Vermont Part II: To The Moon!

One of the announcements the week we visited Vermont was from Democrat Gaye Symington, candidate for Governor in the fall election. She made the bold declaration that her administration would push the use of wind power from 0.2% to 20% of the state's total energy in 10 years.

This sounds familiar. First, there was Al Gore speaking in Washington D.C. July 17th:

I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean, carbon-free sources within 10 years

Gore was primarily talking about wind, solar and geothermal energy sources according to sources at his nonprofit, the Alliance for Climate Protection. More recently, Barack Obama made the following challenge at the Democratic National Convention in Denver:

For the sake of our economy, our security, and the future of our planet, I will set a clear goal as president: in 10 years, we will finally end our dependence on oil from the Middle East.

Everyone thinks they're JFK launching us on another moon mission. Enough already! What do all these statements have in common? Answer: they are ill-conceived and unnecessary environmental posturing in the face of a real energy crisis. Nobody seems to have mentioned to Gore or Symington the simple fact that wind and solar energy both require some measure of backup, because they are not reliably continuous sources of energy. A single cloudy or windless day can mean that the utility company must reconfigure the electric grid to supply the missing power from another site.

The scale of the conversion necessary to fulfill each challenge is lost on these Democrats. Clearly none of them have scientific or technical backgrounds. We should strive to achieve change, but we should set reasonable goals for ourselves. A consultation with the experts on energy might yield a reality check, see Making Gore's Switch Isn't Quite So Simple in yesterday's Washington Post.

Tellingly, Gore and Symington both ignore nuclear power, which is perhaps the only currently available technology for generating power in sufficient quantity without carbon emissions. Obama mentions nuclear power in a strange way, after listing natural gas and clean coal he says he'll "find ways to safely harness nuclear power." Safely harness? Is he reassuring nutty environmentalists or does he really believe that nuclear power plants are somehow unsafe?

Green Posturing

The mayor of Denver has challenged the organizers of the 2008 Democratic National Convention to "make this the greenest convention in the history of the planet." The Wall Street Journal reported that they've hired environmental activist Andrea Robinson as Director of Greening. How does one become an activist for a living anyway? Is that really a valid career, going around to protest rallies and writing angry letters to politicians? I digress...

The WSJ article contains alot of gems, like the litany of liberal interest groups each making demands that ultimately over-constrain the problem:

The host committee for the Democratic National Convention wanted 15,000 fanny packs for volunteers. But they had to be made of organic cotton. By unionized labor. In the USA.

Official merchandiser Bob DeMasse scoured the country. His weary conclusion: "That just doesn't exist."

This is absurd on so many levels, I don't know where to begin. There is no logic to the position that trading with other countries, or products made by non-union labor, or cotton that is grown with modern farming techniques are bad for us as a society. I look at this and wonder if the Dems wish that the miracle of the industrial age (enabling the dramatic rise in living standards we enjoy today) never happened. Economics says that competition, another name for trade, forces improvements in productivity, which in turn reduces costs for everyone. Unions, nationalism, and unfounded superstitions about agricultural technology are all antithetical to those goals.

Speaking of agriculture, the real kicker was the description of the catering guidelines:

No fried food. And, on the theory that nutritious food is more vibrant, each meal should include "at least three of the following colors: red, green, yellow, blue/purple, and white." (Garnishes don't count.) At least 70% of ingredients should be organic or grown locally, to minimize emissions from fuel burned during transportation.

The rainbow food claim sounds like typical new age unscientific garbage. It may be good for culinary artistry, but I doubt that color has any correlation with nutrition. A pile of gray sunflower seeds can pack some vitamins and other essentials, can't it?

