Community College Free-For-All

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Obama keeps puffing on the horn of taxpayer plenty, this time proposing free tuition at community colleges for all comers. This is a misapplication of the empirical observation that earned income is positively related to the level of education.

Supporters of “college for all” naively assume that enabling college enrollment will always translate into actual learning and success on the job market, or that college is always a good idea. Those assumptions are incorrect. Not everyone is capable of benefitting from higher education. It is a disfavor to them, and to their more academically competitive peers, to encourage them to enter an environment in which they are likely to fail or benefit less than in other pursuits, and where they will absorb scarce educational resources such as facilities, equipment, and instructor time and effort. And if less capable individuals are allowed to “succeed” under more relaxed standards, the degrees they earn will be degraded. Moreover, as Peter Theil has emphasized, we tend to think “too highly of higher eduction,” as if it is always one’s best option. In fact, that may not be true for even the most talented individuals, who may be capable of accomplishing greater things without it, and sooner!

But what real costs and benefits can be expected from Obama’s latest proposed giveaway? Scott Shakford at Reason summarizes and critiques the program, explaining that community college administrators are likely to be the chief beneficiaries. Shakford also notes that the program is likely to encourage grade inflation, based on the minimum GPA requirements built into the program. This op-ed in the Digital Journal points out that Obama’s plan will also encourage grade inflation at the high-school level, so as not to “unfairly” deny students their new opportunity to matriculate into community college.

Shakford at Reason puts the total cost to taxpayers at $34 billion, but it is based on an administration estimate that 9 million students could attend community college free-of-charge. It is not clear whether that number is net of those already attending for free. Tyler Cowen offers links to some good discussions of the plan, one of which notes that community college is already free on average for low income students via Pell grants. Higher income students obviously stand to gain, however, so the plan’s targeting of benefits is perverse. Community college completion rates are already quite low, and Cowen notes that the rate for marginal students pulled in by Obama’s program is likely to be even lower, which would further diminish the value of the degree on the labor market.

“Free stuff” always sounds so good and well-intentioned that is it difficult for many to oppose. But free stuff generally means that resources must be diverted from more highly-valued uses for little or no gain. After all, the value of the freebie to beneficiaries of a politician’s scheme can be minimal and they’ll still be takers. Taxes to fund the diversion of resources creates other perverse incentives.

Funding the education of promising but needy students may be quite worthwhile, but offering a free post-secondary education for all will grossly misallocate resources and carry a high social cost.

Big Daddy Wants To Neutralize Your Net

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Net-Neutrality

Once again, President Obama is trying his hand as populist candyman, now pressing the FCC to adopt “net neutrality” rules for regulating internet service providers (ISPs) as common carriers. Net neutrality refers to regulations on ISPs that would prohibit different treatment of different types of internet content, matters that are better left to market participants. Obama has no idea what he’s doing or who he’ll be hurting (hint: internet users of all stripes). The candy is an illusion. Peter Suderman’ has an aptly titled article on this topic at Reason: “Will 2015 Be the Year the FCC Regulates the Internet Back to 1934?” He offers some background on the history of U.S. telecommunications regulation and explains the context within which FCC Chairman Tom Wheeler and the Commission will deal with the issue. Suderman closes with this thought:

If Wheeler does take this route (reclassification of ISPs as common carriers], as he now seems to determined (sic), we’ll end up with an Internet that is more regulated, more subject to regulatory uncertainty in the near-term, and more like a public utility from another era than an information delivery service for the modern age. It’ll be 2015—but for the Internet, it’ll be 1934 all over again.

Wired also gives its perspective but implies that Wheeler is seeking ways to reclassify the ISPs, impose neutrality rules, while also creating sufficient exceptions to mollify the ISPs, avoiding litigation as well as market disruption. That would be nice as far as it goes.

Net neutrality is a misnomer, as Sacred Cow Chips has discussed on two previous occasions in “The Non-Neutrality of Network Hogs“, and “Net Neutrality: A Tangled Web“. A lowlight is the corporate cronyism inherent in calls for net neutrality. The biggest beneficiaries are not consumers, but large content providers such as Netflix and Google, though the latter has altered its position on neutrality now that it is entering the market as an ISP. Another lowlight is the disincentive for network expansion created by forced subsidies to the large content providers, who are extremely heavy users of internet capacity.

