Category: Uncategorized

The Washington Post this week had a series of articles about The Nature Conservancy, a nonprofit dedicated to buying and preserving land. They’re a big organization (one that I’ve supported for many years and will continue) and in their zeal to preserve land they get into dealings as questionable as some similar size corporations. And it is worth noting that when the head of a charitable organization calls himself the “CEO” you’ve got trouble.

Anyway, this one particular part of the series deals with a piece of land on Martha’s Vineyard. The owner was looking for a way to subdivide and develop the land, but the authorities would let him rezone the land. So he lined up some buyers including The Nature Conservancy and told the authorities he was selling the land to the Conservancy. All the sudden he wasn’t a bad guy anymore. To sweeten the deal he asked that he be granted permission to subdivide the land into 35 parcels which would greatly increase the value from the planned six lots. In fact it increased the value by $14 million. The guy then sells the land for the original appraisal of $64 million but writes off $78 million. Basically the guy got the full value of the land plus a $14 million writeoff.

But all’s well that end’s well, right, because the Nature Conservancy can preserve this land now. Not exactly. $45 million of the purchase price came from “donors” who would get to build on the property! In fact, one guy is building a $14 million mansion. And half the land will become an “educational farm” so it won’t really be preserved. And one of the other donors (David Letterman) got to keep the mansion that was already on the property. Of course I’m sure the “donors” all wrote off their donation to The Nature Conservancy as well.

Because the article involves math, I’m sure nobody will really care about what it says. But the bottom line is these guys all got to dodge millions of dollars in taxes and still build vacation homes.

http://www.washingtonpost.com/wp-dyn/articles/A17879-2003May5.html

The whole series is very good, but a little depressing. There’s another story where the Conservancy bought land from a lumber company but in order to afford the price they agreed to “sell” the lumber on the land back to the company. This way the company wrote off a huge donation (including the value of the timber) but still wound up with the lumber and left the conservancy with stripped land to replant.

When you hear that rich people don’t pay taxes, this is how they do it.

Now that Bush has put his billion dollar program to push hydrogen-powered cars, it seems to be coming up more often.

US News had a interesting article (that I’ve already quoted once) about some of the different technologies.

http://www.usnews.com/usnews/issue/030217/biztech/17oil.htm

They pretty much trashed ethanol, saying that the energy it takes to harvest the corn and turn it into alcohol is roughly equal to the power you get from burning it. Essentially it amounts to a huge government subsidy ($1 billion per year) of Archer Daniels Midland, the primary producer of ethanol, and others. They called it “unsustainable, subsidized food burning.” They did say that some new biotechnologies for rapidly breaking down vegetable waste like the cobs, stalks, grasses, etc. was encouraging and currently that stuff is tilled under (which still gives it some use). So they didn’t give up completely. Currently the US produces 2.13 billion gallons of ethanol a year, which I thought was pretty amazing.

They pointed out that natural gas burns much cleaner than diesel or gasoline (or gasohol) and doesn’t cost as much, running about 25% cheaper than the equivalent in gasoline. I thought that it was pretty easy to run a conventional engine on natural gas, but they said for a car that it was about $8,000 for the upgrade. That’s pretty prohibitive I think, given that my car cost $16k brand new (but if they used the ethanol subsidy the government could upgrade 125,000 cars a year the current total number of natural gas vehicles). For big diesel engines like buses it costs an extra $20-50k. Washington DC is spending $100 million to add 250 natural gas buses to its fleet (includes fueling stations and entire cost of new buses). They also said finding natural gas stations isn’t easy but for $1,000 you can get a device that hooks up to your home gas line and refuel at home. I thought that was pretty cool, but it still wouldn’t help you on long trips. Plus there’s the problem that a lot of newer power plants run on natural gas and if you throw in a bunch of cars as well, the cost could escalate pretty quickly (already has, given my last gas bill). And it’s more expensive in the winter when everyone is heating their homes with it. Natural gas in vehicles is currently displacing only 124 million gallons of gasoline per year, about 5% of the ethanol market.

