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Petroleum exports: good for consumers, coffers, companies by Paul Driessen

Eliminating prohibition on exporting US oil and gas will help families, security, allies.

America’s crude petroleum export ban is an antiquated byproduct of the 1973 Arab oil embargo. Repeal is long overdue.

Hydraulic fracturing (fracking) has sent U.S. oil, natural gas, and propane production soaring. Natural gas output is up 36% since 2005. Oil output is expected to increase another 780,000 barrels per day (BOPD) in 2014 and reach 9.6 million BOPD by 2019. The United States is now importing half of what it did in 2005.

All this activity has created millions of oil patch and downstream jobs. Royalty and tax revenues have skyrocketed, and cheaper natural gas fuels and feed stocks have fostered a manufacturing and petrochemical renaissance.

Expanding natural gas use has also reduced carbon dioxide emissions, which should encourage people who still worry about “dangerous manmade climate change.”

petroleumbyproducts

For a larger view click on the pie chart.

Increased production has also enabled companies to export more gasoline, kerosene, jet fuel, lubricants, and other finished products, since refined product exports were never prohibited. Indeed, U.S. refining capacity is at record levels.

However, because they were designed to process heavier crude oils, refineries are limited in how much domestic sweet crude they can handle. Exports would provide an important outlet for excess crude supplies. That in turn would encourage additional exploration and production, protecting jobs, further revitalizing our economy, and multiplying royalty and tax revenues.

That exploration and production must go beyond state and private lands, though. Opening more federal onshore and offshore lands to leasing and drilling is essential and would magnify these benefits many times over. These resources belong to all Americans, not only to those who oppose fossil fuel use.

In many cases, adding fracking to the equation would expand supplies even further, by making otherwise marginal plays more economic to produce, reinvigorating old oil and gas fields, prolonging oil field life, and leaving fewer energy resources behind in rock formations.

Asia needs the energy to fuel its growing economy and support its still inadequate petroleum production infrastructure. Most of Europe’s natural gas comes from Russia, which charges high prices, engages in energy blackmail, and is rattling sabers in Crimea, Moldova, and Ukraine.

Right now, many European countries prohibit fracking, and EU climate and renewable energy policies have sent business and family energy prices into the stratosphere, killing jobs and preventing families from heating their homes properly.

Expanding domestic U.S. oil and gas production and exports would aid EU workers and families, while also improving America’s gross domestic product, balance of trade, national security, job growth, and prestige. Contrary to what some have argued, American consumers would also benefit, because exports would help stabilize global supplies and prices, keep OPEC and Russian price hikers at bay, and make the United States less reliant on imports and less vulnerable to supply disruptions.

What actually hurts consumers are government and environmentalist opposition to leasing, drilling, fracking, pipelines, and hydrocarbons – and their support for expensive, land-intensive, water-hungry, lower-energy-content ethanol and biofuel “alternatives.”

It is possible that the current $9 per barrel difference between U.S. and global oil prices could shrink slightly if some oil is exported. Barclays Bank says eliminating the export ban could add $10 billion a year to overall national gasoline costs.

However, this potential increase is just 3% of an average household’s annual $2,912 gasoline outlay. That’s $87 a year or $1.68 a week – half the price of pumpinggasone Starbucks Latte Grande.

The consumer impact of America’s massive land and petroleum resource lockdowns is much higher.

Of course, realizing these benefits requires producing more, ending the export ban, and building more pipelines, natural gas liquefaction plants, and shipping facilities. That can and should be expedited.

Europe can and should produce more of its own oil and gas. It has vast petroleum potential waiting to be tapped via fracking. Opposition to producing this petroleum is no more ethical than environmentalist demands that the United States keep its own enormous untapped petroleum supplies locked up, while we deplete other countries’ assets and put their wildlife habitats at risk from production-related accidents.

Nor is it ethical or sensible for President Obama to ask Saudi Arabia to send us more oil, rather than telling his energy and environment regulators to foster more production here at home.

In short, America should produce more here at home, export both crude and refined petroleum to Europe and Asia, and support companies that want to take their fracking technology and expertise overseas.

These actions will benefit American companies, workers, families, consumers, balance of trade, environmental quality, and government revenues. We must not let anti-hydrocarbon ideologies or misinformed policy positions perpetuate this antiquated ban.

NOTE: This article first appeared in Investor’s Business Daily.

About Paul Driessen

Paul Driessen

Paul Driessen is senior policy adviser for the Committee For A Constructive Tomorrow (CFACT), which is sponsoring the All Pain No Gain petition against global-warming hype. He also is a senior policy adviser to the Congress of Racial Equality and author of Eco-Imperialism: Green Power – Black Death.

Milton Friedman on America’s Haves and Have-nots

Nobel Prize-winning economist Milton Friedman talks about the state of inequality in America, what he calls a system of haves and have-nots. Learn more about Milton Friedman, school choice, and his legacy the Friedman Foundation for Educational Choice at http://www.edchoice.org.

[youtube]http://youtu.be/yEQl3zW9NZ4[/youtube]

Yellen: I Helped Blow Up The World

The most-destructive terrorists do not use guns or bombs.  They use their power and influence to lie in public, backed by force of law, destroying people, industry and even entire nations and their governments.  They are found in the halls of finance, and the more-powerful they are the worse they are.  Today, the head of same is found in the Federal Reserve, seated before Congress in the form of ChairSatan Janet Yellen.

First, let me acknowledge the important contributions of Chairman Bernanke. His leadership helped make our economy and financial system stronger and ensured that the Federal Reserve is transparent and accountable. I pledge to continue that work.

Uh huh.  The man who first claimed subprime is contained, who in fact invented and promoted the policies that led to the housing bubble in the first place (people seem to forget that) and then who invented and promoted the policies that have now led to the largest global asset bubble in history (second only to the one he built first, and which exploded in his face.)

The unemployment rate has fallen nearly a percentage point since the middle of last year and 1-1/2 percentage points since the beginning of the current asset purchase program. Nevertheless, the recovery in the labor market is far from complete.

