Friday, May 29, 2009
Build a better mousetrap and the world will beat a path to your door.
That's been a pardigm of American exceptionalism. When you build a better product, given all the variables that go into the purchase of that product, it's clear that if it's better, you win in the battle for the allocation of scarce resources.
What are some of the variables? Good question. For now it's simply amazing that we hadn't used such a direct path to a better car. What were we thinking?
Now gas, that's something I can relate to when discussing the value of mandates. Since government mandated a "better gas" by requiring us to buy ethanol, I've seen my mileage reduced by twenty percent. I've been able to sidestep this drop in gas mileage by purchasing gas over in Chinook, Washington. They have the old, worse gas in supreme (high octane) grade. For those of you who continue to purchase your gas at an Oregon gas station, or at a "branded" gas station in Washington, you continue to lose twenty percent of your car's potential mileage.
But there are different variables yet in place, aren't there? I like buying Chevron branded gas, because the engineers at Chevron have come up with a series of additives that assure the user of longer life for their engines. Second, deaing with a reputable, branded dealer means that I'm less likely to deal with water in the fuel being pumped into my car. That is, the gas being delivered is pure gas.
But water in gas, protecting your engines injection system, all these variables when choosing gas really go out the window with ethanol. You know that you can't store ethanol. Ethanol sucks water out of the atmosphere. And into whatever storage device you use. Whether it's a large tank at a fuel farm, or the tank on your car, you wait too long and you've got a water problem.
Remember that this fall or winter when the lights go out, and you're not able to start your generator. Small engines are pretty cool, but they don't run on water.
(click on pic for more info.)
Point being, I'm pretty pumped that government has finally mandated better cars. As they have mandated better gas. As they want to mandate better health care. And they want to increase the cost of energy so that they can deal with the problem of Man Made Global Warming through Cap and Trade. (Please note: before you begin trading carbon offset certificates, the OregonGuy is putting into place a means for you to buy and sell carbon offset certificates locally. Serially. Hold onto your bucks for now.)
Now, when it comes to buying a car, what is it that determines which car that you purchase?
One of my better econ profs suggested--advice which I follow--the following scenario when approaching a car dealer's lot: when asked "what are you looking for?" reply, "I was thinking of buying a white car."
The point being, the salesman has lost a lot of pricing pressure. If you come in looking for a new Camaro, you limit yourself to a high demand vehicle that lacks elasticity. You might as well come onto the lot with hundred dollar bills hanging out of your pockets. But when you tell him you've simply a preference for "white", since white is a common colour there's a great deal of price elasticity that you have just introduced into the microeconomic choice you face. After you've looked at twenty white cars, you may have seen "the car" you want, and you can begin discussing whether or not that car "comes in white." Again, the elasticity of demand still remains below 1. And negotiating price with an elasticity of demand less than one is where you want to be!
Of course, economic theory goes out the window with the government's mandate for a better car. Because it's better, the elasticity of demand for this car will naturally be 1. The other variables that go into making a buying decision simply go out the window: colour, style, number of passengers, off-road ability, hauling capacity, crash survivability, roominess, acceleration, visibility, comfort; all these former variables of prefence, taste and choice, gone.
Because of the simplicity of government mandates, we've been saved, in the future, now.
I can't wait for my energy prices to double! Of course, I get no more energy. I just pay more. And that money goes to government. See? That's the beauty of cap and trade, a mandate to increase the price of energy. And, I can't wait for my new, better government mandated car. That's the beauty, a better car even though it may not really have anything in it's design or execution that would prompt me to buy it, the assurance that it is better is enough.
And I'm waiting for government mandated health care. It's going to be better, because that's what the mandate says. Whether my government can afford to maintain the level of health care I have now isn't important. It will be better because that's what the mandate says it will be.
It's a time for Change!™ If there's anything in your life that you wish was better, now that the new men are in power, it's time for your wishes be known. What do you want the government to mandate? I want better smokes, but the government has already mandated crappy cigarettes. Oh, they're better, I guess, if you want smokes that self-extinguish. But most smokers I know would prefer smokes that taste good and don't actually go out. Yannow, 'cause we're smoking them?
