This writing involves an article in the December 19 issue of Chemical and Engineering News entitled, "US Firms Detail Investments".
A 3.3 billion pound per year cracker will be constructed at Cedar Bayou, Texas. A 1.1 billion pound polyethylene plant will be constructed at Cedar Bayou or Sweeney, Texas. Expansion of ethylene capacity by 850,000,000 pounds will be made at Laporte, Texas. A 1.7 billion pound methanol plant will be restarted in Channelview, Texas. A propylene-producing metathesis unit will also be constructed at Channelview.
Two companies are studying a polypropylene oxide/tertiary butyl alcohol plant for China.
If the US investment climate is bad, why these several major investments in Texas? The answer is a combination of favorable investment climate and proximity to markets. In spite of the fact that the Obama Administration is antagonistic to business with its various regulations and high taxes, Texas has offered compensating factors. It has no state income tax, so that in spite of high federal taxes, the total tax burden is less significant. The products produced in Texas are also available to various parts of the US at freight costs considerably less than materials produced abroad.
Unfortunately, the petrochemical nature of these high-dollar value investments do not produce many jobs. Many of the individual operations are automated, but those few jobs available are high-paying. However, the low-cost availability of these products to other customer-manufacturers in the US does contribute materially to secondary jobs. If these basic petrochemical investments were made abroad rather than in the US, those secondary jobs would likely also not be available.
The bottom line is that a favorable investment climate not only promotes investment, but also results in jobs. We now have in the US high unemployment, because the investment climate is more favorable to production overseas.
Friday, December 30, 2011
Investment Climate
This writing is based on another article in the December 19 issue of Chemical and Engineering News. The article is entitled, "Air Products Invests in China".
The basic business of Air Products and Chemicals Is to separate nitrogen and oxygen from air. The Air Products investment in China is to supply another Chinese company with oxygen and nitrogen for converting coal to various oil products. Air Products has also constructed an ammonia plant in China to supply ammonia to another Chinese company for manufacture of light-emitting diodes. The obvious question is why is Air Products pumping its investment money into China. The answer is fairly obvious,. While we have lots of coal in the US and could also convert coal into oil products, the Obama Administration is stuck on renewable energy and makes it almost impossible to justify the conversion of coal to oil.
The ammonia situation is not significantly different. The ammonia generation must go where the light emitting diodes are produced. Why not produce light emitting diodes in the United States? The answer again is an unfavorable business climate, as developed by the Obama Administration. Labor costs are high and there too many regulations, all of which lead to insufficient return on investment. Since the return on investment in China is higher, that's where light emitting diodes will be produced and also where Air Products justifies having an ammonia manufacturing plant.
The basic business of Air Products and Chemicals Is to separate nitrogen and oxygen from air. The Air Products investment in China is to supply another Chinese company with oxygen and nitrogen for converting coal to various oil products. Air Products has also constructed an ammonia plant in China to supply ammonia to another Chinese company for manufacture of light-emitting diodes. The obvious question is why is Air Products pumping its investment money into China. The answer is fairly obvious,. While we have lots of coal in the US and could also convert coal into oil products, the Obama Administration is stuck on renewable energy and makes it almost impossible to justify the conversion of coal to oil.
The ammonia situation is not significantly different. The ammonia generation must go where the light emitting diodes are produced. Why not produce light emitting diodes in the United States? The answer again is an unfavorable business climate, as developed by the Obama Administration. Labor costs are high and there too many regulations, all of which lead to insufficient return on investment. Since the return on investment in China is higher, that's where light emitting diodes will be produced and also where Air Products justifies having an ammonia manufacturing plant.
Thursday, December 29, 2011
Speaker Boehner Doesn't Understand Reduced Spending
e-mail to Rep. Neugebauer:
In the December 19 issue of Chemical and Engineering News, Susan Morrissey has an article entitled, Rocky Road for Federal budget". It concerns the fact that Democrats have stalled passage of an omnibus spending bill, apparently developed by House Republicans. The stalling actually involves a dispute on the included payroll tax, which is not part of the omnibus spending. It is said that the spending bill was approved by sections of both the House and Senate. The spending bill includes nine fiscal 2012 appropriations bills.
