Supply & Demand in Carbon Offsets

Marginal Revolution has a good post on the issue of carbon offsets and whether or not they actually work. It's short and well worth the read..

Thoughts regarding Wal-Mart in India

Wal-Mart is looking to enter the Indian retail market - a huge area of opportunity for a number of global retail chains. While this story was covered by a number of media outlets, the Reuters article above focuses, at least partially, on the fact that many shopkeepers are protesting Wal-Mart's possible entry into India, fearing that they will not be able to compete and, thus, lose their livelihoods. This is a distinct possibility and I certainly don't want to sound as if I am heartless, but the article prompted some thoughts:

1. First, assuming Wal-Mart (or another global chain) moves into the market and forces some shopkeepers out of business, will it not at the same time be creating many jobs that these people could obtain and therefore still support themselves? I understand, of course, that the people who lose their livelihoods will not necessarily be the same ones who gain employment, but they very well could be and, even if they are not, the overall creation of jobs will boost the local economy in such a way that more jobs will be created in other industries, thus providing further opportunity for employment. Think of the American situation - there are thousands of Wal-Mart stores around the country that have doubtless put many smaller operations out of business. Has unemployment soared? Quite the reverse - unemployment is extremely low (especially compared to most other industrialized countries in the world). Thus, the idea that greater efficiency means greater unemployment has certainly not been realized in the US and I am unaware of a reason to think that it will be in another market. Thus, the issue is not entirely one of whether or not the shopkeepers will be able to find jobs, but rather, whether or not they will be able to maintain supporting themselves in the manner in which they currently do (and, presumably, wish to), which admittedly is a legitimate concern, but one that pales in comparison to the straw-man concern of rampant unemployment.


2. Second, one shopkeeper was quoted as asking how he is supposed to compete with Wal-Mart when they can sell things for wholesale prices, with the implication that, since he can't and that the result is that he will not be able to stay in business, that Wal-Mart should not be allowed to operate in such a manner. Question: what if it weren't Wal-Mart but simply another shopkeeper that were able to undercut him? Should that other shopkeeper be barred from doing so (and thereby support his family)? Why should one private party be favored by the government over another?


3. Which leads to the third point: while the shopkeepers, I would hold, have a human right to pursue economic activities as they see fit, they do not have a right to actually engage in whatever form of economic activity they feel inclined to regardless of economic realities. That is, while I believe they have every right to establish a business and try to make it work, they do not have a basic right to be able to operate that business even if doing it means that the government must disallow other from pursuing their economic interests because they would conflict or otherwise interfering by setting price floors, etc.


4. Fourth, while Wal-Mart selling things for less than the shopkeepers can would be a detriment to the individual shopkeepers, it will be a huge benefit for consumers in the area who perhaps cannot afford many of the goods that they either need or want. Thus, the shopkeepers qua consumers will actually be benefited by this in some way, on top of the fact that the common good of the general public would be better served by greater availability of goods. If, on the other hand, Wal-Mart (or anyone else) were not allowed to operate in such a manner that the shopkeepers would be undercut, the public would have to pay higher prices for all manner of goods.
   
   Consider the case of a poor family whose livelihood is not dependent on the retail sector. They would, of course, be better served by lower prices for food, clothing, and medicine. To deny them access to these things simply because some people prefer to be shopkeepers as opposed to supporting themselves through some other form of employment (see point 1), would be quite contrary to good sense, to say nothing of potentially unjust given the situation of the consumer.
   
   Furthermore, consider the fact that, if a retail chain were to drive consumer prices down, consumers would have more money to spend, possibly on non-retail products, thus helping the local economy in other industries.
   


5. Fifth, the article mentions how some fear that Wal-Mart could cause the unemployment of 40 million people who depend on the retail industry for their livelihood. This seems like nothing more than fear mongering since, unless every one of those 40 people depend on the "last mile" portion of the retail industry, i.e., the actual retail outlets (in which case the first point applies), then their jobs are not really at risk because Wal-Mart is not simply going to create goods ex nihilo, it's going to buy them from many of the same sources from whom shopkeepers currently buy them. Of course, there is the argument that Wal-Mart will streamline supply chains and engage in other activity that will make many of the jobs in these fields unnecessary, but that starts to get into another issue: should an economy (or rather, the body of rules, etc. that regulate it) be setup in such a way as to encourage inefficiency and waste simply to employ more people? That seems absurd for many reasons.


