San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Friday, January 6, 2012

Another Unintended Consequence

The December 30, 2011 issue of Biofuels Digest contains a fascination article that dramatically illustrates another example of the unintended consequences of governmental legislation.  In 2009 California (who else?) adopted the Low Carbon Fuel Standard which required California purchasers of both fossil fuel and biofuel to calculate the "well-to-wheels carbon intensity baseline".  Basically this means that any fuel that is purchased also has to take into consideration the energy that was used to produce, manufacture, and transport the fuel.  The baseline also includes such esoteric factors as "changes in land use practices associated with producing the fuel". 
Needless to say, this created a very unique set of circumstances for purchasers of ethanol in California.  I quote the article because I certainly cannot say it any better:
"Over the past several months, the Digest and other media noted that California was importing ethanol from Brazil, a 6000 mile, diesel churning tanker haul.  Now, before the California Low Carbon Fuel Standard was put into place, California would have sourced its ethanol needs from Nebraska, some 1200 miles to the east.  The 6000 mile trek was justified, said the authors of the low-carbon standard, on the basis that Brazilian ethanol was produced with a much lower carbon intensity than the aforementioned Nebraskan ethanol.
So what happened to the offending gallons from Nebraska?  Were they no longer producing at all?  Actually, they were being exported via a 6000 mile diesel sucking tanker haul to Brazil, to make up for the shortfall in the Brazilian market.  Same ethanol molecule, same emissions when burned. 12,000 miles of hauling, instead of  1200, to burn the same tankfuls of molecules.  All in the name of reducing carbon emissions."
It doesn't get any better than that. Way to go California! 

Thursday, January 5, 2012

No Taxes on "Financial Speculation"

Yesterday I mentioned the flyer from "Working America".  In addition to being overcome with envy for the income that corporations are realizing, this group also believes that Congress needs to "support the Wall Street Trading and Speculators Tax Act".  They argue that "a small financial speculation tax of one-quarter of one percent on trades would discourage harmful speculation and raise $100 billion a year to aid in job creation."  Wow!  Who could possibly oppose such a great deal?
For one, I could.  First of all, who said that "speculation" is harmful?  How was it determined that "speculation" is harmful?  If it is truly harmful, should it not be made against the law rather than permitted and taxed?  In fact, what is generally called "speculation" is not harmful at all.  Short term, high frequency traders in the stock market provide liquidity for all investors.  That is a good thing.  Furthermore, speculative traders close the gap between bid and asked and reduce costs for all traders. That is also a good thing.
Second, what is "speculation"?  If a person buys a home with the hope that it will appreciate in value, is that not speculation?  If a person buys gold with the hope that it will appreciate, is that not speculation?  If a person starts a business with the hope that it will grow, is that not speculation?  Indeed, is it not the case that every investment venture that humans devise is really speculative?  Why should only those who trade in stocks be penalized with this new tax?  If speculation is bad, then tax all investors.
Lastly, how does this alleged $100 billion dollars the speculation tax raises result in the creation of new jobs?  Who is going to administer the tax?  The government, of course.  How has the government being doing at creating new jobs?  Horrible, of course.  The government cannot create any net employment because it does not produce anything.  So, do we really want a new tax that will raise a hundred billion dollars by taxing those who are productively engaging their capital in the economy and dropping it in the the black hole of government?  I don't think so.

Wednesday, January 4, 2012

East Coast Bias?

Living in the Mountain time zone it occurs to me that there is a definite East Coast bias in news and sports reporting.  It seems that the media gurus who live in the East Coast are incapable of seeing anything of value outside of their own  geographic time zone.  For example, the Boise State football team (11-1 in 2011) has been banished to play a 6-6 Arizona State team in the less than glamorous Las Vegas Bowl tonight.  Boise State has been a Mountain time zone powerhouse for years.  Does anyone seriously believe they would not have been invited to a BCS bowl if they had played in an eastern conference?
CNBC reporter Melissa Lee just reported on the snowstorm that is hitting Denver today.  She said, "It is snowing in Denver today....finally!  It is the first snow of the year."  Now, all of us who live in the west are aware that there has been precious little snow in the east this winter.  But, why does it follow that simply because the east has had no snow that Denver has also had no snow?  I live in the Denver area and besides the twelve inches that has come down overnight, I have recorded six different storms dropping thirty inches of snow so far this season.  How could a national business news reporter be unaware of that fact?
Now, I am not particuarly concerned about college football and snow totals.  I am more concerned about what appears to be a real inability of those who live in our primary media center to comprehend anything that happens outside of their locale.  Is it possible that some (most?) of their financial and economic reporting and advice is equally distorted?  Is it possible that current economic events are seen through the filter of Wall Street with no consideration of Main Street?  I suspect so. Economic conditions are not as bad as they say.