Let us recall that we have a tremendous national debt and a tremendous budget deficit. We have been looking for ways to reduce government spending, but this is what the House Republicans have come up with and which has been generally accepted by the Senate: The total spending bill is $915 billion, which is almost $1 trillion.
The Department of Defense gets a cut of an almost insignificant 3%. The Department of Energy, which I previously said should be completely eliminated, maintains an expenditure of $1.8 billion. That apparently does not include Department of Energy scientific research, which will grow from $46 million to $4.9 billion. The budget for the National Institutes of Health will grow by 1%.The NIH grants, which I have been railing against, will remain unchanged. The EPA will get an almost insignificant cut of 3%. .
If House Speaker Boehner considers this to be a reasonable approach for fiscal funding of government, he needs to be taken out.
In the December 19 issue of Chemical and Engineering News, Susan Morrissey has an article entitled, Rocky Road for Federal budget". It concerns the fact that Democrats have stalled passage of an omnibus spending bill, apparently developed by House Republicans. The stalling actually involves a dispute on the included payroll tax, which is not part of the omnibus spending. It is said that the spending bill was approved by sections of both the House and Senate. The spending bill includes nine fiscal 2012 appropriations bills.
Let us recall that we have a tremendous national debt and a tremendous budget deficit. We have been looking for ways to reduce government spending, but this is what the House Republicans have come up with and which has been generally accepted by the Senate: The total spending bill is $915 billion, which is almost $1 trillion.
The Department of Defense gets a cut of an almost insignificant 3%. The Department of Energy, which I previously said should be completely eliminated, maintains an expenditure of $1.8 billion. That apparently does not include Department of Energy scientific research, which will grow from $46 million to $4.9 billion. The budget for the National Institutes of Health will grow by 1%.The NIH grants, which I have been railing against, will remain unchanged. The EPA will get an almost insignificant cut of 3%. .
If House Speaker Boehner considers this to be a reasonable approach for fiscal funding of government, he needs to be taken out.
Tuesday, December 20, 2011
EU Carbon Tax on Airlines
Cheryl Hogue has an article entitled, "Unfriendly Skies" in the October 17 issue of Chemical and Engineering News. It is basically about an argument between international airlines and the European Union. The European Union (EU) says that when airline flights enter EU space, they generate significant quantities of carbon dioxide through the burning of their jet fuel. The EU says the airlines are subject to "Cap & Trade", which essentially means they must pay tax. The airline object, because it will cost money.
This is only a small segment of the many arguments which involve Cap & Trade, not only at the European Union level, but which also in the US
It may be interesting to review Cap & Trade, for what it really is; a government tax.
Since the collapse of the Soviet Union, Western Europe has been continually moving toward a socialistic culture. However, the inherent economics of socialism is starting to catch up with them. We see this in the economic problems of Greece, followed by Italy and Spain. Even Germany will eventually not be exempt. Collectively, they will all go down to defeat, as the EU is unable to meet its obligations to the various populations.
These obligations involve governmental benefits, such as free housing, free medical care, etc., without the production level to sustain these costs. In an effort to maintain solvency in the various governmental coffers, and the EU in total, various tax forms been developed. The latest of these is the "carbon tax", which has previously been disguised as "Cap & Trade". It is just another new name for a tax to postpone the eventual collapse of socialism, as governments are unable to obtain sufficient revenue to continue the offering of benefits to its populations.
This is only a small segment of the many arguments which involve Cap & Trade, not only at the European Union level, but which also in the US
It may be interesting to review Cap & Trade, for what it really is; a government tax.
Since the collapse of the Soviet Union, Western Europe has been continually moving toward a socialistic culture. However, the inherent economics of socialism is starting to catch up with them. We see this in the economic problems of Greece, followed by Italy and Spain. Even Germany will eventually not be exempt. Collectively, they will all go down to defeat, as the EU is unable to meet its obligations to the various populations.
