Wednesday, May 29, 2013


It used to be that air conditioning was considered a luxury. It was one of modern living’s niceties that made for comfort during the hottest days of the year.  You didn’t need it, but it was nice to have.

It seems, though, our benevolent state and federal governments have turned that thinking on its head. Somehow, over time, AC has become a necessity, a basic human need.  

Earlier this spring, continuing a practice that dates back to the 1980s, the New York State Office of Temporary and Disability Assistance sent applications to vendors throughout the state that would be interested in participating in the Cooling Assistance Component (CAC) of HEAP (the Home Energy Assistance Program). Under the CAC, those companies would professionally install air conditioners or fans in the homes of low-income families having at least one family member who has a chronic or acute medical condition that is aggravated by exposure to extreme heat situations. The government will pay for the installation and equipment to a maximum of $800 per household. The program, which runs from April 1 through August 30 (or until the funds are used up), is funded in part by $3 million in federal money.

To the working man, it’s frustrating enough that he is working to pay taxes that are buying luxurious $800 home cooling systems for people whom he doesn’t even know while he himself must deal with the heat without air conditioning or with a $90 one-room window unit that he bought at a discount store.

It gets even more frustrating when he realizes that his taxes are buying those AC units and room fans for mostly those who created their health problems with their own foolish decision to smoke.   

Consider that the ailment most cited in applications -- as well as in the pro-HEAP sob stories shared by elected officials and the press alike – is Chronic Obstructive Pulmonary Disease (COPD). It is a serious lung disease (which includes emphysema and chronic bronchitis) that gradually makes it hard to breathe. It is the number 3 killer in America, claiming more than 125,000 lives every year.

The prevailing cause of COPD is cigarette smoke. Smoking accounts for more than 90 percent of all COPD deaths. Only 1 in 6 people who come down with COPD have never smoked a day in their lives. The other 5 in 6 were smokers and they might even be smokers yet: Not surprisingly, if someone smoked enough to give themselves COPD, they find it impossible to quit – 39% of all people officially diagnosed with the disease still continue to puff away.

Now, think about that. If well over a third of COPD suffers, who make up a disproportionate population of those utilizing HEAP, can afford, even after diagnosis, to buy cigarettes, they can certainly afford to buy an air conditioner. Better yet, if you think about how many packs of cigarettes it took to get emphysema, how many of the fancy $800 air conditioners could someone have bought in their lifetime?  

Simply put, the Cooling Assistance Component is rewarding bad behavior by giving free money with no strings attached to those who decided to pursue liberty by smoking, yet weren’t responsible enough to deal with the ramifications of their personal decisions. Not surprisingly, this approach to life may also account for the financial position they are in.

But, alas, as long as we have people who are reliant on government for the answer to all of life’s needs – and, most offensively, life’s wants – and a government that is so willing to give (each party begets the other in a never-ending cycle), I suppose we will continue to see such giveaways. Some will argue (and a majority would probably agree) that we have some responsibility as a citizenry to help the truly impoverished with their food and other basic real needs. But, paying for others’ air conditioning -- who in their right mind, even the most giving, can see that as being the right thing to do?

Well, at least we know all is well in the world if they ordered the air conditioner with their federally-subsidized cell phone.

Gasport resident Bob Confer also writes for the New American magazine at Follow him on Twitter @bobconfer 

This column originally appeared in the 03 June 2013 Greater Niagara Newspapers

Wednesday, May 22, 2013


Like the housing bubble and the internet bubble that preceded it, the higher education bubble will see its false prosperity come to an end in the coming years. Unlike them, it won’t pop with violence that will send the economy into a deadly tailspin. Instead, it will crack and its contents will escape gradually, having a collection of harmful -- and even helpful -- effects on the economy.

This can be said with confidence because we are dealing with an entirely different animal.

The housing and internet bubbles popped so powerfully because there were no controls in place – the bubbles behaved as they should have in a free market.

The student loan industry, on the other hand, is no longer a free or mixed market. Since nearly all loans are issued by the government, it used its power to change the game and protect its interests in 1998 by making it law that student loan borrowers could not declare bankruptcy and absolve themselves of their financial obligation unless they could make a case for undue hardship. This is quite unlike the housing crash when hundreds of thousands of mortgage holders declared bankruptcy and left financial intuitions and taxpayers on the hook for trillions of dollars. So, gone is the possibility of freefall that made the Great Recession so horrific.

Even so, there will be significant financial and fiscal repercussions in the long-term…18 years down the road to be exact.