Jeffrey Eisenach at AEI picks apart the arguments in favor of internet regulation. He also counters assertions that consumers are likely to benefit from internet regulation. Here are two choice quotes:

And while much is made of consumers’ limited choices, the broadband market is actually less concentrated than the markets for search engines, social networks, and over-the-top video services: discriminatory regulation of ISPs cannot be justified on the basis of market power.

Finally, there’s the argument about fast lanes and slow lanes, or, in regulatory jargon, “paid prioritization.” The simple reality is that edge providers like Netflix require prioritization for their services to work. It’s just the “paid” part they don’t like.

Finally, Don Boudreaux provides two relevant quotes on regulation, one from the great Ronald Coase, along with some of his own thoughts. I close with Boudreaux’s summation:

Government imposition of “net neutrality” will substitute bureaucrats’ politically poisoned judgments on what are and what are not appropriate business practices for the market-tested judgments of legions of suppliers competing for the patronage of hundreds of millions – indeed, often billions – of consumers.

Pesticides Preferable To Pests, Damaged Crops

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The chart above is something of a joke, but it has a serious point: it provides evidence every bit as solid as some research making the rounds on social media. Bad science finds easy footholds on the internet, but more shocking is the ease with which it is tolerated and even promoted within academe. But according to Warren Meyer, we live in the age of “post-modern science“:

It means that certain data, or an analysis, or experiment was somehow wrong or corrupted or failed typical standards of scientific rigor, but was none-the-less (sic) ‘accurate’. How can that be? Because accuracy is not defined as logical conformance to observations. It has been redefined as ‘consistent with the narrative.’

Here is a particularly egregious example of scientific swill that I have seen posted several times over the past few days: “MIT Researcher: Glyphosate Herbicide will Cause Half of All Children to Have Autism by 2025“. The headline itself is more than sufficient to sound the BS alarm. This MIT “researcher”, Stephanie Seneff, is not a biologist, chemist, or geneticist. As it happens, she is a computer scientist (with advanced degrees in electrical engineering) who specializes in “text mining.” Her work, apart from serving as an activist, involves finding correlations between the appearance of words and “adverse outcomes” in reports and literature. She has a reputation in the scientific community as a bit of a “quack”. In this case, HuffPo goes so far as to say that her glyphosate research is “dumb.” Discover has also objected to Seneff’s work, and MIT’s tolerance of it.

A frequent refrain in critiques of research is that correlation is not causation, a fact that is demonstrated by the chart above and Seneff’s research. At best, Seneff presents evidence of correlation between the uses of certain words, the selection of which may be subject to severe bias. In addition, there is no convincing evidence that autism is increasing, but there is plenty  of evidence that the definition and diagnosis of autism have expanded dramatically. There is increasing evidence that autism is often of purely genetic origin.

Here are a couple of other useful links debunking Seneff’s work:

Medical Doctors weigh in on Glyphosate Claims

Stephanie Seneff: Following the Geiers dumpster-diving in the VAERS database

Synthetic pesticides like glyphosate are applied to crops in low concentrations that are unlikely to cause harm. So-called natural pesticides are often applied more heavily because they are less effective at controlling pests. It is not clear that one is safer than the other. Here is a nice piece on synthetic vs. natural pesticides.

Kevin Drum has asserted that the internet contributes to “cognitive inequality”. That is, it “makes smart people smarter and dumb people dumber”. The spread of disinformation like Seneff’s research via social media is a good case study of the latter part of Drum’s claim.

A big hat tip to members of the Facebook GMO Skepti-Forum for many of the links above.

Statists Can’t Imagine Liberty

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Imagine all the people, living for today AND tomorrow, free to do whatever the hell they want, creating, trading, investing, growing, playing, praying, partying. But any human initiative to improve upon the harsh conditions of the natural world is apparently offensive to the nihilistic sensibilities of those on the Left (as are a host of other freedoms). That attitude is often expressed by gentry leftists, already living quite comfortably, without recognition that the statist policies they advocate would render the same conditions unattainable for most others and probably unsustainable for themselves. The hypocrisy is glaring. Here are links to a few recent articles and posts illustrating the duplicity of the Left.

