Monthly Archives: October 2008

Renewable corruption

The October 24, 2008 edition of Spanish financial newspaper “Expansión” reports that the Ministry of Industry is investigating fraudulent practices in renewable energy subsidies.

What a surprise. How naive can the Ministry be?

The desire to promote renewable energy at all cost, almost obsessively, has drawn governments to offer juicy subsidies on any attempt to research or produce energy from new sources. It is all framed, of course, in the human-caused climate change dogma, which ought to make humans change our habits.

How to implement such change? By pouring loads of public money in subsidies for private companies, to make new businesses with energy sources (wind, solar, bio-fuels) which will supposedly help the planet.

There are two basic problems with such policy:

  1. It is nonsense to think that those energy sources can represent a significant percentage of the needed energy, taking into account current existing technology.
  2. It is also nonsense to think that public money will promote private initiative. It only promotes corruption.

Fraud in subsidies applications was to be expected: First of all, companies see subsidies as an additional source of income, not as aid. Secondly, those energy sources are not profitable on their own (with current technology). For this reason, serious companies, which could develop conscientious and productive work, are not going to apply for those subsidies.

However, the government must spend that money for several reasons:

  • The subsidies have been budgeted following the climate change dogma, and the dogma brings votes; the dogma must be financed.
  • Politicians like to portray themselves before the public as defenders of the planet, and they like to say they put a lot of money into it.
  • Money for those subsidies is in the budget, and the budget must never go unspent. It must be spent even if not needed, or else that manager will see his or her budget reduced, and along with it his/her relevance.

Weasel-companies are always willing to take advantage of that money that must be spent even if no real useful project exists for it. All that’s required is to justify before the Ministry of Industry a few action plans that fit in with the dogma, or that fit in with the subsidies’ manager pocket, and the subsidy is easy to obtain.

The end result: guaranteed fraud on the people paying their taxes with their work. Lots of public money have gone into private hands with no benefit at all for the general public.

If the Government intends to curb fraud and to do something for the planet, they should implement a decent energy policy, eliminating subsidies programs which are nothing but a catalyst for corruption, prioritizing nuclear energy again, and promoting respect for the environment (rather than “fighting climate change”).

Without dismantling the subsidies system, energy will be only be spent along the way to keep up a system of renewable and renewed corruption.

Back to GMT+1, waiting for GMT+0

Tonight (Oct 25 to Oct 26) is the end of DST (Daylight Savings Time), which has kept central Europe artificially in GMT+2, commonly known as CEST (Central European Summer Time), and we’ll go back to the usual timezone, called “CET”, or Central European Time, or GMT+1.

Along with central europe goes Spain, which however is geographically far from “central” europe, and thus we ought to be using a different timezone. GMT+1 is not right for Spain. At 7am there is sunlight coming through your window in Rome or in Zurich, while in Spain it’s pitch dark. At that time, it ought to be 6am in Spain, or GMT+0, the same time as in Portugal or the United Kingdom, our meridian neighbours.

I encourage all readers to advocate for Spain to change its official timezone to GMT+0 (also called UTC or UTC+0). This is what will truly save energy (the earlier in the day we can make use of natural sunlight, the less energy is required to light factories, streets, etc…), while also adapting work schedules to natural light conditions, surely helping people have a healthier life. More info on my blog’s Spain in GMT+0! page.

Third U.S. Presidential debate in Madrid

In Madrid today took place the public screening of the third U.S. presidential debate. It was originally scheduled for last Thursday, October 16, to be followed by a local debate between Madrid-based democrats and republicans. The screening was later moved to October 18 (today).

When I got there I noticed fewer people than at the first screening. Then Ms. Deborah Luhrman, of Democrats Abroad, made an announcement before the screening begun: there would be no republican representatives present for the after-screening local debate. She explained that this resulted from the change of date, which made it impossible for the republican Representatives (she didn’t name who) to participate in a debate today. She complained that the republicans could not find or appoint another person to come to the debate, after which she expressed satisfaction for the absence of republicans in the screening, and uttered: “to hell with them“.

That’s certainly very democratic of democrats, isn’t it?

Ms. Luhrman then announced details about the election night party of the democrats in Madrid on November 4th, which will apparently include a Sarah Palin look-alike contest. As usual, the left treats their political opponents as their entertainers, and as mere objects for mockery.

(This post was not to comment on the presidential debate itself, but about the local screening of it)

Let it all fall down

Governments around the world are trying out different formulae to tackle the financial crisis. They claim they are trying to reactivate the financial sector, to encourage banks to offer loans to small businesses and people, and to other banks. Other cases of government intervention are focused on preventing banks from going bankrupt.

This is all wrong. If the financial sector is in a financial crisis, let the financial sector sweat out its own illness. Any part of it that cannot survive the crisis should simply be left to die, because its demise means that it has no value. The crisis must be allowed to work as it should, promoting consolidation, discarding some old players and creating opportunities for new players to enter.

Government intervention is absolutely wrong. It is nothing but a quick fix, with lasting negative side effects, while prolonging the cost of the crisis, imposing it on generations to come. Furthermore, why should banks and other financial entities be allowed to earn loads of money for themselves (their shareholders) when the economy is fine, but they have to be helped by the government when things are not so nice anymore? Every individual and small business benefits from their work in times of prosperity, and they have to adjust to difficult times. The financial sector should be no different.

Is the problem really lack of trust among lenders? Is a bunch of public money going to help them regain trust? Not a chance. They should regain trust the old fashioned way: by going into business again (i.e., start lending) to then ascertain that customers begin repaying their loans. Why would banks feel compelled to lend again? Simply because it’s their business. The business of banks is based on risk. They take a risk lending money, and charge for that service. It’s a matter of waiting to see who can hold out longer; banks or their customers. My guess is that banks, without the gift from governments, would have needed to attract customers again sooner than those customers would have needed the loans.

The financial sector should be left to its own devices to try to recover, whatever that may entail. Having governments intervene is anti-natural; it is an external factor inserted into the normal life cycle of any company that ought to survive on its own merit. Of course, earlier government intervention had its share of blame in driving the economy and the financial sector down (read: unrealistically low interest rates in the U.S. for a long time, the 1977 Community Reinvestment Act), but this is no excuse to pour millions of public money to that financial sector, or to nationalise banks left and right, as several EU countries are doing.

In summary, the situation is outrageous: rather than reducing public spending, governments have, once again, disposed of our money to use as they see fit, without any clear indication that the amounts of money they are dumping on the financial sector is going to make any difference one way or the other.