Archive for the 'Environment' Category

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What Is A Libertarian?

Do you want to know what a Libertarian really believes in? Listen to the father of modern day Libertarianism, Milton Friedman define it without all the distortions and misrepresentations from those who claim to know what libertarianism is.


Environmentalism: Luxury Of The Rich

Going through the trouble of getting my smog check this weekend reminded me of one of my pet peeves in politics: wealthy environmentalists feeling moral about themselves while others (primarily the poor) pay the burden.

Here in California, in order to register your car you have to get a smog check every two years. They typically start around $50/car and go up from there, depending on the size of the car. However, if your car has the ‘service engine soon’ light on, for any reason, it will not pass smog. No ifs ands or buts. On top of that, if you are lucky enough to get your car serviced, thereby removing the ‘service engine soon’ light, you still can’t smog your car…you have to drive it around for a few days, under different conditions, for atleast 20 miles before you even have a chance to pass smog.

Luckily for me, I can pay my mechanic (a family friend) to drive to San Diego and replace the part needed to remove the ‘service engine soon’ light. But I am reminded of how difficult and terrifying this situation was when I didn’t have that luxury. When I was growing up, I had (like most of my friends and neighbors) a cheap, used, beat up, automobile, and the thought of having to pay the cost of bringing it up to smog was terrifying. Most of the time we would simply buy off the smog check operator. Giving him $50 on top of the smog fee to get him to do what was needed to ‘pass’ the car. California has gotten smarter about that and I hear now, it’s near impossible to fake a ‘pass’ on smog (though I haven’t needed to try). So if you have an old, beat up, car that you use to get to work and pick up your groceries with, one that is vital to your parenting, income and free time, and and it doesn’t pass smog – too bad for you (don’t get me started on the ‘assistance’ offered either), it’s time to take the bus (and even here, environmentalists will cheer, as greater use of buses is encouraged). Yet, how many rich environmentalists do you think would even have to deal with a smog check problem?

The smog check is just a minor reminder of environmentalism in general: it is a luxury of the rich. The richer you are, the more you can afford to be an environmentalist. Whether we are talking about environmental land regulations, emission regulations, a gas tax, or any other contentious environmental issue, the costs are usually disproportionately paid for by the poor.

Nothing demonstrates this better than looking at the trends in global poverty and environmentalism. David Friedman writes:

For someone in favor of helping poor people, the economic development of China and India is arguably the best news of the past fifty years. Development was, after all, the explicit goal of foreign economic aid, development planning, a variety of programs in the post-war period that were supposed to lift the third world out of poverty–and didn’t. The fact that more than two billion people are now in the process of moving from extreme poverty towards the sort of life westerners have long lived represents an enormous improvement in the condition of the world’s poor.

It also represents a sharp increase in the consumption of depletable resources and production of carbon dioxide.

Take China as an example, a country where millions of people are moving out of poverty yearly. Great news for those interested in poverty. But bad news for environmentalism, as China moving from rural agricultural society to urban industrialized society means they will burn alot more coal (coal being one of the cheapest sources of energy), thereby increasing the production of carbon dioxide. Some environmentalists, seeing the contradiction try to get around it by making an argument that the environmental impact affects China (and poor areas in general) the most, but this pales in comparison to the economic impact that environmental regulations would impose. Economic development, in many inherent ways, is really at odds with environmental development.

Of course this means nothing to the wealthy environmentalists living in the comfort of the wealthiest countries in the world. Being outside the realm of absolute poverty gives them the luxury to be environmentalists and pontificate on the ‘evils’ of global warming. People in China on the other hand, are more concerned with feeding their children and reaching the standard of living that we in the west have long enjoyed.

The same general pattern applies here in the United States. The higher up on the income ladder you are, the more you can afford to be an environmentalist, and the rest of us have to hear your moral tripe and – worst of all – pay for it.

For more on this go here, here, here, here, and here.

Quote Of The Day

“Since electricity is generated mostly by burning coal, has anyone calculated how much pollution is created by electric cars, even though none of that pollution comes out of their tailpipes?” —Thomas Sowell, Random Thoughts

Could Global Warming Be Good?

