Thursday, December 25, 2008

OMG GM is going to go bankrupt. It's the Government's fault!

The real threat to the U.S. auto industry is its own poor management.

Wednesday, November 19, 2008

Fuck Economics and Fuck the Automakers

Goddamn it. I didn't want this to be an economics blog. I wanted it to be a political blog. What? What's that you say? I should write about Barack Obama, then? I don't think that I can really say more about Barack Obama than has been said. Besides, if I don't tell him how to fix the economy, who will? Okay. Fine. Barack Obama in 20 words or less:

First Black President. Fairly boring but intelligent. Better than the white-haired flip-flopper. He needs to grow a handlebar mustache.

Bang! Right on at twenty words. What? "flip-flopper" counts as two words? Fuck you! It's hy-phen-a-ted.

Alright as I said, it is up to me to save the world from economic ruin, so let me get to it. I'll start with:


The big three automakers have been ensconced in the elite position as principal suppliers of cars to the American people since the early 20th century. However, their privileged market position has been declining since the 1970s. Why you ask? Well, there have been several reasons:

  1. They have been burdenered by unfavorable and inflexible contracts with their principal union the UAW (who is probably the biggest villain here)

  2. They have had inferiour quality control to their rivals (especially the Japanese)

  3. They have been burdened by too large and extensive a network of dealers (who are not directly under their control)

  4. They have focused on large luxury vehicle manufacturing and marketing--these vehicles are unrealistic during periods of higher gasoline prices

And last but not least, they have been hurt by the credit crisis. Bullshit. Okay. It's true. They have been hurt by the crisis, but BULLSHIT!!! Most businesses have been hurt by the credit crisis. Circuit City declared Chapter 11 recently. But Best Buy, Fry's, and Newegg didn't. Economics is Darwinism (at least in a capitalist economy). Hard economic time culled the old, sick, and weak sheep from the herd. And Chrysler, GM, and Ford have a bad case of bronchitis. It's possible that they might recover under better conditions, but when food is scarce, they won't make it.

But that doesn't mean that they shouldn't be helped. It isn't the federal government's job to preserve capitalism in its purest most idealistic sense just like it isn't the federal government's job to preserve democracy in its purest most idealistic sense. It is the federal government's job to do what is in the best interest of the majority of people while preserving a high degree of fairness for all.

So this brings up the question: What action can the federal government take that would most benefit the American people(Fuck the automakers; they don't get to vote)?

If the federal government gave money to the automakers, how much would they need to stay afloat long enough to recover? $25 billion might no be enough. Even if they managed to survive on $25 million, they would no doubt need to shrink and who's to say they wouldn't keep making the same mistakes that they have in the past? They would still be burdened by horrible contracts with labor and car dealers (some of which have been codified into state law--believe it or not).

If the automakers disappeared, all manor of havoc would break loose. $3 million jobs would disappear over night and we might as well all go begging on the streets of Beijing. But bankruptcy doesn't mean that the automakers would disappear. It would mean that contracts that they have with the union, suppliers, dealers, and creditors would be renegotiated before a federal bankruptcy judge. That could be perfect. Right? It's all of those legacy contracts that are weighing down GM, Ford, and Chrysler. But the psychological impact that a bankruptcy would have might damage the economy by itself--not to mention any interruption in business that would go with that.

So what else is there to do. Well:

  1. The federal government should start mediating renegotiation of the unsavory automakers contracts immediately.

  2. The government should start seeking a buyer for Ford, GM, and Chrysler.

First off: the contracts. They have to be renegotiated eventually. Either voluntarily or under the auspices of a bankruptcy judge. Why not start now?

