Negative Externality, The Spanish Prisoner, and "The Plan" Part 2

T Boone's plan. Shut down the natural gas power plants. Convert cars to compressed natural gas (CNG) and replace the 22% of electricity we get from natural gas with wind power from the plains. In plain terms this is a confidence scam in which some people (investors in wind power and conversion specialists) will become very rich by filling in the hidden costs with massive taxpayer support.

Negative externality is a term used to describe the costs not paid by the producer or consumer of goods. Wind energy is the definition of negative externality. I know, most people say that oil is the definition because of the environmental costs...but bear with me.

Wind power on this scale is only viable with massive government subsidies that force (encourage) the producer and consumer to use something they would not otherwise choose. Some people will lose jobs. Others will become very rich. No matter what, an entire industry would be created that never knows what it really costs to produce it's product or what to charge customers to make it a stand-alone enterprise. This disconnect has never worked before because the government is controlling prices. I have heard the "plasma TV" argument and it's total garbage. There was a free market competing to lower prices. For wind energy, this plan lets the government choose winners and losers.

So how is this whole plan like the Spanish Prisoner confidence trick?

The United States plays the role of the wealthy prisoner held hostage by nefarious oil barons.

The confidence trickster (Pickens) has offered us a way to release the US from these barons, IF we supply some of the money to build his scheme. Of course there is a promise that we will be rewarded generously when the prisoner returns. However, once the victims (taxpayers) have turned over our money, we will learn that further difficulties have arisen, requiring more money, and then the trickster continues attempting to get more money until the victim is cleaned out and the process ends, presumably with the victim realizing he has been robbed and that there is neither free electricity, nor any easy rewards.


And what are these difficulties?

1. The natural gas power plants were built where the electricity was needed. The transmission and distribution lines are short and the total system costs are contained within a measurable unit called a utility. So how do we get the power generated in the plains to where it is needed in the big cities that are thousands of miles away? Who pays for this negative externality? What happens to the billions spent on these natural gas plants - many of which are very early in their life cycle? The answer is we do, we do, we do. Billions upon billions in transmission and distribution paid for by the taxpayer while perfectly good natural gas power plants rot in place.

2. Our cars. According to our friends at Car Talk, converting cars to CNG will cost $3,000 to $5,000 dollars. New cars with the CNG upgrade are an extra $3,500 to $7,000. So in this plan, guess who pays for the upgrades. That's right, a magic fairy comes and *poof* free money drops in from the government.

3. While CNG is currently cheaper than gas, only a Marxist would forget that massive adoption of CNG would change the market. And what about the other transmission and distribution market...gas stations? That doesn't currently exist either.

4. Finally, the trickster has us chasing a moving target. Twenty two percent of our electricity is a real number that grows every single year as our economy and population expand. There will never be enough windmills to catch up.

T Boone is a smart man and he has built a coalition of people looking to get rich in a hurry. This scheme is brilliant and plays on so many fears. I think he might just pull it off.

Obama Gives His "Freedom From" Speach

Today Obama pitched his version of economics to a friendly group in Flint, MI. In it we heard about freedom. Freedom from responsibility, freedom from paying your bills, and freedom from making good decisions. What we didn't hear was Freedom to...

The difference in those little prepositions couldn't be larger. The freedom from people see government as a nanny that prevents bad things from happening to you regardless of your actions. The freedom to people see government as an obstacle (more often than not) to a free people achieving their dreams in life.

Freedom from people see private enterprise as source of tax revenue while the freedom to people see private enterprise as a path to personal prosperity.

Here's a short laundry list of Obama's government-centric view of how the economy works.

Obama talked about his $1,000 tax cut for working families

Free tuition for students who pledge to teach in their communities.

A $4,000 scholarship for college students

A foreclosure prevention fund.

A crackdown on deceptive lending.

100's of billions for green energy jobs.

His vision of universal health care.

Let's start at the top. His planned tax cuts really amount to a redistribution of earnings since most of the targeted people don't pay federal taxes today.

Free tuition for teachers. How about ending a union that has kept real wages for teachers below market value for decades. That way, they can pay for their own tuition when they get one of the plentiful jobs. Let's stop subsidizing poverty wages for teachers and give them the opportunity to succeed based on their own talents.

Foreclosure prevention fund is another way of saying, "go ahead and take a loan for too much, we got your back." Subsidizing risky loans only guarantees more risky loans.

Crackdown on deceptive lending probably means that Uncle Sam will have a greater role during your loan closing - meaning you will pay more to close a home loan. Maybe we can get another subsidy for the higher costs of home loans?

Universal health care. Ugh. All I can say is the proper phrase is rationed health care - except of course if you are really famous or rich.

The "green" jobs come about after he takes 7 trillion in new taxes from private enterprise and kills millions of our old jobs via the "Climate Security Act."

When this speech is placed in context with his only piece of legislation - the Millenium Act (S 2433) - I can only call this philosophy a creeping form of Marxism.

The New Marxism:

Environmentalism is not the same as Environmental Science. The -ism part implies a belief system that has evolved to the point that the Czech President calls it the new Marxism. Unfortunately most of the scientists working in this field are acting like they are papists from the middle ages.

I'll go even further. It seems to me that the folks in the former eastern block nations have a better handle on what freedom means and the need to preserve it than we do in the U.S. It's a shame that only a handful of politicians in this country have made this sober assessment of an obvious problem.

The "green" movement is all about intentions without regard to facts. See the abject failure caused by the ethonol mandates. The Heritage Foundation has a good review: Calling the solution worse than the problem.
http://www.heritage.org/Research/Energyandenvironment/wm1912.cfm

Washington - Czech President Vaclav Klaus said Tuesday he is ready to debate Al Gore about global warming, as he presented the English version of his latest book that argues environmentalism poses a threat to basic human freedoms.

'I many times tried to talk to have a public exchange of views with him, and he's not too much willing to make such a conversation,' Klaus said. 'So I'm ready to do it.'

Additionally,

'Like their (communist) predecessors, they will be certain that they have the right to sacrifice man and his freedom to make their idea reality,' he said.

'In the past, it was in the name of the Marxists or of the proletariat - this time, in the name of the planet,' he added.

'It could be even true that we are now at a stage where mere facts, reason and truths are powerless in the face of the global warming propaganda,' he said.

http://www.monstersandcritics.com/news/europe/news/article_1407867.php/Czech_President_Klaus_ready_to_debate_Gore_on_climate_change