Today’s students are participating in an outsized educational marketplace fraught with bloated price tags that has started to produce minimal return on investment. A significant portion of the under-35 workforce is claiming underemployment (citing a weak economy), when in reality, they are victims of over-competition (too many college educated workers), and a mix of over-qualification and under-qualification (too many degrees that don’t fit the needs of the economy).

So, how will they ever pay back their student loans? They won’t.  In 2011, the Department of Education launched “Pay As You Earn” (PAYE). Under this program, loan holders will see their payments cap out at 10% of their annual discretionary income and, after 20 years, the loan balance will be forgiven. Come 2031 we will see the first of these forgiven loans hit the US Treasury to the tune of billions of dollars (I wrote about PAYE in 2012. Read the column here:

That harmful effect on our nation’s balance sheet will wane over time, though, because the college boom is setting itself up from a huge drop off in demand over the next few years. As I mentioned in last week’s column, universities are overpriced as a result of students’ easy access to money (government loans). Believing that an unlimited supply of candidates and money exist, the schools are charging what they can get away with. Those days are numbered.

The recession made Americans regain a sense of financial knowhow and they can see that these huge bills for tuition, dorms and books aren’t worth it. That’s why 70% of young Americans enter college, but only 31% of them ever complete a degree – 1 or 2 years is painful enough. One can expect that 70% trial rate to plummet over the next few years.

The fall has likely started. Look at how many colleges are now running campaigns to try to regain some of the money they’ve “lost” or how many are cutting some jobs to adjust to the recent slackening in demand. Those are immediate adjustments. Long term efforts will see falling or stagnant tuitions, downsized colleges, and massive cost-cutting across the board, making tens of thousands of faculty, staff, and support unemployed across the US.

That’s a bad thing, right? For them it is, but there will be a positive effect on the economy. As I wrote in 2010 (, Generations X and Y are a whole decade behind in their attainment of the rewards of adulthood (like a home and children), because they have to pay off their student loans. Take away that burden, and they can, at a reasonable age, buy things that they normally wouldn’t under the burden of student loans. While higher education might suffer, retail, housing, automotive, and other industries will get a shot in the arm. In this case, the economy won’t miss a beat and might actually improve as the bubble cracks.

The next 5 years (and then again 18 years out) should prove interesting as we watch a decline in higher education and the rewards and pain that come from it.        

Gasport resident Bob Confer also writes for the New American magazine at Follow him on Twitter @bobconfer 

This column originally appeared in the 27 May 2013 Greater Niagara Newspapers

Wednesday, May 15, 2013


The bursting of the housing bubble was the unquestioned cause of the Great Recession. After years of unprecedented growth in the housing market that saw home ownership and home values rise dramatically, the collective bad decisions of homebuyers, banks, and government finally caught up to the economy at large.

The supply of easy money that led to the ersatz prosperity –- financial institutions foolishly gave, and government foolishly backed, mortgages for almost everyone, whether or not they were actually worthy candidates – proved to be the bane of the same. It didn’t take the new homeowners -- or owners of an investment property -- long to figure out that easy money really wasn’t so easy; their exorbitant mortgage payments weren’t sustainable, especially if the slightest hiccup appeared in their personal finances – such as the small scale recession fueled by high gas prices that pre-dated the heart of the Great Recession. With their family budgets hit hard, they had to choose between paying for their mortgages or their survivability (food, utilities, and transportation). That choice not being so difficult, they defaulted on their loans. Housing prices plummeted and the financial sector suffered immensely.

Our economy still hasn’t recovered a half-decade later and likely won’t before the decade closes. If the ship is ever righted to the heights that we remember, it won’t be long before another bubble is ready to burst; on the horizon is one that has numerous characteristics eerily similar to the housing market’s -- It’s none other than the college bubble.

Easy access to money defines the modern college experience. Such is to be expected when you consider the federal government has been one of the largest lenders in the college loan market. From 1965 to 2010, it issued subsidies to lending institutions to fund their student loans while assuming all the risk. In 2010, Congress acted to eliminate the middle man and now the government deals directly with the debtors.

So, whether being the lender indirectly or directly, Uncle Sam has always demanded and/or strived to give out funds ad nauseam under that wanton desire to be benevolent that drives Big Government, especially since government has what is believed to be unlimited backing (the taxpayers and Federal Reserve) to make good on bad lending decisions. The federal government currently backs 90% of new student loans.  

With the ability to borrow the capital necessary to fund their degrees, Americans have taken to the classroom in numbers. In 1965, at the start of the government’s lending efforts, only 23 percent of the middle class had received any education beyond the twelfth grade. Now, more than 3 in 10 have a degree, while a whopping 70 percent of young Americans enter college within 2 years of their high school graduation. 20 million Americans -- 1 in every 15 -- attend college every year. Just like it seemed as if everyone in 2006 was a homeowner (prior to the bursting of the housing bubble), it seems like everyone is college student.

