Its no secret that I am a global warming skeptic. Like any other issue that is important to me, I thoroughly researched both sides of the argument. Although I was tempted to prejudge the issue simply based on who were the people and groups supporting the global warming mantra, I became increasingly skeptical when that side kept saying that the debate was over: scientists had reached a consensus. Huh? Scientists never reach a consensus on any hypothesis so the progrobal warming crowd was trying to squelch debate. . The cornerstone of the global warming argument is that it is caused by CO2 emissions and those need to be curbed or else we are all dead. Several things have transpired. First, a new study Andreas Schmitter of Oregon State reported in Science says that the global warming models have overestimated its impact on earth's temperatures and the previous estimates of temperature increases of 10 F are implausible. Nonetheless, he concludes that CO2 will likely cause climate change, but not as severe. Schmitter's work as well as other models must still be taken with a healthy dose of salt however. Remember this is the same crowd that cannot predict the temperatures next week rather than next century. Then there is the report from China Daily (http://www.chinadaily.com.cn/opinion/2011-11/29/content_14181836.htm) that poor nations cannot afford to aggressively reduce CO2 omissions but that black carbon soot (from stoves and fires) is the problem (not to the environment but to people's health). Although once thought to contribute to global warming, the research now shows that black soot lingers in the atmosphere too short a time to have a major impact on earth's tempertures. Lastly, there is the work of geologist (and retired energy executive) Leighton Steward who warms that aggressive reduction in CO2 levels will be dangerous. Steward argues that CO2 is not responsible for global warming and reductions will inhibit plant growth. Less CO2 means that food production would slow and that fruits and vegetables would require more water for growth. One of Steward's compelling arguments regarding CO2 is that currently the earth's levels are 338 parts per million while the danger level for US submarines is 8,000 parts per million. So we are nowhere near the danger zone for health, reductions will harm food production, CO2 does not cause the earth to warm and even if it did, it would have a debatable impact on temperature. So who do you believe?
I am not a greenie weenie but I do own an electric four wheel drive ATV. At our farm I have always walked to where I deer hunt and then went back and got the ATV if I took a deer. Now as I have aged I ride to about a quarter of a mile of where I hunt and walk the rest of the way. I have found that I seem to see more deer if I use the electric rather than my gas ATV. However, two problems got my attention. First, I got shocked (no pun intended) when I had to replace the 8 batteries ($700). Second, I learned not to trust the battery charge indicator when the ATV died while on the way back from a hunt. These issues are probably obvious but now comes the news that the national highway traffic safety administration is investigating the Chevy Volt because of the tendency of lithium batteries to explode in a crash. It makes one wonder if green is safe. GM rushed out immediately and stated that the cars were safe but would offer loans to the dozen or so people who have bought the car if they had concerns. Presumably they are not offering another electric vehicle. The news also is augmented by Duke Power telling its customers not to use the home charging stations because of a fire hazard. With those concerns and questions raised on the impact on the power grid from off peak use if there were thousands (rather than dozens) of vehicles charging and questions on the demand on coal power plants, one wonders if these vehicles were not politically correct if they would be banned. The same is true for ethanol which has been demonstrated to be worse for the environment than gasoline and for the incandescent light bulb with its hazmat warnings. If these were conventional products the environmental activists would be up in arms demanding recalls and bans. However, since these products are "green" apparently it doesn't matter that they are harmful to the environment or even dangerous.
Recall that I was on the radio with the editor of Knoxville's "alternative" newspaper and he said that we should increase taxing the wealthy to distribute it to the poor to make them better off. My response was this was truly dumb because it created disincentives among both groups. Well a friend of mine sent me the following.
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.
He also sent me the following basic economic lesson on why socialism always fails.
An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, "OK, we will have an experiment in this class on socialism". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.
As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.
