Category: Public Policy

Blog author: kschmiesing
Friday, October 14, 2005
By

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.

Blog author: jspalink
Friday, October 14, 2005
By

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.

Blog author: dphelps
Friday, October 14, 2005
By

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.

A man’s home is his castle, unless of course government officials need his property for a new strip mall or a hotel. Since June, when the U.S. Supreme Court dramatically expanded government’s eminent domain powers, some three dozen states have formulated measures to protect property owners from the Kelo v. New London ruling. Sam Gregg looks at the potential Kelo has to “violate basic norms of justice concerning property.”

Read the full commentary here.

In between dire warnings from the World Alliance of Reformed Churches (WARC) about the evil neo-liberal economic order and calls for more money from its member denominations, this gem arrived today via Ecumenical News International:

Church bank says its loans are at forefront of anti-poverty fight

Utrecht (ENI). Thirty years after its launch, a church-backed international development bank says it has become a world leader in providing resources for small loans for poor people to set up in business. The Netherlands-based Oikocredit agency announced it had approved record funding in the first nine months of the year for what is called the microfinance sector, which among other things offers small microcredit loans to cash-strapped borrowers.

According to its website, “Oikocredit believes that poor people can build themselves a better life, if only given the chance, if only given credit.” Beyond the cliches and PC buzzwords, there’s some clear economic thinking going on here.

“Throughout our years of operations, Oikocredit has proven that small poor entrepreneurs, cooperatives and others in developing countries are credit-worthy partners indeed. In fact, the demand for loans offered by Oikocredit steadily increases as the effectiveness of this credit for development is broadly recognised. Thus our loans are directed at groups: cooperatives of small-scale coffee farmers, for instance, who need their own coffee mill for increased income. Or microfinance institutions that split up our loans into thousands of small loans to very poor people.”

It’s not perfect, but its a far sight better than many other half-brained church schemes to “end poverty now.”

This interview with Charles Sandmel, a veteran of the municipal bond market, gives us some insights into current trends in the ethical investing movement. Some key points:

  • The leading market sectors over the last few years are in areas that “most of them [ethical investors] avoid, such as energy.”

  • Ethical investors don’t buy “Big Oil because of the pollution problems.”
  • Examples of ethical investments: wind turbine farms and facilities.
  • Examples of unethical investments: government bonds for nations with standing armies.
  • Sandmel likes bond funds for ethical investors because “going to the companies that are borrowing gives you a much greater chance to engage them on your social issues than simply buying their stock.”

Mark Cuban, billionaire owner of the Dallas Mavericks, opines on his blog about the difference between “investing” and “speculating.” He says, “The difference between the two is very simple. If you spend the money and the only way you can earn a return on that money is by selling whatever it is you have purchased. You are speculating.”

With respect to buying bonds, Cuban writes:

If you give your money to a mutual fund or hedge fund that puts money into public stocks and bonds, that’s super speculation.

Why Super Speculation? Because there is a 99 pct certainty that you are 3rd in line to get paid with whatever earnings the fund generates with your money.

First the fund itself has to get paid. They take money off the top.

Then the person who makes the investment decision has to be concerned about keeping their job. You see if the fund doesn’t outperform its peers or comp indexes, then the person who is responsible for the fund is out of a job.

Do you think that person cares more about putting a roof over his family’s head or you? Which means when push comes to shove, unless there are strict limitations, that fund manager is going to take the chances necessary to outperform his comps. And I can tell you that its par for the course to “go down swinging” than it is to take a called 3rd strike. Meaning, they risk your capital in hopes of keeping their jobs if that’s the only way to keep their jobs.

For Cuban, the “the problem is when the balance between the two shifts from heavy in investing to heavy in speculation.” This is because an emphasis on the former, “when money goes to create commerce, that’s capitalism at its best. Money going to smart people to do smart things. If it has good results, everyone makes money. The economy grows. Expectations are based on the prosperity of the company, typically over a longer term. New ideas create new wealth. It’s not a zero sum game. It can be an everyone wins game.”

But when there’s an emphasis on the latter, and while “speculation isn’t a bad thing. It can serve many purposes,” even so “it primarily just results in redistribution of wealth. If I speculate better than you, even if you are investing in apples and me in oranges, then its just a contest to see who does a better job. The winner gets the cash. Across all the different levels of speculation, the trillions of dollars, its a zero sum game.”

