g m g D e s i g n . c o m

Friedman–a guy I respect–seems a bit too anxious here (title of editorial is “Anxious in America”). He makes the common mistake that the president is capable of–and should–have the capacity to micro-manage our economy. Of course, our current president has made a lot of mistakes. His biggest mistake is foreign policy-related (but not as simple as “he should never have invaded Iraq”; I supported the overthrow of that regime). On the economy, he can be blamed for governmental expansion that is adversely affecting the USD (other factors play into that as well) and saddle the next gen with huge debt. But let’s not over-hype it.

Our current debt can be paid. Other big elephants in the room are Social Security and Medicare. No easy solution since they’re not going away, but the president did make a real effort at Social Security reform (partial privatization, which I support as a logical step)… but of course Dems and many Repubs shot that down, for the usual political reasons (i.e., older people vote).

Friedman points out that renewable energy is a biggie that the government should be pushing. I understand his reasoning. He was a mid-east reporter for years, after all. He argued years ago that, basically, our oil money fuels some of the worst regimes in the world. He’s argued for a gas tax that amounts to a gas “floor” (minimum price), with offsets for poorer families.

Good points, under the geo-political circumstances, but unnecessary. Gas prices are high due, primarily, to market forces right now. Those SUVs are looking less attractive and those geeky hybrids better by the day. This was inevitable and it’s (under the circumstances) good news. It’ll be painful, but we have no choice but to adapt.

The only wrench in all this is the possibility of government subsidies of some sort. I.e., a tax credit for guzzlers or something like that. Seems pretty unlikely at this point, fortunately. But politics has a way of screwing things up. Now that oil/gas is expensive, things can finally start looking up on the domestic renewable fuel industry. Let’s hope politicians decide not to intervene.

You may have noticed the price of certain foods has gone up. In the States, I haven’t noticed a significant difference. But it’s a big deal in the third world, with rioting and political upheaval recent consequences of the higher food costs. There are several reasons why food prices are higher now and why they’ll remain high in the medium term. One reason: politics.

Politics is a necessary evil. Done right, a good political system sets the stage for fair competition in the marketplace, security, stability, blah blah blah. Unfortunately, politics has a way of screwing things up as well. In the case of food, prices are higher (primarily) due to trade restrictions. “Hoarding nations” hamper food exports, meaning that natives (in the hoarding countries) have food. Good for them, right? But not good for others who rely on those food exports.

In the end, this sort of thing just makes trading of food less economically efficient, likely affecting the efficiency of other areas of trade. The few benefit, while many more–including those in the “hoarding” countries–will suffer as a result.

OpinionJournal’s Bret Stevens asserts that Iraqis prefer McCain over Obama. Why? B/c they’re concerned that Obama/the Dems will pull out too quickly (I guess Obama’s message of hope just isn’t that convincing to them).

So, should we care what Iraqis think/are worried about? Yeah, I think we should. We got events moving (for the good, initially) in that country. Abandoning Iraq to let [Salafist extremists/Iran/all of the above] take over isn’t exactly a strategic vision worth endorsing.

Screwed up we have in that country. That leaves us with voting for the candidate who has the better vision. Is it McCain? Hard to discern, though Obama’s presumed greater willingness to engage the bad guys (including Iran) at the bargaining table can’t hurt.

Too bad a McCain/Obama ticket is out of the question. That combo would be interesting, would it not?

FP mag comes up with 5 reasons to love high gas prices. They are:

• mass transit boom
• lower obesity rates
• fewer accidents
• shorter commutes
• higher interest in bio-fuels

They left out one more important reason: decreased desire to drive visually obstructing SUVs. Really, how did they miss that one?

Seriously, the high gas prices are good for us in the long run. Finding alternatives and augmenting efficiency are things that we’ve put off for too long, and I’m not a big fan of bad regimes getting billions in oil revenue indefinitely. That said, it’s the market that should come up with innovate replacements to our oil addiction, not the bureaucrats in Washington.

UPDATE 6-23:

Forgot to add yet another important (positive) side effect of high gas prices: reduced carbon footprint. I.e., gas prices go up, conservation goes up to compensate (to save $). People drive less, Al Gore is happy (not that that last item is crucial in the slighest).

You gotta love intros like this:

Coming Anarchy, Phatic Communion, Soob, Tom Barnett, Weekly Standard, and zenpundit have thematically similar posts that boil down to a a discussion of America’s relatively talentless political class.

This is a good thing.

The most ambitious should be in the business of creating wealth, not redistributing it.

You gotta love that last sentence.

Good summary of the farm bill and why politicians–except John McCain–voted for this idiotic bill. (I.e., kudos to McCain for not voting for this monstrosity.)

