Coase Colored Glasses

Monday, February 28, 2005

Free Market Environmentalism In A Nutshell

(Here) is a pretty good article I got off the Cato institute. Anderson and Leal do a pretty good job of outlining a lot of the things we have been talking about in class using examples from the mismanagement of Yellowstone. It is especially good in talking about the market approach to environmental goods, offering a nice critique of the claims by free market environmentalist’s critics. Thought it may be a nice review for everyone going into the daunting midterm on Friday.

Study Groups

I figured this would be the best place to post information about study groups or if you are looking for a study group for the upcoming test.
Please post the
Time and Place of a study group if you are having an open group. Thanks.

More Eminent Domain Abuse

My uncle sent me this article on how some legislators have actually proposed the idea of taking away drug patents from companies and redistributing them to other smaller companies that agree to sell them at a lower price to the public. Of course the action would be justified under eminent domain and "just compensation" would be given. I don't know about the rest of you but the idea of government seizing private property so that they can sell it cheaper for the "good of the whole' sounds an awful like something a now extinct country that bore a red flag with a large hammer and sickle would do. And what happened to their economy????

Sunday, February 27, 2005

Oil Spills and Richard Epstein

I stumbled upon this paper (here) a couple of weeks back and finally read it this weekend. The subject of the paper is offshore lands and the present regulatory scheme that governs it, more precisely the regulation of offshore drilling. The driving force behind the regulation of offshore lands was, according to the author, the 1969 oil spill off of Santa Barbara. Information on the spill can be found (here). The author contends that the present system of “leasing” rights to use of offshore lands is wrought with complex regulatory rules. These rules have created a system where environmentalists have been able to shape policy without having to incur any substantial costs and leave the public with the additional costs of an inefficient policy. The author termed this scenario a “political externality.” He contends that the way to solve this inefficiency is to free up these offshore lands from regulation and allow the market to allocate by price not political decree.

The author recognizes that the prospect of oil spills in the future is a particular fear among those potentially harmed. According to the author, a private property system for offshore lands would create an incentive to “take precautionary measures that reduce the likelihood of accidents” and in the case of an accident would be better equipped to compensate those effected by the damage. He contends that a regulatory system cannot accomplish both these tasks. Indeed, it is only under a property rights system the individual has the incentive to make sure his property doesn’t interfere with yours and if it does then we can rely on the courts (tort law) to determine restitution. This part of the paper I really enjoyed because he relies on Richard Epstein a lot and I am reading Epstein for another class and I really like his views on government.

Environmental groups would not be silenced, of course, by adopting a property rights regime for offshore lands. Of course environmental groups have different motives but they would have the same ability as “big oil” to purchase these areas if they felt inclined to do so. In fact the Nature Conservancy bought a small oil field in Texas that is the breeding grounds of a rare species of chicken and has collected some “$5.2 million dollars in royalties over the last seven years. The Nature Conservancy claims that careful management is allowing it to protect the prairie chicken while working on the land to raise money for other conservation efforts.” Indeed, only under a property rights regime can we ensure that all have an economic opportunity to pursue scarce resources.

Some Thoughts Concerning Regulation

The moral hazard (Defined as precautions that are not taken because if there is an adverse consequence some other party will pay for the damages) in Moscow is very similar to that of the New London case. If the city of New London is allowed to confiscate the property because "economic revitalization" qualifies as eminent domain then I can foretell many development agencies lobbying zoning commissions and city officials screaming that their proposed development has economic benefits for the city justifying such private property seizure. Because the property will be taken and given to the developers at less than market prices, costs of development will not be internalized and more "strip malls" than would otherwise appear in response to the market will spring up. It is going to cause inflation to go through the roof, but I guess the planning commissions understand the economic consequences of the decisions they make. I am not on any payroll so I can not be fined if my predictions turn out to be wrong.

Cafe Hayek argues that the property development falls under this over devlopment because the developers do not have to pay what the market is asking of them (the price the four people would be willing to take to move) otherwise there would not be the issue at hand. Thus the developers do not internalize the costs of their developments. I tend to agree. The market is being broken down and artificial prices are bing set. These prices do not represent the true costs of doing bushiness and as a result the proposed benefits are not accurate because they do not represent these costs.

There is another problem present however, the mayor of Moscow and the city officials for New London have created an artificial prisoner's dilemma. Let me clarify, each party, the meteorologist and the farmers or the developers and potential home owners depend on cooperation to maximize their individual benefits by gaining what they are in the market for, money, houses, and accurate weather prediction. In a market situation there are incentives for them to cooperate fully, each party had something to gain from the services of the other. And with these incentives the services and goods are provided.

However because of the rule created by the Mayor and the potential rule created by the Supremes, cooperation is no longer efficient. If a home owner buys their home it could potentially be seized and they will be compensated at less then market value. The homeowners represent the prisoner that did not confess while his cohort did and hence got the worst out come. It is the same with the meteorologist, it they cooperate they will be stuck with an outcome that is inefficient for them. As a result the markets in these arenas will fall apart because there is no incentive to cooperate. Each side will cooperate in the first round but every subsequent round, because of the incentives of the various parties to not cooperarte and hold out to gain at the expense of the other, nobody will cooperate unless there was cooperation in the previous round. (When I say cooperation I mean home owners buying homes at market prices and meteorologist providing their services at market prices.) No goods will be provided and these markets will fall apart. I thought we would have learned our lessons in Russia and their similar practices that resulted in less then stellar economies.

West Jordan Zoning Commission v. Utah Power

The City Council of West Jordan, Utah (where my parents live) has an ongoing debate with Utah Power over a zoning issue.

Because of increased power needs in new developments, Utah Power wanted to set up a new substation, and the City Council decided to put off a decision because of the standard "Not in my backyard" issues of city residents. (The most honest objections I heard were from my mother, who only complained of property value concerns.)

You can read the latest chapter in the political fight in the latest West Jordan Journal. The article starts on the left side of the front page.

The first time this issue came up was the beginning of last year, when Utah Power warned that the city wouldn't get through two summers without serious problems. The West Jordan City Council said that Utah Power hadn't done enough research, and in a 4-3 vote dismissed a request to rezone property for a new substation. The dismissal was spearheaded by newly elected councilman Kim Rolfe.

Now, according to the above article, the council finally realized that more research hadn't changed anything, and were forced to put an Ad Hoc measure into place - a temporary substation located next door to Councilman Rolfe's home. Eventually, a permanant substation will be constructed exactly where the power company said they had to construct it. (The City Council was very political about it, in that they still blamed the problem on Utah Power.)

The moral of the story: Pretending experts are wrong for political reasons doesn't make the experts wrong, it makes the politicians look like idiots.

In Moscow today, all weather forecasters simultaneously quit their jobs...

If we can't predict the weather, we can at least blame the forecasters for our problems, right?

Alex Tabarrok at Marginal Revolution shares this story.

Moscow Mayor Juri Luschkov said: "Weather forecasters in our city and the surrounding area will be held responsible for financial losses that the city incurs through their incorrect prognoses."....

He did not elaborate on how much the fines would be or if the cash would be taken from the weathermen, or the companies they worked for.

The fines come after the head of the Romanian National Meteorology Agency, Ion Poiana, was fired after he predicted warm weather fronts on days when temperatures plunged to a record minus 36 degrees centigrade.