Remember when we had the bogus agreement to preserve the Bush tax cuts? After months of haggling the compromise ended up being a budgetary rounding error. Now the so-called supercommittee has thrown up its hands and has given up trying to find $125 lousy billion in cuts a year for 10 years. Mind you although this was continually referred to as a $1.25 trillion cut, it actually is only 3 percent of the federal budget each year. Actually I thought that the supercommittee was anti-constitutional in the first place because the supercommittee replaced the House of Representatives which has the budgetary responsibility under the constitution. Some pundits have stated that the president who always sits on the sidelines would have gotten a deal if he wanted one. However, they argue he did not want a deal because he plans to run on a do nothing congress. The only problem is why the congressional democrats would be dumb enough to go along since they are part of the do nothingness (see Steny Hoyer's comments in a previous post). So the bottom line is that if the supercommittee succeeded it would have not made a difference. The fact that it failed reiterates the need to replace the incumbent administration and the overwhelming majority of the incumbent congress regardless of party.
Rick Perry in a speech in Iowa called for sweeping changes in the federal government. Among the highlights were to make congress part time, cut congressional pay in half, criminalize insider congressional trading, cut congressional staffs, end lifetime appointments to the supreme court. enact a balance budget amendment and limit federal spending to 18 percent of GDP. For all the proposals see http://www.rickperry.org/uproot-and-overhaul-washington-html/. Of course if spending is limited to 18 percent then a balanced budget amendment is unnecessary. But what about the ones dealing with the congress. I believe it was Mark Twain who said that when congress is in session no man's life, liberty or property is safe. Tis true. A part time congress would force our elected officials to have real jobs that would force them to live amongst real people with real problems rather than being on the fantasy island that is Washington, DC. I have written that the Fed needs to move from DC to Kansas City and we would see a dramatic shift in monetary policy. The same could be said for the congress. It was interesting to see Steny Hoyer's (D-Md) comments. Hoyer is a lifelong politician who is the number 2 house democrat. Hoyer was said to react angrily and stated: “Is this a serious proposal he’s making for a country that has very high unemployment, who’s budget deficit is larger than it’s ever been in history, which has two wars that we’re confronting and trying to bring to a conclusion?” Mr. Hoyer said of the Republican presidential hopeful. If this is what he thinks is pandering to the Tea Party, it is not in my opinion speaking to the issues that the American public feels are very, very critical to them, jobs being the number one issue,” Mr. Hoyer said. “So I don’t think it’s a very serious effort on his part.”
Methinks the gentleman protesteth too much. It seems that Hoyer is making Perry's case. The congress is in large part responsible for all that Hoyer laments. Instead of fixing it, they have - and are- making things worse. If I were Perry, I would circulate Hoyer;s comments as an endorsement for congressional overhaul.
One of the blogs I follow is Greg Mankiw's - a Harvard professor with ties to republican administrations. Students walked out of his introductory econ class protesting that it was unbalanced in favor of Adam Smith over John Maynard Keynes. Excuse me? An introductory class has to be heavy on Smith since the basic principles of microeconomics are the heart of the discipline. Teaching Keynes is teaching macroeconomics which in some hands is a discipline other than economics. If it is not based on supply and demand, it becomes sociology. Here is the story from Slate.
Harvard Students Stage Walkout in OWS-Like Protest
Intro econ class walks out, criticizes professor as favoring the rich.
By Will Oremus | Posted Tuesday, Nov. 8, 2011, at 9:39 AM ET
The Occupy Wall Street movement has landed at Harvard University, where some 70 students walked out of an introductory economics class last week to protest what they saw as biased teachings.
The students explained their walkout in an open letter to professor Greg Mankiw posted on the website of the Harvard Political Review. "Today, we are walking out of your class, Economics 10, in order to express our discontent with the bias inherent in this introductory economics course," they wrote. "We are deeply concerned about the way that this bias affects students, the University, and our greater society."
NPR’s Morning Edition covered the kerfuffle, suggesting that the students objected to the class partly because of Mankiw’s résumé. He served as an adviser to President George W. Bush and is now advising the campaign of Republican presidential contender Mitt Romney. He has also criticized the Occupy Wall Street protests and warned against the "politics of envy."
Ironically, Mankiw said he was lecturing on income inequality on the day the students walked out.
Students who participated in the walkout wrote in the open letter that they had hoped to be presented with a balanced view of economics in a required introductory course. "Instead, we found a course that espouses a specific—and limited—view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today. There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory."