Tuesday, January 3, 2012

Hegemonic and Voluntary Associations

In a letter to the editor of the Denver Post on Sunday, January 1st, Dan Sage of Centennial, Colorado opines that "unfettered predatory corporations are largely responsible for huge portions of the economic and political crisis we now face..." He concludes by saying, "Without new and innovative ways to regulate and limit both partners of the corporate state there will be little chance for the vast majority in this country to participate in the promise of a free society---a nation free from both corporate and governmental tyranny."
Mr. Sage clearly does not understand the difference between hegemonic and voluntary associations.  If I do not pay my property tax the county sheriff will come and take my house from me.  If I do not pay my income taxes the IRS will throw me in jail.  If I do not pay my speeding ticket the county judge will issue a warrant for my arrest.  If I do not pull over for a police officer he is allowed to use extreme measures to stop me.  If I resist he is allowed to use deadly force against me.  All of these are examples of hegemonic associations.  I do not voluntarily agree to any of them.  However, if I attempt to ignore them, I am punished for my attempt.  Government exists exclusively on the basis of hegemonic associations.  Nothing about government is voluntary.
Corporations, on the other hand, exist exclusively on the basis of voluntary associations.  No corporate entity or CEO has ever accosted me in the street and forced me to buy his goods under penalty of law.  I have never been threatened with a fine or imprisonment for not going to Wal-Mart.  I have never been threatened with loss of life for not buying a Ford.  The notion that corporations are "predatory" is ridiculous and impossible.  I am always free to buy or not buy any good or service produced by any corporation in the country (except, of course, those run by office, drivers license, etc).  Nobody is a victim of predatory corporations.  On the other hand, we are all victimized by the government on a daily basis. 
Just who does Mr. Sage believe will do the new and "innovative" regulating that he wants?  Government, of course.  Why should we expect that new and innovative regulation will be any better than old and ridiculous regulation?  Solving the problem of over regulation with more regulations does not make sense.

Monday, January 2, 2012

Buy American?

Some poor fellow wrote a Letter to the Editor of the Denver Post the other day in which he described the process by which he managed to buy American made Christmas cards.  Turns out he had gone to the local Wal-Mart and purchased a box of Christmas cards.  Much to his dismay, when he returned home he discovered that the cards were made in China.  This would not do!  He returned the cards and spent the rest of the day looking for, and eventually finding, a box of Christmas cards that were made in America.  He slept well that night and he wrote the Editor of the Denver Post the next day describing his patriotic and economically stimulative activities.
I, however, do not think he was patriotic and economically stimulative enough.  If it is a good thing to purchase goods made in America rather than things made in China, then it must be a better (more patriotic and better for the economy) thing to purchase goods made in Colorado.  If it is a good thing to purchase goods made in Colorado it must be a better thing to purchase goods made in the Denver metropolitan area.  If it is a good thing to purchase goods made in the Denver metropolitan area, it must be a better thing to purchase goods made exclusively by residents of Highlands Ranch.  If it is a good thing to exclusively purchase goods made by residents of Highlands Ranch, it must be a better thing to purchase goods made by people living on my street.  If it is a good thing to purchase goods made by people living on my street, it must be a better thing to purchase goods made by people living in my house.  If it is a good thing to purchase goods made by people living in my house, it must be a better thing purchasing goods made by my 4 year old daughter.
I conclude that you will all receive Christmas cards made by my 4 year old daughter.  It is the only patriotic and economically good thing to do.