There has been no recovery in employment rate of the population.  At all.

Since anyone driven from the workforce by Fed policy doesn’t count as “unemployed” Yellen’s statement is akin to arguing that the natural death rate has not gotten worse over time which may well be true but if you’re shooting people by the busload there are still more people dying — and you’re responsible for their deaths.

Among the major components of GDP, household and business spending growth stepped up during the second half of last year.

Uh huh.  All of it borrowed, I might add.  Median household income adjusted for inflation is not rising.  Therefore all of this increased spending must be borrowed money, which is not an improvement in the common man’s situation.

The same is true with businesses; they never saw their indebtedness decrease — not even in the depths of the recession.

We have been watching closely the recent volatility in global financial markets. Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook.

The Fed caused that volatility.

Our current program of asset purchases began in September 2012 amid signs that the recovery was weakening and progress in the labor market had slowed.

There has been no recovery.  Not in inflation-adjusted incomes nor in the employment rate of the population.  Neither has improved one iota since 2009.  Borrowing more money is not an “improvement” as incomes must rise net-net to service the new debt.  They haven’t.

The Committee has emphasized that a highly accommodative policy will remain appropriate for a considerable time after asset purchases end.

Of course you have.  The government is blowing more money than it takes in too, and you know full well that this can’t continue forever either, but you won’t take the candy away from the baby – even when told, point-blank as Bernanke was on multiple occasions over the last few years, that Congress is incapable of rational fiscal management on its own without being forced to do so by market-based borrowing costs.

Regulatory and supervisory actions, including those that are leading to substantial increases in capital and liquidity in the banking sector, are making our financial system more resilient. Still, important tasks lie ahead. In the near term, we expect to finalize the rules implementing enhanced prudential standards mandated by section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We also are working to finalize the proposed rule strengthening the leverage ratio standards for U.S.-based, systemically important global banks. We expect to issue proposals for a risk-based capital surcharge for those banks as well as for a long-term debt requirement to help ensure that these organizations can be resolved. In addition, we are working to advance proposals on margins for noncleared derivatives, consistent with a new global framework, and are evaluating possible measures to address financial stability risks associated with short-term wholesale funding. We will continue to monitor for emerging risks, including watching carefully to see if the regulatory reforms work as intended.

This is the biggest lie of all.

Derivatives are nothing other than a scam intended to get around margin requirements that would otherwise be imposed by the market in the absence of government bailouts and guarantees.  The “financial system” has repeatedly demonstrated that it has both, with the most-outrageous example of same being when Paulson and Bernanke literally corralled Congresspeople into a room and threatened them with economic nuclear winter if they didn’t get a $700 billion blank check.

That “need” came about due to The Fed and Congressional willful blindness toward the outright fraudulent declarations of “adequate” margin supervision and reserves against said positions.  What 2008 laid bare on the table was that these claims were outright lies, that is, public frauds, and yet none were either prosecuted nor were the firms that had made such outrageous and false statements allowed to fail, with only a couple of exceptions.

The fundamental reality is that The Fed believes, despite decades of proof otherwise, that it can successfully “manage” the business cycle and continually pump up asset bubbles without consequence. The problem with such an assertion is that every time The Fed has done this to date throughout history the balloon has found a pin and popped with dramatic consequence, and what’s worse, the severity of those excursions in terms of real-world economic impact has risen with each successive attempt and failure.

The Market Ticker

The Sierra Club Hates Energy

If I told you that you should hate coal, oil and natural gas, you might think I was crazy and you would be right. Everything we do involves these three energy reserves and the U.S. has so much of them that we could be energy independent of the rest of the world while, at the same time, exporting them.

When you think about energy reserves, think about the hundreds of thousands of jobs they represent. Then think about the huge revenue in leases and taxes they represent to the government that needs to reduce its debt. Ultimately, though, try to imagine a nation that does not utilize petroleum in thousands of ways or fails to tap its enormous coal and natural gas reserves to generate the electricity upon which that everything depends.

I recently received an email from the Sierra Club praising the President’s State of the Union speech in which he claimed that climate change—by which they mean global warming—is real and that the science is “settled.” No, the science entirely refutes it—except if one means that the climate has always been a state of change. The most recent climate change is seventeen years of cooling that has gifted us with record-breaking cold as far south as Florida.

What Sierra Club focused on was Obama’s call for “new sources of energy” other than the traditional ones. He was referring to solar and wind energy. A recent news article on CNSNews noted that “Solar power, which President Barack Obama promoted…accounted for 0.2 percent of the U.S. electricity supply in the first nine months of 2013, according to data published by the U.S. government’s Energy Information Administration.”

According to the EIA, “the United States is producing less electricity now than it did when Obama took office…From 2008 to 2012, U.S. electricity production declined by 1.7 percent.”

Some might take this as a good thing, but “electricity has gotten more expensive since 2008—with the electricity price index at an all-time high.” So we are paying more while getting less.

The Sierra Club, however, criticized Obama saying “As long as his administration keeps throwing lifelines to old sources of energy like oil and gas, we won’t be able to lead the world on clean energy solutions like wind and solar.” They called for an “end to oil and gas fracking on public lands.” What they are not saying is that the Obama administration has virtually put an end to any exploration and extraction of energy sources on public lands. And you can forget about the massive reserves estimated to exist off-shore of our coasts.

In early January, Mark D. Green, the editor of Energy Tomorrow, a project of the American Petroleum Institute, examined the reality of our vast energy sources. Keep in mind that every product we purchase is dependent in some way on oil. “Every day 143 U.S. refineries convert an average of 15 million barrels of crude oil” that provide power for our vast transportation needs and thousands of other uses. Oil is the basis for the creation of plastic. Try to imagine living without anything that does not utilize plastic in some fashion.

