Subsidizing solar panels

It has been my contention for years that people who were sympathetic to the Soviet Union during the cold war migrated to the environmental cause when the wall came down. Recently I pointed out that the Audubon Society seems unconcerned about the estimated 200,000 birds that are killed by wind mills meaning that politics trumps birds. Now there is another example coming into the news and it was first brought to my attention by the congressional black caucus. The government has a program which provides incentives for people to place solar panels on the roofs of their homes and in the low usage times the home owner can sell the excess energy back to the power company. Now the people who purchase these panels are in the upper income groups while lower income people cannot afford the investment in panels. The result is that lower income people are subsidizing the higher income people and this is basically a transfer of wealth from the poor to the rich. The black caucus has brought this to the attention of congress but the environmentalist lobby has thwarted any action to remedy this situation. They cannot discontinue the subsidies to those who purchase solar panels because most people would not buy them without government financial assistance.

Looks matter

This past week a local politician in New Hampshire commented on a senate race between two women. He broke the basic rules of politically correct speech and said what he really thought. He pointed out that one of the women was homely and the other was attractive. While that may have been true as he saw it, he failed to understand that humans are social animals and must get along to get along. What surprised me was the way commentators responded to this not very bright individual. They acted surprised that someone would judge a person based on their appearance as if that is something they would never do. There are numerous studies showing that first impressions have a powerful influence on how people judge one another. It is a matter of civility and kindness that we do not make derogatory comments about others appearance but it does not mean that we do not notice those things. If I am 6 foot 8 and I walk into the room what is the first thing you notice about me. If I am 5 foot 8 and weigh 300 pounds what is the first thing you notice. When a beautiful woman walks in do people notice?

Job creators

In July of 2012 President Obama said in a speech regarding new business owners, you didn’t build that. Supporters said he meant that without infrastructure provided by government the business would not have been built. The argument against that is if all it takes is government roads and such why is it we get so few people like Bill Gates. There must be more to it. Now last week Hilary Clinton said in speech that business does not create jobs. She went on to state that businesses and corporations are not the job creators of America. “Don’t let anybody tell you that it’s corporations and businesses that create jobs,” the former Secretary of State said. I am not sure just whom she thinks does create jobs but the mindset of these two people represented by these remarks indicates a misunderstanding of our free market capitalist system. The constitution of the United States and in the particular the Bill of Rights was established to limit the power of government in order to open the door to individual freedom which in turn led to entrepreneurship. It is the individual starting out on his own, risking his own time and money that builds the small company that create the jobs. This is just one example of American exceptionalism.

Future

The path to energy independence is coal to oil to natural gas and finally to hydrogen. The latest scare is reminiscent of Malthus back in 1800 when he predicted the earth would die in its own waste products as population exploded but he failed to see the coming industrial revolution. The present day scare mongers fail to see the birth of controlled fusion. This is the process of converting hydrogen into helium and releasing an almost unlimited amount of clean energy. This energy will be used to run the world including the desalting of sea water which will change the world’s deserts into oases. Here is a recent quote from one of these mongers regarding population growth. These growing numbers mean a greater impact on the environment than ever, with worries about the conversion of forests for agriculture, the rise of urbanization, the pressure on species, pollution, and climate change The forest will be left untouched, as now wasted desert land is turned into crop land. Since power will be almost free, cities will be built and expanded with care to preserve the best for the earth. There will be no pollution or climate change but there will be an abundance of food and clean water. This will minimize the threat of poverty and allow people to better their educations to prepare for all the new jobs that will be created because of low cost energy. New industries will spring up and technology will raise the standard of living for all. This is already underway in the third world where most people live and fusion will accelerate the process. The only obstacles in the way of this new world are politicians who always seem to be more interested in their party than in their constituents. Our job as citizens will be to elect people who have their priorities straight and that will be no easy task.