These obligations involve governmental benefits, such as free housing, free medical care, etc., without the production level to sustain these costs. In an effort to maintain solvency in the various governmental coffers, and the EU in total, various tax forms been developed. The latest of these is the "carbon tax", which has previously been disguised as "Cap & Trade". It is just another new name for a tax to postpone the eventual collapse of socialism, as governments are unable to obtain sufficient revenue to continue the offering of benefits to its populations.
Tuesday, November 29, 2011
Sending Money to the EU Would Be Idiocy
Open e-mail to Rep. Neugebauer:
Randy,
The European Union (EU) is collapsing economically. With its economic collapse, it will return to an earlier form of Western Europe. Namely, individual countries, with individual currencies and national governments.
The EU's impending collapse is a result of individual member governments giving more money to their citizens, than they have collected by taxing productive individuals and enterprises. The individual citizens have no desire to give up their pensions and other government benefits and strongly resist any governmental efforts to make such reductions. Cite the riots in Greece. While tax cheats are prevalent, particularly in Italy, the likelihood that governments can obtain significantly more revenue from taxes is remote. Traditional bankruptcy is imminent for the EU as a whole and many of the individual member countries. And, when I say traditional bankruptcy, I don't mean the standard weasel wording bankruptcies of Chapters 9 and 11 in the US. I mean "out of business".
There has been talk of a US bailout of the EU. This is not only ridiculous. It is downright idiotic. The US suffers from the same disease as the EU, but at a slightly lower level, and it is anticipated that it will catch up and will eventually take its turn on total bankruptcy. Attempts to cut US government expenditures have been futile, and we are already deeply in debt. How can any rational person think that by our borrowing more money to give to the European Union, for a temporary relief of their problem, will solve anything?
We must take notice of what has happened to the EU and watch its fall. Perhaps we can learn something from the observation and take some real action so that we do not follow the same route.
There has been talk that if we don't increase our own debt by borrowing money to give to the EU, it will negatively impact our own economy through reduction of our exports. Think of it in practical terms. We should borrow money to give to the EU so that they can give back our borrowed money and take our manufactured goods in return? What kind of logic is this? Why stop there? Why not give money to the Russian government so they can pass it on to their people, who will buy our skis and snowmobiles?
What happens when no one will lend us any more money to give away? Or even when no one else in the world has any more money? We then revert to the Middle Ages, when there was no economic or technological progress. There are more people in the world now and more people available to starve to death, as they will be unable to buy food or produce their own.
Let's get off this idiocy and return to free-market trading, which has existed for thousands of years. You sell goods to people, if they have the money to pay for them. Without money, don't sell and they do without. It is only in the modern concept of idiocy that one could dream up the idea of giving someone money so that he can buy your goods.
Randy,
The European Union (EU) is collapsing economically. With its economic collapse, it will return to an earlier form of Western Europe. Namely, individual countries, with individual currencies and national governments.
The EU's impending collapse is a result of individual member governments giving more money to their citizens, than they have collected by taxing productive individuals and enterprises. The individual citizens have no desire to give up their pensions and other government benefits and strongly resist any governmental efforts to make such reductions. Cite the riots in Greece. While tax cheats are prevalent, particularly in Italy, the likelihood that governments can obtain significantly more revenue from taxes is remote. Traditional bankruptcy is imminent for the EU as a whole and many of the individual member countries. And, when I say traditional bankruptcy, I don't mean the standard weasel wording bankruptcies of Chapters 9 and 11 in the US. I mean "out of business".
There has been talk of a US bailout of the EU. This is not only ridiculous. It is downright idiotic. The US suffers from the same disease as the EU, but at a slightly lower level, and it is anticipated that it will catch up and will eventually take its turn on total bankruptcy. Attempts to cut US government expenditures have been futile, and we are already deeply in debt. How can any rational person think that by our borrowing more money to give to the European Union, for a temporary relief of their problem, will solve anything?
