Tuesday, February 27, 2007

Energy, Al Gore, and Audioslave

1) Lynne Kiesling over at www.knowledgeproblem.com wonders why there is no talk of dynamic pricing or offering customers differentiated products that would reduce the need for increased generation and distributional capacity in the TXU deal. This would include such things as variable pricing. It costs the most to generate electricity when the plant is running at or near capacity. By offering variable pricing arrangements (similar to congestion tolls), electricity users could consume power when it costs less, such as at night during the summer, and consume less when is costs the most, such as the middle of summer days. This would more efficiently use electricity generation and distribution resources, reducing the need for additional plants and wires.

Why am I skeptical about the possibility of this happening? Because the public is woefully ignorant about economics and practically now elected official or bureaucrat knows jack about economics.

2) Apparently Al Gore doesn't practice what he preaches: http://www.tennesseepolicy.org/main/article.php?article_id=367
Gore's mansion consumes more electricity in one month that the average American household does in one year. Then again I forget that Al Gore is a member of the Anointed and the moral standards the rest of us are subject to don't apply to him. (See Thomas Sowell's A Conflict of Visions or The Vision of the Anointed for more on the Anointed.)

3) Audioslave was a fairly popular rock band that I actually liked. You can check out their songs for free at http://xsao.net if you're interested. They broke up recently. Three of the members were in Rage Against the Machine prior to forming Audioslave. Rage was a socialist (communist is probably closer to the mark) band and proud of it. They were and are (they've regrettably gotten back together) a socialist band as opposed to a band that is socialist. According to a friend of his, the singer of Audioslave Chris Cornell apparently quit the band because he was tired of writing all the music and splitting the revenue from the publishing rights four ways.

I guess Chris is not a socialist and couldn't stomach the other guys making money off his labor. Perhaps America trading Rage Against the Machine to France for Johnny Hallyday (see my post from a few days ago) will make all parties happy. Maybe this will make the rest of the guys rethink their socialist mentality, but I doubt it. If the rest of band had just respected property rights and the division of laobr a little more, Audioslave might still be around. Thanks to www.antimusic.com for the story. They're always a great source for under the radar music news.

Monday, February 26, 2007

Energy, Energy, Energy

I'm not sure at this point what to make of the TXU buy out deal. http://www.wacotrib.com/news/content/gen/ap/TXU_Sale.html
If the company taking them over does indeed abandon the plan to build 8 of the 11 proposed coal fired plants it will probably be beneficial environmentally in the short and possibly long run. Higher electricity prices could result as well. There are ways to produce electricity with fewer negative externalities (nuclear anyone?).

On the other hand, the prospective new company appears to be heavily influenced by environmentalists promoting renewable energy and conservation. The renewable side of things offers some interesting possibilities, but I don't buy this conservation stuff. The primary reason I don't is because "(o)nly 2% of the energy that starts out in an oil pool under the Gulf of Mexico ends up propelling 200 pounds of mom and the kids-the ultimate payload-2 miles to the game." It takes massive amounts of energy to turn raw energy into usable forms. It takes energy to make energy. Because of this I don't believe that conservation alone, or very much at all for that matter, is the answer to future energy needs, if economic growth is to continue. Here's the link to the article I pulled the quote above from. It's written by Peter Huber, no relation as far as I know. He has also coauthored a really interesting book titled The Bottomless Well.

On a related note, here's an article on the land use costs of biofuels.
There is a trade off between using land to produce ethanol crops and using land to produce food or forest. The author estimates that it might require clearing an additional 50 million acres of forest to produce economically significant amounts of ethanol. This also goes against the historical trend of energy requiring a smaller and smaller footprint over time (a great insight from The Bottomless Well).

Friday, February 23, 2007

Tax Competition

Apparently rock lengend (although I can't remember ever hearing of him) Johnny Hallyday plans to move to Switzerland to escape French tax rates (ahh, he's French; no wonder I've never heard of him).


