Posts tagged ‘germany’

How Does This New Trade Deal Offset My Higher Costs If I Don't Grow Soybeans?

Trump supporters are saying "I told you so" as Trump and European officials reached an agreement to dial back tariffs and pursue some efforts at free-er trade.  Trump supporters have argued, and I was skeptical, that Trump really wanted free trade but was engaging in brinkmanship as part of the opening phases of negotiation.  First, let's see exactly what this agreement included:

– They will work towards “zero tariffs, zero non-tariff barriers, and zero subsidies” on non-auto industrial products. That’s not a huge category of goods, as it excludes agriculture and raw materials, among other things, and zero non-tariff barriers and subsidies seems really unlikely. But still, it would be great if we made progress here.

– The EU will buy more U.S. soybeans and liquid natural gas. This was probably going to happen anyway because of market shifts and other factors.

– They will have a dialogue about conflicting regulatory standards in the U.S. and EU. This is a long-time goal of U.S. and EU trade policy-makers. It sounds easier than it really is.

– They will work together on reform of the WTO, and to address problems to the trading system caused by China.

In addition, the agreement effectively included:

  • Current Trump tariffs on steel and metals, and the European retaliation, will remain in place
  • Trump will not currently put in place his threatened $200 billion in auto tariffs on European vehicles

So the basic agreement is 1) leave all new tariffs in place; 2) sell more soybeans and natural gas to Europe; and 3) talk about tariff and non-tariff barriers that typically consume years and years of discussion.

This is basically a big zero.  Even beyond the fact that the agreement avoids most of the major trade categories, the act of negotiating towards lower tariffs, lower non-tariff barriers, and reconciling conflicting regulator standards has been done before -- its called NAFTA and the TPP, both of which Trump has sh*t on.  Sure, they can have flaws (especially the TPP), but these compromises are the only way these trade deals get made, as country leaders each are in thrall to their own influential crony industry.  The US's own high tariffs on SUV imports is a great example.  This is all not to mention the time -- TPP negotiations took 8 years -- through which we consumers apparently will still suffer under Trump's tariffs.

So for most US consumers, the end result of all of this is that we still are paying higher prices for any product that contains metal, from soda cans to automobiles.  This is great for soybean farmers, I suppose, but sucks for the rest of us.   This is all about politicians balancing one crony against another and in this calculus, consumers always lose.

Trump says he is for free trade, but he still spouts all this fairness BS.  Things that he considers "unfair" are actually just "unfair" to a few people in a few industries, but are eminently "fair" for 300 million consumers in the US.  Here is the true test of a free trader:

Consider two trade regimes.  In Regime #1, the US charges 0% tariffs on German steel and Germany charges 0% tariffs on US steel.  In Regime #2, the US is able to charge 10% tariffs on German steel while Germany still charges 0% tariffs on US steel.   I would bet quite a bit of money that Trump would say that Regime #2 is a better deal for the US, while free traders like myself and most economists would say that Regime #1 is not only better for the world as a whole, it is better for the US.  Zero tariffs allows the division of labor and comparative advantage to all work their magic to make sure capital and productive effort in this country are employed for the highest return.

Are You (or Trump) Really for Free Trade? Here is a Hypothetical to Test You

A few days back, we had a debate in the comments about whether Trump really wants free trade.   In my view, Trump looks at tariff rates and trade deficits like a simple scorecard of winning or losing without really understanding trade and its benefits.  Sure, Trump proposed a zero tariff rate agreement in passing with our European trading partners.  I think he did this because it made him look good and he knew they would never go for it.

But no matter the case, even if he is sincere, he still is judging this proposal by a very different standard than economists would.  Take European tariffs on passenger cars.  My understanding is that they are about 10% on US cars vs. our 2.5% on theirs  (this ignores the absolute hypocrisy in this whole thing that our light truck tariff on imports is like 25%, but put that aside).  Trump sees taking these two passenger car tariff rates to zero as a win NOT because it would be a benefit to consumers but because in his thinking the US gets a 10% concession out of Europe and only gives up a 2.5% concession in exchange.  Winning!

I tried to think of the best way to highlight the difference between Trump's thinking and good economic thinking on trade, and I came up with this hypothetical:

Consider two trade regimes.  In Regime #1, the US charges 0% tariffs on German steel and Germany charges 0% tariffs on US steel.  In Regime #2, the US is able to charge 10% tariffs on German steel while Germany still charges 0% tariffs on US steel.   I would bet quite a bit of money that Trump would say that Regime #2 is a better deal for the US, while free traders like myself and most economists would say that Regime #1 is not only better for the world as a whole, it is better for the US.  Zero tariffs allows the division of labor and comparative advantage to all work their magic to make sure capital and productive effort in this country are employed for the highest return.  I believe from reading the comment section of this blog that there are many many people who call themselves a free trader but who would say that Regime #2 is a better deal for the US.  If you believe that, you better have done a lot of work educating yourself on the issue because the great mass of economic theory and practice is against you.

I am not an economist and I am too busy today to give the whole explanation today, but here is one hint at part of the answer:

As of mid-2017, there were 29,288 steel-consuming firms, employing more than 900,000 workers who face higher prices versus just 916 steel-producing firms with 80,000 employees who benefit from those higher prices and reduced competition.

D-Day: In Retrospect, More About Keeping the Soviets Out of Western Europe than About Defeating the Nazis

I am reposting this from several years ago, but I am doing it on June 7 because last time when I posted it on June 6 people called me disrespectful.  I am not really sure I understand why, but this characterization is so wrong (I already have a trip lined up to be in Normandy next year around the 75th anniversary) that it is easier just to hold off for a day.

Over time, my understanding of the importance of the D-Day invasions has shifted.  Growing up, I considered these events to be the single key event in defeating the Nazis.  Listening to the radio this morning, this still seems to be the common understanding.

Over time, I have had to face the fact that the US (or at least the US Army) was not primarily responsible for defeating Germany -- the Russians defeated Germany, and what's more, would have defeated them whether the Allies had landed in France or not.  Check out the casualties by front, from Wikipedia:

click to enlarge

The Russians defeated Germany.  Period.   And I don't think the western allies would ever have had the stomach to inflict the kind of casualties on Germany that were ultimately necessary to defeat her without Russian help.  To me, this is the great irony of WWII, that it was not ultimately a victory for democracy.  Only totalitarian Russia could defeat totalitarian Germany.  This thought often bothers me a lot.  It doesn't fit with how we want to view the war.

However, D-Day did have an important effect -- it kept Western Europe out of Soviet hands.  We did not know it at the time, but I would argue in retrospect that from mid-1944 on we were competing with Russia to see how Europe would get divided up after the war.  D-Day allowed the western allies to overrun most of Western Europe and keep it out of Soviet hands, perhaps an even more important outcome than just speeding the defeat of the Germans.  Sure, FDR gets grief for giving the farm away to Russia at Yalta, but what could he do?  The Soviet occupation of Eastern Europe at that point was a fait accompli.  What would have been FDR & Churchill's negotiation position at Yalta if their armies were not even on the continent (excepting Italy, where we might still be fighting in 2014 and getting nowhere)?