They mentioned vegetable diesel fuel which is essentially soy bean oil. It costs twice what diesel costs, but can run in a regular diesel engine (that’s amazing to me). But it’s use last year was only 15 million gallons.

So you’ve got all this stuff out there and then you’ve got hydrogen, which for some reason everyone wants to only burn in “fuel cells” that cost hundreds of thousands of dollars. Why not just combust it? That would be a lot cheaper. The problem with hydrogen is that it takes more electricity to generate it than the power you get out of it so you’re still burning coal or gas or building nuclear plants to produce it.

They talk about hybrid cars and touched on an interesting point. There’s really no point in building tiny hybrid cars. You can build tiny gasoline cars that get 30-40 mpg, so what’s it matter if you get 50 mpg from a hybrid? They need to be building hybrid trucks and SUV’s, that’s where the fuel is being burned and where the potential for savings is greater. People just won’t trade in SUV’s for tiny hybrid cars, so just accept it and make hybrid SUV’s.

Also there’s Bush’s least favorite remedy because it doesn’t involve a subsidy to any lobbyist or corporation: insisting on higher efficiency vehicles. That would greatly reduce our dependence on foreign oil and it’s easy to achieve. Hey, and smaller cars cost less than big ones! There’s no development curve, you don’t pay more for the fuel, and so on.

Looks to me like the easiest and smartest solutions are using natural gas more often and encouraging the use of smaller cars. We could save billions by eliminating the ethanol subsidy, not developing far out technologies, and just drive smaller cars. US cars and trucks burn 600 billion gallons of gas per year. Increasing the average mileage 2 miles per gallon would save 60 billion gallons. That’s 30 times the amount of gasohol and 500 times the amount of natural gas we’re burning in vehicles. And how hard would it be to raise the average from 20.8 mpg to 22.8? Plus it costs the taxpaying consumer less to buy smaller cars and costs less to run them! No government subsidy required. In fact, by reducing demand, the price of gas would decrease. Why doesn’t Bush push that program?!

Democracy is when people have equal votes. But in the US it wouldn’t be practical to have all 280 million people vote on every single law. So we elect representatives to do the voting on our behalf. Those representatives are US, state, county, and city congressmen, mayors, commissioners, etc. They are all elected to pass the laws so that citizens don’t have to worry about learning about every law.

This system is called a representative democracy or “republic”. The system itself is still considered to be a democratic system, but the form of government is called a republic. That’s why the pledge of allegience says “and to the republic for which it stands”. If you look at the definition of democracy (below) it says that a democracy is through the people directly or through elected representatives. So the US is a democracy and a republic. But a lot of know-it-alls will correct people who say that the US is a democracy and say we are not a democracy but a republic. In fact, we are a democracy.

Here’s what my dictionary says:

democracy (d??-m??k??re-s??) noun plural democracies

1.” Government by the people, exercised either directly or through elected representatives.

2.” A political or social unit that has such a government.

3.” The common people, considered as the primary source of political power.

4.” Majority rule.

5.” The principles of social equality and respect for the individual within a community.

republic (r??-p??b??l??k) noun Abbr. rep., Rep., Repub.

1.” a. A political order whose head of state is not a monarch and in modern times is usually a president. b. A nation that has such a political order.

2.” a. A political order in which the supreme power lies in a body of citizens who are entitled to vote for officers and representatives responsible to them. b. A nation that has such a political order.

3.” Often Republic. A specific republican government of a nation: the Fourth Republic of France.

4.” An autonomous or partially autonomous political and territorial unit belonging to a sovereign federation.

5.” A group of people working as equals in the same sphere or field: the republic of letters.

The American Heritage?? Dictionary of the English Language, Third Edition copyright ?? 1992 by Houghton Mifflin Company. Electronic version licensed from InfoSoft International, Inc. All rights reserved.