Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

For "a human being, the question 'to be or not to be,' is the question 'to think or not to think.'" Ayn Rand

29 June 2008

Miss Breeziness -- A Study of the Misanthropic Mind

Recently, I have had the great pleasure of making the acquaintance of a remarkable young lady from New Zealand. She grew up in China, but has become a stalwart individualist, all the while being a very sweet and thoughtful young lady. She has made some recent perceptive comments on some of my postings here and goes by the appellation of Miss Breeziness.

Being thoughtful, she has noticed that there are surprisingly large numbers of people who do not have a very high regard for most people. I have made posts in recent times which have emphasized the fact that the liberals or socialists, particularly the radical environmentalists, often do not care for the interests of man. In discussions of human sexuality in my older posts, I discussed the misanthropy of many conservative and religious persons. In my discussions of benevolence and toleration, I noted problems of misanthropy among Objectivists and libertarians. But, Miss Breeziness has put the entire big picture on misanthropy in all these segments of the political spectrum of viewpoints into one well-written essay called "A Study of the Misanthropic Mind" with her own uniquely gentle, yet incisive style. I highly recommend that you take the time to read her essay.

I hope she will continue writing on such interesting topics, as well as visiting here to comment on my postings and to offer her own insights on the topics discussed here. Thanks, Miss Breeziness!

25 June 2008

Alan Reynolds - Scapegoating the Speculators

Alan Reynolds has written another interesting article on energy and pricing entitled "Scapegoating the Speculators." After the Democrats tried to claim that the price of oil had gone up greatly because the U.S. oil companies were responsible for manipulating the price and most of the public did not buy into their arguments, they and others, including John McCain, began focusing more and more on an explanation that the price of oil was higher due to speculators. Alan Reynolds offers some very interesting perspective on this claim.

But first before considering his argument further, why is this an important matter? If, as the Democrats are saying, speculators are driving up the cost of oil or even if they are not but are perceived to be doing so, then the Democrats can address the problem of high gas prices by passing a law to control the speculators. This gives them more power over the financial markets and will result in more campaign contributions from financial people who will want to get on their good side. What the Democrats and their occasional Republican ally (John McCain in part) will not then have to do is to allow U.S. oil companies to drill for more oil and gas. As environmentalist extremists and Global Warming Alarmists, these people do not want to allow more oil and gas to become available. They actually do want the price of oil and gas to go up even more, but they do not want to be seen as the responsible party for that price increase. This is all about perception in the eyes of the public. The Democrats do want to manipulate the supply of oil and gas to make the price go way up, but they do not always, especially with an election coming up, want to be perceived as having done so.

So, what does Reynolds say? Commodities speculators are just as happy to bet that oil prices will go down as to bet that they will go up. They are trying to anticipate the expected relationship of oil supply to oil demand. If next month's oil futures contract is for oil at a higher price, then producers may slow their sales on the spot market and try to wait a bit for the higher price. [This is usually a good thing, since it helps to level out prices by keeping supply and demand on a more even keel.] Refinery's are likely to buy more oil now rather than in the future if the future price is expected to be higher, thereby boosting the present price. But, if this combination of reactions to the higher future price occurs, then oil inventories will increase. At this time, U.S. oil inventories are modest, so this speculative boost to oil prices does not appear to be the case!

He notes that speculation that the price of oil would go up decreased after the price exceeded $100 per barrel. On 11 March, there were 113,307 long contracts (those expecting a future price increase) on the New York Mercantile Exchange. By 10 June, there were only 25,246 long contracts, meaning that there are nearly as many contracts going short (expecting a price decrease) as going long. Off the commodity exchange, one can bet on the future price of oil by investing in the US Oil Fund. Those betting short on this fund outnumber those betting long by a two to one ratio. These speculators are betting on the price of oil going down!

Reynolds says there is no mystery behind the rise in oil prices. There is booming demand for oil and products made from it in India, China, and the Middle East. The supply of oil from the U.S., Mexico, Venezuela, Nigeria, and Russia has fallen.

Back to my comments: U.S. oil production is falling because Congress and President Clinton have not allowed more exploration and drilling for oil in the U.S. Production continues to fall in Mexico because their nationalized oil company is run incompetently. Oil production in Venezuela is down because of the tyrannical reign and complete irrationality of Hugo Chavez. Nigeria's production is down due to internal unrest and sabotage. Russia's production is probably down because the oil companies there were taken over by ex-KGB thugs tied in with Putin.

Prices are always determined by supply and demand unless government sets the price. If government does set the price too low, then people stop producing and supplying that good or service. If we want to use oil at a reasonable price, then we have to allow the production of a goodly supply of oil. So, instead of wasting our time and money while we pay far too much for our gasoline, Congress needs to allow the exploration and production of oil on the federal lands in the contiguous 48 states, in Alaska, and in our coastal waters. This will increase supply and that will bring down the price of oil and its products, such as gasoline. Of course, with oil and gasoline as expensive as they are now, people will make greater efforts to conserve them as well. The magnitude of the world's demand increase is likely to run well ahead of conservation efforts alone, so both oil production increases and more efficient usage are the proper response.

24 June 2008

Brits Unconvinced Man Caused Global Warming

Ipsos MORI polled 1,039 adults in Great Britain and found that 6 out of 10 agreed that "many scientific experts still question if humans are contributing to climate change." Four out of ten agree that they "sometimes think climate change might not be as bad as people say." About 20% answered each question with a refusal to commit response. After years of much worse global warming propaganda in Great Britain even than we are subjected to here in the United States, the British public clearly has major doubts.

Many people did not want to place restrictions on their lifestyles. A small minority claimed to be willing to make significant and radical changes in their lifestyle, such as driving and flying less. More than half did not have confidence in international and British leaders to tackle climate change. Two-thirds want the government to do more, but nearly as many said they saw green taxes simply as 'stealth' taxes. The tax doubters are the perceptive ones.

The Global Warming Alarmists had hoped that the UN Intergovernmental Panel on Climate Change (IPCC) report last year would finally convince the Britons of the Global Warming Crisis. It is said that 2,500 scientists found a 90% chance that humans were the main cause of climate change and warned that drastic action was needed to cut greenhouse gases. Actually, many scientists making contributions to the scientific review portion of the report do not agree with the summary portion of the report written largely by politicians and a few hand-picked scientists. Many critical scientists dropped out of the UN working groups in protest over how their scientific work and assessments were used in previous reports. Some of the public have doubts due to seeing the documentary "The Great Global Warming Swindle" on TV and due to such books as that of Lord Lawson, a former Chancellor, who questions the consensus on climate change.

This is all very bad news for those in the UK government who aim to cut greenhouse emissions by 20% over the next 12 years. It is not looking as though the British people are on-board for such personal deprivation for such a dubious rationale.

The socialists have turned to environmentalism as a means to acquire power after their boast that they could provide everyone more worldly goods fell on its face and Capitalism emerged as the clear victor for providing people with more food, better clothing, better housing, better health care, more interesting jobs and entertainment, and a wider variety of personal choices. The only self-consistent collectivist environmentalist is one who wishes to return man to the status of the Noble Savage. For the moment, they are using scientists to provide a rationale for their grab for power. They are buying many of them with generous research money and a huge amount of media attention. As a result, many scientists are playing the Global Warming alarmist game with them. This is a close parallel to the old socialist technique of paying Capitalists for the rope that the socialist plans to use to hang the Capitalist with. When the public catches on that many scientists are leading them down a road of personal deprivation for reasons that are not sound, the public will lose its regard for science. The socialist environmentalists will have used the avarice and desire for attention of many scientists to totally discredit them and science itself.

Once the socialists have the power provided by the claim that they are saving the earth from the depredations of man, they will have no use for science and scientists. It will be enough to lead men suffused with superstition, teased by rumors, and fed and dreaming up conspiracies. Science will only cause problems in this quest to return man to the state of the Noble Savage as it approaches its goal. For now, bribed scientists are a tool to help the socialists to power. Later they are expendable. No, they are an impediment to be eliminated. These scientists have been only too willing to hand the socialists the rope to hang them with. The Capitalist society has been the great provider for science as both have evolved from the philosophy of the Enlightenment. As the socialists make further progress in destroying Capitalism, its destruction will entail the death of science.

Just as the production of goods and services flourishes in a free market place, so do ideas and technical developments prosper in a free market. Socialism is clearly the antithesis of the free market for goods and services. What people understand less well is that ideas and new inventions depend just as much upon the freedom of individuals to make their own choices and to pursue their own happiness. The market place of ideas must be as free as that for goods and services if ideas are to be explored and understanding is to be realized in the life of man.

