Category Archives: Energy Policy

IEEE and U.S. Hegemony

In IEEE‘s flagship magazine, Spectrum, there is a fairly idiotic editorial warning Europeans against buying natural gas from Russia.

Why can’t the European Union just adopt a strategy of energy independence and wean itself from Russia and the “stans”?

Of course, there is no way for Europe to be “independent” with respect to natural gas. There aren’t sufficient reserves in Europe to meet the current demand. A reduced supply of natural gas will necessarily result in higher prices for energy. Higher prices for energy translate to reduced economic development and everybody being poorer. Why should the Europeans impoverish themselves?

Of course, the writer of the editorial, William Sweet, is not really opposed to Europeans purchasing gas from non Europeans; he praises a pipeline being developed to ship it from Nigeria.  Rather, he seems upset with people buying gas from Russian suppliers. Why?

Russia has repeatedly shown its willingness in recent years to cut off gas supplies for political reasons, basically to bring countries it considers its satellites to heel, notably Ukraine. Of course it wouldn’t dare cut supplies to a country like Germany, which gets about half its gas from Russia. But where German and Russian interests and values collide, Russia could manipulate markets to get its way and use the threat of its market power to ward off diplomatic or military action.

In other words, if Europeans are trading with Russians, they might refuse to back some third party who is contemplating some intervention targeting Russia. Hmm, I wonder who this unnamed party might be?

A recent survey by London’s Financial Times found that European mistrust of Russia has increased sharply in the past six months: the proportion of respondents who consider Russia the greatest threat to world stability rose from just a few percent in July to nearly 20 percent in September, putting it well ahead of Iran and almost as high as China. It may come as a shock to many American readers, however, that the United States still ranks in European minds as the greatest threat to world stability, scoring over 25 percent in September.

And here we see the problem. If Europeans are trading with Russians, they might not side with the U.S. in a dispute with Russia.

This article highlights why I have mixed feelings about my IEEE membership. The work it does in developing and maintaining standards is wonderful. But their consistent support for the American military-industrial complex gives me pause. Like IBM supplying Hollerith tabulators to the Nazis with no concern for what they were being used for – there is no U.S. military or security program, no matter how abusive of civil liberties or vulnerable to tyrannical misuse that IEEE won’t support. Normally the IEEE leadership concerns itself solely with the technical problems that are needed to enhance U.S. government power.  In this case, the Spectrum editorial board is going further and demanding that European politicians adopt policies solely for the benefit of the U.S. government (and to the detriment of people living in Europe).

Yes, the Russian government has imperial ambitions. Yes, Putin’s government is a fascistic one. However, if Russians are trading with Europeans, if the Russian economy integrates with the European one, the likelihood of of a Russian millitary attack of Europe is much lower.  Increased economic integration between Europeans and the people living in former Russian satellites will also reduce the likelihood of conflicts between Russia and the satellites as well (especially since it would lead to greater Russian/former satellite integration as well).

Bastiat’s dictum applies:

If goods don’t cross borders then armies will.

The U.S. government’s global hegemony is ending. If IEEE wishes to retain its technical leadership in a multipolar world, it should stop viewing itself as a unofficial arm of the U.S. government and stick to its valuable work in developing standards.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.
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Third Party Debate

The City Club of Cleveland extended an invitation to the top six presidential candidates*. Of the six candidates, Libertarian Party candidate Bob Barr, Constitution Party candidate Chuck Baldwin, and independent candidate Ralph Nader participated; Democrat Barack Obama, Republican John McCain, and Green Party candidate Cynthia McKinney were no-shows.

Unlike the debates we have already seen in this cycle, the candidates in this debate actually debated the issues!

*The candidates who could theoretically receive the requisite electoral vote to win the presidency

One Congressman Stands Up For Sanity

Ed Schafer, US Secretary of Agriculture, seems to think we need to bail out the ethanol industry:

Agriculture Secretary Ed Schafer’s statement on Oct. 17 that the U.S. Department of Agriculture could provide ethanol companies that got into trouble by speculating on corn with up to $25 million per company in refinancing has caused a firestorm of criticism among ethanol critics who say he is favoring one segment of agriculture and might waste taxpayer money.

According to a report on Agweb.com, Schafer said at the World Food Prize symposium in Des Moines, Iowa, “There’s going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn. This is important public policy for the country because corn-based ethanol is a stepping stone to energy independence through cellulosic ethanol. We’re going to continue to support it as much as we can. We have the responsibility to make sure we cement in the infrastructure of rural America and ethanol production has increased the economic opportunities, the jobs and the building of rural America.”

One can’t claim that these companies are “too big to fail” or that their failure will endanger our entire economy. One can’t claim, with any sense of honesty, that the ethanol experiment has really done much positive for America. In reality, one can’t say a good word about this mess.

Which just proves, once again, that government is more than willing to engage in theft of tax dollars and redistribution to industry in order to satisfy the politically-correct goal of the day. And nobody will stand up to them… Scratch that– nearly nobody:

Ethanol plants may be the next beneficiary of a federal bailout and Mesa congressman Jeff Flake is among those opposed to that idea.

Flake, a fiscal conservative, panned the plan Wednesday saying federal promotion of ethanol production is the problem. “The federal government’s ethanol policies have driven up the price of corn,” said Flake. “But rather than reforming the policies that have caused a spike in corn prices, the federal government wants to bail out ethanol producers who speculated on the price of corn. Only the U.S. Department of Agriculture could dream up a policy like this.”

Flake said tax breaks and credits for ethanol producers should be repealed. “The high price of corn has had a ripple effect over our entire economy. Instead of trying to bail out every industry hurt by it, the federal government needs to take a serious look at reforming our ethanol policies,” said the East Valley Republican.

I’m never one to look to Congress to solve my problems; nor do I think that elections are likely to improve our collective lot. But it’s good to see someone who wishes to stand athwart the tide, and I can’t say I’d mind seeing a few more like him.

Why Libertarians Should Vote: Threats to Liberty from the Left and the Right on the Colorado Ballot (Part 2 of 3)

Cont’d from Part 1

What motivates these very nice people to be such tyrants? Some will vote in ignorance of the issue* and others out of a sense of ‘social justice.’ Very few will intentionally vote to take liberty or property from a fellow citizen; most will vote to do so out of a well intentioned but misguided sense of right and wrong.

The Colorado ballot contains 18 ballot measures, most of which are proposed amendments to the state’s constitution. About half of these measures would restrict liberty, increase taxes, or otherwise punish individuals for activities which ought not to be a crime in a free state or country.

Threats to Liberty from the Left

Union backed amendments 53, 55, 56, and 57 are all very hostile to business. Amendment 53 targets business executives for criminal liability (as if business executives are not already criminally liable for committing crimes), 55 would change Colorado from a “right to work state” to a “just cause state,” 56 requires employers with 20 employees or more to provide health coverage for employees and their dependants, and 57 would put employers at greater liability than the existing workman’s comp laws.