So if a farmer plans for no frost when the forecaster said there probably wouldn't be any, and the frost kills the plants, the forecaster is fined. If the fines go to the farmer, we have a moral hazard problem - the farmer doesn't take as many precautions to protect from frost because the forecaster will pay if the crops fail. Even if the fines go to the government, a potential forecaster has less incentive to work at forecasting because of the risk that he or she will be fined if the instruments are off or the models are inaccurate.

Saturday, February 26, 2005

A BOOST FOR THE OPEN-SPACE FUND

Members of the state's Quality Growth Commission have received some hopeful news. Governor John Hunstman Jr. has asked lawmakers to provide a substantial boost to the Leray McAllister open-space fund. It looks promising that he will at least get some funding, due to the state tax revenue projections. You can find the article here.

It is good to see that this is a priority to the Governor. He has initially asked for $5 million for this fund, although Republican lawmakers have offered a one-time only $3 million. Hopefully they will be able to work together to create ongoing allocations for funds such as the Leray McAllister open-space fund, which currently has less than $800,000. The attempt by Gov. Huntsman is very appreciated by those in favor of open-space preservation. I think we are fortunate to have a governor who has open-space preservation as a priority, especially at the present time when funding for preservation continues to diminish, and also because Initiative 1 was shot down last November. The only thing stopping the Governor are those who have different priorties and ideas of how a projected $122 million in extra tax revenue should be used. The article also states that many of our lawmakers have plans to use this revenue for the roads and highways.

Friday, February 25, 2005

I didn't receive the exam questions by email this afternoon- Did anyone else? If so, would you mind posting them here? Thanks very much!

Thursday, February 24, 2005

Breathing New Life Into City Centers

I was looking around on the internet about urban sprawl and actually found something on urban fill instead. Urban fill is essentially filling in dead or abandoned parts of cities by redeveloping them into mix-use buildings. All of the examples that I came across at least on this site were in Colorado, mostly in Denver and Boulder. They have pictures and descriptions of sites that have recenlty been completed. It looks pretty cool and seems to me to be an ideal way to liven up abondoned and undesirable parts of cities. In a way it also counteracts the phenomina of urban sprawl by encouraging more growth inside the cities instead of outside them. While some people hit the suburbs because they want to get away from the hustle and bustle of city life others leave because many big cities are run down and not taken care of properly. This site discusses the use incentives by local governments to promote the development of vacant and rundown land in urban areas. When the incentives are there for the private builder to take on the project urban fill becomes the best way to improve urban areas and make them a more desirable place to live. Notice the key being incentives for the builder. Once again the theme of an issue is "Incentives Matter"

Coase and the Civil War

The following is from Alex Tabarrok at Marginalrevolution.com: Brad DeLong has an arresting post on the costs of the civil war.

* Cost of Civil War to North: $140 per capita (including only economic damages for dead and wounded)
* Cost of Civil War to South: $340 per capita (including only economic damages for dead and wounded)
* "Indirect" additional cost of Civil War to South: $450 per capita.

Cost to buy and free all the slaves? $90 per capita.

Wednesday, February 23, 2005

Abuse of eminent domain

The Supremes heard Kelo v. City of New London on Feb 22. A decision is not expected until June. Here is the Institute for Justice story. Here is the basic information from Oyez, one of the best sites for tracking the Supreme Court. Here is the amicus brief filed by the American Planning Association. As you might imagine the planners like what New London is trying to do.

Abuse of eminent domain

In Wednesday's USA Today, (February 23, 2005), they have an article discussing a recent Supreme Court ruling about a Connecticut town that is using their power of eminent domain to seize property from private land owners. The most outrageous aspect of this case is that the city of New London, Connecticut is using their power of eminent domain to seize land not only to build a road and a park, but also for private development that will "increase tax revenue" for the town of New London. In an article written by Joan Biskupic, (they don't have an internet link to this article, but the paper's website is here,) the Court Justice's ruled that the court shouldn't "interfere with decisions made by local officials." Supreme Court Justice Ruth Bader Ginsburg agreed with local officials because the town's "unemployment rate is depressed, and this would generate jobs." Justice O'Connor didn't believe that the justices should "second-guess" local officials.
After discussing zoning laws and regulations and discussing the ability of the market to determine how we use private land, I find this to be a slap in the face of private property rights. What a perfect example of Fifth Ammendment abuse by government.

Tuesday, February 22, 2005

Flood Planes: subject to government whims?

This comes from when I was a little munchkin growing up near Houston. The town in which I lived, called The Woodlands, was a great place to live; I had a forest at the end of the street (essential for all young boys, as far as I'm concerned) and still lived close enough to regular urban development to have everything I needed. The forest area was originally intended to remain as it was, as it was officially in the Flood Plane. This was certainly appropriate, as we had severe floods on several occasions while I lived there.

About a year before my family moved from Texas, the forest was torn down and replaced with homes. Somehow, the planners found a government employee who would declare the area as "not in the flood plane". This is the Houston area, so the property didn't need to be rezoned; it was just arbitrarily declared safe from floods.

Anybody who had lived there longer than a year could have told them that they were morons for creating developments there, but they were after the money and weren't interested in the well-being of the community.

A couple of related links: This link actually uses Bear Creek in The Woodlands as an example of how things should be done, but the information they cite predates the flood I mentioned above. The same problem applies to this site, which praises the design of The Woodlands and its success in a 1979 flood, but ignores more recent (and less cautious) developments. (The last paragraph in the article sums it all up rather nicely).

Real Open Reasons

As I was looking around on the web today I came across this article on the Economics of Open Space Conservation. There are so many reasons to have open spaces beyond just the great "view." We have to make sure that we keep open spaces to allow for a continued supply of ground water. I live in Chile for 2 years and it was amazing to see the water problems they would have in Santiago(the capital). Due to over-urbanization, when rain storms would come, the entire city would flood. In two days there could be over a foot of water in the streets. Then during the summer, the water prices skyrocked because water had to be pumped in. It's important that we try to create some types of open spaces rather than confine ourselves to the "concrete jungle."

Friday, February 18, 2005

Open Space Preservation

I am concerned any time people start talking about "open space preservation" in Mountain West States. Most of my concern comes from the fact that the federal government owns generally over 50% of the land in these states. Why do we need to put more government regulation on our private land? It seems to me that these initiatives are misunderstood by the population in various circumstances. More regulations on private land affects what the private land owner is able to do with his/her land. When the government owns more that 50% of the land in mountain states like Utah there is no reason that the private land owners should be told how they can use their land while taxing the population to implement these regulations. I don't know if anybody else has noticed but there is plenty of "open-space" in the region. Even with rapid development, government land will remain government land.
The one aspect of open space policy that I see as valid is the protection of farm land and this issue should still be up to private land owners. Click here for more basic information on Utah's open space issues and farm land protection. This gives good information on the topic, however, I think we need to take a step back and see what is really happening to our "private land".

Class Participation

In checking class participation, I noticed that there are two "juli" profiles, with the distinction that one "juli" is capitalized while the other is not. If these are two distinct people let me know who you are. If this is only one person, everything is okay.

Cheers.

The arbiter of My Choices

I understand that this post is not about an environmental issue however I feel that it gets to the heart of everything we have been talking about. Regarding the recent removal of vioxx from the market and the subsequent out cry from those who benefit from such a drug reagarding their ablity to be able to choose their own risk benefit analysis, former FDA commissioner, David Kessler outrageously said that "To argue that people ought to be able to choose their own risks is to impose an unrealistic burden on people." (http://www.aynrand.org/site/News2?page=NewsArticle&id=10859)

I was completely dumb founded when I heard this, when did we as a people decide that we can no longer make decisions for ourselves? Is the freedom we long for and continually strive for a freedom from choosing our own path, letting someone else choose for us? When is the government the one who is supposed to arbitrarily decide what is good or bad for me, do they even know my needs (with the new HYPA act they absolutely do not know my medical needs)? When did we as a people give our right to choose to some one else? Have we really become so ignorant and apathetic as a people that we are no longer qualified to make our own decisions? I wonder, it amazes me that there has not been an out cry over all of this. It is basic bureaucratic behavior however. This statement fits the incentives they face to a tee.