And, just like construction firms, realtors, resellers and the like fed off of a freewheeling mortgage market at the turn of the century, driving up housing prices (it was not uncommon to see 80% to 150% increases across the country from 2000 to 2006), universities are capitalizing on the freewheeling student loans and the widely-held misconception that everyone needs a college education. Knowing that everyone – the poor, middle class, and rich – all have access to funds and will buy their product, they are charging what they want and whatever the market can bear.

Because of these factors, education costs have grown at a rate beyond inflation. Tuition and fees at public universities rose 4.8 percent in 2012 to an average of $8,655, while allegedly-nonprofit private colleges increased tuition and fees by 4.2 percent to $29,056. That’s par for the course: Since 1985 the college education inflation rate has risen nearly 500%, more than 4.3 times the amount of all other consumer prices.

As it was with housing in the Great Recession, the financing of and demand for higher education isn’t a sustainable economic model – easy money creates more demand, but said easy money ultimately creates unaffordability and less demand.

So, how, when and why will this college bubble burst? That will be the topic of next week’s column. 

Gasport resident Bob Confer also writes for the New American magazine at Follow him on Twitter @bobconfer 

This column originally appeared in the 20 May 2013 Greater Niagara Newspapers

Thursday, May 9, 2013


You might recollect the buzz of recent years regarding the precipitous decline in honey bee populations. Since 2006, most apiaries have seen their bee colonies decrease by 30 to 90 percent per year. Some hives have been totally wiped out.

25 percent had once been the maximum rate of mortality in northern states that had significant cold-weather die-offs. But, the recent deaths have been occurring everywhere and during the spring and summer when temperatures are perfect and food is plentiful.

For some time, the reasons for this frightening extirpation remained unknown, and the moniker of “colony collapse disorder” was placed upon it as a catch-all for what could be either natural or man-made causes. Those days of uncertainty are gone:  It was determined over the past couple of years, by independent studies released in prominent journals like Science and Nature, that the root cause of honey bee deaths was the family of pesticides known as neonicotinoids. Last year, those findings were affirmed just across the border by Ontario’s Ministry of Agriculture, Food and Rural Affairs which discovered that 70 percent of the dead bees across the province showed exposure to neonicotinoids.

These insect nerve agents have been used in increasing abundance on corn since 2005, after entering the market in the 1990s (it is now used on most all commercial corn in the United States). That timeline of pervasiveness aligns perfectly with the sudden decline in bee populations. Produced by Bayer, neonicotinoids are applied directly to the seed and thus become a part of the adult plant, including the nectar and pollen upon which the bees feed. The chemical doesn’t kill bees outright, but it seriously impairs their development and behavior, which accounts for the inability of the bees to feed properly (they waste away), maintain their colonies and replenish them through adequate reproduction.  

Other countries are taking steps to combat this scourge. In Canada, Ontario officials have encouraged farmers to inform beekeepers when they are planting, because the dust associated with planting can carry neonicotinoids to wildflowers in adjoining hedgerows as well as lawns and pastures even a few miles away. This would allow the beekeepers to move their stock to another area when planting is underway. But, it does nothing to address the longer-termed problems associated with pollination once the plants grow. 

A more powerful means of suppression is taking place in the European Union. Starting December 1st of this year and lasting through 2014 and 2015, the use of three specific types of neonicotinoids will be totally banned in the EU. This 2-year moratorium will see a return to 20th century insecticides and a likely resurgence in honey bee populations.

Germany and the United Kingdom passed on the ban and will allow for the continued use of the offending compounds. That’s not any different than what is happing here in the US. Even though federal studies link neonicotinoids to colony collapse, including a report released by the USDA and EPA earlier this month, the government has no immediate plans to limit or ban the use of neonicotinoids -- a major study on the impact of neonicotinoids won’t be made available from the EPA until 2018.

2018 could likely be too late, especially if a ban is determined to be necessary; that in itself could take a few more years. American farmers (especially fruit growers whose trees need more help from bees than field crops do) – and those who consume their produce -- need answers and actions now. If bees were wiped out, or something close to it, fruits and vegetables wouldn’t get the pollination they need. Estimates show that the total loss of crops would approach $15 billion per year. 

Neonicotinoids are certainly proving to be a bane to the health of the environment, the economy, and the people.

Gasport resident Bob Confer also writes for the New American magazine at Follow him on Twitter @bobconfer 

This column originally appeared in the 13 May 2013 Greater Niagara Newspapers