Coyote Blog

From Jane Galt:

All this useless activity is so that our politicians can look like They
Care by giving tiny tax breaks to all of their favorite people--that is
to say, the people who vote for them and give them money. All of these
tax breaks, almost without exception, do the most good for the people
who least need them. Meanwhile, they waste time for the rest of us,
distort the economy, and require us to pay extra people to process tax
returns. It's lose-lose-lose all around unless you owned a seal-fur
farm between 1987 and 1991.

She also outlines her alternative tax plan.

From the Beatles (yes, those guys)   (Beatles, Robin Hood, and of course they perform the song)

From yours truly, the five worst traits about taxes

I couldn't have expressed my frustration with the economic illiteracy of the press and the general population better than does TJIC:

Jane Galt has a series of posts
explaining why a competitive free health care market creates new drugs,
and why strict regulation and/or nationalization wouldn't improve
things.

Mostly, this series just makes me sad and tired, the same way
I'd be sad and tired if I saw smart verbal well educated people
spending their time explaining that, no, Jews don't have horns, and
it's a bad idea to drown your neighbors to see if they are witches.

The sheer wasted effort combating idiocy and ignorance, when
these talented people could be doing so much more, if not for the
resting levels of stupidity and ignorance cloaked with self-righteous
anger that permeate the population.

The only proviso I would add is that for those of our political class, I suspect the ignorance may be more willful than actual, since a clear understanding of economics in the general populace might stand in the way of gaining personal power.  I expressed related sentiments here:

Economics is a science.  Willful ignorance or emotional
rejection of the well-known precepts of this science is at least as bad
as a fundamentalist Christian's willful ignorance of evolution science
(for which the Left so often criticizes their opposition).  In
fact, economic ignorance is much worse, since most people can come to
perfectly valid conclusions about most public policy issues with a
flawed knowledge of the origin of the species but no one can with a
flawed understanding of economics.

Jane Galt takes on some of the more common anti-immigration talking points.  Just for example:

5. There were ethnic newspapers, but nothing like today's ethnic media.

This is just ridiculous. Immigrants in 1900 could get all the
entertainment that was then available in their own language; for
example, by 1918, New York City boasted 20 Yiddish theaters.
The idea that Latin American immigrants are somehow uniquely unable to
assimilate because they can now watch soap operas and the Venezuelan
version of Eurovision in their very own language seems to me
self-evidently absurd; an immigrant at home watching television in
Spanish is immersed in her own culture no more thoroughly than was the
typical resident of an ethnic neighbourhood who shopped, worked, went
to services, and partied entirely with their compatriots.

I am working on some research right now -- immigration opponents are claiming that "yes, immigration may have been OK in the past, but its different now."  I am in the process of putting together anti-immigration quotes from the late 19th and early 20th century that cover all of the same ground -- they're lazy, they breed too fast, they have disease, they don't integrate, they have divided loyalties -- but aimed at Irish and Italians.

Via Jane Galt:

The environmental movement has so far utterly failed to develop a
coherent approach to replacing carbon producing power sources. Wind and
solar are not such a coherent response without a massive breakthrough
in battery technology, because variable sources are inadequate to
provide base-load power. Also, they too have negative externalities:
wind kills birds and destroys views, and many solar panels are loaded
with gallium arsenide, a highly toxic substance that is apparently
rather tricky to dispose of.

All this wouldn't be so bothersome if the environmental movement
merely failed to provide realistic alternatives, but in fact, many
environmentalists actively move to block new wind installations (I'm
looking at you, Robert jr.) and nuclear power plants, spread hysteria
over nuclear waste, and otherwise actively work against the cause they
are trying to advance. As such, it is perfectly legitimate to demand
why they are blocking the only things that have any realistic chance of
replacing carbon-emitting power plants.

The answer, in my opinion, is that too many environmentalists flunk
basic and economic knowlege, which is why so many people believe it is
practical to replace a coal-fired turbine that pumps out 1,000
megawatts with a solar installation that will, in peak sun conditions,
produce about 1 kilowatt per 150 feet of space, twelve hours a day; or
wind farms, which average less than 1 megawatt per turbine in prime
spots. In addition, the core of the environmental movement are people
with a whole host of linked views about things like capitalism,
consumer culture, and so forth; they find solutions that support,
rather than changing, the existing system much less emotionally
interesting than radical conservation strategies. Unfortunately, the
latter are a thoroughgoing political failure, but the environmental
movement has strenuously resisted adjusting to this reality. (Some
leaders have, God bless them). As long as this attitude persists, the
environmental movement is blocking change that could and should happen;
it is perfectly legitimate, nay necessary, to tax them on this.

