Recently in Economics Category

Esolen has yet another fascinating post:

What I had not counted on was the purely human: that when a man and a woman both work full-time outside of the home, their relationship to one another, to the home, and to the money they earn must, absent a conscious determination otherwise, be fundamentally altered.  Now I can't speak with complete confidence about this; I am more or less wondering aloud.  Does what is called "The Tragedy of the Commons" apply, when no one in particular is responsible for the earning of the money, and no one in particular is responsible for stretching that money, managing it, spending it wisely for the sake of the family?  If no one in particular is responsible for that latter role, does that job actually get done?  Sometimes yes; often no -- we know plenty of double-income families who do not take care of their economic gardens, so to speak, and who live more expensive and also more slovenly lives than do single-income families (for example, the majority of homeschooling families).  Governor Bradford of Plymouth noted that even among his fellow Christians, the fallback position was to do as little work as possible tending land held in common, while deriving from it as much as they reasonably could; his response was to decry the utopias of some (he has in mind Plato's Republic), and to assign to each family their own land to work.  In other words, if no one in particular is responsible for either earning or managing / spending, then a couple may engage in behavior that rewards the individual in the short term, while hurting the family in the long term.  Why should I work my tail off, when my husband or wife has settled into a comfortable position?  Or why should I watch what I spend, when my husband or wife is blowing over a hundred dollars a week on lunch? 

There are applications in the way we treat natural resources too.

The convergence of a number of things - the new eco-movement, a slow economy and a Big Government growing bigger and more oppressive by the minute - all at the same time has made many stop and think about the rat race they find themselves in. How much of how we live is excessive? Where have we gone so far forward that we are actually going backwards? And where does this fit in our worldviews? How does this all fit together?

People have begun to looking again at conservation and energy saving techniques as a way to save money - and if it helps nature while they’re at it, that’s good too. But some may also be asking "Do I need all this stuff?" or "Why am I spending all this money?" Charles W. Sasser writes in The Backwoodsman (Jan/Feb 2009):

I looked around and observed how many of my friends held eight-to-five jobs they could barely tolerate. The average American owned two cars, a house with a 30-year mortgage, a color TV set and a stack of bills on luxuries and ‘necessities’ long worn out and discarded. It seemed to me that he did not work to enrich his life. Instead, he worked to support his possessions, all the while feeling compelled to continue to buy and buy in hopes of ever new and more wonderful possessions making him happy.  

Think about that. How much of your work pay goes to things you don’t need? Or things just to get you to work? I remember a colleague complaining about money, but also bragging about all of the cable channels he had. Who’s forcing you to pay all that money just so you can sit in your living room? How much is the electric bill? Look at the recession as an opportunity to reasses your priorities and habits. 

Technology is great and important. But how much is too much? We complain our kids are obese, but buy them the technologies that make them that way.

Eric Brende writes in his book Better Off: 

Technology undoubtedly has, and will always have, some role in making life easier or better, so one shouldn’t exclude it. But the role is supplemental. Technology serves us, not we technology.

Brende and his wife spent a year living with an Amish sect trying to figure out why or how they live they way they do. They found that these "primitives" have technology, just not what we are used to. And they are happy. Why? In spite of instant 24/7 communications, and unlimited goods and services, we are still separated from our families, don’t interact with our communities, have no sense of purpose in our jobs. Yet we often see ourselves as better off than "simpler" or "poorer" folk.

From an eco-sense, how much consumerism is waste? From a Christian sense, how does God want you to spend money and resources? Churches talk often about tithing. I’m not aware of any tithing verses that say "Give your money to your church!" It’s more like, "Give some of it back to God." So in a more accurate sense, we should be supporting our church and other God-centered groups or causes. In a much broader sense, God is telling us to use all of our money (and in turn our resources) wisely. When buying something, ask yourself, "Would God spend this on this?" or "Does this improve my relationship with Him?" or "Is buying this going to make me a better or happier person?" Start thinking like this and you start to see how much money you could be saving. He doesn’t expect us to be perfect, but how many of us are even looking at perfect?

