Nuclear Power is Good!

Dr. Patrick Moore, founder of Greenpeace, discusses the issue of Nuclear power and how environmental groups use fear-mongering and exaggeration to push their anti-nuclear agenda. See the interview with Mr. Moore here

Hayek at Bodega Bay

I was away with family for four days just this weekend. We rented a home near Bodega Bay in California; the weather was lousy except for the very first day. The beach was chilly and we had fog most of the time. We still had a great time all in all. During quiet times, I managed to re-read some chapters of F.A. Hayek’s The Road to Serfdom. I came across this paragraph and I felt that it is as relevant today as it was back in the 1940’s:

Economic liberalism [Free-market capitalism] is opposed, however, to competition’s being supplanted by inferior methods of coordinating individual efforts. And it regards competition as superior not only because it is in most circumstances the most efficient method known but even more because it is the only method by which our activities can be adjusted to each other without coercive or arbitrary intervention of authority.

It seems that the events of the last several months have moved us away from freer markets and to more government oversight and planning. How long before we see the “unintended consequences” of these actions?

Obama's social security tax plan

Less driving, less pollution: Thank you, free-market!

From SFgate:
This year's record-shredding spike in gasoline prices has finally ended, with prices throughout the country falling by more than a penny per day.

And American drivers can thank themselves for the drop.

Shocked by prices that reached $4.11 per gallon nationwide and $4.61 in California, drivers stopped buying as much fuel. That cut the demand for gasoline's raw material, crude oil. Crude prices dropped as a result, taking gasoline prices with them.

High gas Prices are working—consumers are conserving gas by driving less or choosing alternatives. While I still think that high gas prices are a heavy tax on the average American, it should be noted that high gas prices have done more to get people out of their cars (and to choose fuel efficiency) than any preaching by the Sierra Club or any other environmental group.

(Graph by Mark J. Perry@Carpe Diem)

The Free Market’s imagery problem

Free-market advocates are notoriously terrible at creating positive mass media propaganda to further its idea’s. The Left has developed a great talent at pulling the heart strings with very good results. The following observation is made by Joseph Packer:

Modern-day statists seem incredibly adept at commanding the attention of the public. Have you ever noticed how there exists an unending stream of documentaries criticizing the free market? Roger and Me, Wal-Mart: The High Cost of Low Prices, This Is What Democracy Looks Like, and Sicko are some of the titles that immediately pop to mind. I can’t remember ever seeing a libertarian documentary being widely promoted, despite the fact that libertarians make up roughly 13 percent of the American population, according to research by David Boaz and David Kirby.

Is there an American over the age of 25 who does not remember the terrible images from the Exxon Valdez oil spill? These images evoke strong anti-corporate feelings even though the company has now spent over $3 billion to alleviate the environmental impacts and has paid restitution to the affected fishing industry.

How many individuals have seen pictures, much less heard of, the Milwaukee disaster? Over 400 times as much pollution was knowingly dumped in Lake Michigan in 2004 by local governments that understood they would not be held accountable. Americans have been inundated with pictures of melting icecaps, but have they seen pictures of the children starving because of our energy policies? Numerous studies show that government policies pushing ethanol as a solution to global warming act to raise food prices, leaving the world’s poorest to starve. This on top of the fact that most scientists believe the corn ethanol being pushed by the government will have no effect on warming. Many Americans have been confronted with images of children working in factories; however, they do not see the images of the 5,000 Nepalese girls forced into prostitution because of U.S. trade sanctions against child labor. These facts are not secret, but their lack of visual presence means they are all but invisible to most Americans. (Read The Entire Article)

There has been over the last number of years an acceptable move to more government oversight and regulation by the general public and a doting Washington establishment; in the false hope that stricter government oversight will equate less volatility, less malfeasant behavior, and generally a safer world. But as Mr. Packer notes above, more government oversight does not necessarily lead to its purported results.

The Socialist Brain of....

The Fan/Fred bailout is a scandal

Dick Armey adroitly blasts congress and President Bush on this latest example of crony-capitalism:

Americans who work hard, pay taxes and play by the rules can't seem to get fair representation in Washington, D.C., these days. In the current debate over a government bailout of speculators, irresponsible banks, Fannie Mae and Freddie Mac, the responsible majority has once again been pushed aside in a legislative rush to "do something."