She only sortof answers her own question at the end.  The real answer is that many who currently lead the environmental movement don't want a technological fix that sustains economic growth without CO2 emissions.  The whole point of latching onto, and exaggerating, the theory of anthropomorphic global warming is to find a big new club to bash capitalism and wealth.  Just watch this segment of Penn & Teller's Bullshit! where film of environmental movements is shown.  All the rhetoric is not anti-polluter, it's anti-corprorate and anti-capitalism.  Many leading environmentalists want nothing less than to shut down the global economy, and if that means taking down every poor person in the world just to get at Exxon and General Motors, they are willing to do so.

Jane Galt makes a case against industrial animal husbandry, a position which she argues is not inconsistent with being a libertarian or classical liberal.  While I don't get as worked up about such practices as cruel, I don't think it is inconsistent for a libertarian to be so concerned.  And I don't rule out that I would be just as worked up if I were more informed about what was going on.

However, what really caught me eye was this:

This is an approximate description of what happens to industrially
farmed chickens . . . lifted, mind you, from a business school case
aimed at helping industrial farms be more efficient, by using rose
coloured chicken contact lenses to cut down on the need for debeaking
'em.

I can attest that this was indeed a real case that we studied at Harvard Business School*.  In fact, it so freaked me out at the time as a concept that I included it in my most recent novel.  From BMOC [warning, profanity lurks ahead]:

Poor, boring, earnest Julian
was always prepared, because he was always terrified, scared to death
that one night slacking off might somehow destroy his future Career
(always with a capital-C), and therefore future Life, much like the
fear of catching AIDS from a one night stand.  Julian participated
(unfortunately) all too much in class, droning on in that irritating
voice of his, advocating positions as spectacularly expected as
Susan's were non-conformist.

Julian,
therefore, was not really a candidate to get cold-called to open the
class discussion, particularly this late in the year.  However, it
was clear to everyone in the room, particularly the professor, that
Julian longed to open a case.  Every day Julian would look at
the professor with this hopelessly wistful expression, only to be
followed by a look of desolation when someone else was chosen.

So
today, letting Julian open was in the same spirit as the homecoming
queen giving a pity-fuck on the last day of high school to the geek
who has been mooning and sighing over her for four years.  And right
at this
moment, Julian had the same surprised and ecstatic look on his face
that the geek would have.

But it was not just the site of
Julian creaming all over himself at his chance to open that had Susan
longing for the piranha button.  Some satanic twist of fate had
Julian Rogers earnestly and painstakingly laying out a strategy and
plan for the new product roll out of ... contact lenses for chickens.
Contact fucking lenses for Christ-sake chickens.  Right this very
second he was outlining his sales pitch to chicken farmers,
explaining how putting contacts in chicken's eyes will somehow
reduce the number of chickens that have to have their beak cut off.
Did she hear that right?  This had to be a joke "“ but no,
everyone seemed to be taking it seriously, and certainly Julian was
taking it deadly seriously.

* I know those anti-capitalists out there will be using this as evidence that business school is crafted to keep us cold and heartless.  HBS consisted of studying 2-3 cases per day for about 200 days a year, which means that over two years one might read a thousand business cases.  This case was more in the spirit of breaking the monotony of yet another case on brass vs. plastic water meters rather than part of a consistent attempt to make us cold and heartless.

I'll say it:  Jane Galt is a genius.

I have addressed abortion and the court more seriously here and here, among other places.  Basically my premise has been that I accept a privacy right, and accept a woman's control of her body, but wonder why the Left (which coined these terms and defends them as moral high ground) doesn't believe that this privacy and decision-making control extend to other areas like breast implants, using Vioxx, seat belt use, helmets, use of tanning booths, smoking, fatty food consumption, make wage agreements, pricing products and services, etc. 

But, I must admit, I am having SCOTUS nomination process fatigue, and, as such, Jane Galt aka Megan Mcardle found this wonderful post from Glen Wishard that sums up my current thinking on abortion vis a vis the Supreme Court perfectly:

Make no mistake, then - the Supreme Court is no longer the Supreme
Court of past fame. It is now the National Abortion Tribunal, and its
members are no longer jurists, they are the Keepers of the Abortion
Toggle Switch.

-----0-->0-----

Fig. 1A. Abortion Toggle Switch, closed.
Suction motors will engage.

As we can see from the schematic diagram above, the Abortion Toggle
Switch is currently in the closed (ON) position. The entire purpose of
the so-called Supreme Court, as current wisdom understands that
purpose, is to stare at this switch all day wondering whether they
should play with it or not.

