Tuesday, January 30, 2007

Nuclear Power: Hated by Environmentalists

The environmentalists' hatred for man and his technology is revealed by the reluctance of most environmentalists to embrace nuclear energy as a solution to the alleged global warming problem. Nuclear plants emit no carbon dioxide. Yet, environmentalists will rant and rave against nuclear power for all of its alleged harms, despite the fact that in the West not a single person has died from an emission of radiation into the environment by a nuclear power plant.

If the Nuclear Regulatory Commission were shut down, and all federal and state regulations were eliminated on nuclear power plants (and all other forms of electricity generation), I suspect that we would generate the majority of our electricity from nuclear power plants. Nuclear power has an inherent economy of scale because a very tiny amount of material can produce a huge amount of energy. Nuclear energy is very concentrated. This means that the cost of handling uranium and disposing of waste is very small in comparison to the amount of energy produced.

Contrast this with coal, where many 100-car-long trainloads of coal are needed to produce the amount of electricity that could be produced in a couple softballs' worth of uranium. Even with nuclear waste being radioactive, it is far easier and more environmentally "friendly" to dispose of nuclear waste than it is to dispose of coal waste, some of which inevitably gets disposed of in our lungs.

Only a wealthy, technologically advanced society can cheaply deploy a technology as advanced and beneficial as nuclear energy. Nuclear energy is clean and would be very cheap if it were not regulated. Yet all of the regulations on power generation -- including the pollution rules on fossil power -- just make our economy that much poorer, and less able to afford something as magnificent as nuclear power. So, ironically, by attempting to regulate in order to prevent pollution, such regulations have the opposite effect of making us poorer and therefore more likely to use polluting technologies, such as fossil fuels.

This point may not seem obvious, but observe that the worst polluting societies are the emerging Third World countries that are far poorer than ours. China, the former Soviet Union, developing parts of Africa and Asia, all have far more polluted air than we have in the West. Poverty and pollution go hand-in-hand.

As a final tidbit on nuclear power, I remember reading about an Alaskan village that wanted to install a tiny underground nuclear reactor for electricity. They believed it would be far cheaper to generate electricity through nuclear fission than it was to burn fuel oil that had to be arduously transported at great expense to their small village. I spoke to a nuclear engineer who told me that it was feasible to make such small nuclear reactors, but you would have to wait for "hell to freeze over" before the regulators would permit it. Given how much those Alaskan villagers have to pay for electricity, and how low they probably set their thermostats to save money, I imagine that they are already living in their frozen little hell.

Monday, January 29, 2007

Señor, Where's My Tortilla?

At the risk of sounding drunk on the ethanol story, here is another unintended consequence of that boondoggle. The excellent Latin American editorial columnist Mary Anastasia O'Grady describes in today’s Wall Street Journal a scenario south of the border whereby Mexicans may soon discover they have run out of tortillas.

This unlikely of scenarios requires a "perfect storm" of government intervention on both sides of the border. It hasn’t happened yet, but warning signs of the coming storm are visible. The first of these, the U.S. ethanol subsidy, is already underway. As a result, global corn prices are rapidly rising. Corn futures are at record levels.

Tortillas, made from corn, are a ubiquitous and tasty staple of Mexican cuisine. Spanish conquest, wars, revolutions, and socialist economic policies could not dislodge the tortilla from its central place in Mexican cooking. However, a perfect storm combination of artificially high corn prices caused by the U.S. ethanol subsidy, Mexican quotas on imported corn, and impending price controls has the potential to do so.

How could this happen? Mexico has long imposed a quota limiting imports of corn. The ostensive purpose of this policy is to ensure a sufficiently high price of corn domestically so that the many thousands of Mexican subsistence farmers could keep operating. Farming small plots of land high in the mountains in a style that has barely changed since the days of the Aztec Empire cannot compete with the economies of scale of modern, industrial farming.

However, Mexican corn farmers are free to export their corn if the global price is high enough. Guess where the big new demand for corn is pushing global corn prices to record levels? The new demand for corn is coming from the U.S. ethanol plants that are converting corn into ethanol.

Now, there can still be enough tortillas on the street corner, albeit at much higher prices, if the price mechanism is not interfered with. Tortilla prices will simply rise to reflect the higher prices of corn.