We must take notice of what has happened to the EU and watch its fall. Perhaps we can learn something from the observation and take some real action so that we do not follow the same route.
There has been talk that if we don't increase our own debt by borrowing money to give to the EU, it will negatively impact our own economy through reduction of our exports. Think of it in practical terms. We should borrow money to give to the EU so that they can give back our borrowed money and take our manufactured goods in return? What kind of logic is this? Why stop there? Why not give money to the Russian government so they can pass it on to their people, who will buy our skis and snowmobiles?
What happens when no one will lend us any more money to give away? Or even when no one else in the world has any more money? We then revert to the Middle Ages, when there was no economic or technological progress. There are more people in the world now and more people available to starve to death, as they will be unable to buy food or produce their own.
Let's get off this idiocy and return to free-market trading, which has existed for thousands of years. You sell goods to people, if they have the money to pay for them. Without money, don't sell and they do without. It is only in the modern concept of idiocy that one could dream up the idea of giving someone money so that he can buy your goods.
Tuesday, November 8, 2011
Cut Promotional and Grant Funding to Federal Science Agencies
In her article "Prioritizing Science Funding", October 24 Issue of Chemical & Engineering News, Susan Morrissey says, "Members of a key congressional science committee believe that fiscal 2012 federal budget could be trimmed by over $1.5 billion through cuts to science agencies without undermining the role of science and innovation in the US's long-term economic growth".
I agree with that 100%.
The letter to Congress' Joint Select Committee on Deficit Production comes from 11 Republican House members, of the House Science, Space & Technology Committee.
Two operations which the National Foundation and the National Institute of Standards & Technology engage in and which I strongly object to are promotion programs and research grants, primarily to universities. It is through those two operations, which the agencies wield political power for the administration and should be eliminated. One program specifically mentioned by the Committee for abolishment is the Advanced Research Project Agency-Energy program (ARPA-E). I heartily agree. This program wastes millions and perhaps billions of dollars pursuing the Administration's undefined dream of "Clean" energy, when we have made great strides in improving cleanliness of fossil fuel use.
I agree with that 100%.
The letter to Congress' Joint Select Committee on Deficit Production comes from 11 Republican House members, of the House Science, Space & Technology Committee.
Two operations which the National Foundation and the National Institute of Standards & Technology engage in and which I strongly object to are promotion programs and research grants, primarily to universities. It is through those two operations, which the agencies wield political power for the administration and should be eliminated. One program specifically mentioned by the Committee for abolishment is the Advanced Research Project Agency-Energy program (ARPA-E). I heartily agree. This program wastes millions and perhaps billions of dollars pursuing the Administration's undefined dream of "Clean" energy, when we have made great strides in improving cleanliness of fossil fuel use.
Thursday, November 3, 2011
Treasury Sec. Geither Can Radically Cut Production of US President $1 Coins
Open e-mail to Rep. Neugebauer:
Randy,
My associate, Gordon Anderson, has brought to my attention an ABC video clip by reporter Dianne Sawyer, which shows that the US Mint is producing Presidential $1 coins in quantities well above reason. http://abcnews.go.com/WNT/video/coins-costing-taxpayers-14076274 (after the Merck commercial).
The clip indicates that "By act of Congress", the Philadelphia Mint is producing the coins at the rate of $600,000 per day, Since there is essentially no circulation demand, the coins are being stored. Present stored coins have a $1 billion face value. Additional storage space will be required for additional minted coins, until the project is terminated in 2016. The new storage facility will cost $650,000 and shipping cost will be $3 million. Rep. Jack Reed was a cosponsor of the original bill. In the clip, he recommends Congress do something about the problem.
Wikipedia also has an extensive presentation of the program. Included is a reference to Rep. Jackie Speier of California, who is currently circulating a “Dear Colleague” letter recommending that the U.S. not produce any dollar coins. She plans to introduce legislation calling for the immediate halting of all dollar coin programs. http://en.wikipedia.org/wiki/Presidential_$1_Coin_Program.
