What does government energy policy have in common with government food advice? Every 30-40 years the Federal government reverses itself 180 degrees and declares all the stuff that they said was bad before is now good today.
Federal policies moved in coal's favor in the 1970s. With the Middle East oil crisis, policymakers began to adopt policies to try and shift the nation toward greater coal consumption, which was a domestic energy resource. The Energy Supply and Environmental Coordination Act of 1974 directed the Federal Energy Administration to prohibit the use of oil or natural gas by electric utilities that could use coal, and it authorized the FEA to require that new electric power plants be able to use coal. The Energy Policy and Conservation Act of 1975 extended those powers for two years and authorized $750 million in loan guarantees for new underground low-sulfur mines. Further pro-coal mandates were passed in the late-1970s.
I was aware of the regulations at the time as I was working in an oil refinery in the early 80's and it affected us a couple of ways. First, it killed demand for low-sulphur heavy fuel oil. And second, it sidelined several co-generation projects that made a ton of sense (generating electricity and steam from wasted or low-value portions of the oil barrel) but ran afoul of these coal mandates.
I am out of the country (currently in Thailand for a wedding). I read this in the local Asian WSJ, an article about money and patronage in the Malaysian political process. And while I suppose I was supposed to think "wow, Malaysia is sure screwed up" -- all I was really left with at the end of this article was "how is this any different from the US?" How does 1MDB differ from, say, various green energy funds at the Federal level or community development funds at the local level?
Under pressure within his party to resign, he called together a group of senior leaders in July to remind them everyone had benefited from the money.
The funds, Mr. Najib said, weren’t used for his personal enrichment. Instead, they were channeled to politicians or into spending on projects aimed at helping the ruling party win elections in 2013, he said, according to a cabinet minister who was present.
“I took the money to spend for us,” the minister quoted Mr. Najib as saying.
It still isn’t clear where the $700 million came from or where it went. But a six-month Wall Street Journal examination revealed that public entities spent hundreds of millions of dollars on a massive patronage machine to help ensure Mr. Najib’s United Malays National Organization stayed in power. The payments, while legal, represented a new milestone in Malaysia’s freewheeling electoral system, according to ruling-party officials....
The prime minister, who is chairman of 1MDB’s board of advisers, promised repeatedly that the fund would boost Malaysia’s economy by attracting foreign capital. It rolled up more than $11 billion in debt without luring major investments.
Yet Mr. Najib used the fund to funnel at least $140 million to charity projects such as schools and low-cost housing in ways that boosted UMNO’s election chances, the Journal investigation found.
The minutes portray a fund that repeatedly prioritized political spending, even when 1MDB’s cash flow was insufficient to cover its debt payments.
This illustrates one (of many) reasons why those lobbying to reduce campaign spending are on the wrong track. Because no matter how much one limits the direct spending in elections, no country, including the US, ever limits politicians from these sorts of patronage projects, which are essentially vote-buying schemes with my tax money.
The reason there is so much money in politics is because supporters of large government have raised the stakes for elections. Want to see money leave politics? -- eliminate the government's ability to sacrifice one group to another while subsidizing a third, and no one will spend spend a billion dollars to get his guy elected to public office.
By the way, in this current Presidential election we are seeing a vivid demonstration of another reason campaign spending limits are misguided. With strict spending limits, the advantage goes to the incumbent. The only people who can break through this advantage are people who are either a) already famous for some other reason or b) people who resort to the craziest populist rhetoric. Both of which describe Donald Trump to a T (update: Trump has spent virtually no money in this election, so he should be the dream candidate of clean elections folks, right?)
In fact, the rate at which police are killed by gun violence is not substantially higher than for the average citizen. In 2015 there were 39 firearms deaths of police (from the source above). Given the way that firearms stats are reported broadly, these are probably not all killings by other people (some police likely are killed by accidental discharge, etc). But assuming they are all gun killings, and assuming about 900,000 police (I get a broad range of estimates for this seemingly simple number) gives a rate of 4.3 per 100,000 per year, not much higher than the US gun homicide death number of 3.55 (you may have seen much higher numbers of gun death numbers -- over 2/3 of these are suicides).
Postscript: The current media model is breaking the Internet. I have seen the chart a ton of times on the most dangerous professions, so I searched for it. Do it yourself. The first 8 or 9 links all turn out to be the stupid new media format of requiring 10 clicks to get through a list. I simply refuse to ever click on these things. It is a horrible way to present information. I suggest you boycott them as well.
