Category Archives: Economics

Remembering Ploesti

Thoughts on energy and war from Bob Zubrin:

In World War II, we controlled the oil. In this war, the enemy does. This is an unacceptable situation, because it places our fate in the hands of people who want to kill us. In World War II, we had no compunction about destroying the Nazi fuel-making facilities at Ploesti and Leuna, or about systematically sinking the Japanese tanker fleet, because we didn’t need their oil. As we have seen, those attacks were incredibly effective in breaking the enemy’s power. On May 12, 1944, the day of the Leuna raid, the Third Reich ruled an empire comprising nearly all of continental Europe, with a collective population and industrial potential exceeding that of the United States. A year later, it did not exist. Once Japan’s tanker fleet was sunk, the collapse of its empire was almost as fast. Today we are confronted by an enemy without a shadow of the armaments of the Axis; all the Islamist countries have is oil. Were we to destroy that power, they would be left with nothing at all. But we can’t hit them where it would truly hurt, because our economy needs their oil to survive.

And we have people in power who think that climate change is a bigger risk than totalitarianism. Because, you know, in many ways, they don’t mind totalitarianism that much, as long as it’s their own.

Climate Change

It’s about the policies, not the science:

What isn’t solid, however, are all of the “fiddly bits.” How fast is warming happening? Will it speed up, and by how much? What the economic and environmental impacts be? What other factors besides anthropogenic ones might be contributing to the warming?What complex little mechanisms might slow the process down, or speed it up? And so on. It’s inherent in the nature of a system as complex as climate that these questions will be hard to pin down.

Because the uncertainty is about these “fiddly bits,” and not about the fundamentals, the worry is not about what the science says but about what the policy should be. The process by which greens dream up and then implement policies to address the problem of global warming makes the sometimes messy IPCC process look like a finely tuned, well-oiled machine by comparison.

Global greens develop stupid, horrible, expensive, counterproductive climate policy agendas, and then try to use the imprimatur of “science” as a way to panic the world into adopting them. All too often, in other words, they fall prey to the temptation to make what the science says “clearer than truth” in Acheson’s phrase, in order to silence debate on their cockamamie policy fixes. A favorite tactic is to brand any dissent from the agenda as “anti-science.” It is not only a dishonest tactic; it’s a counterproductive one, generating new waves of skepticism with every exaggeration of fact.

Yup. Every time someone calls me “anti-science” because I’m appropriately skeptical of lousy science and worse prescriptions, it simply increases my resistance to their idiotic policy nostrums.

[Update a few minutes later]

Climate scientists must not advocate policies:

I believe advocacy by climate scientists has damaged trust in the science. We risk our credibility, our reputation for objectivity, if we are not absolutely neutral. At the very least, it leaves us open to criticism. I find much climate scepticism is driven by a belief that environmental activism has influenced how scientists gather and interpret evidence. So I’ve found my hardline approach successful in taking the politics and therefore – pun intended – the heat out of climate science discussions.

They call me an “honest broker”, asking for “more Dr Edwards and fewer zealous advocates”. Crucially, they say this even though my scientific views are absolutely mainstream.

But it’s not just about improving trust. In this highly politicised arena, climate scientists have a moral obligation to strive for impartiality. We have a platform we must not abuse. For a start, we rarely have the necessary expertise. I absolutely disagree with Gavin that we likely know far more about the issues involved in making policy choices than [our] audience.

As well you should, because you’re right — you don’t.

Detroit

Death by democracy:

Here, where cattle could graze in vast swaths of this depopulated city, democracy ratified a double delusion: Magic would rescue the city (consult the Bible, the bit about the multiplication of the loaves and fishes), or Washington would deem Detroit, as it recently did some banks and two of the three Detroit-based automobile companies, “too big to fail.” But Detroit failed long ago. And not even Washington, whose recklessness is almost limitless, is oblivious to the minefield of moral hazard it would stride into if it rescued this city and, then inevitably, others that are buckling beneath the weight of their cumulative follies. It is axiomatic: When there is no penalty for failure, failures proliferate. This bedraggled city’s decay poses no theological conundrum of the sort that troubled Darwin, but it does pose worrisome questions about the viability of democracy in jurisdictions where big government and its unionized employees collaborate in pillaging taxpayers. Self-government has failed in what once was America’s fourth-largest city and now is smaller than Charlotte, N.C.

This is why the Founders gave us a republic, not a democracy.

The Social Cost Of Carbon

…and the much higher cost of carbon denial:

…the relationship between GDP and carbon is not merely linear, but quadratic, with total economic output rising as roughly the square of carbon use. For example, since 1975, carbon use has doubled, causing a quadrupling of global GDP. Furthermore, if we take the ratio of current global GDP ($60 trillion) to carbon use (9 billion tons) and divide it out, we find that, at present, each ton of carbon used produces about $6,700 of global GDP.

So each ton of carbon denied to the world economy destroys about $6,700 worth of wealth. That is the difference between life and death for a Third World family. Seven tons denied corresponds to a loss of $47,000, or a good American job. Since 2007, the combination of high oil prices and a depressed economy has reduced the United States’ use of carbon in the form of oil by about 130 million tons per year. At a rate of $6,700 per ton, this corresponds to a GDP loss of $870 billion, equivalent to losing 8.7 million jobs, at $100,000 per year each. Were we to implement the program of the Kyoto treaty, and constrict global carbon use to 1990 levels, we would cut global GDP by $30 trillion per year, destroying an amount of wealth equal to the livelihood of half of the world’s population.

These people understand neither science, or economics.

Obama’s Five Disconnects

…as pointed out by Mickey Kaus:

Does Obama recognize that his initiatives have a weak connection, and even perverse connection, with actually achieving his goal? I hope his biographer, Jonathan Alter, will tell me. But either way, there’s a vacuum between his speechmaking and governing. Is that unusual? After all, Democrats have campaigned for years by arguing that Republican policies benefit the rich–think of all the distributional tables Democrats distributed to fight Reagan’s budgets-without ever saying how much inequality, exactly, they’d be willing to tolerate.

But Obama isn’t vague or incoherent. He’s quite precise about where he wants to go–namely back to something like what we had three decades ago. If his means don’t come close to matching his ends, if they even subvert them, that seems a more troubling, almost pathological mismatch, in which liberalism becomes a sort of cargo cult whose mechanisms have zero hope of achieving the desired results.

Yes, it is a cargo cult, driven by magical thinking.