Category Archives: political economy

“Stable Climate”

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Alex Flint and Kalee Kreider, posing as pro-climate adapters rather than as climate mitigators, want us to move toward adapting to our changing climate rather than attempting to mitigate our climate’s changes. That would seem to be a step in the right direction.

However.

Around the world, people are giving priority to higher living standards, economic security, and access to affordable energy above a stable climate.

This is a false dichotomy, leading to their false premise. In truth, we do have a stable climate—stable over human-level time frames—and we have it in conjunction with the potential for higher living standards, economic security, and access to affordable energy. These are not mutually exclusive.

For one thing, the plain fact is that our climate is stable over generations of humans, and that flows from the equally plain geologic fact that our climate is warming predictably, if noisily over thousands- to multi-million year cycles.

Since the end of the last glaciation, some 11,000 years ago, our climate has varied over narrow temperature ranges from the warming period that roughly coincides with the rise of human civilization and persisted into the period of the Roman empire to the Little Ice Age that ran from the early 14th century into the early 19th century. That variability, too, leaves us today still a couple degrees cooler than the geologic warming rate of our planet.

The other thing is that geologic warming rate. Our climate has been warming since the earth formed and stabilized as a solid body because our sun has been warming since it coalesced gravitationally and lit off its core fusion furnace. That warming is governed cyclically by our planet’s not quite circular orbit around the sun, which moves us closer and farther from the sun—not by much but by measurable temperature effects—on a cycle that harmonizes with our planet’s rotational axis precession, a cycle that points our norther hemisphere toward our sun in some seasons and away from our sun in the six months later seasons, a precession that points our northern hemisphere toward the sun in summer, roughly 6,500 years later has our northern hemisphere pointing away from the sun in summer, then after another 6,500 years points it back toward the sun in summer again for a complete cycle of about 13,000 years. That precessional cycle harmonizes with our orbit’s behavior over some hundreds of thousands of years.

Around that lockstep cycling, our climate varies noisily from the presence of an atmosphere that maintains a more stable temperature across days and months—and centuries—while being intermittently impacted by volcanism and meteor strikes. The outcome of those orbital and rotational mechanics and the interactions of volcanism and meteor strikes has produced the geological record of epochs much warmer and colder than today with life being lush in the warm periods, along with epochs of atmospheric CO2 being much higher and much lower than today, with life being lush in both higher and lower CO2 epochs—life has been lush when it was warmer independently of CO2 concentrations with no correlation between the CO2 epochs and the warmer and cooler epochs.

Mitigation always has been a scam to draw Federal funding for pet research projects.

Even though this op-ed’s excuse for shifting to adaptation comes from that false premise, it’s still a welcome step toward economic prosperity and sanity.

Overwrought

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A letter-writer in The Wall Street Journal‘s Letters section offered this regarding the secondary education compact President Donald Trump (R) has on offer for, so far, a few of the more major colleges and universities.

The White House’s new compact is central planning in academic dress: dictating who colleges admit, what they charge and what professors may say….
…
Higher education has always thrived on independence and competition, not government loyalty oaths.

There is no central planning here, neither is there any White House diktat regarding admissions, charges, or speech. There is no requirement for any of the institutions to accept the deal.

Higher education still can thrive on independence and competition—and it will regain that independence when it stops being dependent on Federal government funding. Were these institutions (and the rest of them not yet offered) to decline Trump’s offer, all that would happen is that they would not gain preferential access to the Federal teat.

That would be the first step toward true educational independence.

A Misconception

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The headline and subheadline say it all.

Funding Freeze Threatens an Economic Lifeline in Chicago
Washington’s move halts plan to extend a train line into a depressed pocket of the city

Except that Washington’s move needn’t halt anything. Chicago could reallocate its spending priorities and fund the extension itself.

There’s no political will to do so, though; too many politicians in the city are addicted to Federal dollars, and apart from that, they benefit personally politically from bringing in the pork rather than spending city money.

Too, relying on Federal dollars—the taxes paid in by citizens from elsewhere in the State and especially by citizens of other States—lets city politicians avoid the drudgery of worrying about, and doing something about, the costs of such a project. And that benefits the politicians’ union employers donors.

A major factor in those costs is labor, which is driven by Federal construction dollar strings mandating union wage rates whether the builders are union shops or not. Allowing non-union wages would greatly reduce the cost of any construction project, including this train line extension.

One small example of the city officials’ shortsightedness on the revenue side is this from Wendy Jones, who runs a nonprofit that mentors young men:

The Red Line would have been a huge improvement, and it probably would have increased the property value here[.]

That increase in property value would have increased property tax revenues for the city. There would be sequelae, too, were the city managers ever to get serious about solving its crime problem: an influx of businesses, with attendant jobs, into the area fed by the train line extension, with an associated increase in income and business tax revenue to the city.