As to the sale: Those companies are clearly managed very poorly. Toyota or Honda would do much better. If they aren't interested, Tata, Hyundai, or Shanghai Automotive Industry Corporation might be interested. These companies would require some serious government incentives to even think about buying one of the Toxic Three, but the taxpayer would likely get bigger bang for their buck handing it over to these guys. But wouldn't these guys just relocate the US auto industry overseas? Maybe. But that's been happening for decades. Besides, if the burdensome contracts are renegotiated, they might not move operations overseas. Honda and Nissan have manufacturing plants in the U.S. (It would help even more if the government could lift the health care burden from the car companies ... but that's another blog entry.)

So there you have it. It ain't perfect, but it's the best you'll do under the circumstances. Now get the fuck out of here. I have to go to bed.

Tuesday, September 23, 2008

Hubris of The Herd

The US Government has done it again. It has totally fucked all of the responsible taxpayers. And I'm up in the middle of the night writing about it. It won't do any good, but maybe I'll be able to sleep.

You know the first part of the story. Government deregulates banks and other lenders. Government make credit cheap. Banks try to cash in by making as many loans as possible. Wannabe homeowners take advantage of cheap credit to buy homes they can't afford. Homeowners take advantage of cheap credit to refinance usury rated credit cards into whopping big mortgages--bigger than their houses. Banks indulge in an orgy of lending: to homeowners, to businesses, to each other so that they can go on lending. The housing market finally stabilizes and then drops as Fed Chairman lowers interest rates (too late, of course). Homeowners get hit with nasty clauses in variable rate mortgages. Homeowners start to default on credit cards--then house payments. Banks stop lending. Housing market plummets. Banks fail. Investment banks fail. Panic ensues.

Now, to avert a depression (that's right, I said the d word), the Bush administration and Henry Paulson (He developed bitch tits because his testosterone was too high and his body upped the estrogen) have a plan to save the day. The have proposed that the taxpayers--that's right, you and I--pony up Seven Motherfucking Hundred Motherfucking Billion Fucking Dollars. That's right, ladies and gentlemen, each person in the US will have to pay $2,300 to clean up this mess. If all of the people in the world coughed up $100, it still wouldn't be enough.

Perhaps it's better than the alternative. The alternative would be a downward spiral in home prices, massive bank failures, foreclosures on a massive scale, mass homelessness. Layoffs, squatting. Fire and brimstone coming down from the skies! Rivers and seas boiling. Forty years of darkness! Earthquakes, volcanoes! The dead rising from the grave! Human sacrifice, dogs and cats living together... mass hysteria!

That's fine. We should avoid those things. But I say this. Those who are irresponsible should pay. I want a D branded on the head of every banker whose bank needs to be rescued and each homeowner who can't pay his mortgage should be stripped naked and forced to fellate Richard Simmons.

Monday, September 15, 2008

Sarah Palin, Lehman Brothers, The McRib Sandwich--Who's Smarter?

My money's on the sandwich.

Today the markets came crashing down. Today I went to McDonald's for the first time in... Today I had to hear about that Hockey Whore again. I don't know which item was worse. Okay, yes I do. Even I can't joke about what a horrific event for the economy of the US and the world the bankruptcy filing by Lehman was. Very bad. Very very bad. I guess I should say more than that--this is a blog, right?

I didn't get my McRib. I'm starting with this one because it has the most immediate impact on my life. I don't like McDonald's. I NEVER go there. Except when they have the McRib. I'm not going to say that it's great cuisine or anything. McRibs complete garbage, but they are delicious. I order mine without pickles. Who ever heard of pickles on barbecue? I'm pretty barbecue deprived. I'm from St. Louis and grew up eating delicious barbecue. Now I live in the so-called city of Seattle. I saw the McRib advertised yesterday, so I drove to McDonald's and ordered one. The lady at the drive through didn't know what I was talking about. This is the second time that it has happened to me in a year. Seattleites must have no concept of barbecue (not that I'm claiming that the McRib is barbecue), so McD's doesn't carry the McRib here. Seattle sucks. I feel very strongly about barbecue. I'll get back to politics now. That's why we are all here.