Jonah Goldberg has some fun with a recent piece on the many double standards of the Left. According to Don Boudreaux, this piece is flawed only in Goldberg’s use of the term “liberal” rather than the more accurate “statist”:

If you work from the dogmatic assumption that liberalism is morally infallible and that liberals are, by definition, pitted against sinister and — more importantly — powerful forces, then it’s easy to explain away what seem like double standards. Any lapse, error, or transgression by conservatives is evidence of their real nature, while similar lapses, errors, and transgressions by liberals are trivial when balanced against the fact that their hearts are in the right place. Despite controlling the commanding heights of the culture — journalism, Hollywood, the arts, academia, and vast swaths of the corporate America they denounce — liberals have convinced themselves they are pitted against deeply entrenched powerful forces and that being a liberal is somehow brave. Obama, the twice-elected president of the United States, to this day speaks as if he’s some kind of underdog.

To digress briefly, Boudreaux elaborates on the true meaning of liberalism here.

This essay by Walter Russell Mead, “The Liberal Retreat,” describes the state of the leftist agenda after six years of the Obama Administration. It is written from more of a conservative point of view than my preferred libertarian position, but it is very much on-target in its assertion that the “body politic” is not buying into the leftist agenda. We are post-“peak Left”:

Shell-shocked liberals are beginning to grasp some inconvenient truths. No gun massacre is horrible enough to change Americans’ ideas about gun control. No UN Climate Report will get a climate treaty through the U.S. Senate. No combination of anecdotal and statistical evidence will persuade Americans to end their longtime practice of giving police officers extremely wide discretion in the use of force. No ‘name and shame’ report, however graphic, from the Senate Intelligence Committee staff will change the minds of the consistent majority of Americans who tell pollsters that they believe that torture is justifiable under at least some circumstances. No feminist campaign will convince enough voters that the presumption of innocence should not apply to those accused of rape.

It is a point of no small irony that many on the Left express apprehension about the prospect of normalized relations between the U.S. and Cuba. Heaven forbid that this process might introduce the fruits of capitalism to Cuban shores. Here’s an interesting (and disturbing) take on Castro’s Hipster Apologists:

Flickering across my computer screen, elements of the left were uniting with elements of the right, insisting that Cuba remain in the cold, a museum of the Cold War isolated from both the glories and evils of American culture. One lefty tweeter even complained that an invasion of icky American tourists would undermine ‘family values’ in Cuba.

American universities are hotbeds of egalitarian philosophy as well as identity politics. Here’s a good example of the consequences of this sort of leftist mind freeze in an opinion piece by an economics professor at the University of Wisconsin, W. Lee Hansen, on an initiative to use grading quotas at the school:

I would argue to the contrary that many students will suffer academically if they receive the artificial boost of higher grades than they actually earned just because they happen to be in a ‘targeted group.’ Students need accurate feedback on how they’re doing, not inflated grades that boost their egos.

I would also argue that the university’s reputation will be diminished by these efforts at equalizing grades between groups. Pressures to eliminate grading gaps will lead to the ‘dumbing down’ of courses and, even more likely, grade inflation for targeted minority students. This pretend solution won’t make the university better for anyone.

Any university making use of grading quotas deserves scorn. It’s sad that a great institution like Wisconsin-Madison would stoop to such a practice. Then again, egalitarian philosophy and identity politics deserve scorn. These are ideas that ultimately breed envy, hatred and social failure.

Alluring Apocalypse Keeps Failing To Materialize

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Past predictions issued by the global warming community have been spectacularly bad. So bad that “climate change” has replaced “global warming” as the preferred label among adherents. The modelers have constructed something of a false reality, often confusing model predictions with actual data in their “findings”, but faithful followers do not grasp the fiction of that modeled world. Climate models incorporating carbon forcing effects have a poor track record, consistently over-predicting temperatures. Predictions of more severe weather have also failed to pan out. To the contrary, severe weather events such as hurricanes and severe tornadoes have been in a quiet period.

