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[uh-lek-tree-uh-man-see]
With the passing of H.R.2454 (a.k.a. Waxman-Markley or the American Clean Energy And Security - ACES - Act of 2009) and the subsequent ongoing debate in the Senate, I thought I'd jot a few thoughts.
On Climate Change:
- As I stated here, my view on anthropogenic climate change boils down to: if it is real, it is inevitable
- "My fear is that a solution that is effective, equitable, and enforceable is simply beyond the global community's technical and political ability."
- All economically viable fossil fuels will be used by someone, and the carbon will most likely end up in the atmosphere
- It may already be too late to reverse what has occurred
- This is not to say nothing should be done, but should shade our response to becoming adaptable to the uncertain effects that it could cause
- Crippling our economy does not seem prudent
On Cap and Trade:
- Cap and Trade, as a theory, is my preferred method of reducing greenhouse gas (GHG) emissions
- Preferable to a straight CO2 tax
- Creating a market for negative externalities is a great way to account for their effects
- Should drive innovation
- However, there is something subliminally disconcerting about agreeing to limit the emission of a main component of my very breath
On H.R.2454:
- Seems to do little to actually lower GHG
- Environmentalists don't even seem to like it
- Reducing American GHG does not necessarily equal a reduction of Global GHG
- A non-Global agreement will only shift CO2 production to other locations
- Moves a lot of money around
- Different industries have different allowances
- Heavily influenced by political shenanigans
- Job creation does not necessarily equal economic growth
- Increased energy costs will be crippling to our economy
- Proponents should be upfront about costs
- To reduce atmospheric CO2 levels to "acceptable levels" will require an unprecedented reduction in standard of living
- How will compliance be verified?
- What type of costs and economic inefficiencies will verification schemes add?
A look at economic freedom, population growth, and the Tragedy of the Commons by Ronald Bailey at reasononline.
Hardin believed that Smith's metaphor of an invisible hand was contributing to "the dominant tendency of thought that has ever since interfered with positive action based on rational analysis, namely the tendency to assume that decisions reached individually will, in fact, be the best decisions for an entire society. If this assumption is correct it justifies the continuance of our present policy of laissez faire in reproduction." As the essay makes abundantly clear, Hardin is convinced that "rational analysis" will prove that Smith's invisible hand leads to inevitable population ruin.The inverse relationship between wealth and fertility is quite evident, however, it will be interesting to see how prosperous countries fare as time progresses. Can a society maintain its economic strength while declining in population? More specifically, can the immense welfare commitments of Western nations be upheld by fewer and fewer young workers? An equilibrium will be reached - either by increased fertility, immigration from lands with excess youth, or a decline in benefits and entitlements.
In fact, several recent studies suggest that Hardin might have it backward. Under certain circumstances, there may actually be an invisible hand that leads to an optimum population.
...
Norton persuasively argues that Hardin's fears of a population tragedy of the commons are actually realized when the invisible hand of economic freedom is shackled. Many poor countries have poorly specified and enforced property rights. Poor property rights means that many resources are effectively left in open access commons where the incentive is to grab what one can before the other guy gets it. Norton points out that in such situations, more children mean more hands for grabbing unowned and unprotected resources such as water, fodder, timber, fish, pastures, and for land clearing. Lacking the institutional incentives to invest in and preserve resources, this drive to take as much as possible as quickly as possible leads to perpetual poverty.
Here's a list of various sweeteners that you may not recognize as sugar on an ingredient list. Some were quite surprising. (link)
Barley malt. A sweetener produced from sprouted barley that is mostly maltose. It is used in combination with other sweeteners and for cooking and baking.
Brown rice. A sweetener produced commercially by cooking brown rice flour or syrup brown rice starch with enzymes. It can be used for cooking and baking and is sometimes combined with fruit concentrates to be used in food products.
Brown sugar. A refined sugar coated with molasses.
Cane syrup. A very sweet syrup made from sugarcane.
Corn syrup. A manufactured syrup of cornstarch that contains varying proportions of glucose, maltose, and dextrose. It is used in salad dressings, tomato sauces, powdered drink mixes, fruit drinks and juices, and desserts like pudding and ice milk.
