The Myth of the Stupid American

This is obviously just blatant communist propaganda.

Editor's Note - I am surrounded by morons!

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Save the Radio!!!

A ruling by an obscure regulatory agency threatens to silence Internet radio. After intense lobbying from the recording industry, the Copyright Royalty Board (CRB) is about to mandate exponential increases — by as much as 1,200 percent — in royalties paid every time webcasters stream a song online.

If these unfair rules are allowed to go into effect on May 15, many public, independent and smaller Internet radio stations will have to shut down. At stake is the diversity of musical choice that the Internet has come to represent for more than 50 million listeners.

Congress must stop this bad rule and replace it with a system that both pays artists and fosters more diverse Internet radio programming. We must rapidly mobilize support for new legislation that will rescue Internet radio before it’s too late.

Rescue Internet Radio: Take Action Today

Protect Artists and Webcasters
Though compensating artists is crucial, that goal must be balanced with the desire to maximize the number of places listeners can go to hear new music. Artists cannot benefit from music channels that no longer exist.

Both artists and webcasters must be protected with reasonable regulations. The CRB decision was crafted by lobbyists at the Recording Industry Association of America (RIAA) and favors only the largest record labels. It raises the pay-per-performance rate to a level that is not sustainable for upstart webcasters — wiping the Internet clean of diverse musical options, while taking away the only chances many artists have to be heard.

The CRB rushed these draconian rules into place despite tens of thousands of protest letters from listeners, musicians and webcasters. Their rules would force webcasters to make a back payment for all music played since 2006.

When the rule takes effect. the vast majority of webcasters could immediately go out of business. NPR, Pacifica and community radio stations would be crippled and forced to take down much of their online content.

Learn More about the CRB Decision

You Can Help Rescue Internet Radio
Independent musicians, webcasters and listeners are joining forces with members of Congress to reverse this bad decision. Reps. Jay Inslee (D-Wash.) and Donald Manzullo (R-Ill.) introduced the bipartisan Internet Radio Equality Act (H.R. 2060), which would reverse the CRB decision.

If not reversed by Congress, the CRB rule change will stifle the creative, independent and diverse range of musical choices now available online. Instead, listeners will be left with the same cookie-cutter formats that have turned commercial radio into a mind-numbing race to the bottom.

Industry-wide consolidation has destroyed musical diversity and shut out independent and local artists on broadcast radio. We can’t let the same thing happen on the Internet.

Inslee and Manzullo’s legislation would reverse the CRB ruling so that artists and musicians can thrive alongside a new generation of Internet radio webcasters.

Support the Internet Radio Equality Act
Read Inslee and Manzullo’s New Legislation

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How Biofuels Could Starve the Poor

Thanks to high oil prices and hefty subsidies, corn-based ethanol is now all the rage in the United States. But it takes so much supply to keep ethanol production going that the price of corn -- and those of other food staples -- is shooting up around the world. To stop this trend, and prevent even more people from going hungry, Washington must conserve more and diversify ethanol's production inputs.

By C. Ford Runge and Benjamin Senauer
From Foreign Affairs, May/June 2007

The Ethanol Bubble
In 1974, as the United States was reeling from the oil embargo imposed by the Organization of Petroleum Exporting Countries, Congress took the first of many legislative steps to promote ethanol made from corn as an alternative fuel. On April 18, 1977, amid mounting calls for energy independence, President Jimmy Carter donned his cardigan sweater and appeared on television to tell Americans that balancing energy demands with available domestic resources would be an effort the "moral equivalent of war." The gradual phaseout of lead in the 1970s and 1980s provided an additional boost to the fledgling ethanol industry. (Lead, a toxic substance, is a performance enhancer when added to gasoline, and it was partly replaced by ethanol.) A series of tax breaks and subsidies also helped. In spite of these measures, with each passing year the United States became more dependent on imported petroleum, and ethanol remained marginal at best.

Now, thanks to a combination of high oil prices and even more generous government subsidies, corn-based ethanol has become the rage. There were 110 ethanol refineries in operation in the United States at the end of 2006, according to the Renewable Fuels Association. Many were being expanded, and another 73 were under construction. When these projects are completed, by the end of 2008, the United States' ethanol production capacity will reach an estimated 11.4 billion gallons per year. In his latest State of the Union address, President George W. Bush called on the country to produce 35 billion gallons of renewable fuel a year by 2017, nearly five times the level currently mandated.

The push for ethanol and other biofuels has spawned an industry that depends on billions of dollars of taxpayer subsidies, and not only in the United States. In 2005, global ethanol production was 9.66 billion gallons, of which Brazil produced 45.2 percent (from sugar cane) and the United States 44.5 percent (from corn). Global production of biodiesel (most of it in Europe), made from oilseeds, was almost one billion gallons.

The industry's growth has meant that a larger and larger share of corn production is being used to feed the huge mills that produce ethanol. According to some estimates, ethanol plants will burn up to half of U.S. domestic corn supplies within a few years. Ethanol demand will bring 2007 inventories of corn to their lowest levels since 1995 (a drought year), even though 2006 yielded the third-largest corn crop on record. Iowa may soon become a net corn importer.

The enormous volume of corn required by the ethanol industry is sending shock waves through the food system. (The United States accounts for some 40 percent of the world's total corn production and over half of all corn exports.) In March 2007, corn futures rose to over $4.38 a bushel, the highest level in ten years. Wheat and rice prices have also surged to decade highs, because even as those grains are increasingly being used as substitutes for corn, farmers are planting more acres with corn and fewer acres with other crops.

This might sound like nirvana to corn producers, but it is hardly that for consumers, especially in poor developing countries, who will be hit with a double shock if both food prices and oil prices stay high. The World Bank has estimated that in 2001, 2.7 billion people in the world were living on the equivalent of less than $2 a day; to them, even marginal increases in the cost of staple grains could be devastating. Filling the 25-gallon tank of an SUV with pure ethanol requires over 450 pounds of corn -- which contains enough calories to feed one person for a year. By putting pressure on global supplies of edible crops, the surge in ethanol production will translate into higher prices for both processed and staple foods around the world. Biofuels have tied oil and food prices together in ways that could profoundly upset the relationships between food producers, consumers, and nations in the years ahead, with potentially devastating implications for both global poverty and food security.

The Oil and Biofuel Economy
In the United States and other large economies, the ethanol industry is artificially buoyed by government subsidies, minimum production levels, and tax credits. High oil prices over the past few years have made ethanol naturally competitive, but the U.S. government continues to heavily subsidize corn farmers and ethanol producers. Direct corn subsidies equaled $8.9 billion in 2005. Although these payments will fall in 2006 and 2007 because of high corn prices, they may soon be dwarfed by the panoply of tax credits, grants, and government loans included in energy legislation passed in 2005 and in a pending farm bill designed to support ethanol producers. The federal government already grants ethanol blenders a tax allowance of 51 cents per gallon of ethanol they make, and many states pay out additional subsidies.

Consumption of ethanol in the United States was expected to reach over 6 billion gallons in 2006. (Consumption of biodiesel was expected to be about 250 million gallons.) In 2005, the U.S. government mandated the use of 7.5 billion gallons of biofuels per year by 2012; in early 2007, 37 governors proposed raising that figure to 12 billion gallons by 2010; and last January, President Bush raised it further, to 35 billion gallons by 2017. Six billion gallons of ethanol are needed every year to replace the fuel additive known as MTBE, which is being phased out due to its polluting effects on ground water.

The European Commission is using legislative measures and directives to promote biodiesel, produced mainly in Europe, made from rapeseeds and sunflower seeds. In 2005, the European Union produced 890 million gallons of biodiesel, over 80 percent of the world's total. The EU's Common Agricultural Policy also promotes the production of ethanol from a combination of sugar beets and wheat with direct and indirect subsidies. Brussels aims to have 5.75 percent of motor fuel consumed in the European Union come from biofuels by 2010 and 10 percent by 2020.

Brazil, which currently produces approximately the same amount of ethanol as the United States, derives almost all of it from sugar cane. Like the United States, Brazil began its quest for alternative energy in the mid-1970s. The government has offered incentives, set technical standards, and invested in supporting technologies and market promotion. It has mandated that all diesel contain two percent biodiesel by 2008 and five percent biodiesel by 2013. It has also required that the auto industry produce engines that can use biofuels and has developed wide-ranging industrial and land-use strategies to promote them. Other countries are also jumping on the biofuel bandwagon. In Southeast Asia, vast areas of tropical forest are being cleared and burned to plant oil palms destined for conversion to biodiesel.

This trend has strong momentum. Despite a recent decline, many experts expect the price of crude oil to remain high in the long term. Demand for petroleum continues to increase faster than supplies, and new sources of oil are often expensive to exploit or located in politically risky areas. According to the U.S. Energy Information Administration's latest projections, global energy consumption will rise by 71 percent between 2003 and 2030, with demand from developing countries, notably China and India, surpassing that from members of the Organization for Economic Cooperation and Development by 2015. The result will be sustained upward pressure on oil prices, which will allow ethanol and biodiesel producers to pay much higher premiums for corn and oilseeds than was conceivable just a few years ago. The higher oil prices go, the higher ethanol prices can go while remaining competitive -- and the more ethanol producers can pay for corn. If oil reaches $80 per barrel, ethanol producers could afford to pay well over $5 per bushel for corn.