The exaggerated claims extend to such topics as sea-level changes, ocean temperatures, sea ice extent, and a variety of other issues. Some recent warnings are particularly outrageous: A recent study published by the World Health Organization (WHO) claims that anthropomorphic global warming (AGW) will kill 5 million people over the two decades beginning in 2030. It is discussed here at the CATO blog, which quotes a rebuttal by Indur M. Goklany:

Firstly, [the WHO study] uses climate model results that have been shown to run at least three times hotter than empirical reality (0.15◦C vs 0.04◦C per decade, respectively), despite using 27% lower greenhouse gas forcing.

Secondly, it ignores the fact that people and societies are not potted plants; that they will actually take steps to reduce, if not nullify, real or perceived threats to their life, limb and well-being. …

Finally, the WHO report assumes, erroneously, if the IPCC’s Fifth Assessment Report is to be believed, that carbon dioxide levels above 369 ppm – today we are at 400ppm and may hit 650ppm if the scenario used by the WHO is valid – will have no effect on crop yields.

So, not only does the WHO study exaggerate risks, but when it comes to human survival, it’s policy prescriptions may have the wrong sign! That is, a warmer climate is more likely to result in improved crop yields, nutrition, and human welfare.

CATO provides further evidence of humanity’s ability to adapt from a recent study of heat stress mortality in the U.S. The CATO author states:

… the U.S. population has, ‘become more resilient to heat over time’—in this case from 1987 to 2005—led by the country’s astute senior citizens. This discovery, coupled with many other similar findings from all across the world (Idso et al., 2014), adds yet another nail in the coffin of failed IPCC projections of increased heat related mortality in response to the so-called unprecedented warming of the past few decades.

A so-called “Friday Funny” post from Watt’s Up With That (also linked at the first CATO post above) provides a wonderful compendium of “Over a Century’s Worth of Eco-Climate Predictions and Disinformation,” containing such jewels as the following quotes:

David Brower, a founder of the Sierra Club: ‘Childbearing should be a punishable crime against society, unless the parents hold a government license. …’

Presidential candidate Barack Obama, January 2008: ‘Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket. Coal powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.’

Chicago Tribune August 9, 1923: ‘Scientist says Arctic ice will wipe out Canada.’

Kenneth E.F. Watt in ‘Earth Day,’ 1970: ‘If present trends continue, the world will be … eleven degrees colder by the year 2000. This is about twice what it would take to put us in an ice age.’

Michael Oppenheimer in ‘Dead Heat’, 1990: ‘(By) 1995, the greenhouse effect would be desolating the heartlands of North America and Eurasia with horrific drought, causing crop failures and food riots… (By 1996) The Platte River of Nebraska would be dry, while a continent-wide black blizzard of prairie topsoil will stop traffic on interstates, strip paint from houses and shut down computers…’

Many other bone-headed predictions appear at the link. Sacred Cow Chips has a few previous posts on the topic of AGW.

Needless to say, the media and many pundits love a disaster scenario. The climate warmists seem to understand this and are eager to offer a steady flow of propaganda for the media to offer to the public. They encourage acceptance of an energy poor world and ultimately greater poverty and human suffering. They also encourage an acceptance of state authority and coercive force as the ultimate guarantor of human survival, despite the tenuous evidence of climate risk and a long track record of government failure in addressing social problems.

Keynesian Bull Chips

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Keynesians have some unfortunate propensities. Quick to blame insufficient private demand for economic ills, they propose to ratchet government to higher levels to make up for the supposed shortfall. That diagnosis is often debatable; the prescription may be a palliative at best and destructive at worst. A fashion among Keynesians is to invoke warnings about the dangers of deflation, a hobgoblin providing additional cover for expansionary monetary and fiscal policy. Then, the mantra of infrastructure spending is invoked, ignoring the many political, regulatory and technical obstacles to efficient execution of favored infrastructure initiatives, even as promising but disfavored private infrastructure projects are blocked. This form of activism is thus revealed as simple statist, agenda-driven politics.

