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Obama's Green Obsession: More Harm Than Good?

Thank you for publishing this. There are so many scientific illiterates making decisions based on emotions instead of facts, every little bit helps. I think you could make a lot of money selling perpetual motion machines to Obama and his followers. :-)

Anyone who has studied thermodynamics (by that I mean understands thermodynamic efficiencies), realizes that it is energy that is the key to everything in the economy. The Austrians will tend to appeal to these folks because they are closer to the truth of reality. Their insistence on gold as a medium of exchange is close but flawed, and misses the point that you have made above, that capital is energy stored against entropy. The rest of their analysis is in line with thermodynamic understanding. And the universe, as far as we know, is in line with thermodynamic understanding. Probably our economic policies should be too. ;-)

Of course, Keynesians point to success of their policies. But those successes are all short term (years or decades, not centuries) and not sustainable. That is, they look at only part of a system, disregarding the flows across the system boundaries. They think they have discovered perpetual motion because they are adding energy without realizing it. Economic theory will eventually catch up with reality. Politics keeps it from seeing that connection, but it only slows it down. There are enough smart people there that eventually they will find their errors.

This would be much quicker if so many economists (all?) weren't scientific illiterates themselves.

I'll state it directly for those who still haven't got it. Economics can't contradict the principles of science, the underlying laws that our corner of the universe seems to run on. If it appears to, then you haven't understood the system, or aren't examining the complete system. Financial hijinks can appear to make something out of nothing, but it really doesn't. As we are currently discovering.

Energy is conserved, entropy increases.