With the price of raw materials at such highs, the biofuel craze would place significant stress on other parts of the agricultural sector. In fact, it already does. In the United States, the growth of the biofuel industry has triggered increases not only in the prices of corn, oilseeds, and other grains but also in the prices of seemingly unrelated crops and products. The use of land to grow corn to feed the ethanol maw is reducing the acreage devoted to other crops. Food processors who use crops such as peas and sweet corn have been forced to pay higher prices to keep their supplies secure -- costs that will eventually be passed on to consumers. Rising feed prices are also hitting the livestock and poultry industries. According to Vernon Eidman, a professor emeritus of agribusiness management at the University of Minnesota, higher feed costs have caused returns to fall sharply, especially in the poultry and swine sectors. If returns continue to drop, production will decline, and the prices for chicken, turkey, pork, milk, and eggs will rise. A number of Iowa's pork producers could go out of business in the next few years as they are forced to compete with ethanol plants for corn supplies.

Proponents of corn-based ethanol argue that acreage and yields can be increased to satisfy the rising demand for ethanol. But U.S. corn yields have been rising by a little less than two percent annually over the last ten years, and even a doubling of those gains could not meet current demand. As more acres are planted with corn, land will have to be pulled from other crops or environmentally fragile areas, such as those protected by the Department of Agriculture's Conservation Reserve Program.

In addition to these fundamental forces, speculative pressures have created what might be called a "biofuel mania": prices are rising because many buyers think they will. Hedge funds are making huge bets on corn and the bull market unleashed by ethanol. The biofuel mania is commandeering grain stocks with a disregard for the obvious consequences. It seems to unite powerful forces, including motorists' enthusiasm for large, fuel-inefficient vehicles and guilt over the ecological consequences of petroleum-based fuels. But even as ethanol has created opportunities for huge profits for agribusiness, speculators, and some farmers, it has upset the traditional flows of commodities and the patterns of trade and consumption both inside and outside of the agricultural sector.

This craze will create a different problem if oil prices decline because of, say, a slowdown in the global economy. With oil at $30 a barrel, producing ethanol would no longer be profitable unless corn sold for less than $2 a bushel, and that would spell a return to the bad old days of low prices for U.S. farmers. Undercapitalized ethanol plants would be at risk, and farmer-owned cooperatives would be especially vulnerable. Calls for subsidies, mandates, and tax breaks would become even more shrill than they are now: there would be clamoring for a massive bailout of an overinvested industry. At that point, the major investments that have been made in biofuels would start to look like a failed gamble. On the other hand, if oil prices hover around $55-$60, ethanol producers could pay from $3.65 to $4.54 for a bushel of corn and manage to make a normal 12 percent profit.

Whatever happens in the oil market, the drive for energy independence, which has been the basic justification for huge investments in and subsidies for ethanol production, has already made the industry dependent on high oil prices.

Cornucopia
One root of the problem is that the biofuel industry has long been dominated not by market forces but by politics and the interests of a few large companies. Corn has become the prime raw material even though biofuels could be made efficiently from a variety of other sources, such as grasses and wood chips, if the government funded the necessary research and development. But in the United States, at least, corn and soybeans have been used as primary inputs for many years thanks in large part to the lobbying efforts of corn and soybean growers and Archer Daniels Midland Company (ADM), the biggest ethanol producer in the U.S. market.

Since the late 1960s, ADM positioned itself as the "supermarket to the world" and aimed to create value from bulk commodities by transforming them into processed products that command heftier prices. In the 1970s, ADM started making ethanol and other products resulting from the wet-milling of corn, such as high fructose corn syrup. It quickly grew from a minor player in the feed market to a global powerhouse. By 1980, ADM's ethanol production had reached 175 million gallons per year, and high fructose corn syrup had become a ubiquitous sweetening agent in processed foods. In 2006, ADM was the largest producer of ethanol in the United States: it made more than 1.07 billion gallons, over four times more than its nearest rival, VeraSun Energy. In early 2006, it announced plans to increase its capital investment in ethanol from $700 million to $1.2 billion in 2008 and increase production by 47 percent, or close to 500 million gallons, by 2009.

ADM owes much of its growth to political connections, especially to key legislators who can earmark special subsidies for its products. Vice President Hubert Humphrey advanced many such measures when he served as a senator from Minnesota. Senator Bob Dole (R-Kans.) advocated tirelessly for the company during his long career. As the conservative critic James Bovard noted over a decade ago, nearly half of ADM's profits have come from products that the U.S. government has either subsidized or protected.

Partly as a result of such government support, ethanol (and to a lesser extent biodiesel) is now a major fixture of the United States' agricultural and energy sectors. In addition to the federal government's 51-cents-per-gallon tax credit for ethanol, smaller producers get a 10-cents-per-gallon tax reduction on the first 15 million gallons they produce. There is also the "renewable fuel standard," a mandatory level of nonfossil fuel to be used in motor vehicles, which has set off a political bidding war. Despite already high government subsidies, Congress is considering lavishing more money on biofuels. Legislation related to the 2007 farm bill introduced by Representative Ron Kind (D-Wis.) calls for raising loan guarantees for ethanol producers from $200 million to $2 billion. Advocates of corn-based ethanol have rationalized subsidies by pointing out that greater ethanol demand pushes up corn prices and brings down subsidies to corn growers.

The ethanol industry has also become a theater of protectionism in U.S. trade policy. Unlike oil imports, which come into the country duty-free, most ethanol currently imported into the United States carries a 54-cents-per-gallon tariff, partly because cheaper ethanol from countries such as Brazil threatens U.S. producers. (Brazilian sugar cane can be converted to ethanol more efficiently than can U.S. corn.) The Caribbean Basin Initiative could undermine this protection: Brazilian ethanol can already be shipped duty-free to CBI countries, such as Costa Rica, El Salvador, or Jamaica, and the agreement allows it to go duty-free from there to the United States. But ethanol supporters in Congress are pushing for additional legislation to limit those imports. Such government measures shield the industry from competition despite the damaging repercussions for consumers.

Starving the Hungry
Biofuels may have even more devastating effects in the rest of the world, especially on the prices of basic foods. If oil prices remain high -- which is likely -- the people most vulnerable to the price hikes brought on by the biofuel boom will be those in countries that both suffer food deficits and import petroleum. The risk extends to a large part of the developing world: in 2005, according to the UN Food and Agriculture Organization, most of the 82 low-income countries with food deficits were also net oil importers.

Even major oil exporters that use their petrodollars to purchase food imports, such as Mexico, cannot escape the consequences of the hikes in food prices. In late 2006, the price of tortilla flour in Mexico, which gets 80 percent of its corn imports from the United States, doubled thanks partly to a rise in U.S. corn prices from $2.80 to $4.20 a bushel over the previous several months. (Prices rose even though tortillas are made mainly from Mexican-grown white corn because industrial users of the imported yellow corn, which is used for animal feed and processed foods, started buying the cheaper white variety.) The price surge was exacerbated by speculation and hoarding. With about half of Mexico's 107 million people living in poverty and relying on tortillas as a main source of calories, the public outcry was fierce. In January 2007, Mexico's new president, Felipe Calderón, was forced to cap the prices of corn products.

The International Food Policy Research Institute, in Washington, D.C., has produced sobering estimates of the potential global impact of the rising demand for biofuels. Mark Rosegrant, an IFPRI division director, and his colleagues project that given continued high oil prices, the rapid increase in global biofuel production will push global corn prices up by 20 percent by 2010 and 41 percent by 2020. The prices of oilseeds, including soybeans, rapeseeds, and sunflower seeds, are projected to rise by 26 percent by 2010 and 76 percent by 2020, and wheat prices by 11 percent by 2010 and 30 percent by 2020. In the poorest parts of sub-Saharan Africa, Asia, and Latin America, where cassava is a staple, its price is expected to increase by 33 percent by 2010 and 135 percent by 2020. The projected price increases may be mitigated if crop yields increase substantially or ethanol production based on other raw materials (such as trees and grasses) becomes commercially viable. But unless biofuel policies change significantly, neither development is likely.

The production of cassava-based ethanol may pose an especially grave threat to the food security of the world's poor. Cassava, a tropical potato-like tuber also known as manioc, provides one-third of the caloric needs of the population in sub-Saharan Africa and is the primary staple for over 200 million of Africa's poorest people. In many tropical countries, it is the food people turn to when they cannot afford anything else. It also serves as an important reserve when other crops fail because it can grow in poor soils and dry conditions and can be left in the ground to be harvested as needed.

Thanks to its high-starch content, cassava is also an excellent source of ethanol. As the technology for converting it to fuel improves, many countries -- including China, Nigeria, and Thailand -- are considering using more of the crop to that end. If peasant farmers in developing countries could become suppliers for the emerging industry, they would benefit from the increased income. But the history of industrial demand for agricultural crops in these countries suggests that large producers will be the main beneficiaries. The likely result of a boom in cassava-based ethanol production is that an increasing number of poor people will struggle even more to feed themselves.