Lehman Brother's collapse, yea the collapse of the modern financial system itself can be laid in some measure at the feet of George W. Bush and Bill Clinton. Alan Greenspan will get most of the blame, but I think it's only fair that old W. and Slick Willie assume a fair share. Why? Well, first and most obviously, George Bush fucked the finances of the country to the point that the government's hands are somewhat tied. The Iraq War, the medicare drug bill and other disgusting government handouts (BTW, I don't begrudge seniors healthcare, but that bill was a handout to drug companies and private insurors), and huge tax cuts have left this country unable to cope with an economic downturn.

Bill Clinton Slick Willie Bill Clinton on the other hand is responsible for some serious errors in banking regulation:

  • 1994 Riegle Community Development and Regulatory Improvement Act helped to reduce predatory lending practices on low income home owners but also relaxed capital requirements and other regulations to encourage the private sector secondary market for small business loans and contained more than 50 provisions to reduce bank regulatory burden and paperwork requirements.

  • 1994 Riegle-Neal Interstate Banking and Branching Efficiency Act permitted adequately capitalized and managed bank holding companies to acquire banks in any state one year after enactment.

  • 1996 The Economic Growth and Regulatory Paperwork Reduction Act reduced the record keeping requirements on banks and amended the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974 to streamline the mortgage lending process.

  • 1999 The Gramm-Leach-Bliley Act modified portions of the Bank Holding Company Act to allow affiliations between banks and insurance underwriters. While [it] preserv[ed the] authority of states to regulate insurance, the act prohibit[ed] state actions that have the effect of preventing bank-affiliated firms from selling insurance on an equal basis with other insurance agents.ref

I guess a Republican congress can share the blame as well.

As to the Palin, I despise her. She epitomizes what is wrong with this country. She is completely unqualified to be Vice President. As governor, she hired her brother-in-law as a state trooper and then fired him when he divorced her sister. She is pro-life and does not believe in evolution. 'Nuf said.

But even worse than Sarah Palin is the fact that she is accepted as a candidate for VP. If Americans weren't so stupid (this is becoming a theme here, hmmm) she would have been laughed off the stage at the Republican National Convention. The 'every man syndrome' is at work here. Americans would rather vote for the super soccer mom than a brilliant editor of the Yale Law Review (for those who don't know, Yale Law is one of the toughest programs to be admitted to). They value familiarity over accomplishment. That's perfectly fine choosing a friend or lover, but this is the Presidency of the United States of America, the MOST POWERFUL JOB IN THE WORLD. ARRGH!!! Even worse, they didn't learn from their mistake. They chose George Bush. The stupidest, laziest, president that reminded them of their favorite drinking buddy and they got fucked over for eight years. You want more, voters? Feel free. I'm moving to Vanuatu.

Wednesday, September 10, 2008

Lipstick on a Democracy

Let's just list this here for a second. John McCain says he's about change, too. So I guess his whole angle is "Watch out, George Bush. Except for economic policy, healthcare policy, tax policy, education policy, foreign policy, and Karl Rove style politics, we're really going to shake things up in Washington. That's not change. That's just calling the same thing something different. You know, you can put lipstick on a pig. It's still a pig.

Did Barack Obama mean this literally? Was he trying to insinuate that John McCain was some kind of crossdressing pig? A J. Edgar Hoover for the 21st century? That seems ridiculous. Maybe he meant that McCain's policies were just the disgusting lipstick that your 300 lb. Aunt Selma got on that delicious pork chop that you had been going to eat until she took a big bite out of it. Or maybe he meant that the true way to save this country is to go out into the fields where the cute little pigs are frolicking and put lipstick on them so that they can have the self-confidence to rise up from their slop and make a star in reality TV. Maybe he meant that hardworking software developers should pretty themselves up more before coming to work. Maybe he meant that we can defeat Islamic terrorists by disguising pigs so that they will eat them and feel so ashamed of themselves that they will give up their violent attacks. No. I don't think that he meant any of those things at all. What he really was referring to is the highest truth. This truth has been shared with very few, but I will now share it with you, my loyal, non-existent readers.

