Coyote Blog

Private employees unions (I will leave out public employee unions from this discussion, as they are a different animal) enter the public discourse a lot less frequently than they did in my youth, say in the 1970's.  At that time, union power and actions and negotiations and strikes were very frequent stories on the evening news.  However, one thing I have noticed throughout my life is that commentators seems to be either all-in for or against unions.  I actually think the issues are more subtle, and that unionization is a mixed bag.

On the pro side, unions are basically free association.  It is the right of any set of individuals to band together for negotiating leverage.

On the pro and con side is the role of government.  Early on, the government acted to stop individuals from exercising their free association rights and forcibly break up unions and bar their activities.  Today, I would probably argue the government has slid the other way by writing rules to tilt negotiating power away from employers towards unions (the obvious counter to this is if it is true, why have private unions withered over the last two decades).

On the con side, and it is a big con, is the tendency of unions to push beyond just wage and working condition negotiation into advocating for productivity destroying rules (e.g. featherbedding, strict job categories, etc).  These productivity destroying rules have helped to undermine whole industries, and, ironically, the unions themselves.  They embody an inherent contradiction in that the wages gains the union wants require productivity gains to support, productivity gains which are impossible under union-preferred work rules.

Here is a great example of the negative side of these union rules, from a NYT report on why New York subways cost so much more to build than do similar projects in the rest of the world

It is not just tunneling machines that are overstaffed, though. A dozen New York unions work on tunnel creation, station erection and system setup. Each negotiates with the construction companies over labor conditions, without the M.T.A.’s involvement. And each has secured rules that contractors say require more workers than necessary.

The unions and vendors declined to release the labor deals, but The Times obtained them. Along with interviews with contractors, the documents reveal a dizzying maze of jobs, many of which do not exist on projects elsewhere.

There are “nippers” to watch material being moved around and “hog house tenders” to supervise the break room. Each crane must have an “oiler,” a relic of a time when they needed frequent lubrication. Standby electricians and plumbers are to be on hand at all times, as is at least one “master mechanic.” Generators and elevators must have their own operators, even though they are automatic. An extra person is required to be present for all concrete pumping, steam fitting, sheet metal work and other tasks.

In New York, “underground construction employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe,” according to an internal report by Arup, a consulting firm that worked on the Second Avenue subway and many similar projects around the world.

That ratio does not include people who get lost in the sea of workers and get paid even though they have no apparent responsibility, as happened on East Side Access. The construction company running that project declined to comment.

The article also touches on one of my frequent themes, about why Progressives still support huge public sector payrolls when these actually reduce the government services they are passionate about:

Public officials, mired in bureaucracy, have not acted to curb the costs. The M.T.A. has not adopted best practices nor worked to increase competition in contracting, and it almost never punishes vendors for spending too much or taking too long, according to inspector general reports.

At the heart of the issue is the obscure way that construction costs are set in New York. Worker wages and labor conditions are determined through negotiations between the unions and the companies, none of whom have any incentive to control costs. The transit authority has made no attempt to intervene to contain the spending.

“It’s sad, really,” said Lok Home, owner of the Robbins Company, which manufactured much of the tunneling equipment used for East Side Access. “Because if they controlled the costs, they could do twice as many expansion projects and still have more money for maintenance.”

A while back I was writing about something -- the Civil War I think -- and I mentioned that I had been lucky enough to have James McPherson as a professor.  I remember a comment on the post that said something like "yes, yes we know, you went to Princeton."  I certainly was lucky, and that school contributed a lot to what I am.  But as far as attributing sh*t I know to a source, Princeton is in at least second place.   By far the greatest source of what I know about history, art, music and even about the sciences comes from the Teaching Company.  And that is available to all of you, no SAT required.

I just checked my account and I have taken 71 courses from them, including 54 history courses**.  I think I have taken, for example, pretty much all the courses on this list in a Tyler Cowen post.  I began my journey taking courses on things that had always interested me but I knew a fair amount about already, such as the history of Ancient Rome or the Civil War or WWII.  But the most fun I have had has been taking courses on periods I knew little about -- such as Daileader's great histories of the Middle Ages or the History of China.  And I have had the most fun taking courses on things I knew NOTHING about, such as the history of India, of pre-Columbian American civilization, and of nomadic civilizations of Asia.

The key thing to remember is:  never pay rack rate.  Everything goes on sale from time to time.  Today until midnight, for example, they are having a 70% off sale on a subset of their stuff.  You can still get cd's and dvd's if you want but I used to get the digital download for my iPod and increasingly just stream the audio from an android app and stream the video from their Roku app.

** My family thinks I am weird because I listen to these courses as I run and work out (instead of music).  But it turns out this was not nearly as weird as when I have done Pimmsleur language courses while I am running.  If you want to really take your mind off your running, try to diagram a sentence in your head to figure out which of freaking German article you should be using.  Also, it creates a nice reputation around the neighborhood for eccentricity if you babble in foreign languages as you run.

I am not sure I am able to continue blogging in the current environment.  When I began blogging over 12 years ago, it was to report on my various adventures in trying to run a small business.  It soon morphed into a platform for me to think out loud about various policy issues.  For example, while I didn't really understand this when I started, it became a platform for me to think through mistakes I made in my initial enthusiasm for the Iraq War.  You can see me in the early years evolve from a kind of knee-jerk global warming absolute denier to a lukewarmer with much more understanding of the underlying science.  I think of myself as an intellectual (though one who cannot spell or proof-read) who likes to discuss policy.

But I am not sure this is the time for that.  The world seems to be moving away from intellectualism.  I say this not because Trump voters were somehow rejecting intellectualism, but because intellectuals themselves seem to be rejecting it.  They act like children, they are turning universities into totalitarian monoculters, and they compete with each other to craft mindless 140-character "gotchas" on Twitter.  I challenge you to even find a forum today for intellectual exchange between people who disagree with one another.  In politics, Trump clearly rejects intellectualism but for whatever reasons, the Democratic opposition has as well.

We have a tribal war going on in this country that has officially gone beyond any real policy issues.  While the US and the Soviet Union had real differences in philosophy and approach, most of their confrontations were in proxy wars which bore little resemblance to these values.  That is what politics are now -- a series of proxy wars.  We spend several days focusing attention on Jeff Sessions, but spend pretty much zero time talking about real issues like approaches to the drug war, and police accountability, and sentencing reform.  Instead all we can focus on is the political proxy war of this stupid Russia hacking story.   Obama's birth certificate and Hillary's servers and Russian hacking and Trump's real estate sales -- all we fight are proxy wars.

