Chuck Schumer: biggest Congressional hypocrite of all time?

Schumer is such a goddamn putz. As reported today in the New York Post:

SCHUMER: REFINERIES CAN'T COPE

May 7, 2007 -- Sen. Charles Schumer yesterday called for a federal investigation into why large oil companies have been unable to keep pace with consumer demand for gasoline.

Schumer (D-N.Y.) said he was specifically concerned because problems at aging refineries have been instrumental in hiking gas prices, which may be on the verge of setting records.

The senator said he would be asking the Government Accountability Office to look into whether oil companies are purposely underinvesting to keep the market tight.

Hypocrite? Moron? Or as one of my friends suggested, "satanic rectal spawn"?

If Schumer wants to know the fundamental problem with American refineries, he need not look anywhere but a mirror. The New York Times reported two years ago that "Over the last quarter-century, the number of refineries in the United States dropped to 149, less than half the number in 1981." Worse, the United States hasn't seen a new refinery built since 1976. Every time a company would like to build one, they can't get past the hurdles that Congress, and state and local governments too, made to satisfy the tree-huggers. The blame falls mainly on Democrats, but also on "environmentally minded" Republicans who'll court any vote to win elections.

Schumer has never run a business, although one shouldn't need to in order to comprehend common sense, free market principles. Suppliers are perfectly capable of determining the natural balance of reinvesting profits and output on their own, without any need for government to "encourage" them with subsidies or state-funded studies, and certainly without government hindering them. The U.S. could import far more crude than it presently can, but refineries' capacity is a bottleneck. Well, if only oil companies could build more refineries, it's true that they'd resultingly make even higher profits, but don't forget that they'd supplying more gasoline at lower prices.

Schumer can't see any of this, whether willfully or because of ideological blindness. Under capitalism, everybody wins -- except schmucks like Schumer, whose political livelihood is based on blaming these "evil capitalists" that in fact make our lives better. He could push for legislation to allow oil companies to build more refineries, or drill in ANWR, which would cause prices to start falling now merely on the promise of increased future supplies. Most people don't see the big picture that if gas prices fell to perhaps half of current levels, their lives would be improved far more than taxing some oil CEO of, what, $10 million, then redistributing it among 300 million people? I personally don't care how much the Big Oil executives are paid. They earn every penny, as far as I'm concerned, by leading these companies that provide a critical resource that people are willing to buy via peaceful commerce.

However, when it comes to getting people to vote for you, truth just doesn't compete with creating fear, including the fear that somebody just might have more than you. So Schumer will continue to harp on "income inequality" and oil companies' supposedly obscene profits, notwithstanding that, as my friend Josh Hendrickson pointed out a while back, oil companies' profits are hardly the highest compared to other industries, when you look at the percentages.

And if Schumer is correct that oil companies are purposely "underinvesting" in refineries, then why are there entrepreneurs trying to build new ones? Or is that a lie, just like one of my friends claims that Canadians coming here for medical procedures is just a right-wing lie?

The new pro-ANWR blog

Via Rita at the Bivings Group, which does PR work for Arctic Power (and others), there's a new website for supporters of drilling in ANWR: action.anwr.org

As the blog says,

Please visit our Action Center and Take Action NOW! In just a minute or two you can Send a letter to your Congressmen, Sign the ANWR Petition, and Tell your friends to take action.

Definitely check it all that good stuff. I don't how effective the e-mailing and online petition are, but if you have a few minutes to spare, they can't hurt.

Of special note on the blog are "ANWR Fact and Fiction" and a video making the case for drilling in ANWR.

I do want to comment on a couple of things in "ANWR Fact and Fiction."

...no good American wants to "ruin" any amount of our land, even if it is a largely uninhabited, frozen desert.

Actually, I consider myself a good American and a good capitalist. I see nothing wrong with "ruining" a certain amount of land, if that means sufficient benefit. That's why we dump garbage in certain places, rendering any adjacent land quite unsuitable for residential use. Similarly, if drilling in ANWR meant that the land would be unusable for any purpose once the oil is drained, I'd say that's worth 30 years of 1.5 million barrels a day.

In reality, ANWR has the potential to supply America with an additional 1.5 million barrels per day for 30 years – that's equivalent to 30 years worth of Saudi imports.

