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May 26, 2006 08:00 AM UTC
47 Comments
your spineless Bush-Republican governor did not “stick it” to the Democrats, he stuck it to the voters. My guess is that neither Dick Cheney, Karl Rove, or Tom Delay were available to give the governor advice (party line)on these issues so he vetoed them. This way, our expectations for effective governance is not heightened.
Veto power outlines how essential it is to elect a Republican Governor to help stem the tide of the Dem legislature.
Scott,
Without using the standard (r) rhetoric, can you explain why the legislation listed above was worthy of a veto? In my opinion, too often individuals blindly disparage legislation solely based on which side proposed the legislation.
Ritter should thank Owens. He now has a pretty good argument to make to Democratic and independent voters that any Democratic governor would be better to have than any Republican.
I agree with Brio and Bluto.
One of the vetoes that makes me most angry is the ethanol one. In his veto letter his excuse was that adding ethanol would make gas more expensive and the percentages of ethanol in gasoline, 10% he cited in his letter, would hurt businesses.
The way gas prices are now and will be, ethanol would be cheaper and the percentage he stated wouldn’t be for three years, giving businesses time to adjust.
The prescription drug plan was similar to what the Feds put in place and the Gov’s reasoning for vetoing that one made no sense to me either.
I personally can’t wait until this crap California transplant governor leaves office. He has used his veto power to harm the citizens of this state too often.
Goodbye Gov Owens and good riddance.
Lulu, I will answer and it has to do with free market principles and free enterprise – it is important for the state to not be in the pharmacy and health care business – as far as ethonal the same answer –
I am for small government and Owens has been using his veto power well to keep in check the intrusive big government flavored legislature.
Lulu, if you have ever taken a basic economics (or for that matter world government history) class, you know that the end result of government continuing to expand it’s social welfare programs leads to oblivion. The free market has given the United States the best of everything for 250 years because it is the markets (and the people) that dictate what direction they want to move, not the government.
I heard he left alot of unsigned stuff on his desk, and he could’ve left his office in better shape than he found it. In the meantime, howsabout we all take the long weekend, and resume this on Tuesday? Happy/Merry Memoriable Day, y’all, and let’s not forget why we have this holiday to begin with! No matter what side of the aisle/isle/I’ll you stand on, let us at least agree on this: We wouldn’t be posting on this site, or going about our normal lives, had it not been for those who came and went before us.
May the deity of your choosing bless you accordingly.
Well said Little Guy, well said.
Scott and Stupid,
How much has the federal government grown with a (r) senate, house and pres? Don’t you feel a bit hypocritical with your small gov’t chant?
What’s wrong with cheaper prescription drugs and less reliance on oil through ethanol? Is the governor’s job to do everything that he can to protect the oil industry and the pharmaceutical industry or any other large donor base?
I’d like to hear something specific – what is wrong with those two bills?
This question is aimed at Democrats in the audience.
There was a US Senate bill called the DeMint-Crapo bill.
Our Federal government has been spending/robbing the current excess in our Social Security accounts and in 2017 we’re going to face a huge deficit in Social Security.
The DeMint(R)-Crapo(R) bill would have set aside Social Security excess into reserve, to be used on Social Security benefits. When these votes were cast on March 16, 2006, they went as follows.
Every single Democrat in the US Senate, including Salazar, voted “no” on this bill, they were joined by 8 Republicans.
The remaining 46 Republicans voted “yes”.
I would like to know from the liberals in this group what rationale can explain this vote.
I should have mentioned Allard voted “yes.” I suspect Coors would have done the same.
Scott
The Owens’ approach to keeping govment small has been to do nothing. Go back over the initiatives he proposed when he first took office and find something he did. He poured concrete in parts of Denver, the rest fell apart. We needed those initiatives to work. They needed leadership to move forward. He couldn’t provide it. His staff couldn’t provide it. He installed posers like Holtzman and went his self-indulgent little way. That has caught up with him. At home, in his office, and in his future. He will not be missed.
But he got you Ref C Xeno, no kudos there?
Hey Stupid, a bit of projection?
Owens would rather waste taxpayer money than hand Dems a victory. The state *already* has to buy drugs for Medicaid recipients, the bill would have let them do it cheaper by joining other states to get a volume discount. It didn’t create anything, it just made what’s already in place more efficient and saved taxpayers money to boot.
