Clarkson Energy Homes

What is a budget surplus? Let’s say that you normally spend $400 per month on groceries. This month you budget for $10,000,500 and you spend $500 on groceries. You are out $100 more than usual on groceries. You’ll have to make up for it some where else in your budget. But you have a $10,000,000 grocery budget surplus. You should celebrate. Sound good? Perhaps you should go into government.

Concentrated power is not rendered harmless by the good intentions of those who create it.

— Milton Friedman I think all too often we forget that people in power are ambitious and the person who reins in power to do some good now also reins in power for so many others to do so much bad tomorrow.

Sheldon Richman worte the following in Obama’s Uninformed Optimism on the Future of Freedom Foundation web site.

There is more to fear than fear itself. There’s government and its dim-witted attempts to fix the economy.

The article articulates a pet peeve of mine. Lawyers, like President Obama, do not have the training needed to make economic decisions about a whole country. Heck, economists do not have the training to make economics decisions for a whole nation. IMO, we need a system of government which strips government of the power to affect the economy. Swearing a person into office does not magically imbue that person with a means to predict the future or to understand an economy. Relying on any government official to “fix” the economy reveals at least one major flaw in our system of governance. As long as we rely on a flawed system of government we do ourselves and our descendants a huge disservice.

While we are certainly in a worldwide recession, not everyone is hurting. Throughout much of the world a new middle class is expending. I read this article in The Economist and the one it refers. A lot depends on what you call middle class. The American Middle Class would hardly recognize the Chinese Middle Class, but a very large portion of the world is becoming the new world middle class and that means we will see a lot of the things that come with emerging middle classes. Things like more democracy and more migration from rural to urban areas. And political machines being replaced by term limits and subsidizing agriculture and selling lots of televisions and cell phones.

Steve Fambro is the inventor of an electric vehicle which gets something like 33 miles to the dollar. It is one of those prototypes, but has already sold a few thousand cars. In this short video of an interview with Steve he describes an interesting, but not uncommon problem with his suppliers. Regulation of industry is subject to change. Usually changes are attempted annually by some federal or state legislators. Many changes come from the industry itself. Big industry players like regulation because it allows them to eliminate or to greatly reduce their competition. Industries which are dominated by big bureaucratic companies are less likely to be as nimble as companies like Steve Fambro owns. When we use regulation to reduce competition we often clear the path for less nimble companies. That changes the landscape of the playing field for that industry. All the suppliers have to deal with a bureaucracy and they have to adopt priorities which cater to slow moving, slow changing customers. Regulators want a few big players in their industries. They can monitor them easier and there is less to do. Regulators have a better chance to keep control of their industry if they do not have a bunch of small competitors constantly innovating what they are attempting to regulate. That’s one reason why regulators pressure legislators for long laborious processes to get anything accomplished. If they let everything happen quickly they would never be able to keep regulations up to date with practice. Innovation drives progress. We are worse off as a species when we slow innovation. Why would anyone deliberately slow progress? The answer lies in our systems of government. The players in those systems are often rewarded for slowing innovation. Regulation is all about control. Innovation is all about chaos. Control and chaos are not best buds. Thus regulators, seeking to make their lives easier, reduce chaos, thus making everyone’s life worse off. Innovation can be found in controlled environments. It is just slower to happen. Slowing innovation has been the goal of many humans throughout history usually because they do not see where this chaotic future will take us. Invariably it takes us all to a better place.

What is a “But” libertarian? It is a libertarian who uses a phrase like, “I am all for free markets, but … [inset some government planned economy].” “But” libertarians are not real libertarians. John Stossel was (and probably still is a “but” libertarian. He is all for small government except for pollution control. Never mind that the U.S. government is the single largest polluter in the world. They can fix it. They’re the government! If you see a free market economist telling a reporter about his plan to fix the economy and his plan does not include removing the power to regulate from all forms of government then he is not a free market economist after all. His plan controls the economy and he is advocating a controlled economy, not a free one. I am a free market advocate. My advocacy plan is that we should have no plan for the economy. Let the market participants, not government decide if more people should own their own homes or drive new cars or if private banks should be lending money or holding on to every dime. Defend the right of each citizen to trade without government interference or support. Set us free of your plan. Please stop helping us.