Sunday, January 1, 2012

Welcome and Statement of Purpose

Welcome to my blog.  Like most other folks in the universe I believe that I am brilliant and that I have things to write that you should read.  I had never intended to write a blog (I don't even use a cell phone and I have no idea how to "tweet") but I was forced to do so to protect my health.  I need an outlet valve for my excessive blood pressure brought about by reading stupid stuff written by ignorant people.  I thought a blog might be a good idea.  So, here it is.  I hope you like it.
I am the Mad Welshman.  I am not mad in the sense that I am insane.  Or at least I do not think I am insane.  That might be a determination best left to someone other than me.  I am mad in the sense that scarcely a day goes by where I do not read or hear something about the economy and the world that is horribly wrong.  It seems as if very few people truly understand how the world really works.  Their ignorance causes them to say and do harmful things.  Those harmful things are harmful both to themselves and to others.  Their ignorance is not limited to any particular branch of life but I tend to focus my blog postings upon ignorance related to economics and political philosophy.
My goal is simple.  I want to see reality as clearly as possible.  I do not want my vision of reality clouded by political bias and economic ignorance.  I do not want my understanding of current economic events shaped by media gurus who have no concept about how the world really works.   I have been striving after these goals for several decades and this blog will give you a window into my continuing struggles to see the truth.
No blogger should ever go very far without revealing his presuppositional biases.  Here are mine:
1.  I am a Christian and I believe the Bible is inerrant and sufficient for all matters of faith and practice.  This presupposition is not subject to debate.
2.  I am an Austrian when it comes to economic theory.  I reject Keynesianism and the Monetary School.  This subject is subject to debate.
3.  I have no political ax to grind.  I believe all politicians to be people of low moral standards and I believe nothing that they say.  In general, I see politics and politicians as merely a means to coercively control the behavior of others.  I believe in freedom, both in people and in markets. 
If I write something that strikes you as interesting, please post a comment for all to read.  I would enjoy a bit of banter in this blog.  If I write something that irritates you, please feel free to post a comment showing me where I am wrong.  If I am wrong I want to be corrected.  But, be warned in advance, I will not tolerate arguments based upon feelings and intuition.  Please try to stick to the facts.  I have noticed, while reading other blogs, that people who respond to bloggers usually do so with a stream of invectives and personal attacks.  I don't see much value in that approach.  Try to be civil, won't you?

Update:  6-1-13

I had not looked at this introduction to my blog since I put it up almost a year and a half ago.  Things have changed a bit since then.  Probably the biggest change has to do with the fact that I have branched out into other subjects.  I had planned on sticking with economics and politics but I have branched out into theology, sports and feeble attempts at being humorous.  Despite my best effort at writing things that could irritate or motivate readers into making a comment, I have had only 35 comments posted to this blog.  A couple of them included wonderful insults.  I enjoyed receiving those comments because they made me feel like I was a real blogger.  Still, there is very little interaction with readers up to this point.  As of today I have posted 341 articles to this blog.  I think most of them are pretty good.  Why don't you look around at them and see if you agree.

Update:  11-1-14

After having written 600 posts to this blog I decided to shut it down for a couple of months during  last summer.   I decided to restart it again in September.  When I returned I discovered that someone had hacked into my blog and is using it to advertise some products associated with Tiger Woods.   Whoever is doing this is not doing it with my permission.  I do not have the technical expertise to stop it.  If any of you know how to stop it please let me know.  If there is any way to have this person fined, arrested or forced to watch CSPAN without any bathroom breaks I would like to take advantage of the opportunity to do so. 

Update:  7-23-16

I have now posted over 1000 pieces to this blog.  After all of those posts I have been able to solicit a grand total of 16 members.  Most of my blog posts are read by about 20 faithful readers.  Occasionally one of my posts will go viral.  For me that means it will get 40-50 hits in a couple of weeks.  That usually happens when somebody reads one of my posts and then links it to their Facebook page.  This past week something strange has started to happen.  Every couple of hours I get a sudden rise of hits, usually between 21 and 50, that lasts only for a minute or two.  As a result, my total number of hits per day has gone wildly up this week.  I have no idea why that is happening as clearly whoever or whatever is coming to my blog is not actually reading any of the posts.  Oh well, I guess that is better than zero hits per day, although I would prefer that anyone who takes the time to come to my blog would actually read some of the high quality content to be found there.