As a part of the socialist agenda against Capitalism and the market place of ideas, the federal government scientist Dr. James Hanson of the Goddard Institute for Space Studies has called for using the courts to prosecute those politicians who deny the idea that man has caused Global Warming and that this is a disaster. Dr. Hanson is one of the media's favorite alarmists. Another prominent scientist alarmist had already made the same call. This scientist is Dr. David Suzuki, a Canadian scientist who became a producer of environmentalist documentaries and is well-known to the watchers of the CBC. Apparently scientists of the socialist environmentalist persuasion are highly inclined to the elimination of free inquiry and freedom of conscience. This tendency is broadly based in the postmodernist, multicultural, and environmentalist fascist socialist worldview.

Thanks to Robert Bidinotto for directing my attention to the article on the poll of the British people and to the comments of Dr. Hanson and Dr. Suzuki.

22 June 2008

The Right to Life and Slavery

Most Americans believe that as human beings one has the inalienable right to life, liberty, and the pursuit of happiness. Today, I want to revisit a single aspect of our individual right to life, liberty, and the pursuit of happiness.

There are many ways to look at one's life, liberty, and pursuit of happiness. There are other ways to look at it which are also right than the viewpoint I am going to take today. But, fundamentally our life consists of all the hours we have lived and our plans for the use of our future hours. Let us oversimplify this further to consider each hour that we have just lived and each hour that we are about to live and make decisions on what we are going to do with it. If an individual had no control over how he just used his last hour, then it is unlikely that that hour added much to his life, it surely did not add to his sense of living in liberty, and he is unlikely to have been very successful in the pursuit of his happiness. Similarly, looking forward to the next hour of our life, we have a decision or several decisions on how to use it. If we can chose to spend all of that hour doing things that we believe will enhance our life, then we are already assured that our life will be better, we will feel free, and we will be pursuing our individual happiness in those ways which uniquely define that happiness to us as an individual, living creature.

So, what shall I choose to do in the next hour? Well, it is Sunday, so I could go home and work on building a new retaining wall for the garden. Let us suppose I do that. I get some fresh air, I get a wee bit of exercise, and I get a nice garden retaining wall. Oh, and my home value goes up a bit and my property taxes go up with it. Of course, I also paid sales taxes already on the wall blocks waiting to be used and on the gasoline used to go buy them. OK, so I guess I will do something else. I could watch TV and listen to the news. How exciting to find out about the latest effects of flooding in Iowa and the new declaration of a federal emergency area to cover the troubles there. And, I learn about how Obama is sure that there is no need to allow the drilling of oil in federal lands, which just happen to cover most of many of our western states. Or, I could hear McCain proclaim that he thinks the north slope in Alaska is pristine and we should leave it that way. I could hear many schemes to make the American medical system like that in Canada, the UK, France, or even Cuba. Yes, even Cuba, but I will not talk about that one, since only the truly insane want Cuba's medical system. So, if I watch TV news, I am frustrated, but, hey, I made the choice, right? But, I did still pay taxes to purchase the TV and I have a room for it in my house on which I must pay property taxes. Still, both choices to work on the garden or to watch TV are relatively lightly taxed and both are relatively free of government expropriating some of my time during that hour or in subsequent hours because I made one of those choices.

Let us suppose that being a small business owner, I decide to go to my laboratory and work on analyzing a carbon coating said to have been applied to a cubic zirconia gemstone to make it look more diamond-like. The income of an hour of work on that project will have federal income taxes, social security taxes, Medicare taxes, Workman's compensation insurance, and Maryland and Federal unemployment taxes withheld from it. I have no determinative choice in how that money is used and I oppose most of the ways in which it is used. Some of the ways it is used are just wasteful and evil for depriving me of the better things I could do with it, but many of them are for the actual doing of further evil deeds. Because I am a business owner, I have further bookkeeping to perform for replacing any supplies I may use in the laboratory analysis I chose to do in this hour. If I take some part of the money I made and invest it in buying additional laboratory equipment, then I get to pay property taxes on that equipment and do the bookkeeping to keep track of its depreciation over the years. Now, I happen to enjoy finding out such things as the nature of new coating technologies and I have specifically in the area of coatings on gemstones discovered some false claims in advertising. I also like working to be able to add to my laboratory's analysis capabilities by buying new equipment. This is fun, but is there any valid reason why when I make this choice to do productive work, I am taxed many more minutes of the hour with tax payments and with the mandated, unpaid contribution of future time than I would be if I worked on the garden retaining wall or I watched TV?

I think it is fair to say that this is clearly wrong. This is clearly a violation of my right to life, liberty, and the pursuit of happiness. I do not have the liberty to choose to spend the next hour of my life on anything without government taking a part of that hour away from me. This is especially true if I try to do productive work which requires an income to enable me to carry out that work. It costs a lot of money to keep a laboratory working. Most of the income the laboratory makes goes into paying the bills to keep it going. A small part, highly dependent upon the fluctuations in the laboratory income, goes to me in the form of a salary or into buying equipment which enables the laboratory to make more money in the future or at least to keep it up-to-date enough to continue making as much money as it does now. But, each new piece of equipment brings more taxes and more bookkeeping. I may love doing the scientific investigating that I do into the properties of materials and in evaluating the success or failure of various manufacturing processes, but I am forced by governments to pay a heavy price in precious minutes out of every hour that I choose to put into such work. Why? Why do I have less right to an hour of my life put into laboratory material analysis than I do if I put it into building a garden retaining wall or into watching TV?

What gives those who vote for these government policies that discriminate against what I like to do the right to make such forceful demands upon the minutes of each hour of my life? Is it not the case that each such minute they take is one in which they hold me as their slave? For years I have been asking this question. No one ever gives me an answer. Those elitists who believe they know how a man should live his life and that they are the ones to force him to do so according to their values never answer my question. Why should they? They have the power. The force and as-needed violent power of government is in their hands. I am deprived of many minutes of every hour I choose to work by applying my time, my investment of untold thousands of hours in all the technical and scientific knowledge I have acquired, and my investment in the laboratory I have struggled to build and I do not even get an answer as to why.

It is especially wry that many of these socialist elitists controlling governments claim to be egalitarians. This is a fraud. We all have the same number of hours of life in a week, yet they take many more hours in the form of taxes and mandated requirements for our work from some of us than from others. This taking is the taking of the hours of lives. They seek equality of income and property, but the most precious thing that any of us have is the hours of our lives. That, these socialists tax with extreme inequality.

Walter E. Williams wrote a column called "Are Americans Truly Against Slavery" in which he identified excessive taxes as slavery. As I have noted in the past, Williams is very good at getting to the heart of the matter and he does so with an obvious passion. I wrote a comment in reply to this column also at this same website. A number of the other comments are also quite good.

21 June 2008

Donald Lambro: Energy charade

Due to the press of work in the lab, I have not commented on some good commentaries I have read of late. I will direct your attention to a fine commentary by Donald Lambro this last Monday, published in the Washington Times, for which he is chief political correspondent. It is entitled "Energy charade." Lambro discusses the total emptiness of the Democrat energy plan which encourages lawsuits against OPEC countries and would put a so-called windfall profits tax on U.S. oil companies, while not allowing the production of additional U.S. oil and gas or the building of oil refineries. He quotes Republican Senators Kay Bailey Hutchison of Texas and Bob Corker of Tennessee, who note the tom-foolery of the Democrat energy plans.

He recounts how Ronald Reagan responded to high oil and gasoline prices by deregulating the oil industry, allowing more oil wells to be drilled, and allowed pipelines to be lengthened. We produced our way out of a high price and shortage situation brought on in good part by Jimmie Carter and a host of restrictions during his presidency. Then Republicans passed legislation to drill in ANWR, but President Clinton vetoed the bill. Sen. Hutchison says that the passage of that bill would have produced the same amount of oil that we import from Saudi Arabia every day.