I have a book from the seventies somewhere around here called The Disaster Lobby. It’s out of print, but you can probably find it on half.com or at a used book seller. It is an important book because it tells the history of many of the disasters that were going to happen last century which never came about. Here’s a little video from The Heartland Institute about our favorite Bogeyman, Global Warming. If you are Global Warming advocate or even a skeptic, why not skip over to Heartland to see the skeptic side of the argument? It won’t kill you to look.

Here’s an excerpt of a dialog I am having with someone in my local newspaper that I thought was of interest. (I cleaned up a few typos.) Creed wrote:

If we treat drug addiction as a disease, yet legalize drugs, are we not offering up the disease to even more weak-willed persons?

Yes. But protecting weak-willed persons from their own self-destructive behaviors is not a legitimate use of government. I’m addicted to those Little Debbie Swiss Rolls. I know I shouldn’t eat them. They’re little rolls of sugary goodness, but they are detrimental to my health. I don’t think anyone would seriously make the case that making them illegal is a legitimate use of government. BTW, I just ate a whole box of HEB Swiss Rolls while I was writing this reply. [Don't say it. Don't say it.] (more…)

I found this great resource for Storm Shelters. The page illustrates the old web adage that content (and not form) is king. The frames version, for example, keeps removing the menu frame and resorting back to the frame-less version, which has no navigation. A very clunky interface that people are obviously willing to deal with to get this information. I read the storm shelter page with great interest. It has all the stuff I needed for my research into storm shelters and there is another page hidden away that has still more external resources about storm shelters. I don’t know if they are still working, but at least they existed at one time. So what does this have to do with economists? Well, close to the bottom of the page is this little story to illustrate another old adage: Let the buyer beware.

However, this is a good time to remind everyone that there are always “companies” that rush in after a disaster to take advantage of the victims of that disaster. It is sad but true. After Hurricane Andrew struck southern Florida, trucks crammed with jugs of tap water pulled into town, charging exhorbitant [sic] prices for something that, a day or so before, was not even considered valuable. After the ice storm struck Quebec, Canada in January, 1998, the same kind of thing happened. We heard of one person buying a whole truck-load of generators, then trying to peddle them to power-less Canadians at twice the price. There are companies that have products that can be “turned into” storm shelters. They have jumped into the shelter business, adapting these products somewhat. So go by the old adage, “Let the buyer beware!” If you have already decided that you are going to buy a shelter, ask the hard questions before you invest–because it really IS an investment.

The little amateur economist in me keeps pestering me about another old adage. People who excel in one field of study or research do not necessarily have more or better insight in another field which they have not studied or researched well. In this case, these storm shelter experts do not have any better insight into economics, which they have obviously not studied well. The owners of those “trucks crammed with jugs of tap water [that] pulled into town, charging [exorbitant] prices” were well compensated for their risk of negotiating washed out roads, looters and other disaster related dangers. Had they not pulled into town with their high priced water, the town would have had many truckloads less of much needed potable water. The incentive to provide cheaper water to survivors was not lessened by their arrival. The incentive to do better future disaster planning was instilled in the buyers of that high-priced water. The “person buying a whole truck-load of generators, then trying to peddle them to power-less Canadians at twice the price” provided a whole truckload of generators which might never had arrived at the site of the disaster had that person been forced to sell the generators for a more “reasonable” price. The incentive to provide cheaper power to survivors was not lessened by the arrival of that one truckload of generators. The incentive to do better future disaster planning was instilled in the buyers of that high-priced power. Note to self: Avoid supplying extra information about the reasons you are providing information on a web site. Stick to the subjects you know best.

Only government could pay $646,214 per government job and think it a bargain. That’s the estimated cost given by Alan Reynolds at CATO based on the math behind the latest Stimulus Bill. In a Wall Street Journal Reynolds said:

Mr. Zandi’s current estimates have government employment growing by 330,400 over two years as a result of the House bill (compared with 244,000 in Bernstein-Romer paper). Yet even that updated figure still amounts to only 8.3% of total jobs added, even though state and local governments are to receive 39% of the funds ($214.5 billion). Spending $214.5 billion to create or save 330,400 government jobs implies that taxpayers are being asked to spend $646,214 per job.