John Cochrane covers these and other pathologies of the Keynesian mindset in “An Autopsy for the Keynesians.” His wsj.com op-ed might be gated, but you can also try the first link given here. From Cochrane:

Stimulus advocates: Can you bring yourselves to say that the Keystone XL pipeline, LNG export terminals, nuclear power plants and dams are infrastructure? Can you bring yourselves to mention that the Environmental Protection Agency makes it nearly impossible to build anything in the U.S.? How can you assure us that infrastructure does not mean “crony boondoggle,” or high-speed trains to nowhere?

Keynesians warn that policymakers must actively mitigate the risk of deflation, but there are strong reasons to believe that deflation is more friend than foe. Cochrane makes that point in this post on the CATO Institute web site, distinguishing between deflations precipitated by financial crises and those induced by gains in productivity or other positive shifts in aggregate supply, such as the current oil supply boom, which involve healthy declines in the price level

This post by Christopher Casey at the von Mises Institute discusses the monetary causes of “bad” deflations. Jerry Jordan emphasizes some conceptualizations of money as a factor of production here, noting that stable money, as an input complementary to capital and labor, tends to boost the economy’s productivity (and reduces prices):

It is important to note that a condition of “rising purchasing power of money” is most commonly described by the pejorative “deflation.” This unfortunate custom has caused most observers to believe that a gradually falling “price level” is as bad, or even worse than, a gradually rising “price level.” Our analysis concludes there can be—and historical experience has demonstrated—“virtuous deflations” during periods of rapidly rising productivity.

Government’s Siren Song of Mortgage Risk

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What’s not to like about cheap, easy housing credit? It would be hard to criticize if it developed in response to real risks and rewards in a free market, devoid of interference by public authorities. Lenders with their own capital at risk tend to keep their pencils sharp when assessing collateral and borrower repayment capacity; borrowers respond to rate incentives by adjusting the timing of their consumption and their borrowing demands. This helps keep the extension of credit at manageable levels relative to earning power, and discourages destructive boom and bust cycles in housing prices. Conceivably, such arrangements could give rise to a more stable and prosperous economy with relatively, realistically easy credit as a by-product. If so, I’m all for it.

Unfortunately, that is not the sort of housing finance market we have in the U.S. In particular, bank lending often carries little real risk to anyone but taxpayers. Depositors who fund bank lending are almost always 100% federally-insured. As for bank capital, large institutions may be rational to regard themselves as too-big-to-fail, meaning that federal authorities will come forward with bailout money should they fall on hard times. Borrowers are encouraged by mortgage agency buyers (Fannie Mae and Freddie Mac) whose implicit federal guarantees reduce the nominal cost of borrowing, and whose standards of credit quality tend to move procyclically. Borrowers are subsidized by the tax deductibility of interest costs. Bankruptcy laws and foreclosure rules make collecting on bad debts more difficult. Finally, there is always pressure on lenders to engage proactively in high-risk community lending.

When risks are meaningless to market participants and rewards are inflated, the normal self-regulatory function of the market is suspended. Who cares about mistakes when you don’t have to pay the consequences? But society ultimately pays in misallocated resources, higher taxes and unstable markets. And while the costs to lenders and borrowers are blunted, most don’t get off scot-free: other consequences may include falling housing prices, widespread personal bankruptcies and damaged credit, foreclosures, stricter regulatory oversight, and a prolonged follow-on episode of hard credit.

The expansion of credit leading up to the housing crisis was marked by the rise of non-traditional mortgage products, which typically involve risky collateral and borrowers with tenuous credit. Interest-only mortgages reduce the borrower’s monthly payments, but the borrower fails to build their equity cushion over time. Payment option adjustable rate mortgages (ARMs) can be criticized on the same grounds, except they are arguably worse. Subprime mortgages are characterized by high loan-to-value ratios and tend to be marketed to borrowers with less than stellar credit histories.

