Coyote Blog

I realize I did not comment on the Joe Romm oil price bet per se.  Here are two reasons I don't like the bet:

1.  Romm is making a catastrophic forecast (ie oil >$200) but wins his bet at $41, what one might consider a fairly normal current oil price.  This is very equivalent to Romm forecasting a 15F increase in world temperatures in the next century (which he has) but making a bet that he would win if temperatures go up by only 0.1F.  Clearly, a 0.1F increase over the next century would be considered by all a thorough repudiation of catastrophic anthropogenic global warming forecasts.  So why should he win the bet at this level?

2.  The bet, particularly in the next few years, has more to do with the current government's actions than Exxon's or Saudi Arabia's.  To bet that oil prices will stay low in nominal dollars, one must bet that Obama's deficits won't destroy the value of the dollar, that the Fed's expansionist monetary policy won't lead to inflation, that Congress won't pass some kind of legislative restrictions making oil production more expensive, and that the world won't sign a treaty to restrict carbon.  In short, Congress will have more effect in the near term on oil prices than flow rates in Saudi fields, and I am certainly not going to make a bet in favor of Congressional or Presidential restraint.

Postscript: Here is what you have to believe to accept Romm's 15F global warming forecast.   Here is how I opened that post.  It is interesting how similar the forecasting issues are:

For several years, there was an absolute spate of lawsuits charging sudden acceleration of a motor vehicle "” you probably saw such a story:  Some person claims they hardly touched the accelerator and the car leaped ahead at enormous speed and crashed into the house or the dog or telephone pole or whatever.  Many folks have been skeptical that cars were really subject to such positive feedback effects where small taps on the accelerator led to enormous speeds, particularly when almost all the plaintiffs in these cases turned out to be over 70 years old.  It seemed that a rational society might consider other causes than unexplained positive feedback, but there was too much money on the line to do so.

Many of you know that I consider questions around positive feedback in the climate system to be the key issue in global warming, the one that separates a nuisance from a catastrophe.  Is the Earth's climate similar to most other complex, long-term stable natural systems in that it is dominated by negative feedback effects that tend to damp perturbations?  Or is the Earth's climate an exception to most other physical processes, is it in fact dominated by positive feedback effects that, like the sudden acceleration in grandma's car, apparently rockets the car forward into the house with only the lightest tap of the accelerator?

Joe Romm of Climate Progress is a leading climate alarmist, telling the world that burning fossil fuels will increase CO2 concentrations by 0.04% of the atmosphere over the next century and thus destroy mankind.  As such, he is a supporter of the current cap-and-trade bill in Congress, whose purpose is to raise the price of fossil fuels (either directly as a tax or by restricting their supply) so that less will be used.

On a different but related topic, Joe Romm is also apparently a peak oil alarmist.  As I have written, I suspect real oil prices will rise steadily over the coming decades, but we aren't going to fall off some cliff and see a sudden hyperinflation of oil prices (temporary spikes are a different story).  He writes

The IEA's work makes clear that for oil to stay significantly below $200 a barrel (and U.S. gasoline to be significantly below $5 a gallon) by 2020 would take a miracle

I tend to doubt it, in part because I have seen so many very similar predictions ever since the mid-1970s, but I suppose some day someone will be right with one of these.   I wonder if there is some kind of psychological profile that causes people to see positive feedback-driven accelerating curves everywhere.

But here is my confusion -- he is absolutely convinced that oil is going up by $140 a barrel or more.  Let's look at this in the context of Co2.  The CBO estimates the clearing price for a ton of Co2 emissions under the current bill will be between $20-$30 a ton.  Since a barrel of oil creates about a third of a ton of CO2 emissions, this implies the cap and trade bill might increase the price of oil by $7-$10 per barrel.  But if Romm think oil is going up by natural market forces by $140+, why even bother?  Why not just put a tax on coal and be done with it?