This should have been a perfect opportunity for Republicans, struggling to regain some standing with the American people, to rise united and demand real accountability and reform. (Read More)

When President Bush signs this bill, it will be another black mark on his legacy of big government conservatism. The federal government and its myriad programs have grown by leaps and bounds under his stewardship.

The Money Map

The world is running out of oil?

From FT.com

The Arctic holds as much as 90bn barrels of undiscovered oil and has as much undiscovered gas as all the reserves known to exist in Russia, US government scientists have said in the first governmental assessment of the region’s resources.

The report is likely to add impetus to the race among polar nations, such as Russia, the US, Denmark, Norway and Canada, for control of the region.

The US Geological Survey believes the Arctic holds 13 per cent of the world’s undiscovered oil, while 1,669,000bn cubic feet of natural gas is equivalent to 30 per cent of the world’s undiscovered gas reserves.

With large findings in the Caspian Sea, Brazil, and all the untapped reserves in the U.S.-- and now the Artic--somebody needs to challenge me on my theory that the world is not running out of oil; At least not anytime soon.

Here is another news link for this story

The average American Joe speaks

In an election season full of acrimony, The Bobo Files has an interesting bipartisan video.

Now this is an engine!

Free-market taxis in Cuba

While the U.S. is slowing moving leftward with big government bailouts and massive government programs, the Cubans are starting, albeit very slowly, to allow market reforms. The ban on private taxis in Cuba has been lifted.

Are you miserable enough?

Mark J. Perry at Carpe Diem provides us the following graph detailing the Misery Index. According to Perry, despite all the gloom and doom in the popular press, it looks like things aren’t as bad as described. We could be living though the malaise of the 1970’s or even the Great Depression of the 1930’s.

Some "speculators" lose too

NEW YORK (Reuters) - SemGroup LP declared bankruptcy on Tuesday after $3.2 billion in oil trading losses torpedoed the formerly 12th-largest private U.S. company.

The Tulsa-based company racked up the massive losses as oil prices ran up record gains, undercutting short crude futures positions SemGroup bought to hedge against its 500,000 barrel-per-day trading business.

To meet obligations, SemGroup plans to sell off oil and natural gas gathering, transportation, and storage assets worth an estimated $6.14 billion that were purchased in a whirlwind of acquisitions since it was founded in 2000. (Read More)

Semgroup was, according to Forbes, the 12^th largest private company in the U.S. The company overestimated the oil market and it has collapsed unto itself. Unlike what the popular media regularly portrays, sometimes the “speculators” will not be making a mint. They will instead make the wrong moves and they will lose spectacularly. Being an oil trader or a "speculator" does not automatically mean great profits and high returns.

The writing is on the wall

Americans are not happy

For the fifth straight month, 80% or more of Americans are dissatisfied with the way things are going in the country. Gallup’s July midsummer mood reading shows only 17% of Americans satisfied and 81% dissatisfied. See story here

Around The Horn--Posts on Oil

Posts worthy of note and your time:

The Bobo Files has a petition to sign for those that want Congress to lift the moratorium on off-shore drilling.

Domestic oil myths are covered by The Historian at The Real World.

Shaving Leviathan comments on the controversial drilling at ANWR.

Cartoons for Sunday

HT: Mark J. Perry@Carpe Diem

"Al Gore is our savior!"

Al Gore called for congress not to overturn a federal ban on offshore drilling recently. If congress had any collective wit about them, they should immediately dismiss his comments as the rantings of an unrealistic lunatic.

Mr. Gore seems to be living in a parallel universe where the average American can afford to chuck over $4 and more for a gallon of gasoline for lord knows how long--I guess until the miracle of “alternative energy” comes along full bore in 10, 15 years or more? Mr. Gore is a multi-millionaire with nary a worry about the effects of paying higher prices for energy. If ushering the era of a carbonless economy means bankrupting middle class Americans, then so be it: To indirectly suggest that Americans must sacrifice in order to usher in his radical vision of the new era--the “green” nirvana--strikes me as callous arrogance. Mr Gore suffers from a misplaced messianic complex.

