Filed under: Energy, Global Warming, Junk Science, Politics, Science/Technology | Tags: Energy Independence, The Climate Scandal, We Don't Understand Clouds
Back in 2008, then candidate Barack Obama claimed in a speech in Golden Colorado, that his planned investments in “green” energy would create “five million new jobs that pay well and can’t ever be outsourced, ” Robert Bryce notes in the Wall Street Journal. It was all bunk.
President Obama not only does not change his mind, he doesn’t learn from what is going on in the world. In his State of the Union speech, the president claimed credit for his “all of the above” energy policy, not mentioning that he has fought tooth and nail — every bit of energy production except wind and solar. He has attempted through the EPA to shut down the coal industry which provides nearly half of our electricity.
Increasing amounts of natural gas come from fracking by private investors on private land, which is fortunate, for Obama has opposed any drilling on public lands. He is still talking about “carbon pollution”— whatever he thinks that is — carbon dioxide is a natural fertilizer for plants, and as our climate cools will help crops to avoid damage from the cold.
In December, the Center for European Policy Studies, a Brussels-based think tank, reported that European steelmakers are paying twice as much for electricity and four times as much for natural gas as their U.S. competitors. In Denmark, the wind-energy capital of Europe, residential electricity now costs about 41 cents per kilowatt-hour, more than three times the U.S. average rate. Robert Bryce notes:
Proof came last month when both the European Union and the German government announced separately that they were both rolling back aggressive subsidies and mandates for renewable energy. The reason: staggering costs. Spain has racked up some $35 billion in debt—known as the “tariff deficit”—thanks to excessive renewable-energy subsidies. In Germany, renewable-energy subsidies are now costing German consumers and industry about $32 billion a year. The costs have become so onerous that on Jan. 21 Germany’s economy and energy minister Sigmar Gabriel told energy conference attendees in Berlin that his country is risking “dramatic deindustrialization” if it doesn’t reduce energy costs.
It may take 20 years or more for Europe to recover from the waste of their investments in wind and solar.
The American energy landscape has undergone a big change — not thanks to, but in despite the actions of the U.S. government. U.S. net imports of petroleum have declined from 12.5 million barrels per day in 2005 to 8.6 mbd in 2011. Dependence on imports has dropped from its 60 percent peak in 2005 to 45 percent the level it was back in 1995. This 30 percent reduction in just seven years is equivalent to three times the number of barrels nominally imported from Saudi Arabia. Some of the drop is related to the recession-induced drop in consumption, some to the blend with ethanol. Since 2008, technologies like deep-water drilling, hydraulic fracturing and horizontal drilling have increased crude oil output by 18 percent.
The idea of “energy independence” has been way oversold. Oil is a commodity. Assume all of the petroleum in the world goes into one big storage tank. Producers pour oil in, consumers take it out. Everybody pays essentially the same price, and the international oil companies determine what happens to the oil once it enters the global market. When the Arab oil-producing countries declared an embargo of the U.S. and selected European countries way back in 1973, there was no real shortage in the U.S. The long gas lines and price hikes had more to do with panicked consumer behavior and the complete bungling of the Federal energy bureaucracy. The Soviet Union has threatened boycotts of European countries, which has been one of the reasons for the ramp-up of wind and solar in the European Union. There has been talk about a crisis that might be caused by a blockage of the Straits of Hormuz. But America is not dependent on the Persian Gulf for its oil supply. Most of U.S. oil imports come from North America. When there is a supply disruption somewhere in the world, it affects everyone.
A huge calculating error in official U.S. government climate data shows beyond a doubt that climate scientists unjustifiably added on a whole degree of phantom warning to the official “raw” temperature record. Skeptics believe the discovery may trigger a real climate scandal in Congress and sound the death knell on American climate policy. Independent data analyst Steven Goddard released his study of the official adjusted U.S. temperature records relied upon by NASA, NOAA, USHCN and scientists around the world to “prove” that our climate has been dangerously warming. Goddard found a startling disparity between the “raw” thermometer readings, as reported by measuring stations, and the “adjusted” temperatures. The adjustments, in effect, turn a 90 year cooling trend into a warming trend.
