Comments (64)

• np

  ford makes crappy cars. it's got nothing to do with environmentalism. crappy cars don't sell.

  Published: September 10, 2006 6:43 AM

• Vince Daliessio

  np, Ford actually led the domestic manufacturers in overall quality for a number of years, and consolidated a bunch of manufacturing worldwide, along with buying other marqes, some of which have been profitable (Volvo, Aston-Martin), others not (the disappointing Jaguar, the train wreck that is Range Rover). Bill Ford chased Jac Nasser out (admittedly he had failed to realize much cost savings from consolidation, but had done a good job on quality)and immediately began repudiating everything Ford had started doing correctly. He chased Carlos Ghosn out of Mazda too, after he performed minor miracles there, to the great benefit of Nissan and Renault. Ford should sit back and let professional management get the company back in shape, if it isn't already too late.

  Published: September 10, 2006 10:36 AM

• David C

  Ah, but you are wrong. You see Ford couldn't compete because the unions and regulations were bogging it down. So what they did was try to get government to create massive enviro regulations to drive used cars out of the marketplace while upping the barriers for entry for new entrants. So Ford had every reason in the world to be "pro environment".

  Ford's real mistake was going along with the EZ fed credit game. Now the economy is too saturated in debt, and when consumers must choose between their house and their over expensive SUV, the house will win out every time. Their other mistake was assuming that the govt will always protect them from outside competition - they were wrong.

  Published: September 10, 2006 6:29 PM

• np

  toyota doesn't seems to have no trouble selling 'environmentally freindly' cars.

  Published: September 10, 2006 8:24 PM

• Mark Brabson

  Toyota and Honda have the good fortune of not being crippled with labor unions. Almost all of their operations are non union. Besides being a cheaper workforce, more importantly it is flexible and efficient. Something that is impossible in a Union workplace, with seniority rules and ridiculously restrictive job definitions.

  I think the unions are probably the biggest single burden on the domestic automotive industry. There are other burdens as well, but the unions are the most pervasive.

  Published: September 10, 2006 9:24 PM

• M E Hoffer

  This article is an amazingly myopic piece of hack-ism. The link to Faux-News is, almost, over-the-top poetic comedy.

  The only use I can really imagine for this "work", is to label it: "Satire", and post it at, literally, www.treehugger.com .

  Published: September 10, 2006 9:37 PM

• TokyoTom

  Dear Ms. De Coster:

  I'm not sure I understand why you're so enamoured of "junkman" Steve Milloy, who plays the role of court jester for Exxon on climate change matters and self-appointed gadfly to corporations that try to paint themselves as "green". The second role is also entertaining, but in acting in a gadfly capacity Milloy does not thing more than take a page from the book of the greens by also trying to exact a pound of flesh from large corporations; this serves only to perpetuate the twin problems of corporate statism and feeble private property rights that have turned large corporations into an environmental battleground.

  In the case of Ford, one should not forget that Bill Ford's family have been fleecing the company for years by taking out millions in unjustifiable dividends, as was noted here: http://www.lewrockwell.com/englund/englund23.html

  In the case of BP, Milloy fails to make any coherent point at all. One might note that Exxon and the other members of the API have acknowledged that climate change is a real problem for which action is justified now. What remains to be seen is when the Administration will decide that it is in our long-term interests to cease subsidizing environmentally destructive practices at home, and to cease subsidizing the environmentally destructive economic development of our growing rival, China.

  Regards,

  TT

  "I believe that it is better to tell the truth than to lie. I believe that it is better to be free than to be a slave. And I believe that it is better to know than be ignorant."

  - H. L. Mencken

  Published: September 11, 2006 12:59 AM

• Karen De Coster

  Toyko Tom:

  Perhaps on second check you will note that I found Milloy's column and topic very worthwhile, drawing out additional comments on the topic. It is only in *your* words that I am "so enamoured" of Milloy and every single thing he's ever done or said. Perhaps you'll someday accept the notion that an agreement with a particular thesis is not nesessarily a blanket approval of a person's complete anthology of thought. Or is that too difficult to grasp? You are free to post, on your own blog, attacks on Milloy's 1,295 other columns that are not the subject of this here post.

  I suppose it's easy, however, to make such egregious statements when you refuse to use your real name.

  
  Karen De Coster

  Published: September 11, 2006 10:42 AM

• Person

  Karen: I don't have anything to say about the matter on which you posted, but I feel I should respond to your last statement: "I suppose it's easy, however, to make such egregious statements when you refuse to use your real name."
  
  Whatever else you find wrong with TokyoTom's posts, I think it's unfair to criticize his use of a pseudonym. Many posters here with admin privileges are very vindictive, and will use whatever powers they have to "get back" at posters they don't like. We already saw here how Stephan Kinsella was ready to reveal (what he falsely believed to be) my personal information to intimidate me from posting further. And of course, I only went to using a pseudonym because previously a poster here with admin privileges had used information he knew about me from outside in an attempt to intimidate me.
  
  While I may disagree with what a lot of TokyoTom says, on the matter of protecting oneself from errant Mises blog admins through a pseudonym, I am with him 100%.

  Published: September 11, 2006 11:49 AM

• David White

  Let's cut to the chase here and point the finger at the real culprit: the federal government's subsidization of Middle Eastern Oil -- http://www.evworld.com/view.cfm?section=communique&newsid=11520 -- which has so distorted prices at the pump that automakers have had little incentive to invest in fuel-efficient and/or alternative-powered cars. Instead, we've got a ruinous war on our hands and an economy that will soon be going into freefall, as our Empire of Debt -- http://www.lewrockwell.com/french/french35.html -- collapses under its own weight (or rather, the weightlessness of its Monopoly money).

  Published: September 11, 2006 1:14 PM

• Person

  David White: The government doesn't subsidize Middle Eastern oil. We've been over this more than once here. If you have a coherent argument why you think otherwise, please try to state it in your own words.

  Published: September 11, 2006 2:10 PM

• David White

  Excuse me, Person-person, but since taxpayers fund the military, just as they do everything else, the enormous cost of securing the flow of oil from the Middle East is not reflected in the pump price. Hence it is a subsidy in that consumers don't pay (anywhere near) the full price for gasoline. (Nor do truckers, who accordingly glog up our highways with their monstrous machines and prevent the vast majority of freight from being shipped by rail.)

  These are my own words, Person-person, though if you have a problem with referencing expert analysis, you can explain why in your own words, if not with your own name.

  Published: September 11, 2006 2:58 PM

• Person

  Excuse me, Person-person, but since taxpayers fund the military, just as they do everything else, the enormous cost of securing the flow of oil from the Middle East is not reflected in the pump price. Hence it is a subsidy in that consumers don't pay (anywhere near) the full price for gasoline.
  
  

  Does not follow, sorry. This military intervention is not necessary for Americans to purchase oil; the military just gets in the way. Japan, Switzerland, India, etc etc etc seem to buy oil from these regions just the same without military interventions. Ergo, the cost of a military is not part of the true cost of bringing it over, and paying for a military does not reduce its price.
  
  

  (Nor do truckers, who accordingly glog up our highways with their monstrous machines and prevent the vast majority of freight from being shipped by rail.)
  
  Truckers *do* "overuse" the roads, but that would be a subsidy to *road usage*, not a subsidy to oil. That road-subsidy would be there even if trucks used another fuel source.
  
  Alright, so the mlitary and road "subsidies" don't count as oil subsidies. Got any other arguments up your sleeve, or are you prepared to admit you're wrong?

  Published: September 11, 2006 3:36 PM

• Mark Brabson

  Probably one of the most damaging subsidies the government imposes has nothing to do with energy at all. It is the sugar subsidy, probably the most damaging subsidy there is.