As for natural gas, experts predict that lower prices as more is discovered via fracking, will increase industrial output 2.8 percent by 2015 and 3.9 percent by 2025. Policies that would allow the export of U.S. liquefied natural gas would generate between $15.6 billion and $73.6 billion to the Gross Domestic Product and help reduce our deficits and debt.

The Sierra Club doesn’t want to see the U.S. benefit from coal, oil and natural gas. It wants to see the landmass filled with solar farms and thousands of wind turbines that would not produce enough electricity to meet the needs of nation, let alone a major city. Because they are unpredictable, all require the backup of traditional plants.

Nor does the Sierra Club make any mention of the Obama administration’s war on coal that has forced 153 plants to shut down. It’s Environmental Protection Agency has proposed regulations that would require new plants to employ carbon capture and sequestration technology that is not commercially available! Nor is there any reason to capture carbon dioxide, the gas that is the “food” that every single piece of vegetation requires; a gas that plays virtually no role at all in the Earth’s climate.

As this is being written, the State Department just released a report that would clear the way for the construction of the Keystone XL pipeline from Canada after a five-year delay by the Obama administration. Pipelines are the safest way to transport oil and natural gas. If the U.S. cannot gain access to the oil, it will go to China and other nations.

The prospect of the pipeline was rejected by the Sierra Club. Friends of the Earth announced that it would join with the Rainforest Action Network, the Sierra Club, and other radical Green groups to hold vigils around the nation Monday to protest its possible approval and construction.

The Sierra Club is not only lying to its members, it is lying to all of us when it says “Getting all of the energy we need without using fossil fuels is no longer a question of whether we can—but whether we will.” We can’t, we shouldn’t, and we won’t…but we must wait until Obama is no longer in office and, as early as the 2014 midterm elections, we must rid our nation of his supporters in Congress.

Then we will watch our nation’s economy expand with more jobs and more revenue.

© Alan Caruba, 2014

The EPA’s Agenda: Undermine Capitalism and America

The Environmental Protection Agency has been in a full assault on the U.S. economy since the 1980s when the global warming hoax was initiated. It has been assisted by the National Oceanic and Atmospheric Administration and NASA.

To put it in other terms, our own government has engaged in lying to Americans and the result has been the expenditure of billions of taxpayer dollars on something that was not happening and is not happening.

On January 22, the House Oversight and Government Reform Committee released the deposition transcript of former senior EPA official John Beale. After defrauding the agency of nearly $900,000 and spending weeks and months away from his office by claiming he was on assignment for the CIA, the transcript contained a bombshell.

Discussing his job, at the time as a close associate of Gina McCarthy, the new EPA administrator, Beale revealed that he was there to come up with “specific proposals that could have been proposed either legislatively or things which could have been done administratively to kind of modify the capitalist system…”

EPA - BustedDan Kish, senior vice president of the Institute for Energy Research, responded to the revelation saying “In his testimony under oath, Beale, perhaps unwittingly, has laid bare the administration’s end goal. The President’s policies are not about carbon, they are not about coal, and they are not even about energy and the environment. They are about fundamentally altering the DNA of the capitalist system. These policies are not about energy, but power.”

When the new EPA administrator, Gina McCarthy, in testimony before a congressional committee in mid-January was asked by Sen. Jeff Sessions (AL-R) to confirm a statement made by President Obama last year that global temperatures were increasing faster in the last five or ten years than climate scientists had predicted.

She said, “I can’t answer that question.”

“You’re asking us to impose billions of dollars of cost on this economy and you won’t answer the simple question of whether (temperature around the world is increasing faster than predicted) is accurate or not?” Sessions responded.

“I just look at what the climate scientists tell me,” said McCarthy.

The Earth is in a cooling cycle that has lasted seventeen years at this point, but the EPA administrator was not inclined to accept this fact, nor question the climate scientists who provided the data based on computer models that have been consistently wrong now for decades.

We owe the Heartland Institute, a free market think tank a debt of gratitude for the eight international conferences it has held to debunk global warming. Joseph Bast, its president and CEO, has said, “The toll our EPA is taking on the country is staggering, putting hundreds of thousands of Americans out of work at a time when millions of people are unemployed and our reliance on foreign sources of energy threatens to compromise our nation’s security.” Heartland’s science director points out that “EPA’s budget could safely be cut by 80 percent or more without endangering the environment or human health, Most of what EPA does today could be done better by state government agencies…” I serve as an advisor to Heartland.

This is the same EPA that proposed restrictions for new wood stoves in early January. The reason given was to reduce the maximum amount of fine particulate emissions (soot) allowed for new stoves sold in 2015 and 2019. The soot is made up of solid particles and liquid droplets that measure 2.5 micrometers or less. The EPA claims, as it does for virtually all its regulations, that it is linked to heart attacks, decreased lung function, and premature death in people with heart and lung disease. This is worse than junk science. It represents no science whatever, being an invention of EPA employees who specialize in such nonsense. The Earth produces soot every day and circulates it globally.

The only way Americans will be protected against the EPA’s attack on our economy will be a Congress controlled by the Republican Party and a Republican President that will support the oversight that is needed and the reversal of its vast output of regulations. It will have to do this as well for NOAA, NASA, and other governmental departments and agencies that, until recently, spewed forth all manner of “data” supporting the global warming hoax.

At the heart of the global warming hoax, now called climate change, is the assertion that carbon dioxide (CO2) and other “greenhouse gases” have been dangerously warming the Earth by trapping heat, but you don’t have to be a scientist to know that the current cold spell, comparable to the 1500-1850 mini-ice age, is the result of lower solar emissions by a sun. CO2 is a minor (0.038) element of the Earth’s atmosphere, but the second most vital gas for all life on Earth because it is the “food” that maintains all vegetation.

Little wonder, during the government shutdown, more than 93% of EPA employees were furloughed when designated as “non-essential.” That was more than nine out of every ten employees!

In September 2013, the Republican members of the Senate Environmental and Public Works Committee issued a report that EPA officials had, from the beginning of President Obama’s tenure had “pursued a path of obfuscation, operating in the shadows, and out of the sunlight.” It detailed violations of the Freedom of Information Act and other federal laws and regulations intended to encourage transparency and accountability in the government.