Patrick Michaels asks in Forbes if the Overselling of Global Warming will lead to a new Scientific Dark Age? We have relied too much on computers to answer questions for which they have no real answer. We have constructed models of the climate which contain way too many assumptions and guesses, and people are beginning to recognize that it is politics that is driving the issue rather than science, that wind and solar aren’t really free, but make expensive energy that is no longer on offer when the subsidies are removed.
Filed under: Politics, Domestic Policy, Economy, Health Care, Energy, Democrat Corruption, Taxes, Capitalism, Regulation | Tags: State of The Union Speech, Bad Economic Ideas, No Help For The Economy
Democrats mostly don’t read Republican stuff, whether history, economics, or foreign policy. We are the enemy and our opinions and our writings are suspect. A liberal member of the family refused to read a piece I had extracted from the Wall Street Journal because he considered the Journal to be right-wing territory — even though only the Opinion page leans right and the news pages lean left. Anecdotal, of course, but typical of many on the left.
Do you suppose that many Democrats have watched the great videos of Milton Friedman explaining troublesome ideas like the minimum wage, or extending unemployment benefits. They just don’t. And they would reject it, not because it didn’t make sense, but because they were enemy ideas.
Republicans study issues to determine what works. Democrats cite studies that they believe will help them win. Republicans are looking for growth in the economy and successful strategies to get there. Democrats are looking for issues that will sway their voting groups, and testing potential language to see what words will be most effective.
Many studies over time have shown that increasing the minimum wage is an unemployment act for young people. Many states have minimum wage rates that are higher than the national minimum wage. It is meant as a starter wage for people just learning to work, not as a wage to support a family. The official poverty level for a one person household is $11,490. A full-time worker earning $7.25 an hour is above the poverty level. For a two-person household, the poverty level is $15,510, and two people earning the minimum wage would not qualify as being below the poverty level. In most cases, the person who earns the minimum wage belongs to a household where the family income is $50,000 or more. Most people who earn the minimum wage get an increase within a year. Most businesses that hire people at the minimum wage are finding it advantageous to replace workers with self-checkout aisles, and mechanization and robots will soon be replacing more. Then where do beginners learn how to work?
New research shows that extending unemployment benefits is a net economic drag. The liberal case for extension of benefits rests on the supposedly stimulative effect of greater disposable income for the unemployed. The new study conducted by economists at the University of Pennsylvania and the Federal Reserve Bank of New York contends that any such stimulus is dwarfed by the economic damage done by extending jobless benefits. People respond to incentives, and unemployment benefits reduce one’s incentive to look for a job. They allow some people to wallow in discouragement longer than they otherwise would, or encourage the recipients to wait for a better job.
The White House pays women less than it pays men.
Universal pre-kindergarten does not improve outcomes. There are modest positive effects during the preschool era, but they do not last even into kindergarten, much less through elementary years.
There is no evidence that Michelle Obama’s obesity initiatives for children have reduced obesity. Mostly, the kids won, because they hate the lunch menus.
Maybe some people spend a lot of time worrying about those who make more money than they do. It has always seemed to me that it is only a challenge to yourself. What matters is your own success at the things that matter to you. Some mothers take a part-time job so they can be home with their kids when they aren’t in school. When you retire, you and your company part company, They are through with you and concerned with current employees. When you ponder your accomplishments in your old age, it will have more to do with your family and friends than with what you did at work. I just don’t think people spend a lot of time envying those who make more money, though the federal government it insistent on encouraging envy.
Filed under: Politics, Economy, Environment, Energy, Democrat Corruption, Taxes, Capitalism, The United States, Regulation | Tags: Extraordinary Political Cartoons, Investor's Michael Ramirez, Investors Business Daily
What more needs to be said? (click to enlarge) IBDeditorials.