  Published: September 11, 2006 3:40 PM

• David White

  So if the government provided fuel for free, ALL freight wouldn't move from rail to road? And if it did, that wouldn't be a fuel subsidy translating into a road subsidy?

  Gimme a break. All I'm prepared to admit is that you don't know what you're talking about, else you'd present a coherent argument to counter Copulos's.

  (And by the way, since trucks do virtually ALL the damage to our roads, but pay nowhere near the cost of doing so, this road subsidy is in addition to the fuel subsidy, making matters all the worse.)

  Published: September 11, 2006 3:51 PM

• Person

  So if the government provided fuel for free, ALL freight wouldn't move from rail to road?
  
  No, traffic would eventually reduce the returns thereto -- but I have no idea what that has to do with this topic.
  
  And if it did, that wouldn't be a fuel subsidy translating into a road subsidy?
  
  It would be a fuel subsidy still. You specifically said there were OIL subsidies. A road subsidy is not an oil subsidy. A road subsidy subsidizes me irrespective of my fuel choice.
  
  Gimme a break. All I'm prepared to admit is that you don't know what you're talking about, else you'd present a coherent argument to counter Copulos's.
  
  I *have* refuted the claims in that paper that you didn't bother to put into your own words when you first posted because you're not capable of a coherent defense of it, several times on this blog. I asked you to defend some of the claims, and you couldn't. Even without referencing any facts and figures, I showed that your claims were in error because of fundamentally flawed premises. Road construction is not an oil subsidy. Military intervention does not reduce the price of oil. If you don't have any further arguments, I guess we're done here, and I've handled another crank, so to speak.
  
  (And by the way, since trucks do virtually ALL the damage to our roads, but pay nowhere near the cost of doing so, this road subsidy is in addition to the fuel subsidy, making matters all the worse.)
  
  Yes, David, I do agree that if you change the topic to something I partially agree with you on, you can save face. BUT YOU'RE STILL CHANGING THE TOPIC TO SAVE FACE BECAUSE YOU CAN'T DEFEND YOUR ORIGINAL CLAIM.
  

  Published: September 11, 2006 4:10 PM

• Vince Daliessio

  David, what you say is true too, of course large American companies try to eliminate competition by regulations and tarriffs. Cartellism is alive and well in the USA. But don't forget that the spread of unionism and worker benefits were also used in part to control competition.

  My comment was intended to address the management side of the equation.

  Published: September 11, 2006 4:31 PM

• Nick Bradley

  Person/David White,
  

  
  I think you two are talking past each other. David White is right in claiming that military power subsidizes oil prices. However, David is wrong if he is claiming the the subsidy comes back solely to the US. In fact, the subsidy does not come back to just US pumps; the subsidy is spread out to ALL oil consumers.
  

  
  Since oil is "fungible", the military subsidy lowers the price for non-middle eastern oil as well; that's why when OPEC raises prices, the cost of non-OPEC oil rises as well.
  

  
  I think David is right when it comes to fuel subsidies translating into road subsidies. ANYTHING that lowers the cost of shipping by road gives it a comparative advantage over shipping by other means. If registration fees (as an example) were eliminated, that would increase the comparative advantage of shipping by road vs. shipping by other means (I am staying away from calling a tax cut a subsidy).
  

  
  I recently undertook a cross-country move from the West Coast to the Midwest. As I was driving along these massive highways with relatively little traffic, I realized that 90% of the traffic on them consisted of large trucks. So, like any good libertarian, I started to think of ways that the (1) waste of resources could be averted and (2) the users of the interstate highways would actually pay for them. I realized that the interstate highways would be remarkably easy to privatize.
  

  
  I envisioned a setup wherein a single owner would have title to an entire interstate highway, whether it be a small highway or a massive one like (I-80), which stretches from San Francisco to New Jersey. Drivers would simply buy a sticker every year that states which highway they have paid the priveledge to drive on. Since most drivers only drive on a few select highways most of the time, they would only be paying for the roads they use. Larger vehicles would, naturally, be charged more by the private owner. I suppose stickers for highway groups and "all highways" could be bought as well. For example, I-95, I-295, I-395, I-495, and I-270 could be bought for those who live in and around DC. In addition, temporary passes could be purchased for road trips.
  

  
  The sticker tag system would be enforced by cooperation between the private owner and highway patrolmen; this would only be temporary until the private owners created their own enforcement mechanisms. The road owner and the enforcement entity (which would still be public at this point) would split the penalty fees recieved from violators.
  

  Published: September 11, 2006 4:50 PM

• Mark Brabson

  Privatizing the roadway system is exactly the right answer.

  I would make the entire limited access system a toll way. Users would be required to purchase automatic toll sensors for their vehicles, which automatically deduct tolls from their accounts. There would be no manned or coin toll plazas. Security would be provided privately by either the owner of the road's or a contractor of his choice. The most burdensome tolls would be placed on trucks and other commercial vehicles, which do the most damage. Cars would have a much lighter toll burden.

  Unfortunately, it would be impracticle to privatize the non-limited access highways, as there is no way for a private owner to charge for the service. I would decommission the non-interstate portion of the national highway system.

  Published: September 11, 2006 5:04 PM

• Nick Bradley

  Mark Brabson,
  

  
  Why all the tolls? Doesn't that make the plan all that more complicated? Do you want to stop every time you switch highways and wait in line? It's much easier to simply charge high fees for non-compliance.

  Published: September 11, 2006 5:34 PM

• David White

  Vince,

  No argument there, as I was merely trying to explain why the market can't work as it otherwise would, such the true cost of oil would stimulate investment in alternative fuels and modes of transportation.

  Nick,

  To be clear, I never said anything about the affects of the subsidy being confined to the US. All I said is that the vast sums of money that the government spends to secure the flow of Middle Eastern oil are not reflected in the pump price but are instead socialized through taxation (including tax deferral via money printing). Person can't comprehend this, so I don't know what else to say to him.

  Published: September 11, 2006 5:50 PM

• Mark Brabson

  Nick Bradley:

  We have modern high tech. toll systems here in central Florida. You have a toll sensor on the windshield of your car. As you pass by an area with a detector, it automatically charges your toll. You can pass through these toll devices at full highway speed, 70+ mph. These are the systems I would implement in a nationwide toll system. You would have to make a one-time purchase of a toll sensor for your car and maintain a billing account with the highway company. But you would never have to slow down or stop on the highway system, because the sensor would charge your toll to your account automatically. If a car entered the system without a sensor, it would be detected and removed from the toll roads by the private security.

  Published: September 11, 2006 5:56 PM

• M E Hoffer

  You guys, with your "windshield stickers" and "toll booth transponders" are stuck in the '80s.

  Bring yourselves up to speed, dial up some of the following keywords: GPS, Comet Tracker, Geo-Fencing ...for starters.

  The DHS is all over this stuff, like white on rice.

  Given the proliferation of cell phones, and the easy implementation of "mandatory" On*Star.

  We could be 90 days away from a system that mandates a "travel plan" required to be filed, a la FAA and Planes, b4 "Take-Off".

  Ya know, checking the calender, it Is the 21stC.

  Published: September 11, 2006 8:04 PM

• Mark Brabson

  M.E. Hoffer:

  I still don't own a cell phone. If somebody wants to get ahold of me, they can leave an email, or leave a message on my so 1980's primitive technology answering machine at home. :)

  I think transponders, very primitive though they might be, are quite adequate to the job of billing tolls for a privately owned highway company. :)

  Published: September 11, 2006 8:59 PM

• M E Hoffer

  MB,

  That's all well and good. :)

  I was more responding to: "I envisioned a setup wherein a single owner would have title to an entire interstate highway..." + "Drivers would simply buy a sticker every year that states which highway..."

