Friday, July 30, 2010

America's Biggest Oil Spill

We will still have to see what the long term effects are--but so far, the damage of the BP oil spill appears to be more economic than ecologic.

The Deepwater Horizon explosion was an awful tragedy for the 11 workers who died on the rig...But so does not seem to be inflicting severe environmental damage. "The impacts have been much, much less than everyone feared," says geochemist Jacqueline Michel, a federal contractor who is coordinating shoreline assessments in Louisiana...

So far, the teams have collected nearly 3,000 dead birds, but...the
Valdez may have killed as many as 435,000 birds..."We can't speak to the long-term impacts, but Ivor is just saying what all of us are seeing," says Amy Holman, a National Oceanic and Atmospheric Administration (NOAA) director for Alaska who is working on van Heerden's assessment team in the Gulf...

Marine scientist Ivor van Heerden, another former LSU prof, who's working for a spill-response contractor, says, "There's just no data to suggest this is an environmental disaster. I have no interest in making BP look good — I think they lied about the size of the spill — but we're not seeing catastrophic impacts." Van Heerden, like just about everyone else working in the Gulf these days, is being paid from BP's spill-response funds. "There's a lot of hype, but no evidence to justify it..."

"There are a lot of alarmists in the bird world," Kemp says. "People see oiled pelicans and they go crazy. But this has been a disaster for people, not biota."

From Time Magazine, 7/29/2010 "The BP Spill: Has the Damage Been Exaggerated?"

The photo essay of 100 Days of the Oil Spill is worth checking out, though notable for its absence is any mention of the US delay in accepting international offers of assistance.

HT The Rational Capitalist. (And be sure to check out the political cartoon he links to.)

Thursday, July 29, 2010

Take a Test on Economics

  1. Gross Domestic Product (GDP) measures a country's total economic activity. T or F?
  2. Consumer spending represents around two-thirds of the economy. T or F?
  3. If prices are stable, that means there is no inflation. T or F?
  4. Money is a creation of government. T or F?
  5. A period of gently falling prices is a bad thing. T or F?
  6. Before the Reserve Bank/Fed/Bank of England was created, the world was wracked with inflations, booms and busts. T or F?
  7. Economics is a "value-free" science. T or F?
  8. Saving takes money out of the economy. T or F?
  9. Interest rates are set by the Central Bank. T or F?
  10. A good war is good for the economy. T or F
  11. Government spending pumps up an economy in depression. T or F?
  12. Banks are inherently bankrupt. T or F?

Answers here.


Wednesday, July 28, 2010

Free Market means Freedom

"Underlying most arguments against the free market

is a lack of belief in freedom itself."

Milton Friedman, Capitalism and Freedom, 2002, pg 15

The first part of that quote is great too:
"A major source of objection to a free economy is precisely that it ... gives people what they want instead of what a particular group thinks they ought to want."


Sunday, July 25, 2010

Happiness--the proper state for Man

With all the political crap going on---this is a reminder to myself: I love People!!
(Wealth truly is not the problem)

Also posted here.

Matt's website: Where the Hell is Matt?

HT John Dick, personal communication.

Friday, July 23, 2010

Dodd-Frank claims its first victim

"Ford Motor Co. is an outstanding recent success story, having just announced solid earnings. They restructured wisely, shedding Jaguar and Volvo, and took no bailout money. But they ran into trouble last week when their auto financing operation tried to issue debt. The rating agencies, fearing Dodd-Frank, refused to let Ford use their AAA rating in the offering prospectus. Many prospective buyers are forbidden from buying debt without this rating. So Ford had to pull the offering.

In financial markets especially, political incentives are swamping market incentives. The voice of the consumer, as transmitted through the price system, grows fainter with each new "reform.
(Source: Wall St. Journal July 21st) "

Warren C. Gibson, 7-21-2010, communication via Barstool Economists Yahoo group.

"No legal tender law is ever needed to make men take good money;

its only use is to make them take bad money."

