Futures and Options

Well fellow fiscal conservatives, it’s our fault.

That’s the latest spin on this manufactured Swine Flu “crisis”.  Nichols hits all the bases in a brilliant piece of political propaganda.  Blaming the opposing party?  Check.  Ignoring the fact that there is functionally no difference between budgeting the money in the already bloated “stimulus” bill and passing an emergency appropriation?  Check.  Ignoring the fact that Chuck Schumer (Democrat) removed the funding in question from the bill?  Check.  Positing an apocalyptic scenario of martial law?  Check.

I’ll be blunt.  Nichols is engaging in pure and unadulterated fear-mongering when he suggests that Swine Flu, which has thus far afflicted only very mild symptoms on a couple dozen Americans, is a catastrophic risk.  Sure, it might be.  But tuberculosis might be a catastrophic risk too.  There is not so much as a single shred of evidence to suggest that, whatever happens, it could have been prevented had there been extra funding in the stimulus bill for “pandemic preparedness”.  Nichols’ remarks are classic political grandstanding and lack any substantive support for the premise that anything in this current scenario would have been helped by having greater funding.

Of course, a politician these days would be remiss if he failed to take the opportunity to use an unavoidable natural disaster as a propaganda piece.  I mean, they can’t just go around basing their campaigns on substance and appeal to intellectual positions.  That’s just crazy talk.

Last week, the EPA issued a proposed finding that greenhouse gases endanger public health and welfare because they contribute to global warming. These findings will surely be challenged in court, but they will just as surely be upheld, given the considerable (and appropriate) deference that courts give to agencies for scientific determinations of this kind. The upshot is that the EPA will be moving forward to regulate carbon dioxide and a number of other greenhouse gases under the Clean Air Act. Indeed, the EPA hardly has a choice in this regard, after the Supreme Court ruled in Massachusetts v. EPA that the agency does indeed have the power to regulate greenhouse gases under the CAA. I think there were a lot of problems with that opinion, but it’s on the books, and so the question is what the next step is for greenhouse gas regulation.

Almost anything would be better than the EPA trying to shoehorn CO2 regulation into the existing framework of the Clean Air Act. The CAA was drafted to deal with more conventional air pollutants like nitrogen dioxide; it is simply not equipped to regulate the basic by-product of our entire, modern, industrialized economy. At the outset, the CAA requires EPA to set a National Ambient Air Quality Standard (NAAQS) for each pollutant–standards which state and local pollution control agencies would then have to meet for their area by whatever means they see fit. This system has worked reasonably well for some conventional pollutants, and it certainly has the virtue of giving local governments meaningful control over pollution policy. But setting a NAAQS for carbon dioxide would be entirely pointless, because the concentration of greenhouse gases (unlike many conventional pollutants) is not determined by local factors, so local governments would have absolutely no control over their concentration. Los Angeles could reduce its own carbon footprint to zero, and it wouldn’t make a lick of difference to its local greenhouse gas concentration as long as China and India keep building power plants.

And of course, EPA has the power to directly regulate both “stationary sources” and automobiles under the Clean Air Act. The threshold for regulation of a stationary source under the Act is currently 250 tons of pollutant per year, which for conventional pollutants usually applies to very large sources like power plants. But there are an incredible number of stationary sources, including things like apartment buildings, that emit more than 250 tons of CO2 per year. Is EPA really going to start regulating all of them?

And consider the enormous predicate decision that EPA would need to reach before embarking on such an adventure: what is our desired level of greenhouse gas emissions? That decision has undeniably enormous economic implications and is simply not one that can be reached with a narrow, objective analysis of scientific data. This is not like figuring out how much mercury is acceptable in drinking water. Capping greenhouse gas emissions will have an tremendous impact on the world’s economic activity for decades. If that is a decision that must be made, Congress is the body that has to do it. A nominally politically accountable government agency acting as the Soup Nazi of greenhouse gases is not a future that any of us should welcome, whether you accept the global warming science or not.