A while back I got a LOT of feedback when I asked if Republicans really wanted to create 12 million refugees. My assumption was that if one opposed substantially liberalizing immigration quotas (ie making the quota near unlimited) and one opposed "amnesty" for the 12 million currently illegal immigrants in this country, the only alternative was to try to deport them all.
I got a lot of responses back from all over the political spectrum, but the one I found the most surprising was to say that I was setting up a false choice. The only alternative to amnesty was not deportation. Many advocated for what I would call an "illegal but tolerated" status for these 12 million people, sortof a parallel to how marijuana is treated in many states. I have a few reactions to this:
Isn't this the status quo? People got really angry with me in the comments for trying to create a straw man position (deportation) for Republicans by not considering this "illegal but tolerated" status. But I can say with all honesty it never crossed my mind. The one theme I get from every Republican candidate and nearly every Conservative pundit is that the current immigration situation is broken and intolerable. So I am still confused. If "amnesty" is still intolerable and the current situation is intolerable and deportation is not what they want (or at least not what they are willing to admit to in public) -- then what is it that Republicans want?
To avoid charges of racism or economic Luddite-ism (since both history and most economic studies show immigration to be a strong net positive), immigration restrictionists often argue that what they are really defending is the rule of law. Immigration is illegal and what they can't abide is seeing so many people flaunt the law. But what could possibly be more corrosive to the rule of law than an "illegal but tolerated" status? We give effective amnesties all the time. Colorado didn't wait to legalize marijuana until every past illegal user had been prosecuted.
"illegal but tolerated" is a license for abuse and harassment. It is why organized crime flourishes in narcotics and in alcohol when it was illegal but tolerated. It is why women get abused in prostitution. It creates unpersons with limited access both to the legal system and to the basic plumbing of the modern world (e.g. banking). It drives people underground, pushing people who at worst committed a victim-less crime (ie illegal immigration) into crimes with real victims (e.g. identity theft).
I continue to argue that Conservatives are abandoning their free market principles when they advocate for strict limits on immigration. I have heard folks like Sheriff Joe say that these folks are "trespassing" in the US. Well, they are only trespassing if we are Marxists and adopt the view there is no such thing as private property and everything belongs to the government. In a free society, the actual questions involved are whether an immigrant can rent an apartment from me, or work for me, or bank with me, etc. Those are supposed to be private decisions. In effect, Conservatives are arguing that I can only hire from or rent to people on a government-approved list. That does not sound like free markets and small government to me.
I am not blind to the problems that our generous welfare policies have on immigration. I would argue that what is needed is a new immigration status. In a sense, those who want 12 million people to be "illegal but tolerated" are essentially arguing for the same thing, but frankly that solution sucks for everyone. I would argue for institutionalizing a new level of legal presence in this country, well short of "citizen" but beyond "illegal but tolerated."
As an aside, for years the Roman Empire was really good at this, at least in its early years. It grew and adopted and eventually commanded the loyalty of a broad range of peoples and cultures in part because it was incredibly flexible in thinking about citizenship status. It had many custom levels, such as Civitas sine suffragio (citizenship without the vote). Many Conservatives argue that Barbarian immigration brought down the Roman Empire and use that as an argument for modern restrictions. But in fact, I believe just the opposite -- that it was the Romans losing their knack for citizenship flexibility and integrating new cultures that contributed to their downfall.
Anyone may enter or reside in the US. The government may prevent entry of a very short list of terrorists and criminals at the border, but everyone else is welcome to come and stay as long as they want for whatever reason. Anyone may buy property in the US, regardless or citizenship or residency. Anyone in the US may trade with anyone in the world on the same terms they trade with their next door neighbor.
The US government is obligated to protect the individual rights, particularly those in the Bill of Rights, of all people physically present in our borders, citizen or not. Anyone, regardless of citizenship status, may buy property, own a business, or seek employment in the United States without any legal distinction vs. US "citizens"
Certain government functions, including voting and holding office, may require formal "citizenship". Citizenship should be easier to achieve, based mainly on some minimum residency period, and can be denied after this residency only for a few limited reasons (e.g. convicted of a felony). The government may set no quotas or numerical limits on new citizenships.
All people present in the US pay the same taxes in the same way. A non-citizen or even a short term visitor pays sales taxes on purchases and income taxes on income earned while present in the US just like anyone else. Immigrants will pay property taxes just like long-term residents, either directly or via their rent payments.