And like most tribal warfare, the two tribes are incredibly similar.  I have called them the Coke and Pepsi party for years.  Go talk to the the rank and file and sure, one group may like Nascar and barbecue while the other likes Phish concerts and kale, but you will see them asking for the same sorts of things out of government.   Take the minimum wage, a traditional blue tribe issue.  In Arizona, a heavily red state (we have a super-majority in the legislature of the red team), a $10 minimum wage referendum passed by nearly 60% of the vote last year.  The members of the two tribes absolutely hate each other, but they support the same laws.  I guess I should be happy they don't get together, since as a libertarian I think many of these things they want are bad ideas.

People tell me I need to just deal with the adversity.  But I don't mind opposition per se.  I love when I get a chance to respond to real criticism.  Hell, I wrote 5000 words or so here in response to such criticism.  It's fun.  But more likely nowadays I will write a couple thousand words on school choice and the response will be, in total, "Your a Trump cuckservative."  Several years ago I wrote a long article on rail in response to a Joel Epstein piece.  Epstein had argued the US rail rail system was inferior to those in Europe and Asia because we don't have enough passenger rail.  I argued with a series of charts and analysis that the US rail system was superior because it focused on freight over passengers, and that shifting freight to rail had far more environmental benefits than shifting passengers to rail.  Epstein's entire response to my article was, "You should get out of the country more often."  This is the classic intellectual argument of our day.  It was smug.  It implied my article was based on being part of the wrong tribe, the narrow-minded denizens of flyover country rather than the coastal set that have been to Gstaad but not Tulsa.  At it did not even bother addressing the issues raised.

Or look at Black Lives Matter.  BLM actually had what looked to me to be the outlines of a pretty good plan.  To really achieve their goals, though, was going to take a lot of work jurisdiction by jurisdiction, establishing some model legislation and best practices and bringing it to various municipalities.  It didn't even try.  It abandoned this plan in favor of just disrupting sh*t and shaming the unwoke for saying that "all lives matter."  Today, invocations of BLM consist pretty much 100% of virtue signalling for one's own tribe or shaming of the other tribe.  Its the equivalent of dueling fans at a game yelling "Yankees suck!" "No, Red Sox suck!"

People also tell me to just deal with it, that if I love the policy stuff I should ignore these problems.  But let me give you an analogy.  Let's say you absolutely love English Premier League football, but every time you try to go to a game, you miss most of what happens on the field because hooligans are fighting around you in the stands.  Do you keep going for your love of football or at some point is the mess that surrounds it just too much?

Anyway, I am highly tempted just to say "screw it" for a while and focus on something else entirely.  I am trying a different approach as a change of pace, trying to write a more formal policy piece for a think tank, but I am having a surprising amount of trouble doing it well.  Writing such pieces was not really my forte at McKinsey when I was a consultant and I am not sure it is now.  Not disciplined enough in my writing, I think.

Anyway, on a positive front, I now have a dedicated (though very small) room for my model railroad and I installed the first bit of benchwork.  This is sort of like laying the keel for a new ship.  Coyoteblog readers, I know, will be hanging on the edges of their seats for further updates.

From Parks and Recreation:

Jean-Ralphio: Why don’t you use that time to go after one of your passions? Like model trains, or toy Gandalfs or something.

Ben: I don’t know why you jumped straight to model trains. I mean, it’s accurate…

About a year and a half ago when I was in Asia, I saw a lot of folks has laundry racks that were essentially lifts, where one could put the laundry out to dry and then lift it up out of the way.  I thought this would be awesome for our laundry room, which unusually for a laundry room has a 12 foot ceiling.   Since we live in Arizona, I hand a lot of things like my cotton shirts to dry, it reduces the wrinkles and in our 4% humidity it tends to be bone dry after just a few hours.

But it was impossible to find one in the US.  I even had a contest on this web site to try to find one, with no real luck.  So after nearly a year of searching, multiple false starts, language issues, shipping issues, disappearing orders, and a general contractor who had absolutely no idea how to install the thing, we finally meet with success:

It is awesome for us -- lowers to about 5 feet above the ground to make it easy to hang things on it, and then raises high enough that the laundry clears me head.  Down & Up:

I'd buy the US distribution rights for this thing if I thought anyone else had similar applications for it over here.

A few random notes on computer games for those who share that interest:

1. For those Diablo fans who loved Diablo II but were disappointed that Diablo III was not exactly the sequel they'd hoped for, I have a suggestion:  Path of Exile from Grinding Gear Games.  It is set up as an mmrpg (so you have to be online to play) but it plays just fine single player and all the map areas are dedicated instances such that you aren't fighting other players for kills and loot drops.  The skill tree is famously enormous.  A certain group of you will buy the game 2 minutes after clicking on the next link (I did).   Here is the whole tree, it is absurd (the highlighted areas are the selections for one of my characters).  The customization ability is simply staggering.   Choosing a class like fighter or mage (they have different names in this game, but essentially these base classes) just changes your starting point on this map.  But this is not the end of the customization.  There is also an elaborate skill gem system where your attack and defense skills are based on your gem choices, both the main gems and support gems one adds to it.  Seriously, the actual combat is not much more elaborate than the debuff then hack and slash and loot drop of other Diablo style games, but this game has more ability to fine tune and experiment with character design than any I have ever played.
2. My absolute favorite, by far, board game has finally come out as a PC game -- Twilight Struggle.  It is on Steam and I can't yet fully recommend it because I have not played through all the way online.  I am told the AI needs to be tougher but it should be fine for noobs.  There is also online person to person play.  I love the gameplay and it has also been a platform for my son and I to have a lot of discussions about recent history.  If you are a total noob, here are a few lessons for the Soviet player (which I have the most experience playing)
   • The Soviets have to rush.  The game has three periods, and you have big advantages in period 1 and disadvantages in period 3.  You HAVE to build up a lead early or you are toast later on.  I have seen a 15 point lead evaporate in the last third of the game.  The best outcome is to win the game outright by the smear rule (20 point lead) by turn 7.
   • Your first move is to coup Iran.  Asia is yours in the early game if you succeed.  The only alternative is to first turn coup in Italy, but that is a riskier strategy and can only be justified if your first turn hand is really tuned to that approach.
   • Coup every turn ASAP.  Coups are your most powerful weapon (other than events) and couping first thing every turn denies that ability to the US
   • The space race is for dumping your worst cards, not an end in and of itself (always exceptions, of course).  Twilight Struggle's best dynamic is how you end up with your opponents cards in your hand that you end up having to play for them-- the space race is one way to dump the worst of these cards (e.g. grain sales to the Soviets).  Since the cards you can play become more restricted as you advance in the space race track, there are even some advantages to failing your rolls early on.
   • If you play the China card, it needs to be for a BIG goal - like improving your scoring of Asia right before you play the Asia scoring card.  In many cases, it is better to not play the China card at all than to have it pass to the Allies.
   • Cards that allow you to play influence on any country should be used to get access to places where you have no adjoining influence -- don't use it to add to existing influence or enter countries to which you already are adjacent.   This is the only way in initially to places like South America and much of Africa..  Decolonization is your friend.
   • Learn to love this site.  Not only does it give you a LOT of strategy, but it also answers complex card interaction questions for every card.