Participants in the 1996 World Food Summit set out to cut the number of chronically hungry people in the world -- people who do not eat enough calories regularly to be healthy and active -- from 823 million in 1990 to about 400 million by 2015. The Millennium Development Goals established by the United Nations in 2000 vowed to halve the proportion of the world's chronically underfed population from 16 percent in 1990 to eight percent in 2015. Realistically, however, resorting to biofuels is likely to exacerbate world hunger. Several studies by economists at the World Bank and elsewhere suggest that caloric consumption among the world's poor declines by about half of one percent whenever the average prices of all major food staples increase by one percent. When one staple becomes more expensive, people try to replace it with a cheaper one, but if the prices of nearly all staples go up, they are left with no alternative.

In a study of global food security we conducted in 2003, we projected that given the rates of economic and population growth, the number of hungry people throughout the world would decline by 23 percent, to about 625 million, by 2025, so long as agricultural productivity improved enough to keep the relative price of food constant. But if, all other things being equal, the prices of staple foods increased because of demand for biofuels, as the IFPRI projections suggest they will, the number of food-insecure people in the world would rise by over 16 million for every percentage increase in the real prices of staple foods. That means that 1.2 billion people could be chronically hungry by 2025 -- 600 million more than previously predicted.

The world's poorest people already spend 50 to 80 percent of their total household income on food. For the many among them who are landless laborers or rural subsistence farmers, large increases in the prices of staple foods will mean malnutrition and hunger. Some of them will tumble over the edge of subsistence into outright starvation, and many more will die from a multitude of hunger-related diseases.

The Grass is Greener
And for what? Limited environmental benefits at best. Although it is important to think of ways to develop renewable energy, one should also carefully examine the eager claims that biofuels are "green." Ethanol and biodiesel are often viewed as environmentally friendly because they are plant-based rather than petroleum-based. In fact, even if the entire corn crop in the United States were used to make ethanol, that fuel would replace only 12 percent of current U.S. gasoline use. Thinking of ethanol as a green alternative to fossil fuels reinforces the chimera of energy independence and of decoupling the interests of the United States from an increasingly troubled Middle East.

Should corn and soybeans be used as fuel crops at all? Soybeans and especially corn are row crops that contribute to soil erosion and water pollution and require large amounts of fertilizer, pesticides, and fuel to grow, harvest, and dry. They are the major cause of nitrogen runoff -- the harmful leakage of nitrogen from fields when it rains -- of the type that has created the so-called dead zone in the Gulf of Mexico, an ocean area the size of New Jersey that has so little oxygen it can barely support life. In the United States, corn and soybeans are typically planted in rotation, because soybeans add nitrogen to the soil, which corn needs to grow. But as corn increasingly displaces soybeans as a main source of ethanol, it will be cropped continuously, which will require major increases in nitrogen fertilizer and aggravate the nitrogen runoff problem.

Nor is corn-based ethanol very fuel efficient. Debates over the "net energy balance" of biofuels and gasoline -- the ratio between the energy they produce and the energy needed to produce them -- have raged for decades. For now, corn-based ethanol appears to be favored over gasoline, and biodiesel over petroleum diesel -- but not by much. Scientists at the Argonne National Laboratory and the National Renewable Energy Laboratory have calculated that the net energy ratio of gasoline is 0.81, a result that implies an input larger than the output. Corn-based ethanol has a ratio that ranges between 1.25 and 1.35, which is better than breaking even. Petroleum diesel has an energy ratio of 0.83, compared with that of biodiesel made from soybean oil, which ranges from 1.93 to 3.21. (Biodiesel produced from other fats and oils, such as restaurant grease, may be more energy efficient.)

Similar results emerge when biofuels are compared with gasoline using other indices of environmental impact, such as greenhouse gas emissions. The full cycle of the production and use of corn-based ethanol releases less greenhouse gases than does that of gasoline, but only by 12 to 26 percent. The production and use of biodiesel emits 41 to 78 percent less such gases than do the production and use of petroleum-based diesel fuels.

Another point of comparison is greenhouse gas emissions per mile driven, which takes account of relative fuel efficiency. Using gasoline blends with 10 percent corn-based ethanol instead of pure gasoline lowers emissions by 2 percent. If the blend is 85 percent ethanol (which only flexible-fuel vehicles can run on), greenhouse gas emissions fall further: by 23 percent if the ethanol is corn-based and by 64 percent if it is cellulose-based. Likewise, diesel containing 2 percent biodiesel emits 1.6 percent less greenhouse gases than does petroleum diesel, whereas blends with 20 percent biodiesel emit 16 percent less, and pure biodiesel (also for use only in special vehicles) emits 78 percent less. On the other hand, biodiesel can increase emissions of nitrogen oxide, which contributes to air pollution. In short, the "green" virtues of ethanol and biodiesel are modest when these fuels are made from corn and soybeans, which are energy-intensive, highly polluting row crops.

The benefits of biofuels are greater when plants other than corn or oils from sources other than soybeans are used. Ethanol made entirely from cellulose (which is found in trees, grasses, and other plants) has an energy ratio between 5 and 6 and emits 82 to 85 percent less greenhouse gases than does gasoline. As corn grows scarcer and more expensive, many are betting that the ethanol industry will increasingly turn to grasses, trees, and residues from field crops, such as wheat and rice straw and cornstalks. Grasses and trees can be grown on land poorly suited to food crops or in climates hostile to corn and soybeans. Recent breakthroughs in enzyme and gasification technologies have made it easier to break down cellulose in woody plants and straw. Field experiments suggest that grassland perennials could become a promising source of biofuel in the future.

For now, however, the costs of harvesting, transporting, and converting such plant matters are high, which means that cellulose-based ethanol is not yet commercially viable when compared with the economies of scale of current corn-based production. One ethanol-plant manager in the Midwest has calculated that fueling an ethanol plant with switchgrass, a much-discussed alternative, would require delivering a semitrailer truckload of the grass every six minutes, 24 hours a day. The logistical difficulties and the costs of converting cellulose into fuel, combined with the subsidies and politics currently favoring the use of corn and soybeans, make it unrealistic to expect cellulose-based ethanol to become a solution within the next decade. Until it is, relying more on sugar cane to produce ethanol in tropical countries would be more efficient than using corn and would not involve using a staple food.

The future can be brighter if the right steps are taken now. Limiting U.S. dependence on fossil fuels requires a comprehensive energy-conservation program. Rather than promoting more mandates, tax breaks, and subsidies for biofuels, the U.S. government should make a major commitment to substantially increasing energy efficiency in vehicles, homes, and factories; promoting alternative sources of energy, such as solar and wind power; and investing in research to improve agricultural productivity and raise the efficiency of fuels derived from cellulose. Washington's fixation on corn-based ethanol has distorted the national agenda and diverted its attention from developing a broad and balanced strategy. In March, the U.S. Energy Department announced that it would invest up to $385 million in six biorefineries designed to convert cellulose into ethanol. That is a promising step in the right direction.

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It's Jihad, Charley Brown

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Corn Ethanol: Laundering Fossil Fuels, Bilking Taxpayers, Damaging the Environment

By Tad W. Patzek
March 16, 2006

Corn ethanol is the fuel du jour. It’s domestic. It’s not oil. Ethanol’s going to help promote “energy independence.” Magazines trumpet it as the motor vehicle fuel that comes from the “Midwest rather than the Mideast.” But is it really?

There is plenty of corn, to be sure. American farmers grow about 42% of the world’s output. It’s the single largest crop on earth (the sugarcane crop is larger, but it contains more water). In 2004, U.S. corn output could have fed the entire population of China. However, a mere 2% of U.S. corn goes directly to feed people; another 19% goes into processed foods (e.g., the high-fructose corn syrup additive in almost every processed food product in our supermarkets). The majority of U.S. corn goes to feed livestock, even though corn makes cattle sick and produces antibiotic-resistant bacteria.

These uses still leave mountains of excess corn stashed all over Midwest fields, waiting to rot or be processed into ethanol.

Interestingly, the National Corn Growers Association has been asking every corn grower to lobby Congress to increase domestic production of fossil fuels by opening the Arctic National Wildlife Reserve and the Outer Continental Shelf for exploration and production, and by drilling everywhere on U.S. territory for oil and gas. Why? Because the U.S. agricultural industry depends heavily on natural gas, coal, and petroleum for its existence. Nitrogen derivatives and other fertilizers drive the high yields achieved by U.S. farmers. Corn farming devours about 40% of these fertilizers. Nitrogen fertilizers, accounting for roughly half the total energy input per acre of harvested corn, are made from natural gas that is badly needed for other uses, such as home heating, cooking, and power generation. Today, the U.S. imports 15% of its natural gas and 60% of its oil. Furthermore, it is the world’s largest importer of nitrogen fertilizers, mostly from Trinidad, Tobago, Canada, Russia, and Saudi Arabia.

The farm sector also depends significantly on natural gas and petroleum for transportation, refrigeration, irrigation, crop drying, heating farm buildings and homes, and pesticides and herbicides.

Accounting for the direct costs, roughly 40% of the calorific value of industrial corn grain comes directly from the use of fossil fuels, mostly natural gas, but also coal and petroleum. This grain could be burned in efficient corn stoves to provide home heating for the Midwest, or it could be ground, fermented, and distilled to produce ethanol.