Bill Owens: a wholly owned subsidary of big Pharma, Colorado taxpayers and health care consumers be damned.
On balance, good vetoes by Owens.
The drug prescription bill was bulit on the fantasy that government price controls work and that members of the Colorado legislature could keep their hands off the state’s formulary. Anybody who was around during the price controls of the 1970s knows they don’t work, and they lead to more inflation and black and gray markets. And anyone who’s paid attention to the mandated health benefits (which don’t apply to large companies covered by ERISA, only to small employers) imposed by Colorado legislatures knows they can be rolled by anyone with a campaign contribution. I can see the line of contributors forming now to advocate their favorite nonessential drugs. Such legislation just won’t work. I’m not in the health care business.
Ethanol is the biggest agricultural subsidy ever created and the biggest rip off for voters. It’s all about small farm states rolling presidential candidates and our local politicians, starting withour senators, looking out for a few farmers and screwing the rest of us. The economics of ethanol for drivers and for energy independence are that it brings negative benefits, as anyone who’s been reading non-farm state analysts knows. (I own a corn farm.)
The bill regarding employers and their ability to require employees to attend meetings was sponsored by the unions. They don’t want employers to have a chance to campaign against union organization efforts. If you can’t beat your opponent, get the legislature to tilt the playing field in your favor. As much as I’d like to vote for Ritter, this may be a major reason I and many independets might go GOP so that we have a properly split government.
I don’t know much about the anti-discrimination bill promoted by gays, so I can’t comment on it except to say that any employer who discriminates based on anything but competence and whether a person can do the job and get along with colleagues is a thowback to the days of segregation and racial discrimination. That also goes for all employers who discriminate based on a person’s religious beliefs. Finally, is this a real problem. I personally don’t know, but I suspect it is at some employers. (I’m straight and in favor of civil rights for all, including gays.)
Medicaid contracts with phsyicians definitely need to be simplified, but they’re complex because a small percentage of physicians have cheated or tried to cheat in the past, and the exisiting regulations reflect that reality. All laws and regulations are designed to control the 5% or 10% of society that just can’t play by the rules, and the rest of us pay for their lack of integrity. See campaign reform legislation and regulations as prime examples of how cheaters ruin life for everyone else.
So Scott – how does your rhetoric hold up when a bill has bi-partisan primary sponsors, has a broad base of bi-partisan co-sponsors, and passes both chambers with very broad bi-partisan majorities? Specifically how does your rhetoric jive with SB 198 which the Governor vetoed yesterday?
Educate yourself on the bills and try and get beyond the empty and over-played rhetoric. Maybe next time you post you will look less like an uninformed partisan hack.
What happened to the comments section of this site? I long for the days when informed insiders made up the majority of posts.
Another Skeptic: Very good analysis. I couldn’t have said it better myself. (No really, I couldn’t.)
Ethanol is a ripoff which consumes more energy to produce than it creates. No more mandates or subsidies. Owens was right.
Skeptic, your answer on the drug bill was a total non-sequitur – as was the governor’s veto. It’s apparent you haven’t read it and have no idea what you’re talking about, you’re just regurgitating someone else’s talking points. Among others, the bill was supported by the AARP, the Colorado Federation of Independent Business and the pharmacists.
The bill has nothing whatsoever to do with price controls – the state still buys drugs at market price, it just gets them cheaper because it’s joining other states and getting a volume discount – the same way you get Motrin cheaper per pill if you buy it in the 500-count bottle rather than the 50-count.
According to the AARP, such legislation has worked quite well in other states, saving tens of millions of taxpayer dollars – in fact, Colorado is one of the last embarrassing holdouts. It’s also why the big drug companies hated the bill.
It’s the governor and his own health care department, not the legislature, who decides *if* there’s a drug list at all and if so what drugs are on it. If anything, these bills have frustrated the drug lobby because states refuse to pay for heavily advertised, expensive, and not necessarily more effective drugs. When states have decided to a formulary – which, by the way, is heavily recommended by the Bush Administration as a way to qualify for a multi-state purchasing pool – they evaluate strictly on effectiveness, not marketing. So, just because it’s on TV, it may not be on the list.
The bill saved the state money and helped uninsured Coloradans.
As Mark Littwin pointed out in the Rocky today, Owens just handed Ritter and the Democrats a big gift with a bow on top.