Pure government handouts, like Welfare, food stamps, the EITC, farm subsidies, and public housing, will only be available to those with full US citizenship. Vagrancy and squatting on public or private lands without permission will not be tolerated.
Most government services and fee-based activities, including emergency services, public education, transportation, access to public recreation, etc. will be open to all people within the US borders, regardless of citizenship status, assuming relevant fees are paid.
Social Security is a tough beast to classify - I would put it in the "Citizen" category as currently structured (but would gladly put it in the "available to everyone" category if SS could be restructured to better match contributions with benefits, as in a private account system). But, as currently configured, I would propose that only citizens can accrue and receive SS benefits. To equalize the system, the nearly 8% employee and 8% employer social security contributions will still be paid by non-citizens working in the US, but these funds can be distributed differently. I would suggest the funds be split 50/50 between state and local governments to offset any disproportionate use of services by new immigrants. The federal portion could go towards social security solvency, while the state and local portion to things like schools and medical programs.
It may be possible to earn-in to benefits in #5 and #7 based on some cumulative tax payment history. For example, unemployment taxes are really close to an insurance policy, such that a couple of years of payments into the system could make one eligible for benefits. Given how much fraud I see on this from citizens**, I can't believe immigrants would be any worse.
With news that even yoga classes are being cancelled due to fears of Westerners appropriating from other cultures, I am led to wonder -- why don't these prohibitions go both ways? If as a white western male, I can't do yoga or host a Cinco de Mayo party or play the blues on the guitar, why does everyone else get to feed greedily from the trough of western culture? If I can't wear a sombrero, why do other cultures get to wear Lakers jerseys, use calculus, or even have polio vaccines? Heck, all this angst tends to occur at Universities, which are a quintessentially western cultural invention. Isn't the very act of attending Harvard a cultural appropriation for non-Westerners?
I say this all tongue in cheek just to demonstrate how stupid this whole thing is. Some of the greatest advances, both of science and culture, have occurred when cultures cross-pollinate. I have read several auto-biographies of musicians and artists and they all boil down to "I was exposed to this art/music from a different culture and it sent me off in a new direction." The British rock and roll invasion resulted from American black blues music being dropped into England, mutating for a few years, and coming back as the Beatles and the Rolling Stones.
Or here is an even better example: the movie"A fistful of Dollars". That was an American western with what has become a quintessentially American actor, Clint Eastwood. However, it was originally an Italian movie by Italian director Sergio Leone (it was not released in the US until 3 years after its Italian release). But Sergio Leone borrowed wholesale for this movie from famed Japanese director Akiro Kurosawa's Yojimbo. But Kurosawa himself often borrowed from American sources, fusing it with Japanese culture and history to produce many of his famous movies. While there is some debate on this, Yojimbo appears to be based on Dashiell Hammett's Red Harvest, a classic of American noir fiction.
As always, take this with a grain of salt given my past history of investment advice. I am frequently correct on my calls to short something, but tend to be really early, such that a person (ie me) can likely be short-squeezed into oblivion before the fall takes place.
That being said, I think autos would be a good short. Why?
They are riding positive sentiment, based on a strong October. But October was strong because it had 5 weekends rather than 4 and recent results reflect a lot of channel stuffing. Shorting means finding the top, and this feels like the top
I would be stunned if the Volkswagen emissions cheating is limited to Volkswagen. Volkswagen is not unique -- Cat and I think Cummins were busted a while back for the same thing. US automakers don't have a lot of exposure to diesels (except for pickup trucks) but my guess is that something similar was ubiquitous. **
This comes against a backdrop of rising US auto sales (see the numbers for October, out earlier today) and it's not difficult to explain the gains. Just take a look at the following data from Experian on the lunatic loan terms being extended to borrowers (from Q1):
Average loan term for new cars is now 67 months — a record.
Average loan term for used cars is now 62 months — a record.
Loans with terms from 74 to 84 months made up 30% of all new vehicle financing — a record.
Loans with terms from 74 to 84 months made up 16% of all used vehicle financing — a record.
The average amount financed for a new vehicle was $28,711 — a record.
The average payment for new vehicles was $488 — a record.
The percentage of all new vehicles financed accounted for by leases was 31.46% — a record.
** Postscript: The biggest problem with the emission cheating is that it caused the world to under-estimate the cost of emissions mandates. When performance of cars starts to drop noticeably when emissions cheating is fixed, it will be an eye-opener
I am going to reprise parts of an article I wrote in Forbes several years ago, because I think the conclusions are particularly relevant given the Democrats' discussion of income inequality and the Scandinavian economic model.