Because corn grain is a nascent, or “baby” fossil fuel, it takes a lot of energy to transform it into ethanol. For example, the best performance guarantee by ICM, Inc. of Kansas, states that a dry-mill ethanol plant will spend an incredible 58% of ethanol’s calorific value on direct distillation and co-product processing costs. If corn or ethanol must be moved from the Midwest to either coast, there is an additional transportation cost of up to 11% of ethanol’s calorific value. An average U.S. refinery uses less than 12% of gasoline or diesel fuel’s calorific value to produce and distribute them. Therefore, it takes from roughly 5 to 12 times more fossil energy to refine corn grain into ethanol than it does to convert crude oil into gasoline or diesel fuel.

Ethanol refineries also use huge amounts of water. An average dry-mill plant needs about 750,000 gallons of processing water per day. Some of this water is recycled, but the rest must be obtained from a local water supply. Clean drinking water is becoming scarce in much of the Midwest, especially across its western area. An average ethanol refinery emits dozens of dangerous chemicals into the air, such as toluene, ethylbenzene, acetone, formaldehyde, acetaldehyde, acrolein, benzene, styrene, and furfural. In line with the current schizophrenic attitude towards ethanol production, the U.S. Environmental Protection Agency has just proposed allowing ethanol refineries to more than double their legal air emissions, from 100 to 250 tons per year.

There are serious questions about the sustainability of corn production. Iowa has lost about half of its 14 inches of top soil to erosion. Fertilizer runoff and farm chemicals have polluted much of the Mississippi River basin, and that runoff flows all the way into the Gulf of Mexico. Over the last 20 years, the runoff from Midwestern corn and wheat fields into the Gulf of Mexico has totaled between 2,000 and 10,000 tons of nitrate per day. Over the next 70 years, thanks to agribusiness and industrial agriculture, the most productive grassland ecosystem on earth may be completely destroyed, neutered by overproduction. As they continue to be degraded, Midwestern fields will have to become larger and be subsidized even more with fossil energy.

Industrial crop production (corn, wheat, soybeans, etc.) causes environmental damage and loss of human health valued at between $5.7 and $16.9 billion per year. The annual hidden subsidies to agribusiness from environmental resources are estimated at $25 to $100 per hectare.

If you compares a corn field with a prairie, the conclusion is that the prairie runs on sunlight, while the corn field runs on fossil fuels. The most eloquent testimony to this effect was given by Theresa Schmalshof of the National Corn Growers Association, before the House Subcommittee on Energy and Mineral Resources in Washington, D.C. on May 19, 2005. She said that corn farmers will “face huge obstacles if our nation cannot come to grips with its desire to have limitless resources, like natural gas, for production and not realize that these resources have to come from somewhere. I am sure the members of the subcommittee as individuals know this well. However, Congress seems unaware of this fact. We can produce corn, but we need you to produce the kind of policy that enables us to use the needed resources to do so.”

Thus corn agriculture is a scheme to launder fossil fuels into an industrial raw material, while damaging the environment of roughly half the continental U.S. land mass, and poisoning most rivers, streams, and coastal waters.

For more on what Patzek has to say, click here.

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Dollar Myths

By Axel Merk
April 26, 2007

Without shying away from controversy, we do away with a number of myths of why the dollar ought to move up or down.

Myth I: The dollar is safe because the U.S. has ample assets
Some say the current account deficit that requires foreigners to arrange for over $3 billion of capital inflows every business day just to keep the dollar from falling does not matter. These pundits say a deficit of 6.5% of Gross Domestic Product (GDP) is sustainable because the deficit is only about 1% of all private assets held in the U.S.; as a result, deficits could be carried a long, long time.

This argument is one about the dollar going to zero, an extreme case of the dollar losing relative to other currencies. However, the current account deficit and its affect on the dollar is about cash flow: by putting it in the context of a GDP is reasonable, as GDP is a cash flow measure of production. Comparing it to private savings is mixing apples with oranges.

Myth II: The dollar is doomed because of our large budget deficit
Just as dollar optimists are wrong to say the dollar is safe because of our tremendous wealth, dollar pessimists are mistaken to put too much emphasis on the budget deficit. By issuing debt, the direct impact of the budget deficit can be mitigated to the burden of interest payments. Of course, as interest payments become excessively large, they will weigh on the dollar eventually. However, the linkage to the dollar is indirect. While it is correct that large budget deficits structurally weaken the U.S. in the long run, it is not appropriate to link short-term dollar movements to the budget deficit.

Myth III: A lower dollar will cure the trade deficit
All too often we hear how much more competitive we would be if we only allowed the dollar to fall. While a weaker dollar may be a short-term boost to earnings and make exports a tad more competitive, it will not bring back industries that have been outsourced. It is most unlikely that the U.S. will thrive on exporting sneakers to China, no matter how low the dollar will fall.

What a weaker dollar may do is provide temporary relief. But unless the U.S. turns into a society of savers and investors, a weaker dollar will only be a pause to an even weaker dollar as imbalances are built up yet again.

Myth IV: A lower trade deficit will save the dollar
Odds are that the current account deficit may be close to its peak. However, that does not mean the dollar is out of the woods: if an abatement in the rate at which the current account deficit deepens were due to a sustained improvement in savings and investments, it may have long term positive implications for the dollar. But it looks like the driver behind any ‘improvement’ (if one can talk of such as the deficit continues to widen) will be due to a drop in domestic consumption due to a slowing economy. Rather than being good news for the dollar, this discourages foreign investors to invest in the U.S. American CEOs focus their investments abroad, so why should foreigners invest in the U.S.?

As the economy slows and consumers can no longer extract equity from their homes, the savings rate ought to go up. Famous for having dipped into negative territory, consumers have to pare back their spending as access to easy money dries up.

Myth V: A weak economy causes a currency to falter
We agree that the U.S. economy is heavily dependent on growth to keep the dollar stable. But it is a U.S. specific problem: in the current environment, it may not apply to the European Union. The key difference is that, in recent years, the European Union has focused on structural reform rather than growth; as a result, it does not have the severe current account deficit the U.S. has. Should the world economy slow down, many markets may suffer, but the euro might still do comparatively well. Europe has plenty of issues, but as far as the euro is concerned, the region is in a very strong position.

In contrast, a reduction of foreign money inflows into the U.S. is the single biggest threat to the greenback. As a result, the dollar has been reacting negatively to any news signaling a slowdown of U.S. consumer spending. And as consumer spending is closely linked to the fate of the housing market, negative data on housing may reflect negatively on the dollar. As the housing market is not very liquid, any adjustment process is likely to be long and grinding.

Myth VI: China is the problem
In our assessment, China is the most responsible player in Asia. Unlike China, we believe other Asian countries, including Japan, are willing to risk a destruction of their currencies in order to continue to export to American consumers. The Chinese are taking their imbalances very seriously and are working hard at addressing many issues facing a nation governing 1.4 billion people. Having invited Western investment banks to invest billions in their local banks has provided an encouragement for reform from within.

If there is one thing that spooks the currency markets more than a slowdown in U.S. real estate, it is the flaring up of protectionist talking Congress. When presidential candidate Hillary Clinton recently expressed concern about the Chinese buying up the majority of U.S. debt, the dollar fell sharply. If protectionist measures increase, foreigners will have fewer incentives to purchase U.S. dollar denominated assets, providing pressure on both the dollar and interest rates.

Interestingly, nobody seemed to focus on the fact that there is an unconventional solution to foreigners holding too much of our debt: live within your means and do not issue debt. Such an old fashioned concept would indeed strengthen the dollar. Unfortunately, none of the presidential candidates at either side of the aisle seem to have heard of this notion.

Myth VII: Higher interest rates help the dollar
It seems that ever since academics developed a theory of how interest rate differentials move currencies, the theory has not worked. Yet just about every textbook continues to teach it. Aside from the fact that expectations on future interest rates and inflation are more relevant than actual interest rates, there are simply too many factors influencing currencies to be able to focus in on interest rates. Why do some low yielding currencies, such as the Swiss franc, perform reasonably well, whereas many developing countries have weak currencies despite high interest rates?

A good year ago, the U.S. joined the ranks of developing nations in paying more in interest to overseas creditors than it receives in interest from its own investments. As a result, higher U.S. interest rates mean higher payments abroad, further weakening the foundations of the U.S. dollar.

There are many more myths about the dollar, but the selection above may provide some food for thought. Investors interested in taking some chips off the table to prepare for potential turbulence in the financial markets may want to evaluate whether gold or a basket of hard currencies are suitable ways to add diversification to their portfolios. We manage the Merk Hard Currency Fund, a fund that seeks to profit from a potential decline in the dollar. To learn more about the Fund, or to subscribe to our free newsletter, please visit www.merkfund.com.

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Hamas Rocket Firings End Calm on Israel-Gaza Border

From CNN
April 24, 2007

• Hamas militants fired a barrage of rockets and mortar shells toward Israel
• Group says it fired 30 rockets and 61 mortar shells at Israel
• The action ends five months of relative calm along the Israel-Gaza border

For the first time in five months, the armed wing of Hamas has fired mortars and rockets into Israel from Gaza, breaking an unofficial truce and a period of relative calm along the border.

Hamas' militant wing, Izzedine al-Qassam Brigades, claimed responsibility for the attack in a statement posted on its Web site. The group's spokesman, Abu Obeida, promised "a cruel and painful response to any aggression in the Strip [Gaza]."

Obeida added: "We want to remind Zionist forces that we still hold Gilad Shalit and we are still prepared to kidnap others."