All of these amendments would make Colorado a less attractive place to do business and would likely mean fewer decent paying jobs. Like most populist proposals, the people who the advocates of these measures are trying to help would be hurt the most.

Amendments 51, 58, and 59 concern taxation. Amendment 51 would increase the sales tax to fund programs for the developmentally disabled, 58 directly taxes the oil and gas industry (Coloradans who wish to pay more for gas should support this measure), and 59 redirects funds which under current law are rebated to taxpayers under the Taxpayer Bill of Rights (TABOR) to an education savings fund.

Given governments’ track record of mismanaging taxpayer money (especially given what’s going on in Washington), I am in no mood to pay additional taxes or allow the government at any level to keep more no matter what the reason.

Threats to Liberty from the Right

While many of the ballot measures are economically on the Left, at least one is socially conservative. Amendment 48, the so-called “personhood” amendment would amend the Colorado Constitution to define all fertilized eggs, embryos, and fetuses as people complete with all legal rights associated with being a person. Clearly, this amendment is an attempt to ban abortion in the state of Colorado. Inevitably, if 48 is passed, there will be legal challenges which 48’s proponents hope would ultimately lead to overturning Roe v. Wade.

Amendment 48 makes no exceptions for rape** or incest. While there is an exception for abortion in the event that the life of the mother is threatened, opponents of 48 believe that doctors would put women at unnecessary mortal risk out of fear of being prosecuted for murdering the unborn. Because a fertilized egg would have the same legal rights as a person, a woman and her doctor could face life imprisonment and even the death penalty (someone explain to me how this is “pro-life”!).

Opponents of 48 also fear that doctors would be compelled to violate doctor/patient confidentiality as they may be required to report miscarriages to the authorities if s/he has the slightest suspicion that the miscarriage was caused intentionally***.

Giving fertilized eggs a definition of personhood would also:

– Ban commonly used birth control such as the birth control pill and the morning after pill
– Ban embryonic stem cell research (both public and private)
– Raise additional legal reproductive rights questions on issues with regard to artificial insemination

Despite what both pro-lifers and pro-choicers say, the abortion issue is very complex and there is plenty of room for debate on the merits of this issue among libertarians. What I would hope abortion foes would realize is that this measure has implications far beyond a legal prohibition of abortion.

NEXT: Why Libertarians Should Vote: Restoring Liberty via the Ballot Box (Part 3 of 3)

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Inconvenient Convention Facts and Fictions Exposed

Now that the conventions are over, it’s time to separate the facts from the fiction. With so much misinformation being peddled by the political campaigns (not to mention rumors spread through e-mail, the internet and the MSM), this is very often a difficult task. My approach is to be skeptical until I am satisfied that I have looked at a variety of sources which I believe to be objective. Snopes and Factcheck.org are among the sources I use as a starting point.

The video below comes from factcheck.org. I generally trust this site because, in my judgment at least, they seem to be very even handed in their analysis,* they cite their sources, and go into detail as to how they arrive at their conclusions. This video provides an overview of the misleading statements made in Denver and in St. Paul; the website goes into more detail about these statements complete with sources.

(If the video fails to play, click here to watch)

A few observations:

This b.s. about “giving tax breaks to Big Oil companies” is maddening. Businesses, whether large or small, should neither pay taxes nor be subsidized. Businesses only pay taxes on paper; taxes are passed down to employees in the form of lower wages and higher prices for consumers. Why do we assume that the money that companies or individuals make belong to the government in the first place? If McBama was truly interested in creating jobs, reducing the price of groceries and gas, and improving the overall economy,** he would eliminate taxes and subsidies for all businesses. This would encourage businesses to bring jobs back to America rather than leaving America to escape the tax code. If the practice of subsidizing failing businesses ended, companies would have to survive by producing goods and services people actually want. Now that’s the “change” that I believe in!

Mike Huckabee. What can I say? As bad of a choice as John McCain is for the Republican ticket, the Republicans would have done much worse with Huckabee. Either Gov. Huckabee is insanely bad at math or he deliberately lied to the G.O.P. delegates and the country about Sarah Palin receiving more votes as Mayor than Joe Biden did in the Democrat primaries. Did he really think that no one would check? Did he really think that he was helping the McCain campaign?

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Ron Paul’s Speech at the “Rally for the Republic”

Ron Paul spoke in front of a crowd of approximately 10,000 at the “Rally for the Republic” (AKA the “Ron Paul Convention”) across the river from the Republican National Convention.

Below are the first 3 parts of his speech, the full text of the speech can be read here.

Other speakers on the last day of the rally included Tucker Carlson, Lew Rockwell, Gov. Jesse Ventura (who hinted that he might make a presidential run in 2012), and Barry Goldwater Jr.

Libertarian presidential nominee Bob Barr was also in attendance at Ron Paul’s big show but Barr said he was not disappointed that Paul did not make an official endorsement of his campaign:

Barr, a former GOP congressman, told ABC News he respects Paul’s intent not to make an endorsement in the general election, and is “here today because there are thousands of people who believe we need to shrink the power, the size, the scope of the federal government.

“These are liberty-loving Americans, and those are my kind of people,” Barr exclaimed.

[…]

“We’re all in this together — we believe in the same things,” Barr said.

“Ron has chosen to work within the Republican Party, I’ve chosen to work through the Libertarian Party through the electoral route, but we all want the same thing,” he added.

http://www.campaignforliberty.com/

http://www.bobbarr2008.com/

Cali Going “Green” — Raising House Prices By Restricting Supply

California, in an attempt to fix the housing mess* by making houses less affordable by making you buy features you wouldn’t otherwise**, has announced new statewide building restrictions to go “green”.

From the Governator on down, nanny statists in California are more than willing to use force to make your life more expensive, and are quite happy to gloat about it the whole while:

Today, the California Building Standards Commission announced the unanimous adoption of the nation’s first statewide “green” building code. The code is a direct result of the Governor’s direction to the Commission and will lead to improved energy efficiency and reduced water consumption in all new construction throughout the state, while also reducing the carbon footprint of every new structure in California.

Unanimous? There’s nobody willing to step up and say “maybe we should let individuals decide how their houses should be built”? You can argue day in and day out whether building codes for safety purposes are a legitimate form of government coercion, but this is just nanny-state do-gooderism. It’s the logical next step to a government that won’t allow any market forces the freedom to develop the energy people want to use, so simply requires that they use less. Allowing market forces to price water, for example, might suggest to people that they should save water for their own sake. But government regulation artificially keeping water prices low means, of course, that they must either ration water, mandate regulation to reduce use through the building code, or both. Throwing bad government after bad? I’d say so.

“Once again California is leading the nation and the world in emissions reductions and finding new ways to expand our climate change efforts,” said Commission Chair Rosario Marin.

Sometimes being first is a good thing. Sometimes it’s not. Something tells me that increasing housing prices in a place like California, already far too expensive with other taxes and regulations (and market forces) for the average person to survive comfortably, will not end up helping the state.