Most interesting paragraph:

Consider their latest masterpiece, the 2007 farm bill that Congress this week delivered, several months late, to George Bush. Congress and the farmers have conspired to make an already unjust agricultural policy—a system that has subsidised the “farming” activities of such paupers as David Letterman and David Rockefeller—even worse. Through a complicated and overlapping system of government-sponsored insurance, counter-cyclical assistance, disaster aid and legacy payments tied to nothing, the five-year, $307 billion bill lavishes cash on wealthy farm households, the main restriction on collecting it being a means test that applies to couples making more than $1.5m a year. And even that can be avoided by employing a reasonably competent accountant.

Definitely not this Congress’s finest hour (actually, I don’t recall this Congress having a “finest hour” at all, but this is bad even by their low standards.)

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In other news, it really makes it a quandary to know who to vote for. At the highest level, McCain’s risky/bold decision not to vote for a stupid bill makes me really want to vote for him. He’s not perfect, but he’s stood his ground pretty well on a number of issues (immigration comes to mind, too). He compromised somewhat on the Bush tax cuts (which he initially voted against), of course. But the fact that he’d take unpopular stances at high risk soon before and now, during, his presidential bid is awe-inspiring.

Don’t get me wrong. There are definitely things I like about Obama, but voting for the farm bill isn’t one of them. His lack of backbone is hugely discouraging.

I was reading a good blog entry on MarginalRevolution on this subject. What follows is not necessarily a summary of the blog entry, but my personal thoughts on the matter. For starters, there’s money to be had by the (local or domestic) business community in stifling free trade. Free trade means that consumers get free choice for additional sources of competition. Hence, there’s strong economic incentive against the business community advancing free trade (unless their business is dependent on it, which many are). If there’s good money in something, chances are there’s lobbying. Politicians can be bought, of course. But ordinary citizens can be convinced of the “danger” of free trade as well. Again, when there’s money to be had by convincing people for or against something, you’ll have an army of people who do just that.

Then there’s “irrational nativism,” of course. We see a lot of that with the illegal immigration debate here in the States. Don’t get me wrong, I’m not endorsing illegal entry into this country. But neither am I going into the sort of irrational and uncompassionate foaming-at-the-mouth rhetoric that some people get into on this subject. Immigrants have had an historical positive effect on this country, and while I don’t endorse illegal entry, I suspect that the illegal immigration “debate,” if one can call it that, isn’t so much about illegal immigrants but about immigration policy in general.

Protectionism and anti-immigrantism are not good for this country, or any country. Such sentiments aren’t good for our economy, our collective values, and our security (long argument on that one that I’ve expounded on in previous posts). But they’re good for businesses that want to restrict consumer freedom and choice; and there good for some politicians, who want to get elected and leave the electorate holding the bill.

UPDATE: just noticed blog entry on Thomas Barnett’s site on this subject. Related to globalization, Barnett summarizes 5 characteristics of growing economies:

1) Openness to global trade and FDI
2) Political stability but not necessarily democracy; a gov committed to growth
3) High savings
4) Sensible gov spending and inflation control
5) A willingness to let markets allocate resources

On point 1, “FDI” refers to foreign direct investment. On point 2, I’ll add that, as Barnett has pointed out elsewhere, free markets result in freedom in the broader sense, including politically. Point 5 has the obvious humanitarian advantage of greater prosperity (greater access to healthcare, food, etc).

Per BBC News, China and Taiwan (Republic of China) to engage in talks, esp over tourism & trade. Notice that economic interests–and definitely not politics–is driving this greater connectivity… as is usually the case.

Haven’t posted in a while due to being busy w/ stuff. Tomorrow, we’re getting bamboo flooring installed in place of the carpet. We literally cleared out the living room this evening. It’s been a long, long evening.

Good article by Thomas Friedman of the NY Times.

Pithy point:

As I have argued before: When you have leverage, talk. When you don’t have leverage, get some. Then talk.

Tactics used by the bad guys:

Principle No. 1: Always seek “control without responsibility.” In Lebanon, Gaza and Iraq, Iran & Friends have veto power over the politics, without being held fully responsible for the electricity. America’s allies, by contrast, tend to have “responsibility without control.”

Principle No. 2: Always insist on being able to both run for political office and bear arms. In Lebanon, Gaza and Iraq, America’s opponents are both in the government and have their own militias.

Principle No. 3: Use suicide bombing and targeted assassinations against any opponents who get in your way. In Lebanon, Syria is widely suspected to have been behind the spate of killings of anti-Syrian journalists and parliamentarians. One suicide attack on a major official in Iraq can neutralize superior U.S. power.

Principle No. 4: Use the Internet as a free command and control system for raising money, recruiting and operations.

Principle No. 5: Cast yourself as the “resistance” to Israel and America, so any opposition to you is equal to support for Israel and America and so no matter how badly you are defeated the mere fact that you “resisted” means you didn’t really lose.

Moving forward:

Here’s hoping that once the primary silly season is over, the McCain and Obama camps will stop jousting over whether to talk with our enemies — which we must — and will start focusing instead about how we and our friends get more chips to bargain with — which we lack.