Democrats use a counter argument that replacing this much Saudi oil would not drop the price of gasoline but a few pennies at the pump. They seem to like false calculations based on simple proportions to calculate savings, but this is not how pricing for gasoline works over short time periods such as we are experiencing now. Right now, most people are not in a position to respond to high prices by trading in vehicles using more gasoline per mile to obtain one using less. The price situation is not quite such that if gasoline doubles in price then everyone will respond by using half as much. But people do respond with some cut-backs even in the short run. Still, the demand is a bit greater than the supply, so the price is being bid up sharply so fewer people can afford to use gasoline and fewer companies can transport goods and services at a profit. Thus, it may only take a modest increase in supply to make a bigger decrease in price in many instances. In addition, there are those who claim that there is much more oil in the North Slope of Alaska than the amount commonly banted about as proven. If the oil companies are freed to develop the oil fields there, they are likely to deliver much more oil than the Democrats say they will.

20 June 2008

The Fallacy of Man the Vicious Animal Killer

A great many Americans believe that we are greatly endangering the animals of the United States by virtue of our high technology, mobile, and reasonably comfortable lifestyle. They believe that we have pushed those other animals of North America, which we commonly simply refer to as the animals, as though we were not animals ourselves, to the verge of extinction. Where they are not almost extinct, their survival has become more brutish and nasty than ever before. Cities now cover the continent and there is nowhere for wild animals to live anymore. We build roads everywhere and our mining, lumbering, and oil and gas fields are destroying animal habitats everywhere outside the cities. We have no right to deprive these other animals of their place in the environment and ought to return to the status of the Noble Savage in order to claim no more resources than it is our right to do.

This flies in the face of both simple everyday observation and the observations of many scientists who have studied a wide variety of animals. Since those scientists who do publish or broadcast alarmist claims of the deaths and extinctions, usually possible future extinctions, of the animal kingdom's denizens get far more publicity than do those who report that the animals are holding their own in most cases, let us concentrate on what we ourselves see, if we are observant at all. Certainly the states of Virginia, Maryland, Pennsylvania, New York, and Ohio ought to be among the worst states for animals if they are fairing badly in the onslaught of habitat destruction by voracious humans. I speak of these states because I hear news accounts more regularly about the deer, raccoon, fox, and rabbit populations in this area of the country than in others. I also travel about in them more than in other states over the time period since 1971.

In the 1970s, I lived in Cleveland. In Cleveland, not in one of its bedroom communities. We had rabbits, squirrels, and raccoons in the neighborhood on a regular basis. In 1980 we moved moved to Silver Spring, Maryland, a Washington, DC suburb. In our yard we see squirrels, rabbits, chipmunks, mice, moles, and voles. In the woods along the Paint Branch Creek a few hundred yards away, I constantly see deer, as I did last weekend on a bike ride. I have also seen opossums there. In the woods near College Park, home of the University of Maryland, I have seen many raccoons. On my drive to my laboratory in Columbia, MD in the Baltimore - Washington corridor, I constantly see deer and foxes, both silver and red. Of course, I also smell skunks with great frequency. I have seen muskrats on the drive to work. I have had both skunks and foxes in front of my laboratory. I just returned from a bike ride along a bike path through a large residential neighborhood in Columbia and I saw three deer on this ride. When we moved here in 1980, the number of deer was starting to grow and their numbers were way up in the late 1980s. It has only been in the last 10 years that I have made frequent sightings of foxes.

On a trip to Virginia, I saw a coyote in a park east of the Appallachian Mountains. On trips in Pennsylvania, New York, and Virginia, I am constantly seeing deer. Twice in Maryland, deer have run into family cars. Just over a week ago, a deer in Rochester, New York ran into my daughter Katie's car. Everywhere we hear and see the evidence of a burgeoning deer population causing more and more car accidents. Yet the deer populations continue to grow. Apparently, as we have become more wealthy and more people move to metropolitan areas, we hunt less and the hunting is apparently more of a factor in decreasing deer populations than is their foolish tendency to run into cars. Perhaps another factor favoring deer population growth in many areas outside the growing metropolitan areas was the long term reduction in the amount of land being farmed. In much of the country, land farmed in the late 1800s and early 1900s has reverted to forest and woodlands. But this has not been a necessary factor in the increased deer or fox populations, since they are growing even in the face of the growth of the Washington - Baltimore high population corridor.

Once upon a time, most Americans did not want to see foxes. They worried that the foxes would eat their chickens, cats, and small dogs. Nowadays, people are clearly more tolerant of them and even of coyotes, whose population is also growing. Reports are that puma and black bear populations are also growing. Apparently, when people are not dirt poor and when farms are better equipped to provide their farm animals with more protected housing, more and more people are not driven to exterminate carnivorous animals or to worry quite so much that the deer might eat a few ears of corn. Generally farmers are making very good money these days.

Maybe humans are not so voracious after all. Maybe they become less so as their lives become more secure and they feel less threatened. Maybe they even acquire some significant joy in seeing other creatures thrive and living well. I do. Yet, we see this happening even in cities and metropolitan areas. If this is the case, should we be so ready to believe that drilling for oil and then producing it and delivering it by pipeline is going to kill off the caribou? Well, that experiment has now been done. The results are in. The caribou herds are growing, not dying off. Similarly, we hear that some future possible few degrees of warming is going to decimate the polar bears. Well, the warming of the 1970s to 1998 did not do that. In fact, the polar bears did just fine. For them, it is not swings of a few degrees of temperature that matter so much as how much they are hunted. Rather the same situation as with the deer or foxes and coyotes.

There is no reason to prevent the exploration, drilling, and production of oil and gas on the Federally owned lands that dominate most of the western states or of the lands and waters of the northern areas of Alaska or anywhere else. We can easily both find and produce oil and have a habitat very suitable for wild animals. Apparently, the animals are more adaptable and sturdy than many give them credit for being. In fact, some animals just love oil fields and pipelines. In the late 1960s I worked in oil fields and on pipelines in the summers to earn money for college. In the oil fields along the south bank of the Red River in Texas, the copperheads and scorpions just loved the pumphouses as a place to live. Along the pipeline in north central Oklahoma and another in west Texas that I worked on, the prairie dogs loved to establish colonies straddling the pipelines. Why? Because the pipelines are heated in the winter to allow the oil to flow better. Prairie dogs are not fools. They like warmth in the winter. Working on the pipelines you had to be careful however. Sometimes, rattlesnakes by the several dozen would move into prairie dog colonies. They really like the ready-made holes and the warmth also.

Many scientists can be bought with research money, and/or with fame, and/or with political correctness incentives. Some courageous scientists will buck such political delusions, but many non-scientists may not be able to or inclined to read their published work and make a critical analysis of it for themselves. However, most Americans do evidence significant analytical capability in their own line of work and this has made them the most productive workers in the world. So, when you see yourself that so many animals are flourishing, as you must see, or smell in the case of the ubiqutious skunk, trust in your own ability to evaluate the claims that man is eradicating the animals and appropriating all the resources of the planet to his own needs and leaving nothing for the other animals. This politically correct thesis is clearly nonsense.

So, do not buy the line that man must not drill for oil and gas in the Federal lands of the west or in the north slope of Alaska. Do not accept the idea that drilling in the oceans will pollute all the beaches and kill the fish. Actually, the fish thrive around the oil platforms in the Gulf of Mexico. Do not believe the nonsense when environmentalist radicals claim that the caribou will be eradicated by a single pipeline across Alaska or even by several. Use your common sense. Do not go gently into the night and the dank cave that those who worship the Noble Savage would thrust you into. Demand your use of energy so man can continue to be nobly productive and creative in building a world ever better for man and also for the animals who seem to be thriving even as we thrive.

12 June 2008

U.S. is to Food as OPEC is to Oil

The United States is in many respects to food production similar to OPEC with respect to oil production. The U.S. has a huge impact on the world price of food and affects prices in good part with Federal government mandates and price controls largely dictated by the huge Farm Bill passed recently and its predecessors. As a result, the U.S. government and many state governments also act in constraint of trade in food in many profound ways. When we pass a NOPEC bill in Congress which allows lawsuits against OPEC for their acts in constraint of oil trade and for conspiring to affect the cost of oil in the U.S., we are acting rather hypocritically. The OPEC nations might say that if we want to play that game, they can play it also. A lawsuit now has been initiated against OPEC in response to their constraint of the oil trade. Might OPEC nations respond with laws against the restraint of trade in food and follow-up with lawsuits of their own?

I am not suggesting that what OPEC is doing in the oil markets is wise or that it is moral. But, their restrictions on oil production are not different than our own refusal to explore and develop many of our suspected oil resources. As we will discuss here, we also have a huge impact on world food prices and we clearly manipulate those in many ways which also have nothing to do with the free market. As we complain about the sharp price increases in oil, much of the rest of the world is complaining about the great cost increases in food. We should allow the free market to develop our oil resources and we should allow it to control food production also.