Oil is discovered in Caspian Sea

So, it looks like a Swedish firm has made a nice find of oil in Russia’s north Caspian Sea. Try and guess how long it’s going to take them to start drilling. Do you think that it will take 5 years? Or perhaps it will maybe take 10 years? Nope. Try the end of September of this year. The Russians aren’t squeamish about putting their resources to work, that’s for sure.

BTW, with a major oil find off the coast of Brazil, this finding in the Caspian Sea and all the untapped potential in North America, the talk by people that constantly rail about oil running out very soon or how far past the world is from Hubbard’s Peak is sheer conspiracy babble.

Happy Friday!

Holy Dumbo, Batman! Where's Robin?

Rise in lawsuits against bloggers

Many of us who blog believe that since we are exercising free-speech on our blogs, the possibility of being sued for libel or slander is non-existent; a recent article in the Christian Science Monitor has should quickly dispel that notion. An excerpt:

The blogging community increasingly is subject to lawsuits and threats of legal action running the gamut from subpoenas to cease-and-desist notices. Since blogging became popular in about 2004, there have been 159 civil and criminal court actions involving bloggers, according to the nonprofit Media Law Resource Center (MLRC) in New York. Seven cases have resulted in verdicts against bloggers, with cumulative penalties totaling $18.5 million. Many more legal actions never result in trial.

The result? A stifling of free speech in a medium providing more comprehensive and diverse opportunities for commentary than ever before, digital-rights activists, media lawyers, and bloggers say.

Congressional approval hits all time low—14%

Approval of Congress has reached an all-time low reading of 14%, having dropped five points over the past month. The decline from last month is almost all because of depressed ratings from Democrats. My question is: How low can they go?

Fannie and Freddie: Ron Paul called it in 2003

The whole ugly mess that has slowly revealed itself over the last week regarding GSE’s Fannie Mae and Freddie Mac were carefully foretold by Ron Paul in 2003:

The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.

While Dr. Paul wasn’t the first or the only one sounding the alarm on Fannie and Freddie, it sure is nice to know that there is someone in Congress that is sharp enough and honest enough to see a train wreck in the making.

The water shortage myth

We have been told for months that there is a water shortage in California. However, I have always contended that the price of water is too cheap in California; the price is set by municipal water districts. Because water is so inexpensive, any calls by state officials to conserve go unheeded. Residents simply do not have the incentives to really conserve. And like I always say--incentives always matter. A recent article at Forbes summed up the situation and a solution rather nicely:

California is perpetually portrayed as suffering from a shortage of water. Case in point: Gov. Arnold Schwarzenegger recently declared a statewide drought, telling citizens to prepare for rationing. But the state's problems are not a result of too little water.

The real problem is that the price of water in California, as in most of America, has virtually nothing to do with supply and demand. Although water is distributed by public and private monopolies that could easily charge high prices, municipalities and regulators set prices that are as low as possible. Underpriced water sends the wrong signal to the people using it: It tells them not to worry about how much they use.

Bush acts on drilling, challenging Democrats

Bush has lifted the moratorium on off-shore drilling. The ball now falls on the Democrats’ court.

How much will you save if you slow down?

Save gas and money by moderating your speed to a “sweet spot” when you drive—here’s a cool tool by Political Calculations. Check it out.

High gas prices threatens health care for seniors

It’s simply amazing how high gas prices negatively impact sectors of our economy that one would have never imagined possible. In this case, health care workers are having difficulty dealing with the higher cost of fuel prompting some to leave for other positions. (Read story)

Christine Mair, a companion to elderly people and graduate student, drives hundreds of miles every week taking clients to lunch, to doctor visits and shopping.

Mair's agency, the nonprofit A Helping Hand, provides companion services to 400 people each year in Orange, Durham, Chatham and Wake counties. It reimburses workers for driving clients on errands but not for travel to clients' homes. Mair drives a fuel-efficient car with manual transmission, but she still pays up to $50 a week for gas to travel between her Raleigh home and clients in Pittsboro and Chapel Hill.

"It gets pricey," she said.

Four things you didn’t know about me...

Fellow blogger Arduous Nincompoop had me participate in a fun little query. Check it out.

