The fine against Midwest Oil of Minnesota is twice as large as any imposed on a company since 2001, when the state established a formula based on wholesale prices, fees and taxes to determine a daily floor for gas prices.

The price law was intended to prevent large oil companies from driving smaller competitors out of business, but some critics argue it fails to protect consumers.

According to the Commerce Department, the Midwest-owned stations in Anoka, Oakdale and Albert Lea sold gas below the minimum price on 293 days in 2005.

Kevin Murphy, deputy commissioner of the department, called the violations "willful, continuing, and egregious and warrant a substantial penalty."

The company has 30 days to contest the fine by requesting a hearing.

In previous cases, companies were fined anywhere from $500 to $70,000 for selling gas too cheaply.

And in those cases, the companies and the department generally had agreed on the amount of the penalty.

Midwest had not cooperated with the department on a penalty, and was accused by the department of using several delaying tactics before the matter could be resolved.

Midwest officials couldn't be reached for comment Thursday.

Midwest is a subsidiary of the Wisconsin-based Science and Technology Institute, led by Dr. R.C. Samanta Roy.

Gov. Tim Pawlenty and several Minnesota legislators have urged a repeal of the state's minimum price rules.

Critics have argued that it ends up costing most customers an extra dollar or more to fill up, without adding to tax revenues.

Defenders of the law say it's critical to protect small and medium-sized stations.

They note that unlike large chains, those stations often can't cushion below-cost gasoline with sales of other merchandise.

Yesterday, Treasury officials told Senate aides that without an increase in the nation's $8.18 trillion debt limit, the government "would default on obligations for the first time in history sometime during the week of March 20." The Senate will have to take up the issue soon since "federal default is considered unimaginable because it would rattle bond markets, force interest rates higher and shake the economy." The debt limit increase to around $9 trillion would be the fourth increase in five years. "I don't think the leadership wants to have any debate on this, and I think the reason is pretty clear," Finance Committee ranking member Max Baucus (D-MT) told CongressDaily. "It's embarrassing." To avoid an extended debate, the leadership is set to vote on the issue as close to the March 17 recess as possible. Finance Committee chairman Sen. Chuck Grassley (R-IA) has admitted he wants the debt limit increased "with the least debate" possible. "I would like to see a bill on any Thursday night just prior to a recess," he said. The New York Times warned the Senate bill may "be put to a voice vote, so that no individual would have to go on record as approving the measure. The American people deserve better."



DO AS WE SAY, NOT AS WE DO: "The American dream begins with saving money and that should begin on the very first day of work," Vice President Cheney said yesterday. "Yet a lot of American families live paycheck to paycheck...and this underscores one of our fundamental obligations in Washington: to be good stewards of the taxpayer's dollar." But as Bloomberg columnist John M. Berry said, "The reality is that taxes and spending are badly out of whack, and hardly anyone - certainly neither President George W. Bush nor Vice President Richard Cheney - wants to admit it." Cheney, after all, once claimed, "Deficits don't matter." The $5.6 trillion projected ten year surplus, accumulated as part of what American Progress Senior Fellow Gene Sperling describes as "the rainy day savings of the 1990s," is gone. "The outlook for the federal budget over the next decade continues to be bright," the Congressional Budget Office (CBO) wrote in January 2001. "Such large surpluses would be sufficient by 2006 to pay off all debt held by the public that will be available for redemption." The current national debt stands at $8,269,768,312,946.41.



IRRESPONSIBLE ON TAXES: The Center on Budget and Policy Priorities pegged the cost of permanently extending the Bush tax cuts and the Alternative Minimum Tax at $3.3 trillion over ten years. This figure includes $486 billion in interest payments for servicing the debt. (By comparison, Bush's 2007 defense spending request is $439 billion.) To put this into perspective: over the next ten years $917 billion of these tax cuts will go to just the wealthiest 1 percent of families (those earning more than $400,000 in today's dollars). Rather than face up to the fiscal challenges facing the country, the administration continues to urge Congress "to make the Bush tax cuts permanent." Even a "budget hawk" like Sen. John McCain (R-AZ) is caught up in the tax-cutting frenzy. Last month, McCain voted in favor of extending tax cuts on dividends and capital gains. Yet in May 2001, when the fiscal picture was rosier, McCain voted "no" because he was "very concerned about the deficit." (Bush still claims: "You cut taxes and the tax revenues increase.") "I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us at the expense of middle-class Americans who need tax relief," McCain said at the time. (More on why the tax cuts fail to spur economic growth.)