A few days ago I asked readers if they could find me a laundry drying rack that could elevate with an electric winch, to take advantage of the limited floor space but 12 foot ceilings in my bizarrely designed laundry room.  These are surprisingly common in Asia but I could not find any for sale in the US.

Several of the early responses found manual ones but missed on the electric/automatic spec  (e.g  here and here).  I may in the end get one of these and motorize it but the contest specified already motorized.

Phil had the first winning entry, finding this Asian model for sale to the US in retail lots.  Its too expensive, and Dwight found one later much cheaper, but the contest was for first email, and did not say anything about price.  I will give Dwight honorable mention because I feel like I searched the Sh*t out of Amazon and somehow missed this.

I decided to give a second award to Neil.  He was the first one to go a little more creative and search beyond laundry to get something with the right functionality but designed for a different application.  It is not the most attractive item in the world but easily has the best price-value ratio of any solution so I awarded a second prize for it.

Finally, while it does not win, Brad gets honorable mention for this closet solution, which is not quite what I am looking for, but might have been made to work if I didn't have other options.

Thanks to everyone.  I'll post a picture when we finally install something.

I will give a $10 Amazon gift card to the first person with an email in my inbox (coyote--at---coyoteblog dot com) with a North American retail source (no large lots) for something similar to this:

Does not need to be a scissor lift, could be cables but must be motorized.   We have a very modern house which sometimes results in odd rooms.  Our laundry room is tiny in footprint but has a 12 foot ceiling (!).  So I was just in the process of designing a motor lifted frame with poles to hang clothes for drying** that could lift up and down from the ceiling when I saw this.  They seem to have many in Asia but I can't find one here.    This one has some sort of air drying system which we don't need so that is not a necessary part of the package.   This is a (homemade I think) hand winched version which would also be OK if it were motorized.

PS, this is not quite it

Update:  Thanks.  I have a couple of winners I will announce.

**Phoenix has approx. 5% humidity so we don't need to bother hanging them outside, they will dry anywhere in hours.

The media tends to talk about the growth of the Chinese economy as if it is something new and different.   In fact, there probably have been only about 200 years in the history of civilization when China was not the largest economy on Earth.  China still held this title into the early 18th century, and will get it back early in this century.

This map from the Economist (via Mark Perry) illustrates the point.

Of course there is a problem with this map.  It is easy to do a center of gravity for a country, but for the whole Earth?  The center in this case (unless one rightly puts it somewhere in the depths of the planet itself) depends on arbitrary decisions about where one puts the edges of the map. I presume this is from a map with North America on the far left side and Japan on the far right.  If one redid the map, say, with North America in the center, Asia on the left and Europe on the right, the center of gravity would roam around North America through history.

I was filling out my EEO-1 forms the other day (that is a distasteful exercise where the government is leading us towards a post-racial society via mandatory reporting on the race of each of my employees).  For each employee there are five non-white categories:  Black, native American, native Hawaiian, Hispanic, and Asian.  I started to think how interesting it is that the Left supports numerous government interventions in support of the first four, but never mentions Asians.

This can't be solely due to lack of past discrimination.   Watch a movie from the 1930's or 1940's and you will see Asians shamelessly stereotyped** as badly as any other race.  And generations who lived and fought WWII had many members, even a majority, that harbored absolute hatred against one Asian people, the Japanese.  We only sent one group to concentration camps in the 20th century, and it was not blacks or Hispanics.  Of course "Asians" is an awfully broad categorization.  It includes Chinese, with whom we have had a complicated relationship, and Indians, for whom most Americans until recently probably have had little opinion at all one way or another.

One problem for many on the Left is the fact that Asians are considered a serious threat (both as immigrants and as exporters) to the Left's traditional blue collar union base.  Another is that they are an emerging threat to their little darlings trying to get into Harvard.  I have heard the squeakiest-clean, most politically correct liberals utter to me the most outrageous things about Asian kids.  Which is why I was not really surprised that white parents in California who claim to support merit-based college admissions immediately change their tune when they find out that this will mean that far more Asia kids will get in.

I have been working with some data on state voting and voter registration patterns by race in the wake of the recent Supreme Court decision vis a vis the Voting Rights Act.  The Left went nuts, saying that blacks and Hispanics would again be discriminated against in the South, and the Obama Administration vowed to get on the case, saying that it would begin with Texas.

By the way, Texas may make perfect sense politically for Obama but is an odd choice based on the data.  Minority voter registration and voting rates as compared to the white population are usually used as an indicator of their election participation and access.  In the last election, according to the Census Bureau in table 4B, blacks in Texas both registered and voted at a higher rate than whites.  In Massachusetts, by contrast, in that same election blacks registered at a rate 10 percentage points lower than whites and voted at a rate about 7 points lower.

But if you really want something interesting in the data, look at the data and tell me what group, if we accept that low participation rates equate to some sort of covert discrimination, deserves the most attention (from the same table linked above):

US Voter Registration Rates (Citizens Only)

White:    71.9%

Black:    73.1%

Hispanic:     58.7%

Asian:     56.3%

US Voting Rates (Citizens Only, last Presidential election)

White:    62.2%

Black:    66.2%

Hispanic:    48.0%

Asian:    47.3%

** Postscript:  I am not an expert on discrimination, but I watch a lot of old movies and read a lot of history.  To my eye, stereotyping of Asians has been more similar to anti-Semitic portrayal of Jews than to stereotyping of blacks or Hispanics.  Blacks and Hispanics have most often been stereotyped as lazy and unintelligent.  Asians and Jews are more frequently stereotyped as scheming, plotting, and intelligent-but-evil.  Frank Capra, who directed a lot of good movies also directed a series of heavy-handed propaganda movies for the government during the war.  The one on Japan is interesting -- your gardener's quiet mien is actually masking a nefarious scheme.  Even in the 1940's Japan was portrayed as economically frightening to us.

Update:  Over the last couple of elections, Asians have shifted to voting fairly heavily Democratic.  So a cynical person would suggest that they might suddenly "discover" this group.  We shall see.

My son and I were watching a TV show and at the end there was a blurb about it being made in Georgia.  I said to him "I guarantee that "filmed in Georgia" translates to "subsidized by Georgia."  He did not believe me, and could not understand why anyone would subsidize film production.  After all, we can argue about whether any government subsidized jobs make sense or just cannibalize investment in other areas, but film jobs are the most temporary and fleeting of all jobs.

Turns out I was right (I followed a web link from the credits):

Georgia production incentives provide up to 30% of your Georgia production expenditures in transferable tax credits.

The program is available for qualifying projects, including feature films, television series, commercials, music videos, animation and game development. With one of the industry’s most competitive production incentive programs, the Georgia Film, Music & Digital Entertainment Office can help you dramatically cut production costs without sacrificing quality.