Reason had an excellent piece back in 2000 about the history of Earth Day and the doom and gloom predictions made by the people who organized the very first Earth Day back in 1970.  I came across it last night and decided that it would be fun to pull out a few of more interesting assertions made by the proponents nearly 40 years ago.

Let’s start with my favorite.

“The world has been chilling sharply for about twenty years.  If present trends continue, the world will be about four degrees colder for the global mean temperature in 1990, but eleven degrees colder in the year 2000. This is about twice what it would take to put us into an ice age.” – Kenneth Watt (Ecologist at UC Davis, from a speech given at Swarthmore in 1970)

Well now.  That was spectacularly wrong.  Of course, maybe in 40 years it will be “right” again; after all, the scientific support for global warming does appear to be waning.

And, let’s not forget what the issue was for the first Earth Day, the “Population Bomb.”

“Population will inevitably and completely outstrip whatever small increases in food supplies we make.” – Paul Erlich, biologist, Stanford University, 1970

“The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.” – Paul Erlich, 1970

“It is already too late to avoid mass starvation.” – Denis Hayes, chief organizer of the first Earth Day, 1970

“Demographers agree almost unanimously on the following grim timetable: by 1975 widespread famines will begin in India; these will spread by 1990 to include all of India, Pakistan, China and the Near East, Africa. By the year 2000, or conceivably sooner, South and Central America will exist under famine conditions….By the year 2000, thirty years from now, the entire world, with the exception of Western Europe, North America, and Australia, will be in famine.” – Peter Gunter, professor, North Texas State University, 1970 (emphasis original)

And now, what actually happened:

• Since 1970, food production per person has increased by 26%
• The increase in food production has not been accompanied by increased land use, so habitats have not been destroyed

As Reason points out, the driving cause of world hunger is not overpopulation, but poverty.  Famine is caused almost entirely by political events and oppressive governments.  To truly combat poverty and world hunger one would be better to forcibly eliminate dictatorships and military governments like those found in Somalia or Darfur.  The answer is not giving the people aid (though this is, of course, a legitimate means of helping during the interim), but in deposing dictators and helping to establish more progressive governments.

Of course, the doom and gloomers made some nasty predictions about pollution too.

“Scientists have solid experimental and theoretical evidence to support…the following predictions: In a decade, urban dwellers will have to wear gas masks to survive air pollution…by 1985 air pollution will have reduced the amount of sunlight reaching earth by one half….” – Life magazine, 1970

“At the present rate of nitrogen buildup, it’s only a matter of time before light will be filtered out of the atmosphere and none of our land will be usable.” – Kenneth Watt

“Air pollution…is certainly going to take hundreds of thousands of lives in the next few years alone.” – Paul Erlich

And now, what really happened:

• Carbon monoxide and sulfur levels in air have dropped more than 75% since 1970
• Particulates are down over 50% since the 1950s, despite the fact that current tests for particulates include particles far smaller than those included in the 1950s numbers
• Ozone and nitrogen dioxide levels have dropped 30% since 1970
• The number of days with smog in major US cities have dropped by more than 60% since 1988
• Between 1960 and 1970 (before any clean air laws came into effect), particulates dropped by 25%
• It takes more than 20 new cars to match the same total emissions as one 1960′s-era vehicle

And let’s not forget pesticides.

Paul Erlich predicted, in 1970, that a 1973 study by the Department of Health, Education, and Welfare would find “that Americans born since 1946…now had a life expectancy of only 49 years, and predicted that if current patterns continued this expectancy would reach 42 years by 1980, when it might level out.”

Of course, we now know that DDT is not responsible for the multitude of negative effects that were once assigned to it.  We do know, however, that nearly 100 million people have died from malaria and over 14.5 billion cases of malaria have been reported since DDT was banned.  However, in Sri Lanka in 1963, when DDT spraying was still in effect, there were only 17 cases of malaria and no deaths.  Prior to the introduction of DDT, Sri Lanka experienced as many as 2.8 million infections and 7,300 deaths per year from malaria.  Thank heavens that we have banned this damnable life-saving pesticide!  Of course, if DDT is banned and more people are dying, I guess that makes the “population bomb” less worrisome, which makes a cynical part of me wonder if that’s not what the Earth Day people were after all along.