The magical realism of the Kyoto Treaty

Remember all the static and noise by environmentalists and lefty’s everywhere regarding the Kyoto treaty? And how the “evil” George W. Bush was responsible for the destruction of the earth because he didn’t sign it? (Even though the Senate rejected the treaty in the first place-but let’s not let facts get in the way of a good Bush bashing.) Well, as I have commented before, the Kyoto treaty doesn’t work as well as its' proponents shrill. Even though I am not a big fan of Mr. Bush, I do agree with him on his stance on Kyoto. And it looks like most member nations of the G-8 are also starting to see the light of reason.

U.S. lifts moratorium on new solar projects.

DENVER — Under increasing public pressure over its decision to temporarily halt all new solar development on public land, the Bureau of Land Management said Wednesday that it was lifting the freeze, barely a month after it was put into effect.

The bureau had announced on May 29 that it was no longer processing new applications to build solar power plants on land it oversees in six Western states after federal officials said they needed first to study the environmental effects of solar energy, a process that would take two years.

But amid concerns from the solar power industry, members of Congress and the general public that the freeze would stymie solar development during a particularly critical time for energy policy, the bureau abruptly reconsidered. (Read More.)

I wonder if groups that currently oppose drilling at ANWAR or off-shore would be willing to fast-track development of drilling for the same reason that this decision was reversed by the BLM; Namely, “a critical time for energy policy.” I think that the BLM made the right decision by foregoing expensive and time consuming environmental impact studies. This same approach should be adopted for oil and gas development in the lower 48 at the very least. It’s ironic that environmental impact studies would have bogged the building of environmentally friendly solar panels.

Happy Friday!

My kinda squirrel!

Advice on Charity

I found an interesting article by Sudhir Venkatesh on charity in the New York Times. An excerpt:

I told the three people who came to me for advice that, in my opinion, prospective donors had two traits working against them.

First, they confused charity with commerce: that is, they uncritically applied the language of outcome-oriented investment to efforts to change human behavior in social settings. Humans, alas, don’t operate neatly according to market logic, though incentives can shift behavior.

Second, donors seem reluctant to talk about their own self interest. Instead of admitting their personal desires, they speak of selfless charity. Of course, donors can do whatever they want with their money, but this attitude doesn’t help them grow.

A Brave New Green World!!

Oh, boy! Hang on to your wallets! Wait till you get a load of this. Currently, in the U.K., there is legislation to ration personal CO2 emissions: When you gas up, or when you buy that airline ticket to visit grandma, the government will track all of your CO2 use. When you overuse your allotment of personal CO2, you will have to buy some credits from someone who has them. Imagine that! This is where modern environmentalism is taking us, folks--a massive leviathan of a bureaucracy with ever more control of our lives and our freedom in the name of “saving” the planet.

It would cost a country like Britain billions of dollars a year to run a personal cap-and-trade system nationwide, but set that aside. War-time-like energy rations are a clear illustration of the extent to which environmentalists hope to control every aspect of modern life. Do you really want to blow much of your annual "ration" on that long carbon-spewing jet flight to Florida, or should you swap that summer AC for weekend drives in the country?

The global warmists want you to sacrifice for their cause. And the duration of their war on carbon will make the decade-and-a-half of British rationing during and after World War II seem like a fleeting moment. The pending climate-change bill calls for a 60% cut in carbon emissions from their 1990 levels by 2050. Once 2050 rolls around, who exactly will declare the end of hostilities?

The prospect of personal CO2 rations should debunk the idea that the cost of curbing carbon emissions would fall on the owners of dirty old factories. That notion was always a green herring: Like corporate taxes, the business costs of carbon reduction will be passed on to consumers. In that sense, we should be grateful to the Brits for showing us where this anticarbon crusade really ends up.

Can you imagine what this sort of personal cap-and-trade would cost if it were implemented in the U.S.? My only hope is that this sort of bureaucracy would frustrate Americans to no end and any politician that suggested it would be sent packing. I can only hope.

Who owns the Oil companies?

If you have a 401K plan at work, you just may have benefited from the run-up in oil prices. Pension plans like California's public employees' pension fund have also benefited from the bull market in oil. Why don’t we hear more of this from the presidential candidates or the large media outlets?