WHEN IS AN EMERGENCY NOT AN EMERGENCY: The Bush administration continues to bypass standard congressional budget procedures with its reliance on "emergency" spending bills. "In theory, emergency spending bills are for one-time, unforeseeable calamities," the New York Times reported. "In practice, Mr. Bush has financed the entire war in Iraq, as well as the war in Afghanistan" by labeling the ongoing conflicts as emergencies. "Emergency spending on natural disasters has shot up as well" because Congress does not set aside a "rainy day fund" to cover disaster spending. Senate Budget Committee Chairman Judd Gregg (R-NH) has called these tactics "irresponsible" and "unrealistic." Gregg told CongressDaily, "Essentially what [members of the administration are] saying is, 'Everything else in the government is going to be subject to severe limitations in spending, but the area that we're interested in is going to have no budget process at all, it's simply going to be done outside the budget process through emergencies.'" Added Gregg, "I don't think they have any credibility on budgets."



FOREIGN DEBT: "Foreign entities own a little more than 53 percent of the U.S. federal debt in publicly traded world markets," ABC News reported last month. In contrast, only "1 percent of all active corporations that filed taxes in 2002" are foreign-owned. While there is nothing inherently wrong with foreigners buying our debt (foreign central banks have kept interest rates low), a "disorderly situation would occur if foreign money dried up suddenly when the United States still needed it. Then the adjustment in American savings might happen involuntarily. Interest rates would rise sharply, and the dollar could fall abruptly. This could induce a sharp economic contraction, even stagflation." If we continue to live at the mercy of the main financiers of our debt - whether it's Japan, China, the United Kingdom, or "Caribbean Banking Centers" -- we could find ourselves on "on increasingly thin ice."



THE HUMAN COSTS OF BUDGET DEFICITS: The President's budget shows what happens when the right wing pushes budget cuts under the guise of "deficit reduction." On the revenue side, the budget proposals would extend tax cuts for the wealthy at a cost of $1.7 trillion. On spending, the budget proposes $36 billion in Medicare cuts, $276 million in cuts to the Centers for Disease Control, a 3.8 percent cut to the Department of Education, and nearly $600 million in cuts to science and technology programs. Read the Center for American Progress analysis of the Bush budget here.

Here is how to reconcile my reports with the good news you get from the mainstream media:

(1) When the US Department of Labor, for example, releases the monthly payroll jobs data, the press release will put the best spin on the data. The focus is on the aggregate number of new jobs created the previous month, for example, 150,000 new jobs. That sounds good. News reporters report the press release. They do not look into the data to see what kinds of jobs have been created and what kinds are being lost. They do not look back in time and provide a net job creation number over a longer period of time.

This is why the American public is unaware that higher paid jobs in export and import-competitive industries are being phased out along with engineering and other professional "knowledge jobs" and replaced with lower paid jobs in domestic services. The replacement of higher paid jobs with lower paid jobs is one reason for the decline in median household income over the past five years. It is not a large decline, but it is a decline. How can it be possible for the economy to be doing well when median household income is not growing and when economic growth is based on increased consumer indebtedness?

Many economists mistake offshore outsourcing with free trade based on comparative advantage. As a result of this mistake, ideology speaks instead of economic analysis. For example, Matthew J. Slaughter, an economics professor at Dartmouth, commits a huge error when he writes: "for every one job that US multinationals created abroad in their foreign affiliates they created nearly two US jobs in their parent operations." If Slaughter had consulted the BLS payroll jobs data, he would have realized that his claim could not possibly be true. Slaughter did not come to his conclusion by examining aggregate job creation. Instead, he measured the growth of US multinational employment and failed to take into account the two reasons for an increase in multinational employment: (1) multinationals acquired many existing smaller firms, thus raising multinational employment but not overall employment, and (2) many firms established foreign operations for the first time and thereby became multinationals, thus adding their existing employment to Slaughter's number for multinational employment.

