LoebA

Cap-and-Trade: Wasting a Perfectly Good Crisis

To Derryl I will respond that the maxim "do unto others..." appears in almost every culture as a central principle, and for obvious reasons. The test of success Newton proposed is in complete contradiction of that.

And as for your comment, you are essentially saying that what people were capable of learning about the climate before they had high-powered computers is comparable to what people can figure out now that they do. And, taking your logic forward, you would also be saying that you can't trust doctors these days because medical practice before Pasteur thought disease was caused by "bad air" and so on. Sorry, I have spent a couple of decades reading the journals on the state of knowledge about such issues as it progressed over time, and it seems to me that we know something more now than we did in the 1940s.

And as for the "global warming preachers" who you say are doing this strictly out of self-interest, do you actually know any of them, or are you just ascribing thoughts and motives to people you have never met?

Cap-and-Trade: Wasting a Perfectly Good Crisis

In response to the know-nothing response of Danny Newton, the thermal properties of ocean water are such that there is a lag time between the heating of the atmosphere, which transfers heat to the surface of the water and to the water runoff from the continents, and the heating of the full water mass of the oceans. Thus, as a matter of physics the consequences of actions taken now will not be experienced immediately. Indeed, the lagging effects will take many years.

But that doesn't mean that they won't occur, and if Mr. Newton's attitude is that anything that doesn't affect him personally and imediately is not worth considering, let me ask him if he would he feel the same if he had good reason to suspect he had swine flu and was planning to visit an elementary school. Under the test of success he has used for himself he would still go. First, visiting the school doesn't change whether he has the disease or not, so going to visit the children has no incremental cost to himself personally. Second, the dangers to others his presence might cause is something that won't be manifested until after he leaves, so under his test he can simply insulate himself from the consequences by ignoring them. That is, applying his test of success, he can pretend that his own actions do not have any consequences to others. Such a standard for human interaction relieves people who have no concern for others of any negative feelings, allowing them to go through life serving themselves without thought of the consequences. But it doesn't mean that there aren't any, only that they are ignored or rationalized away.

Mr. Newton's test of success doesn't meet the basic moral premises for civilized society, and I suggest that Mr. Newton not try to disguise that as a scientific question. People like Mr. Newton need to come to grips with the fact that climate change, like a contagious disease, is something we can and should do something about, and a price-signaling mechanism has been shown to be the best way to do that.

Now let's get on with designing a mechanism that will work most efficiently and not let the moral deficiencies of some stand in the way.

Leaving Green to the Free Market - Barron's

Jack-

interesting comment on alkylate that I will have to check into. but I thought the product of alkylation is iso-octane, for which the octane standard is named. it has an octane of 100, not 130. have I got it wrong, or is there some disconnect?

On Apr 26 04:59 PM john s. gordon wrote:

> loeb -
>
> i was told that the reason we had leadfree amoco in 1945 was that
> all the other refiners shut down their aviation alkylate (130 RON)
> capacity after the war but indiana standard elected to keep their
> facility running & use the product as a premium blending stock
> (you don't really need 130 octane in your car).
> lead slows down the combustion and reduces knocking by acting as
> a free radical trap. i did a lot of racing @ that time & when
> you are running 7800 rpm the faster combustion without lead gives
> you that little extra oomph that can make all the difference.

Leaving Green to the Free Market - Barron's

John Gordon is correct. There was Amoco lead-free, the product of a long interaction between the parent company Standard of Indiana and the Blaustein family of Baltimore, who sold American Oil Company to it in the 1910s when Indiana Standard was trying to get East Coast retail outlets after the Standard Oil breakup in 1911. According to sources, the Blausteins opposed the use of lead and because they held two (?) seats on Indiana Standard's board convinced Standard to put unleaded premium on the market. Of course, it cost a bit more to make, so they produced studies to show that unleaded was worth the extra cost because it avoided the engine damage caused by the scavengers in leaded. By 1970 the parent had renamed itself after its subsidiary. Now here's the irony. When EPA issued its regulations in 1973 all the refiners sued to have them rescinded, and the case was captioned by the D.C. Circuit alphabetically, so that the case was called "Amoco v. EPA." So the case in opposition to controlling leaded gasoline was named for the only sgnificant company to have promoted unleaded. To complete the irony, EPA won the case by citing Amoco's own data showing the engine damage leaded cost. Thanks to John Gordon for bringing up this illustration of the contradictions and ironies encountered along the way to getting the lead out.


On Apr 26 10:06 AM john s. gordon wrote:

> loeb - yes the presence of TEL in fuel fouls your spark plugs more
> rapidly & rots out your tailpipe more rapidly. ethylene dibromide
> had to be added to the fuel as a lead scavenger. also you end up
> with a lot of waste oil with lead contamination. these are all costs.
> fortunately after 1945 we had lead-free amoco high test (in CA they
> called it american white) & i used that.