Oh, and Stupid (an apt name if ever there was one), it’s the nations who spend an excessive amount on their military and protecting their empire, while neglecting their social infrastructure, that end up crumbling. There’s an excellent book by Paul Kennedy called “The Rise and Fall and Fall of the Great Powers” that tracks this quite thorougly. I’d also recommend Paul Krugman’s “The Great Unravelling” if you can ever turn off Rush Limbaugh and put down the comic books.
It is precisely those nations who have “government” (and government is us, by the way) control care of their health care that are doing exponentially better than we are. We have the highest infant mortality rate, the highest teen pregnancy rate, the highest abortion rate, the lowest overall lifespan, and the highest child poverty level of all the industrialized nations. Our child mortality rate hovers around that of many third-world nations. Canadians and Scandinavians repeatedly rate their overall satisfaction with their government-run health care much higher than ours, and their drugs are hell of a lot cheaper, too, since we’re subsidizing them.
Bobster,
When states “negotiate prices” they set prices, imposing price controls, no matter what you choose to call them.
A little history. HMOs and pharmacy benefit management companies negotiate drug prices with manufacturers. Do they get “discounts?” Yes, from prices inflated to allow discounts. For more than 25 or 30 years, hospital group purchasing organizations have been negotiating discounts with drug companies and the companies that make all kinds of medical supplies.
Some of the discounts on IV solutions range up to 70%. Do those manufacturers still report some of the best profit margins in all of industry? Yes, because they inflate “list prices” so they can give the big discounts and make the group purchasing organizations look good to their members. Those members, by the way, know the game, but they also have to show that they’re trying to control costs. So they play along.
Thus, the group purchasing organizations, the pharmacy benefit managers and the few states that “negotiate” with drug makers, effectively impose price controls that are easily gamed. The end result is that a few health care executives and politicians can brag about controlling drug prices that still are uncontrolled. But in the process they create huge, costly and ineffective computerized information systems and bureaucracies that help drive costs even higher.
In addition to being ineffective and in many ways harmful, these price controls give all the players financial incentives to hire lobbyists who spend their time wasting legislators’ and bureaucrats’ time negotiating better deals for their clients and greasing the way with “campaign contributions.”
Now, if you’re a trade association executive or lobbyist, you’ll love price controls on prescription drugs, because they’s make your members and clients more dependent on you and you’ll be able to make more money and look more important in the scheme of things. If you’re a politician in charge of a committee with power over the price controls, you’ll love them, too, because you’ll look more important and powerful. And you’ll be able to take bribes (contributions) that will keep you and your friends in power.
And it’s all about power. Isn’t it?
Typical right-wing “hey, look over there!” argument. Let’s throw enough irrelevant crap on the wall so that we’ll have an excuse not to do anything. And once again, you put forth a non-sequitur with absolutely no cites or evidence.
Meanwhile, bulk purchasing plans have proven results across the country. HHS states that Louisiana estimates that it will save $27 million in its Medicaid program in 2006 as a result of the arrangement. Maryland reports that its Medicaid program will save $19 million in 2006 because of the purchasing pool, while West Virginia expects to save $16 million. Altogether, the pooled purchasing program for these states will cover over 1.3 million beneficiaries.
In 2004, after paying over a billion dollars in Medicaid drug expenses, Georgia began a Consolidated Drug Purchasing Program.
As a result of many of these changes, Georgia saw realized a reduction in pharmacy cost trends for the Medicaid program of 18% to 25% during the first six months of the new program.
Additionally, 13 states have joined together to fund a project headed by Oregon’s former Governor John Kitzhaber in which reviewers comb through drug studies to help policy makers purchase the cheapest, most effective medicines. Arkansas, Alaska, California, Idaho, Kansas, Michigan, Minnesota, Missouri, North Carolina,Washington, Wisconsin and Wyoming are the states that have joined Oregon in the project.
The fact is, Colorado already has to buy drugs for Medicaid patients – and are already negotiating prices. They can do it expensively – the way they’re doing it now – or more cheaply through a bulk purchasing plan. And right now, the drug makers have states like Colorado by the short hairs – as the Denver Post put it, states without bulk purchasing plans are the last deep pockets for the drug industry.
So we have a choice – we can continue to pay artificially high prices, and leave uninsured and underinsured Coloradans hanging in the wind (and we all pay for the uninsured eventually). Or, we can go with a proven business practices with a track record of success and do something.