I think I can explain how the pigs' lipstick works.
Well, this should be interesting.
Remember that they make lipstick with a very dense policy.
Yeah, OK.
And remember about the campaign standing still and how they really get uptight when you try to move the campaign, right?
Right, yeah.
I think the lipstick in that dense policy is probably what makes the campaign stand still. As soon as the pony's mane starts to get good in the back of any sort of motion, especially of the campaign or gas, begins to make the ends split.
Well don't the splitting ends change the density of the ponies' lipstick so it affects the density of the pigs' lipstick, which makes the campaign move which upsets the pigs?
No, it isn't like that.
Well, how does it work?
Well, what it does is when it strikes any sort of energy field or solid object or even something as ephemeral as the campaign, the first thing it does is begins to inactivate the molecular motion so that it slows down and finally stops. That's why the campaign stops. And also have you ever noticed how the the campaign ads shrink up? That's because the molecules come closer together. The cold policy makes it get so small, this is a really brittle campaign.
And that's why the pigs don't want you to touch it.
See, when the campaign gets that brittle what happens when you try to move it is it disintegrates. And the pigs get uptight 'cause you know they, they worship that campaign. They salute it every day. You know we've got something here.
And, and, and, and that's the basis of all their nationalism. Like if they can't salute the campaign every morning when they get up . . .
Yeah, it's a vicious circle. You got it.

And there. Now you know the true meaning of Barack Obama's pig-lipstick reference with all of the subtexts, supertexts, intexts, outtexts, amphitexts, intratexts, contexts, sanstexts, and smstexts.

No question now what had happened to the face of Sarah Palin. The creatures outside looked from Sarah Palin to man, and from man to Sarah Palin, and from Sarah Palin to man again; but it was impossible to say which was which.

-Except from Political Campaign by George Orwell.

Have you seen the little piggies
Crawling in the dirt
And for all the little piggies
Life is getting worse
Always having dirt to play around in.

Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
Always have clean shirts to play around in.

In their sties with all their backing
They don't care what goes on around
In their eyes there's something lacking
What they need's a damn good whacking.

Everywhere there's lots of piggies
Living piggy lives
You can see them out for dinner
With their piggy wives
Clutching forks and knives to eat their bacon.

-Piggies by George Harrison

Tuesday, September 2, 2008

What Me? Harass Governtment Officials?

Note: I do NOT harass government officials. I do however call them up to chat. This will likely be the first such friendly conversation that I share with you, my loyal, non-existent readers.

Today I spoke with a very nice man from the FBI. It was hilarious actually. I was very upset over the raids by the Ramsey County Minnesota Sheriff's Office

cops are pigs

and the FBI on several groups protesting the Republic National Convention.

I started an email campaign (with little success) to call the sheriff's office's internal affairs department with complaints. Not only did my emails fall on deaf inboxes, but the internal affairs department was not taking calls due to the convention. (Or did they stop taking calls because my email campaign succeeded? I'll imagine that was the case.) Anyway, I thought it would be a good idea to call the FBI's Minnesota office to nip this bad behavior in the bud. What follows is a brief recreation (i.e. inaccurate down to the very syllable).

FBI Receptionist: FBI. How may I help you?

Me: I would like to report corruption.

FBI Receptionist: Thank you. Hold please.

Poor Confused FBI Agent (henceforth referred to as Waldo): Hello. What can I do for you?

Me:I'd like to report corruption.

Waldo:You're going to have to be more specific.

Me:Well a couple of days ago, the Ramsey County Sheriff's Office raided some protesters of the Republican Convention. They arrested the leaders and seized some laptops. I have it on good authority that Karl Rove ordered the raids because the protesters had pictures of his son having sex with a donkey.

Waldo: Excuse me?

Me:And I won't stand these politically motivate raids. I want an investigation. Someone isn't playing it straight at the FBI. Don't just sit there with your finger in your ass while Gargamel eats all of our boys in blue. This is Amnerika!