Now this is a sad state for this once-great court to have fallen to,
and makes me wonder if we don't need another court to assume the
neglected responsibilities of the current one. Then the Abortion Toggle
Switch could be moved to some remote corner of the public's attention,
and the various abortion partisans could play their endless game of
Keep Away without buggering up the entire constitutional process.

ROFL

Katrina comes at a very bad time for US gasoline markets.  Supplies are already tight, and now a substantial amount of US oil production and refining capacity are shut in, for an unknown period of time.  Long ago, I worked as an engineer in a refinery and it can take days to get everything restarted from a cold start.  The result will almost certainly be near-term gas shortages.

There are two ways this can play out:  1)  a short term spike in prices, as much as a dollar or more a gallon or 2) long and irritating gas lines.  Lets hope that prices are allowed to reach their level and gas lines can be avoided, but who knows what political stupidities (ala Hawaii) will be proposed. 

I really, really hate gas lines.  I hate the uncertainty of whether or not I can find a station open.  I hate refilling my tank every day to make sure I am not caught short.  And for those of you who say I am arrogant since I can afford higher prices but the poor cannot, I assure you that folks who are paid by the hour are hurt much worse waiting around for hours in gas lines than the mere irritation I encounter.  More on gas line expectations as a semi-self-fulfilling prophecy here.

PS-  Expect to see news of a refinery fire or explosion over the next week.  The risk of accidents is very high when these complex plants have to start up -- they weren't really meant to be turned on and off.

Update:  First signs of a gas shortage?
Update #2:  The Mises Blog has a roundup of economics posts supporting price spikes during spot shortages (popularly known as gouging).
Update #3:  Jane Galt has more in praise of price gouging

Katrina News at Technorati

Well, our most socialist state is attempting to repeal the laws of supply and demand:

Hawaii issued a list of wholesale price caps for gasoline, the
state Public Utilities Commission said, amid this month's
record-breaking run up in retail gas that saw island residents paying
some of the highest prices in the nation.

This marks the first state cap on gasoline prices since the 1970s
energy crisis, when the average inflation-adjusted price of a gallon of
regular unleaded hit $3.

Hawaii's recently enacted gas cap law goes into effect on September 1, with the pre-tax wholesale cap in Honolulu set at $2.1578

Gee, I bet this will work out really well.  Either the price cap will be set high, such that it is meaningless, or it will be set low, such that Hawaii will likely get this:

update:  given the structure of the price caps, the result could actually be higher rather than lower prices at the pump -- see update #2 below.

It's good to know that Hawaii is looking to China for economics ideas.

The Chinese government and its state-owned oil companies are locked
in battle over artificially low gasoline prices at the pump that has
caused a massive shortage in the southern manufacturing province of
Guangdong....

The crisis
highlights the persistent problems Beijing faces as the economy is
transformed to a more market-based system but that is often retarded by
authorities who fear loosing political control in the face of
full-fledged capitalist rules.

Beyond the obvious run-up in world-wide oil prices and Hawaii's logistical isolation that raises all of the prices on the island, the article on CNN identified one other possible culprit for high prices: the state government

Higher-than-average taxes on gasoline in Hawaii contribute to those
high prices. The state levies a 16 cent per gallon tax, and various
local authorities add on other taxes.

In Honolulu, for example, total state, federal and local gas taxes
amount to about 53 cents per gallon, one of the highest rates in the
United States. The national average, according to the American
Petroleum Institute, is about 42 cents per gallon

It seems like only a few days ago I was pointing how governments have a hard time resisting meddling in oil markets, and that this meddling never works out well.

Even in the US, which is typically more comfortable with the operation
of the laws of supply and demand than other nations, the government has
been loathe to actually allow these laws to operate on oil.  During the
70's, the government maintained price controls that limited demand side
incentives to conserve, thus creating gas lines like the ones we are
seeing in China today for the same reason.  When these controls were
finally removed, a "windfall profits tax" was put in place to make sure
that producers would get none of the benefit of the price increases,
and therefore would have no financial incentive to seek out new oil
supplies or substitutes.  Within a few years of the repeal of these
dumb laws, oil prices fell back to historical levels and stayed there
for 20 years.

Like the gas rationing and price controls in the 1970's, this occurs in a Republican administration (Hawaiian Governor Lingle).  It continue to be difficult to take the Republican Party's professed support for free markets seriously.

Hawaii's Star Bulletin reported that Governor Linda
Lingle (R) is an opponent of the caps. The newspaper said Lingle
believes it would be better to force oil companies to open their books
and show consumers how much money they make at each stage of business.