Thomas Barnett wrote an interesting commentary published on 11 June 2008 in the Washington Times, entitled "U.S. edge in global food trade." On the Scripps Howard News Service it is entitled "U.S. sits pretty in global food trade network." Barnett only mentions concerns with the hypocrisy of our food manipulation policies in passing. The point of this article is that he is proud that we are as dominant as we are in the food production business. I am also proud of that and we should have enough self-confidence to allow the free market to prevail. Barnett says, "When the professional fearmongers try to scare you with America's 'oil addiction,' remember this: If the world's got us over the barrel on energy, we've got the world over a bread basket." Here are some of the interesting facts that Barnett notes:

  • North America exports 105 million metric tons, the former Soviet Union nations export 21 million, South America 18 million, and Australia/New Zealand 9 million metric tons. Of this the North American share is 68%.
  • The net importing regions are: North Africa and the Middle East import 58 million metric tons, Asia imports 47 million, sub-Saharan Africa 17 million, and Europe 12 million metric tons.
  • North America imports half its oil, while the Middle East imports three-quarters of its food.
Barnett also discusses how global warming will help North America produce more food and cause people to use less energy, which will hurt OPEC. Since I do not think the global warming scare will last as people become more aware of how flimsy the arguments for it are and because a productive world will continue to have a great deal of use for oil, I am not too interested in Barnett's arguments here. But, it is clear that the demand for food is such that more farmland is being put back into production. He notes that Dakota farmers are presently tilling fields that have laid fallow for decades and that land speculators are counting on increased production in Russia, Ukraine, and Kazakhstan. He also notes that the Chinese are running around the world buying up arable land in other countries.

He notes that food is about 0.1 to 0.2 of a household's spending in industrialized nations, but is as much as 0.8 of household spending in developing nations. Today, only 7% of rice is traded globally and 12% of corn is traded. He believes these percentages will increase and that the global food trade network will become as important as the global energy trade network. Rather than moan so much about the cost of oil, we should produce more food for export. Of course, we should also produce more oil and gas as well.

11 June 2008

Obama on Taxes

Barack Obama warns that McCain's tax policy, spending plans, and energy plans will continue the economic slowdown he likes to pretend is a recession. However, his higher taxes on oil companies and wealthy individuals, even though accompanied by a $1000 tax break for most working families, will do much less than McCain's plans to straighten out the economy. The plans of either to institute carbon taxes are likely to send the economy into recession, if implemented, especially as some sort of additional tax.

Not happy to only make the economically absurd claims above, Obama claims that President Bush sacrificed investments in health care, education, and energy and infrastructure on "the altar of tax breaks for big corporations and wealthy CEOs." The truth is that the Bush tax cuts enabled the economy to grow so fast and steadily that much more money rushed into the government coffers and both Republicans and Democrats in Congress gleefully spent every last additional penny and then spent some a second time. Chris Edwards, The Cato Institute director of tax policy notes that the Department of Health and Human Services increased spending by 67% in 7 years under Bush, while the Dept. of Education increased spending 92%, the Dept. of Energy spending was up 42%, and federal capital investment outlays were up 35% for non-defense investments and 131% for defense investments. The big tax breaks for corporations resulted in an increase of 128% in federal corporate tax revenues. I suppose Obama's claim that they got those big tax breaks means that he thinks their taxes should have gone up much more than 128%! Hey, Obama, way to ship hordes of jobs to China and India!

The fact of the matter is that the Democrat goal of hugely expanded government expenditures was much better realized by President Bush with his tax cuts than it ever will be by Democrats with their punitive tax schemes on the higher income earners and windfall profit taxes on whichever industries earn the disfavor of the Democrats. Why do the Democrats never talk about windfall taxes on the movie industry? Is it because so many movie stars and producers are giving them a lot of campaign money? Just wondering.

Barack Obama has genius in fooling many of the people most of the time. Other than that, he does not know at all what he is doing.

10 June 2008

Alan Reynolds: Get Ready for the Oil-Price Drop

Alan Reynolds, senior fellow of the Cato Institute, wrote an article called "Get Ready for the Oil-Price Drop" which is very interesting reading. It was published in the New York Post on 6 June 2008. He points out that the United States is using no more oil now than it did in 2004, which one would hardly guess given all the accusations that Americans addiction to oil is causing the high oil prices or is causing the imminent death of the planet. In addition, he points out that passenger cars are not the primary user of oil, so politicians and socialists trying to make us feel guilty about driving to work are giving evidence that they do not understand how oil is used.

Only 44% of oil becomes gasoline and much of that is used by industry, not just individuals who are being enjoined to walk a mile to a bus stop and wait 15 minutes for it to show up, if it does, then switch to a second bus, then get on a Metro train, and then walk the remaining several blocks to their place of work. Two-thirds of US petroleum use is for transportation, but half of it fuels commercial trucks, trains, airplanes, and ships. Most crude oil is used to produce diesel fuel, heavy oil for industry, aviation fuel, asphalt, home heating oil, propane, wax, plastics, detergents, drugs, and fabrics.

Since such a large fraction of oil is used for industrial production and the delivery of goods and services, the price of oil is very cyclical. That is, its price increases with economic activity and falls when economic activity slackens. Historically, the price of oil fell 44% in the Nov 2000 to Nov 2001 recession, 48% from Oct 1990 to Jan 1992, and 71% from July 1980 to July 1986. Because fuel costs have a huge impact on business profit and loss, when the price of fuel goes up greatly, then production will decrease shortly afterward. In nine out of 10 postwar recessions, the recession began shortly after the price of oil rose greatly. This time around, US manufacturing was proven very resistant to production decreases due to the high price of oil and has been one of the reasons for the sustained oil price increases.

In the US and Britain, industrial production is nearly flat, being only 0.2% higher than it was a year ago. But, in many other countries, production dropped over that period. Japan is down 0.7%, Austria 1.1%, Italy and Denmark 2.5%, Canada 2.9%, Greece 5.4%, Singapore 5.7%, and Spain 13.3%. In April, industrial production in India and China fell. This worldwide production decrease is going to bring down the cost of oil substantially.

Well, maybe it was a good thing it has recently been high. It made it impossible for the Democrats and some very foolish Republican allies to pass the incredibly wrongheaded Warner-Lieberman Energy Security Act which was to tax our use of fuels heavily and grab control of much of our lives. Of course, I also like seeing the US proving to be one of the countries most resistant to industrial output decreases in the world. Those of us who work hard to make the US so productive have much to be proud of. We also give the socialists and the earth goddess worshipers so much to complain about with our use of resources! Let us continue to give them much to be unhappy and bitter about! Heck, they would not know what to do with themselves if they could not complain about those of us who create and produce. They need us, as do all the human parasites. But why should we allow these angry leaches to suck our blood? Why don't we use this high gasoline price episode to keep up a drumbeat campaign for increased oil production in the US and in Iraq?

Richard Rahn: Manslaughter by Politicians

Richard Rahn published an article called "Manslaughter by Politicians" in the Washington Times on 4 June 2008 which is a good read. Commonly, politicians find reasons to pass many thousands of pages of new legislation every year that affect our ability to perform work and to produce goods and services. The greater part of this legislation imposes great costs, which few people stop to consider. They simply accept whatever intended purpose for the legislation the politician offers up as being the only important result of the legislation. If it seems it might be nice to reduce the amount of CO2 emitted into the atmosphere by the human use of energy, then why bother to calculate the cost of using less energy, of developing and using new forms of energy which emit less CO2, or figuring out what human activities will have to be given up to pursue the goal of reducing CO2 emissions. The same is true with respect to many other things that seem good to people, such as OSHA requirements for workplace safety. When do we ever calculate the actual cost of nice sounding legislation against the expected benefit of that legislation? Almost never, and when we do, the calculation is simple-minded and biased toward proving that the legislation was necessary, since it is usually the government that is funding the research study.

Economics is the study of the use of limited resources and all resources are limited and finite, especially perhaps that of human life hours. We are all constantly faced with the decision to do this or to do that. Often, we cannot do both and if we can, we still often have to decide which action we will take first. So, if we are spending more of our money to buy gasoline because the government will not allow oil and gas companies to drill for oil in the United States, then we will have less money to spend on our medical needs. If we must pay more for food because the government is requiring the use of a large fraction of all US corn to make ethanol for gasoline fuel mixtures and driving up the costs of food production with crop subsidies, then again we will be able to spend less on medical care. Since worldwide food prices have doubled in the last year, many poor people around the world are suffering increased malnutrition, which leads to shortened lifespans. There are reasons why the average life expectancy is highly correlated with the per capita income of a society and why income growth is correlated with economic freedom.