When folks like Bernie Sanders say that we have more income inequality than Sweden or Denmark, this is certainly true. By just about any test, such as Gini ratios, we have a much wider range of incomes.
However, we Sanders implies that this greater income equality means the poor are better off in these countries, he is very probably wrong. Because the data tends to show that while the middle class in the US is richer than the middle class in Denmark, and the rich in the US are richer than the rich in Denmark, the poor in the US are not poorer than those in Denmark.
And isn't this what we really care about? The absolute well-being of the poor?
I am not a trained economist or economic researcher, but I have looked for a while for a data source to get at this. I can find Gini ratios all over the place, but how do I compare the absolute well-being of poor in one country to poor in another?
The first clue that I was maybe on the right track was this chart that actually came from a left-wing group trying to promote the idea of reducing income inequality. The chart is hard to read (the study is no longer online and all I have is a bad screenshot), but it seemed to show that the poor in the US were no worse off than the poor in Denmark and Sweeden
So the data had to be there somewhere. Finally I found a set of data that seemed to does the trick. I used data from the LIS Cross-National Data Center. I cannot vouch for their data quality, but it is the same data set used by several folks on the Left (John Cassidy and Kevin Drum) to highlight inequality issues, so I used the same data source. I then compared the US to several other countries, looking at the absolute well-being of folks at different income percentile levels. I have used both exchange rates and purchasing price parity (PPP) for the comparison but my feeling is that PPP is a better approach when we are comparing consumer well-being.
You can click through the Forbes article to see all the comparisons, but I will focus here on Sweden and Denmark since they are very much in the policy-making discussion on income inequality. As usual, you can click to enlarge:
What does this mean? If the data is correct, it means that all the way down to at least the 10th percentile poorest people, the poor in the US are as well or better off than the poor in Denmark and Sweden. And everyone else, including those at the 20th and 25th percentile we would still likely call "poor", are way better off in the US.
All this talk about reducing income inequality by emulating Denmark is thus not about making the poor better off, but just about cutting the rich and middle class down to size.
From Ryan McMaken of the Mises Institute, is your state richer than Bernie Sander's dream country Sweden? The author has used state-level purchasing price parity adjustments, rather than a single US adjustment, due to large variations in state price levels discussed previously here (click to enlarge)
In short, don't ever ever ever take my investment advice. However, I will note that when I tongue-in-cheek called the market top on May 27, the S&P closed at 2123 and has not closed higher than 2128 since.
The reason market timing is virtually impossible is because the actual timing can be so skewed . You can be sure the market is overvalued but it can take years for that to play out, particularly when governments (e.g. US, China) are pumping liquidity into the markets to keep them afloat.
A good example is China. I (and many other much smarter people) were recognizing the China market was overvalued years ago, but had one shorted the China market back then you would have been short-squeezed into oblivion before the actual crash came about this year.
While fundamental investing isn't worthless, the effects of fundamentals seem to get easily swamped by government actions, such that predicting government actions is far more important to investment success than figuring out corporate fundamentals. I learned to tear apart company financials from one of the best back at HBS, but I have no ability to figure out when the Fed will or will not stop dumping money into the markets. So I buy a few index funds and try not to look at them too much.
In Europe, we stayed several times in rental apartments we found through the invaluable VRBO website. One advantage of these apartments is that we can cook breakfast, avoiding the high-priced breakfasts at many hotels.
So I found myself shopping for orange juice in Austria, with a number of choices at hand, but none recognizable to me. Skeptics of capitalism often point to branding and brand-based advertising as particular wastes of resources. But I would have loved to see an orange juice brand I recognized. Brands are essentially a guarantee of predictability -- whether I like the taste or not, I know what a Big Mac will taste like in Omaha or Beijing. Brands are an enormous aid to shopping and making choices, and in this manner create real value for us as consumers. I missed recognizable brands when I was in Europe.
PS- Coca-Cola and Pepsi are obviously the exceptions to this predictability game. Diet Coke, called Coke Light in Europe, tastes entirely different in Europe than it does in the US -- in fact it tastes more like what Diet Pepsi tastes like in the US. Which is ironic, and fitting I guess, because Diet Pepsi in Europe tastes a lot like American Diet Coke.