Leaving Green to the Free Market - Barron's

The author is completely uninformed about the costs of removing lead from gasoline. As senior attorney in the Lead Phasedown at EPA during the 1980s I was there when EPA brought down the myth of the negative cost-benefit associated with lead removal. Refiners had argued for decades -- actually since the 1920s when toxicologists questioned the sanity of putting lead into gasoline in the first place -- that the use of lead additive in gasoline had a positive cost-benefit. It took decades to realize that the use of lead additive cost the driver more in materials deterioration to his car than it saved him at the pump, and that in consequence the use of lead additive was in fact a diseconomy. This is true without even considering the health effects of the lead, which when added in completely destroys the notion that there might be a net social benefit from the use of lead additive. In the end what one learns is that for three generations the use of cost-benefit analysis was a fraud that was perpetrated on the public and on motorists by refiners for their private gain resulting in a net social cost. Either the materials deterioration factor or the public health factor would have been sufficient independently to negate any assertion of positive net benefit of lead usage. It was environmental regulation that ultimately exposed the fraud. So, in the end environmental regulation actually saved the economy billions. But why monetize the benefits? Maybe Ms. Granby should consider that because of the Lead Phasedown her children will have higher IQs and be less likely to engage in criminal or anti-social acts, and her father and husband will be less likely to die at middle age of a heart attack. Not to mention that her car will run twice as long and cost less to maintain all the while. I think Ms. Granby should look at the evidence before she shoots off her mouth. To quote a well-known commentator, "They know nothing, nothing!!!" Get real, lady.

The Debate Continues: Why GM May Survive

I really couldn't stomach Foodman's comment that blamed the plight of these two automakers on the government. it reminds me of the years I gave a presentation at the SAE World Conference in Detroit on the subject of automotive technology choice. it was an insightful paper I thought, and I was bringing it to another audience after presenting it to a number of other audiences, including economic historians and history of technology scholars. but when it came time for questions the crowd asked not about the paper itself but about my work for the U.S. EPA in regulating auto emissions, which had been listed among my credentials when I was introduced. I said nothing at all in my presentation that was adverse or critical of the industry, but what these guys had heard instead was what was in their heads. Foodman, get a life! Like those guys at the SAE you're living inside your imagination, not in the real world. Regulation didn't cause the automakers to decline, it was irrational adherence to Sloanism. Get a grip!

GM Finds an Unlikely Leadership Opportunity

you generalize too much. GM led in technology innovation to the Depression, but after that it decided that new technology had too much risk, and it left innovation to Chrysler. meanwhile, GM had discovered that strategic and marketing innovation was much more successful and avoided the risk of sunk capital, so that's why GM became a laggard. if the industry leader is philosophically opposed to technology innovation over a long time, doesn't that sound like a recipe for the condition we are now in? I think that explains a lot. now, finally, GM decides to innovate, but it came too late. GM is trying to do it at a time when surplus cash has disappeared. it should have done this decades ago, but now the investment in technology threatens to sink the whole enterprise. that is, it has failed even in strategy. all very unfortunate.


On Feb 24 12:31 PM evjw wrote:

> GM's problem was never technology, it was the lack of management
> vision that doomed the company. They've always had good engineering
> and bad execution.

How the Crash Will Reshape America

whoah! that was nasty. let me say that NITRAM appears to be unable to make distinctions between those who caused the calamity and those who are trying to fix it. the true cause was application of a philosophy that allowed people to run wild. humans are prone to greed, and if you allow it to take root it multiplies. for 28 years we encouraged greed under a philosophy of letting the market do what it wanted to do. I experienced this myself while working at EPA in a program that was attempting to protect the public from the scourge of gasoline lead additive. you can't protect infants from a persistent toxic substance by letting the market do what it wants to do, but that's what the Reagan folks were trying to accomplish. it was a terrible, irrational idea that was defeated by public opinion (then the Reagan folks took credit for the success of the program, though they had fought it and were defeated by reasoning people). likewise, you can't keep people from trying to make mountains of cash if you take away the constraints on risks by deregulating large banks and investment houses and trading rules such as the uptick rule, but that also is what people have tried to do over the last generation. ultimately a completely laissez-faire market will always fail, and we were approaching that. so let's not tarnish an administration that has been in power for -- what?, three weeks? -- with the sins of an irrational philosophy that caused this to happen. overall, if people can't even understand cause and effect when the evidence is right in front of them there is little chance we can again become a great economic power. irrationality, like inefficiency, is ultimately punished in the market.