The Reason article goes into more detail and it’s definitely worth a read; I strongly encourage everyone to look through it.  As for myself, I’ll close with a quote from Robert Heinlein’s Lazarus Long character that seems particularly appropriate here:

There hidden contradictions in the minds of people who “love Nature” while deploring the “artificialities” with which “Man has spoiled ‘Nature.’” The obvious contradiction lies in their choice of words, which imply that Man and his artifacts are not part of “Nature”—but beavers and their dams are. But the contradictions go deeper than this prima-facie absurdity. In declaring his love for a beaver dam (erected by beavers for beavers’ purposes) and his hatred for dams erected by men (for the purpose of men) the “Naturist” reveals his hatred for his own race—i.e., his own self-hatred. In the case of “Naturist” such self-hatred is understandable; they are such a sorry lot. But hatred is too strong an emotion to feel toward them; pity and contempt are the most they rate. As for me, willy-nilly I am a man, not a beaver, and H. sapiens is the only race I have or can have. Fortunately for me, I like being part of a race made up of men and women—it strikes me as a fine arrangement and perfectly “natural.”

In celebration of Earth Week (and Earth Day), Iowahawk is hosting his annual Virtual Cruise-In for all of us unenlightened, high carbon footprint gearheads.  If the sound of a pushrod V8 with high-lift cams makes life worth living and the wafting scent of unburned Harley hydrocarbons is like a siren song for your soul, then you owe it to yourself to stop by Iowahawk’s site and check it out.  There’s a lot of very nice iron on display for your ogling pleasure.

I would vote for this woman in a heartbeat.  If her ideology were mainstream among Republicans, the party would have a fighting chance.  I would love to see her running for President when she is old enough to meet the requirements, but somehow I think she may, unfortunately, be smart enough not to want the job.

I came across something interesting today at the Cato @ Liberty blog.  The relevant part is below:

Ever cross your mind that there’s a reason government programs increase over time? I’ll clue you in: Programs increase because of public demand.

It’s not rocket science, people want more services. Period. Somebody’s got to pay for them. Hences taxes. Or perhaps borrowing. Or a combination of both. In any event, there’s no evidence people are willing to get along with fewer services.

The situation seems simple to me; so why can’t you ideologues on the far right understand what’s going on. Instead, you simply go on bemoaning the existence of programs and taxes you don’t like.

Actually, we do see what’s going on.  Saying that programs increase because of public demand is a bit like saying that sunshine increases because of a lack of clouds.  It’s blatantly obvious.  Unlike the far left ideologues, however, conservatives realize that just because the public demands something doesn’t make that something a good idea.  A child may “demand” a chocolate bar in lieu of a nutritious dinner, but that doesn’t make it a good idea to substitute a proper meal with candy.  The idea that whatever we want is inherently good is poisonous to long-term sustainability.  it prioritizes short-term planning over the long term and immediate impulse over sober judgment.

Also, with government services the demand is often overstated because the “somebody” who pays is seldom the same “somebody” who benefits; at the very least even when the people who benefit also pay into the pot, they are putting in less than they are taking out.  Social Security is an excellent example.  Individuals are, on average, withdrawing far more than they have contributed to the system.  It continues to receive support, however, because everyone expects that they too will be able to take more out than they have put in.  If everyone had to pay for governmentally-administered services in proportion to how they use those services, there would not be nearly as much demand.

It’s a very simple matter:  If you promise to provide a service for free or for well below cost, there will always be demand for it.  If you continually provide services for free or below cost, however, you must recoup those expenses somehow and simply borrowing or taxing “the rich” is not sustainable because both sources of income will eventually run dry.  Whether people are “willing to get along with fewer services” or not is irrelevant.  At some point, they will have no choice at all because it will simply not be possible to continue providing services.  And that will be a disaster because people will have made long-term plans based on the assumption of those services being available.

In the end, it comes down to the necessity of operating within a budget.  An occasional deficit is allowable, but the Bush deficits were not, nor are the (far, far larger) Obama deficits.  Yes, balancing the budget will hurt.  Sometimes reality hurts, that’s just the way things are.