The new Chinese 10 Yuan is missing something…

Take a look at the new note. What do you think is missing? See here for the answer

HT: Marginal Revolution

Don’t mess with Texas

A quick look at the graph above will illustrate that the Texan economy is on a roll, folks. Mark J. Perry of Carpe Diem writes the following about the hot Texan economy:

Texas employment has increased in 56 out of the last 60 months, and has increased by +238,700 jobs over the last 12 months, compared to only a +77,000 net increase in jobs nationwide since May 2007. The chart above shows that overall U.S. employment is up by about 5% since 2000, while Texas employment has increased by 13.5% during the same period (1.26 million new jobs).

When Barack Obama talks about how free trade (NAFTA) has hurt Ohio’s economy, he always fails to mention Texas and how it has benefited by NAFTA. Ohio’s economic pain is simply self-inflicted. Maybe other states that are struggling need to model their state economies a little more like the Lone Star state.

The Lovers

I went over to Tasha’s Take and I took the tarot card test...just to see what I would end up with. This is what I ended up with: The Lovers. Read it and weep, boys. I should probably change this blog into an advice column. BTW, if you've never seen the movie The Lover, you should rent the DVD--it's a good one.

You are The Lovers

Motive, power, and action, arising from Inspiration and Impulse.

The Lovers represents intuition and inspiration. Very often a choice needs to be made.

Originally, this card was called just LOVE. And that's actually more apt than "Lovers." Love follows in this sequence of growth and maturity. And, coming after the Emperor, who is about control, it is a radical change in perspective. LOVE is a force that makes you choose and decide for reasons you often can't understand; it makes you surrender control to a higher power. And that is what this card is all about. Finding something or someone who is so much a part of yourself, so perfectly attuned to you and you to them, that you cannot, dare not resist. This card indicates that the you have or will come across a person, career, challenge or thing that you will fall in love with. You will know instinctively that you must have this, even if it means diverging from your chosen path. No matter the difficulties, without it you will never be complete.

What Tarot Card are You?
Take the Test to Find Out.

Speculators = Vampires!

Some of the theories that have been bandied about regarding oil prices and speculators have reached new levels of dogma. The little poisonous gem that I happened upon was a piece that I found (via The Liberal Journal) on the Counterpunch website titled “Gas Price Gouging,” by Mike Whitney. Here’s an excerpt:

This is not about shortages or scarcity; it's about gaming the system to fatten the bottom line. The whole scam is being executed by the same carpetbagging scoundrels who engineered the subprime fiasco; the investment bankers. The Wall Street Goliaths are using the futures market to recapitalize their flagging balance sheets after sustaining huge losses in the mortgage-backed securities boondoggle. That's the whole thing in a nutshell. Now they're on to their next swindle; distorting the futures market with gargantuan leveraged bets on food and oil.

Yes, it’s the carpet-bagging investment bankers. And don’t forget the Illuminati and the Free Masons. They have a hand in everything. Here’s another zinger:

In fact, oil is being deliberately kept off the market to keep prices high. Consider this: if supply isn't keeping up with demand then why aren't there any lines at the gas stations like there were during the '70s?

Somebody needs to tell this fellow that the reason that there was rationing of gasoline and long lines to gas stations (that would then run out of gas) was due to the implementation of price controls by President Nixon. Once wholesale prices for gasoline rose beyond what a retailer could afford to buy (they had to make some profit to pay employees, taxes, utility bills, etc), gas stations ran out of gas. This meant that there was less refined gas to go around. Somehow, Mr. Whitney believes that the lack of rationing and long lines is proof that there is plenty of gas and that prices are being manipulated. The fact that prices are allowed to rise and that it is in effect a signal of the healthy elasticity of the market - there are no long lines - is proof that the mechanism of supply and demand is working as it should. Mr. Whitney does not understand basic economics.

While the futures market is a convenient scapegoat, it is simply a price discovery mechanism. Here’s one example of how the futures market works nicely: One of the reasons that Southwest Airlines has been able to be successful in recent years, while other airlines are faltering, is due to its prescient ability to lock in lower fuel prices with the futures market: It acts as a hedge against volatility and inflation. The futures market is not without risk. If a company bets incorrectly, they could lose money. It isn’t the perfectly gamed system that Mr. Whitney and others believe it is.