Personally, I prefer not to sit around in a cloud of my own paranoia.
Message From GOP: Corporations have more rights than you!
That’s what the HB-1314 veto says. Did you even read what Owens said in his veto? The man couldn’t even pass his own beloved CSAPs.
As I point out over at SoapBlox, how is requiring someone to attend a meeting jive with free communication? It doesn’t.
Unless the new definition of freedom from the GOP is “do this or get fired”.
Another Skeptic: Ethanol is by far NOT the biggest ag subsidy ever created. In fact, if you’ll check USDA analysis you would find that the increased demand for corn created by the ethanol industry has bouyed corn prices to higher than projected levels; bottom line — the “ethanol subsidy” you refer to (more commonly referred to as a “blenders credit”) amounts to less dollars than what is being distributed in the form of “grower payments”. Ethanol is a net gain for the US budget. You say you own a corn farm so you are either directly or indirectly enjoying the benefits of “grower” and “counter-cyclical” payments (subsidies) from the USDA — and at the same time enjoying a robust market for the price of your corn production. I’d say the benefits of ethanol mandates are being enjoyed by a large portion of farmers and rural America as a result of mandated production.
Next Wednesday will be “Energy Dependence” day. Since over 60% of all our transportation fuels are imported — symbolically every $$ you spend at the pump from Wednesday to the end of the year will be money that flows out of the country — in many or most cases supporting the very governments and regimes that would rather see our great country dead than alive. Every gallon of ethanol you burn at the pump is a gallon that isn’t coming from the Middle East. Considering the envirnomental issues, balance of trade, national defense issues and American jobs that are created as a result — ethanol is a bargain.
Pauliboy — There are now over 20 studies that have been done on the energy balance of ethanol. With the exception of two studies — the rank and file show ethanol to have a 1.67 positive energy balance. The lastest one is from UC-Berkeley. Google it and have a look. Considering the fact that the wells-to-wheels energy balance of crude oil is .44 (yes, POINT 44) and that it takes two lumps of coal to make one lump of electricity — biofuels will continue to be a great contributor to our future.
Owens is an asshole.
Less than a year left.
Good riddance.
Ethanol is subsidized not only by government programs such as the blender credit, but also by the consumers who pay more at the pump for gas blended with ethanol, which reduces mpg. I’m no scientist, but the articles published in the Wall St. Journal, NYT and elsewhere make convincing cases that ethanol is a rip off and will not reduce our energy dependence on foreign producers of petroleum and gasoline.
There may be 1,000 studies supporting ethanol, but if the methodology used in designing and executing those studies was flawed, they mean nothing. So much research is biased by the financial support and ambitions of the researchers that neither side of this controversy has much credibility. So I count on the editors of the nation’s leading papers to select articles by credible writers. Sometimes they do and, as the New England Journal of Medicine has shown in the Vioxx case, sometimes they don’t.
Bottom line is that if ethanol were so effective, the markets would have dictated that refiners blend it, not the government. That ADM and other lobbyists have had to buy their way into the market because they couldn’t sell their way in tells objective observers that ethanol couldn’t win on its merits.
This is just another case of top-down, Soviet-style planning by self-interested bureaucrats and politicians who don’t care what happens to consumers. Salazar and Allard are equally culpable.
Ralph, although I respect your “problems” with the Governor, I believe saying that Owens is an a-hole is out of line. I disagree with Salazar but I am not running around calling him names. Grow up and think of better ways to express yourself.
Oh dear, the beloved free market rhetoric again! Take a drive down to Barns Conoco on Broadway and you’ll see an example of where ethanol integration is at it’s best. Last I looked — you could buy E85 there for $1.99 — 60-70 cents below regular gasoline. The reason we need “mandates” is because the oil companies have no major ownership interests in ethanol plants (yet)– so ethanol is a competing product with their oil resources. They have no interest in using a product because it might be the right thing to do — their only interest is in stockholder return — which is fine. BUT, when business interests fail to meet the expectations of society, the only remedy is a mandate. If you know where any free market exists PLEASE let me know — I’d love to play in that market with biofuels and wind energy. Until then, I’ll put my faith in our state government (Gov. Ritter) to be the “equalizer”. It’s no surprise that Gov. Owens vetoed the bill — he’s beholden to the Colorado Petroleum Association.