“The commission should be commended for bringing everyone to the table including representatives of the construction and building trades industry, environmental groups and labor organizations, and achieving something no other state has been able to.”

“We railroaded this through in a bipartisan manner. Therefore it’s obvious that it’s futile to resist.”

The new California Green Building Standards Code goes well beyond the current building standards. These new statewide standards will result in significant improvements in water usage for both commercial and residential plumbing fixtures and target a 50 percent landscape water conservation reduction.

Plumbing fixtures? Better buy a plunger. Maybe even an auger when they get through with your house. Oh, and I hope you like Xeriscapes, because you’re going to see a lot more of them. (Again, this is a result of government artificially pricing water too low, and then enacting use restrictions that natural market forces could already have arranged).

They also push builders to reduce energy use of their structures by 15 percent more than today’s current standards.

Again, in many ways this is a good thing. But it’s not something that most people had deemed necessary to pay for in the past, or it wouldn’t need to be regulated.

They also push builders to reduce energy use of their structures by 15 percent more than today’s current standards.

I guess they thought this was really important to point out, since they repeated the sentence in the press release. Or perhaps they are just experts on “being green”, and not so much into the whole proofreading thing…

The new standards declare the minimum California will accept in environmentally friendly design – local jurisdictions and builders who wish to do more are applauded.

[clap clap clap]Yay, Berkeley! You go girl![/clap clap clap]

In addition to the new codes adopted today, Governor Schwarzenegger’s Green Building Initiative (Executive Order S-20-04) (http://gov.ca.gov/executive-order/3360/) directs state agencies to reduce energy use at state-owned buildings 20 percent by 2015, while also reducing the impact state buildings have on climate change.

Please tell me they’re going to do this by reducing quantity of state buildings and number of state employees by this much!

His executive order directs that new state construction and major renovation projects should meet a minimum of the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) Silver certification in order to save energy, conserve water, divert waste from landfills and cut greenhouse gas emissions. To date, 13 state buildings have achieved LEED certification.

I guess that’s the end of major renovation projects to state buildings. Oh, wait, they’re spending our money? Never mind.

And wow, 13 whole buildings so far? What size bucket does that drop fall into?

According to the U.S. Green Building Council, buildings nationwide account for 70 percent of electricity consumption, 39 percent of energy usage, 12 percent of potable water consumption, 40 percent of raw materials usage, 30 percent of waste output (136 million tons annually), and produce 39 percent of associated greenhouse gases (CO2).

I thought I learned from the NRA that buildings don’t waste energy, people do. Up next, Washington DC outlaws private ownership of buildings!

California’s new building standards will result in increased water and energy savings through a combination of more efficient appliances, use of efficient landscapes and more efficient building design and operation.

Again, I’m sure they’re not doing anything to increase the efficiency of government.

The code also encourages the use of recycled materials in carpets and building materials, and identifies various site improvements including parking for hybrid vehicles and better storm water plans.

Hey, so you get primo parking for your 20 mpg Chevy Tahoe Hybrid, while the guy with the much more environmentally-friendly 36 mpg Honda Civic languishes at the back of the lot. I’ll bet he produces a lot less smug, too.

Additionally, the new code contains standards for single-family homes, health facilities and commercial buildings. The code is composed of optional standards that will become mandatory in the 2010 edition of the code. This adjustment period will allow for industry and local enforcement agencies to prepare for, and comply with, the new green building standards.

This is why the construction industry went along… Anyone with half a brain will be pushing for their construction to be complete by 2010! After all, what California really needs is MORE real estate being developed, because we don’t have quite enough of a surplus now!

Moving forward after 2010, the California Green Building Standards Code will be updated on an annual basis to ensure that the latest technology and methods of construction have been incorporated to always maintain a high level of standards.

And here’s the giveaway to lobbyists. Just think how much money is going to be spent at the state capital ensuring that pet technologies get implemented into the code. Oh, and I’m sure regulations that change yearly will require a lot more inspectors and training, another fun way to spend taxpayer money. Sacramento should be a boom town over the next few years.

For more than 20 years, the California Building Standards Commission has established California as an international leader in areas such as energy conservation, water conservation and seismic strengthening—resulting in some of the most efficient and sustainable buildings in the world.

Ahh, the final buzzword. “Sustainable.” As long as they keep taxes and regulation just shy of killing the goose that laid the golden egg, Sacramento’s economy should remain sustainable. But just imagine if the local government was trying to pull this sort of shit in a state without beautiful scenery and picturesque beaches… They’d call it Detroit.
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Recycling Bad Ideas: Bringing Back 55

Senator Warner has a brilliant idea how to reduce gas prices; force Americans to consume less at gun point:

Sen. John Warner, R-Va., asked Energy Secretary Samuel Bodman to look into what speed limit would provide optimum gasoline efficiency given current technology. He said he wants to know if the administration might support efforts in Congress to require a lower speed limit.

Warner cited studies that showed the 55 mph speed limit saved 167,000 barrels of oil a day, or 2 percent of the country’s highway fuel consumption, while avoiding up to 4,000 traffic deaths a year.

“Given the significant increase in the number of vehicles on America’s highway system from 1974 to 2008, one could assume that the amount of fuel that could be conserved today is far greater,” Warner wrote Bodman.

Warner asked the department to determine at what speeds vehicles would be most fuel efficient, how much fuel savings would be achieved, and whether it would be reasonable to assume there would be a reduction in prices at the pump if the speed limit were lowered.

The department’s Web site says that fuel efficiency decreases rapidly when traveling faster than 60 mph. Every additional 5 mph over that threshold is estimated to cost motorists “essentially an additional 30 cents per gallon in fuel costs,” Warner said in his letter, citing the DOE data.

This law is patently unconstitutional: nowhere in the United States Constitution is the Federal Government permitted to pass laws governing speed limits. The Congress can get around this limit on their power using the usual dodge of merely passing voluntary regulations and withholding highway funds from states that refuse to go along.

This proposed law is ridiculous on many levels. First, the optimum speed varies from vehicle to vehicle. A one size fits all law would really require some people to drive at suboptimal speeds. The law would have the effect of limiting innovation: why research ways to make fuel efficiency at 70 mph better if nobody is allowed to drive at that speed? Just as when the courts in the 19th century gave polluters carte-blanche to pollute on their neighbors’ properties and killed the nascent emission reduction industry – this law will kill all such groundbreaking research.

Second, contrary to Sen Warner’s assertion, a reduced speed limit does not save lives. In fact, quite the opposite:

Taken as a whole, these different analyses lead to the conclusion that overall statewide fatality rates fell by 3.4 to 5.1 percent in the states that adopted the 65 mph limit.

Why did the new speed limit lower the fatality rate? 1) Drivers may have switched to safer roads; 2) highway patrols may have shifted resources to activities with more safety payoff; and 3) the speed variance among cars may have declined — it might decline on the interstates as law abiding drivers caught up with the speeders, and it might have declined on other highways as their speeders switched to the interstates. The evidence indicates that events 1 and 2 did occur; we have no evidence for event 3. Future research ought to be directed toward disentangling the relative contribution of these factors.

