College Tuition Spikes; Enrollment Begins to Fall
Obamaâ€™s attempts to reform the student loan industry had nothing to do with controlling the costs of college. The government runs most of the student loan industry, and interest rates have been kept very low for Federal loans. This is all designed to get more kids into college, regardless of what it costs, and with no real limit to the amount of credit available to the college-bound, there are no incentives for colleges to control costs.
The luster has begun to rub off of the whole college experience in my estimation. A college degree has become little more than a very expensive lottery ticket, and new college graduates will not see any discernable increase in their employment opportunities, incomes, or future prospects.
Even with the endless propaganda urging kids to attend college, the decision to attend college will not make financial sense for a large number of American kids, and we will begin to see a decline in enrollments, especially in full-time, traditional enrollments.
((To Continue Reading, Click Here To Go Straight To Part 2))
The post Predictions for the Next Four Years (Part 1 of 2) appeared first on The Conservative Reader.