But in Mexico, tortilla prices are a political issue. So, the government there is considering imposing price controls on tortillas. If that happens, in accordance with the economic law of supply and demand, a shortage of tortillas will develop. Too many people will want tortillas because the price is held artificially low, and not enough tortilla makers will want to make tortillas because they cannot make a profit when corn prices are so high. So, don’t be surprised if next time you are in Mexico, you overhear one hungry Mexican asking another: ¿Señor, dondé está mi tortilla?


Note: Edited last paragraph for clarification and style on 1/30/06.

Tuesday, January 23, 2007

Drunk on Ethanol

In economics, there is the principle that capital will flow to its highest use. In other words, if you can make a profit doing something, you will find backers for your idea.

That principle is forgotten in what is shaping up to be a monumental boondoggle. I am referring to the government's massive program to promote the production of ethanol as a substitute for gasoline. The motives for this program are several. The stated one is that it will improve our security by reducing our dependence on Middle Eastern oil. That is unlikely. But the less frequently mentioned reason is that it is a sop to farmers. It is seen as yet another in the long, 75-year history of government programs that subsidize farmers: most ethanol is made from corn.

Already, corn farmers are feeling the money-rush of Bush's 2005 expansion of government support for ethanol production. Prior to 2005, ethanol producers benefited from favorable tax treatment, in particular an exemption from the 51 cents-per-gallon federal tax on gasoline. Despite that relative advantage, ethanol production for fuel had grown modestly. The Bush-sponsored Energy Policy Act of 2005 went much further. That Act made the tax break permanent, imposed a tariff on imported ethanol, and called for the first-ever requirement that gasoline producers incorporate a quantitative target of ethanol into a gasoline-ethanol blend to be used by cars.

The effect of the triple-punch of favored tax status, tariffs and production quotas has been huge. In just the past two years, the number of ethanol plants in operation has doubled to 110. Half of these are owned and financed by farmers. In 2006, 5.4 billion gallons of ethanol were produced as producers labored to meet the quota.

Today, President Bush proposed more than quadrupling the bet on ethanol by raising the mandatory production target for gasoline substitutes, primarily ethanol, to 35 billion gallons from the current 7.5 billion target. That represents more than 20% of current gasoline consumption.

Such a massive increase in ethanol production, because it largely depends on corn, will predictably raise the price of corn. It is already happening. Higher corn prices mean higher prices for everything that is made from corn, including livestock feed and high fructose corn syrup. (High fructose corn syrup is itself a market that was largely created by government intervention, in this case the near-prohibition of sugar imports.) This means higher prices for meat and the large number of food products that are sweetened with high fructose corn syrup such as soft drinks. American corn exports will also suffer as they are slowly priced out of the international market.

All of this will have a sad and predictable end. Eventually, the subsidies will be curtailed and/or the price of oil will fall to such a level that ethanol will become unprofitable even with the subsidies. A majority of the plants that produce ethanol will be shut down. Farmers who invested in the ethanol plants will lose their investments. Farmers who plowed under their soybeans and grain fields to plant more corn will get hammered. And, at the end of the day, we will discover that the entire effort did not make a dent in our imports of oil, which will be greater than ever. (The latter acknowledges that production of ethanol may actually consume more energy than it produces. If that is true, increasing ethanol production may result in greater imports of oil. Even if it is not true, it is unlikely that ethanol production will result in any significant energy savings. See the first link above.)

A lot of investment, both direct investment through venture capital and government subsidies, and indirect investment through the diversion of resources from other uses, will be wiped out.

All of this is easy to predict because the government's sponsorship of an ethanol program violates a basic principle of capitalism. That principle is that capital flows to its highest and best uses, if it is left free. If ethanol were practical, no subsidies would be necessary. Because subsidies are necessary, it is not practical. Once the impracticality of ethanol is revealed in the marketplace and the subsidies end, the entire pseudo-industry crashes down.

Government management of the economy never works. There are no examples of legitimate industries requiring subsidies, and no examples of subsidized industries that are legitimate, to the extent they are subsidized. All subsidies destroy wealth. Today, everyone -- farmers, politicians and international security "experts" -- is drunk on ethanol. Tomorrow, all of them -- and all of us who were forced to pay for this boondoggle through higher taxes and prices for corn -- will wake up with a hell of a hangover.