I want to mandate self-extinguishing candles. Open flame seems a lot more dangerous--and demonstrably more dangerous--than ciggies. Also? I want the trucks that move gasoline to service stations off the roads during normal business hours. After all, a gallon of gas has the explosive force of a stick of TNT! Forget about the LNG ships coming into our ports! Get these ubiquitous ticking time bombs off our streets!
Oh, and I want to mandate ponies. Ponies are cute. And Santa Claus. I really think we should mandate Santa Claus, because even if we're occasionally naughty, we're actually really nice and we should be able to get all the free sh*t. Oh, and a pay raise. I need a pay raise. (Really. How do you expect to pay your future, doubled energy costs?)
Well, time is now to get in line. The path to the door of the new Chrysler and GM dealerships is going to be deep, it's going to be long. And why wait? Just drop down and drop off a check. Be the first one on your block to have the miracle it took government to produce: a better car.
It would be churlish of me to point out that the current economic downturn is notably the product of government mandates for sub-prime mortgages, wouldn't it? That government tax mandates created the culture of "flipping"? That government mandates hit the poor and those least able to afford it, their ability to own and maintain their homes?
In fact, just about every negative economic variable that markets, from the financials to the super, result from government mandates?
It would be churlish. Sorry. Enjoy the future.
UPDATE: Found at the Real King's place, a link to this story. Is it really this simple?
UPDATE: Found at the Feedlot, a link to this museum of stupidity past.
Thursday, May 28, 2009
Clean energy. Compared to what?
I read a comment recently about a woman who was shocked that people were going out hunting to bring food to the table. Her advice was to leave the poor critters in the forests alone, and shop for meat in a grocery store. As if the meat you buy at a grocery store didn't define the end-point for some other critter.
I'm not so sure the impulse to keep our energy resources locked in the ground isn't related to the type of thinking shown above, rather than a NIMBY response to resource utilization. That is, whenever you hear about electric cars, solar panels, and other forms of Green Technology, that there is a simple, experiential ignorance on display.
We have amazing resources. Not just in this country, but in this state. And they are amazing, not just from the profound amount of resources at our disposal, but in the potential value of those resources. Our state legislature is arguing over the billions of dollars we're short in government revenues versus government expenditures.
Why mere billions?
Because billions more lie just off-shore of the mouth of the Columbia. And these are amazing resources. We can exploit these resources cheaply. We can develop thousands of new jobs in the energy field. And the state can follow the example of our sister to the North and reap the benefits of billions of dollars in associated resource receipts.
Amazing resources in that we can get the energy to move and build and create. Cheaply. And petroleum and natural gas aren't the only resources at our fingertips. We have significant coal resources within the state, too.
Utilizing these resources would mean new sources of wealth and jobs for Oregonians. But, just like the resources we keep locked up in the woods--how would you define "renewable"?--the policy of our Vision!™ people is to keep these resources locked up. Just as the lady above thinks hunting for critters is morally wrong, yet buying dead carcass at the market is okay.
I've joked in the past about outlawing the use of arsenic in industrial processes. Arsenic. Everybody knows that arsenic is deadly, right? This should be a slam-dunk! Outlaw arsenic! Outlaw "second-hand smoke"! Outlaw poverty! Outlaw all bad stuff! (An omnibus bill.)
The prollem is, outlawing arsenic would shut down the microchip industries in Washington county. And arsenic is just one "dangerous" (scare quotes) substance used in the manufacture of those high-speed miracles. Just another example of the blithe ignorance that fuels our public policy debate over high-tech, Green Choices.
There's nothing "Green" about Green Technology. It's all a ruse to perpetuate the kind of myth exhibited in the lady's thinking above. You want Green Cars? Mountain tops must needs be scraped to come up with all the constituent components that will be necessary to manufacture these modern miracles. And trillions upon trillions of dollars will be spent to provide these "new" technologies, when they aren't really new after all. They're old technologies. And they are old technologies that simply don't provide low-cost energy. But rather than telling you that simple truth, that solar, wind and other "new" technologies have been around for decades, if not centuries in the case of wind power, the problem is is that these technologies don't provide usable energy cheaply when compared to other sources of old technologies.
Even in their pursuit of transforming our economy from a carbon-based energy system to a new Green basis, there is still something hiding in the woodpile. Whether it's arsenic, copper or whatever, mountains will still be scraped, and resources must be mined from the Earth in order to create these New, old tech jobs.