6. Sixth, speaking of waste, the article mentions how investment in infrastructure and supply chain management that would accompany the entrance of Wal-mart or another global chain into the market would vastly reduce the amount of spoilage that currently occurs - a figure possibly as high as 40%. Think about that. 40% of all of the food that is being shipped to consumers is spoiling on the way because of poor infrastructure. Countless people are going hungry each day while 40% of the food supply simply rots in transit. Solving this would, again, entail that a lot of small shopkeepers lose their businesses and have to find employment elsewhere. I don't think that is too high a price when you consider the impact a 66% increase in the amount of available food would have on a developing society. The idea that these infrastructure improvements should not be made because they necessitate the entrance of a global retail chain into the market seem ludicrous - on top of the fact that they demonstrate a lack of economic sense and preference for a small number of shop keepers to be able to run their own shops over a large number of parents being able to feed their children.

I believe that covers everything I have to say for now. I have to admit that I have not thought through all of the various aspects of this issue and am perfectly willing to revise my position if convinced I am wrong. Again, I don't want to come across as cold-hearted and not caring about the fact that the livelihood and way of life for many people is at risk. It's just that those concerns are outweighed in my mind by the greater common good that I think will result as well as the fact that allowing Wal-Mart or any other private party from operating in the market is simply not an injustice to the shopkeepers - as I mentioned in point 3, they don't have some sort of right to own their own shop regardless of economic realities that must be safeguarded by the government. On top of that, as I have said in previous posts, I believe that private parties should be allowed a very wide latitude in terms of freedom of choice when it comes to how to operate. Not allowing private parties to operate because the government wants to protect established businesses of other private parties seems to be the real injustice.

Pork Map

The Sunlight Foundation has a great mashup using Google Maps that allows you to see where the money from Federal earmarks is going.

HT: The Club for Growth

More Politician Hypocrisy

Update: Al Gore Responds
Update 2: Money quote from Cato-at-Liberty post: "Gore has a huge mansion to power, but he also consumes four times more electricity per square foot than my family. Is the inventor of the Internet running a computer server farm out of his home?"

This time, from Al Gore and regarding global warming. Apparently he is in the habit of using in one month twice the amount of energy that the average American household uses in a year, according to this article from the Tennessee Center for Policy Research. An inconvenient truth, indeed.

I don't know where these additional figures come from since they're not in the original article, but they were presented in the Drudge Report Flash that alerted me to this story:

Nashville Electric Service/Gore House

2006

High 22619 kWh Aug – Sept
Low 12541 kWh Jan - Feb
Average: 18,414 kWh per month

2005

High 20532 Sept - October
Low 12955 Feb - March
Average: 16,200 kWh per month

Bill amounts

2006 – $895.60 (low) $1738.52 (high) $1359 (average)
2005 – $853.91 (low) $1461 (high)

Nashville Gas Company

Main House
2006 – $990(high) $170 (low) $536 (average)
2005 – $1080 (high) $200 (low) $640 (average)

Guest House/Pool House

2006 – $820 (high) $70 (low) $544 (average)
2005 – $1025 (high) $25 (low) $525 (average)

Forever Stamp

The USPS is considering issuing "Fovever Stamps" - First Class Stamps that would be good for First Class postage even after a rate increase. I think this would be very convenient because it would limit the need for those darn $.02 and $.03 stamps.

53% of Americans Unsatisified with Their Jobs

From a MarketWatch article:

"Less than half of Americans -- 47% -- are satisfied with their jobs, according to a 2006 survey of 5,000 households released Friday by the Conference Board.

The dissatisfaction is growing. Last year marked the first time a majority of respondents have said they're unhappy at work, according to the occasional survey from the private research organization.

Twenty years ago, about 61% of workers were happy with their jobs. In 2005, 52% were satisfied.

...

The organization is conducted global research into factors that give employees an emotional or intellectual connection with their work.

The discontent uncovered in the latest survey is pervasive, extending to all age groups, all income groups below $50,000 a year, and to six of nine geographical regions.