Waldo:Sir, this is the FBI. Our law enforcement is not politically motivated.

Me:If I marched into Rupaul's bedroom and charged it with a firecode violation for hosting the cast of Oz, that wouldn't be politically motivated?

Waldo:It is part of the FBI's mandate to help local law enforcement enforce laws.

Me:And yet you did nothing to stop Denkinger?

Waldo: You sonofabitch! How did you know? I told him to stop ... that ... that he shouldn't touch where my swimsuit covered, but Denkinger would have none of it [sobbing] my ass still hurts ... I'll get you you dirty motherfucker...

At this point, I considered it judicious to end the call...

Later, I looked up details about the raids. It turns out the the raiders seized various items (including buckets of
tall delicious lemonade
urine) that could be used for riotous mischief. I still think that the raids were politically motivated, but I still had to call and complain--if only to meet my special friend Waldo.

Wednesday, August 20, 2008

I'll Volunteer ... I Guess.

So I've done it. I signed up for Barack Obama's online "community." I also agreed to volunteer for his campaign.

I'm volunteering to campaign for Barack because he's the most revolutionary John_F_Kennedy and Barack Obama Faces MORPHED - leader that we have seen in more than 40 years. He will deliver this great nation from the brink of destruction and lead us all to glory.

No. That's not it.

Actually, I'm campaigning for him to spite all of the racist pieces of shit that live in this country.

My mom has volunteered for Barack. She was working a poll in Missouri about 40 miles South of St. Louis. It was just a school board election, but the Obama Machine sent its minions out to drum up support. She said that about 75% of the people that she talked to expressed the sentiment: "I ain't votin' fer that dam' nigger Muslim."

So even though I am only somewhat enthused at the prospect of being presided over by Mr Obama, I'll campaign for him. If Americans care that much about having a male WASP as president, then this country needs something else. I personally think it would be best for America to be led by a member of its most oppressed minority: Atheists.

Atheism.  Because Babies are tasty.

I'll have to ditch my cynicism about the whole thing and actually pitch in to help out Barack.

Besides, John McCain John McCain making a funny face is a warmongering dumb ass.

Monday, August 4, 2008

Why, Barack, why? Why are most people so stupid?

Today I was at the gym and I glimpsed some interesting news on CNN (it's really odd, the only time I ever watch CNN is at the gym--I belong to two gyms and they both show CNN--why is that?). It seems that Barack Obama has changed courses and now supports offshore drilling.

In contrast to CNN and most corporate media outlets, I will analyze this news from two points of view. First I will analyze it from a policy point of view. Then I will analyze it from a political point of view. Then I might go back and analyze it from a policy point of view again.

First, expanding offshore drilling is a terrible idea. The main argument by the proponents is that the price of oil (and thus gasoline) is too high right now. The high prices are hurting the American consumer who is also being squeezed by the housing crisis. All that is true. They then argue that allowing offshore drilling will reduce gas prices by increasing supply. I am not convinced that the drilling will reduce prices quickly enough to help consumers and even if it did, the environmental consequences wouldn't be worth the oil.

How is it possible that drilling offshore wouldn't really help consumers. Two words: Chevy Volt. It takes about 4 to 5 years to build an offshore oil rig and a decade or more of geologic exploration before construction can start. The Chevy Volt goes into production in 2010. When everyone is driving a plug in hybrid, we won't need more oil. In fact, some longer term investments in oil producing infrastructure may actually lose money. It is true that the offshore drilling will help consumers somewhat in the medium term, but not one bit in the short term. And isn't the proposal to allow drilling a reaction to short term economic pain?

Besides, if consumers are still so reliant on internal combustion for ground transportation that they need more oil production 20 years from now than they do today, then the planet is FUKT. F-U-K-T FUKT. Someday I will get deeper into the science behind global warming, but for now, let me just say that greenhouse gases are recycled very slowly by the Earth. This means that the Earth will continue to get warmer decades after we stop emitting greenhouse gases (the jusry is still somewhat out on this one, but chances are it'll take a while to cool off). This will lead to flooding, pestilence, and droughts. Think that ought to concern the 155.2 million Americans living on the coast?