In mid-January, the Energy and Environmental Legal Institute revealed that emails obtained through the Freedom of Information Act revealed that the EPA used official events to help environmental groups gather signatures for petitions on agency rulemaking. “The level of coordination in these documents is shocking” said an EELI spokesman. The EPA has a long history of this, including a policy of “sue and settle” working with environmental groups to bring a suit to advance regulations and settling the suit to enable it to implement those regulations.

In an April 2013 article in Investor’s Business Daily, John Merline reported that “Overall air pollution levels dropped 62% from 1990 to 2012, while GDP grew 69% and population climbed 26%.” The pollution the EPA keeps claiming is rising includes carbon monoxide, soot, sulfur dioxide, ozone, and others, all well below the EPA’s safety threshold. Water quality, too, has also improved over several decades.

In May 2013, Paul Driessen, a senior policy advisor for the Committee for a Constructive Tomorrow (CFACT) noted that the EPA, since Obama’s inauguration in 2009, had generated 1,920 new regulations. “The EPA’s actions are forcing us to expend vast financial, human and technological resources to achieve minimal or even zero health benefits.”

This is the same EPA leading the effort to shut down coal-fired plants that produce electricity. It is the same EPA seeking to stop the Pebble Mine, described as “a natural resource project in Alaska that could yield more copper than has ever been found in one place anywhere in the world.”

The EPA is the instrument of those who want to undermine capitalism in any way it can. Only that can explain why entire books have been written about its impact on the economy of the nation and the deceptive way it has imposed regulations responsible for it.

President Obama called for “hope and change” when he first ran for office. We can only hope that a new Congress and President will bring about the change we need to shut down the EPA and return control over the nation’s environment to its 50 sovereign states.

© Alan Caruba, 2014

PODCAST: How Mother Nature will Accelerate the Looming Fiscal Avalanche

Many are writing about the looming fiscal cliff that Congress and the Obama administration will deal with upon return from the Thanksgiving break. Senator Mike Lee (R-UT) warns of a looming fiscal avalanche.

In After Fiscal Cliff Comes Fiscal Avalanche, Rejection of U.S. Debt, Senator Lee writes, “While Washington is preoccupied with the so-called fiscal cliff, little attention has been given to the fiscal avalanche that will occur if we continue down an unsustainable, long-term path, causing markets to turn sour on U.S. debt and leading to a spike in interest rates.”

Senator Lee states, “The Congressional Budget Office projects that under the most likely policy scenario, in 30 years, net interest payments on the debt could total $3.8 trillion in today’s dollars. That is more than total government spending for 2011.”

Robert Wiedemer co-author of America’s Bubble Economy – Aftershock wrote America has suffered through a number of financial bubbles and the aftershock following each. To date each of these bubbles, the most recent being the housing bubble, have burst and fallen onto two other looming bubbles. These two bubbles are the “dollar bubble” and the “debt bubble”. Wiedemer predicts these two bubbles will burst when pricked by the pin called “inflation”.

The government fiscal policies which have lead the US to the fiscal avalanche may be helped along by mother nature.

Relying heavily on the research of experts globally, as well as his own original research that correctly predicted the change in the Sun’s behavior, Mr. John L. Casey has spelled out in his book Cold Sun a convincing case that a new cold era has arrived. In Cold Sun, Mr. Casey presents the evidence showing:

1. Global warming ended years ago.
2. The Sun has entered an ominous state of ‘hibernation.’
3. The Earth’s ocean and atmospheric temperatures are dropping rapidly and are now on a long term decline for the next thirty years.
4. Glacial ice worldwide is growing again and the threat of rising sea levels is over.
5. Why we should be preparing now for the coming cold and its ill-effects including record earthquakes, and volcanic eruptions as well as global agricultural devastation.

Mr. Casey’s predictions of mother nature taking her own course fly in the face of current government policies at the national, state and local levels. In this exclusive interview Mr. Casey explains how mother nature will have her way no matter what we try to do:

While government is focused on reducing CO2 emissions to prevent global warming, the earth is in fact cooling. According to Casey this cooling will shorten the growing season causing food prices to increase, require more fuel and energy to heat homes and businesses. The US will experience an increase in the number of natural disasters costing human life loss and property damage on a grand scale. The US ability to recover from such natural disasters here and globally will be restricted by our debt and cost to service that debt in the long term.

The world’s growing population depends on food. Brian M. Carney in his article for the Wall Street Journal asks, “Can The World Still Feed Itself?“. Mr. Carney interviews Peter Brabeck-Letmathe, Chairman of Nestle’ the world’s largest food-production company. According to Mr. Brabeck-Letmathe, “Politicians do not understand that between the food market and the energy market, there is a close link.” That link is the calorie.

Carney reports, “The energy stored in a bushel of corn can fuel a car or feed a person. And increasingly, thanks to ethanol mandates and subsidies in the U.S. and bio-fuel incentives in Europe, crops formerly grown for food or livestock feed are being grown for fuel. The U.S. Department of Agriculture’s most recent estimate predicts that this year, for the first time, American farmers will harvest more corn for ethanol than for feed. In Europe some 50% of the rapeseed crop is going into bio-fuel production, according to Mr. Brabeck-Letmathe, while “world-wide about 18% of sugar is being used for bio-fuel today.”

What does this all mean?

If John Casey is correct in his predictions, and SSRC always is, then cold weather brings with it a shorter growing season and increased demand for fuel to keep people warm. Therefore, we must have policies that increase calories, not decrease the food supply.

These natural events will occur during the same 30 year period where our payments on the national debt will increase to $3.8 trillion.

RELATED COLUMN: Are we living in the Hunger Games?

Florida’s 303 public pension systems are unsustainable

Florida has the third highest number of public pension systems in the United States. According to the U.S. Census Bureau the states with the most public pension systems were Pennsylvania (1,425 systems), Illinois (457 systems) and Florida (303 systems).