  Think of the overhead/manpower it would take (in-)efficiently enforce that schema.

  If we had detailed road usage records--ported to the i-net for "wisdom of crowds"/ open-source oversight--highway funding/ownership --> toll revenue receipts could be traded as easily as ETFs like SPY or QQQQ. With the upshot of disintermediating "Government", if that was decided to be a "positive". No doubt the market would thin the traffic on "crowded" freeways and more than likely raise the per mile tariff on travel from Minneapolis to St. Cloud, for example.

  We have a/another Technology challenge facing us as a Society. We can either use it, again, to further entrench the current State/ Technocracy--toward Panopticon, or we can use it, as we have always had the chance before, to set free the creative ingenuity of the Human Mind and its Human Action.
  

  Published: September 11, 2006 10:25 PM

• TokyoTom

  David, Person and Nick:

  I've long held the view that the US subsidized fossil fuel consumption through our "defense" expenditures dedicated to the Middle East, but in the face of this Administration's policies and the more time I spend at this board, the less certain I am of that.

  Certainly there are tremendous defense expenditures that are rationalized in the name of energy security and protecting the flow of oil to ourselves and our allies, but after the collapse of the USSR I can no longer buy that argument. What I see instead is the opportunistic use of our Treasury for the benefit of defense contractors and political elites, with some benefits to energy companies as well. The fiscal costs are being pushed onto citizens/our children, while we also see higher energy costs resulting from increased uncertainty, along with other costs associated with our unwise foreign policies.

  I would be in favor of forcing the entire defense budget to be funded through energy taxes, just to make it painfully apparent to consumers and industry how badly we are being ripped off. Given the fungibility of oil, we would probably be better served if we spent none of our defense dollars on meddling overseas.

  Regards,

  Tom

  Published: September 11, 2006 11:03 PM

• David White

  Tom,

  "I would be in favor of forcing the entire defense budget to be funded through energy taxes, just to make it painfully apparent to consumers and industry how badly we are being ripped off."

  That's precisely the point that Person can't understand: Socializing these costs through taxation severely distorts the market by suppressing the price of gas at the pump. And even taxes are suppressed, as our welfare-warfare state is funded increasingly through deficit spending -- i.e., money printing -- that lets today's taxpayer off hook, while hanging his children on it.

  This can't go on much longer, however, as the global imbalances are simply too great. In fact, the end may well be only a year or so away, if the graph here -- http://www.minyanville.com/articles/?a=11150 -- holds up. For if the S&P continues to follow the NAHB Index in lockstep, then by this time next year it will be in the toilet, likely taking the rest of the economy with it.

  In Gold We Trust.

  Published: September 12, 2006 7:46 AM

• Person

  No, David White, you can't seem to understand a few basic concepts. Just because the government claims a program accomplishes an objective, doesn't mean government is needed to accomplish that objective. Just because the government spends billions "securing oil" doesn't mean they needed to spend those billions to secure that oil, or that the oil would unavailable if they hadn't. The nations that sell tend to like money, and would tend to like getting the sales money whether or not there was a military around.
  
  If the government is propping up a regime, and that were to stop, then whatever revolution would happen, would happen, and the new regime would sell the oil. So what if they don't sell to the nice Americans? So they sell to the Chinese instead and what would have been sold to the Chinese is sold to Americans. Big deal.
  
  Now, David, do you have a serious, non-laughable argument why oil *specifically* -- not things tangentially related to oil -- is subsidized?
  
  TokyoTom and David: Let's say that all taxes were removed from oil (including hidden taxes on the various stages of production), AND consumers had to pay their quotal share of pollution and whatever global warming it contributes to (discounted for risk and time, of course). Would oil be cheaper?

  Published: September 12, 2006 8:10 AM

• TGGP

  We were actually getting more oil from Iraq before the invasion than afterward. It was War for Less Oil, apparently.

  Published: September 12, 2006 8:22 AM

• Peter

  ... and maintain a billing account with the highway company

  Now why would you want to do that? Only because nasty statist types want to spy on you. In a sensibly-designed system, there'd be no way for the sensor to tell who was passing by, so it wouldn't know which account to bill. You could have the transponder embedded in some personal item, rather than attached to the car (then you can drive a rental car without any fuss, and use it to pay for stuff at the supermarket, too!), issuing cryptographic digital cash in such a way that the payer can't be identified (either personally, or linked to any other payments) [e.g., google for David Chaum and Stefan Brands]

  I'm thinking a single electronic gadget that serves as iPod, cell phone, PDA, digital wallet, ID, keys to your car, house, etc., remote for your TV, etc., security device for online banking, web site passwords, etc., etc. - with heavy crypto to prevent anyone else using it if you lose it/it gets stolen, and to only hand out information that's actually needed. E.g., if you want to buy alcohol (or download porn), it can provide a cryptographic proof that you're over 16/18/21, as appropriate, without giving away any unnecessary information (your actual age, your name, etc.)

  Published: September 12, 2006 8:38 AM

• banker

  I would think defense expenditures subsidize the defense industry, no? If anything, the presidents crusade to wage war against several countries at the same time for no apparent reason probably makes it harder for American oil companies to do business in foreign countries.

  PS I wish people from foreign countries would not associate the actions of Congress and the executive office with every single citizen who has an American passport.

  Published: September 12, 2006 8:39 AM

• David White

  Person,

  "No, David White, you can't seem to understand a few basic concepts. Just because the government claims a program accomplishes an objective, doesn't mean government is needed to accomplish that objective. Just because the government spends billions "securing oil" doesn't mean they needed to spend those billions to secure that oil, or that the oil would unavailable if they hadn't."

  When did I ever say any such thing? All I'm saying, whether government action is needed or not (and it is not, as all state action is ultimately anti-social action), is that if the government's massive military expenditures in the Middle East were built into the pump price instead of being socialized via taxation, the price of gas would be far higher than it is today. So please stop putting words in my mouth, and respond to what I actually say.

  "If the government is propping up a regime, and that were to stop, then whatever revolution would happen, would happen, and the new regime would sell the oil. So what if they don't sell to the nice Americans? So they sell to the Chinese instead and what would have been sold to the Chinese is sold to Americans. Big deal."

  Big deal is right, as I never said anything to the contrary or even addressed this point. So again...

  "Now, David, do you have a serious, non-laughable argument why oil *specifically* -- not things tangentially related to oil -- is subsidized?"

  Seems to me that you're the only one who finds what I'm saying laughable, so I will stick with Copulos's argument and resign myself to the fact that you can't understand it.

  "TokyoTom and David: Let's say that all taxes were removed from oil (including hidden taxes on the various stages of production), AND consumers had to pay their quotal share of pollution and whatever global warming it contributes to (discounted for risk and time, of course). Would oil be cheaper?"

  Not being a Global Warmer myself (in the sense that, if real, there's probably nothing we can do about it; and anyway, it may actually be a good thing), I would expect that fossil fuels would nonetheless be more expensive if producers were not allowed to externalize their pollution costs, as they would have little choice but to pass these costs on to the consumer.

  Published: September 12, 2006 9:47 AM

• Person

  When did I ever say any such thing? All I'm saying, whether government action is needed or not (and it is not, as all state action is ultimately anti-social action), is that if the government's massive military expenditures in the Middle East were built into the pump price instead of being socialized via taxation, the price of gas would be far higher than it is today. So please stop putting words in my mouth, and respond to what I actually say.
  
  Sorry, I couldn't tell what you were saying, so I assumed the meaning that would make some semblance of sense. I guess your argument (and I use that term loosely) had zero merit, not the "little" merit I had previously thought. You're claiming that consumers are getting a "subsidy" because a service they don't need and don't want, and has nothing to do with the production of the product, isn't included in the price. This is not a subsidy. I don't know how to make this point any clearer.
  
