Category Archives: Economics

Business, Economics, Education, Media Criticism, Political Commentary, Social Commentary

Detroit

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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.

Business, Economics, Media Criticism, Political Commentary, Science And Society, Technology and Society

The Social Cost Of Carbon

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…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.

Business, Economics, Media Criticism, Political Commentary, Technology and Society

Obama’s Five Disconnects

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…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.

Economics, Media Criticism, Philosophy, Political Commentary, Social Commentary, Space, Technology and Society

Exploration Is Highly Overrated

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Ben Wright McGee has a long essay on old space versus new, which I think misses the point, because he seems to think that space is about exploration, and then gets bogged down in the pointless argument of whether or not suborbital flight constitutes such:

In almost back-to-back recent events, what to me is an example of the true nature of the conflict between the many colliding conceptions of astronauts, space explorers, and space exploration was brought into sharp relief:

On the one hand, a NASA historian who I greatly respect alleged to me that private suborbital spaceflight and even new, commercial orbital space modules and transportation systems (which have recently received NASA funding to enhance the U.S. space infrastructure and give scientists more platforms and opportunities to conduct research), were patently unworthy of NASA dollars.

Existing Russian and U.S. systems should be relied upon, and the already pinched NASA budget, he implied, should be saved and consolidated for the more worthy endeavor of exploring truly uncharted planetary territory.

To me, this is all beside the point. There is an implicit assumption that the purpose of human spaceflight is to explore space, but that has never, ever been the case. In the sixties, its purpose was to beat the Soviets in a peaceful contest in the Cold War, and since then it’s been largely a jobs program — “exploration” was just the excuse, despite the fact that we haven’t left LEO. To me, exploration is a means, not an end. The goal of human spaceflight should be to develop the resources of and settle space, and if we’re not doing that (which we currently are not, at least NASA isn’t), then we should quit wasting money on it. But we remain stuck in this “exploration” mindset because we’ve never had a real national debate on why we’re spending this money, instead talking with hidden assumption that we all assume are shared by others, even though they clearly are not.

Business, Economics, Mathematics, Media Criticism, Political Commentary

McDonalds Math

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This sort of thing is why we don’t want economic illiterates in charge of the economy. Hey, morons. Don’t you think that if McDonalds could just raise their prices (and hence revenues) by 17% (actually 26%), they’d have already done that?

[Update a while later]

Another question:

Let’s say McDonald’s decided to double all its salaries, so that the entry-level wage became $16 an hour instead of $8 an hour. Why would McDonald’s continue to employ their $8 an hour workers when instead they could hire “better” workers who are worth more? (And those of you who think that the skills, linguistic abilities, experience, intelligence, etc. of fast-food workers makes no difference in service don’t eat in McDonald’s much.)

Again, this is why you don’t want people making policy who don’t understand how business works. And this administration (and sadly, Congress, of both parties, but much more so among the Democrats) is full of such people.

Business, Economics, Media Criticism, Political Commentary, Science And Society

Climate Skeptics

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…and the scientific method:

…how can criticisms of sceptics as politically motivated be squared with science’s commitment to findings always being provisional and open to challenge? At what point can we judge that a scientific question moves from a position of “doubt” to being “settled”?

Both climate change sceptics and advocates of climate policy see this question as important; sharing a faith that scientific evidence is the basis for public policy. However, such a faith omits the possibility that science is not suited to such a role, and that “solving” climate change does not flow linearly from agreement on the science. The attentions of sceptics may or may not be improving the practice and knowledge of climate science. However, if sceptics’ never-ending audit is really damaging policy, that may be more a reflection of an overly scientised policy process than a basis for denying them a voice in debate.

Yup.