Filed under: Domestic Policy, Economy, Energy, Foreign Policy, Health Care, History, Junk Science, Politics, The Constitution | Tags: Policies Based On Mistaken Logic, Progressive Fallacies, The Fallacy of Big Government
I am constantly fascinated by language, and the extent to which we use it to confuse or elucidate, to sway minds and to get our way. We have terms for three of the things that can go awry:
- Unintended consequences —nobody knew that if you did this, that would happen. Pretty straightforward. Sometimes one side has warned about the consequences, but the other denied that it would happen.
- Paradox — A seemingly contradictory statement that may nevertheless be true. Hegel: “We learn from history that we do not learn from history.” To be thoroughly confused, consult Wikipedia’s paradox page.
- Fallacy — An idea or opinion founded on mistaken logic or perception, a false notion. This is the word that describes the entire Obama administration, and the specific reason that there has been no real economic recovery.
President Obama made it clear from the first that he believed the Iraq War was a “dumb war,” and the only reason for being in Afghanistan was to “get” Osama bin Laden. When bin Laden was killed, Obama clearly believed that al Qaeda had been defeated, and was “on the run.” This was mistaken logic, and al Qaeda has taken over Fallujah, and is resurgent throughout the Middle East.
President Obama was sure that spending lots of stimulus money on infrastructure would create the jobs that were needed to restore the economy to prosperity. He discovered that “all those shovel-ready jobs weren’t really shovel ready”.
He was determined to kill two birds with one stone and create green jobs while also saving the earth from global warming. There weren’t really any “green jobs,” the installers came from the manufacturers, and they tried to cover up the lack by labeling janitors, bus drivers, garbage men and secretaries in energy installations as “green jobs,” but that didn’t work. Unemployed men were trained for so-called “green jobs” in government jobs programs like installing insulation, but discovered that to be a competitive field in most communities, who didn’t need additional employees. And the globe hasn’t been warming for over 17 years.
It turned out that green energy merely raised the cost of power, was as inclined to pollute as much demonized petroleum. We have Solyndra, and dozens and dozens of other bankrupt green-energy companies. Electric cars caught fire or turned into bricks, or cost so much that only multi-millionaires could afford to buy the federally subsidized cars. The EPA pushed 15% ethanol in gasoline that would destroy many car engines, and ruin small engines like boats or lawnmowers.
The more you look, the more fallacies you find. The Keystone XL pipeline offers 20,000 direct jobs, and thousands of spin-off jobs. Obama announces a new effort to create jobs, yet refuses to approve the project, which annoys our most important trading partner, and may send the energy to China.
Obama announces a pivot to jobs, while his Environmental Protection Agency is churning out regulations that kill jobs. We have had five years of fallacy.We hired a president who had no experience at running anything, no experience in managing anything. The people with whom he surrounds himself in the White House are as new and inexperienced as the president himself. Their ideas are founded on mistaken logic or perception.
Fallacy. They don’t know what they are doing, and while they may mean well, they lack understanding of the consequences of their actions. In today’s news are more studies that show that giving people insurance — Medicaid for the uninsured — actually significantly increases their use of emergency rooms, raising health care costs rather than saving money.
But we knew that. That was the experience of Romney Care in Massachusetts — the health care the Obama administration liked to pretend they were copying. A complete fallacy in itself. As a policy is put into practice, it collapses or fails to work due to it’s own internal misconceptions.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Energy, Media Bias, Regulation, Statism | Tags: Everything Costs More, Excessive Regulation, Higher Electricity Costs
America is is the midst of an energy boom. Fracking technology has released abundant oil and gas stored in shale deposits. The amazing paradox of the domestic fossil-fuels boom has been overwhelming destructive federal government policy. The U.S.Oil boom driven by private investment and ingenuity has transformed North American oil markets. The International Energy Agency estimates that America will surpass Saudi Arabia and Russia as the world’s largest oil producers by 2015.