Cpl. Gilad Shalit was kidnapped from an Israeli border post near Gaza June 25. Two other Israeli soldiers were killed in the raid. Hamas and other Palestinian militant groups took responsibility for the attack and his abduction.

Israeli defense sources told CNN they believed Tuesday's attack may have been part of a larger operation to abduct another soldier. But the Israel Defense Forces made no mention of an attempted kidnapping in its official statement, saying, "The Hamas terrorist organization attempted to execute yet another terrorist attack by means of a large-scale operation."

It added, "IDF forces operated in an immediate and determined manner, thus thwarting the planned terrorist attack."

It's unclear whether the Hamas attack marks the end of a partial cease-fire between militants operating in Gaza and the Israeli military that began in November. "There was a temporary conditional truce, and the Zionist enemy violated it and therefore it has been essentially over for some time," the Hamas militant spokesman said.

In its statement, the IDF accused Hamas of "cynically using the cease-fire" to continue to plan terrorist attacks against Israel.

Palestinian Prime Minister Ismail Haniyeh, a member of Hamas, said, "We made great efforts at keeping the truce and there was a positive Palestinian position, but unfortunately this position was met by expanding [Israeli] aggression and escalating it against the Palestinian people," according to The Associated Press.

On its Web site, Izzedine al-Qassam Brigades said it fired 30 Qassam rockets and 61 mortar shells early Tuesday in response to recent Israeli operations in Gaza and the West Bank.

An Israeli military spokesman told CNN that only eight mortar rounds had been fired and six rockets, two of which landed in Israel. No injuries were reported.

In response, Israeli helicopters fired on suspected missile launching locations in southern Gaza, the spokesman said.

In his statement on the group's Web site, Obeida called for Palestinian factions to be ready for a new confrontation with Israeli forces after Israeli military operations in the West Bank left nine Palestinians dead over the weekend.

Since November, a partial cease-fire has been in place between the Israeli military and militants operating in Gaza.

Hamas says it has refrained from missile attacks during that time, but some 200 missiles have been launched into Israel by other militant groups, and in recent weeks Israel has commenced air strikes against what they say were suspected militant targets.

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Building A Green Grid

By Christian Parenti

Terry Hudgens is a classic oilman: thick drawl, square jaw, engineering degree from the University of Houston, twenty-five years with Texaco in the oil patch, which ended with his running the company's $5 billion-a-year natural gas business.

These days Hudgens lives in Portland, Oregon, epicenter of organic coffee and politically correct unshavenness. To hear him talk, you could think he is wearing Birkenstocks: Instead of the good-old-boy discourse of the petroleum industry, Hudgens now speaks about "the power of the wind" and the future of clean energy.

But this is not the story of a midlife crisis, a businessman gone groovy at age 55. Instead, Hudgens has brought his hard-nosed oil-patch logic to the frontiers of renewable energy. He is now CEO of PPM Energy, a subsidiary of ScottishPower and America's second-largest and possibly fastest-growing wind power company. He got into wind for the same reason he got into oil--it's a good way to make money.

"This is wind power on a grand scale," says Hudgens. He is talking about projects like Maple Ridge Wind Farm, the biggest power plant of any sort built in New York during 2006. The farm's 195 huge white wind turbines, with blades as long as jet wings perched atop tall steel towers, are spread across miles of ridgeline in Tug Hill, New York, catching steady airflow off the Great Lakes. On a good day this farm will produce 321 megawatts of power, as much as a midsize coal- or gas-fired plant.

The green future wasn't supposed to look like this. In the environmental imagination of the 1960s and '70s, the ecological ideal was something quaint, a village where every house had solar panels, a windmill and a vegetable garden where the lawn once soaked up pesticides. E.F. Schumacher told us that "small is beautiful," and to this day many environmentalists see large centralized systems as inherently bad.

But the speed and magnitude of climate change dictate that we begin the transformation away from carbon-based fuels now--and on a very large scale. Only a few decades remain if we are to avoid cataclysmic runaway global warming and its attendant crises. Realistically, a green transformation will have to pivot on electricity and the existing electrical grid. At one end of the grid, zero-emission vehicles can be plugged in, while at the other end zero-emission power plants--most likely owned by large for-profit companies--can feed the system electricity.

Large utility-scale renewable energy offers important economies of scale. In Denmark industrial-scale wind farms already supply 20 percent of the country's power; Germany and other European countries are close behind. The American Council on Renewable Energy estimates that with "consistent public policy" and enough investment, 70 percent of America's energy consumption could be generated from renewable, carbon-free sources by 2025. Another government-supported study estimates that with radical efficiency efforts, renewable energy could supply all US electrical needs by 2030.

So, how have renewable utilities developed thus far? Who are the key players? How do they relate to the rest of the economy? What technologies work best? And what are the real economics of creating a green power grid?

The story of wind, solar, geothermal and biomass energy development in the United States is an appalling tale of missed opportunities and willful negligence. The government has refused to use subsidies to jump-start green power, but it lavishes public money on fossil fuels. To the extent that the transition to utility-scale green power has begun--with the emergence of companies like Hudgens's PPM and huge wind farms under construction in California, Texas and the upper Midwest--it is no thanks to government initiative.

Petroleum and coal companies received more than $33 billion in direct subsidies between 1992 and 2002. The 2005 energy bill gave the oil and gas industries $6 billion in subsidies while filthy coal will get about $10 billion over the next five years. This public largesse takes the form of everything from R&D support and loan guarantees to accelerated capital depreciation schedules in the tax code.

Meanwhile, renewables have struggled to insure even a basic production tax credit, or PTC, of 1.9 cents per kilowatt hour. This modest incentive was designed to create a stable income for firms willing to risk breaking into the utilities market with new technology. It's important to stress that this tax credit does not reward construction for construction's sake; it rewards only the actual delivery of energy to the grid. But this rational little subsidy, initiated in 1992, was never enacted for more than one year at a time, and it was routinely allowed to expire. Last year the PTC was finally renewed for two consecutive years; it will likely be locked in for five or ten years. That has triggered a huge wave of private investment in green utilities.

Of all the renewables, wind is among the most profitable. Although it supplies only 1 percent of total US electricity, it is the fastest-growing of the renewables: Installed wind capacity jumped by almost a third last year, to 11,603 megawatts. That is about equal to ten major nuke plants or twenty typical coal plants.

"This is heavy industry," says Mike Jacobs of the American Wind Energy Association. "Building windmills is leading to a lot of investment and job creation in traditional industrial areas." Demand for steel towers, gearboxes and those jet-wing-sized blades is creating positive links to some economically battered regions. Last year Gamesa, a large Spanish turbine manufacturer, opened a factory in an abandoned US Steel plant in Pennsylvania. The world's largest wind turbine maker, the Denmark-based Vestas, is opening a plant in Colorado. In North Dakota, sometimes called the Saudi Arabia of wind, DMI industries is emerging as the king of windmill tower construction.

Meanwhile, farmers from Texas to the Dakotas to New York are making money by "double cropping"--that is, renting space in their fields to wind-harvesting utility companies. There is now so much investment flowing into wind--tens of billions of dollars looking for projects--that turbine producers cannot keep up with demand. Many are sold out through 2008.

Thanks to twenty years of bad US energy policy, the leading wind turbine producers and wind farm operators are not American: Suzlon Energy is based in India, Gamesa in Spain, Vestas in Denmark, Mitsubishi in Japan and Siemens in Germany. GE is the only large US firm with substantial investments in wind turbine production.

"Wind is getting much more efficient," says Hudgens. Wind also rates high in terms of its so-called energy return on investment: that is, the amount of energy that goes into producing the windmills that then produce energy. "The average new windmill going online today produces about three times as much power as the ones built just seven years ago," Hudgens explains. And as the turbines get bigger and more efficient, they move more slowly and do less damage to migrating birds and bats--though the environmental threat of windmills has always been exaggerated by wind's opponents, usually rich rural landlords who find wind technology unsightly.

Solar is another promising technology with a variety of applications. Photovoltaic panels on large commercial roofs are becoming popular in Sunbelt states and even in northern states. These "rooftop" systems are highly efficient--no energy is lost in transmission--but such systems typically can't supply more than 15 percent of a client's energy needs.

Utility-scale photovoltaic farms also exist, but these are rarely bigger than sixty megawatts. However, the largest in the United States is 760 megawatts, owned by Tucson Electric Power Company, and is set to more than double in size by 2009. But photovoltaic panels are expensive; pure silicon crystals, from which they are made, are in increasingly short supply.

A simpler technology is concentrating solar power (CSP), or solar thermal, in which fields of mirrors concentrate the sun's heat onto a central tower to boil mineral oil, the steam from which then spins a turbine to create electricity. Several CSP plants generate about sixty megawatts each, though Southern California Edison has a series of linked plants in the Mojave Desert that generate 354 megawatts.

Geothermal--hot water spewing out of the ground--produces only about 2,800 megawatts nationwide but could produce fifty times that with proper investment. However, "we've been nickel-and-diming renewable development," says Karl Gawell of the Geothermal Energy Association. With surprising equanimity, he adds, "The federal government currently spends no money on geothermal R&D."

Landfill gas, the noxious methane seeping from the underground mountains of consumer glories past, already produces a surprising amount of energy, as do various types of biomass such as "digesting" pig waste, cow manure and fermented grass clippings.