The happiest workers are those over 55, those who make more than $50,000 a year, those who put in more than 50 hours a week on the job, and those who live in the Mountain states.

The least happy workers are those under 25, those making less than $15,000 year and those living in the Middle Atlantic states.

Somewhat surprisingly, 53% of surveyed workers said they were happy with their immediate supervisor, and 52% are satisfied with the physical environment at work.

Most workers are interested in the work they do, and they like the people they work with. They are even happy with their workday commutes.

But when the questions turn to money, the discontent shows. Thirty-six percent of workers are happy with their wages, while just 21% are happy with the bonus plan at work. Less than one-fourth of workers are happy with the promotion policy at work, with fewer than a third satisfied with their potential for future growth."

In general, I find the overall finding very surprising - especially considering some of the other things found by the study, including the fact that the majority of people are happy with their immediate supervisor. I wonder if more details regarding the study's methodology are available.

The fact that workers with higher wages tend to be happier with their jobs is not surprising. The fact that those who spend more than 50 hours a week at their jobs tend to be happier is interesting, though not really surprising - if you didn't like your job, you would not be likely to put in overtime, or, if you were salaried, stick with the job that requires 50+ per week. I'm not sure what to make of the geographical considerations - although I'm not sure how much variance there was based on geography.

California Anti-Spanking Law

Sally Lieber, a Democratic Assemblywoman in California, has abandoned her push to outlaw spanking, admitting that she simply didn't have enough votes to get the legislation passed. She has proposed new measures, however:

"Lieber is seeking to classify a laundry list of physical acts against young children, including hitting with a belt, switch or stick, as unjustifiable and grounds for prosecution, probation or a parental time-out — a class on nonviolent parenting."

Asset Bubble

The Motley Fool has a fascinating article about the "Asset Bubble" - the idea that assets of all kinds: stocks, bonds, real estate, precious metals, other commodities, etc., are overvalued and that the situation constitutes a bubble. You should read the entire article but here is a small clip to whet your appetite:

"For 50 years following the end of World War II, the ratio of assets to gross domestic product stayed pretty constant at around 3.8-to-1. That means the market value of all assets held by households in the U.S. -- stocks, real estate, bonds, cash, tangibles, and the like -- roughly equated to 3.8 times one year of GDP. So if the economy grew, so did the market value of assets held, roughly by the same ratio, over all those years.

Then, in the latter part of the 1990s, something started to happen. The market value of the assets held by households started to rise more quickly than the gains in GDP. That 3.8-to-1 ratio jumped to 4.8-to-1 in 1997, 4.95-to-1 in 1998 and 5.27-to-1 in 1999, where it peaked. From 2000 to 2002, it came down, hitting a low of 4.54, but it has been on the rise again and is back up around 5.0."

You should read the article to get the actual analysis of the situation.

Job Competition in a Global Economy

MarketWatch has a good article entitled "Six strategies to stay competitive in a global labor market." The point of the article is that, in an increasingly globalized economy, employment positions are not as stable as they once were thanks to increased competition for jobs among those with the proper skills regardless of geography. The article goes on to elaborate on what workers need to do to remain competitive in the job market.

One of the things I like about this article and the trend it reports, is that workers will need to focus more on basic abilities like communication and team work, rather than specialized skills.

Another is that it recognizes workers as competitors in a market the same way that everyone tends to look at businesses as competitors. Just as in business, competition will result in a better product (labor) for the consumer (businesses) which will have a trickle down effect an benefit the entire economy the same way that competition among businesses does. On a less sterile note, workers competing among each other and, therefore, finding new ways to improve themselves for the sake of bargaining power in the marketplace also has another, less economic benefit - people will, speaking in very general terms, become at least marginally better people in the process. What I mean is, basic abilities like communication and team work are not only valuable in the workplace - they apply to the entirety (or most of it anyway) of one's life.

Thus, not only do I believe that this increased competition in the labor market is a good thing economically, I think it is a good thing in general for society.

Links

A couple of articles about entrepreneurship from yesterday:

The Magic Is in the Tweaking (NY Times)
Is Your Hobby a Business (Motley Fool)

Boomerang Seniors

USA Today is reporting on the phenomenon of Boomerang Seniors - people who move to places such as Florida when they reach retirement, only to move elsewhere (usually their place of origin or where they have family) upon losing their health (which was still quite good when they were 60-something and moved to golfing or other active-lifestyle communities), their spouse, or their savings.