It’s interesting to note that the only study critical of ethanol from a net energy balance standpoint is the one funded by Exxon & Co. (Pimmental). His arguments are based on twenty year old technology with no resemblence of today’s ethanol production models. Even if I conceded that Pimmental was right (which he’s not), I’d have to still say “So what?”. Energy balance is irrelevant; the only alternative is fossil-based, finite supplies of product that keep us beholden to foreign oil. Shall we stop refining crude oil because it has a negative energy balance? Stop burning coal?
BTW — do you have irrigation pumps on your corn farm? How about a phone? A mailbox? Without “Soviet style” (your words) public policy, you’d probably not have electricty that you could afford (we socialize the costs of infrastructure – our REA’s were built with mandates and subsidies — still today, a phone bill that doesn’t reflect the true costs of rural development costs — and a 37 cent stamp to get mail from the hinderlands of this state to anywhere in the US? Under your “free market” theory, none of that would be available in rural areas today.
A sustainable, cost-effective liquid fuel supply is in this countries best interest — and will only be advanced with aggressive state policies — advanced through elected officials who have a vision for a great Colorado future — for both the rural and urban constituents of this state.
OK. So now it’s clear. Supporting ethanol is socialist. I agree with that.
John Deutch, Mr. Deutch, director of energy research and undersecretary of Energy in the Carter administration, and director of the CIA and deputy secretary of Defense in the first Clinton administration, is a professor of chemistry at MIT, destroyed the myth
of biomass fuels in an op-ed page in the May 10, 2006, Wall Street Journal. If you have a paid sub to wsj.com, you can retrieve the full article here:
http://online.wsj.com/article/SB114722621580248526-search.html?KEYWORDS=ethanol&COLLECTION=wsjie/6month
Impact graphs:
Today, we use corn to produce ethanol in an automobile fuel known as “gasohol” — 10% ethanol and 90% gasoline. Generous federal and state subsidies, largely in the form of exemption from gasoline taxes for gasohol, explain the growth of its use; in 2005, over four billion gallons of ethanol were used in gasohol out of a total gasoline pool of 120 billion gallons. Politicians from corn-states and other proponents of renewable energy support this federal subsidy, but most energy experts believe using corn to make ethanol is not effective in the long run because the net amount of oil saved by gasohol use is minimal.
In the U.S., cultivation of corn is highly energy-intensive and a significant amount of oil and natural gas is used in growing, fertilizing and harvesting it. Moreover, there is a substantial energy requirement — much of it supplied by diesel or natural gas — for the fermentation and distillation process that converts corn to ethanol. These petroleum inputs must be subtracted when calculating the net amount of oil that is displaced by the use of ethanol in gasohol. While there is some quarreling among experts, it is clear that it takes two-thirds of a gallon of oil to make a gallon equivalent of ethanol from corn. Thus one gallon of ethanol used in gasohol displaces perhaps one-third of a gallon of oil or less.
A federal tax credit of 10 cents per gallon on gasohol, therefore, costs the taxpayer a hefty $120 per barrel of oil displaced cost. Surely it is worthwhile to look for cheaper ways to eliminate oil.
The economics are not the same in other countries. Brazil is a well-known example, where sugarcane grows in the tropical climate and conventional fermentation and distillation readily yields ethanol.”
Although he shows corn-based ethanol is not cost effective, Deutch believes that it will take a long time to develop the technologies needed to create cost-effective biomass fuels, and he supports such research.
Impact graphs on the biotechnology challenges follow:
The situation in the U.S. is quite different for cellulosic biomass, because much less petroleum is used in its cultivation. There are two paths to convert this material to liquid fuel. In the chemical approach the cellulosic feedstock is gasified with oxygen to produce synthesis gas — a mixture of hydrogen and carbon monoxide. This “syngas” can be converted by conventional chemical techniques into liquid fuel suitable for transportation use. The cost, although uncertain and dependent upon local production conditions, is in the range of $50 to $70 per barrel of oil, which explains why, until now, it has not attracted a great deal of attention.