First of all, no, they aren’t dead.  They’ll be showing up again somewhere I’m sure.  In business a “post-mortem” is an analysis that occurs after a project has been completed and rolled-out; an investigation of what went right, and what went wrong.

So, what went right:

• A grass-roots effort started by a schoolteacher in Seattle was able to draw in a sizable amount of protesters in over 800 cities in the US; something that has historically been difficult at best for Conservatives.  We’ve proven that the conservative base can, in fact, be motivated.  And, unlike the protests against AIG executives, the Tea Parties actually drew more protesters than reporters.
• The protests were peaceful.  I saw no reports of vandalism or arrests and we didn’t have idiots laying down in the streets and no business was disrupted.  This is a clear differentiation from the majority of liberal protests I have seen in the news.

And, of course, what went wrong:

• Poorly chosen date.  By choosing to hold these protests on “tax day” the message was muddled.  While “tax day” is a high-profile day and appears to be a reasonable choice, the fact is that the protests were not anti-tax and the choice of day allowed confusion over that fact.
• The message was allowed to get lost in the noise.  The point of the protests was to come out against excessive governmental spending, especially the ridiculous amounts of pork-barrel spending that were slipped through under the guise of the “Stimulus” bill.  Many media reports, however, referred to the Tea Party participants as “Tax Protesters”.
• Allowing the opposition to frame the message.  Ridiculous and unfounded claims of astroturfing went largely un-refuted and the media were able to frame the event as a protest against taxation when the fact of the matter is that taxation is only a peripheral issue.  Yes, most (all?) of the participants in these protests feel that taxes are too high, but they view that as a symptom, not the disease.  The core of the protests was excessive governmental spending (something that, as I pointed out yesterday, most people seem to agree is bad), not the tax rates in and of themselves.  This message was not clearly communicated and the choice of tax day for the protests only further inhibited the ability to make this fact clear.

Overall, I am inclined to consider these events a qualified success.  The Tea Parties accomplished something that has not been managed in a long time; they gathered significant numbers of conservatives together through grass-roots efforts in over 800 locations across America.  For a group that historically does not show up to protest anything, that’s huge.  The lack of vandalism or disruption of business is also huge.  We’ve shown that conservatives are not like the idiots who lay down in the middle of the street to stop traffic or chain themselves to buildings.  We’ve proven that conservatives are committed to peaceable assembly which is a stark contrast to many other protest movements that advocate disruption and confrontation.

Still, there remains much to do.  As Repurblican pointed out a few days ago, the message needs to crystallize and be disseminated more clearly.  The focus needs to come out clearly and with strong emphasis.  Counter-claims need to be repudiated forcefully and immediately and this, as yet, has not been accomplished.  Without a strong center, this movement will get hijacked and it will peter out.  We’ve reached the point where it truly becomes do or die.  From here on out we need to repudiate the kooky hangers-on, clarify the message, and keep moving; if yesterday’s protests become an end rather than a single step, all effort towards these Porkulus protests will have been for naught.

Despite the implications in my (hopefully) humerous previous posting, I do intend to revisit the Tea Party phenomenon later today after I have had a chance to digest the news reports and the firsthand accounts of the participants (including the teaparty founder, Keli Carender).  I’m open to revising my opinions and, frankly, I hope that I am able to do so.  The less kooky the Tea Parties come off, the better we all are and, honestly, I don’t believe that the guy in the Little Green Footballs post is who Keli had in mind when she started this whole thing.

I was reminded again today of H. L. Mencken’s famous quote that, “For every complex problem, there is a solution that is simple, neat, and wrong.”  Today’s trigger is a piece, purportedly from a letter to the editor, but which has been making the rounds on the Internet for at least a month now.  The idea is ambitiously called “Patriotic Retirement” and the “letter” runs as follows:

There’s about 40 million people over 50 years old……. in the work force – pay them $1 million apiece severance with the following stipulations.

1) They leave their jobs. Forty million job openings – UNEMPLOYMENT FIXED

2) They buy NEW American cars. Forty million cars ordered – AUTO INDUSTRY FIXED.