One of the main points of the article is that places to which elderly are returning are just now figuring out how to handle these demographic dynamics of having younger, healthier seniors move away and be replaced by older seniors who require a greater amount of care and services - especially health related.

Malaysian 1984

This story regarding how a Malaysian state government is considering using spies to catch unmarried Muslims "in close proximity" or engaging in un-Islamic behavior reminds me greatly 0f the illicit affair between Winston and Julia in 1984.

Corn and Sugar

While I don't have all the facts, I have often heard American obesity and heart ailments blamed partially on the fact that so many foods consumed by Americans contain high fructose corn syrup and partially hydrogenized oils (for more information, go here and here).

If you accept the idea that high fructose corn syrup is worse for the body than regular sugar, you will be very interested to learn that one of the main reasons so many US food products contain it is because of a government-erected trade barrier designed to protect domestic sugar producers that causes the cost of sugar in the US to be almost twice the global average.

Real irony enters the picture when you consider that the price of corn syrup is rising because the government is subsidizing ethanol-from-corn production as many politicians' way of gaining votes off of the global warming issue - and that ethanol can be produced much more efficiently from sugar than corn.

See this Club for Growth post for more information.

BoA and MBNA

The NY Times has an article on the BoA and MBNA merger that is very much worth reading for anyone who has read Jim Collins or is just interested in corporate culture in general.

Carbon Offsets

The NY Times has an interesting article regarding emissions offsets and the companies that sell them. Worth the read if you are staying informed on the global warming issue. Mildly interesting if you're not ;-)

European Poverty

One in six Europeans are living below their country's poverty line.

Some Thoughts on Global Warming and a Critical Review of the UN's IPCC Assesments

I've read quite a few articles regarding global warming - many from each "side" of the "debate." I've read plenty of articles regarding how the temperature of the earth is rising, plenty of articles saying that it either isn't or that some or all of the warming can be attributed to natural causes, and plenty of articles regarding various other aspects of the issue. I've read articles from each side arguing that the other is either distorting the truth, lying, using scare tactics, or bullying/paying people to keep quite, or a mix of the above.

I don't consider myself well enough versed in the natural sciences nor to have sufficient access to raw data to determine my own hypothesis as to what is going on. Therefore, the proper course of action (as I see it) is for me to make decisions about which scientists/experts/etc. I think are being the most objective and accurate.

I have to admit that there is something very hard to dismiss about the logic "CO2 and methane trap heat in the atmosphere; humans have been producing and will continue to produce vast quantities of both gases; ergo humans have caused, are causing, and/or will cause the earth to warm (relative to what would have otherwise happened, i.e., if nature would have caused natural cooling, the temperature might remain constant, but this could still be considered warming - relatively)."

Still, I have a lot of things that I am just not sure about: For instance, whether global warming - assuming it is happening - is actually a bad thing. Who's to say that, since humans are part of the environment, the warming we cause is not also "natural". Why should we isolate one factor in the environment and try to keep everything else constant by eliminating its effects? For that matter, since when has the environment ever been static? As I understand it, the physical and natural world (to say nothing of the flora and fauna that populate it) are constantly changing. Why should we try to "freeze" (no pun intended) the environment at a certain stage? It's not like the world has been just as it is now for an eternity and the only thing changing it is us. Even if that were the case, I'm not sure that I would immediately accept the idea that changing it would be an objectively bad thing.

Another thing that I am not sure about is which "side" is more reliable. Many things I hear make me want to think that global warming activists are definitely the less reliable bunch. For instance, the very fact that the UN seems to come down on their side makes me suspicious - I can't remember any time I looked at something the UN did (or didn't do) and thought to myself "there is an intelligent decision made by a competent organization." The fact that I often hear global warming activists implying or stating that global warming skeptics are just greedy capitalists who don't care about the environment also doesn't do much for my opinion of them (I don't like ad hominum attacks in general and I really don't like the cliche of "greedy capitalist"). I also don't like when anyone who has even the slightest doubt about the supposed impending catastrophe of global warming accused of "not caring about the environment" - it sounds way to much like when people who are opposed to minimum wage legislation are accused of "hating poor people."