I congratulate Mr. Romm, however.  If he is so sure of 2020 oil prices, there are all kinds of fabulous ways to become ridiculously wealthy with this knowledge.

Postscript:  There are two reasons why people have been making this same forecast for 30 years and have been wrong most of the time.

First, there is a very human tendency to assume current conditions and trends will go on forever.  Everyone is subject to this bias, even the smartest analysts.  Romm might argue that these are savvy, detail-oriented commodities analyst, but I only have to point to the recent behavior of savvy detail-oriented debt security analysts.

Second, analysts tend to apply current understandings of what technologies and substitutes are economic at $60 oil to a world where oil is priced at $160.  It just doesn't work that way.   The market for petroleum and its substitutes is enormously multi-variate and complex.  A $100 bump in prices will do things that are sometimes hard to predict in detail to the markets for exploration, new technologies, substitutes, conservation, etc.  But in all this complexity, the one thing we do know is that time and again, such changes have occurred quickly and decisively in response to rising oil prices, and have acted to mitigate and reverse price increases.

One ironic way of looking at it, since this is Joe Romm, is to say that there are negative feedbacks that cut in to slow and even reverse sharp rises in oil prices.  Romm seems to reject these negative feedbacks, in favor of a price model that rapidly accelerates.  This is all ironic, since this issue of negative vs. positive feedback is what separates climate alarmists like Romm from many climate skeptics like myself.

More evidence the British police forces seem to be losing their minds at least as fast as American police:

To teach motorists who leave their cars unlocked a lesson, police in Richmond upon Thames, a borough of London, have begun taking their stuff. The victims beneficiaries of these thefts educational efforts return to their cars and find that expensive items such as cameras, laptops, and leather jackets have been replaced by notes instructing them to retrieve their valuables at the police station. Not to worry, though: "If items are needed urgently," the London Times reports, "police will return the goods immediately." Which suggests that if you can't show an urgent need for, say, your computer, they'll take their own sweet time. The justification offered by Superintendent Jim Davis: "People would be far more upset if their property really was stolen."

Woe be to people who actually trust that the police are doing their job reducing crime and fail to secure all of their belongings from petty theft.   One hopes that the police of Richmond on Thames never start to percieve a problem with rapes in their fair city.

I thought this was an interesting image.  Hurricanes tend to extract energy from warm sea water and transport it into the atmosphere.  The image below, via Watts Up With That, shows the cooler "wake" left by Hurricane Bill as it passed north along the Atlantic coastline.

I agree with TJIC:

If we can't trust the government to enforce the speed limit or issue liquor licenses fairly, how can we trust it to kill citizens fairly ?

It strikes me as odd that law-and-order conservatives can distrust every single department of the government except the guys who carry guns.  The post office and the police are run by the same organization.

More extensive thoughts on the death penalty here and here.

I love Google Reader, but over the last several days have had problems with hundreds, or even thousands of old, already read posts suddenly being marked "unread."  Anyone else having this problem?

Today's issue in Arizona:  Should our public utility be required to provide line extensions to new homes "for free" (meaning paid for by existing rate payers) or should homebuilders, developers, and home buyers have to pay the real marginal cost of their utility infrastructure.

It is another of those subsidy issues where "visible" jobs (ie jobs in new home construction) are held out as justification, while "invisible job losses (ie from higher electricity rates to existing customers) are not even mentioned.

One of the biggest sticking points in the case is whether it is fairer to charge new developments the cost of new lines or simply charge the existing 1.1 million APS customers higher monthly rates to fund free lines.

Proponents of free lines said it would only cost customers 80 cents a month for APS to reinstate free lines, but APS officials said that if growth picks up as the economy recovers, customers could be charged an average of $45 a year to fund free lines.

Why is this even a point of discussion?  A small group of people are attempting to make the majority buy them some goodies. The argument, as always, is that when the price of these goodies is spread across lots of people, its not really very much per person.  It is almost as if the rest of us are being made to feel churlish for not agreeing to fund their next housing development.