No amount of supply, though, from ANWR or any other domestic source, would reduce our Saudi oil imports to zero unless Congress enacted legislation to forbid it. We would import less, but never zero: oil is a fungible commodity, so each type of crude will sell for the same price on the global market whether it came from Alaska or the Middle East. And even if we passed import restrictions so we bought no more Saudi oil, Saudi Arabia would just sell to other countries, albeit at lower prices because of the increased supply.

So increasing our own domestic output won't mean energy independence, not without government intervention, nor will it ever significantly deprive Middle East nations of money that sometimes is funneled to terrorists. It will, though, mean cheaper oil prices, and that's all the reason we need to start drilling.

Congressional morons that keep the price of oil high

I've talked before about Congressional Democrats perennially successful attempts to block drilling in the barren ANWR, and Democrats' purely partisan calls for energy independence (which would only make oil more expensive), and Democrat-supporting environmentalists whose lobbying has prevented the construction of any new domestic oil refineries in the last 30 years. But don't get me wrong: some Republicans are just as much to blame.

House Votes to Keep Offshore Oil Drilling Ban

WASHINGTON — The House of Representatives is not lifting a quarter-century congressional ban on offshore oil drilling in coastal waters outside the western Gulf of Mexico amid arguments that new supplies are needed to lower energy prices.

A proposal to end the long-standing moratorium as it applies only to pumping natural gas was expected to be voted on later Thursday as lawmakers moved toward late-night approval of a $25.9 billion Interior Department spending bill.

The proposal to allow oil drilling in waters off both coasts and in the eastern Gulf of Mexico — areas off limits to energy companies since 1981 — was rejected by a 279-141 vote. It had been offered by Rep. Ted Poe, a Texas Republican, who called the drilling ban "an outdated policy" when the country needs to reduce its dependence on energy imports.

Separately, the House passed by a 252-165 vote a measure that would bar oil companies who fail to renegotiate contacts that allow for federal royalty relief no matter how much oil costs in the marketplace from future oil or gas leases.

The measure was aimed at correcting a mistake made by the Interior Department in the 1990s that failed to put an oil price cutoff for royalty relief. The mistake could cost the Interior Department as much as $7 billion in lost royalty revenues. While the measure does not order these contracts renegotiated, it would put pressure on companies to do so, its supporters said.

"Energy companies have been taking oil and gas from the American people for free and then selling it back to them at record prices," said Rep. Maurice Hinchey, a Democrat who sponsored the amendment.

Supporters of the drilling ban, renewed by Congress each year since 1981, scrambled to try to restore the natural gas drilling ban which had been stripped from the Interior spending bill in committee.

Republican Rep. John Peterson argued that developing the offshore gas resources would pose none of the environmental risks — mainly the prospects of a spill — associated with oil drilling. Supporters of the ban argued that natural gas and oil drilling were too closely linked.

Lifting the moratorium for the first time in 25 years would allow energy development within three miles of shore along coastal areas "where tens of millions of our citizens have made it clear that they don't want any more drilling," said Rep. Lois Capps of California, which has extensive offshore deposits but strict bans on exploitation.

Capps planned to offer an amendment to continue the natural gas drilling prohibition.

Florida lawmakers — both Democrats and Republicans — said energy development off the state would threaten a multibillion dollar tourist industry. Florida depends on tourism "and we're going to protect it," vowed Rep. Alcee Hastings, a Florida Democrat.

Opponents of the drilling prohibition argued that access to offshore oil — and especially natural gas — would drive down energy prices and help reduce the country's dependence on foreign sources of energy.

"We have lost millions of jobs already because of high energy costs, and we're going to lose millions more," said Peterson, who has tried unsuccessfully for two years to lift the offshore moratorium as it applies to developing natural gas.

Soaring natural gas prices, which have quadrupled since 1999, have forced companies — especially in the chemical and fertilizer industries — to consider moving overseas where fuel prices are much cheaper, he said.

Peterson's measure would lift the congressional ban which prohibits the Interior Department from offering gas leases in waters along both coasts and in the eastern Gulf of Mexico. It would not affect a presidential ban on drilling, issued by executive order, that is in effect until 2012.

Drilling proponents also faced an uphill struggle to get the moratorium lifted in the Senate, where senators from coastal states probably could block any such action.