A former student of Mankiw’s jumped to his defense, pointing out that the students offered little explanation of what they found "biased" in the course, other than the reference to Smith and Keynes. The student, named Jeremy Patashnik, wrote:
Incidentally, the authors of this letter are in for a treat: there’s plenty of Keynesian theory to come in the second semester of Ec 10. In fact, Mankiw is a great Keynes admirer, and once wrote, “If you were going to turn to only one economist to understand the problems facing the economy, there’s little doubt that that economist would be John Maynard Keynes.” The only reason that these students have not yet studied the father of modern macroeconomics in Ec 10, of course, is that the first semester of the class is devoted to microeconomics.
Asked on NPR to elaborate on his views about economic inequality, Mankiw said there’s no question it has been on the rise for the past 70 years. "I think it’s primarily being driven by a variety of forces in the economy including, for example, technology," he said. Asked whether he thought it was a problem that government needs to address, Mankiw said it depends on one’s political philosophy. "I think the liberal position is more to try to address the outcomes through a progressive income tax, and I think the conservative point of view is to try to address the causes. One of the causes is the educational system."
Since I do not watch the main stream media, I do not know if this was reported. CBO director Doug Elmendorf testified before congress. In an answer to Alabama's Jeff Sessions he conceded that the $800 billion stimulus package would in the end lower GDP.
SESSIONS: And in the next 10 years, since you’re carrying that debt and paying interest on it and the stimulus value is long since gone, it would be a continual negative of some effect?
ELMENDORF: Yes, it would represent a drag on the level of GDP beyond that, if no other actions were taken.
Elmendorf stated that the stimulus should have had a positive short run effect but a negative long term effect. I guess I should said "I told you so." But its like taking candy from a baby. The money to finance the "stimulus" would have to come from somewhere. Since the US was already deeply in deficit, the money would either have to be created by the Fed or borrowed from the private sector. Basic economics tells us that if created by the Fed, it would end up being purely inflationary with no creating in real output. If borrowed, it would reduce monies available to the private sector and crowd out business investment. Either was it would be a drag on the economy. Those who invented other scenarios are using faith and voodoo to supercede Adam Smith and like usual have failed. However, although I used to work at CBO I always take their projections with more than a grain of salt. Economics like the weather is a crap shoot when projecting long term and ten years is an eternity.
When Fannie Mae and Freddie Mac came with hats in hand to beg for another $14 billion in taxpayers' money, there was bipartisan outrage at the committee hearing over their salaries and bonuses. The president was noticeably silent. Didn't the president rail over the AIG bonuses and give approval to the SEIU pickets at the homes of AIG's executives? Didn't the president appoint a wage czar to approve the salaries at the car companies? Something about protecting the taxpayer from the greed of corporate executives? So where was the president's outrage over the million dollar bonuses at Freddie and Fannie? As one of the committee members pointed out it was not just the bonuses but also the inflated salaries of the executives. "How many corporate general counsel's are paid $2 million?" one congressman asked. Indeed. How many? Of course Fannie Mae and Freddie Mac have always been known to pay big salaries and bonuses. Where was the outrage when Franklin Raines took home more than $90 million during his tenure? Regardless, Fannie and Freddie have difficult jobs but not that difficult.
One of my closest friends is an Obama apologist. Yet she marvels at the hackneyed assault on Herman Cain wondering what blonde is going to be dredged up next. In the past when the accused were democrats, the press scoffed saying "private lives didn't matter" and then attacked the women accusers. In this case, where by some miracle all the women are connected to the democratic party, not a peep is heard. The first woman was trotted out as a republican. No one asked how someone who had not worked in 13 years, was in debt, bankrupt, somehow could live in the same building as Obama honcho David Axelrod. Surely Axelrod is not living in some slum yet this woman manages to live in the same building. Notice that this is playing on some's racisms by having a black man being accused by (blonde) white women. Somehow they have forgotten that the president is the result of a joining of a black man with a white woman. Regardless, the whole episode is shameful and as my mother said "I wondered how long it would take before they slandered Cain". When he was at the bottom of the polls it did not matter. Now it does. The left is threatened by a successful conservative black who is more of a role model than the president. Although both have remarkable stories, the president from humble beginnings went to elite ivy-league schools and has been either running for public office or elected to public office all his life. Cain on the other hand is like most of the wealthy people I know: humble beginnings, public education - although a Morehouse grad - and up from the ranks to success. Which is more likely for most of us regardless of origin? Its Cain. Hence the threat to the elite establishment. The following is from a piece by Ann Coulter, who incidentally is a blonde white woman.