Oddly, in the midst of an energy boom, U.S. electricity prices have skyrocketed to new highs. This paradox is not a result of the free market, but of runaway “green” regulation by the government. In November, the BLS Electricity Price Index hit 202.284, an all-time record high nearly 20% higher than just six years ago. According to the U.S. Energy Information Administration, in 2008 the U.S. produced 2.1 billion cubic feet of natural gas per day. Today, it’s 12.3 billion cubic feet and growing fast. But as energy booms, electricity prices are going up as well.
What is at work here is the green movement’s moral beliefs about what kinds of energy are “good.” Wind and solar power, which are “morally pure” cannot exist without generous governmental (taxpayer) subsidy. Wind and sunshine are of course free, but as producers of electricity, very expensive. The wind is intermittent and must be backed up 24/7 by conventional power, and the wind may not blow for days at a time. The sun goes down at night, and only shines in the day when the clouds don’t cover it. Trust me, I live in the Seattle area. We call the occasional appearances of the sun “sun-breaks.”
Electricity is now one of the most regulated goods in the U.S. The Environmental Protection Agency has sweeping powers to regulate CO2 — a power not found anywhere in the Constitution, electricity has become even more expensive, and will get more so. The EPA’s new rules, put in place to pander to the environmental movement will remove 34,705 megawatts of coal-based energy capacity off the market. This will increase electricity prices and the cost of everything where electricity is used.
This is a de facto ban on all new coal-fired power plants in spite of the fact that coal produces a third of all electricity in the country due to its cheap coast and plentiful supply. Despite the fact that CO2 levels are falling in the U.S., not rising, and despite the fact that the earth is cooling, not warming, as it has been for the last 17 years.
The demonization of coal and other fossil fuels means that utilities must shut coal-fired plants, and replace them with more costly energy sources like wind and solar. This is an enormous hidden energy tax, levied on every individual and every business — killing jobs and adding to the unemployment rolls.
Chicago political rules mean you must reward your financial supporters. The environmental movement is flush with money, wind and solar are awash with crony capitalism, and besides, the cost of higher electric bills will be borne by taxpayers.
Of course higher electricity bills on top of higher grocery bills, higher cost health insurance and higher cost of medical care may seem unreasonable. When confronted with a problem, Democrats first reaction is to make a law, to regulate. But that’s where the whole problem came from in the first place — excessive regulation.
Ironically, the very success of economic and political freedom reduced its appeal to later thinkers. The narrowly limited government of the late nineteenth century possessed little concentrated power that endangered the ordinary man. The other side of the coin was that it possessed little power that would enable good people to do good. And in an imperfect world there were still many evils. Indeed, the very progress of society made the residual evils seem all the more objectionable. As always people took the favorable developments for granted. They forgot the danger to freedom from a strong government. Instead, they were attracted by the good that a stronger government could achieve — if only government power were in the “right” hands.
…………………Milton and Rose Friedman: Free to Choose
Filed under: Capitalism, Economy, Education, Energy, Health Care, Media Bias, Politics, Regulation | Tags: "Do-Nothing Congress", The American Dream, The Yearly Summing-Up
I always hate the week between Christmas and New Years. The Media does the “Great Summing Up.” Lists and rankings, best and worst, biggest news stories, best photos, most notable deaths, the best books, the worst books, the funniest cartoons and the best and worst movies. These are not exactly think pieces.
The American Dream is dying, or dead. Things are really bad and only getting worse. The Least Productive Congress in History? The Do-Nothing Congress has been good for America, and if they pass few new laws, we can breathe slightly more easily. Congress passed just 70 laws, which may be too many. But Obama and Congressional Democrats planned an array of Big Government initiatives — gun control, immigration reform, a higher minimum wage, more job creation, infrastructure (again!), climate change, and education, to name only a few. Congress ended the year with none of those initiatives signed into law. And we are far better for it. No major tax hike, and the probability of a major tax hike in the next year has fallen.