Arnold Kling reviews a new book by Peter Wallison on the role of “non-traditional” mortgages in the financial crisis. Wallison highlights the culpability of government in encouraging the subprime lending boom, especially Fannie and Freddie. He also points to the failure of government to institute real reforms to prevent the recurrence of such a crisis:

Congress mandated regulation of practices that played no role in the crisis, either because legislators wanted to mislead the public or were themselves misled. Meanwhile, they did not confront the issue of what do about Freddie Mac and Fannie Mae, and they left the door open for the return of nontraditional mortgages. Indeed, Melvin L. Watt, the recently appointed regulator of Freddie Mac and Fannie Mae, is once again calling for the loosening of underwriting standards.

The drift back to risky lending is underway. Dodd-Frank will not stop it or end “too-big-to-fail” risk-taking and cronyism. The best advice to potential borrowers is to emphasize adverse personal and economic scenarios when evaluating a loan offer, and try to resist the temptation to over-invest in housing. AS voters, we  should demand an end to destructive government intervention in housing markets and home lending.

The Incredible Glibness of Being Gruber

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Gruber Comic

Jonathan Gruber is apparently a man of contradictions. He told a congressional committee last week that he “did not write any part of the Affordable Care Act.” He was asked at the hearing why he had claimed in 2012 that he did write part of the law. According to Peter Suderman, writing in Reason, Gruber replied “that it was ‘an effort to seem more important than I was,’ and that he was ‘speaking glibly.’” Video evidence of Gruber’s glibbery keeps stacking up in the wake of his sworn testimony.  He made the same “glib” claim at least twice in 2010 and again in 2012. In those videos, Gruber seemed pleased to issue disclaimers to his econ classes at MIT and other audiences that he “helped write” the ACA (Obamacare). From Suderman:

There is no way to reconcile his multiple past statements with the statements he made this week while under oath. Either Gruber spent two years lying about his role in writing the law, or he was lying this week in his sworn congressional testimony.

Now, Gruber has been subpoenaed again by the House Oversight Committee, this time in relation to his work and the income he earned as an Obamacare advisor. However, the subpoena covers all documents and exchanges with government employees, including work product, the results of economic model simulations, and any communications related to contracts and the funding of his research. Poor Gruber is in hot water. Lying to Congress, if that charge were pressed, could earn him up to five years in prison.

Of greater importance is that he very likely furnished the administration, as the law was being drafted, with economic projections showing that some existing private health plans would be cancelled. In his testimony last week, he admitted that his model simulations showed as much. Of course, President Obama was quite glib in his repeated assertions that “if you like your health plan, you can keep your health plan.” From Reason:

Shouldn’t that mean that Gruber knew that administration’s repeated promises that those who like their health plans could keep their plans under the law weren’t true? 

Gruber was asked about the promise…. ‘I interpreted the administration’s comments as saying that for the vast majority of Americans the law would not affect the productive health insurance arrangements that they have,’ he said. ‘I did not see a problem with the administration’s statement.’

Of course he didn’t. Gruber is, after all, someone who argued that ‘lack of transparency’ was key to passing the health law.

In fact, on the question of lost coverage, Gruber’s own comic book on the ACA made the same assurances as the Administration. See the frame at the top of this post! More contradiction.

Another crucial point is that Gruber claimed to have written the part of the ACA related to state health insurance exchanges. He stated on multiple occasions (captured on video) that the federal health insurance subsidies created by the ACA were intended as incentives for states to create their own exchanges. The “plain language of the law” is consistent with that claim; it is explicit in providing for subsidies only when a policy is purchased through a state exchange, not a federal exchange. Next year, the Supreme Court will hear the case King vs. Burwell, which turns upon whether the law itself disqualifies ACA insurance buyers in 36 states from collecting federal subsidies. Gruber’s videos appear to be quite damaging to the government’s case.

The State and The Invisible Future Lost

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Lost opportunities can have far reaching consequences. Our society routinely destroys economic opportunities as a matter of policy. This includes immediate discouragement of economic activity via tax disincentives and regulatory obstacles as well as lost capital investment and innovation.  And it includes actions that grant protected status for monopolists, a steady by-product of the regulatory state. Don Boudreaux at Cafe Hayek posts a letter from a reader and his own thoughts on these points. From the letter:

California has 3,754 wineries and they provide good wines for customers, jobs for employees, profits for owners, and fun places to visit. Imagine if Prohibition had never ended or if regulations were such that a mere five wineries produced all the wine for the entire country. Who would have known what we would have been missing?