Some French politicians are letting Hallyday have it for being a bad citizen who seeks to avoid his taxes by moving. Other French politicians sort of get it: people will gravitate to the lowest tax area, everything else being equal. That's the argument for having multiple taxing authorities. If you don't like the one you live under, you're free to move to another one. We've seen this happening with Californians moving to other states. This forces the taxing authorities to use their tax monies efficiently and keeps tax rates lower than the authority might like to.

One more point from this story I can't pass up:

Ségolène Royal, the Socialist party's presidential candidate, criticised the rock legend at her party's conference on Saturday, saying: "When you earn lots and lots of money, you must set an example and pay your taxes in France, the country that has welcomed you and made you a success."

Listen madam, I know nothing of Mr. Hallyday's career, but I seriously doubt that the nation of France did anything for him. Millions of French citizens obviously bought his records and went to his shows, thereby creating his success. By all means let's give credit for someone's success to people or entities that had nothing to do with it. (See my post on Chilton winning state.)

Thursday, February 22, 2007

Various Stuff

1) In today's New York Times there is an article about Korean men using brokers to find wives in countries such as Vietnam. The same thing is happening in India and other Asian countries. One factor is the rising social status of women in Asia which has made them more discriminating, but another is the preference for male children and China's one child policy. Asian and Indian men thus face a smaller pool of women from which to choose a mate. It's amazing the kinds of innovations entrepreneurs come up with to compensate for misguided social preferences (in favor of male children) and wrong headed government policies (the one child policy).

My questions is if you attain a wife through a broker, do you get some sort of money back guarantee?

2) There's a good discussion over at EconLog http://econlog.econlib.org/ about the fact that lots of people truly hate school. This is just as obvious for those of us looking at college students as those of you looking at primary and secondary school students. Maybe one day the educational system as a whole will start to shift to a more efficient structure that is more technical and skill based in nature and is responsive to consumer desires, but I'm not holding my breath.

3) Maybe my favorite Homer Simpson quote of all time:
"Son, a woman is a lot like...a refrigerator! They're about 6 feet tall, 300 pounds. They make ice, and...um...Oh wait a minute! A woman is more like a beer."

Tuesday, February 20, 2007

Priceless Politics

As always, Thomas Sowell has a great column.
In this column he addresses how the poor are used as a means to maintain and expand the welfare state. The amount of money it would take to raise every poor person above the poverty line would be much less than the government spends on welfare.

Sowell then takes on politicians for using the poor as an excuse to do such things as maintain municipal golf courses, which poor people don't regularly utilize. Like Sowell, I fail to see how golf courses fall under the banner of the public interest. The last two paragraphs of the column are outstanding:
"The great allure of government programs in general for many people is that these programs allow decisions to be made without having to worry about the constraints of prices, which confront people at every turn in a free market.
They see prices as just obstacles or nuisances, instead of seeing them as messages conveying underlying realities that are there, whether or not prices are allowed to function. What prices are telling San Francisco is that municipal golf courses cost more than they are worth -- not in my opinion, but in the actions of people who are spending their own hard-earned money."

This is a classic example of rent seeking and free riding. In this case golfers rent seek in the form of voting for politicians who will subsidize golf courses and thus free ride in the sense that the golfers themselves get the benefits of the course without having to pay all the costs the course incurs.

Friday, February 16, 2007

School Finance and Vouchers

On the Waco Trib's editorial there is an editorial on school choice. The article says that one of the drawbacks of school vouchers would be that they would reduce the funding of public schools. Really?

According to the Texas Education Agency, the average per pupil spending in Texas public schools in 2004-05 was $9,269. House Bill 18, which is a bill that would create school vouchers for certain children states that the voucher value would be "equal to the total average per student funding amount in the school district the child would otherwise attend during the preceding school year for maintenance and operations, including state and local funding, but excluding money from the available school fund." Now if this bill were to pass, the revenue question would be a wash for schools. They would lose 1 student and the funding associated with that student. The school district and system as a whole would be no better or worse off financially.