I bring this all up due to the effort by the OR150 project to indoctrinate our kids with the type of thinking on display in the woman's comments above. The Oregon 150 people were in Astoria on Tuesday, talking to your kids about how they need to get involved with the Vision!™
"'By giving students an active role in structuring community organizing efforts, we're looking to ensure peer-to-peer outreach and to embed a transformational process that not only gets young people thinking about their communities, but becoming active in them as well,' said Aili Schreiner, Project Manager of Project 2059."
Great. The "community organizers" are getting access to the schools, but there is no balance provided as a counter-point to the silliness that they preach. You can see what they're thinking in the video embedded on their website. (I'm sorry to link to this in that I don't want to highlight the words of the young girls in their video. But remember, she simply represents a level of education that reflects the best work and efforts of her public school teachers.)
Green Tech. Old tech that simply doesn't work very well. And not as cheaply as those sources of energy that we rely upon, day after day. What to do? Increase the price of those sources so that we simply ignore that we're using stupid tech at higher prices. What to do? Well, how's that Man Made Global Warming Crisis coming? A little cap-and-trade and Bingo! We'll tax the Sh&t out of cheap energy, killing those industries. So we have to use old, expensive tech that doesn't work very well.
And then we'll call it good.
Wednesday, May 27, 2009
Number 2 in the nation for unemployment. Revenues are falling. People are out of work.
The Democrat plan? Borrow more. Spend more. Tax more.
Not surprising, is it? When was the last time you heard of a "Tax and Spend" Republican? (Okay, Gordon Smith. But you see how that worked out.)
The State House is in a battle for some common sense. The Dems want to spend more and more, tax more and more, and borrow more and more. If you were running the House, what would you do?
You can reach Debbie Boone at 503-986-1432. You can e-mail her at firstname.lastname@example.org.
You can reach Brad Witt at 503-986-1431. You can e-mail him at email@example.com.
A call, asking them to keep spending to last budget cycle's level is quick and easy.
In increasing order of probability:
10. “MIT: Global Warming of 7°C ‘Could Kill Billions This Century’”
9. Godzilla could kill billions this century…if he existed.
8. A space alien invasion could kill billions this century…if they existed and were bad.
7. The Blob! could billions this century…If someone found its frozen carcass and thawed it out.
6. If the Earth’s core suddenly stopped spinning…it could kill billions this century…And possibly worse: It could bring a sequel to the most scientifically flawed Sci-Fi movie this side of An Inconvenient Truth.
5. If the Earth suddenly stopped spinning…And we didn’t stop spinning…Billions could die this century.
4. If really survived being blown up by Kurt Russell and global warming thawed its carcass out…Billions could die this century.
3. If a full scale nuclear war erupted…It could kill billions this century.
2. If a super-space-virus named The Andromeda Strain leaked out of a space capsule in New Mexico…It could kill billions this century.
1. If a really big space rock hit the Earth…It could kill billions this century.
You can never tell when the Grim Reaper is gonna knock on your door. But it's apparent that MIT has a scarcity of Karl Popper primers on their shelves.
Some are born great, some achieve greatness, and some have greatness thrust upon them.
Which of these best describes America during the Obama administration?
For those of you who believe the whole hopey changiness thingy, you believe that our current President was born great. Or, at least, that our President will achieve greatness.
What happens if greatness is thrust upon our President?
There are a multitude of problems facing the White House. All of them courtesy of George W. Bush. None of these problems are of our President’s own making. Our President inherited all of them.
I had a hard time listening to Republican apologists working to describe the economic downturn that began to be noticed in 2001 as “Bill Clinton’s” legacy. For me it was time to man up. Explain the downturn, take it, and make it yours. And then explain the ways in which you were going to attack it. Worse, were the imputations that these Clinton legacy effects were still in effect after 9-11. Well, hell yah. Don’t be a dope! Who wouldn’t think that the attacks as vicious as those perpetrated against the World Trade Center, the Pentagon and a hole in Pennsylvania wouldn’t exacerbate an economic downturn?
Personally, I’ve had to come into companies that were struggling, to fix them. It’s what I do.