I was watching the Simpsons (the greatest societal sophistry) and I think they got this message loud and clear. In the episode the Simpson family was arrested for violating the "Government Knows Best Act" as funny as this is, it is extremely sad. This is exactly how we as American's think these days. Ironically we think that there is too much corruption in government yet if our government comes out with some safety rating, man they always have our best interest in mind so we don't have to. We are unquestioning.

The same holds true for environmental issues. Anytime the government sets up a regulation, well I guess to be a good American I must agree that this is the only right answer to the problem, government knows best.

Like a previous blogger pointed out, economic freedom or the right to choose based on your own cost/benefit analysis is the only way to achieve the higher quality that we all want out of life. Better drugs, a better environment, a longer life all arise out of our choice.

So I guess the major question that I want to pose is do you want government making your choices for you? As for me well you can lick the hand that feeds you or get your own food, I and my house rather get our own.

Living with Nuclear Waste

I am here to tell you that I am from Tooele and have lived with the nulear waste for some 28 years It has been nothing but trouble since it came to tooele county. The nuclear waste is not right in Tooele but the nerve gas is 30 minutes to the south and envirocare facilities is over the 10,000 ft moutain and 30 min to the west in skull valley the name is kind of ironic. The goshutes that live in skull valley and own the land there took this waste to store and made millions. and neing the people they arte spent this money in ways imaginable and so now they have no money and lots of nuclear waste to store what idiots. Tooele county is one of very few places in the country that have the facilities to dispose of the waste. All of the nerve gass will be distroyed and gone by 2008. Which was a very comforting thought.

Thursday, February 17, 2005

Class Assignments 2-17-05

Coase Colored Glasses
PS 4820 class members:

I have an "on again, off again" medical condition that sometimes
interferes with my thinking processes. (I know, many of you think I am always "off") I have it today (Thursday Febreary 17) and do not anticipate being able to teach tomorrow. So... class tomorrow is canceled. Here are your assignments for next week:

Please read the following for Tuesday, February 22 (because of the
Monday holiday we meet on Tuesday). Be prepared to analyze the Envision Utah ideas using tools from the course:
http://www.envisionutah.org/Chapter_1.pdf
http://www.envisionutah.org/library/media/papers/pdf/lands.pdf

For Wednesday, February 23,read:
http://www.perc.org/publications/percreports/june2000/zoning.php

No reading assignment for Friday, February 25 but we will have class.

WRITING ASSIGNMENT FOR TUESDAY: Bring to class two questions you would like to answer on the midterm. One question should be a "course summary to this point" question. The other should be a more spcific, short answer (one-two paragraph) question.

Please post information and respond to posts on Coase Colored Glasses about zoning, smart growth, open space preservation, disappearing farmland, etc. Ask yourselves what are the claims, how can we know if they are true, what incentives are created by the proposals, and how do we know if they are good policy?

--Randy

The ironic affect of emotionless economists.

Economists are unique people, no offense Randy. The ideas they propose to integrate markets into every day life can seem somewhat heartless. Yet, those proposed plans essentially not only solve the problems but increase the lifestyles of those involved as well. We live in a world of skeptics. In 1980 The Global 2000 Report to the President of the U.S. stated that “if presents trends continue, the world in 2000 will be more crowded, more polluted, less stable ecologically, and more vulnerable to disruption than the world we live in now.” What this doomsday report failed to mention was the ingenuity individual have when they are able to be creative in a free market society. 15 years later in The State of Humanity, Julian Simon, with the help of more than fifty scholars, would find that “our species is better off in just about every measurable way.”
Studies show that life expectancy and food production have increased and infant mortality has declined. So what accounts for this phenomenon. Well, in You have to Admit it’s Getting Better, Indur M. Goklany credits economic freedom. He writes, “Analysis indicates that the more economically free a country’s population, the higher its economic growth” (65).
So in my opinion, we should side with the crass economists and send poorer countries our trash. Industrialization leads to better economies, better life styles, and a better way of life. So even if it sounds politically incorrect, harsh or brash, economists aren’t really that heartless. Eventually those “outrageous ideas” come full circle and enhance rather than impair other countries inhabitants.

Save The Polar Bears!!!!!!!

I found an article on Yahoo news linked to an LA Times story of an environmental group pushing for the inclusion of the Polar Bear on the Endangered Species List. The arguemnt being that global warming is "rapidly" taking away the bears habitat and shortening it's hunting season when it can hunt seals on the ice. It all sounds so tragic until you read further into the article and come to find that Polar Bear numbers have actually increased over the last three decades from 25,000 to 30,000. They are in fact quite well protected without being listed under the Endangered Species Act. The true motivation behind it all is that groups fighting against global warming are in search for a "poster boy" or in this case "poster bear" of the damaging affects of global warming. "We hope it will have a big educational benefit to bring this to the attention of the American public," said Kassie Siegel, the lead author of the petition. "People do like polar bears" The groups are using existence value of the polar bear to promote awareness of global warming. The Endangered Species Act is merely the vehicle for doing so. When people think of Arctic ice lands and glaciers they think of Big "cuddily polar bears" Like we have discussed in class it makes people feel good to know that they are there wandering the ice and playing in the snow. Claiming they are threatened is nothing more than a scare tactic directed towards to the masses so they will do their part to fight against global warming and protect polar bears. Whether or not this stategy will work will come down to how much existence value polar bears really do have for people and if they are truly willing to pay for that value. I personally think its just another example of how the Endangered Species Act is readily abused time and time again.

Wednesday, February 16, 2005

Saving the soil?

The land on which we live is made up of many types of areas. Some are fruitful and productive while some are too rigorous to do anything but enjoy their beauty. Of all the land in the world, how much can we use to produce the food we depend on? There is about 10% of the world where we can grow food. This land competes with society where we build our houses, schools, shopping malls and all the other places that we “can’t live without”. The best places to be are the same places where we used to grow food. Food production is moved to areas that must be modified; these modifications often cause the erosion of precious soil. Soil is created at a rate of about .4 tons/acre/year. This means we are rapidly losing the soil upon which our lives depend. How much soil do we really have? Even with these estimates, nobody knows exactly how much soil we have left now, or in the future.

Soil does more for us then just supporting the way we live. It tells the history of an area. It’s a good way to measure the health of local environments, and most of all…its just fun to play with. Here are some more links about soil. Other ways to learn about soil, if you're interested come find out about the USU soil judging team.

It's what's Inside that Counts

When I hear air pollution I imagine a large polluted city like Los Angelos. Never did I imagine air pollution to exsist within my own home. After reading It's What's Inside That Counts http://www.nationalinspection.net/inspector/articles/itswhat.html I was blown away to learn that air pollution levels indoors is two to five times and has even been one hundred times greater than the air pollution out doors. This is particularly dangerous when you consider that many people spend 90% of their time indoors. Indoor air pollution much like outdoor air pollution carries health hazards. Some of the short term health hazards are hard to recognize because they have the same symptoms of common viral infections such as a cold. Many of the short term effects are easily treated. Indoor air pollution also carries with it the risk of serious long term effects such as respiratory diseases, heart diseases and cancer. Some of the long term effects are debilitating and at worst fatal. It scares me to think that I might be living in a home with poor air quality...especially with the heightened air pollution in Cache valley due to the inversion.