Highlights from the Georgia Entertainment Industry Investment Act include the following:

• 20% across the board, transferable flat tax credit with a minimum of $500,000 spent on qualified production and post production expenditures within Georgia
• Additional 10% tax credit if a production company includes an imbedded Georgia promotional logo in the qualified feature film, TV series, music video or video game project
• Provides same tax credits to all instate and out-of-state labor working in Georgia, plus standard fringes qualify
• No limits or caps on Georgia spend; no sunset clause
• For commercials and music videos, a production company may group multiple projects together to meet the $500,000 minimum spend on qualified expenditures

This is just insane.  WTF is the state doing subsidizing 30% of the cost of making commercials?  What could possibly justify this, except that this is a sexy business and it gives politicians a chance to rub shoulders with film people?   Why are Georgia business people taxed in order to hand money film producers?   What makes film production a "good" industry and, say, campgrounds a bad one?

Well, I suppose it could be argued that filming in Georgia would help advertise Georgia by showing scenes filmed on location in the state.  Except that the show we were watching was Archer, an animated series about spies based in New York City.  Not one second of the TV show has ever shown or ever will show a live image of Georgia, and I am almost all the way through the second season and not one location in the state of Georgia has been mentioned  (though they might have mentioned the one in Asia).

How many times does an argument have to be wrong, and for how long, before it finally loses credibility?  I suppose the answer must be nearly infinite, because the "they will not assimilate" argument is rising again, despite being about 0 for 19 on the groups to which it has been applied.  Germans, Irish, Italians, Eastern Europeans, Chinese, Mexicans and now Chechnyans.   This argument always seems to be treated seriously in real time and then looks stupid 20 or 30 years later.  As an extreme example, here is Benjamin Franklin writing about Germans in 1751:

why should the Palatine Boors [ie Germans] be suffered to swarm into our Settlements, and by herding together establish their Language and Manners to the Exclusion of ours? Why should Pennsylvania, founded by the English, become a Colony of Aliens, who will shortly be so numerous as to Germanize us instead of our Anglifying them, and will never adopt our Language or Customs, any more than they can acquire our Complexion.

(By the way, if you want to retain an unadulterated rosy image of Franklin, who was a great man for many reasons, do not read the last paragraph at that link.  People are complicated and sometimes even great men could not shed all the prejudices of their day.)

The only good news is that the circle of those acceptable to the xenophobic keeps getting larger.  It used to be just the English, then it was Northern Europeans, then much later it was all Europe and today I would say it is Europe and parts of Asia.  So that's progress, I suppose.

Fun fact:  Ironically, the English King at the time Franklin wrote the quote above was George II.  He was actually a German immigrant, born in Germany before his father came to England as King George I, jumping over numerous better claimants who were Catholic.  His son actually assimilated very well, as George III spoke English as a first language, and his granddaughter Victoria practically defined English-ness.  By the way, Victoria would marry another German immigrant.

Came in via email this morning

Dear President & CEO,

 

We are an organization specified at dealing with domain name dispute and registration in Asia. We have something important on intellectual property right need to confirm with your company.

 

On April 13, 2013, we received an application formally, one company named "Phgbuhfcj Holding Ltd" applied for the Brand Name "coyoteblog" and some domain names with our organization.

After checking, we found your company is the original trademark owner. If the company's action haven't been authorized by your company, so their behavior will conflict with your interests. In order to deal with the matter better, please contact us ASAP. (If you are NOT President, please forward this to your President & CEO, because this is urgent. Thanks.)

Best Regards,

 

Andy
Auditing Director

Web: http://www.easyfa.org

Update, from the comments:  Yes, it is!  I figured as such.  This blog gets pretty good Google ranking so I like to post this stuff for others to find in the future.

I have been a stock market bear for some months now.  I don't really think the US economy is going to double dip on its own, but I felt like Europe and Asia would bring us down.  Well, I simply underestimated both the Fed's and the ECB's willingness to goose financial assets.  If the Fed and ECB are going to inflate our way out of, uh, whatever it is we are in, then I certainly don't want to be holding bonds, particularly at these absurdly low interest rates.  Stocks are not as good of an inflation hedge as some hard assets, but they are a hell of a lot better than most bonds.  I'm  certainly not going to buy back in the current euphoric highs, but I am giving up on trying to predict that market based on fundamentals.  It seems that fundamentals are a suckers game, and you better not be timing the market unless you have an inside line to government policy, because that seems to be what drives the train.

PS-  I wish Milton Friedman were still around.  QE was as much his idea as anyone else's.   I wonder what he would have thought of the results, or of this particular implementation.

My Forbes column is up this week.  I really did not want to write about climate, but when Forbes conctributor Steve Zwick wrote this, I had to respond

We know who the active denialists are – not the people who buy the lies, mind you, but the people who create the lies.  Let’s start keeping track of them now, and when the famines come, let’s make them pay.  Let’s let their houses burn.  Let’s swap their safe land for submerged islands.  Let’s force them to bear the cost of rising food prices.

They broke the climate.  Why should the rest of us have to pay for it?

The bizarre threats and ad hominem attacks have to stop.  Real debate is necessary based on an assumption that our opponents may be wrong, but are still people of good will.  And we need to debate what really freaking matters:

Instead of screwing around in the media trying to assign blame for the recent US heat wave to CO2 and threatening to burn down the houses of those who disagree with us, we should be arguing about what matters.  And the main scientific issue that really matters is understanding climate feedback.  I won't repeat all of the previous posts (see here and here), but this is worth repeating:

Direct warming from the greenhouse gas effect of CO2 does not create a catastrophe, and at most, according to the IPCC, might warm the Earth another degree over the next century.  The catastrophe comes from the assumption that there are large net positive feedbacks in the climate system that multiply a small initial warming from CO2 many times.  It is this assumption that positive feedbacks dominate over negative feedbacks that creates the catastrophe.  It is telling that when prominent supporters of the catastrophic theory argue the science is settled, they always want to talk about the greenhouse gas effect (which most of us skeptics accept), NOT the positive feedback assumption.  The assumption of net positive climate feedback is not at all settled -- in fact there is as much evidence the feedback is net negative as net positive -- which may be why catastrophic theory supporters seldom if ever mention this aspect of the science in the media.

I said I would offer a counter-proposal to Mr. Zwick's that skeptics bear the costs of climate change.  I am ready to step up to the cost of any future man-made climate change if Mr. Zwick is ready to write a check for the lost economic activity and increased poverty caused by his proposals.  We are at an exciting point in history where a billion people, or more, in Asia and Africa and Latin America are at the cusp of emerging from millenia of poverty.  To do so, they need to burn every fossil fuel they can get their hands on, not be forced to use rich people's toys like wind and solar.  I am happy to trade my home for an imaginary one that Zwick thinks will be under water.  Not only is this a great way to upgrade to some oceanfront property, but I am fully confident the crazy Al Gore sea level rise predictions are a chimera, since sea levels have been rising at a fairly constant rate since the end of the little ice age..  In return, perhaps Mr. Zwick can trade his job for one in Asia that disappears when he closes the tap on fossil fuels?

