Thoughts on the Devastating Chinese Earthquake

China was recently struck by a very devastating earthquake.  Nearly everyone knows this.  Tens of thousands died.  Schools were hit particularly hard.  Why schools?

This article discusses that the central economic policies directly lead to poor school construction: compromising materials to get the job done.  It’s another question of incentives and responsibility: who is responsible, and what is their incentive for being responsible?

Can the free market provide safe products?  Many individuals point to current unsafe products as evidence that the market cannot, and that it consistently fails to do so.  But we must ask: who is responsible for safety?  Individual consumers?  The companies that produce their products?  The governments that regulate them?  Until we understand who is ultimately responsible, it is difficult to assign blame.

Can the free market provide dangerous products?  Sure, but for a very limited time only.  Competition immediately shuts them down, unless, of course, the market regulates competition, acting as a barrier to development and growth.

Can the government make dangerous products?  Hint:take a look at the “safe” record of NASA spaceflight as evidence of government safety.

It is quite sad to hear millions of Chinese unable to care for themselves, unable to take care of their families, even in an emergency situation.  It is sad to see them continually rely on the government for all sorts of aid, from emergency supplies to rescue operations to money to shelter to rebuilding.  This is such a contrast to the attitude of self-reliance prophets have continually impressed upon us. 

One wonders the level of devastation should the market have been responsible for safety, for school construction, and individuals for emergency preparation, insurance, etc.  And this is certainly an admonishment to us to get our houses in order and prepare for what may come.

This indeed was a tragedy.  But the scope could have been much lower if freedom and liberty had a larger role.

Ron Paul: The Revolution Continues

This article, an interview with the man himself, and this article, a thorough review of The Revolution: A Manifesto, are highly recommended.  The book is still a hot seller.

The word “manifesto” is an interesting word choice.  It really makes us think of the unabomber or Karl Marx.  But what is a manifesto?  It is a statement meant to manifest, or show, one’s beliefs, especially those with social and political underpinnings.

The word “revolution” is also an interesting word choice.  In this sense, Ron Paul is referring to an ideological revolution, a change in the way we think and perceive man’s relationship to the state.

Is the state really the benevolent benefactor it’s cracked up to be?  Or are the perpetual failures linked with governments (war, waste, dependency, corruption, etc.) indicative of some sort of pattern?  Why are we considering the state as the necessary instrument to resolve poverty, to clean up the environment, to wage war, to control our transactions, and to punish an individual’s conception of wrong-doing at the expense of another individual’s way of life?  Why does the state keep expanding in power, despite its constant, unfailing ineptitude, greed, and corruption?

Why are we silently complicit to this monstrous, perpetual, fantastical growth?

Scott McClellan’s Memoirs: Former Press Secretary Speaks Out

Scott McClellan, a former Bush press secretary, recently released his memoirs, What Happened: Inside the Bush White House and Washington’s Culture of Deception.  There are some things cited in this article that impressed me.  One of them was how Mr. McClellan admires and respects the president as an individual, but had a hard time with the manner some things were carried out.

I also like his humility, as evidenced by this statement:

I frequently stumbled along the way…My own story, however, is of small importance in the broad historical picture. More significant is the larger story in which I played a minor role: the story of how the presidency of George W. Bush veered terribly off course.

He had a hard time with some members of the Bush administration.  Regarding the ardent defense of the war in Iraq and the war on terror, he remarks:

But he {President Bush] and his advisers confused the propaganda campaign with the high level of candor and honesty so fundamentally needed to build and then sustain public support during a time of war. … In this regard, he was terribly ill-served by his top advisers, especially those involved directly in national security.

His biggest issue was with the Iraq war.  He writes:

History appears poised to confirm what most Americans today have decided: that the decision to invade Iraq was a serious strategic blunder. No one, including me, can know with absolute certainty how the war will be viewed decades from now when we can more fully understand its impact. What I do know is that war should only be waged when necessary, and the Iraq war was not necessary.

Simple, clear, and concise.  “War should only be waged when necessary, and the Iraq war was not necessary.”  I like it.