The U.S. Census Bureau publishes The Annual Survey of Public Pensions: State- and Locally-Administered Defined Benefit Data, which is a census of all 222 state government pension systems and a sample of local government pension systems. The latest report was published in August 2013.

The six states with the largest amounts of total state and local cash and investment holdings in 2011 (the latest year data is available) were California ($600.0 billion), New York ($319.3 billion), Texas ($192.6 billion), Florida ($157.8 billion), Ohio ($152.4 billion) and Illinois ($127.7 billion) in total holdings and investments. Total holdings and investments in these states comprised just over half (51.2 percent) of total holdings and investments for the United States.

The Florida pension system is overseen by the State Board of Administration (SBA), which was created by the Florida Constitution and is governed by a three-member Board of Trustees (Trustees), comprised of the Governor as Chair, the Chief Financial Officer and the Attorney General.

The basic problem is there are fewer paying into public pensions with a growing number taking funds out of the systems. The report looks at active public pension members versus beneficiaries over time. The ratios of member to beneficiaries are: 1991 2.8 to 1, 2001 2.3 to 1 and 2011 1.7 to 1. Public pension systems are unsustainable.

For a larger view click on the chart.

The Florida Retirement System (FRS) carries the bulk of the public pension system load in the sunshine state. Cities, counties, school boards and public hospital employees pay into this system. According to the MyFRS website, “The FRS Pension Plan funding valuation takes place annually, available December 1st and was 86.9 percent funded, as of July 1, 2012. You can view a chart that compares the plan’s actuarial liabilities to the plan’s actuarial assets for the past five fiscal years. The annual benefit payments to FRS retirees and beneficiaries (shown in white on the chart) are a part of the overall plan liabilities. The market value of the total assets of the FRS Pension Plan is updated monthly.”

The Census Department reports the following public pension data for Florida (in thousands of dollars): Total contributions of $4,993,460, total employee contributions of $349,947, contributions from the state government $875,190, and from local government $3,768,323. Contributions from state and local government means from Florida taxpayers.

According to the report in 2011 Florida’s public pension systems payed out between $20,000 to $24,999 on average.

Defined benefit public pension programs are a growing financial burden for cities, counties, school boards and public hospitals. If one pension system fails Florida taxpayers will be left holding the bag.

RELATED: Florida’s public pensions still bleeding taxpayers

Are US banks enabling manipulation on a vast scale?

Geo Intelligence states, “Top economists, financial experts and bankers say that the big banks are too large … and their very size is threatening the [US] economy.”

On June 27, 2013 Representatives Alan Grayson (D-FL), Raul Grijalva (D-AZ), John Conyers (D-MI) and Keith Ellison (D-MN) sent a letter to Federal Reserve Chairman Ben Bernanke. The letter states, “We write in regards to the expansion of large banks into what had traditionally been non-financial commercial spheres. Specifically, we are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining. [Isn’t that a national security issue?]”

Grayson, et. al. note, “Here are a few examples. Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012. Goldman Sachs stores aluminum in vast warehouses in Detroit as well as serving as a commodities derivatives dealer. This ‘bank’ is also expanding into the ownership and operation of airports, toll roads, and ports. JP Morgan markets electricity in California.”

Grayson, et. al write, “According to legal scholar Saule Omarova, over the past five years, there has been a ‘quiet transformation of U.S. financial holding companies.’ These financial services companies have become global merchants that seek to extract rent from any commercial or financial business activity within their reach.  They have used legal authority in Graham-Leach-Bliley to subvert the ‘foundational principle of separation of banking from commerce’. This shift has many consequences for our economy, and for bank regulators. We wonder how the Federal Reserve is responding to this shift.” Read more.

ProPublica is tracking where taxpayer money has gone in the ongoing bailout of the financial system. The ProPublica database accounts for both the broader $700 billion stimulus bill and the separate bailout of Fannie Mae and Freddie Mac. According to their data: 927 banks received  $606B of which $366B has been returned. The banks revenues are $116B showing a total net to date of a minus $124B.

Following is the ProPublica list of Florida banks/mortgage servicers that were bailed out (those in RED failed to repay the government and resulted in a loss):

1st United Bancorp  
Alarion Financial Services  
Allstate Mortgage Loans & Investments, Inc.  
Bank United  
Bayview Loan Servicing, LLC  
Biscayne Bancshares, Inc.  
Capital International Financial, Inc.  
CenterState Banks of Florida, Inc.  
Central Florida Educators Federal Credit Union  
Coastal Banking Company  
Community Bancshares Of Mississippi, Inc. (Community Holding Company Of Florida, Inc.)  
Community Credit Union of Florida  
First Community Bank Corp of America  
First Federal Bank of Florida  
First Southern Bancorp  
Florida Bank Group, Inc.  
Florida Business BancGroup  
Florida Housing Finance Corporation  
FPB Bancorp  
GulfSouth Private Bank  
Gulfstream Bancshares  
Highlands Independent Bancshares  
Iberiabank  
IBM Southeast Employees’ Federal Credit Union  
Marine Bank & Trust Company  
Naples Bancorp  
Ocwen Financial Corporation, Inc.  
Pinnacle Bank Holding Company  
Premier Bank Holding Company  
Q Lending, Inc.  
Quantum Servicing Corporation  
Regent Bancorp  
Seacoast Banking Corp  
Seaside National Bank & Trust  
TIB Financial Corp  
U.S. Century Bank

 

For the full list of banking institution in the United States that received taxpayer bailouts click here.

Obamacare’s Negative Impact on Florida’s Seniors

Column courtesy of the Heritage Foundation.

The Medicare program that provides health insurance to seniors faces a dire financial future. And Obamacare is making it worse.

Medicare’s Part A trust fund is projected to be insolvent by 2026 and the total program has a long-term unfunded obligation of more than $35 trillion. This means the government has made $35 trillion worth of benefit promises to current and future seniors that are not yet paid for — a staggering amount that is more than double the nation’s total current debt.