Promise of methane hydrate

Climate change is a hot topic and as is often the case it is filled with misinformation either out of ignorance or on purpose. It is now common knowledge that Al Gore’s book was filled with exaggerations and when asked about this, he replied that he had to exaggerate to get people’s attention. In the long run this hurt the cause of those pursuing changes because they lost credibility. This was further damaged when it was discovered that scientist in England were deliberately skewing data to prove their ideas. This combined with many people who just don’t believe that climate change is a problem based on their own feelings or their preconceived bias has caused the whole issue to become bogged down and swallowed up by politics. Nothing will destroy good science like politics. Recently a new source of energy called methane hydrate has come to prominence. This is an almost unlimited supply of natural gas found on the ocean floor and research is underway in many countries around the world on how to harvest this new source. Japan, in particular is interested since they must import all of their energy. Other countries are interested in methane, as a clean source of energy especially when compared to coal and oil and China is dying in their own smog. Many people have made a commitment to solar and wind as the answers to the problem of climate change and many of those see natural gas as getting in the way of their solution. Thus articles are published emphasizing the leakage of methane at the pumps and pipelines. Instead of fixing the leaks they demand that methane not be used. Others say that while methane eliminates the problems of air pollution in things like acid rain and heavy metals they say the release of carbon dioxide is the cause of climate change and methane still does that. When these people were told that carbon dioxide can be used to mine methane hydrate they say that there will be leaks and once again instead of fixing the leaks they say methane should not be used. Cars running on natural gas are less expensive to run. Methane at $2 is equivalent to gasoline at $3.60 and has an octane rating of 110 vs 90 for most gasoline. Unlike gasoline the exhaust contains no acid rain chemicals and no heavy metals and emits 25% less CO2. The engine runs cleaner and requires less maintenance and oil changes are less frequent and engine ware is reduced. Home filling stations can be purchased for $500 where they tap into the natural gas line used to heat the home which further lowers the fuel cost. In the event of a collision natural gas is safer.

Going to methane hydrate

The technology of mining methane hydrate is moving ahead with government research money combined with investments from private companies. The gas is trapped on the ocean floor about 2,500 feet down where the pressure and cold temperature have frozen the gas surrounded by ice. When carbon dioxide is pumped into the mushy mass the methane is released and the carbon dioxide is captured. Experiments in Alaska and Japan have proved successful in extracting the gas while sequestering the carbon dioxide. The government just gave a 40 million dollar grant to a Texas University to perform similar experiments in the Gulf of Mexico. There are vested interest in the current methods of mining oil and gas and these companies have lots of money tied up in equipment so there will be a transition period in moving toward the hydrate mining. The use of mining hydrate while simultaneously capturing carbon dioxide is the answer to climate change so moving in this direction makes sense. This process eliminates the need for fracking and all of the associated problems. There will be time for this transition since global temperatures have leveled out, the oceans are rising at the moderate rate of one tenth inch per year, the Arctic Ice is coming back and the Antarctic ice is at record levels. It seems the earth has been given a reprieve from the dire predictions of just a few years ago and the pathway to solve the problem of climate change is clearly laid out. Big oil, like Brick and Mortar stores, will be forced by technology to either change or go out of business but dinosaurs don’t die easily.

LNG plants

The price of natural gas has declined by 70% since 2008 as supplies continue to increase going from 21 million million cubic feet in 2008 to 26 million million cubic feet in 2013. As the US supply of natural gas continues to increase the demand from overseas markets continues to rise. About 20 permits to liquefy natural gas and ship it overseas have been applied for but only one has been given the go ahead. Building these facilities will create new high paying jobs and will help to balance our imports. Natural gas will soon replace oil as the leading fossil fuel around the world and the United States is well situated to take advantage of this change assuming the government cooperates. It takes about 4 years to construct a plant and if we had begun when the gas boom started there would already be plants in operation.