Probably not on net balance, but it can certainly have some positive affects. For example, Freeman Dyson, professor of physics at the Institute for Advanced Study, in Princeton writes:

The warming effect of carbon dioxide is strongest where air is cold and dry, mainly in the arctic rather than in the tropics, mainly in mountainous regions rather than in lowlands, mainly in winter rather than in summer, and mainly at night rather than in daytime. The warming is real, but it is mostly making cold places warmer rather than making hot places hotter. To represent this local warming by a global average is misleading.

So global warming primarily causes cold areas to get hot instead of hot areas to get hotter. Well increasing the temperature in cold areas just happens to significantly increase human life expectancy:

Now a new NBER paper strikingly argues that warmer weather is better for life expectancy, not just comfort:

[B]oth extreme heat and extreme cold result in immediate increases in mortality. However, the increase in mortality following extreme heat appears entirely driven by temporal displacement, while the increase in mortality following extreme cold is long lasting.

In other words, deaths from heat reflect what coroners call a “harvesting effect”; heat kills people who didn’t have long to live anyway. The same doesn’t hold for deaths from cold.The life expectancy benefit of heat is large, too:

These longevity gains associated with long term trends in geographical mobility account for 8%-15% of the total gains in life expectancy experienced by the US population over the past 30 years.

Dyson’s talk can be found here. The study on temperature and life expectancy can be found here and here.

Quote Of The Day

“I recently have started using the well-known book, The Skeptical Evironmentalist by Bjorn Lomborg…In the section on forests, Lomborg states that in the previous 50 years before publication (in 2001), contrary to the assertions of various people and organisations, the total area of land covered by woods and forests barely changed at all. He cites figures produced by the United Nations. When it comes, specifically, to tropical forests, he states that the best estimate is that the area covered by them decreased at a rate of 0.46 per cent a year in the previous 15 years. Again, he cites United Nations figures in his analysis”. —James Bartholomew, writing in the blog The Welfare State Were In

Quote Of The Day

“If you think that government would never force consumers to buy “boutique” products when consumers would prefer to buy mass-produced products, you’re mistaken. In a new paper — “Market Fragmenting Regulation: Why Gasoline Costs So Much (and Why it’s Going to Cost Even More)” — University of Illinois law professor Andrew Morriss and Mercatus Center scholar Nathaniel Stewart show that much of the recent rise in the price of gasoline at the pump was caused by regulations that obstruct oil-producers’ abilities to produce and distribute gasoline on a large scale. Although government started interfering significantly in the oil market in the early 20th century, Morriss and Stewart find that beginning only in the late 1980s did the EPA and state and local governments launch unprecedented requirements on how fuel is formulated: “These fuel requirements added a set of constraints to refinery operation and transportation of fuels.” Significantly, “Through various State Implementation Plans (SIPs), state and local governments also imposed restrictions on gasolines sold in their jurisdictions. Although there is no comprehensive list of formulations mandated by all levels of government, there appear to be at least seventeen different formulations — a major increase from the single standard (the lead standard) in place in the mid-1980s. In addition, some state and local governments have imposed ‘biofuel’ requirements.” The consequence? What would have been a national market in gasoline now is a fragmented market. Refiners are unable to take advantages of economies of scale. Consumers are denied the lowest possible prices for gasoline”. —Donald J. Boudreaux, chairman of the Department of Economics at George Mason University, writing in the Pittsburgh Tribune-Review

The Ugly Side Of Environmentalism

Phelim McAleer, environmentalist and former writer for the Financial Times, describes his new documentary and why he decided to make it:

Speakout: Environmentalists are new foes of some of the world’s poorest

Colorado’s miners have struggled long and hard for the right to organize and have safe working conditions.

Many have paid with their lives in this struggle.

Some were the victims of the poor safety standards that used to characterize the industry, while others died in bloody confrontations when mine owners were quick to hire private armies to confront troublesome workers.

As a liberal European journalist, I was familiar with these stories and also knew about how Europe’s miners faced similar battles to improve their working lives. These struggles meant that miners have always had a special status for us left-wingers. They were a superior breed who fought for themselves and the rights of all workers.

However in my more recent journalism, I have discovered there is a new threat to miners, their families and their wider communities.

This threat is not from cigar-sucking, champagne-swilling robber barons. Mining is now one of the most regulated businesses in the world. Banks will not lend to, insurance companies will not cover and governments will not give licenses to companies that want to open unsafe or polluting mines.