Rahn cites a study by Frank Lichtenberg of the National Bureau for Economic Research that found that the medical expenditure needed to gain one life year in the US is about $11,000 and the pharmaceutical R&D expenditure needed to gain one life year is $1354. Consequently, when the politicians proposed allowing Americans to buy their prescription drugs in Canada, where a national health system puts pressure on pharmaceutical companies to sell their drugs at prices below those sufficient to fund the development of new drugs, the necessary expenditure to buy one year of life through pharmaceutical developments becomes impossible. So, does it make sense to save some money now on drug purchases at the expense of not further extending American lives in the future? Few people ask and think about this question, yet it is a central question.

When politicians fail to ask such questions and to weigh them rationally, they are committing manslaughter. When dealing with manslaughter, we have a serious responsibility to name the crime, even if it does not seem to be the nice thing to do in a non-confrontational society. But, it is better to force a confrontation and examine the consequences of the actions we force upon others carefully, then to unthinkingly bury the bodies as they pile up.

07 June 2008

Taxes, the Economy, and Solving Problems

There is a mind-set that any problem at large in one's society should be addressed with new laws establishing new redistributions of income either through taxes or by mandating required actions. Often these problems are viewed as righting an inequality, though with the elevation of environmentalism into a religion, especially among those formerly of the socialist political spectrum, drastic new programs and taxes are being proposed simply to punish human beings for exhibiting the ability to make the world a better place for human beings. Actually, government and tax policy has long been about punishing human beings for exhibiting productive ability. Those with ability seem to earn more envy than appreciation from a plurality of voters.

What is the rational approach to determining the scale of government and taxes? It has long been clear that minimizing both provides maximal freedom, maximal creative and productive output, and allows people ever-increasing resources to devote to human problem solutions. But this is not a viewpoint people keep clearly in mind as they approach any given problem. This rational, principled perspective is usually lost when it is most needed.

As I have noted several times, one of the undoubted reasons for the present economic slowdown has to be the uncertainty that businessmen have to have about future tax rates in the United States. Many business investments have payback periods extending many years into the future. They require a great deal of capital being invested over the course of a year or two or more, which is justified only if a profit can be reasonably anticipated from the investment over a number of years after the losses of the first year or two. Some investments have a shorter payback time, but very many require years. Consequently, with the Bush tax cuts expiring in 2011, businesses must be worried about their calculations on anticipated net income for investments being made now and next year. With the Democrats in firm control of the Senate and the House of Representatives and the expectation that they will strengthen their grasp of power in those bodies in the 2008 elections and grab the Presidency with a far-left socialist radical, businessmen have to be figuring that future taxes will be heavier than they are now. This rules that many investments that would have been profitable with present tax law, will not be profitable with the expected tax increases. Companies respond by buying fewer capital goods than they would have and by hiring fewer new employees.

It is simple. The calculations on any given investment decision are anything but simple, especially given that one does not know what the future tax structure will be and what future mandates will exist. This uncertainty is always present to too large a degree with activist, expanding government. But with an activist socialist presidential candidate whose stated program is "Change you can believe in", uncertainty is at a maximum. Then there is the huge power grab over most every aspect of our lives represented by the Warner-Lieberman Energy Security Act's crushing fuel taxes and their uncertain administration. Only idiots would not refrain from making many investments in this climate. That this climate of uncertainty (climate change?) depresses investment is what is very simple to understand.

So, let us examine a commentary by Ed Feulner, President of the Heritage Foundation, on some aspects of our tax policy and its effects. Five years ago, key provisions of the 2001 tax cut were accelerated to take effect in 2003, including doubling the child tax credit to $1,000, ending the marriage penalty, expanding the earned income credit for married joint filers, a new 10% tax bracket for low-income taxpayers, reduced marginal tax rates for other income brackets, the top capital-gains tax rate was cut from 20% to 15%, and the tax rate on dividends was reduced from as high as 39.6% to 15%. The result was that the economy added jobs every month from August 2003 until January 2008. 8 million new jobs were created and economic growth rates more than doubled.

In the static economy mindset, the tax cuts reduced taxes by $1.3 trillion from then through the end of 2007. But actually, because the economy grew so much more and investors could invest more wisely with lower tax rates, the government collected more tax revenue, not less. In 2003, federal revenues were 16.1% of GDP, but by 2006 they were 18.6% of a larger GDP than we would have had with the original higher tax rates! With lower tax rates, Federal government tax revenues increased from $1.77 trillion in 2003 to $2.41 trillion in 2006. This is a 36% increase in Federal revenue in 3 years! Despite that huge increase, Democrats act as though government was starved for money to spend on essential programs.

It is a marvelous thing when you can have a tax cut that leaves more money in the hands of the people and at the same time gives more money to the government to tackle such issues as it should, or more likely that it should not. This additional money paid for the war in Iraq and Afghanistan and many, many unsound Congressional giveaways. There were other effects also. The top 5% of income earners paid 59.7% of all income taxes by 2005, which was the highest % paid by that group since such records were kept in the mid-1980s. The cut in the double-taxation capital-gains tax resulted in a doubling of capital-gains tax revenues.

So, why would Democrats want to end the Bush tax cuts? It sure is not so that they will have more tax revenues to help the poor and the disadvantaged with. No, it is purely for demagogic reasons. They wish to pose before an ignorant public as the champions of the poor and the disadvantaged by piling more taxes on those who are already paying the vast majority of income, capital-gains, and dividend taxes. If they really were champions of the poor and disadvantaged groups, they would leave these tax cuts in place.

Worse yet, many of them back the Lieberman-Warner carbon tax bill which will raise taxes still higher and produce huge uncertainties for business planning. It will give Congress hugely greater power and give them many more opportunities to milk money out of lobbyists for all the groups who use energy and want special exemptions, energy credits, or who want alternative fuel and energy efficiency development monies. What a bonanza of power for Congress, while the people suffer economic stagnation and the end of many of their dreams. How many diseases will not be cured, how many products that enrich our lives will not be developed and produced, how many homes will not be bought, and how many jobs will be lost in America to India and China where a carbon tax will rightfully not be adopted?

Victor Davis Hanson: The bad war?

Dissatisfaction with the war in Iraq appears to be inducing both the left and parts of the right to reinterpret America's previous wars. The conservative Patrick Buchanan has written Churchill, Hitler and the 'Unnecessary War': How Britain Lost Its Empire and the West Lost the World." Wow, what a perspective on WWII! Then there is the view that American and British bombing of German cities in WWII was a war crime, put forth by the leftist Nicholson Baker in Human Smoke: The Beginnings of World War II, the End of Civilization. Just war theory is popular in some circles. Victor Davis Hanson has a well-done commentary on this rewriting of history and this tendency to think that "liberal democracies be not just better and smarter than their adversaries, but almost superhuman in their perfection."

He points out that Buchanan's (and many others) belief that the Treaty of Versailles that ended WWI was too harsh, should be viewed in light of how much worse the treaty was that Germany (Prussia) offered France in 1871 after the Franco-Prussian War or to the treaty offered to Russia in 1917 when Russia left WWI after its revolution. According to Hanson, it was also milder than the treaty Germany intended to offer a defeated Britain and France should Germany win WWI. It may still be the case that the Treaty of Versailles was too harsh in terms of reparation payments, but one can also argue that the penalty for starting a war and losing it needs to be severe to prevent countries from playing at war as though it is a game. Try and try again until you win all the marbles, as in the Hundred Years War. This is rather what Germany did by starting WWII. To prevent this, one can argue, as Hanson does, that the real mistake was not occupying Germany after WWI.

In any case, Hanson claims that these books do not prescribe realistic alternatives, which ought to be a lot easier to do after the fact than it is reasonable to expect it was for Britain and France while fighting for their lives. What kind of world would it have been if we had continued to find ways to keep doing deals with Hitler which were adequate to keep him happy? I expect Hitler would have been happy for a few more years if every time he proposed taking large chunks of other countries, the Allies had said "OK, go right on ahead." After all, he was only asking for areas where Germans lived. They lived in most of the cities and large towns throughout eastern Europe where they were prominent professionals and tradesmen. Hitler could have gone on a long time taking over areas alleged to committed abuses against these Germans, many of whom were German Jews.