Vox shares what is perhaps the greatest achievement in human history, the continuing disappearance of absolute poverty:
Readers of this blog will likely have seen this before (though it may well be new to Vox readers). Here is the amazing thing about the Vox article: It never once mentions capitalism, trade, economic freedom, or any synonym. Here is a sampling of the tone of the accompanying article:
Vox is treating this like it is the result of some top-down effort, using the same language one might use to describe the eradication of Yellow Fever in Panama. As if this resulted (and as if future progress depended on) some all-hands-on-deck technocratic government program.
No one "set about" eradicating poverty. It happened because governments, at least to some extent, got out of the way and didn't stop it. China is a great example. Mao "set about" trying to eliminate poverty using many of the approaches likely favored by the Vox staff, and killed a few tens of millions of people in the process.
Here is my theory of the world's accelerating wealth formation that I have written on a number of times before. This chart largely results from:
There was a philosophical and intellectual change where questioning established beliefs and social patterns wentfrom being heresy and unthinkable to being acceptable, and even in vogue. In other words, men, at first just the elite but soon everyone, were urged to use their mind rather than just relying on established beliefs and appeals to authority.
There were social and political changes that greatly increased the number of people capable of entrepreneurship. Before this time, the vast vast majority of people were locked into social positions that allowed them no flexibility to act on a good idea, even if they had one. By starting to create a large and free middle class, first in the Netherlands and England and then in the US, more people had the ability to use their mind to create new wealth. Whereas before, perhaps 1% or
less of any population really had the freedom to truly act on their ideas, after 1700 many more people began to have this freedom.
So today's wealth, and everything that goes with it (from shorter work hours to longer life spans) is the result of more people using their minds more freely.
Verizon's decision to stop subsidizing smartphone purchases in exchange for 2-year contract lock-ins is going to be a big change in the industry. It will be interesting to see what happens to handset prices. A while back someone I know had a Verizon iphone that they lost. They were talking about going out and buying a new one to replace it. I said, "uggh, an $800 hit." They looked at me like I was crazy. They said they had paid something like $300 for it. I pointed out that that was likely with a 2-year contract lock-in, and that a replacement would go full price which can run over $800 depending on which version they had.
They did not believe me. In fact they were almost indignant that I would suggest such a thing. And went running off the the Verizon store with every confidence an iPhone 6 plus could be purchased for $200-$300.
This situation has obtained for a decade. It will be interesting to see what happens to iPhone sales when customers are exposed to something closer to the true price. Since most iPhones without contract go for more (substantially more in fact) than the laptops I am buying my employees, I can't help but think that iPhone revenues will suffer. (Of course, the result could be everyone who wants a new iPhone switching to AT&T from Verizon -- it is not at all clear Verizon's new no-subsidy rates are low enough to be a better net deal than the old rates+subsidy).
I use Verizon because my business operates in the boondocks and Verizon is almost always the last carrier standing when I drive out to our locations. I wonder if Verizon will now be allowing unlocked phones? I presume this will be the case -- T-Mobile is the other company that ended phone subsidies and I moved my unlocked Nexus to them.
By the way, the current T-Mobile $50 a month plan allows unlimited data and text when roaming in 120 countries, and $0.20 a minute international calls from any of these countries. This is even better than you can do with the old method of buying an international sim card and switching when you land. No other US carrier is even in the ballpark. You have to pay Verizon $20 a month or so to get them to reduce international roaming text costs to 50 cents each with some paltry amount of data. For international travelers, there is no other choice even close to T-Mobile among US carriers.
My headline is probably the most accurate description of how China's devaluation of the yuan yesterday affects this country. But I bet you will not see it portrayed that way in any other media. What you are going to see, particularly as the Presidential election races heat up, are multiple calls to bash China in some way to punish it for being so generous to American consumers. Why? Because the devaluation of the yuan will negatively affect the bottom line of a few export sensitive companies. And if we have learned anything from the Ex-Im battle, things that GE and Boeing like or hate are much more likely to affect policy than things that benefit 300 million consumers. Make no mistake, protectionist measures are the worst sort of cronyism, benefiting a few companies and workers and hurting everyone else (look up concentrated benefits, dispersed costs).
By the way, aren't the worldwide competitive devaluation sweepstakes amazing? If everyone is doing it, then devaluations have no substantive effect on trade (except to perhaps decrease its magnitude in total), which just adds to the utter pointlessness of the game. And it is hilarious to me to see US elected officials criticizing China for "manipulating" its currency, as if the US Fed hasn't added several trillion dollars to its balance sheet over the last few years in a heroic attempt to manipulate the value (downwards) of our own currency.
