American Elephants

Global Warming? Be sure you’ve got your long johns on! by The Elephant's Child
January 8, 2009, 11:20 pm
Filed under: Energy, Europe, Foreign Policy, Freedom, Socialism

Europe’s vaunted green policies are in shambles. Even as the World Wildlife Fund insists, insists, that what Europe needs are more windmills, Europeans are freezing.  Russia is in a power struggle with Ukraine; supposedly a bitter commercial dispute over natural gas.

Europe made a decision that in the interests of being green, they would depend on Russia to supply their natural gas. One would think that a study of history would give them pause, but such was not the case.

From The Times in London: “States of emergency declared across Europe over gas.”

Governments across Europe declared states of emergency and ordered factories to close as Russia cut all gas supplies through Ukraine yesterday in their worsening dispute over unpaid bills. …

Schools and factories were closed and trees were felled to keep home fires burning after Russia turned off the gas taps to more than a dozen countries.  Itr was a clear demonstration of the dpendence of the Continent on Russian gas supplies.

Despite temperatures as low as minus 27°C and the threat of heating cuts to millions of households, Moscow said that it had no choice but to cease supplies because Ukraine, the country through which 80 percent of Russian gas bound for Europe flows, had closed its pipelines.  The claim was denied by Kiev.

Countries tapped into their reserves and urged the use of alternative fuels but at least 15,000 households in Bulgaria — which gets 92 percent of its gas via the Ukrainian pipelines — found their heating cut off overnight.

Twelve countries received no Russian gas at all yesterday:” Austria, Bulgaria, Slovakia, the Czech Republic, Bosnia, Croatia, Greece, Hungary, Macedonia, Romania, Serbia and Turkey.  France, Italy, Germany and Poland reported that their supplies from Russia were markedly down.”

David Satter, a senior fellow at the Hudson Institute reports that:

The gas war between Russia and Ukraine is not what it seems.  It resembles a bitter commercial dispute, but in fact, it is a power struggle.  Russia, by cutting off the gas to Ukraine, is pressuring Ukraine to submit to its will…

Most of Ukraine’s gas came from Russia, but much of Russia’s export pipeline network was in Ukraine, outside Russian control.  This meant the two countries were trapped in a marriage they could not annul, and in which negotiations quickly came to resemble threats of suicide.

Russia could threaten to cut off supplies to Ukraine.  But with 80 percent of Russia’s gas exports going through its territory, Ukraine could steal the gas intended for Europe.  It was in this unstable situation that Europe elected to increase its energy dependence on Russia.  The security of European gas supplies thereby depended not only on the reliability of Russian and Ukrainian commitments but, much more problematically, on their ability to behave in a civilized manner toward each other.

In the wake of Ukraine’s efforts to join NATO, Russia is in no mood to be civilized toward Ukraine.  This is the reason for the suggested price increase from $179 per 1,000 meters to $450…Each side quietly hopes that European pressure will force the other side to submit.

Global average temperatures have been declining since 1998.  Governments at all levels are still anxious, for reasons that have nothing to do with energy efficiency, to depend on “alternative fuels”.  Windmills break down in very cold weather, or throw off huge chunks of ice, or arms go flying.  Alternative diesel fuel solidifies in cold weather, stopping movement at inconvenient times.  Huge amounts of cash from UN grants, government grants, wind farms, carbon trading, and billions and billions are squandered on superstition generated by unreliable computer programs.

As usual, the old adage “follow the money” leads to some enlightenment.

If at first you don’t succeed, keep doing the same damn thing over and over again. by The Elephant's Child

Barack Obama gave a speech today, to insist that we must make “a clean break from a troubled past and set a new course for our nation.”  Instead of the speech he might have given, offering citizens some certitude for the future; he remained in campaign mode, trying to scare the public into instant acceptance of his “American Recovery and Reinvestment Plan”.   He could have guaranteed that he wouldn’t raise taxes during a recession by asking that the Bush tax cuts be made permanent.  He could have offered some growth-oriented proposals like cutting corporate taxes to at least the level that other countries pay.  Until businesses and people have some confidence in the future, they are not going to shop and spend, and banks are not going to lend.

Confidence is not engendered by “acting boldly” and spending a larger percentage of our national GDP than has ever been spent since World War II.  Mr. Obama is unclear about what is happening in the economy and what can effectively be done by government, which in general, is not much.

“We start 2009 in the midst of a crisis unlike any we have seen in our lifetime, a crisis that has only deepened over the last few weeks.”  Well, no.  “Manufacturing has hit a 28-year low.  Many businesses cannot borrow or make payroll.  Many families cannot pay their bills or their mortgage.  Many workers are watching their lif savings disappear.  And many, many Americans are both anxious and uncertain of what the future will hold. ” This is simply scare talk, and he offers only nebulous miracles.

“Now I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible.  If nothing is done, this recession could linger for years.”

This is not creating confidence in the future.  It is trying to make you go for a plan that your common sense tells you is nonsense.  The idea that there is nothing wrong with the economy that printing up and dispensing several trillion more dollars won’t fix, is denied by past experience, by common sense, and by economic history.

We have a long history of recessions and depressions.  So do other countries.  We have a long history of stimulus payments — sending people a check.  It never works.  You might, at best, get an upward blip for a week or so, but it doesn’t cure anything.  FDR believed that a big infrastructure program and a lot of government jobs would cure the Depression.  He was wrong.  Pumping government money into the economy simply prolonged the Depression, and for many parts of the country the Depression lasted well into the fifties and sixties.  The Japanese believed that they could fix their economy with government jobs and a vast program of improving infrastructure. They did it over and over for ten years under several prime ministers.  It didn’t work, and their national debt soared.

Economist Arnold Kling mentioned listening to  [economists] Joseph Stiglitz and Martin Feldstein being interviewed by Charlie Rose.  “Both of them” he says, “are keen on trying a big stimulus.  Stiglitz says that everything done so far has been a failure, but again he doesn’t draw the obvious conclusion.  Instead, he says we have to try something bigger and different.”

I was reminded of the Battle of the Somme, one of the worst policy blunders of all time.  Having experienced nothing but failure using offensive tactics up to that point, the Allies decided that what they needed to try was…a really big offensive.  Just as Feldstein and Stiglitz pay no attention to on-the-ground housing market, the British generals ignored the impact of machine guns on men advancing over open fields.

My guess is that in 1916, anyone who doubted his own ability to direct an enormous offensive involving hundreds of thousands of soldiers would never have made it to general.  Similarly, today any who doubts the ability of a handful of technocrats to sensibly allocate $800 billion would never make it into government or the mainstream media. …

The arithmetic is mind-boggling.  If 500 people have meaningful input, and the stimulus is almost $800 billion, then on average each person is responsible for taking more than $1.5 billion of our money and trying to spend it more wisely than we would spend it ourselves.  I can imagine a wise technocrat taking $100,000 or perhaps even $1 million from American households and spending it more wisely than they would.  But $1.5 billion?  I do not believe that any human being knows so much that he or she can quickly and wisely allocate $1.5 billion.

Do read the whole thing. If you think the money they want to take from you now is a lot, just wait.  The government has no money of its own; it all comes from your pocket.  Government jobs do not improve the economy.  The salaries that pay for government jobs come from your pocket.  Studies show that infrastructure projects are completed more quickly and more inexpensively by private industry.  This is true in every country.

Ronald Reagan said that ” Government is like a baby; An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”  He got it right.

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