Most voucher proposals call for a voucher amount that is less than the average per pupil spending in public schools. In this case, the public school system would actually be better off financially from the voucher program. They would lose one student, but the revenue decrease would be less than the per pupil spending. There would actually be more money in the public system, assuming the voucher holding student goes to a private school, under a a voucher system in which the voucher amount is less than per pupil spending.

Whether or not school vouchers will be beneficial or are a good idea is a seperate question. However, the idea that school vouchers will reduce available public school revenue as a whole is a myth.

Tuesday, February 13, 2007

Congestion Tolls

If you go over to Knowledge Problem (http://www.knowledgeproblem.com) there is a nice summary of a New York Times article on congestion pricing, which is essentially charging drivers variable road user fees (tolls) depending on the amount of traffic at a given time. Basically congestion tolls would spread traffic out over the course of a days or days and make road usage more efficient in terms of speed travelled and the number of traffic delays.

Here's a link to a site with all sorts of nice information on congestion tolls:

For those brave few who really want to sink their teeth into transportation issues I highly recommend Street Smarts, edited by Gabriel Roth.

Sowell on Global Warming

Thomas Sowell is always worth the read. Today his column is on global warming.

He has one especially great observation:
"There are all kinds of scientists, from chemists to nuclear physicists to people who study insects, volcanoes, and endocrine glands -- none of whom is an expert on weather or climate, but all of whom can be listed as scientists, to impress people who don't scrutinize the list any further."

This is quite common: scientists, economists, etc. lending their names to documents proclaiming something or other on which they have little, if any, expertise. Meanwhile those who do have expertise in a subfield, but don't adhere to the chosen view are marginalized. This is the reason you will very rarely if ever see me making grand proclaimtions on macroeconomics. I am not a macroeconomist and God willing I never will be. Therefore, I don't say a lot about the national economy, especially the finer points of it.

Friday, February 9, 2007

Walter E Williams for President!

The great Dr. Walter E Williams was recently encouraged to run for President by Mallard Fillmore, cartoon news duck. Here's a story on the surrounding mania for Walter:

However, I fear Walter will not be running. "The biggest obstacle to his own candidacy, Mr. Williams said, is his wife of 47 years, Conchetta. 'She said that if I ever thought about it seriously, she'd assassinate me,' he said." Walter does recommend Ron Paul, who like Walter has about as much chance of winning in the current intellectual climate as Michael Moore winning a beauty contest.

Walter does give some tips for long life:
While his age (he'll turn 71 next month) might seem a problem to a presidential run, Mr. Williams says he is in excellent health, thanks to a regimen that includes a personal trainer, bicycling, two glasses of wine each day -- and smoking half a pack of cigarettes daily. "My grandfather smoked a pack of Camels a day, drank almost a half-pint of Old Grandad every day and died when he was 94," he said

Thursday, February 8, 2007

Trade $chool!

Nice to see a trade school doing something good:
There is a shortage of welders. If you don't believe me just open up any classified. This article says the guys start out making $20+ an hour. The question I want answered is why in the name of all that is good and holy do soo many college students who have no aspiration to do anything beside make money not go to trade schools and become welders, electricians, machinery technicians, etc? Why waste all that time and money going to a university when you can save two years and learn immediately marketable skills at technical schools?

Maybe part of the reason is that a university degree bestows some degree of social standing on a graduate. That's probably due to myths about the value of education created by the intelligensia. Those of us in academia need to do a better job of pulling the university off the cross.

Wednesday, February 7, 2007

The Good and the Very Bad

On the good side of things this morning:
This is an article by Walter Olson on warning labels. Thankfully my father never paid attention to the headline.

On the awful side, go over to the Drudge Report this morning and just take a gander at the headlines: global warming skeptics being fired, proposals for ecological crime laws, and a ban on walking and listening to music! (I'm not making that up.)

My shack in the woods days are drawing nearer.

Tuesday, February 6, 2007

Cold, Hard Facts?

