An article in a recent issue of The Economist (“Sweet Land of Subsidy,” December 3rd to 9th, 2011, p. 42) tells the story of Iuka, Mississippi, a small community (2000 pop. 3,059) in Tishomingo County, where the local economic development foundation “invested” an unreported sum of the taxpayers’ money in the mid-1990s to build a 90,000 square foot facility so as to lure a job-creating private employer to the area. Although several call-centers have since “taken a look”, the building never has had a rent-paying tenant and remains vacant nearly two decades on.

The director of the development foundation there blames the county’s failure to attract businesses on the lack of local access to broadband internet connections.

Not to worry, though. In early November, the Federal Communications Commission (FCC) announced that it would redirect $4.5 billion from a program established to guarantee universal access to landline telephone service to a new “Connect America Fund” (CAF), intended to provide “reliable” broadband internet connections to Americans living in rural areas and, as is obligatory in a period of state-created recession, claiming with a straight face to add 500,000 new jobs and $50 billion to GDP over the next six years.

According to the FCC, 18 million U.S. souls do not now have broadband service, and it claims that 7 million of them can be reached with the new subsidy. The subvention thus amounts to more than $640 per person, assuming that none of the unconnected people live in the same household. (The marginal cost per household is estimated to be $775, although, owing to duplication, the incremental cost of previous subsidies has run as high as $350,000 per house.)

More recently, according to the same article, $7.2 billion in federal stimulus money was spent on rural broadband access. CAF raises the ante by 62.5 percent.

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The world price of crude oil has been on a roller coaster lately, gyrating above and below $100 a barrel. Several weeks ago, prices at the pump reached $5 a gallon in some places but seem to have settled down, at least temporarily, to less than $4 in many parts of the country. The elevated cost of gasoline—and of heating oil, aviation fuel and other energy products derived from “black gold”—understandably is a matter of great concern to most Americans.

Rising energy costs already have changed many families’ summer vacation plans, threatened to short-circuit the weak recovery from the Great Recession and, combined with recent increases in food prices, contributed to incipient inflationary pressures that foreshadow a lower standard of living and a return to the stagflation of Jimmy Carter’s presidency.

Fluctuations in crude oil prices are being driven mostly by uncertainty over supplies from oil-producing countries in North Africa and the Middle East, along with a weakening U.S. dollar and other political factors that largely are beyond the control of the much-maligned U.S. oil industry.

But they are not totally beyond Washington’s control. Just recently, President Obama reversed course once again, announcing policy initiatives that the White House claims will increase domestic oil production.

The president says he now wants to lease more drilling areas in the Gulf of Mexico and reduce bureaucratic delays in issuing permits for energy exploration and recovery.

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Hard on the heels of his speech to the U.S. Chamber of Commerce, in which he jawboned the owners of private businesses to increase hiring in return for federal tax breaks and other subsidies, President Obama has included in his budget request for fiscal year 2012 a proposal to make a $8 billion down payment on a six-year, $53 billion taxpayer-financed “investment” in high-speed rail.

The president’s budget proposal is a bad idea for at least two reasons. First and foremost, the public sector has little or no incentive to spend the taxpayers’ money in ways that maximize the ratio of benefits to costs. What is more important, no public transit system in the country, with the possible exception of New York City’s subway, generates passenger revenues sufficient to cover operating costs, let alone capital costs. All others gush red ink year after year.

Passenger fares on public transit modes typically are set at rates below full cost in order to maximize ridership and to “prove” that transportation via bus or rail is a worthy public service.

It may be reasonable to assume that high-speed rail transportation in the Northeast corridor, linking Washington, D.C., Philadelphia, New York and Boston, could pay its own way, but that conclusion depends on the relative cost of rail versus air and automobile travel among those same cities.

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President Obama, in his State of the Union address Tuesday night, was right to focus on the challenges the United States faces as domestic companies try to compete with low-cost global competitors. But he was wrong to suggest that the United States can “win the future” by getting Washington more involved in innovation and education.

As the president conceded elsewhere, Washington is, in fact, a big part of the problem—with high corporate tax rates and excessive regulation.