Tuesday, February 15, 2005

Do I trust you?

On monday we discused some of the possible reasons for the failure of initiative 1 in this last election despite it's seemingly high support. I remember talking with some students from California about this intiatve and thought their insights were interesting. They supported the idea of preserving clean water and open space(who wouldn't), but that they were skeptical of the method. In California, intiatives, a form of direct democracy, have basicly taken over the policy forming process. Some say the problem with this is that it bypasses the checks and balance built in to the normal form of legeslation. Another problem is the sheer number of initiatives on the ballots. Voters, with all thier incentives to be uninformed, rarely know anything about the intiative untill they step into the voting booth. As a result many initiatives that pass are found to be unconstitutional by the state legislature and then dropped. For more information on California's initiative process go to http://www.cainitiative.org/pdf/initiativereportfinal07feb2002.pdf

IT is my understanding that it is much harder to get an initiative on the ballot in Utah, but the problem of uninformed voters directly passing law kind of scares me.

OHV REGULATION

For those of us who spend time outdoors, it is obvious that the use of OHVs is dramatically increasing year to year. We also get to see first hand, the people who abuse the privelage of accessing public lands with these vehicles. I am happy to see the Forest Service and BLM beginning to take action towards effectively regulating and managing OHV use on our public lands. For some information on OHV use and management, click here.

Some of the main concerns are that when OHVs are used off of designated trails and roads, they can cause extensive soil erosion. They also help to spread invasive weeds and plants to the open or exposed areas where vegetation has been destroyed. One of the most obvious concerns related to abusing the recreational rights of OHV use is the negative externalities that the person creates. During the deer hunt last year, I went to one of my favorite spots. It was about a two hour hike from the bottom of the canyon, and this spot has always been successful for me. I can't tell you how upset I was when I reached the area and discovered that a 4-wheeler had driven down off the top, across the sidehill, and then through a 200 acre meadow, leaving a foot- deep trench in the ground. It is because of the irresposibility of a few that all of those who use OHVs must yield to management and enforcement strategies.

Intrinsic value is intrinsically worthless!

Yes I know the wording in my title entails that I an inept at making an intellectual statement and for the most part I agree, though I have found an article that seems to agree with my statement.
The article argues that humans are the source of value for all things. In that they assign value to different thing using a price system and by using any system other than the price system or the market, for assigning value you are just forcing your own judgments onto others. The author is evaluating the situation of assigning values from an economist point of view, which tends to weaken concerns for intrinsic value.

recycling

Ricoh Electronics has faclilitated a plan to eliminate waste to lanfill. This was a goal set in July of 1999, and the accomplishement date was set for 2001. To read what Ricoh Electronics is doing to aid in the objective of eliminating waste in landfills read this. This link explains the five R's that need to be implemented in order to achieve this goal. It also includes the concept of the zero waste to landfill abjective and their results. They had good results and the 5 R's are really something to think abnout. Not everything can be recylced but most can be reused or we can reduse our usage of many things. The results are positive and if we could all follow the 5 R's we would have even better reslults.

Funny Science

The recent removal of Vex from the market shocked and scared many people. Now there is talk of removing its cousin produced by Pfizer Celebrex. Some info can be found here about the COX-2 drugs and their possible affects. But what stands out most to me is what the article does not say, and even what information was released about the studies was not complete. The Celebrex study that had said it greatly increased the chance of heart disease is in my opinion flawed. In a discussion with a prominent hand doctor about the study I was told that the sample size was small and the entire sample consisted of cancer patients. Also the recipients took 800 mg, while the average dose that all doctors prescribe is 200mg, sometime 100mg. This is just an example of skewed science that does not always include every factor. The article does not even state how scientifically the COX-2 drugs affect the body only that it does. Vioxx has been removed form the market and Celebrex may soon follow; and all because of what I have come to believe is funny science. This shows exactly how powerful funny science is because our society views science as impartial, but rarely do they understand that many labs are bureaucracies funded by the government or special interest groups. In my opinion this 'funny science' needs to be looked at more carefully, and I do wonder what other 'discoveries' are based on funny science that have altered our lives. Because we as consumers often are not given a chance to choose the risk or not we are stuck with the result of this science.
Personally I have seen what arthritis can do, and to be honest I've seen Celebrex at work and in my opinion it is worth the risk.

Monday, February 14, 2005

beauty queen

The California Condor is on the endangered species list, both federally and in California. It is , personally, one of the most unattractive birds and is the most endangered bird in North America. We have been talking about the value that we place upon things and the subsequent care that we give, or do not give, to that object. This article discusses the California Condor and is well written and basically informative (ie. no deep stuff that only biologists understand).
The California Condor is not one of the typical charismatic species that we are trying to save from exctinction. As an adult, it has a compleatly bald head and neck that ranges from yellows and blues to pinks, it is the largest North American bird, and eats carrion. It is not the typical "cute" endangered animal. However, it must have inspired some awe in us, because we have given it an existence value. An example of this is the great care that has been taken to keep this species in existence, as was explained in the article, and even more important, the work that has been done politically. As part of the Endangered Species Act, there must be an approved recovery plan written (a plan created to get the species back to the non-threatened level and what will happen in the future for the species). The article shows that indeed that information has been created, as it has not for over half of the species who are also on the endangered species list. That program appears to be well thought out from the few simplified points in the article. Each point is focused on what end is desired and with specific numbers that can be used as guidelines. Many of the species listed under the Endangered Species Act do not have any program at all, the people who work to get them listed do not take the time to compleate what they are supposed to do and as a consequence those same species are rarely better off. On the other hand, drastic action was taken with the California Condor. It was placed in captive breeding programs, and over time reached sufficient numbers that the administrators and workers of the program were able to begin the reintroduction phase of their plan. The Arizona phase of the reintroduction was also interesting, (and wise to form a second population to protect against "catastrophic" events) and it would have been interesting to have had more said about the "'nonessential experimental' population....[where]the protections for an endangered species are relaxed, providing greater flexibility for management of a reintroduction program."
There were many listed threats that contributed to the reduction of the California Condor and it also appears that as much is being done to work to eliminate the threats as possible. Those things include of course that man is no longer shooting the California Condor, the lead bullet is slowly being replaced, and the birds are being reintroduced in wilderness areas or at least areas less densly populated which will ensure to better protect them.
The Endangered Species Act is under much controversy and at some point in the future will be even more so since it is supposed to be under revision by the government, the actual date was quite a while ago. The Endangered Species Act seems to have been extreamly important in the continuation of this species and with continued knowledgeable support, especially the written plans for species continued existence, it may continue to help to preserve species so that we may enjoy them either for their value to the environment and its systems, or just for the strange values that we place upon them for one odd reason or another.