What about its impact on the price of oil?

True, such a law would result in lower consumption of gasoline on the roads, both because of lower fuel consumption and because people would curtail long road trips (because they would take too long). But the reduction in demand for driving would have no impact on the other manifold uses of petroleum. People living in the United States consume upwards of 9 billion barrels a day. If we are charitable, and assume that this time around the savings in consumption will be 100 times larger – that would still amount to 16 million barrels a day, or less than 1% of the oil consumed in the United States each day. Obviously this move would have a barely perceptible effect on the price of unrefined oil.

What about the impact on the price of gasoline?

Well, the price of gasoline is set almost entirely by the supply available. The run up in price could be due not only to to a shortage of available oil, but also due to the availability of refining capacity. And indeed, the oil industry has been expanding its refining capacity at a much lower rate than the rate at which gasoline consumption is growing. Last year, refineries supplying the U.S. market were pumping out 98% of the maximum amount of gasoline that they can theoretically produce.

In such a circumstance, a small drop in the consumption of gasoline could have a major impact on the price. So Senator Warner could be right, forcing everyone to drive more slowly could result in a 10% reduction in the price of gasoline… in the short term. Of course, 5 – 10 years from now, demand would have risen to current levels, and we would be right back where we are today.

The obvious question is why aren’t refiners expanding capacity? After all, gasoline is liquid gold. If they make it, they will be able to sell it at a profit. We should be seeing refiners adding capacity to their operations. Are these refiners idiots? Are they walking away from money? Apparently not! Two years ago, they were trying to avoid wasting money because they didn’t want to invest in major expansions until they figured out what regulations the government is going to impose upon them.

In hearings before Congress [in 2006], oil executives outlined plans to increase fuel production by expanding their existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical & Refiners Association.

But those plans have since been winnowed to no more than 1 million barrels a day, according to the Energy Information Administration, an arm of the federal government.

“If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining,” said John Hofmeister, the president of Shell Oil. “Industrywide, this will have an impact.”

So, because refiners are afraid that their investment in additional capacity can be rendered worthless at the stroke of a presidential pen, they are holding off making any such investment. And I can hardly blame them.

The 55 mph speed limit was one of many dumb ideas that came out of the Federal Government in the early 1970’s. Thankfully, it was abandoned in the 1990’s for reasons that are still operative today. It is a shame that an economic ignoramus who manages to win an election could have he power to reinstitute such a dumb law. Senator Warner would be making a better use of his time and political capital if he worked towards ending the disastrous “Energy Independence/Sustainability” initiatives that are wreaking such havoc with the production of energy world wide. Let’s leave the disastrous ideas of the 1970’s in the dustbin, where they belong.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Obama & McCain Call For Renewed Laws Against Witchcraft and Those Who Make Infernal Pacts With the Devil

In barbaric cultures, when people find themselves facing unpleasant changes, like the failure of crops or natural disasters, they look for scapegoats to blame. In the Europe and early colonial America, all to often the quest for a scapegoat took the form of a persecuting old women, who were charged with having used magic to curse their neighbors crops or herds. The fact that many of these old women owned or were squatting on property that was coveted by neighbors or powerful landlords was not lost on the more enlightened thinkers of the time.

Witches in the StocksThree centuries may have passed since the infamous Salem Witch trials, but the backwards superstition that prompted them is still with us. And Barrack Obama and John Sidney McCain have decided to publicly embrace the superstitions and to lead a modern day hunt looking for witches and sorcerers to punish. their targets are not the old defenseless women that their predecessors hung and burned alive. No, they have decided to target a new scapegoat. The speculator:

Kill the speculators! is a cry made during every famine that has ever existed. Uttered by demagogues, who think that the speculator causes death through starvation by raising food prices, this cry is fervently supported by the masses of economic illiterates. This kind of thinking, or rather nonthinking, has allowed dictators to impose even the death penalty for traders in food who charge high prices during famines. And without the feeblest of protests from those usually concerned with civil rights and liberties.

Yet the truth of the matter is that far from causing starvation and famines, it is the speculator who prevents them. And far from safeguarding the lives of the people, it is the dictator who
must bear the prime responsibility for causing the famine in the first place. Thus, the popular hatred for the speculator is as great a perversion of justice as can be imagine.

Walter Block – Defending the Undefendable

How have these evil speculators supposed to be driving up prices? The International Herald Tribune endeavors to explain – using arguments which would be right at home in the Chewbacca Defense or in A Tryal of Witches.

The “Enron loophole,” a 2000 measure that allowed unfettered oil trading on electronic markets, is now blamed by many for speculation in the tight energy market and is seen as responsible for the rapid increase in prices …

The Enron loophole was “slipped into law by Senator Phil Gramm in late 2000 at the behest of Enron lobbyists to exempt some energy traders from the regulations and public protections applicable to exchange-traded commodities. As a result, the Commodity Futures Trading Commission (CFTC) is unable to fully oversee the oil futures market and investigate cases where excessive speculation may be driving up oil prices,” said an e-mail from the Obama campaign. …

Energy trading giant Enron collapsed in a major corporate scandal in 2001 that sent executives to prison, but not before it won exemption a year earlier from federal oversight for energy commodity trading. Critics claim that measure has allowed speculators to drive up the price of oil well beyond levels dictated by current supply and demand.

The International Herald Tribune, Obama details plan to tax excess oil company profits, end energy trading loophole

So what have these evil speculators done? They have purchased oil today and stored it, hoping to sell it tomorrow for a much higher price. How does this raise the price? To answer this question, we must look at how a speculator acquires his oil. When a company which is pumping oil out of the ground auctions off their oil, the speculator offers more money than anyone else to purchase the oil. Let’s think about the implication of that statement for a moment. The speculator spends his own money and offers more of it to the producer than anyone else. In other words if we are being screwed by the price of oil, the speculator, who is paying more than we are, is even more screwed.

In the short term, this does drive the price of oil up. However, in the end, the speculator must sell his oil. he must sell his oil to people who wish to consume it, and at a higher price than he paid for it. If he guesses right, he can sell every barrel he has for a price higher than he paid for it. If, on the other hand, only when the price is $30.00 a barrel lower than he paid for it, will enough people be willing to purchase his oil for him to sell off all his stock, he may take a huge loss – having made a small fortune by wasting a large fortune. Much like a witch who wastes her time cursing a neighbors sheep by dancing naked under the full moon having drunk a potion made out of fingernail clippings, the speculator who tries to purchase enough of a good to create an artificial shortage is wasting his time and money.

This can be easily shown from the reaction of commodities traders to one of the most blatant attempts by any speculator to corner a market and drive up the costs of agricultural products permanently. This speculator hoped to double or even trebble the price of grain by creating artificial shortages. This dastardly speculator was called the United States Agriculture Department, and it was acting at the behest of many congressmen in the 1920’s to prop up food prices at the levels they had reached in World War I when under Herbert Hoover’s leadership, it tried to corner the world grain market using the American taxpayer as a source of financing.