Postscript:  There is no doubt that some German troops were pinned down in the West by the invasion, but many of these troops were already pinned down by the mere threat of invasion.   Only the experienced soldiers and new equipment gathered by Hitler for the Wacht am Rhein, what we now refer to as the Battle of the Bulge, were a major diversion from the East due to the invasion, and even that was a relatively small amount of reserves compared to the immensity of the Eastern Front.  Had we overrun the industrial Ruhr earlier, that would have made a real difference but we only really achieved this a few months before Berlin was taken.

There are a lots of what-ifs about the war in the West and about how the war might have been shortened.  What if Montgomery really could have taken Cannes on D+1?  That if the Allies had taken the larger solution to trap more Germans at Falais?  What if the Allies had given limited supplies to Patton rather than Montgomery and Operation Market-Garden?  What if Eisenhower had been less timid about trapping the Germans in the Bulge?

But I think the most interesting missed opportunity was a small one with huge impact -- what if the Allies had been more aggressive in taking the Scheldt Estuary?  The Allies were desperately short of supplies in Northern France in the Fall of 1944.  They simply could not get enough supplies over the beaches at Normandy and across France to support all the armies they had in play.  They needed a real high-capacity port in the North and they actually captured one in Antwerp almost intact around September 3.  Antwerp, though, is not right on the ocean -- boats had to come down an estuary which the Germans still controlled.  Quick action in early September could have easily cleared the estuary and made the port almost immediately use-able.   The Allies took only half measures and basically dithered for a while, failing to see the opportunity, as the Germans continued to fortify their position.  In the end, it was not until nearly December before Antwerp could act as a port, long after the opportunity for a coup de grace of the Germans in the West had passed.  If you are interested, here is the Wikipedia article on the Battle of the Scheldt.

Update:  by the way, there were lots of good comments on the original post and you can see them here.

A Reminder: Why the US Rail System Is At Least as Good As the European System if You Care About Energy Use

In an article about the French railroad SNCF, Randal O'Toole makes a point I have screamed to the world for years:

Meanwhile, French trains carry less than 11 percent of freight, as more than 86 percent of freight is transported on highways. Those numbers are in sharp contrast to the U.S., where at least a third of freight goes by rail and less than 40 percent goes by truck (and I suspect a bad model has erroneously exaggerated the role of trucks).

American railroads are a model of capitalism, one of the least-subsidized forms of transportation in the world. They are profitable and do far more for the national economy than Europe’s socialized railroads, which mainly serve narrow elites.

Most of the intellectual elites and nearly all the global warming alarmists deride the US for not having the supposedly superior rail system that France and Germany have.  They are blinded by the vision of admittedly beautiful high speed trains, and have frittered away billions of dollars trying to pursue various high speed rail visions in the US.

I know that the supposedly pro-science global warming alarmists sometimes are not actually very focused on science, but this is pretty simple to think about.

First, consider the last time you were on a passenger train.  Add up the weight of all the folks in your car.  Do you think they weighed more or less than the car itself?  Unless you were packed into a subway train with Japanese sumo wrestlers, the answer is that the weight of the car dwarfs that of the passengers it is carrying.    The average Amtrak passenger car apparently weighs about 65 tons (my guess is a high speed rail car weighs more).  The capacity of a coach is 70-80 passengers, which at an average adult weight of 140 pounds yields a maximum passenger weight per car of 5.6 tons.  This means that just 8% of the fuel in a passenger train is being used to move people -- the rest goes into moving the train itself.

Now consider a freight train.  The typical car weight 25-30 tons empty and can carry between 70 and 120 tons of cargo.  This means that 70-80% of the fuel in a freight train is being used to move the cargo.

Now you have to take me on faith on one statement -- it is really hard, in fact close to impossible, to optimize a rail system for both passengers and freight.  In the extreme of high speed rail, passenger trains required separate dedicated tracks.  Most rail systems, even when they serve both sorts of traffic, generally prioritize one or the other.  So, if you wanted to save energy and had to pick, which would you choose -- focusing on freight or focusing on passengers?  Oh and by the way, if you want to make it more personal, throw in a consideration of which you would rather have next to you on crowded roads, another car or another freight truck?

This is why the supposedly-green folks' denigrating of US rail is so crazy to me.  The US rails system makes at least as much sense as the European system, even before you consider that it was mostly privately funded and runs without the subsidies that are necessary to keep European rail running.  Yes, as an American tourist travelling in Europe, the European rails system is great.  Agreed.  I use it every time I go there.  I have to assume that this elite tourist experience must be part of why folks ignore the basic science here.

My original article on all this years ago was in Forbes here.

Postscript #1:  One could argue that what matters is not the weight ratios of freight vs. passenger rail but how those compare to the road alternatives.  I would have to think this through, but it gets way more complicated because you have to start worrying about average occupancy and such since that also differs.  At full capacity say of 4 people, the typical 4000 pound car (US, rest of the world is less) would passenger weight around 12% of the total, higher than for the passenger train.   But average occupies could change the comparison and I don't have the time to work it through.  But for a full analysis we would have to take a lot of other things into account.  For example, trains are a poor fit with customer travel time preferences for longer US distances, even for higher speed options.  In the same way freight pencils out worse for rail in Europe because the last mile transport problems become a bigger percentage in a shorter haul.  I am confident though that for the US, the freight-dominant system is the right solution and it amazes me how hard it is to get anyone to recognize this.

Postscript #2:  Thinking about the SNCF, I actually did a consulting project there 20+ years ago.  I remember two things.   First they had 25% more freight car repair people than they had freight cars.  Which led me to making the tongue-in-cheek suggestion that they could give every one of these folks their own tool bag, assign them their own car to ride around on, and still cut a fifth of their staff.  I have never, ever, ever seen bloated staffing like I did at SNCF.  My other memory was lunches with executives that took place in palatial dining rooms with waiters in white gloves.  We ate for like 3 hours and drank a case of wine and all I could think about doing after lunch was going to take a nap.

Postscript #3:  This is really going to be a random aside, but if you want to bring science to the table, monorails are the dumbest things ever.  The whole advantage of rail is the friction reduction of a metal flanged wheel rolling on a metal rail.   Most monorails (and people movers) are just tires on a concrete beam (e.g this is how the Disney monorails work).  This is no more efficient than a bus and actually less because the train jacks up the vehicle to passenger weight ratio over a bus.  Because of certain geometry issues, monorails also have limited capacity.  Disney has been struggling with this for years at the Magic Kingdom in Florida and their ferry boats seem to move a lot more passengers than the adjacent monorails.  Monorails do look awesome, though, and their tracks are airier and more attractive than traditional elevated rail tracks.