Despite the fact that the Medicare trustees have been warning of this financing disaster for many years, President Obama’s massive health care law makes the matter much worse, not better.

VIDEO: Ann Lorenz, who has Parkinson’s disease, worries about Medicare’s future:

Ignore the political rhetoric of keeping Medicare “as we know it.” Obamacare has already made significant changes to Medicare, namely through provider reimbursement reductions and the creation of an unelected board of bureaucrats, the Independent Payment Advisory Board (IPAB).

Here are three examples of Obamacare’s impact:

1) Huge payment reductions that reduce access to care. According to the Congressional Budget Office (CBO), Obamacare will reduce Medicare reimbursements by $716 billion over 10 years. These cuts will hit Part A providers such as hospitals, nursing homes, skilled nursing facilities, and hospices, along with Medicare Advantage plans. The trustees predict that if Congress allows these cuts to go into effect, 15 percent of Medicare providers would go in the red by 2019, 25 percent by 2030, and 40 percent by 2050.

This will absolutely impact seniors’ ability to access medical care. As the trustees explain: “Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.” (Emphasis added.)

2) Medicare “savings” are spent on other parts of Obamacare. Obamacare’s Medicare “savings” and increased Medicare payroll tax are often touted as increasing the solvency of the Part A trust fund, but that simply is not true. The money is counted as paying for new entitlement spending in Obamacare.

As CBO plainly states, “CBO has been asked whether the reductions in projected Part A outlays and increases in projected [hospital insurance] revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.”

3) The ominous and looming power of IPAB. The board will consist of 15 unelected and unaccountable bureaucrats, charged with meeting a newly created budget target in Medicare. When Medicare spending surpasses the target, IPAB will have to make recommendations to lower Medicare spending. The trustees project the much-hated IPAB will need to step up and make recommendations for the first time in 2016.

Obama’s Medicare agenda falls far short of what is necessary to put the program on a sustainable path, and his law’s negative impact on seniors is yet another reason the law must be repealed in its entirety before its most egregious provisions (Medicaid expansion and exchange subsidies) begin in 2014.

RELATED COLUMNS:

SHOCK: Two-Thirds May Not Insure Under Obamacare…
Cheapest Plan $20,000 Per Family…

Are hedge fund managers moving to Florida a good idea?

Cheryl Carpenter Kilmek in BizPac Review reports:

“The word is out among hedge fund owners that Palm Beach County is the place to be. Kelly Smallridge, President and CEO of the Business Development Board of Palm Beach County, says in the past two weeks she has been getting phone calls every day from New York hedge fund owners tired of high taxes and cold weather looking for a change.

Following a recent New York Post article that said, “The city’s hedge-fund executives are flying south — and it’s not for vacation,” Fla. Gov. Rick Scott sent a letter to hedge fund owners asking them to consider Florida, which prompted a tremendous response.”

But is this really good for Florida?

Florida has had its share of hedge fund managers gone bad. Can you say Ponzi scheme? For example, Scott W. Rothstein, is the disbarred lawyer and the former managing shareholder, chairman, and chief executive officer of the now-defunct Fort Lauderdale law firm Rothstein-Rosenfeldt-Adler. He was accused of funding his philanthropy, political contributions, law firm salaries, and an extravagant lifestyle with a massive $1.2 billion Ponzi scheme.

HedgeCo.net lists the following recent cases of hedge fund manager fraud:

Hedge Fund Manager Convicted by Jury In Black Diamond Ponzi Scheme

February 12, 2013 :

New York (HedgeCo.Net) – A Federal jury has convicted a certified public accountant Jonathan D. Davey, 48, of Newark, Ohio, of four criminal charges relating to an investment fraud conspiracy, the FBI reports. The federal indictment, returned in February 2012, […]

Charges Allege $311 Million Global Hedge Fund Fraud Scheme

February 8, 2013 :

New York (HedgeCo.Net) – An indictment was filed and an information unsealed today charging two business associates in the hedge fund management industry with defrauding institutional investors and causing collective losses of more than $311 million, announced United States Attorney […]

Witness in Rajaratnam Hedge Fund Insider Trading Case Gets One Year Behind Bars

February 1, 2013 :

New York (HedgeCo.Net) – Roomy Khan, a government co-operator in the biggest hedge fund insider trading conspiracy in US history, has been sentenced to one year in prison. Khan has pleaded guilty to passing inside information to Galleon Group fund […]

BCM Hedge Fund Analyst Sentenced in Manhattan

February 1, 2013 :

New York (HedgeCo.Net) – Jason Pflaum, a former research analyst with the hedge fund Barai Capital Management (BCM), was sentenced to time served, followed by two years of supervised release, for his participation in an insider trading scheme in which […]

Insider Trading: California Hedge Fund Founder Gets 2 Years Behind Bars

January 25, 2013 : Permalink

New York (HedgeCo.Net) – San Francisco hedge fund founder Doug Whitman was sentenced yesterday to two years behind bars after a conviction on securities fraud and conspiracy charges. Whitman Capital, the hedge fund he had presided over had about $100 million in assets. […]

Hedge Fund Fraud: Wireless Analyst Sentenced to 4+ Years

January 16, 2013 :

New York (HedgeCo.Net) – The securities research analyst who had publicly refused in 2010 to wear a wire in a hedge fund insider trading trading probe was sentenced yesterday to over four years in prison, Bloomberg’s HedgeWorld reports. John Kinnucan […]

California Hedge Fund Manager Jailed For Fraud

January 15, 2013 :

New York (HedgeCo.Net) – Albert Ke-Jung Hu, a silicon valley hedge fund manager, has been jailed for 12 years on charges of defrauding investors out of at least $6.5 million. “Instead of investing the money as promised, Hu “converted that money […]

Madoff: Doomed Hedge Fund Magnate Speaks Out

December 28, 2012 :