Just a week earlier in a Wall Street Journal article, the president elaborated on this, rhetorically declaring a truce with business and laying out the administration’s strategy for moving “toward a 21st-century regulatory system.”

Mr. Obama said this new system would need to strike a balance between the innovativeness, job-creating capacity and robust growth produced by free markets and the responsibility of government to impose “common-sense rules” to protect the public. He called for a “government-wide review of . . . rules already on the books,” and said that “careful consideration” would be given to the costs and benefits of all pending regulations. But as Yogi Berra once said, “This is like deja vu all over again.”

Presidents Clinton and Reagan both signed executive orders requiring that proposed federal regulations be implemented only if their economic benefits exceeded the costs of complying with them. Reagan even established a branch within the Office of Management and Budget—the Office of Information and Regulatory Affairs (OIRA)—to make sure executive branch agencies complied. The executive orders by and large were ineffective.

In fact, the federal government has been expanding its control of the private economy since the 1890s, on the theory that vulnerable people must be protected from cradle to grave by an omniscient bureaucracy that knows what’s best for them. The growth in regulation typically has been justified by analyses, prepared by the regulatory bureaus themselves, which grossly overstate regulation’s benefits and understate its costs.

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According to a Poll Position survey conducted in late October, 45 percent of Americans said “No” when asked whether the U.S. government should stop helping to fund NPR; 39 percent said “Yes.” Only those respondents identifying themselves as Republicans favored, by a 54 percent to 28 percent margin, ending taxpayer support for NPR.

Given that the federal budget is more than $1 trillion in the red and that deficits extend into the future as far as the eye can see, federal subsidies to public broadcasting understandably are on the table.

The just-released report of President Obama’s deficit-reduction commission recommends diverse measures to put Washington’s fiscal house in order, including a $100 billion reduction in defense spending, a substantial increase in the federal excise tax on gasoline, ending of the tax deductibility of home mortgage interest payments and eliminating all funding for the Corporation for Public Broadcasting.

Federal funding of public radio and television seems to be comparatively small potatoes in the larger budget picture.

This year, for example, congressional appropriations for CPB, the primary channel through which tax dollars are funneled to PBS television and NPR, amounted to $422 million.

At a time when economic stimulus programs, financed primarily by borrowing and the Federal Reserve’s recently announced second round of “quantitative easing,” total in the trillions, who could object to spending a mere few hundred million dollars to support the production and distribution of public programming? Well, I do!

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Environmental Protection Agency officials Wednesday provided power companies and states with new guidance on EPA’s plans to regulate greenhouse gases.

A D.C. lobbyist for two major power companies told Bloomberg News that “the energy and manufacturing sectors will essentially be in a construction moratorium” as a consequence.

Here we are, with 15 million Americans unemployed and millions more underemployed, and the EPA is moving blindly ahead with new regulations that will increase dramatically the energy costs of U.S. industries, reducing their competitiveness and profitability, and making it less likely they will hire.

EPA’s action amounts to rewriting the Clean Air Act to suit its own bureaucratic and ideological objectives. At a time when the Obama administration should be focused on job creation and the nation’s economic recovery, promulgating stringent new environmental rules should be its last priority.

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Economists and pundits, who contend that the Federal Reserve System has little room to maneuver in using monetary policy to jump-start our anemic economy, often have claimed that America is mired in a Keynesian “liquidity trap”, a situation in which the demand for money is unresponsive to changes in market interest rates.

After all, those commentators emphasize, the Fed has adopted a target for the federal funds rate (the interest rate charged on overnight interbank loans) of between zero and 0.25 percent. The implication is that further reductions in that rate will have little or no effect on the incentives of businesses to invest in new plant and equipment or of consumers to borrow in order to finance the additional spending necessary to raise GDP growth above the (recently downwardly revised) estimate of 1.6 percent during the second quarter of 2010.

But those commentators overlook or ignore the easily verified reasoning of John Maynard Keynes, who defined a liquidity trap in terms of long-term rather than short–term interest rates. The long-term (ten- or 30-year) rate on Treasury securities now runs at about three percent, meaning that the Fed still has arrows in its quiver. Unfortunately, however, those arrows, the use of which would demand the central bank engage in further “quantitative easing”, requires it to purchase more under-performing, “toxic” assets from banks and other financial institutions that lent money to homeowners who could not repay their mortgages. Engaging in such transactions places more bad debts on the Fed’s balance sheet, constrains its ability to conduct monetary policy in the future and raises the specter of higher rates of future price inflation.