  Not being a Global Warmer myself (in the sense that, if real, there's probably nothing we can do about it; and anyway, it may actually be a good thing), I would expect that fossil fuels would nonetheless be more expensive if producers were not allowed to externalize their pollution costs, as they would have little choice but to pass these costs on to the consumer.
  
  And, like everyone else arguing this point, you bases these numbers on guesses you pulled out thin air. If you have an *actual* reason why you believed oil is subsidized, now's your seventh chance.

  Published: September 12, 2006 10:00 AM

• David White

  Are you trying to say that the reason the US military has spent several decades in the Middle East isn't primarily due to the presence there of the world's largest oil reserves? If not, then why is it there? If so, then why should its presence be funded via general taxation rather than as a user fee attached to the pump price, the better for the market to respond in kind?

  As for pollution costs, all I said is that "I would expect" that were these costs fully internalized, fossil fuels would be more expensive than they are today. Not having provided any numbers, there were none to pull "out of thin air," as you continue to do with my words.

  Granted, it could be that burdensome regulatory costs (which do little to solve the problem and only increase the size and scope of government) would compare favorably to what oil producers/refiners would have to pay for a market-based solution (and perhaps such a study has been done). But in any case, the fact that no one has as yet sided with you merely confirms that you're the only one who can't seem to understand what Copulos is saying.

  So why don't you try this: instead of picking on this particular messenger, why don't you pick apart Copolos's message?

  Published: September 12, 2006 10:43 AM

• Person

  Are you trying to say that the reason the US military has spent several decades in the Middle East isn't primarily due to the presence there of the world's largest oil reserves? If not, then why is it there?
  
  

  First of all, "the presence of oil" is not a reason. It's a noun. Normally, it's okay to use a noun as a reason, as the predicate is implied: "I couldn't leave because of the weather." However, in this case, when it's pretty clear you have no clue what the hell you're talking about, it simply won't do. If you meant that the US intervenes to gain access to oil, well, for the fourth time, that justification is *in error*. Imagine that -- the government inaccurately judging the effectiveness of a policy for a goal! Or are you trying to say that *because* the government claims it has a certain effect, it must be right in this regard? Or have you even thought about that?

  
  
  
  If so, then why should its presence be funded via general taxation rather than as a user fee attached to the pump price, the better for the market to respond in kind?
  
  It shouldn't be there *at all*. Even so, since the presence impedes access to oil, it seems that non-oil-users should bear more of the cost, since they lose out less, but whatever.

  
  
  As for pollution costs, all I said is that "I would expect" that were these costs fully internalized, fossil fuels would be more expensive than they are today. Not having provided any numbers, there were none to pull "out of thin air," as you continue to do with my words.
  
  I'm just highlighting that your entire position on this is based on a crude guess.
  
  

  But in any case, the fact that no one has as yet sided with you merely confirms that you're the only one who can't seem to understand what Copulos is saying.
  
  No, it's proof that anti-oil nuts are more likely to try to write poor "proof" of how much oil is subsidized, failing to realize that they're wrong. Intelligent people recognize that these "subsidies" are phony.
  
  

  So why don't you try this: instead of picking on this particular messenger, why don't you pick apart Copolos's message?
  
  Because it's grossly unreasonable to expect me to have to refute every part of every essay in every link you throw at me, and then interpret failure to do so as proof I'm wrong. There are thousands of essays on this matter, and no end to links you can send me, all of which will have numerous errors it will take years to cover. And then if I did refute one, you could say, "ohh, yeah man, good point, I just don't know a lot about this particular issue... what about these other forty essays?"
  
  If you want me to refute someone's arguments, FIRST state it in your own words as proof that you understand it and are capable of defending it.
  
  Link pile-ons: the last refuge of a scoundrel.

  Published: September 12, 2006 11:04 AM

• David White

  I couldn't read beyond your first two sentences, as they are proof that you are delusional.

  I'm moving on to "greener" pastures.

  Published: September 12, 2006 12:11 PM

• Person

  Well, I guess reasonable people can disagree about whether "the presence of oil" is a noun.

  Published: September 12, 2006 12:15 PM

• Nick Bradley

  Person,
  

  
  I think you're missing the point. US intervention DOES lower the cost of oil, but that DOES NOT justify the intervention.
  

  
  Even on utilitarian grounds it does not: US intervention DOE lower the cost of oil, but it does not lower it more than it costs to intervene.
  

  
  Or,
  

  
  Price reduction in good or service

  
  I don't know of any positive externalities from market intervention that outweigh their costs. Perhaps in the age of naval piracy the presence of the British Navy outweighed the cost (maybe).
  

  
  I suppose it's possible, however. For instance, if al-Qaida were to shut down Abqaiq (which they have tried), the world's largest Oil Production Facility (in E. Saudi Arabia), hundreds of billions of dollars would be lost in the global economy and the price of oil would skyrocket. On UTILITARIAN grounds, intervention that costs less than the epxected damage from such a strike would be justified. But to make that claim one would also have to believe the government has the power to prevent such an attack.
  

  
  A similar claim would have to be made for securing shipping through the Strait of Hormuz, the Strait of Malacca, and the Panama Canal. If a tin-pot dictator (like Ahmadinejad) shut down the Strait of Hormuz, or if a radical regime rose in Indonesia and shut down the Strait of Malacca, a similar claim could be made.

  Published: September 12, 2006 3:08 PM

• Person

  US intervention DOES lower the cost of oil,
  
  No, it doesn't. Even if I accept (which I don't) that *some* military force is necessary to keep terrorists away from extraction, having a government do it makes it more expensive, not less. I'm not trying to justify anything on utilitarian grounds (like you implied); I'm just refuting a false claim.
  
  And then, even if I accept your "analysis", your position amounts to saying that "true market forces" (i.e., wackos destroying oil fields) say that we "should" be using less oil. I don't consider wackos destroying oil fields to be a market force though.

  Published: September 12, 2006 3:41 PM

• Vince Daliessio

  Nick asked;

  "Why all the tolls? Doesn't that make the plan all that more complicated? Do you want to stop every time you switch highways and wait in line? It's much easier to simply charge high fees for non-compliance."

  The best solution is the simplest - privatize every square inch of road. Surface streets should belong to the owners of the properties they service, while highways should belong to entities that will operate them. They can charge high tolls, low tolls, no tolls, share / charge revenues with feeder roads, whatever. All of this must arise in a market order, none of it should be a matter of law unless property rights are violated.

  As a matter of principle (though there are some legacy issues arising from their creations by / as monopolies), it does not matter how the owner of the road pays for the O&M of the road, only that he owns it and charges what he wants for its use.

  Published: September 12, 2006 5:03 PM

• Gary Anderson

  When you have cheerleaders of real estate and the eonomy like David Lereah, Kramer, Kudlow and all the other shils saying that everything is ok, you may well produce too many SUV's. Since when is this the fault of Ford. If the Federal Reserve cannot really see the disaster that is coming in the housing market, then how do you expect Mr Ford to see it, unless he reads the bubble blogs. SUV's imply a cash atm in your house, er, actually being your house. This atm has closed up, maybe for years. It will hurt the guzzlers even more than high gas prices.

  Published: September 12, 2006 5:04 PM

• Mark Brabson

  I do totally support the privatization of the Interstate Highway system and other limited access roads. These roads facilitate privatization by the very fact of being limited access. The private owner would be able to control access.

  That is not possible with other highways. It is especially not possible with local roads. Privatization is a pipe dream with those roads because a private owner would have no way of collecting revenues.

  Published: September 12, 2006 5:43 PM

• M E Hoffer

  MB,

  with this: "Privatization is a pipe dream with those roads because a private owner would have no way of collecting revenues."