...the President and his supporters sure make it hard. In his speech last week at American University he said:
Just because Iranian hardliners chant “Death to America” does not mean that that’s what all Iranians believe. (Applause.) In fact, it’s those hardliners who are most comfortable with the status quo. It’s those hardliners chanting “Death to America” who have been most opposed to the deal. They’re making common cause with the Republican caucus. (Laughter and applause.)
That last part seems to have gotten the Conservatives in an uproar, and I suppose I can see why, though I am reluctant to join in the usual Internet rush to burn someone over what may have been a ham-handed joke.
It is actually the first sentence that floors me. Either the President is straight-out being deceptive, or he is a total foreign policy naif. Iran is not like the US. People in Iran are not allowed to consistently chant messages with which the rulers do not agree. As a minimum, they are met with violence and arrest (e.g. in 2009 with the Green movement). So if anyone is chanting "Death to America" at public events, it is with the tacit approval of the nation's rulers. It may very well be that the mass of Iranians don't agree with that message, but in Iran, what the mass of Iranians believe is largely irrelevant.
Yeah, that headline seems a bit odd -- Dodd-Frank is about banking, right? Well, apparently buried within Dodd-Frank are conflict minerals rules which I suppose were spurred by the efforts of a few dim-bulb celebrities who have a knack for latching onto poorly thought out "solutions" for Africa that tend to have staggering unintended consequences.
In this case, the logic was that minerals sales to western companies were propping up dangerous warlords and militias, particularly in the Congo. The law imposed huge penalties on American companies that did not purge their supply chain eight, ten, twelve steps deep of any suspected bad actors in the mineral world.
Because what Progressive supporters forgot in patting themselves on the back for their sensitivity in passing such laws is that minerals extraction and related labor is about the only source of income for citizens of these countries, which are among the poorest in the world. We may cut have off some of the money flowing to warlords (though not much as they turn out to do pretty well in the new bootlegging environment), but we are cutting off all the money that went to the struggling population. Further, by driving the trade underground, it becomes impossible to impose event he most basic rules on the trade. Dodd-Frank turned the mineral trade in these countries into the cocaine trade.
The 2010 Dodd-Frank Act increased violence in the Congo by 143 percent (and looting by 291 percent) through its “conflict minerals” rule, which has backfired on its intended beneficiaries. So concludes a new study by Dominic Parker of the University of Wisconsin and Bryan Vadheim of the London School of Economics.
As we noted earlier, Dodd-Frank conflict minerals regulations have also caused starvation in the Congo, harmed U.S. businesses, and resulted in increased smuggling—even as they punish peaceful neighboring countries in Africa just for being near the Congo, whose civil wars have killed millions over the last 20 years. They have inflicted great harm on a country that was just beginning to recover from years of mass killing and had the world’s lowest per capita income. The new study is consistent with a 2013 paper by St. Thomas University law professor Marcia Narine that criticized the conflict minerals rule for its dire consequences for the Congolese people.
For locals, however, the law has been a catastrophe. In South Kivu Province, I heard from scores of artisanal miners and small-scale purchasers, who used to make a few dollars a day digging ore out of mountainsides with hand tools. Paltry as it may seem, this income was a lifeline for people in a region that was devastated by 32 years of misrule under the kleptocracy of Mobutu Sese Seko (when the country was known as Zaire) and that is now just beginning to emerge from over a decade of brutal war and internal strife.
Meanwhile, the law is benefiting some of the very people it was meant to single out. The chief beneficiary is Gen. Bosco Ntaganda, who is nicknamed The Terminator and is sought by the International Criminal Court. Ostensibly a member of the Congolese Army, he is in fact a freelance killer with his own ethnic Tutsi militia, which provides “security” to traders smuggling minerals across the border to neighboring Rwanda.
The people of eastern Congo agree that it would be beneficial to bring greater clarity and transparency to the mineral trade. A variety of local and international initiatives to do so were under way when the embargo hit. Those efforts may now become a casualty of the Dodd-Frank law.
The high foreign trade deficit is also a barrier to the formation of small new companies. The annual trade deficit of the US is greater than the rate of GDP growth, which explains a lot of things. Probably more companies are being destroyed than created in the US. Legislate and reverse the foreign trade deficit and there will be a massive surge in small companies.