A few more interesting tidbits the article points out about the book:

• Steve Hadley, then the deputy national security adviser, said about the erroneous assertion about Saddam Hussein seeking uranium, included in the State of the Union address of 2003: “Signing off on these facts is my responsibility. … And in this case, I blew it. I think the only solution is for me to resign.” The offer “was rejected almost out of hand by others present,” McClellan writes.

• Bush was “clearly irritated, … steamed,” when McClellan informed him that chief economic adviser Larry Lindsey had told The Wall Street Journal that a possible war in Iraq could cost from $100 billion to $200 billion: “‘It’s unacceptable,’ Bush continued, his voice rising. ‘He shouldn’t be talking about that.’”

• “As press secretary, I spent countless hours defending the administration from the podium in the White House briefing room. Although the things I said then were sincere, I have since come to realize that some of them were badly misguided.”

The long list of disgruntled administration insiders (including Larry Wilkerson, Jack Goldsmith, John Ashcroft, Richard Clarke, and others; watch No End in Sight, for instance, to get a flavor) makes a negative imprint on the Bush administration, in my opinion.

In closing, let me quote from Scott McClellan’s thoughts upon seeing Scooter Libby and Karl Rove get together for a confidential pow-wow, during a time when the Valerie Plume incident was very visible and very problematic:

I don’t know what they discussed, but what would any knowledgeable person reasonably and logically conclude was the topic? Like the whole truth of people’s involvement, we will likely never know with any degree of confidence.

And so it goes.  There are so many things we can “never know with any degree of confidence.”  We can never see exactly what transpired and why.  But we certainly see enough to make some judgments.  Why did President Bush attack Iraq?  We may not know.  But certainly the evidence indicates that no matter what his motivation, it was a tragic move for nearly all parties, and continues to be so.

Questions the Oil Executives Should Have Been Asked

1. What would happen if gas prices were forced down? Thankfully, they were asked this, at least with respect to Katrina. Yes, as supply and demand would indicate, lowering price sends an artificial signal that supply is greater than it actually is. This always results in a shortage.
2. What can the government do to decrease the cost of oil and gasoline for everyone? Blaming others on profits is typical Washington politics: let’s blame someone else for our problems and avoid taking any responsibility ourselves. Frustratingly typical, and of course, completely pointless.
3. How can an adversarial Senate committee on a crucial election year possibly have the country’s best interests at stake?
4. How can an adversarial Senate committee on a crucial election year actually think to accomplish anything by grilling oil executives?
5. How can an adversarial Senate committee on a crucial election year determine what level of profits, for you or anyone else, are “reasonable?”
6. If your pay was cut to zero, what would be the next effect on gas prices in America? As salaries here are three orders of magnitude less than profits, the cost benefit to you and I, even for executives to work for free, would be negligible; a couple of pennies per gallon at most.
7. How many U.S. jobs are associated with the oil and gas industry?
8. How do record profits affect shareholder earnings?
9. What is the relationship between shareholder earnings and the American public?

Answering these questions would show that it is in the country’s best interests to have a strong oil and gas industry: our economy depends upon it. It would also show what the government can do to lower gas prices: stop restricting and regulating oil exploration and refining, and instead let the market go to work, providing low-cost, efficient energy producing fuel for all of us.

Who will teach our Senators that we are a capitalist nation, not a communist one?

China Coal Shortage: Real Problem with Price Fixing

I ran across this article which highlights a real problem with price fixing.  Let me quote from the article itself:

BEIJING (AP) — Chinese power plants are running out of coal, with less than a three-day supply in some areas, the government said Tuesday, adding to China’s logistical headaches following a devastating earthquake.

It is the second time in three months that Chinese power plants have run short of coal, an unintended effect of government-mandated price controls — a throwback to communist central planning — to shield the public from rising global energy costs.

Beware of price ceilings!  Shortages are real problems that actually happen when governments decide to fix prices.  Let’s hope we do not forget this, especially with rising food and fuel costs.  Fixing prices at some arbitrary high point would cause shortages.  If high prices cause this much headache and turmoil, what would a large-scale food or gas shortage do?  What would happen if electricity, gas, or food was simply not available, at any price?

I don’t mean to be an alarmist, but I do want to make it clear that when we start monkeying around with the pricing mechanism, as recent Senate and House grillings of oil executives have hinted we are headed towards, there is a real danger of these type of effects.