Anyway! I think that does it for the "Some Thoughts" part of this post; now, on to the "Critical Review" part . . .

Dane alerted me to this article yesterday. I definitely recommend reading it even if you get lost in parts. While I've heard a lot of various scientific rebuttals to a lot of global warming hysteria, I've never come across something this . . . . . . comprehensive (for lack of a better word). I'm adding this to my list of things that makes me seriously doubt that global warming "activists" are the more accurate and more reliable side. This is also pushing me more into the camp of people who believe that many global warming activists are outright lying in their statements.

Like I said, worth the read. The issue as a whole, I believe, is also definitely worth staying on top off.

The Irony of Self-Righteous Politicians

From the Club for Growth:

Wisconsin Governor Jim Doyle wants to tax oil companies in his state, but at the same time, prevent them from passing the cost onto consumers.

It's liberal. It's punitive. It's unconstitutional. But it's really not a big surprise.

However, here's the ironic part. Doyle also wants to increase drivers' license fees by $10 because it's costing the state more money to comply with new federal identification mandates.

In other words, Doyle wants the freedom to pass costs onto taxpayers regarding drivers' license fees, but he wants to deny that same freedom to oil companies.

Targetted Taxes (aka "Government Playing Robin Hood")

U.S. News and World Report has a great, short article on the issue of taxing oil companies for their recent windfall profits (you may want to watch this video for context - I was going to write a post when I first saw this video when it came out, but I thought I might burst a blood vessel). There are all kinds of aspects to this issue that the author does not address, but the main point of the article, i.e., accepting the premise of taxing recent oil profits leads to the logical conclusion of taxing other successful, profitable companies for whatever kind of well-intentioned goal a politician can dream up, is well made.

HT: TaxProf Blog

Freakonomics

Freakonomics is a great book that I read last year (over my honeymoon, actually, which should say something about how good of a book it is) and know that Maarek and Dane have read as well. So far, I haven't fell in love with their blog as much as I have with the book, but it is still worth checking out.

More People Fleeing Taxes

This time in the USA. From The Plain Dealer

From 2003 through 2005, about 39,000 households left Ohio for states without income taxes, taking $2.1 billion in annual income with them, according to the Internal Revenue Service.

HT to the Club For Growth

What!? They Got The Cost Estimate Wrong? Will It Be Cheaper Than We Thought?

From the Club for Growth:
Highway officials in Alaska have increased their cost estimate for the "Bridge to Nowhere" project by $67 million.

Price Away Congestion

From the New York Sun:

What if Mayor Bloomberg were to announce that on-street parking in New York City would be free, with no time limits? Initially New Yorkers might be pleased. But they would soon discover that no spaces were available, because cars would stay parked for long periods of time.

That's what happens with free goods, in this case, curbside parking places: People consume too much of them, far more than if they would pay for them. Similarly, in much of Manhattan and on some streets in other boroughs, traffic is a nightmare because motorists don't pay the full cost of road use.

I highly recommend reading the whole thing, as it gives the outlines of the argument for market based roads.

One of the principles of the Free Market System is that a market is the best way to distribute a resource. It discourages waste and encourages new supplies of that resource to be brought to the market. Because parking space is a resource, and there is a market for it, people are willing to invest millions of dollars building garages to allow others to park, and those that do park do so in a more efficient manner, for short periods, rather than hording a space for fear of losing.

If we allow roads to become a market, charging for their use, they will be used more efficiently, and investors will seek to create profits by meeting the needs of those who drive.

Update: TCS has another take on the matter, looking at it from a more political angle.

Solar Activity as a Cause of Global Warming

Concerning global warming, there is an interesting article concerning new research that suggests that, while the earth may be warming, it may be more due to solar activity than man-made pollutants. Worth the read.

Natural Gas Cartel Possible

From MSNBC:

Leaders of natural gas-rich Russia and Qatar said Monday they would explore the creation of a natural gas cartel to represent the interests of producer countries to influence the global market.

Read more here.