Russian oil

If North Dakota oil keeps bringing down the price the world will gain an unexpected benefit. This will be the one thing that will get Putin’s attention and perhaps deter is desire to recreate the old Soviet Union. Among the many threats facing Russia’s economy, cheap oil could be the biggest of all. Crude prices have fallen more than 23 percent since June, depressing the ruble and knocking a potentially gaping hole in the national budget, which draws 45 percent of revenues from oil taxes. Just one more incentive for the government to open the Green River Formation for drilling.

News burnout

Using the story of the Little Boy Who Cried Wolf as a stepping off point, I want to illustrate two situations in modern day politics where this children’s story comes into play, excuse the pun. Assume you are in charge of the warning siren in your city. You know that if you fail to sound the warning and a tornado hits, you are big trouble but if you sound it at every dark cloud you will be safe. The result is that after a while no one pays any attention to the siren. The second example is cable news. When a problem comes up the news is focused on this problem to the exclusion of all else. When this news cycle runs its course, usually with a week or two unless a new problem pops up and then that is the news. This results in every problem becoming a crisis and the people having to deal with one crisis after another just become immune to whatever. Who cares about the Arab Spring, the bombing of Libya, the VA, the Ukraine, ISIS, the beheadings and now we have Ebola. Each of these was portrayed as crises of monumental importance. We are suffering from news burnout.

Fast fission

When it comes to fusion there is an intermediate step that has been sidelined because of the large supply of inexpensive natural gas. This is a fast fission reactor. Yes fission is what our current nuclear reactors are but fast fission is different. It does not produce large amounts of radioactive waste and what is produced is not long lived. Fast reactors can’t melt down or blow up, and don’t use water to cool. We have those designs now, and have built many that work fine. Some submarines are even powered with fast reactors. We just need to start building them on a commercial scale for energy. Making them as small modular reactors would be an ideal way to start. These reactors use up all of the fuel instead of leaving some unspent as radioactive waste. They can even use up all of the stored waste we have accumulated since the first nuke power plant was built. There is enough fuel to last 50,000 years. Research should continue on fusion as we make the transition from coal to oil to natural gas and finally hydrogen. But it is very likely that we will pass through fast fission before we hit hydrogen. This does not preclude the discovery of some new and better method of producing energy, something that no one has even dreamed of……yet!

Green River

Gas is $2.79 per gallon in Hastings today and that is down just about a dollar since last year. Since the US uses about 135 billion gallons per year this gives consumers an extra 135 billion dollars to spend on other items. We can all thank North Dakota for that since the oil patch out there is now producing 1 million barrels per day. This has done more for the middle class than anything else. If the government would open the Green River Formation for drilling it would bring in another 15 million barrels a day and bring the price of gas down lower, get rid of our negative balance of payments and we would no longer have to import oil from the Middle East. The US currently produces 13 million barrels per day and 3 million are converted to distillates and exported. The US uses 20 million barrels per day so they must import 10 million barrels. With the additional 15 million from Green River the US would not import any oil and would have an additional 5 million barrels to export. At the current price of $80 per barrel that means $400 million dollars per day or $150 billion dollars per year pouring into the US economy. This does not include the natural gas that would come from Green River and that could be used to replace oil giving additional oil for export. The more we export oil and more we replace our oil with natural gas the cleaner the environment. This is a win-win.

CDC spin

Here is an example of Washington spin. First is a Republican commentator talking about the CDC budget. It is true that spending for the CDC has dipped ever so slightly since 2011, but the cuts followed years of massive increases. Overall, since 2000, CDC outlays have almost doubled, from $3.5 billion to $6.8 billion (in 2014 constant dollars). Moreover, in January, the Republican-controlled House actually passed legislation that increased CDC spending for 2014 by $567 million — $300 million more than was requested by President Obama. Here is a Democratic commentator. WASHINGTON -- The lead agency tasked with responding to the threat of Ebola both within the United States and abroad has seen its budget drop dramatically in the past four years. But CDC officials and lawmakers who support the agency warn that years of austerity has hobbled both the CDC and the National Institutes of Health, both in terms of their ability to combat future outbreaks and their ability to prevent them from happening in the first place.