The FFB managed to hold up wheat prices for a time. Seeing this apparent success, wheat farmers naturally increased their acreage, thus aggravating the surplus problem by the spring of 1930. Furthermore, as America held wheat off the market, it lost its former share of the world’s wheat trade. Yet, prices continued to fall as the months wore on, and the heavy 1930 acreage aggravated the decline. The accumulating wheat surpluses in the hands of the FFB frightened the market, and caused prices to tumble still further. …

The FFB programs had thus inadvertently encouraged greater wheat production, only to find by spring that prices were falling rapidly; greater surpluses threatened the market and spurred greater declines. It became clear, in the impeccable logic of government intervention, that the farmers would have to reduce their wheat production, if they were to raise prices effectively. The FFB was learning the lesson of every cartel-production must be reduced in order to raise prices. And the logic of the government’s farm monopoly also drove the FFB to conclude that farmers had been “overproducing.” Secretary of Agriculture Hyde accordingly lectured the farmers on the evils of “overproduction.” The Secretary and the FFB urged farmers to reduce their acreage voluntarily.

The first group of farmers selected to bear the brunt of this sacrifice were the marginal Northwest growers of spring wheat-the original agitators for price supports. They were not very happy at the prospect. The farmers, after all, wanted subsidies from the government; having to reduce their production of the subsidized crop had not been included in their plans. A group of economists left Washington at the end of March to try to persuade the Northwest farmers that they would be better off if they shifted from wheat to some other crop. In the meanwhile, in this topsy-turvy world of interventionism, troubles piled up because the wheat crop was abundant. Surpluses continued to accumulate, and wheat prices continued to fall. Legge and Hyde toured the Middle West, urging farmers to reduce their wheat acreage. Governor Reed of Kansas reflected the common-sense view of the farmer when he wondered why the government on the one hand promoted reclamation projects to increase farm production and, on the other hand, urged farmers to cut production.[20] Since the individual farmer would lose by cutting acreage, no amount of moral exhortation could impel any substantial cut in wheat production.

As wheat piled up in useless storage, foreign countries such as Argentina and Russia increased their production, and this increase, together with the general world depression, continued to drive down wheat prices.[21] On June 30, 1930, the GSC had accumulated over 65 million bushels of wheat held off the market. Discouraged, it did little until late 1930, and then, on November 15, the GSC was authorized to purchase as much wheat as necessary to stop any further decline in wheat prices. Bravely, the GSC bought 200 million more bushels by mid-1931, but all to no avail. The forces of world supply and demand could not be flouted so easily. Wheat prices continued to fall, and wheat production continued to rise. Finally, the FFB decided to dump wheat stocks abroad, and the result was a drastic fall in market prices. By the end of the Hoover administration, combined cotton and wheat losses by the FFB totaled over $300 million, in addition to 85 million bushels of wheat given gratis to the Red Cross.

Murray Rothbard – America’s Great Depression

The important lesson from Herbert Hoover’s disastrous experiences as a speculator is that a speculator cannot create an artificial shortage. Why?

1) because consumers of the good will be aware that the speculator has a great deal of the commodity in storage waiting to go back on the market and will make their plans accordingly.

2) because until he is selling the stuff he bought for more than he paid for it, the speculator is losing massive amounts of money.

Thus if the speculator guesses wrong about future demand for consumption, he will go broke. If the speculator is right, and the price of oil will go up much higher, then the speculator has provided a marvelous service. For when consumers are at their most desperate, when the supply of oil is at a low point relative to demand, the speculator adds his stock to the supply. This action alleviates shortages, and thus drives prices down. Furthermore, by taking product off the market now, by bidding up prices now, the speculator encourages producers to increase production helping mitigate the future shortages that the speculator is foreseeing.

The so-called “excessive” profits that Obama and McCain are demogouging against are as mythical as the witchcraft that the British Crown so zealously prosecuted more than a quarter millenium ago. It is ironic that as they make speeches about the downturn in the mortgage industry, a textbook case where speculators completely misread future consumer demand and were financially wiped out as a result, that these politicians turn around and accuse another class of speculator of doing the same thing. It is shameful that just as fellow Harvard alum William Stoughton promoted a superstitious theology that sent people to the gallows, Barack Obama, who really should know better, has chosen to promote a superstitious econology that will inevitably destroy many lives.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Lesson In Unintended Consequences #2

The government likes to support biodiesel. It has all the buzzwords. “Recycling”. “Sustainable”. “Environmentally-friendly”. So they subsidize efforts to blend diesel with biodiesel.

One main problem here. Americans don’t use much diesel. So they’re subsidizing foreign, not domestic, use. In fact, they’re simply sending money for non-American-produced diesel that won’t be consumed on American soil to foreign fuel companies:

The problem began when Sen. Chuck Grassley (R., Iowa), the friend of farmers, inserted the so-called “Blenders’ Credit” into the Jobs Act of 2004. The idea was to increase biofuels production and consumption in the U.S., as biofuels were thought to be environmentally friendly and a viable alternative to fossil fuels. The credit provides $1 for each gallon of biodiesel that is mixed with regular diesel in the United States. The provision has not dramatically increased domestic consumption, but it has increased production and exports to Europe’s thriving and subsidized diesel markets.

Under World Trade Organization rules, the U.S. government cannot extend the credit only to American companies or to fuels produced in America. Thus, foreign companies are eligible whenever they bring their biodiesel stateside for mixing. But the limited American market for the fuel has given birth to an unintended consequence known as “Splash and Dash.”

Rep. John Shadegg (R., Ariz.) demonstrated the concept’s simplicity last week by referring to an article that received little attention when it was published last year. It works like this: A foreign tanker carrying 9 million gallons of biodiesel from Brazil or Malaysia sails to an American port. While it waits, 9,000 gallons of American diesel is added — that’s right, a .1 percent blend — so as to earn the blender a $9 million tax credit. The tanker heads to Europe, where diesel cars are far more common and biodiesel is further subsidized.

In some cases, tankers have reportedly made round trips from Europe to the U.S. simply to collect the subsidy. Thus we “import” and “export” the same fuel from and to the same country.

“Just think of it,” said Shadegg. “If I produce biodiesel anywhere in the world where the cost of shipping it to the United States before shipping it to the end consumer is less than a dollar a gallon, then I’m going to take advantage of this subsidy.”

(Emphasis added).

Does lowering the cost of fuel for Europeans really seem like a great use of our tax dollars (and those of our children/grandchildren, since we’re borrowing the money anyway)? Now, you’d think that this program would be universally opposed in the United States…

But you’d be wrong:

Last week, Shadegg proposed a bill (H.R. 5713) to end “Splash and Dash” by limiting the blenders’ tax credit to biodiesel that is actually consumed in the United States. But domestic producers are already upset by this idea: Although they resent foreign firms’ use of “Splash and Dash” to take away their competitive advantage, they still want their subsidy for the biodiesel they export to Europe. Grassley, the original author of the tax credit, wants to make Splash and Dash less profitable but continue those subsidies for American exporters that have so angered the Europeans.