Texas Disappearing

As I was sitting listening in class to day I remembered that in Texas they have a big problem with ranches and people buing the land to make ranchettes. I found this article that hit hard because my wife is from Texas. The state looses about 178,700 acres of land per year to ranches to construction of roads and houses shopping malls and centers ect. Between 1992- 1997 the state lost about 893,500 acres of land to development. These numbers keep growing at an alarming rate each year. Out of the 50 states Texas ranks #1 in the country of land lost to development. There is some hope, though. While much of the Texas landscape was altered long ago to meet the needs of a growing agricultural and industrial economy, many natural communities that provide valuable wildlife habitat still exist throughout the state. But we must act now to protect these natural communities, so that the next generation can also enjoy the rich, uniquely Texan natural heritage

Saturday, February 12, 2005

Existence Value of the Amazon Rainforest

After reading through the blog and thinking about the existence value of the environment I searched for what the value of the Amazon rainforest might be. I found an excellent paper here. The paper discusses the total economic value of the Amazon rainforest. It is clear from the research that maintaining the forest is of far more value than the deforestation. As noted in the paper revenue per year for logging the forest is only about $400/yr/ha. Contrast that to the economic value of having an intact forest: nearly $1,000/yr/ha.
The existence value of the forest is worth even more than that in my opinion. Although the research attempted to include a monetary value to such things as medicine not yet discovered. I believe that if the forest houses an undiscovered cure for cancer or aids the value would be even higher both in option value and the monetary benefits of the find.

Friday, February 11, 2005

The ost of Existence Value

Class this morning has caused me to think a little more about intrinsic value, existence value, and how they can be measured. Goods valued intrinsically or for their existence value are not fundamentally different from consumption goods because they are both scarce (an argument often given for preservation). Because of scarcity we face tradeoffs.

If we think of a bundle of goods composed of 1. environmental quality (a good with definite intrinsic value), and 2. a composite good of all other things, then it's easier to see the tradeoffs. Our consumption is constrained by the law of diminishing marginal utility. In other words, the utility recieved from consuming one additional unit of any good declines as we consume more. Common sense confirms that the more we spend on environmental quality, the less resources we have for all other goods, and the convenience of life decreases. And if we use all of our resources consuming other goods, our demand for the existence of undisturbed wilderness isn't filled, and life begins to lose its beauty. This economic law leads rational consumers to prefer averages over extremes when choosing a consumption bundle.

Measuring the existence value of wilderness using money is neither crass nor inappropriate. It is, in fact, a very accurate measurement tool. Private landowners truly face these tradeoffs (they have to pick up the tab for preservation, they aren't at Hamiltons with mom and dad). Here is a fantastic example of how the Audubon society faced these tradeoffs. The society found a way to fund its conservation efforts while protecting birds as well. They made the money by selling some of the existence value (the existence of reserves that outlaw drilling) of their property to an oil company.

Class articles

For Monday, Feb 14 read the c.v article article posted here. For Wednesday, February 16. read the other article.

Thursday, February 10, 2005

MINNESOTA'S BIODIESEL

The state of Minnesota has enacted a new law that will require all diesel fuel sold in the state, beginning this summer, to contain at least 2% farm-based oil. This oil is a hybrid fuel, called biodiesel. It is composed of peanut oil, canola, soybean, recycled cooking oils, and animal fats. Supporters of this new hybrid fuel confirm that it will reduce diesel exhaust and pollution, although it is too early for research to support these claims. You can listen to this story here.

Those who are involved in agriculture and the production of these farm-based products are looking forward to the benefits they will receive from the fuel subsidies and sales. There are many trucking companies who fear that this hybrid fuel will end up costing them alot more than just the projected 2-3 cents per gallon, when compared to regular diesel fuel. Many, such as members of the Sierra Club feel that more time and focus should be spent on updating the engines of fuel consuming vehicles so no matter what fuel they require, less would be used. For the moment, I support the experimentation of new sources of energy, fuel, etc. This type of innovative thinking and experimentation is what it takes to help manage and protect our environment and natural resources. As for those involved in the trucking business, it is their resposibility to adapt to the ever-changing technologies that attempt to aid in the reducing of pollution.

The Onion could not top this

Coase Colored Glasses
You might remember Daphne Zuniga from Melrose Place...

http://www.cnsnews.com//ViewCulture.asp?Page=\Culture\archive\200502\CUL20050210a.html

Forests Being 'Slaughtered for Toilet Paper,' Actress Declares
By Marc Morano
CNSNews.com Senior Staff Writer
February 10, 2005

Washington (CNSNews.com) - An American television actress is blasting the U.S. news media for failing to report that "endangered forests are being slaughtered for toilet paper."

"I think there is a dumbing-down bias (in the media) frankly," said Daphne Zuniga, who starred in the television series "Melrose Place."

"The press is reporting things that are absolutely irrelevant to any of our lives and they are sensationalistic and it is damaging," Zuniga told Cybercast News Service. She made the comments Wednesday night at the Washington Press Club Foundation's 61st annual congressional dinner, which she attended as a guest of Congressional Quarterly.

"We start to think that these things are important, like [the rape trial of NBA star] Kobe Bryant and [the molestation trial of] Michael Jackson and yada, yada, and meanwhile, you know, endangered forests are being slaughtered for toilet paper, you know, sequoias -- whatever it is," Zuniga said.

Zuniga is a member of the Creative Coalition, a social and political advocacy organization with roots in the entertainment industry. Other Coalition members at the press dinner included actor Ron Silver of the "The West Wing," actress Fran Drescher from the television series "The Nanny," and Joey Pantoliano of HBO's "The Sopranos."

"I met a congressperson today and I am getting interested in coming to the Hill to express my issues, which are environmental mostly, but also [First] Amendment," Zuniga said. She said mercury emissions were her key environmental concern.

According to Zuniga, "One out of six women are toxic with mercury. Mercury comes out of coal plants and chlorine plants. I am toxic, I deal with symptoms, children are born with, you know, autism -- there is an epidemic in this country. This is like, the air that we breath," Zuniga said.

"Maybe it's not interesting, but it is definitely newsworthy...unless we have to wait for everyone to be drastically sick so we can sensationalize it," she added.

When asked about a series of new scientific studies showing that U.S. coal-fired power plants emit less than one percent of the world's mercury output, Zuniga responded, "That is false, it is not one percent.

"We (the U.S.) have a large percentage of the pollution...We have to be more responsible, we have more resources, and we use more and more," she added.

But as Cybercast News Service reported last week, several new studies show that if all U.S. coal-fired power plants were shut down -- resulting in zero mercury emissions -- worldwide levels of mercury would be only slightly affected.

The studies by the Center for Science and Public Policy (CSPP) also revealed that mercury emissions from Yellowstone National Park and other natural sources are significantly higher than the amount coming from the 1,100 coal-fired power plants in the U.S.

In addition, research has shown that elemental mercury levels in the oceans and the methylmercury traces in ocean fish were at higher levels before the advent of coal fired power plants.

"This hypothesis appears supported by the presence of higher levels of methylmercury in 550-year-old Alaskan mummies than levels in a recent sample of pregnant native Alaskan women, drawn from an Alaskan State study" said Robert Ferguson, in an interview with Cybercast News Service. Ferguson is the executive director of the CSPP, a public policy research group based in Washington, D.C.

'It's never totally objective'

Actress Fran Drescher also weighed in with her views on bias in the news media.

"It's never totally objective and it is a business and it needs to sell papers and magazines and get viewers to tune in. Everything has to be taken with a slight grain of salt," Drescher told the Cybercast News Service.

Drescher said she was in Washington to promote "more arts in public education, which she called "very important for the psychological growth of the child."

Drescher, who has been treated for uterine cancer, also promoted her efforts to increase public awareness of gynecological cancers.

"Johanna's Law is coming up for a vote [in Congress]. It is an education bill for informing women and their doctors about gynecological cancers, the early warning symptoms and the tests that are available," Drescher said. "It took me two years and eight doctors to get diagnosed," she added.