  Did you bother to find out anything about: Comet Tracker, Geo-Fencing, or GPS in general?

  Toll-Booths, of any kind, let alone Toll-Takers, are anachronistic, at best.

  Any road can/could be a "Toll Road", no problem at all.

  Published: September 12, 2006 6:59 PM

• Vince Daliessio

  I repeat myself;

  "They can charge high tolls, low tolls, no tolls, share / charge revenues with feeder roads, whatever."

  Smart homeowners / business owners would either contract out / rent out the roads they owned to companies that would make deals with the limited-access highway owners for improvements, signage, toll agreements, whatever to feed traffic to the highways. Or they would set up barricades, neglect their pavements, and piss off their neighbors (I happen to think the former would occur, but I'm not a utilitarian). ME Hoffer points out some revolutionary ways roads could be paid for, there will be many others, and the best solutions will arise in the market.

  Either way government has no role.

  Published: September 12, 2006 8:48 PM

• Peter

  Person: congratulations! I think this oil price thread is the first time I've agreed with anything you've posted here ;)

  David White: you keep saying "noone agrees with you", "you're the only one who finds my position laughable", etc.; (a) you're wrong: I agree with Person; (b) why does that matter? If Person is right, he's right, whether or not anyone else agrees. And in this case - mirabile dictu - he's clearly right! Argue the point, instead.

  Published: September 13, 2006 6:58 AM

• Nick Bradley

  Person,
  

  
  "No, it doesn't. Even if I accept (which I don't) that *some* military force is necessary to keep terrorists away from extraction, having a government do it makes it more expensive, not less. I'm not trying to justify anything on utilitarian grounds (like you implied); I'm just refuting a false claim.
  

  
  And then, even if I accept your "analysis", your position amounts to saying that "true market forces" (i.e., wackos destroying oil fields) say that we "should" be using less oil. I don't consider wackos destroying oil fields to be a market force though."

  
  

  
  I NEVER said that military force was necessary to keep terrorists away from extraction. I merely said that military intervention in this case ON UTILITARIAN GROUNDS ONLY if the cost of intervention is less than the damage that would have been caused.
  

  
  I don't believe that we should be using less oil.
  

  
  I also don't believe wackos destroying oil fields is a market force either. Furthermore, I do not believe that they are all "wackos", but are employing advanced fourth-generation warfare tactics to achieve their goals (read some of Lind's articles at LRC sometime to under stand 4GW). Bin Laden's goal is to expel western oil companies from oil-producing states and setablish a single, centralized, Islamic State (the Ummah), ran by a Caliph.
  

  
  Bin Laden has publicly stated that he believes oil should be at least $200 a barrel, and I imagine he would do everything in his power to accomplish that.

  Published: September 13, 2006 7:36 AM

• Nick Bradley

  Vince Daliessio,
  

  
  I imagine there would be a vast array of different setups for a completely privatized road system.
  

  
  I see only limited-access highways, bridges, and turnpikes being ran on a toll-type system. Other roads would be quite different:
  

  
  Residential - The first thing that would happen is that every subdivision (or equivelant in your community) in America would essentially become a "gated community". All roads witihn the subdivision would be owned by the homeowners in the subdivision. Each homeowner would own a share of his subdivision's road equal to the lenth of his property's frontage as a percentage of total road in the neighborhood. The subdivision administration corporations (SACs) formed by the homeowners would charge every onwer the same amount in porportion to how much street frontage they have. The SACs would then form cooperatives with nearby SACs to collectively own thoroughfares that connect their subdivisions to other areas.
  

  
  Commercial - The storeowners would onw the streets in front of their businesses. Storeowners want to maximize traffic in front of their store to attract customers, but they have to pay for it.
  

  
  Limited access highways would be for-profit and privately owned entities. They would operate on some type of toll system or a sticker pass system.
  

  Published: September 13, 2006 7:49 AM

• Nick Bradley

  Peter,
  

  
  Can you explain why you believe military protection does NOT lower the cost of oil. Keep in mind here that NOBODY here is arguing that the reduced price is greater than the cost of intervention.
  

  
  Play out this thought experiment for a moment:
  

  
  What if private oil companies had to provide their own security for oil tankers exiting the strait of Hormuz? How much would that cost? I believe this alone would be a substantial sum. But if this security costs more than $0, it would raise the cost of getting oil from the ground to the pump, and thus raise prices. Even if you believe that NO security would have to be purchased by oil companies (i.e. you believe that they wouldn't be attacked by Islamic fundamentalists who want to expel Western Oil Companies from the region), the lack of "free" security from the United States Navy would at least raise their maritime insurance premiums.
  

  
  The security provided currently is not just limited to the high seas. The mere presence of US forces stabilizes regimes (historically, perhaps not in the present) and allows oil to be pumped with little interruption; Think of oil production where US forces are NOT present, such as Nigeria and Chad, where oil production is constantly disrupted.
  

  one must also not forget the training and assistance that the US government and defense contractors provide to local military forces that DO provide on-site security at oil facilities.
  

  
  One more thing to mention. In Indonesia, there are no US military forces. As a result, Western oil companies that are present there purchase their own security from private firms. There is no doubt that this raises the cost of production in Indonesia.
  

  
  In Kazakhstan, oil companies have "pooled" their resources, have co-located their secure compounds, and have purchased private security to provite mutual defense agaisnt terrorist attack and oil production disruption. This too has raised the cost of production.
  

  Published: September 13, 2006 8:04 AM

• Mark Brabson

  I don't know about this "gated community" thing. I don't want to turn this country into a million, mini-fortresses.

  Collective ownership of a neighborhood's street's, with owner's assessment in proportion to length of frontage could work. But I would 86 the idea of gating the community as unneccessary and obstructive.

  As for city and county roads, (other than neighborhood streets) and for non-limited access highways, probably best left to some entrepreneur to figure out, as the details on how to fund those are going to be nebulous by necessity.

  Published: September 13, 2006 10:33 AM

• Mark Brabson

  M E Hoffer:

  I am aware of all those wonderful technologies.

  But, much of that technology has serious privacy issues that Libertarians by principle must condemn.

  Published: September 13, 2006 10:37 AM

• Nick Bradley

  Mark Brabson,
  

  
  Why WOULDN'T you gate off the entrances? First of all, it is the only feasible way to restrict access to your private property. Secondly, crime drops dramatically if unauthorized persons cannot get inside (only criminals that live in your neighborhood could steal from you).

  Published: September 13, 2006 1:20 PM

• M E Hoffer

  MB,

  I'm sorry to say that "privacy" is a primative pipe dream, yet, it is.

  We're either going to embrace these types of Technologies and utilize them to liberate us, or they, those types of Technologies, will embrace us, along with our self-deluding selves, and imprison us, with the State happily abetting it.

  For "Libertarians"-- their vaunted "privacy", where, pray tell, does it currently exist? where, do you have the proper expectation of it ?

  Published: September 13, 2006 4:13 PM

• Peter

  (i.e. you believe that they wouldn't be attacked by Islamic fundamentalists who want to expel Western Oil Companies from the region)

  Chances are if it weren't for the vast military presence, Islamic fundamentalists wouldn't be interested in expelling western oil companies. And/or, they'd be Arab oil companies. Etc. In fact, my belief is that the "military protection" which you believe reduces the cost of oil actually significantly increases it!

  Published: September 13, 2006 8:29 PM

• Peter

  ME Hoffer: "These technologies" are not inherently opposed to privacy. There are ways to provide specific information without giving away other information. Zero-knowledge proof, Chaumian blinding, etc. You can have privacy _and_ technology. The statists just get in the way, and force manufacturers to build in functions that are against their customer's interests.