The biotech approach, by contrast, seeks to produce new enzymes that will break down the difficult-to-digest cellulosic feedstock into simple sugars that can be fermented into ethanol or other liquid biofuels products. This approach merits genuine enthusiasm, especially as one can imagine engineering an organism to produce enzymes that (a) break down the cellulosic material, as well as (b) more efficiently ferment the sugars into ethanol. Realizing this exciting prospect will not be easy. Many hurdles must be overcome: Biotech experts need to assemble the gene “cassette” and the organisms, and talented engineers need to demonstrate a cost-effective process. Most importantly, an integrated bioengineering effort is required to develop a process that: reduces the harsh pretreatment required to dissolve the solid cellulosic feedstock; increases the concentration of ethanol that is tolerated by the enzymes; and achieves an efficient process to separate the ethanol from the product liquor.
Success will require a sustained research effort; it is too early to estimate the production costs of this method, because process conditions are unknown.
This is why I believe the ethanol movement is way premature. It’s a boondoggle for corn growers and a hugely regressive tax imposed on your favorite residents, illegal immigrants, and 35 million poor Americans.
Just the kind of regressive program you’d expect politicians seeking campaign contributions and votes in the Iowa caucuses to support. Oh, well, ethanol is paying for a lot of homes in Beaver Creek, I guesss. So it’s good for Colorado?
The RIA -ethanol analogys is flawed for a simple reason. Providing rural areas with irrigation, soil preservation, electricity, phone and farm-to-market subsidies provided a huge return on investment.
Ethanol provides a negative return on investment, and it should not be subsidized directly nor indirectly with regressive use taxes.
I will agree with your statement that ethanol from corn is not our long-term ticket out of oil dependency. What it does provide, however, is an immediate solution to import offsets. I own a corn farm as well, but do not have an ownership in any ethanol plant. That said, I have friends who have made those investments and are doing quite well. Again, I have been a life long Republican but have become sickened by our free market rhetoric — as if one really exists — while the corporate concentration of power grows each and every day. My friends who have invested in ethanol could probably buy a house in Beaver Creek now — and good for them! I’d much rather have them creating the wealth as the likes of Ken Lay, middle eastern shieks, etc. They are good citizens of our small communities and when those dollars are created locally — we all win. I also know that if crude oil stayed in the $70 range that ethanol is a viable industry without any subsidies. Cellulostic ethanol technology is knocking on the door and will be our fuel of the future – even the corn growers will admit that. In the meantime, we can produce a domestic product that integrates into our current distribution system with few disruptions — setting the stage for a cellulostic-based fuel supply.
If we were really serious about free markets – we’d stop the subsidies of both the oil industry (fossil fuel companies are the receipients of nearly 75% of the $15 billion Energy Act last year)and the coal-fired power plants. The GAO issued a report that the fossil fuel industry has received over $160 billion in subsidies over the past 40 years — so when you hear the shrill cries of the “industry” state that they have no problem with renewable energy — they just don’t want to have to compete with a subsidized industry — try not to throw up. Somebody step up to the plate and give us our beloved free market and the renewable energy industry would thrive. That said, I have little doubt it will happen — although my party will continue to campaign as though one exists, or soon will, and we’ll buy that crap and spend the next four years watching nothing happen. Owens showed the colors of our party by his veto last week of the ethanol bill — and if the Republicans were lucky enough to put an R back in the Governor’s seat we’d have nothing but more of the same for four more years. Skeptic — I appreciate your thoughts and inputs here. We may not agree on many things — but it’s only through civil dialogue that we’d find some understanding — something that is missing at the federal level — and we’re all paying the price.
Dear Another Skeptic:
Have you ever looked at the energy balance across an ethanol plant? I have. The analysis for a gallon of ethanol taking more energy to generate than it produces IS correct IF you dry 100% of the byproduct (a wet mash called distiller’s grains) into a dry product very similar to corn flakes without the sugar. However, if the cattle farmers in the area are willing to pay for the wet mash on a per pound OF PROTEIN basis similar to corn, then drying is not necessary. That reduces over 70% of the energy consumption within the fence line and allows ethanol to be net energy positive within the fence line rather than energy negative.
Also NO SUBSIDIES GO TO THE ETHANOL PRODUCER. THIS ADMINISTRATION CHANGED THE LAWS – 1005 OF THE SUBSIDY GOES TO THE OIL COMPANY BLENDING THE ETHANOL – THE PRODUCER NEGOTIATES HOW MUCH OF THE SUBSIDY THE PRODUCER WILL GET BACK FROM THEM. The old system used to subsidize the producer – blenders hated it. It got changed – blenders were keeping as much as 50% of the usbdiy early last year (demand has changed that). But the sybsidy is to the oil company. PLEASE GET THE FACTS STRAIGHT.