Minimum Wage Effects Begin

I was shocked, SHOCKED to find that Arizona is experiencing one of the most immediate effects of raising a minimum wage rate: many people who heretofore were able to work and now being laid off - being it is illegal to hire them for what they are legitimately worth, or legitimately willing to work for. Minimum wage legislation is basically a law that makes it illegal for people whose labor is not worth a certain dollar figure to work.

Investing in Freedom

As a follow-up to Ken's post on economic freedom and prosperity, I would like to let everyone (both of you) know that you can now invest in the Economic Freedom Index. First Trust Advisers have created a fund that invests in the most free economies in the world as chosen by the Index.

The portfolio (IEFP) is made up of country funds or large foreign stocks from the top 20 countries labeled "free" by the annual Heritage/Wall Street Journal Index of Economic Freedom. (Countries are ranked by five categories: free, mostly free, moderately free, mostly unfree, and repressed.)

It will be interesting to see how this performs compared to, say, a fund which just tracks the S&P 500.

HT to the Club For Growth

Freedom & Non-interference = Prosperity

Please read Walter E. Williams' article "World Poverty" on Townhall. It a wonderfully concise article on the relation of economic freedom and prosperity. Here's an excerpt:

Some people claim that some countries are rich because of abundant natural resources. That's nonsense! Africa and South America are probably the richest continents in natural resources, but are home to some of the world's poorest people. By contrast, countries like England, Japan and Hong Kong are poor in natural resources, but their people are among the world's wealthiest. Hong Kong even has to import its food and water. Some people use the history of colonialism as an excuse for poverty. That's also nonsense. The United States was a colony. So were Canada, Australia, New Zealand and Hong Kong, but they're rich countries.

The reason some countries are rich while others are poor is best explained by the amount of economic freedom its peoples enjoy and the extent of government control over economic matters. Don't make the mistake of equating economic freedom with democracy. After all, India, politically, is a democracy, but economically it is mostly unfree and poor, ranking 104th in economic freedom. There are countries on the economic freedom index that do not have much of a history of democracy, such as Chile, ranking 11th, and Taiwan, 26th, and yet these countries are far wealthier than some of their more democratic counterparts. Why? It's because their economic systems are free or mostly free, which is not guaranteed by a democratic political system.

I took the liberty of doing some number crunching and found that there is a .7+ correlation between Heritage's Index and a country's GDP per Capita.

Thanks to CARPE DIEM for the link.

The Economic Side of the Global Warming Debate

Following Maarek's lead, I'll try to pay more attention to the "Society" half of our name in forthcoming posts, including this one (despite the title).

One of the big issues - at least by some measures - in our society today is global warming. Global warming spans multiple arenas - environmental, political, economic, even personal conduct since individuals effect and affect so much of what is considered global warming-causing activity.

Most people are well acquainted with the environmental, political, and personal-conduct aspects of the issue. People are aware of the types of changes that global warming "activists" (for lack of a better word) are anticipating: melting of the polar ice caps, coastal flooding, etc. People are also aware that it comes up as a political issue which some politicians try to leverage for one purpose or another. People are also aware of the various things that many people do that, intentionally or otherwise, contribute to or prevent global warming: recycling, wasting (or not) electricity, even being a vegetarian (the whole issue of methane from cows; as a side note, while most people think of carbon dioxide as being the main culprit in the global warming arena, it seems that methane is 50 times as effective at trapping heat in the atmosphere - thus creating the interesting question of which hurts the environment more - making some hamburger meat or driving six miles to the store to buy it).

The economic side of global warming, at least in my experience, is not very prominent in people's minds, though. There is, of course, massive economic considerations with global warming. Many of the processes that produce carbon dioxide, methane, and, for that matter, any substance that is potentially harmful to the environment, could be done in other - more expensive - ways. Thus, society faces the omnipresent decision of a trade-off. On the one side, there is cheap energy and products, and on the other side, more expensive or less energy and products.

Concerning this trade off, Townhall has an interesting article about a theoretical trade off between global warming and economic growth. While you should read the entire article, the short version is: since 1900, estimates for how much the earth has warmed are around .7 degrees Celsius, while global GDP increase about 1800%. Assuming that 100% of global warming is due to processes and activities whose only other benefit was the 1800% increase in GDP, the question is "is .7 degrees Celsius worth an 1800% global GDP increase?" The author's answer is "yes, absolutely." He does gloss over some very important considerations, but I think his general theme is worth thinking about and that his conclusion is, at least, tenable.