Yellen income gap

Janet Yellen, head of the Fed spoke this week on why the middle class is struggling and she gave two reasons. First was the high cost of college and second tougher lending practices. If we evaluate these two problems we see that federal government policies have aggravated both of these areas. Research shows there is direct correlation between the rising cost of college and the availability of student loans. As soon as colleges found out that the government was offering student loans they started raising tuition and it has now blossomed into students loans totaling over one trillion dollars and many think it will be the next big government bail-out. The reason qualifying for loans is difficult is that the government in its pursuit of expanding the availability of home ownership allowed millions of people to qualify for loans that they could not repay and in typical government fashion the pendulum swung back too far and now getting a loan is too difficult for most. Once more the phrase, the unexpected consequences of good intentions, explains it all.

War name

The Presidents policy on ISIS, is in his own words, “to degrade and ultimately destroy”. Yesterday after two months of careful thinking the government came out with a name for this mission to destroy and it is,” Operation Inherent Resolve “. Am I missing something or is there a disconnect here? The President is sometimes referred to as the reluctant warrior and that is a good thing when you are considering going to war but once you go it is wise to get rid of the reluctant part and go all out to win.

Government too big

In the past I have suggested that perhaps 300 million plus people cannot be properly governed by our present system. I mentioned the SEC problems controlling the banks, followed by the VA scandal, and the secret service and now we have the Ebola situation. There also seems to be some miscommunication between the state department and the defense department and the White House when it comes to foreign policy. When the right hand doesn’t know what the left hand is doing maybe the process is too complicated. It is time for some outside source to study this problem and make some recommendations on what to change.

Income gap

In the last two weeks the market has lost one trillion dollars and since the top one percent own 60% of the stocks they have lost 600 billion. The top one percent represents 1.4 million people so they each lost $420,000. This is one way to close the income gap and fight income inequality.

Syrian Air Force

The Turks say they will not send in ground troops as long as the Syrian Air Force remains intact. The United States has the ability to destroy this Air Force with a minimum of losses similar to what was done in Libya. If the US did that then the Free Syrian army could challenge Assad and the Turks would help to take out ISIS. The US could kill two birds with one stone and not put combat troops on the ground. This is such an obvious solution that I must be missing some vital point.

General welfare

There was a discussion on the news about divorce and they quoted Jesus who said, Matthew 5:31-32 "It has been said, 'Anyone who divorces his wife must give her a certificate of divorce.' But I tell you that anyone who divorces his wife, except for marital unfaithfulness, causes her to become an adulteress, and anyone who marries the divorced woman commits adultery. The definition of marital unfaithfulness has been expanded to include physical or verbal abuse, excessive drinking, unwillingness to work and my favorite, irreconcilable differences, which can mean things like he doesn’t pick up his dirty socks and he leaves the cabinet doors open. I bring this up not because of any particular interest in divorce but to illustrate the parallels in the interpretation of the general welfare clause in the constitution. This clause was put in to lay out the two reasons for taxation. to pay the debts of the United States, and to provide for the common defense and general welfare of the United States. This has come to mean the transfer of money from one group to another. The group with the best lobbyist will usually come out ahead. We have home owners who deduct their interest payments, farmers who are paid not to plant, businesses that can deduct the cost of health care all the way down the line to the people who get money just because they don’t have much. This whole process has led to the campaign finance mess where groups are buying face time in front of elected officials who maintain they are not influenced by money. We have drifted far afield from the general welfare where many of the expenditures in the budget, things like the State Department spending $630,000 for face book “likes”, border on the ridiculous.