Banning Racists From Social Media Is Just Helping Them By Reducing Transparency on Their Distasteful Views

Via Engadget

Twitter is continuing to act on its promise to fight hate speech, however imperfectly. The site has banned Wisconsin Congressional candidate Paul Nehlen after he posted a racist image that placed the face of Cheddar Man (a dark-skinned British ancestor) over actress and soon-to-be-royal Meghan Markle, who's mixed race. The company said it didn't normally comment on individual accounts, but said the permanent suspension was due to "repeated violations" of its terms of service.

Nehlen, who's hoping to unseat Paul Ryan in the 2018 mid-term elections, has a long history of overtly expressing his racist views. Twitter suspended him for a week in January over anti-Semitic comments, and he has regularly promoted white supremacist ideology. In private, he used direct message groups to coordinate harassment campaigns. Breitbart supported Nehlen's ultimately unsuccessful run against Ryan in 2016, but distanced itself from him in December 2017.

As the title of the post implies, I am torn on this.  On the one hand, there is an argument that removing a powerful communications tool from bad people makes it harder to spread their, um, badness.  On the other hand, I am not sure that driving these folks underground is the right approach.  Sure, Nehlen has likely rallied some people of a similar mind to his side, but the flip side is that he has advertised himself to  LOT of people as having distasteful views.  I know that from my point of view, my awareness that awful folks like this still exist on the peripheries of power has grown from social media, whereas without it I likely might have convinced myself this sort of stuff was a thing of the past.

It reminds me what I wrote a while back about putting the Confederate flag on license plates:

Which brings me back to license plates.  If a state is going to create a license plate program where people can make statements with their license plates, then people should be able to make the statement they want to make.  ... Let's assume for a moment that everyone who wants to display this symbol [the Confederate battle flag] on their car is a racist. Shouldn't we be thrilled if they want to do so?  Here would be a program where racists would voluntarily self-identify to all as a racist (they would even pay extra to do so!)  What would be a greater public service?

To take this to an extreme, think about the effort to de-platform certain college speakers.  I like to imagine who the most extreme example of such a controversial college speaker would be, and I come up with that old standby, Adolf Hitler.  So what if in 1938 Adolf Hitler came to the States for a college speaking tour in 1938.  Couldn't that have been a good thing?  Many of the mistakes made by the world in 1938-1945 was underestimating both Germany's appetite for expansion and its ruthlessness in its approach to the Jews.  Wouldn't it have been better to listen to a bad guy and potentially get some clues to this future?

In Comparing Trump to Hitler, We Are Comparing Him to the Wrong German

I just finished re-reading Barbara Tuchman's the Guns of August at almost the same moment I was also reading from Trump's UN speech.  I was struck how much Trump's nationalism flavored with a sense that his country is somehow not getting its due in world affairs seems so similar to Kaiser Wilhelm II, leader of Germany from the late 19th century through the First World War.  And I think the fear many of us have is that Trump's seemingly ham-handed, blustering, confrontational style will mirror Wilhelm's mis-steps that played a large role in the advent of WWI.

It wasn't necessarily that Wilhelm wanted war and conspired to get it -- in fact, his panicky foot-dragging in the crucial late days of late July and early August of 1914 were an interesting part of the story.  He seemed to me like a blowhard in a bar that always talked about throwing down with everyone around him but was surprised on the day he actually found himself being taken out to the parking lot for a real fight (and he was not the only driver of German actions -- the army for one had a beautiful plan and almost couldn't bear not to try it).  But Wilhelm by his bluster and unpredictability and untrustworthiness and at times outright nuttiness spent years making all the options that were not-war less feasible.

How The Left Is Changing the Meaning of Words to Reduce Freedom -- The Phrase "Incite Violence"

A surprising number of folks on the Left of late seem to be advocating for restrictions on free speech -- Howard Dean is among the latest.  One of the arguments they use is that, they say, it is illegal in one's speech to "incite violence".  Folks like Glenn Reynolds and Eugene Volokh have responded with legal analyses of this statement, but I want to point out something slightly different -- that in the way the Left is using this phrase, the meaning has been shifted in very dangerous ways.

First, some basic legal background, and on First Amendment issues I find it is always safe to run to Eugene Volokh for help:

To be sure, there are some kinds of speech that are unprotected by the First Amendment. But those narrow exceptions have nothing to do with “hate speech” in any conventionally used sense of the term. For instance, there is an exception for “fighting words” — face-to-face personal insults addressed to a specific person, of the sort that are likely to start an immediate fight. ....

The same is true of the other narrow exceptions, such as for true threats of illegal conduct or incitement intended to and likely to produce imminent illegal conduct (i.e., illegal conduct in the next few hours or maybe days, as opposed to some illegal conduct some time in the future). Indeed, threatening to kill someone because he’s black (or white), or intentionally inciting someone to a likely and immediate attack on someone because he’s Muslim (or Christian or Jewish), can be made a crime. But this isn’t because it’s “hate speech”; it’s because it’s illegal to make true threats and incite imminent crimes against anyone and for any reason, for instance because they are police officers or capitalists or just someone who is sleeping with the speaker’s ex-girlfriend.

So it is illegal to "incite violence" though this exception to free speech is typically very narrow.  As I understand it, a KKK speaker who shouts from the podium, "look, a black guy just walked in, everybody go beat him up" would probably be guilty of inciting violence if the crowd immediately beat the guy up.  A BLM speaker who shouted as part of his speech that the crowd needed to fight back against police oppression would likely not be guilty of inciting violence if, some months later, one of the audience members assaulted a police officer.

But what all of this has in common is speakers telling their supporters to go out and commit violence against some other person or group.  The violence incited is by the speakers supporters and is specifically urged on by the speaker.  But this is not how the Left is using the term "incite violence".  The Left is using this term to refer to violence by opponents of the speaker attempting to prevent the speaker from being heard.  For example,  when folks argue that Ann Coulter cannot speak at Berkeley because she will "incite violence", they don't mean that she is expected to stand up and urge her supporters to go do violence against others -- they mean that they expect her opponents to be violent.

This is a horrible newspeak redefinition of a term.  It is implying that a speaker is responsible for the violence by those who oppose her.  By this definition, the socialists of 1932 Germany were guilty of "inciting violence" whenever  Nazi brownshirts tried to brutally shut down socialist meetings and speeches.

I am not sure why the Left is so good at this - perhaps because most of the media is sympathetic to the Left and is willing to let them define the terms of the debate.  The Left has successfully performed a similar bit of verbal judo with the claim that Russians "hacked" the last election.  By calling leaks of Democratic private correspondence "hacking the election", they have successfully left the impression among many that the Russians actually manipulated vote totals, something for which there is zero evidence and really no credible story of how it might have been done.