The second claim about local food is a common meme going around in enviromental circles these days. It's adherents even have a name: localvores. Trouble is, the idea that local food uses less fuel during transport is actually wrong in most cases. The Boston Globe had an article in 2007 explaining the details:

Judged by unit of weight, ship and rail transport in particular are highly energy efficient. Financial considerations force shippers to pack as much as they can into their cargo containers, whether they're being carried by ship, rail, or truck, and to ensure that they rarely make a return trip empty. And because of their size, container ships and trains enjoy impressive economies of scale. The marginal extra energy it takes to transport a single bunch of bananas packed in with 60,000 tons of other cargo on a container ship is more than an order of magnitude less than that required to move them with a couple hundred pounds of cargo in a car or small truck.

"Local food systems are often built around small-scale logistics," says Chris Foster, a research fellow at England's Manchester Business School and co-author of a December 2006 study on the environmental impacts of food production and consumption commissioned for Britain's Department for Environment, Food and Rural Affairs. "You begin to make more trips in cars. More food is shifted around in small trucks and vans, which are relatively energy-inefficient ways of moving."

Democrats and Deficits

John McCain undoubtedly bites off more than he can chew when he promises to balance the federal budget. He is a champion for fighting earmarks and pork, but those amount to a tiny sliver of the budget pie. The real budget meat is in the entitlement programs: Social Security, Medicare/Medicaid, and other transfer programs that currently amount to more than half of the total spending per year. Even if he is successful in forging a compromise fix for Social Security, it is unlikely to shrink.



Meanwhile the Democrats have done an about-face on deficits this election year, and nobody seems to notice. For most of George W. Bush's reign, the Democratic minority in Congress were deficit hawks. They complained incessantly about the supposed squandering of the Clinton surpluses, and held press conferences touting "record deficit" numbers (fiscally irresponsible, but not close to record if you adjust for inflation). Now that they're the majority party in Congress and Obama is the frontrunner, suddenly deficits don't matter at all. Asked about McCain's balanced budget pledge, Obama said:

"I do not make a promise that we can reduce it by 2013 because I think it is important for us to make some critical investments right now in America's families"

Note the weasel word he uses, investment. How did we go from Bush deficits being terrible to deficit spending = investment? It's simple, Democratic overspending is good, Republican overspending is bad. Libertarian Steve Chapman takes both sides to task for the coming fiscal disaster. The scariest part is that if the Dems control both the Whitehouse and Congress, the new spending burden will likely be much worse than if control is divided. Chapman notes:

The National Taxpayers Union Foundation added up all the promises made by the two candidates and found that McCain's would cost taxpayers an extra $68 billion a year. Obama's add up to $344 billion a year.

Please Do Piss on the Third Rail

I was not particularly impressed when John McCain said he'd balance the federal budget in 4 years. I think that such a goal is pure fantasy, especially with a Democratic Congress. Many analysts and observers agreed, noting that McCain's own numbers just don't add up. Still, I give him credit for trying. He has his heart in the right place: control spending! Maybe he should throw the Dems a bone and compromise on retiring the Bush tax cuts in exchange for tough cuts on the spending side. Of course that's really only something he could do as President, after winning the election.

I was stunned when he dared touch the third rail of politics a few days later, in Denver July 7th. McCain was roundly criticized by the lefty blogosphere for boldly declaring the impending Social Security crisis "a disgrace." The liberal nuts went insane, he muddied their sacred government cow. Matthew Yglesias called it "peeing on the third rail." The comments sections were flooded with the usual claims that Social Security has no real fiscal shortfall. This issue is the Dem equivalent of Global Warming denial: the science is all against them. The Trustees of Social Security themselves, actuaries with pocket protectors, publish a detailed report projecting demographic trends and resulting revenue versus spending. It says the program is in trouble. What's more, Obama believes there is fiscal imbalance. Why would he propose eliminating the payroll tax cap of $102000 if there were no need for higher revenue?

McCain was asked to clarify. Young people, he said, "are paying so much that they are paying into a system that they won't receive benefits from on its present track that its on, that's the point." Here is a courageous politician, willing to take on an issue that burned George W. Bush just 3 years ago. Anyone under the age of 40 should think long and hard about that. We pay more than 12% of our paycheck to FICA, yet the funds don't legally belong to us. The money is not in an account, it doesn't accrue interest or grow, and it can be redefined by Congress on a whim. In all likelyhood, future benefits for today's workers will be 75% of current benefits or less, and we will be forced to work years longer until retirement.