Does living simpler, which often includes being a bit more ecoaware, mean selling your home, becoming a farmer or living in a hut? No, of course not. Jenna Woginrich has combined her life with some old-fashioned homesteading. The Dervaes turned their urban home into a urban oasis. No, we don’t all need to start rasing animals or growing all our own food - but if you want to, go ahead.

We all could support our local food suppliers better. Saves money, conserves resources and builds the economy. Economy and community start locally. Start by supporting local churches and farms, then work your way out to your region, state and country. Corporations and governments try the "one size fits all approach." Living simpler means doing what actually works for people.

The starting local approach and living a bit simpler and a bit more ecoware means better health. We’ve seen how health is impacted on the quality of our foods and environment. Improve these things and improve your quality of life.

There’s a lot of implications here. Better health. Better lives. Stronger neighborhoods. Less reliance on government. Self-reliance. Stronger churches.

Bottom line is a life more in sync with what the Creator wanted. -D

American Insurance Group, even after a $180,000,000,000 taxpayer funded bailout, has dumped its climate change program. Treehugger says it was a risk/reward decision. Former AIG Environmental CEO says the program was annoying clients. Two former VPs say the program - including lobbying efforts - is dead, while a current AIG spokesman says climate related products and services are "still available." Treehugger observes:

It's kind of ironic, really--the company that had a hand in creating a global recession by making unsustainable investments was on the brink of making some of the most important, most sustainable investments of all.

Not ironic at all, my green friends. Important and sustainable rarely mean profitable when government is regulating the investments.

UPDATE: On the other hand, Wal-Mart (aka "not bailed out") is taking a stab at making green profitable:

What's interesting about the way Wal-Mart is going about this program, however, is that it hopes to provide an accurate rating on each project. I suspect lots of products that currently call themselves green won't fare so well when put to the Wal-Mart test.

Yep.

Read more here.

-D

MetroCatholic:

Recently, religious leaders have spoken about global climate change and its impact on people in poverty. The National Religious Partnership on the Environment has called particular attention to the hardships that will burden the poor if policies to reduce greenhouse gas emissions are not carefully structured. Representing the Partnership as a guest speaker, Walter Grazer said that it is incumbent that policies “create new well-paying, climate-friendly jobs and assist workers who lose their jobs as a result of new climate regulations and other policies.”

Climatists have unwittingly created a new sort of eco-justice program.

UPDATE: More here. What about the "climate refugees" created by the economic impacts of climate change regulations?

The House barely passed the "Cap & Trade" legislation. What will happen if the Senate also passes it? From Heritage Foundation:

• Compared to no cap and trade, real GDP losses increase an additional $2 trillion, from $7.4 trillion under the original draft to $9.6 trillion under the new draft;

• Compared to no cap and trade, average unemployment increases an additional 261,000 jobs, from 844,000 lost jobs under the original draft to 1,105,000 lost jobs under the new draft; and

• Peak-year unemployment losses rise by 500,000 jobs, from 2 million under the original draft to 2.5 million under the new draft.

By 2035 the bill will:

•Reduce aggregate gross domestic product (GDP) by $9.4 trillion;
•Destroy 1,145,000 jobs on average, with peak years seeing unemployment rise by over 2,479,000 jobs;
•Raise electricity rates 90 percent after adjusting for inflation;
•Raise inflation-adjusted gasoline prices by 58 percent;
•Raise residential natural gas prices by 55 percent;
•Raise an average family's annual energy bill by $1,241; and
•Result in an increase of $28,728 in additional federal debt per person, again after adjusting for inflation

Change we can believe in. -D

Excerpts from "New Obama rules will transform US auto fleet" :

Carpenters will still haul materials around in pickup trucks, but they will cost more.

So business' will get hit with higher costs. Especially small business'. Can our bankrupt car companies afford to sell less of trucks - a best seller?

That means cars and trucks on American roads will have to become smaller, lighter and more efficient.

"Smaller, lighter" to me means "less safe." I don't care if a Prius meets government standards, you can't change physics. More steel, more weight, more protection.

Already on Tuesday, some drivers were skeptical. Dixie Bishop, who runs a plumbing business in San Antonio that uses vans, worries the new requirements will drive up her costs at a time when customers are cutting back on repairs.

"Are they going to take my horsepower down?" she asked. "I have to be able to carry old water heaters and toilets. It's not beneficial for me to haul one water heater at a time. We need the power to pull these heavy items."