Hanson says of America's role, "They and those who sent them into the carnage of World War II knew Americans could do good without having to be perfect. In contrast, the present critics of the Allied cause enjoy the freedom and affluence that our forefathers gave us by fighting World War II while ignoring -- or faulting -- the intelligence and resolve that won it."

05 June 2008

The Right to Offer Employment Without Enslavement

As an adult with full possession of his senses, I have the right to choose to devote hours of my life to productive work. No one has the right to deny me that choice or to prevent me from doing productive work. Others have this same right. Furthermore, we have the right to work with one another to carry out tasks which we have agreed to perform together. No one has the right to deny us this cooperation. For them to do so is a significant violation of each of our individual rights to life, liberty, and the pursuit of our happiness.

Now suppose that of the several people working cooperatively to accomplish the tasks they have chosen to work on have come to terms in this cooperation which take into account that one or more have invested many more previous hours of work and provided capital in order to make it possible for others of the group of cooperating individuals to have the job that they have chosen to take. Commonly the individual or group of individuals who invested prior hours of work and capital to make other jobs possible are the owners of a business. One would think that their efforts to create other jobs which did not require years of work with low income so that every possible penny could be re-invested in the business and who mortgaged their home and used a substantial part of their prior life savings to start a business and guide it through the first 5 to 10 years when most businesses fail, would be considered something of a good guy.

But no. Such a person is regarded with great suspicion by government. Governments at all levels are inclined to believe that this employer must be watched with an eagle eye and closely regulated. Regulation means that he will commonly be told that he must do this and he must do that or the full force of government wielded violence will fall upon his head. So, he must keep books which may require the investment of many, many more hours each year than the needs of his business actually require. He must collect payroll taxes from his employees and keep records on them and submit forms on the process to the governments. Each quarter of the year he may be required to submit state unemployment insurance fund payments with filled out forms to the state government, even in those quarters where virtually every worker has exceeded the $8500 limit on which the tax is collected. The time to fill out the form may be 30 or 40 minutes and the payment may be less than $10. The state government is not bothered by this in the least. After all, they did not have to pay the employer for his time. Indeed, the employer is never regarded as an actual individual having a finite number of hours in his life. This employer apparently has no right to believe that he has a right to these hours of his life at all. The state, local, and federal governments are all very sure that they can require an employer to turn over many tens of hours of his life every year to them.

Slavery has always been present throughout all of recorded history. Slavery is not just the case of putting chains on a man and then telling him that he must do this and that or you will whip him. In fact, the slave will do better work if the chains are not present. The slave master may find it more effective to tell the slave to do this and that and keep me happy or I will kill your wife and children. Or, in the modern age, he (or a large gang of slave masters) may instead say, you have invested years in earning a house and saving money or in building a business. How wonderful, because this means that we can force you to do our bidding with the threat that we will take your house away from you, we will take your savings, or we will take the capital of your business away. This has great advantages, because this gang of slave masters now does not have to look so brutal as they would standing there with the blood of your wife or children dripping from their hands. Now they have merely to take money and property, which is so much cleaner. But does not taking this money and property mean that they are taking the hours of the employers life used to make the money and acquire the property? Is this not a clear violation of his right to life and certainly of his right to pursue his happiness? Is this slightly higher level of abstraction really too much for most Americans and others to comprehend? Apparently it is. Or do they understand, but they really do not believe that a man has the right to life and the pursuit of happiness?

Once upon a time, Americans thought that the individual right to life, liberty, and the pursuit of happiness was something every man had a right to fight for whenever anyone used force to deprive him of these rights. Americans fought King George III and the English Parliament in the name of this right, but apparently any American today who is an employer is especially deprived of these individual rights. Yes, everyone is substantially deprived of them and everyone is substantially enslaved by requirements imposed with the threat of force upon many of the hours of his life. But, no one is so heavily enslaved as the damned employers.

So, what is the most recent imposition upon my time? The 2007 Survey of Business Owners and Self-Employed Persons, which Title 13, United States Code, requires businesses and other organizations that receive this questionnaire to answer the questions and return the report to the U. S. Census Bureau. The form requires information on the business and on the four principal owners of the business.

So what information is so critical that the government feels justified in taking 30 minutes of my time? Is the business owned by another company, employee owned, is it a cooperative, owned by an estate or trust, an American Indian tribal entity, a non-profit, publically held, did any individual own 10% or more of it, is it jointly owned by a husband and wife, did two or more members of the same family own the majority of the business, how many owners are there, and give the % ownership by the top four owners.

Owner: How was ownership acquired? When was ownership acquired? What functions does owner perform? How many hours does owner work a week? [60 or more is regarded as an adequate upper limit! Government workers have no idea.] Was business the primary source of income? Prior to this business, was owner ever self-employed? [Yes, I cut lawns as a kid.] What was the highest education level? Is owner male or female? What age is owner? Was owner born in US? Is Owner Hispanic, if so what type? Is owner White, Black, American Indian, Asian Indian, Chinese, Filipino, Japanese, Korean, Vietnamese, other Asian, Native Hawaiian, Guamanian or Chamorro, Samoan, other Pacific Islander, or some other race? [Other, human.] Is he a veteran? Is he a disabled veteran?

Business: What year was the business established? What sources of capital were used to start the business? [No government grants, loans, or insured loans, that's for sure. I did not meet the racial and gender requirements.] What was the total amount of capital used to start the business? Did business operate from home? Operate as a franchise? Did franchiser own more than 50%? What sources were used to finance expansion and capital equipment in 2007? How much of sales was from export in 2007? Did business establish operations outside US in 2007? Did business outsource functions outside US? What languages was business conducted in? What types of workers were used? What benefits were supplied? Do you have a website? Have e-commerce sales? Make on-line purchases? What are business hours? Is business currently operating?

Congress does not even read the bills they pass. What are the chances that they will study this data to learn anything about business from it? Actually, the fixation on such issues as the race of the owners suggests that they have no interest in understanding business. They simply want to have justifications for continuing to discriminate against those businesses owned by white males. They also want information on the extent of outsourcing overseas so they can monkey with businesses on that prime issue for demagogues, read most politicians.

I really am tired of being a slave to governments. Is there something wrong with me because I feel that way? Don't be shy you lovers of government expansion. Justify my slavery. Tell me why I should embrace it as a rational man. Ease my pain by giving me understanding. If you cannot do so, then share my pain enough that you will start taking action to reduce my enslavement. Don't continue being a slave master yourself. Surely you do not believe in slavery? Surely you find yourself appalled at what you have wrought? Free the slaves!

04 June 2008

Iran at War with U.S., Pelosi Spokesperson for Iran

For many months, it has been clear that Iran has been waging war upon the United States. They have provided training, supplies, money, medical support, and safe havens for forces fighting American troops in Iraq. Weapons supplied by Iran have been used, with their knowledge and their intent, to kill American soldiers. Iran has been the chief supporter of the Shiite Mahdi militia, which long controlled the very important port of Basra and cut-off much of the flow of oil out of that port. The Mahdi militia also played the major role in creating friction and fighting with the Sunnis, thereby bringing Iraq to the brink of all-out civil war. The recent crack-down of the Iraqi government to oust the Mahdi militia from control of Basra and its surroundings did much to improve Sunni cooperation with the government and to recently increase the flow of oil. This flow of oil is extremely important as a means to put Iraqis back to work and to give them a means to concentrate on re-building the country Saddam Hussein destroyed in decades of looting, neglect, and legal instability.

But, for all of its nefarious activities, the Speaker of the House of Representatives is acting like a spokesperson for the theocratic tyrannical government of Iran. Here is her perspective of the situation in Iraq and the role of Iran:

"Well, the purpose of the surge was to provide a secure space, a time for the political change to occur to accomplish the reconciliation. That didn’t happen. Whatever the military success, and progress that may have been made, the surge didn’t accomplish its goal. And some of the success of the surge is that the goodwill of the Iranians-they decided in Basra when the fighting would end, they negotiated that cessation of hostilities-the Iranians."

How wrongheaded. Yes, Iran did seek to have hostilities cease when their proxy forces were too hard-pressed by the Iraqi government and the American troops. But, there is no indication whatsoever that they did this as a matter of goodwill. Our Speaker is clearly disassociated from this world. How can one so readily describe a country at war with us throughout most of the surge as being responsible for its success because of their goodwill as evidenced by a partial surrender. This is as ridiculous as describing Japan as being responsible for our success in the Pacific campaign of WWII because hostilities ceased due to Japan's goodwill!