Crystalline. A sweetener that is made from cornstarch and comes in granules fructose like table sugar. It is used in dry mix beverages, low-calorie products, enhanced or flavored water, still and carbonated beverages, sports and energy drinks, chocolate milk, breakfast cereals, baked goods, yogurt, fruit packs, and confections.
Dextrose. Another name for glucose. A simple sugar that is less sweet than fructose or sucrose. It is used in many baking products like cake mixes and frostings, snack foods like cookies, crackers, and pretzels, and desserts like custards and sherbets.
Fructose. A sugar found naturally in fruit; also a simple sugar refined from fruit.
High fructose. A highly concentrated syrup of mostly fructose and some corn syrup glucose that is prevalent in soft drinks and other processed foods.
Honey. A concentrated solution of fructose and glucose, plus some sucrose. It is produced by bees from the nectar of flowers.
Invert sugar. A sugar created by heating sugar syrup with a small amount of acid such as cream of tartar or lemon juice in order to reduce the size of the sugar crystals. The resulting product is smoother and suitable for use in candies and some syrups.
Lactose. A simple sugar in milk.
Maltodextrin. A sugar made from maltose and dextrose in corn. It is used in a wide array of foods, from canned fruits to snacks.
Maltose. A simple sugar made from starch.
Mannitol, sorbitol, xylitol. Sugar alcohols derived from fruit or produced from dextrose. These sweeteners are used in many dietetic products. Sugar alcohols do not promote tooth decay, unlike sugar.
Maple syrup. A concentrated sap from maple trees, predominantly fructose. Molasses The thick syrup by-product from the processing of sugarcane or sugar beet into sugar. Blackstrap molasses, a popular health food, is a good source of calcium, iron, and potassium.
Muscovado or Barbados sugar. A British specialty brown sugar that is very dark brown and has a particularly strong molasses flavor. The crystals are slightly coarser and stickier in texture than “regular” brown sugar.
Sucanat. Nonrefined cane sugar that retains all of its molasses content.
Sucrose. Refined, crystallized sap of the sugarcane or sugar beet; a combination of glucose and fructose.
Turbinado. A less refined sugar that still has some natural molasses coating.
White grape juice. A highly purified fructose solution. Virtually no other nutrients are present. It is often used in juice concentrate blends.
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Peter Schiff | ||||
| ||||
"So you think that money is the root of all evil?" said Francisco d'Anconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?
(Link to complete passage from Capitalism Magazine.)
Here's a powerpoint presentation showing some interesting data on the housing market. It is produced by Whitney Tilson and Glenn Tongue, managing partners of T2 Partners and the authors of More Mortgage Meltdown. I haven't had a chance to check out the book, but the charts are quite foreboding. As I've examined before, the subprime mess is not the end of the mortgage/bank problems. There are many Alt-A and Option ARM mortgages still poised to deliver massive defaults, as well as commercial real estate and consumer debt.
Silicon Valley venture capitalist Vinod Khosla of Khosla Ventures explains why biofuels are the answer for fossil fuel replacement for personal transportation in the near term. As I have said before, liquid fuels are key to providing economical transportation. He also brings up the point that first generation biofuels (corn ethanol) are only stepping stones to more viable and efficient future fuels.
Also important to remember is the busted link between corn ethanol and American food prices. This "fact" was thrown around in the media last year as food and fuel prices soared. In hindsight, the sharp increase in corn prices had a much stronger correlation to the commodities bubble than an increase in ethanol production, which is conveniently overlooked.
The first quarter of 2009 saw a continued, dramatic slide in home prices. From cnnmoney.com:
Phoenix and Las Vegas continue to be hammered.The S&P/Case-Shiller National Home Price index, a bellwether of real-estate market direction, plunged a record 19.1% during the quarter compared with the first three months of 2008. That followed an 18.2% drop last quarter.
The Case-Shiller 20-city index dropped 18.7% year-over-year, also a record. It fell 18.5% during the last three months of 2008. This index has plummeted 32.2% from its July 2006 peak and has fallen 32 straight months.
Two cities have now have fallen more than 50% from their peak prices: Phoenix is down 53% since June 2006 and Las Vegas is off 50.4% from its August 2006 high. Dallas prices suffered the smallest loss from peak, just 11.1% since June 2007.Official press release from S&P/Case-Shiller with in depth charts and graphs can be found here.