Instead I have discovered that the biggest threat to miners and their families comes from upper-class Western environmentalists.

The discovery has been particularly shocking because at heart I have always been an environmentalist. I want to protect the planet for future generations. I want to ensure that industry cleans up its messes and does more good than harm.

My admiration for environmentalists started to decline when I was lucky enough to be posted to Romania as a foreign correspondent for the Financial Times. There I covered a campaign by Western environmentalists against a proposed mine at Rosia Montana in the Transylvania region of the country.

It was the usual story. The environmentalists told how Gabriel Resources, a Canadian mining company, was going to pollute the environment and forcibly resettle locals before destroying a pristine wilderness.

But when I went to see the village for myself I found that almost everything the environmentalists were saying about the project was misleading, exaggerated or quite simply false.

Rosia Montana was already a heavily polluted village because of the 2,000 years of mining in the area. The mining company actually planned to clean up the existing mess.

And the locals, rather than being forcibly resettled as the environmentalists claimed, were queuing up to sell their decrepit houses to the company which was paying well over the market rate.

It was surprising that environmentalists would lie, but the most shocking part was yet to come. As I spoke to the Western environmentalists it quickly emerged that they wanted to stop the mine because they felt that development and prosperity will ruin the rural “idyllic” lifestyle of these happy peasants.

This “lifestyle” includes 70 percent unemployment, two-thirds of the people having no running water and using an outhouse in winters where the temperature can plummet to 20 degrees below zero centigrade.

One environmentalist (foreign of course) tried to persuade me that villagers actually preferred riding a horse and cart to driving a car.

Of course the Rosia Montana villagers wanted a modern life – just like the rest of us. They wanted indoor bathrooms and the good schools and medical care that the large investment would bring.

When I left the Financial Times, the plight of these villagers never really left me. I have come across a lot of tragedies and hard-luck stories as a journalist, but I had never covered a situation where the solution to poverty is being opposed by educated Westerners who think that people really are “poor but happy.”

When a representative of Gabriel Resources asked me to write a brochure about the project I declined, but I did suggest that if they did not interfere editorially I would make a documentary.

I gathered up extra funding and the documentary Mine Your Own Business premieres Tuesday at the Denver Gold Forum at the Hyatt Regency Hotel in Denver. The film will shock and upset those who, like myself, unquestioningly believed environmentalists were a force for good in the world.

For Mine your Own Business I started looking beyond Romania and found a similar pattern in very different villages in Africa and South America.

It is sad that my fellow left-wingers and environmentalists who often come from the most developed countries are now so opposed to development.

However, it is not sad but tragic that the real losers in this clash of cultures are some of the poorest people on the planet.

The full article can be found here. The website for the movie, along with a trailer, can be found here. I encourage those of you who have an innocent view of environmentalists to buy the movie, and see for yourself the ugly side of environmentalism.

Quote Of The Day

“This is because the solution to the energy crisis is so blindingly obvious. The solution is: allow the oil companies to drill for oil—in Alaska, in the Gulf of Mexico, off the coast of California, on all the land mass of the United States now set aside as “wild-life preserves” and “wilderness” areas. Allow the construction of new atomic power plants! Stop interfering with the strip mining of coal! Stop interfering with the construction of refineries, pipelines, and harbor facilities necessary to the supply of oil and natural gas! This will increase the supply and reduce the demand for oil (this last because substitutes for it will be more readily available). All this can be summed up in very few words: Politicians and environmentalists, get the hell out of the way!”–George Reisman, author of Capitalism: A Treatise on Economics and Pepperdine University Professor Emeritus of Economics

Quote Of The Day

“High gas prices aren’t easy on consumers. Most households could find a much better way to spend $1,000 than on filling up the tank. But if there’s a better way to restructure the energy market, expand supplies, and create a long-term source of stable and affording fuel, we haven’t found it yet. We’ve tried ethanol subsidies, “windfall profit” taxes and other market manipulation tricks. None of them have primed the gas pump for lower prices. Now it’s past time to drill. With a barrel of crude selling for more than $70, Congress could let the market work. There’s now plenty of incentive to give ANWR’s caribou a few derricks to look at”. —The Wall Street Journal