He goes on to state that "global cooling", i.e., reducing the amount of global warming we cause, is simply too expensive - at least right now. Apparently, the lowest estimate for how much it would cost is 1% of global GDP per year. In addition to the interest his article in general causes, I would like to point out a very good observation on his part, namely, that capitalism has a long and consistent tradition of making things cheaper. Think about it - it's an Econ 101 point - products and services start off with high costs that gradually lower over times as various market forces kick in. His point is that, currently, clean energy alternatives, such as hydrogen and fusion, are simply too expensive (or simply not mature), but will decrease in cost the longer we wait. Thus, theoretically, in 10-20 years, we might have a perfectly viable, cheap solution to the problem of producing energy. Simply "waiting the problem out" until we have such a solution would eliminate the cost of trying to curb gas emissions now - costs that could have severe detrimental effects on the global economy.

Of course, this either (a) ignores the obvious objection of "what about the emissions that we will continue to produce for the next 10-20 years and all of their detrimental effects? Shouldn't we start solving the problem as soon as possible and not worry more about our pocket books than our environment?" or (b) assumes that technological advances will be able to counteract those 10-20 years of detrimental effects as well.

While I'm not going to take a particular position on the various issues outlined above, I certainly do think it is something worth thinking about.

HT to CARPE DIEM for the link.

Flags and Free Speech

Here at Society and Money, the vast majority of our posts, comments, and links refer to the money half of our title. Why this is I can only speculate, but for my part I believe it has something to do with the impersonal nature of economics which allows me to point to a chart and tell someone they are wrong. The society part must include more detailed, nuanced arguments which are difficult to convey in a blog. However, today I bring you a post that has nothing to do with economics or money.

San Francisco State University is investigating a group of students for burning a flag. I know this is a contentious issue. There are arguments with merit on both sides of this issue. I recognize that the flag is a symbol of our country, and that an insult to the flag is an insult to our country. However, if someone wants to insult our country, our freedom of speech traditions would seem to protect their right to do so. In the polarized political landscape we inhabit, "conservatives" have been in favor of making flag burning illegal, while "liberals" have defended the act as a first amendment right, although many exceptions exist. Personally, I think that it is usually better to err on the side of freedom. If someone wants to burn our nation in effigy, that is a freedom we should respect.

But what if someone burned another flag? The flag of an organization that most of the world considers a terrorist group, responsible for acts of war and murder on an international scale? What if someone burned the Hezbollah flag?

College Republicans are under investigation for disrespecting the flag of Hezbollah. "After students filed a complaint claiming they were offended because the flags bore the word “Allah,” SFSU initiated an investigation into accusations of incitement, creation of a hostile environment, and incivility." This will be interesting to watch. Burning a flag is an insult, no question. But is that insult something that should be punishable? If the school decides that it is, it will have amazing repercussions across the country as people on both sides jump in to "end the insensitivity and insult" to their symbol of choice, banning any act they find offensive (Note that Nazi flags have a cross on them. Indeed they consist of nothing but a cross and circle on a field. Should the Church sue to prevent the desecration of Nazi artifacts? Discuss).

I doubt that any actual punishment will result from this investigation, but the fact that there is an investigation seems to show a double standard in respect for the United States of America and Hezbollah.

Economics and Morality

TCS Daily has a good article entitled "The Morality of Rising Inequality". The article touches upon at least three different, very large topics of interest and concern to me: the relation of Economics to Ethics/Morality, Relative Wealth, which we have been posting about recently, and inequality. I will have to reserve most of my thoughts for future, more well planned posts.

Right now, I would simply like to highlight the point made in the article that Economics and Morality are separate disciplines. That is, Economics can tell us what is happening, usually why it is happening, usually whether it will continue and for how long, etc. It doesn't attempt to tell us whether or not this event/effect is a good or bad thing - except in economic terms. The specific case in question regards the situation of rising inequality among classes of people and whether this is a good, bad, or neutral thing. Economics does not attempt to answer that question - that is the realm of other disciplines (perhaps Morality, Politics, Socio-Political Philosophy, etc.).