* * *

UPDATE 1/25/07: The good times at the ethanol punch bowl may end sooner than a lot of soon-to-be-unhappy investors and farmers may realize. The Dow Jones Newswire reports:

"Speaking... at the World Economic Forum, [U.S. Energy Secretary] Bodman also said he does not see a 51-cent-a-gallon subsidy to U.S. farmers remaining in place beyond 2010 or an import tariff of 54 cents a gallon on ethanol beyond 2008. 'The idea is that at some point in the future all these technologies need to stand the test of the free market,' Bodman said."

Perhaps Bodman has been reading up a little on how ethanol may consume more energy than it saves, corrodes automobile engines, raises the price of corn products... Well, you know the story. All subsidies end. But before they do, they cause a lot of damage. That is why Bodman is wrong on one key point. All technologies should stand the test of the free market all of the time, not just at some point in the future.

Divided and Conquered

A Wall Street Journal article today ("In Climate Controversy, Industry Cedes Ground") shows how American industry is capitulating on the global warming issue. Captains of industry are falling all over themselves to proclaim their eagerness for controls on carbon dioxide emissions... as long as the controls hit other industries more than their own.

Duke Energy CEO James Rogers, long known as an "environmentalist" CEO, despite his helming some of the largest carbon dioxide producing coal-burning utilities in the country, best captures this attitude, when he said, "If you're not at the table when these negotiations are going on, you're going to be on the menu."

Rogers is doing his best to make sure that utilities other than his will be on that menu. He supports one form of carbon dioxide controls that will favor coal-burning utilities like his own and disadvantage, on a relative basis, other utilities that emit less carbon dioxide. Needless to say, the CEOs of those other utilities support their own carbon dioxide controls that especially favor their companies, in relative terms.

The article points out that the automobile manufacturers favor controls on the utilities and oil companies, and the oil companies favor controls on the automobile manufacturers and utilities. The utilities just want to make sure all sectors of the economy face controls, so that their industry is not singled out.

Amidst all this jockeying to beggar-thy-neighbor, almost no one is asking why carbon dioxide should be controlled at all. One of the only companies that was doing that, ExxonMobil, just threw in the towel after being threatened by a couple of senators [hat tip: Gus Van Horn].

One thing is clear amidst all this jockeying is that the beggars at the table will soon discover that they are the only ones on the menu.

Monday, January 15, 2007

The American Samoa Exemption

The new legislation to increase the minimum wage reportedly will maintain the "American Samoa Exemption", a policy that has permitted employers on the U.S. island chain to pay workers far below the U.S. mainland minimum wage.

The Exemption reveals the immorality and impracticality of the minimum wage.

The exemption of American Samoa from the minimum wage is an acknowledgement that the minimum wage forces some people to endure a wage of zero, i.e., far below the "minimum". No one can legislate productivity, and if productivity means some worker's labor is worth less than a minimum wage, that worker will not be hired. His job will essentially be outlawed.

Productivity in that part of the world is much lower than in the mainland United States, and therefore prevailing wages are much lower. If the U.S. minimum were enforced there, it would cause not just a little unemployment, like it does in the mainland U.S., but widespread unemployment. In fact, it would be completely unenforceable.

The existence of the American Samoa exemption is an unpleasant reminder to everyone who votes for the minimum wage -- Democrats, Republicans and President Bush -- that it destroys jobs, and that the higher it is set, the more jobs it destroys. Furthermore, the people who suffer the most from the minimum wage are those who are young and beginning their working years, and those with the least education and skills. These are precisely the people the Democrats pontificate about wanting to help.

The wider issue is that the Democrats don't want to help the poor; they want the poor. In fact, they want as many people as possible to be poor, because it creates a dependent class of modern-day serfs who believe that the Democrats are their salvation. By keeping a large class of people poor, unemployed and dependent on government hand-outs, Democrats corral their votes. It is an ugly form of "vote-buying" that trades on human misery. The minimum wage is part of that.

As for the hapless Republicans who vote for the minimum wage, they "just don't get it". They think that by placating their opposition, the Democrats, they will somehow keep their grip on political power. In fact, their policy does nothing but strengthen the opposition by endorsing their moral premises, and enacting their laws.

UPDATE 1/16/07: A cruel experiment in economics may be about to happen. The Democrats have agreed to extend the mainland minimum wage to American Samoa and the Marianas Islands. Tuna workers are now paid an average of $3.60 there. Workers in nearby tuna-processing countries such as Thailand and the Philippines are paid $0.67 per hour.

With the new minimum wage slated to rise to $7.25 per hour in two years, it is highly likely that many of the U.S. island workers will lose their jobs, and the industries they work in will contract. A rump group of workers will get paid the higher wage. Watch some economist cite those workers in a future study when he claims the minimum wage is working in American Samoa.