The Samaritan Guide is NOW Accepting Applications — for the 2005 online Guide.

The Samaritan Survey is the entry point for the October 1 — November 30 application to the 2005 Samaritan Guide.

Note: 2005 Samaritan Award applicants need NOT re-apply.

Application deadline is November 30, 2005 at 11:59pm

Eric Schansberg ponders the lessons that we can learn from the aftermatch of Hurricane Katrina. One of Schansberg’s biggest questions in light of the government’s failure to effectively manage the disaster is this: if the government, both local and federal, failed at all levels to deal with Katrina before, during, and after it made landfall, shouldn’t we be looking for other options rather than trying to depend more on a system that obviously failed? Schansberg suggests that while the government does play a role in the welfare of the nation, private organizations, charities, and local community groups are much more capable of dealing with the emotional and physical care of those displaced in the aftermath of the hurricane.

Private charitable activity is always better. Charity is always preferred ethically because people are engaged in voluntary, mutually beneficial exchange with others. Charity is always preferred biblically because it fills the biblical mandate to love others, especially those who are the most vulnerable. Charity, if done well, is preferred practically, because it is more effective, more efficient, and can focus on the spiritual as well as the material concerns of the needy. Again, if government is ineffective, shouldn’t our response be less dependence on government and more encouragement of private activity?

Read the full commentary here.

Blog author: jballor
Wednesday, October 5, 2005
By

Also from last week’s McLaughlin Group, Mort Zuckerman from U.S. News & World Report makes the important point that rising costs of gasoline greatly impact the poorest and most vulnerable populations.

MR. ZUCKERMAN: …It is very difficult in America to really cut back on gasoline consumption, because people go to work and go shopping in their cars. We do not have public transportation in the way that Europe does.

MR. MCLAUGHLIN: Well, we need that for the macroeconomy and the microeconomy.

MR. ZUCKERMAN: Yes, we do need — absolutely, because it is the sole means of transportation both to jobs, to schools and to entertainment. So it is —

MR. MCLAUGHLIN: Forget the means. I’m talking about consumption, consumption, consumption.

MR. ZUCKERMAN: I’m talking consumption, yes. But the other part of it is when gasoline prices go up, if they go up by 50 cents a gallon, people use 20 gallons a week. Okay, that’s $10 a week or $500 a year. And for a couple, that’s $1,000 a year. For the poor people or the people earning relatively…It really hurts a lot. So it really disproportionately hits the poor.

So while prices go up and the market adjusts and people will make decisions based on that, some of us don’t have all options to choose from that a large amount of disposable income allows. If you struggled before when gas was $1.50 a gallon to afford what it takes to commute to your job, imagine when that cost is doubled. Certainly there are still general possibilities for off-setting some of this burden (such as carpooling or relying on what public transportation there is), but especially the short-term effects when the costs of a commodity like gasoline rise as they have, as Zuckerman says, it “disproportionately hits the poor.”

So while on the broader economic level it is best to let the market work, at the same time churches, charities, and community groups should be acutely aware of this, and attempt to address these individual situations as best they can.

Blog author: jballor
Wednesday, October 5, 2005
By

Check out this exchange, involving Tony Blankley from The Washington Times, Pat Buchanan of MSNBC, and Eleanor Clift of Newseek, from last week’s McLaughlin Group about President Bush’s call for people to conserve gasoline in their daily activities:

MR. BLANKLEY: Let me make a quick point. Free-market prices maintain equilibrium of supply and demand. Let the price go up. People will make individual decisions.

MR. MCLAUGHLIN: Right.

MR. BLANKLEY: And they will cut back. They did when the prices went up. Some did; some didn’t. The idea of hortatory calls for conservation never work.

MR. BUCHANAN: John, they are all buying Eleanor Clift Priuses and they’re not buying my Navigators anymore.

MS. CLIFT: Right. (Laughs.)

MR. BUCHANAN: The market is working. People will not drive when the price goes up —

MR. MCLAUGHLIN: So you agree —

MR. BUCHANAN: — but they’ll put investment and money into oil.