The leadership of the Democrat Party is utterly astounding. Yes, the leadership of the Republican Party is often incompetent, but mostly there is evidence that they live in this world. Nancy Pelosi seems rarely able to observe reality without coming up with some incredibly wrongheaded assessment of it. Is she a holographic projection created by beings from a far off anti-matter galaxy for the purpose of subjugating the United States and then the Earth? What can explain such distortions of reality? I really want to know. Is there anybody out there who can explain this to me? I really am completely befuddled by it.

Congress May Have Done Something Useful

In May, Congress passed a bill to stop adding oil to the Strategic Petroleum Reserve. This bill takes effect on 1 July. Economist Philip Verleger, as reported in the 16 June issue of Forbes, says that this will result in an immediate drop in the price of sweet (low sulfur), light crude of $20/barrel. How is this possible, given that only 60,000 barrels of oil a day are being added? This is only 0.3% of U. S. oil consumption.

The market for light, sweet crude oil is very tight and this is what is mostly being put into the Strategic Petroleum Reserve. Only 10 million barrels of oil produced each day are light, sweet crude out of the total of 87 million barrels. This is the oil that has the price we hear quoted all the time of $135/barrel. When 130,000 barrels a day of Nigeria's Bonny Light oil was lost to saboteurs earlier this year, prices for sweet, light crude shot up. The light, sweet crude comes mostly from Saudi Arabia, Nigeria, and the North Sea.

In a 29 November 2004 column in Forbes, Steve H. Hanke of The Johns Hopkins University estimated that the filling of the reserve was responsible for about $10 of the then sweet, light crude price of $55.

The government gets 185,000 barrels of oil each day as a royalty payment from its Gulf of Mexico oil field leases. It sells some and trades some for the light, sweet oil it mostly puts into the reserve. After 1 July, the government will sell all of this oil and have more income from it. This will amount to about $1.5 billion extra income in the 2nd half of 2008. We can be sure that Congress will quickly use the fact of that income increase to spend another $2 billion in the 2nd half of the year.

Steve Forbes, in the same 16 June issue, notes that Federal Reserve policy has brought about a reduction in the value of the dollar by adding to the money supply. He believes that the Fed should aim to adjust the money supply so that gold has a price between $550 and $600 an ounce. He notes that the falling value of the dollar has been responsible for a large part of the cost increase for oil.

Barack H. Obama Flees

I have had little to say about Senator Obama lately. He is so wrongheaded that I doubt that he is of this world. He is surely an alien.

His beliefs are based on a foundation that men and women are consumed by envy and racial discord. He believes that those with fewer worldly goods will be made whole if only they had more worldly goods and that this should be accomplished by the government seizing goods and requiring services from those with more worldly goods to be given to those with less. This viewpoint is fundamentally so wrong that it is difficult to choose which argument to present against it first.

People make different choices in life. This should be obvious to anyone. If you choose to roll the dice on planning a professional basketball career and put all of your energy into playing basketball and none into studying, on average, you will earn far less income than someone who studies and learns something about work ethics by having part-time jobs as a teenager. If you say that playing basketball is acting black and studying and working is acting white, and you disdain the latter, you will pay a price for that. If your passion for basketball is so great that you are willing to pay this price the rest of your life, then it is your right to make this choice. But if you make this choice and then you expect to spend the rest of your life hiring government thugs to dip into the pockets of those who chose to acquire work skills and mental capabilities that earn them more income, you have become a thief. If you do not do this, then you have pursued your dream and this deserves some respect. If it does not work out, then it is still possible to study and learn work skills. It may be harder, but in America, you can always do this. Our many immigrants constantly show us that this can be done. There is no need for anyone to become a thief in America.

I object fundamentally to the idea that the amount of worldly goods that we have is the source of happiness. There is nothing wrong with having them. There are plenty of things it is pleasant to have. But what makes a man a man is the knowledge that he can identify his own dream, then face the challenges he must in the pursuit of his dream and succeed despite them to accomplish what he set out to do. When he does this, without using force against others, he is likely to actually make the lives of those he interacts with and trades goods and services with better. In any case, he earns the right to respect himself and should be respected by others. If he is a good scientist, doctor, farmer, investor, grocer, homebuilder, basketball player, clothing retailer, or hairdresser, he should be respected for it. But, if he failed to reach his dream and he turns to taking money by force from others through the tax system of a socialist government, we should never, never, never respect his thievery.

Simple-minded people like Senator Obama are consumed with the idea that equality in terms of income and wealth will somehow cause most people to become happy. This is strangely materialistic. It does a huge injustice to the human soul. It also rises in the face of the fact that if material goods had such power, then why isn't everyone extremely happy? Today's poor have much, much more than did early American colonists. Those colonists had much more in America than they generally had had in Europe before they came to America. Food is readily available for the poor, in fact they are more likely than most people to be fat. This is hardly starvation, which for hundreds of years before the wonders of capitalism came into play, was the frequently reoccurring scourge of most of the world's population. The homes of the poor are usually better heated and often air-conditioned, than those of most people in the past. Then there is the ease of entertainment and transportation compared to the past. There is the ready availability of health care and resultant longer lives. If the possession of worldly goods and security is the measure of happiness, then no one in America today has any right to unhappiness! But, of course this is simple-minded. Turning large numbers of people into the receivers of stolen goods or turning them into slave masters is not going to produce universal happiness. There is no honor among thieves. What this does is makes everyone everyone else's enemy. It makes everyone a threat to everyone else's dream.

Senator Obama believes that he can use the combination of widespread envy and either a sense of being discriminated against or a guilt for having a racial association with someone who discriminated against others to attain his dream. He dreams of having the power of being President of the United States and using that power to finally acquire satisfaction with who he is by earning the love of the poor and downtrodden in society. In his pursuit of power, he joined a Black Values, separatist church in south Chicago. This gave him a power base adequate to become an Illinois senator in the state legislature and then to acquire a U. S. Senate seat. But now, the very evident racial hatred and the extreme irrationality in the pulpit at that church, which is applauded enthusiastically by the congregation, have caused him to flee association with it. Yet, he has been enveloped in this atmosphere, by his own choice, for 20 years.

Here is what Thomas Sowell has to say about Senator Obama:

Are Barack Obama's views shown by what he says during an election year or by what he has been doing for decades before?

The complete contrast between Obama's election year image as a healer of divisions and his whole career of promoting far-left grievance politics, in association with America-haters like Jeremiah Wright and Bill Ayers, are brushed aside by his supporters who talk about getting back to "the real issues."

There is nothing more real than a man's character and values. The track record of what he has actually done is far more real than anything he says, however elegantly he says it.

Read more in his commentary, "Irrelevant Apologies."

02 June 2008

Lambro: Recession fixation

Donald Lambro commented today in the Washington Times that Americans are deeply pessimistic about the future of the American economy, owing in large part to the Democrats media campaign that the economy is in recession. Let us look at the facts.

  • GDP grew 0.9% in the first quarter of 2008. This is weak, but it is not recession.
  • The unemployment rate is low and near 5%. People who want to work and who have some marginal skills are working.
  • New home sales rose 3.3% in April. As earlier noted in this blog, home sales are really only in trouble in a few areas of the country, generally those where unrealistic increases in housing valuations occurred earlier.
  • With the exclusion of transportation orders, factory orders increased 2.5%, the largest such increase in 9 months.
  • We remain the world's largest economy, producing $14 trillion of goods and services each year.
  • Exports grew 3% in the first quarter and we are selling $1.4 trillion of goods and services abroad.
This appears to be a relatively mild slowdown and we appear to be starting to come out of it. Noting that the stock market is forward-looking, I recently rearranged my retirement portfolio to weigh stocks more heavily in order to take advantage of the coming increase in growth rates in the economy. The American economy is very robustly minimizing the effects of the loss of housing values in some areas of the country, the problems with some types of credit, and the very high cost of oil. The only really worrisome future event is an economy-killing combination of Democrat tax increases and legislation to squash our use of energy in business favored by both Obama and McCain. Short of these disasters, I think the economy will soon be doing much better.