Sunday, January 14, 2007

Republicans Ally with Hillary Clinton to Bring On Socialized Medicine

George Bush and Arnold Schwarzenegger jointly get credit for empowering Hillary Clinton to once again seek socialized medicine. Bush led the way by accepting the premise that government must provide for medical care when he initiated the government provision of prescription drugs to the elderly. He also endorsed the idea that it was unfair for drug companies to charge a lot for their drugs and make money, since he initiated that plan in response to a public outcry over "high" drug prices.

Gov. Schwarzenegger took this further and has proposed de facto socialized medicine in California, the nation's largest state. As goes California, so goes the rest of the country.

One should not be surprised by the leftist actions of two of the leading Republicans of the land. The spiritual father of George Bush and Arnold Schwarzenegger is Republican President Richard Nixon who, when he was president, radically expanded the welfare state and the government's regulatory apparatus. It is doubtful that any Democrat could have gotten away with such things as: the creation of the Environmental Protection Agency and OSHA, the imposition of nationwide wage and price controls, the abolition of the remaining gold standard, and the endorsement of the near hyper-inflation of the currency.

Republicans are often worse enemies of capitalism than Democrats. If they decide to advocate a statist policy, their fellow Republicans are ham-strung from speaking out in opposition, as they would if a Democrat were taking the same position. Out of a mistaken view that it is "pragmatic" to placate the opposition by hijacking their ideas, they enact avowedly left-wing programs such as the expansion of welfare spending, raising the minimum wage, etc. However, such a tactic, while it may be "pragmatic", is far from practical. All they succeed in doing is demoralizing their party and at the end of the day, all they have accomplished is the enactment of a laundry list of left-wing policies that would make any Democrat proud to have accomplished.

The bottom line is: NO party stands for anything remotely resembling even a semi-free society. Even when judged strictly on economic terms, I cannot endorse a Republican over a Democrat.

I might add that many Democrats have done "Republican" things such as John Kennedy, who lowered income taxes, Jimmy Carter who deregulated railroads, trucking, and the airlines, and Bill Clinton, who presided over welfare reform and partial deregulation of telecommunications and electricity.

I think it is very important to withdraw support of Republicans until they begin to actually stand for limited government. Don't think that we will get worse economic policies under a Democratic administration. Odds are, we won't.

Thursday, January 11, 2007

Global Warming: The Economic Case for Doing Nothing

The complexity of the global warming debate makes it a good one for those who want to use it as a lever to fight modern, industrial capitalism. It is similar to the Marxist critique of capitalism where the proponent takes a few truths and mixes it in with a variety of half-truths and some lies to create a theory that becomes difficult to make heads or tails of, let alone refute. The Marxists did this by taking certain historical facts such as child labor and slavery and weaving them into an argument that these were caused by capitalism. (That is not true, and can be the subject of another post, or I would simply cite Andrew Bernstein's book The Capitalist Manifesto for his discussion of those issues.)

In evaluating any particular global warming claim, we must carefully examine the motive and method of the proponent. Is he honest, does he deal only in facts, or is he dishonest? Most environmentalists, from what I can observe, are dishonest in their motive and method. They have a goal -- the establishment and preservation of a pristine natural environment that excludes man -- and they are willing to use any tactics to achieve it. For example, that could mean citing part of a time-series of data -- the part that supports their claim -- and then ignoring the other "inconvenient" part of the data that would contradict their claim. It may also mean citing a wide variety of anecdotes and then claiming that those anecdotes constitute proof.

The global warming advocates have used these tactics. For example, the earth appears to have warmed since 1970, but it was cooling in the several decades prior to that. The entire time-series of temperature history may reflect warming due to man's emission of carbon dioxide into the air... or it may not. Going back further in time, there is a correlation between carbon dioxide levels and temperatures. Both of these measures have fluctuated in tandem in a regular cycle going back hundreds of thousands of years. What is the relationship between carbon dioxide and temperature? In which direction is causation, or are they both caused by a third factor? The global warming advocate asserts that carbon dioxide causes the temperature increase, and that the recent man-made emissions of carbon dioxide will cause further global warming. How does he know this?

These are just a few questions that I would ask regarding the global warming debate.

However, my main objective here, in addition to encouraging a very healthy skepticism regarding the motive and "facts" of the global warming advocates (and some of their opponents, to the extent they are loose with the facts), is to interject an economic perspective into the discussion.