But the most productive of all the renewables is the oldest. Hydropower, mostly owned by major utility firms, produces about 9 percent of all US electricity. When electrification began in the 1880s, hydro was king; by 1920 water produced 40 percent of American electricity. During the big government, big vision days of the New Deal, hydro construction boomed: Think Hoover Dam, Grand Coulee Dam, Tennessee Valley Authority, etc.

Dams are much disparaged for killing fish--or, in fact, killing whole rivers. But state-of-the-art hydro can avoid much of that. And if climate change is allowed to run out of control, we can kiss the riparian habitat goodbye anyway. "Currently only 3 percent of existing US dams are harnessed for power," says Jeff Leahey of the National Hydropower Association. A crash program of carbon emissions reduction would no doubt involve retrofitting many existing dams with fish-friendly power turbines. But when I ask Leahey about such plans and whether the hydropower industry is lobbying for them, he is rather dispassionate. "Lately, the direction has really been away from hydro."

Cutting-edge hydropower, often called kinetic hydro, doesn't even require dams. In New York City's murky East River, a new firm called Verdant Power has installed a small field of underwater turbines that generate ten megawatts of electricity from the might of the river's tides (in fact, the East River isn't a river at all, but a tidal strait). That's small-scale, but advocates of kinetic hydro say it could be a useful part of a larger solution: New York State could produce 600 megawatts of power this way--that's half of what a typical nuke plant produces.

A major problem facing green utilities is the battered condition of our electrical grid. Two decades of radical deregulation have allowed utility companies to cut back on maintenance. Electricity demand has increased by about 25 percent since 1990, but the rate of investment in transmission facilities has decreased by about 30 percent. Companies find it more profitable to simply overload the old grid. The result is congestion, which means rising inefficiency: In 1970 only about 5 percent of electricity was lost during transmission; now the rate is almost double that. It also means large blackouts like the one that hit the Northeast and Midwest in August 2003. A green future--with plug-in vehicles at one end of the wires and renewable energy suppliers at the other end--will lean on the grid even harder.

"Five years out, the electrical grid, the infrastructure, is going to be a serious problem," says Mike Jacobs. "The last time a huge round of transmission lines was built was in the 1970s, in response to big blackouts in the 1960s." This impending crisis of the electrical infrastructure will require robust government action--tough new regulation to force reinvestment rather than profit-taking.

In canvassing the leaders of the green power industry, I was repeatedly struck by their timidity: Their discourse is polite, their vision limited. The wind industry has settled on a goal of supplying 20 percent of US electricity by 2020. Why so little? Why not more, sooner? When I press Hudgens, he says simply, "We're not projecting greater growth. But it's not impossible."

Given the crisis we face as a species, carbon-free electricity ought to be a top priority. Subsidies for fossil fuels should be eliminated and replaced with mercilessly steep carbon taxes. This money, and more, should underwrite clean power generation and a massive overhaul of the national grid. Aggressive state action may also be needed to sweep away NIMBYs who oppose wind farms on aesthetic grounds.

Though it clashes with America's free-market mythology, aggressive state intervention has propelled all the tectonic shifts in our economic history. From granting land rights for plantations, to the creation of the railroads, to the rise of Big Oil and the creation of the aerospace and high-tech industries, government support has always helped the market along. It's time to couple these traditional tools--subsidies and tax incentives--with punitive regulation and tax levies to euthanize fossil fuels and build a green grid.

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Islam is wonderful, but I can't stand the Muslims

"Why should I try to convert my non-Muslim friends when I often prefer them to the Muslims that I know? How will being Muslim change their lives for the better if they already display more of the Islamic virtues than most of the Muslims they are likely to meet?"

By Michael A. Malik

There was a white face in the mosque. You don't see very many, so I went over and asked if he was a Muslim, “I used to be, but not any more.” he said, “I thought Islam was wonderful, but I couldn't stand the Muslims”. What could I say except “I know how you feel”;. Most converts do.

Of course one meets some special individuals in encounters with the ummah, but how is it possible that in the Muslim world they seem so few and far between? Does my being a cultural alien mean that I am inherently less capable of understanding Islam, or is it just that I don't understand my fellow Muslims? Why is it that a trip to the mosque so often leaves me closer to despair than hope? Why do I so rarely feel enlightened and uplifted after conversation with my fellow Muslims, yet so often offended by their behaviour, frustrated by their mindless approach to truth, and enraged by the inadequacy of the Islam they expect me to accept? How often I have felt like giving it all up.

Fortunately I was a Muslim for four years before going to the Muslim world and meeting those who feel that Islam belongs to them by birthright, so I early on formed a relationship with God which served to armour me against the ummah. The first time I went into a mosque in a Muslim country, the first thing to happen was that someone tried to throw me out. Now they weren’t to know that I was a Muslim but they didn't even ask. When I told them, in fact, the first thing they did ask was “Sunni or Shi’a?”, so if I'd picked the wrong one they would probably have thrown me out anyway. I thoroughly confused them when I said I didn't care, however, and eventually they let me stop and pray.

First impressions last a long time, they say, but many years after having learned by experience the best way to get in, pray, and get out without harassment, it still seems that in a strange mosque a strange face is more likely to be greeted with hostility than welcome.

The man in the editor's office was obviously a Muslim, so the brusque arrogance of his manner should not have come as a surprise. It did little, however, to incline me towards composing a careful answer, too much effort was required to remain courteous, and it seemed more like a challenge than a question. “And how many of your people have you converted?” he said, but I suspect the answer was more complex than he really wanted to hear.

“Converted to what?” is the first response. Islam presumably, yet here we have a huge assumption that we both agree on what that is. Why should I try to convert my non-Muslim friends when I often prefer them to the Muslims that I know? How will being Muslim change their lives for the better if they already display more of the Islamic virtues than most of the Muslims they are likely to meet? I share what I have found when they show Interest, but like me they often look at the Muslim world and wonder what we have in common. They find it hard to see living examples of the principles of which I speak.

I came to Islam through a search for Truth, but I found that in practice most Muslims give the truth a very low priority, and I can still be shocked by their facility for saying whatever they think suits the conversation best. Along with truth goes trustworthiness, surely an Islamic virtue, yet travelling through the Muslim world I met Muslims eager to sit down and discuss breaking an agreement not two minutes after sealing it with a pious recitation of Al Fatiha [first chapter of the Quran]. And closer to home how distasteful it is to belong to a community so notorious with regard to paying bills.

How about Mercy and Compassion - those words now repeatedly on my Muslim lips. In three years of travelling through the Muslim world, hardly a day passed without some stranger feeling he ought to instruct me in the principles of Islam. In all that time, in all these casual encounters, not only was mercy never given pride of place, but I actually don't recall it ever having been given a place at all. It is not necessary for my friends to look to the Muslim heartlands, when at home the Muslim example can be confused with “My Beautiful Launderette”.

But they see the Muslim heartlands every evening an TV, with their dictators and demagogues thick on the ground, oppressive and unjust societies, poverty and ignorance. There is no point in telling friends that Islam is a complete way of life. That it is a way to achieve joy and fulfillment in this life, hope and trust when approaching the next, and the perfect basis for a tolerant and peaceful society for all humanity. What can I answer when someone says “Show me!” - “Point to a Muslim country you can use as an example.”

My Islam sees in the prophet endless examples of forgiveness and tolerance, yet my friends see the mindless enforcement of rigid laws and eccentric punishments. I sometimes explain, but could just as well tell tales of Shari'a court corruption and injustice. My Islam insists on individual freedom, there is no compulsion, no priests are needed, and except for piety all men are equal. I kneel before no man, though I will kneel in prayer beside any, and my wealth and privilege is permitted, though charity is to be preferred, and the prophet chose to die a pauper.

My friends can understand and be drawn to such principles, but unless they can see this utopia in a more tangible form than my theories they are surely destined to remain cynical about their possible fulfillment. As long as I can't show them examples of Muslims living in a way they consider preferable to their own, I won't worry too much about their conversion. They see my Islam as a pipe dream, and who knows, perhaps they are right. The task is of course even harder when the friends concerned are women, as the clichéd platitudes of Islamic freedom and equality mean nothing when such highly visible inequities and oppression are impossible to hide.

Since I came back to this country there has been much talk in the Muslim community about an “identity crisis”. But the business successes of their family networks show that Muslims have no problem in identifying themselves with other Muslims, they just have trouble in identifying themselves with anything recognisable as Islam. In fact it seems that most Muslims would rather have as little to do with Islam as possible from the moment they are old enough to avoid it.

“Brother, let me tell you the most important thing in Islam”, said the stranger who had cornered me in a Lahore coffee bar. Far from agog, I waited to hear what it might be, though experience had taught me that it was unlikely to include any of the five pillars, truth or tolerance, or the like. “The most important thing in Islam” he said “is that your wife covers her head”, a view of Islam which I had heard often from many Muslim men. In other words the most important thing in the practice of Islam is to get your wife to do it, or your children, or your grandfather, or anybody but yourself!

Back in Britain I listened to the Muslim wails. “We are losing our children! By the time they leave school they are strangers, lost to us and to Islam! What can we do?” My usual response was often faced with dismay – “I can say what I think you should do, but it's unlikely that you will do it, because it involves changing yourselves. It involves changing the way you understand your Islam”. This is not suggesting wholesale innovation, as it might seem to imply, but quite the reverse. “It is necessary to revive that Muslim community which is buried under the debris of the manmade traditions of several generations, and which is crushed under the weight of those false laws and customs which are not remotely related to Islamic teachings, and which, in spite of all this, calls itself the ‘world of Islam’” (Qutb - Milestones). It's time to get back to the real thing - and I don't mean coca cola.

