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.

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.

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.

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.

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.

Acton President Rev. Robert A. Sirico appeared yesterday on Your World with Neil Cavuto on the Fox News Channel and discussed the president’s nomination of Harriet Miers to replace Sandra Day O’Connor as an Associate Justice of the United States Supreme Court.

If you didn’t have a chance to catch the interview live, you can watch it by clicking here (5.2 mb Windows Media file).

The issue is not conversion, but jurisprudence.

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.

Rosa Parks Circle, Grand Rapids

Rosa Parks Cicle is a small park in the middle of downtown Grand Rapids. It is often used as a public music venue in the summertime, and an ice skating rink in the winter. Unfortunately, this year it was scheduled to remain closed (like so many parks facilities and pools in the area) due to a citywide budget crunch. Here is where businesses and private individuals step up and take the baton where the local government fails. Two businesses (LaSalle Bank and Centennial Wireless) have written checks to the city, providing the needed funds to run the rink, on a limited basis. The Grand Rapids Griffins Youth Foundation, a tax-exempt organization affiliated with the city’s American Hockey League franchise, will also be providing free skate rentals to those who need them.

While I don’t ice skate very often, every time I do head downtown in the evening to the Rosa Parks Circle. The ice rink is packed with people of all ages skating around and having a great time. From all of us who use the facility, a big thank you to LaSalle Bank, Centennial Wireless, and the Grand Rapids Griffins Youth Foundation for your contributions and for keeping skating downtown available to all.

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.”