The government doesn't care about you Dixie. They think they can run your business better than you. And they believe in the Global Warming Hoax, and believe you should believe in it too.

Of course, developing the technology will cost money — billions of dollars — and automakers will pass that on to their customers.

No kidding.

The Obama administration says the changes mean the average vehicle would cost about $1,300 more, although some private analysts say the increase will be much heftier. The administration says gas savings will make up the difference in about three years.

Not when gas keeps rising. Who can wait three years?

Automakers have said they need stable, relatively high gasoline prices to create a market for electric vehicles. General Motors fears rolling out its rechargeable Chevrolet Volt next year with gas at $2 per gallon.

So it's in the government's best interest to not attempt to lower gas prices .

But the Volt is expected to sell for $35,000 to $40,000, and buyers may be unwilling to pay that much for a sedan, even if tax credits help ease the burden, unless gas prices soar.

Who want's to pay luxury prices for a car that - compared to the luxury cars - is a soda pop can?

Is anyone yet regretting electing these people who are intent on ruining your life? Yes, let's improve how we drive, but let's not drive off a cliff in the process. -D

From the Pittsburgh Tribune-Review:

If the Waxman-Markey global warming bill becomes law, it will have a devastating impact on people but virtually no impact on the planet.

It's a massive energy tax in disguise that promises job losses, income cuts and a sharp left turn toward bigger government, concludes The Heritage Foundation.

By 2035, the bill would:

• Reduce aggregate gross domestic product by $7.4 trillion

• Destroy 844,000 jobs annually on average, with peak years seeing unemployment rise by more than 1.9 million jobs

• Raise electricity rates 90 percent after adjusting for inflation

• Raise inflation-adjusted gasoline prices by 74 percent

• Raise residential natural gas prices by 55 percent

• Raise an average family's annual energy bill by $1,500

• Increase inflation-adjusted federal debt by 29 percent ($33,400 additional federal debt per person).

But Waxman-Markey would result in virtually no difference regarding global warming. Climatologists have calculated the impact on temperature to be only hundredths of a degree in 2050 and no more than two-tenths of a degree at the end of the century.

The cost-benefit analysis clearly indicates that this latest Gang Green scheme is all cost and no benefit. Some way to "save" the planet, eh?

-D

Catherine Claire Larson, author of As We Forgive, on how how social conditions contribute to reconciliation:

I wasn’t able to include it all in my book, but I’ve been greatly impressed by the groups which are wedding reconciliation work with micro-enterprise. World Relief has an essential oil business that is enabling Hutu and Tutsi to work in reconciled community, Indego has their basket weaving enterprise that is doing the same, and Prison Fellowship Rwanda has been involved with a cattle operation, while Land of a Thousand Hills works with coffee plantations. It strikes me that by creating economic opportunities where interdependence is vital, they are really creating ideal environments for reconciliation and restoration. I wasn’t ever able to track it down, but one of my friends shared that her college professor did his dissertation in Reconstruction era history of America. He concluded that in areas where interdependence was more vital to survival that racial reconciliation happened at a more rapid pace. Intuitively, that seems to make sense. I’d love to see the research though.

A holistic approach to ecology that includes economic as well as social and environmental development is pretty intuitive, though we tend to think of this applying more in the third world than in our own country.

Groovy Green:

It has come to my attention recently that the real estate trust Prologis is developing the rooftops of their existing buildings by contracting to lease the space to power companies to install solar panels.

From the comments:

Yes, we are preparing to remove ourselves from the economy, to an extent. We have purchased acreage far from the city, where we will slowly build our own house. We will raise vegetables and fruit, chickens and rabbits, etc. We will trade labor and food with our neighbors, and try to become as self-sufficient as possible.

Ben Cohen is excited because reduced consumption means less trash in landfills.

Yale's Fred Pearce is stoked because poor people don't contribute as much CO2.

Environmental damage is related to liberalization of international trade reports Reuters, so the opposite must be true. When the traders go on strike, the environment will have to get better.

I doubt history has ever seen tax policy used this way to green-up an economy. Simply brilliant.

As this experiment works itself out I also wonder if Americans can transcend the historic links between poverty and ecological debt.