Why Wind Power Does Not Greatly Reduce Fossil Fuel Use

The problem with wind power is that electric utilities have to be prepared at any time for their power production to just stop on short notice.  So they must keep fossil fuel plants on hot standby, meaning they are basically burning fuel but not producing any power.  Storage technologies and the use of relatively fast-start plants like gas turbines mitigates this problem a bit but does not come close to eliminating it.  This is why wind power simply as a source contributing to the grid makes very little sense.  Here is Kent Hawkins of Master Resource going into a lot more depth:

How do electricity systems accommodate the nature of wind and solar? They do this by having redundant capacity almost equalling the renewable capacities as shown in Figures 5 and 6 for two jurisdictions that have heavily invested in wind and solar – Germany and Ontario, Canada.

Pt I Fig 5

Figure 5 – Duplicate capacity requirements for Germany in 2015.

Source: See note 4, sub point a.

 

Part 1 Fig 6

Figure 6 – Duplicate capacity requirements for Ontario, Canada, in 2018

Source: Ontario Power Authority[5]

In both figures, the left-hand columns are peak demand requirements and include all the dispatchable capacity that is required to reliably meet demand and provide operating reserve. In the right-hand columns, if you look very carefully, you can see the capacity credit for wind by the slight reduction in “Peak Demand + Op Reserve.” In summary, when wind and solar are added, the other generation plants are not displaced, and, relative to requirements, wind and solar are virtually all duplicate capacity.

Wind might make more sense in niche applications where it is coupled into some kind of production process that can run intermittently and have its product stored.  I think T Boone Pickens suggested having wind produce hydrogen from water, for example, and then store the hydrogen as fuel.  This makes more sense because the total power output of a wind plant over a year can be predicted with far more certainty than the power output at any given minute of a day.  This is one reason why the #1 historic use of windpower outside of transportation has been to pump water -- because the point is to fill the tank once a week or drain the field over a month's time and not to make absolutely sure the field is draining at 10:52 am.  The intermittent power is stored in the form of water that has been moved from one place to another.

I am Not An Isolationist, But...

US military interventions abroad -- at an absolute minimum -- have got to represent some reasonable path to a better future.  It is amazing how even this simple and obvious test is almost never met by our actions.  Instead, I think many folks substitute some test more like "Is the situation really bad?--if so, rev up the troops."  To this end, Assad is clearly a bad guy.  Assad (or someone) using poison gas on civilians is a bad thing.  Russia providing cover for these bad things is also a bad thing.  But what is the alternative?  Obama's support of rebels in Libya is just a fantastic example we should all remember -- the Libyan regime was bad but we supported its overthrow in favor of a situation now which is clearly worse.  Iraq-style regime change is out of favor for good reasons, but at least regime change advocates had a clear explanation of how they wanted to get to a better future with military action -- they were going to take the whole place over with massive military force and stand on it for a couple of decades until, like Germany after 1945, it becomes a responsible citizen of the world.  The costs are high and I don't think it is in our long-term interests to do so, but at least there was a logical story.

What is the story in Syria?  We kill a couple hundred folks with cruise missiles to avenge a few dozen folks killed with poison gasses and, what?  Do the citizens of Syria really need yet another foreign power lobbing explosives into their country?  The only argument I hear is that Assad crossed a line and now we have to show him what for.  But this sounds like an 18th century aristocrat vowing to defend his honor after an insult.  It's sort of emotionally satisfying -- take that, asshole! -- but where does it get us except further mired in yet another foreign conflict we have not hope of making better?  We look back and criticize the major powers in 1914 for getting involved in the constant squabbles in the Balkans but do the same thing in the Middle East, the 21st century's Balkans.

Trade and World Peace -- Economic Nationalism Leads to War

President Trump is a strong economic nationalist.  He believes that this country should source everything domestically - its products and its labor - and any labor or resources that are coming from other countries should either be stopped by a wall or heavily taxed.

Economists and I will spend a lot of time over the next four years trying to explain to our economically-ignorant administration why global trade and the global division of labor increase domestic incomes and production rather than decreasing them.  But I do not want to lose sight of another important benefit of open trade in the global economy - peace.

We often miss the fact because our news is dominated by stories of violence and terror, but we live in times of unprecedented peace around the world.  It is no coincidence that this is occurring at the same time that global trade is at a historic peak.  People and governments can obtain just about anything they want, inexpensively, through voluntary trade.  This has seldom been the case through history -- and when people could not get what they wanted through free trade, they tried to take it by force.

Think about the corollary of Trump's economic nationalism, particularly if everyone followed this same approach.  If one skews all the rules and taxes and prohibitions so everything must be sourced domestically, then if a country does not have some particular resource or skill domestically, it is out of luck.  No domestic rare earth metals?  Sorry.

But governments and powerful people seldom calmly accept that something they critically need is not available.  They will be tempted to go and take it.  The worst, most violent empire building of the last 100-150 years has occurred when countries have pursued economic nationalism.  Think of the colonialism of the late 19th century.  Today we happily trade with South Africa and other countries for valuable resources, but in that time of economic nationalism, if a country wanted access to these resources, it felt it had to control the land and the people.  Hitler in the 1930's wanted to make Germany self-sufficient in agricultural goods and certain other resources, and the only way to do that was to go and grab other people's land and resources.

The best example of all of this phenomenon is, I think, Japan in the 1930's.  Japan felt that it was resource poor and under Trump's theory of economic nationalism, it felt it had to control oil and other resources it did not have domestically.  So it plotted to go take it.  When the US instituted a trade embargo in these very goods to punish Japan's aggressiveness in China, it just accelerated Japan's thinking in this area, convincing it for good it had to control these resources, and it was soon invading the oil-rich islands of what is now Indonesia.  This example is all the more telling because Japan actually found true prosperity after the war when it traded peacefully for these resources.  Unfortunately, it adopted economic nationalism, via MITI, of another form and helped manage themselves into a 20-year recession, but that is another trade-related story for another day.

Postscript:  I have more to say on this when I get my thoughts better organized.  Right now I am hurrying to a plane, for Regina, Canada, where I am speaking on global warming tomorrow.  There is a related issue of what happens when strong protectionism on our part pushes China over into the crash they have been putting off for years -- suddenly a crash largely of their making becomes the fault of the US, with implications for a formation of a new cold war, but that again is another topic for another day.

Politicians Are Going to Use "Fake News" Panic as A Wedge to Enhance Censorship

This is simply a terrible idea and demonstrates the point I made after the last election, that "fake news" is the new "hate speech" -- in other words, an ill-defined, amorphous term that will be the excuse for censorship.  Every politician thinks that every criticism of themselves is "fake news".   Note the absolute relish with which the millennial Endgadget author greets this awful idea:

Fake news and hate speech are sadly unavoidable on social media, but that might change soon... in Germany, anyway. Late last week, Thomas Oppermann — chairman of the German Social Democratic Party — proposed a stringent law meant to hold companies like Facebook responsible when fake news makes the rounds. As reported by Der Spiegel(and translated by Deusche Well), Oppermann's plan would require Facebook to actively combat fake news all day, everyday. Here's the fascinating bit: if a fake news item pops up and Facebook can't address it within 24 hours, it would be subject to a €500,000 (or $522,575) for each post left untouched.