I encourage you to read it all, including an appearance by the summer of the shark.

First, I will admit that this was probably a throwaway line, but it does represent the worldview of a lot of Americans.  In an article showing a funny story about poor preparation of college students, Kevin Drum ended with this:

This does not bode well for our coming economic war with China, does it?

Trade is not war.  Trade is cooperation, exactly the opposite of war.   By definition, it benefits both parties or it would not occur, though of course it can benefit one more than the other.

Treating trade like war is a very dangerous game engaged in by some politicians.  At best, it leads to protectionism that makes the country poorer.  At worst, it can lead to real war.

Consider two examples of a country treating trade like war, both from Japan.  In the 1930's, Japan developed an imperial desire to directly control all the key resources it needed, rather than to trade for them.  The wealthy ports of China and iron-rich Manchuria were early targets.   This desire was compounded when the US used trade embargoes as a policy tool to protest Japanese invasions and occupation of China.  This eventually led to war, with Japan's goal mainly to capture oil and rubber supplies of southeast Asia.  Obviously, this effort led to Japan essentially being left a smoking hole in the ground by late 1945.

The second example was in the 1980's, as Japan, via MITI, actively managed its economy to promote trade.  The "trade as war" vision was common among Japanese leaders of the time.  The results was a gross, government-forced misallocation of resources and bubble in the real estate and stock markets that led to a couple of lost decades.

Chinese exceptionalism, or do we just notice it because it is so large.  I clicked through to this chart from a link on Instapundit that said to note how Chinese fertility fell off the map.  When I watched the video though, what I saw was ALL the fertility rates falling at roughly the same pace, at roughly the same point.  The lesson seems to be that fertility tends to drop with increasing mortality, wealth, and technology -- which is what many of us have been saying in response to Paul Ehrlich for years.

I am probably over-reading this, but I am sensitive that there is a sort of storyline of Chinese exceptionalism -- due to their taking some sort of totalitarian third way -- that seems to be admired among certain US socialists and environmentalists and Thomas Friedman.  This hearkens back to all the admiration for the Japanese MITI-managed economy, right before their economy crashed for two decades or so.

China flourishes because it has a culture, never fully suppressed by Mao, whose people take well and quickly to capitalism -- much of the development around Southeast Asia in previous decades was led by expat Chinese.  The totalitarianism that is, depressingly, so admired by the US intelligentsia is just going to lead China into the abyss.  Already we can see bubbles emerging due to the state's forced mispricing of key economic inputs, from capital to oil.  The burden of spending on triumphalist projects like super-bridges and mega-buildings and Olympics and high speed trains is going to start appearing over the next few years.

Here is my prediction:  The Chinese are going to have a bubble burst that will rival any such economic explosion that we have seen in the last century.  I have been looking at the situation and by a number of metrics, the bubble is already huge.  I would bet against China, but the problem (as with all shorts) is timing.  Government officials, if they really dedicate themselves to the task, can extend bubbles for a long time.  Even in the US, which is less authritarian and more transparent, it can be argued that Fannie and Freddie and Barnie Frank and Alan Greenspan helped push off the reckoning by at least 5 years.   Of course, the longer you push it off, the worse it gets.  Which means the Chinese bubble is going to be a doozy.

Postscript: Here is a nice example -- admiration from US environmentalists for China gutting their economy to make arbitrary goals

It's interesting to note the dedication China has displaying in achieving its [energy efficency] target -- shutting down entire operations and even executing rolling blackouts. Surely there would have been some amount of embarrassment for the nation on the world's stage if it had missed its target, but that likely would have been minor. It's worth noting the difference in political culture: What do you think would have happened if the US had such an energy-reduction target to hit, but a sagging economy got in the way?

I can tell you with some certainty: We would have missed that mark.

Will there never be an end to Americans who take advantage of our uniquely strong speech protections to laud totalitarians?

TJIC writes:

Chinese factory conditions may not be the exact cup of tea for a San Francisco graphic designer or a Connecticut non-profit ecologist grant writer "¦ but they're, by definition, better than all the other alternatives available to the Chinese workers (or the factories would find it impossible to staff up).

I wrote previously:

One morning, a rice farmer in southeast Asia might faces a choice.  He can continue a life of brutal, back-breaking labor from dawn to dusk for what is essentially subsistence earnings.  He can continue to see a large number of his children die young from malnutrition and disease.  He can continue a lifestyle so static, so devoid of opportunity for advancement, that it is nearly identical to the life led by his ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but certainly no longer than he worked in the field) for low pay (but certainly more than he was making subsistence farming) and take a shot at changing his life.  And you know what, many men (and women) in his position choose the Nike factory.

Update: In an interesting question of incentives, Foxconn, the manufacturer much in the news for a rash of suicides at its plant in China, apparently pays about 10-years salary to the families of workers who kill themselves.  They have ended the practice, worried that they are incentivizing some of the suicides.

Long ago on this site, I wrote this:

More recently, progressives have turned their economic attention to lesser developed nations.  Progressives go nuts on the topic of Globalization.  Without tight security, G7 and IMF conferences have and would devolve into riots and destruction at the hands of progressives, as happened famously in Seattle.  Analyzing the Globalization movement is a bit hard, as rational discourse is not always a huge part of the "scene", and what is said is not always logical or internally consistent.  The one thing I can make of this is that progressives intensely dislike the change that is occurring rapidly in third world economies, particularly since these changes are often driven by commerce and capitalists.

Progressives do not like American factories appearing in third world countries, paying locals wages progressives feel are too low, and disrupting agrarian economies with which progressives were more comfortable.  But these changes are all the sum of actions by individuals, so it is illustrative to think about what is going on in these countries at the individual level.

One morning, a rice farmer in southeast Asia might faces a choice.  He can continue a life of brutal, back-breaking labor from dawn to dusk for what is essentially subsistence earnings.  He can continue to see a large number of his children die young from malnutrition and disease.  He can continue a lifestyle so static, so devoid of opportunity for advancement, that it is nearly identical to the life led by his ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but certainly no longer than he worked in the field) for low pay (but certainly more than he was making subsistence farming) and take a shot at changing his life.  And you know what, many men (and women) in his position choose the Nike factory.  And progressives hate this.  They distrust this choice.  They distrust the change.  And, at its heart, that is what the opposition to globalization is all about "“ a deep seated conservatism that distrusts the decision-making of individuals and fears change, change that ironically might finally pull people out of untold generations of utter poverty.

