May — 2010 — VOICES for REASON

Once again, an episode from Ayn Rand’s Atlas Shrugged leaps to life from behind closed doors in Washington, D.C. According to a recent report from The Washington Post, President Obama is angry about the British Petroleum oil leak in the Gulf of Mexico:

Since the oil rig exploded, the White House has tried to project a posture that is unflappable and in command.

But to those tasked with keeping the president apprised of the disaster, Obama’s clenched jaw is becoming an increasingly familiar sight. During one of those sessions in the Oval Office the first week after the spill, a president who rarely vents his frustration cut his aides short, according to one who was there.

“Plug the damn hole,” Obama told them.

That’s the politician’s answer to every intractable problem: give orders, issue threats, and wait for obedience. But the creative human mind cannot take orders like that. Notice I didn’t say, “refuses to take orders.” I said, “cannot take orders.” Read the rest of this entry »

Writing in The Wall Street Journal, sports journalist Allen Barra has hailed the recent Supreme Court decision in American Needle v. NFL as “a clear victory for free enterprise.”

I want to leave aside the complex antitrust technicalities on which this decision hinged and just focus on what it means for enterprise to be “free.” Free from what? If the term has any objective meaning, it denotes freedom from coercion, from physical interference by others. So if Barra is correct about this court decision being a victory for freedom, it must mean that some coercive practice has been swept away. But was it?

Consider what led to the court case. All thirty-two teams in the National Football League formed an association (NFL Properties) that entered into a contract with Reebok, a manufacturer of sporting goods. In this contract, Reebok promised to pay NFL Properties licensing fees on the sales of headwear featuring team logos. In exchange, NFL Properties promised that Reebok would have exclusive licensing rights for ten years.

That contract was entered into freely. The court case featured no evidence that Reebok made physical threats against NFL Properties—or that NFL Properties made physical threats against Reebok—or that any of the member teams made physical threats against the others. Physical coercion was simply not an issue in the case. On the contrary, the Supreme Court’s decision to declare the contract illegal is itself coercive. It obliterates, by government force, the freedom in which the NFL-Reebok contract was conceived and written.

According to the decision’s supporters, the 32 teams who formed NFL Properties are now “free” to enter into individual contracts with American Needle. But when the teams actually had freedom, they chose differently. They chose to contract together, as an association, and they chose to contract with Reebok. Now that contract has been swept into the trash can, by force of law. The teams are, in fact, less free than they were before the Supreme Court decided their case. That’s anything but a “clear victory for free enterprise.”

Image: WikiMedia Commons

Whenever you hear about the miracles of wind power, always keep in mind one thing above all: because the wind blows erratically, and sometimes doesn’t blow at all, wind power is inherently unreliable. As I wrote in a recent piece on “green energy,”

where coal, oil, and natural gas can be burned whenever power is needed, at the exact quantity needed, wind and sunlight can be harnessed only when the weather cooperates–and electricity can’t be stored [in significant quantities] for a rainy day. Thus, they are always used as supplemental, not primary, sources of power on electric grids.

An engineer friend of mine recently witnessed this fact firsthand while driving east of San Francisco. He sent me this still picture that is as good as a movie–because the windmills were not moving. As he wrote: “Good thing Californians have reliable coal and gas-fired power on the grid elsewhere; Gaia did not see fit to bless us with breeze-based power today. Hundreds of them, dead still.”

As Americans ponder how to react to the BP disaster in the Gulf of Mexico, with many calling for massive restrictions on oil drilling, it’s important to know the story of the Santa Barbara oil spill of 1969–and the disastrous American reaction to it.

Daniel Yergin summarizes the spill and the ensuing outcry in The Prize:

in January 1969, the drilling of an offshore well in the Santa Barbara channel encountered an unexpected geological anomaly, and as a result, an estimated six thousand barrels of oil seeped out of an uncharted fissure and bubbled to the surface. A gooey slick of heavy crude oil flowed unchecked into the coastal waters and washed up on thirty miles of beaches. The public outcry was nationwide and reached right across the political spectrum. The Nixon Administration imposed a moratorium on California offshore development, in effect shutting it down.