Oh, it gets better. Facebook and other "market-dominating platforms" would be required to to have teams in Germany dedicated to fielding reports of fake news and hate-filled posts. Fortunately for Oppermann — and German web users, most likely — the push to penalize companies for letting false, misleading or malicious content run wild has received plenty of support from the other major party in German politics, too. The country's Christian Democratic Union hates all of that stuff just as much, prompting one senior party member to promise definitive action "at the beginning of next year." The CDU has also proposed legislation (with backing from Chancellor Angela Merkel, no less) that would make it illegal to post fake news entirely.

I Stand By My Prediction -- Republicans Have Shackled Themselves to a Suicide Bomber

Granted this was not that brave of a call, but nevertheless from July 20:

Back in the depths of WWI, the Germans woke up one day and found that their erstwhile ally Austria-Hungary, to whom they had given that famous blank check in the madness that led up to the war, was completely incompetent. Worse than incompetent, in fact, because Germany had to keep sending troops to bail them out of various military fixes, an oddly similar situation to what Hitler found himself doing with Italy in the next war.  ... Anyway, Germans soon began to wonder if they were "shackled to a dead man."

I am reminded of that phrase as I see that the Republicans have officially nominated Donald Trump for the presidency, perhaps the worst choice the party has made in its history, Nixon included. I don't think "shackled to a dead man" is quite right. I think that "shackled to a suicide bomber" is more apt. Trump is not only going to lose big in this election to an incredibly weak Democratic candidate, but he is also going to kill the Republicans in the House and Senate and any number of down-ballot elections.

Why Germany Struggles With Integrating New Immigrants -- And Why Their Experience Isn't Comparable to the US

For years I have argued that immigration controls in this country are effectively a form of occupational licensing.  While US immigration controls are a terrible policy IMO, Germany's approach seems even worse.  They welcome people into their country but don't let them work, and then wonder why newly immigrated refugees can't find jobs.

In 2015, Germany waited the longest of any country in Europe to restrict the flow of asylum seekers from the Middle East. Yet once they arrived, the asylees who immediately sought work in Europe’s largest economy were greeted by bureaucracy. The law initially forbade asylees from seeking work for 9 months after their arrival, but was reduced to 3 months in November 2014. Then, inexplicably, at the height of the inflows, the German governmentbanned working if the asylee was forced to stay a reception center, which could be up to 6 months.

After the initial waiting period, asylees did not receive unrestricted employment authorization. Instead, they would have to find a “concrete” job offer—i.e. a firm must promise to hire them if the permit is granted—then apply for authorization. Even then, companies can only hire them during the first 15 months if the jobs are offered first to EU residents, and the federal labor department agrees that no one was willing to take. They also set asylee wages, which can price out low-skilled workers.

The hoops don’t end there. Asylees still have to get the approval of the immigration office at the municipal level. Under the law, it would take four years before they could compete equally with EU citizens.

On top of all these refugee-specific regulations, skilled workers are then tasked with proving that they can work in certain occupations. In order to obtain an occupational license, documentary proof of training—proof that’s often buried under bombed-out homes in Syria—is required. Some states in Germany allow asylees to demonstrate their skills in order to receive licensing, but others do not. “I am a dentist and could work, but what am I supposed to do? I am not allowed to work here!” one asylee told DW News.

Low-skilled immigrants haven’t avoided being targeted either. Germany introduced its first ever minimum wage in 2015—which disproportionately hits lower skilled migrants—and a study by the German government in August 2016 found that it had already cost 60,000 jobs.

 

Republicans Shackle Themselves to a Suicide Bomber

Back in the depths of WWI, the Germans woke up one day and found that their erstwhile ally Austria-Hungary, to whom they had given that famous blank check in the madness that led up to the war, was completely incompetent. Worse than incompetent, in fact, because Germany had to keep sending troops to bail them out of various military fixes, an oddly similar situation to what Hitler found himself doing with Italy in the next war.  (This is a really interesting book if you have any doubts about how dysfunctional the Hapsburg Empire was in its waning days).

Anyway, Germans soon began to wonder if they were "shackled to a dead man."

I am reminded of that phrase as I see that the Republicans have officially nominated Donald Trump for the presidency, perhaps the worst choice the party has made in its history, Nixon included. I don't think "shackled to a dead man" is quite right. I think that "shackled to a suicide bomber" is more apt. Trump is not only going to lose big in this election to an incredibly weak Democratic candidate, but he is also going to kill the Republicans in the House and Senate and any number of down-ballot elections. Nutty over-the-top crazy talk that might have been mildly entertaining in the primaries is not going to be very funny to voters trying to pick who sits at the other end of the red phone.

As I said on twitter this morning, I almost wish I had not left the Republican party 30 years ago so I could quit today.

If I Were President, On The Day After Vote for Brexit...

I would propose a free-trade agreement with the UK.    No loss of sovereignty, no stupid EU regulations and bureaucrats, no restrictions on what can be called "sausage" -- just trade.  I would offer a similar deal to anyone else who wanted to leave.

Actually, when Obama visited, I would have been tempted to offer it to Britain at that time.  Why was the US President so hell-bent on encouraging closer ties between Britain and Germany when he should have been working to improve the relationship between the UK and the US.

I will admit that I am not thrilled with the anti-immigration tone of the Brexit vote, but the EU is a package deal, and there is a lot of bad with the good in the package.  Here is a good list of reasons to vote for Brexit (hat tip maggies farm)

The Asymmetry of How the Government Values My Time

I was struck recently by a stark asymmetry in how the government values the time of private individuals.

On the one hand, they insist on a high value for my time, with the state of California ruling that no one may sell their time for less than $15 an hour.

On the other hand, in numerous ways, the government values our time at zero.  They, for example, treat recycling as "free" and ignore the value of the millions of man-hours spent sorting trash.  The IRS certainly values our time at zero, as does most tax agencies.  Certain sales tax agencies do provide a collection and paperwork credit (since technically the business is acting as an agent of the state in collecting the tax) but that credit generally amounts to pennies per hour of labor.  Mono County California changed their tax filing process in a way that created thousands of extra man hours of private filing labor all to save a few dozen of their hours every 3 years on audits.

And then there is this.  Germany is considering eliminating their unlimited autobahn speed limits to save energy:

…the head of Germany’s Federal Environmental Office, Andreas Troge, says a speed limit of 120 km/h on motorways “costs nothing and would immediately reduce C02 emissions by 2.5 million tonnes per year”.