I am far, far, far from being an anti-growth guy.  But I agree with the anti-growth guys in one respect - it is perfectly reasonable for new developments to pay for the full incremental infrastructure cost of their development.

Over 700 employees of San Francisco's BART transit agency make over $100,000 just in cash wages.  This does not include lucrative benefits that probably add $30,000 or more to total compensation for most employees.  (SF Chron, via Thin Green Line)

I haven't written about Peak Oil lately, but there is a pretty good editorial on the topic in the NY Times today.  Michael Lynch makes a technical point I have been making for years:

Let's take the rate-of-discovery argument first: it is a statement that reflects ignorance of industry terminology. When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time. But as years pass, the estimate is almost always revised upward, either because more pockets of oil are found in the field or because new technology makes it possible to extract oil that was previously unreachable. Yet because petroleum geologists don't report that additional recoverable oil as "newly discovered," the peak oil advocates tend to ignore it. In truth, the combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years.

But Lynch's editorial misses two issues I think are important.

First, nothing ever flat runs out.  If supply declines over time while demand continues to rise, prices increase.  The increased prices cause some buyers to conserve or to find substitutes.  On the supply side, higher prices make recovery of incrementally more difficult oil economic, and provides a higher price umbrella under which substitutes can compete.  This is particularly true in oil, where there is never a fixed limit to the amount of oil recoverable -- estimates are always based on price expectations.  Higher prices mean more investment can be justified, generally allowing more oil recovery.

Second, I think Lynch is misguided in some of his discussion of political risk.  While I am not hugely worried about an OPEC-like embargo in the future, the fact is that more and more of the world's future oil supplies are controlled by public rather than private oil companies.  For countries like Mexico, the state-run oil company is the post office, comparable both in terms of its management competance (or lack thereof) and its focus on non-economic missions (like providing jobs for key political supporters).  Ronald Bailey wrote a while back:

The problem arises because 77 percent of the world's known oil reserves are in the hands of state-owned oil companies. Such "companies" do not respond with alacrity to market signals and so are under-investing in new production technologies and even in maintaining the production facilities that they currently have. I have earlier pointed out that an "oil crisis," that is, a steep rapid run up in the price of oil may occur at any time due to government incompetence or maliciousness.

I wrote about Mexico in particular:

Kevin Drum is concerned that projected drops in Mexican oil production are a leading indicator that the "Peak Oil" theory is coming true.  I would argue that, in fact, it is a trailing indicator of what happens when you let governments run producing assets.  Drum says:

The issue here isn't that Cantarell is declining. That began a couple
of years ago and had been widely anticipated. What's news is that, just
as many peak oil theorists have been warning, when big fields start to
decline they decline faster than anyone expects. So far, Cantarell
appears to be evidence that they're right.

Actually, fields in the US do not tend to decline "all of a sudden" like that.  Why?  Because unlike about any other place in the world, oil fields in the US are owned by private companies with capital to make long-term investments that are not subject to the vagaries of political opportunism and populism.  There are a lot of things you can do to an aging oil field, particularly with $60 prices to justify the effort, to increase or maintain production.  In accordance with the laws of diminishing returns, all of them require increasing amounts of capital and intelligent management.

Unfortunately, state owned oil companies like Pemex (whose assets, by the way, were stolen years ago from US owners) are run terribly, like every other state-owned company in the world.  And, when politicians in Mexico are faced with a choice between making capital available for long-term investment in the fields or dropping it into yet another silly government program or transfer payment scheme, they do the latter.  And when politicians have a choice between running an employment meritocracy or creating a huge bureaucracy of jobs for life for their cronies they choose the latter.

Ditto in Venezuela.