I wrote in return
As for wolf-dogs comment on the trade deficit, I think this is totally wrong. Most of the trade imbalance is with stuff like cars and steel which are unlikely startup businesses. The easy availability of Asian manufacturing sources for nearly anything you want to make or can dream up facilitates startups and entrepreneurship. My gut feel, just seeing what entrepreneurs around me are doing but not from any hard data, is that globalization and easy international sourcing is a net positive for small business formation.
I have never seen any data on this though. Thoughts?
In an article on an incipient bank run in Greece, Zero Hedge wonders, "What is perhaps more shocking is that anyone still had money in Greek banks at all..." I agree. With talk for weeks of capital controls and the example of raids on depositor funds (even supposedly insured deposits) in Cyprus, my money would have been long gone. Even in the US in 2008-2010, I took our corporate funds out of the main Bank of America account and spread them all over. It was a pain in the butt to manage but even facing much smaller risks than in Greece, I thought it was worth it.
Just when we thought the absurdity that marks every single day of Obama's reign could not possibly be surpassed, we learned that 4 hours (3 hours and 47 minutes to be precise) after the US president vowed to sign a new law banning bulk data collection by the NSA (named, for purely grotesque reasons, the "USA Freedom Act"), the Obama administration asked the secret Fisa surveillance court to ignore a federal court that found bulk surveillance illegal and to once again grant the National Security Agency the power to collect the phone records of millions of Americans for six months.
Or, as the Guardian's Spencer Ackerman, who spotted this glaring page out of Josef Stalin's playbook, summarized it:
June 2, 6:03pm: Obama says he'll sign law banning bulk collection. June 2 9:50pm: DOJ asks secret court for 180 more days of bulk collection
The WSJ, like many other media sites, has a headline today that says "U.S. Suspects China in Huge Data Breach of Government Computers." Then, when you read the article, it says "Chinese hackers" or "hackers in China".
There is an enormous difference between saying China is responsible and saying hackers in China are responsible. The first would be a very serious affair, implying the Chinese government was engaged in hacking of US Government records. The latter is virtually meaningless. It simply means that the hackers happened to be Chinese. They could have easily been Russian or American.
The media claims to be largely pacifist, but has anyone else noticed that they sure seem to be trying to stir up Americans in some sort of anti-China fever of late?
Man has almost certainly warmed the world by some tenths of a degree C with his CO2, though much of this warming has hit night-time lows rather than daily highs. Anyway, while future temperature rise forecasts are often grossly exaggerated by absurdly high assumptions of positive feedback, there is at least a kernel of fact in there that CO2 is likely warming the world somewhat.
However, the popular "science" on climate change is often awful, positing, for example, that hurricanes are being increased by man right in the midst of the longest hurricane drought we have seen in the US for a hundred years.
Inevitably, the recent severe California droughts have been blamed on manmade CO2. As a hopefully useful adjunct to this debate, I have annotated a recent chart from the San Jose Mercury News on the history of California droughts to reflect the popular global warming / climate change narrative. You be the judge of the reasonableness:
I am mostly inured to being told I am "anti-science" for thinking manmade global warming will be less than catastrophic. In debate situations (which are increasingly rare, since most colleges where I do most of my speaking no longer want a second side in climate discussions) I usually can demonstrate I know a hell of a lot more about the science than my opponent in the first 3 minutes or so.
But the whole "pro-science" pose of environmentalists is especially funny when they get really excited about some very stupid technology. Environmentalists' support for corn ethanol is a good case in point. Most of them have retreated on this, and the media has pretty much allowed them to pretend they were never really vociferous supporters of this technology that most now consider (and I considered from the beginning) to be environmentally damaging.
Here is the new, latest, greatest example. From Think Progress, where else, but the story has been reprinted all over the hip environmental Left:
The World’s First Solar Road Is Producing More Energy Than Expected
In its first six months of existence, the world’s first solar road is performing even better than developers thought.
The road, which opened in the Netherlands in November of last year, has produced more than 3,000 kilowatt-hours of energy — enough to power a single small household for one year, according to Al-Jazeera America.
“If we translate this to an annual yield, we expect more than the 70kwh per square meter per year,” Sten de Wit, a spokesman for the project — dubbed SolaRoad — told Al Jazeera America. “We predicted [this] as an upper limit in the laboratory stage. We can therefore conclude that it was a successful first half year.”