President George W. Bush has said he has no plans to remove the drilling ban.

But Capps said if Congress lifts its moratorium and declares that coastal waters should be opened to drilling, she fears the president "is going to revoke his moratoria" as well.

The offshore drilling issue has divided Congress largely along geographic lines.

Lawmakers from coastal states —both Republicans and Democrats — worried that drilling offshore could threaten their tourist and fishing industries and bring risks of environmental damage.

"People don't go to visit the coasts of Florida or the coast of California to watch oil wells," said Rep. Sam Farr, another California Democrat.

Don't you just love Congressional politics? Nothing is ever passed anymore as a separate bill. And the most pernicious measures inserted into massive bills tend to be simple, yet so effective in damning the American people.

Whether in ANWR or off-shore fields, merely allowing drilling will help drive down oil prices immediately. Capps needs to take a microeconomics class or two. Prices are not just a reflection of the present, but of expectations of future supplies too. When buyers on the global petroleum market are uncertain of Iranian and Nigerian output, and when they expect China and India's appetite for oil to grow, they're willing to pay more. When they know that the supply, especially domestic supply under stable U.S. control, will be higher for years to come, they won't be as willing to pay. As I've explained before, we won't see $40 per barrel crude right away, but buyers will have greater confidence in reliable supplies.

Back into the limelight steps Maurice Hinchey, the conspiracy theory nutcase who claimed on Sean Hannity's radio show that Karl Rove leaked the "Bush memos" to CBS. (After a year and some months, he has yet to offer one shred of proof.) In accusing the oil companies of making too much profit, Hinchey ignores the reality that our friend Josh Hendrickson pointed out last month: other industries normally have far higher profit margins. And I ask, who was crying for the oil companies during the 1990s when oil and gasoline prices were quite cheap?

Hinchey's crime is even worse: is he really as stupid as he sounds, that he laments the federal government losing $7 billion in royalties, when the oil companies would invariably pass that cost on to consumers? He also omits the fact that states and the federal government collect far more in gasoline taxes than oil companies make in profit. I wish I could remember now who recently noted that with all the taxes collected over the years, the federal government could buy every American today a brand-new Prius. How's that for putting things in perspective? And don't forget the double-taxation, because governments also get a cut of oil companies' profits.

Certain lawmakers are so concerned about tourism, but higher oil prices (at the pump and also the rippling effect) cost Americans far more than the tourism industry would gain. "Protect" is the proper word, all right, because Hastings and Farr are engaging in nothing short of protectionism. "To hell with you, and to hell with the idea that I should have to compete. I'm going to use the power of government to benefit my livelihood and make you bear the cost."

Did they ever consider who can still visit Florida or coastal California when high gasoline prices force families to cut back on leisure? What of families taking vacations closer to home, because it now costs considerably more to drive somewhere, or because airline tickets have gone up from higher fuel costs? And what of the working poor, who Democrats supposedly champion? Instead of actually doing something to bring down the price of gasoline, all the Democrats are doing is protecting the vistas, which are enjoyed more by the well-to-do. Just who are liberals really fighting for?

And three miles is really quite a distance. To put something else in perspective, I work about a mile north of the Empire State Building. At triple that distance, even the largest oil rig will hardly mar the sea's horizon. I personally would prefer the oil rigs out there, knowing that someone's helping to keep my fuel costs down (and strictly for his own self-interest).

Humberto Fontova recently noted in Human Events that there tends to be more aquatic life, especially fish, around the artificial reefs of oil rigs. His excellent piece addresses the issue of oil rigs' environmental impact. "The environmental dangers of oil exploration and extraction rank right up with the marvels of Cuba's healthcare as modern man's most zealously cherished fables." In 50 years, we've never had a major spill from rigs, only tankers, and "More birds get fried by landing on power lines and smashed to pulp against picture windows in one week than perished from three decades of oil spills." It's well worth reading the whole thing.

What to do about the price of gasoline?

Leave it to one of the greats to tell us like it is. Larry Kudlow wrote on Tuesday that President Bush undid a few things by which government is making oil and gasoline more expensive. He added:

One action President Bush should have taken (and could still take) is to end the 54-cent-a-gallon tariff on imported ethanol (which basically means Brazilian ethanol.) Why the U.S. government should protect the already heavily subsidized ethanol industry at the expense of American consumers is hard to fathom.