All of that would be in addition to all the construction jobs that building the extension would entail, and would still be available were the city to spend its own money on the construction.

As a bonus, the city spending its own money on the project would reduce the city’s dependency on the Federal government and reduce the latter’s leverage over the former.

That it’s a widespread and longstanding misconception that halting Federal construction funds transfers must perforce halt construction projects only demonstrates the knee-jerk response to and dependency on Federal funding that too many on both sides—politicians and citizens—have settled into.

The Federal government isn’t the only level of governing where spending discipline and reallocations are necessary.

The Editors Miss Again

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This time, the editors of The Wall Street Journal waxed excited over President Donald Trump’s (R) responses to the People’s Republic of China President Xi Jinping’s export blocks controls on rare earths and related materials aimed at the United States.

First things first.

None of this [trade war] is good for the US and global economies.

The editors appear to be writing from a fantasy garret office. In what war do they imagine that one side suffers no harm at all? In the real world, wars damage all participants.

Then there’s this from the editors’ swampish imaginations.

Mr Trump started the fun by announcing on social media midday Friday that “some very strange things are happening in China!” He said Beijing has turned “very hostile” and is sending letters to the world announcing tighter controls on the export of “every element of production having to do with” rare-earth minerals.

There’s that fantastical editorial garret world again. This latest round was begun by the PRC’s Xi when he imposed those controls on rare-earths, processed rare earths, and any product from wherever exported that contains rare earth materials comprising 0.1% or more of the product’s value. Trump is merely responding to that attack rather than meekly lying down and forcing us to accept it.

But back up a bit, too, to a time of which the long-term memories of the editors seem broadly deficient. The PRC has been inflicting its trade war on us for years and years. It has been stealing our technologies through espionage and hacking.

It has been forcing technology transfers from private enterprises as a condition of their doing business in the PRC, a condition only slightly eased over the ensuing years.

It has been forcing private enterprises to accept as partners PRC-domiciled companies as a condition of those foreign enterprises doing business in the PRC, a condition only slightly eased over the ensuing years.

It has demanded PRC government-approved back doors into foreign companies’ operating software as a condition of those foreign enterprises doing business in the PRC, a condition only slightly eased over the ensuing years.

It has demanded PRC apparatchiks in foreign companies’ management teams operating PRC-domiciled arms, a requirement only slightly eased over the ensuing years.

The PRC has begun dumping its industrial output on the international market at below production cost pricing nominally to shore up the economic malaise of its own overproduction, but in truth to bankrupt other nations’ domestic industrial producers—including in the US—and so gain market share to the point of other nations’ dependency, especially ours, on PRC output.

Trade wars aren’t easy, as the editors noted in their headline. But trade wars are made the harder when folks who should know better don’t even understand the war actually progress.

30-Year Mortgages

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Patrick Brenner, Southwest Public Policy Institute President, thinks these have been terrible ideas. I disagree. Central to his thesis this:

The 30-year mortgage locked families into a lifetime of interest payments that cost the borrower far more than the original price.

However, he never mentions a Critical Item that also obtained throughout his period of interest, the post-WWII mobility, both geographically and economically upward, of the American working force/homeowner population.

Two personal examples illustrate, and I claim our examples are typical, not unusual.

When my wife and I were starting out, as Lieutenants in the USAF, we were able to buy our first house courtesy of one of those “dangerous” shorter term balloon payment loans. We were highly mobile as USAF officers, but that mobility, as I claim, wasn’t unusual—the civilian work force also was highly mobile, and that mobility allowed homeowners to sell their homes, pursuant to their mobility, before the balloon came due, and buy another home in their new location, now with a variable rate loan (fixed for a period of years, then floating with the market), 15-year fixed mortgage, or an evil 30-year mortgage, with interest rates favoring the variable rate and the 30-year. Again, mobility allowed most homeowners to sell their homes before the variable rate reset, along with selling their 30-year mortgaged homes long before being “locked in for life.”

It also was the case that many of these balloon mortgage homeowners refinanced into a new variable rate loan or into a 15-year or 30-year mortgage. Banks expected these sorts of refinances and smoothed the path.

Many years later, as my wife and I were long established civilians and approaching retirement, we bought our current house with a 30-year mortgage. We’ve since refinanced that mortgage a number of times as interest rates went down, and currently have a monthly payment a bit over half that original payment.

So much for ever being locked in for life with a high-rate mortgage. With that mobility, very few homeowners actually paid more in aggregated principal and interest than the value of their homes—they refinanced down, or they sold and moved on.

The only thing in the way now is a greatly reduced mobility in our homeowner population. There are a number of reasons for that reduction in mobility, but the key here is that reduced mobility. Being “stuck” in some way with a 30-year mortgage is a symptom of relative immobility, not a cause of affordability. That immobility also contributes heavily to the lack of houses on the market while demand for homeownership remains high—that’s excess elevated pricing for homes.