No one sees an immediate crisis at Petróleos de Venezuela. But its windfall from high oil prices masks the devilish complexity and rising costs of producing heavy oil. Meanwhile, the company acknowledged last month that spending on "social development" almost doubled in 2006, to $13.3 billion, while its spending on exploration badly trailed its global peers. And Petróleos de Venezuela's work force has ballooned to 89,450, up 29 percent since 2001 even as production declined"¦ Petróleos de Venezuela's cash is said to be running short as Mr. Chávez uses its revenue to cement political alliances with Bolivia, Cuba and Nicaragua.  The company has borrowed more than $11 billion since the start of the year, a rapid debt buildup that reflects a wager by Mr. Chávez that oil prices will remain high indefinitely.

The oil industry in these countries follow the following cycle:

1.  US companies invest huge amounts of capital and know-how to build oil industry
2.  Once things are producing, local government steals it all
3.  Oil fields go into extended decline due to short-term focused and incompetent government management
4.  US companies invited back int to invest huge amounts of know-how and capital
5. repeat

The AZ Republic is at it again, cheer-leading any program that spends more taxpayer money, even to the extent of blatant editorializing in a news article.  From an article on cash for clunkers (emphasis added):

The program leveraged $3 billion in clunker rebates into $20 billion-plus in new-car sales. That far exceeded the initial goals for what is arguably the most successful of the government's recent economic-stimulus programs.

Here are the sum total of the sources quoted to reach this conclusion:

• Scott Gruwell, general-sales manager of Courtesy Chevrolet in Phoenix
• U.S. Transportation Secretary Ray LaHood
• Bobbi Sparrow, president of the Arizona Automobile Dealers Association
• Arizona MVD spokesman

So lets see -- the article quoted three groups that receive money from the program plus the administrator of the program.  Can't get more balanced than that.  I am not really good with the pithy 200-word letter to the editor, but I sent this in today:

Max Jarman and Betty Beard wrote that the cash for clunkers program "is arguably the most successful of the government's recent economic-stimulus programs."  Admittedly this is a low bar, but what evidence do they have of "success?"

Car buyers, they argue, really like the program.  Edmunds.com estimates that the government has been paying $3500 to $4500 for vehicles that have a blue book value averaging just under $1500 each.  Of course participants are happy "“ the government is effectively buying dollar bills for three dollars each!  But is this really a reasonable way to spend taxpayer money?

Car dealers also seem to be ecstatic about the program.  I would be too if the government gave my customers $3 billion of other people's money to buy products from my business.  But why are auto dealers more worthy of such largess than appliance dealers, or home builders, or even massage therapists?

Not mentioned in the article are the other 99% of car owners and business that did not participate in the program.  Unseen and unspoken for are the businesses and individuals who are $3 billion poorer because the government has chosen to divert this money to a more politically-favored industry.

Sometimes, greens and organic-proponents act as if the only point of chemicals is to ... uh... I don't know what they think.  They act as if the chemicals are added simply as an evil conspiracy by corporate America to both make the product less efficacious and simultaneously more expensive and complex to make.  Somehow this behavior is all driven by the profit motive, though the logic sort of escapes me.

Well, at least one green seems to be starting on a voyage of discovery:

Good news and bad news at the dentist this morning. The good news is, my teeth are fine. The bad news is, the dentist told me I should give up Tom's of Maine and Nature's Gate in favor of Crest and Colgate.

I pressed him on it because I know sometimes people have knee-jerk reactions about green products, and he insisted that he's only come to the conclusion after observing many people's teeth. In fact, he went so far as to say that I'd be better off brushing my teeth with just water. He said the big C's of dental care have "lots of artificial ingredients in them that are great for your teeth."

Really?   I am sure that if we get Obamacare the government will be willing to provide him some Tom's of Maine all natural homeopathic cancer remedy should he ever contract that dreaded disease.  What?  Don't tell me homeopathic remedies with one molecule of active ingredient in a glass of water don't work either.