In his recent speech at Wood’s Hole, Wyoming, Fed Chairman Bernanke was right to say that economic recovery cannot depend solely on the policies of the central bank over which he presides. But the fiscal discipline (spending and tax cuts) required to achieve that goal is incompatible with the vote motives of incumbent politicians or their challengers for political office.

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The United States never was intended to be a democracy, but rather a compound republic delegating clearly enumerated powers to the federal government and creating a masterfully designed system of checks and balances amongst its three branches meant to limit Washington’s intrusions on the sovereignties of the several states and the liberties of their peoples.

As attentive students of the New Deal know, however, any brake that the federal judiciary might think of applying to the expansion of the central government’s powers was undermined by FDR’s proposal to “pack” the Supreme Court after his landslide reelection to the White House in 1936. Although it failed to become law, the court-packing plan nevertheless soon was followed by the famous “switch in time that saved nine”, thereby ushering in a period of judicial deference to the executive and legislative branches that fulfilled the president’s intent, namely securing a working majority of justices willing to clear the path of constitutional objections to the Social Security Act, the Wagner Labor Relations Act, minimum wages and other legislative monuments to his “progressive” agenda. More than any other consequence of FDR’s politically-motivated meddling, the Commerce Clause thereafter became a dead letter, as Ms. Kagan candidly admitted during her recent confirmation hearings.

Mr. Obama apparently has as little respect for the third branch of government as FDR had. Twice rebuffed in tests of the moratorium he imposed on offshore deepwater drilling by the federal courts, issued by executive order on May 27, the president responded by ordering a new ban on exploratory drilling in waters deeper than 500 feet, effective until November 30.

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Although President Obama’s executive order imposing a six-month moratorium on drilling for crude oil and natural gas in ultra-deep waters within the 200-mile territorial limit recognized by international law has at least temporarily been suspended by a federal district judge, offshore drilling will not come to a screeching halt even if that precipitous action ultimately is determined to be within his constitutional powers.

As reported in the Wall Street Journal on Friday. July 2, Respol YPF SA, a Spanish company, has announced that next year it will begin drilling exploratory wells off the northern coast of Cuba, just 60 miles south of Key West. Industry experts as well as the U.S. Geological Survey seem confident that substantial deposits of crude oil and natural gas are there for the taking.

America’s oil companies cannot participate in exploiting those deposits because of our long-standing and counterproductive trade embargo against Cuba. (Can anyone identify a benefit flowing from that embargo offsetting the heavy costs imposed on me and other smokers of cigars? I doubt it.)

The point is that if the United States commits to bypassing offshore drilling at depths greater than 500 feet, we will be cutting off our collective noses to spite our collective face. Spain, China, Venezuela and other nations will continue to exploit potential reserves of fossil fuels, wherever they may be found. As a result, more of the world’s supply of crude oil and natural gas will fall into the hands of unfriendly nations.

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Article I, section 2, of the Constitution requires the populations of the various states to be enumerated every 10 years. The first such census was conducted in 1790; its main purpose was to apportion seats in the House of Representatives among the original 13 states.

The Founders scarcely could have foreseen the stunningly costly and politically sensitive undertaking the census now has become.

There is much at stake. Census figures will be used to shift representation in Congress from states where populations have declined since 2000 to those where they have grown. By 2012, every state also will have redrawn its own legislative district boundaries to reflect recent population trends.

Moreover, the 2010 headcount will determine how every state and community fares over the next decade when federal funds are allocated for a host of social programs, including health care and job training; highway, bridge and tunnel construction; public education; and much else. The jackpot of taxpayer-financed loot to be doled out based on census results now amounts to about $400 billion. With federal spending reeling out of control, billions more likely will be up for grabs.

How much will it cost to count noses this year? No one really knows. The Census Bureau began planning for 2010 immediately after 2000. It is not yet fully ready. Preparations for 2010 have been plagued by fraud, cost-overruns and failures of computer hardware and software.

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