A World with Many Fewer Women

Mark Steyn published a commentary in the Washington Times today about discrimination against women. He starts by discussing the claims of some that Hillary Clinton is losing the Democratic nomination as their Presidential candidate to a relative unknown with little experience because she is a woman. The best part of this discussion is how light-weight he describes Obama to be:

How else to explain why their gal got clobbered by a pretty boy with a resume you could print on the back of his driver's license, a Rolodex apparently limited to neo-segregationist racebaiters, campus Marxist terrorists and indicted fraudsters, and a rhetorical surefootedness that makes Dan Quayle look like Socrates. "On this Memorial Day," said Barack Obama last Monday, "as our nation honors its unbroken line of fallen heroes - and I see many of them in the audience here today."

Hey, why not? In Obama's Cook County, Ill., many fallen heroes from the Spanish-American War still show up in the voting booths come November. It's not unreasonable for some of them to turn up at an Obama campaign rally, too.

Then he notes that old-time sexism is common in much of the world. He relates some statistics about how people in many cultures are choosing to have male babies, while aborting female fetuses. In India there are 1000 boys for every 900 girls nationally. In some Punjabi cities there are only 300 girls for every 1000 boys. In China, the one child per couple requirement has couples also choosing boys over girls. The result is that the first generation born under this policy has 119 males for every 100 girls. One supposes that as couples can increasingly afford abortions, this ratio of males to females will grow.

Europe and Canada are dependent upon immigration not to lose population. Indian women in England and Wales gave birth to 114 boys for every 100 girls between 2000 and 2005. Indians, Chinese, and Koreans living in America have 1.05 boys to every girl for the first child, 1.17 boys to every girl for the 2nd child if the first was a girl, and 1.51 to 1.00 for the third child if the first two children were girls! It looks as though a lot of Asian-Americans will have to use their relative wealth to import wives from their homelands if they wish to marry within their ethnic group. India and China had better continue their economic growth at a high rate, so their young men will be able to import wives from other parts of the world. It is not clear that these societies are open to allowing their men to marry women from other cultures, however. The only other solution would be an inversion of the old practice of one man having several wives.

Steyn assumes that this female feticide will lead to a return to a kind of patriarchy. Perhaps it will mean the men will have the majority of votes in some democratic societies, but the very important law of supply and demand will operate here. As societies become too rich in males, the perceived value of the rarer females will increase. This first wave of very high preference for male children will be moderated. Young men will be desperate to acquire desirable and even just acceptable wives. These wives will be able to name their price and with many societies starting to modernize, they will more and more be able to choose a husband and hold the power of divorce to ensure that their man will treat them with honor and respect, not to mention giving them considerable power over spending family money. This will likely transform some of these traditionally very patriarchial societies.

Early America had a huge imbalance of excess males to females. This empowered women in America compared to their situation in old Europe at the time. In time, that gender imbalance became much less in the East than it was in the West. In 1869, the Wyoming Territory constitution allowed women to vote and to hold public office. In 1870, the Utah Territory allowed full suffrage to women. In 1893, Colorado approved female suffrage. By 1912, Idaho, Washington, California, Michigan, Kansas, Oregon, and Arizona gave women the vote. There is a pattern here. Western states, which suffered from too few women, valued women enough to give them a vote before the Eastern states did. This is evidence of the ubiquity of the Law of Supply and Demand.

It will be very interesting to see how the shortage of women among Indians and the Chinese plays out.

01 June 2008

China's Public School Death Traps

Government corruption is a world-wide phenomena. The greater the power of government over the lives of individuals, the greater the corruption tends to be. In China, where the power of Communist, post-Mao, government is still very great, many parents in Sichuan Province are bereaved by the loss of their child under collapsed public schools. School after school proved more likely to collapse in the recent earthquake than other buildings, because they were built by corrupt Chinese officials. The fact that these buildings were known to be unsafe for many years, added to the parents anger. Remember also that Chinese parents are only allowed one child. Read more about this in this article by Andrew Jacobs in the New York Times.

Though governments love to use the welfare of children as a reason to expand their power, these power-enhanced governments cannot point at a history of providing for the well-being and safety of children. This is something for us to remember as the public school monopoly ossifies with time here into similar rigid propaganda machines and loses all care for the individual child. Already the propaganda is thick and the individual child is but scantly regarded.

Earmarks as Tools for Congressional Income

Most Congressmen make a fortune while serving the public interest. No, make that while pretending to serve the public interest.

Congressmen generally love power and they will pass special interest legislation happily in order to ensure huge campaign contributions from people, companies, unions, and non-profits who wish those favors or to be protected from the awesome and arbitrary power of Congress. It seems that Americans are pretty tolerant of this. On the other hand, Congressmen use their inside information and their power to make themselves rich while in office. People seem to be less tolerant of this, but then they pay little attention to this pattern when it comes time to vote.

FOX News just did a documentary describing a few cases in which Congressmen used earmarks and their insider knowledge to make easy money. Businessmen are not allowed to use insider knowledge, but as usual, Congress lives by a different code than that they impose on the rest of us. There is something particularly evil about this bifurcation of the legal codes applied to Congressmen and to the rest of us. Meanwhile, very many of these same politicians pose as being champions of equality and even pretend to want an equality of material good outcomes. What effrontery this is to any rational observer!

Strangely, most Americans do think that Congressmen and politicians are crooks or at least damn nearly so. Yet, there is a huge disconnect between this perception and their readiness to assume that the solution to most any social problem is to be found by having these same crooks pass more legislation to regulate and mandate the actions of the rest of us. Over and over again, they vote these same power-hungry and wealth-voracious politicians back into office. Over and over, they rely on these politicians and their special interest allies to inform them of what the national social problems are, how government can rectify the problem with legislation or regulatory fiats, and allow them to administer the enforcement of the new laws.

Power has always been a strong inducement to corruption. The Founders and the Framers of the Constitution understood this. There are many reasons why the power of the federal government, and also the state governments for the most part, was highly limited in their constitutions. Placing limits on this corruption of power was one of those important reasons.

The most important reason to limit the power of government is to allow the individual to flourish in the exercise of his right to life, liberty, and the pursuit of happiness. This covers much more than political corruption, but where political corruption is ubiquitous, there will be little regard for the rights of the individual. Indeed, the best way to convince the populace that the politicians should be given more power is always to tell them that some public good overrides the rights of the individual. This causes much more power and wealth to flow to the politicians.

The Proud, The Few

Thomas Donnelly and Frederick W. Kagan published an interesting commentary in the New York Post about the treatment the Democrats are advocating for the Army and the Marines. They have reduced these proud forces to a new class of victims. They claim they are "broken." In "The Proud, The Few" Donnelly and Kagan point out that the Army and the Marines are too effective as fighting forces to be termed broken, though the policy of keeping them understrength relative to the size of their tasks is very much in need of being addressed by Congress. Instead of using the fact that they are overstretched as an excuse for surrender, Congress should enlarge the voluntary forces so that they can handle the strains of fighting terrorists and Islamic radicals who wish to force Islam upon the rest of the world.

The NOPEC Congressional Farce

The slick politicians of Congress recently passed a law which makes it illegal to take actions in restraint of trade in oil and gas which affect the supply and price of oil, gas, and gasoline in the United States. They posed that this would make it possible to sue OPEC, so the bill has come to be known as NOPEC. This is likely to have no significant effect on OPEC and its policies. But, Congress thinks this will make the American people think that it politicians are doing something about the price of oil, gas, and gasoline.

They have been working very hard in Congress for 30 years with increasing effect to increase the cost of oil, gas, and gasoline on many fronts. They have restricted the exploration for oil and gas, the development of oil and gas fields, the building of oil refineries, and required the use of costly and useless gasoline additives or substitutes. If Congressmen were not excluded from prosecution in lawsuits, the very legislation they just passed could and should be used against them. The law is always different for Congress men and women, however.

I am making a confident prediction that though this law was passed as an anti-OPEC law, it will be used far more often and effectively against American businessmen. It will be one more reason for them to fear government and it will drive up the cost of doing business in America. Congress and attorneys general will abuse this power, consistent with their record in so many other cases, such as legislation originally passed to fight racketeering.

The present price of oil, gas, and gasoline is significantly higher than need be, largely due to unreasonable environmental and climate change assessments. Congress wants the price of fuels to go up, so the public will use less of them. Many congressional politicians have literally said as much, while some pretend to be concerned about the higher costs even as they take actions in the name of reducing our carbon footprint which drive the costs upward. Meanwhile, American flora and fauna are prospering and there has been no global warming for 10 years. Scientists have observed that the sun will be providing the earth with less radiation over the next 10 years, which will cause global cooling. So people are being made to suffer for no reason at all.

Why do we not throw these rascals out of office? What is it that is too complex for us to understand here?