Guaranteed failure for Leaders who don't get it. It's the economy Stupid !

An Unfinished Ukraine Palace and a Fugitive Leader’s Folly in today's New York Times shows how absolute power corrupted Yanukovych, former strong man of  Ukraine, absolutely. The problem is that corruption is so endemic that only wealthy cronies can afford to be Parliamentarians.  There is no clean free market leader there to guide the country to a prosperous future nor is there in Egypt where  an old Mubarak crony was made premier while Generalisimo Isisi prepares to take complete control.

Don't Sell Cheap U. S. Coal to Asia

Why not?  As long as the facility is privately funded and local rights to a clean facility are protected then the coal port in Seattle should be built.  Personally I think it's a bad deal for the private companies proposing it.  The prospect for a long term market is dismal.  Sure, today it makes economic sense but tomorrow when China listens to its citizen's demand for clean air it won't be.

Chemical Spill Muddies Picture in a State Wary of Regulations

The chemical tank leakage in Charleston, West Virginia have the ideologues drawing up positions for greater government oversight versus those fighting a rear guard action to placate the public and then forget the disaster. The usual Chamber of Commerce argument of less government interference defending industry are tiresome when the real problem in a rural poor state dependent on large companies extracting natural resources is crony capitalism circumventing an individual's property rights; such as to clean air, water and unspoiled woodland.

It is sad to see Senator Joe Manchin of West Virginia, a former coal broker, “expounded on the theme. “Coal and chemicals inevitably bring risk — but that doesn’t mean they should be shut down,” Mr. Manchin said. “Cicero says, “To err is human.’ But you’re going to stop living because you’re afraid of making a mistake?” No, but why circumvent the process of making sloppy operators pay for their mistake in court? Let me get this right Joe. You want give industry the right to rape, pillage and spoil your state to the economic detriment of it's citizens so that your coal brokerage has more business?

As a Libertarian I believe in less government and more liberty. I believe in Adam Smith's observation that many players acting in their self interest most efficiently increases the public good. Concentrations of economic power that reduce the number of players capable of operating on an equal basis distorts this basic law of economics so that the public good is reduced. When society attempts to regulate these monopoly distortions with rules it is inevitable that wealthy operators will hire the best legal talent to ameliorate if not eliminate them. West Virginia appears to have a long tradition of letting industry run rough shod over regulations already in place. I doubt that additional ones will help. On the other hand what would help is the economic sting of making the despoilers of the state pay.

 The first order of business in West Virginia is to expose the cozy relations between industry and regulators with thorough well argued journalism of the same caliber of McClure’s magazine described in Doris Kearns Goodwin's The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism. Hopefully these exposes elects a reforming governor much like TR to clear the sinecures of influence out of State Government so that the judiciary can do it's job of making industry pay for the damage they create. With regard to additional regulation this TR like persona would order a commission to study accidents such as the chemical tank incident in Charleston and develop valuations necessary to protect the public with bonding requirements. Industrial facilities with the potential to put hundreds of thousands of people at risk will require sufficient insurance that the underwriters, protecting their reserves, will inspect, audit and eliminate sloppy operators beforehand. If there is an accident, then there is a pool of money to fix and compensate.

President Obama ! Tear Down the Department of Energy

The current impasse over un-employment benefits between Democrats willing to extend them and Republicans wanting cutbacks in spending elsewhere to maintain fiscal discipline is unnecessary. Democrats should have a handy list of departments and programs to sacrifice for contingencies such as these. Success requires throwing out those programs that are not only useless but do not help the progressive cause nor which garner much support from other side of the aisle. The Department of Energy, for example, was a prime candidate for elimination, if only Rick Perry could have remembered. Oops! But surely what Democrat would fall on their sword for this grotesque barnacle that needs scraping off our ship of state.


The Department of Energy has and is doing a very poor job of picking and funding winners. This is a very sad state of affairs because asset allocation, when done correctly, is a huge benefit to society and we as a country have the distinct advantage of doing it better than others. Our advantage comes from a combination of relatively free markets and press. Advantages the department currently does it's best to stifle.


The Department of Energy has three silos working at cross purposes to promote Fossil, Nuclear and Renewable Energy individually. It gathers crony capitalist scheming to bulldoze over free market and property rights concerns such as insuring nuclear plants from liability, funding uneconomic projects to clean coal and jump starting battery production for a nascent electric car industry that does not yet know its market nor battery needs. This department's failures leave it with unhappy constituents such as the Sierra Club, distressed with nuclear and coal initiatives not on their agenda. Fossil fuel interests are laughing uncontrollably over the the industry's fracking revolution driving our country to energy independence despite former Secretary Stephen Chu's best efforts against it. That he has left recently with desultory result and scandal symptomatic of a useless agency should give President Obama pause. If he is disappointed enough with his surge in Afghanistan to disengage from there, why not with the Department of Energy?



 Mr. President preserve that which you truly believe in and throw this particular agency to the wolves. The G. O. P. will resist at it's own peril, despite their serial hatred for your administration, and it would put the fear of elimination in other bureaucrats. Yes there are other departments that need letting go, but let us start with this easy one first.

Cato's YouTube presentation

The Useful Science

While reading in "The Economist" about the preponderance of economic studies focused on the United States, I wonder about spending and the Keynesian notion that it doesn't matter how the money is spent, just that it is and it be massive.  A cursory google search got me to the "Failure of Obama Stimulus Package / Stimulating Economic Growth" by the  Heritage Foundation which uses my favorite example of Japan's massive spend in the 1990's to counter the huge asset deflation suffered earlier and which did nothing at all to avoid the lost twenty years and counting. I believe that massive spending in productive investment is the correct answer, but I can't prove it.  Who has a good study on that?  

Good on you Justice Department

I am not usually in favor of the Justice Department when they mettle in commerce, but their call against the T-Mobile and ATT merger was right on.  Today's "Carriers Step Up Battle for Customers" is exactly the type of competitive activity we need in the marketplace.  Take Carlos Slim's monopoly in Mexico as the counterexample.  You can not be the world's richest person and Mexican without a crony environment.

Overhaul of Israel's Economy Has Lessons for United States

Steven Davidoff's Politico article shows how Israel dealt with their "Pyramid" problem of wealth and influence concentrating into a few hands.   We need to re-activate Teddy Roosevelt's Trust Busting agenda, especially in finance.  Currently the deck is stacked so that financial assets and therefore power concentrates. TR's progressive actions trump my Libertarian sensibilities because he was up  against a cabal of crony capitalists the likes of which is now re-appearing.  Remember Adam Smith's free markets work when there are many players and monopolies, duopolies and oligopolies are the anti-competitive schemes of cronies working to seek unjust rents from society.