Tag Archive: subsidies

If President Obama really wanted to lower gas prices, he would have thrown his full weight behind the Keystone pipeline. Pictured: Mr. Obama speaking at a gas station in Indiana (AP/Jae Hong).

For the past several weeks, Republican leaders have placed the blame for higher gas prices upon President Obama. To support this assertion, these Republicans have cited President Obama’s rejection of the Keystone XL pipeline and the crippling regulations that have been enacted by the Obama administration. However, our president and his supporters argue that gas prices are rising due to outside influences such as Middle Eastern tension and that, henceforth, President Obama is unable to make much of an impact on gas prices. These are both valid arguments, so who is really to blame for higher gas prices?

In his op-ed in the Wall Street Journal this morning, Republican governor Bobby Jindal lays out a comprehensive rebuke of President Obama’s current energy policy. He argues that President Obama has been obstructing new oil drilling by reducing deep-water drilling permits by nearly 30%, by rejecting the Keystone pipeline, and by enacting stringent gasoline standards. These standards, which typically involve the mixing of regular gasoline and inferior (and more costly) ethanol, are currently being implemented at the state level here in California, and I can assure you that they are extremely costly. Besides Hawaii, California has the highest average gas prices in the entire United States, and the state’s average gas price is fifty-seven cents higher than the national average. Additionally, gas in California costs, on average, a whopping $1.05 more than that of Wyoming, the state with the least costly gas of all. Wyoming, of course, is one of the most conservative states in the United States, with more than 50% of its residents identifying themselves as conservatives. Clearly, government policy makes a big difference in gas prices, even at the state level.

There are certainly foreign influences contributing to rising gas prices here in the United States, but it is simply inaccurate when President Obama and his supporters paint these influences as the exclusive cause for rising gas prices. Mr. Jindal puts it this way (emphasis is mine):

Some estimates suggest that the U.S. could overtake Russia as the world’s top producer of oil and gas by 2020, and we should not be singling out [the oil industry] for tax increases that would inevitably lead to higher prices for American Consumers. Rather than punish[ing] one type of producer in favor of crony capitalism, [America] should adopt a flatter tax code with lower rates and no loopholes that allows different energy types to compete in the marketplace.

Gov. Jindal’s point is twofold. First, there is a wealth of oil here in the United States that is simply being ignored by the Obama administration in their attempt to protect a heavily-subsidized clean energy industry that has been a failure on all fronts. By taking advantage of the energy we have here at home, the US can reduce its dependence upon foreign oil and can provide a massive influx of oil supply into the marketplace, prompting rapid price declines. Secondly, Mr. Jindal advocates for a fairer tax code that allows oil companies to compete on the same playing field as solar, wind, and other heavily-supported energy industries. By allowing the free market to decide prices and products, such a tax code would force clean energy companies to create more advanced, innovative products in order to stay afloat and to stay competitive. Meanwhile, oil and gas companies would have to find more efficient ways to refine and extract oil and gas to meet public demand for lower prices and better fuel.

Will Obama’s college plan work?

A free market solution to the tuition dilemma would be far more effective than a government program. Pictured: Obama speaking to students at the University of Michigan.

While campaigning in Michigan yesterday, President Obama announced a plan to curb student tuition costs in order to give everyone a chance to profit from a quality college education. Although well-meant, the president’s government-centered plan will ultimately be a big loser for college students across the United States.

Currently, the federal government subsidizes student loans heavily and appropriates $1 billion annually to underwrite these loans. President Obama’s proposal would octuple federal loan spending and bring it to a sizable $8 billion. Also, his plan would provide a merit-based awarding of loan funds to colleges. Schools that keep tuition rates down under the plan would receive more federal loan money than schools that fail to do so. Overall, this is a decent plan, but with a glaring flaw: it involves more government subsidies.

GOP presidential candidate Ron Paul in particular has offered the most candid perspective on the failure of our student loan system. His bold plan eliminates the Department of Education altogether and gradually phases out student loans, putting pressure on colleges to lower their tuition costs and offer more sensible loan plans than their competitors. By letting the free market work, colleges that offer a quality education for a low price will be rewarded by a clamoring wave of applicants, while those that raise prices too much or lower their standards for educational excellence will suffer devastating decreases in student enrollment. Thus, prices would be reduced significantly across the board, giving even poorer Americans a chance to go to college and get a degree. By contrast, government subsidies encourage colleges to increase tuition by giving these colleges access to government funds for the distribution of student loans.

Obama’s plan could even be entirely appeasement. Handing out (borrowed) money to students from middle-class families could constitute an attempt to buy votes this upcoming November. However, if President Obama really cares about controlling costs, he should really take a closer look at a free-market approach to education.

Solyndra received a $525 million federal loan guarantee before it went bankrupt in early September.

Today, President Obama’s attorney sent a scathing letter to Congressional investigators, saying that attempts by lawmakers to find the truth about the defunct solar company Solyndra and its exorbitant federal loan are “partisan politics”. I can distinctly recall that during his election campaign, President Obama promised Americans that his administration would be the most transparent in history. Even placing that aside, this is a very irritating and disappointing move by the Obama administration. The American people have a right to know exactly how and why President Obama and the White House fast-tracked over five hundred million dollars for Solyndra, which received investments from and was run by financial supporters of the president’s 2008 election campaign. Obama has a lot of explaining to do about this deal, but he is refusing to cooperate with Congress. What does he have to hide?

After the President’s announcement, the chairman of the House Energy and Commerce committee, Fred Upton (R-Mich), delivered a stinging rebuke to the president’s refusal to cooperate with the Solyndra investigation:

We have been reasonable every step of the way in this investigation, and it is a shame that the Obama Administration and House Democrats continue to put up partisan roadblocks to hide the truth from taxpayers. Solyndra was a jobs program gone bad, and we must learn the lessons of Solyndra as we work to turn our economy around and put folks back to work. Our judicious and methodical work over the last eight months has garnered tens of thousands of pages of documents from DOE and OMB that have proven we are on the right track. Now, we need to know the White House’s role in the Solyndra debacle in order to learn the full truth about why taxpayers now find themselves a half billion dollars in the hole. The White House could have avoided the need for subpoena authorizations if they had simply chosen to cooperate. That would have been the route we preferred, and frankly, it would have been better for the White House to get the information out now, rather than continue to drag this out. Our request for documents is reasonable – we are not demanding the President’s blackberry messages as we are respectful of Executive Privilege. What is the West Wing trying to hide? We owe it to American taxpayers to find out.

Ouch. Hopefully, President Obama will be compelled to give up the documents by the Justice Department, and our congressmen can continue their hard work uncovering the giant mess our president has made with his “investment” in Solyndra.


Jersey Shore on the taxpayer dime

The New Jersey Economic Development Authority approved yesterday (9/14/2011) a motion to cover $420,000 of the production costs of the famous TV show “Jersey Shore”. This is what happens when government is put in charge of your money.

Read more about the story here.


Get every new post delivered to your Inbox.

Join 111 other followers