Why the oil “shortage” is made in Washington.
Category Archives: Economics
How High Taxes Kill Jobs
Jim Manzi explains it to Barack Obama. Unfortunately, both presidential candidates are economic ignorami.
The Era Of Carbon Craziness
Is it almost over? Let’s hope so.
Compound Interest
Some interesting thoughts on the insane notion of banning it to save the planet. Also, comments about law students’ economic literacy.
If We Can Put A Man On The Moon…
…why can’t we kick the fossil fuel habit? Well, we can, but not the way we put a man on the moon, and certainly not within a decade. On the thirty-ninth anniversary of the first landing, I explain.
[Afternoon update]
It’s interesting to note that the original landing was on a Sunday as well. I don’t know how many of the anniversaries have fallen on a Sunday, but I would guess five or so. It’s not too late to plan to commemorate the event with a ceremony at dinner tonight, with friends and family. Also, a collection of remembrances here. If you’re old enough to remember it yourself, you might want to add one.
Has The Oil Bubble Burst?
Maybe. These were clearly unsustainable prices–the only question was how long it would take them to drop. And what do you know? The market works:
Gas may be getting just a bit cheaper, but major changes in how Americans live and drive are already in motion.
Car buyers have been fleeing to more fuel-efficient models. U.S. sales of pickups and sport utility vehicles are down nearly 18 percent this year through June, while sales of small cars are up more than 10 percent.
While slashing production of more-profitable trucks and SUVs, automakers have been scurrying to build their most fuel-efficient models faster.
Toyota Motor Corp., which hasn’t been able to keep up with demand for its 46-miles-per-gallon Prius hybrid, said last week it will start producing the Prius in the U.S. and suspend truck and SUV production to meet changing consumer demands.
Ford Motor Co. and General Motors Corp. also have announced plans to increase small car production, and GM has said 18 of the 19 vehicles it is launching between now and 2010 are cars or crossovers.
And what do you know, they didn’t do it because their intellectual superiors in Congress passed a law making them. They did it because gas was four bucks a gallon. Maybe people aren’t the stupid sheep that technocrats think they are.
Is John McCain A Complete Economic Idiot?
Sometimes it seems like it:
In front of a roomful of 500 General Motors employees — of all places — John McCain paraded his radical Green credentials this morning. McCain embraced California’s lawsuit against the EPA demanding that states be allowed to set their own auto mileage standards.
“I guess at the end of the day, I support the states being able to do that,” he said at the town hall meeting at GM’s Technical Center in Warren, Mich.
California’s policy is strongly opposed by the auto industry because of the nightmare patchwork of regulatory standards such a proposal would set. The industry prefers national standards — a position that McCain had supported until this morning. McCain’s flip-flop on the issue (assuming he meant what he said, and his campaign doesn’t quickly move to correct the gaffe) would put him at odds with the Bush administration and longstanding Republican policy.
No way he has a prayer of winning Michigan (and probably not Ohio, either) if he persists in this stupidity. And it’s not going to give him California, either.
The Finance Crisis
I know what you’re saying — “who invited the fat chick to the Twister party?” Certainly, all of us (with the possible exception of Randy) wish she wasn’t here. But it’s important to remember that fat chicks are often an important source of party supplies, and we must take the good with the bad. In the same way, Fannie Mae supplies the critical financial weed and beer to keep our national economic party going.
The numbers are complex, but let me boil it down for the economic layperson. Fannie Mae is a government company type thing that has a large pile of money, which I will call “A”. The first thing it does is create $20 million bonuses for high performance executives like Franklin Raines, James Johnson and Jamie Gorelick, which I will call “B.” Next, it allocates an amount “C” to lobbyists to make sure important Congressmen always get a thoughtful holiday card from Fannie Mae. After subtracting B and C from A, they are left with D, which is lent to homebuyers. These homebuyers then pay back the amount E, which, when subtracted from D, leaves F, the amount Congress has to come up with. In order to keep this important financial system humming along at peak efficiency, it is necessary that you, the taxpayer, are F’ed.
RTWT, and save the Dave!
Good Move
The president has lifted the executive order banning offshore drilling.
This puts Congress in a political fix. He’s calling on them to lift the Congressional ban now, but that would require Congressional action. They can simply ignore it (though at their political peril). The neat thing is that they can’t ignore the issue forever. There is a default position not to their liking. It will expire at the end of September anyway (as it does every fiscal year) and will have to be renewed with a Congressional vote. Usually, this is uncontroversial, but not this year. We’ll see if they’re willing to do it.
Energy Versus Space?
Jeff Foust wonders if new government energy initiatives will crowd out space budgets.
Maybe. His piece reminds me of an idea I’ve had for an essay on why energy independence isn’t like landing a man on the moon.
In fact, I had a related comment over at Space Politics this morning, in response to a comment from someone named…Someone…that cost-plus contracts are a proven means of success in space:
I know alt.spacers see cost-plus as some sort of ultimate evil. But recognize its been successful in the past, from the Saturn V to the Pegasus. And the X-33 would likely have been finished and test flown if NASA had used its traditional cost-plus approach instead of the fixed price model they used. If NASA had funded the X-33/VentureStar under the same procurement model as the Shuttle it would be flying today.
To which I responded:
But recognize its been successful in the past, from the Saturn V to the Pegasus.
Only if by “successful,” you mean it eventually results in very expensive working hardware. Not to mention that Pegasus was not developed on a cost-plus contract.
And the X-33 would likely have been finished and test flown if NASA had used its traditional cost-plus approach instead of the fixed price model they used.
Perhaps. At a cost to the taxpayer of billions. And probably a radically different vehicle than the one originally proposed.
If NASA had funded the X-33/VentureStar under the same procurement model as the Shuttle it would be flying today.
Perhaps. And likely just as big an economic disaster (and perhaps safety one as well) as the Shuttle.
We don’t like that form of procurement because historically, in terms of affordable access to space, it has repeatedly been proven not to work.
Anyway, I do need to write that essay. We’re not going to get energy independence from government crash programs (though prizes may be useful).