Interview by Tomas Sowell on reasononline. Sowell's latest book is The Housing Boom and Bust,
"a plain-English explanation of how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust".
reason: What sort of reactions should the federal government have to the current situation?
Sowell: First, the government should not try to artificially keep up housing prices. The tremendous irony is that the very politicians who for years talked of affordable housing are fighting to keep housing prices from falling. How does housing become more affordable except by keeping prices down? They really have no interest in having housing become affordable by means other than their largesse.
reason: Do you think they need to be doing anything to ease the woes of people in foreclosure?
Sowell: Not at all. Foreclosure is not something that happens to you like being struck by lightning. Foreclosure is the end result of things people have done that they need to stop doing in the future. And the market can take care of that. California is one of those states where we’ve seen a drastic reduction in fancy no-money-down mortgages and all kinds of creative financing; we’ve seen those things drop sharply within just a couple of years as housing prices fell and foreclosures rose, as long as the government isn’t there to prop them up.
Who is up next for bailouts? How about California?
Preliminary returns on Tuesday night show that voters soundly rejected ballot measures calling for higher taxes, meaning that the not-so-Golden State's politicians are likely to take hat in hand and head to Washington begging for a bailout.Where does this stop? How many other states have budget troubles? If you want to have government spending, you must have sufficient tax receipts to pay for it. The moral hazard of a federal bailout of individual states is staggering. Why would any state balance its budget?
Republican Gov. Arnold Schwarzenegger floated that idea months ago, as did Assembly Speaker Karen Bass, a Democrat. Schwarzenegger's visit to the White House on Tuesday surely didn't harm its prospects.
California does have enough cash to survive through June 30, but the state controller estimated in March that another $10.6 billion would be necessary to last the summer.
An article in Tuesday's Bond Buyer newspaper reported, citing congressional sources, that the U.S. Treasury and Federal Reserve are considering loan guarantees and "other assistance" to state governments. A House of Representatives committee is holding a hearing Thursday on a bill to provide federal guarantees; House Speaker Nancy Pelosi, a San Francisco Democrat, is in a position to make that happen.This is just a symptom of our greater national problems. We are spending more money than we make on nearly every personal and governmental level. This cannot continue.
Now, it's true that California's fiscal woes are serious, but they're the result of politicians' poor decisions over many years. No matter how it's concealed, a bailout could jeopardize the nation's AAA credit rating - and invite 49 other governors to queue up outside the Treasury building. (The incentive is perverse: The worse shape your state is in, the more cash you get from the Feds.)
Here's detailed interactive graphical representation of the U.S. electrical power grid from NPR. It shows the grid and power generation facilities, as well as wind and solar potential.
The U.S. electric grid is a complex network of independently owned and operated power plants and transmission lines. Aging infrastructure, combined with a rise in domestic electricity consumption, has forced experts to critically examine the status and health of the nation's electrical systems.
In this passage, Hayek touches upon the concept of the Tragedy of the Commons and negative externalities. He acknowledges a limitation of a pure capitalist system, yet posits that this fact is not reason enough to discard of the system outright. He then later describes that these responsibilites would fall to the state: "In no system that could be rationally defended would the state just do nothing. An effective competitive system needs an intellegently designed and continuously adusted legal framework as much as any other."
There are, undoubted fields where no legal arrangements can create the main condition on which the usefulness of the system of competition and private property depends: namely, that the owner benefits from all the useful services rendered by his property and suffers for all the damages caused to others by its use. Where, for example, it is impractical to make the enjoyment of certain services dependent on the payment of a price, competition will not produce the services; and the price system becomes similarly ineffective when the damage caused to others by certain uses of property cannot be effectively charged to the owner of that property. In all these instances there is a divergence between the items which enter into private calculation and those which affect social welfare; and, whenever this divergence becomes important some other method other than competition may have to be found to supply the services in question. Thus neither the provision of signposts on the roads nor, in most circumstances, that of the roads themselves can be paid for by every individual user. Nor can certain harmful effects of deforestation, of some methods of farming, or of smoke and noise of factories be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances, we must find some substitute for the regulation by the price mechanism. But the fact that we have to resort to the substitution of direct regulation by authority where the conditions for the proper working of competition cannot be created does not prove that we should suppress competition where it can be made to function.
tri