-- Stephen T. Byington, Source: September 1895, American Federationist

Wednesday, July 21, 2010

Capitalism can't be failing when it doesn't exist.

"Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It’s not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!"

-- Ron Paul(1935-) American physician, US Congressman (R-TX) Source: Has Capitalism Failed?, July 9, 2002

HT Liberty Quotes

Also---be sure to check out a great post by 3 Ring Binder on politicians then and now.


Tuesday, July 20, 2010

Buy low, Sell high

"When buying and selling are controlled by legislation, the first things bought and sold

are legislators."

-- P. J. O'Rourke (1947- ) US humorist, journalist, & political commentator
HT Liberty Quotes

Monday, July 19, 2010

Docs 4 Patient Care on Berwick appointment

Docs 4 Patient Care is an active, reputable physician's group working hard to promote health care freedom. I have personally talked with a number of the board members. They are hard working, honest individuals dedicated to providing quality care to their patients and restoring independence and freedom to medical decision making. Please check them out and provide them support.

My son thinks the following YouTube clip is "scaremongering" similar to the tactics of the global warming alarmists. Perhaps he is right about the tone and the style of message--but the major difference I see is that Dr. Scherz is correct in stating that socialized medicine increases pain, suffering and death. That statement is not conjecture but fact.

Dr. Berwick openly advocates the redistribution of wealth as necessary to the provision of health care. This is the fundamental premise of socialism: from each according to his ability, to each according to his need. This is the premise which led to the totalitarianism of the Soviet Union, and is causing the current economic stagnation of Europe, and increasingly in the United States. It's time that President Obama and Speaker Pelosi were honest about their socialist intentions so that the debate in America can center on the right issue.:

Do we still believe in individual rights, freedom and limited government, or do we submit to the directives and central planning of the political elite?

Freedom or Statism.
The choice is still ours.

Dr. Berwick:
"Any health care funding plan that is just, equitable, civilized and humane must, must, redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent health care is by definition redistributional."

Saturday, July 10, 2010

Hayek on Liberty, Values and Altruism

Another good quote from Hayek's Constitution of Liberty. (Warning: I am cherry picking quotes. There is much to disagree with in Hayek.)

Hayek's appreciation of the importance of liberty both allows him to tumble upon some key ideas, while at the same time distracts him from looking for the even more fundamental principles upon which liberty is properly grounded. I am discovering his propensity for empiricism as manifested in his view that the "wisdom of social progress" (a sort of "wisdom of the crowd" through time) is superior to the individual rational mind for identifying the proper rules and institutions for human interaction. Also, he views the foremost purpose of liberty not as the means for man to live his individual life free from the aggressive acts of other men, but rather as the best way to guarantee the progress of civilization. In the quotes below, however, he drifts close to comprehending one of the problems with altruism, and stumbles into the importance of being free to act upon one's own values.

Coercion is evil precisely because it thus eliminates an individual as a thinking and valuing person and makes him a bare tool in the achievement of the ends of another. --pg 21

To extol the value of intellectual liberty at the expense of the value of the liberty of doing things would be like treating the crowning part of an edifice as the whole.
--pg 33

General altruism, however, is a meaningless conception. Nobody can effectively care for other people as such; the responsibilities we can assume must always be particular, can concern only those about whom we know concrete facts and to whom either choice or special conditions have attached us. It is one of the fundamental rights and duties of a free man to decide what and whose needs appear to him most important.

The recognition that each person has his own scale of values which we ought to respect, even if we do not approve of it, is part of the conception of the value of the individual personality. How we value another person will necessarily depend on what his values are. But believing in freedom means...that we do not feel entitled to prevent him from pursuing ends which we disapprove so long as he does not infringe on the equally protected sphere of others.

A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom. --pg 79


Thursday, July 8, 2010

Majority Rule, Democracy and Liberalism

I am currently reading The Constitution of Liberty by Friedrich Hayek. Although there is much in his writing with which I disagree, I find the following quotes helpful in clarifying a distinction which has been a point of dissension for several discussions (on and off line) in which I have recently been involved.