Which is why I really enjoyed this article linked by Mark Perry:

"Years after activists accused Nike and other Western brands of running Third World sweatshops, the issue has taken a surprising turn. The path of discovery winds from coastal factory floors far into China's interior, past women knee-deep in streams pounding laundry. It continues down a dusty village lane to a startling sight: arrays of gleaming three-story houses with balconies, balustrades and even Greek columns rising from rice paddies.

It turns out that factory workers -- not the activists labeled "preachy" by one expert, and not the Nike executives so wounded by criticism -- get the last laugh. Villagers who "went out," as Chinese say, for what critics described as dead-end manufacturing jobs are sending money back and returning with savings, building houses and starting businesses.

Workers who stitched shoes for Nike and apparel for Columbia Sportswear, both based near Beaverton, Oregon, are fueling a wave of prosperity in rural China.

Update: I would have thought it unnecessary to add these provisos, but apparently per the comments it is necessary for some.  Of course people need to be treated as human beings.  Companies in some poor countries that are using the power of local government to actually enslave workers or to employ them in non-consensual ways are not organizations a good libertarian would ever defend, as our bedrock principle is to deal with other human beings without force or fraud.

My point is that we cannot apply our wealthy middle class values to the pay/benefits/workweek package being offered in poor countries.  To my mind it is immoral to try to deny poor people in poor companies jobs just because we rich people in the US would not consider taking such a job.  This arrogant and frankly clueless attitude forgets a critical question - what is their alternative?  We may think the Nike factory job sucks, and against the choices we have it probably does, but I would bet the subsistence rice farming job, with one's family always one bad harvest away from starvation, would suck worse.  Of course we should aspire that everyone in the world can work in an air conditioned building for $40,000 a year while spending most of the day surfing the Internet and texting friends complaining that they are underpaid.  But you can't tell these countries that the only ladder they can use to escape poverty doesn't have any rungs in the first 20 feet.

One of the great appeals of catastrophic anthropogenic global warming theory in certain sectors is the fact that what it takes to fight the imagined threat  (reduced trade, reduced economic growth, government controls on the economy, populist hammering of energy companies, micro-controls on individual decision-making) are exactly the things the socialists wanted to do before their schtick became tired.  Global warming has become the back-door to state control, combining some exaggerated science with a lot of folks' uninformed desire to "do the right thing", to create a new vector for old objectives.

Today, 56 newspapers  are all allowing some global warming activist to take over their newspapers to run the same panicky plea.   Bruce McQuain picks up the story:

In reality, I've come to understand this isn't about "climate change", this is about the politics of income redistribution. I've spoken of it in the past. This has been a goal of the third-world debating club, also known as the UN, since it has come into existence. The IPCC is just a convenient vehicle on which to base their claims and put them forward to the industrialized countries for fulfillment. The underlying "science", like a wet paper box, is coming apart at the seams. And not a single mention in the editorial. But it becomes clear, the further you get into it, that it is about what I contend it is about:

Social justice demands that the industrialised world digs deep into its pockets and pledges cash to help poorer countries adapt to climate change, and clean technologies to enable them to grow economically without growing their emissions. The architecture of a future treaty must also be pinned down "“ with rigorous multilateral monitoring, fair rewards for protecting forests, and the credible assessment of "exported emissions" so that the burden can eventually be more equitably shared between those who produce polluting products and those who consume them. And fairness requires that the burden placed on individual developed countries should take into account their ability to bear it; for instance newer EU members, often much poorer than "old Europe", must not suffer more than their richer partners.

If you were playing buzz word bingo with this paragraph you'd be at the prize table right now picking one out. It hits all of the favorite themes of income redistributionists. And its blatancy should scare you. This is about your wallet, your money and the rest of the world making a claim on it. This is the third world's dream come true.

I have to object somewhat to his last line.  This is the third world leader's dream come true, as I think most adults understand from past experience that aid like this gets siphoned off by the ruling regime.  What the Third World's people really need is what Southeast Asia and India and China have - real private investment making for real economic growth (to be fair, I think Bruce would accept this correction).

I thought this bit was hilarious:

It is in that spirit that 56 newspapers from around the world have united behind this editorial. If we, with such different national and political perspectives, can agree on what must be done then surely our leaders can too.

Apparently we are supposed to be dazzled that 56 institutions that all, in unison, blindly cling to the same 150-year-old failed business model, hoping that some other group can be prevailed upon to bail them out, would actually think alike about some issue.  Amazing!

Norman Borlaug, the founder and driving force behind the revolution in high-yield agriculture that Paul Ehrlich predicted was impossible, has died at the age of 98 95.  Like Radley Balko, I am struck by how uneventful his passing is likely to be in contrast to the homage paid to self-promoting seekers of power like Ted Kennedy who never accomplished a tiny fraction of what Borlaug achieved.  Reason has a good tribute here.  Some exceprts:

In the late 1960s, most experts were speaking of imminent global famines in which billions would perish. "The battle to feed all of humanity is over," biologist Paul Ehrlich famously wrote in his 1968 bestseller The Population Bomb. "In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now." Ehrlich also said, "I have yet to meet anyone familiar with the situation who thinks India will be self-sufficient in food by 1971." He insisted that "India couldn't possibly feed two hundred million more people by 1980."

But Borlaug and his team were already engaged in the kind of crash program that Ehrlich declared wouldn't work. Their dwarf wheat varieties resisted a wide spectrum of plant pests and diseases and produced two to three times more grain than the traditional varieties. In 1965, they had begun a massive campaign to ship the miracle wheat to Pakistan and India and teach local farmers how to cultivate it properly. By 1968, when Ehrlich's book appeared, the U.S. Agency for International Development had already hailed Borlaug's achievement as a "Green Revolution."

In Pakistan, wheat yields rose from 4.6 million tons in 1965 to 8.4 million in 1970. In India, they rose from 12.3 million tons to 20 million. And the yields continue to increase. Last year, India harvested a record 73.5 million tons of wheat, up 11.5 percent from 1998. Since Ehrlich's dire predictions in 1968, India's population has more than doubled, its wheat production has more than tripled, and its economy has grown nine-fold. Soon after Borlaug's success with wheat, his colleagues at the Consultative Group on International Agricultural Research developed high-yield rice varieties that quickly spread the Green Revolution through most of Asia.

The contrast to Paul Ehrlich is particularly stunning.  Most folks have heard of Ehrlich and his prophesies of doom.   But Ehrlich has been wrong in his prophesies more times than anyone can count.  Borlaug fed a billion people while Ehrlich was making money and fame selling books saying that the billion couldn't be fed -- but few have even heard of Borlaug.   Today, leftists in power in the US and most European nations continue to reject Borlaug's approaches, and continue to revere Ehrlich (just this year, Obama chose a disciple of Ehrlich, John Holdren, as his Science czar).

Continuing proof that the world moves forward in spite of, rather than because of, governments.