Here's a link to an article by a global warming skeptic, a retired Canadian climatologist and current environmental consultant.


Toward the end, he writes:
"Until you have challenged the prevailing wisdom you have no idea how nasty people can be."

Monday, February 5, 2007

Ethanol Subsidies

There is a neat little debate about ethanol subsidies and tax credits at the Property and Environmental Research Center (PERC). It's from their magazine from March 2006.


Super Bowl Ads

I was slightly disappointed. Looked like a disproportionate number of beer ads and way too many ads for the CSI's.

If you go over to The New York Times or catch it at The Drudge Report, one writer thinks that the ads with cartoonish violence, like the Rock Paper Scissors ad, might reflect the toll of the Iraq war. I can only respond: COME ON! It's just funny stuff. Stop reading too much into everything and looking for spurious relationships. What's funnier than a bunch of guys slapping each other?

Texas and Texas A&M tonight in College Station. Big game, especially after A&M knocked off Kansas in Kansas Saturday. I couldn't help thinking about the authorities having to disperse the crowd of Aggies trying to buy tickets. If you want to efficiently distribute tickets, just raise the price. Those willing and able to pay will purchase them. This way, A&M can capture the rents that I guarantee you scalpers will capture instead. Also it may force the Aggies to learn a little economics. Of course raising the prices of tickets due to increased demand will never happen on a college campus, but one can dream.

Friday, February 2, 2007

Is American Idol democratic?

There is an article in The New York Times today on the increased participation of fans in choosing certain pop culture outcomes, such as American Idol, Rock Star, the Grease show and all kinds of stuff involving the Super Bowl. The title of the article is "Democracy Rules, and Pop Culture Depends on It." I can't help focusing on the democracy part of the title and story.

In democratic governments, such as ours (we're not a pure democracy, but that's for another time), everyone has a vote, someone wins, the other person loses, and we live the with decision of the majority and the winner holds office. In the American Idols contests, is there really this type of democratic decision making? The fans vote and someone wins (Kelly Clarkson for instance), but that doesn't stop you from preferring the music of Sideshow Bob (Justin whatever his last name is that was runner up to Clarkson). You still have a choice as to which person's music you prefer and you can act accordingly and purchase their CD's. You are not bound by the decision of the majority. (Granted, the number of votes per person is unlimited in the American Idol case, but the decision is still made by popular vote.) In government, you are bound by the decision of the majority. If you prefer John Kerry too bad, George W. Bush is president.

Which leads me to conclude that the "democracy" practiced in pop culture situations and government are different animals. The democracy of pop culture does not force you to do anything. You can believe that Taylor Hicks is a no talent bum and avoid his tunes like Rosie O'Donnell avoids Chip and Dales dancers. You're not bound by a majority decision. If you don't like a minimum wage set by a democratically elected Congress, just try to make your displeasure known by paying someone or agreeing to work for less!

So all I can say is thank God pop culture as a whole is not democratic. Otherwise I'd be stuck listening to George Strait and Green Day instead of Black Label Society and Dream Theater. Thank God pop culture is subject to the market and not democratic control so I'm not bound by the preferences of the majority and I can't force anyone to adopt my preferences.

UN Climate Change Panel and the French

This line from Jacques Chirac from the Reuters write up on the report is priceless:

"Faced with this emergency, now is not the time for half measures. It is the time for a revolution, in the true sense of the term. We are in truth on the historical doorstep of the irreversible."

Who knows more about revolutions than the French? I guess heads are going to role. I should take bets on which revolution will sweep France first, the revolution in energy and society that will be required to reduce greenhouse gas emissions to some level or the Islamic Revolution that's already well underway in France.

In France's defense they are on their way to banning smoking in public, so they're doing their part to stop emissions. Here's a great summary of the French attitude toward the State from a bank worker on the smoking ban: "We've no choice but to obey. The law is the law. Values have changed, and we have to move with the times." Does anyone is France every stop to think that maybe this attitude is part of the reason the country is in an economic and societal malaise?