Energy Secretary Sam Bodman actually defended the tariff earlier this month saying it was necessary so that foreign producers "can have no advantage over American companies." Holy smokes, this is the energy version of steel tariffs and it's just as bad an idea.

But all this talk of price gouging is nothing more than the usual political pabulum.

Update: one thing Larry didn't mention is that President Bush directed the EPA to wave "clean air" rules, by which the EPA requires certain states to use only specific blends of gasoline. Believe it or not, there are 42 different blends (maybe even more now!), so if gasoline supplies run low in a state that is heavily restricted by the EPA, it often can't just buy gasoline from an adjacent state. Sometimes it must come from two or more states away, which makes the gasoline unnecessarily expensive. Bush said "Every little bit helps" regarding the effect on gasoline prices, and even this good start had a little downward pressure.

However, Bush called for increasing tax breaks for hybrids cars, which I have exposed as "The bad way to cut taxes." As I explained, cutting taxes must be uniform, not just for specific industries or products. Otherwise, like in the case of hybrids or anything else we can get "tax credits" for, it's merely favoritism -- a subsidy. By nature, a subsidy is how the government skews the market in favor of special interests.

Larry had previously assailed the ridiculous ethanol subsidies here, concluding, "The administration is being hoisted on its own ethanol petard." And he is correct. The blame for gasoline prices is not just from the price of oil, but the pile of crap known as the 2005 energy bill. In a couple of decades, economists might just look back on the energy bill and its effects like we today look back on the 1970s wage and price controls: "Who were the schmucks that didn't think about ethanol's scarcity, or even that its price would go up from demand, yet mandated a sudden spike in its use?"

But in our midst are interventionists in the guise of free-marketers, who have a form of laissez-faire but deny the power thereof. As I explained several ways in that link, there is no, NO justification whatsoever for ethanol subsidies. Any subsidy takes money from some to give to others, and though the latter can then sell their goods for less, at best it's all the same for the consumer. If an item would normally sell for $2, but a $1 subsidy allows it to sell for $1, then the taxpayer still pays $2 total, for who else pays the subsidy? Then it gets worse, because an equivalent item that might sell for $1.50 will never come to market. The uncompetitive sellers stay in business, at the expense of the consumer and his lost 50 cents.

Now, I also oppose subsidies for oil companies. I'm the first to support the elimination of all subsidies for everyone, believing that that is the level playing field on which they compete for the consumer's business. But to be fair, "Big Oil" hardly receives the boost that ethanol producers and corn growers are. The energy bill boosted their subsidies, and the mandate to phase out MTBE was the hidden windfall for them. When I tried to tell rufus a dozen times that ethanol will rise in price as it becomes more popular, he didn't believe me, but I turned out to be right.

Sadly, President Bush, though I believe he knows better, has bowed to politics and has come out against price gouging, though such a thing is completely mythical. If he didn't, Democrats would score too many points with voters. Republicans have to display some populism, lest anger over gas prices (fueled by mainstream media) give them the same fate as George H.W. Bush. As this Detroit News op-ed says so well, "One thing you can always count on, as soon as the price of a gallon of gasoline nears $3, Democrats will start demagoguing." Link courtesy of our friend Josh Hendrickson. Josh has also noted the interesting correlation between gas prices and Bush's approval ratings, and that if the Republicans finally get smart, they'll bring up ANWR. Drilling in ANWR would immediately cause crude oil prices to drop (because current prices also reflect future supply), but Democrats consistently block all legislation. Especially now, I cannot fathom why Republicans don't drive this point home.

At the present time, our only option is for the lesser of two evils. I, for one, would rather have Republicans half-heartedly screwing up the economy than Democrats completely wrecking things with "windfall profits" taxes. That reminds me: when will Democrats start calling for "windfall profits" taxes on ethanol producers, who are now earning larger and larger margins? Or do they not want to risk that the American people will finally realize that it's absurd for government to support business, and that it's this absurdity that makes things more expensive than they ought to be? Unlike liberals' use of "ought," my use there means "if the blasted government didn't stick its nose in, whether it's trying to 'help' or simply redistribute money to supporters."