With that background, I decided to look at the Act itself.
The "Presidential $1 Coin Act of 2005’’ (Public Law 109-145) requires the US Mint, among other requirements, to produce each year a quantity of $1 coins commemorating four US Presidents, until all Presidents have been so honored. The Act included an Amendment to Section 5112 of Title 31, United States Code, with the addition of:
‘‘(n) REDESIGN AND ISSUANCE OF CIRCULATING $1 COINS HONORING EACH OF THE PRESIDENTS OF THE UNITED STATES.—" and related subparagraphs.
The quantity of issued (minted?) coins is specified in:
‘‘(4) ISSUANCE OF COINS COMMEMORATING 4 PRESIDENTS DURING EACH YEAR OF THE PERIOD.—
‘‘(B) NUMBER OF 4 CIRCULATING COIN DESIGNS IN EACH YEAR.—The Secretary shall prescribe, on the basis of such factors as the Secretary determines to be appropriate, the number of $1 coins that shall be issued with each of the designs selected for each year of the period referred to in paragraph (1).
(http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ145.109.pdf)
If I understand this correctly, Congress does not need to take any legislative action to stop the exorbitant minting. A simple phone call to Secretary of the Treasury Timothy Geithner suggesting that he cut the volume of coins for each President to say $1000 should be enough to do the trick. If Geithner is uncooperative, you might ask for a Congressional hearing to have him explain publicly why he continues this exorbitant minting.
Randy,
My associate, Gordon Anderson, has brought to my attention an ABC video clip by reporter Dianne Sawyer, which shows that the US Mint is producing Presidential $1 coins in quantities well above reason. http://abcnews.go.com/WNT/video/coins-costing-taxpayers-14076274 (after the Merck commercial).
The clip indicates that "By act of Congress", the Philadelphia Mint is producing the coins at the rate of $600,000 per day, Since there is essentially no circulation demand, the coins are being stored. Present stored coins have a $1 billion face value. Additional storage space will be required for additional minted coins, until the project is terminated in 2016. The new storage facility will cost $650,000 and shipping cost will be $3 million. Rep. Jack Reed was a cosponsor of the original bill. In the clip, he recommends Congress do something about the problem.
Wikipedia also has an extensive presentation of the program. Included is a reference to Rep. Jackie Speier of California, who is currently circulating a “Dear Colleague” letter recommending that the U.S. not produce any dollar coins. She plans to introduce legislation calling for the immediate halting of all dollar coin programs. http://en.wikipedia.org/wiki/Presidential_$1_Coin_Program.
With that background, I decided to look at the Act itself.
The "Presidential $1 Coin Act of 2005’’ (Public Law 109-145) requires the US Mint, among other requirements, to produce each year a quantity of $1 coins commemorating four US Presidents, until all Presidents have been so honored. The Act included an Amendment to Section 5112 of Title 31, United States Code, with the addition of:
‘‘(n) REDESIGN AND ISSUANCE OF CIRCULATING $1 COINS HONORING EACH OF THE PRESIDENTS OF THE UNITED STATES.—" and related subparagraphs.
The quantity of issued (minted?) coins is specified in:
‘‘(4) ISSUANCE OF COINS COMMEMORATING 4 PRESIDENTS DURING EACH YEAR OF THE PERIOD.—
‘‘(B) NUMBER OF 4 CIRCULATING COIN DESIGNS IN EACH YEAR.—The Secretary shall prescribe, on the basis of such factors as the Secretary determines to be appropriate, the number of $1 coins that shall be issued with each of the designs selected for each year of the period referred to in paragraph (1).
(http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ145.109.pdf)
If I understand this correctly, Congress does not need to take any legislative action to stop the exorbitant minting. A simple phone call to Secretary of the Treasury Timothy Geithner suggesting that he cut the volume of coins for each President to say $1000 should be enough to do the trick. If Geithner is uncooperative, you might ask for a Congressional hearing to have him explain publicly why he continues this exorbitant minting.
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