The damage of such policies goes on and on, and the negative effects compound with the passage of time. But those effects are seldom visible when policies are made. We never observe the bounty of the counterfactual when a new plant or shop isn’t built, a new shift isn’t added, a new company isn’t formed, a price increase isn’t discouraged by competition, or when inventions and discoveries aren’t made. From Boudreaux:

The unseen includes also, and more importantly, the greater and better and completely different goods and services, the newer and safer and less-resource-intensive ways of production, and the more full prospects for human flourishing and the heightened hopes and the improved and expanded life-style options that human creativity – unleashed by free markets and governed by open competition and private property rights – makes possible.

Technology and the advance of knowledge is a process that builds upon itself. The achievements of recent decades were impossible for us to have imagined beforehand, but much more might have been possible. Looking forward, the opportunities lost to today’s stultifying policies will become more staggering as the decades pass, losses much greater than we can imagine today.

Live Long and Prosper With Fossil Fuels

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Do your friends have even a clue as to the massive cost of eliminating fossil fuels? What it would mean for their way of life? Perhaps they do, but it’s not polite to admit to such obvious truths in many circles. Alex Epstein cares enough to tell the world about the spectacular benefits and currently dismal alternatives to fossil fuels in his new book, The Moral Case For Fossil FuelsHis thesis and and a few of his arguments are reviewed in a pair of posts by Bryan Caplan, who really likes the book. According to Caplan:

Epstein’s book has two key claims. His first claim is descriptive: Laymen and experts alike greatly underestimate the benefits of fossil fuels and greatly overestimate their costs… .

Epstein’s second key claim is normative: Human well-being is the one fundamentally morally valuable thing. Unspoiled nature is only great insofar as mankind enjoys it… .

Both claims strike me as reasonable, though the first is true only as a generalization about modern energy mythology, punditry and statist philosophy. In fact, one might say that society acts as if it understands the benefits of fossil fuels very well, as evidenced by our emphasis on maintaining a high and/or growing standard of living supported by these energy sources. Yet the popular misconceptions are a reality, and we persist in choosing leaders who favor policies that handicap fossil fuels and human well-being.

Caplan offers some choice quotes from Epstein’s book. I repeat only three. The first is on the benefits of plentiful energy:

Energy is what we need to build sturdy homes, to purify water, to produce huge amounts of fresh food, to generate heat and air-conditioning, to irrigate deserts, to dry malaria-infested swamps, to build hospitals, and to manufacture pharmaceuticals, among many other things. And those of us who enjoy exploring the rest of nature should never forget that energy is what enables us to explore to our heart’s content, which preindustrial people didn’t have the time, wealth, energy, or technology to do.

The second quote might seem controversial to some, but it is unequivocally true:

“[W]hen we look at the data, a fascinating fact emerges: As we have used more fossil fuels, our resource situation, our environment situation, and our climate situation have been improving, too.

The third quote is about the drawbacks of some prominent alternative energy sources:

Traditionally in discussions of solar and wind there are two problems cited: the diluteness problem and the intermittency problem. The diluteness problem is that the sun and the wind don’t deliver concentrated energy, which means you need a lot of materials per unit of energy produced…

Such resource requirements are a big cost problem, to be sure, and would be one even if the sun shone all the time and the wind blew all the time. But it’s an even bigger problem that the sun and wind don’t work that way. That’s the real problem– the intermittency problem, or more colloquially, the unreliability problem. As we saw in the Gambian hospital, it is of life and death importance that energy be reliable.

There is no doubt that technology will someday bring better and cleaner energy sources, but we are nowhere close. The flow of subsidies to weak alternatives destroys resources, and the subsidies themselves skew heavily toward the upper end of the wealth distribution. And of course, popular fears about nuclear energy have limited our ability to diversify. For the indefinite future, we would do well to embrace plentiful and cheap fossil fuels, especially to help reduce poverty and poor living conditions in the developing world.