Off shore drilling

Much to the dismay of environmentalist, President Obama has opened up the east shore of the United States to oil drilling. It is estimated that from Maine to Florida there is 5 billion barrels of recoverable oil and that is less than the amount used in one year. If instead The President would open up drilling in the Green River Formation where there are proven reserves of 1.5 trillion barrels which would last 250 years and not risk any underwater problems the country would be better served. The Green River Formation lies in mostly rocky deserted areas of Wyoming, Utah and Colorado.

ND oil exports

As the North Dakota oil becomes more readily available the US refineries are changing their operations. The oil imported from the Middle East is heavier than the US oil and thus the US oil contains a higher percentage of the good stuff like gasoline and aviation fuel. As these refineries make the change over the amount of gasoline is increased and thus the price for American drivers will continue to fall. The US presently is not allowed to export oil but that may change as the US becomes more self-sufficient and that would put upward pressure on the price. On the upside it will provide more jobs in the energy field and add to exports which will help in foreign trade balance which normally runs about 40 billion per month. If the government would open the Green River Formation to drilling this deficit could be overcome with exports and the number of good paying jobs would be in the millions since it would take about 500 million barrels a month in exports.

Action in Iraq

The argument against putting combat troops in Iraq and Syria is that we have tried that before and the American people are tired of war. Most experts agree that it we want to use combat troops it would have been easier three years ago than it is today. With that kind of reasoning will it be more difficult to control ISIS is we wait longer. If they are left alone they will likely develop a radical state in the area and set up a government. They will then have the where-with-all to plan for their long term goal of a world-wide Caliphate. As the people of the west are tired of war how long will it be before the problem becomes untenable? A few beheadings got everyone upset for a week but now that is gone. When we see movies of these terrorist throwing babies up in the air and catching them on bayonets everyone will get upset for a week or so and that will fade. These people have made it abundantly clear that their plan is for world domination. They will be training suicide bombers and sending them around the world and maybe then people will realize what they are up against but then again maybe everyone will say we are tired of war and just sit back and watch. Taking no action is always easier than acting and most of the time it is politically safer.

Peace prize

It is somewhat of a rarity these days to see some good news in the mainstream media but this week it happened. A 17 year old Pakistani girl received the Noble Peace Prize. She grew up in the Swat Valley in Northern Pakistan where her father ran a small school for girls. When the Taliban came in they closed all the girls schools and burned most of them. The young girl Malala wanted to continue her education and spoke out publically, encouraging other girls to continue their studies. The Taliban shot her in the neck and head and she was taken to London where after many surgeries she recovered and continues to speak out about the education of girls. I contrast that with President Obama who went to Europe and spoke in apologetic terms about the mistakes that American has made and the officials in Norway and Sweden were swept off their feet and awarded him the Peace Prize. He had only been president for a few months and had accomplished nothing aside from great speeches and they were in awe of him. They were not alone.

Con-man

When the details of the holocaust were made public, the world said never again. When 800,000 were slaughtered in Rwanda, President Clinton said it was his biggest mistake not to have intervened. When it looked like a pending massacre in Libya the US stepped in under the new rule laid down by Susan Rice and Samatha Powers saying the US will not stand by like we did in Rwanda. Since then we have witnessed over 200,000 killed in Syria as we failed to follow up on President Obama’s infamous Red Line. Now we are watching ISIS take over most of Iraq and Northern Syria by slaughtering people. The new government in Iraq is now asking for American troops on the ground. In a few years will we once again look back and say never again. Our President who just a few years ago strutted around exuding confidence, some say arrogance, now looks like a lost little boy. I honestly can’t blame him as we elected a man with little experience and raised him to heights unseen and now he cannot live up to our unreasonable expectations. It is an American weakness or perhaps a human weakness to fall for a charismatic, attractive person with great oratorical skills, a person under other circumstances we might refer to as a con-man.