Of course oil producers don’t worry that much about ending the subsidy to foreigners. While an infintesimal proportion of their tax dollars support the foreign subsidy, a far greater amount of our tax dollars go right into their own pockets.

But hey, I’m sure if we just elect Obama/McCain/Barr/Cthulhu, he’ll solve all these problems and “reform” the government!

The Amish– Behind Ahead Of Their Time

From the AP, sure to be an environmentalist’s wet dream:

High gas prices have driven a Warren County farmer and his sons to hitch a tractor rake to a pair of mules to gather hay from their fields. T.R. Raymond bought Dolly and Molly at the Dixon mule sale last year. Son Danny Raymond trained them and also modified the tractor rake so the mules could pull it.

T.R. Raymond says the mules are slower than a petroleum-powered tractor, but there are benefits.

“This fuel’s so high, you can’t afford it,” he said. “We can feed these mules cheaper than we can buy fuel. That’s the truth.”

And Danny Raymond says he just likes using the mules around the farm.

“We’ve been using them quite a bit,” he said.

Brother Robert Raymond added, “It’s the way of the future.”

Way of the future? Does this mean we should all switch from petroleum to alternative mules? Just make sure you understand the mule industry’s “planned obsolescence” strategy. You need to replace the mules every time they stop fogging a mirror.

I guess the Amish would be laughing their heads off over this… They’ve been using alternative mules for generations. But since they’re not typically connected to the internet (oh, the electricity they save!), I don’t think we need to worry about their reaction.

Hat Tip: Billy Beck

Farmers Struggling Despite High Corn Prices

With record-high corn prices, and plenty of subsidy money floating around, an interesting thing is happening. Less farmers are growing corn!

Why? Because the inputs used in growing corn are rising in price even more quickly:

The amount of corn planted in the U.S. is expected to dip this year. Rice acreage in California, which sells as much as half its crop overseas, is predicted to increase by only a small amount. Instead, farmers are planting cheaper-to-grow wheat and soy.

They say the reason is simple. The cost of planting some crops is rising as fast as their prices, and sometimes faster, leaving little incentive to increase production of some foods that remain in high demand around the world.

Farmers typically plant their crops once a year and not all of them cost the same to produce. Both corn and rice, for example, require more fertilizer to grow and fuel for farmers to tend than other crops. As the prices of those supplies rise faster than the prices of some commodities, farmers are shying away from some expensive crops.

This, of course, came as a bit of a shock to me. I never realized that corn was so resource-intensive to grow. So much so that the cost of growing corn makes it barely sustainable, even with the subsidies and record prices caused by high demand.

But that raises another question. If corn is a very resource-intensive crop for us to grow, why in hell would we want to use it as a fuel source?!

Why Energy Independence Is a Futile Way to End Middle-East Terrorism

In an earlier post, I discussed the economic damage that “energy independence” would cause to U.S. consumers. In a recent conversation in meatspace, I ran into someone who acknowledged this problem, but argued that the price is “worth it” because when we trade with people who make oil, those people use the wealth to do all sort of bad things, like funding Al Queda. This argument has some merit; I certainly wouldn’t buy bread from a guy who would use the money to fund attacks on his neighbors.

Let’s examine this problem using the infamous Your Black Muslim Bakery in Oakland California as an example. This bakery is the cash cow for a gang that is involved in all sorts of criminal activity, ranging from auto-theft to destroying the stocks of alcohol stores since the bakers religiously disapprove of drinking.

If we take the proponents of energy independence’s approach to this matter, we would be calling for the city of Oakland, through a web of subsidies and taxes, to encourage the development of industries providing alternatives to bread. We would demand that they subsidize spaghetti shops, encourage people to bake their own bread, and tax bread use. We would seek to make bread more expensive for all so that people will consume less bread and stop buying bread from the bakery.

Instead of focusing on this particular bakery, instead of calling for a boycott of that particular bakery, we would seek to deprive all bakers of their livelihoods, make food more expensive for all including those who are desperately poor and have difficulty affording food. This is taking a sledgehammer to swat a fly and very immoral to boot!

But by trying to use violence to change the behavior of their countrymen, especially in a manner so ineffective to achieving their stated goals, the politicians calling for energy independence are crossing the line. People would rightly laugh if the Mayor of Oakland tried to eliminate bread from the city of Oakland as a means of ending the Your Black Muslim Bakery’s rein of terror. People should do the same to politicians calling for “energy independence” as a means of depriving Al Queda of its operating funds.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Hey, At Least They’re Honest!

I found this little gem on reason.tv. On April 16, 2008 a group called Ad Hoc National Network to Stop Evictions and Foreclosures held a protest in Washington D.C.

What were they protesting? As the name of the organization suggests, Ad Hoc was advocating a freeze on all evictions in the U.S. Many of the Ad Hoc supporters wanted to go well beyond this, however. Some called for cancelling of all student loan debt, others called for “free” electricity, “free” healthcare, and “free” education. Still others ranted and raved about every real and imagined sin of the U.S. government (I half expected to see Rev. Wright in the video somewhere).

But don’t bother labeling these people as Marxists or Socialists; at least a few of the protesters who were interviewed readily embraced these philosophies and described themselves as such.

Why is this important? Isn’t this just a small group of extremists?

I wish that were the case. While most people we run into in our daily lives don’t call themselves Marxists or Socialists (they are probably clueless about these philosophies), many of them are calling for some of these very things. Supporters of Barack Obama, Hillary Clinton, Ralph Nader (who’s policy proposals are unsafe at any speed), and Mike Gravel (the faux libertarian) each support the Ad Hoc agenda, at least to some extent because their candidates support this agenda to some extent.

John McCain isn’t exactly someone who comes to my mind as a staunch defender of Capitalism either. McCain embraces this so-called “national greatness” philosophy where the individual should be willing to sacrifice himself for the “common good” of the country. McCain also criticized the Bush tax cuts as a tax cut for the rich* and pointed out that Mitt Romney’s background in business “chasing profits” was not as honorable as his lifetime service to his country.

One thing I can say about the Ad Hoc people, as insanely naïve as they are; at least they are honest about who they are. The same cannot be said about the top three candidates running for president.

» Read more

Thank You, Big Oil

Glenn Beck on CNN wrote a nice little piece about the hypocrisy of “environmentalists” and why we shouldn’t be demonizing “Big Oil” for working for profit.  Worth a quick read.