Like most terms in our field, the word "democracy" is also used in a wider and vaguer sense. But if it is used strictly to describe a method of government---namely, majority rule--it clearly refers to a problem different from that of liberalism [in the European 19th century meaning of the word]. Liberalism is a doctrine about what the law ought to be, democracy a doctrine about the manner of determining what will be the law. Liberalism regards it as desirable that only what the majority accepts should in fact be law, but it does not believe that this is therefore necessarily good law. Its aim, indeed, is to persuade the majority to observecertain principles. it accepts majority rule as a method of deciding but not as an authority fo rwhat the decision ought to be. To the doctrinaire democrat the fact that the majority wants something is sufficient ground for regarding it as good; for him the will of the majority determines not only what is law but what is good law.
--F. Hayek, The Constitution of Liberty, University of Chicago Press, 1960, pg 103-104

Then in an end note, Hayek quotes another author in a way that I think adds even further clarification:

Liberalism and Democracy happen to be two things which begin by having nothing to do with each other, and end by having, so far as tendencies are concerned, meanings that are mutually antagonistic. Democracy and Liberalism are two answers to two completely different questions.

Democracy answers this question--"Who ought to exercise public power?" The answer it gives is--the exercise of public power belongs to the citizens as a body.

But this question does not touch on what should be the realm of the public power. It is solely concerned with determining to whom such power belongs. Democracy proposes that we all rule; that is, that we are sovereign in all social acts.

Liberalism, on the other hand, answers this other question,--"regardless of who exercises the public power, what should its limits be?" The answer it gives--"Whether the public power is exercised by an autocrat or by the people, it cannot be absolute: the individual has rights which are over and above any interference by the State."
-J. Ortega y Gasset, Invertebrate Spain, quoted in Hayek, ibid, pg. 442

It is thus possible to consent to the political order (e.g. the use of majority rule) without agreeing to the rightness or justness of every majority decision.


Sunday, July 4, 2010

4th of July

On the 4th of July, I like to use the day to contemplate all that is good and right about our country, its people and its form of government.

Two hundred and forty-four years ago, on this day, a group of men agreed to a statement declaring independence from a tyrannical government. At the time that Great Britain was accused of this heinous crime, it was the freest country in the world. Still, it fell short of a government for free and independent men.

That document was a declaration of independence not just for a band of British colonists, but for all of humanity:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.
The full and consistent application of the the principle of equal individual rights has yet to occur in this country or elsewhere-but this document correctly names the proper principle to guide our social an political interactions; the mutual respect of the inalienable rights to life, liberty and the pursuit of happiness.

Even such a clear, concise statement is open to varying interpretation unless we rigorously define each and every salient term. What is meant by equal? Unalienable? Liberty? The pursuit of happiness?

From the second major crisis of liberty which our country faced, I'd like to add the following quote in an attempt to extend our understanding:

Baltimore, Maryland, April 18, 1864

...The world has never had a good definition of the word liberty, and the American people, just now, are much in want of one. We all declare for liberty; but in using the same word we do not all mean the same thing. With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others the same word may mean for some men to do as they please with other men, and the product of other men's labor. Here are two, not only different, but incompatable things, called by the same name---liberty. And it follows that each of the things is, by the respective parties, called by two different and incompatable names---liberty and tyranny.

The shepherd drives the wolf from the sheep's throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as the destroyer of liberty, especially as the sheep was a black one. Plainly the sheep and the wolf are not agreed upon a definition of the word liberty; and precisely the same difference prevails to-day among us human creatures, even in the North, and all professing to love liberty. Hence we behold the processes by which thousands are daily passing from under the yoke of bondage, hailed by some as the advance of liberty, and bewailed by others as the destruction of all liberty. Recently, as it seems, the people of Maryland have been doing something to define liberty; and thanks to them that, in what they have done, the wolf's dictionary, has been repudiated.


Lincoln, Abraham, 1809-1865. Collected Works of Abraham Lincoln. Volume 7.

Have a wonderful 4th of July.