Who cares what led to our current situation? If you’ve inherited a bankrupt company your job will not be easier if you blame your predecessors. (In fact, nobody wants to hire an “Alibi Ike”.)
I explain to my kids that God invented time so that “everything doesn’t happen at once”. The flip-side to that coin is, don’t expect everything to be done at once.
And I don’t.
I’m old fashioned. In a lot of ways. I want the Four Lads to sing at my funeral. “It’s Istanbul (Not Constantinople)”. I want—with apologies to Saul Bellow—many things.
I can live without many things. There are a few things that I have found that I cannot live without. I do not want to wake up tomorrow to find that these few things have disappeared. And you do not want to find America lacking in some of these things.
If you are a long-time reader of this blog, you’ve read before of my affection for President Gerald Ford. What “sealed the deal” for me was his masterful diplomacy leading up to the Helsinki Accords. For those of you new to this site, I welcome you, and ask you to read this document.
This was the masterful document that set up the ascension of President Reagan’s and Prime Minister Margaret Thatcher’s defeat of the former Soviet Union. And for you revisionists out there, I was no fan of President Reagan prior to his election. But the proof is in the pudding. While President Ford may have gained a certain acrimony from what is today referred to as the “Christian conservatives,” it is true that President Ford’s masterful diplomacy during his tenure in office, albeit short, put into place the diplomatic tools that were necessary for the follow-on of the Thatcher-Reagan years.
I watched the ‘Stash on Greta Sustern’s show last night. Listening to the Ambassador one is struck by the sheer incompetence of our President’s current foreign policy team. Joe Biden was right. The President is being tested. The question is, is anybody grading the President?
We’ve had notably disastrous Presidents when it comes to foreign policy…most notably President Carter. It can be argued that in retrospect the Clinton Administration also fell short, whether it was in pursuit of Al-Qaeda or Secretary Albright’s curious work with the North Koreans. To their credit, however, was at least an older cadre of foreign policy wonks who were aware of the impact of a North Korean nuclear program on two of our most important allies; Japan and South Korea.
The administration is caught up with the shiny tools of power. They are focused on achieving goals that attempt to overcome market forces; an attempt to gain control over the industrial and financial markets in the United States. As the common Joe wakes up to the priors in place, criticism of our current, massive deficit increases up-tick in intensity. Yeah, Martha, those deficits are that large.
No one will want to buy the new Government Motors automobile. The Environmental/Leftist Complex doesn’t care about market values. Their values are of a higher kind. It’s all about Change!™
So we’ll live for a while at a Dow of 8500. When inflation begins to roar, people will complain. Automakers will make cars that no one will want to buy. GM and Chrysler will again need to be bailed out. Union employees will have job guarantees. A re-reading of post-war England should be required of our public school kids. But that would be too harsh. We’re on a path toward insignificance. But that is what the Enviro/Leftist Complex wants.
They’re getting what they want.
Tuesday, May 26, 2009
Words fail me.
Fortunately, wordsmith Roger Simon had this:
"What’s interesting - and revealing - about the video is the collusive laughter between Sotomayor and the audience about legislating from the bench - something Obama assured us in his introduction of the jurist she does not do. Maybe Sonia should try stand up."
One of the confusing labels in talking about politics is Liberal.
Since I've always considered myself a Liberal, I have come to the point where those on the Left should, in my humble opinion, be referred to as Leftists, rather than Liberals. Most of my values--Liberal values--are encapsulated in our nation's founding documents; the Declaration of Independence and our Constitution.
Speech should be free. Property rights and contracts must be enforced. The choice of what religion I should choose to adhere to is mine, and mine alone.
It is one of the fundamental concepts of our titular form of government that the coercive powers of the state must be limited.
What has resulted is a society where the ownership of certain types of assets is extremely diffuse.
This is an amazing testament to a market-based economic model that relies upon diffusion and self-interest to drive an economy.
One of the defining differences between the United States and all other countries has been the sheer wealth of this country, as opposed to every other country. Walking though the streets of Frankfurt, Vienna, Milan, Moscow, an American is struck by just how quaint it all is. Quaint being a nice word for a 1950's feel that everything is stuck in a time warp. How poor everything is. You see it in the people and how they dress. Everything seems to be a knock-off of American fashion, made in backwater countries with cheaper grades of material. The age and wear on their tram systems. And the biggest difference between all these European and Asian markets has been the difference between where they were and where they are. That is, all of these markets have suffered from greater degrees of central control and authority, from socialism, than has the United States.