David Axelrod's Pattern of Sexual Misbehavior
by Ann Coulter
Herman Cain has spent his life living and working all over the country -- Indiana, Georgia, Minnesota, Nebraska, Kansas, Washington, D.C. -- but never in Chicago. So it's curious that all the sexual harassment allegations against Cain emanate from Chicago: home of the Daley machine and Obama consigliere
David Axelrod. Suspicions had already fallen on Sheila O'Grady, who is close with David Axelrod and went straight from being former Chicago mayor Richard M. Daley's chief of staff to president of the Illinois Restaurant Association (IRA), as being the person who dug up Herman Cain's personnel records from the National Restaurant Association (NRA). The Daley-controlled IRA works hand-in-glove with the NRA. And strangely enough, Cain's short, three-year tenure at the NRA is evidently the only period in his decades-long career during which he's alleged to have been a sexual predator. After O'Grady's name surfaced in connection with the miraculous appearance of Cain's personnel files from the NRA, she issued a Clintonesque denial of any involvement in producing them -- by vigorously denying that she knew Cain when he was at the NRA. (Duh.) And now, after a week of conservative eye-rolling over unspecified, anonymous accusations against Cain, we've suddenly got very specific sexual assault allegations from an all-new accuser out of ... Chicago. Herman Cain has never lived in Chicago. But you know who has? David Axelrod! And guess who lived in Axelrod's very building? Right again: Cain's latest accuser, Sharon Bialek. Bialek's accusations were certainly specific. But they also demonstrated why anonymous accusations are worthless. Within 24 hours of Bialek's press conference, friends and acquaintances of hers stepped forward to say that she's a "gold-digger," that she was constantly in financial trouble -- having filed for personal bankruptcy twice -- and, of course, that she had lived in Axelrod's apartment building at 505 North Lake Shore Drive, where, she admits, she knew the man The New York Times calls Obama's "hired muscle." Throw in some federal tax evasion, and she's Obama's next Cabinet pick. The reason all this is relevant is that both Axelrod and Daley have a history of smearing political opponents by digging up claims of sexual misconduct against them.
The Occupy folks have not covered themselves with glory all of the country. The reaction of the local authorities has been interesting. In Nashville, the governor has ordered the removal and arrests of Occupy Nashville. A local judge however has refused to hear the cases and has released them back to the streets. Little has been said of what happened in Atlanta where we have the case of a black mayor and a mostly black police department with a black police chief clearing out the mostly white Occupy Atlanta folks. If the races had been reversed we would have seen story upon story evoking the racist history of the south. Indeed one of the older Occupy Atlantans accused the black mayor, Kasim Reed of being akin to Bull Connor. Now it is likely that Reed who was born in 1969 does not have a clue who Bull Connor was. But the irony of it all: a black Bull Connor! Probably the only similarity is that both Reed and Connor are democrats. Regardless, one of the protestors opined that Reed was reacting to qrowing white constituency that is gentrifying midtown and downtown Atlanta implying that these in-migrants are conservatives. Quite the contrary, most of these whites are themselves liberals. I guess it is difficult for some to wrap their arms around the fact that many people regardless of political affiliation do not like to see their city trashed. Also the growing charges of crimes such as rape and robbery are disquieting. Perhaps Reed like mayors and governors across the political spectrum are more interested in maintaining law and order than in posturing by this generation's flower children.
In the Kingsport, TN paper the Times News on October 26, 2011 was a story from the Associated Press with no by-line entitled “Alabama battle reminder of civil rights past.” It was an attempt to link the upcoming Supreme Court hearing of Alabama’s immigration law to that of its ugly history on civil rights. Saying that its immigration law “has resurrected ugly images from Alabama’s days as the nation’s battleground for civil rights a half-century ago” evoking memories “of the state’s sometimes violent path to desegregation.” I am sorry but it is a far stretch to equate the denial of state services to illegal immigrants to the denial of civil rights to citizens of the state. The main point of contention is the provision in the law that required schools to check the immigration status of students. How this “provision conjures images of Gov. George Wallace standing in the schoolhouse door to block integration” leaves me mystified. However, I am open minded to anyone who sees a parallel. George Wallace was the typical southern democrat: a segregationist who yelled the N-word loud and often to get elected and re-elected. He even used his notoriety to run for president. When blacks finally were able to vote in large numbers in Alabama, he was miraculously transformed, issued the appropriate mea culpas and re-elected with a significant number of black votes.