  Published: September 13, 2006 8:35 PM

• M E Hoffer

  Peter,

  You stated what I had meant. Sorry, if I was unclear.

  Take "Toll Transponders", from our current experience w/ "E-Z Pass", there's no way that technology "needs" to be tied to personally identifiable information, yet, it is.

  To your point.

  Published: September 13, 2006 9:27 PM

• TokyoTom

  David White/Nick: I used to be with you, but have migrated to Person's position. Whoever owns the oil fields will have an incentive to sell oil, and any justifications for using our military to support one set of owners for the sake of "supply security" have clearly been swamped by the costs of the blowback, market uncertainty and the costs of the Iraq war.

  "Supply security" has since become a mantra used to justify obviously counterproductive poliicies that benefit only special interests.

  I advocate expensing the military budget through import taxes, but solely for the purpose of making the costs of our insane policies painfully obvious to everyone, rather than being masked and pushed off onto future generations.

  Person:

  "Let's say that all taxes were removed from oil (including hidden taxes on the various stages of production), AND consumers had to pay their quotal share of pollution and whatever global warming it contributes to (discounted for risk and time, of course). Would oil be cheaper?"

  Thanks for giving me another soapbox on global heating. With rational defense policies, gas prices would fall even if an implicit GHG tax were factored in. Of course if the GHG "tax" were dealt with separately (and seen as the user fee that it economically would be), it would serve to lower demand for gas and would thus lower prices.

  Gas prices have already gone through the roof, partly from (1) Iraq/Iran, (2) growing demand from the economies (China/India/Brazil) that we continue to subsidize by not forcing them to pay for the costs of using the global atmospheric commons as a GHG/particulate dump, and (3) Katrina/Wilma.

  Various observers have pointed out that the costs of Iraq to date have already exceeded our all-in costs for complying with the Kyoto Protocol over its lifetime.

  For you fence-sitters out there, I wonder if you've

  (1) seen the latest Economist:

  http://www.economist.com/opinion/displayStory.cfm?Story_ID=7884738

  or (2) noted perhaps this recent statement by that renowned scientist, Stephen Hawking (soon to be labelled and dismissed by Dr. Reisman and others as a radical environmentalist/people-hater)?

  http://abcnews.go.com/2020/Science/story?id=2319559&page=3

  Regards,

  Tom

  http://abcnews.go.com/2020/Science/story?id=2319559&page=3

  Published: September 14, 2006 5:23 AM

• Nick Bradley

  TokyoTom,
  

  
  You are misunderstanding what I have stated (as others have too). I DO NOT, I repeat, DO NOT, believe that the cost of the USG providing security in the region is lower than the reduced cost of gas. If I state that US Security in the region costs $250 Billion, but the reduced cost in oil is only equal to $50 Billion, how am I stating that it was worth it? I AM NOT.
  

  
  But I AM stating that if there were no USG-provided security in the reiogn, OPEC still existed, and the vast quantity of oil was still owned by states, prices WOULD be higher.
  

  
  Let me repeat for it to sink in: The cost of intervention is higher than the savings in lower oil prices.
  

  
  On another point, during your rant about global warming and gas prices (I noticed you said "global heating" so you wouldn't be seen as a quack), you completely neglected to mention that our refining capacity has not expanded in three decades! You mentioned Katrina and Wilma restricting refining capacity, probably because you feel the hurrcanes were caused by global warming, err, I mean global "heating". You have also failed to mention that refineries must make doezens of different blends of gas to sell in various US States, dramatically increasing the cost of producing gasoline.
  

  
  Many assume that the price of oil is directly reflected at the pump; wrong! It fails to neglect 100% of the cost of shipping, producing, and delivering gasoline. It's akin to claiming that the price of semiconductors is dependant on the price of quartz (the best form of silica, which is used to make silicon).
  

  
  I see that you sent a link to a story with Dr. Stephen Hawking, the renowned climatologist. Oh, that's right, he's a physicist. Physicists have historically been very pro-statist by the nature of their work; If physicists aren't teaching, they're working for the government.
  

  
  The Economist would love to see a global regulatory regime put in place that favors the EU over the US; The EU is already complying with many of Kyoto's standards and have experienced less economic growth in recent years.
  

  
  I especially like the Economist's PATENTLY ABSURD claim that since we're not sure whether global warming is occurring due to human activity or what it's extent is, we MUST do something about it. Apply that logic to other social problems. "We're not sure if there's a crime problem in town, so we should definitely hire more policement and beef up the number of patrols". Or, we don't know if there's a foreign adviary out there, so we should definitely increase he defense budget." How absurd indeed.

  Published: September 14, 2006 11:45 AM

• Nick Bradley

  TokyoTom,
  

  
  If you advocate shifting the cost of defense from direct to indirect taxes, why not advocate it for all of our asinine social programs?
  

  
  Why not just support the FairTax so that every taxpayer becomes painfully aware every time he buys something at the store how much he is getting robbed by the State? Or do you just want to shift defense expenditures towards implementing a carbon emission credit regime? Or spend the money to buy up privately-owned forests and wetlands at eminent domain prices? Would that suit you.
  

  
  I'm sorry if I've upset you, but I feel that anybody who endorses action against global warming (or "heating") is a closet statist.

  Published: September 14, 2006 11:53 AM

• Vince Daliessio

  To those worried about "gated" communities - gates or no, the owners of the property, singly or in concert, should get to decide who may enter. In most cases, simply blocking through streets will reduce 95-98% of non-owner traffic, the balance would be regulated by the property owners singly or in concert. This had relevance to the other hot thread here, "Liberty on Immigration". This would also tend to tip the balance toward ownership and away from rental in lower-density communities.

  Published: September 14, 2006 12:05 PM

• M E Hoffer

  http://technology.guardian.co.uk/weekly/story/0,,1871355,00.html

  may be of interest: GPS/Mapping mash-up by individual.

  Published: September 14, 2006 8:14 PM

• TokyoTom

  Nick, many thanks for your comments.

  Let me repeat for it to sink in: The cost of intervention is higher than the savings in lower oil prices.

  It sounds like we agree that the purported “benefits� of US-provided security for oil supply are far out-weighed by the costs, so we would be better off without US military bases and intervention abroad, which simply invite mischief by our political and economic elites for their own benefit.

  On another point, during your rant about global warming and gas prices (I noticed you said "global heating" so you wouldn't be seen as a quack), you completely neglected to mention that our refining capacity has not expanded in three decades! You mentioned Katrina and Wilma restricting refining capacity, probably because you feel the hurrcanes were caused by global warming, err, I mean global "heating". You have also failed to mention that refineries must make doezens of different blends of gas to sell in various US States, dramatically increasing the cost of producing gasoline.

  Not sure what part of my comments reached “rant� level, but I was simply responding to Person's question. I agree completely with your excellent points about the relationship between refining capacity and refining regulations and the cost of gas - points that I have separately made earlier on other threads. Thanks for filling in the discussion here.

  As to the hurricanes, you’re batting at ghosts – I was not trying to attribute particular hurricanes to global heating, but simply to note (rather explicitly, I thought) that the wallop delivered by hurricanes last year took a bunch of refining capacity off-line and thus contributed to supply shortages and thus price hikes. Of course, climate scientists do agree that warming the Earth should lead to stronger (and perhaps more frequent) hurricanes, but that is not a point I was trying to make at all.

  Oh, that's right, he's a physicist. Physicists have historically been very pro-statist by the nature of their work; If physicists aren't teaching, they're working for the government.

  Nice dismissal of the views of Dr. Hawking without addressing the substance of his expressed concerns. Personally, I had always viewed physicists as bumbling ivory-tower revolutionaries, always seeking to understand things in ways that upset the current order, and subject to sanction from the powers that be for occasionally upsetting their apple cart.