USU Political Turf Battle

(I'm very deliberately not using specific names in this post. If you know who is involved, you already know their names; if not, you can find out easily enough if you're interested.)

Two USU departments are going through a nasty territorial dispute.

The first, Department A, has offices in the Merrill library right now, conveniently located in the middle of campus. Unfortunately, it won't be long before they are evicted. (No more library means no more offices for them.) To resolve the situation, the Department A asked Department B for space in another building, an on-campus residence building called hereafter "Building 1".

The request was rejected by the Department B for several reasons. The space in Building 1: (a) includes some of Department B's offices, (b) includes the residence of the Area Director, and (c) is right in the middle of their most financially secure and stable area. Instead of giving up their office space and evicting someone they work closely with, Department B offered part of Building 2, which has (a) twice the space and (b) less financial impact on the department, (c) but isn't as close to the campus itself.

In theory, that should have ended it. Instead, the Department A went to a high-level administrator to request the space. If you know anything about this administrator (like, say, the fact that their spouse is a major figure in Department A), this probably qualifies as a conflict of interest. Department A also has people in Building 1 on a daily basis, taking notes about how many people are using the space, and asking the area director why he needs to live there.

Department B, meanwhile, is doing everything they can to retain possession of the space in Building 1.

Basically, it's turning into a situation where competing dogs marked the same territory, and now they're fighting to see who gets to keep it.

Those Darn Cows!!!

Medecine Bowl National Forest in Southeastern Wyoming is having problems with water pollution due to overgrazing of cattle in the area. The story can be found here. Apparently the abundance of cattle in the area has caused fecal coliform pollution in the water that is hazardous to humans, fish and other wildlife. But the Forest Service doesn't seem to care. They are the ones that granted the grazing permits and as of date have done nothing to reduce the number of cattle in the area. Conservation groups have filed suit against the Forest Service for failure to protect clean water. Basically there exists a problem of enforcement as the Forest Service is failing to enforce pre established standards for clean water. Little reason has been given as to why the Forest Service has failed to enforce the standards. Could it be that they value their contracts with domestic ranchers more than they do the clean water standards? Grazing contracts are an economic benefit to them while the same cannot be said for clean water. It appears that theme of the conflict is quite simple. Incentives Matter. The law suite filed by the conservation groups may provide the incentive to change for now, but what of the future?

Wednesday, February 09, 2005

2006 Budget

On Monday the White House issued the budget for 2006. After being hammered by fiscal conservatives over the past few years for letting the federal deficit balloon, the Bush administration offered an olive branch to this key constituency by planning a reduction in “overall discretionary spending” that will, according to the administration, cut the federal deficit in half by 2009. For an overview of the 2006 budget click (here). The White House contends that the economy will continue to grow at a rapid rate leading to increased tax receipts, and there will be no need to rescind the tax cuts passed during the President’s first term.

One major news story out of the budget was the proposed reduction in farmer’s subsidies. As the New York Times Robert Pear points out in his article, “the proposal puts Mr. Bush at odds with some of his most ardent supporters in the rural south” namely cotton and rice growers. Mr. Pears piece can be found (here). As the article goes on to say, most of the subsidies payments go to large farms and not “family farms.” The support for this move has come from a strange partnership of fiscal conservatives and environmental groups. Groups like the Heritage Foundation and environmental groups have been in pursuit of the same goal: more stringent caps on agricultural subsidies. Such strange partnerships are not unique when their interests coincide on a particular issue.

According to the Environmental Working Group website (here) farming subsidies have tallied over $103 billion dollars from 1995-2003, with most of these subsidies going to, as mentioned before, cotton and rice growers. The opposition to the proposed cuts is already forming from large and small farm organizations. The new chairman of Senate Appropriations Committee, Thad Cochran from Mississippi (a state that is a major beneficiary of the subsidies) is promising to fight the proposal. The President said after his slim 3% popular vote win that he had “political capital” to spend, he may have to use more of that capital than he intended to spend on passing the caps on the farmers subsidy program.

I guess a general question I would like to propose, just for fun, is whether any of you think that President Bush is spreading himself to thin with all these proposed reforms (social security, tax code, etc.) and is perhaps overreaching?

Tuesday, February 08, 2005

Off Road Vehicles

Sorry, the link for 'SUWA' is here.

Off Road Vehicles

Is there a problem in southern utah with these ORV's? I would agree that there is and something needs to be done, but what? I own a 1969 Jeepster Commando, now, obviously it would not pass any kind of emisions test, it also has a small oil leak that I have tried to figure out but have been unsuccessful. My dad along with my four brothers also own Jeepsters between the years 1967 and 1970, all of which are in about the same condition as mine. Every year we go to moab to go out on the jeep trails. This has been a fun family vacation for about ten years. It is also very benificial finacially to the city of Moab. Every year thousands of people go there with there jeeps and dirt bike motorcycles to have fun and in turn end up spending a heathy amount of money in the city. The Southern Utah Wilderness Alliance 'SUWA' is fighting to make laws to control where the ORV's can go. Here is more info. The SUWA is battling with the BLM to have them enforce the laws that are already setup. The SUWA wants to have defined areas or roads where the vehicles can go and actually enforce this. I agree that the ORV's should stay on marked trails but I don't think that SUWA is dealing with the problem in the correct way. With thousands of people in different areas and on different trails how could you control them and make sure that they are staying on the marked trail? It would be literally impossible, you can't watch everyone and if someone goes off the trail how would you punish them or let alone know who it was? I feel that you do have to make designated trails for the vehicles but that does not mean that everyone is going to stay on them. I think you need to somehow teach the people that use the trails WHY they are staying on them and not going off where ever they want. Like we have discussed in class they need insentives to help them obey the rules and/or laws. You can't just say 'well I am a tree hugger or I am a bark eater and I want you to stay on the trails' and expect the people using the trails to listen, you need to give them good valid reasons. I personally try to stay on the trails as much as possible because I like seeing the wilderness in its natural state, but not everyone cares about that so I think the answer or atleast a great start would be to educate the trail users why they should stay on the trail as much as possible. After people have been educated I think they will feel like there is a reason or insentive not to go off the trail and to keep the southern utah wilderness in a beautiful natural state.

Monday, February 07, 2005

Re: miles tax to replace gas tax.

I am writing in reply to Kents comments on the miles tax. First, I have to say that I would love to see a miles tax, and I think anyone who drives a truck or SUV would feel the same. As far as fuel efficiency and emissions goes, this seems to be a poor policy. It creates incentives only to drive fewer miles, not to purchase cars that use less gas, in fact, it creates incentive to buy larger cars that burn more gas. A truck that gets 8 mile to the gallon is taxed at a lower rate than a car that gets 30 miles to the gallon. Like I said, this wouldn't bother me since I like SUVs and trucks. However, I don't think it would fly with the environmentalists. Second, although I don't have any idea about the cost of the GPS system, it seems to me like it would be costly to install, track, and maintain the systems, which ultimately would be passed onto the consumer, which in turn raises the cost of automobiles. Third, a miles tax in my opinion would not help the inversions, even if there was a great tax placed on cars that drove on that day. Since a miles tax would eliminate the need for smaller fuel efficient cars, there would be more trucks and SUVs driving, burning more fuel, and causing a worse inversion, even if fewer people were driving.