A basic question is what is the Alabama law if parents who are citizens secretly send their children to a school outside their district? In some states parents have been fined and/or jailed for doing this. For example, early this year a poor black Ohio woman living in subsidized housing in Akron was sentenced to 10 days in jail and three years probation for sending her two children to a school in another district! Instead of sending them to an inferior school in Akron, she registered them with their father’s address in nearby Copley. The children’s father was found guilty of a felony of grand theft for “defrauding the school system for two years for the educational services provided to his children.” The court said that the cost of sending the children to the wrong school was $30,500.
Ohio’s governor pardoned the parents. However, if it is legal for state to do this to its own citizens for sending their kids to the “wrong” school then why is it illegal for a state not to provide educational services to non-citizens? Moreover, what would Alabama law provide for a non-resident citizen of say neighboring Georgia illegally sending a child to a school across the state line in Alabama? I would wager that there would be expulsions, penalties, fines and possibly jail time too. So the question is why should illegals be given privileges not granted to citizens?
Alabama has been subject to calling the R-word (racist) by the usual suspects. It is not mentioned in the media that two republican representatives have introduced legislation to remove all racist wording from the state's constitution. The measure, co-sponsored by Sen. Arthur Orr, R-Decatur, and Rep. Phil Williams, R-Huntsville, would have to be a ratified by voters in a statewide referendum, likely in November 2012. The offensive language that would be removed includes a provision that says separate schools shall be provided for "white and colored children," and that no child of either race shall attend the same school.It would also remove references to Alabama's "poll tax," which was used to keep blacks from voting until passage of the 1965 federal Voting Rights Act.
So the democrats have replaced the N-word with the R-word in electoral politics. Isn't it interesting that the liberals and especially the black liberals did not say a peep in the defense of the poor black woman in Ohio and yet have all come to the aid of illegals in Alabama? That says something about who is becoming the more important voting block in racial politics.
Rep. Ron Paul in an interview with CNN's Wolf Blitzer was reported in the Politico as: "Paul was pressed by Wolf Blitzer on how eliminating about 221,000 government jobs across five cabinet departments would boost the economy. He responded: 'They're not productive jobs,' he said." The implication is that the 221,000 were employed in activities that would not be demanded by the private sector. Eliminating these positions would enable the 221,000 workers to pursue activities demanded by the market which are by definition "productive". The question is whether this is the case. Undeniably, many government jobs are a creation of the government's desire to grow itself. However, to address the issue of whether these jobs as productive, I fall back on the venerable Adam Smith. On May 29, 2009, I wrote "What would Adam Smith do? http://haroldblack.blogspot.com/2009/05/what-would-adam-smith-do.html). Here Smith on the role of government says that the functions of the government were national defense, administration of justice, and the provision of public goods (transportation infrastructure and education). Although many of us would quibble over education, it strikes me that some of these should be the province of the federal government while others belong to the states. For example, the national defense is the federal government's responsibility rather than the states. To argue that those employed in all aspects of national defense from the private sector companies servicing the demands of the military, to those directly employed by the military are "nonproductive" is at best specious. Although the market does not provide this service, it is because of the difficulties of measuring and meeting individual demands in the market place. All within proximity would receive the same service regardless of demand. In that case, all individuals would allocate $0 for the service. Thus national defense is as much a public good as in transportation infrastructure. Although some may argue that this is the responsibility of the states, one must consider the building of the interstate highway system - a wonderful boon to commerce and to public convenience. It would have been difficult if not impossible for this to have been done by the states. However, other than these few items, the federal government should have few if any other responsibilities rendering those other employees nonproductive. Rather than nonproductive, these workers are counterproductive in that they suck capital out of the real economy and dramatically raise the costs of production. In that sense, Ron Paul was being kind when he called them "nonproductive".
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com