The Santa Barbara outcry and ensuing restrictions on drilling started right before the 1970s…which turned out to be one of the most traumatic decades energy-wise in recent history. The decade was notable for scarce energy, the OPEC oil embargo of 1973, gasoline shortages, and the belief that energy would never again become abundant and affordable. But underlying all that were the post-Santa Barbara domestic restrictions on energy development, particularly offshore drilling. American companies had had plans to develop plentiful oil reserves in Alaska and off the coast of California, reserves that would greatly increase our flexibility in a then-volatile international oil market, but an oil spill in Santa Barbara changed all that.

Yergin writes:

However great the need for oil, the leak increased opposition to energy development in other environmentally sensitive areas, including the most promising area in all of North America, the one most likely to stem the decline in American production….Alaska.

Today, we face a similar situation. An offshore oil spill–a very unfortunate, very rare, but still inevitable part of offshore drilling–is empowering the forces who are against offshore drilling, period, even though such drilling is a means to a resource indispensable to our standard of living.

And to learn the story of the 1970s in detail, I refer you to Part 3 of my course on the history of oil, “The Triumph and Tragedy of the Oil Industry,” available here. (The story begins around the 14 minute mark and ends just after the 29 minute mark.)

Image: Wikimedia Commons

I originally started this post by writing: “Apple and Adobe are at war.” But they’re not—not yet, anyway. At this point—as long as antitrust authorities stay out of the way—Apple and Adobe are engaged in economic competition, not war.

The disagreement between the two companies centers on the place of Adobe’s Flash technology on Apple’s mobile products such as the iPhone, iPod, and iPad.

Much of the Internet’s video was created with Adobe’s proprietary Flash software, but those videos won’t play on Apple’s mobile products. Why? Because Apple refuses to allow Flash and has effectively barred developers from creating “apps” using Adobe’s software. CEO Steve Jobs has a 1,671-word explanation of Apple’s policy here. It’s filled with evidence that keeping Apple’s products Flash-free will enhance operational speed, battery life, security, and error-free functionality. Adobe disagrees.

Putting the technicalities aside, my point is this: It’s Apple’s prerogative to set the terms for software development on Apple’s own products. Disagreements among competitors are settled on the free market by persuading individual customers that a particular product will satisfy their own needs. Over time, technologies succeed or fail accordingly. Gasoline engines win, steam engines lose. VHS tape wins, Sony Betamax tape loses. CDs win, cassette tapes lose. Some businesses make money, others go bankrupt.

Now, however, news reports indicate that a real war is about to break out between Apple and Adobe—not with guns and bombs, but with the politer kinds of physical force that government regulators wield: fines, penalties, and jail terms. Adobe, it is rumored, wants to force its way into Apple’s devices by threat of prosecution for violating America’s antitrust laws.

Will antitrust enforcement give Adobe the revenues it couldn’t earn on a free market? Stay tuned …

Image: WikiMedia Commons

Following up on an earlier post, here’s another insightful challenge to the mythology of electric cars.

Considering the batteries we have today, and the trajectory of the technological development, I am pessimistic about the viability of a mass market for battery electric cars in the near to mid-term.

Our current battery technology simple does not provide the cost, durability and energy storage attributes that allow for the development of mass-market products. We can get around some of these issues with niche products or schemes like battery leasing, or subsidizing the products but none of these are solutions for the mass market.

Within Toyota, we’re working on a niche electric vehicle. At the North American International Auto Show in Detroit this year [2009], we showed a concept of what our current thinking is. A small, city car with relatively limited range, that’s reasonably affordable, targeted at non-traditional markets. But it’s not intended to be a mass-market car. We’re looking at sales volumes of thousands not millions. To produce an electric vehicle that’s truly intended for a mass market, a replacement for your current gasoline car, we’re going to need a battery chemistry that isn’t currently available.

Now, some readers might yet suspect that the person quoted is a shill of the oil industry. In fact, the statement is from Bill Reinert, one of the designers of the ultimate “green” icon: the Toyota Prius.

Image: Wikimedia Commons

Anytime you see an electric car you are likely to see a “zero emissions” sticker on it, implying that the driver of the car is driving without emitting CO2. Electric car companies are using this idea to market their cars, and to imply that those of us who drive gasoline-powered cars should feel guilty. For example, Coda Automotive, an electric car company, brags that its not-yet-existent sedan, once it exists, will be “An all-electric car to let you drive your way out from under the thumb of big oil. To help steer us away from climate change, polluted skies…”

It is true that electric motors do not emit CO2, and electric cars don’t have tailpipes that emit CO2 or anything else. But ask yourself (or Coda): Where does the electricity that charges the “zero emissions” car come from? Answer: It almost certainly comes from burning coal or natural gas, by far the leading sources of electricity production in America, because they produce the cheapest, most abundant power. Another question: What happens when you burn coal or natural gas to produce electricity? CO2 is emitted.