As I don't really have a horse in the two party Coke-Pepsi horse race, I don't usually get into the endless discussion of political tactics one can find in the media or on various political blogs.

But I must say that I am scratching my head over ardent Democrat Kevin Drum posting this chart on his blog:

Does he really think this will embarrass Republicans?  Heck, Republicans  may soon be running this as a TV ad.

Two large drivers of high health insurance costs in certain states is 1) bans on interstate competition for health insurance and 2) state-by-state mandates for minimum coverage.  These two government actions lead to some states having remarkably higher health insurance prices than others.  Via Carpe Diem:

The average health insurance ranges from a low of $1,254 in Wisconsin to a high of $8,537 in Massachusetts, and the national average is $2,613. That kind of variation couldn't exist in a competitive market for health insurance. Interstate competition for health insurance would go a long way towards bringing health insurance costs down.

That Massachusetts model sure is doing wonders, huh?  If reimportation of drugs from Canada makes sense, why not of policies across state lines? See where your state ranks here.

Climate activist Adam Sacks at Grist:

We must leave behind 10,000 years of civilization; this may be the hardest collective task we've ever faced.  It has given us the intoxicating power to create planetary changes in 200 years that under natural cycles require hundreds of thousands or millions of years"”but none of the wisdom necessary to keep this Pandora's Box tightly shut.  We have to discover and re-discover other ways of living on earth.

We love our cars, our electricity, our iPods, our theme parks, our bananas, our Nikes, and our nukes, but we behave as if we understand nothing of the land and water and air that gives us life.  It is past time to think and act differently.

If we live at all, we will have to figure out how to live locally and sustainably.  Living locally means we are able get everything we need within walking (or animal riding) distance. We may eventually figure out sustainable ways of moving beyond those small circles to bring things home, but our track record isn't good and we'd better think it through very carefully.

Likewise, any technology has to be locally based, using local resources and accessible tools, renewable and non-toxic.  We have much re-thinking to do, and re-learning from our hunter-gatherer forebears who managed to survive for a couple of hundred thousand years in ways that we with our civilized blinders we can barely imagine or understand.

Yep, let's all return to that sustainable world of 8000BC, scrap the worldwide division of labor and all our technology, and go back to subsistance farming and travelling by horse.  Gee, what a happy time that was...

Interestingly, this guy is making an incredibly common failure among physical scientists -- the attempt to apply conservation of mass/energy physical models or bacteriological growth models to economic growth:

Endless growth is an impossibility in the physical world, always"”but always"”ending in overshot and collapse.  Collapse: with a bang or a whimper, most likely both.  We are already witnessing it, whether we choose to acknowledge it or not.Because of this civilization's obsession with growth, its demise is 100 percent predictable.  We simply cannot go on living this way. Our version of life on earth has come to an end.

Here is what I wrote, in a post titled "Physics, Wealth Creation, and Zero Sum Economics"

My guess is that this zero-sum thinking comes from our training and intuition about the physical world.  As we all learned back in high school, nature generally works in zero sums.  For example, in any bounded environment, no matter what goes on inside (short of nuclear fission) mass and energy are both conserved, as outlined by the first law of thermodynamics.  Energy may change form, like the potential energy from chemical bonds in gasoline being converted to heat and work via combustion, but its all still there somewhere.

In fact, given the second law of thermodynamics, the only change that will occur is that elements will end in a more disorganized, less useful form than when they started.  This notion of entropic decay also has a strong effect on economic thinking, as you will hear many of the same zero sum economics folks using the language of decay on human society.  Take folks like Paul Ehrlich (please).  All of there work is about decay:  Pollution getting worse, raw materials getting scarce, prices going up, economies crashing.  They see human society driven by entropic decline....

[But] the world, as a whole and in most of its individual parts, is wealthier than in was in 1900.  Vastly more wealthy.  Which I recognize can be disturbing to our intuition honed on the physical world.  I mean, where did the wealth come from?  Out of thin air?  How can that be?