That is it "costs nothing" as long as you value private individual's time at zero dollars an hour.

The US Has The Best Rail System in the World, and Matt Yglesias Actually Pointed Out the Reason

Yglesias has a very good article on why passenger rail is not a bigger deal in the US.   In it, he says this (emphasis added):

Instead the issue is that the dismal failure of US passenger rail is in large part the flip side of the success of US freight rail. America's railroads ship a dramatically larger share of total goods than their European peers. And this is no coincidence. Outside of the Northeast Corridor, the railroad infrastructure is generally owned by freight companies — Amtrak is just piggybacking on the spare capacity.

It is a short article, so it does not go into more depth than this, but I have actually gone further than this and argued that the US freight-dominated rail system is actually far greener and more sensible than the European passenger system.  As I wrote years ago at Forbes:

The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by far the greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails. ....

I would argue that the US has the world’s largest commitment to rail where it really matters.  But that is what private actors do, make investments that actually make sense rather than just gain one prestige (anyone know the most recent company Warren Buffet has bought?)  The greens should be demanding that the world emulate us, rather than the other way around.  But the lure of shiny bullet trains and grand passenger concourses will always cause some intellectuals to swoon.

Which would you rather pounding down the highway, more people on vacation or more big trucks moving freight?  Without having made an explicit top-down choice at all, the US has taken the better approach.

Minimum Wage, American vs. European Restaurants

In reading reviews of European restaurants to try to find places to dine, I saw a lot of criticisms of their service.  There seems to be a meme among travelers that Austrian restaurants in particular often have bad service.

I am not sure I can agree with this -- we had a lot of good wait-staff in Austria  But I can say that they had to service a LOT more tables than a typical American waiter.  I don't know what the standard is today, but it used to be that 4-6 tables was the max American restaurants considered that a waitperson could cover and still provide acceptable service.  In Austria, the number was often double that.  I watched one gentleman memorably service almost 20 tables during the busy lunch hour at a museum cafe in Vienna.  I can tell you he was working his butt off but we still had to wait for basic service like ordering or paying our bill or getting our food delivered.

I pair this information with a second factoid from a travel book we read when trying to figure out what tipping policy was over there.  The book, as well as most other sources we consulted, said that tips for waiters in Austria and Germany could be less generous because waiters were paid much more than in the US -- a fact that the source considered a point of superiority over the US for the Europeans.

That may or may not be -- personally, I have never like the US tradition of restaurants outsourcing the paying of their staff to the customers.  But it may well be that these higher wages have their cost in the form of reduced customer service, as restaurants are forced to minimize their higher cost staff to keep prices reasonable.

Where's Coyote?

I am in Europe for a little bit.  I have not blogged because I either had a good Internet connection, but no time, or vice versa.  I am now on Lake Maggiore at a little town called Gerra for a few days, and watching the rain on the lake (perhaps this is disappointing for other travelers, but for Phoenicians watching a cold rail fall is a treat).  This area is an odd one, barely inside Switzerland.  Most of the folks are bilingual in German and Italian but most speak Italian day to day and most of the road signs are in Italian.  But they price their services in Swiss Francs, so they are no fools.  It all seems to work fine and be a source of pride for local residents.

Here are a few notes so far from our trip:

  • T-Mobile's rock-bottom international roaming rates appear to be the real deal.  I have gotten service everywhere we went and free (if sometimes slow) data.  The only problem so far is I can't send or receive MMS (SMS is fine) so I can't send my kids the usual picture travel-log I like to send.
  • Until today, XCom Global's European roaming wifi hotspot was great.  It worked in Switzerland, Austria, and Germany but failed me in Austria when the separate Austrian unit they sent me turned out to have a bad sim card.  They claim the other unit that works everywhere else will work in Austria as well -- we shall see, but if that is true, why did they send me a separate Austrian unit?
  • The Mercedes plant tour at Sindelfingen, Germany is great.  I could have stayed all day.  I have been on a lot of plant tours, and some have been very intimate with the machinery.  But those tended to be private tours.  This is the most up-close and personal I have ever gotten on a public tour.  The tour covered a large stamping plant and a final assembly line.  We took the 1:00 English tour, which I think is the most complete one.
  • I have never been to Baden Baden, Germany before.  A beautiful town with a 19th century vibe, we stopped there only because we needed to stop somewhere not far from Stuttgart.  We ate an incredible meal at the Michelin one-star Brennar's Park Hotel Restaurant.  Lichtentaler Allee was one of the most beautiful and peaceful public parks I have ever walked.
  • Last night we went to the opera at Bregenz (you may have seen it in Quantum of Solace, or you can google the amazing stages).   I thought the performers were from meh to fine, but not outstanding.  The staging though was gorgeous, probably the most beautiful stage production I have ever seen.

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Surprise! Greek Problems Were Not Solved By Kicking the Can Down the Road

Greece is looking like it's falling apart again.  Or perhaps more accurately: Greece continues to fall apart and the lipstick Europe put on the pig a few years ago is wearing off and people are noticing again.

I warned about this less than a year ago:

Kevin Drum quotes Hugo Dixon on the Greek recovery:

Greece is undergoing an astonishing financial rebound. Two years ago, the country looked like it was set for a messy default and exit from the euro. Now it is on the verge of returning to the bond market with the issue of 2 billion euros of five-year paper.

There are still political risks, and the real economy is only now starting to turn. But the financial recovery is impressive. The 10-year bond yield, which hit 30 percent after the debt restructuring of two years ago, is now 6.2 percent....The changed mood in the markets is mainly down to external factors: the European Central Bank’s promise to “do whatever it takes” to save the euro two years ago; and the more recent end of investors’ love affair with emerging markets, meaning the liquidity sloshing around the global economy has been hunting for bargains in other places such as Greece.

That said, the centre-right government of Antonis Samaras has surprised observers at home and abroad by its ability to continue with the fiscal and structural reforms started by his predecessors. The most important successes have been reform of the labour market, which has restored Greece’s competiveness, and the achievement last year of a “primary” budgetary surplus before interest payments.

Color me suspicious.  Both the media and investors fall for this kind of thing all the time -- the dead cat bounce masquerading as a structural improvement.  I hope like hell Greece has gotten its act together, but I would not bet my own money on it.

In that same article, I expressed myself skeptical that the Greeks had done anything long-term meaningful in their labor markets.  They "reformed" their labor markets in the same way the Obama administration "reformed" the VA -- a lot of impressive statements about the need for change, a few press releases and a few promised but forgotten reforms.  At the time, the Left wanted desperately to believe that countries could continue to take on near-infinite amounts of debt with no consequences, and so desperately wanted to believe Greece was OK.