Quote Of The Day

“Let us take a minute, then, to stick up for the big guys and ask, what’s wrong with large profits for large oil companies? If a healthy profit margin–about 10% for the oil giants–is a problem, it comes with a built-in solution. Large profits create large incentives to increase supplies, build more refining capacity, and create new technology to meet energy needs. Exxon Mobil’s profits alone in the first quarter of this year are four times as large as the $2 billion exploration tax credits stuffed into last year’s energy bill. It’s not a coincidence that more than 70% of the money spent researching new fuels comes from oil companies, not to mention the cost of drilling new wells, exploring new fields and developing technology and techniques to extract crude from fields previously considered exhausted”. —The Wall Street Journal

Quote Of The Day

“At Oxford Ghosn presents a gift of $2.7 million from Nissan to fund a Japanese studies program and then turns to one of his favorite activities–meeting with a group of graduate students. When one student asks why Nissan lags behind Toyota in new hybrid vehicles, Ghosn shoots back: “When you have technology that costs $6,000 but the customer is willing to pay $2,000, you have a problem. … We are not ready to mass-market a technology where you are losing your shirt on every car.”” — Carlos Ghosn, CEO of Nissan, quoted in Forbes

Quote Of The Day

“Price movements up or down provide incentives for people to consume less or to consume more — and to produce more or produce less. From the standpoint of the economy as a whole, the history of any particular batch of oil is irrelevant. Prices need to ration all oil according to existing supply and demand. At the same time, prices need to provide incentives to produce more oil or less oil, according to the same supply and demand conditions. “Windfall” profits and windfall losses are all part of the same adjustment process. If politicians seize the windfall profits and leave windfall losses alone, what that means over a cycle of years is that the average rate of return on oil production falls below what is needed to attract the investments that greater oil exploration and production require. This is not a matter of economic theory. It is a matter of history documenting thousands of years of politically controlled prices. Significantly, those who are making the most noise about gasoline price today have the least interest in that history”. —Thomas Sowell, in an article titled, “Oily politicians: Part II”

Quote Of The Day

“Ironically, the people who are making the most noise about the high price of gasoline are the very people who have for years blocked every attempt to increase our own oil supply. They have opposed drilling for oil off the Atlantic coast, off the Pacific coast, or in Alaska. They have prevented the building of any new oil refineries anywhere for decades. They have fought against the building of hydroelectric dams or nuclear power plants to generate electricity without the use of oil. They love to talk about their own pet “alternative energy sources,” without the slightest attention to what these would cost in terms of money, jobs, or our national standard of living. Even when one of their pet “alternative energy sources” — windmills — is proposed to be built near them, suddenly it is not right to spoil their view. Politicians have indulged these spoiled brats for generations. Now, when the chickens come home to roost, they are screaming about high prices and Big Oil. That is world class chutzpa”. —Thomas Sowell, in an article titled, “Oily politicians”

Gas Economics 101

Alan Murray writes in the Wall Street Journal:

Give Rex Tillerson some credit. The new chief executive officer of Exxon Mobil Corp. ventured out of his executive cocoon last week to be interviewed by Matt Lauer on NBC’s “Today” show — an act of courage for an oil company CEO….

Mr. Lauer is no Sam Donaldson. Still, in his good-natured, morning-TV way, he went for the kill. In a final question, he asked: “Would Exxon Mobil be willing to lower profits over the summer to help out in this time of need and crisis?”

I think he was serious. After all, what better way to recover from his partner Katie Couric’s defection to CBS than to see headlines reading: “Oil Chief Tells Lauer He’ll Cut Profits, Prices.” It didn’t happen. Instead, Mr. Tillerson answered: “Well, that’s not the business. We’re in the business to make money.”

You might think a network newsman earning $13 million a year would have a firmer grasp of capitalism. Would it really be a good idea for Exxon to take money from its shareholders — many of them pensioners — to subsidize fuel prices for sport-utility vehicle owners? One of the beauties of the marketplace is that it eliminates the need for those sorts of distributional decisions, which no person — not even Matt Lauer — can make well.