Congress’ approval rating fell to a new low in a November Gallup poll at 9%, and 72% of Americans agreed that “big government” was the nation’s Number One threat. That is an encouraging opinion.
It used to be that a limited government with only modest aims was the guiding principle of nearly every Congressman. Until some sanity is restored to Congress, gridlock may be the best thing we can hope for. A year spent thoughtfully repealing useless laws, wretched excess, and governmental duplication would do us a world of good.
Markets have been encouraged by governmental inaction. Businessmen are not quite so frightened about what government might do next. In 2013, the growth oriented NASDAQ has surged 40%. Markets look six months to a year on down the road.
The EPA is facing real questions about just what ‘science’ they are relying on in their push for power and control. They are backing off their attempt to require 15% corn ethanol in gasoline, which will save many cars and all sorts of small engines. Inaction from the EPA would be a real boon to the economy.
The Democratic majority is running scared from the ObamaCare disaster and its potential influence on the 2014 election. The President is not going to win back the approval of the American people easily. The economy might survive after all. Let’s hear it for gridlock, and root for another do-nothing year in the nation’s capitol.
Filed under: Canada, Capitalism, Economy, Energy, Junk Science, National Security | Tags: Meaningless Words, Pretentionness, World Energy Rankings
About those national rankings: A new World Economic Forum (WEF) survey on the world’s “best sustainable energy systems” places energy self-sufficient Canada below Latvia, Costa Rica, Columbia and Romania. Huh?
The Geneva-based think tank’s latest survey of countries with the most “sustainable energy systems” put Norway as the country with the best energy system in the world. You always have to watch out when they start throwing that “sustainability” word around. It is an ever-so fashionable word, always to be thrown in to any paper deemed to be truly “serious.” And Geneva is always to be considered “serious.”
Canada, our neighbor to the north, producer of one of the world’s largest amounts of crude oil, natural gas, wind, nuclear and hydroelectricity, suddenly finds itself ranked below Latvia, which is almost entirely dependent on Russia for its fossil fuel supply. It had, however, “diversified” enough to warrant a ranking four places above self-sufficient Canada.
“The WEF,” the Financial Post says, “arrived at its befuddling conclusion after ranking countries on economic growth, environmental sustainability and energy security performance, and ‘analysing the complex trade-offs and dependencies that affect country efforts.’”
This report is absurd, of course, but governments and non-governmental organizations (NGOs) have fallen into a pattern of using words that are fashionable but essentially meaningless to show that they are “with it,” to be taken seriously. Call them navy blue pin-striped words, or Rolex words. And “sustainable” is one of the worst. Sustainable means it will last over time, and we clearly have no idea. Tomorrow is unknown.
“Diversity” is more popular in academia than in the energy business, but a way of sneaking in a bunch of unaffordable “alternate energy”systems, beloved by environmentalists, yet only exist with ongoing governmental subsidies. In either case, it is nonsense. In academia it is supposed to be desirable to have students of varying races and ethnicities, but undesirable to have diversity in their thought or politics. All will conform.
Other words that fall into the same general category are “fairness,” (who decides?), “equality,” (how?) “tolerance,”( regarding what?). The words become more meaningless as they are used to excess, and no thought is dedicated to what they really mean in the context where they are used.
Silly report. Canada ranked a paltry 14th, and the United States, soon to become the world’s number one energy producer ranked a distant 37th out of 124 countries.
Filed under: Capitalism, Democrat Corruption, Economy, Energy, Global Warming, Junk Science, Regulation, Science/Technology, Taxes | Tags: Decarbonization Fail, End User Energy Cost, Public Subsidy Forever
The German energy giant RWE just pulled the plug on one of the world’s largest wind parks, the £4 billion Atlantic Array in the Bristol Channel. RWE did so for the stark reason that “the economics do not stack up”. It’s a mantra that well reflects the entire chaotic, incoherent and frankly competing elements at the heart of Europe’s energy policies.