I Can’t Think Of A Catchy Title

I suppose the best way to describe myself would be to say that I have a problem with authority. I’ve always disliked when people told me what to do, even as a young child, and I’ve always preferred to find my own path through life and make my own decisions, even if it occasionally went against the conventional wisdom and sometimes worked to my short-term disadvantage. My dad said I inherited it from him, but that I’ve taken it to a whole new level. When I was young I wanted to be a journalist, until I got to college and realized that journalism was less about the search for objective truth than it was about writing the stories that best suited your employer’s interests, whether they were true or not (which didn’t sit well with me at all). So I drifted aimlessly through a couple of years of college as an indifferent (often drunk) student, unsure of what to do with myself until one of my fraternity brothers gave me a copy of “The Fountainhead” and I got hooked on the ideas that success and a refusal to conform to societal standards were not mutally exclusive, and that the greatest evil in the world was society and government’s failure to recognize or accept individuality and individual freedom as a strength, not a weakness. So I threw myself into studying politics and history, worked in a few political campaigns after college, had some success, and thought about doing a career in politics until I realized that most of the people I knew who had never had a career outside of politics had no comprehension of how the real world actually worked and tended to make a lot of bad, self-absorbed decisions that rarely helped the people they claimed to be representing.

That didn’t sit well with me either, so I decided to put any thoughts of going into politics on hold until I’d actually had a life and possibly a real career, and I spent the next couple of years drifting between a series of random yet educational jobs (debt collector, deliveryman, computer salesman, repo man, dairy worker) that taught me the value of hard work, personal responsibility and the financial benefits of dining at Taco John’s on Tuesday nights (2 tacos for a buck) when money got tight.

After awhile, however, the desire to see the world (and the need for a more consistent and slightly larger paycheck) convinced me to join the Army, where I spent ten years traveling around the world on the government dime working as an intelligence analyst. I generally enjoyed my time in the military, despite the aforementioned problem with authority (which wasn’t as much of an issue in the military as many people might think it would be), and I got to see that the decisions our political leaders make were sometimes frivolous, often ill-informed, and always had unforeseen repercussions down the road…especially on the soldiers tasked with implementing those decisions. I was fortunate enough to spend most of my 10 years in the military doing jobs I enjoyed, traveling to countries that I always wanted to see (Scotland is the greatest place in the world to hang out, Afghanistan is very underrated) and working with people I liked and respected, until I finally decided that at 35 it was time to move into a job where I didn’t have the threat of relocation lying over my head every two or three years, where I didn’t have to worry about my friends being blown up, and where I didn’t have to work in any capacity for George W. Bush.

I work now for a financial company in Kansas where I’m responsible for overseeing, pricing and maintaining farms, commercial and residential properties, mineral assets, insurance policies, annuities, etc. In my spare time I like to read books on economics, history, and politics (I’m preparing to tackle Murray Rothbard’s “Man, Economy & State” and Von Mises’ “Human Action”…should take me about a year at the rate I’m currently finishing books), watch movies, and destroy posers on “Halo 3″ (where I’m signed in under “UCrawford” for anyone interested in taking a shot at me some time). I used to play rugby until age, inconsistent conditioning, and a string of gradually worsening injuries finally convinced me to quit. I’m a rabid fan of the Kansas Jayhawks in general and their basketball and football programs in particular and I’m also a devoted fan of the Kansas City Chiefs and Royals. I’m also fond of going online and debating/picking fights with people on the merits of the philosophy of individual freedom…sometimes to the point of being an asshole (but hopefully a reasonably well-informed asshole). I’ve been a big fan of The Liberty Papers ever since finding it online, I respect the body of work they’ve put out, and I’m honored that Brad Warbiany invited me to join his jolly band of freedom fighters. So cheers, Brad, and to everyone else I look forward to reaching consensus or locking horns with you in the near future.

Another Congressional Show Trial

The heads of so-called “Big Oil” were brought before yet another Stalinist tribunal Congressional Committee today and asked to explain how they could commit the unpardonable sin of making a profit:

WASHINGTON — Top executives of the five biggest U.S. oil companies said Tuesday they know high fuel prices are hurting consumers, but deflected any blame and argued their profits _ $123 billion last year _ were in line with other industries.

“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” said Rep. Edward Markey, D-Mass., as his committee began hearing from the oil company executives.

Lawmakers were looking for answers to the soaring fuel costs a day after the Energy Department said the national average price of gasoline reached a record $3.29 cents a gallon and global oil prices remained above $100 a barrel although supplies of both gasoline and oil seemed to be adequate.

“I heard what you are hearing,” John Hofmeister, president of Shell Oil Co., told Markey, adding in prepared testimony that he knows that “Americans are worried about the rising price of energy…. These cost increases are hitting consumers hard, particularly the poor and those on fixed incomes.”

But neither Hofmeister nor the executives from Exxon Mobil Corp., BP America Inc., Chevron Corp., and ConocoPhillips said their companies should be blamed and they rejected the notion that their profits are extreme.

“Our earnings, though high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements,” said J.S. Simon, Exxon Mobil’s senior vice president. Last year the oil and gas industry earned 8.3 cents per dollar of sales, only a little higher than the Dow Jones Industrial Average for major industries, he argued in prepared testimony.

In other words, the marginal profit of Exxon Mobil or any of the other oil companies isn’t any different, on average, from any other major industry. There are no “windfall” profits. There is no price “gouging.” Yes, profits are higher in relative terms, but that’s because in relative terms the price of the chief commodity used in the production of gasoline, crude oil, was recently higher than it has ever been, even when adjusted for inflation.

In order to understand that, of course, you have to understand economics, which is the one thing that the demagogues on Capitol Hill don’t understand:

Markey challenged the executives to pledge to invest 10 percent of their profits to develop renewable energy and give up $18 billion in tax breaks over 10 years so money could be funneled to support other energy and conservation.

But who, Congressman Markey, is supposed to decide which alternative energy projects are the most promising ? Isn’t that something we’ve always left up to the market.

There’s nothing wrong with making a profit, and that’s all the oil companies have done. Until Congressman Markey and his henchman can point to a similar contribution they have made to the productive capacity of the entire planet, they should just shut up.

Earth Hour — What They SHOULD Have Said

Allow me to engage in a bit of strawman-bashing. In the comments to Don Boudreaux’s excellent post at Cafe Hayek, a rather idiotic argument came up. It is the same argument that many of our own contributors received when we opposed Ron Paul, and commenters told us “If you don’t like Ron Paul, you must tell us who we SHOULD vote for.” It’s a strawman, of course, because criticizing one idea doesn’t obligate you to posit your own. But that’s not good enough for some people, as this comment to Don’s post shows:

Congratulations!

Instead of bringing forward some better and more rational proposals that will help to avoid that hysteria that indeed clouds the environmental issues and could cause the remedies to be worse than the sickness, and help the world to be able to use scarce resources wisely and effective… you live up to your role as an educator, as a beacon of light… and just make fun of it all.

As if the folks at Cafe Hayek haven’t offered their own positive ideas on a whole host of topics, one bit of criticism gets the “well, what would YOU do about it?” response. Laughable…

…but I’m going to offer a suggestion anyway. I’m going to offer the free-market environmentalist answer.