Well, it doesn't. [Now we get to politics] According to Gallup, only 37% of Americans worry about climate change much. And thus, 69% of Americans favor offshore drilling even though alternative technologies could ease the energy burden on Americans faster (and as I've stated before, lowering income and capital gains taxes while implementing carbon taxes would spur the economy--not harm it). So although I am not pleased with Barack's decision, I do understand that a controversial candidate in a tight race can't afford to side against 70% of the American public on an issue (energy prices) that is number #2 behind the economy in general. grumble ... grumble ... wish he had stuck to his guns ... grumble ... grumble.

Which brings me to my next question. Is the American public too stupid to be allowed to vote? I used to think that democracy was the greatest thing since sliced bread (err ... I guess democracy predated sliced bread), but I am completely disillusioned. After 2000, when the American People elected a man whose grammar is almost as fucked up as his moral compass, I blamed it on the antidemocratic leanings of the Supreme Court. When 2004 came and the American People reelected the same poo flinger that lied to us and got us involved in a horrible quagmire in Iraq, I started to lose faith. The recent shortsightedness of the American Public has all but ruined my faith in them.

My wife says that democracy is a terrible idea and that benevolent dictatorship is the only answer. I think that's kind of risky ... isn't that what

kim jong-il claims to be?

She does however have another good idea. Let's bring back voting tests. I'm slightly leary. It seems that the poor uneducated proletariat might be severely disadvantaged by this. On the other hand, what have they done for themselves anyway? Another idea is to let experts in various fields (i.e. professors or Ph.D. holders) elect the higher ranks of some government agencies (i.e. the SEC, FDA, EPA, Justice Department, maybe FCC). This way at least those agencies--which do wield some policy--would not be filled with morons. The problem with that is that they might be beholden to rich corporation who dole out grant money and might file those agencies with corrupt sleaze bags (would that be much different?)

In conclusion: the unwashed masses are morons who can't be trusted to be from 32 ice cream flavors much less pick the most powerful person in the world. The best idea that I have heard to fix this is to not let them vote ... or at least make their votes count less.

Monday, July 14, 2008

Obama Sells Out--McCain Sleeps In

Let me preface my remarks by saying that I am inclined to support Barack Obama, but haven't made my decision, yet. As an undecided voter, the events of the past week have given me pause.

On July 9th, Barack Obama voted to increase the Federal Government's ability to spy on Americans and granted immunity to the telecoms who had violated their consumers privacy in the past.

First, a little background: in 2002, the NSA asked AT&T multiple telecoms to turn over millions and millions of phone conversations of Americans communicating with people overseas. The telecoms complied. George Bush has been trying to get these acts legalized ever since.

The FISA Amendments Act gave the NSA eavesdropping in emergencies without court approval, provided the government files required papers within a week. It also granted retroactive immunity to the telecoms. Both parts of this law are likely unconstitutional. The retroactive immunity is Ex Post Facto. The allowed search is an unlawful search. We'll see if the Supreme Court is comptent enough to overturn the law. My money is on the telecom immunity being overturned and the actual spying powers being upheld.

Barack Obama voted for the FISA Amendments Act. John McCain didn't bother. Now I'm not sure which bothers me more. The fact that Barack Obama who holds himself up as a champion of individual liberties would support such a rancid piece of legislation. Or the fact that John McCain wouldn't bother to show up to such an important vote. Both are reprehensible.

Let's try to analyze their motivations a bit. Obama would like to be able to say that he is tough on national security and terrorism. It may be misguided, but some people actually think that terrorism is the biggest challenge that we face.