Update: More here.

Update #2: Penn and Teller on Borlaug

This week, we have been given a chance to see a real contrast.  Two consumer staples, gasoline and food, have both seen their prices go up substantially over the last several months.  Both price spikes have been due to a combination of market forces (particularly increasing wealth in Asia) and US government policy that has the effect of restricting supply.

However, the political response from Congress has been completely different.  In the very same week that Democrats in Congress have introduced bills to punish oil companies for high prices with windfall profits taxes, they have passed a farm bill that rewards farmers who are already getting record high prices with increased price supports and direct subsidies.  This despite the fact that on a percentage basis, the increase in crop prices has been far larger than the recent increase in gas prices.  The contrast in approaches to two industries in very similar situations couldn't be more stark.

The only reason I can come up with is votes:  There are a lot more farmers and people who feel themselves dependent on the agricultural industry than there are oil workers.  The oil industry is incredibly efficient on a revenue per employee basis, and I guess that comes back to haunt them.  There is no oil industry equivalent of the Iowa Caucuses to cause politicians to fall to the ground groveling and shoveling out taxpayer money to buy votes.

It turns out, according to Barack Obama, (who hales from the party that doesn't believe in questioning anyone's patriotism) that I am not a "Patriot Employer."  This is from the text of Senate Bill S. 1945 of which he is a co-sponsor  (My snark is interspersed in italics):  Patriot Employers are to be given tax breaks over unpatriotic employers (I presume this means that their tax rates will be raised less in an Obama presidency than those of other folks) with "patriot employers" defined as such:

(b) Patriot Employer- For purposes of subsection (a), the term
`Patriot employer' means, with respect to any taxable year, any
taxpayer which--

  `(1) maintains its headquarters in the United States if the taxpayer has ever been headquartered in the United States,

OK, I guess I can comply with this.  Though I am not sure the best way to begin an Obama "kindler gentler foreign policy" is to tell the nations of the world that we will be taxing their company's income in the US at a higher rate than our own companies.

  `(2) pays at least 60 percent of each employee's health care premiums,

So the #1 determinant of patriotism is not commitment to individual rights but paying 60% of employee health care costs.  I guess I am so unpatriotic

And, just from a practical standpoint, 90% of my employees are seasonal, hired for about 4 months of the year.  To be patriotic, I have to pay their health care costs all year long?  Also, since most of my employees are retired, they are on Medicare or an employee retirement medical plan.  If they pay $0 in premiums and I pay $0 of that, do I get credit for 60%?  Maybe the government can mandate a solution for zero divided by zero, like they did for the value of pi years ago

  `(3) has in effect, and operates in accordance with, a policy requiring neutrality in employee organizing drives,

I presume neutrality means that in a hypothetical union drive, I do not express my opinion (and likely opposition) to said unionization drive?   I am told that this also entails allowing card checks rather than hidden ballot voting.  In other words, patriotism is being defined here as 1) giving up your free speech rights and 2) opposing hidden ballot voting.  Uh, right.  Besides, if a union organized our company, as unlikely as that would be, I would probably have to do a Francisco d'Anconia on the place.

  `(4) if such taxpayer employs at least 50 employees on average during the taxable year--

`(A) maintains or increases the number of full-time
workers in the United States relative to the number of full-time
workers outside of the United States,

In other words, we don't want American companies growing overseas.  This could also be called the "give up international market share act."  This implies that it is unpatriotic for US-based Exxon to explore for oil in Asia and that it is more patriotic to let the Chinese national oil company do it.  This implies that it is more patriotic for Coke to lose market share in Germany than to gain it.  This means that it is more patriotic for Mattel to buy its toys in China from Chinese companies rather than run the factories themselves (and thereby be accountable themselves for product quality and working conditions).

This is beyond stupid.  We LIKE to see US companies doing well overseas.  If we have to import our raw materials, we feel more comfortable if it is US companies doing the extraction.  Don't we?  In the name of patriotism, do we really want to root for our domestic companies to fail in international markets?

`(B) compensates each employee of the taxpayer at
an hourly rate (or equivalent thereof) not less than an amount equal to
the Federal poverty level for a family of three for the calendar year
in which the taxable year begins divided by 2,080,

90% of my workers are retired.  They work for me to supplement their income, to live our in nature, and to stay busy.  They need me to pay them based on the poverty line for a family of three, why?  I will tell you right now that if I had to raise wages this much, most of my employees would quit.  Many of them force me to give them fewer hours so they can stay under the social security limits for income.  I discussed what rising minimum wages often force me to do here, but just as an illustration, a $1 an hour across the board wage increase would easily wipe out all the money I make in a year and put me into a loss position.  In which case the lowered tax rate would not do me much good anyway.

  `(C) provides either--

  `(i) a defined contribution plan which for any plan year--

`(I) requires the employer to make
nonelective contributions of at least 5 percent of compensation for
each employee who is not a highly compensated employee, or

`(II) requires the employer to make
matching contributions of 100 percent of the elective contributions of
each employee who is not a highly compensated employee to the extent
such contributions do not exceed the percentage specified by the plan
(not less than 5 percent) of the employee's compensation, or

`(ii) a defined benefit plan which for any plan
year requires the employer to make contributions on behalf of each
employee who is not a highly compensated employee in an amount which
will provide an accrued benefit under the plan for the plan year which
is not less than 5 percent of the employee's compensation, and

Uh, I am not sure why it is unpatriotic for an employee to save for themselves, but I think 401k plans are a nice benefit.  I would certainly offer one except for one tiny fact - ALL MY EMPLOYEES ARE ALREADY RETIRED!!  They are over 65.  They are drawing down on their retirement, not contributing to it.

This is at the heart of the problem with all US labor law.  Folks up in Illinois write laws with a picture of a steel mill in mind, and forget that employment and employees have infinite variations in circumstances and goals. 

So I am unpatriotic, huh.  But if forcing companies to contribute to emplee retirement plans is patriotic, why is hiring folks once they are retired to give them extra income in retirement unpatriotic?  In fact, maybe I could argue that 100% of the wages I pay go to retirement spending

`(D) provides full differential salary and
insurance benefits for all National Guard and Reserve employees who are
called for active duty, and

In other words, we of the government are not going to pay our employees (ie reservists on active duty) what they are worth and are not going to give them benefits, so to be patriotic you need to do it for us.  We in Congress are not really very patriotic and don't support the troops, so you need to do it for us.

All kidding aside, I would do this in my company if it was applicable, but I really resent being piously told to do so by several Senators who don't really model this behavior themselves.

  `(5) if such taxpayer employs less than 50 employees on average during the taxable year, either--...

blah, blah.  Basically the same stuff repeated, though slightly less onerous.

Since when did patriotism equate to "rolling over to the latest AFL-CIO wish list?"