* * *

To start, let us assume that the "global warmers" are correct. The earth will warm a few degrees over the next century because of carbon dioxide emitted into the atmosphere by man. My first economic question is: What will be the cost of abating that carbon dioxide?

Carbon dioxide is the central by-product of the key life-sustaining activities of man. First, it is the product of respiration, the process that every human and most non-plant life forms use to convert their food into fuel. Obviously, the carbon dioxide that is produced from respiration could not be controlled without killing humans or other living things.

Carbon dioxide is also the most abundant by-product of combustion. Analogous to respiration in its importance, combustion of fossil fuel is man's number one industrial process, in terms of its importance to our standard of living. For ancient man, combustion of wood, when cavemen learned how to control it, was his key technological achievement. It put man on the path to civilization. Today, combustion of fuels including natural gas, coal and oil is what provides us with heat in winter. Combustion of fuels is the basis of nearly all methods of transportation. Combustion of gasoline powers cars, combustion of jet fuel powers airplanes, and combustion of diesel powers ships and trucks.

Combustion of fossil fuels provides man with most of the electricity he uses. Electricity is the most useful form of energy man has invented to date. It powers our computers, which amplify our minds and enhance our productivity. It powers our televisions, our work tools, the implements used by surgeons to heal us, and the kitchen appliances that make our lives easier and more enjoyable. The list is extensive; try thinking of more examples of how you personally benefit from electricity.

The only way to reduce carbon dioxide is to reduce combustion. By reducing combustion we will have less of all of the life-sustaining and life-enhancing processes and products that arise from combustion, including all of those that depend on electricity.

Let us be clear with examples what is involved in reducing carbon dioxide so that the earth may become a couple degrees cooler and the sea level a couple feet lower a hundred years from now. We are talking about making our homes colder in winter, driving our cars less often, turning on the lights less frequently, and paying more for all goods that are transported by truck, rail, plane or ship. We are talking about increasing the cost of nearly all industrial processes and the cost of almost all manufactured goods. In sum, we are talking about reducing our standard of living.

* * *

The second economic objection is: The global warming argument ignores the tremendous power of the human mind to solve problems. Even if global warming will result in warmer temperatures and higher sea levels, these effects will transpire over many decades. Will engineers, scientists and entrepreneurs do nothing during that period of time? Of course not. Will man’s technological capacities and ability to solve problems remain static during that time, or will it advance, as it has at an accelerating rate for the past thousand years? The latter is true, as long as the world’s economies remain sufficiently free and unencumbered by regulations, such as those that the global warmers would like to impose. As long as the human mind is free to employ reason, our technological capacity to solve problems will improve.

Given man’s inventiveness, are we to assume that he will passively do nothing while rising ocean levels submerge some of his coastal lands? Even with 20th century technology (which should be dramatically eclipsed in this century), consider the problems man has been able to solve. Much of Holland lies below sea level. Yet in the middle of the last century, a water control system was deployed that keeps Holland dry and prosperous. Venice, which has been sinking in the mud for hundreds of years, is now in the process of deploying a water management system that is designed to keep not just the magnificent Piazza San Marco, but all of Venice, from flooding.

In reality, in the vast majority of cases a sea level rise of a couple feet that manifests itself over decades will be handled with much simpler, “low-tech” solutions, such as: building sea walls higher, and putting new buildings and houses on a higher base of earth. Property owners will have decades to incrementally make these changes.

To worry about a rise in sea level of a couple feet is to assume that people in the affected regions will do nothing. Instead, scientists, engineers, businessmen and property owners will figure out how to prevent flooding, or people will gradually move inland from affected areas, or they will address the problem through simple methods such as building taller sea walls. It will be in their self-interest to do so. The time-frame for action will be stretched out over decades. No one is facing the prospect of an immediate flooding of coastal regions, which is the unstated fear the global warmers want to convey.

Man’s inventiveness is abundantly capable of solving big problems. When whales disappeared in the seas due to over-fishing in the 1800s, and whale oil prices shot up 10-fold, scientists discovered kerosene, which turned out to be better than whale oil. Not only was it cheaper, but it emitted less smoke and better light. When rubber and oil became unavailable to warring nations in World War II, scientists invented processes for making synthetic rubber (still used today) and processes for converting coal into oil (used extensively by South Africa when it faced a trade embargo). To solve the “problem” of slow travel, engineers invented airplanes to replace ships. To solve the “problem” of slow, hand calculations, scientists invented the calculator and later on the computer.