As to McCain's motivation for not voting? I haven't a clue. Maybe he feels that Yea or Nay, the vote could be held against him. I'm not sure how wither vote could be worse than abstinence given that he has supported unlawful electronic searches in the past. Oh well, I never fucking understand why McCain does what he does. Senility maybe?

So who do I vote for? Not McCain. He'll lead us into war with Iran. Obama? Maybe. There is a third option:

The Artist Formerly Known As Prince

Tuesday, July 1, 2008

The Economy? Energy Policy!

Recently, I read a webpage on npr that discussed the American economy. I was shocked to see that it did not mention Climate Change or Global Warming. I personally believe that Human Induced Climate Change (HICC) is probably the biggest challenge that humanity has faced since before the bronze age, but I'm not here to discuss that. I'm here to discuss the HICC, Energy Policy, and the economy.

Why is energy so expensive?

No one can deny that the exorbitant price of energy is one of the largest factors in the current downturn. Some blame OPEC. Others blame speculation, but--and this is basic, people--it's supply and demand. There is too much demand and not enough supply. Thus the price has risen.

Simple, right? What does that have to do with HICC? Well ever since the late 90s, Europe has been introducing measures to curb greenhouse gas emissions as part of the Kyoto Protocol. In general, world policy has been shifting toward environmental regulation of greenhouse gases to curb HICC. This puts the world's large energy companies in a precarious position. The price of energy is high right now, but it is risky for them to increase capital investment in fossil fuels. Those investments might pay off in the short term, but could be burdensome over the long term--under a Carbon Cap and Trade or Carbon Tax. Thus, they are taking a wait and see approach. On the other hand, renewable energy can't quite make it off the ground just yet. The technology still has not improved enough that it can compete with fossil fuels in a totally free market.

Thus, the government should end all of this indecision and finally implement new policies to control climate change. Nothing hurts the economy more than uncertainty. Still not convinced? Look at Europe. $140/barrel oil has not hurt Europe nearly as much as the U.S. Why? Because it has implemented measures to reduce greenhouse gas emissions, thus reducing fossil fuel use. If the U.S. had increased the gasoline tax 4 years ago, demand would have decreased, U.S. automakers would be making efficient vehicles, and the price of oil might not risen as high as it is now.

What should we do about expensive energy and Climate Change?

But John McCain and Barack Obama have it right. We need to have a Carbon Cap and Trade system. Right? WRONG. Let me explain why. A Carbon Tax would place a price on the cost of emitting greenhouse gases, thus making non-emitting technologies such as wind and solar competitive. A Carbon Cap and Trade system would allow energy companies and others to emit CO2 (and other green house gases), but if they exceed a certain cap, they would have to pay a penalty. Companies that did not exceed that cap could sell their permits to pollute to the higher polluters. Additionally, other entities that reduced greenhouse gas emissions in other ways, could apply for permits to pollute which they could then sell. The problem with this scheme is the same as the problem with the energy market today: uncertainty. Energy infrastructure requires large capital expenditures and long term investments. If the carbon market is volatile (which could be due to technological changes, political uncertainty, or just the herd mentality), this will discourage capital investments and thus slow technological advancement. Consider this: Fred's Renewable Energy develops a new widget which allows the production of clean energy almost as cheaply as coal fired power plants. This will cause the price of carbon emissions permits to go down so that coal fired power plant owners can afford them and can then continue to pollute.

There are other problems with the system in Europe as well. The practice of grandfathering is particularly bad. Owners of old polluting technology are given free permits by the government. They can then sell these on the free market or use them themselves. This is just free money given out by the government. Another problem is the administration cost of a Cap and Trade system. In it, not only does the government have to verify the amount of emissions of all participants, but it also must verify that trading is done fairly and above board, that any new permits are for valid reasons (such as planting of trees or mechanical filtering of CO2 from the air). With a Carbon Tax, only emissions need be tracked.

