Exchange on Costs of Middle East Oil Importation

A reader posts below:

>Let me agree with everything that you say about climate change. But please answer this question: Do cars use oil and do they emit carbon dioxide? If they do use oil, is it not beneficial for us to reduce our consumption so that American wealth is not transferred to the Middle East?

My response:

>I am not opposed to limiting pollution or reducing oil consumption. These can be done with rather than against natural market processes and so limit the dumb mistakes that governments inevitably make.

Murray N. Rothbard had an argument that I found interesting. In the 19th century there were court cases where citizens claimed that pollution was a form of battery and tried to obtain damages from the polluters. The courts threw out this argument. At the time, there was likely a utilitarian argument in favor of pollution, but the judges' decisions (I have no citations) were not fully consistent with the fundamental approach to rights used in the Declaration of Independence. The rights to life, liberty and the pursuit of happiness do not imply the right to harm others. Judge Richard Posner has written a textbook on law and economics in which he argues that judges have acted to optimize efficiency. This is a utilitarian argument. If true, the reason for the judges' mistaken belief that encouraging pollution will maximize social welfare is an antiquated view of social welfare. Also, Posner's utilitarian argument is flawed. It may have made sense in the 19th century when development was just beginning, but it needs to be tempered with rights-based concerns. There ought not be an absolutist right to harm others in order to produce social welfare nor should there be an absolutist claim to limit all harm to the environment while the economy declines.

We now know that pollution does harm to us, including causing diseases like cancer. Also, there is tremendous value in a clean environment. A trip to China in 2003 convinced me of that. Because a clean environment is an inseparable good, that is, there is no way to charge people for its use, and as well pollution is an external cost, which means that polluters do not pay, some correctives are needed. There is market failure. But the correctives can most effectively be accomplished through means that support the market system.

The way to balance the costs of pollution with the benefits (e.g., in increased industrial production) is either through a tort system devised by the courts (where the courts establish standards of care and wrong doing that are stricter than today's) or legislation accomplishing the same thing. A moderate cap and trade system where realistic limits on pollution are coupled with the ability to sell rights to pollute is also workable. Such steps will slow economic growth with respect to consumer goods, though, so they need to be done with care.

Similar standards are in place in areas like automobile safety standards. When there is a car accident, the lack of the ability of the car to withstand the crash to some degree contributes to injuries. The question is how far to go to establish standards. If the courts say that all cars should be crash proof the cost of cars will increase exponentially. Congress and the courts have not concluded that cars can be built without regard to safety, but the standards do not appear to be extreme. Industry fought safety belts, for instance, but ultimately rules supporting inclusion of belts were put into effect and they have not been overwhelmingly expensive. There are tens of thousands of deaths each year due to automobile accidents. But I do not hear anyone proposing to criminalize cars. Rather, the Democrats just subsidized the car industry. So why are they subsidizing industry while aiming to impose massize costs via cap and trade? The goal is not limiting pollution but control and power of the state.

With respect to pollution and cap and trade the Democrats do not aim to maximize social welfare or the balance the need for a clean environment with the need for other kinds of progress. For instance, the cap and trade bill as it was originally proposed included, I believe, retroactive standards on homeowners that would have cost each American homeowner thousands of dollars. The standard of raising energy efficiency by 50% over six years seems arbitrary and capricious.

Moreover, there is a willingness to hand decision making to national and international authority (a cap and trade administrator, for instance) which poses a threat to freedom. Instead of talking in terms of costs and benefits and balancing progress with limits on pollution and capricious state authority, the Democrats and environmentalists have an extremist agenda.

The claim of global warming, for instance, has become an obsession with the Democrats and the environmentalist movement. Rather than debate the question intelligently, they have chosen to falsify research. The Democratic media then report the falsified findings as though they are facts. This is evidence of the partisan nature of the Democratic media such as NPR and the Washington Post.

That said, I agree that it is beneficial to us to reduce consumption of anything, including oil. That is efficiency. But buying a resource from another country is not transferring wealth. The reason we buy oil is to produce wealth. In other words, the benefit of the oil exceeds the cost. If the price of oil rises sufficiently, alternatives will be found. But purchasing oil from the Middle East is not so maleficent a result that government is needed to alter market processes. Firms have been much better at innovation than governments. If that were not so, then Sweden, Cuba and North Korea would be innovation centers.

Certainly, there is little in common between the Middle-Easterners-are-demons argument and the claim that there is global warming. I suspect that there will be alternative fuels coming into being as the real price of oil rises. Meanwhile, if you feel that we should rely on alternative fuels, why not study chemical engineering and work on inventing a low-cost alternative? That is what Americans used to do before the advent of paper money and big universities.

Okyay Debunks Climate Change Report

It is rather astonishing that anyone takes Al Gore's tin foil hat theory of climate change seriously after the e-mails revealing that much if not all of the climate change research has been doctored. Raquel Okyay aims to further debunk the claims of the die-hard ideologues and extremists who dominate the United States government and the autistic left. Raquel, a distinguished voice in Ulster County, New York politics, has been researching the facts behind the report behind the meeting of environmentalists in Copenhagen. Raquel writes:

>I admit that I have been skeptical of man-made global warming from the get go. For one thing Al Gore does not impress me one bit with his “end of the world” predictions, knowing full well that an ulterior motive is at bay. But it wasn’t until I started reading “Climate Change Reconsidered — The Report of the Nongovernmental International Panel on Climate Change” (“Reconsidered”) that I realized that not only does it appear that Gore is dead wrong on his (and others) theory of man-made climate change, but the entire movement, that bases its findings on biased and inconclusive science, is really about perpetrating a global socialist society aimed at redistributing wealth on an international scale.