  Sounds like you’d like to send Hawking packing, back to his tower; I think it’s kinda interesting that he feels strongly enough to leave his theoretical work briefly to talk about the climate, even though he has no particular financial stake (work or otherwise) in doing so. Whaddaya trying to say – that we really need to discount what those card-carrying scientists have to say, especially physicists, and if they seem to agree with each other on the big issues then we should be particularly dismissive and hold onto our wallets? If that's your position, then I have a Stone Age to sell to you, Mr. Luddite.

  The Economist would love to see a global regulatory regime put in place that favors the EU over the US; The EU is already complying with many of Kyoto's standards and have experienced less economic growth in recent years. I especially like the Economist's PATENTLY ABSURD claim that since we're not sure whether global warming is occurring due to human activity or what it's extent is, we MUST do something about it.

  The logic you state is of course absurd, but it’s not the Economist’s position, which is a little more sane and understandable, even if muddle-headed in some aspects. The Economist takes note that

  "10,000 years ago, the wild fluctuations stopped, and the climate settled down to the balmy, stable state that the world has enjoyed since then. At about that time, perhaps coincidentally, perhaps not, mankind started to progress. Man-made greenhouse gases now threaten this stability. Climate change is complicated and uncertain, but, as our survey this week explains, the underlying calculation is fairly straightforward. The global average temperature is expected to increase by between 1.4°C and 5.8°C this century. The bottom end of the range would make life a little more comfortable for northern areas and a little less pleasant for southern ones. Anything much higher than that could lead to catastrophic rises in sea levels, increases in extreme weather events such as hurricanes, flooding and drought, falling agricultural production and, perhaps, famine and mass population movement.�

  
  What the Economist does not note is that the consensus position on atmospheric sensitivity to GHGs is that if CO2 levels stabilize at a doubling of CO2 levels (which levels we are likely to reach this century), average surface temperatures will stabilize at about 3°C (5.4°F) higher than in the mid-1900s. In the past few decades we have already experienced about 0.5°C of this increase – with an Arctic that is rapidly melting (ask Ted Stevens and BP), Great Lakes that don’t freeze, a spring that comes two weeks sooner in NE, and various and sundry other effects. Note that increases at the high end are just as likely as estimates at the low end.
  http://www.realclimate.org/index.php/archives/2006/03/climate-sensitivity-plus-a-change/

  This is rather a sobering picture, and what is absurd is to pretend that nothing is happening and to then sidestep the question of what, if anything, should be done about it. Where the Economist’s argument is weak is in its failure to describe the property rights failures and rent-seeking that underpin global heating, and in its resulting assumption that the >expenditure of public funds

  We simply need to stop subsidizing practices that hurt all of use by establishing user fees, and no public expenditure of funds is required – in fact simply by correcting GHG institutions (and getting the government out of the land-ownership business) we could eliminate all forms of energy subsidies, both for fossil fuels and for alternatives, and simply let the market work. (Of course, the more we delay, the more public and private expenditures on infrastructure changes will be needed as global warming progresses – no doubt some construction firms are salivating at this, even as insurers blanch.)

  The Economist alludes to the rent-seeking aspect of the problem when it suggests that to grease the transition to sensible GHG policies it may be necessary to establish a new gravy train of government-funded projects to replace the pork that the establishment of user fees would remove. I hope not, but we will certainly be better off if pricing signals are correct, even if the pork spigots remain open but funnelled in new directions.

  As for the international aspects of the problem, you have your finger on something crucial, but you’ve mislabelled it. As the atmosphere is a global commons, coordinated action is needed for steps to regulate the commons to be effective; otherwise, unilateral action by a few to restrict their GHGs (and to increase the costs their manufacturers bear) is wasted if the US, China, India and others continue to mock those efforts by refusing to pay users fees themselves and to push costs off onto everyone. Classic “tragedy of the commons� stuff, surely?

  If you advocate shifting the cost of defense from direct to indirect taxes, why not advocate it for all of our asinine social programs? Why not just support the FairTax so that every taxpayer becomes painfully aware every time he buys something at the store how much he is getting robbed by the State? Or do you just want to shift defense expenditures towards implementing a carbon emission credit regime? Or spend the money to buy up privately-owned forests and wetlands at eminent domain prices? Would that suit you.
  Good questions, and not at all upsetting. I’ve simply focussed on defense because I think that is one particularly prominent area in which we’re being ripped off and manipulated. Precisely for those reason, however, I harbor no illusions that the politicians and special interests benefitting from our ruinous defense policies would agree to expensing defense costs through gas taxes, since this would put an end to their joyride. I’m not familiar with the FairTax, but perhaps it’s a good idea generally.
  I’m not advocating a shift of defense expenditures towards climate change, but simply note the first for comparison purposes. On defense, we have clearly and very expensively shot ourselves in the foot, and the mischief will continue to cost us much more, for no net gain. On the other hand, compliance costs on climate change, even if fully funded by the government, would have been expected to have been smaller, with the tangible benefits that result from more rational resource use. But they are fundamentally apples and oranges, as climate change compliance costs should fundamentally be private, like other decisions to consume resources, and not funded by government. As noted above, I would prefer to see government out of the land ownership business generally, and certainly am not proposing further use of eminent domain.

  I'm sorry if I've upset you, but I feel that anybody who endorses action against global warming (or "heating") is a closet statist.
  You haven’t upset me in the least. On global heating climate/change I think it is clear that we have a problem that will continue to worsen until institutional corrections are made. Libertarians might honestly argue that the present discounted costs of having governments involved outweigh the present benefits of using government to facilitate corrections in failed property rights mechanisms, but those taking this position should be willing to acknowledge that (1) costs are accruing, (2) for the benefit of certain interests and elites, and (3) as time goes on the balance of whether governmental action is justified will change. But those who simply deny that there is a problem at all – and thus no principled decision to be made - are not libertarians, but closet idiots who are the unwitting pawns of the rent-seekers richly benefiting from inaction. I presume you are not the latter.

  As I favor action now, in the form of transferable, privately-owned GHG emissions permits and offset rights, does that make me a statist? If so, I’m happy to accept the label. I’m already know generally as a green people-hater (and a cowardly anonymous one at that), so I suppose it can’t get much worse.

  Regards,

  Tom
  

  Published: September 15, 2006 4:44 AM

• TokyoTom

  Nick:

  An html error after "expenditure of public funds" caused an omission; let me restate:

  "its resulting assumption that the expenditure of public funds is warranted by global heating - this is a misdiagnosis. The problem arises because the atmosphere is a global commons that is essentially unowned and thus unregulated, so that use of it is "free" to economic actors while the costs are borne by all."

  Regards,

  Tom

  Published: September 15, 2006 4:51 AM

• Nick Bradley

  TokyoTom,
  

  
  I have many points to make.
  

  
  First, as far as Dr. Hawking goes, he is no authority on the subject, but John Q. American seeing that piece on ABC thinks "this really famous scientist thinks it's true, so it must be". Furthermore, members of the Academia are overwhelmingly statist, with physicists being even more so.
  

  
  As for the economist,

  
  "10,000 years ago, the wild fluctuations stopped, and the climate settled down to the balmy, stable state that the world has enjoyed since then."
  

  
  It settled down to the stable, balmy state that the world has enjoyed since then? Has the Economist ever heard of the "Little Ice Age"? From 1250 - 1850, the world experienced a dramatic DROP in temperatures; it commonly snowed in July in the early 1800s. What gets me is that the most common explaination for the "little ice age" was a drop in solar activity. If that was true for cooling, couldn't the opposite be true for warming? Why should we cause a trillion or so in economic damage (or non-growth) just in case?
  

  
  as for GHG trading, how would you create an emission credit trading system without the government controlling it?
  