Therefore, I propose the following analogy (poor as it may be): when people opposed on one level or another to what is generally called capitalism or derogatorily called "laissez fair capitalism" attack economics based on their perception that it is responsible for institutionalizing greed, materialism, etc., it is like a person who criticizes the indicator lights on a machine that, under the supervision of an operator, is producing a product that the person doesn't like. What they should really criticize (I leave the issue of whether their criticism is valid or not out) is either the machine that is not capable of producing what they consider to be a good product or the operator who is operating a perfectly good machine in such a way that it produces an unacceptable product or both, insofar as they both contribute to the undesired outcome.

German Brain Drain

The New York Times has an interesting report about Germans fleeing their country for greener economic pastures. We here have commented on the trend of wealthy people in Europe and elsewhere moving their assets to low tax jurisdictions, and the uproar this caused, especially in France. Imagine what is happening now that educated professionals are joining the very wealthy in seeking more accommodating locations.

Among the more popular programs on German television is “Goodbye Deutschland!: The Emigrants,” a 12-part series chronicling several families who have forsaken Germany for South Africa or southern Spain.
The trigger for this latest bout of angst was the release last fall of new government statistics showing that 144,800 Germans emigrated in 2005, up from 109,500 in 2001. At the same time, only 128,100 Germans returned, a decline of nearly 50,000 from the year before. That made it the first year in nearly four decades that more people left than came home.

These emigrants are not just teenagers looking for adventure abroad, but doctors, engineers, executives, and entrepreneurs. The life blood of a nation. Germany is now worried about replacing its educated classes as the current crop retire, but no amount of patriotic platitudes will convince people to stay when they know that they can have a better life somewhere else.

Gas Prices

Carpe Diem has an excellent post about price fixing, price gouging, and predatory pricing for gas.

Free Markets in Movies

For a while now, various ideas have been floated to try and improve the movie going experience. One that has always intrigued me is selling the movie on DVD at the theater. You liked it, you can take it home right away. It would seem to make as much sense as selling CDs after a concert. But the concept apparently terrifies theater companies.

PARIS: A Hollywood film about a bumbling New York museum security guard is stoking an international feud between movie theater chains and movie producers about how much time passes between a film's theatrical release and DVD sales. (IHT)

Movie theaters in Europe are refusing to show Night at the Museum because it is scheduled to be released on DVD a mere 13 weeks after it is released to theaters. The major theater chains in Germany and Britain are convinced that without more than three months of exclusivity they cannot compete with home theaters. French theaters are not complaining, because they are protected by a law that prevents the release to DVD for six months. These theaters are admitting that they are so unpleasant people would rather wait 13 weeks and watch a movie at home than deal with seeing it on the big screen.

It would seem that the theaters don't understand their own market. The role of theater is not that of "the only place to see a movie," but rather "the best place to see a movie." If a major chain cannot compete with a tv at home, it deserves to die. Unfortunately for them, they might.

HT TechDirt

Free Tax Help

For anyone who earns less than $39,000 or is over the age of 60, the IRS has volunteers around the country who will help you prepare your taxes. More details, here.

A Picture is Worth a Thousand Words

via CARPE DIEM:

Skeletons in Your Tubes

A lot of people have "skeletons in their closet." Sometimes they have a nasty way of being discovered or just falling out accidentally. This isn't all that uncommon, particularly with elected officials to whom such skeletons can be very damaging. It's not usually thought of as something "average" people have to worry about - in terms of a personal liability.

To an even greater degree, people don't usually think of the details of their personal life as liabilities. Who cares if I like hiking on the weekends and always go to such-and-such a bar on Thursdays with the same group of people? Who cares if I used to own a motorcycle and have a strange tattoo on my lower back that no one has ever seen?

Contrary to that perception, such pieces of information - harmless in themselves (there's nothing intrinsically wrong with any of the examples I mentioned above) - can be quite damaging to someone, particularly someone looking for someone applying for a new job.

According to this article, 23% of people admit to using Google to do a little checking on someone before they have a meeting. All of a sudden, your website, your blog posts, other people's blog posts about you, etc. can be a massive liability.

There are some interesting anecdotes in the article if you can spare the 3 minutes to read it.