Fifteen miles in any direction from the ring-road in Moscow one meets incomprehensible poverty. The Socialist Paradise's mask is ripped away. Within the city limits one need only visit the new middle-class in their homes to get a sense of what is real poverty. The dourness of the monochrome exteriors of their housing is better than what passes for "home" within those façades. If you can remember the cheap, fleabag hotels of the 1960's on Burnside, you can capture the flavour of living the dolce vita in the former Soviet Union. Threadbare or non-existent carpets in entryways. Threadbare or non-existent carpets in their living space. Space for a bed, a chair, maybe two beds. And a cooking ring.
But there is, for all that, a certain forced social egalitarianism.
When you live in a poor country, most people share in that poverty.
It's easy for me to see the point of divergence between Liberal and Leftist. It occurred in the 1960's in this country. It happened when our Congress adopted President Johnson's plan to create a Great Society. Narrow-minded parochial thinkers adopted a view (Vision!™) that our country was too great, too rich and too powerful. What they proposed was a safety-net, that no one in this country would have to live in the kind and type of poverty that afflicted the poorest of our people. And, it was a truly horrid poverty.
If you never visited an Indian reservation in the 1960's, you can't appreciate the poverty that these people lived in. If you never visited a migrant workers' camp in the 1960's, you can't imagine the poverty that these people lived in. If you've never seen the poverty of the field workers' camps of the Deep South in the 1960's, you can't imagine the poverty of those places. So our government policy became one of lifting these people from their poverty. By giving them cash.
At the same time, some truly important legislation was being passed. A public campaign was being waged against those who refused to adhere to what I believe are my Liberal beliefs. Led by Dr. Martin Luther King and great Republican senators and congressmen--following the extremely important Brown v. Board of Education--Republicans worked to make sure that the promises of the 14th, 15th and 16th Amendments were effected through enabling legislation, most notably, the Civil Rights Act. More important than cash, more important than "lifting up", was the levelling of the playing field.
What occurred was a bifurcation: the Left went toward re-distributionism; the Right went to equity before the law. The Leftist impulse was to take from the Man. The Right worked to ensure that political and economic opportunities were guaranteed to all, regardless of colour, race or creed.
I'm afraid that what we're seeing today--vis a vis our country's increasing cant toward socialism--is a result of this political bifurcation between the Left and the Right. Leftists wish to paint those of us on the Right as Nazi's, anti-science bigots, in-bred mouthbreathers.
In juxtaposition, they paint themselves as social-justice activists, smart and chic.
How do we describe ourselves? Interesting question. I know I'm not a Nazi. I know I have a deep appreciation for science and the scientific method. I know that I only mouthbreath at night. I think some nights I saw many logs.
Being a Liberal, rather than a Leftist, I believe in things like the meaning of words. I believe that "due process" is important. I believe that limiting entry into markets is a bad thing. I believe in an even playing field. I believe that government has a role to play in regulation of our behaviour, but that that role is limited. And if you want to reduce those limitations, the due process for those reductions is incorporated into the Constitution through the Amendment Process.
We, as a nation, are going to be tested on the fundamental beliefs of the Left and the Right. I would admonish those who seek to effect social justice to remember the writing of Edmund Burke. Or, more importantly for those of us who went to Beaverton High, the philosophy of Coach McGee: before you tear a system down, explain how the system you're going to replace the old system with is better. How it works. How it gets a can of peas to market more cheaply. How you can work more competetively. How you can work to give your family a better life. How it will increase our liberty and our freedom.
One of the dilemmas of the modern economist is how to transform nations which suffer high rates of oligarchy. In this country it has been our economic mobility that has created new wealth and new wealth holders without regard to ancestry. Oligarchy lends itself to certain forms of corruption. In this country, it is our common belief that no man is above the law and that all men are equal before the law that has held creation of oligarchy at bay. It has been our system of limited government that has held at bay the pre-emption or dominance of markets by our government. And more importantly, held the allies of the Left at bay.