3) They either buy a house or pay off their mortgage – HOUSING CRISIS FIXED.

Let’s take a look at this more critically, shall we?  The US life expectancy is 78 years (on average, for men it’s 75 years, for women, it’s 81 years, but for simplicity, let’s use the average).

If someone is 50 years old and receives the $1,000,000 to retire, that amounts to $35,714.28 per year until that person’s death.  Assuming they die at 78.  If they live longer, it’s less per year.  So they’re probably going to be looking for another job eventually anyway because, unless all of these people live in areas with ridiculously low costs of living, that $35,714.28 per year just doesn’t go very far.  If someone is 60 years old, then it becomes more reasonable at $55,555.55 per year.  Of course, this is all assuming that this is tax-free income.  If it is taxable, lop at least 40% off of those numbers so that Uncle Sugar can have his cut.

Requiring the purchase of a new American car (neglecting the fact that many “Japanese” cars are built in America and many “American” cars are built in Canada or Mexico), would mean that the person would sacrifice about a year’s worth of his or her payout in order to buy the car.  Or they would buy a small car (on which auto makers see very little profit) and promptly sell it, creating a glut of nearly-new used cars that would serve only to depress the automotive market further after the initial, artificial, spike in sales.  More important, however, is that this addresses a symptom and not the disease.

Simply increasing demand through a government mandate will not provide an incentive for increased quality or new ideas, which again serves only to harm automotive companies in the long run.  The situation we currently have exists because US automotive firms have been slower to react to changes in the marketplace than foreign firms have been and simply forcing people to buy the current products will not drive the innovation that US auto makers truly need to see.  In fact, their current state of desperation is, interestingly, the most likely means to ensure that their products will actually improve and become competitive once again.  Look at Ford, for example.  Ford was in a desperate place a few years ago and made the very bold move of ousting William Clay Ford from the position of CEO and bringing in Alan Mulally.  Under Mulally’s leadership, Ford has begun a rather impressive turnaround.  Not only are they the only US auto maker to decline federal bailout money, but they are also producing a hybrid that bests Toyota’s comparable offering (the new Fusion hybrid that offers superior mileage to Toyota’s Camry hybrid, and, I speak from experience with both cars, offers a superior driving experience).  Desperation breeds innovation.

Buying a new house or paying off a mortgage represents the potential sacrifice of 3 or more years worth of the payout in most scenarios and once again ignores the underlying causes.  First of all, people who are 50 or older are unlikely to be upside down in their mortgages.  These are not, by and large, the people who are at risk of losing their homes and they are not, by and large, people whose mortgages represent a high risk to the banks.  Sure, there will be some people here who fit both those categories, but not in significant numbers.  The 50+ and employed demographic is not where most of the risk lies.  Because of this, a stipulation requiring that these people either pay off their mortgage or buy a new house (presumably outright rather than with a loan) would not have any significant affect on the amount of toxic assets carried by banks.  Additionally, many people in this age group already have their homes paid off, so forcing them to buy a new house is also going to force them to sell a house as well (most likely they would buy a house and then sell it again immediately given the hassles involved with moving and also with renting), which means no real progress is made as houses would remain on the market, just now with different owners.

And, lest you think I’m letting something slip, there’s the small problem of the math.  $1 million multiplied by 40 million people is $40,000,000,000,000.  $40 Trillion.  That’s significantly more money than we’re spending on large companies.  More expensive, less effective.  Everyone loses.

At first blush, the proposition seems good.  But upon actual critical analysis it falls apart, fast.  It’s a “feel-good” solution that is actually no solution at all and it represents our collective (and unfortunate) desire for simple “quick-fix” remedies that don’t require us to think about complex issues.  Reality doesn’t work that way.  The problems we are facing today are complex, and the solutions will also be complex.  We’re going to have to actually think to get ourselves out of this one.  I know that’s frightening to many people, but it’s unavoidable.

Much like this Dilbert strip, we are not better off when people like you try to help.  Please, for the love of all that is good and decent, shut up.  You’re only making it that much more difficult for conservatism to be taken seriously.