Note that many commodities have spiked in price over the last couple of years. It isn’t just oil. Does that mean that corn, wheat, copper, and fertilizer are being manipulated by speculators too? Should congress make laws to meddle in the trading of those commodities as well? The rise in oil is occurring globally, not just in the U.S. Attempting to stifle speculators in U.S. financial markets will do nothing to the global price of oil.

So, what’s the answer? Why has oil jumped to its record highs? The primary answers are the weak dollar and good old supply and demand, folks. I know that this is not as sexy and as attractive as a conspiracy theory. But there it is. If the Fed ever decides to fight inflation and strengthen the dollar, commodity prices would fall like a rock. It’s as simple as that. Alan Reynolds of the Cato Institute explains it best:

There is no mystery behind the rise in oil prices. They rose too high too fast because of booming demand for oil for petrochemical products, electric power and shipping from many emerging economies (particularly China, India and the Middle East). Meanwhile, the supply of oil slipped in the US, Mexico, Venezuela, Nigeria and Russia.

Now, I’m not saying that the futures and options markets have absolutely no effect on the global price of petroleum. All I’m saying is that its effect is greatly exaggerated for political reasons.

When Congress returns from vacation expect more heated rhetoric on this issue; there are currently at least ten bills submitted by Democrats attempting to address “speculation.” I blame congress for legitimizing the arguments put forth by bloggers like Mr. Whitney: No quarter is given to facts or to the unintended consequences that may follow bad legislation.

Secret Report: bio-fuel caused food crises

Environmentalist groups pushed the idea of bio-fuels for decades and now that it has been implemented and turned into a global food crisis, you hardly hear a peep from any of them. This Guardian article relating to an unreleased World Bank report claims that bio-fuels have caused food prices to increase by 75%. While I do believe that bio-fuels have some responsibility for higher food prices, I think the 75% figure sounds rather high. In any case, it looks like the report makes U.S. policy to be less than desirable.

But here is my thought on all of this: Now that the world knows, and our government knows, that corn ethanol production is expensive and causes food shortages, how long will it take our federal government to correct this problem?

Solar Water Heaters are state law in Hawaii

Well, it looks like that cozy house that you wanted to buy somewhere on a Hawaiian island (I can hear the laughter) just got a little more expensive. I wonder how long before the California legislature itches to do the same. If you have a couple of days of overcast skies or days of rain, how do you heat up your water for a shower? Answer: most solar water heaters are backed up by electric or gas.

Happy Independence Day!!!

I hope everybody has a great day with family and friends. Please take a moment to remember our troops abroad.

Colombian Special Forces strike FARC again

From the LA Times--Armed forces disguised as rebels Wednesday rescued former Colombia presidential candidate Ingrid Betancourt, three U.S. defense contractors and 11 other hostages held by leftist insurgents, in a daring operation that delivered the latest in a series of blows to the country's largest anti-government force.

The 46-year-old Betancourt, who was held for more than six years, called the rescue operation impeccable and told reporters that she planned to run for the presidency again.

Comment: I read in the WSJ that the disguised Colombian soldiers were wearing Che Guevara t-shirts. The rebels were easily duped by that ruse. I wonder if Americans (the ones that live around my very own community) that wear those same t-shirts know that Che Guevara was a cold blooded murderer. Or that he was an ally to such brutal butchers as Pierre Mulele and Laurent Kabila. In any case, this is a win for the good guys and another blow to Hugo Chavez and all leftist groups everywhere that sympathize with FARC and Chavez.

No income tax in Taxachussetts…

Well, this is a pleasant surprise. It seems that there is a real grassroots movement to abolish the Massachusetts state income tax. If this would come to pass, Massachusetts and New Hampshire would both have no state income tax. I wonder how that would change some of the economic dynamics that exist between the two states; many people have migrated up to New Hampshire from Massachusetts (over the last several decades) due to the steep cost of living in Massachusetts. Will that migration stop? Abolishing the state income tax will remove at least one incentive to pick up and move across the border. That is, of course, if Massachusetts rids its state income tax.

Volkswagen scooter?