Climate stuff

I have stated many times that we should take the necessary steps to reduce CO2 emissions around the globe but that the use of solar and wind is just a political ploy to transfer money from government to friends who in turn make campaign contributions. The cause of global warming was seriously hurt by people, without adequate information, making exaggerated statements about climate change. Here is a report issued yesterday which once again throws doubt on many of the claims. Climate scientists have been puzzled by the behaviour of the southern ice for many years now. The most commonly used models say that its steady growth should not be happening in a warming world (though the warming of the world is also in doubt, as air temperatures have been steady for the last fifteen years or more - and it turns out that deep ocean temperatures are not increasing either, leaving the "mystery" of the apparent end of global warming "unsolved"). This failure of reality to match up with climate modelling has, as some eminent climate scientists have noted, had the effect of "limiting confidence in the predictions" of severe warming and associated disasters this century. Meanwhile at the other end of the planet the Arctic sea ice has covered lesser areas in recent times. The lowest Arctic area seen in the era of satellite measurements was in 2012, but the three consecutive record-high Antarctic maxima of 2012, 2013 and now 2014 have resulted in global sea ice levels this year and last year coming out pretty much normal. ® I will repeat once again that the solution to the problem is to move from coal to oil to natural gas and finally to hydrogen. We have the natural resources to do this, it just requires commitment by government to allow private industry to move forward.

Shale boom

As President Obama touts the US economic recovery he fails to mention the energy industry. The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said. U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report today. The country became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids. “The U.S. increase in supply is a very meaningful chunk of oil,”Francisco Blanch, the bank’s head of commodities research, said by phone from New York. “The shale boom is playing a key role in the U.S. recovery. If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.” The US is still importing 7 million barrels per day and if the government would open federal lands to drilling this deficit would be eliminated and gas would drop to two dollars and the economy would grow even more. The next move would be to remove existing laws which prohibit the exporting of oil. This would decrease our balance of payment problem and allow countries like China to move away from coal to oil. Meanwhile the US would continue its move from oil to natural gas.

Sanctions

Most of the world’s experts on international politics agree that a nuclear Iran would cause an imbalance of power in the Middle East and cause other nations like Kuwait and Saudi Arabia to develop their own nuclear weapons. Many of these same experts feel this could lead to a nuclear war in the Middle East and quickly spread if Israel were attacked. The West had imposed serious sanctions on Iran to the point where the election in June 2013 brought in a new leader who was supposed to be a moderate. Here is a quote from Obama. We put in place an unprecedented regime of sanctions that has crippled Iran’s economy…And it is precisely because of the international sanctions and the coalition that we were able to build internationally that the Iranian people responded by saying, we need a new direction in how we interact with the international community and how we deal with this sanctions regime. And that’s what brought President Rouhani to power. This new leader was a smooth operator and his talk resulted in the The JPOA, (joint plan of action) between Iran and the west allowed for the reduction in sanctions until November 24th These were major adjustments and limited the sanctions with the promise from Iran that they would cooperate more fully with the West. Now as we approach November 24 the Iranians are asking for additional concessions and some fear that Obama is so concerned about sending in ground troops that he will cave into their demands if they promise to help in the fight against ISIS. Let us hope that the fear of a nuclear Iran is overblown because Obama will try to work with Iran if they will help battle ISIS. For those who are interested, here lists the reduction in sanctions. In the JPOA the U.S. government (USG) has committed to suspend temporarily certain sanctions involving Iran’s purchase and sale of gold and other precious metals, Iran’s export of petrochemical products, Iran’s automotive industry, and certain associated services1 regarding each of the foregoing. The JPOA also includes a commitment to establish financial channels to facilitate Iran’s import of certain humanitarian goods to Iran, payment of medical expenses incurred by Iranians abroad, payments of Iran’s UN obligations, and payments of $400 million in governmental tuition assistance for Iranian students studying abroad. In addition, the JPOA includes a commitment to license certain transactions related to the safety of Iran’s civil aviation industry. Finally, in the JPOA the USG has committed to pause efforts to further reduce Iran’s crude oil exports and to enable Iran to access $4.2 billion in Restricted Funds2 in installments over the course of the six-month period beginning January 20, 2014, and ending July 20, 2014 (the JPOA Period). Unless otherwise noted, these relief measures do not include transactions with persons on the U.S. Treasury Department’s Office of Foreign Assets Control’s (OFAC) List of Specially Designated Nationals and Blocked Persons (the SDN List)