I have said it for four years:  There are only two choices here:  1.  The rest of Europe essentially pays off Greek debt for it or 2.  Greece leaves the Euro.  And since it is likely Greece will get itself into the same hole again some time in the future if #1 is pursued, there is really only leaving the Euro.  The latter will be a mess, with rampant inflation in Greece and destruction savings, but essentially the savings have already been destroyed by irresponsible government borrowing and bank bail-ins.  At least the falling value of Greek currency would make it an attractive place at for tourism if not investment and Greece could start rebuilding its economy on some sort of foundation.  Instead of bailing out banks and Greek officials, Germany should let it all fall apart and spend its money on helping Greece to pick up the pieces.

By letting Greece join the Euro, the Germans essentially let their irresponsible country cousins use their American Express Platinum card, and the Greeks went on a bender with the card.   The Germans can't keep paying the bill -- at some point you have to take the card away.

Thoughts On Campus Speech 1: Hitler Would Have Been The Most Valuable Campus Speaker

Yesterday,  Yale did not cave to pressure from certain parts of the student body and Ayaan Hirsi Ali spoke on campus.  As with many controversial speakers, mostly consisting of folks not on the political Left, a number of campus groups tried to force Yale to cancel her speech because they expressed themselves offended by her.   Among politically correct colleges, there has been a growing trend towards enforcing a right not to be offended, though this enforcement tends to be asymmetric -- Muslims apparently have a right not to be offended, but Christians do not.  Women have it but men do not.  Greenpeace has it but Exxon does not.

People of prominence who offend us or with whom we violently disagree should not be the least but the most welcome speakers on campus.  I will demonstrate this by using the most extreme of all possible examples:  An imaginary speaking tour by Adolph Hitler, say in December of 1938.  Could there be a more distasteful person, the leader of Nazi Germany just weeks after the Reichskristallnacht?  But I think he would have been the most valuable speaker I could possibly imagine.

If he were honest, which Hitler likely couldn't have stopped himself from being, what valuable insights we could have gained.  The West made numerous mistakes in the late thirties and even into the forties because it just could not believe the full extent of Hitler's objectives and hatreds**.   Perhaps we would have understood sooner and better exactly what we were dealing with.

Even if he were dishonest, and tried to "convert" the office without discussing specific plans, that would still be fascinating.  What arguments did he use?  Could we get insights into why he struck a chord among the German people?  Would his rhetoric be compelling to American audiences?  I despise the guy and almost everything he stood for but I would have loved to have him on campus as a speaker.

I will tell one of my favorite stories about the rise of Hitler.   You have heard the story of Jesse Owens at the Berlin Olympics.   Supposedly this was a slap in the face to Hitler, to have a black man winning medals.  But one of the last events of the games was a four man relay race.  The US was certainly going to win.  But one of the US runners was Jewish and the US pulled the runner from the race and substituted Owens.  The US didn't want to embarrass Hitler by making him hand a medal to a Jew.  This sounds odd to put it this way, but one of the problems we had in really taking the worst of the Holocaust seriously as it was happening is that we were not able to see that Hitler's anti-semitism was so much more dangerous than the ubiquitous and run-of-the-mill anti-semitism that obtained all over Britain and America.  We should always have a policy of letting even the most extreme people talk as much as they like.  We might learn that they have a point and adjust our thinking on something, or we might learn that they are even batshit crazier than we thought.  Either outcome is useful.

Thank God For Scientists: "Unexpected Link Between Solar Activity and Climate Change"

Without scientists, we would never be apprised of the fact that the behavior of the sun affects how warm or cold it is on Earth (emphasis added)

For the first time, a research team has been able to reconstruct the solar activity at the end of the last ice age, around 20 000–10 000 years ago, by analysing trace elements in ice cores in Greenland and cave formations from China. During the last glacial maximum, Sweden was covered in a thick ice sheet that stretched all the way down to northern Germany and sea levels were more than 100 metres lower than they are today, because the water was frozen in the extensive ice caps. The new study shows that the sun’s variation influences the climate in a similar way regardless of whether the climate is extreme, as during the Ice Age, or as it is today.

“The study shows an unexpected link between solar activity and climate change. It shows both that changes in solar activity are nothing new and that solar activity influences the climate, especially on a regional level. Understanding these processes helps us to better forecast the climate in certain regions”, said Raimund Muscheler, Lecturer in Quaternary Geology at Lund University and co-author of the study.

My snarky tone is a bit unfair here.  While the sun seems an obvious candidate as a major climate driver, changes in its actual energy hitting the Earth have always appeared small compared to what would be needed to explain observed temperature changes.  This team hypothesizes that the changes in the sun's output have effects on atmospheric circulation that have a larger than expected impact on temperatures.  Henrik Svensmark explains it a different way, hypothesizing that cloud formation is heavily influenced by cosmic rays, and higher solar activity tends to shield the Earth from cosmic rays, thus reducing cloud formation and increasing temperatures.

Skeptics find this sudden realization that the sun affects climate to be kind of funny, since they have argued for years that higher temperatures in the late 20th century have coincided with a very active sun, probably more active than it has been in hundreds of years.   Climate alarmists have denied any influence to the sun.  Sun deniers!  This absolutist stance may seem odd, given that most skeptics (despite what is said of us) actually accept some amount of warming from CO2, but here are these folks who wrap themselves in the mantle of science that deny any effect from the sun?  The problem that warmists have is that higher climate sensitivities, on the order of 3 degrees C per doubling of CO2, greatly over-predict past warming (as I demonstrate in my videos, see around the 59 minute mark).  If anything else whatsoever other than CO2 caused one iota of the warming over the last 50 years, then this over-prediction just gets worse.  In fact, warmists have to assume crazy high levels of aerosol cooling -- that go beyond what most of the science supports -- to make their forecasts work looking backwards.

What Happens When You Abandon Prices As A Supply-Demand Matching Tool? California Tries Totalitarianism

Mostly, we use prices to match supply and demand. When supplies of some item are short, rising prices provide incentives for conservation and substitution, as well as the creation of creative new sources of supply.

When we abandon prices, often out of some sort of political opportunism, chaos usually results.

California, for example, has never had the political will to allow water prices to rise when water is short. They cite all kinds of awful things that would happen to people if water prices were higher, but then proceed instead with all sorts of authoritarian rationing initiatives that strike me as far worse than any downsides of higher prices.

In this particular drought, California has taken a page from Nazi Germany block watches to try to ration water

So, faced with apparent indifference to stern warnings from state leaders and media alarms, cities across California have encouraged residents to tattle on their neighbors for wasting water — and the residents have responded in droves. Sacramento, for instance, has received more than 6,000 reports of water waste this year, up twentyfold from last year...

Some drought-conscious Californians have turned not only to tattling, but also to an age-old strategy to persuade friends and neighbors to cut back: shaming. On Twitter, radio shows and elsewhere, Californians are indulging in such sports as shower-shaming (trying to embarrass a neighbor or relative who takes a leisurely wash), car-wash-shaming and lawn-shaming.