>Much of the language and direction of the meeting of Environmentalists at Copenhagen is based upon four Reports of the International Panel on Climate Change (“IPCC”) originally published in 1990 with its fourth Assessment published in 2007. The panel, assembled by the United Nations (“UN”), sought to present legislative language so as to bind sovereign countries to reduce UN directed carbon emission, as well as force industrialized nations to fund carbon emission standards and applications on non-industrialized nations.

Read Raquels analysis here.

Obama Does a Daley

All America remembers the original Mayor Richard J. Daley. When I took a public sector labor relations course the instructor had a couple of anecdotes about the corruption in Chi-Town in the 1950s, 60s and 70s. Of course, Chicago is not alone. In 1904 Lincoln Steffens published a collection of McClure's Magazine articles he had written in a book named Shame of the Cities. In it, Steffens outlines widespread corruption in city after city. Minneapolis, for instance, was run by a criminal organization. In the 1930s, New York's Mayor Fiorello Laguardia ended the city's corrupt political club, Tammany Hall, but institutionalized the corruption under a series of expanded government agencies and public authorities overseen by Robert Moses. The New Deal of that period overlay a pretense of government rationality on the underlying infrastructure of partisan corruption. It has never disappeared. The corruption in government today is on a much larger scale than ever before in history, but it is done in a bureaucratized manner. Witness the recent bailout of Wall Street. In the 19th century Wall Street gained benefits by bribing state legislatures, as Rockefeller and Gould did with respect to oil piplines and railroads. The amounts involved were in the tens of thousands. Today, Wall Street gets the Federal Reserve Bank and Congress to authorize subsidies in the trillions, and America's dim witted, Democratic Party media pundits applaud the corruption while the Republican media pundits on Fox watch while sucking their proverbial thumbs and saying how great George W. Bush was.

Jim Crum just sent me an article that appears in the Obamafile Blog (entry for 12/16/09). In violation of the most elementary standards of decency and clean government Obama threatened to remove Nebraska's Offutt military base unless Senator Ben Nelson (D-NE) falls into line.

The Obamafile Blog cites a Washington Examiner article that states:

>According to a Senate aide, the White House is now threatening to put Nebraska's Offutt Air Force Base on the BRAC list if Nelson doesn't fall into line.

>While the Democrats appease Senator Lieberman, they still have to worry about other recalcitrant Democrats including Nebraska Senator Ben Nelson. Though Lieberman has been out front in the fight against the public option and the Medicare buy-in, Nelson was critical of both. Now that those provisions appear to have been stripped from the bill, Lieberman may get on board, but Nelson's demand that taxpayer money not be used to fund abortion has still not been met.

President Obama's clumsily corrupt use of quid pro quo results from his experiences as a politician in Chicago led by Richard J. Daley's son, Richard M. Daley.

Eric Hoffer on Israel, 1968

My father just sent me this quote from an Eric Hoffer article in the LA Times in 1968. Hoffer was a longshoreman who gained fame as a social philosopher in the 1960s. Notice the reference to Sweden.


ISRAEL'S PECULIAR POSITION...by Eric Hoffer - LA Times 5/26/68
The Jews are a peculiar people: things permitted to other nations are forbidden to the Jews.
Other nations drive out thousands, even millions of people and there is no refugee problem. Russia did it, Poland and Czechoslovakia did it.
Turkey threw out a million Greeks, and Algeria a million Frenchman.
Indonesia threw out heaven knows how many Chinese and no one says a word about refugees.
But in the case of Israel , the displaced Arabs have become eternal refugees.
Everyone insists that Israel must take back every single one.
Arnold Toynbee calls the displacement of the Arabs an atrocity greater than any committed by the Nazis.
Other nations when victorious on the battlefield dictate peace terms.
But when Israel is victorious, it must sue for peace.
Everyone expects the Jews to be the only real Christians in this world.
Other nations, when they are defeated, survive and recover but should Israel be defeated it would be destroyed.
Had Nasser triumphed last June [1967], he would have wiped Israel off the map, and no one would have lifted a finger to save the Jews.
No commitment to the Jews by any government, including our own, is worth the paper it is written on.
There is a cry of outrage all over the world when people die in Vietnam or when two Blacks are executed in Rhodesia .
But, when Hitler slaughtered Jews no one demonstrated against him.
The Swedes, who were ready to break off diplomatic relations with America because of what we did in Vietnam,
Did not let out a peep when Hitler was slaughtering Jews.
They sent Hitler choice iron ore, and ball bearings, and serviced his troops in Norway.
The Jews are alone in the world.
If Israel survives, it will be solely because of Jewish efforts. And Jewish resources.
Yet at this moment, Israel is our only reliable and unconditional ally.
We can rely more on Israel than Israel can rely on us.
And one has only to imagine what would have happened last summer [1967] had the Arabs and their Russian backers won the war,
To realize how vital the survival of Israel is to America and the West in general.
I have a premonition that will not leave me; as it goes with Israel so will it go with all of us.
Should Israel perish, the Holocaust will be upon us all.