Here’s what the World Wildlife Fund should have said:

Greetings. In our modern world, we are faced with many problems. While the work of caring environmentalists and improved technology has done a lot to improve the environmental situation in the Western world, we have much farther to go. Rising populations and increased worldwide standard of living are only adding to the strain that humanity is placing on our planet. Oil and coal have served us well to bring us to this point, but exact a heavy toll on the planet to extract and use. These sources of energy are the past; they are not the future.

Conservation is one part of the solution to this problem. Conservation helps the environment by reducing demand, and helps individuals by reducing the prices they pay for the resources they use. Taken in the aggregate across society, reduced individual energy use helps to ensure that we can move from today’s needs to the future, and do so in a smooth transition. We hope that our recent Earth Hour event reminds humanity that they should be ever-mindful of their impact on the planet, and do what they can to minimize that individual impact, for the good of their pocketbooks and the planet.

But conservation is not enough. The pressures of increased population and increased prosperity will only lead to higher energy consumption. In order to protect our Earth, we must find alternative energy sources, with a smaller impact on our environment. To ensure widespread acceptance, the solution must be both environmentally-friendly and cheap. Our current solutions show promise, but are too expensive to be deployed on a wide scale. Thankfully, rising prices of oil will make it more economically feasible to explore alternatives, and the work of firms such as Massachussetts’ Konarka Technologies are helping to bridge the gap between today and the future.

Environmentalism and energy consumption are not mutually-exclusive. The crucial factor, however, is technology. We can solve these problems, but it won’t be done by politicians or policymakers. It won’t come from Washington or Brussels. And it can’t be done by mandate. The solutions will come from hard-working, caring, dedicated scientists and engineers. It will come from those in the private sector who stand to make a profit from cheap, clean energy.

Those who care about our planet have many options open to them. For those who are still young, with their careers and lives ahead of them, we encourage you to study physics, materials science, and engineering. You can directly impact the problem by researching, developing, and implementing the technologies which will help us solve these problems. For those who may be too late to change their career path, there are countless investment opportunities in the companies working on these problems. The beauty of these options is that it offers you both the opportunity to profit and enact a social good.

Turning off your lights for an hour is a reminder of what you can do in the short term, and of the important problem that we must solve. But if you really want to help, it’s time to get your hands dirty and start making the long-term solution a reality.

Those of us on “the right” are often lambasted as uncaring when it comes to environmental problems. We are not. We are simply cognizant of the fact that the solutions “the left” offers are typically damaging, counterproductive, and anti-prosperity. The real solution will come from the same place all solutions come — the long-term work by people trying to improve their own lives, and by extension improve the world for the rest of us.

Google “Doing Their Part” For Earth Hour

Seen today:

google.jpg

“Earth Hour” is a worldwide event where individuals are asked to shut off their lights for an hour. Ineffectual, pointless, but that’s what we need to do “for the planet”.

So what does Google do? Do they run some of their servers in a lower-power mode, perhaps sacrificing the speed of search results in order to reduce energy use? Nope. Do they even do the politically correct but economically idiotic idea of buying “carbon offsets” for the energy they use for that hour? Nope. Does blackening their home page even save energy? Nope. In fact, outside of changing a few lines of very simple code, it doesn’t appear that this gesture has taken any effort at all.

What have they accomplished? Well, they’ve “raised awareness”. Good work, fellas, because without Google, I may never have known about the idea of conservation!

What a joke.

Others covering this: Don Boudreaux & Billy Beck

Gordon Brown Resists the EU’s Biofuel Targets

The Guardian- Gordon Brown is preparing for a battle with the European Union over biofuels after one of the government’s leading scientists warned they could exacerbate climate change rather than combat it.

In an outspoken attack on a policy which comes into force next week, Professor Bob Watson, the chief scientific adviser at the Department for Environment, Food and Rural Affairs, said it would be wrong to introduce compulsory quotas for the use of biofuels in petrol and diesel before their effects had been properly assessed.

“If one started to use biofuels … and in reality that policy led to an increase in greenhouse gases rather than a decrease, that would obviously be insane,” Watson said. “It would certainly be a perverse outcome.”

Under the Renewable Transport Fuels Obligation, all petrol and diesel must contain 2.5% of biofuels from April 1. This is designed to ensure that Britain complies with a 2003 EU directive that 5.75% of petrol and diesel come from renewable sources by 2010.

But scientists have increasingly questioned the sustainability of biofuels, warning that by increasing deforestation the energy source may be contributing to global warming.

Watson’s warning was echoed last night by Professor Sir David King, who recently retired as the government’s chief scientific adviser. He said biofuel quotas should be put on hold until the results were known of a review which has been commissioned by ministers.

“What is absolutely desperately needed within government are people of integrity who will state what the science advice is under whatever political pressure or circumstances,” he said

Suspending my skepticism of the man made global warming phenomenon for a moment; the scientists make a very important point in this article about how government should think first before acting. The problem is that governments don’t think; people think. If the people of the U.K., the U.S. or anywhere else for that matter believe they can depend on the government making intelligent decisions on their behalf, this biofuels boondoggle is only the latest example of why those who would outsource their thinking to the government are mistaken.

Fortunately for the U.K., they have a prime minister in Gordon Brown who is willing to resist the knee jerk reaction to go along with the European Union and actually listen to scientists rather than seek out scientists who will tow the popular party line.

The prime minister made clear that Britain is wary of the target when he said last November: “I take extremely seriously concerns about the impact of biofuels on deforestation, precious habitats and on food security, and the UK is working to ensure a European sustainability standard is introduced as soon as possible, and we will not support an increase in biofuels over current target levels until an effective standard is in place.”

Unfortunately for us here on the other side of the pond, President Bush took the opposite approach: he caved. In 2007 President Bush signed legislation which would require the production of 36 billion gallons of biofuels by 2022. As Brad pointed out in his recent post on this subject, E-85 ethonal in particular wastes a tremendous amount of water.

What the biofuels proponents fail to tell consumers is that E-85 ethanol is horribly inefficient. As George Mason University Economics Professor Walter Williams points out, this particular fuel cannot be piped (because of pipeline corrosion from leftover water) but must be shipped by trucks and trains, damages engines not specifically designed for ethanol (again because of the leftover water), and is 20 to 30 percent less efficient than petroleum. Williams goes on to explain that to produce one SUV tank worth of fuel with E-85 requires 450 pounds of corn; enough corn to feed one person for an entire year!

Despite all of this, the politics is leading the way rather than the science and the free market. The farm subsidy lobby is very powerful in Washington in both political parties (and is apparently powerful in the EU as well).

And that’s really the dirty little secret. But for government subsidies, E-85 ethanol would have no chance of competing in the free market. Biofuel production displaces the basic economic resources of land, labor, capital, and entrepreneurial ability which could otherwise be used to better address the energy problem. British scientists are already thinking about the possible consequences of the EU’s biofuels policies. How much pain can be avoided if only policy makers will have the courage to listen before allowing such a disastrous policy from moving forward? The only way to solve the energy problem is for governments to get out of the way, allow innovators to innovate, and let the free market pick the winners and losers.

Hat Tip: Cato Daily Dispatch

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