The 230-foot stretch of road, which is embedded with solar cells that are protected by two layers of safety glass, is built for bike traffic, a use that reflects the road’s environmentally-friendly message and the cycling-heavy culture of the Netherlands.
In the US, we pay about 12 cents a KwH for electricity (the Dutch probably pay more). But at this rate, in 6 months, the solar sidewalk has generated... $360 of electricity. Double that for a year, and we get $720 of electricity a year.
How much did the sidewalk cost? The article doesn't say. You will find this typical of wind and solar articles. If they quantify the installation cost, they will not quantify the value of power produced. If they quantify the power produced, they will never quantify the installation cost. This article says the installation cost was $3.5 million, though I suppose one should subtract from that the cost to build a similar length concrete bike path, but that can't be more than $100,000 for 230 feet. They say they are getting 70kwh per year per square meter, which is $8.40 worth of electricity per square meter per year. Since regular solar panels - without all the special glass overlays and installation in the ground and inverters and wiring - cost about $150-$200 per square meter, you can see this is a horrible investment.
Part of the reason this is a bad investment is that solar panels are simply not efficient enough and cheap enough to be cost effective -- I think they will be someday, but not now. But this project has special problems:
The panels are actually in the ground with people driving over them. Honestly, could one actually choose a worse spot for a solar panel? This installation location, vs. say a roof, adds incredible cost to toughen the panels for wear. Also, it increases their maintenance costs and likely reduces their life.
Even worse, the panels have to sit flat on the ground, which is not the most efficient place for them. Panels are most efficient if tilted at an angle and (in the case of Holland) facing south. Further, they are more efficient up in the air where they do not get shaded by trees or buildings.
This is just stupid, stupid, stupid. Perhaps if solar becomes more efficient and we have run out of space on every roof in the world, one might possibly maybe (but probably not) consider this. But despite the inherent inanity of this idea, look at all the articles on Solaroad -- Think Progress, the Huffington Post, Engadget, Tree Hugger, Extreme Tech, NPR, Sustainable Business -- they all have multiple, gushing, unrelentingly positive articles about this. Look at all the positively fawning comments on Think Progress. I can't find a single article on the web that is even slightly skeptical.
Update: A reader sends me this epic video takedown of this stupid idea. He did this in advance of the article today. He finds it to be complete BS, despite the fact that he overestimates electrical production by a factor of 2.
The example comes from the world of private operation of public parks, the business my company is in. We keep parks open by operating much less expensively than can the government, usually using only the fees paid by park users without any additional tax dollars.
Last year, Barack Obama issued an order raising the minimum wage of Federal contractors to $10.10 an hour. Though concessionaires like us are normally thought of legally as tenants of the government rather than contractors, the Department of Labor wrote the rules in such a way that this wage order would apply to concessionaires that operate Federal parks, such as those in the US Forest Service's campground concession program.
As a result of this order and similar minimum wage increases by the State of California, a concessionaire (not our company) that ran campgrounds in the Tahoe National Forest in California informed the Forest Service that it would need to raise camping rates to offset these minimum wage increases. As an aside, wages and benefits that are tied to wage rates (e.g. workers comp and payroll taxes) make up about 50% of a private concessionaire's costs. So if minimum wages go up, say, 20%, then (given the very low margins in the business) a 10% price increase is necessary just to stay even.
The Tahoe NF rejected the fee increase request, despite the fact that the concessionaire turned over its books to show that it was losing money at the higher minimum wage rates.
So what did the Tahoe NF do? It took over operation of the campgrounds itself, ending a successful 30-year partnership with private operators. How did it solve the minimum wage issue? Simple! Minimum wage laws don't apply to the Federal government. So it will use dozens of volunteers who are paid nothing to operate the campground.
In other words, at a time when the President believes it is a burning priority to make sure every campground worker makes at least $10.10 an hour, the US Forest Service is firing private, paid workers and replacing them with volunteers.
By the way, even using volunteers, the US Forest Service will STILL be paying more to operate the campgrounds than it did with the concessionaire. Under the private partnership, the private operator paid all expenses and paid the US Forest Service a concession fee, essentially rent. The campground's operation and maintenance were paid for entirely with user fees, and the USFS actually made money from the operation. Now, even with volunteers, the USFS operating plan shows it using $2 million of taxpayer money over the next five years in addition to user fees to keep the parks open.
Update: Despite the original (stated) reason for taking over the campground, and despite using dozens of unpaid laborers, the USFS still had to raise customer rates in the end -- higher than the original private concessionaire proposed!