As I waited to begin my talk to the gathering of young Muslims I engaged in conversation with the group. A nice, quiet, attentive, well-mannered lot I thought. Then time to begin, but the mike wasn't working, and they waited “Testing! Testing! 123...” for while. Rather than just read numbers, it seemed more appropriate to read some Qur’an - after all, I was going to be talking about prayer. To my amazement, the first words of Fatihah seemed to fall in the room like a grenade, turning the group into a rabble. Punches flew, people rolled on the floor, conversations were attempted back and forth across the room, and Fatihah was generally taken as Time Out. If these were the ones at a Muslim conference, what on earth would the Muslim youth who weren't there have been like?

Now it's not that I'm a one for excessive displays of reverence, I see my religion more in a practical kind of way, but this was , which the Prophet called the best of the chapters of the Qur'an, and which Al-Ghazali called the key to Paradise. These words are not recited in every rakat of prayer without good reason. The outward displays of reverence, such as venerating a Qur'an, placing it high up and wrapped away, cannot do justice to the awe and wonder this surah deserves. But if a Muslim does not have a reason for this reverence which satisfies his understanding, the outward displays become hollow and easy to discard.

At the exhibition, the school kids of all ages were milling around looking at the World of Islam. As they tried to find the answers for their question sheets it was clear that Muslim kids knew little more than all the rest. No wonder our young people are losing their Islam. They have received so little to start off with. From out of the crowd around the Qur'an, one boy said to the teacher “I can read that!”, and proceeded to do so - more fluently than I could have done myself. The teacher was obviously highly impressed, but then asked the obvious question, “What does it mean?”, and the boys satisfaction turned to wry embarrassment. “I don't know”, he shrugged, and that was the end of that.

Now our young people are not stupid. Muslims have a better academic record than most groupings, as a glance at the honours board of your local school will show. The teacher's response was a common sense question, one that anyone might have expected in the situation. The embarrassment came from the common sense questions that remained unspoken, “Then why did you learn it?”, “What use is it to you?”, “Is this a skill without a purpose?” The teacher implicitly understood that these are questions you do not ask, and neither it seems do Muslims. It is as though Muslims are afraid that Islam can't stand up to common sense questions, yet Fatihah alone can satisfy whatever intellectual demands are put upon it and still remain inexhaustible. Are we passing on the key to the door of paradise, and forgetting to explain how you use it to open the lock.

If young Muslims are not shown the full richness of Islamic knowledge, we must not be surprised if they show more interest in fields where there seems further to explore. It will take some time before mosques are again centres of learning in all its aspects, places of research, experimentation and debate concerning our understanding of God and Creation. But when western educated young Muslim adults begin to search for their spiritual roots, God willing, they will uncover the means of reinvigorating the ummah, and leading them in the example of the Companions. If our Islam is not like theirs, filled with a sense of awe, wonder and excitement, can we really be doing justice to the service of Allah.

In such a situation, we will find new Muslims drawn towards the mosque. At the moment, amidst the ummah they are more likely to find Islam expressed as a cultural adjunct, where even the five pillars are avoided. But if the pillars are treated as unnecessary then what is needed to be Muslim, and if they are necessary how many Muslims are there in the ummah?

This goes to the heart of the conversation question, as we need to know what is essential for a person to be considered Muslim. Do Muslims in fact expect more from a convert than they do from those born in their cultures? How little does a westerner have to do before Muslims accept him as Muslim, and how far can he stray from their cultural norm before they consider him a disturbing intrusion and would rather that he stayed away? Is the reason there are not more converts because they would disturb the status quo?

But our effect on our surrounding society is a mirror to our behaviour and how well we represent Islam. We must live in a way that seems preferable and then at least partially satisfy the expectations of the inquisitive. Once upon a time, Islam spread like wildfire. In a few short years the Message spread to Morocco and to China. Millions welcomed the good news, and quickly shaped their lives around it.

Now Islam may be fast growing in the third world regions, but here in the West Muslims face a peculiar reaction to their invitations to join them in their faith, as almost nobody wants anything to do with it. If the message we are passing on no longer seems to have the same effect, is it not time to consider if we just have a communications problem, or whether we ourselves are abusing the message? Fortunately we still have the original - all we have to do is understand it!

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Why You Should Own A Gun

By Alan Caruba
April 17, 2007

The murders on the Virginia Tech campus, the worst such rampage in our history, might have been mitigated if just one member of the faculty or a student had the means to return fire.

I have owned guns for decades. On rare occasions, I have had to "show" one of my guns to people with bad intentions. Not surprisingly, they changed their plans to take my money and do me some harm. The Virginia Tech murders confirm the value of empowering ordinary citizens to carry a concealed weapon.

On March 9, I learned of a ruling in the case of Parker v. District of Columbia in which Senior Judge Lawrence H. Silberman wrote an opinion, with Judge Thomas B. Griffith concurring, that restored the Second Amendment to the citizens of the District and, by extension, to every citizen of these United States. Not since 1976, had residents of the District had the right to defend themselves with force of arms.

Judge Silberman wrote, "In sum, the phrase 'the right of the people', when read intratextually and in light of Supreme Court precedent, leads us to conclude that the right in question is individual."

As Alan Gottlieb, founder of the Second Amendment Foundation, noted succinctly, "The right of self-preservation was understood as the right to defend oneself against attacks by lawless individuals, or, if absolutely necessary, to resist and throw off a tyrannical government."

That is precisely why the Second Amendment says, "the right of the people to keep and bear arms shall not be infringed." Many States refused to ratify the proposed U.S. Constitution until this amendment and nine others were included. As Judge Silberman noted in his decision, the Second Amendment acknowledges "a right that pre-existed the Constitution" in the same way as freedom of speech.

Barely a week later in the Greenwich Village area of New York, David Garvin, carrying two semi-automatic firearms and a bag with 100 rounds of ammunition killed Alfredo Romero, a pizzeria employee, firing 15 rounds into him. Confronted by unarmed auxiliary police officers, Nicholas Todd Pekearo and Eugene Marshalik, he killed them as well. They were volunteer civilians who wear uniforms nearly identical to regular police. Finally, Garvin—a man with no psychiatric history—was shot dead by full-time police officers.

This is why police officers are always armed. I could not help wondering how that event would have been altered if any of his victims had been able to shoot back.

The Second Amendment Foundation notes that firearms are used defensively an estimated 2.5 million times every year, four times more than criminal uses. This represents some 2,575 lives protected and saved for every life lost to a gun. According to the national Safety Council, the loss of life to accidental firearm death is at its lowest point since records were begun nearly a hundred years ago.

In a nation where the rights conferred on individual Americans by the Second Amendment were just reaffirmed by the U.S. Court of Appeals in the District of Columbia, it's worth considering that, as of November 1997, there were an estimated 129 million privately owned firearms in the nation.

Guess what? After September 11, 2001, the one thing a lot of people did was to go out and buy a gun. If a bunch of fanatical Muslims could hijack four commercial airlines, destroy the World Trade Center towers, fly one into the Pentagon, and intended to fly the other possibly into the White House or the Capitol building, a lot of people decided that being able to shoot people with similar intentions was a very good idea.

Since then we have seen numerous incidents of "instant Jihad syndrome" where some Islamist decided to kill infidels who were just out for an hour at the local mall or otherwise peacefully going about their lives. And, yes, there are still criminals who use firearms. Now, however, Americans are not bound by some gun-banning law to be nothing more than victims.

Responsible gun ownership is a good idea. And if this is the first time you have heard about the recent decision of the Court of Appeals, that's because this story got buried by most mainline newspapers and by virtually all of the broadcast news media. No doubt this case will go to the Supreme Court at some point.

The writers of the U.S. Constitution understood the necessity for an armed citizenry. When only the government has guns, everyone else is just a slave. Gun-banners who would turn everyone's life and liberty over to the care of an all-powerful, central government, don't understand and don't agree with that.

As gun law expert, John M. Synder, put it, "Gun rights are human rights. Gun rights equate with the right to defend life and, therefore, with the very right to life itself."

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Can liberty survive the income tax?

By Alan Keyes
April 12, 2007

Thanks to our nation's income tax system, individual Americans are not free--they are literally on parole.

If they fail to show up at the designated time and place to testify against themselves, they face the prospect that their material goods will be confiscated and their bodies seized and imprisoned. All this because they are guilty of the crime of doing what the most fundamental law of nature gives them the right to do--procure the means of preserving themselves and their loved ones.

A dilemma
Every year around this time, I find myself in a great quandary, a struggle between my sense of obedience to law and my sense of principle. The reason: it's time to file an income tax return.

Don't get me wrong. I have no trouble with the logic that effective government requires some form of taxation. What I can't understand is how we reconcile the clear provisions of our Constitution with the demand that every citizen testify under oath as to the amount of income they have earned in the previous year.

The Fifth Amendment to the Constitution provides that "No person . . . shall be compelled in any criminal case to be a witness against himself." The common understanding is that every American must file an income tax return or be prosecuted for the failure to do so.