ABC News' John Stossel, a libertarian hero, recently made a similar error. In debunking Lou Dobbs' concern with US jobs lost to offshore outsourcing, Stossel invokes the California-based company, Collabnet. He quotes the CEO's claim that outsourcing saves his company money and lets him hire more Americans. Turning to Collabnet's web page, it is very interesting to see the employment opportunities that the company posts for the US and for India.

In India, Collabnet has openings for 8 engineers, a sales engineer, a technical writer, and a tele-marketing representative. In the US, Collabnet has openings for one engineer, a receptionist/office assistant, and positions in marketing, sales, services, and operations. Collabnet is a perfect example of what Lou Dobbs and I report: the engineering and design jobs move abroad, and Americans are employed to sell and market the foreign made products.

(2) Wall Street economists are salesmen. The companies that employ them want to sell stocks and bonds. They don't want bad news. A bear market is not good for business. Similarly, business associations have the agenda of their members. Offshore outsourcing reduces their labor costs and boosts their profits and performance-based bonuses. Therefore, it is natural that their association reports put a positive spin on outsourcing. The same organizations benefit from work visas that allow them to bring foreign workers in as indentured servants to replace their more fractious and higher paid American employees. Thus, the myth of a US shortage of engineers and scientists. This myth is used to wheedle more subsidies in the form of more H-1B visas out of Congress.

(3) Official US government reports are written to obfuscate serious problems for which the government has no solution. For example, "The Economic Report of the President," written by the Council of Economic Advisers, blames the huge US trade deficit on the low rate of domestic savings. The report claims that if only Americans would save more of their incomes, they would not spend so much on imports, and the $726 billion trade gap would close.

This analysis is nonsensical on its face. Offshore outsourcing has turned US production into imports. Americans are now dependent on offshore production for their clothes, manufactured goods and advanced technology products. There are simply no longer domestic suppliers of many of the products on which Americans depend.

Moreover, many Americans are struggling to make ends meet, having lost their jobs to offshore outsourcing. They are living on credit cards and struggling to make minimum payments. Median household real incomes are falling as higher paid jobs are outsourced while Americans are relegated to lower paying jobs in domestic services.

They haven't a dollar to save. As Charles McMillion points out, the February 28 report from the Bureau of Economic Analysis shows that all GDP growth in the fourth quarter of 2005 was due to the accumulation of unsold inventory and that consumers continued to outspend their incomes.

Matthew Spiegleman, a Confeence Board economist, claims that manufacturing jobs are only slightly higher paid than domestic service jobs. He reaches this conclusion by comparing only hourly pay and by leaving out the longer manufacturing work week and the associated benefits, such as health care and pensions.

Stossel simply does not know enough economics to be aware that he is being used. The bought-and-paid-for-economists are simply earning their living and their grants by serving the interests of corporate outsourcers.

(4) Policy reports from think tanks reflect what the donors want to hear. Truth can be "negative" and taken as a reflection on the favored administration in power. Consider, for example, the conservative, Bruce Bartlett, who was recently fired by the National Center for Policy Analysis for writing a truthful book about George Bush's economic policies. Donors to NCPA saw Bartlett's truthful book as an attack on George Bush, their hero, and withheld $165,000 in donations. There were not enough Bartlett supporters to step in and fill the gap, so he was fired in order to save donations.

When I held the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies, I saw internal memos describing the grants CSIS could receive from the George H.W. Bush administration in exchange for removing me from the Simon chair.

In America "truth" has long been for sale. We see it in expert witness testimony, in the corrupt reports from forensic labs that send innocent people to prison, and even in policy disputes among scientists themselves. In scholarship, ideas that are too challenging to prevailing opinion have a rough row to hoe and often cannot get a hearing.

Even the president of Harvard University, Larry Summers, an academic economist of some note and a former Secretary of the Treasury, was forced to resign because he offered a politically incorrect hypothesis about the relative scarcity of women in science.

The few reporters and columnists who are brave or naive enough to speak out are constrained by editors who are constrained by owners and advertisers. For example, it is impermissible to examine the gaping holes in the 9/11 Commission Report. Publications and editors are intimidated by the charge of "conspiracy theory," just as criticism of Israel is muted for fear of being labeled "anti-semitic."

All of these reasons and others make truth a scarce commodity.
Censorship exists everywhere and is especially heavy in the US mainstream media.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: paulcraigroberts@yahoo.com