Acton Institute PowerBlog - Entries from Friday, October 14, 2005

Attack of the So-Called Free Markets!

Friday, October 14, 2005

Economic reality is finally catching up with the big American automakers and their suppliers, as noted by Thomas Bray in Wednesday’s Detroit News:

Around Detroit, the bankruptcy of giant auto parts maker Delphi Corp. is seen as a precursor of what’s in store for the entire American auto industry. More fundamentally, it confirms the bankruptcy of the industrial welfare state.

The powers of denial ensure it may be some time before our politicians, unions and even corporate leaders catch up to that fact. Exhibit A was the knee-jerk rant by Gov. Jennifer Granholm, who pronounced herself “angry” at Delphi. She then went on to blame the usual catalog of left-wing villains: “globalization,” “outsourcing,” “upper management,” “lack of support from Washington for the industries that made our country great” and “so-called free trade.”

Oh yes, and not enough government spending on health care.

I must pause here to note that Governor Granholm seems to be of two minds on the issue of globalization. Sure, international trade and investment are great when German and Japanese corporations partner to open a new engine plant in your state, or when you go on a trade mission to Japan in order to urge Japanese companies to outsource their jobs to... (ahem) ...“invest in Michigan.” But when Delphi feels the heat of international competition? Well, that’s another story.

But I’ve gotten off-topic. Returning to Bray’s article, we see that all of the reasons listed by Granholm for Delphi’s struggles lose their punch when faced with cold, hard reality:

But no amount of foot-stamping is likely to change facts. Among them: Delphi’s 33,000 unionized workers in the United States, like those of General Motors, Ford and Chrysler, still earn far above the national average in wages and benefits long after it was clear that this was no longer sustainable.

Touché.

Bray closes with an observation that we would do well to take to heart:

Globalization isn’t the enemy. It’s simply the messenger, exposing the rotten structure of the industrial welfare state for what it is, a lumbering dinosaur that can’t see 20 feet ahead of itself. Like the broader welfare state, to which it is so closely tied through labor, tax and other laws, the industrial welfare state of the 20th century is badly overdue for a rethinking.

Related: Suspension of Davis-Bacon Act in hurricaine-ravaged areas leads to higher wages for workers.

Posted by Marc Vander Maas in Business and Society at 15:30 | Leave a comment | Trackback

More Radiation?

Friday, October 14, 2005

I can’t vouch for the validity of any of the claims made in this new book from Laissez-faire Books, but I confess its publicity material piqued my interest. It argues that inordinate fear of radiation leads to unnecessary and even counterproductive energy policy. As one none-too-keen on radiation in general (stand away from that microwave!), I’m nontheless intrigued by this book’s argument.

Posted by Kevin Schmiesing in Technology & Regulation at 11:25 | Leave a comment | Trackback

Cuisinarts of the Air

Friday, October 14, 2005

An article appeared in Wired News today on the unintended consequences of wind farms. One of these consequences -- among many others, I’m sure -- is “an astronomical level of bird kills.”

Thousands of aging turbines stud the brown rolling hills of the Altamont Pass on I-580 east of San Francisco Bay, a testament to one of the nation’s oldest and best-known experiments in green energy.

Next month, hundreds of those blades will spin to a stop, in what appears to be a wind-energy first: Facing legal threats from environmentalists, the operators of the Altamont wind farm have agreed to shut down half of their windmills for two months starting Nov. 1; in January, they will be restarted and the other half will be shut down for two months.

Though the Altamont Pass is known for its strong winds, it also lies on an important bird-migration route, and its grass-covered hills provide food for several types of raptors. “It’s the worst possible place to put a wind farm,” said Jeff Miller, a wildlife advocate at the nonprofit Center for Biological Diversity. “It’s responsible for an astronomical level of bird kills.”

In July, Anthony Bradley wrote a piece for Acton News and Commentary titled “The Answer is (not) Blowing in the Wind,” which touched on this point. While wind farms can provide a somewhat less polluting energy source, environmentalists now desire that they be placed in areas with the least biological and ecological impact. Good luck. Nature is all around us and it will never be possible to generate energy without impacting the environment. This has been true since cavemen discovered fire. And while the levels of impact vary (I think we can all agree that destroying the ecosystem of a river by dumping heated water from a powerplant is worse than some dead birds), there will always be an impact.

All of this (various examples from the Wired article included environmental impacts on sheep, bats, birds, marine animals, ...) begs the question: If we’re going to have to shut down wind farms every other month to protect the environment, is it wasteful stewardship? While wind power may provide some (and by some, I mean very little) alternative energy, if it’s not a consistent source, shouldn’t we be investing in more efficient means of energy production rather than wasting time and space on wind power?

As a side note - another article in Wired suggests that nuclear power (cleaner and more cost effective than coal) can pave the way to efficient and economically driven power generation for the United States.

Posted by Jonathan Spalink in Environmental Stewardship at 11:02 | Comments (2) | Trackback

Touché

Friday, October 14, 2005

For a succinct article on governmental processes versus private processes, see this nice little report by Bill Steigerwald. It focues on responses to Hurricane Katrina by private companies and by the city, state, and federal governments. Stories like these need to be circulated more widely.

Posted by David Michael Phelps in Effective Compassion at 10:27 | Leave a comment | Trackback

Through Rain, Sleet, and Privatization

Friday, October 14, 2005

Hello, Newman-san.

Any predictions on how this will turn out? All eyes should be watching Japan, whose legislature just approved the privatization of their postal service. (It is important to note that the Japanese postal service is markedly different from ours here in the States.)

It is also a state-owned savings bank with more than $3 trillion (਱.7 trillion) in assets, making it by some measures the largest financial institution in the world, and the largest provider of life insurance in the country.

Golly, Gus, looks like the times are a-changin’.

Of course, the States have private agencies to compete with the US Postal Service: FedEx and UPS are the two largest (nearly 80% of the express delivery market is held by these two alone--I hesitate to list DHL as a private company; the majority-owner of their parent company, Deutsche Post, is the German government).

Will America ever retire its government post? I think whatever happens in Japan will be an important element in that conversation. But nonetheless, the Japanese move is an important event for all who believe in individual initiative, for more than one reason. But if it does nothing else, the news illustrates why classical liberals ought to be persistent: (now) Prime Minister Koizumi has been calling for this privatization since 1979.

So for all you out there calling for privatization of social security, or education, or ________, buck up; all things come to those who wait--even government-delivered mail.

Posted by David Michael Phelps in News and Events at 09:52 | Leave a comment | Trackback