Interestingly, in the 19th century, scientists faced a similar problem in the physical world in dating the age of the Earth.  There was evidence all around them (from fossils, rocks, etc) that the earth had to be hundreds of millions, perhaps billions of years old.  The processes of evolution Darwin described had to occur over untold millions of years.  Yet no one could accept an age over a few million for the solar system, because they couldn't figure out what could fuel the Sun for longer than that.  Every calculation they made showed that by any form of combustion they understood, the sun would burn out in, at most, a few tens of millions of years.  If the sun and earth was so old, where was all that energy coming from?  Out of thin air?

It was Einstein that solved the problem.  E=mc2 meant that there were new processes (e.g. fusion) where very tiny amounts of mass were converted to unreasonably large amounts of energy.  Amounts of energy so large that it tends to defy human intuition.  Here was an enormous, really huge source of potential energy that no one before even suspected.

Which gets me back to wealth.  To balance the wealth equation, there must be a huge reservoir out there of potential energy, or I guess you would call it potential wealth.  This source is the human mind.  All wealth flows from the human mind, and that source of energy is also unreasonably large, much larger than most people imagine.

Via Chris Edwards at Cato, from recent government data:

XKCD

Having the dreaded WordPress WP-Cron bad behavior with my server resources, causing my host to be less than amused.  Working on it....

From the AP today, whose editors obviously all failed chemistry

Must be edited by Mr. Mom -- CO, CO2, whatever it takes.

From Edmunds:

Consumers who traded in their clunkers through the program also benefitted financially, generally speaking. Based on preliminary data, Edmunds.com estimates that the average cash value of the traded-in clunkers was $1,475. The owners of those vehicles earned rebates for either $3,500 or $4,500, depending on the replacements vehicles they chose. Edmunds.com Senior Analyst David Tompkins, PhD, points out that many will also save money on gas each month, thanks to their more efficient new purchases.

So the government is paying consumers $4500 for assets with a market value of $1,475.  Well of course it's a popular program with its participants -- Obama is buying up dollar bills for $3.

Left undetermined is whether consumers have been enticed into more expensive cars they cannot afford by this $3000 windfall.   It seems like just yesterday when the Obama administration was slamming credit card companies for enticing people into debt with low teaser rates or slamming mortgage companies for enticing people into mortgages they could not afford.

By the way, someone needs to explain the economics behind the theory that lining auto dealers pockets with taxpayer money is stimulative to the economy:

"Our analysts have determined that dealers are enjoying a 20 percent increase in gross profit per sale involving a clunker trade-in since the program launched."

Jesse Jackson, Jr. is freaking brilliant.   When Larry King challenged him (well, not really, King never challenges anyone, particularly on the left) that people see the public option as health care by the Post Office, Jackson replied:

Look at it this way: There's Federal Express, there's UPS, and there's DHL "¦ The public option is a stamp; it's email. And because of the email system, because of the post office, it keeps DHL from charging $100 for an overnight letter, or UPS from charging $100 for an overnight letter.

This is really a weird view of the world, particularly given the history of how Fedex started.  It's amazing, given this logic, that McDonald's doesn't charge $100 for a Big Mac, given that there is no government competitor in that market.

The reality of course is that the relationship works the other way around - Fedex and UPS keep the Post Office in check.  Many of the Post Office's most recent service offerings were copied from UPS and Fedex.  After decades of trying, the USPS still can't emulate these companies' most basic service offerings, such as offering door-to-door tracking of packages.

By the way, here is a graph of the USPS keeping a lid on the industry's costs (via Carpe Diem):

It should be noted that the Post Office is still losing money at the current stamp price.

Also from Carpe Diem is this little service parable

The stamp vending machine at the downtown Flint Post Office no longer sells stamps, it sits there empty. Right next to the dark, empty vending machine for stamps sit two fully operational, bright and shiny vending machines, one for soft drinks and one for snacks, presumably owned and operated by a private, for-profit vending machine company (see photo above).