How do oligarchies develop? History is replete with examples, but all of the examples that I can think of come with a single requisite: partnership with those who hold political power. (Sure, you can nitpick and say it was religious power that created these oligarchies. Perhaps that was true through the 17th century, but the rise of liberalism meant a diminution of religious power in favour of political power. States and Kings ruled in the temporal sphere. Prior to the rise of nationalism, religious power was the political power.)
In many parts of the world, aggregation is the problem. Mexico comes to mind. So too much of Latin America. Which has led to us singing songs of the poor campisonos. After a great aggregation, supported by an oligarchy tied to political power, how do you attempt to disaggregate? Where Leftists fail is in their identification of the enemy. It is the government partnership with the private sphere where the concept of market economics is most distressed. It is not teh "Globalization" thingy. Huge disallocations of capital have, and will, occur. Visit the light-rail Vision!™ of Portland. Billions to build. Billions to maintain. And still people prefer private autos. One can only sadly note that most of the transportation problems of the state could have--should have--been solved if those dollars weren't so wasted. And lastly, it is not the Military-Industrial Complex that we must avoid. That threat, like the threat of polio, has disappeared.
Today we need fear the Environmental-Leftist Complex. A rising oligarchy of private/public partnerships that are taking billions of private dollars and directing the use of those dollars to projects supported by the Environmental-Lefitst Complex.
I attempted to point out the rise of the Left--and their compulsion to centralized authority--with my post "A Foot in the Door or a Seat at the Table?" back in 2008.
The text includes an article by Arrigo Levi. Written in 1976, after the election of President Carter, but before his accession to office, Levi writes the following words:
"An “institutional” approach to the problem of organizing a better management of world problems has not received much attention (especially, but not only, by America) during the last few years. A lot of time has been wasted, and in the atomic age, the supply of time is not unlimited."
What to do, what to do?
I haven't talked or written much about groups like the Bilderberg or the Trilateral Commission. Folks who write about these groups are treated by the Left like conspiracy theorists. That Levi was involved in these groups is mentioned, but no imputed conspiracy is intended. But a brief internet search of these groups, and their attendees, is recommended. I will leave it to you, the reader, to ask yourself if there is a shred, a scintilla of evidence that would link groups like these to the push by other non-governmental agencies to adopt policies and practises that would likely give greater power and authority to central planning agencies and authorities, rather than less.
America has been a bastion of freedom and economic liberty throughout its history. There are those who would assert that this "exceptionalism" is the cause for the angst, the stǚrm und drang of our modern world. It is Levi's prescription that we should "the democratic West ought to concentrate its attention on the hasty construction and completion of Western and worldwide institutions, in order to strengthen our economies and our societies and to contain within a more stable framework the great risks of Euro-communism."
I would proffer that there is greater risk to our institutions in America from these hastily constructed Western and worldwide institutions than from an obeissance to our own particular rule of law and national self-interest. In Oregon, we have first-hand experience of the cronyism of our state's elected officials. Of course, this cronyism is couched within the Vision!™ of our dear leaders. So we must accept that friends and families of the politically connected will receive largesse from their political partners.
We will see increasing central control and planning nationally, just as we have been on the wrong end of the stick here in Oregon for more than 30 years. And the businesses and unions who sign on for their piece of the public/private partnership will, in the short-run, prosper. (Which is totally Keynesian, no? "In the long-run, we're all dead"?) What results is an increasing oligarchy, the private/public partnerships of those companies that adopt the central impulses of the Left for short-term advantage. Increasing centralization, rather than increasing decentralization. More barriers to entry, not fewer. Greater public planning and government "investment."
Where, in the constitutions of either the state or the national government does it read "government shall mandate private investment"? I assert it does not. We have never supported oligarchy, or the creation of oligarchy, at any moment of our previous history. That was a European disease. Or a Latin disease. Or an Asian disease.
No one reads "Wealth of Nations" anymore. No one cares about dead guys who wrote about the mistakes and failures of the past. The Left is comprised of the social-justice activists, the smart and the chic. Just don't try to pin them down on how and where wealth is created. Wealth is simply unimportant. I guess that's because it's "unsustainable."
The miracle of the self-fulfilling prophecy.