I know – I have worked in the venture capital side to finance these plants. And oh, by the ay, the majoirty of the profit on an ehtnaol plant – it goes to the VC. The plant oerator pays makret price for corn, the promoter (and I have met very few Democrats in the promoter group) look for 200% returns on their investment within 5 years and the Venture Capitalists – the little farmers, right? Their base target is 45% return PER YEAR on the money. Plant filaures are less than 1 in 10, so don’t talk to me about free market risk/reqard ratios.
I am a “free marketer” if you would – but a free market is one in which labor, intellectual capital and financial capital can compete equally – rarely happens.
CJ: If there was a more exact or appropriate word to describe our soon-to-be-ex governor, I certainly would have used it.
Reading the press release from the Governors office on the Ethanol bull raises a few questions, left unanswered. Does he truly support the use of foreign oil or our farmers at home? What does he have against declining our dependence and addiction to oil? Or, are the oil and gas companies in Colroado, whom he has represented and lobbied for before becoming elected, so deep in his pockets he must do everything he can to protect their interest? He takes a hit at the corn lobby with no mention of buddy Bruce Benson.
Owens is in bed with the oil companies, just take a look at Trailhead funding.
It would not be fair to leave Benson hanging out there by himself. Owens is in bed with plenty of other oilmen including Jack Overstreet, Bill Armstrong, Frederick Hamilton and Cimarex Energy. Hmm…I wonder whose interest Owens really had in mind when he vetoed the Ethanol bill?
Another Skeptic, Farm Boy, El Paso LL: I must say, this thread has been educational. I really enjoy the point-counter point on this issue. Unfortunately, most people will support one side or another based on who has the best sound bite, without all the technical info you all have provided today. It is a complex issue with good points made by each of you. Thanks for sharing.
Farmboy, Thanks for the dialogue. It’s made me refresh my memory on the issues.
Do your friends worry that every small town in Iowa is building or operating an ethanol plant—that the capacity will reduce returns and even produce losses as the “free market” imposes it’s will on prices?
El Paso’s comments on the venture capital aspect are enlightening. A lot of small town investors are being attracted to ethanol plant partnerships like thousands of suckers were taken in by limited partnerships in oil drilling ventures. The VCs know what they’re doing and will profit, although not as much as they hope. Individuals will finance general partners who will win the Beaver Creek estates. I don’t know how much the individual, unsophisticated investors are protected from the vultures.
I am a strong believer in regulated free markets. Regulated free markets are level playing fields with transparency that gives equal information to all speculators. No free markets are perfect, and the distribution and comprehension of information is imperfect, and that’s why speculators play the game—they think they have better info or better insights into the markets. Good ones are right 50% of the time and manage their money well.
Agricultural markets, cash and futures, are regulated, relatively free, relatively regulated and imperfect. They’re imperfect because politicians can manipulate them at will and frequently do. And they’re imperfect because the grain merchants, processors and other commercials have much better information than producers and most speculators. Yet, they work, and they work better than any alternatives yet invented.
Update, correction, or whatever you want to call it. Owens’ veto of the bill that would have required simpler contracts for physicians involved private insurers, not Medicaid. I got it wrong earlier in this thread. While my general comments on the issue of regulating physicians stands, the issues involved in this bill are quite different.
I don’t know how to access the veto messages to see why Owens vetoed the bill, but he and GOP legislators have been in the pockets of the health and casualty insurance markets for decades. And the insurers probably made a fairly credible case that they couldn’t afford to simplify their systems just for Colorado. An act of Congress is needed, and the insurers own Congress, too, imho.
Skeptic,
Given that we have a growing demand for liquid fuels in the US I’m not overly concerned about the proliferation of plants in Iowa. Because the midwest is best suited for corn production, and the fact they don’t irrigate (consuming coal-fired electricity to do so)– I’d much rather see it produced there than in places like the Central Great Plains where we rely on the finite resources of the Ogallala aquifer and coal-fired electricity from Wyoming to withdraw the water. Our challenge will be how do we get the ethanol production from the midwest to the east and west coast in the most efficient manner. My friend at Conoco-Phillips predicts there will be a two major underground pipelines built to accomodate the production.
