28 September 2011
25 September 2011
The Solyndra Scandal
Haven’t written about this. But it is indeed a terrible scandal, because the private sector never ever puts money into ventures that end up failing:
That is the whole post.
He fails, of course, to realize the difference between private investors betting on what consumers will get behind via voluntary exchange in the market and government using money taken from individuals under pain of law and giving it to select individuals as political patronage. The failure of a private concern is equivalent to the government giving a half billion dollars of other people's money to a private firm in return for political support, regardless of the fact that the firm's business plan was fatally flawed from the start. In February, the government also gave up its "first lien" position in an asinine bid to attract more private investment into the failing company. So the chances of American's getting any of their money back is not virtually nil. It is absolutely zero.
Creative destruction, innovation, the beauty and power of the market are lost on the Progressive. Government deciding what is best for you, determined by base political calculus, is the way of things. And anyone else who disagrees with this worldview is just too stupid to realize how right, how brilliant. the Progressives are.
20 September 2011
15 September 2011
Where will the money come from?
There are a couple of head scratching questions. First and foremost is how long it will take to repair the bridge. Estimates range from three months to two years, but officials still don't know. This is unacceptable. First of all, metallurgical analysis shouldn't take more than a few days, and that should be lessened significantly taking the severity of the situation into account. In other words, "officials" should have known by no later than Tuesday what the analysis and engineers inspection reports said.
As far as the time it takes to make the repairs, I would love to know what branch of the bureaucracy is in charge of coming up with these estimates. In September 1999 Hurricane Floyd buckled a very small bridge just south of New Hope, PA. The span is just over 15 feet. Residents were told to be happy that the repairs took just less than one year.
A bridge of just about the same size two block away from my house is also under repair, it was not damaged by the earthquake or hurricane, I believe it is just routine. The estimate is that it will be done in four months. The trucks came in and ripped the black-top off. And...no one has seen a worker on the sight since. So if this is done by Christmas, I'll eat my shoe.
There is another bridge a few miles away that crosses over the Pennsylvania Turnpike. I believe that this was also a matter of regular maintenance. It has been closed almost two years and I don't know that anyone knows when it will be done.
There is no reason why that bridge cannot be repaired in less than one year considering how important it is to the two states involved, and the goal should be no more than six months. It is estimated that replacing the bridge could take "years." Nothing more specific or any reason for such a vague answer is given.
But the big question is how will the repairs or replacement be paid for? Initial estimates to repair the cracks will cost $10 million; more extensive repairs would cost $60 million and replacing the bridge would cost "several hundred million dollars" (again with no context or explanation for the arbitrary and meaningless estimate). Everyone, including (disappointingly) Rand Paul, is running to the federal government, of course.
Thankfully, the Federal Highway Administration has an "emergency relief program." Ohhhh, but there is a problem: the law specifically states that "in no event" may funds "be used for repair or reconstruction of bridges that have been permanently closed because of imminent danger of collapse."
But that certainly isn’t going to stop the congresscritters and other urchins from trying to suck everything they can get from other people.
Now, I don’t necessarily have a problem with the federal government spending federal funds on roads, bridges &c, so long as those projects are directly involved in interstate commerce. And the Sherman Minton Bridge certainly fits that description. So let’s look at some numbers.
Anyone buying gas in Indiana pays 15¢ per gallon to the state treasury and the good folks in Kentucky collect 18¢ per gallon. This is all on top of the 18.4¢/g the federal government collects (closer to home, the Commonwealth of Pennsylvania collects an obscene 31.1¢/g, see here). In 2008 the federal government collected $37.9 billion in fuel taxes, Indiana collected $856 million and Kentucky raked in $617 million, see here. Indiana contributed 1.84% to national GDP in 2010 and Kentucky kicked in 1.11%, see here.
So a little common sense sprinkled with back of the envelope mathematics would show that collectively, the two states are entitled to 2.95% of the federal highway funds (you get back what you contribute, no?) which comes to over $1.1 billion dollars. This is on top of the $1.47 billion that the two states collected in fuel taxes that is ostensibly to be used for things like this. So I just found over $2.5 billion dollars from which these grubby little idiots can parse out the “several hundred million” or so that it would take to replace the bridge with enough left over to repair the one that they ignored and caused this problem to begin with. Building and maintaining roads and bridges is a legitimate function of government, and the federal government using federal funds to assist in maintaining those roads and bridges that affect interstate commerce is also legitimate. Because government at all levels have gone beyond their purview and keep expanding their bishopric to include, well, everything and not concentrating on that which it should, everyone suffers, and pays, more.
More resources are wasted; more people become dependent on government for services that the government can’t and should be providing; more capital is removed from the market; less is produced. So bridges crumble and then the politicians who are the most responsible for the fact that the bridges are crumbling get together, act serious and demand to know where they can get the money to fix their own mess. And in two years, or however long it takes to get the benighted thing fixed, they will all pose for pictures with an obnoxious ribbon and fake scissors and block traffic for just a few extra more minutes. Because they’re doing the people’s work.
"I think this is a rotten way of approaching the history of thought. In the first place, all of these political thinkers and economic thinkers were involved in movements, almost all of them. When they say anything, they have certain intentions. They use the words in a certain way, have a certain author’s intention.
In order to understand their intention, you have to understand who they’re talking to, who their friends are, who their enemies are, who they’re reacting against. In other words, the historical context of what they’re saying."
That is why Rothbard wrote An Austrian Perspective on the History of Economic Thought, which I haven't read, but I have and it is a tremendous reference.
Anyway, I enjoyed the excerpts and look forward to reading Nasar's book.