  
  Here is a series of five questions that one must answer in the affirmative to support "action" against global warming:
  

  
  1. Is the earth warming significantly outside of natural cycles?
  

  
  --I say no; first of all, sami-accurate climatological data only goes back a couple of hundred years. Secondly, many of the temeratures readings we take are near more urban and developed areas. I read something a while back that temperatures have not risen in rural areas AT ALL in the past 100 years.
  

  
  2. If it is warming significantly, what is the primary cause?
  

  
  --Is it even CO2? Water vapor is responsible for the is responsible for the vast bulk of GHGs. Methane also plays more significant role than CO2. How about the sun? There was an excellent article in the Times (UK) called "let's look on the sunny side" by tim hames (http://www.timesonline.co.uk/article/0,,6-2331369,00.html).
  Hames, along with many others, feel that sular activity is far more likely to have an effect on climate change than anything else. Also, Who's to say that even if it was CO2 it wouldn't result in more abundant plant life and cancel the whole thing out?
  

  
  3. If significant climate change is occuring due to CO2 emissions that won't be re-absorbed back into plantlife or oceans, how much will the earth's temperature rise in the future?
  

  
  -- Global Warming estimates vary, anywhere from 1 - 5 degrees celsius.
  

  
  3. If significant climate change is occuring due to CO2 emissions and they won't be absorbed by the oceans or plantlife, and the earth's temperature is going to rise significantly in the next century or two, can we do anything about it?
  

  
  -- The Kyoto Protocol, with its draconian measures that would have stifled economic growth, promised to reduce temperatures 100 years from now by 1 degree celsius, AT BEST.
  

  
  5. If significant climate change is occuring due to CO2 emissions and they won't be absorbed by the oceans or plantlife, and the earth's temperature is going to rise significantly in the next century or two and we can we do something about it, should we?
  

  
  -- Some feel that global warming would be a GOOD thing. A great article at LewRockwell.com by Bill Walker entitled "Global Cooling: Fear the Ice", lists a host of positives that can come from a warmer climate:

  
  -- Russia, Canada, Alaska, and the Northern US States would have FAR better agrpcultural yields.

  
  -- Overall, agriculture and wild plantlife would improve.

  
  -- Increased reainfall can be a quick fix to projected water shortages in the third world.

  
  -- If Sea Levels do rise (that's a big "if"), what's to stop coastal cities from building Dikes? The Dutch did it 100s of years ago. Can't we to?

  
  The world may be a better place even if we did have global warming, which is probably unlikely.
  

  
  Clobal cooling, IMHO, is a much bigger concern.
  

  Published: September 15, 2006 12:04 PM

• TokyoTom

  Nick, sorry to leave you (and the rest of the board!) hanging.

  I’m happy to see that you’re making an honest effort to work through the data. I have gathered (surprise!) a bunch of links on data issues; if you're really interested please let me know.

  Before we embark on addressing the particular points you’ve raised, I hope we can share a joint understanding (that I thought we reached when we discussed this in March) that the nature of global warming as an economic problem is that it relates to heavy use of the global atmospheric commons as a dumping ground for gases that induce further warming of the atmosphere, surface and oceans – use that has essentially been free of charge due to that absence of any meaningful property rights relating to the atmosphere.

  This is resulting in a tragedy of the commons where, unless coordinated action can be agreed to regulate the commons and to effectively charge for its use as a GHG dumping ground, it will continue to be in the rational self-interest of economic actors to continue to over-produce GHGs, regardless of the level of damage this imposes on everyone (either directly or to shared ecosystem resources). That this is the case is clearly evidenced by the persistent efforts by fossil fuel manufacturers and users to purchase political inaction through campaign contributions and by funding for-pay pundits to disrupt the waters of the policy debate by muddying the rather stark scientific consensus about the nature of the problem.

  Now let me briefly address your specific points:

  A. Hawking: You dismiss him as “no authority� and, as a physicist and a “member of Academia� he must be “overwhelmingly statist� and bemoan that John Q. American finds him credible. Sorry, but Hawking is talking about climate physics; that kinda falls within his general area of expertise. If he has credibility with the public, it’s because he earned it. Although it’s not his particular bailiwick to craft a policy, but he hasn’t really don’t that has he – he’s simply said there is a serious problem and we need to start reducing global warming. What’s statist about that?

  B. Economist:
  The Economist is correct that, relatively speaking, we have been in a rather long and stable inter-glacial period – one that we would be foolish to bump ourselves out of and back into periods where there were really wild climate swings. The role of solar activity in climactic cycles has of course been considered and it has been shown that solar activity cannot be the primary cause of the recent warming.

  I am sure you are aware of the greenhouse effect generally and acknowledge that GHGs play in moderating our climate. You must also be aware that with the rise in industrial activity and certain farming practices we have been pumping GHGs into the atmosphere like crazy. Do you seriously think that increasing CO2 levels to those not seen for millions of years will have NO effect on climate?

  GHG trading: As I noted in March, given the tragedy of the commons aspects to climate change - free riders, information difficulties, myriads of parties and no shared legal underpinnings, purely private "solutions" clearly won't work, will they? As US industry and consumers cannot effectively “homestead� the global atmosphere and exclude others, government must be used. This can be done by creating private and tradable permits.

  C. Your questions
  1. Is the Earth warming? Large swaths of the Arctic – Alaska, Canada, Siberia etc – are warming like crazy, with summer temps up by 1-5 degrees C. As far as data points go, the heat island affect is understood and corrected for.

  2. Why is the Earth warming? By understanding and controlling for other long-term factors, there is nothing left except our remarkable GHG dumping, plus feedbacks (water, albedo). CO2 can lead to only limited greening, since equivalent increases of water are needed in photosynthesis. But actual observations show that greater heat shuts down photosynthesis, and leaves less food for herbivores.

  3. Future temps? If CO2 levels stabilize at twice pre-industrial levels, scientists except equilibrium temps to be 3 degrees C higher (5.5 F) with higher temps being just as likely as lower ones. We have already experienced 0.5 C of this – with all of the Arctic melting, Great Lakes that don’t freeze in winter, glaciers disappearing, etc.

  4. Can we do anything about it? You mean, besides pretending that there’s no problem, that if there is, it will either be a boon or solve itself, or simply whimpering and forking over all the money we will need to adapt our infrastructure? Yeah, we can implement private property rights and use the power of private markets and individual decisions to properly reflect costs and to transform our economies. We simply need users fees (in the form of tradable permits) that force private parties to internalize the external costs imposed by GHGs – this will eliminate the current implicit subsidies for our destructive use of the global commons and create powerful incentives to change our energy mix and improve our use of fossil fuels, including creating markets for GHG sequestration.

  In the process we can eliminate a raft of pork-barrel energy project favored by rent-seekers and big government. BTW, implementation of the Kyoto Protocol would have been much cheaper than the bottomless-pit pork barrel that the “war on terror� has created, but I agree that Gore and Clinton should have negotiated a more meaningful treaty – that imposed real obligations on China/India (whom we have instead chosen to subsidize through inaction and the Asia-Pacific Initiative).

  5. Should we do anything about global heating? I think you know my answer. Should we bother to go to the effort to solve any of our great tragedy of the commons problems, or is it wiser to hope they will go away, knowing full well that they will not - because of the property rights failures they manifest – and simply go on merrily subsidizing current consumption at the cost of our future? Is an ounce of prevention cheaper than a pound of cure? Should we have ever regulated pollution?

  In the interest of brevity I have necessarily skipped over a few things. If there's something you'd really like me to address, please let me know.

  Best regards,

  TT
  

  Published: September 22, 2006 7:01 AM