People want government to "do something" about gasoline prices, when in fact the federal government shoulders a good part of the blame. People also wanted government to "do something" about the Great Depression, too, though the Federal Reserve triggered it, and the federal government prolonged it. Why look for solutions from the people who created the problem in the first place?

Saving us from foreign oil "dependence"?

In his latest follow-up to a State of the Union Address that extolled the fallacial virtues of big government, President Bush struck again:

Bush: U.S. on Verge of Energy Breakthrough

MILWAUKEE Feb 20, 2006 (AP)— Saying the nation is on the verge of technological breakthroughs that would "startle" most Americans, President Bush on Monday outlined his energy proposals to help wean the country off foreign oil.

Less than half the crude oil used by refineries is produced in the United States, while 60 percent comes from foreign nations, Bush said during the first stop on a two-day trip to talk about energy.

Some of these foreign suppliers have "unstable" governments that have fundamental differences with America, he said.

"It creates a national security issue and we're held hostage for energy by foreign nations that may not like us," Bush said.

Bush is focusing on energy at a time when Americans are paying high power bills to heat their homes this winter and have only recently seen a decrease in gasoline prices.

One of Bush's proposals would expand research into smaller, longer-lasting batteries for electric-gas hybrid cars, including plug-ins. He highlighted that initiative with a visit Monday to the battery center at Milwaukee-based auto-parts supplier Johnson Controls Inc.

During his trip, Bush is also focusing on a proposal to increase investment in development of clean electric power sources, and proposals to speed the development of biofuels such as "cellulosic" ethanol made from wood chips or sawgrass.

Energy conservation groups and environmentalists say they're pleased that the president, a former oil man in Texas, is stressing alternative sources of energy, but they contend his proposals don't go far enough. They say the administration must consider greater fuel-efficiency standards for cars, and some economists believe it's best to increase the gas tax to force consumers to change their driving habits.

During his visit to Johnson Controls' new hybrid battery laboratory, Bush checked out two Ford Escapes one with a nickel-metal-hybrid battery, the kind that powers most hybrid-electric vehicles, and one with a lithium-ion battery, which Johnson Controls believes are the wave of the future. The lithium-ion battery was about half the size of the older-model battery. In 2004, Johnson Controls received a government contract to develop the lithium-ion batteries.

On Tuesday, Bush plans to visit the Energy Department's National Renewable Energy Laboratory in Golden, Colo., to talk about speeding the development of biofuels.

The lab, with a looming $28 million budget shortfall, had announced it was cutting its staff by 32 people, including eight researchers. But in advance of Bush's visit, Energy Secretary Samuel Bodman over the weekend directed the transfer of $5 million to the private contractor that runs the lab, so the jobs can be saved.

And it gets worse from there. The article was supposed to have been written this Monday, but from something it said, I would have thought it was from November or so. It mentioned Americans have only recently seen a decrease in gasoline prices. Strange, because in my area (and gasoline down the road is quite expensive compared to elsewhere), pump prices started decreasing significantly about four months ago.

Isn't it so easy to "invest" in new ventures when it's not your money, especially when the money comes from people who have no control over how it's invested, and when it's all but impossible for them to hold you accountable for mismanagement and outright fraud? Isn't it so easy to "save jobs" when it's not your money? Isn't it equally stupid when it's just for the sake of jobs, a basic Keynesian principle? When it's not your money, though, you need not give a damn whether the company can operate profitably, or whether its scientific goals are at all feasible. Since the money government spends is never its own, it's no problem for government to award another lucrative contract, or give another tax break, so a company can develop a new battery that, subtracting whatgovernment poured in, actually loses money on net.

The best and only way the federal government (and any level of government) should promote a "breakthrough" in new energy sources is to not promote any source whatsoever. Governments at all levels must stop their interference in market processes, and let the competitors battle it out. Cease all subsidies, like those given to ethanol manufacturers. Cease special tax breaks for oil industries, too. Cease the subsidies for alternative fuel sources like wind and solar energy, which are extremely inefficient. Cease the unfair hindrances on nuclear energy. People use the phrase "level playing field" all the time, and many don't realize a true "level playing field" is when government neither assists nor hinders anyone.