Ebola

I have suggested on a number of occasions that perhaps our form of government is not sufficient to deal with 300 million people. The recent incident with the Ebola patient who came here from African causes me to think that maybe the world is too big for existing governments to cope. This man carried a sick lady home from the hospital in Liberia and she later died from Ebola. He then boarded a plane for Brussels but was examined and declared healthy. Then he went through the airport and boarded a plane for Ft Worth by way of Dulles in Washington DC. Arriving in Texas he came into contact with 18 people, five of whom were students at different schools. He got sick and went to the hospital where he was in contact with others in the emergency room. The doctor gave him some anti-biotic and sent him home. Two days later an ambulance brought him back to the hospital where he was diagnosed with Ebola. Now the government is telling the parents of the kids in the schools where contact was made, that they are safe.

China

Mao led China from after the war until his death in 1976. His government was strictly communist and change came only after he died. When China started to move toward a more free market economy, that is, where individuals could start and own their own business, things changed rapidly. Once again it was proven that getting rid of central government control opens the door to growth. I recall when the government first allowed the free market that everyone felt it was only a matter of time before the communist government fell. The theory was that once you have economic freedom that political freedom would follow but it didn’t happen. 25 years ago the Tiananmen Square situation came up and many thought that was the beginning but the government used tanks and troops and shut it down. This week we see the protestors in the streets of Hong Kong and once again are asking if this is the start of the change away from central government control.

Too big

In the recent past, I have posed the question that perhaps our form of government is not adequate to serve 300 million people. It first came up with the SEC and its inability to oversee the finance industry. Then we had the case of the VA where the problem was deemed systemic and now we have the secret service where the frat boy atmosphere prevails. Are these wake-up calls for change or just exceptions to the rule?

Wall Street Chums

It is common knowledge in the finance business that the revolving door between government and Goldman-Sachs has filled Washington with Goldman employees. The problem arises from the fact that financial products have become so complicated that government inspectors have to work closely with Goldman to understand them and a kind of Stockholm Syndrome develops. When this happens with the SEC it is called regulatory capture. An insider is now releasing secret tapes showing how these regulators have been taken in by Goldman employees. In 2009 the Federal Reserve Bank of New York set out to investigate why US government officials were so blind to the Wall Street crash of 2008. Why were they unable to forecast the oncoming financial crisis? Why did the economic contagion nearly topple the whole global financial system? The fault, according to an independent review by Columbia University Prof David Beim, was that the government regulators were too deferential to the banks they were supposed to oversee. Within the New York Fed, employees were urged by their supervisors to look the other way when they found violations and to temper critical reports. Ho hum.

Rising debt

Here is an early warning signal from France. PARIS – France's Socialist government has detailed a 21 billion-euro ($26.5 billion) cost-cutting plan, the deepest-ever spending cuts in the country's modern history. Presenting the 2015 budget Wednesday, Finance Minister Michel Sapin said, "These spending cuts are crucial to our credibility in the eyes of the French and Europeans, they'll be fully applied." A significant part of the savings is to be made on France's generous welfare system. The government plans to cut 3.2 billion euros from health spending, and to cut family benefits by 700 million euros. The government also plans to diminish the number of state employees next year and limit wage increases. France's debt is now above two trillion euros and represents 95.1 percent of gross domestic product, according to statistics released Tuesday. Our current debt to GDP is 73% and rising. It is very difficult to take away benefits once people are accustomed to them. There will likely be public protest in France. The solution to our debt problem is to grow the economy and that can start with the energy business and opening government lands to drilling. The other alternative is to cut spending.