What is the problem with developing ANWR

The Artic National Wildlife Refuge in Alaska is a prime example of economics vs. environmental/sentimental issues. ANWR is “Renowned for its wildlife, Arctic Refuge is inhabited by 45 species of land and marine mammals, ranging from the pygmy shrew to the bowhead whale.” 80 million acres are designated as wilderness area. Currently the government doesn’t allow any development of resources on this refuge in fear of disrupting and hurting the migration pattern of the animals that occupy that space.
However, a recent survey done by the USGS found that ANWR was sitting on top of 5.7-16.0 billion barrels of oil. With 11.8 billion barrels able to be technically recovered. This means that there is a large oil reserve that we haven’t even tapped into yet.
This is where we come into a problem of economics vs. environmental groups. Many environmental groups suggest developing in this region will hurt the air quality, increase oil spills that will kill needed vegetation for those species inhabiting the region, and will force polar bears and muskoxs’ to leave. However, a testimony given to the House Committee on Resources by the Secretary of the Interior, Gale Norton found that most of those concerns were invalid. He found that a study done by the National Academy of Science (NAS) showed that air quality didn’t decrease, spills rarely occurred and when they did they didn’t have an extensive impact on the environment. NAS also found that only one polar bear left the area do to seismic activity.
Yet, people still advocate no intrusion. Matthew Cronin suggests we look to the real life example of Prudhoe Bay. In 1968 many people argued that the development of these oil reserves would kill caribou and only produce at most 9 billion barrels of oil. Since then the caribou has grown phenomenally from 5,000 to 32,000. And the oil reserves have currently produced 13 billion barrels of oil and is still pumping.
So I guess what I would like to know is what is the real problem with developing these resources in Alaska. The land is barren and no one lives there. Damage to the environment is very minimal so economically I think we are losing out by standing by and not tapping into this natural resource.

Acidity of Oceans

We have been warned that the growing amount of carbon dioxide in the air coming from the burning of fossil fuels is killing a number of fish and the reefs they live on. If this escalates we could be eating no fish whatsoever. This could be prevbented by watching what we burn or by puting some type of filter on our refineries to make the air coming out cleaner and less harmful to our oceans.

Acidity of Oceans

There are those people that think that by burning fossil fuels and putting carbon dioxide in the air we are making our oceans more acidic and so doing we are killing the reefs and marine life that are there. This problem if it escalades might have us eating no fish whatsoever. If there is a way to come at this problem it could be driving less like we talked about before, and looking at what kind of emissions that our refineries are putting in the air. and finding a way to filter out the impurities.

Sunday, February 06, 2005

The West Coast making strides

Well as we a know California has very strict emissions laws. There is a bill the the state of Washington is trying to pass that would make their laws the same as California (House Bill 1397 & Senate Bill 5397). If this bill gets passed it will be effective in 2009, and by 2016 all cars would have to be equipped with the necessary parts.

Okay here the catch...All the numbers pertaining to the consumers look great, but the predictions by the Alliance of Automobile Manufacturers say the the numbers were not done by auto-engineers and could cost Washingtionians thousands extra, every time they go to purchase a new car. The question I ask is, who's numbers are we to believe? We all want to save money and the environment in the process, but people tend who wants to pay extra for a new car? Is the Alliance of Automobile manufactures using scare tactics to avoid having to spend extra money on production cost, let me know who's numbers are legit.http://seattlepi.nwsource.com/local/aplocal_story.asp?catagory=6420&slug=WA%20XGR%20Car%20Emissions

Coase gone wild?

Recently a University of Colorado professor has gotten himself into trouble for some insensitive remarks regarding the victims of the 9/11 attacks (here). President of Harvard University, Lawrence Summers, has also found himself in hot water of late for his remarks at a women scientist’s convention (here). This is not the first time President Summers has rocked the boat with what some would call politically incorrect remarks. As the chief economist at the World Bank Mr. Summers wrote an internal memo in 1991 that outlined three reasons why the World Bank should promote the movement of “dirty industries” (polluting industries) to less developed countries (here).

The reasons Summer’s outlines in his memo are very much grounded in the Coasian concept of relying on market allocation of pollution rights to there most efficient position. On a normative level Summer’s comments are disturbing, on the other hand if economic efficiency is our goal his proposal has a great degree of validity.


Although the adoption of Coase has been widespread within the U.S., I am not so sure that Summer's proposal has as much acceptablility by other countries around the world. Especially in countries with a large Green faction the idea of receiving alien toxic waste is unthinkable. Indeed, the transaction costs on an international level seemingly kill Summer's proposal.

Saturday, February 05, 2005

Oregon: Miles tax to replace gas tax?

I just finished reading an article that states that Oregon is developing a trial system to tax on milage traveled instead of gas taxes. The article is titled, "Driving While Intaxicated". The focus of the new program is to increase revenues from taxes to fund state roads. Currently, with the increase of fuel efficient cars Oregon is not bringing in as much in gas taxes as needed. I thought that a similar program could be used to help internalize the externalities caused by pollution.
The design is to tax vehicles based on the number of miles that they travel within state borders. This would be monitored by a GPS system that records those miles. Each time that a person goes to pay for their gas a computer chip located near the gas tank would let the pump know how many miles you traveled and charge you the applicable tax. A major advantage, in my opinion, to taxing in this manner is that the tax can be flexible. For example, on days with an inversion the tax could be double or tripled. Certain times of the day could have a higher tax attached.

Friday, February 04, 2005

Utah Wilderness

I am not a big fan of most environmentalists decisions but sometimes they do have some good ideas. I ran across this page from southern utahs wilderness and about george w bush's plan to do away with the wilderness area that george senior and bill clinton had created. The reason that he is trying to do away with this is so that the government can begin drilling for petroleum and oil in these areas. I know that utah has a fair amount of oil in the southern part of the state but if mr president has his way we will have oil fields as far as the eye could see. I wish I had a solution for this but I have no idwa what will happen.

Thursday, February 03, 2005

State of the Union

I found the State of the Union to be more than just a bunch of rhetoric. Actually, the President brought up an issue that may change the outcome of our future retirement, "Social Security". Not only has he proposed an overhaul to the system but he has started a tour to promote his plan. To me, that isn't just a bunch of rhetoric, it actually sounds pretty serious. As we're talking about free markets, I would like to learn more about the President's plan, how it would be implemented, and how potentially beneficial or detrimental it could be if passed. From what I understand, it will be privatized and each payer would have their own account. The money would be invested and whatever the payer puts in is invested in themself. I'm sure it's more complicated than that, but if it really worked the way that I understand it, it would be much better than paying for everybody else's retirement and then not having any when it's our turn to retire.

Gray Wolf Protections

Last week I posted an article on the costs of reintroducing gray wolves some western states, namely Wyoming, Idaho, and Montana. I found a somewhat related article on at cnn.com . It talks about how a U.S. Disctric Court Judge found the Bush Administration in violiation of the Endangered Species Act. The Administration had granted permission to ranchers in certain areas to shoot the wolves on site to protect livestock. It turns out that only a few wolves were actually shot in a small area of Montana but it created enought attention for a District Court Ruling.

Cap and Trade

Here is the EPA site reporting the results of 'allowance' auctions (after clicking on a year, click on the 'results' link to see them displayed). It's interesting to note that every year environmental groups are also purchasing allowances. It's also interesting to note that elementary schools bought some in 2003 - I'm guessing that the students weren't the driving force behind that activism...and we wonder why school budgets can't cover the basic costs of education, but that's another issue. The point is that environmental groups could be very successful if they were to put their money into something like buying allowances instead of lobbying.