Over at Climate Skeptic, I discuss a Cato study that finally gets at an issue I have tried to press for years:  That even if one accepts the worst of the IPCC warming scenarios (which I do not) the
cost of CO2 abatement, particularly in terms of lost economic growth, is far
higher than the cost of rising temperatures -- ESPECIALLY for the poor. 

Hurricanes are a great example.  The world is probably warming a bit due to man's CO2, but likely less than the catastrophic rates one sees in the press.  This warming may or may not increase hurricane severity.  But let's assume it does.  Let's say Asia faces an extra cyclone or two each year from global warming. 

Over time, trends in deaths from hurricanes and severe deaths have shown no correlation with storm frequency or severity.  Death rates from storms track nearly perfectly with wealth:  As wealth has increased in the US, severe storm deaths have dropped to nearly zero;  Where countries are less wealthy, they experience more death.  Bangladesh is not the site of some of the deadliest storms on record because they get hit by the worst storms, but because they are poor.  (figure source)

As a result, if we really face this tradeoff (which I doubt) the world still is better off richer with 10 hurricanes than poorer with 8.

It is always amazing how big round numbers hold the media in thrall.  Last week we saw the inevitable spate of articles about oil crossing the $100 mark, if only for a few minutes of trading  (actually, the more interesting milestone was somewhere back in the low $90 range when we exceeded the highest past price for oil in inflation-adjusted dollars).

I don't get hugely worked up about gradual commodity price changes.  Oil price increases are signals, signaling marginal consumers to use less and suppliers with historically marginal sources and substitutes to consider their development.  Also, our economic dependence on oil per dollar of GDP has declined, meaning that $100 oil has less impact on the economy than, say, it would have 20 years ago:

I would certainly prefer lower oil prices, and my business suffers to some extent when gas prices rise, but it is not a disaster  (it is interesting that higher oil prices are considered bad in the media, while lower home prices are considered bad in the media).  I know from past experience in the oil patch that oil price bubbles are often followed by oil price drops.  The high oil prices of the seventies were followed by rock-bottom oil prices in the eighties, and subsequent recession in the oil patch (causing the housing bust I discussed here). 

Also, given how we got to these higher oil prices, I tend to take them as good news.  Oil prices are not rising due to some drop off in supply.  Instead, they are rising because of a strong global economy, in particular with millions of people entering the middle class in Asia.  This is GOOD news. 

I have written on peak oil a bunch, so I won't get into it again.  Oil production at worst is going to flatten out for a long time, meaning we will have a steady rise in oil prices over time as the economy grows.  If you want a third party evaluation of peak oil theory, go ask climate catastrophists who believe that CO2 production is an impending disaster for the economy.  These guys know that there are lots of unproduced hydrocarbons out there, and it terrifies them.   Al Gore and James Hansen were running around last week trying to close off Canadian tar sands from development.

Finally, after this series of random thoughts, one more interesting take on this via Megan McArdle:  $100 oil was a stunt

Some observers questioned the validity of the price mark when it
emerged that the peak was the result of a trader "“ one of the "locals"
who trade on their own money "“ buying from a colleague just 1,000
barrels of crude, the minimum allowed, industry insiders said. The deal
on the floor of the New York Mercantile Exchange was at a hefty premium
to prevailing prices.

Insiders named the trader as Richard Arens, who runs a brokerage
called ABS. He was not available for comment. Analysts said he may have
been testing the ceiling of the crude price, but the premium he paid
surprised the market.

Before the $100-a-barrel trade, oil prices on Globex were at $99.53
a barrel. Immediately after the trade, prices went down to about
$99.40, suggesting a trading loss of $600 for Mr Arens.

Stephen Schork, a former Nymex floor trader and editor of the
oil-market Schork Report, commented: "A local trader just spent about
$600 in a trading loss to buy the right to tell his grandchildren he
was the one who did it. Probably he is framing right now the print
reflecting the trade."

Let's forget all the other issues surrounding ethanol for a moment  (we'll mention a really bad one below), and just consider one fact that is beyond dispute.  Ethanol has an energy content per gallon that is only about 65% of that of gasoline.  So, another way to put it is that it takes a bit over 1.5 gallons of ethanol to replace 1 gallon of gasoline.  There is nothing suspicious or sinister about this (ethanol is flawed for other reasons) or at all controversial. 

Therefore, when your paper prints something like this:

"The number of plants under construction is truly frightening,"
said Ralph Groschen, a senior marketing specialist with the Minnesota
Department of Agriculture who closely watches the state's ethanol
development. The country could go from 7 billion gallons of capacity
now to 12 billion gallons, or about roughly 10 percent of U.S. gasoline
capacity, in a few years, according to Groschen.

You need to understand that you and everyone else are failing at simple math.  In 2004 the US consumed just over 140 billion gallons of gasoline.  So, already, our media has failed the math test.  12 billion gallons would be 8.6%, but we will give them a pass on rounding that to "roughly 10 percent."  But this 8.6% only holds true if gasoline is replaced by ethanol 1:1.  Using the actual figures cited above, 12 billion gallons of ethanol is about 7.8billion gallons an a gasoline equivalent, which would make it  5.6% of US gasoline usage in 2004, and probably an even smaller percentage if we were to take the worlds "gasoline capacity" at face value, since surely capacity is higher than production.

I know it seems petty to pick on one paper, and probably would not be worth my time to bother if it was just this one article.  But this mistake is made by every MSM article I have ever seen on ethanol.  I can't remember any writer or editor ever getting it right.

By the way, if you want more on what is wrong with ethanol, check my past posts. 

Finally, the other day I pointed out how much of our food crop is getting diverted to fueling our cars, with negligible effect on CO2 or oil imports.  If you really want to be worried about ethanol, note this:

Biofuels need land, which means traditional food crops are being
elbowed off of the field for fuel crops. Biofuel production is
literally taking the food out of people's mouths and putting into our
gas tanks. Already, increased food costs sparked by increased demand
are leaving populations hungry. The price of wheat has stretched to a
10-year high, while the price of maize has doubled.

Need more
land? Clear cut some forest. Is there a word beyond irony to describe a
plan to mitigate climate change that relies on cutting down the very
trees that naturally remove carbon from the atmosphere? Stupidity,
perhaps? The logic is like harvesting a sick patient's lungs to save
her heart. Huge tracks of Amazon
rainforest are being raised to the biofuels alter like a sacrificial
lamb, and the UN suggests that 98 percent of Indonesia's rainforest
will disappear by 2022, where heavy biofuel production is underway.

Still
need land? Just take it. The human rights group Madre, which is backing
the five-year moratorium, says agrofuel plantations in Brazil and
Southeast Asia are displacing indigenous people. In an editorial
published on CommonDreams last week, Madre Communication Director Yifat
Susskind wrote, "People are being forced to give up their land, way of
life, and food self-sufficiency to grow fuel crops for export."