Big renewable energy projects will always require state intervention and public cash in pursuit of the illusory aims of decarbonization. Private investment and business venture capital, are of sounder mind, and not inclined to take on the monumental risks involved, without the safety net of government guarantees and continuing public subsidies. Often better known as crony capitalism.
A democratic electorate views its key priorities with a combination of skepticism and common sense, particularly when their first priorities, like an improving economy have gone a glimmering. RWE had complained that the government was treating environmental subsidies as a “political football” which is an accurate representation of the ideological differences at the heart of the coalition.
The British Liberal Democrat energy secretariat is philosophically committed to paying for renewable energy, apparently whatever the cost to the end energy user. George Osborne’s Conservative Treasury, on the other hand, is quite aware of the political cost of the consumer’s energy bills. Britain has been dealing with “energy poverty,” for a number of years. But the whole thing goes back to Germany’s panicked knee-jerk reaction to abandon nuclear power in the wake of Fukushima. That led to the early closure of perfectly operational power stations, many owned by RWE. That short-sighted reaction now threatens Germany with a serious power shortage. RWE knew that the Atlantic Array needed more, not less government subsidies, and there is no prospect of that happening. They have embarked on a fast track divestment of their assets, divested itself of part of its UK gas and electricity sector and are outsourcing 1,400 jobs from Europe to India.
This is a stark warning to the rest of the world that renewable energy projects come with a need for constant government subsidy. These projects do not pay for themselves. Australia is drafting legislation to abolish the country’s carbon pricing mechanism to assuage the consumer anger over soaring energy prices. Green Dreams are all very well, but business is business, and the public has had enough of governmental green dreams. Somebody really needs to tell President Obama.
Filed under: Economy, Energy, Environment, Freedom, Junk Science, Law, Regulation | Tags: Cancelling Inconvenient Laws, Climate Change Is Not the Threat, Does Duke Energy Get Off?
The Justice Department announced a couple of weeks ago that “a subsidiary of Duke Energy has agreed to pay $1 million for killing golden eagles and other federally protected birds at two of the company’s wind projects in Wyoming. The guilty plea was long overdue victory for the rule of law and a sign that green energy might be going out of vogue.”
“As Justice noted in its news release, this is the first time a case has been brought against a wind company for violating the Migratory Bird Treaty Act. The 1918 law makes it a federal crime to kill any bird of more than 1,000 different species. Over the past few decades, federal authorities have brought hundreds of cases against oil and gas companies for killing birds, while the wind industry has enjoyed a de facto exemption. By bringing criminal charges against Duke for killing 14 golden eagles and 149 other protected birds, Justice has ended the legal double standard on enforcement.”
Triumph of hope over Obama priorities. The Obama administration is about to approve a rule that will ensure the death of golden and bald eagles for the next 30 more years. Hundreds of thousands of birds die each year flying into the deadly turbine blades atop the towers of a wind farm. Many wind farms are built in mountain passes where wind is more likely, but that is the birds migrating course as well. The birds that are not chopped up by turbines are often fried by solar arrays.
It gets to be a real problem when you divide everything up into political interest groups, according to how much cash they donate. The Keystone XL Pipeline proved that Greens trump Unions. Unions trump Hispanics, and Hispanics trump Blacks. Where women fit into the priority line, I don’t know, or Gays. The good of the country, or the rule of law, are nowhere to be found. Politics trumps all.
The renewable energy business is also losing its lustre, as the public discovers how expensive “green jobs” are. In January Texas Comptroller Susan Combs reported that each wind related job in Texas, the top wind energy state in the union, cost taxpayers $1.75 million. People are also discovering that they don’t much like wind turbines that ruin scenic countryside, reduce property values and create excessive noise. Chris Clarke of KCET reported that the Ivanpah Solar Electric Generating System, a new solar-thermal project in the Mojave Desert killed 52 birds just in October, killed by the intense heat generated by the project’s mirrors.