As long as we see a future of $50+ crude oil, a maturing ethanol industry will stay competitive in the market place. It’s likely you and I will live to see the day of $100 oil. Today’s ethanol is being produced for less than $2/gallon — and that trendline is going down as technology advances. It wasn’t long ago they could only squeeze 2 gallons of ethanol out of a bushel of corn –today’s technology gives us almost 3 gallons. Couple that with enzymes that may make heating the corn mash a thing of the past –and it just continues to get better — both from an energy balance perspective and price point. Once we master the art of cellulostic ethanol, we can then be well on our way to independence. In the meantime we’ll have to accept some less than perfect systems — but those imperfect systems give us the pathway to energy independence.
Conservative:
The DeMint-Crapo bill had one provision that killed it for Dems and some Republicans: it locked a portion of Social Security funds into guaranteed individual payouts. That would have been the base on which privatized Social Security could have been placed, and a majority of Senators killed it for that reason. Social Security is not an investment program; it’s insurance. Unless you’re invested in a few specific life insurance policies, your insurance will never pay you back for avoiding a claims filing. Insurance works on a risk pool; some people take a loss and others take more than their pay-in, based on the fates. And so, since DeMint and Crapo’s bill would have invalidated that principle, it died.
Also, in case you were really unaware, the impending deficit in Social Security is a “known known” event; the money the DeMint-Crapo bill would have protected (that’s “placed in a lockbox” for you folks not too arrogant to concede a decent thought to Al Gore) is the surplus money that is supposed to have been coming in to buffer against the 2017 deficit period. In fact, however, the U.S. Treasury notes sitting in the Social Security office (those flimsy bits of paper the President found when he went looking) are the single most secured investment note that the U.S. government issues; they are to be paid before all other debts and obligations… The only way Social Security gets in trouble in 2017 is if some uncaring Congress and President bankrupts the country. Oh, wait.
For those of you who have the time, here is the link to a great interview of Tom Friedman — it’s an hour long but WELL worth your time:
http://video.google.com/videoplay?docid=3654901030398257198&q=tvshow%3ACharlie_Rose
Bobster
You forgot two very important points when you discuss SB 1. AARP has no vested interest in the legislation other than taking money from the disabled and children to fund more long-term care, which makes up around 80% of Medicaid spending. Seniors are now under Medicare part D and should not be dictating to children and the disabled what drugs are best for them. Secondly, if the state utilizes the bulk purchasing it will no longer be able to receive the federally mandated “best pricing” feature.
The Federal Government mandates a Medicaid “best-price” provision that gives Medicaid access to the lowest price paid by any other purchaser in the United States. The federal government and the states share funding for the program. The federal share of Medicaid expenditures averages about 57 percent.
Under the best-price provision, state Medicaid agencies obtain access to the lowest prices paid for prescription drugs by any purchaser in the United States without having to duplicate the efforts of large private purchasers to earn those discounts.
If the state utilizes the bulk purchasing it will no longer be able to receive the federally mandated “best pricing” feature.
Bad deal For Seniors
SB 1 does not provide an assistance program at all, for coverage of Medicare part D “doughnut hole”. This program will not provide assistance to enrollees with their premiums, deductibles, and coinsurance, under a Part D Plan. Under the federal guidelines, the seniors who utilize this program would never pay “true out-of-pocket expenses” and thus never achieve the threshold to obtain catastrophic coverage. Thus putting the senior in the “doughnut hole” forever. This also is financially harmful to seniors in that once they drop out of the Medicare Part D plan they will be penalized with a 1% increase to their premium for however long they are not on the Part D plan. Seniors can only enter into a Part D plan once a year and therefore could be penalized 12% of their premium.
Another factor for seniors joining the multi-state pool program is that their current Part D plan has a formulary or preferred drug list (PDL) for drugs they are receiving. Most seniors chose their plans based on the formulary or preferred drug list that fits their needs. Once they join the multi-state pool its formulary or preferred drug list may not obtain the same medications that was on their Part D plan, the seniors will be subject to the multi-state pool’s preferred drug list. For many switching medication can be extremely harmful and most often worsen an individual’s medical condition, and costing the senior more in further treatments, or can be ultimately fatal.
What kind of Cool Aid are you drinking?
[…] Governor Owens vetoed 12 more bills today, includingВ a billВ that would fund afterschool programs for kids (HB-1363)В and a bill that wouldВ prohibit price gougingВ (HB-1251). After last week’s veto of 18 bills, Owens has now struck down 30 bills in two weeks. […]