I don’t want to pick on Mr. Lauer, though. Just about everyone in this year’s great energy debate earns an “F” for economic literacy. That starts with the MBA-in-Chief, President Bush, who last week called on the Justice Department and the Federal Trade Commission to investigate “price manipulation” by the oil companies. His comments came after he received a letter from the two top U.S. congressional leaders from the “party of business” — Sen. Bill Frist and Rep. Dennis Hastert — calling for investigations into “price gouging.”

Price manipulation? Price gouging? Those are fine fighting words to Americans paying more than $3 a gallon for gas. But when it comes to explaining today’s gasoline prices, they have little meaning — and Messrs. Bush, Frist and Hastert should know better.

“Price gouging” is a common law concept that might apply if, say, a gasoline station in New Orleans charged $10 a gallon to drivers fleeing from Hurricane Katrina. “Price manipulation” is a less-precise term that seems to suggest oil companies have power to set gasoline prices. Neither reflects the situation facing most Americans today, who can choose from multiple, competing suppliers of gasoline. The oil and gasoline markets aren’t perfect. But if the U.S. government wants to go after companies with pricing power, oil companies fall pretty far down the list.

Most experts agree that today’s gasoline prices — unlike those of three decades ago — are the result largely of supply and demand. Supply is tight and threatened by security concerns and political instability in oil-producing nations. Meanwhile, demand from places like China and India is booming.

Moreover, high prices, as painful as they may be, aren’t just a problem, but also a solution.

Since Jimmy Carter donned his cardigan sweater three decades ago, U.S. policy makers have tried all sorts of gimmicks to reduce dependence on foreign oil, to no avail. Oil imports have risen from a third of U.S. oil consumption to 60%. The reason: Oil was cheap. It’s symptomatic that the Arizona resident who complained on the “Today” show about spending $50 to fill his tank was driving an SUV.

As gasoline prices rise — and everyone becomes convinced they will stay high — people will figure out how to consume less, oil firms will invest more, and alternative energy will become more common. That is just Economics 101 — a course that most participants in this debate seem to have missed.

As for those who worry the merger of Exxon and Mobil might have created an industry that is too concentrated — well, stop worrying. Exxon Mobil still has only about 8% of the retail gasoline market in the U.S. And its size is a plus overseas, giving it the clout it needs to push for access to government-controlled oil reserves and the financial heft it needs to undertake multibillion investment projects. That’s all good for U.S. energy security.

Since no one else seems willing to make that case, it is a good thing Mr. Tillerson is. For morning TV viewers, he may have started a trend. On Monday, ConocoPhillips CEO James Mulva was interviewed on ABC’s “Good Morning America.”

Quote Of The Day

“What has also happened in recent times has been that higher gasoline prices bring outraged charges of “gouging” by Big Oil. Some of the most emotionally powerful political words and phrases are wholly undefined — “exploitation,” “greed,” “social justice” and the perennial favorite, “gouging.” Are the oil companies charging all that the traffic will bear? No doubt. But they were probably charging all that the traffic would bear when the price of gasoline was half of what it is today. Even businesses that are losing money are charging all that the traffic will bear. Otherwise they could raise their prices and stop losing money. Most of the people who are making this claim are charging all that the traffic will bear for their own labor or the use of their own products. Dressing up the plain fact that we all usually prefer more to less in political rhetoric about “gouging” explains nothing. Something that is true all the time cannot explain drastic changes”. —Thomas Sowell, in an article titled, “Oily politicians”

Quote Of The Day

“Which brings us to the Bush Administration, which is bludgeoned daily by the likes of Mr. Schumer, whose real concern is exploiting an issue that might elect a Democratic Senate in November. Meanwhile, the White House refuses to attack the left’s anti-consumer energy policies and has even capitulated on requiring a rise in auto fuel-efficiency standards. Mr. Bush could instead be talking about the national and economic security need for a pro-domestic-production energy policy–starting with drilling in Alaska. It’s worth reminding the American public that in 1995 the Republican Congress passed an ANWR production bill, which Bill Clinton vetoed because he said it could be five to 10 years before the oil would be produced. We would have that oil today if Mr. Clinton had signed that bill. Instead we have rising gas prices and record dependence on foreign oil. Is that enough to spur Congress to act on ANWR and deep-sea production? If not at $75 a barrel and $3 a gallon, Mr. Schumer, then when?” — Wall Street Journal Hot Topic