Note that McCain was not even proposing private accounts as the solution, that was D.O.A. for Bush in 2005. His very reasonable, politically moderate full response reads:

"Now, how do you fix it? Now, how do you fix it? You fix it by reaching across the aisle, and you say to the Democrats, 'Sit down with me at the table. Sit down with me, the way Ronald Reagan and Tip O'Neill did the last time that Social Security was in deep trouble, and that was way back in 1983.'"

Useful Infidels

What's wrong with this picture?


For those who don't know, this is recently deceased al-Qaeda commander Abu Ubaida al-Masri, who is believed to have helped plan the 2005 subway attacks in London. He was a terrorist. He hated westerners so much that he spent much of his time planning coordinated attacks like the London one, and the failed attempt in 2006 to bomb trans-Atlantic airliners.

So why is he using a Bluetooth cellphone headset? That little miracle of technology would not exist were it not for the coordinated efforts of American universities, European engineers and Asian manufacturing expertise. It is a shining example of the wonders of economic and intellectual cooperation, a tribute to people who build useful things and seek to move humanity forward. It certainly was not created by bearded thugs living in the remote mountains of Pakistan.

One wonders what these guys think when they order their handsets, iPods and satellite dishes from Amazon.com. Do they curse at Microsoft Word when it mangles the HTML of their latest anti-American rant? Do they even notice the irony?

Minority Report

Via Marginal Revolution, Economists Decode Rational Behaviors of Black Women. The article summarizes the recent work of economists Tim Harford (the Undercover Economist), Kerwin Kofi Charles and A. Scott Cunningham on African-American marriage markets and related social consequences. It is a well established fact that African-Americans have experienced a disintegration of the family unit and alarmingly high rates of non-marital births (70%). I've always been interested in this topic, and to many conservatives it would seem to serve as a moral bellwether for society in general. The beginning of this article suggests the root cause is not a moral one:

For policy makers and society in general, who are indoctrinated to believe Black out-of-wedlock births, low marriage rates and single-parent households with all the attendant social ills are a result of a lack of morals entrenched in Black culture, Harford has given a logical explanation: "Marriage markets" where there are large numbers of Black men in prison significantly reduce the lifetime chances of marriage among Black women.

The issue is certainly not new. I did some background reading and found that it had been studied as early as 1965, when sociologist Daniel Patrick Moynihan wrote "The Negro Family: The Case for National Action". The subject was racially controversial even then. Moynihan went on to become a prominent and respected Democratic Senator. In the past four decades, academics have pondered a number of theories about the destructive shift in African-American family structure:

• women entering the workforce, allowing greater independence
  
• declining work opportunities for African-American males
• expanded welfare programs offering alternative support
• the sexual revolution

Today there is no consensus on any of these theories or their moral implications. The newest thesis advanced by Harford and Cunningham, that the soaring number of incarcerated black men plays a key role, suggests that there is a moral component:

Harford posits Black men who see the competition behind bars have no incentive to marry. The sex imbalance caused by imprisonment allows Black men who are not in jail to enjoy themselves sexually without getting married.

Cunningham explores "the relative shortage of men in Black communities, created largely by the high rates of Black male incarceration." Cunningham hypothesizes "that these high 'sex ratios' allows for men with tastes for sexual diversity to form concurrent partnerships, as well as affects on their condom use.

The rate of imprisonment causes scarcity of marriageable males, which tilts bargaining power heavily in favor of the remaining pool of men, encouraging promiscuity and other risky sexual behavior, which raises STD rates and non-marital births. After reading this, my thought was to ask if there are other subpopulations where this behavior has been observed? One that immediately came to mind were the post-WWII populations in Germany and Japan. Surely they had lost significant percentages of men in their prime. Did cultural or moral restrictions change the outcome, or were they not analogous in some other way?