The Kennedy's have never been shy about using the government as their own personal plaything:

Senator Ted Kennedy, who is gravely ill with brain cancer, has sent a letter to Massachusetts lawmakers requesting a change in the state law that determines how his Senate seat would be filled if it became vacant before his eighth full term ends in 2012. Current law mandates that a special election be held at least 145 days after the seat becomes available. Mr. Kennedy is concerned that such a delay could leave his fellow Democrats in the Senate one vote short of a filibuster-proof majority for months while a special election takes place...

What Mr. Kennedy doesn't volunteer is that he orchestrated the 2004 succession law revision that now requires a special election, and for similarly partisan reasons. John Kerry, the other Senator from the state, was running for President in 2004, and Mr. Kennedy wanted the law changed so the Republican Governor at the time, Mitt Romney, could not name Mr. Kerry's replacement.

"Prodded by a personal appeal from Senator Edward M. Kennedy," reported the Boston Globe in 2004, "Democratic legislative leaders have agreed to take up a stalled bill creating a special election process to replace U.S. Senator John F. Kerry if he wins the presidency."

In 1946, a factory might employ its own cafeteria staff, the people who cleaned the bathrooms and windows, the folks who painted the building, even mechanics for the motor pool.  Today, all that stuff is outsourced.  The work and jobs are still there, but the jobs have been outsourced to service companies so the factory can focus just on production.

Are manufacturing jobs numbers smart enough to take this into account, or is the (relative) decline in manufacturing jobs in part attributable to unwinding of vertical integration and outsourcing of work to service companies?

To be very specific:  Is an accountant in a factory a manufacturing job, or a service job in the government numbers?  Certainly this person is a service worker if he is an independent contractor working for the factory, but what if he is employed in the factory with an office in the factory on the factory's payroll?

Anyone know?

One of the justifications for diverting highway money to ridiculously expensive light rail systems is that light rail supposedly reduces energy consumption.  Really?  This is via the most recent report from the DOE's Transportation Energy Book, as highlighted by the Anti-Planner (click to enlarge):

The figures for cars are from tables 2.12 and 2.13 of the same report.  Even the best light rail systems are not substantially more efficient than cars, and this gap will likely continue to close, as it has for years, as cars get more efficient.

A Note on Freight: By the way, passenger rail promoters in the US always point to the Europeans as having a better rail system.  But while the Europeans put more of their passengers on rail than does the US, they put less of their freight there.  I would argue that the US system is much more "green", as the differences in energy use between a ton mile of freight on road vs. rail is much larger than the difference in energy use of a passenger mile on road vs. rail.  And besides, from a lifestyle standpoint, would you really want more freight on the roads?  (This is a real tradeoff -- unless one spends the absurd amount of money to build two separate systems, a rail network can be optimized for freight or passengers -- the two do not coexist very well on the same tracks).

Postscript: Just to head off the obvious rhetorical battles -- the incremental energy efficiency of moving one driver to a light rail rider of an existing system is very high.  The car consumption goes away and the train does not incrementally increase its energy use much with one more passenger.  So at the margin, it is correct when someone tells you that it saves energy to shift your commuting to an existing light rail line.  However, it does not make sense, from an energy perspective, to build a light rail line in the first place.  The investment is too high, the energy savings are negligible or non-existent, and the operating cost are so high that light rail tends to crowd out bus operations that help the poor.  As I have written before, for every light rail system I have checked, the cost to build the system is enough to buy every daily rider a Prius and the operating deficit enough to keep every one of these Prius's filled with gas.

Update:  I further understand that cars in the city likely have lower gas mileages than these averages, particularly for commutes that might be substituted by light rail.  But light rail is sold as if it is substantially more energy efficient, and it really would have to be orders of magnitude more efficient to justify the capital costs that are so much higher than for an equivalent capacity of roadway.  The efficiency is just not there.