Many fiscal conservatives have criticized the idea of any carbon regulation arguing that the energy markets should be free of such distortion. In his seminal work, Milton Friedman argued that the role of government in commerce should be diminished except to diminish negative "neighborhood effects"--effects on third parties for which it is not feasible to charge or recompense them. (from Capitalism and Freedom by Milton Friedman). What's climate change, but a big negative effect on many third parties? The carbon taxes are a way to recompense society for the pollution that is emitted and a way to discourage it from being emitted in the first place. A further benefit of a Carbon Tax is to make the price of energy somewhat predictable, thus encouraging long term investment in those technologies which are most cost-efficient.

But markets are efficient. Shouldn't then a Cap and Trade scheme be preferable? The problem is that the government should not be trusted with handing out pollution permits. Too many corrupt companies with political connections will be falsely rated as green and given free permits. Furthermore, if the markets are ever flooded, polluters will be able to stockpile cheap permits.

Won't all these schems hurt the economy?

But what about the effects on the economy? People will pay higher energy prices and this will tank the economy. Right? Not necessarily. If we offset the carbon tax burden that consumers face with income tax cuts so that it is revenue neutral, the only people who will be overly burdened will be prolific polluters. And that's exactly who should be. So Mr Obama and Mr McCain, please get this right. Save the planet and help the economy.

Monday, June 30, 2008

Stupid People vs. A Well Run Political System

This rant concerns the stupidity of the average American. That's right, I said it, most people are stupid. Average people are even more stupid. How does that work? Well, everyone has some good ideas and some terrible ideas, but if you average them all together, there are just bad ideas. In business, bad ideas die a Darwinian death. In politics, bad ideas are elected or enacted as compromises between extreme but creative ideas.

So why does the average person get to vote? I guess democracy has worked well in practice in the past when people generally voted on the recommendations of newspaper editors (who tended to be more intelligent and better informed than average).

But in this day of excessive television coverage and extreme scrutiny of sensational issues such as sex and religion (neither of which is relevant to 97.3% of issues), people tend to vote for the politician who looks good on TV and tends not to make mistakes. Well, you know what that gets you? Mediocrity. Imagine if Babe Ruth or Michael Jordan had been more afraid of making mistakes than intent on success. What sort of athletes would they have been?

Still, as Sir Winston Churchill has said, ...democracy is the worst form of government except all the others that have been tried. Maybe there's a better form of government that hasn't been tried, but maybe if the average 'tard would stop watching American Idol and start paying a-fucking-ttention to what's going on, democracy might work a little better.

We should let our politicians make mistakes. If they make somewhat insensitive remarks, we should let them slide a bit. If they misspeak, give them a pass. If they have associated with undesirables, let it go. On the other hand, if a candidate shows real inexpertise over important issues, consistently demonstrates a lack of intellectual ability, or puts forth unwise policies, let 'em have it with both barrels.

Let's look at some examples of faux pas and categorize them Slip Up (don't cast aspersion on this brilliant leader) or Fuck Up (you are a dumbass who shouldn't be elected).

John Edwards' $400 Hair CutSlip UpObviously
Bill Clinton bangs Gennifer FlowersSlip Up Or maybe Go Bill!
Bill Clinton probes Monica Lewinsky with a cigarSlip UpDude is freaky!
Ken Starr probes Bill Clinton with SubpoenasFuck UpKen Starr has contributed to society about as much as Star Jones.
George Bush uses the word "nucular"Slip UpHe watches The Simpsons too much?
George Bush can't make his verbs and subjects agreeFuck Up Me fail English? That’s unpossible.
Barack Obama goes to a church with an insane preacherSlip Up Aren't all preachers insane at some level? And don't politicians generally hang out with the worst sort?
Barack Obama makes a deal to take public funding and then goes back itFuck UpDishonest, but then $100s of millions would be tempting
John McCain confuses Sunni with ShiaFuck UpOkay, plenty of people could make that mistake, but none of them should be in charge of the free world either.
So think about the issues and when a controversy starts to dominate basic cable, try to consider what it really means. Is it a slip up or a fuck up?