The point here is obvious. Man’s ability to solve problems is limitless. That ability requires only one thing: freedom. This means the freedom to size up a problem, investigate it and solve it using his own mind. This means economic freedom: secure property rights unencumbered by taxation and regulation. This means the right to act as he sees fit, without having to gain approval from a governmental authority. This means not facing the type of regulations, such as taxes on carbon, or prohibitions on certain technologies and subsidies for others, that the global warmers advocate. The best defense against potential problems from global warming is the unfettered human mind.

To recap, the first economic point I have made so far is that restricting carbon dioxide emissions will reduce our standard of living. The second is that if the human mind is kept free, it will solve whatever problems may emerge from global warming.

* * *

The last economic question I will ask is: What are the benefits of global warming? This question is largely ignored in the debate. Yet, it must be asked. For instance, the earth was warmer during the “Medieval Optimum” and then cooled significantly before the temperature rose again more recently. During the last Ice Age, man discovered how to control fire which, arguably, was the most important technological advance of human history. Man has demonstrated an ability to adapt and even prosper under varying climatic conditions. Why should we assume that global warming this time around will only be bad for him?

A few examples illustrate the significant benefits from having more carbon dioxide in the atmosphere and from higher temperatures. For example, consider that carbon dioxide is plant food. When there is more carbon dioxide in the air, plants will grow bigger and faster. Therefore, more carbon dioxide in the air may enhance crop yields, and make food for humans more abundant and cheap. (It may also introduce a feedback loop whereby more plant mass converts more of the carbon dioxide in the air into oxygen, thereby bringing down the carbon dioxide levels naturally.)

Warmer temperatures may open up frigid lands in Canada and Siberia to cultivation.

Less ice in the Arctic may open up the Northwest Passage for ocean-going vessels, thereby reducing the shipping distances between Europe and the Far East.

Warmer temperatures at northern latitudes reduce the cost of heating homes in winter.

Of course, all of the standard claims regarding the disasters from global warming counteract these benefits. Pick up any newspaper or magazine to read about those; I will not recount them here.

An objective analysis, untainted by the environmentalist mission of the global warmers, may show that global warming is a mixed bag. Both good and bad consequences could emerge over the coming decades and centuries. Of course, all of this assumes that global warming is really happening and that it is caused by man.

The “threat” of global warming provides a convenient scare campaign for those who oppose man’s industrial progress and material comfort on earth. It is a campaign that unites environmentalists, who prefer pristine nature over man, and religious ascetics, who despise material comfort.

While parts of their argument may turn out to be accurate, I skeptically challenge and refuse to accept at face value the claims, conclusions and calls for action made by such a disingenuous group of advocates. For each of their points, the burden of proof is clearly on them. Yet, even if man is causing global warming through his industrial processes that emit carbon dioxide, restricting those processes will harm us enormously today for a small benefit many years in the future, if there is any benefit at all. No government has the right to forcibly impose such self-sacrifice on its citizens. If global warming is a real problem, the only solution is the unfettered human mind.

Modified 1/17/07: Minor style edits.

Wednesday, January 10, 2007

GUEST COLUMN about Hugo Chavez's plan to nationalize its energy industry

Calling A Spade A Spade

by Dr. Michael J. Hurd of DrHurd.com:

Venezuelan dictator Hugo Chavez is taking over what remains of private, or semi-private, industry in his country, calling it "21st-century socialism." And he actually thinks that calling it this is a GOOD thing?? At any rate, a political analyst in Venezuela by the name of Erik Eckvall is entirely right to say, "Let's call a spade a spade. This is Communism. [Chavez is] clearly saying the state should own the means of production."

More precisely: Chavez is saying that HE should own the means of production, and he's electing to call it socialism. Regardless of the century, the results will be the same: property seized through force and theft will cease to function as property. That's why Communism--another word for total socialism--failed on such a spectacular level in Soviet Russia and its satellite countries, by any rational economic standard. That's why North Korea is starving to death. That's why Communist China, while retaining as much control as it can over the right to free speech and the media, has been forced to go in a capitalist direction in the economic realm. When you throw morality (i.e., property rights) out the window, you get very, very bad economics as a result.