“Is washing the sidewalk with water a good idea in a drought @sfgov?” Sahand Mirzahossein, a 32-year-old management consultant, posted on Twitter, along with a picture of a San Francisco city employee cleaning the sidewalk with a hose. (He said he hoped a city official would respond to his post, but he never heard back.)

Drought-shaming may sound like a petty, vindictive strategy, and officials at water agencies all denied wanting to shame anyone, preferring to call it “education” or “competition.” But there are signs that pitting residents against one another can pay dividends.

All this to get, in the best case, a 10% savings. How much would water prices have to rise to cut demand 10% and avoid all this creepy Orwellian crap?

One of the features of Nazi and communist block watch systems was that certain people would instrumentalize the system to use it to pay back old grudges. The same thing is apparently happening in California

In Santa Cruz, dozens of complaints have come from just a few residents, who seem to be trying to use the city’s tight water restrictions to indulge old grudges.

“You get people who hate their neighbors and chronically report them in hopes they’ll be thrown in prison for wasting water,” said Eileen Cross, Santa Cruz’s water conservation manager. People claim water-waste innocence, she said, and ask: “Was that my neighbor? She’s been after me ever since I got that dog.”

Ms. Franzi said that in her Sacramento neighborhood, people were now looking askance at one another, wondering who reported them for wasting water.

“There’s a lot of suspiciousness,” Ms. Franzi said. “It’s a little uncomfortable at this point.” She pointed out that she and her husband have proudly replaced their green lawn with drought-resistant plants, and even cut back showers to once every few days.

Update:  Seriously, for those that are unclear -- this is the alternative to capitalism.  This is the Progressive alternative to markets.  Sure, bad things happen in a free society with free markets, but how can anyone believe that this is a better alternative?

Are You Desperately Worried About Global Warming? Then You Should Be Begging for More Fracking

Charles Frank of Brookings has looked at the relative returns of various energy investments in the context of reducing CO2.  The results:  The best answer is natural gas, with nothing else even close.  Solar and Wind can't even justify their expense, at least from the standpoint of reducing CO2.  Here is the key chart (Hat tip Econlog)

powerplants

 

Note that this is not a calculation of the economic returns of these types of power plants, but a relative comparison of how much avoided costs, mainly in CO2 emissions (valued at $50 per ton), there are in switching from coal to one of these fuel sources.  Natural gas plants are the obvious winner.  It remains the winner over solar and wind even if the value of a ton of CO2 is doubled to $100 and both these technologies are assumed to suddenly get much more efficient.   Note by the way that unlike wind and solar (and nuclear), gas substitution for coal plant yields a net economic benefit (from reduced fuel and capital costs) above and beyond the avoided emissions -- which is why gas is naturally substituting right now for coal even in the absence of a carbon tax of some sort to impose a cost to CO2 emissions.**

I was actually surprised that wind did not look even worse.  I think the reason for this is in how the author deals with wind's reliability issues -- he ends up discounting the average capacity factor somewhat.  But this understates the problem.   The real reliability problem with wind is that it can stop blowing almost instantaneously, while it takes hours to spin up other sorts of power plants (gas turbines being the fastest to start up, nuclear being the slowest).  Thus power companies with a lot of wind have to keep fossil fuel plants burning fuel but producing no power, an issue called hot backup.  This issue has proved itself to substantially reduce wind's true displacement potential, as they found in Germany and Denmark.

There is no evidence that industrial wind power is likely to have a significant impact on carbon emissions. The European experience is instructive. Denmark, the world's most wind-intensive nation, with more than 6,000 turbines generating 19% of its electricity, has yet to close a single fossil-fuel plant. It requires 50% more coal-generated electricity to cover wind power's unpredictability, and pollution and carbon dioxide emissions have risen (by 36% in 2006 alone).

Flemming Nissen, the head of development at West Danish generating company ELSAM (one of Denmark's largest energy utilities) tells us that "wind turbines do not reduce carbon dioxide emissions." The German experience is no different. Der Spiegel reports that "Germany's CO2 emissions haven't been reduced by even a single gram," and additional coal- and gas-fired plants have been constructed to ensure reliable delivery.

Indeed, recent academic research shows that wind power may actually increase greenhouse gas emissions in some cases, depending on the carbon-intensity of back-up generation required because of its intermittent character.

 

** Postscript:  The best way to read this table, IMO, is to take the net value of capacity and energy substitution and compare it to the CO2 savings value.

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The first line is just from the first line of the table above.   The second is essentially the net of all the other lines.

I think this makes is clearer what is going on.  For wind, we invest $106,697 for $132,030 $132,030 for $106,697 in emissions reduction (again, I think the actual number is lower).  In Solar, we invest $258,322 for $69,502 in emissions reduction.    For gas, on the other hand, we have no net investment -- we actually have a gain in these other inputs from the switch -- and then we also save $416,534.  In other words, rather than paying, we are getting paid to get $416,534 in emissions reduction.  That is not several times better than Solar and Wind, it is infinitely better.

Postscript #2:  Another way to look at this -- if you put on a carbon tax in the US equal to $50 per ton of CO2 that fuel would produce, then it still likely would make no sense to be building wind or solar plants unless there remained substantial subsidies for them (e.g. investment tax credits, direct subsidies, guaranteed loans, above-market electricity pricing, etc).  What we would see is an absolute natural gas plan craze.

D-Day More Important in Containing the Soviets than Defeating the Nazis

Over time, my understanding of the importance of the D-Day invasions has shifted.  Growing up, I considered these events to be the single key event in defeating the Nazis.  Listening to the radio this morning, this still seems to be the common understanding.

Over time, I have had to face the fact that the US (or at least the US Army) was not primarily responsible for defeating Germany -- the Russians defeated Germany, and what's more, would have defeated them whether the Allies had landed in France or not.  Check out the casualties by front, from Wikipedia:

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The Russians defeated Germany.  Period.   And I don't think the western allies would ever have had the stomach to inflict the kind of casualties on Germany that were ultimately necessary to defeat her without Russian help.  To me, this is the great irony of WWII, that it was not ultimately a victory for democracy.  Only totalitarian Russia could defeat totalitarian Germany.  This thought often bothers me a lot.  It doesn't fit with how we want to view the war.

However, D-Day did have an important effect -- it kept Western Europe out of Soviet hands.  We did not know it at the time, but I would argue in retrospect that from mid-1944 on we were competing with Russia to see how Europe would get divided up after the war.  D-Day allowed the western allies to overrun most of Western Europe and keep it out of Soviet hands, perhaps an even more important outcome than just speeding the defeat of the Germans.  Sure, FDR gets grief for giving the farm away to Russia at Yalta, but what could he do?  The Soviet occupation of Eastern Europe at that point was a fait accompli.  What would have been FDR & Churchill's negotiation position at Yalta if their armies were not even on the continent (excepting Italy, where we might still be fighting in 2014 and getting nowhere)?