Yet, it also appears to be the case that the contents of the return can be used in evidence against us if and when we are prosecuted for tax evasion or other income tax related crimes, including perjury, if we do not scrupulously comply with the letter of the voluminous tax code.

If filing is compulsory, we are being forced to provide testimony that may be used in evidence against us. This means that we are compelled to bear witness against ourselves, which the Constitution plainly forbids.

On the other hand, those who support the use of the income tax return will say that it does not violate the Fifth Amendment because filing the return is a voluntary act. But if this were truly the case, how could anyone be prosecuted for failure to file a tax return? Prosecution brings the force of law against the individual. Acts performed under the threat of prosecution are therefore not voluntary acts, but acts done under the threat of force.

Shallow legal arguments
I'm sure that the self-interested representatives of the legal profession will spring forward to assure me that the Courts have accepted the validity of the income tax system and cooperated with its enforcement mechanisms (by sanctioning the coercion used to enforce compliance). But we all know that this offers no assurance of constitutionality.

The Courts do not reliably represent the rule of law, since they willfully ignore the plain provisions of the Constitution that is the Supreme Law of the Land and the source of all their legitimate governmental power. The Courts blithely fabricate and impose requirements that are nowhere found in the Constitution (such as the separation of Church and state) and demand respect for rights that contradict its principles and stated purpose (like the so-called right to abortion).

Given this dismal track record, it's not at all hard to believe that they would cooperate in the imposition of an income tax regime that contradicts the Constitution's plainly worded guarantee against self-incrimination.

Respect for law
If we assume for a moment that the income tax regime is enforced by means that systematically disregard one of the most basic guarantees against governmental abuse of individuals, we realize that it puts conscientious citizens in a terrible position. If they choose to cooperate, they lend credence to the abuse--so that over the course of generations, people become more and more inured to it, and ignorant of the abrogation of right that it represents. Since habitual deference to law enforcement is the only basis for the filing requirement, such deference becomes the source of government authority, rather than the plainly declared and duly ratified will of the people expressed in the Constitution.

Habitual deference to the perceived force of law is far from being characteristic of a free people. Indeed, it is the reason large masses of people in every region of the world submitted to despotism and arbitrary tyranny in the centuries before the influence of Christianity led thinkers to articulate the doctrine of God-given inalienable rights.

We must be careful, of course, to keep in mind the distinction between habitual deference to the force of law and the habit of respect for the law. The first is quite simply the product of fear, the second is the fruit of good civic education.

Courts and all the trappings of so-called law are no strangers to tyranny. They have more often been its tools and servants than its enemies. The preponderance of human history offers examples of tyrannical and unjust regimes that cowed the masses into submission using handy symbols of power to shackle the mind, reinforced by the routine application of brute force.

Constitutional self-government is supposed to achieve respect for law on a very different basis, one that commands obedience on account of the assurance that the transcendent principles of right and justice will be respected in both the substance of the law and the procedures that enforce it.

The issue
Here then is the question: If the administration of the income tax departs from the principles of right and justice plainly set forth in the Constitution, does our cooperation with the income tax regime constitute and encourage the habitual deference to force without respect for right that has been a key support for sustaining tyrannical and unjust government? Does our willingness to cooperate help to shackle the mind and will of our children and of future generations, corrupting their understanding so that they will no longer recognize the distinction between legitimate government by law, and government by force masked with the handy symbols of law?

If we truly care about liberty--which is to say, constitutional self-government based upon respect for our God-given inalienable rights--are we obliged to cease this cooperation, even as, in the founding generation of our country, people ceased to cooperate with a system of taxation that contradicted those rights?

This challenge might be less urgent if the issue involved were not so critical to the material foundations of liberty. The American founders repeatedly alluded to Blackstone's pithy dictum: The power to tax is the power to destroy. How much more so when the mechanism of taxation itself involves the destruction of one of the most vital protections against governmental abuse of the individual: the protection against self-incrimination.

The income tax gives the government the power to attack or manipulate the material resource base of the whole people, determining what share will be controlled by the government and what will be left to the discretion of individuals. It also places every individual under a requirement to reveal to the government the sources of their individual sustenance, knowledge that could be used to attack or sever these lines of supply at will. It places every individual under a reporting requirement which, aside from being incompatible with the Fifth Amendment, can at any time become the basis for embroiling the individual in legal and bureaucratic challenges that consume their time and resources in ways that can threaten their own survival and that of the family and friends who rely on them.

By contrast, Montesquieu defined liberty as the ability to live without fear that others could assault your life, In our society, livelihood is life. Franklin Roosevelt appeared to agree when he cited freedom from fear among the four freedoms for which we did battle during the Second World War. Under our system of constitutional self-government, legitimate power means power consistent with liberty. The provisions of the Constitution aim to secure liberty by establishing a government whose powers are limited by respect for the Constitution's principles and requirements.

Free-market alternative
I admit that we would face an insoluble dilemma if the income tax were the only form of taxation capable of funding our government effectively. If this were so, it would mean that republican government consistent with the U.S. Constitution and its principles is impossible. The best we could hope for would be some less evil form of tyranny.

However, the success of the free enterprise economy made possible by respect for liberty means the existence of a huge marketplace, whose transactions generate an enormous exchange of goods and services. A system of taxation that imposed a modest toll (retail sales tax) on every such open and public exchange in the marketplace would more than suffice to fund the government, without the need to threaten the livelihood or constitutional right of any citizen. In the normal course of their voluntary business and other economic affairs, people would pay for government services, just as they pay for food, clothing, shelter, transportation, and entertainment.

If we care any longer to preserve the substance of democratic self-government, we need urgently to develop and put in place the free-market alternative to the liberty-destroying income tax system now in place. If we fail to do so, we leave the people, as individuals and as a whole, defenseless against the strategies of self-righteous, power-hungry elites who are already manipulating its administration to isolate and demoralize our people, crushing both their individual spirit and their ability to associate effectively for political action.

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Tax Day Confirms Economic Exploitation: Serfdom USA?

By Paul Craig Roberts
May 14, 2001

Is the United States a free country? Not by traditional measures. In the history of Western civilization, freedom has an economic meaning and a legal meaning. More and more, the United States fails both measures of freedom.

April 15 -- Tax Day -- has come to symbolize America's lack of economic freedom. Americans have no more claim to their incomes than did medieval serfs. The most successful Americans are comparable to slaves.

The long struggle for freedom was a struggle to own oneself and the value of one's labor. European serfs did not own their labor. Consequently, they were not free to sell their labor in markets for wages.

In the feudal age, labor, like land, was not bought and sold, but allocated according to a system of use rights. The lord of the manor could claim as much as one-third of a serf's working time. The remainder of the time, serfs would produce for their own households.

When serfs became owners of their labor, which they sold for wages, they became free men unaccountable to lords. Freed labor produced independent men because men had nothing to fall back on except their own strivings.

Free and independent men required accountable law. Law ceased to issue from the mouth of a lord or king. In time it became the work of elected representatives and bound the government itself. Freedom resulted from self-ownership and protection from arbitrary arrest, detention and dispossession.

A slave was worse off than a serf. A serf faced a maximum tax rate of 33 percent, but a slave was owned by another and had no claim to his own labor beyond subsistence.

Low-income Americans face a Social Security and Medicare tax rate of 15.3 percent, a federal income-tax rate of 15 percent, federal excise taxes, state income and sales taxes, and local property taxes. The combined tax rate exceeds the burden borne by a medieval serf.

Upper-income Americans are exploited like 19th century slaves. The uncapped Medicare tax places the top federal income-tax rate at 41.5 percent. Adding in Social Security, excise, state income and sales taxes, and property taxes produces a tax burden in excess of 50 percent.

President George W. Bush's tax cut merely raises America's successful class from slavery to serfdom. Unfair tax laws that tax phantom income push the burden on "the rich" to 75 or 80 percent of their incomes. Because of the way capital-gains taxes are levied on investments, in April many investors were taxed at twice the statutory maximum despite the collapse in the value of their investments.

To benefit from professional money management, millions of Americans invest in mutual funds and investment partnerships. According to proper accounting practice, the investor's basis is the price of the mutual-fund shares when he purchased them. Capital gains would be computed on any increase in share value at the time the investor exits the fund by selling his mutual-fund shares.

But this is not the way the tax system operates. A mutual-fund share is a composite of the stocks of many companies that comprise the fund's diversified portfolio. When the mutual-fund manager sells shares of specific stocks that have risen, the gains are apportioned to the individual fund owners and taxed even though the owners retain their mutual-fund shares and have realized no gains themselves.

This unfairness spelled disaster for investors on April 15. At the beginning of 2000, stock prices were still up. Fund managers, anticipating the market's decline, sold to protect the gains. Despite these early gains, by the end of 2000 the market's fall caused lower mutual-fund share prices. Millions of investors have losses of tens or hundreds of thousands of dollars but are faced with taxes on tens or hundreds of thousands of dollars of phantom capital gains realized only on paper by fund managers.

Where does the money come from to pay these taxes? Few incomes are large enough to support such a burden. The taxes only can be paid by selling off assets. Investors are faced with a capital levy -- a tax employed by tyrants. Just as Americans own less of their labor than feudal serfs, law no longer is their shield but a weapon in the hands of government.

The United States has become a tyranny, and it has happened on our watch.

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