The President does not change his mind. If he believed that Infrastructure was the key to economic growth in 2008, he still believes that today. Unfortunately, the world is changing its mind. Global warming is no longer a threat, the climate has been cooling for 17 years, and “alternative energy” is way too expensive, and in light of our new wealth in oil and gas from fracking and shale-oil projects on course to make us the Saudi Arabia of the world, maybe it’s not worth it to kill all those birds so carelessly.
And the Migratory Bird Treaty Act of 1918 is just an old law. The President can just wave his hand and say that it doesn’t apply to his administration because he likes wind and solar energy better.
Filed under: Capitalism, Democrat Corruption, Economy, Election 2014, Energy, Politics, Progressivism, Taxes | Tags: Barack Obama, Richard Epstein, Uncommon Knowledge
I am a great admirer of Richard Epstein. I like his mind and the way he thinks and I am fascinated with anyone who can speak for 20 or 30 minutes in complete sentences without pause and without a stumble. There is a perfect coordination between brain and mouth.
I am a slow thinker— clear enough, but s-l-o-w, and the connection between thought process and actual speech leaves much to be desired. I have made speeches that were
much somewhat admired, but they were short and it was a struggle. This particular video from Uncommon Knowledge from the Hoover Institution is from March of 2009. It is nevertheless completely fascinating, but over 30 minutes long, if you can make the time.
Richard Epstein discusses his personal and professional associations with Barack Obama in the video starting at 20.36 and lasts around ten minutes if you are short on time. I have found his comments on Obama to be as good a guide as I can find, and have proven accurate as situations arise. It helps to explain the inexplicable.
There is a lot that is inexplicable. The man remains much of a mystery, and as we get deeper into the weeds of ObamaCare, it is more puzzling. He does not change his mind. Once he has accepted ‘received knowledge’ he is not open to changing his mind. Hence, in spite of the collapse of the IPCC, Obama will pursue his pledge to stop global warming in its tracks. The failure of the stimulus merely means that he needs more infusions of wealth into the economy to stimulate it. See what you think.
Filed under: Capitalism, Domestic Policy, Economy, Education, Energy, Freedom, History | Tags: The American Founding, The Experts Keep Getting it Wrong, Transforming a Nation
Particularly when there is vast discontent with the way things are, there are voices that assure us that it will always be this way. The nation is changed forever by these policies that you hate, and we can’t go back to the way it was.
Of course that’s what Barack Obama promised when he dazzled Americans with his mellow baritone voice and lofty promises — it was all about Hope and Change. In the thrill of the moment people forgot to ask just what it was he meant by ‘hope’ and ‘change’. His answer was that he wanted to “fundamentally transform the United States of America.” We really should have asked for a straightforward definition of that as well.
What is it that ‘fundamentally transforms’ a nation? The two big inventions that brought the European medieval world to an end by the beginning of the sixteenth century and made the settlement of the New World possible were the printing press and the full-rigged ship. In the mid-fifteenth century there were only around fifty thousand books in all of Europe, most of them controlled by the church. By the end of the century, there were more than ten million. That is an explosion of knowledge, many books were technical and agricultural and in the hands of the growing merchant class. The full-rigged ship pushed out the boundaries of the world as it was known to Europeans.
The colony at Jamestown was founded, not by the English state, but by a profit-seeking corporation. Two intellectual inventions were vital to the development of the United States — the corporation and double-entry bookkeeping. Because of double-entry bookkeeping, it became possible for people to invest in distant enterprises and still keep track of how the investment was doing. Ferdinand and Isabella sent an accountant along with Columbus on his first voyage to ensure they got their share of the profits.