On Feb 14 06:36 AM NITRAM wrote:

> We are not, and never will be again, the financial capitol of the
> world. Our GREED and the largest group of LIERS AND CHEATS in our
> government. One of our enemies will be the new financial capitol
> of the world. Obama , Pelosi and the other court jesters will destroy
> we from within

The Ultimate Game Changer: Why 2009 Will Be Worse Than 2008 (Part 1)

you're wrong. when I lived in New Orleans in the 1970s they talked every year about the "nightmare scenario" when a hurricane would come up to the city by the back road, that is, up through Lake Pontchartrain. I'm surprised it took all of 30 years to happen, but in the interim people cried out for investment in some real protection, and they did assessments and studies and scenarios, but when it happened it wasn't a surprise to anyone who had been there. so I wouldn't say anything that happened in the market was a suprise like New Orleans, except to the extent that when it happened to the market the weaknesses had also been predicted for years, though perhaps with less certainty. we always knew we were in a heap of trouble. so please take the facts into consideration when you write.

10 Stupid Moves That Created This Mess

I'll add one I think is essential -- removing the uptick rule. when I first found out that the rule had been abandoned my first thought was, "what idiot thought that was a good idea?" Immediately once it took effect you could see the change in market behavior. Stocks I follow became much more volatile as traders followed short sales with more short sales to beat down the price, and with everyone doing it any breakdown became an opportunity to snip off a nice profit in 30 miutes. But then when we had a major break in the market it became an opportunity to drive down prices for weeks. I wouldn't be surprised if short sellers coordinated their efforts behind the scenes. With the stabilizing effect of the uptick rule gone, no one was assured that they could hold a position without getting whacked. It may be that fear and greed drive the market, but the two are not two sides of the same coin -- each has its own properties. When you allow fear to take over (and removing the uptick rule did that), the most profitable strategy is to create panic for your own gain. But this leads to systematic destruction. So who was the idiot? A whole bunch of people who forgot (mostly for ideological reasons) that the responsibility of government is to provide for the stability of markets. Put that on your list.

Good Regulation Requires Good Regulators

I completely agree, but I would add one thing that also needs to be said. Chris Cox was not remiss because he was a bad person, though his actions are condemnable. He was remiss because he was following a philosophy that told him that deferring to the market was the right thing to do. At bottom it was a misguided belief that the market can do all things that caused the problem. As the article points out, people cannot regulate themselves, which should be self-evident. If we trick ourselves into thinking anything else we pay the price. So, it was a philosophical failure more than anything that led to the present crisis.

The Deflation Scam

I completely agree, but I would add one thing that also needs to be said. Chris Cox was not remiss because he was a bad person, though his actions are condemnable. He was remiss because he was following a philosophy that told him that deferring to the market was the right thing to do. At bottom it was a misguided belief that the market can do all things that caused the problem. As the article points out, people cannot regulate themselves, which should be self-evident. If we trick ourselves into thinking anything else we pay the price. So, it was a philosophical failure more than anything that led to the present crisis.

Why AIG Gets Billions While GM Gets Scorn

hey, didn't the failure of AIG to put up funding by a certain date trigger a conversion to equity, and doesn't that mean that the U.S. now owns a large marjority of AIG? if we own it and we're putting money in, that is money we are paying to ourselves, perhaps simply buying GM is the way to go

Automakers: A Pitiful Trio

as a former senior official at the U.S. EPA in a program (to take lead out of gasoline) that succeeded in saving the consumer billions of dollars in waste, in saving children and aging adults from the scourge of IQ deficits and heart attacks, in preventing violence and raising SAT scores, and in averting long-term damage to public health while strengthening national security, I resent ideological people such as yourself that trash the government and its many beneficial programs. moreover, we did all this by introducing an untried market-based trading mechanism that has been copied successfully for CFCs, acid rain, and soon for climate change. it was called the "lead phasedown." by contrast, Atlas Shrugged is fiction, and though it is appealing it is still fiction. that is, someone made it up from her imagination. by contrast, what we did at EPA is fact, and if you study the history of the conflicts between the auto industry and its petroleum allies you will see that laissez-faire is a dangerous ideology when there is no institutional mechanism to offset its extremes. so you folks that trash the government ought to give some thought to how lucky you are that this incredible return on investment was achieved on so little public investment, and then think about how much worse life would have been for you and your own descendants had they lived in the world that would have existed without our efforts. all you are offering against the fact of what actually occurred is fiction. I suggest you stop misleading people with stuff that isn't even factual. you are an ingrate of the first order.

John McCain's Questionable Capitalist Philosophy

in 1980 Ronald Reagan took on President Jimmy Carter. Carter said, "If I lie to you, don't vote for me." Reagan proposed to cut taxes, increase defense spending, and balance the budget. no surprise that Reagan as president began an era of deficits, and that he blamed it on Carter. except for the eight years of Clinton, it's been exactly the same ever since: deficits and distortions. but the public seems to be distracted from the truth by fictions and outrageous promises. the whole phenomenon seems to have spilled over to the culture generally, so the fact that nobody on Wall Street has been concerned about accounting for risk seems to be just another manifestation of the same culture of distortion. it's about time to wash the slate clean and get rid of the lemming leadership we have had.