To call a car “zero emissions” because it generates CO2 at the power plant instead of the engine is intellectually indefensible–and dishonest. And it is a particularly dangerous form of dishonesty, because it promotes the idea that oil and other fossil fuels are dispensable to our standard of living. They are not.

Image: Wikimedia Commons

In his latest piece, Wall Street Journal business columnist Holman Jenkins argues that today’s electric cars are “welfare wagons”–overpriced, underperforming novelty items that the rest of us will be subsidizing for upwards of $7,500 apiece. Of Nissan’s much-touted Leaf, he writes:

the Leaf is a car for a wealthy hobbyist, good for a trip of 100 miles after which it becomes an inert lump at the end of your driveway (or behind a tow truck) for the many hours it will take to recharge.

Read the whole thing.

For those inclined to believe that today’s electric cars are just going through the growing pains of any new technology, consider what a wise man told Henry Ford over 100 years ago, when electric cars were also considered the wave of the future.

Electric cars must keep near to power stations. The storage battery is too heavy…Your [gasoline] car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.

The wise man’s name? Thomas Edison.

Of course, we can’t and shouldn’t rule out the possibility that some brilliant company will overcome all the obstacles to practical electric cars–but that company must prove itself on the free market, not gorge itself on other people’s money.

Image: Wikimedia Commons

If John McCain had been elected in 2008, a woman’s legal right to procure an abortion would be in grave danger right now.

Remember, McCain ran for president on a campaign promise to select judges who agree that Roe v. Wade is “a flawed decision that must be overturned.” Before the 2008 election, there were already as many as four votes to overturn that decision (certainly Justices Antonin Scalia and Clarence Thomas, and possibly John Roberts and Samuel Alito). Now add the two successors that McCain would have selected (to replace retiring Justices David Souter and John Paul Stevens), and voila! A strong majority, ready to sweep aside Roe v. Wade, could be in place on the Court.

The fact that the nation has been spared such a “McCain Court” is perhaps the only reason to be glad that President Obama is in office at this critical juncture. To his credit, Obama made clear his support for abortion rights during the campaign. And just recently, speaking about the search for a successor to Justice Stevens, Obama said: “I want somebody who is going to be interpreting our Constitution in a way that takes into account individual rights, and that includes women’s rights.” Read the rest of this entry »

Did you notice the irony in President Obama’s eulogy for the 29 coal miners from Massey Energy who died recently in West Virginia? Obama has repeatedly denounced the work of coal miners for emitting CO2 and has said of coal companies that he will “bankrupt them” through “a cap and trade system in place that is as aggressive, if not more aggressive, than anybody else’s out there.” More broadly, he has shown hostility toward all fossil fuels, speaking of “the tyranny of oil” and proclaiming “the age of oil must end in our time.”

So what could the President say about men who died doing jobs he believes shouldn’t exist? What could he find positive to say? The only thing he could come up with, apparently, was admitting the truth that he denies every other day of the year–that coal miners are producing abundant, affordable, indispensable energy.

From the speech:

Day after day, they would burrow into the coal, the fruits of their labor, what we so often take for granted: the electricity that lights up convention centers like this; that lights up our churches and homes, our schools and offices; the energy that powers our country and the world.

What the President did not admit is that coal (along with other fossil fuels) is indispensable in part because all his favored sources of “green energy,” such as solar panels and windmills,  can produce nowhere near the cheap, reliable electricity we get from coal. What the President did not admit is that he’s part of the chorus demonizing fossil fuels, and that he has called for emissions from fossil fuel use to be cut 80% worldwide by 2050 despite no remotely plausible large-scale replacement.

The most true and most hypocritical line in his whole speech was: “the fruits of their labor, what we so often take for granted.” What do you mean “we,” President Obama? The reason so many people take for granted the benefits of coal is because people like you make them feel guilty for emitting CO2, while completely evading the indispensable positives we get from coal and other fossil fuels. If you really want to do honor to these coal miners, start giving speeches about the value of industrial energy, and about how a combination of coal, oil, natural gas, and nuclear–technologies that the “green” movement opposes savagely–are the most promising means of providing it.

Image: Wikimedia Commons