Mighty Mouse Takes Down Housing Development

I found this news story from the Billings Gazette both interesting and pathetic. The Preble's meadow jumping mouse which has been on the endangered species list until recently ruined the plans of a Housing Developer because he had to preserve much of his purchased land to protect the habitat of this mouse. Apparently the mouse is now off the list because it has been determined that the mouse is not part of a distinct subspecies. The damage to the development has already been done and all that can be placed where what used to be the protected habitat is a park. As I was reading this I had to ask myself, is a certain kind of mouse all that important that it should be so costly for housing developers and others who want to use the land? It seems rather ridiculous that a tiny feild mouse could hold so much power. I understand that protection of endangered species is important but in situations like this I think it goes too far. It's just a mouse! I have a whole community of them living in my basement! How are housing developments going to hurt a mouse?

Wednesday, February 02, 2005

State of the Union

President Bush's State of the Union address was fairly typical of such speeches: full of rhetoric, raising several issues of the problems we need to solve but rarely offering solutions. The general idea was familiar: increase spending to pet projects while miraculously decreasing overall spending.

It was 4 degrees this morning

and I’m guessing that if not for global warming according to the current thought, it would have been 3 degrees. We are all in danger, we may all fry. This must be fought at all costs, that extra degree to boost us to 4 could destroy the world, get out your sunscreen. I found this lovely article on BBC, a chat with Michael Crichton about his new book here somewhat similar to the article we read the first day in class.
My point to this post is what if there really is no such thing as human caused global warming, and we (humans) identify global warming as the sole problem as here and not look at possible other problems. Global warming is being blamed for causing so many of Africa's problems and that is the reason according to the article. In the article it estimates trends for the next fifty years, but yet we only started noticing global warming in about the last twenty years or so. If the trend continues as the author of the second article says it would be 6 degrees this morning, and than boy would we be in trouble. They say global warming affects the weather and say how it would affect the weather, and we all know how accurate weather predicting is. So in 50 years Logan this morning would have been 6 degrees and only have had 7.2 feet of snow this winter and that is a worst case scenario. Run for the hills or your local environmental group to save us from this frightening future.


Tuesday, February 01, 2005

Chains That Give Freedom

As I read our class blog one problem seems to jump out, the class understanding of free markets. As we talk about Coase and free market solution to environmental problems it is imperative that a true understanding of what exactly constitutes the "free market" that is being talked about. Private property advocates view of markets are not those left without fetters (regulation). Don Boudreaux captures this idea perfectly here (http://cafehayek.typepad.com/hayek/2004/11/index.html, scroll down towards the bottom of the page, it is the entry titled Fettered by Unfettered Language) . There are two fetters that are essential for the market to run efficiently.

The first and foremost is competition. Markets that are free are bound by it. Private firms compete for consumer dollars and access to supplies, like water. What this does is create a system in which firms cannot afford to discriminate based on any criteria including race and gender because by doing so they eventually lose profit. For example, a law firm (firm A) has two applicants for a litigatory position, one black, one white. Now assume that the black candidate is far superior in every aspect, but the law firm refuses to hire the young attorney because in their neck of the woods it would be unpopular, the inferior white guy gets the job.

How does the market handle this discrimination? Well, suppose that this firm A is engaged in a large litigatory dispute in which it is forced to put its only litigator to work. Firm B, the firm that is opposing Firm A, is from out of town and is the firm that hired the superior black applicant. Firm B will then have the advantage in the trial and in the market as well. By winning such a case against the discriminating Firm A they will be able attract high profile clientele while Firm A will pay the price of their discriminatory preferences by losing their clients to the other firms. Firms do not need regulation that says do not discriminate, the market will cure the social problem itself. (for further information on this see Sowell "Civil Rights: Rhetoric or Reality") Markets transcend things like discrimination because of competition.

The second fetter is equally important; "the common law of property, contract, and tort, all supplemented, when appropriate, by criminal law." Those who advocate free markets understand that in order for transactions to exist in the market, there needs to be a system that guarantees contracts are enforced. Without contract enforcement the entire free market system would be undermined and there would be no incentive for individuals to participate. Thus free market advocates like F.A. Hayek knew and understood that contract enforcement was a prerequisite to the free market he advocated.

Hayek knew that civilization rested on the appropriate application of these fetters. That is why he said, "Most of the advantages of social life, especially in its more advanced forms which we call "civilization," rest on the fact that the individual benefits from more knowledge than he is aware of. It might be said that civilization begins when the individual in the pursuit of his ends can make use of more knowledge than he has himself acquired and when he can transcend the boundaries of ignorance by profiting from knowledge he does not himself posses." (The Constitution of Liberty Ch2 p 22, F.A. Hayek) Man would not be able to take advantage of the knowledge of his fellow without the fetters on the market that fostered transactions. Man is only willing to transact if he is secure in his property through the common law with criminal law to back it up.

Thus to have free market solutions intended by those like Milton Friedman, F.A. Hayek, Thomas Sowell, Walter Williams, Professor Simmons and myself means to fetter the market with its institutional fetters; competition and common law and then let it work its magic. These types of markets can solve the market failures that government regulation tries to fix. It only takes time.

Protect the market or the people

First I would like to apologize there is no link for my source. I got it out of "The Constitution of Liberty" by Friedrich Hayek. In chapter two(pg.22-51) he talked about the market determining various rights as they pertain to trade. He felt that the government should stay the heck out trade all together, to prevent any loss of information that would be exchanged. He felt that information exchanged thru trade brings about progressive change in human civilization. Any institution that makes guidelines or seeks to control markets restricts progress and makes society constrained and thus un-free.
After I read this for my Political Organizations class, I began thinking about the different information that came to the Americas as a result of no government intervention on trade. Slavery came to mind, and we all know what ideologies came what it, and the notion that Native Americans were savages who had no souls, which contributed greatly to the extermination of thousands tribes. Several social problems occurred as a result of "Free-trade".
I say all this just to say that if we don't have government policies targeted at protecting markets but also protecting the rights of the people who make up those markets, then we leave the door open to allow a person or a group of people to exploit the masses and take away basic human rights in the process, just because it's profitable for business. If we determine rights based on who values air, water or trees more, whoever has more of the commodity by which value is measured (i.e. land, money, people, heredity,etc.) will receive supreme rights over all the other parties involved, which is unjust unless a all parties agree upon their rights and claims to the resource in question. The government should therefore protect and enforce the argreement by the various parties to avoid violence and any other ill-mannered feelings which could bring social tension.

Rescuing Water Markets

I posted a comment to a recent post on water rights and how those rights should be determined. I stated quite simply that those rights should be determined by the market and that whoever values it more will own the rights and can trade or sell them as they please. I began looking for sources on the topic and came across an article at www.perc.org that reveales that its not always that simple. The article is entitlled "Rescuing Water Markets" and discusses the effects of the water market that existed between the city of Los Angeles and rural Owen Valley in the early part of the 20th century. Because of the rapid growth of L.A. more water was needed as the surrounding area lacked a large enough watershed to provide for the growing community. The answer to the problem was Owen Valley which is located in Southeastern California near Nevada. It was an agricultural community that had an abundance of water. The city of L.A. began to buy property with the included water rights and began to send the water to L.A. Initially both sides were becoming better off. L.A. was receiving their water and the farmers were making more money selling their water than they were selling their crops.
Eventually problems arose. These problems came from three main sources: Disputes over valuation of the water, bilateral monopolies as only two parties were involved in the water trade, and third party effects on the Own Valley community. The article is a little long but interesting. It shows that in real world situations markets, although usually are the best solution, do have their problems as well.