If she is so opposed to it, why didn't she veto the bill?  And is having government officials marching into private offices to confiscate accounting data really her preferred "free market" alternative?

Update:  Apparently the cap in Hawaii was passed pre-Lingle, and she fought to reverse it, so I will cut her some slack. Lynne Kiesling has more details on the plan, which includes how the cap will be calculated week to week.  Politicians there are calling it a "market-based price cap".  LOL.  Next we will see freedom-based speech limitations and privacy-based telephone taps.  Note that how the cap is calculated does not change the statement I made before:  Either the price cap will be set high, such that it is meaningless, or
it will be set low, such that Hawaii gets gas lines.

PS- Lynn is the economic goddess of energy markets, so if energy and power markets and regulation interest you, I recommend her blog.

Update #2:  Jane Galt makes the good point that the Hawaiian price caps are on wholesale gasoline prices, so while there may be gas shortages at the wholesale level, retail prices may be able to float higher to close the supply gap.  This would ironically lead to higher, not lower prices at the pump, and large profits for gasoline retailers.  Since wholesale sources of gas tend to be out-of-state corporations, and gasoline retailers tend to be smaller, locally owned businesses, I wonder if this is a case of rent-seeking by gas station owners.

I am a little late linking this, but the world is in the midst of one of those pure, tightly controlled experiments to demonstrate the true price of socialism.  And, as usual, no one will learn from it.  Via Jane Galt:

It is depressing to look back at history and see how regularly the same
nice-sounding idea--"let's take the land from the rich people who unjustly own
it and give it to those who need it"--turns into tragedy for everyone. It's even
more depressing to realise that despite the seeming predictibility of the
result, lots of people want to do it anyway.

The Atlantic, which she quote in a follow up post, has more detail:

Mugabe decided on what he called "fast-track land reform" only in February of
2000, after he got shocking results in a constitutional referendum: though he
controlled the media, the schools, the police, and the army, voters rejected a
constitution he put forth to increase his power even further. A new movement was
afoot in Zimbabwe: the Movement for Democratic Change"”a coalition of civic
groups, labor unions, constitutional reformers, and heretofore marginal
opposition parties. Mugabe blamed the whites and their farm workers (who,
although they together made up only 15 percent of the electorate, were enough to
tip the scales) for the growth of the MDC"”and for his humiliating rebuff.

So he played the race card and the land card. "If white settlers just took
the land from us without paying for it," the President declared, "we can, in a
similar way, just take it from them without paying for it." In 1896 Africans had
suffered huge casualties in an eighteen-month rebellion against British pioneers
known as the chimurenga, or "liberation war." The war that brought Zimbabwean
blacks self-rule was known as the second chimurenga. In the immediate aftermath
of his referendum defeat Mugabe announced a third chimurenga, invoking a valiant
history to animate a violent, country-wide land grab...

The drop-off in agricultural production is staggering. Maize farming, which
yielded more than 1.5 million tons annually before 2000, is this year expected
to generate just 500,000 tons. Wheat production, which stood at 309,000 tons in
2000, will hover at 27,000 tons this year. Tobacco production, too, which at
265,000 tons accounted for nearly a third of the total foreign-currency earnings
in 2000, has tumbled, to about 66,000 tons in 2003.

Mugabe's belief that he can strengthen his flagging popularity by destroying
a resented but economically vital minority group is one that dictators elsewhere
have shared. Paranoid about their diminishing support, Stalin wiped out the
wealthy kulak farming class, Idi Amin purged Uganda's Indian commercial class,
and, of course, Hitler went after Jewish businesses even though Germany was
already reeling from the Depression. Whatever spikes in popularity these moves
generated, the economic damage was profound, and the dictators had to exert
great effort to mask it.

Overall, the country has gone from a net exporter of food to outright famine.  For this particular experiment, I am happy to live in the control group.  Stay tuned, as this show is likely to hit the road soon and move to Venezuela. 

One of the less remarked on casualties of 9/11 and the war on terror is any progress on a number of issues that GWB looked like he might tackle (e.g. social security and tort reform).    While the war is far from over, and I have had mixed feelings about some part of it (e.g. here), the infrastructure seems to be in place to fight the war while also tackling some new domestic issues.

Jane Galt, over at Asymmetrical Information, has a nice post about new momentum in the Bush administration to tackle social security.  It is unlikely that Bush could draw any more hatred than he already has, so he might be the right person to finally grab the third rail.

UPDATE #1

Marginal Revolution tackles social security and links to other good sources.