Month: November 2011

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Fracking

Fracking was invented way back around World War II, as a means of getting oil to come out of the ground more easily. Back then they used napalm. The process was invented by Halliburton, the company Dick Cheney headed before becoming vice-president.

Halliburton didn’t want you to know what chemicals are used in fracking– besides the millions of gallons of water. Could be benzene, toluene, ethylbenzene and xylene, diesel fuel, sand. But there was this contentious little law– something about drinking water– that made it illegal for them to inject these deadly chemicals into the ground near anybody’s sources of drinking water. No problem. With former oil executive Bush in charge, Dick Cheney was appointed to meet with oil industry executives– in secrecy– to draft some new laws, one of which gave the oil industry an exemption to the Safe Drinking Water Act.

This is how the system works.

Did you know that in Alberta and British Columbia, you only own the top layer of the ground beneath your house? What’s below that– including any natural gas or oil– belongs to the government. Now, you might think your government would at least make sure that any money to be made from the deposits under your home would benefit you directly. And you might also believe in the tooth fairy.

In fact, you are not entitled to one red cent for any oil or gas beneath your house.  The government doesn’t care about your rights or your property: they will hand over the oil and gas to Exxon or Shell or some other carbon company and they, in turn, will reward the government with “Royalties” they can then spend on things they can give the taxpayer.

And the government’s share of the profits from this mineral wealth guarantee that the government is going to support these industries if you try to fight them.

And do you think the cost of the water used, and the damage to the environment, is an expense to the oil industry? Are you mad?

In the U.S., you might own the mineral rights. You might not. It depends on state law and previous agreements with previous owners. You might very well purchase a property only to discover that you own nothing beneath the surface In principle, just like in Alberta and British Columbia, though, mineral rights to anything below the surface are owned by the property owner.

How can you own part of an oil deposit if it encompasses several properties? Under the “rule of capture”, whoever pumps out the oil first gets it. You snooze, you lose.

Some oil companies have, in fact, been caught digging their wells on an angle in order to pump out the oil below somebody else’s property.

So once again, it’s socialism for the investors– they get to share the property below your house– and free enterprise for the working classes– you have to go out and work for a living. And then you have to pay them for the oil. And then you might find out that your drinking water has been contaminated by the toxins they inject into the ground to free up that oil and gas. And then you find out that you won’t be compensated because Dick Cheney and George Bush saw to it that the oil industry will not be liable for any damage done to your drinking water.

True, but unbelievable.

More on who owns your oil.  But not much more.

Even more.  Better information from Wiki.

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Social Security

This piece of common sense is so obvious that I’m pretty sure most people assume it is already the law. It isn’t: every government and corporation should be required to set aside in an independently managed fund all of the monies required to fully vest the pension commitments of the organization. There. Simple. Under no circumstances should the government or a corporation be allowed to ever, ever touch that money.

I am aware of the fact that at the beginning of Social Security, the government actually had to pay out to people who had never contributed money it had never collected for the program.

Your are astonished? You mean they don’t have to? You mean the government can simply collect the money required for these pensions and then spend as much of it as it wants on other things– like bizarre failed weapons systems or wars– while promising that future governments will make up the difference?

And thus we have Illinois. And Republicans claiming– it’s an outright lie– that Social Security is unsustainable. In fact, there is nothing more sustainable than Social Security, if the government would simply pay it back for all the money it stole out of the system so that Mitch McConnell could use it so he could claim to not raise taxes and still– miraculously– spend more money on Homeland Security and the military.

The Republicans act as if Social Security is funded by general revenue, so you are not really entitled to it. But Social Security was not instituted to fund general government programs. It was instituted specifically to collect your contribution to your future retirement needs. The U.S. government has been borrowing this money for years to fund other government expenditures– like the stealth bomber or the Mitch McConnell Freeway.

I suspect that a Republican government will try to find some way to keep the revenue stream without keeping the benefit. That is what they do. A tax on the working class with an upper ceiling is a Republican’s wet dream.

By the way, I’m not averse to the idea that the independence of pension funds should go two ways. The rate at which employers and employees contribute to the fund should be wisely and carefully crafted, and the benefits received should also be wisely and carefully crafted and the brains should carefully establish the correct rates and then it should all be locked in.

That means that if inflation eats away at the value of those pensions, the price of security is that they will not be adjusted beyond the rate fixed in the original agreement. That means it could be adjusted, but only if the possibility of it was factored into the original terms of the plan, including the potential costs.

That means, yes, some pensioners might be disadvantaged by high inflation at some point– but I don’t think that’s an unreasonable price to pay for real security. (I’m not going to go into it here, but people then also should be aware of the government using inflation as a tool to reduce the real cost of their obligations.)

Yeah, it’s complicated.

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Pension Fraud

Public schoolteachers in Illinois do not participate in Social Security, and their pension fund is in precarious shape. Last year the fund reported having just 48 cents for every dollar of benefits it had promised, largely because the state had failed to pay the required amount of money into it for many years. NY Times, November 5, 2011

So Anthony Wiener has to resign his seat in Congress because he hit on a few women he was not married to. So Herman Cain is toast because of 15-year-old allegations. So Eliot Spitzer is out because of a call girl. Did any of these gentlemen hurt anybody as much as the state government of Illinois has hurt its public school teachers? So Obama wears a flag pin in his lapel and the Republican candidates reverently clasp their hands to their hearts during the singing of the national anthem. So Kim Kardasian got divorced after 81 days of marriage.

It’s not even close. Not even in the same universe. How different is your life going to be if you are going to get half of the pension you expected, and which you paid for? How different is your life because Anthony Wiener tweeted a picture of his underwear?

Yet Americans screamed and jumped and screeched and wailed until Anthony Wiener resigned. Yet the government of Illinois continues along blissfully oblivious to the slightest opprobrium.

Rick Perry is half right in the way that only a half-wit can be: it’s a ponzi scheme in the sense that you start paying for it at the beginning for those who are retiring at that time, and then, when you retire, you collect… So, in theory, if the taxpayers decided to stop paying into at a certain point in time, you get what happens with a ponzi scheme: the money runs out.

So, if you think we will run out of taxpayers in the future, vote for Rick Perry and he’ll do his best to get rid of Social Security. Then everyone can just put some money aside every year, year after year, so that when they retire, they will have a few hundred thousand dollars in the bank.

Uh huh.

There is nothing fiscally unsound about social security and it would take the collapse of our entire economy to make it fail. Or the massive stupidity of a lot of of legislators and the shenanigans of investment brokers and managers.