New York (HedgeCo.Net) – The master of manipulation, Bernie Madoff, second only to Charles Ponzi himself, sent out a Christmas memo claiming that “Insider trading… has been present in the market forever, but rarely been prosecuted.” “Markets have always focused on […]

2 Prominent Hedge Fund Managers Found Guilty

December 18, 2012 :

New York (HedgeCo.Net) – A New York jury has found Anthony Chiasson and Todd Newman, both former hedge fund managers, guilty of insider trading charges. The NYT reports: “The government built its case around the testimony of two key witnesses: Spyridon Adondakis, […]

Three Unregistered Brokers Charged For Improper Sales Of Hedge Fund Interests

December 10, 2012 :

New York (HedgeCo.Net) – The SEC has charged three brokers who raised funds for an Oregon-based hedge fund manager for failing to register as broker-dealers before engaging in securities transactions. “Broker-dealer registration is crucial to protecting investors from Ponzi schemes […]

SAC Hedge Fund Insider Trading Professor Resigns

November 30, 2012 : 

New York (HedgeCo.Net) – The Neurologist linked to the Alzheimer drug tests/hedge fund insider trading case, has resigned from his position at the University of Michigan. Professor Sid Gilman is accused of leaking data to SAC hedge fund trader Mathew Martoma. Gilman was paid […]

SEC Preparing Civil Suit Against Cohen’s Hedge Fund SAC Capital

November 29, 2012 :

New York (HedgeCo.Net) – A week after hedge fund trader Mathew Martoma was charged with insider trading, the SEC is going after the hedge fund in question, Steven A. Cohen’s hedge fund SAC Capital, according to people familiar with the situation. “In […]

Rubio Tweets “There is only one savior, and it is not me. #Jesus”

Senator Marco Rubio took offense at the Times cover title “The Republican Savior”. In response he tweeted “There is only one savior, and it is not me. #Jesus”.

rubio time magazine cover

The TIME magazine column “Immigrant Son” by Michael Grunwald notes, “But while Rubio is a child of immigrants, he’s also a child of the conservative movement, an ambitious ideologue and former political operative who speaks partisan Republican with the fluency of a native. (Romney, by contrast, spoke it as a second language.) Like Paul Ryan, a potential 2016 rival, he’s part of a new generation of lean and hungry conservatives who grew up in the anti-government Reagan era and entered politics after the scorched-earth Gingrich revolution. Bipartisan compromise is not usually his thing.” To read the entire TIME magazine story click here.

There are questions being raised about the future of America and the role partisan politics plays in creating a country divided. At a recent TEA Party Sarasota meeting one member stated, “the political parties were merely two squads on the same team”. Big government, more regulation and higher taxes have been embraced by both Republicans and Democrats. This has led to crushing debt, unfettered spending and more government control.

Can any one politician actually make a different when the party system works against any change or reform?

We will see if Rubio will remain independent in his actions or will become part of his party’s leadership. Will political power trump his moral compass as he becomes the “new voice” of the Republican party?

Early civilizations were well aware of the danger of pride and power and knew that this could destroy kings and empires if not held in check. And thus a philosophy was developed by the very wise Greco-Roman philosophers (lovers of truth) in order to help their rulers and themselves to be vigilant about their behavior, lest they destroy themselves by pride. And thus when any great general (be it an emperor-to-be, a war general, or any victor of a great battle) was honored by a great manifestation such as a triumphal entry into his city-state, a slave (a lowly of lowlies) would ride in the chariot with him and whisper in his ear that he should remember that “he is not a god, but a mortal human being”.

A lesson that all politicians must learn?

Gov. Scott declares war on Citizens Property Insurance

On November 30, 2012 Governor Rick Scott addressed Florida’s 6th Annual Insurance Summit in Lake Buena Vista. During his remarks he targets Citizens Property Insurance as a threat to Florida’s economic future. Below are his remarks addressing Citizens Property Insurance:

In order to decrease costs for Florida homeowners we must increase competition in the marketplace by addressing major concerns with Citizens Property Insurance.

Citizens was created to be the insurer of last resort. Today Citizens is now the largest insurer in the state.

Citizens poses three major concerns to our insurance market for Florida families who dream of owning a home:

First, the existence of Citizens Insurance increases the chance that Floridians will be hit with hurricane taxes;

Second, Citizens is grossly underfunded; and

Third, Citizens inhibits new companies from coming to Florida resulting in less competition.

First, all of Citizens policyholders are subject to a special hurricane tax. Florida families could be hit with a hurricane tax at a time when they can least afford it, right after a devastating storm. And 79% of Citizens’ policyholders have no idea that they are subject to a hurricane tax.

Think about this. The average Citizens insurance policyholder pays a premium of approximately $2,300. If a storm hits that depletes Citizens’ surplus, either one big storm or several smaller storms, Florida’s families will be assessed hurricane taxes to pay for Citizens losses. This means that the average family with a Citizens policy faces a hurricane tax of over $1000.

A family may be forced to pay this tax even though their home wasn’t hit by a storm. A family in Tampa could be insured with Citizens and face a hurricane tax to pay for losses to Citizens’ policyholders in Miami.

If Citizens can’t pay its claims, the families with Citizens policies are first up for hurricane taxes. Then, once Citizens taxes its own policyholders, they will then tax every Floridian with an insurance policy in order to get additional funds.

So, Citizens Property Insurance poses a threat to each and every Floridian with an insurance policy. If Citizens can’t pay its claims, we are all on the hook for its losses. And Floridians can be taxed multiple times. Your homeowner’s policy could be taxed; your auto policy could be taxed. Even the policy on your family pet could be taxed.

That means that the average Florida family who owns a home and two cars could be taxed three times to pay for a Citizens’ deficit.

Most families have no idea that they are liable for the potential losses of the state’s largest property insurer.

My second major concern is that Citizens is woefully underfunded. Today, Citizens has a little over $6 billion in surplus. But one storm the size of Hurricane Andrew could result in nearly $14 billion in losses to Citizens. That’s an unfunded liability of nearly $8 billion dollars. The only way to pay for those losses is by taxing Florida families.