A Cafe Hayek Reader asks:

Imagine we had entirely private health insurance market "“ no Medicare or Medicaid.  If I live to be sixty-five, I will probably have a personal and/or family history that indicates a strong probability of developing an expensive chronic condition. I would wager that is true of almost all sixty-five year olds.

So here is my question: which insurer in their right mind would take on my risk?

I suspect none. Once philanthropy and savings were exhausted, I would surely risk a painful life and preventable death.

Do I want this? Does anyone? Isn't "socialized" medicine for older people an unpleasant moral necessity for our wealthy society? Please note I am deeply suspicious of most arguments cast in moral terms in discussions of politics and economics. I ask these questions guardedly.

I answer in the comments:

Imagine we had entirely private life insurance market "“ no government options at all. If I live to be sixty-five, I will probably have a pretty high probability of dieing in the next 15 years or so. I would wager that is true of almost all sixty-five year olds.

So why would anyone insure me?

Because the life insurance market has developed a very reasonable solution to this -- you negotiate a term life rate for X number of years. Your rate might be Y a year for 10 years, or 1.5Y a year for 20 years, or 2Y a year for 30 years. The longer the rate guarantee, the higher the rate. You are explicitly paying higher rates than you might have in younger, less risky years to make sure you get a coverage guarantee at an affordable rate in later, risky years.

Of course, if you play the grasshopper and never buy insurance until you are 65, your price is going to be awful. But I don't think it is a reasonable role for government to do all kinds of individual-liberty-defying and costly things just because you did not take responsibility for your old age earlier in life. However, saying that, I of course know that this is EXACTLY what the government does with Social Security.

I have a high deductible individual insurance plan from Assurant who specializes in insuring individuals, and they have been evolving to a pricing model sort of similar to the term life model I listed above, though they are not quite there yet.

To the folks that say this is no solace for folks already 65, that is an implementation transition issue, not an argument against the market's ability to deal with this. Certainly a lot of folks have paid Medicare taxes for years and are counting on it. Some kind of phase out, possibly where the government redirects Medicare funds to make up the difference in policy prices for having not started locking in earlier, is possible. But the question was not an implementation question - it was a question of whether the market inherently fails for 65-year olds, and I think the answer is that it does not. We have a perfectly serviceable analog in life insurance to prove it

I call this the "failure of imagination" argument against free markets.  Some sector of the economy (such as education) has been dominated by government for so long that folks can't imagine a private model.  For example, when I argue for private grade school education, I can't tell you how often people say "private schools are all really expensive, no one could afford them."  Private schools are expensive because in the current government model, the only market niche for private schools is for families that can afford to pay the government for education they don't use and then pay a second time for a private school.

Readers probably remember that I am against the death penalty.   My main objection is that it effectively short-circuits appeal rights.  Sure, people sent to death row get a lot of appeals, but those appeals are relatively narrow in time, say over 8-10 years.  Would 10 years of appeals help a black man put wrongly on death row in Alabama in 1955?  It wasn't until 20-30 years later, or even 50 years later, that both society and technology have changed enough to free a lot of people in jail.  Just look at how many people the Innocence Project has helped to free, and how many are starting to be freed with DNA.

In this context, I found this statement (via Stephen Littau of the Liberty Papers) particularly frightening.

"This court has never held that the Constitution forbids the execution of a convicted defendant who has had a full and fair trial but is later able to convince a habeas court that he is "˜actually' innocent. Quite to the contrary, we have repeatedly left that question unresolved, while expressing considerable doubt that any claim based on alleged "˜actual innocence' is constitutionally cognizable." "“ From the dissenting opinion by Justices Scalia and Thomas on the question of whether death row inmate Troy Davis should receive a new trial after 7 eye witnesses against him recanted their testimonies against Davis.

If innocence does not matter, what the hell does??