Partnerships had long been around, but in a partnership each partner is liable for the debts of the entire enterprise, a large risk. The joint-stock company solved that problem by limiting each investor’s liability to the amount that he had invested. This was completely different from the Spanish and French who sought to control all aspects of their subjects’ activities and to convert Indians to the Catholic religion.
The profit-seeking Virginia Company’s investment in America desperately needed something to sell profitably in England to defray the costs of maintaining a settlement. In 1612, a man named John Rolfe obtained some tobacco seeds in the West Indies, and brought them back to try in Virginia soil. In 1618 twenty-thousand pounds of tobacco were grown in Virginia and shipped to England. In 1629 it was one and a half million pounds.
In New England, both Plymouth and Massachusetts Bay were founded by joint stock companies.The members of the corporations who came to New England were called planters. Those who remained in England and invested money were called adventurers — which gave rise to today’s term venture capitalist.
There were already fishermen in villages like Marblehead and Gloucester in Massachusetts, and the banks off New England were a perfect habitat for cod that grew to 200 pounds. Cod exports soon became a mainstay of the economy, but the cod waste — the bones, skin and guts — went to fertilizing New England fields — which made a big difference in the thin rocky soil.
The Puritans believed firmly in reading the Bible, and had the highest literacy rate in the Western world, and as soon as they built a church they were apt to build a school. Harvard College was founded just six years after the Puritans landed.
New England exported lumber, ships masts, soap, butter, cheese and the produce of the farms. By the end of the seventeenth century New England had become one of the great shipbuilding centers of the world, and a truly diverse economy. The innovations came from ordinary people in an extraordinary land, creating what was needed to improve their lives. Far distant from an interfering government, people were free to follow their ideas and dreams. A heritage that is as natural to Americans as breathing.
Which brings me to an article in the Wall Street Journal about “The Outsiders Who Saw Our Economic Future.” “In both America’s energy transformation and the financial crisis, it took a group of amateurs to see what was coming.”
Part of Barack Obama’s transformation of America for the 21st century was reaching back to our most ancient sources of energy to save us from global warming. His election was “the moment when the rise of the oceans began to slow and the planet began to heal.” Obama was cutting the number of licenses and permits for drilling on federal lands, and in federal waters. These two quotes are not from the same speech, but capture the drift.
We’re offering a better path, a future where we keep investing in wind and solar and clean coal; where farmers and scientists harness new biofuels to power our cars and trucks; where construction workers build homes and factories that waste less energy.
And yes, my plan will continue to reduce the carbon pollution that is heating our planet because climate change is not a hoax. More droughts and floods and wildfires are not a joke. They’re a threat to our children’s future.trucks; where construction workers build homes and factories that waste less energy.
Around the same time a few little-known wildcatters began pumping meaningful amounts of oil and gas from U.S. shale formations. A country that was once running out of energy is now on track to become the world’s leading producer.
The resurgence in U.S. energy came from a group of brash wildcatters who discovered techniques to hydraulically fracture—or frack—and horizontally drill shale and other rock. Many of these men operated on the fringes of the oil industry, some without college degrees or much background in drilling, geology or engineering.
Federal Reserve chairmen Alan Greenspan and Ben Bernanke failed to foresee the financial meltdown. Top banking executives were stunned, and leading investors such as Bill Gross, Jim Chanos and George Soros didn’t fully anticipate the downturn.
John Paulson began researching housing and scored a record $20 billion for his hedge fund by betting against subprime mortgages. as did Jeffrey Greene a Los Angeles playboy, and an out-of-work 35 year-old, and a doctor turned stock investor who did not subscribe to the common wisdom that the Fed would not let housing crumble and the real estate boom would continue. A fabulously successful bet against common wisdom.
The “experts” don’t always have the answers. Progress does not only not move in a straight line, it doesn’t move along party lines. It does not come from wise all-knowing experts in government who know just what to do. They don’t. Americans are free people in an extraordinary land, and they do pretty well without excessive regulation and regimentation. There is a point at which the ‘experts’ overreach. We’re almost there.