Steam Valve

Some Hit Hard by the Economy Have a Home to Return to

startribune.com leads with an article describing how some "Latinos in the prime of their work life are returning home because their dreams have collapsed along with the economy."

And here I thought that the economic hardships besetting us were being felt by a large swath of Americans across the board.  Why are we reading an article that implies that it's only affecting latinos who are being forced to return to Mexico?

The non-latinos adversely affected by the economic downturn don't have a place to return to.  But there's no article about that at startribune.com.

Why is that?

Soap Price Mystery Solved?

I'd been wondering recently why the price of laundry detergent had gone through the roof.  My musings took place mostly in the detergent aisle of the grocery store, and I didn't take it any further than that.  But the sticker shock when confronted with the price hikes left me with the firm and definite conviction that something was going on in the laundry detergent business, and it was more than just the generalized price increases we saw when gasoline was $4/gallon.

Today I read a blog post on the Foundry  that shed a glimmer of light on the question:

When Congress passed its last major energy legislation in 2005, a minor provision was added late in the legislative process that created a $1-per-gallon tax credit for renewable diesel fuel created through thermal depolymerization. The measure was included to benefit a single firm that produced boiler fuel from turkey waste, but in 2007 the Internal Revenue Service ruled that the tax credit also applied to other livestock waste. This led corporate giants ConocoPhillips and Tyson Foods to form a joint venture that turned chicken, cow, and pig fat into diesel fuel.

But just as ethanol mandates drove up the price of food, diverting Tyson’s animal fat into the energy market drove up the costs of manufacturing soap. So the soap lobby fought back and earlier this year Congress cut the thermal depolymerization tax credit in half. This made the Conoco/Tyson venture unprofitable, which they have since discontinued.

Whether this will have any effect on the price of laundry detergent remains to be seen. 

The other night I was looking through an old cookbook I inherited from my mother-in-law.  I started out looking for rhubarb recipes but ended up thumbing through the entire collection.  The cookbook contained recipes contributed by various women in the area south of Mankato.  I found a soap recipe, which the author suggested could be used for laundry soap by grating the final product into your washing machine.

This did not send me rushing out to the store to buy lye, however.  Many years ago, not long after having earned a chemistry degree, I decided to experiment at home with soap making.  I found a couple recipes, gathered together the tin cans I had filled with a variety of different fats (bacon grease poured on top of chicken fat, etc.) and got out a can of draino.  As I recall, I may have used my since forgotten chemistry knowledge to somehow remove the impurities in the fat.  I don't remember how I did that. 

What I do remember is that I never used the resulting product for anything.  It was greasy.  Maybe I didn't use enough lye.  Store-bought soap suddenly seemed to be a miraculous invention when compared with the results of my foray into soap making.  I couldn't summon up any motivation to continue experimenting with soap making.

So I'm a little less than enthusiastic to try this old cookbook recipe.  But maybe if the economy gets bad enough, homemade soap may make a comeback, and we'll be seeing articles in those magazines in the checkout aisle titled, "Tips to Keep your Soap from Getting Too Greasy."

Gotta Love This Guy

Steven Crowder.  He's funny.

Thug Government

When our president, sworn to uphold the constitution, behaves like a common thug, bullying and threatening private parties to a dispute to give up their rights under the law under threat of being destroyed, then I think we have as a country crossed yet another line on the path away from the rule of law.

Attorney Tom Lauria, who represents some of the Chrysler creditors, reported the threats on WJR radio host Frank Beckmann’s radio show in Detroit.  His clients bought bonds that, in exchange for a low rate of return, gave them the security of having first lien rights.  This means that in bankruptcy, they are to be paid 100 percent before any junior creditors receive a penny.  That’s what bankruptcy law provides, and it was with this understanding that they purchased the bonds in the first place.

Lauria told Beckmann that these bondholders had already agreed to accept half of what they’re entitled to under bankruptcy laws even though the have no obligation to do so, but the government offered them a deal that would pay them 29 cents on the dollar, while junior creditors would receive 10 - 20 billion dollars.

Cutting their demands in half wasn’t enough of a concession for President Obama, who equated the bondholders’ belief that the bankruptcy laws should mean what they say with a desire for an "unjustified taxpayer-funded bailout."

Lauria said that one of his clients gave up the fight after being "directly threatened by the White House, and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight."

Lauria explains why the rest of us should be concerned about use of the vast power of the federal government to coerce concessions in a dispute over contractual rights:

I think everybody in this country should be concerned about the fact that the president of the United States, the executive office is using its power to try to abrogate that contractual right.  If the president will attack that contractual right, what right will it not attack?
. . .
when you make a deal it’s supposed to be honored, and if it’s not honored you’re supposed to be able to get protection in court and what is happening here, through the force of the United States government, and that’s what’s disturbing about this, I mean, private parties have disputes all the time, but for the United States government to step in, the executive office of the United States government, who under the constitution is charged with enforcing the laws, to step in and try to in effect break the laws, I think we should all be concerned about that. That is a constitutional issue.

And that, succinctly, is exactly why the government should not be taking over private enterprise.  Once it does that, it acquires interests directly adverse to private parties.  Apparently, the temptation to abuse its vast powers in pursuit of those interests becomes irresistible.

For the rest of us watching this drama unfold, whether still shell shocked from watching 401(k) balances shrink, or standing on the sidelines wondering whether to invest in this economy in any way,it give us one more reason to be leery.

Cross-posted at Truth v. The Machine