Category Archives: public policy

Libertarianism doesn’t mean a free-for-all

Matthew Yglesias usefully rips into the wilfully dumb kind of “libertarian”:

It’s worth going back to first principles on markets, property rights, and air pollution. To have a functioning market, you need to have property rights. And property rights need to be defined in some way or other. This includes taking some view of the relationship between property rights and particulate emissions into the air. On one conceivable conception of property rights, the Sierra Club could buy up a field somewhere and then assert that its property rights over the field give it the right to exclude any form of air pollution from wafting into its field. On that definition of property rights, which is the one “the Greens” would favor if we really wanted Stone Age economic conditions, industrial production would swiftly become impossible. You couldn’t so much as warm yourself with a fire before neighbors were accusing you of tresspassing for depositing microscopic soot particles in their lawns.

The reality-based community triumphs

Kunstler is his usual alarmist self this week as he examines the challenges facing Barack Obama’s presidency, but as usual he’s a fun read and dispenses nuggets of genuine wisdom:

Many observers think that Wal-Mart and its clones are immune to the larger forces swirling around us. Just because many cash-strapped people are hunting for bargains at WalMart these days does not insure the survival of the Big Box model very far into the future. In fact, in every trend we can see — from the oil markets to events in China to the impoverishment of the US working class to the coming crisis in truck transport — you can easily discern fatal weaknesses in this model. Local retail (and its support structures) is coming back. We just don’t know how, yet, and we don’t know how much capital and effort will be squandered trying to rescue WalMart, when the time comes. But the imperative re-scaling of commerce in America also represents huge opportunities for young people to get into their own businesses.

Mr. Obama will preside over the potential restructuring of all our systems, some of them in ways he and his supporters have not imagined. We haven’t begun to see where fate will take higher education, but my guess is that it will no longer be a “consumer” activity, and that the hypertrophied land-grant diploma mills will have to to shrink or die as state financial support withers away, and all sorts of unnecessary professions from “public relations” to “marketing” cease to require certified graduates.

The rough ride we’re all in for makes it even more of a relief that Obama will be the U.S. president instead of John McCain. He might be wrong about some things, maybe a lot of things, but there are lots of indications that he inhabits the real world and believes in evidence more than faith-based ideology. That puts him a step up on the last guy, and two steps up on the character McCain decided he’d play in an effort to win the presidential election.

Let failing companies fail

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Credit: “How not to take a roundabout in the wet,” Flickr/edvvc

The banks and investment firms arguablyneeded bailing out because they’re integral to having functional financial markets, which are in turn integral to, well, modern capitalism. If they go down, almost literally everybody goes down. But a failing carmaker is just a company that blew it. Those fail all the time.

They do not deserve to be bailed out.

In a letter to Treasury Secretary Henry M. Paulson Jr., House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.) asked Paulson to “review the feasibility . . . of providing temporary assistance to the automobile industry during the current financial crisis.”

The letter notes that Congress granted Paulson broad discretion to use the bailout money to “restore financial market stability. A healthy automobile manufacturing sector is essential to the restoration of financial market security,” the letter continues, as well as to “the overall health of our economy, and the livelihood of the automobile sector’s workforce.”

Stability and security are not the same thing any more than a mechanically functioning economy is the same thing as a prosperous one. Governments can arrange for the first; they can only temporarily pretend to arrange for the second, and only at tremendous cost.

The Post helpfully goes on to explain why this is a moronic idea for practical reasons, not just principled ones:

If the request is granted, it would expand the federal government’s role in private enterprise far beyond the financial sector. Critics have warned that a bailout of GM would attract a long line of other companies to Washington to argue that their survival, too, is critical to the economic health of the country. The move would push the Bush administration to decide winners and losers in yet another huge sector of the economy, and it would force President-elect Barack Obama to manage a complex restructuring of the ailing automotive industry.

I work for a newspaper. Where’s the New York Times‘s bailout? Or, more to the point, the Christian Science Monitor‘s? Or U.S. News and World Report‘s?

GM and Ford and Chrysler screwed up massively, failing to foresee a consumer demand for smaller, cheaper, drastically more efficient vehicles. They are very big companies, but they are not special companies, and the problem is not something that just happened to them; Nissan and Honda and Toyota haven’t had an easy ride the last couple of months, but they’re still going concerns. If the U.S. automakers can’t make it on their own, let them go.