Let's get past the labels of both Communism and socialism. State ownership of production, while an accurate definition of these systems, has become too polite. Let's really call a spade a spade: any government official who seizes any private property, whatsoever, is guilty of theft and coercion. Government that protects private property is civil; government that seizes private property (in all, or in part) is criminal.

I wonder if our Congress and President will at least call it what it is...and apply the same principle to themselves?

Wednesday, January 03, 2007

America's Moral Cowardice Empowers Its Enemies

America's global enemies are pathetically weak. North Korea cannot feed itself. It's people live on the edge of starvation. North Korea is one bad harvest away from collapse.

The Muslim terrorists, who have been at war with the United States for decades, are a couple of oil shipments away from returning to barbarism. Their economies produce nothing, except oil. Without it, primitive nomads would criss-cross the Arabian desert again.

Contrast the power of our North Korean and Muslim enemies with the strength of the enemies we faced at the outset of World War II. Germany was a leading industrial superpower. Their scientists pioneered the rocket, understood advanced nuclear science, and could have developed the nuclear bomb. On the eve of World War II, German industry was producing warplanes at a faster rate than the combined U.S. and British air forces.

Japan had one of the world's largest naval fleets, and had already conquered much of one country, China, that was far bigger than itself.

From the day Great Britain declared war on Germany on September 3, 1939, until the day Japan surrendered on September 2, 1945 (Germany had surrendered four months earlier), it took barely six years to defeat the great German and Japanese empires. From America's entry in the war on December 7, 1941 until Japan's surrender, it took less than four years of fighting to reduce Berlin to rubble and central Hiroshima and Nagasaki to nuclear vapor.

The Palestine Liberation Organization, the world's first Islamic terrorist group, first began attacking Westerners in the 1960s. Iran, the leading state sponsor of terrorism today, invaded our embassy and took U.S. hostages in 1979. In less than four years, America defeated the combined German and Japanese armed forces. In contrast, America has been attacked for more than four decades by Muslims, and the terrorists remain as strong as ever.

Since the most recent and most heinous Muslim attack, the destruction of the World Trade Center in New York, the attack on the Pentagon, and the attempted attack on the U.S. Capitol or White House on September 11, 2001, five years have gone by, and America has accomplished little.

Instead of defeating the primary state sponsor of terrorism, Iran, America wrings its hands over the status of Palestinians. Instead of forcefully stopping the Saudi financing of terrorists, America's president holds the Saudi leader's hand and kisses him on both cheeks.

America has evaded the nature of our enemy. America has appeased our enemy. Yasser Arafat, the leader of the Palestine Liberation Organization, was the most frequent visitor to the White House in the 1990s (I wonder, did he sleep in Lincoln's bedroom?). Yasser Arafat received the Nobel Peace Prize, with the blessing of the United States.

Now, it turns out, there is "smoking gun" documentation that the U.S. State Department knew of Yasser Arafat's direct involvement in one of the earliest PLO terrorist acts, the 1973 murder of two U.S. ambassadors in Khartoum, Sudan.

Why did the U.S. publicly obfuscate Arafat's direct involvement in this terrorist act? Why does the U.S. today minimize and downplay the direct role of Iran in ordering terrorist attacks by Hamas and Hezbollah? Why does the U.S. today minimize and downplay the river of Saudi money that finances madrassah schools that ideologically equip the terrorist vanguard?

What does America gain by building up and adding airs of respectability to thugs, simple thugs motivated by a barbaric religion who take pleasure in the humiliation of the West (recall the jubilant Muslim throngs [links here, here and here] that appeared across the globe on September 11, 2001)?

America's enemies are weak. I do not need to make the case here that a small projection of our military power could quickly and readily defeat any state that sponsors terrorism, with minimal loss of American life. (See my essays entitled, "The Nuclear Bomb: Why We Should be Willing to Use It" and "Hezbollah: The Party of God".)

Instead of defeating the enemy, America turns the other cheek. Instead of fighting the enemy, America sends treasure ships to them (e.g.: money and weapons training to the Palestinians, fuel and grain and nuclear reactors to the North Koreans). Instead of naming our enemy, America evades their nature, and then helps our enemy in their ruse to the world that they are civilized.

Our enemies are weak. Their philosophy of life impoverishes them. Their only strength comes from the material and moral sustenance we provide them.

It is time we withdraw it.


Acknowledgement and thanks:

Thank you, John Lewis, for the inspiration and data you provided for my article in yours, entitled, "America's Sanction of Its Enemies."