Oil Honesty

John McCain was interviewed by Scott Pelley on 60 Minutes Sunday:

"What do you do for the person who just saw gasoline go from three and a quarter to three fifty on its way to $4?" Pelley asked.

"I would love to tell you that I have an immediate answer for that. And I don't. The only way we are going to fix it is to eliminate our dependence on foreign oil. We've got to have a crash program, a all out effort," McCain said. "But, I can't give you straight talk and tell you that tomorrow I can change the price of a gallon of gas."

An honest man in Washington! Compare and contrast this with Hillary Clinton.

Oil Entitlement

Hillary Clinton was stumping in Hattiesburg, Mississippi recently. Here is an excerpt:

"Oil hit a $104 a barrel," said Sen. Clinton. "The president said 'I sure wish they'd drop the price' and they said 'No, we won't, Mr. President.' And he said he was disappointed."

Sen. Clinton continued, "I've got to tell you you won't see me holding hands with the Saudis. You'll see me holding them accountable for what they do to the oil price and to our country."

Hold them accountable. Uh, actually Canada supplies more oil than Saudi Arabia, and neither is close to cornering the U.S. import market. Do Democrats actually believe this conspiracy stuff? Oil is a fungible commodity, and the price is set by a world market. Hillary and Obama both lamented the Bush administration's lack of tact on foreign policy. Now, it seems she's saying that we should twist arms to manipulate the outcome of free market trade in our favor.

I'm seeing a pattern here. Democrats think that the solution to everything is a new entitlement. Need healthcare? By golly, government will give it to you. Wages too low? We'll just pass a law saying you get a "living wage." Oil too expensive? Government will make it cheaper by dictating to those dastardly foreigners! No thought is given to the fact that all of these are economic exchanges, people trading goods and services for mutual gain. Strong-arming the Saudis isn't going to change anything. The world oil supply cannot be changed much by an angry woman in the Whitehouse. In the long run, oil demand driven by growth in China, India and all parts of the world will continue to rise.

Praising Bill Clinton?

I strongly believe that economics should be the deciding issue for any Presidential contest. A robust economy heals many problems by increasing the size of the pie for everyone. The private sector adds jobs, tax receipts grow, and the annual deficit shrinks. At least that's the theory.

The economy is like a very complex machine, with many inputs. The President sets the national agenda, and has the power to influence some of these inputs. Chief among those are:

• Controlling federal spending
• Liberalizing trade
• Maximizing investment capital

Of course there are many other factors outside the control of the Executive:

• Domino effects from foreign economies
• Consumer spending
  
• Monetary policy controlled by the Federal Reserve
• Energy prices (oil!)

Surprisingly, Bill Clinton did quite well with the top three. On spending, he was checked by a Republican congress for 6 years, and his early first-term healthcare proposal was defeated. On trade, he supported and extended NAFTA, despite the opposition of many Democrats. He also signed GATT, which created the World Trade Organization that is so hated by many progressives. Much of this was due to the Clinton Administration's ties to the Democratic Leadership Council, the New Democrats that advocated liberalizing trade, support for Israel, and more business-friendly policies. Clinton also passed the Taxpayer Relief Act of 1997, lowering capital gains taxes and fueling the superheated economy of his second term.

So, what can we learn in 2008 from all this? Bush does not merit praise for his economic contribution over two terms, especially on federal spending. Outlays as measured against GDP are below the 40-year average, but in the longer term the new Medicare Part D entitlement and Iraq spending will hurt:

Total Revenues and Outlays as a Percentage of Gross Domestic Product

The Democrats running for the nomination are not any better. Both Barack Obama and Hillary Clinton propose new healthcare entitlements which will swell the budget. Both have been shamefully pandering to the rust-belt voters over who can slam NAFTA and globalization more:

Democratic Myths Collide with NAFTA Reality

Passing ECON 101 should be a prerequisite to voting in this country.