Also on Obama

Subsidies for corn ethanol, and ethanol mandates generally, are bad.

“Clean coal” is very bad except as part of a bridging strategy to something better, in which case it’s only moderately bad.

If you think I’m being tough on the new guy, I should say that I think he’s a hell of a lot better than the alternative would have been.

Taking stock

Obama speaks

Obama speaks

(Credit: “obama,” Flickr/BohPhoto)

Wow. Lots has changed since I was last blogging here something like as often as I want to, back before the Canadian federal election ate my life. That kicked off at the beginning of September; since then the markets have spiralled downward, the prices of oil and of gas have tanked, a serious recession has apparently begun, the Canadian Conservatives have been re-elected and named a new cabinet, and, oh yes, the Americans elected Barack Obama.

The landscape has clearly changed. Some observations:

  1. The crashing price of energy — oil is down more than 50 per cent from its high last summer — indicates dramatically reduced demand for the stuff. Environmentally speaking, this is good: the slower we burn through the supply, the less urgent will be efforts to exploit marginal deposits of it. But it’s also a clear indicator of dramatically reduced economic activity, which means people as a whole are poorer. There’s a serious policy problem: When fuel was expensive, critics said we couldn’t afford cockamamie plans to make it more expensive — by taxing it — to encourage the use of alternatives. Now it’s cheaper, but critics say the economy can’t take any more shocks, such as a tax on fuel. There will never be a comfortable time for market-oriented policies that make any kind of energy more expensive.
  2. If we’re lucky, though, people won’t soon forget how unpleasant it was to take out second mortgages to fill the tank and won’t flock back to SUVs they don’t need. I’m not terribly optimistic on this point, though: we had the energy crisis of the 1970s and the SUV came along anyway.
  3. The downturn should, however, create opportunities for entrepreneurs with the best kind of green ideas: those that help the planet while making the economy more productive. Efficiency is a lot more appealing in bust times than in booms. And the downturn should also kill off some of the sillier children of the recent green boomlet, such as bogus carbon-offset programs.
  4. With a weaker economy, the make-work argument for green policies (that aggressive government action to promote green technology will “create jobs”) appeals to a lot more people. Obama’s platform promises five million new green-collar jobs, for instance. More jobs may be a happy byproduct of sound environmental policy, but making them a deliberate economic end is asking for trouble.
  5. In the same vein, rumour that Obama is considering making Robert F. Kennedy Jr. the head of the U.S. Environmental Protection Agency is unsettling. I have no idea whether Kennedy is a capable administrator who can head a large government entity; I do respect his vigour and enthusiasm in fighting traditional pollution, especially of waterways. The question is whether the EPA will be the point agency on climate change in an Obama administration or whether the issue will be seen as essentially an economic/industrial matter and be handed to an appropriate cabinet officer. I hope that’s what happens.
  6. In Canada, the environment portfolio’s just been given to Jim Prentice, who was most recently the minister of industry. He’s also considered Prime Minister Stephen Harper’s most quietly competent ministers. We’ll have to see whether what Harper’s after from him is quiet or competence. I hope Prentice is in the job to steal the best parts of the Liberals’ “Green Shift” plan. Harper could safely do that pretty much immediately, since its author, Liberal leader Stéphane Dion, is resigning in disgrace over the election results as soon as his busted party can pick a successor.
  7. By the way, poor Stéphane Dion. A very good man in a very wrong job.

Regular blogging resumes. Thanks for your patience.

Money and carbon

Bill Doskoch compares the climate crisis to the credit crisis: figuring out what to do is hard, and then doing it is harder, but the fact we don’t want to deal with it doesn’t mean it isn’t coming for us.

Many commentators saluted the “resilience” of the U.S. consumer without noting that it was all being done with borrowed money.

And now, the bill is becoming due. Years of economic pain will be the likely result.

To my mind, we’re running a climate deficit by pumping carbon into the atmosphere to keep today’s economy propped up (in part so we can buy stuff we don’t really need by using borrowed money). The longer we put off meaningful action on reducing emissions, the greater the bill will be — and as this post shows, things are getting worse globally instead of better.

Where the hell have I been?

Blogging on the Canadian election here, mostly.