Finally, Citizens hurts Florida families by crowding out competition in the insurance marketplace, which limits the ability to reduce costs for homeowners.

I’ve traveled the state and spoken to numerous leaders of insurance companies to ask them: “What’s preventing you from expanding your business in Florida?” Nearly every time I’ve been told that the domination of Citizens Insurance prevents new companies from coming to Florida while also preventing existing companies from expanding in Florida.

How can any private insurance company compete with a government-sponsored entity that doesn’t pay taxes and doesn’t need to charge fair market prices? It can’t.

Shrinking Citizens is the first step toward increasing competition in the marketplace and driving down prices for homeowners.

Shrinking Citizens will also protect Florida families from hurricane taxes.

And, shrinking Citizens will attract new capital to Florida and help to permanently reduce the cost of property insurance.

To make the dream of homeownership a reality for more Floridians, we must reduce the size of Citizens, which has grown from an insurer of last resort to an insurance giant in just a matter of years.

We began making some progress toward this goal by giving over 400,000 Citizens policyholders the opportunity to return to the private insurance market this year.

Of course, we must also ensure Citizens is not wasteful. I recently directed the Chief Inspector General to investigate travel expenses and firings at Citizens. This report will tell us what additional steps must be taken to enforce oversight and compliance within Citizens. A taxpayer organized entity must be held to the highest standards of integrity and good stewardship of the public trust.

VIDEO: Democrat Candidate Patrick Murphy Calls TEA Party “Extremist”

Democrat Congressional Candidate Patrick Murphy runs away from a reporter asking him to clarify his statement that the “Tea Party are Extremists” made during a debate with his opponent, incumbent Rep. Allen West (R). Murphy is Rep. West’s opponent for Florida’s new Congressional District 18 seat.

On Thursday October 4, 2012 during a debate with Rep. West, Murphy made the statement, “I used to be a Republican but because the TEA Party people are extremists, I decided to become a Democrat!”

J. Mark Campbell, investigative reporter for The United West, repeatedly asked Murphy to explain his statement about the TEA Party after the debate. Campbell approached Murphy and then, it was OFF TO THE RACES…as he literally, RAN-A-WAY!

Following the debate Rep. West stood outside in the parking lot answering press questions for 30 minutes. Murphy was no where to be found.

Rubio Votes Against Continuing Resolution

After his vote against H.J.Res.117, a short-term Continuing Resolution to fund the federal government for six months, U.S. Senator Marco Rubio issued the following statement:

“Today, the federal government once again left one of its most basic duties unfulfilled – the passage of an annual budget. After four consecutive years of trillion dollar deficits and a $16 trillion national debt, the American people deserve for their elected officials to come together with an action plan to reduce spending and encourage real growth. Instead, Congress passed a continuing resolution that merely extends federal spending at its current levels and punts away the responsibility of governing to another time.

“As I’ve done before, I voted against this short-term continuing resolution because I believe that times are too dire to continue this inaction. We are treading water while the water is boiling. Congress has a responsibility to move America out of this mess by charting a fiscally responsible path for the future, starting with a responsible and balanced budget.

“Instead of working with Republicans to address this issue a long time ago, President Obama merely proposed partisan budget plans that left his promise of deficit reduction behind and were so flawed not a single senator in either party voted for them. In order to move America forward, we need Washington to live within its means and stop borrowing money to support a bloated federal government. We can’t say that President Obama’s leadership has failed this time, because the truth is he hasn’t led at all.”

Florida to Lose 79,459 Jobs Due to Defense Cuts

The Jacksonville Business Journal reports that Florida stands to lose 79,459 jobs and $4.1 billion in labor income by the end of fiscal 2013 if $1.2 trillion in federal defense cuts take place in January as planned.  A report conducted by George Mason University by economist Stephen Fuller says Florida would suffer the sixth most job losses of all the states. The report measures the impact of both defense and nondefense employment reductions at federal agencies and their contractors, as well as at businesses that count them as customers. A little more than half of Florida’s lost jobs in the next fiscal year — 41,905 — would result from Department of Defense cuts, and the rest would stem from reductions at civilian agencies. During that period, Florida would also see gross state product losses of $8 billion. To read more click here. The George Mason University report concludes – The magnitude of economic impacts resulting from the Budget Control Act of 2011 over the combined FY 2012-FY 2013 period have been shown to be large and their impact on the U.S. economy to be significant:

• Combined DOD and non-DOD agency spending reductions totaling $115.7 billion in FY 2013 would reduce the 2013 U.S. GDP by $215.0 billion.

• These spending reductions would result in the loss of 746,222 direct jobs including cutbacks in the federal workforce totaling 277,263 and decreases in the federal contractor workforce totaling 468,959 jobs, thus affecting all sectors of the national economy.

• The loss of these 746,222 direct jobs and 432,978 jobs of suppliers and vendors (indirect jobs) dependent on the prime contractors would reduce total labor income in the U.S. by $109.4 billion.

• The loss of this labor income and the resultant impacts of reduced consumer spending in the economy would generate an additional loss of 958,508 jobs dependent on the spending and re-spending of payroll dollars associated with the direct and indirect jobs lost as a result of BCA.

• This loss of $215.0 billion in GDP and 2.14 million jobs in 2013 would erase two-thirds of the GDP gains projected for the year and raise the national unemployment rate by 1.5 percentage points by the end of 2013.

• These economic impacts would affect every state with their respective vulnerabilities to projected DOD and non-DOD spending reductions being determined by their agency mix and relative magnitudes of federal payroll and procurement. Based on current patterns of federal spending by state, ten states account for more than half of total federal payroll and procurement outlays. This significant concentration of federal spending represents a major threat to these states’ economies in 2013. While other states may appear less vulnerable to federal spending reductions, these may also suffer significant impacts dues to their smaller sizes or more specialized economic structures.

Florida is has twenty-one military installations, and is home to U.S. Central Command at MacDill AFB in Tampa.