That some of our Middle East oil-buying dollars go to terrorists is a very valid concern about free trade. I'll get to that later, but right now let me say that President Bush has to emphasize it because the Democrats have been. Neither side is doing it out of genuine concern, though. The Democrats certainly didn't care about "energy independence" until recently, but they've created the myth because they don't have much else to make an issue of. Bush has no choice but to follow suit, and sadly, a serious economic matter gets reduced into more partisanship.

Congress is deeply concerned about dependency on Middle East oil. So deeply that, in a vote this last December, it again rejected allowing drilling in ANWR (most of the blame we can put on Democrats), let alone other rich oil fields in Alaska. More than any subsidies or tax breaks, more than any promotion of "democracy" abroad, drilling in ANWR would have the greatest effect on reducing our "dependence on foreign oil." It would also immediately reduce oil prices on the global market. Effects on price would occur once appropriate legislation passed (or even rumors it would pass), before any drilling commenced, because prices do not just reflect current supply, but future expectations of supply.

Critics say it's only enough oil to supply the U.S. for two years, but that is a lot. Imagine that you and your family suddenly found a two-year supply of food in your back yard, and that you are your grocer's biggest customer. Wouldn't he suddenly be very conciliatory if before he demanded high prices? Perhaps he has a lot of savings to carry him through two years, until you consume all of your finite supply. But what if you look a little more and find an even greater supply, or you find a way to make the food yourself for a cheaper cost than your grocer's prices? Worse, what if in that time, you find a grocer who will sell for really cheap prices? (Here I refer to tar-sand oil deposits in Alberta, Canada, which are a promising source once the technology gets going.)

I recently had a discussion with a close friend about Middle East oil and Sino-U.S. trade. Is it wise that we send so much money to potential enemies in actual warfare? No, but we trade with Saudi Arabia, Iran and China because the benefits outweigh the costs. Benefits and costs aren't always monetary, remember. So by measuring trade flows, we can actually approximate how much Americans, collectively, are willing to save by accepting the risk that Middle East terrorists eventually will harm us and our interests, using some of the dollars we paid for Middle East oil. The same goes for China using some of our money to modernize and expand its military, with the single goal of conquering Taiwan.

Admittedly it is not an absolute that free trade promotes peaceful relations. After all, we certainly cannot trust Iran, at least not with its current leadership. Peaceful relations can still be very cold, after all, and free trade isn't a guarantee of permanent peace, but it does maintain peace in the present. The trade will continue until one side decides, or both sides decide, that it prefers the destruction of war, and the risk of losing, instead of peaceful trade.

If Iran really wanted nuclear weapons, couldn't it just buy technology from renegade Soviets? Perhaps, but I would think not. It's far more noticeable than Iran's nuclear projects, which they claim are covert, but we know about them, and the Iranians know that we know, and we know that the Iranians know that we know... Besides, once Western intelligence learned of Iran's acquisition of a nuclear weapon, it would play into the United States' hands: such a discovery would invite UN Security Council action (severe sanctions). Moreover, Israel would undoubtedly begin military strikes against all possible nuclear sites in Iran. Madman Mahmoud, therefore, will continue playing the stall game.

I would suspect India is doing everything to ensure that none of its nuclear technology, at least that which could be used to develop weapons, reaches Iranian hands. It's benefiting far more from peaceful trade with the United States than it could ever get by selling nuclear technology to Iran. Similarly, for all the anti-West violence, Pakistan as a nation likes warm relations with the United States. China and North Korea are a different matter, especially North Korea, because Kim Jong-il, aka He of the Supposedly Infallible Memory, is a madman.

If we right now cut off all trade with Iran, that may force its hand before we can deal with it. Iran might then seek out the nearest available nuclear warheads and lob a few toward Israel, and its missiles could potentially carry warheads to southern Italy. I do believe we will eventually have to assault Iran with our military might, which will be much easier until Iran has a working nuclear weapon. Right now Mahmoud & Co. think they have time to develop nuclear weapons on their own.

China is also stalling. I think its leaders look far into the future and are willing to exercise the requisite patience. As I wrote last March in my "How libertarian are you?" entry:

Someone best described as a neo-con once told me that China is merely a paper tiger and nothing to worry about. Perhaps so. Vietnam, however, taught our enemies that we can be beaten if they make it too costly for us to win. I worry that China will become a serious threat in a couple of decades, as it continues to strengthen its military and modernize its society. At some point, China may be able to capture Taiwan because they'll make the blood price too high, and if anti-war sentiment sufficiently ferments over the years.

It's important to remember that not every dollar in China's trade surplus is a dollar it can spend. China needs some of those dollars to buy petroleum, and because it must import many different types of raw materials, it doesn't have much of an overall trade surplus compared to that with the United States. Also, it returns many of the dollars to the U.S. Treasury and receives U.S. Treasury bonds, which are not just an investment, but collateral for China's insolvent banking system.

There's still a lot of money that China can allocate for its military expansion, though, but even in a couple of decades, it could not hope to approach, let alone defeat, the United States. But again, those fellows in Beijing aren't looking to win: they just want to make the fight over Taiwan so decreasingly worthwhile that we'll give up.

Meanwhile, we continue to trade with China. Free trade means that neither side is more dependent on the trade than the other is: free trade is symbiosis, not parasitism. China's communist leaders have embraced some market reforms as the key to prosperity, with the clear goal of modernizing China into a formidable superpower. Are they really selling us a rope to hang ourselves with, a twist on what Lenin mockingly said of capitalists? Or are they embracing a snowball (the free market) they formed themselves and will never hope to stop?

I don't think free trade, and the market reforms it encourages, are the answer to ending tyranny in China. I think that, like in the United States, it will take an armed revolt by the people. My own ideas on how to accomplish that, however, cannot be publicly shared.

Start the drilling

President Bush this morning, in his weekly radio address, said we need to get going on our "national energy strategy." Why should we need an energy strategy, let alone a national one? How about ending these insane government regulations and letting the free market work?

I think it's long been time to set up the wells and pump ANWR dry. A month ago, Jonah Goldberg made a strong case, including refuting the claim that drilling would disrupt the caribou herds. Ironically, he notes, the 2000 acres for drilling are fifty times smaller than Ted Turner's Montana ranch. Actually, Ted Turner's website lists his ranches and their sizes: his Flying D ranch alone is 113,600 acres, and his other three Montana ranches total over 38,000 acres.

I disagree with Goldberg's assessment that Turner and other rich environmentalists are "daft" about ANWR or other developments. I think these ultra-rich liberals are crazy like a fox: they're using their fortunes to deprive other people of land. Now, I am the first person to argue that it's their right to purchase huge tracts of private land in Montana, Argentina or wherever. It's Ted Turner's right to "protect" wetlands by purchasing them with his own money, if he outbid others who also offered to buy the land (for whatever reason, including development). However, rich environmentalists go far beyond that.

Ted Turner likes to use his fortune to influence public policy, because he can get the same result for pennies on the dollar. In a bidding war with oil companies, even Turner couldn't afford to buy those 2000 acres of ANWR. Even if he could, what would he do with it? Pet the caribou? So it's too great an opportunity cost for Turner to buy that part of ANWR. However, for a fraction of the purchase price, he and other rich environmentalists can and do donate to environmentalist groups. Those groups lobby against ANWR drilling, that lobby zoning commissions to enact absurd restrictions because of allegedly endangered frogs and garter snakes, that lobby to "protect" wetlands and "endangered species."

Those last two are grievous examples of how the federal government sidesteps the "eminent domain" clause of the Fifth Amendment. Your land may have been private property for years, long before any "wetlands" or "endangered species" were identified. And once the federal government declares "wetlands" on your property or finds some endangered insect, that it: you can't use that part of your property anymore. Government doesn't have to compensate you at all.

Actually, Ted Turner wasn't satisfied with donating to environmentalist groups. He started his own, the Turner Endangered Species Fund. When the website claims, "We work closely with state and federal agencies, universities, and private organizations," that means they lobby government bureaucrats, liberal professors who meet their agenda, and other "private" environmentalist groups. It still comes down to the fact that these rich environmentalists can afford nice parcels of land with nice houses, and their "pro-environment" efforts make it more expensive (if not flatly impossible) for the rest of us to have the same. Their "righteous" cause drives up the prices of real estate, petroleum, lumber, etc., which is no big deal to them. They can afford it -- most of us can't.